[Senate Hearing 107-355]
[From the U.S. Government Publishing Office]




                                                 S. Hrg. 107-355, Pt. 4

 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2002

=======================================================================

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                                S. 1416

AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2002 FOR MILITARY ACTIVITIES 
   OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR 
DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL 
  STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER 
                                PURPOSES

                               ----------                              

                                 PART 4

                                AIRLAND

                               ----------                              

                          JULY 10 AND 19, 2001


         Printed for the use of the Committee on Armed Services
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
2002--Part 4  AIRLAND

                                                 S. Hrg. 107-355, Pt. 4

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2002

=======================================================================

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                                S. 1416

AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2002 FOR MILITARY ACTIVITIES 
   OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR 
DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL 
  STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER 
                                PURPOSES

                               __________

                                 PART 4

                                AIRLAND

                               __________

                          JULY 10 AND 19, 2001


         Printed for the use of the Committee on Armed Services



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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

EDWARD M. KENNEDY, Massachusetts     JOHN WARNER, Virginia,
ROBERT C. BYRD, West Virginia        STROM THURMOND, South Carolina
JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
MAX CLELAND, Georgia                 BOB SMITH, New Hampshire
MARY L. LANDRIEU, Louisiana          JAMES M. INHOFE, Oklahoma
JACK REED, Rhode Island              RICK SANTORUM, Pennsylvania
DANIEL K. AKAKA, Hawaii              PAT ROBERTS, Kansas
BILL NELSON, Florida                 WAYNE ALLARD, Colorado
E. BENJAMIN NELSON, Nebraska         TIM HUTCHINSON, Arkansas
JEAN CARNAHAN, Missouri              JEFF SESSIONS, Alabama
MARK DAYTON, Minnesota               SUSAN COLLINS, Maine
JEFF BINGAMAN, New Mexico            JIM BUNNING, Kentucky

                     David S. Lyles, Staff Director

                Les Brownlee, Republican Staff Director

                                 ______

                        Subcommittee on Airland

               JOSEPH I. LIEBERMAN, Connecticut, Chairman

MAX CLELAND, Georgia                 RICK SANTORUM, Pennsylvania
DANIEL K. AKAKA, Hawaii              JAMES M. INHOFE, Oklahoma
BILL NELSON, Florida                 PAT ROBERTS, Kansas
E. BENJAMIN NELSON, Nebraska         TIM HUTCHINSON, Arkansas
JEAN CARNAHAN, Missouri              JEFF SESSIONS, Alabama
MARK DAYTON, Minnesota               JIM BUNNING, Kentucky

                                  (ii)


                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
                       The F-22 Aircraft Program
                             july 10, 2001

                                                                   Page

Druyun, Darleen A., Acting Assistant Secretary for Acquisition, 
  Department of the Air Force....................................     4
Frame, Lee, Acting Director, Operational Test and Evaluation.....    17

                 Army Modernization and Transformation
                             july 19, 2001

Kern, Lt. Gen. Paul J., USA, Military Deputy, Office of the 
  Assistant Secetary of the Army.................................    43
Bond, Maj. Gen. William L., USA, Director, Force Development, 
  United States Army.............................................    53


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2002

                              ----------                              


                         TUESDAY, JULY 10, 2001

                               U.S. Senate,
                           Subcommittee on Airland,
                               Committee on Armed Services,
                                                    Washington, DC.

                       THE F-22 AIRCRAFT PROGRAM

    The subcommittee met, pursuant to notice, at 2:36 p.m. in 
room SR-222, Russell Senate Office Building, Senator Joseph I. 
Lieberman (chairman of the subcommittee) presiding.
    Committee members present: Senators Lieberman and Inhofe.
    Majority staff members present: Kenneth M. Crosswait, 
professional staff member; and Creighton Greene, professional 
staff member.
    Minority staff member present: Thomas L. MacKenzie, 
professional staff member.
    Staff assistants present: Kristi M. Freddo and Jennifer L. 
Naccari.
    Committee members' assistants present: Frederick M. Downey, 
assistant to Senator Lieberman; Andrew Vanlandingham, assistant 
to Senator Cleland; Eric Pierce, assistant to Senator Ben 
Nelson; George M. Bernier III, assistant to Senator Santorum; 
and Derek Maurer, assistant to Senator Bunning.

   OPENING STATEMENT OF SENATOR JOSEPH I. LIEBERMAN, CHAIRMAN

    Senator Lieberman. The hearing will come to order. I thank 
the witnesses, Mrs. Druyun and Mr. Frame, for being here. We 
are in the midst of three votes, and I appreciate that Senator 
Inhofe agreed to come over here. We will try to give our 
opening statements and see if we can begin to hear from you 
before we have to go back for the second vote.
    We are convened this afternoon to hear testimony on the 
progress of the F-22 program which we reviewed last year. I 
want to put on the record before getting to that subject my 
thanks and appreciation to Senator Santorum for his leadership 
on this subcommittee.
    We work very closely together. We both had the same thought 
when the party control of the Senate switched, which was that 
nothing on this subcommittee would change except the titles.
    So, I appreciate very much working with him, and I look 
forward to continuing to do so. He could not be here today, he 
took a special trip. I am grateful that Senator Inhofe is here 
in his place.
    Over the past several years the subcommittee has spent 
substantial time and effort trying to understand and take 
action on the services' various tactical aircraft modernization 
efforts. Today we are going to deal with one major area within 
that program, that is the F-22.
    Unfortunately, there have been some problems in the F-22 
program since we reviewed it last year. For instance, 
developmental testing has not proceeded as rapidly as former 
Secretary Delaney testified last year that it would. That means 
that the Air Force is facing a need to delay the beginning of 
operational testing until the Air Force and the contractor team 
can complete sufficient developmental testing to ensure that we 
have high confidence that the operational testing will be 
successful.
    Unfortunately, further delays in starting operational 
testing will translate into additional engineering and 
manufacturing development (EMD) costs. We also understand that 
the estimates of production costs have increased by as much as 
$2 billion, according to Air Force projections, and more 
according to others within the Department of Defense. Now, that 
kind of increase will mean that the Air Force will not be able 
to buy the total planned number of production aircraft within 
the legislative cost caps that Congress has established for 
production.
    The Air Force is proposing to use funds diverted from 
producing aircraft in the near-term to invest in cost reduction 
initiatives that may achieve long-term savings. Cost estimates 
made this year by various DOD groups appear to be diverging 
rather than converging, as has been the case over the past 
several years.
    Now, the F-22, in my opinion, is a revolutionary 
improvement over existing aircraft systems, and that is why I 
have supported it and continue to support it. We should expect, 
I suppose, to have bumps in the road as we conduct testing on 
any program attempting, as this one is, to field cutting-edge 
technology. Nevertheless, we need to be diligent in ensuring 
that we do not cut corners on developmental testing that have 
very serious ramifications if the Department were to begin 
operational testing before the system is really ready.
    We have had recent tragic experience with the V-22 program, 
where, in hindsight, I think one might argue we should have 
insisted that the Department conduct more developmental testing 
before entering the operational evaluation. We need to hear 
from the Air Force and the operational test and evaluation 
about the schedule and content, therefore, of the testing 
program for the F-22.
    This subcommittee expressed concern last year about the 
potential erosion of the F-22 testing effort. I said last year 
that this erosion could signify that the risk of the F-22 
program upon entering the initial operational test and 
evaluation may not be as low as we had planned and hoped it 
would be. I also said that it would be very short-sighted to 
have to scrimp on testing to fit within the EMD cost cap, and 
that is why Chairman Santorum and I, and this subcommittee, led 
the efforts to allow additional flexibility in the EMD cost 
caps to protect testing content in the F-22 program. Protecting 
testing content was the right thing to do then, and is the 
right thing to do now.
    The Air Force and contractor team made substantial attempts 
to identify production cost efficiencies after the joint 
estimating team identified potential major cost growth several 
years ago. Over the past several years, members of the Armed 
Services Committee have been asking the Air Force whether there 
might be opportunities for investing now to achieve recurring 
cost savings as production proceeded. The Air Force answer has 
been that the F-22 program would fit within the cost cap.
    The Air Force has not indicated there were any additional 
financially effective cost reduction opportunities that were 
not being pursued because of the EMD or production cost caps. 
Nevertheless, the budget now before us proposes production of 
13 aircraft, as opposed to the 16 aircraft that had been 
planned at this time last year. The Air Force is proposing to 
use the additional budget authority freed up by deferring 
production of those three F-22s to invest in additional cost 
reduction opportunities.
    From a broader perspective, however, there is another 
troubling note here, and I referred to it briefly a little 
earlier in this statement. Until last year, Air Force witnesses 
have been testifying that the various production cost estimates 
internal to the Defense Department have been converging and, of 
course, we all know that reasonable people and reasonable 
organizations can differ on such cost estimates, but it had 
been encouraging that these differences in cost estimates had 
been narrowing.
    This year, it appears that the difference between the Air 
Force's production cost estimate, which is an increase of as 
much as $2 billion, and that from the cost analysis improvement 
group within the Pentagon, which I gather is for a production 
cost increase of as much as $9 billion, is larger by far than 
it had previously been. We need to hear from Mrs. Druyun why 
this is happening so late in the EMD program, and what 
implications it has for the program overall.
    Again, I repeat what I said during my statement, this is a 
revolutionary program which I have supported and continue to 
support. I think our role in this subcommittee is to make sure 
it will come out as right as we can possibly make it come out.
    I now want to recognize and call on Senator Inhofe and 
again thank him for being here.

              STATEMENT OF SENATOR JAMES M. INHOFE

    Senator Inhofe. Thank you, Mr. Chairman. We had a Senate 
Armed Services Committee hearing this morning. We had all of 
the Chiefs and all of the Secretaries. I expressed to them that 
there was a time prior to just recent history when we had the 
best equipment, whether it was flying equipment, whether it was 
ground equipment, artillery, or anything else. I am not sure 
you were there at that time when I was talking about the guy 
that came up, and it was always, during the Vietnam War, the F-
105s, F-100s, F-4s, at least they had the notion they believed 
we had the very best of everything.
    Now we do not, and now we are looking at, from air-to-air, 
we have that problem with right now on the market the SU-27s 
being sold to potential adversaries. It is better in some 
respects than our best air-to-air, which is the F-15, in terms 
of range, in terms of range detection, which means they detect 
us before we detect them. The same can be said about our air-
to-ground, or F-16. So in order to try to keep up with the 
competition, I look at this as something we have to do 
everything we can to get it deployed as quickly as possible.
    We are now looking at the Eurofighter, the Rafale, and all 
of these things coming online, and we have to be up there where 
we can be competitive. The only thing we have up there right 
now is the F-22, so my major concern, Mr. Chairman, is to find 
out whether it is the caps that need to be changed or the 
tests. What has to be done to get this so that we are going to 
have it deployed and available to save American lives?
    That is my major concern with this program.
    Senator Lieberman. Well said. I agree. Thank you.
    We will now go to the witnesses. Hopefully we can hear from 
one or both of them before we have to go vote. I thank them 
both very much for being here.
    First, Mrs. Darleen A. Druyun, Acting Assistant Secretary 
for Acquisition of the Department of the Air Force.

STATEMENT OF DARLEEN A. DRUYUN, ACTING ASSISTANT SECRETARY FOR 
            ACQUISITION, DEPARTMENT OF THE AIR FORCE

    Mrs. Druyun. Thank you, Mr. Chairman, and members of the 
subcommittee. I am very pleased to provide an update on the 
progress of the F-22 program today. As you requested, my update 
will include changes in the flight test program, flight test 
accomplishments, assessment of the congressional cost caps, and 
a summary of where we stand with respect to production cost on 
the program.
    Air superiority is key to the successful employment of 
military powers. Control of the 21st century air battle 
requires a combination of low observability, supercruise, 
integrated avionics, and high maneuverability to defeat the 
emerging fighter and surface-to-air missile threats.
    The multimission F-22 Raptor is a key element in the Air 
Force's modernization program and its highest acquisition 
priority. Late aircraft deliveries are the principal reasons we 
are behind in our test schedule. This has impacted the start of 
dedicated IOT&E as originally planned in August 2002, which I 
will explain shortly.
    The Air Force convened two teams of flight test experts to 
review the F-22 test program over the past year. In August 
2000, the Air Force assembled a team of experts to evaluate the 
flight test requirements and make recommendations to improve 
flight test efficiencies. One of the key recommendations by the 
flight test review team was to slip the start of dedicated 
IOT&E by 4 to 6 months.
    Slipping the start of dedicated IOT&E from August 2002 to 
December 2002 provided an additional 4 calendar months of 
flight testing with no impact to the December 2005 initial 
operational capability. The Director of Operational Test and 
Evaluation in January 2001 this year sent a letter to Congress 
stating that the increase in the EMD cost cap by 1\1/2\ percent 
was necessary to ensure adequate testing. The 1\1/2\ percent 
cap increase equates to $307 million, which is sufficient funds 
for slipping the start of the dedicated IOT&E date from August 
2002 until December 2002.
    The flight test review team also made two other key 
recommendations to increase flight test efficiency, both of 
which were implemented by the Air Force. The team also 
recommended the addition of a fourth mission control team, 
which would increase the potential weekly sortie generation 
rate from 8 to 10 sorties a week.
    Second, additional data reduction analysis would 
significantly improve our test analysis capability, which is 
very important for efficient flight test operations and anomaly 
resolution. After the flight test review team completed their 
efforts, I personally assembled the Red Team to conduct a 
thorough, independent assessment of the test program's proposed 
restructure.
    The Red Team was chartered to focus on the findings of the 
Air Force team, to provide an independent assessment of the 
test program, and present specific recommendations concerning 
the test program's effectiveness, efficiency, and adequacy to 
verify F-22 system effectiveness and suitability.
    The members of the Red Team had a wealth of test experience 
to provide this independent assessment. Members of the team 
were Mr. John Krings, former Under Secretary of Defense for 
Operational Test and Evaluation; Dr. Eugene Covert, professor 
emeritus at MIT in the aeronautics and astronautics area; 
retired Maj. Gen. George Harrison, former Commander of the Air 
Force Operational Test and Evaluation Center; and Mr. Jim 
Smolka, chief test pilot of NASA's Dryden Flight Research 
Center.
    Overall, the Red Team was very impressed with the F-22 
program and was highly complimentary of the total team effort. 
Significant operations and recommendations from the Red Team 
included that the restructured avionics and flight test 
sciences plan were the results of an orderly process which made 
no compromises in safety or technical areas. They praised the 
team for first inflight aircraft signature measurements meeting 
specification, cited the engine performance as exemplary, and 
recommended, amongst other things, that we establish periodic 
decision points over the next year to objectively reassess 
progress in the test program. We are going to follow through on 
that, and the Red Team is going to continue to lead that 
effort.
    They also recommended that we extend dedicated IOT&E start 
date by at least 4 months beyond December 2002 to reduce the 
schedule risk and improve the dedicated IOT&E success 
potential.
    The Air Force has acted on the Red Team's recommendations. 
Specifically, we have slipped the start of dedicated IOT&E 
another 4 months from December 2002 to April 2003, giving 
additional test time to ensure adequate testing is 
accomplished. This slip will require additional EMD cost cap 
relief above the previous 1\1/2\ percent adjustment. This slip 
will not impact the December 2005 initial operational 
capability of the aircraft.
    During the past few months, the F-22 team has experienced a 
significant improvement by setting team records for sorties, 
beginning in March 2001. In other words, the results of the 
Tiger Team, the test team, and the Red Team are beginning to 
take effect. The average over the past 4 months, 36 sorties a 
month, and 88 flight test hours per month, has more than 
tripled from the prior year average of 11 sorties a month and 
23 flight test hours per month.
    Presently, we have five aircraft at Edwards Air Force Base 
conducting flight tests, and we will deliver the remaining 
three EMD aircraft by the end of this year.
    The F-22 has achieved several significant performance 
milestones in the test program this year. Highlights include 
the first flight of aircraft 4005 with a block 3.0 software, 
and that software provides the first-look, first-shot, first-
kill for fighting capability, so that has already been 
delivered, and we are into the testing of that.
    The radar cross-section testing has been unprecedented. 
Aircraft 4004 meets the key RCS spec requirements, and if I 
could compare that, sir, to the B-2 program with respect to its 
RCS testing, it was not until the fourteenth production 
aircraft that success in manufacturing resulted in similar 
accomplishments for the design spec.
    The F-22 radar's performance has been outstanding so far. 
On 12 April of this year, the team verified the F-22 radar met 
a key design specification for the detection range. The flight 
test results demonstrated the radar met 105 percent of the 
design requirements.
    On May 3 of this year, the flight test engine completed 
4,300 engine cycle test cycles at Arnold Engineering 
Development Center. I would add not only has this performance 
and durability testing been outstanding, but the flight test 
program has proceeded since September 1997 with no engine-
related failures.
    We recognize there is considerable work to be done to 
complete the F-22 test program. We do also want to highlight to 
you that the F-22 is successfully advancing through the test 
program of this complex revolutionary system. As of yesterday, 
the test team accomplished more than 1,230 hours of flight 
testing, and we are continuing, as I said, to really pick up 
the pace of our test program.
    Turning to the EMD development cost cap, the 1997 Congress 
enacted a cost cap for the F-22 EMD program. This cap has been 
an effective cost-control tool for the program. Recognizing 
that the development contract is over 95 percent complete, with 
hardware design finalized and key performance parameters and 
technical acquisition program baseline criteria so far being 
met, we believe that this cost cap has been an effective tool 
for incentivizing aggressive cost control across the entire F-
22.
    However, the remaining development work focuses on testing 
to verify safe and effective operation of the combat fielded 
system. Continuation of the EMD cost cap at this time can only 
serve to limit testing, which is not the best way to complete 
the development program. Given this situation, the Air Force 
now believes the EMD cost cap should be eliminated.
    With respect to production cost, the F-22 remains 
absolutely dedicated to the objective to deliver 339 production 
aircraft to the warfighter at an affordable cost. The 
production cost will be the key element in the low rate initial 
production decision. That decision is formalized by a Defense 
Acquisition Board (DAB) review, and that DAB review we are 
hopeful will be scheduled sometime perhaps in the month of 
August.
    Once the DAB is complete, we will submit any revisions to 
our acquisition strategy and cost estimates to Congress in 
response to the statutory requirements laid out in the National 
Defense Authorization Act for Fiscal Year 2000.
    An important factor in production cost control is the 
implementation of effective cost reduction initiatives. These 
initiatives have been known as the F-22 production cost 
reduction plans in the Air Force. The F-22 has a well-
structured program plan to continuously pursue cost savings 
initiatives.
    While the results to date are within the contractual cost 
performance target guidelines established for the target price 
commitment curve back in 1997, I would like to point out to you 
that during the transition from the development into production 
we have seen cost growth. The postponement of the low rate 
initial production (LRIP) DAB due to the strategic review has 
continued to erode subcontractor confidence in this program, 
and made them very reluctant to make capital investments to 
help reduce costs. It is important to note that the 
subcontractors account for approximately 60 percent of the 
program cost in production.
    The process of defining production cost reduction plans 
(PCRPs) has been ongoing since 1997. The F-22 management effort 
to oversee and track projects includes an online interactive 
database that allows real time reporting and tracking of every 
PCRP. If you were to look at that database today, we have over 
1,000 items within that tracking system. Clearly, the F-22 
program is executing a test program that is focused on no 
compromises in safety, and it is also very much focused on its 
mandate to deliver a compliant aircraft that provides best 
value to the warfighter.
    Thank you very much for the opportunity to provide you with 
a brief update on the F-22 program. I would like to submit my 
formal statement for the record, and I look forward, Senators, 
to responding to your questions.
    [The prepared statement of Mrs. Druyun follows:]

               Prepared Statement by Mrs. Darleen Druyun

    Mr. Chairman and members of the subcommittee, I thank you for the 
opportunity to appear before you to discuss the Air Force's F-22 
program. I am pleased to provide an update on the progress of the F-22 
Air Dominance Fighter program. As you requested, my update will 
include: changes in the flight test program, flight test 
accomplishments, an assessment of the efficacy of the congressional 
cost caps, and a summary of where we stand with respect to production 
costs on the program.

                         AEROSPACE SUPERIORITY

    Control of the vertical battlespace has been, is, and will remain a 
major element of United States national security policy. DOD's Joint 
Vision 2020 envisions the U.S. military dominating all aspects of a 
conflict--full spectrum dominance. Control over what moves through air 
and space provides a fundamental benefit to joint forces. Full spectrum 
dominance depends on the inherent strengths of aerospace power: speed, 
range, flexibility, stealth, precision, lethality, global/theater 
situational awareness, and strategic perspective.
    Air dominance is key to the successful employment of military 
power. Protection of U.S. and allied joint forces is the number one 
priority--their protection requires the Air Force to quickly control 
the vertical battlespace. Air dominance prevents our adversaries from 
using air and space to attack, maneuver, or perform reconnaissance that 
could interfere with the operations of our air, land, or surface 
forces. Air dominance provides the freedom from attack, the freedom to 
maneuver, and the freedom to attack at a time and place of our 
choosing. While the U.S. and our allies had air dominance during 
Operation Desert Storm, newer and more effective weapon systems are 
emerging that threaten our ability to achieve air dominance in the 
future. Our forces must be modernized to maintain the edge over our 
potential adversaries, which we now enjoy.
    Control of the 21st century air battle requires a combination of 
low observability, supercruise, integrated avionics, and high 
maneuverability to defeat the emerging fighter and surface-to-air 
missile threats. The F-22 combines all of these features into an 
affordable portion of the Air Force's modernization program. The F-22 
and the complementary Joint Strike Fighter (JSF) provide the Air Force 
with a comprehensive and affordable modernization plan to exploit our 
Nation's ability to control the vertical dimension well into the 21st 
century. The F-22 will enable the United States to obtain air 
dominance--the total denial of the airspace to the enemy.
    The multi-mission F-22 Raptor is a key element in the Air Force's 
modernization program and the highest acquisition priority. The F-22 
brings a revolutionary capability to the battlespace in replacing the 
aging F-15. In the hands of Air Force aviators, the F-22 will dominate 
the aerial arena of the 21st century. We appreciate your concern, 
support, and funding for our efforts to modernize and sustain the 
world's most respected aerospace force.

                 U.S. TACTICAL AIR FORCE MODERNIZATION

    To maintain its viability, our Air Force needs to modernize as the 
threat evolves and to avoid technical obsolescence. The Air Force's 
ongoing time-phased modernization effort is based on developing the Air 
Force's core competencies and striking an affordable balance between 
readiness and modernization of the aerospace force. Within our total 
force modernization efforts, the tactical aviation modernization 
program envisions an evolution of the current F-15/F-16 high-low mix to 
a high-low mix of the F-22 and JSF aircraft to provide the most combat 
capable, efficient, and lethal air force possible. The proper mix of 
the high capability F-22 and the lower cost JSF provides the Air Force 
with the necessary combat aircraft to defeat the full spectrum of 
potential threats in the first decades of the 21st century at a minimum 
risk to the lives of our aviators. Within our strategy, the F-22 is the 
high capability force designed to destroy enemy aircraft and attack 
highly defended, high-value targets. The lower cost JSF, purchased in 
large numbers, will provide the bulk of the attack force once the air-
to-air threat has been eliminated by the F-22. The low cost design of 
the JSF relies on the F-22 for air superiority.

                       FLIGHT TEST PROGRAM STATUS

    We are behind in testing right now, but we are not going to rush 
testing. Late aircraft deliveries are the principal reason we are 
behind in our testing schedule. This has impacted our ability to start 
Dedicated Initial Operational Test and Evaluation (DIOT&E) as 
originally planned in August 2002. While the Air Force is fully 
committed to cost control, we will not rush the start of DIOT&E. As the 
table below illustrates, we lost valuable testing time due to late 
aircraft deliveries. In some cases, aircraft first flight dates slipped 
by more than a year, placing increased pressure on the test program.

                       AIRCRAFT DELIVERY SCHEDULE
------------------------------------------------------------------------
                      Planned First     Current First
     Aircraft       Flight (JET) \1\       Flight       Ferry to Edwards
------------------------------------------------------------------------
             4003   July 1999.......  March 2000......  March 2000
             4004   August 1999.....  November 2000...  January 2001
             4005   January 2000....  January 2001....  March 2001
             4006   June 2000.......  February 2001...  May 2001
             4007   September 2000..  September 2001..  September 2001
             4008   February 2001...  October 2001....  December 2001
             4009   July 2001.......  October 2001....  October 2001
------------------------------------------------------------------------
\1\ JET is Joint Cost Estimate Team.

    In light of the fact we are behind, the Air Force convened two 
teams of flight test experts to review the F-22 test program over the 
past year. In August 2000, the Air Force assembled a team of test 
experts, F-22 Flight Test Review Team, to evaluate the flight test 
requirements and make recommendations to improve flight test 
efficiencies. One of the key recommendations by the Flight Test Review 
Team was to slip the start of DIOT&E by 4 to 6 months. DIOT&E marks the 
start of operational testing. Slipping the start of DIOT&E from August 
2002 to December 2002 gave us an additional 4 calendar months of flight 
testing with no impact to the December 2005 Initial Operational 
Capability (IOC). In order to get EMD cap relief for this slip, the 
Director of Operational Test & Evaluation (DOT&E) determined in a 
January 19, 2001 letter to Congress that the increase of the EMD cost 
cap by 1.5 percent was necessary to ensure adequate testing. The 1.5 
percent cap adjustment equals $307 million, which is sufficient to fund 
the 4-6 month slip (August 2002 to December 2002) to the start of 
DIOT&E.
    The F-22 Flight Test Review Team also made two other key 
recommendations to increase flight test efficiency, both of which were 
implemented by the Air Force. The team also recommended adding a 4th 
Mission Control Team. By adding manpower for the 4th Mission Control 
Team, we increased the weekly sortie generation rate from 8 to 10 
sorties. Second, by adding additional analysts at the participating 
test organizations, we significantly improved our test analysis 
capability, which is very important for anomaly resolution and 
efficient flight test operations.
    After the F-22 Flight Test Review Team completed their efforts, 
which resulted in a revised test program, I personally assembled a Red 
Team to conduct a thorough ``independent'' assessment of the revised 
test program. I chartered the Red Team to accomplish the following 
tasks:

        (1) Review the test program findings and recommendations of the 
        F-22 Flight Test Review (FTR) Team
        (2) Provide an independent assessment of the test program
        (3) Present recommendations concerning the test program's 
        effectiveness, efficiency, and adequacy to verify F-22 system 
        effectiveness and suitability

    The members of the Red Team had a wealth of test experience to 
provide an independent assessment of the proposed F-22 flight test 
program. Members of the team were:

         Mr. John E. (Jack) Krings, former Undersecretary of 
        Defense for DOT&E, and current DOD and NASA consultant
         Dr. Eugene E. Covert, former Air Force Chief Scientist 
        and current Professor Emeritus in the Department of 
        Aerodynamics and Astronautics at MIT
         Maj. Gen. (ret.) George Harrison, former Air Force 
        Operational Test and Evaluation Center (AFOTEC) commander and 
        current consultant for GTRI
         Mr. Jim Smolka, Chief Pilot, NASA Dryden Flight 
        Research Center

    The Red Team completed their efforts by briefing their 
recommendations to the Defense Acquisition Executive, Acting Director 
of Operational Test and Evaluation, Secretary of the Air Force, the 
Chief of Staff of the Air Force, and SAF/AQ in late May 2001. Overall, 
the Red Team was very impressed with the F-22 program and was highly 
complimentary. Listed below are the most significant recommendations/
findings from the Red Team:
Commendations
    (1) Applauded the F-22 program for doing trail-blazing work in 
developing methodologies to test complex, highly interactive and 
integrated systems
    (2) Praised team for first in-flight aircraft signature measurement 
meeting specification
    (3) Hailed engine performance as exemplary
Recommendations
    (1) Establish periodic decision points over the next year to 
objectively reassess DIOT&E and Milestone III (High Rate Production) 
schedules. If necessary, reschedule rather than compress testing to 
meet unrealistic milestones
    (2) Conduct gun testing before DIOT&E
    (3) Work with DOT&E to explore additional improvements in avionics 
and missile test efficiency
    (4) Extend DT&E at least 4 months (beyond December 2002) to reduce 
schedule risk and improve DIOT&E success potential
    The Air Force has implemented all of the Red Team recommendations. 
Specifically, we slipped the start of DIOT&E another 4 months from 
December 2002 to April 2003 giving us additional valuable test time to 
ensure adequate testing is accomplished. This slip will require an 
additional adjustment to the EMD cost cap above the previous 1.5 
percent adjustment. This slip will not impact the December 2005 Initial 
Operational Capability (IOC). The revised test program now includes gun 
testing prior to the start of DIOT&E. The F-22 team has also worked 
very diligently with DOT&E to resolve our differences with avionics 
testing to include missile shots. Today, I'm pleased to report these 
differences have been resolved and are being formally documented in 
change pages to the Test and Evaluation Master Plan (TEMP).
Description of Current Flight Sciences Flight Test Program
    The current Flight Sciences plan has margin to the start of DIOT&E 
and is built on the historically achieved test point accomplishment 
rate.
Description of Current Avionics Flight Test Program
    The current avionics flight test program plans to conduct 1,530 
hours of testing by April 2003. The program maintains a direct lineage 
to the original 1,970 hour Green Team baseline test matrix that was 
built following a strategy to task methodology. This methodology 
involved ACC describing how the F-22 would be employed (strategy) and 
the test team building a program to ensure complete testing of those 
required functions (task). The Green Team baseline matrix was refined 
by the Green Team II activities during the first 6 months of 2001. The 
Green Team II identified several ways to conduct more efficient 
testing, for example, conducting more tests concurrently and reducing 
live open air missile scenarios to only those that required an actual 
missile fired to satisfy developmental technical objectives. They 
refined the execution plans accordingly and the result was a 1,454 hour 
program. Subsequent to that refinement, six missile scenarios were 
upgraded back to open air missile shots to satisfy AFOTEC concurrent 
operational test objectives and OSD operational test concerns. Gun live 
fire testing was also reinstated and the result is the current 1,530 
hour program. Smartly refining the test plan while adhering to the 
original Green Team philosophy has led to a robust yet efficient 
avionics flight test program plan that begins with subsystem testing 
and progresses to integrated systems evaluations of the entire weapon 
system.
    The plan does account for the fact that some test runs will have to 
be repeated after anomalies are discovered and corrected. An anomaly 
factor to re-fly 33 percent of the test runs is included accordingly. 
In addition, not all runs will achieve the proper test conditions on 
the first attempt. For example, a target emitter failure during a data 
collection run generally would require another attempt to collect the 
data. For these and other similar reasons, a factor to re-fly 30 
percent of the runs due to test inefficiencies is part of the planned 
program. Both the anomaly and inefficiency factors are supported 
historically. The F-22 Avionics Analysis and Integration Team and the 
Combined Test Force Mission Avionics Test Team will continuously guide 
test planning and execution to ensure that the F-22 will be certified 
ready for IOT&E when required.
Flight Test Accomplishments
    During the last few months, the F-22 team experienced a significant 
turnaround in flight test accomplishments by setting personal best for 
sorties in March, April, and May 2001. Table below provides flight test 
accomplishments:

                    MONTHLY FLIGHT TESTS: HISTORICAL
------------------------------------------------------------------------
                    Month                        Sorties    Flight Hours
------------------------------------------------------------------------
March 2000..................................             4            11
April 2000..................................            10            25
May 2000....................................             4             6
June 2000...................................            12            19
July 2000...................................             6             9
August 2000.................................            24            56
September 2000..............................            13            31
November 2000...............................            21            48
December 2000...............................             5             9
January 2001................................            12            23
February 2001...............................            11            18
------------------------------------------------------------------------
  Average...................................          11.1          23.2
------------------------------------------------------------------------


                  MONTHLY FLIGHT TESTS: RECENT RESULTS
------------------------------------------------------------------------
                    Month                        Sorties    Flight Hours
------------------------------------------------------------------------
March 2001..................................            32            72
April 2001..................................            37            92
May 2001....................................            49           113
June 2001...................................            28            74
------------------------------------------------------------------------
  Average...................................          36.5          87.8
------------------------------------------------------------------------

    Since March 2001, the F-22 team test has significantly increased 
the monthly hour sortie rate and monthly flight hours. I attribute this 
turnaround to two factors. First, delivery of aircraft to the F-22 
Combined Test Force (CTF) at Edwards Air Force Base. Second, the 
improved efficiency resulting from the implementation of the F-22 
Flight Test Review Team recommendations.
    Presently, we have five aircraft at Edwards AFB conducting flight 
tests, and the contractor is on track to deliver the remaining 3 EMD 
aircraft by the end of this year. The present F-22 fleet at Edwards AFB 
includes 2 flight sciences aircraft and 3 avionics aircraft. With the 
acceptance of three new Raptors later this year, this will round out 
our fleet at eight aircraft. As part of the EMD contract, the 
contractor will deliver 9 aircraft. After completing all of its useful 
testing at Edwards AFB, aircraft 4001 retired from flight testing 
several months ago and is now undergoing live fire testing at Wright-
Patterson Air Force Base.
    The F-22 Team has achieved several significant performance 
milestones in the test program this year. Some of these accomplishments 
are listed below:

         First flight of aircraft 4005 with Block 3.0 software 
        has been completed.
         Radar Cross Section (RCS) testing has been 
        unprecedented. Aircraft 4004 startled the experts by being 
        under the specification requirement in the critical areas 
        measured during our DAB criteria test. This has never been done 
        before and is directly attributable to the very detailed and 
        rigorous development efforts to ensure a mature low observable 
        capability for the first airplanes built. By comparison, it 
        took the B-2 program the 14th production aircraft to make this 
        same claim.
         The F-22 radar's performance has been outstanding. On 
        12 April 2001, the team verified that the F-22 radar meets the 
        Acquisition Program Baseline (APB). The F-22 radar APB is the 
        detection range at which the radar range search mode has a 50 
        percent probability of detection against a 1 square meter 
        target. The flight test results demonstrated the radar met 105 
        percent of the APB value.
         AIM-9 launch at 100 degrees/second roll rate has been 
        completed.
         Calendar year 2001 program criteria (see table below) 
        is on track.

                   CALENDAR YEAR 2001 PROGRAM CRITERIA
------------------------------------------------------------------------
                                       Estimated
       2001 Program Criteria           Completion          Remarks
------------------------------------------------------------------------
Conduct sufficient engine initial   June...........  Complete
 service release testing to
 determine engine hot section life.
Conduct full-scale airframe         September......  Report only
 fatigue testing sufficient to
 define life limits and initial
 airframe inspection requirements.
Complete F-22 radar detection       May............  Complete
 range.
Complete F-22 first block 3         July-August....  On Track
 avionics AIM-120 guided launch.
Complete first segment of radar     August.........  Started
 cross section (RCS) stability
 over time testing.
Establish flight envelope for       May............  Complete
 Block 2 airframe structures.
------------------------------------------------------------------------

Avionics Testing
    The team has achieved remarkable success with avionics Block 3.0 
testing. On 5 January 2001, aircraft 4005 flew the first flight of 
Block 3.0 avionics. This event was clearly the most technically 
demanding challenge the program faced with regard to completing the 
Defense Acquisition Board (DAB) Low Rate Initial Production (LRIP) 
criteria. The Block 3.0 software provides and controls the ``first 
look, first shot, first kill'' warfighting capability of the F-22. 
Block 3.0 provides the multi-sensor fusion F-22 pilots will need to 
accurately acquire, track, identify and engage multiple targets. Block 
3.0 also provides the ability to employ both the AIM-120C and AIM-9M 
missiles. In addition to the successful radar detection range testing, 
the avionics system with Block 3.0 has demonstrated the ability to 
maintain missile quality track accuracies at impressive ranges and has 
successfully demonstrated sensor fusion supporting target 
identification. Avionics is no longer a technical issue. Test and 
verification of system avionics design is the present challenge.
    The avionics flight test pace to date has been slowed due to 
aircraft availability. Aircraft 4004 began an upgrade to Block 3.0 on 
29 June 2001. The aircraft was originally delivered in a Block 1.2 
configuration. While Block 1.2 allowed the program to accomplish 
significant testing with aircraft 4004, test utility and productiveness 
were limited since Block 1.2 contained only partial CNI and no EW 
functionality. As a result, 4004 was restrained from fully contributing 
to flight test execution and run completion/burndown. Aircraft 4005 
underwent a 6-week modification period to install additional 
instrumentation and software stability fixes to maximize test 
efficiency and to support the upcoming first avionics AIM-120 missile 
shot. Aircraft 4006 entered a similar modification period on 7 June 
2001 and will not return to flight test until the latter half of July 
2001. These required modifications to increase long-term test 
efficiency take the aircraft out of service and have slowed the 
avionics test pace in the short-term. Flight test execution planning 
continues to balance the accomplishment of test points against removing 
aircraft from service for software block modifications so that over the 
long-term, the maximum amount of test runs can be accomplished as 
efficiently as possible.
Static Testing
    Static testing is progressing very well. The team has successfully 
completed all of the Air Vehicle Design Ultimate Load conditions, 
wherein the whole airframe is subjected to 150 percent of the design 
limit load and approximately half of the localized static testing. 
Completion of the remainder of the local test conditions is projected 
by mid September 2001. No major failures have been experienced in any 
of the testing to date. The completion of static testing is 
significant, as the test results directly support F-22 envelope 
expansion flight testing.
Fatigue Testing
    As of 5 July 2001, the F-22 team completed 1,258 equivalent flight 
hours (equivalent to 15.7 percent of the 1 lifetime), which means we 
are behind schedule for fatigue testing. Per the plan, we should be 
over 30 percent complete by now. The team has experienced some down 
periods resulting in the program being behind schedule. First, down 
period occurred on 26 February 2001 due to excessive motion of the text 
fixture ``dummy'' engines, which caused damage to the ``dummy'' engine 
and engine bushings. To correct this problem, the team changed the size 
of the bushings and made other modifications. Testing resumed on 21 
March 2001. Second, down period occurred on 10 May 2001 with a 
``dummy'' main landing gear repair. The dummy left main landing gear 
trunnion shaft cracked. Analysis error inaccurately predicted main 
landing gear door internal loads. Testing resumed on 8 June 2001. Both 
of the above failures are not representative of the fleet. Presently, 
the team is having problems with the pads sticking to the fatigue 
article. The fatigue article is located in an open bay facility, which 
is not environmentally controlled. As a result of this situation, the 
team is experiencing adhesion problems with the pads sticking to the 
fatigue article. At our 28 June 2001 F-22 CEO meeting, I assigned an 
action item for Lockheed to assemble a team of experts to fully examine 
this adhesion problem. Despite these problems, we should complete the 
first fatigue lifetime test by the end of calendar middle of February 
2002.
Engine Tests
    On 3 May 2001, Flight Test Engine (FTE) 18, the Initial Service 
Release (ISR) qualification test engine, completed 4,332 total 
accumulated cycles (TACs) of accelerated mission testing (AMT). This is 
equivalent to 1/2 the engine design service life requirement in the 
specification (full hot section design service life).
    While it is clear there is still considerable work to be done to 
complete the F-22 development program, at this stage in development, 
the F-22 is far more mature than any other aircraft weapon system 
program at this point in the development cycle. As of 2 July 2001, the 
F22 Team accumulated more than 1,229 hours of flight testing. No other 
fighter program has accumulated as many hours at their production 
decision as the F-22 program. The table below illustrates this point:

           FLIGHT TEST HOURS COMPARISON AT PRODUCTION DECISION
------------------------------------------------------------------------
                                                       Flight Test Hours
            Aircraft                 # Aircraft in       at Production
                                      Initial Lot          Decision
------------------------------------------------------------------------
F-15............................                 30   250
F-16............................                 16   460
F-18A/B.........................                  9   345
F-22............................                 10   1,229 and growing
------------------------------------------------------------------------

        ENGINEERING AND MANUFACTURING DEVELOPMENT (EMD) COST CAP

    In 1997, Congress enacted a cost cap for the F-22 EMD program. This 
cap has been an effective cost control tool for the F-22 program. The 
F-22 EMD program has resulted in a weapon system that is currently 
meeting or exceeding all key design goals, and the production 
configuration is essentially complete. The EMD contract is over 95 
percent complete with all hardware design finalized; all Key 
Performance Parameters (KPP) and technical Acquisition Program Baseline 
(APB) criteria are being met. The remaining effort on the EMD program 
includes efforts to finish integration and testing of final software 
build and contractor/government efforts to complete system level 
verification and development test and evaluation (DT&E). Another major 
effort is required for DIOT&E. Continued enforcement of the cap will 
inhibit completion of the development program and will necessitate the 
need for future cap adjustments.
    Prior to the hardware design being finalized, the EMD cost cap was 
an effective tool for making design trades, but given the remaining EMD 
work principally involves testing and we have limited funding, we would 
only have the option of reducing tests. Given this situation, we now 
believe EMD cost cap should be eliminated. Retaining the cap now could 
prevent completion of final development efforts and key DT&E and DIOT&E 
efforts. These efforts are needed to verify safe and effective 
operation of the combat fielded system. The correction of minor 
deficiencies can be accomplished and fielded in the initial operational 
capability systems if cap headroom allows. Shortage of cap headroom now 
would prevent the Air Force from completing minor deficiency and system 
level verification tasks.
    While the EMD cost cap was useful earlier in the F-22 program, it 
now has the potential of harming the test program. During last year's 
testimony before this committee (22 March 2000), the former Director of 
DOT&E, Mr. Philip Coyle, recommended doing away with the EMD cost cap. 
He believed the EMD cost cap was causing many programmatic changes to 
reduce costs, which almost always translated into less testing and 
increased development risks. He also commented at this point in the EMD 
phase, cost reductions are largely test related since the test budget 
is essentially the only remaining uncommitted EMD budget. Not only are 
testing tasks often eliminated, but there is concomitant inefficient 
rescheduling of the remaining tasks. Any further reduction of testing 
tasks increases the risk of not being ready to start or successfully 
complete IOT&E. In light of these concerns, Mr. Coyle recommended a 
most helpful congressional action would be to remove the EMD cost cap 
and institute an alternative method for controlling the F-22 program 
cost.
    Even though we strongly recommend the EMD cost cap be eliminated, 
let me assure this subcommittee that the F-22 team remains firmly 
committed to cost control. Absent an EMD cap, cost control pressures 
still exist for a few reasons. First, this is probably the most 
reviewed program in the Air Force. I personally conduct Monthly 
Execution Reviews to monitor cost performance. Second, I conduct semi-
annual F-22 Chief Executive Officer (CEO) meetings to ensure the top 
program challenges such as cost performance receive the highest level 
of corporate attention. Third, at our Quarterly Defense Acquisition 
Executive reviews with Office of Secretary of Defense the focus is on 
cost performance. Fourth, the government grades the contractor on how 
well they maintain cost performance as part of the award fee process. 
Finally, the Contractor Performance Assessment Report (CPAR) process 
provides annual grades to the contractors on their cost performance, 
which serves as an input for future DOD source selections. I'm 
confident the above tools give the Air Force and the contractor ample 
influence and incentive to control program costs.

                            PRODUCTION COST

    I personally review the F-22 program on a monthly basis and can 
assure you that the F-22 government/contractor team understands the 
desire and need for close control of F-22 costs. I would like to begin 
by affirming that the F-22 team remains absolutely dedicated to the 
objective to deliver 339 production aircraft to the warfighters at an 
affordable cost. Presently, we have two cost estimates for the F-22 
production, both of which exceed the production cost cap of $37.6 
billion. One by the Office of Secretary of Defense Cost Analysis 
Improvement Group (OSD CAIG) and the Air Force CAIG. We are continuing 
to work to narrow the variance between the two estimates. The plan is 
to have this resolved by the Low Rate Initial Production (LRIP) Defense 
Acquisition Board (DAB). While OSD has not scheduled a LRIP DAB yet, 
the Air Force is ready to have a DAB now. Once the DAB is complete, we 
will submit any revisions to our acquisition strategy and cost estimate 
to Congress. A revised acquisition plan has been formulated by the Air 
Force and presented to OSD for review and consideration. This plan will 
be formally approved by DOD as part of the LRIP DAB process and 
submitted to Congress in response to the statutory requirements laid 
out in Section 131 of the National Defense Act for Fiscal Year 2000 
(P.L. 106-65). Complete details of the revised acquisition strategy 
will be released when the internal DOD review and decision process are 
complete.
    An important factor in us being able achieve our objective of 
delivering 339 production aircraft to the warfighters at an affordable 
cost is a timely LRIP decision. Everyone understands the importance of 
the department's on-going strategic review, but we cannot minimize the 
impact this has had on the F-22 program. The strategic review has 
effectively delayed our LRIP, which marks the third year this decision 
has been delayed. This delay is placing enormous cost pressure on the 
F-22 program. Contractors report that the greatest threat to meeting 
production program affordability goals is the delay in a LRIP decision. 
This lack of program ``commitment'' is perceived as a ``risk'' in the 
advertised procurement of 339 aircraft and 777 F119 engines. 
Unfortunately, ``risk'' in business base and future business 
computations ultimately translate into higher individual lot prices. A 
LRIP decision will benefit the program by affirming DOD's commitment to 
current and future program execution.
    An equally important factor in on cost control efforts are the 
implementation of effective cost reduction initiatives. These 
initiatives have become known as the F-22 production cost reduction 
plans (PCRPs), a critical tool enabling the Air Force to deliver F-22 
aircraft within the production cost cap. More importantly, PCRPs will 
continue to drive down aircraft costs over the life of the production 
program. The continuous cost reductions lower the average unit 
production prices and ensure our warfighters get early access to the 
revolutionary F-22 capabilities that will enable the United States to 
guarantee air dominance well into the 21st century.
    The F-22 program has a well-structured plan continuously pursuing 
cost savings initiatives. An exceptional management framework is 
established to provide real-time monitoring and oversight of cost 
savings initiatives. Finally, performance to date is within the 
performance guidelines established for target price performance during 
the transitioning from development into production. Some deviations 
from the plan have occurred, and the F-22 team immediately implemented 
rational response to these deviations in order to deliver the program 
within the requested and available appropriated production budgets. The 
F-22 team continues to make progress in cutting the cost to produce F-
22s. The key management focus for the F-22 team is to constantly pursue 
cost savings initiatives adequate to ultimately deliver the program 
within the appropriated production budgets.
    Accordingly, I would like to briefly describe the status of our 
PCRPs. The production cap forms the basis for the team management 
approach in establishing the affordability objectives and cost savings 
targets for PCRP cost reductions. For purposes of clarity, I will use 
flyaway costs as the measure of the cost to produce a jet. The PCRP 
program is reducing the flyaway costs for the F-22. The table 
summarizes the reductions in flyaway costs.

----------------------------------------------------------------------------------------------------------------
                                                                                          Average Unit Flyaway
                  Production Aircraft Lots                       Number of Aircraft       Cost  (In millions of
                                                                                                dollars)
----------------------------------------------------------------------------------------------------------------
PRTV I......................................................                        2                     318.5
PRTV II.....................................................                        6                     259.1
Lot 1.......................................................                       10                     199.5
----------------------------------------------------------------------------------------------------------------

    This table demonstrates that jets are cheaper to produce with each 
succeeding procurement lot. The challenge is whether cost reductions 
are adequate to deliver the production program within the production 
cap.
    The process of defining PCRPs has been on-going since 1997. With 
the criticality of PCRPs to meet well known program affordability 
objectives, the F-22 team built an efficient management structure to 
jointly oversee the development and implementation of PCRP projects. 
The management effort includes an on-line interactive database that 
allows real time reporting of PCRP status spanning idea generation, 
approval, implementation, and tracking. The latest assessment indicates 
airframe PCRPs are valued at $21.5 billion and the engine PCRPs are 
valued at $4.9 billion. The F-22 team's assessment is that 
approximately one half of the then-year savings for airframe PCRPs 
($21.5 billion) and engine PCRPs ($4.9 billion) are in the production 
cost baseline. The remaining PCRPs will be incorporated in future 
production lots. The paragraphs and charts below provide you a glimpse 
of some of the PCRPs that we are implementing now.
    The Radar Transmit/Receive (T/R) module design was updated in three 
major areas. The number of Monolithic Microwave Integrated Circuit 
(MMIC) and Application Specific Integrated Circuit (ASIC) parts were 
reduced and the cycle time reduced for the acceptance test program. Two 
MMICs were combined into one and three ASICs were reduced to two.
    New high speed milling machines have been purchased at Marietta. 
Reprogramming of machining tapes take advantage of the high speed 
capability. High speed milling increases quality and decreases 
production run time up to 40 percent.
    The cost reduction worked jointly by a Pratt & Whitney/Chemtronics 
Integrated Product Team addressed the exhaust nozzle transition duct 
structural bulkhead, the thermal protection liners and eliminated the 
conformal structural spars. The bulkhead was changed from an Titanium 
Alloy-C ($200/pound raw material) to a Titanium 6-2-4-2 ($40/pound) 
near net shape forging. The revision greatly simplified the 
manufacturing process and reduced the processing time. Thermal liner 
attachments were changed from a difficult to produce ``shaped'' thin 
wall casting to simple threaded rods attached to the transition duct 
body. With the new liner attachment scheme the conformal structural 
spars, which required hot forming and expensive metal removal, could be 
changed to simple flat sheetmetal spars. This change is typical of what 
can be accomplished with minor requirement revisions and experience 
gained during the development process. Savings per engine are $120,800 
with a 50 percent reduction in manufacturing lead-times and weight 
savings of 20 pounds. 


      
    
    
      
    Thank you for this opportunity to provide you with an update on the 
F-22 program, and I look forward to your questions.

    Senator Lieberman. Thank you very much. Mr. Frame, why 
don't you begin. We will see how far we can get. Thanks for 
being here.

 STATEMENT OF LEE FRAME, ACTING DIRECTOR, OPERATIONAL TEST AND 
                           EVALUATION

    Mr. Frame. Mr. Chairman. members of the subcommittee, I 
appreciate the opportunity to appear before you to discuss the 
test and evaluation of the F-22 program. This is my first 
appearance before this subcommittee, but the fourth appearance 
from the Office of the Director of Test and Evaluation. I very 
much appreciate your commitment to demonstrated performance 
through realistic test and evaluation. I look forward to 
bringing you up to date on the status of the F-22 test program.
    The F-22 has completed 1,224 hours of flight test as of the 
end of June 2001. This is approximately 600 hours more than 
when the Director testified last year. Previous Air Force plans 
for increased test efficiency have not been achieved, and the 
number of flight test points flown per hour remains virtually 
the same as for last year. The bulk of and more difficult 
testing remains. The live fire testing has progressed well, but 
some critical tests still remain.
    The F-22 program had originally planned for a low-rate 
initial production (LRIP) decision in December 1999, but this 
was deferred until certain exit criteria were met. The program 
did not complete these exit criteria prior to the anticipated 
December 2000 decision due to late deliveries of test aircraft 
and subsequent modifications to these aircraft. The program 
completed all LRIP exit criteria by February 2001.
    As the Director testified last year, the principle issue 
with the test program is its slow pace and slipping schedule. 
Since last year's testimony, the number of lost aircraft test 
months increased from 49 to 61. Many of the problems 
highlighted in last year's testimony still remain to be 
corrected, including brakes, main landing gear struts, and 
cockpit deficiencies. As these issues linger, and others 
emerge, it is difficult to complete the process of flight test, 
fix, and retest.
    The program has made some recent progress with the five 
aircraft now on station at Edwards. However, as the Director 
stated in last year's testimony, there were not enough aircraft 
months available to complete an adequate development test 
program prior to the start of the planned August 2002 
operational test. In January 2001, we supported a 1.5 percent 
relief of the F-22 development cost cap, but felt that 
development testing would take 9 to 12 months beyond the 
planned August 2002 start of operational tests. As a result of 
that cap relief, the Air Force changed the start date to 
December 2002.
    Since January of this year, the Air Force has conducted a 
review of the planned development test. As a result, they have 
reduced the number of F-22 avionics flight test hours from 
1,970 to 1,530 by increasing test concurrency. Though some test 
planning efficiencies have been identified, in my view at least 
another 8 months beyond December 2002 is needed before 
operational tests can begin. As a result of the Air Force-
sponsored independent Red Team review, the Air Force recently 
agreed to establish April 2003 as an objective, and August 2003 
as a threshold date for beginning the operational test.
    This will require further relief in the development cost 
cap. I support this, but caution that cap relief for additional 
testing is not enough. The development program must maintain 
emphasis on finding development problems and devoting the 
resources necessary to correct them prior to operational test. 
The Air Force Operational Test and Evaluation Center provided 
operational assessment to support the planned December 2000 
LRIP decision.
    The recent operational assessment reported many of the same 
issues from previous years' assessment, recurring issues with 
the operational implications are main landing gear strut 
settling, environmental control system problems, intraflight 
data link shortfalls, and missile launch detect performance. 
The operational assessment highlighted the aircraft brake and 
hook design difficulties as creating the potential for the F-22 
to require longer airfields.
    The F-22's performance and flying qualities has been a 
predominant part of the flight test program so far. Performance 
has generally been meeting expectations with flying qualities 
of the F-22 assessed as excellent through the flight envelope 
explored thus far. However, a moderate, uncommanded roll-off 
has been encountered, and the aircraft has demonstrated a 
tendency to dig in during some maneuvers. Flying qualities in 
the takeoff and landing configuration are judged to be 
outstanding, with the aircraft handling qualities during in-
flight refueling rated as excellent. Flying qualities at both 
positive as well as negative angles of attack are superior to 
current operational aircraft.
    The flight test pilot's assessment is that the F-22 is easy 
to fly, and it will be very difficult to enter uncontrolled 
flight or an unintentional spin. Flying qualities testing that 
remains to be completed is primarily associated with expanding 
the flight envelope into more demanding areas. Recent Air Force 
planning initiatives have reduced the number of flight tests by 
about 25 percent.
    While it is not yet finalized, the plan defers content, 
leverages concurrency, and, with the user's concurrence, 
deletes some test points. Until we see the final plans and 
schedule for this, we cannot fully assess its impact on 
operational test readiness.
    A significant concern is that the expansion of the flight 
test operating envelope is totally dependent on the 
availability of only one fully instrumented aircraft with the 
block 2 structural modifications. This impacts the possibility 
of accelerating performance and flying qualities testing while 
more rapidly expanding the allowable flight envelope.
    This is an extremely high risk situation both in terms of 
the large number of test points to be completed, and the severe 
impact of unexpected problems that might ground this aircraft 
for any extended period. Also, test point completion efficiency 
must significantly improve in order to clear the required 
flight envelope prior to the start of operational tests.
    The F119 engine remains on schedule to support the flight 
test program, and has demonstrated good performance. The 
current structural test plan represents a 2-year slip from the 
plan recommended in 1999. Full-scale static testing was 
successfully completed to 150 percent of the F-22 design load 
limit in June 2001. Remaining local structural static tests are 
due to be completed by September of this year.
    Fatigue testing started in late December 2000. The LRIP 
exit criterion established in December 1999 was the initiation 
of fatigue testing with a goal of 40 percent of first life 
completed by the end of calendar year 2000. This goal was not 
met and, as of June 2001, only about 16 percent of the first 
fatigue life has been completed.
    Senator Lieberman. Mr. Frame, when you come to a 
comfortable stopping point I am going to ask you to do that, 
because we have to go and vote.
    Mr. Frame. I think this is it. I am about ready to go into 
avionics, so why don't we take a break.
    Senator Lieberman. The subcommittee will stand in recess. 
We will be back as soon as we can. [Recess.]
    [The prepared statement of Mr. Frame follows:]

                   Prepared Statement by Lee H. Frame

                              INTRODUCTION

    Mr. Chairman, members of the subcommittee, I appreciate the 
opportunity to appear before you to discuss the testing and evaluation 
for the F-22 program. This is my first appearance before this 
subcommittee but the fourth appearance for the office of the Director 
of Operational Test And Evaluation (DOT&E). I very much appreciate your 
commitment to demonstrated performance through realistic test and 
evaluation. This commitment has been expressed in your statements and 
comments at these hearings. I look forward to bringing you up to date 
on the status of the F-22 test program.
    The F-22 Raptor continues in the Engineering and Manufacturing 
Development (EMD) phase and has completed 1,224 hours of flight test as 
of the end of June 2001. This is approximately 600 hours more than when 
the Director testified last year. However, previous Air Force plans for 
increased test efficiency have not been achieved and the number of 
flight test points flown per hour remains virtually the same as last 
year. The bulk of and more difficult testing remains to validate major 
F-22 design characteristics including stealth, integrated avionics, 
weapons integration, improved logistics, and flight sciences addressing 
performance and handling qualities. The live fire testing has 
progressed well but some critical tests still remain. The details of 
test status and performance will be discussed in these six areas.
    The F-22 program had planned on a Low Rate Initial Production 
(LRIP) decision in December 1999. However, the program did not 
accomplish all required LRIP exit criteria prior to the anticipated 
December 2000 Defense Acquisition Board (DAB) due to late deliveries of 
test aircraft and numerous delays due to modifications to these 
aircraft. Subsequently, the program completed all DAB exit criteria by 
February 2001.
    As the Director of Operational Test and Evaluation testified last 
year, the principal issue with the test program is the slow pace 
resulting in slipping schedules and little information with which to 
assess performance. Since the March 2000 DOT&E testimony, the number of 
aircraft test months lost has increased from 49 to 61. Many of the 
problems highlighted in last year's testimony still remain to be 
corrected including brakes, main landing gear struts, and issues 
associated with cockpit design, including lighting and canopy 
reflection issues. As these issues linger and others emerge, the bulk 
of the difficult testing remains to be completed. This makes it 
difficult to flight test, fix, and retest. Since the Director's March 
2000 testimony, three of the planned five aircraft have been delivered 
and begun flight test at Edwards AFB. The program has made some 
progress with the five total aircraft on station at Edwards. However, 
as the Director advised Congress in the beginning of this calendar 
year, and as he predicted in last year's testimony, the number of 
aircraft months available prior to the start of the planned August 2002 
Initial Operational Test and Evaluation (IOT&E) were far too few for 
the task of an adequate developmental test. The Director's January 2001 
correspondence to the defense subcommittees supported relief of the F-
22 EMD cap by the suggested 1.5 percent but also stated that, in his 
opinion, the total time necessary to complete an adequate DT&E would be 
9 to 12 months beyond the planned IOT&E start date of August 2002.
    Since January of this year, the Air Force has conducted an 
``executability review'' of the planned developmental test. The intent 
was to tailor the developmental test plan to stay within the schedule 
dictated by the EMD cap with the additional 1.5 percent relief, which 
equated to a planned start of IOT&E in December 2002. As a result, the 
Air Force reduced the number of F-22 avionics flight test hours from 
1,970 to 1,530, albeit a reduction in hours largely achieved through 
increasing concurrency in tests. Although some test planning 
efficiencies have been realized through this review, the bottom line 
remains the same--more time is needed, at least another 8 months beyond 
December 2002 before IOT&E can begin. The Air Force recently agreed to 
establish April 2003 as objective and August 2003 as threshold dates 
for beginning IOT&E, which will require further relief in the EMD cost 
cap. I support this in concept but caution that cap relief alone is not 
enough. Flexibility in schedule must re-orient the program to an 
emphasis on content. An adequate test program is one that enables us to 
understand the weapons system and uncover significant development 
problems in time to correct them for operational test and production.

                         OPERATIONAL ASSESSMENT

    In the 1991 F-22 Milestone II, the Defense Acquisition Board 
directed the Air Force Operational Test and Evaluation Center (AFOTEC) 
to provide an Operational Assessment (OA) to support the LRIP decision. 
The OA began in January 1998 and finished in December 2000. In last 
year's testimony, the Director summarized the OA conducted at the 
direction of the Defense Acquisition Executive. AFOTEC will perform 
another OA to support the certification for readiness to enter the 
IOT&E. The most recent OA reported many of the same issues from the 
previous year's report and acknowledged that testing is still immature, 
making it not yet possible to conclude definitive operational impacts. 
Recurring issues with operational implications are main landing gear 
strut settling, environmental control system problems, intra-flight 
data link shortfalls, and missile launch detect performance. However, 
this most recent OA highlighted the aircraft brake and hook design 
difficulties as creating the potential for the F-22 to be forced to 
operate from longer airfields. Additionally, the amount of support 
equipment that will be necessary to maintain stealth characteristics 
may affect the mobility support requirements for the weapons system. 
Another key suitability issue highlighted in the assessment is the need 
to develop interfaces from the F-22 integrated maintenance information 
system to a logistics data support system that will be available for 
the F-22 IOT&E and initial beddown. Late development of the planned 
interfaces may not support operational test and fielding of the F-22.

                            FLIGHT SCIENCES

    Evaluation of the F-22's performance and flying qualities has been 
a predominant part of the flight test program to date. Performance has 
generally been meeting expectations with supercruise Mach number 
exceeding the operational requirement. Flying qualities of the F-22 are 
generally assessed as excellent throughout the flight envelope explored 
thus far. However, a moderate uncommanded roll-off has been encountered 
at one transonic Mach number/angle of attack combination and the 
aircraft has demonstrated a tendency to ``dig-in'' during maneuvering 
in the transonic region creating overshoots in both angle of attack and 
g-loading. Flying qualities in the takeoff and landing configuration 
are judged to be outstanding with aircraft handling qualities during 
in-flight refueling rated as excellent. Flying qualities at both high 
positive as well as negative angles of attack (including with weapon's 
bay doors open) are superior to operational aircraft, primarily due to 
the advanced digital flight control system and vectored engine thrust 
capability of the F-22.
    Recent Air Force re-planning initiatives have reduced the number of 
flight test points by about 25 percent. While it is not yet finalized, 
the plan defers content, leverages concurrency, and with the user's 
concurrence, deletes test points. Until we see the final plans and 
schedule for flight test point accomplishment, we cannot fully assess 
its impact on readiness for IOT&E.
    To date, more test points have been flown to evaluate F-22 flying 
qualities than all other test disciplines combined. This has provided a 
sound basis for the flight test pilots' assessment that not only is the 
F-22 easy to fly but also that it will be very difficult for a pilot to 
enter uncontrolled flight, or an unintentional spin mode. Flying 
qualities testing that remains to be completed is primarily associated 
with expanding the flight envelope into areas that have not yet been 
cleared for flight testing, such as high g/high roll rate maneuvering, 
the high-speed/low-altitude flight regime, and testing with external 
stores and weapons.
    Expansion of the flight test operating envelope, however, is 
totally dependent on the availability of a fully instrumented and 
structurally modified test aircraft. The availability of only one 
aircraft with the Block II configuration (Aircraft 4003) to complete 
essentially all of the flight sciences testing, including structural, 
performance, propulsion, and flying qualities, is a significant test 
schedule risk. This seriously impacts the possibility of significantly 
accelerating F-22 testing in the performance and flying qualities area 
and more rapidly expanding the allowable flight envelope prior to the 
scheduled April 2003 start of IOT&E. This is an extremely high-risk 
situation both in terms of the large number of test points yet to be 
completed and the severe impact of unexpected problems that might 
ground the aircraft for an extended period. Although it is difficult to 
predict problem areas, vertical fin buffet that might require a 
redesign, speed brake use causing control surface failures, and the 
nose roll-off at a moderate angle of attack are known potential problem 
areas. Even if problems are not encountered in expanding the allowable 
flight envelope into more challenging parts of the envelope, the test 
point production efficiency must significantly improve relative to past 
performance in order to clear the required flight envelope prior to the 
start of IOT&E.
    Without augmentation of Aircraft 4003 with another flight test 
asset, our assessment is that the completion of the required testing to 
provide an adequate flight envelope to start IOT&E at the threshold 
start date of August 2003 is high risk. This date can only be achieved 
if Aircraft 4003 significantly improves its test point production 
efficiency and consistently avoids even moderate airframe and engine 
problems for the next 2 years.

                          F119 ENGINE TESTING

    F119 engine testing remains on schedule to support the flight test 
program through the end of EMD. The LRIP DAB Exit Criterion ``Complete 
first portion of engine Initial Service Release (ISR) qualification 
test'' was completed in November 2000 and the complete ISR 
qualification test was done by early May 2001. This represented the 
equivalent of about 6 years of operational service engine life and 
successfully demonstrated the full hot section service life requirement 
in the engine specification. Modifications to correct some minor 
mechanical problems that were encountered during ISR testing are being 
incorporated into the production version of the F119 engine. To date, 
there has not been an engine-related shutdown in the test program 
although occasional anomalies have been encountered with the Airframe-
Mounted Accessory Drive. The very good engine performance demonstrated 
in ground and flight test, as well as the history of nearly on-schedule 
engine deliveries to date, indicate that F119 engine availability for 
the aircraft that are dedicated for use in the IOT&E program is 
relatively low risk.
Structural Testing
    The current structural test plan represents a 2-year slip from the 
plan recommended by the Joint Estimating Team in 1999. Full-scale 
static testing began in April 1999. Testing was successfully completed 
to 150 percent of F-22 design limit load in June 2001. The remaining 
local structure static test cases are due to be completed by September 
of this year.
    Fatigue testing started in late December 2000. The LRIP DAB Exit 
Criterion, established in December 1999, was the initiation of fatigue 
testing with a goal of 40 percent of first life complete by the end of 
calendar year 2000. This goal was not met and as of June 2001, only 
about 16 percent of the first fatigue life test had been completed.

                                AVIONICS

    The F-22 flight test fleet will eventually include six aircraft 
equipped with a fully integrated avionics suite to support the planned 
avionics flight test effort. F-22 avionics subsystems, including the 
active element electronically-scanned Northrop Grumman APG-77 radar; 
Communications, Navigation and Identification (CNI); Electronic Warfare 
(EW); and weapons delivery functions are integrated through two Common 
Integrated Processors (CIPs) to provide the pilot with a sensor fusion 
combat capability. Development of the complex mission software to 
provide this integrated situation awareness capability is a major 
challenge. Avionics systems flight test has not progressed as far as 
was expected or planned due to delays in hardware and software and late 
delivery of avionics test aircraft to the Combined Test Force (CTF) at 
Edwards AFB. This limited Block 3.0 software testing on Aircraft 4005 
this year.
    The Air Force's executability review resulted in selecting an 
avionics test plan with approximately half of the number of runs as 
previously envisioned. The Air Force has stated that it intends to 
maintain the same content as the original 1,970-hour plan in the new 
program which will total 1,530 hours if all efficiency and anomaly 
resolution planning factors are realized. Although there is moderate 
risk in completing this revised avionics test plan, the revised plan 
should support readiness for IOT&E.
    The Flying Testbed (FTB) consists of the Boeing 757 airliner 
prototype as modified to support the F-22 program. The aircraft has 
been altered to add the F-22 integrated forebody and Northrop Grumman 
APG-77 radar in the nose, as well as winglets above the cockpit 
containing CNI and EW antennas. Missile Launch Detector system sensors 
are installed in the FTB enabling their performance to be evaluated 
against various infrared sources. A simulated cockpit (from which the 
sensors are operated) and separate diagnostic display terminals are 
installed for use by developmental test engineers. Two common 
integrated processors, actual F-22 aircraft sensors, and controls and 
displays hardware are installed in as realistic an F-22 simulated 
configuration as is possible. Developmental software releases are 
installed and evaluated to assist in development of the mission 
avionics software prior to installation and flight test in actual F-22 
aircraft. This provides a credible flying laboratory to evaluate 
avionics performance and assist in software development. The FTB has 
proven to be very useful in troubleshooting radar, CIP, display, and 
sensor problems. By early June 2001, the FTB had flown over 650 hours 
in support of the F-22 avionics development effort.
    Section 8124 of the DOD Appropriations Act 2001 requires the first 
flight of an F-22 aircraft incorporating Block 3.0 software be 
conducted before a full funding contract for F-22 LRIP may be awarded. 
In its planning, the Air Force accelerated the need date for this 
interim block of mission avionics software from April 2001 to December 
2000 in order to meet this exit criterion. Through the Working 
Integrated Product Team (WIPT) process, with both the Air Force and the 
Office of the Secretary of Defense involved, several lower priority 
avionics functions were deferred from Block 3.0 to subsequent 
incremental software block releases in order to meet the new need date. 
Avionics functions deferred from Block 3.0 avionics until later in the 
test program included some aspects of sensor management/sensor track 
fusion, electronic warfare, and CNI, along with some built-in test and 
housekeeping functions. However, the Block 3.0 software, as flown on 
January 5, 2001, in Aircraft 4005, allows fused integrated operations 
of most radar, CNI, and EW functions sufficient to detect, track, 
identify, and shoot AIM-120 and AIM-9M missiles. This software block 
has been extensively tested in the FTB.
    Three additional software blocks are planned to be developed and 
integrated into the flight test aircraft and evaluated prior to the 
start of IOT&E. These are Blocks 3.1.0, 3.1.1, and 3.1.2. Block 3.1.0 
software is in developmental testing and will soon be installed in the 
FTB. This software block will be installed in flight test aircraft 
during 2002 and will include most of the functions previously deferred 
from Block 3.0. Block 3.1.1 software will add additional functions with 
Block 3.1.2 being the final baseline that will be used during IOT&E to 
demonstrate fused integrated operations of all radar, CNI, and EW 
functions. Block 3.1.1 will begin flight testing in the spring of 2002 
with Block 3.1.2 becoming available toward the end of that year.
    Some performance issues with Electronic Countermeasures (ECM) and 
with some of the tactical modes are being addressed but APG-77 radar 
performance data gathered during flight test on F-22 aircraft show the 
system meeting or exceeding specifications for radar detection and 
tracking functions. CNI development has been behind schedule and the 
subsystems are maturing at a slower pace than expected. EW development 
is also behind schedule and has been slow to mature. Integrated testing 
of the EW subsystem is proceeding on the FTB.
    Avionics system testing has not progressed as far as was originally 
expected or planned. Significant delays, primarily due to late delivery 
of avionics test aircraft, have limited Block 3.0 software testing in 
the F-22. Lack of avionics system stability, resulting in system 
failures requiring a 20-minute restart procedure, has required several 
modifications to Block 3.0 software. Avionics systems testing on the 
FTB has progressed satisfactorily and as of June 2001, three of the 
eventual six F-22 avionics test aircraft were flying in support of the 
avionics development effort at Edwards AFB.

                      WEAPONS INTEGRATION TESTING

    In order to ensure a very low Radar Cross Section (RCS), the F-22 
was designed to carry its air-to-air missile armament internally for 
operations in a high threat environment. Two AIM-9 infrared guided 
missiles (initially AIM-9M with AIM-9X planned for later 
implementation) are contained inside side fuselage weapons bays located 
under the wings and six AIM-120C radar guided AMRAAM missiles can be 
carried in two weapons bays located on the bottom midsection of the 
fuselage. The missiles are launched by rail extension (AIM-9) or rapid 
pneumatic/hydraulic launchers (AIM-120) located behind quick-acting 
doors. The missile launch sequence, from doors open through missile 
launch to doors fully closed occurs very rapidly to preserve the F-22's 
stealth characteristics in combat.
    Several successful AIM-9 and AIM-120 missile separation tests have 
demonstrated the feasibility of internal weapons carriage. Such tests, 
to be conducted across the operational missile employment envelope of 
the F-22, are key elements of the build-up to guided weapons employment 
testing.
    Data analysis conducted following the first AIM-120 safe separation 
test determined that the standard AMRAAM q-bias command (necessary to 
safely maneuver the missile away from the launch aircraft flow field 
immediately after launch) would require modification for F-22 
employment. The q-bias programmed into the current AIM-120 was 
developed based on F-15 ejector launch parameters. A new software 
modification to the AIM-120 missile is required to enable the missile 
to be fired from the F-22 under other than non-maneuvering flight 
conditions. This software modification is currently being developed in 
conjunction with the Joint Air-to-Air Missile Program Office. It will 
need to be validated on the F-22 and then be integrated into 
operational AIM-120 missiles.
    The launch of precision weapons is the most critical step in the 
flight test program for validation of the integration of avionics and 
weapons systems and missile launch and control algorithms. The 
algorithms are also necessary for the mission-level simulation in the 
Air Combat Simulator (ACS) during pilot training and mission-level 
IOT&E sorties. Flight test validation of the Block 3.1.2 software, 
which contains full-up closed-loop tracking and missile launch and 
control algorithms, is critical to the start of IOT&E pilot upgrade 
training. Weapon system delivery testing involving guided missile 
launches is required to complete these tasks and provide data from 
which performance predictions can be made.
    In late calendar year 2000, the F-22 System Program Office provided 
a tentative guided weapons test planning schedule to DOT&E. The 
schedule assumed about 1 month was required to accomplish each test 
scenario contained in the F-22 Test and Evaluation Master Plan (TEMP), 
including workups and rehearsals. Since that guided weapons test 
schedule was provided, initiation of live guided missile testing has 
been delayed by about 5 months with the first AIM-120 guided weapon 
launch now scheduled to occur in August of this year. Additional guided 
missile combined developmental/operational testing (including 
integration of the AIM-9X into the F-22 weapon system and demonstration 
of AIM-120 launches from external weapons stations) will not be 
completed until after the F-22 EMD program ends in September 2003. 
Results of guided weapons testing using Block 3.0/3.1 software are 
necessary to provide adequate data for use in validation of the ACS. A 
fully validated ACS is essential to much of the IOT&E effort, 
especially in the evaluation of those aspects of F-22 combat employment 
that cannot be conducted in open air testing due to resource, range and 
safety restrictions.
    DOT&E recently provided direction on adequacy of the Air Force's 
latest plan to execute the air-to-air missile test program contained in 
the January 2001 approved TEMP. The Air Force desires to use the 
Instrumented Test Vehicle (ITV), a captive-carry version of the AMRAAM 
missile that captures pre-launch and post missile launch data 
transmitted from the F-22 to the missile, to evaluate weapons 
integration and end-to-end performance in lieu of live firings on a 
number of the missile test scenarios specified in the TEMP. DOT&E is 
requiring that the Air Force validate the efficacy of this approach 
prior to a final decision.
    Based on the very limited number of unguided missile separation 
tests performed to date, we cannot adequately assess the overall F-22 
weapons system performance. Forty-three of the 48 planned missile safe 
separation tests have yet to be completed. AIM-120 guided weapons 
testing in conjunction with the integrated avionics system, has yet to 
commence, as do AIM-9M guided missile shots. Some important fully 
integrated guided missile test launches will not be completed by the 
start of IOT&E and will either be done concurrently with IOT&E or after 
the EMD program ends. DOT&E believes the largest development risk to 
overall F-22 mission effectiveness lies in the integration of the 
advanced avionics suite with air-to-air weapons employment.

                     LOGISTICS TEST AND EVALUATION

    Very little progress was made in accomplishing logistics test and 
evaluation objectives during calendar year 2000. Although some progress 
has been made this year, nearly 3,400 logistics tasks remain to be 
completed prior to the start of IOT&E, and the program is over 2,700 
test points behind relative to the logistics test plan schedule 
established at the beginning of calendar year 2000. Completion of 
remaining logistical tasks prior to the start of IOT&E is a challenge 
if the IOT&E effort is to succeed as planned, especially as it involves 
maintenance of F-22 stealth capabilities during high sortie rate 
conditions and availability of a full-up Integrated Information 
Management System (IMIS) capability upon which a successful IOT&E 
depends. The test plan, however, has gained coherency and benefited 
from the intended dedication of avionics aircraft. The ability to 
produce and sustain the required high sortie rate, develop interfaces 
to service common support equipment, validate specific low-observable 
repair techniques through effectiveness tests, and conduct low-
observable restoration maintenance concurrent with other tasks are 
examples of logistics test and evaluation issues that are pending 
resolution.

                        STEALTH CHARACTERISTICS

    Stealth is one of the major technological features in the F-22 
design and is essential to its intended operational effectiveness. 
Testing of F-22 stealth characteristics has included extensive ground 
and limited flight tests. Both RCS and Infrared (IR) signatures of the 
F-22 have been measured in flight while stability-over-time testing has 
yet to be completed. On January 31, 2001, Aircraft 4004 completed the 
LRIP exit criterion that required initiation of RCS flight test on an 
open-air range. Preliminary data show a direct correlation with 
baseline measurements from ground RCS test facilities and inflight RCS 
imaging techniques, and provide high confidence in F-22 RCS 
predictions. However, due to late aircraft deliveries, a significant 
amount of RCS flight test remains to be completed prior to the start of 
IOT&E. The first fully production representative F-22 RCS test 
aircraft, Aircraft 4008, will not be delivered to the CTF at Edwards 
AFB before December of this year.

                 LIVE FIRE TEST AND EVALUATION (LFT&E)

    The LFT&E program continues to progress in accordance with the 
strategy and alternative plan that DOT&E approved in 1997, although 
some of the testing schedule has slipped. Fifteen of the 21 scheduled 
ballistic tests have been completed. Two of the six live fire test 
series that have not been completed are intended to assess the 
potential for sustained fires. One of these series will investigate 
fire in the wing leading edge using a full-up wing and the other will 
evaluate the effectiveness of the engine nacelle fire suppression 
system given combat damage. Two remaining test series will investigate 
hydrodynamic ram damage to fuel tanks located in the wings and 
fuselage. The other two test series were originally intended to assess 
the capability of the onboard fire protection system in the main 
landing gear bays and the aft wing attach bays. Since the Air Force no 
longer intends to employ fire extinguishers in these bays, these tests 
will not be conducted.
    Live fire testing has led to an F-22 wing redesign that replaced 
selected composite spars with titanium spars. This design change alone 
is claimed by the Air Force to have reduced the vulnerable area of the 
aircraft by as much as 50 percent. The hydrodynamic ram test scheduled 
for early this calendar year is now scheduled for mid-August 2001. This 
test will be an attempt to confirm the survivability of the new wing 
design to this widely experienced damage phenomenon. It is important 
that the upcoming live fire test with high-explosive incendiary threats 
against the F-22 wing be done with flight representative airflows and 
structural loads with the wing properly fixed to the aircraft. Prior 
tests with the wing mounted in a test fixture have shown the potential 
to introduce unrealistic results. A test procedure is in place that 
will permit realistic aerodynamic and structural loadings on the wings 
of the test article. This test procedure is intended to evaluate the 
survivability of the new wing design that was changed as a result of 
poor performance during previous live fire tests started in 1992.
    Live fire testing showed that there is a substantial chance of fire 
from hits on avionics cooling lines in the wing tip avionics bay. The 
fluid used in these pressurized lines is flammable. An automatic 
shutoff valve was added to the F-22 avionics cooling system in an 
attempt to reduce this risk of fire.
    Fire and explosion are the leading causes of aircraft loss, and 
based on existing data for other dry bays, the assessed probability of 
kill given a hit is very high on unprotected bays. Hence, effective 
fire suppression is mandatory to achieve a survivable aircraft design. 
The decision by the Air Force to remove fire suppression systems from 
the main landing gear and the aft wing attachment dry bays, as well as 
other factors, have increased the aircraft's probability of being 
killed given a hit and estimates are now that the vulnerable area is 
some 30 percent higher than the original F-22 specification. The F-22's 
vulnerable area estimates could increase further as a result of the 
remaining tests. The Air Force has revised upward the vulnerable area 
threshold for the F-22. At this time, the aircraft currently meets this 
revised higher vulnerable area requirement.
    The F-22 fuel tanks represent the largest presented area of any F-
22 aircraft subsystem. The original fuel onboard tank inert gas-
generating system (OBIGGS) design could not withstand the F-22's 
vibration environment. Functional testing of the new OBIGGS design 
using the Fuel Systems Simulator needs to be conducted. These tests are 
expected to demonstrate that the new design achieves the inherent 
concentration needed to protect the fuel tanks against explosion. The 
F-22 must demonstrate its fire and explosion survivability prior to the 
decision to enter full-rate production. The vulnerable area estimates 
used by the Air Force assume that the OBIGGS provides the desired 
protection.

                     CONCLUSIONS AND RECOMMENDATION

    As DOT&E has repeatedly stated over the last 3 years in testimony 
before this subcommittee, Air Force efforts to reduce costs and stay 
within the EMD cost cap have consistently resulted in plans that 
accomplish less testing with correspondingly increased development 
risk. These development risks have become greater with elapsed time as 
the cost reduction options become more difficult to implement.
    The Air Force has implemented several test program reductions and 
proposed other reductions. In fall 2000, Air Force schedule estimates 
showed that the previously planned test program could not be completed 
as originally scheduled and that IOT&E could not be started in August 
2002, as earlier scheduled, without clearly unacceptable risks. In 
December 2000, the Air Force briefed DOT&E on a plan that would, after 
cap relief of 1.5 percent, defer the start of IOT&E by 4 months (i.e. 
December 2002), allowing additional time for developmental testing. 
Although DOT&E believed that as much as a 9-month to 1-year delay in 
the start of F-22 IOT&E was needed to complete necessary developmental 
testing, DOT&E supported cap relief and delaying the start of IOT&E. In 
May 2001, an Air Force-sponsored independent Red Team was commissioned 
to assess the executability of the remaining F-22 developmental test 
effort to reduce risk and allow completion of necessary tasks in 
advance of the start of IOT&E. Currently, the Air Force is developing a 
redefined developmental test plan based on an objective IOT&E start 
date of April 2003, with a threshold start date of August 2003. As 
mentioned earlier, the Air Force proposed a change to the live guided 
missile launch program upon which DOT&E has provided direction to 
validate proposed live missile launch alternatives. This proposed TEMP 
change is under evaluation by DOT&E.
    These reductions in developmental test programs have increased the 
risk to successfully completing an adequate IOT&E. Although these 
reductions in test content do contribute to relieving schedule 
pressures, they may not be enough to allow EMD completion within the 
current schedule. Considerable uncertainty remains with the flight test 
aircraft sortie rate, and there is some uncertainty regarding the 
actual delivery dates of the last three flight test aircraft to the CTF 
at Edwards AFB that will permit them to start productive contributions 
to the test program. Therefore, I support removing the cost cap because 
it will help to focus the program on completing adequate developmental 
testing and correcting any deficiencies in preparation for a successful 
and adequate IOT&E.

    Senator Lieberman. The hearing will reconvene. Thanks very 
much for your patience. That should be it for a while on the 
floor. Senator Inhofe, who has been very good to come here 
today, has another meeting that he must go to, so I am going to 
ask him to do his questioning of the two witnesses first.
    Senator Inhofe. I have just a few questions, Mr. Chairman. 
I think Senator Sessions will also be coming over. I do 
apologize for having to leave. In the 1998 Defense 
Authorization Bill we established the development cap for the 
F-22 at $20.4 billion, then we came back later in 2001 and 
raised it by 1\1/2\ percent, which was $307 million, if it was 
determined by the Director, in consultation with certain 
parties, that that be necessary. Of course, they came back and 
said it would be, and now it appears that your position is that 
even with that 1\1/2\ percent it is not adequate. I would like 
you to address that in a little more detail than you did in 
your opening statement.
    Mr. Frame. At the time, we agreed with the 1\1/2\ percent. 
At that time we also thought it would still take not just 4 
months but 9 to 12 months beyond the August 2002 date, so we 
were just looking at the rate of accomplishment of the test 
points, the delays that we had seen historically, and we just 
basically did a fairly straightforward calculation. That took 
us out to July or August 2003 to finish everything. In the last 
year we have made actually less progress than we thought we 
would make a year ago, and based on that I think the time we 
have added has been good, but we are still looking at August 
2003.
    We have deleted some of the test points, and a combination 
of that and the slow progress still leaves us with August 2003 
as our best estimate.
    Senator Inhofe. Can you put a percentage or money with that 
August deadline?
    Mr. Frame. In terms of a percentage, or how much additional 
cost, I think I would leave that to Mrs. Druyun in terms of the 
cost.
    Mrs. Druyun. I think the biggest problem that we suffered 
this past year was just an absence of the right test aircraft 
at Edwards to really make progress with the program. We now 
have five test airplanes out at Edwards. The good news is that 
we decided last year we were not going to send any more 
airplanes out there that were not in the right configuration. 
We would fix them in place and then ship them out.
    We have now five assets. Our last three assets will be 
delivered, test airplanes will be delivered, one in September, 
one in October, and one in December. I track them every single 
month, and if they slip 1 or 2 days, they are in my office 
explaining what the reasons are.
    Senator Inhofe. I have been in the Senate since 1994, and 
prior to that 8 years in the House. It seems, Mr. Chairman, 
every time we develop anything, the C-17, the B-1, the B-2, we 
go through the same thing, and there are always opponents of 
the platforms that are going to try to exaggerate this.
    I do not really see this as all that different than some of 
these that we have had in the past, but as far as delays caused 
by structural problems, you say you are 15.7 percent into that, 
and yet you feel you have had an excessive amount of structural 
problems. What do you predict in the future in that area?
    I think the buckling of the forward tail boom was one of 
them.
    Mrs. Druyun. The ultimate loads testing structurally we 
have completed. Now we are finishing up the local loads 
testing. I believe that the results we have seen to date from 
the ultimate loads structural testing show that the airplane is 
in structurally excellent condition. We have completed the 150-
percent ultimate loads test that were scheduled.
    We had a problem with the test rig that you may recall, 
sir, in which the test rig broke and so we had to finish off 
that last test, and we did complete that about 2 months ago. 
What I find to be interesting is, if you were to go back and 
historically look at structural testing--and I lived through 
the C-17, when we broke the wing, which I found to be a very 
painful part of the development of that aircraft--we have not 
seen any major structural problems in this airplane.
    As a matter of fact, Mr. Marty Meth of the OSD staff 
reported last year that you had an approximately 40 percent 
chance of having some sort of major structural issue getting 
out to the 150 percent ultimate loads testing, and we have 
completed that milestone, and we did not have that sort of 
problem.
    To try to answer your question regarding the EMD cost cap, 
the current cost cap is roughly $20.4 billion. Added to that 
would be the $307 million at 1\1/2\ percent increase, and so 
that would take you out to about, almost $20.7 billion.
    Now, the added time that we need, we have set the objective 
as April 2003, the start-dedicated IOT&E, and we have set the 
threshold at October 2003. I am the first to tell you that the 
April 2003 date is moderate risk. We recognize that.
    I think Mr. Frame feels that it is at least moderate risk, 
and for that reason, as we go through and figure out how much 
additional funds do I need to ask for to complete the 
development program, test runs us about $50 million a month, so 
I am looking to come up with funding that would cover us, 
slipping the start of dedicated IOT&E perhaps as late as the 
July time frame, almost literally on top of each other in terms 
of the dates with respect to dedicated IOT&E start.
    Our objective is to get started in April. If you look at 
the test efficiency of this program, it has not been very good 
in the past. If you look at what we have done in the last 4 
months, having the right assets out there and the right 
configurations, I think that we are now beginning to make good 
headway, but I am still going to ask for an adequate amount of 
funds to cover us for several months beyond April 2003.
    I have discussed this with the Secretary of the Air Force, 
Dr. Roche, and he believes that is a prudent thing to do, but 
at the same time, we also believe getting rid of the cost cap 
on development at this point in time is the right thing to do. 
The airplane is essentially designed. Now we are in the test 
phase. As we find problems, it is typical of testing you find 
problems, you go through, analyze them, and you make your 
fixes, and considering where we are, 95 percent complete, now 
is not the time to skimp on the testing part of the program.
    Again, get it finished up and make those necessary 
modifications to the airplanes that need to be made to ensure 
this airplane meets the operational requirements and its 
suitability requirements as well.
    Senator Inhofe. Do you think we learned some lessons from 
the V-22 that we can avoid?
    Mrs. Druyun. If you look at what we have done on the F-22, 
the major criticism that we have had is that our program is 
very slow. On the F-22 program, safety is our paramount 
concern, and when we do not understand something, we have set 
that test team, all those test assets, we basically have 
grounded them and waited until we understood.
    Last year we had canopy cracks. I did not have good data on 
canopy cracks with respect to this airplane, and we went 
through and did very careful analysis, and it was those sorts 
of things that slowed this program down, but I believe it was 
the right thing to do.
    Mr. Frame. In my view, I think we have stayed very 
carefully away from safety problems. I do not think that we are 
taking any risk with regard to safety. My concern is not 
safety, but the fact that we defer capability. Because of EMD 
cost caps we do not have the money to do the test, or we do not 
have the money to fix the things that we find in the test, so 
it is not just a matter of the testing, it is a matter of 
fixing the things and not deferring content out beyond the 
operational tests.
    Senator Inhofe. I think a distinction should be drawn, Mr. 
Chairman. A lot of times the caps are on because there is this 
feeling that the contractors have to do the testing, and we 
have to make sure we have something that is going to work.
    One last question, Mrs. Druyun. What is the maintenance 
concept for the F-22? At what stage will the Air Force develop 
a public depot maintenance capability?
    Mrs. Druyun. That is an excellent question, sir. If you 
went back to the joint estimate team of 1997, one of the items 
laid into the joint estimate was that they would basically 
defer setting up a depot capability until much later in the 
production of this airplane, really more like the year 2011 
time frame, and that is one of the challenges with the cost cap 
in this program, and that cost cap has laid in place. It was on 
the basis of what the JET came forward with, which was 
deferring setting up a depot capability.
    Senator Inhofe. Deferring for how long?
    Mrs. Druyun. Making a decision perhaps in 2004, but 
actually not laying money until much later in the program. It 
could be as late as 2011.
    Senator Inhofe. Do you mean keeping it contracted out for 
maintenance purposes until 2011?
    Mrs. Druyun. Yes, sir, that is correct, and what they were 
trying to do was not duplicate much of the test equipment, the 
support equipment. As they started shutting down a production 
line, they would take all of that equipment and ship it to the 
depot that was going to be activated.
    Recognizing that we have depot legislation that sets up the 
50-50 requirements, we have to obviously be within the strict 
limits of the law, and so this is another area where that cost 
cap for production was based on deferring depot capability if 
we have to. I think that we are very actively looking at moving 
up depot activation. That cost cap for production is going to 
have to increase to allow us to be able to begin activation of 
a depot much sooner, and it is just a rough estimate of at 
least $2 billion.
    Senator Inhofe. I do not think anyone is going to argue 
with you as far as the core aspect of this vehicle. I have been 
disturbed for quite some time about the length of time it takes 
to get our good, modern, updated platforms into a public depot. 
I hope that you do not labor under the misconception that the 
administration's request to do away with the 50-50 is going to 
be fitting, because I do not believe it is going to be.
    Mrs. Druyun. I agree with you, sir.
    Senator Inhofe. I do not like the idea of having to rely 
upon a national security waiver as a way around this. I would 
like very much to visit with you further about that, because I 
am very much concerned about doing all we can to get this in 
production, but I also want to make sure that we have more 
capability to maintain it as early as possible.
    Mrs. Druyun. That is where we could come back in and 
basically ask for cap relief in production so that we could 
begin that activation sooner, because when we set that cap it 
was with certain understandings.
    Senator Inhofe. Thank you. Thank you, Mr. Chairman.
    Senator Lieberman. Thank you, Senator Inhofe. Thanks for 
being here.
    Mr. Frame, I wonder if it is all right if we go ahead with 
the questioning, and we will enter your full statement into the 
record. When we are through with questioning, if there are 
parts of your testimony that you want to stress, I will 
certainly give you the opportunity to do that.
    Let me begin by reference to your prepared testimony. At 
page 5, you referred to the flight sciences testing, and you 
say that, ``the completion of required testing to provide 
adequate flight envelope to start IOT&E at the threshold start 
date of August 2003 is high risk.'' Do I understand that 
correctly, that you are not saying that August is----
    Mr. Frame. The reason I say it is high risk is that we have 
only one aircraft. If you have it down for any reason, that is 
a day-for-day slip. We have some plans for efficiency and 
redoing some of these, but there is not a lot of slack. With 
only one aircraft, to expect for 2 years for this thing to 
operate without any problems I think is just----
    Senator Lieberman. So it is high risk in the sense of 
future----
    Mr. Frame. I do not say it is high risk in terms of its 
eventually getting to the performance, although we have only 
accomplished about 40 percent of the flight sciences, which is 
structures, flying qualities, and engine. We have only about 40 
percent of that done, and we are going to do the more difficult 
part now. What we have seen so far is actually pretty good.
    There are some anomalies that we need to work through, but 
in terms of performance, flight performance, it looks pretty 
good. The issue is, we have just one test article to get us 
there to 2003's test start.
    Senator Lieberman. According to that standard, what would 
be a date by which risk would be lower?
    Mr. Frame. I do not think that you could add 4 months and 
say the risk is now low, because you have just one test 
aircraft. I think the Red Team said that there was no way of 
making that low risk.
    Mrs. Druyun. Yes. It is test asset constrained to one 
airplane, because it is fully instrumented to be able to do all 
of the flight sciences testing, and for that reason it is a 
high risk, and it will remain a high risk, but it is something 
that we watch very carefully.
    Senator Lieberman. Mrs. Druyun, today you indicated in your 
testimony that the initial goal for operational testing by 
August 2002 was now going to slip to April 2003 and possibly to 
July of that year.
    Let me ask you what gives you confidence that operational 
testing can begin then, in the face of what would appear to be 
annual under-performance of the F-22 testing effort compared to 
the plan? In other words, what is the basis of that projection, 
altered as it is, that you have made today?
    Mrs. Druyun. The basis of that projection is, today I have 
five test airplanes physically at Edwards in the right 
configuration, very important. By the end of this year, I will 
have my last three development birds physically at Edwards, and 
in testing.
    Today, we are achieving an average of 13 test points per 
hour, which includes reflies and going through any of the 
anomalies. I have gone through this very carefully, and I have 
reaffirmed once again that this is consistent with the planning 
factors that we laid in place to complete 1,530 hours to get us 
to the start of dedicated IOT&E.
    Our sorties average 2.2 hours. We fly 3 days a week. I also 
have a buffer built in where I can fly up to 3 hours per 
sortie, because I have dedicated fuel tanker support at 
Edwards, and we also have the ability as well to fly on 
Saturdays. If I were to look at what we have done since the end 
of March, we have flown an average of five sorties, 13 test 
points per hour. We have been flying an average of 2.21 hours 
for each one of our sorties. I have flown as high a number of 
sorties as 10 a week.
    So I feel like what has been our principal problem has been 
that we have been asset-constrained. I just have not had the 
right flight test airplanes and the right configuration, and we 
are finally overcoming that problem.
    Senator Lieberman. Let me ask the question whether it makes 
any sense to delay the schedule that you have described here in 
the interest of reducing risk by allocating more testing time.
    Mrs. Druyun. I believe right now, sir, that my ability to 
meet a start date of April 2003 is still a moderate risk, and 
that is why, as we go forward through our DAB process, and as 
we go through our budget process, we are looking at building in 
adequate margins to help lower that risk with respect to how 
much money I need to successfully complete the development 
program.
    Senator Lieberman. So you are going to obviously keep 
evaluating this, I presume?
    Mrs. Druyun. The Red Team that we laid in place, headed up 
by a former chief tester within OSD, he is going to come back 
and do an assessment on a quarterly basis, and we will continue 
to work very closely with Mr. Frame's organization so that we 
stay as close together on this as possible.
    Senator Lieberman. Let me go on to a few other questions 
relating testimony that you have given today to testimony that 
Secretary Delaney gave last year. There have been some 
significant changes. This is not necessarily bad, but I want to 
ask you to explain the changes a bit more.
    Last year, Secretary Delaney, in response to a question I 
asked about whether the Air Force and the contractor team might 
be foregoing some investments during EMD that could yield a 
recurring savings during production responded, ``Congress take 
no action at this time to delete or amend the cost cap for 
EMD.''
    In the end, the Air Force did ask Congress to increase the 
EMD waiver of 1 percent to the level of 1.5 percent and that 
was included in last year's final Authorization Act.
    Now, you have a DAB decision on LRIP where the projected 
production cost estimates for the program do not permit the 
Secretary of Defense to certify that the Air Force can buy the 
program within the cost caps. You have now come in and asked to 
defer three of the planes to provide more funding to achieve 
some of those cost reduction opportunities. I want to give you 
an opportunity to explain in a little more detail than you have 
in your opening statement about why that change of direction.
    Mrs. Druyun. If I could take you back, as we were preparing 
for the LRIP decision back last fall, that was scheduled, as I 
said, either the latter part of December 2000 or the early part 
of January 2001, and it obviously--we could not hold that DAB 
until we successfully completed the last of the criteria, and 
that was the successful flight of aircraft 4006, which we 
demonstrated the first week of February.
    But as we were preparing for the DAB, the Air Force cost 
analysis group updated its detailed cost estimate, and at that 
time it was very clear that we had exceeded the cost cap 
established for production, and the cost cap for production is 
$37.6 billion.
    The Air Force estimate was that we had exceeded it by about 
$2 billion, and it became very clear to us that we needed to 
make much more investment in the production area to bring down 
the cost of this airplane. It also became very clear to us when 
we dug through the data that 60 percent of this cost, as I 
explained earlier, sir, is with our subcontractors.
    If you look at the industrial base over the last few years, 
it has greatly weakened. Our subcontractors are losing 
confidence in this program, because we originally were going to 
make an LRIP DAB decision in 1999. That was postponed to 2000.
    We had the change of administration, and the strategic 
review that took place, and basically all of this has been 
pushed out toward the end of this fiscal year, and our 
subcontractors are very reluctant. They will not make any 
investments in this program because they do not feel it is 
right now a good investment until they know whether we are 
going to get into low rate production, which is the reason that 
led us to conclude that rather than buy 16 airplanes in the 
2002 budget, it made more sense to buy 13 airplanes, and by 
buying three fewer airplanes, we were able to carve out $85 
million for PCRPs, production cost reduction initiatives that 
the contractors have basically identified.
    It also was clear to us that there were a number of things 
we had to defer in Lot 1. We did not have enough money to pay 
for them. Contractors made up-front investments for the early 
production assets that are currently in build, or the 
preproduction assets that will be used for tests that are 
currently in build, and I had to ask the contractors--they 
floated the bill for this--if they would float it for another 
year so that we could buy the required assets under the Lot 1. 
When I look at the amount of money I had to defer, I had about 
$163 million worth of deferment, I wanted to add PCRP on top of 
that, another $85 million, which now brings my PCRP investment 
to $150 million.
    Then for Lot 2, I am seeing cost growth, and it is 
principally amongst the subcontractors, and that cost growth is 
in the neighborhood of at least $150 million, and so when I 
added all of that up, it amounted to about $398 million. When I 
looked at the cost of 16 airplanes versus 13 airplanes, we were 
able to offset those costs and really get a much healthier 
production cost reduction initiative program going, where we, 
the service, paid for it, not the contractors.
    I think that is the major change that took place last year 
from when Dr. Delaney was testifying on the program. A lot of 
things have happened that very much affected our subcontractor 
base, which really drove us to sit back and reevaluate where we 
were going, and it really makes sense to defer buying 
airplanes, those three airplanes, and push them out later on so 
that they will be cheaper when we pick them up at a later time 
frame, to get those initiatives in up front sooner rather than 
later.
    Senator Lieberman. You are confident, based on what you are 
hoping to do here, that in fact the later purchases of the F-
22s will be cheaper?
    Mrs. Druyun. Yes, but I would tell you, sir, that we still 
have a challenge with respect to the issue of cost. Our 
estimate back last October was, we were about $2 billion out of 
bed. We are in the process right now of going through another 
very detailed estimate to see exactly where we are. I suspect 
that we are probably more.
    It is probably a higher number, and for that reason Dr. 
Roche, our new Secretary, has basically asked us to take a 
fresh look at the whole issue of cost and how we come up with a 
higher fidelity cost estimate, and so one of the things that we 
are looking at very clearly in terms of some of the 
alternatives is to really focus on what I would term 
predictability. I think we have a much better understanding in 
terms of predicting the cost over the first five lots, and 
really getting a learning curve established.
    Something we set in place back in 1997 is called the target 
price commitment curve, and this is a contractual curve we set 
in place where contractors are allowed to recoup the 
investments they have made to bring down the cost of producing 
this airplane. I am tracking that very carefully, and I will 
tell you for PRTV-1, PRTV-2, and for Lot 1, I am within that 5-
percent band that we have established.
    We must stay focused on the next lots, 3 and 4, so that I 
can have a realistic chance of bringing it within the cost caps 
established by Congress, but I would also tell you, sir, there 
are variables in there. One is, when do I activate a depot, and 
we had deferred that. If we bring that up sooner, that is 
obviously going to affect the cost cap. We are going to 
probably defer by at least 2 years a multiyear procurement. 
Multiyear procurement does save money, and so there are a 
number of variables that would affect that.
    Senator Lieberman. Let me come back just to clarify, in 
going from the 16 planes acquired down to 13, we are deferring, 
not canceling those?
    Mrs. Druyun. No, we are strictly deferring.
    Senator Lieberman. You said you are going to take a new 
look at the Air Force numbers, which are somewhat over $2 
billion for the cost of production. Am I right that the CAIG 
office in the Pentagon has now projected $9 billion over the 
production cost?
    Mrs. Druyun. The OSD CAIG has consistently been about $9 
billion. One of the new techniques that we have both been 
looking at, rather than a point cost estimate, is looking at 
really more of a range from the low confidence to a high 
confidence. You would find there is not a lot of difference in 
their baseline program. Where the significant difference occurs 
is the amount of credit that the OSD CAIG gives us with respect 
to the production cost reduction initiatives.
    I look at a return on investment of about 7 to 1. They are 
crediting me with about 4.6 to 1, and that is where a large 
portion of our difference is. We are very early in actually 
producing airplanes, and there is a question of establishing 
where your learning curve is, and how you track down that 
learning curve. I personally believe, in order to get to a high 
fidelity estimate, it is going to take us at least 2 more 
years, where we can stand up with confidence and say we believe 
this is the point estimate to complete this program.
    Senator Lieberman. Does the review you referred to, that 
Secretary Roche has asked you to make, based on the higher than 
initially projected cost estimates, include any consideration 
or reconsideration of the target buy of 339 planes?
    Mrs. Druyun. No. Our objective is still to buy 339 
airplanes. Clearly, if you were to talk to the user, that 
number was very carefully put together looking at the threats 
and the capability that they need to be able to succeed in this 
mission.
    Senator Lieberman. Obviously, we will want you to keep us 
posted on the varying estimates of cost, particularly as they 
have seemed to have diverged between the Air Force and the 
CAIG, and needless to say, that will have an impact on the 
overall budget request over the years ahead for the Air Force 
and the Pentagon generally.
    Let me come back to the other significant new position that 
the Air Force is taking this year, and that is, last year 
Secretary Delaney said Congress should not delete or amend the 
EMD cost cap. This subcommittee was very focused on that 
because of our concern that the cost cap, while it had some 
value as an inhibiter of runaway cost, nonetheless was 
inhibiting adequate testing.
    However now, this year you have taken the position that 
today the EMD cost cap should be eliminated. The direct 
question I want to ask is, if Congress were to eliminate the 
EMD cost cap, can you assure the subcommittee that the Air 
Force will not reduce test program content in the absence of 
the cost cap?
    Mrs. Druyun. Yes, I can very clearly say that we will 
continue to work with the OSD test and evaluation organization. 
I think that 1,530 hours, our Red Team looked at that and said 
it basically is derived out of the original estimate back in 
1997 of 1,970 hours.
    Today, we have specifics laid out as to what needs to be 
done. We have detailed what we call Test Information Sheets 
(TISs), and test is obviously paramount in this program. We 
need to successfully get through the test period and make those 
changes to the airplane that are identified that need to be 
made to ensure they meet the requirements, and that is 
operationally suitable and effective, and we are not here to 
skimp on tests, sir.
    Senator Lieberman. Mr. Frame, I know you do not get into 
the cost estimate business, but do you want to comment on the 
exchange we just had about the elimination of the EMD cost as 
it affects testing, which clearly is your focus?
    Mr. Frame. I think the EMD cost cap does two things. First 
of all, it limits how much you can spend on a per-month basis, 
and it also puts a target date at the end, and you cannot go 
beyond that and still be within the cost cap. Both of those 
tend to restrict the conduct of tests, besides constricting the 
conduct of the tests.
    When you find things that go wrong, you need time and money 
and resources to go ahead and do the analytic and engineering 
work to fix those things. It is not just a matter of deferring 
the fixes: because then we eliminate the capability. There are 
a lot of minor capabilities that keep slipping. We get through 
a test, we say, well, we cannot do this, we will defer this 
until after IOT&E. Each one of those reduces the capability of 
the aircraft a little bit, and at some point we get really 
concerned, so I think the cost cap should go.
    Senator Lieberman. Thank you for that answer. We worry 
about this because we want the plane to be up to our 
expectations, and safe, but the other concern just from a cost 
point of view is that if we find out later on, because we have 
not adequately tested earlier, that we have a problem, 
presumably that ends up costing us a lot more.
    Mr. Frame. That is true. The sooner we find these things 
the easier it is to get them corrected. We had some live fire 
issues found early on in the tests. They have been 
incorporated. They are now in production. Those are the kinds 
of things we want to do more often.
    Senator Lieberman. Thank you.
    Mrs. Druyun, I am going to invoke the ghost of Secretary 
Delaney again. He is hovering here today. He testified last 
year that the Air Force had found efficiencies within the F-22 
program that would enable the program to reduce total test 
hours to 3,757, which represented the decline of about 200 test 
hours from the year before.
    Do I understand you are proposing again this year to reduce 
the total number of test flight hours for the F-22 program?
    Mrs. Druyun. I am not familiar with what Dr. Delaney 
specifically had to say, but I can go back to the original 
number of test hours estimated as part of the joint estimate 
team back in 1997, and for mission avionics their estimate was 
1,970 hours. At the time they made that estimate, we did not 
have detailed TISs. Today, we have very detailed TISs that have 
been developed and 1,970 hours was a number basically that was 
a parametric estimate.
    Today, we have a much finer fidelity in terms of that 
estimate. I asked the Red Team to look at that area and they 
basically said that there is very good correlation between the 
two, and that the 1,970 hours really, by the time you wrote it 
all down as to what you needed to do, as opposed to what you 
thought you would do, now translates to approximately 1,530 
hours of testing.
    Senator Lieberman. I do not want to misunderstand you. Is 
that the comparable figure to the 3,757 hours that the Air 
Force gave us as a total test hours plan last February?
    Mrs. Druyun. There was a second piece to that. It was 
called 1,787 hours for air frame and system test. This is 
basically the flight sciences arena, and I do not believe--and 
Lee may be in a better position to respond, but I think that 
that pretty much remains intact.
    I think we have a lot more definition to that as we have 
built TISs.
    Senator Lieberman. Help me understand if I am using the 
right number. I thought 3,757 was the number the Air Force said 
last year was the total test hours planned. Has that number 
changed any this year?
    Mr. Frame. It has. The previous estimate, at least for 
avionics, was 1,970, and that is now down to 1,530.
    Now, part of how they intend to achieve that is, they look 
at running many of the different systems on the aircraft on a 
different sortie, getting test points on multiple systems. 
Instead of doing the radar and then having another flight for 
the communications they can do some parallel work and institute 
some savings. We are looking at that. We think they can 
accomplish some of that, but that does represent some reduction 
in the actual flight hours.
    Senator Lieberman. Mr. Frame, do you have an opinion as to 
whether those changes are appropriate, or whether they increase 
risk unacceptably?
    Mr. Frame. I think they increase risk. I am not sure 
whether they increase risk unacceptably, but what it means is, 
if I am trying to do two things at once and I cannot get one 
done, or there is a problem, I may end up having to redo a 
test.
    One of the areas of the flight sciences is maybe we skip 
test points. Instead of doing three test points in a series we 
go from the first one to the third one because we are 
comfortable with the modeling in between. But if we find in the 
test that there is something we do not understand, we may end 
up having to go back and redo that missing test point and that 
would actually take us more time. There is some increase in 
risk with skipping test points and I think that is part of the 
tradeoff that the Air Force is trying to do to keep this thing 
on schedule.
    Senator Lieberman. Mrs. Druyun, did you want to comment?
    Mrs. Druyun. Yes. Last year, Dr. Delaney did state that our 
target for a number of test points that we could accomplish per 
sortie was 11.3. Our average today is 13 test points per hour. 
I would tell you we actually have built a fairly elaborate 
burn-down schedule for avionics, and we do have approximately 
33 percent of the time set aside for anomaly factors and about 
another 30 percent factor set aside for reflights that one is 
going to have to go through.
    That is something I asked the Red Team to look at, because 
in my opinion, they have tremendous test background. I felt 
that they were in the best position to advise me as to whether 
or not 1,530 hours looked to be reasonable, and they think it 
does look to be reasonable. It does have risk, and as I said 
before, we are going to do what is necessary to prove that this 
airplane can meet its mission.
    Senator Lieberman. Mr. Frame, that completes the questions 
I have. I wonder if there is anything in your testimony that 
you did not get to deliver that you would like to go back to at 
this point, and we will see if Mrs. Druyun wants to respond to 
what you say.
    Mr. Frame. I wanted to mention that I think it is very 
important to realize that the culmination of these development 
testing are the guided missile flights. Those are the important 
tests that look at the aircraft aerodynamics in terms of being 
able to get the missile launched, the ability to support the 
missile, the avionics ability to track the targets, and support 
the missile throughout engagement.
    That is a very important part of the test program, and we 
have yet to do one of those. We have only done a few, I think 
43 of the 48 separation tests remain to be conducted throughout 
the envelope to make sure the missile can be launched 
satisfactorily. We have yet to do any of the guided missile 
launches. I think the first one is due next month, so that is 
just beginning to get started.
    With regard to the avionics, we have only done about 10 
percent of the overall avionics flights, so there is a lot more 
work to do there. I think the fact that the bulk of and more 
difficult part of the testing is yet to be done is one of the 
things that makes us a little cautious about achieving 
particular IOT&E dates.
    Senator Lieberman. Mrs. Druyun, do you want to respond or 
add anything for the record?
    Mrs. Druyun. With respect to the issue of missile testing, 
I will tell you that we are working very closely with Mr. 
Frame's office, and if we need to add more tests for the 
missiles, we have actually built that into our schedule. I 
think right now there is concern about seven of our captive 
carry tests, whether or not they will be adequate, and I am 
here to say clearly if they are not adequate, we are prepared 
to put the right assets in and actually do the missile firings.
    There are a number of areas such as, for example, the wing 
roll-off that was mentioned. I just wanted to say very clearly 
that this is not a wing-drop issue like what was seen in the F-
18. There has been a lot of confusion on that. The aircraft 
basically always rolls 5 to 10 degrees to the left when you 
enter the transonic region, and that is between .9 and 1.1 
mach.
    We can compensate via the leading edge flap software fix. 
It is totally transparent to the pilot, and as these issues are 
identified we have, I think, a very robust team with Lockheed 
and Boeing to work through each one of those issues and 
understand them and make whatever changes or fixes need to be 
made. It is something that we will continue to work very 
closely with our test organization and with Mr. Frame's 
organization.
    Senator Lieberman. I thank you both for your testimony.
    Mr. Frame, it has been a very impressive debut for you 
before the subcommittee. This subcommittee has relied on the 
OT&E office for the kind of independent evaluation that you not 
only give folks at the Pentagon, but you give to us. Mrs. 
Druyun, we thank you for your hands-on strong leadership. I 
think I feel confident in speaking for Senator Santorum in 
saying that we understand the F-22 is the top acquisition 
priority of the Air Force.
    We feel strongly that the country needs this plane, and we 
just want to stay involved in oversight as well as 
authorization to make sure that it comes out right. Thank you 
for a very good exchange today that I think helps the 
subcommittee fulfill its responsibility.
    The record will stay open for a week if any of the other 
Members want to ask you questions for the record or you want to 
submit additional testimony yourselves.
    The hearing is adjourned.
    [Questions for the record with answers supplied follow:]

              Questions Submitted by Senator Rick Santorum

                         GENERATED COST SAVINGS

    1. Senator Santorum. Mrs. Druyun, how much money did lowering the 
quantity of planned aircraft purchases from 16 to 13 in fiscal year 
2002 generate? How much of this money will go to the incorporation of 
Production Cost Reduction Programs (PCRPs), and what is the expected 
return-on-investment for these programs?
    Mrs. Druyun. Savings of approximately $398 million were generated 
allowing the Air Force to fund final negotiated costs for 13 aircraft 
and to invest a projected $85 million in Producibility Improvement 
Projects (PIPs). While the exact return-on-investment is unknown, 
approved PIPs to date have yielded an  18:1 return.

                     EXCEEDING THE CURRENT COST CAP

    2. Senator Santorum. Mrs. Druyun, the written testimony indicates 
that both the Air Force and the Department of Defense cost estimates 
for production of 333 F-22 aircraft exceed the current production cost 
cap of $37.5 billion. The Air Force estimate has been reported to be 
$2.0 billion over the cost cap and the Department's estimate has been 
reported to be $9.1 billion over the cap. Are there differing 
assumptions in the development of these estimates? Did either or both 
of these estimates presume savings achieved by congressional approval 
of a multiyear production program? What steps are being taken to 
reconcile the significant differences between the two cost estimates?
    Mrs. Druyun. The primary differences between the Air Force and OSD 
cost estimates are with assumptions regarding out-year cost reduction 
initiatives. While both estimates include projected multiyear savings, 
differences remain in other key areas such as return-on-investment for 
producibility improvements. We are continuing to work closely with the 
OSD Cost Analysis Improvement Group (CAIG) to better understand the 
differences in our estimates.

               FORTY PERCENT CHEAPER TO OPERATE THAN F-15

    3. Senator Santorum. Mrs. Druyun, previous Air Force witnesses have 
testified that the F-22 will be 40 percent cheaper to operate than a 
comparable number of F-15s. Is this still a valid number? Considering 
the additional requirement to maintain the stealth characteristics of 
the F-22, how is a savings of this magnitude achievable?
    Mrs. Druyun. The current O&S estimate for the F-22 is 28 percent 
less than a comparable number of F-15s. This estimate does include 
increased costs associated with F-22 stealth maintainability; however, 
these costs are more than overcome by the fact the F-22 is more 
reliable, maintainable, and deployable that the F-15.

               NECESSARY TO RETAIN ADEQUATE TEST CONTENT

    4. Senator Santorum. Mrs. Druyun and Mr. Frame, it appears from 
your written testimony that you both feel the modified test program 
being presented today is not executable within the statutory 
development cost caps, even with the 1\1/2\ percent relief allowed to 
the cap in last year's legislation. If this is true, what would you 
propose as necessary to retain adequate test content, yet maintain 
fiscal discipline within the program?
    Mrs. Druyun. At this time, I would recommend the F-22 EMD cost cap 
be repealed. The EMD cost cap has been an effective tool in focusing 
management attention to control F-22 development costs. With the 
majority of the development program complete, the remaining effort 
principally involves testing. Retaining the EMD cost cap at this point 
could constrain the Air Force's ability to complete all necessary 
testing required to ensure the F-22 safely and effectively enters 
dedicated operational test and evaluation. Even though I strongly 
recommend the EMD cost cap be eliminated, let me assure this 
subcommittee that the F-22 team remains firmly committed to cost 
control. Absent an EMD cap, cost control pressures still exist for a 
few reasons. First, this is probably the most reviewed program in the 
Air Force. I personally conduct monthly execution reviews to monitor 
cost performance. Second, I conduct semi-annual F-22 Chief Executive 
Officer meetings to ensure top program challenges such as cost 
performance receive the highest level of corporate attention. Third, at 
our Quarterly Defense Acquisition Executive reviews with the Office of 
the Secretary Defense, the focus is on cost performance. Fourth, the 
government grades the contractor on how well they maintain cost 
performance as part of the award fee process. Finally, the Contractor 
Performance Assessment Report (CPAR) process provides annual grades to 
the contractors on their cost performance, which serve as an input for 
future DOD source selections. I'm confident the above tools give the 
Air Force and the contractor ample influence and incentive to control 
program costs.
    Mr. Frame. The remainder of the engineering, manufacturing, and 
development phase should be focused on ensuring the weapons system 
performance necessary for a successful initial operational test and 
evaluation. The best way to maintain adequate test content in the 
remaining development test and evaluation is to encourage an ``event-
driven'' decision to enter initial operational test and evaluation, 
that is, to enter operational testing when performance is stabilized 
and ready to demonstrate required capability. The recent modification 
of the developmental test and evaluation plan is adequate to do that, 
though there are inherent risks. Any future modifications to the scope 
of developmental test and evaluation would be judged on the basis of 
preparing the system for entry into initial operational test and 
evaluation. We look to conduct a rigorous operational test of the 
version of the F-22 weapons system that is intended to be purchased. 
The current developmental test is vital to ensure that pilots and 
maintenance personnel can operate safely in the intended operationally 
realistic environment.

                   RISK OF OTHER STRUCTURAL PROBLEMS

    5. Senator Santorum. Mrs. Druyun, with fatigue testing currently at 
15.7 percent of one fatigue life, what is the risk that other 
structural problems will be discovered that could impact the test 
progress? Does the restructured test plan have any provisions for 
additional structural problems that may be discovered?
    Mrs. Druyun. The risk of a major structural issue during fatigue 
testing is low. The F-22 test program has provisions to address minor 
technical issues should they arise; however, a major structural failure 
would require a reassessment of the existing test program.

                       ADEQUACY OF NEW TEST PLAN

    6. Senator Santorum. Mr. Frame, there is a statutory requirement 
for the Secretary of Defense, before the LRIP decision, to certify 
``that the test plan in the engineering and manufacturing development 
phase is adequate for determining the operational effectiveness and 
suitability of the F-22 aircraft.'' In your opinion, is the new, 
reduced level of developmental testing being presented by the Air Force 
today, if successfully executed, adequate for entry into initial 
operational test and evaluation?
    Mr. Frame. The criterion for successful execution of the modified 
developmental test plan is entry into initial operational test and 
evaluation with the capability to complete required air superiority 
missions, described in the operational requirements document. The 
modified test plan presented by the Air Force has the potential to 
produce such a capable weapons system for entry into initial 
operational test and evaluation. The new plan is heavily success 
oriented. We believe that the start of initial operational test and 
evaluation with a weapons system capable of fulfilling the validated 
operational requirements is more likely to be August 2003, as opposed 
to the Air Force's planned date of April 2003.

    [Whereupon, at 4:21 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2002

                              ----------                              


                        THURSDAY, JULY 19, 2001

                               U.S. Senate,
                           Subcommittee on Airland,
                               Committee on Armed Services,
                                                    Washington, DC.

                 ARMY MODERNIZATION AND TRANSFORMATION

    The subcommittee met, pursuant to notice, at 2:32 p.m. in 
room SR-222, Russell Senate Office Building, Senator Joseph I. 
Lieberman (chairman of the subcommittee) presiding.
    Committee members present: Senators Lieberman, Ben Nelson, 
Inhofe, and Santorum.
    Majority staff members present: Daniel J. Cox, Jr. and Arun 
A. Seraphin, professional staff members.
    Minority staff members present: Ambrose R. Hock and Thomas 
L. MacKenzie, professional staff members
    Staff assistants present: Gabriella Eisen and Kristi M. 
Freddo.
    Committee members' assistants present: Frederick M. Downey, 
assistant to Senator Lieberman; William K. Sutey, Sheila 
Murphy, and Eric Pierce, assistants to Senator Ben Nelson; 
Brady King, assistant to Senator Dayton; Christopher J. Paul, 
assistant to Senator McCain; John A. Bonsell, assistant to 
Senator Inhofe; George M. Bernier III, assistant to Senator 
Santorum; and Derek Maurer, assistant to Senator Bunning.

   OPENING STATEMENT OF SENATOR JOSEPH I. LIEBERMAN, CHAIRMAN

    Senator Lieberman. The hearing will come to order. I thank 
everyone for being here. Today, we are going to review the 
status of Army modernization and transformation. I want to 
welcome our two witnesses, Lt. Gen. Paul Kern, Military Deputy 
for Acquisitions, Logistics, and Technology; and Major Gen. 
Bill Bond, Director of Force Development.
    I appreciate that you are here. I want to begin by 
expressing my admiration for General Shinseki and other leaders 
of our Army, including the two who are with us, who, in my 
estimation, really have set the pace for transformation for the 
other military services and the Department of Defense at large. 
This subcommittee has been and will continue to be firmly 
behind your effort. The Army has undertaken an ambitious task 
here to create a transformed Objective Force beginning in 2010, 
to field six to eight Interim Brigade Combat Teams, and to 
recapitalize and selectively modernize a large part of heavy 
Legacy Force which the country must continue to rely on for the 
next 25 years. Unfortunately, I am concerned that the Army has 
not been adequately supported in the budget proposed by the 
Defense Department this year. In last year's budget request, 
the Army buying power actually dropped over 1\1/2\ percent from 
the year before. In this year's budget, it appears the Army 
modernization funding has once again decreased in real terms. 
When you factor in inflation and factor out the money for the 
programs transferred to the Army from the Ballistic Missile 
Defense Office (BMDO), it looks to me like Army procurement has 
actually decreased by $630 million from last year's level. The 
research and development account is only slightly better with 
an increase of $190 million. It is becoming increasingly clear 
that a large part of the Army's efforts to modernize and 
transform have to be self-financed.
    Last year, this committee, I am pleased to say, tried to 
help. We added $1.1 billion to the Army modernization accounts, 
all but $14 million of which was for items that were 
specifically on the Army funded requirements list. Among those 
were the Army's top three unfunded requirements, which are 
Future Combat System R&D, the Wolverine Heavy Assault Bridge, 
and the Grizzly Tactical Breacher. Unfortunately, in 
conference, the Grizzly was dropped, but we were able to add 
$650 million to accelerate the second Interim Brigade Combat 
Team. At the end of the conference, the Army received a 
modernization plus-up of $1.25 billion. That is a measure of 
the extraordinary leadership of my predecessor as chairman of 
the subcommittee, Senator Santorum. That is going to be a hard 
act to follow. What a difference a year makes. While the 
overall defense budget was increased, this year's Army 
modernization accounts, as I have said, are worse off than they 
have been. I continue to believe that we need to spend more on 
defense. The military services are underfunded, particularly 
the Army. It is obviously more important than ever that we 
ensure that scarce resources are allocated to those systems and 
programs that contribute the most to transforming the Army to 
meet the emerging threats, while maintaining overmatching 
capabilities against the current ones.
    Accordingly, the subcommittee today seeks to understand the 
Army modernization and transformation requirements, the major 
programs and initiatives to fulfill those requirements, and the 
availability of the necessary funding to do so. Within this 
overall context, the subcommittee is particularly interested in 
the following areas: an update on the most promising Objective 
Force technologies which will most likely require further 
development and funding in the near term; an update on the 
Interim Brigade Combat Teams, with emphasis on Interim Armored 
Vehicle production and testing, including the status of the 
side-by-side comparative evaluation and initial operational 
test and evaluation, and an update on the recapitalization and 
modernization of the Legacy Force with specific emphasis on 
aviation, armored systems, trucks, and digitization. I suppose, 
more broadly, we need to understand how the Army intends to 
prioritize among the competing recapitalization, modernization 
and transformation demands in the absence of greater resources.
    I said in the absence of Senator Santorum, at our first 
hearing, what a pleasure it has been to work with him. It has 
been 5 years, I think. When control of the Senate changed, I 
said I had a reaction to the subcommittee change-over, which 
was that nothing would change except the title of the Chairman. 
He did point out to me quickly that I had to do more work. In 
any case, I am delighted to introduce the ranking member, 
Senator Santorum.

               STATEMENT OF SENATOR RICK SANTORUM

    Senator Santorum. Thank you, Mr. Chairman. I look forward 
to working for you for the next year and one-half. I want to 
say that it has been a pleasure working with you, and I would 
just start off agreeing with everything that is in your opening 
statement. I think you have hit the nail on the head.
    First of all let me welcome General Kern and General Bond. 
Thank you for coming in and testifying. We have a lot of 
concerns on this subcommittee about the Army's ability to fund 
what you say you want to do. Let me just be very clear about 
that. I think Senator Lieberman has laid out the concerns about 
recapitalizing, modernizing, maintaining the Legacy Force and 
funding the interim brigades, much less doing the kind of 
investment that is going to be necessary to reach any kind of 
Objective Force in any kind of realistic time frame. On top of 
that, I have serious questions about Army aviation and where 
that goes and how that fits into this transformation. I have 
serious concerns about OSD's commitment to this transformation. 
So, I see this as a very serious hearing and a very serious 
discussion that must be had as to how we are going to get from 
where you are to where you want to go.
    I don't see how, what you have on the table and how you 
suggest your funding, that gets you there. I think you have too 
many balls in the air and I don't know how you will fund them 
all. That is a decision that this subcommittee obviously wants 
to help you with. We are not here to take shots. We are not 
here to pick winners and losers. I think the chairman is very 
clear. We want to work with you. We are very supportive of this 
transformation. I am not saying be less bold. Maybe what I am 
saying is that we have to be more bold. But the way I see this, 
from a budget standpoint, resource standpoint, whatever it is, 
I don't see how this occurs. I don't see how you get there, and 
I am anxious to hear, as Senator Lieberman laid out, how these 
different aspects of Army transformation are going to be funded 
and accomplished in any way close to the timeframe that the 
Army projects it to be done. Thank you, Mr. Chairman.
    Senator Lieberman. Thank you, Senator. Senator Inhofe, 
would you like to make an opening statement?

              STATEMENT OF SENATOR JAMES M. INHOFE

    Senator Inhofe. I would, Mr. Chairman. We have had so many 
hearings recently and, of course, we have had a lot of missile 
defense hearings, but we have also had readiness hearings. I 
spent 5 years as Chairman of the Readiness and Management 
Support Subcommittee and I have to say that Danny Akaka is 
extending me the same courtesies that you are extending Senator 
Santorum, so I understand why he is appreciative.
    I think it is important when you point out what the real 
shortfall is in terms of funding, that is a figure I didn't 
have, but I have asked my staff to go back and look at that 
because that makes it even more disturbing. I agree with 
Senator Santorum. The things we are trying to do--and if we are 
talking about the Legacy Force and the Objective Force and the 
Interim Force, I want to get into a discussion on timelines and 
the one thing that I would want to be sure of is that, as we go 
through this transformation, you still have to make up for what 
has happened over the last 5 to 10 years. I know the problems 
with the OPTEMPO. I know what is happening in the downsizing 
and the declining budgets. I know that we have RPM accounts 
that have been neglected for years. I mean, we have barracks' 
roofs that are leaking. So there are a lot of these things that 
have to be taken care of and have to be included in the 
budgets.
    The thing that concerns me, if I could single out one thing 
during this process, is that we maintain or we gain--because we 
are not there right now--a superior position from our potential 
adversaries. At one of our other meetings last week, I talked a 
little bit about where we were in terms of our air vehicles--
air-to-air, air-to-ground--and we are inferior today. This is 
something America's not used to. It is something we did not 
have to face in the years past. We talked about the Vietnam 
War, when we had the F100s and F105s and F4s and 86s and 84s. 
They were better than what anybody else had, any of our 
adversaries. You could agree or disagree with the different 
wars but the one thing our fighters knew is they had the best 
equipment. We do not have the best equipment today.
    If I could single out one area where our equipment is not 
the best, it would be in our artillery in terms of range and in 
terms of rapid fire. There are four countries, Great Britain, 
Germany, Russia, and South Africa, that all make a vehicle that 
is better than our Paladin. So here we are sending our young 
troops out with equipment that is inferior. I would just hope 
that both of the witnesses who are here today will be outspoken 
and at least share with us if they are equally concerned. I 
asked General Keane last week at a hearing what he thought 
about the risk of not having the best equipment. He said--and 
this is a quote, Mr. Chairman--he said, ``I think it is 
absolutely outrageous to think that we would permit our young 
Army soldiers to be outgunned by adversary artillery on the 
battlefield today.'' He continued by saying that, ``the thing 
that kills soldiers on the battlefield more than anything else 
is enemy artillery. We have to be able to reach out and kill 
it. We will kill it with joint fires to be sure. But we have to 
be able to kill it with close precision fires. We have to do it 
at range and we have to have the mobility to do it. We have to 
have the lethality to do it, and the Crusader happens to be the 
vehicle that is the answer to that.''
    So I want to get into some of these systems. We have heard 
a strong statement from General Shinseki, and I would like to 
have you all be thinking about other areas where we are 
deficient, because this is an area we have to do something 
about. Mr. Chairman, I feel very strongly about these things. I 
am concerned about this interim problem we have. In fact, 
during the August recess I will be at Ft. Lewis to see what 
kind of work is being done on this Interim Force. So I 
appreciate being included in your hearing.
    Senator Lieberman. Thank you, Senator. I look forward to 
hearing your report after you return from that visit. General 
Kern, would you like to begin?

   STATEMENT OF LT. GEN. PAUL J. KERN, USA, MILITARY DEPUTY, 
          OFFICE OF THE ASSISTANT SECETARY OF THE ARMY

    General Kern. Thank you, Mr. Chairman. Members of the 
subcommittee, both General Bond and I appreciate the invitation 
to appear before your subcommittee today and to discuss the 
Army's modernization budget and our transformation. We thank 
you for the support that you have given. As you have noted in 
the past years, this subcommittee has been a very strong 
supporter of the Army's position and we certainly thank you for 
that, and want to continue to work with you in the future. With 
your permission, I would like to submit our written testimony 
for the record and I will summarize a few points and try to 
address some of the comments that you and the members have 
made.
    Senator Lieberman. Good. Without objection, the full 
testimony will be printed in the record.
    General Kern. Sir, we have provided a chart that shows 
historical trends of Army budgets over the years. I think it 
amplifies the comments that you have made.
      
    
    
      
    In the past, we have had to peak to achieve modernization 
goals. We have done that twice in the last half of this century 
and that is not going back and looking at the history prior to 
World War II. It is noted that there is an absence of that peak 
in the current programs and the projections and that certainly 
supports the statements that both you and Senator Santorum have 
given to us today about the future and the concerns that you 
have about how we will achieve the transformation.
    Despite the declining budgets, the downsizing and the 
OPTEMPO, the Army has been busier than ever. I think you also 
recognize that there has been about a three-fold increase in 
the PERSTEMPO and OPTEMPO. So, there is a mismatch between our 
requirements and our resources to achieve all of the things 
that we are asked to do.
    Now, we believe this fiscal year 2002 budget follows on the 
increases that you provided last year. It is a step in the 
right direction. Certainly the priorities have been fixing the 
people problems as noted by Senator Inhofe, and the declining 
base infrastructure, the falling behind in our repair and the 
increases that are reflected in pay to keep people at parity. 
Clearly, in the United States Army people will always be our 
most important asset and despite any investments in equipment 
we have to have the best soldiers to continue the process.
    We thank you for your endorsement of General Shinseki's 
transformation, which has been supported by our new secretary. 
Secretary White has come in and added his endorsement to that 
transformation. He has added a point that particularly strikes 
home to me--that we also have to work at our business 
practices. But clearly the focus we will continue to work on is 
transformation as we move forward. The Chief's vision has three 
interdependent components--people, readiness, and 
transformation. Today we will talk about the transformation 
component. We will not get into the people and the readiness 
sides as we present it to your subcommittee.
    We believe that the fiscal year 2002 budget as presented 
enables us to focus on our objective, which simply stated is 
the Objective Force. So, the three axis chart which we have 
been using to describe the three components all are focused on 
that Objective Force. The two adjoining vectors, which are 
represented by our Legacy Force, the force which we ask our 
soldiers today to fight with and so we must maintain the 
readiness of that force, and our Interim Force, achieves one of 
the shortcomings.
    Senator Inhofe, you asked us to address one of those areas 
that we find ourselves short in, and that is our ability to 
rapidly deploy our forces so that we do not repeat instances we 
have found in the past, such as in Operation Desert Shield, 
when we deployed the 82nd Airborne Division rapidly to the 
Gulf. When they got there they did not have the protective 
requirements that our armored forces have, or the protected 
capabilities that our armored forces have, nor the mobility.
    Again, and more recently we looked at the shortcomings of 
Task Force Hawk in the ability to rapidly deploy and move the 
United States Army. So, our Interim Force is focused on 
overcoming that particular shortcoming, and we can talk more 
about that. I would tell you that we are prepared to move out 
on a comparative evaluation as requested by the subcommittee 
and as in legislation from last year, and we have allocated 
resources and time to do that.
    Finally, in our modernization strategy, we are moving 
towards a balanced modernization and we must take some risk and 
we understand that. Our recapitalization of the force is 
focused on 19 systems, and General Bond will speak more about 
that. Also, the organization of our modernization and Unit Set 
Fielding efforts will move us to focus on a networked 
battlefield as we take advantage of what we have learned from 
past experimentation and development of the digitized 
battlefield to allow us to achieve a networked battlefield, 
which we are focusing on today, on our counterattack III 
Armored Corps.
    We have focused the balance of our modernization and 
science and technology efforts teamed with DARPA and that now 
is moving off into its second year. We will be getting into 
another phase of that this fall, as we move into a down-select 
of the four teams into either a three- or a two-team 
competition as we move into the future.
    We will begin fielding of our intermediate operational 
capability with the Interim Brigade Combat Teams. That contract 
was awarded in November of this past year, after a very serious 
review of all those capabilities. The protest, which you asked 
us to comment on the impact of, was finalized after some 
hundred days, and we believe that we have recovered all of that 
schedule that was lost during that protest period of a little 
bit more than a hundred days. So, we estimate that will give us 
an initial operational capability of April 2003.
    In the meantime, we are fielding those systems and 
continuing the experimentation with the forces at Ft. Lewis. If 
Senator Inhofe has an opportunity to visit that, I think he'll 
be impressed with the progress that our soldiers have made in 
learning new tactics, techniques, and procedures which are 
going to change the doctrine. That is another aspect of that 
Interim Force. While it fulfills an immediate shortcoming, it 
is also beginning to teach us new ways of fighting and taking 
advantage of speed and knowledge. That was one of the precepts 
that came out of our Army After Next studies which we are 
applying now in a much shorter time frame. So, we expect to 
look at the learning that takes place after we field the 
Initial Brigade Combat Teams, then move on to the total of six 
to eight brigades and the down-select of the technologies which 
will take place as we move forward.
    You asked us to comment on what we see as most promising in 
those areas right now. We see some particular promise in areas 
of active protection. We see some particular promises in some 
miniaturized components, and the nanotechnologies which are 
beginning to materialize, particularly in the areas of applying 
MEMS technology to GPS, the global positioning system, and 
IMUs, inertial measurement units. We see some real promise 
there that will help not only the Army but all the services.
    Senator Lieberman. Can you say a little more about that, 
within the limits of what you can say?
    General Kern. We have looked through some of our initial 
work that was done, particularly at MIT, and some of our 6.1 
funding, some capability to use miniaturized technologies that 
allow us to put on a single chip, a board, actually it is 
multiple chips, both a miniaturized GPS receiver, which will 
take care of some of the countermeasure issues that we are 
looking at, combined with a miniaturized inertial measurement 
unit. The two, in coupling with one another, allow us under a 
very hardened structure, high accelerations, as you might find 
going down an artillery tube or in a rocket or in the flak 
jacket of a soldier, the ability to maintain accurate 
geographical location anywhere in the world. So, we see great 
promise in that technology that the DARPA and the United States 
Army are working together on producing in conjunction with 
other services.
    We also see great promise in what is perhaps one of the 
great strengths of the United States. In our network 
capability, we like to consolidate the words in one long 
acronym of C\4\ISR but command control, computers, 
communications, on the one side, as we bring that into the 
network capability and intelligence, surveillance, 
reconnaissance-ISR. So, our programs with the tactical Unmanned 
Aerial Vehicle (UAV), another critical shortcoming in our 
budget request that we need to overcome right now, which also 
will be part of both our counterattack force and our interim 
brigades, is an area that we then also can expand the work that 
we are doing, and again on our Future Combat System work with 
DARPA and other advanced UAVs, much like the other services.
    The other area which I would say is one in which we are 
moving up, both within the Army and with DARPA and the others 
services, is in robotics and how we apply that to both aviation 
platforms and grounds systems. Each of those areas are key 
technologies in which we are moving out, which are coming ahead 
very quickly and show great promise. We expect to be able to 
look at all of those in the year 2003, in the spring, to make a 
decision on moving ahead on fielding for the Objective Force 
and moving out into development and production. We are using 
the metric of a technology readiness level. GAO published a 
report on that a few years ago which we found very useful in 
being able to measure our readiness to move technologies out of 
the laboratory and into production. So, that is the measure 
which we will use to make that decision as we move forward in 
2003 as well as a great deal of trades between our training and 
doctrine on how those concepts are being developed and what the 
technology lends to new concepts of how we can fight on the 
future battlefield.
    We will be spending 64 percent of the Army's RDA budget 
over the next few years focused on the Objective Force. We also 
have some very high priority systems which you continue to 
support and which are in this year's budget--the Comanche, the 
armed reconnaissance attack helicopter is moving forward. It 
passed Milestone II last year and is now moving into the 
engineering and manufacturing development phase. We feel very 
confident that Comanche will really be our first fielded system 
of the Objective Force, and it will be part of the network 
capability of intelligence, surveillance, and reconnaissance, 
combined with attack capability. The Army Battle Command 
System, which is bringing together what had been a series of 
stove-pipe command and control systems, is now integrated into 
a single system. We have demonstrated that capability, so we 
are pleased with the work that is going on there. The Crusader 
system, as noted by Senator Inhofe, is now under test at Yuma 
Proving Grounds and we are extremely pleased with the progress 
it is making. It has demonstrated 11 rounds per minute, which 
is far in excess of anything that anyone else is capable of 
doing with a thermally-cooled----
    Senator Inhofe. Compare that to the Paladin.
    General Kern. We are at best able to do six rounds a minute 
with our Paladin and that is not sustained, so we are almost 
able to double the rate of fire and we do that with one-third 
the crew members and that is the automation. There are almost 2 
million lines of software code in that automation.
    Senator Inhofe. What's the ratio of sustained?
    General Kern. There is no real ratio because a Paladin 
Howitzer with an uncooled gun tube cannot sustain that rate of 
fire. It has to wait and let the gun tube cool down, or it has 
to slow down its rate of fire to do any sustained firing. So, 
this truly provides us a much better capability. I would also 
add that it almost doubles the range. We have demonstrated 
better than 40 kilometers with the Crusader over the Paladin's 
20-plus kilometers. We have also demonstrated a four round 
simultaneous impact with it, and it is able then to put four 
rounds in the air for a simultaneous impact. We know we can 
push that further. So, the Crusader gives us a great capability 
that is not present in our current Paladin and that is just in 
the fire control.
    There are some other capabilities which we can demonstrate 
to you strictly in the area of mobility. One of the challenges, 
and why our priority has been on the Crusader, has been the 
inability of the Paladin to keep up with our current force, 
much less the future force, of Abrams and Bradley fighting 
vehicles. In many of our past experiences in Operation Desert 
Storm we had to revert to rockets as opposed to guns because 
they could not keep up with the current force. The Crusader is 
demonstrating advantages in each of those areas as well as the 
fact that we have restructured that program to allow it to be 
downsized to a 40-ton platform, and we have added a wheeled re-
supply vehicle which gives us greater air transportability as 
well as the ability to have options on how we configure that 
force. That has been a very successful program and one which we 
are proud of the progress we have made.
    The last point I will make is the need for 
recapitalization. We have looked at 19 systems of our current 
force. I will let General Bond speak in more detail about that. 
A very thorough analysis has been conducted on both how we 
selected those systems and the intensity of which we are 
managing both the improvements of those systems to achieve a 
half-life problem that the United States Army has today. The 
systems which we fielded in the 1980s are wearing out. Our 
operating and support costs have been steadily increasing. It 
is a necessity now to insert both new technologies and improve 
the readiness levels of our current force.
    So, I thank you for the opportunity to have summarized 
where we are and with your permission, I would let General Bond 
make a few comments.
    Senator Lieberman. Thank you, General Kern.
    [The joint prepared statement of Lieutenant General Kern 
and Major General Bond follows:]

 Joint Prepared Statement by Lt. Gen. Paul J. Kern, USA, and Maj. Gen. 
                          William L. Bond, USA

                              INTRODUCTION

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to appear before you today to discuss the fiscal year 2002 
Army budget request and the status of Army modernization and 
transformation. It is our privilege to represent the Army leadership 
and America's soldiers who rely on us to provide them with the 
capabilities they need to execute our National Military Strategy 
throughout the world. The programs, schedules, and funding levels 
described in this statement, however, may change as a result of 
Secretary Rumsfeld's strategy review, which will guide future decisions 
on military spending.
    We thank the members of this subcommittee for your important role 
in support of the ongoing Army transformation initiative that began in 
October 1999. Your support has allowed the Army to begin concrete 
measures to implement the goals and objectives of the transformation 
and to ensure that the Army remains the world's preeminent land force. 
This transformation will continue over the next several decades. Your 
continued advice and support are vital to our success.
    One of the chief reasons that the Army transformation has enjoyed 
widespread support is the recognition of the complex and changing 
strategic environment that we currently face. A transformed Army is 
designed to meet the challenges of the 21st Century operational 
environment by employing advanced warfighting concepts and using new 
equipment that features significantly enhanced capabilities derived 
from leap-ahead technologies. The combination of new warfighting 
concepts, Future Combat Systems and highly skilled soldiers will ensure 
that the Army maintains full spectrum dominance and is capable of 
fighting and winning our Nation's wars--decisively.
    Military power alone is not sufficient to face the security 
challenges of today and tomorrow, but there is also no doubt that a 
national and international effort to secure and advance our interests 
cannot succeed without a prudent and ready capability to use military 
power. Security challenges know no boundaries, and the post-Cold War 
world presents its share of instability. We do enjoy, however, a period 
of relative strategic calm without a single immediate major military 
threat to our vital interests. We also face a period of dramatic 
technological proliferation and advanced capabilities that offer both 
promise for us as well as future risks. This overall environment 
provides the Army the opportunity and the need to, as President Bush 
said, ``move beyond marginal improvements to harness new technologies 
that will support a new strategy.''

         NEAR- AND FAR-TERM READINESS--MAINTAINING THE BALANCE

    In the 1990s, the Army faced declining budgets, downsizing, and an 
operational tempo that has increased threefold since the fall of the 
Berlin Wall. This has resulted in the sacrifice of far-term readiness 
to pay for our non-negotiable, near-term readiness contract with the 
American people. The mismatch between requirements and resources forces 
us daily to prioritize among operations, force structure, readiness, 
and modernization. The Presidents budget for fiscal year 2002 is taking 
the initial steps to address this mismatch. In the final analysis, the 
Army has had no other recourse than to mortgage its future, in terms of 
modernization and installation support, to maintain near-term 
readiness. This imbalance between near- and far-term readiness needs to 
be corrected. Future readiness, along with the current readiness of our 
force and the related quality of life of our soldiers and their 
families, depend on creating the proper balance.
    We have articulated a vision for the future that we believe 
addresses both our near- and far-term readiness challenges and meets 
the demands of the future operational environment with a transformed, 
strategically responsive force ready to accomplish its mission 
throughout the spectrum of operations. The vision is about three 
interdependent components--people, readiness, and transformation. The 
Army is people--soldiers, civilians, veterans, and families--and 
soldiers remain the centerpiece of our formations. Warfighting 
readiness is the Army's top priority. The transformation will produce a 
future force, the Objective Force, founded on innovative doctrine, 
training, leader development, materiel, organizations, and soldiers. 
The vision weaves together these threads--people, readiness, and 
transformation--binding them into what will be the Army of the future. 
Within the latter of these, is the transformation of the Army's 
operational force; this is the focus of our testimony today.

                          ARMY TRANSFORMATION

    The budget for fiscal year 2002 enables the Army to continue the 
transformation, though not at the optimal level. Army transformation 
focuses its main effort on an endstate--the Objective Force. Two 
adjoining vectors support this main effort. The first is the Legacy 
Force, which is the current force in the Army, both light and heavy. We 
must allocate sufficient resources to reverse the downward trend of 
mission capable rates for some of our systems, and we plan to do this 
by modernizing and recapitalizing the Legacy Force. We will modernize 
by selectively procuring new systems and will recapitalize by returning 
remaining systems to a near zero time/zero mile standard, thus 
restoring them to a like-new condition. The other adjoining vector is 
the Interim Force, comprising six brigade combat teams. These combat 
formations are designed to meet an immediate warfighting requirement by 
filling a capabilities gap at the mid-point in the spectrum of 
operations that neither our light nor heavy forces can fill at this 
time.
    Transformation represents the essence of the Army's vision and the 
necessary change required to make sure the Army of the future is 
prepared to meet expected requirements by fielding adaptable and highly 
capable units. The ability to harness the revolutionary advances in 
technology, coupled with an understanding of the changing nature of war 
and the overall strategic environment, creates the opportunity and 
imperative for the Army to make dramatic changes in transformation. 
This transformation will not occur overnight, but will require a period 
of up to 30 years to identify, develop, produce, and field new 
capabilities throughout the Active and Reserve components. 
Transformation will be a continuous process throughout this period, but 
its completion will be phased because of the time needed to develop, 
evaluate, and incorporate revolutionary technologies; the limitations 
in resources available to fund the effort; and the concurrent 
requirement to maintain the readiness of the Army at all times.

                         MODERNIZATION STRATEGY

    The Army has developed a modernization strategy to implement 
transformation while at the same time assuring adequate readiness of 
the Army throughout this decades-long process. This modernization 
strategy is a coordinated and comprehensive approach of focusing all 
efforts and programs on building capabilities by equipping and 
organizing forces. This strategy is best described as one of ``balanced 
modernization'', which seeks to develop and field combat-capable units 
through an appropriate mix of selective fielding of new equipment 
(modernization), rebuilding and upgrading existing equipment 
(recapitalization) and preserving needed elements of current equipment 
(maintenance).
    A key process that is integral to this balanced modernization is 
Unit Set Fielding. It is both a process and a strategy that modernizes 
the force through a family of systems approach to fielding. Unit Set 
Fielding involves the synchronization of individual system fielding 
plans into a single unit fielding schedule to streamline the fielding 
process. Unit Set Fielding represents an important shift in emphasis in 
the Army toward providing improved capabilities as a package to 
organizations and not just fielding isolated systems. As part of a 
coordinated array, this disciplined modernization strategy goes beyond 
just equipping Army units. It also incorporates the manning, 
sustaining, training, organization, and installation requirements to 
ensure that an increased capability is being fielded, and not just 
pieces of equipment. The Army leadership has made their preference 
clear--we are even willing to field fewer individual systems in the 
future in order to ensure that more coordinated sets of systems and 
capabilities are incorporated into Army units, thereby significantly 
increasing overall force effectiveness.
    Specifically, this balanced modernization strategy consists of the 
following major components and priorities: 1) science and technology 
efforts to enable timely fielding of the future Objective Force and, in 
particular, the Future Combat Systems (FCS), which will be the 
foundation of that force; 2) fielding of immediate operational 
capabilities through the Interim Brigade Combat Teams (IBCT), which are 
outfitted with the new Interim Armored Vehicles; and 3) maintaining and 
improving essential warfighting capabilities of the existing Legacy 
Force which is needed to preserve unquestionable military superiority 
for possible missions in the near term.

                        OBJECTIVE FORCE AND FCS

    The Army's ultimate goal for transformation is the Objective Force. 
Operating as part of a joint, combined, and/or interagency team, it 
will be capable of conducting rapid and decisive offensive, defensive, 
stability and support operations, and be able to transition among any 
of these missions without a loss of momentum. It will be lethal and 
survivable for warfighting and force protection; responsive and 
deployable for rapid mission tailoring and the projection required for 
crisis response; versatile and agile for success across the full 
spectrum of operations; and sustainable for extended regional 
engagement and sustained land combat. It will leverage joint and 
interagency reach-back capabilities for intelligence, logistical 
support, and information operations while protecting itself against 
information attacks. It will leverage space assets for communications; 
position, navigation, and timing; weather, terrain, and environmental 
monitoring; missile warning; and intelligence, surveillance, and 
reconnaissance. The Objective Force will provide for conventional 
overmatch and a greater degree of strategic responsiveness, mission 
versatility, and operational and tactical agility. With the Objective 
Force, the Army intends to deploy a combat capable brigade anywhere in 
the world in 96 hours, a division in 120 hours, and five divisions in 
30 days. Our ability to quickly put a brigade-size force on the ground, 
with the balance of a division following a day later, fills a current 
gap for credible, rapid deterrence. The Objective Force will offer real 
strategic options in a crisis and changes the strategic calculations of 
our potential adversaries. The Army with Objective Force capability 
will provide the National Command Authorities with a full range of 
strategic options for regional engagement, crisis response, and land 
force operations in support of the Nation.
    Future Combat Systems is one of the essential components for the 
Army's Objective Force. The FCS is more than just a single combat 
platform. Rather, it is the collective, related family of systems that 
pull advanced technologies designed for future use to the present so 
that we provide desired combat capabilities early, with the ability to 
add planned enhancements over the life of the systems. The FCS is 
envisioned as a digitized land combat capability and system-of-systems, 
which will have a multi-mission role. It will include mounted and 
dismounted teams, manned and unmanned systems, and air and ground 
components--all linked within a network of Command, Control, 
Communications, Computers, Intelligence, Surveillance, and 
Reconnaissance (C\4\ISR). It will be capable of destroying an enemy by 
fires, maneuver, and assault, and is also capable of seizing and 
controlling terrain. Additionally, the FCS is intended to be as lethal 
and survivable as our current heavy forces, yet much more deployable 
and strategically responsive. Over the next 6 years, the Army will 
demonstrate and validate FCS functions and exploit high-payoff core 
technologies, including composite armor, active protection systems, 
multi-role (direct and indirect fire) cannons, compact kinetic energy 
missiles, hybrid electric propulsion, human engineering, and advanced 
electro-optic and infrared sensors.
    At this point, the Army investment is in the form of aggressive 
science and technology (S&T) efforts to identify and develop the leap-
ahead technologies needed as the basis for revolutionary change and 
improvements in the Objective Force. Army S&T funding and efforts are 
partnered with the Defense Advanced Research Projects Agency (DARPA) in 
a collaborative effort to give the greatest impetus to this priority 
effort. The fiscal year 2002 budget funds FCS demonstrations of system-
of-systems functions and cost sharing technologies. The Army's goal is 
to identify the technological solutions in the 2003-2004 time frame to 
permit production and fielding of the FCS by the end of this decade. 
These are ambitious goals, and therefore the Army is devoting 96 
percent of its total S&T funding directly to support programs needed to 
develop Objective Force technologies, with 37 percent of this amount 
specifically in support of the FCS. Overall, as an indication of the 
priority being placed on the future force, the Army is devoting 64 
percent of its total Research, Development, and Acquisition funding for 
the next 6 years to systems that are projected to be part of the 
Objective Force.
    The Comanche reconnaissance and attack helicopter will be the first 
Army Objective Force system to be fielded and is the air component of 
the FCS. The fiscal year 2002 budget continues our efforts toward 
achieving this important capability. The Comanche is a uniquely capable 
system that incorporates the latest technology available, especially in 
the area of digitization, sensors, and low observable technology 
advances. Although Comanche will be fielded as part of the Objective 
Force, its digitization will be compatible with Legacy and Interim 
Force systems. Comanche will provide a lethal combination of 
reconnaissance and firepower.
    The Army Battle Command System (ABCS) is currently envisioned as 
the internetted network that will enable the C\4\ISR capabilities of 
the Objective Force. ABCS is the Army's component of the Global Command 
and Control System (GCCS) and is a complex system of systems that 
provides the mechanism to receive and transmit information among the 
joint forces. This advanced capability will significantly advance the 
ability to expand situational awareness of the battlefield to every 
echelon of the force, thus dramatically improving the ability to 
increase the speed and effectiveness of all tactical decisions.

                             INTERIM FORCE

    To fulfill an immediate operational requirement and provide a 
capability that does not presently exist, the Army is also in the 
process of organizing and equipping Interim Combat Brigade Teams 
(IBCTs) as the basis for an Interim Force to provide valuable 
capabilities to the regional CINCs as well as the National Command 
Authorities. These organizations will make use of existing off-the-
shelf technologies along with more rapidly deployable equipment and 
structure to provide a responsive and capable force that effectively 
complements other existing forces. The IBCTs will offer great potential 
for use in a wide array of possible contingencies, ranging from peace 
enforcement missions such as in Bosnia and Kosovo to warfighting 
missions like those in Panama and Desert Shield/Desert Storm.
    The equipment foundation of the IBCT will be a family of Interim 
Armored Vehicles (IAVs) which will be capable of being transported by 
C-130 type aircraft and also have enhanced characteristics for greater 
effectiveness in a variety of operational missions. Last year, Congress 
supported the IBCT concept with an additional $600 million for IAV 
procurement and for organizing the second IBCT. We are very grateful 
for this support. Thus far, the Army has already reorganized two 
brigades at Fort Lewis, Washington, into the IBCT structure, has 
awarded a contract for the initial procurement of the IAVs, and has 
made the necessary fiscal decisions, aided by congressional support, to 
provide funding for fielding six IBCTs. The Army will train and test 
soldiers and leaders in the doctrine and organization of these new 
units to ensure that they can respond to operational requirements. An 
IAV-equipped battalion-sized element will undergo training and initial 
operational testing and evaluation to guarantee system suitability and 
effectiveness. Innovative applications and technology insertion in 
supporting forces will complete the IBCT package and enable initial 
operational capabilities for the first IBCT in 2003, and full 
operational capabilities by 2005. The fiscal year 2002 budget procures 
326 IAVs with operational fielding of the first IBCT beginning in 2002. 
The IBCTs are projected to remain an invaluable component of the Army 
for more than 20 years.

                              LEGACY FORCE

    While the development of the Objective Force and fielding of the 
Interim Force are critical components of the Army's transformation and 
modernization strategy, they will take many years to implement fully. 
Throughout this period, the Army continues to balance its enduring 
commitment to readiness and its obligation to support any and all 
missions assigned by the National Command Authorities. The current or 
Legacy Force is the means of fulfilling that commitment to the Nation, 
and the Army's modernization and investment strategies devote the 
resources required to maintain adequate readiness while the evolution 
of the Army to a technologically advanced force takes place over the 
coming decades. For the next 15 to 20 years, the existing force will 
represent the bulwark of the land forces of the United States, and they 
must be maintained in sufficient readiness and capability to perform 
all potential missions. The nucleus of this force will be the 
Counterattack Corps, which is based upon the Army's III Corps in Fort 
Hood, Texas. In balancing its resources, the Army decided that this 
Corps will receive the highest priority for recapitalization and 
modernization efforts in order to ensure its peak readiness and 
capability for warfighting missions. As a result, it will receive 
modernized systems such as the M1A2 System Enhancement Program (SEP) 
Abrams tank, the M2A3 Bradley, Crusader, as well as other new or 
upgraded systems in a variety of areas. III Corps consists of both 
Active and Reserve components, all of which will be modernized to 
ensure that the Counterattack Corps is ready for any and all missions. 
While all of the systems planned for the modernization and 
recapitalization of the Counterattack Corps are important, the Army 
believes the Crusader is crucial to our ability to decisively win the 
Nation's wars.
    The Legacy Force is an aging one due to the impact of a skipped 
modernization cycle that was one of the results of the ``peace 
dividend'' associated with the end of the Cold War. Currently, 75 
percent of major combat systems exceed engineered design half-life and 
will exceed design life by 2010. Many of our major systems are, or soon 
will be, older than the soldiers who may be taking them into combat. We 
therefore find ourselves in a downward spiral of devoting more and more 
resources to maintaining aging equipment, with commensurate fewer 
dollars to procure new equipment to meet emerging national security 
requirements. The end result is that the Army must devote sufficient 
resources to preserve the combat capability and superiority of our 
forces as a strategic hedge during the period of transformation. The 
Army's modernization and investment strategies accomplish this by 
supporting a combination of very limited but critical modernization 
programs, rebuilding and upgrading currently fielded systems to extend 
their useful life, and, finally, maintaining those other systems needed 
for continued readiness of the force.
    In the area of limited modernization programs, some systems warrant 
emphasis as significant contributors to the quality and effectiveness 
of the Legacy Force. The first of these is the Crusader, a fully 
digital and networked fire support system that provides major increases 
in the range, accuracy, rate of fire, lethality, mobility, and 
survivability over the current M109 series of cannon artillery. This 
advanced system is also a technology carrier for future systems and 
will employ more than two-dozen cutting-edge technologies for the first 
time in a ground combat vehicle. For example, the state of the art 
cockpit, the fully automated ammunition handling system, the integrated 
composite armor, the advanced electronics architecture and the 
revolutionary new cannon assembly are a partial list of some of the new 
technologies being introduced in Crusader. The technologies in Crusader 
allow the Army to employ tactics and doctrine for the first time that 
rely on cockpit automation, robotics, and information exploitation in 
lieu of soldier performed tasks.
    Another new system of particular importance is the High Mobility 
Artillery Rocket System (HIMARS), which is a wheeled version of battle-
tested and proven Multiple Launcher Rocket System (MLRS) that is 
transportable by C-130 aircraft. This more deployable version will 
provide tremendous early-entry firepower and flexibility and will be 
capable of using the entire range of MLRS rockets and missiles, 
including the longer range Army Tactical Missile System (ATACMS) 
munitions. This system will also continue to serve in the future as an 
important means of responsive fire support for both Interim and 
Objective Force units.
    The rebuild and upgrade of key existing systems, recapitalization, 
is a significant and essential component of the overall modernization 
strategy. The fiscal year 2002 budget takes a step in this direction by 
providing additional funding to depot maintenance in preparation for 
recapitalization. The Army has determined that we preserve readiness 
best and most cost effectively when we retire or replace warfighting 
systems on a 20-year Department of Defense (DOD) modernization cycle. 
Today, 12 of 16 critical weapons systems exceed this targeted fleet 
average age. Recapitalization expenditures improve safety, 
supportability, readiness, and warfighting capabilities and have the 
additional benefit of reducing operations and support costs that 
otherwise would be far higher. The recapitalization process, while 
addressing selected and critical systems, is focused on building combat 
capable units. The Army will recapitalize its fleet unit by unit to 
ensure maximum warfighting capability. The Army has established a 
selective recapitalization program that will restore aging systems to 
like-new condition and allow upgraded warfighting capabilities for a 
fraction of the replacement cost. So far, the Army has made final 
decisions regarding the recapitalization of its aviation platforms, 
Apache, Blackhawk, and Chinook. In arriving at the conclusions, Army 
leadership looked at various cost factors, available funding, and 
length of time expected to keep the system in inventory. For example, 
the Army is buying what is needed in terms of capability, safety, and 
reliability to keep the Apache platform flying until we introduce 
Comanche. This is called focused recapitalization. With Chinook, 
because a replacement for this platform is much further in the future, 
we will fully recapitalize the system. A lack of resources, though, 
prevents us from recapitalizing the entire Chinook fleet. Along with 
conducting cost/benefit analyses on Abrams and Bradley, the Army also 
added the dimension of orchestrating their fielding only where the 
configurations complemented one another. For example, M1A2 SEPs will 
only be fielded with M2A3 Bradleys. This decision will reinforce the 
Unit Set Fielding concept, which results in the most capability given 
the available resources.
    Although the Army recognizes it may not have sufficient resources 
to recapitalize all of our fleets to the same capability level, it is 
our intent to seek sufficient resources to ensure we upgrade or rebuild 
to a near zero time/zero mile standard as many Active and Reserve 
component units as practical. We must maintain the readiness of the 
Legacy Force until the Objective Force is operational.

                          INVESTMENT STRATEGY

    To implement the Army's modernization strategy in support of 
transformation, the Army prioritizes its investment of limited 
resources over time. Implementation of transformation requires hard 
decisions and clear priorities among competing needs, and that is the 
essence of the Army's investment strategy. This strategy represents a 
paradigm shift and is characterized by a new emphasis on the 
development of systems and technologies that will support the future 
Army, the Objective Force.
    To accomplish this, the Army has already made tough choices. We 
have canceled or restructured seven major Army procurement programs and 
a significant amount of planned spending between fiscal years 2001 and 
2005 has already been shifted internally to focus efforts and directly 
support our transformation initiatives. Once again, this is not devoid 
of risks--many of these canceled or restructured programs remain valid 
warfighting requirements, and their absence may place our soldiers at 
higher risk in combat.

                       PROGRESS TO DATE--SUMMARY

    The Army has made great strides in implementing the transformation 
process, which was announced by the Army leadership only a short time 
ago in October 1999. Tough decisions have been made to reprioritize 
resources to support these new priorities. The Army has taken 
aggressive steps to accelerate essential S&T efforts to identify 
revolutionary new technologies for our future Army. Two brigades have 
been reorganized at Fort Lewis as the foundation for the new IBCTs, and 
they are presently undergoing training to develop the appropriate 
warfighting tactics, techniques and procedures for their missions. The 
Army has awarded a contract for a family of IAVs to equip these units 
and provide invaluable new capabilities for use by regional CINCs and 
the National Command Authorities. Finally, and very importantly, the 
Army has made the needed decisions to maintain and extend the combat 
superiority and readiness of the current force until the future force 
is completely fielded. Congress and the Department of Defense have 
responded positively by providing both strong support in principle as 
well as essential additional resources to help establish critical 
momentum. There is still much work to be done, but the Army has moved 
out.
    This statement today is intended to reinforce and add to the 
understanding of what the Army is doing now and planning to do in the 
future to make transformation a reality. Continued support will be 
required to preserve the momentum of transformation while 
simultaneously preserving the Army's capability to fulfill its enduring 
responsibility and commitment to the Nation to deliver decisive victory 
on the ground when our national interests are threatened.
    Mr. Chairman and distinguished members of the subcommittee, we 
thank you once again for this opportunity to discuss with you today the 
fiscal year 2002 Army budget request and the status of Army 
modernization and transformation. We look forward to your questions.

    General Bond, please proceed.

 STATEMENT OF MAJ. GEN. WILLIAM L. BOND, USA, DIRECTOR, FORCE 
                DEVELOPMENT, UNITED STATES ARMY

    General Bond. Mr. Chairman, Senator Santorum, distinguished 
members of the subcommittee. Thank you for the opportunity to 
appear before you today with Lieutenant General Kern. I am the 
Army's force developer and the focal point for the Army's 
warfighting requirements process. I will briefly expand on 
General Kern's comments regarding Army recapitalization and 
Unit Set Fielding.
    As a result of the extended period of constrained resources 
brought about by the end of the Cold War, coupled with years of 
operating at a higher OPTEMPO, Army modernization efforts that 
ensure our far-term readiness have been sacrificed to pay for 
near-term readiness. The result of that sacrifice is a skipped 
modernization cycle. That is portrayed graphically by the chart 
provided to you. We have already made tough choices and 
accepted risks to set the conditions necessary to transform--
canceling or restructuring seven major Army programs, all of 
which remain valid warfighting requirements. We have also 
internally shifted a significant amount of spending to focus 
Army efforts and directly support our transformation 
initiative. But to ensure our ability to fight and win the 
Nation's wars, there are some risks we cannot take. Most 
importantly, we cannot afford to skip another procurement 
cycle. We cannot afford to keep mortgaging the future of the 
Army to pay for readiness today.
    Today's Army Legacy Force guarantees our warfighting 
readiness until the Objective Force is fielded in the next 
decade. However, over 75 percent of our major combat systems 
exceed the half life of their expected service life. The cost 
to operate and sustain this Legacy Force is staggering. In 
fact, costs increased 10 percent each year for the last 3 
years. The Army needs to find a way out of these spiraling 
operating and support costs.
    Our transformation plan accounts for an aging equipment 
problem through a program called selective recapitalization, 
which rebuilds and upgrades the most important equipment items 
to a like-new condition. What I am talking about here is 
finding those high-cost drivers that drive our operational 
costs, those parts that cause the system to be non-mission 
capable, and replacing those versus replacing the entire 
system. Doing this in an equitable fashion will increase return 
on investment.
    Senator Santorum. Excuse me. I thought you said two things 
here. You said your high cost drivers, but then you said, the 
key components for mission capability. Aren't those two 
different things?
    General Bond. They are two different things.
    Senator Santorum. OK. So, you said the same thing. That is 
what I am trying to figure out. Which is it?
    General Bond. It is both. We address the high operating 
costs--those things, those parts which cost the most to 
replace, and those parts which cause the system to be non-
mission capable. They're not necessarily mutually exclusive but 
they are in a lot of cases.
    Senator Santorum. That cost the most to replace or cost the 
most to maintain?
    General Bond. The cost to replace, in this case, and the 
cost in time because sometimes they are a low cost item but 
they cause the system to be down multiple times because they 
have to be replaced.
    General Kern. Sir, if I could give you an example. In the 
Apache program, the front end of the Apache is the target 
acquisition/pilot night vision system, and it is a first 
generation FLIR capability. It is the single most costly piece 
of equipment to keep it flying. It costs us a significant 
amount and that has been increasing. We have a capability 
improvement to bring a second generation FLIR into that, at the 
same time significantly reducing the cost of operating that 
system. So, it is a high cost item but it also gives us a new 
capability at the same time. So, the recapitalization of that 
would include bringing in something like that.
    General Bond. In addition, there are small parts within the 
Comanche or the Apache that fail on a regular basis, causing 
the increased non-mission capable time for the Apache. These 
parts can be very inexpensive, but because they're hard to get, 
because of the usage factors requiring them to be hard to get, 
it causes that time to be exacerbated. Those are the kinds of 
parts for which we need to re-engineer and provide a better 
maintenance capability so that they are not having to be 
replaced, even though they are not the high costs items like 
the TADS/PNVS. Do you understand?
    Senator Santorum. Better understand, yes.
    General Bond. The transformation plan accounts for aging 
equipment problems through a program called selective 
recapitalization, which rebuilds, as I talked about, and 
upgrades the most important equipment items to a like-new 
condition. If sufficiently resourced, recapitalization provides 
three distinct advantages. First, it will improve the safety, 
supportability, readiness, and capabilities of our warfighting 
systems. Second, it is the cost effective alternative to 
purchasing new systems. For example, purchasing a new Apache 
helicopter costs approximately $24 million. Recapitalizing an 
existing one costs about $10 million. Third, recapitalization 
costs will be partially recovered through reduced operations 
and supports costs. In fact, we estimate the cost to 
recapitalize UH-60s will be recovered in less than 7 years. The 
readiness and sustainment task force, along with the 
shortcomings that were discovered during Task Force Hawk, are 
also being addressed during each one of these and I can let the 
committee rest assured that every single one of those safety 
concerns in the aviation area are being addressed during this 
recapitalization and modernization. So, they will all be 
covered.
    We are also changing the way we field our equipment to our 
warfighting organizations to recognize that our combat systems 
are increasingly reliant on each other. Instead of fielding new 
equipment one system at a time, we are synchronizing the 
fielding plans for each battalion or brigade, so that a number 
of related systems are delivered within a coordinated Unit Set 
Fielding window. Unit Set Fielding synchronizes the delivery of 
new equipment--modernization--with rebuilding and upgrading of 
existing equipment--recapitalization--and maintaining needed 
elements of current equipment--maintenance. Unit Set Fielding 
also addresses requirements to man, sustain, field, train, and 
organize each unit. It includes installation support and 
training requirements so that we maximize our investment. For 
example, an M1A2 SEP battalion costs between $270 and $350 
million. But without expanded ranges our soldiers cannot train 
on these tanks to their full ability. Without modernized motor 
pools, and all required spare parts, we cannot maintain them 
efficiently. As a result, we only realize a portion of our 
investment in combat capability. Unit Set Fielding will ensure 
that we receive the full amount of combat power we pay for.
    The Army leadership has made its preference clear on this 
issue. We are willing to field fewer individual equipment items 
in the future to ensure that more complete sets of equipment 
and system capabilities are fielded to our Army units. Without 
question, the Army has paid a price to maintain near-term 
readiness. Nevertheless, we continue to do the best we can with 
what we have in resources. The fiscal year 2002 budget 
continues to enable transformation although not nearly at the 
optimum level. With those funds available, we have prudently 
invested in the most promising research and technologies for 
our Objective Force. With your continued help, our Army will 
remain ready to meet our challenges and achieve our 
transformation vision.
    Mr. Chairman, thank you for your invitation to appear 
before this distinguished subcommittee, and I look forward to 
your questions.
    Senator Lieberman. Thank you, General. Thank you to both of 
you. I am going to suggest that we do a round in which we ask 
questions for 7 minutes each. I want to start with a few 
questions on budget priorities overall. I mentioned some of the 
numbers in my opening statement. In the fiscal year 2002 budget 
request, the Army has specifically highlighted Interim Armored 
Vehicle, Comanche, Crusader, and Shadow Tactical UAVs as the 
key components in its procurement request. I want to know 
whether you believe that the fiscal year 2002 budget request, 
with the kind of decrease that I fear is there compared to 
2001, can adequately support these programs.
    General Kern.
    General Kern. Sir, we believe the request as submitted for 
the year 2002 does fully fund those programs. We looked at the 
priority of those. We have also submitted an unfunded 
requirements list of priorities which shows some shortfalls in 
the predominate areas in those systems which you have 
mentioned. We have made it our priority to fully fund those 
systems.
    Senator Lieberman. Do the numbers that I have come up with 
seem generally correct to you, as we take indication of 
inflation and the transfer of programs from the BMDO?
    General Kern. I think we have done a number of studies on 
that but they are about the same that we have concluded there 
also. There are two pieces that we look at as being different 
from the submission from the fiscal year 2001 budget, that is 
those pieces which came to us from the BMDO, the Patriot, and 
the MEADS program. So, if you take them out and you look at the 
total, we believe we are about, in real dollars, and then-year 
dollars, not in constant dollar terms, about $414 million ahead 
in our RDT&E and about $450 million behind in procurement.
    Senator Lieberman. So, it is a little bit different from 
the numbers I came up with but still obviously being $450 
million behind in procurement is significant. Your answer was 
that you feel that within the Pentagon request for 2002, you 
have been able to fund those highlighted programs. How about 
some of your top unfunded requirements. What are they?
    General Kern. Sir, most of those fall into the area of 
OPTEMPO anti-terrorism, delayed repair on our installations and 
some Reserve component money. The biggest single one that hits 
into our area is in the recapitalization area which General 
Bond described, and we believe we are about $566 million short 
there in our request.
    Senator Lieberman. Let me come at this from a somewhat 
different perspective in this question. Assuming that your 
modernization budget remains constant but with no increase in 
real terms, or even decreases in the last 2 years, how will the 
Army prioritize among the competing Objective, Interim, and 
Legacy Force requirements?
    General Kern. Sir, that is probably the hardest question 
Secretary White and General Shinseki have to deal with in terms 
of balancing those priorities. We believe that you cannot 
separate the three components of our transformation. However, 
we must keep them in balance. So, we must continue with the 
science and technology and the research and development 
investments in the Objective Force. We must continue with the 
fielding of the interim brigades, both to overcome the 
shortcoming of our strategic deployability and the 
survivability of our forces in theater and at the same time, to 
learn new Objective Force tactics, techniques, procedures, and 
doctrine development. We believe that the balance, and clearly 
there are many more systems in the United States Army than the 
19 we have chosen to recapitalize, but just picking on those 
systems, we believe is the prioritization effort that we have 
undergone as to where we must put our current investments.
    A great deal of work has been done in aviation systems and 
we will continue to do that. As you have noted, in the aviation 
modernization plan we are eliminating our Legacy aircraft as 
quickly as possible starting with the Cobras and the AH-1s, and 
we have made some very tough decisions in the past year on the 
Apache procurement, where we reduce the total number in order 
to achieve a better capability and overcome some of the 
readiness shortfalls that we are currently seeing. So we have 
in this budget and in the work that we have done in the past 
year, worked very hard on prioritizing and balancing those 
requirements.
    Senator Lieberman. So, the answer that I hear is that you 
are going to try to spread the research that you have roughly 
equally among the Interim, Objective, and Legacy Forces so that 
you will be moving forward toward your goal in each of the 
three.
    General Kern. That is correct, sir. I would tell you that I 
think I have the same picture that you do where somewhere 
around 2005, 2006, when we make the decision that the Objective 
Force systems which we have in development are mature enough to 
move into the production phase, and General Shinseki's goal 
that he set out for us is to field in the first decade, that we 
must have our first units begin fielding around 2008. If we are 
successful in doing that and we do not see an increase, there 
is going to be a major challenge for all of us to resource the 
next generation of the United States Army.
    Senator Lieberman. That will come around what year?
    General Kern. The tough years, I believe, are going to be 
around 2005, 2006.
    Senator Lieberman. Let me ask a few specific questions 
about aspects of the Legacy Force. I know the Army has revised 
its acquisition strategy for the procurement of the A2 model of 
the family of medium tactical vehicles. I gather there are only 
two competitors for the contract and as such, we need to be 
assured that the Army conducts a robust test of the vehicles 
submitted. Can you tell us what steps you have taken to ensure 
that that they will be tested?
    General Kern. Sir, we have initially, as challenged by many 
members over here, looked at the number of miles which we had 
planned and we have increased that to achieve pretty close to 
20,000 miles per vehicle in our testing of eight vehicles for 
each of the manufacturers. We will include in a very thorough 
test the sufficient off-road and on-road OPTEMPO of that 
vehicle to ensure that we do not make the same errors that we 
did in previous testing on the A0 procurement. Finally, there 
will be soldiers involved in that testing to ensure that the 
human factor issues are accounted for in the designs that are 
presented to us by the competitors. We have worked this 
competition very hard to ensure that we both meet the needs of 
the United States Army and get the best product for the United 
States Army and the soldiers of our future. We also have taken 
into account the recommendations made by Congress in this 
competition. We believe it is fair and I would ask that you 
support it as we have constructed it today. I believe it 
answers all of your questions.
    Senator Lieberman. Good. Thank you. Just one more quick 
associated question because my time is up. Does the schedule 
ensure that there will be no break in the production of the 
current A1 model until the A2 passes production verification 
testing and a full rate production decision is made?
    General Kern. As the schedule is planned and laid out right 
now, that is one of the factors. There will be no break in 
production. We will watch that very closely.
    Senator Lieberman. Good. Thank you, General Kern.
    Senator Santorum.
    Senator Santorum. Thank you, Mr. Chairman. Let me move to 
the Objective Force first. You have your modernization cycle 
and you talk about trying to get a proper mix on Legacy Forces 
and we have this big investment in the Interim Force and 
Senator Lieberman asked a question about how you are going to 
balance all of them. From what I see, my concern is that you 
are moving forward with decisions on your Objective Force in 
the technology of 2003 and yet we see your RDT&E is not 
particularly robust. You are talking about transforming with 
very little resources here. You are talking about a leap ahead. 
You are talking about transformation. You are talking about a 
new generation, and you are going to be making those decisions, 
at least some of them, next year, for fielding that force you 
said, I think 2008 was the number that you suggested, or at 
least early in the next decade, I think was maybe the term you 
used.
    General Kern. Our objective is initial operating capability 
in that time.
    Senator Santorum. Right, so you have to begin in what--5, 
7, or 8 years? I guess I just really have some serious 
questions as to whether you are going to be able to do that 
given the resources that are being applied to that Objective 
Force at this time. Are you going to be prepared to make that 
call and are we going to have the knowledge that we need to 
move forward? My concern is, I mean, I am just looking at 
numbers. This is your chart. I am just looking at numbers and I 
just do not see how you have a sufficient amount of resources 
dedicated to the foundation for making those decisions go 
forward.
    General Kern. To answer your second question first, I 
believe we have sufficient resources dedicated to research and 
development in the science and technology pieces. To answer the 
question, the technology is available and ready for us to apply 
to a development. We will use the metric of the technology 
readiness level as I described earlier, which we have 
confidence in and will provide us a good answer. I cannot 
absolutely tell you that science and technology is going to 
produce on schedule. Research sometimes has surprises, 
sometimes things come in earlier than you predict and sometimes 
it takes longer and more resources to get to those. But our 
indications today are that we have made significant progress in 
the investments that have been made, particularly with the help 
of DARPA. Some very innovative steps have been made that will 
support that. So, I am reasonably confident that the resource 
level applied against the science and technology is sufficient. 
We have done a lot of reprioritization in the past years and 
focused our effort on getting the answers that we need. We will 
continue to do that. I will tell you that General Shinseki 
spends a great deal of his time, as well as all the rest of the 
senior leaders, grilling us on exactly those questions. So, 
there's a great deal of leadership attention being paid to that 
part of it.
    The second piece is a little more difficult--are there 
going to be sufficient procurement dollars to acquire these 
systems and to finish the RDT&E, the 6.4 phase when we are 
getting ready to go into production? That I believe is going to 
be a significant challenge for the Department of Defense 
because we are going to be competing with other systems and it 
is going to be a significant challenge for the United States 
Army to achieve the balance of current readiness with the 
investments required in that future force. So I do not 
underestimate the difficulty in achieving those, but I do know 
the lessons of the past of the United States Army when we 
failed to do that--we literally paid the price in blood. So the 
United States Army must be prepared, and with the support of 
Congress, because we fully understand the way the Constitution 
is written, to make those investments.
    Senator Santorum. What makes this cycle different? What 
makes this cycle different with respect to, I mean, what you 
are telling me is you are ready, you'll be ready next year or 
sometime soon after. You feel confident that you'll have the 
technology to field a Future Combat System, that we are not 
just going to do technology research here. We are going to go 
with a whole new Future Combat System for this Objective Force. 
You feel confident that you can get there? What makes this 
restructuring, or modernization cycle, so fundamentally 
different that you can do this less expensively than in 
previous cycles? Again, using your own chart.
    General Kern. Senator, I do not know if I can do it less 
expensively. I do know we need to take the steps towards those 
investments that we know we have to take with the technologies 
available in this country and apply them to our systems. I 
could take you through a couple of alternatives.
    Senator Santorum. But my question is, can we get to the 
leap-ahead technology without a higher amount of investment in 
RDT&E? Can we get there?
    General Kern. The basic research, as I said, again, I think 
is adequately resourced. It is in the final phases where, when 
you get into the final development, what we referred to in the 
past as engineering, manufacturing, and development, when you 
take those prototype investments and must transition them into 
a production-ready capability. There are some positive 
indicators in today's world through modeling and simulation. 
Many of the models which we use in development can drive 
production. That is the way the triple seven was built and that 
is the way we are doing Crusader right now through solid models 
that allowed us, in the past, to make changes in design, which 
are physics-based, not just drawings, and allow that to 
transition to production. So, there are some indications that 
we would be able to do it faster and less expensively than we 
have in the past.
    There are other pieces of the chain and we are going 
towards, much towards, miniaturization of electronics where the 
basic production requirements are very expensive. So, if you 
look at the investment in building a chip factory, it is 
billions of dollars. The cost of producing the chip is pennies. 
There is a difference in how you are going to invest and we are 
looking at different technologies.
    I do not expect that the future systems are all going to be 
made of homogenous armor or even some of the different systems 
that we use today. I expect we are going to see composites and 
there are going to be some different industrial processes 
required for these future systems. I believe, also, that our 
propulsion systems on the ground are going to follow very much 
from what is being done in the commercial sector today.
    Where we in the United States Army have only invested 
literally a few hundred million dollars in the development of 
new engines, the commercial sector is investing billions of 
dollars. So, technologies that are emerging in hybrid electric 
power and fuel cells are things that we are going to have to 
leverage as we move from what we have done in the past into the 
future. So it is difficult to predict how much of that 
leveraging will save us money and how much we, in the Defense 
Department, are going to have to do for our own.
    Senator Santorum. I also have a question. How much of that 
leveraging gives you the leap-ahead technology that is superior 
to somebody else's that is off-the-shelf? But that is another 
question. Go ahead.
    General Kern. There are two parts to that Senator and that 
is one of the reasons why the Interim Brigade is so critical. 
It is not just the technology; it is having the soldiers that 
understand how to use that technology in the environment of the 
battle space. There are examples where we have been working 
with experimentation with the Fourth Infantry Division, which 
we will conclude with a division exercise this fall where we 
understand how to use network battlefields. We have taken a 25 
percent reduction in our combat power, with our current 
platforms, by applying those technologies to that future 
battlefield by networking those systems. We have demonstrated 
that to ourselves through analysis and through field 
experimentation in a recent exercise out at the National 
Training Center. That works, but you can cover a larger area. 
There is risk. So, that is the piece that we must not only have 
the technology, but we also must have soldiers that can use 
that technology to their advantage.
    I have a classic example of walking a Civil War 
battlefield, and I could take you out to Manassas, or we could 
go to Gettysburg. If you look at the artillery pieces that were 
on those battlefields, they were rifled artillery, capable of 
shooting 5 or 6 kilometers without any problem. They were lined 
up, however, as an infantry support weapon hundreds of meters 
away from the opposing forces. So, we have the Union and the 
Confederate forces using indirect fire weapons of today as a 
direct fire weapon a little bit over 100 years ago. They had 
the technology, if they had backed those systems off the front 
of the hills that they were on, to fire them indirect. They had 
teletype that they could have used for communication with 
towers for observation, or balloons for observation, which they 
also used. They did not put the pieces together. So, it is not 
only that one must have the technology, but you have to 
understand how to apply that technology to the battlefield.
    The work that we are doing out at Ft. Lewis with the 
Interim Brigade starts us down that path of learning how to use 
these new technologies. We are going to move from convoys that 
can go today at best about 30 miles an hour, at the very best, 
to 40 and 50 miles an hour. That sounds like a simple thing to 
do, but I would ask you to line up any 20 vehicles that you 
want to pick and try to move them at 50 miles an hour and keep 
that as a coherent unit. That takes a different tactic. There 
are some who suggest that we ought to be able to go 200 miles 
an hour. Now, that is clearly a leap ahead when you are 
operating in a ground plane of environment in urban conditions 
that we have to operate in. So, there are a whole series of 
things like that that must happen, not just having the 
technology in hand. That is the challenge that we face in the 
United States Army--taking that technology and applying it to 
the battlefield.
    Senator Santorum. Thank you.
    Senator Lieberman. Thank you, Senator Santorum.
    Senator Ben Nelson.
    Senator Ben Nelson. Thank you, Mr. Chairman. I would like 
to welcome our panel as well, and thank you for your time, to 
help us as we begin a mark-up of the Fiscal Year 2002 Defense 
Authorization Bill. As I have listened to the discussion today 
and focused on what the goal of an Objective Force is in your 
discussion about how we might be able to reach that goal, there 
are a couple of questions I have regarding that. One is in 
looking at the skipped modernization cycle, but looking at it 
not so much as the skipped modernization cycle but to look at 
it in terms of how much is being put into procurement and into 
RDT&E. I assume that we do not start off with the idea of how 
much money we have before we decide what we are going to buy. I 
assume we start off looking at what it is we need and what 
kind--and I am talking about assets of course, what assets we 
need--and then determine what that is going to cost. I assume, 
also, that the fact that there are some projections of lower 
amounts of money here out in the future could be because we are 
projected to have less money, but could it be because we are 
looking at some economies of adding on to existing technology, 
improving technology? That is my first question. Are we faced 
with trying to figure out what we are going to buy with limited 
funds because of reallocations within the military based on the 
Secretary's study? I am a little concerned about what we are 
doing here, whether we are starting with the objective or 
whether we are starting with the method of getting the 
objective.
    General Kern. Senator, I will start and I will let General 
Bond address the force development area, that clearly is in his 
bailiwick. We believe very strongly in the Army that you start 
with a strategy and not with a resource limitation. So you need 
to match your strategy and what your overall policy is with 
requirements and then identify how you are going to resource 
those requirements, both in terms of people and in terms of 
equipment and training.
    Senator Ben Nelson. What the available resources, on some 
sort of reasonable basis, might be.
    General Kern. We also believe that there are some advances 
in technology that allow you to do things in the future that 
you have not been able to do in the past. As I noted earlier, 
we have learned that in networking the battlefield, at which we 
really believe we are leaders in the world, we see some 
tremendous capability that we have not had in the past. That 
is, a situational understanding of knowing where we are, where 
our friends are, using our intelligence requirements to 
understand where the enemy is, and being able to control the 
tempo and space in the battlefield. That is one area where we 
believe that we can leverage today. We believe that we will 
clearly leverage the joint capabilities that the other services 
bring, the precision capability of our air and naval forces, 
into the Army's battlefield. This will be key. In the end, 
though, it is going to be a soldier on the ground that wins 
America's wars and that is where we must pay our attention, and 
those investments are the ones which we will look at in terms 
of resourcing.
    General Bond.
    General Bond. Yes. Senator, from my perspective, as we look 
at this, to take the three axes that we work with, Objective, 
Interim, and Legacy Forces, we have to try to work a balance. 
We want to make the leap-ahead technology capabilities to 
transform this Army to the Objective Force. That is our goal. 
We are going to take some interim risk in trying to do this 
with an Interim Force to develop those tactics, techniques, and 
procedures, with the objective of being able to determine how 
we need to fight with this force. We are willing to take more 
risk because of where we stand in the world today with the 
Legacy Force. Consequently, as I try to balance these 
resources, trying to make sure I am able to transform, do that 
interim step, and taking the risk with the Legacy Force, that 
is where the crux of the matter lies. That is where the near-
term risk lies, with the Legacy Force. That is where we are 
taking operational risk today.
    The requirement within the Army is to modernize and 
recapitalize the entire force. I cannot afford to do that. All 
I have the resources for in trying to do that balance is to do 
the III Corps, to develop those three and a third divisions 
with that full modernized capability that can be our hammer in 
which to retain dominance in the world. We are willing to do 
that. I think that is the balanced way we need to look forward 
to and that is when General Kern talks about being able to 
support the science and technology. That is where we are taking 
the risk in being able to get those dollars to provide.
    Senator Ben Nelson. If we are faced with a missile defense 
system, for example, which may or may not adversely affect your 
budget as directly as it may affect some of the other services' 
budgets, unless we start borrowing from all the services to 
find a pool of money to pay for that, does that adversely 
impact what your projections are for procurement for the years 
beyond 2002?
    General Bond. Certainly, if you decremented our budgets, it 
would adversely impact us.
    Senator Ben Nelson. So, you are assuming that whatever it 
would be for anything additional on missile defense would be in 
addition to what you are anticipating for your asset budget, 
capitalization budgets?
    General Bond. Yes sir. Senator, that would have to be an 
assumption we make or the Army will not have the ability to 
move forward.
    Senator Ben Nelson. Well, how would that square with the 
Secretary's efforts at reorganization and reorganization within 
the military today to try to find some economies and/or some 
savings that might generate some funds for other projects? I 
assume nothing can be wrung out of what you are proposing here 
for procurement.
    General Kern. I would say first, Senator, that debate is 
ongoing and so there are no conclusions to that at this point. 
We are thankful for the successes of our missile defense 
programs. Certainly, we in the Army have participated in that. 
The ground based missile defense has an Army program manager. 
THAAD has an Army program manager and Patriot PAC-3 has an Army 
program manager. Those are all hit-to-kill technologies which 
we have participated in and benefit. We believe very strongly 
that ballistic missile defense is going to be critical to the 
survival of all of our forces on future battlefields.
    Senator Ben Nelson. As well as theater defense?
    General Kern. Theater defenses are critical to our forces. 
The strategic defenses, I think, are the debate which is yet to 
come and how that will be achieved, but from my perspective, 
the Army has a minimal procurement and RDT&E position right now 
and we have achieved a very delicate balance to move forward in 
the future and if we were decremented from that, it would be 
very difficult.
    Senator Ben Nelson. But if the missile defense system 
becomes a bigger part of the assets of the military, that could 
affect your prioritization of what your current and your future 
projected assets might be. Is that correct?
    General Kern. Senator, I do not think it will affect the 
Army's prioritization of the assets from an overall DOD 
perspective. You may be correct.
    Senator Ben Nelson. OK. Thank you.
    Senator Lieberman. Thank you very much, Senator Nelson.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. The longer we talk 
about these things, the more problems I see out there.
    Senator Lieberman. I am having the same reaction.
    Senator Inhofe. Some have been arguing that the Army is 
going to have to pay for some or all of this transformation 
either by force reductions or canceling some of the programs 
needed to recapitalize the Legacy Force. Now, first of all, 
either one of you, have you looked at this argument? Then 
second, have you assessed the risk that would come with these 
reductions if this were the case?
    General Kern. I guess I will take a stab at that, Senator. 
Yes, we clearly have looked at the arguments and the balance 
that is required. We believe that the United States Army, in 
its role as the dominant ground force, is necessary to win 
America's wars, and I do not think there's an argument on that 
part of the debate in the balance. We also believe that daily 
engagement in the occupation of the United States Army in our 
deployed forces is one which is going to be part of the debate, 
and you have all listened to the balance between a change of 
strategy, of whether it is going to be two MTWs or something 
less. But on a daily basis, the United States Army has people 
deployed in engagement around the world and we still have 
follow-up forces in the Sinai, the Balkans, Korea, and around 
the world that have been part of what we must also balance in 
that equation. So, there is the current piece of it that we 
must deal with as well as our ability to then engage in some of 
those which are less clear today in predictability in terms of 
where our next battlefield may be.
    It is that balance that must be achieved by the United 
States Army to meet our day-to-day mission requirements around 
the world as well as to be able to win future wars against 
threats that are emerging in some cases, as you have noted, 
where we may be overmatched. We want to regain the edge so that 
we send our forces in, as we have stated in the past, we do not 
want it to be a fair fight. We want the U.S. soldiers to have 
the upper hand when they go into battle.
    Senator Inhofe. That is the reason for the second part of 
that in looking for those resources by canceling some of the 
programs needed to recapitalize the Legacy Force. That is where 
the risk comes in, I would say. Would you agree with that? If 
we have to take some of our programs, that would modernize the 
Legacy Force and it is going to increase the risks for our 
troops and put them in with over-matched equipment.
    General Kern. That is a calculated risk that we have taken 
as I mentioned earlier. We have not chosen to recapitalize the 
entire United States Army, but we have selected 19 prioritized 
systems there that give us the best return. Are those the 
correct 19? We will continue to assess that in terms of 
priority. Are there sufficient resources to both recapitalize 
that force and develop the modernization force where we put our 
priority on Comanche, Crusader, tactical UAVs and the automated 
command and control systems, as you noted? So, we have gone 
through that prioritization effort and believe we have a good 
balance. The challenge is to continue that balance and make 
sure that that in fact happens.
    Senator Inhofe. You see, this is my concern, Mr. Chairman. 
We are talking about 2002 but I am wondering now about 2003 and 
2004, where we are headed. I will leave the Crusader alone, but 
I do want to reread just the first and the last sentence 
attributed a couple of days ago to General Keane, to ask you 
both if this characterizes the problem as you understand it 
too. He said, ``I think it is absolutely outrageous to think we 
would permit our young Army soldiers to be outgunned by 
adversary artillery in the battlefield today.'' Then the last 
sentence was, ``we have to do it at range. We have to have the 
mobility to do it. We have to have the lethality to do it and 
the Crusader is the answer to that.'' Do you agree with that 
statement?
    General Kern. Senator, I agree 100 percent with that 
statement and I would add to it. If you look at the chart that 
we provided, when we chose to modernize the last time we did 
not include artillery.
      
    
    
      
    It was a conscious decision to take some risks. I would 
tell you again in 1991 following Operation Desert Storm we had 
an Army systems modernization program in which we had to 
significantly reduce our investments. When we made those 
prioritizations at that time, and we looked at the shortcomings 
of our forces which we had deployed to the Gulf, our biggest 
shortcoming came out in our indirect fire artillery. The 
investment strategy then shifted into the Comanche and the 
Crusader, giving us the reconnaissance capability as well as 
the indirect fires. While I am at it, I would like to correct 
something I said earlier on the Crusader in answer to your 
question. I said, and gave you a little more specifics, the 
sustained rate of fire for the Paladin is four rounds per 
minute. I believe I said six. You can only do that, and I did 
not give you the final answer, for 3 minutes.
    Senator Inhofe. That is why I said, let's go to a sustained 
comparison.
    General Kern. When you sustain it, it is only one round per 
minute. So, you have four rounds per minute for 3 minutes and 
then you have to shift to one round a minute.
    Senator Inhofe. With each of the systems that are produced 
today and on the market for anyone to buy, Iraq, Iran, 
Pakistan, anybody else, of those four countries, each one of 
those is superior to the Paladin. Do you agree with that?
    General Kern. Yes, sir.
    Senator Inhofe. When we were talking, we had the Joint 
Chiefs in and the Secretaries. We asked them to update us on 
the shortfalls and they had talked about between $48 and $58 
billion, but then with this new budget, about $30 billion. To 
break that down, the Army's portion of that was, I believe, 
General Keane said $9.5 billion and then we elaborated on that 
and he talked about the backlog of RPM accounts. I do not know 
why we are not talking a little bit more about these. These are 
the things that are supposed to be done at that very time when 
they're first diagnosed. Are we adequately taking care of the 
program that is going to make up for this backlog in property 
and maintenance? I would suspect that if I went back to Ft. 
Bragg today in a rainstorm that I would stay in the barracks 
and I would get just as wet as I did 3 years ago.
    General Kern. You are correct, Senator. The fiscal year 
2002 budget and the priorities that were made starts to attack 
that problem. We are increasing the RPM investments that are in 
this budget submission request here. It does not get to 100 
percent and it does not address the accumulated backlog and 
repair. So, it just begins to address those issues and does not 
solve them, as you have noted. But it is also the reason that 
there is no significant increase in our procurement budget. So, 
the point that Senator Lieberman noted, we made that trade here 
for military pay and for attacking the repair shortfalls in our 
priorities. But it does not solve them.
    [General Kern provided supplemental information, the 
information follows:]

                        Warfighting Requirements

    The amended President's budget for fiscal year 2002 represents a 
balanced program that will allow the Army to remain trained and ready. 
This program provides near-term capabilities demanded by the warfighter 
and lays the foundation for strategic responsiveness and dominance 
through the Objective Force. The fiscal year 2002 Army shortfalls in 
the areas of transformation, people and readiness total $9.5 billion. 
Included within these shortfalls are additional resources necessary to 
meet warfighting requirements such as: $566 million to accelerate 
recapitalization of the counterattack corps to meet Department of 
Defense goals of maintaining an average fleet age at or below half the 
system's expected service life, $1.9 billion in current force 
modernization to ensure combat overmatch and be able to supplement the 
capabilities of the Objective Force until transformation is complete, 
and $300 million to fully fund ground and air Operating Tempo at 
established readiness levels.

    Senator Inhofe. I see. Mr. Chairman, I know my time has 
expired but I have one more question.
    Senator Lieberman. Well, go right ahead.
    Senator Inhofe. General Shinseki had said--I am looking for 
the date because I had asked the question. He said the Army 
could use another 40,000 troops in order to accomplish the 
current mission profile. This has long been a discussion of all 
these various deployments that we have right now. Do you agree 
with them in terms of what the needs are?
    General Kern. Senator, I certainly agree with our Chief. 
[Laughter.]
    But I would also, if I could just give you a specific 
instance in the areas that I deal with. In contingency 
contracting, we have taken most of our contracting officers out 
of our commands who wear a uniform and have turned that over to 
civilian contracts, and that is okay. We are able to sustain 
that but now those young soldiers that we send on 
contingencies, we send them down to observe plants, for 
example, the commander of DCMA, the Defense Contract Management 
Agency, that oversees the Apache helicopter in Mesa, Arizona, 
just spent 6 months deployed to the Balkans doing contingency 
contracting. So, it is that type of repetitive impact on our 
people which I even see in the acquisition of our systems which 
General Shinseki referred to as this continuous problem. When 
you look at that in terms of retention of people, that is 
something that we must address.
    Senator Lieberman. Thank you, Senator Inhofe. Let's start a 
second round. I wanted to ask a few questions about aviation 
modernization. I understand that the first prototype Comanche 
will complete its work and stop flying in September. That would 
leave only one prototype to meet the test objectives. I also 
understand it would cost $25 million to modify the first 
prototype to take the mission equipment package and another $25 
million to continue to fly it for another year. I wanted to ask 
you, General, is the Army convinced of the risks of the program 
in having only one flyable prototype is low enough to forego 
those investments?
    General Kern. Senator, that has been a concern since we 
started out the program with only one prototype flying. We did 
all our initial flight testing with only a single prototype. No 
aviation program in history has ever done that before. We 
brought on the second prototype to begin the integration of the 
mission equipment packages into the next phase of it once we 
have confirmed our aviation performance envelope with the first 
prototype. Our investments have been in the first prototype to 
prove out the aviation envelope in its mission requirements 
without the mission package on board, just dummy weights to 
simulate that. With the second prototype, we will integrate our 
mission equipment and do that development, but we did not have 
sufficient funds to update then the first prototype to that 
same level of proficiency.
    If we were going to make that investment, we probably 
should have made it a year or two ago to significantly improve 
our schedule. Our challenge today is that if we added that just 
to build the second prototype and bring it up, I do not think 
we would gain any significant advantage in time. I would 
suggest, however, that there are other risk mitigation areas in 
which we could apply that and it would be our challenge then to 
determine what would be the better use of the investment.
    Senator Lieberman. Let me go back to the Legacy Force with 
a few specific questions that are before the subcommittee. The 
Army has reduced the number of M270 multiple launch rocket 
system (MLRS) launchers in each MLRS unit, which has freed up 
launchers to go from the active Army to the National Guard. At 
the same time, the Army is upgrading launchers to the M270A1 
version for eventual fielding to both the active and Guard 
battalions that support the counterattack corps' mission. I 
understand that there are two battalions of M270 launchers at 
the depot waiting for all of the associated support equipment 
needed to field those battalions. The Army has an unfinanced 
requirement of $37.6 million for that equipment. Is that a 
higher priority than upgrading additional launchers to the A1 
configuration?
    General Kern. I will let General Bond comment on the 
priority, but it is an active debate right now within the Army 
as to how to balance our investments with the multiple launch 
rocket system. We have two systems which have that capability--
the M270A1 and the one which we have in development, the 
HIMARS. The HIMARS is the wheeled version of the multiple 
launch rocket system which would allow us to deploy that on 
C130s. So, as we have looked at the recapitalization of the 
M270 multiple launch rocket system we are currently looking at 
the mix of those two systems and trying to determine what is 
the most effective way to both upgrade to the A1 and then bring 
on the HIMARS as quickly as possible. That prioritization 
effort is ongoing right now and that is where that money which 
you had addressed would have to be competed. I will let General 
Bond comment.
    General Bond. Sir, it's a sin to have that much combat 
power sitting in a depot for that amount of time. That is one 
of the things that I have tried to work on with our sustainment 
personnel and that task force in which to get that funded. From 
my point of view, we really need to get that capability out to 
the field. To say whether it is more important than providing 
that A1 capability, that becomes a technical issue partly 
because of the new weapons systems that are coming out and the 
missiles that can only be fired from the A1 capability. Right 
now, I am really working hard to try to be able to fund that 
and make sure that happens while continuing to be able to 
modernize to the A1 configuration and to try to transform into 
the HIMARS capability.
    Senator Lieberman. We want to continue to work with you on 
those matters. The subcommittee has had some interest expressed 
in the procurement of additional heavy equipment transporter 
trucks. I wonder if you could give us the Army's position on 
that. Maybe more specifically, I would ask, do you feel that 
you have met all your wartime requirements?
    General Kern. Senator, I would like to provide a complete 
answer for the record on that issue. The heavy equipment 
transporter, the HET, is not in our unfunded requirement 
priorities right now and there is going to be a debate on the 
entire size of the force whether we have sufficient resources 
to meet that equipment. We are trying to lighten up our force 
right now, moving towards lighter equipment, and that is part 
of the equation. I would note, however, and thank the 
subcommittee for its efforts in the past to give us the heavy 
equipment transporter, this is one of the real shortcomings 
that we found during our deployments to the Middle East where 
we were using everybody else's equipment as we borrowed it.
    [The information referred to follows:]

    The Army's requirement for Heavy Equipment Transporter Systems 
(HETS) is 2,484. At the end of fiscal year 2002 funding, the Army will 
have procured 2,344 HETS. Upon completion of the fiscal year 2002 
procurement, the Army will be short 139 HETS at a cost of approximately 
$80 million. The HETS shortage resides primarily in National Guard 
divisions. Requirements for critical early deploying units have been 
met. Should additional funds become available for the procurement of 
HETS, the Army would procure the HETS to meet existing shortages.

    General Bond. I would also say, Senator, that it is one of 
the priorities within the recapitalization efforts. I need that 
capability to transport our M1s and M2s. Consequently, that 
teaming arrangement with the contractor in the depots should 
provide us additional capability, at least to meet the interim 
capability with that kind of task force.
    Senator Lieberman. OK. Noted. Quick question about the 
Blackhawks. The Army plans to fund the Blackhawk acquisition, I 
believe, at 12 this year, which certainly seems to be an 
insufficient rate to meet the outstanding requirement of 330 or 
even the anticipated requirement of 240 proposed by the 
modernization plan. The National Guard's Adjuants General of 
the 50 states have asked us to add an additional 20 UH-60L 
utility helicopters and 6 HH-60L medivac helicopters this year 
and support a 5-year multi-year procurement of 60 a year. Would 
you agree that the Blackhawk acquisitions remain an unfunded 
requirement of the Army?
    General Kern. Yes, Senator, I would. I think it is an 
unfunded requirement. We have listed that, I believe, at about 
$107 million as the shortfall and unfunded requirements for the 
Blackhawks. Our priority is to get them distributed among the 
Army National Guard and solve that problem as we take the UH-1s 
out of the force.
    Senator Lieberman. Let me ask a futuristic question. You 
mentioned robotics in your opening statement and we were quite 
interested. We had some interesting testimony over the last 
couple of years, and I believe it was in last year's DOD 
authorization bill that we actually set some goals for unmanned 
equipment across the services by 2015. If you can give us a 
quick glimpse at how work is going within the Army on robotics.
    General Kern. Sure. We have a number of programs that are 
addressing robotics. Clearly in the air we have the tactical 
unmanned aerial vehicle, which is not a fully autonomous 
system, but it begins to give us that capability in aviation 
platforms.
    On the ground plane, we have a number of programs in our 
science and technology within the Army that are moving forward. 
They have completed recent testing of our robotic systems 
there, and while we are able to move autonomously, we have not 
completely solved some of the sensor issues associated with 
that. We can move it about 15 miles per hour with relative 
confidence with a robotic vehicle. Also, if it runs into a wall 
of straw in a field it looks like a wall to the robot and so it 
will turn and detour, whereas if I had a tank I would drive 
through that field that was planted there. So, there are issues 
like that in our development that we need to deal with.
    We have developed a lot of interesting things, and we have 
found that a robot does not really care that is up or down, 
left or right. Yet, when we ask a human to design something, we 
design it for a person to be sitting in there who is either 
left handed or right handed and how they can see. While there 
are a lot of people who are concerned about the initial 
development of turning the robot right side up, the answer is 
we really do not care. If it flips over, you just keep on 
moving in the direction until you get to where you want and 
then you just have to make sure the sensor points in the right 
direction.
    Senator Lieberman. That is definitely an advantage over 
your average human being.
    General Kern. Yes, sir, it is. We have DARPA projects that 
are working with them and we work jointly with the Marine 
Corps. In fact, the joint unmanned robotic program in 
Huntsville is headed by a Marine Lieutenant Colonel working 
with us. We are working a number of systems there that look at 
robots that you can wear on a backpack and when you can get in 
an urban terrain that will go up a set of stairs. It will map 
the inside of a room and provide you capability so that you do 
not have to put a soldier in there, which is a very dangerous 
place, inside a dark room. There are efforts that are looking 
at using sonar on those robots to actually do the mapping. So, 
we are finding some interesting results of that, with some good 
results in terms of being able to produce a robot.
    Now, I suggested that why in the world would you ever want 
to strap it on a soldier's back as opposed to having the robot 
follow you like a mule and carry your pack? We believe there 
are some things, again, that we think of in terms of human 
behavior, when we really need to understand much more in terms 
of robotic behavior. But I would also suggest that what we have 
learned is that fully autonomous robotics on the ground plane 
are very difficult to solve all the things that you and I solve 
just walking around on a day-to-day basis. So, there is a lot 
of cognitive behavior that you have that a robot finds 
difficult to deal with. Some have suggested that the robot is 
probably the dumbest soldier we will ever have to teach 
anything. But once you've taught it, it is easy to teach the 
next million of them. So, the challenge is how do you do that 
learning and training experience within robotic systems.
    We also are going to have major logistics issues, which we 
have to understand. Like many of our systems today, robots rely 
on battery power and our infantry battalions are literally 
carrying thousands of pounds of batteries, to keep them re-
supplied. We must address that issue early on as to how we are 
going to be able to do that on the future battlefields. I guess 
the simple answer is we have made a lot of progress. We 
understand a lot more today, but for ground operations there 
are significant challenges in robotics which we still must 
learn how to work through.
    Senator Lieberman. Thanks for that report. I appreciate it.
    Senator Santorum.
    Senator Santorum. Thank you. I want to talk a little about 
the Interim Force and the side-by-side test that is going to be 
done as required by this subcommittee and by Congress. We had 
some concerns about the testing and the size of the test and at 
what level the test would be done and we signed off on letting 
Phil Coyle handle it at the time but since he left, I guess the 
deputy director agreed to comparing two companies performing 36 
platoon size missions. These are two brand new brigades, an 
operational concept. You just gave me a very good speech about 
how it is not necessarily the equipment, but it is the system. 
It is how we integrate this and how we function as a unit. All 
of this is important. Yet, we are doing the side-by-side test 
at a platoon level. What are we to gain from this test if the 
key to our moving forward and leap ahead is in large measure 
how we integrate this in a warfighting concept in this brigade 
or this company? Yet, we are only doing tests on a platoon 
size. I am trying to square what you tell me is the future and 
how we are going to integrate modernization to how we are going 
to test this new concept.
    General Kern. Senator, just before I came over here, I had 
a conversation with Major General John Marcello, who is the 
independent tester for the Army. He commands our Army Test and 
Evaluation Command and he has worked with Mr. Coyle previously 
and the new director of operational tests in developing the 
plans for the testing of the Interim Brigade Combat Team. In 
our process of acquiring systems, we put the majority of our 
effort on the initial operational test and evaluation, the 
IOT&E, and that is what allows us to go into full-rate 
production. That is a very extensive test. It is at a brigade 
level, which will have battalion headquarters represented as we 
go through that test. We have made a great deal of our 
investment in terms of getting the soldiers ready so they will 
move from the work that they are doing today through company 
and then battalions as we field the systems to get ready for 
that test, and that is where the training, operations, and the 
sustainment of all of the systems will take place.
    We have also planned then to address the comparative 
evaluation required in the side-by-side testing and we find, 
that in our overall evaluation, it is a subset of that total 
test that we will do over at the end of that period when we get 
ready to go into full-rate production and we must past that 
test. The difference is, as we have looked at it and discussed 
it, it is basically the M113A3 that we will use as the 
comparison test and the comparative evaluation of a side-by-
side.
    We have done a significant amount of work in analyzing that 
capability. We did it first through analysis and we did that at 
both Ft. Knox and at Ft. Leavenworth where we have our training 
and analysis capability. We have significant amounts of data on 
how that worked. We have done it in gaming. JANUS is the war 
game we used at our company and battalion level to do that and 
that is fairly finite. We did it in our bid sample where we 
asked the equipment to come in, we did some comparative 
testing. We did soldier loading of the M113 and the other 
systems which were proposed, and one of the challenges there is 
that a fully equipped squad of soldiers has a difficult time 
fitting into the M113A3. We concluded that and we can 
demonstrate that. We know that there are relative advantages of 
tracks versus wheels depending upon the environment you put 
them in. We have done a lot of studies and analysis on that. 
So, all of these add up to an accumulation of data that is a 
comparative analysis of what we have today versus where we are 
going and what those future battlefield requirements might be 
as we see them.
    We have concluded, and our choice has been made and 
challenged through the court system, or through our Government 
Accounting Office, not through the court system, and we have 
done a lot of work in understanding that we made the right 
decision. So, we are prepared to do the testing which is 
required. There's a cost, we believe, of about $23 million to 
do that in 2002 but we do not believe that it is going to give 
us any significant new answers that we do not already know. But 
we will add it and we will report back to you as required, but 
the $200 million of testing that is going to go into this 
Interim Brigade Combat Team will end up in lots of different 
developmental tests, human engineering factors tests, and 
finally in an operational test, which will really give us the 
conclusive answer that we made the right decision and are ready 
to go to full-rate production. That will not be until we get 
toward 2003. So, we have an extensive amount of planning to 
accomplish the side-by-side comparative evaluation as required. 
We believe that it is sufficient at the company level to do 
that, to give us the information, particularly when you add it 
with all the other analysis and evaluation that I described and 
then we will add that to the total compilation of information 
that we get at the IOT&E. But we do not honestly believe that 
it is going to give us that much more new information.
    Senator Santorum. General, another question on the Interim 
Armored Vehicle (IAV) and that is the submission of a Selected 
Acquisition Report (SAR), which is required and has yet to be 
sent to Congress. You talked about all the work that you have 
done and all the studying you have done. First, a question. Why 
has that not been sent? Second, again, according to Title X if 
low-rate production quantity exceeds 10 percent of the total 
number of articles to be produced, as determined by the 
Milestone II decision, the Secretary of Defense must include a 
reason in the SAR and since what we are talking about here is 
about 50 percent of the vehicles being produced, why haven't we 
gotten a reason for exceeding the 10 percent? Or maybe you can 
give me the reason why we should exceed the 10 percent.
    General Kern. In the Defense Acquisition Board, which 
allowed us to move forward, we addressed those issues as going 
beyond the low-rate initial production. These systems are 
different in that they are somewhat off the shelf and that the 
systems are being produced. So, the low-rate initial production 
was really designed as a criteria for something which is going 
into new production. So, you did not launch into a production 
of an unknown. So, that debate took place and is accounted for 
in the acquisition defense memorandum which will be part of the 
SAR background data when you receive it. I hate to blame things 
on our headquarters, but we have had a change of administration 
since we have done that and the SAR. We have made our input, 
but it has not made it over to you, sir.
    Senator Santorum. I just want to pick up on something 
General Bond talked about. Maybe this is a question out of 
ignorance but I am sure you can fill me in on this. You talked 
about this hammer of a three and a third division corps that 
you are going to fully modernize and recapitalize. The obvious 
question to me is, what is the relevancy of the 6 and two-
thirds that you are not doing anything with or you are doing a 
minimal amount with? How relevant is the remainder of that 
force? When I hear Senator Inhofe talk about General Shinseki 
saying he needs 40,000 more troops, which is another three and 
a third divisions potentially. I am just trying to understand 
how all that fits together with this force that we are trying 
to put together and the priorities of spending.
    General Bond. Well, that is a good question, sir. But as 
someone said before, quantity has a quality all its own. That, 
coupled with the idea that not all of the nations will 
modernize and our potential enemies will modernize to the full 
capability. We have had to take some risks. We would like to be 
able to fully modernize all of those divisions, all of those 
forces, to give them that combat overmatch. But we cannot 
afford that and transform this Army. What we have chosen to do 
is to try to take those divisions, that counterattack corps, 
that we would need to be the hammer, that you would need to 
have that combat overmatch if, in fact, we went against an 
adversary that had the T90 capabilities and provide them with 
that modernized capability, instead of spreading it over all 
the divisions of the Army. The tactic would be, I believe, to 
try to have force presence to be able to hold the enemy, to 
bring in a counterattack corps, and to use that as the hammer 
in which to re-establish that dominance over that force and 
achieve the objectives that the National Command Authority 
would then dictate to us. Is it the optimum way to do it? No. 
Is it what I would like to do? No. But using the resource 
constraints that we have in trying to take the opportunity now 
to transform and with the current posture in the world that we 
have, we think we can take some risks there and do this. If in 
2 or 3 years or 5 years down the line we find that the 
adversary has increased beyond where we think we are, those 
technologies that we have been applying and working toward the 
Objective Force could easily be transformed and provided to our 
Legacy Force and provide that capability. We have to take some 
risks. We have to make some choices. The Army has chosen to 
take the risk in that force and to try to be able to transform 
this Army.
    Senator Santorum. Can you give me, and maybe you are not 
the right person to ask, but that seems like a very significant 
amount of risk. Can you compare with that, let's say, the other 
branches of the service and their capability, their hammer 
versus your hammer? I mean, how much have they recapitalized? 
Have they modernized? As a percentage of their forces, how much 
risk do they have to assume versus how much risk the Army is 
assuming here?
    General Kern. Quantitatively, we can really only talk to 
the Army, but I believe each of the services has similar 
problems of aging equipment and how much money you need to 
invest--whether it is re-engineering an aircraft or whether it 
is trying to, in our case, re-engine an Abrams tank. We feel 
the risk clearly in the United States Army as we have done that 
and we have made some calculated judgments. About 1,200 tanks 
are of the very best capability, in being able to recapitalize 
the rest of them to a modern capability but not to the same 
level is prudent and something which we can do. We also believe 
that if you are not, it is very easy to get stuck in the past 
and not be willing to let go. But as General Shinseki describes 
it, it is wing walking. You cannot let go of one hand before 
you grab on with the other. That is the balance that we are 
trying to achieve and the risk that we use in our judgments.
    Senator Santorum. If you can answer my question because I 
have to run. My question is, how do you stack up versus the 
other forces, the other branches.
    General Kern. My personal opinion is that we are a little 
bit worse off than the other services.
    Senator Santorum. A little bit worse off or a lot worse 
off?
    General Kern. My personal opinion is probably a lot worse 
off. [Laughter.]
    Senator Santorum. Let me throw out an additional concern. 
You are a lot worse off, you are taking a lot more risk, and 
even doing that, we do not see how you get to fund your 
Objective Force and your Interim Force. So, what you are 
telling me, General, is we are willing to take that risk 
because we think we are going to be able to then insert X force 
here. What we're saying is, I do not see how you pay for X 
force. So, you've assumed all of this risk, you have shrunk 
your effective hammer, and we still do not know how we get to 
the transformed Army. I mean, I do not want to speak for you, 
but that is what I am sitting here looking at and that is not a 
pretty picture from my perspective.
    General Kern. It's a good point, sir. The question is, do 
we know we have to transform them? We cannot stay in the Legacy 
Force if we are going to continue to be the dominant Army and 
the land force of the future. I think that General Shinseki has 
shown significant insight in being able to realize that we must 
transform it. It is an issue we wrestle with every day, sir, 
and it is something for which I do not sleep well at night.
    Senator Santorum. I am just concerned that when you are 
wing-walking that you are going to let go and you are not going 
to be near the wing that you need to grab on to.
    General Kern. Senator, I think all of us share your 
concern. We expect that we are going to have to continue to 
work through these issues with you to find the right balance as 
we move forward. But I do believe that the transformation 
strategy that the Army leadership has laid out is the right one 
and that we must address each of the pieces that are a part of 
that transformation. We must do the investment in the science 
and technology to get the Objective Force. We have to make up 
for the shortcomings with the Interim Force and learn new 
doctrine and techniques to allow us to use the technology for 
that future force. We have to put the investment to keep the 
forces that we have today ready to fight when called upon. So, 
while I am not comfortable that there are enough resources to 
do all of it, I believe we have to address each of those 
pieces.
    Senator Lieberman. You are right and you know we are asking 
you to address each of those pieces. Maybe you are a little or 
a lot worse off than the other services because, as I said at 
the outset, you are ahead in the transformation process. I just 
think we are asking you to do an awful lot and you are trying 
to do it and we are not giving you the resources to do it well. 
We are going to come to a point before long where the risk is 
going to be unacceptable in the short term and/or we are not 
going to see the practicality of getting to the Objective Force 
because we are not giving you enough resources to do it.
    So, we want to work with you, and I thank you, General Kern 
and General Bond. Your testimony has been very responsive to 
our questions. Please again give our regards and appreciation 
to General Shinseki. I hope within the constraints that 
unfortunately we are operating under here because we have 
committed a lot of our national resources already to other 
causes, that we can find a way to advocate and to get you more 
money. That is certainly the goal of the subcommittee on a 
bipartisan basis. I thank you. The hearing is adjourned.
    [Whereupon, at 4:16 p.m., the subcommittee adjourned.]

                                 
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