[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


                                     

                         [H.A.S.C. No. 110-145]

                                HEARING

                                   ON

                   NATIONAL DEFENSE AUTHORIZATION ACT

                          FOR FISCAL YEAR 2009

                                  AND

              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                AIR AND LAND FORCES SUBCOMMITTEE HEARING

                                   ON

              BUDGET REQUEST ON ARMY ACQUISITION PROGRAMS

                               __________

                              HEARING HELD
                             APRIL 10, 2008

                                     
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                    AIR AND LAND FORCES SUBCOMMITTEE

                   NEIL ABERCROMBIE, Hawaii, Chairman
JOHN SPRATT, South Carolina          JIM SAXTON, New Jersey
SOLOMON P. ORTIZ, Texas              HOWARD P. ``BUCK'' McKEON, 
SILVESTRE REYES, Texas                   California
ADAM SMITH, Washington               JEFF MILLER, Florida
MIKE McINTYRE, North Carolina        JOE WILSON, South Carolina
ELLEN O. TAUSCHER, California        FRANK A. LoBIONDO, New Jersey
ROBERT A. BRADY, Pennsylvania        TOM COLE, Oklahoma
JIM MARSHALL, Georgia                ROB BISHOP, Utah
DAN BOREN, Oklahoma                  MICHAEL TURNER, Ohio
HANK JOHNSON, Georgia                PHIL GINGREY, Georgia
JOE SESTAK, Pennsylvania             CATHY McMORRIS RODGERS, Washington
GABRIELLE GIFFORDS, Arizona          GEOFF DAVIS, Kentucky
KENDRICK B. MEEK, Florida            W. TODD AKIN, Missouri
KATHY CASTOR, Florida                DOUG LAMBORN, Colorado
                  Doug Bush, Professional Staff Member
                 John Wason, Professional Staff Member
                      Ben Glerum, Staff Assistant


                            C O N T E N T S


                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2008

                                                                   Page

Hearing:

Thursday, April 10, 2008, Fiscal Year 2009 National Defense 
  Authorization Act--Budget Request on Army Acquisition Programs.     1

Appendix:

Thursday, April 10, 2008.........................................    43
                              ----------                              

                        THURSDAY, APRIL 10, 2008
FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
                       ARMY ACQUISITION PROGRAMS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Abercrombie, Hon. Neil, a Representative from Hawaii, Chairman, 
  Air and Land Forces Subcommittee...............................     1
Saxton, Hon. Jim, a Representative from New Jersey, Ranking 
  Member, Air and Land Forces Subcommittee.......................     6

                               WITNESSES

Francis, Paul L., Director, Acquisition and Sourcing Management, 
  Government Accountability Office...............................    11
Speakes, Lt. Gen. Stephen M., Deputy Chief of Staff, G-8, U.S. 
  Army...........................................................     7
St. Laurent, Janet A., Managing Director, Defense Capabilities 
  and Management, Government Accountability Office...............    10
Thompson, Lt. Gen. N. Ross III, Military Deputy to the Acting 
  Assistant Secretary of the Army (Acquisition, Logistics and 
  Technology), and Director, Acquisition Career Management.......     8
Ugone, Mary L., Deputy Inspector General for Auditing, Office of 
  the Inspector General, Department of Defense...................    15

                                APPENDIX

Prepared Statements:

    Francis, Paul L..............................................    90
    Speakes, Lt. Gen. Stephen M..................................    47
    St. Laurent, Janet A.........................................    67
    Thompson, Lt. Gen. N. Ross III...............................    56
    Ugone, Mary L................................................   107

Documents Submitted for the Record:

    Memorandum for the Record from Mary L. Ugone, June 24, 2008, 
      OIG Audit Report No. D-2008-067, ``DoD Procurement for Body 
      Armor,'' March 31, 2008 (Project No. D2007-D00LA-0054.00). 
      Submitted by John R. Crane, Assistant Inspector General, 
      Communications and Congressional Liaison, Department of 
      Defense....................................................   115
    Memorandum for Department of Defense, Inspector General, May 
      27, 2008, from Lieutenant General N. Ross Thompson III, 
      Response to the Department of Defense (DoD) Inspector 
      General (IG) Final Report No. D-2008-067, DoD Procurement 
      Policy for Body Armor, dated March 31, 2008. Submitted by 
      John R. Crane, Assistant Inspector General, Communications 
      and Congressional Liaison, Department of Defense...........   117

Questions and Answers Submitted for the Record:


    Mr. Abercrombie..............................................   123
    Mr. Ortiz....................................................   129

 
FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
                       ARMY ACQUISITION PROGRAMS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                          Air and Land Forces Subcommittee,
                          Washington, DC, Thursday, April 10, 2008.
    The subcommittee met, pursuant to call, at 2:07 p.m., in 
room 2118, Rayburn House Office Building, Hon. Neil Abercrombie 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. NEIL ABERCROMBIE, A REPRESENTATIVE 
    FROM HAWAII, CHAIRMAN, AIR AND LAND FORCES SUBCOMMITTEE

    Mr. Abercrombie. Thank you very much for coming today. The 
Air and Land Forces Subcommittee meets today to receive 
testimony on major Army acquisition programs. In addition, the 
panel will hear from the Department of Defense Inspector 
General (DOD IG) about a recent report on body armor 
contracting.
    The panel includes Lieutenant General Stephen Speakes, 
Deputy Army Chief of Staff at G-8. General Speakes, thank you 
for the hospitality and for your service and for your always 
being at the ready to answer and observe and create perspective 
for me.
    Lieutenant General N. Ross Thompson, Military Deputy to the 
Assistant Secretary of the Army for Acquisition, Logistics and 
Technology. And I wonder, do your children say that to you when 
you come home at night? That is something of interest to me. 
``Here comes the Assistant Secretary of the Army for 
Acquisition, Logistics and Technology.''
    Janet St. Laurent, from the Government Accountability 
Office (GAO). Thank you very, very much indeed. Once again, the 
GAO meeting its standards, with the reports coming in.
    Paul Francis, also from the GAO. They put your name on 
there, Paul, I think, so they knew who to blame. Right?
    Mr. Francis. Yes. Would you like to know what my kids call 
me? [Laughter.]
    Mr. Abercrombie. Words with somewhat shorter syllables?
    Mr. Francis. Exactly, yes.
    Mr. Abercrombie. And Mary Ugone from the DOD Inspector 
General's Office. Mary, nice to see you, and thank you for 
coming today.
    In its fiscal year 2009 budget request, the Army has asked 
for $35.1 billion for procurement and development of new 
equipment, and the committee expects the 2009 supplemental 
budget request to include billions more. The charge of this 
subcommittee is to ensure that the requested funding is 
allocated in the most efficient and appropriate manner based on 
its judgment of the Army's stated needs.
    While the Army's desire for some systems is a key issue, 
recognizing that desire is not where this subcommittee's 
responsibility to soldiers and the American people end, nor is 
it the admonition of Chairman Skelton to us, in terms of what 
the subcommittee recommends to the committee as a whole.
    Instead, this subcommittee has always taken an approach 
that focuses on ensuring that scarce tax dollars are not wasted 
on programs that are not performing as planned, are being 
poorly managed or are simply a lower priority than other needs 
the Army may have.
    Right now, the needs of the Army are many. It is fighting 
two major wars.
    Please forgive me, ladies and gentlemen, if I am stating 
what seems to be the obvious to you. This is, in fact, for the 
record, and it is the basis upon which we make our formal 
decisions. And while many of these things may be well-known to 
many people in the room, not everybody in the country obviously 
has the same access.
    But, I am sure you all know, the interest is very high. And 
to the degree and extent, by virtue of these hearings, that we 
can create interest where there should be interest so that 
people are better informed, that is obviously our goal. So, 
again, I ask your indulgence if I am saying things either that 
you have heard before or are well-known to you.
    Again, the Army is fighting two major wars; trying to 
complete a comprehensive reorganization program, the modularity 
program; improve the capability of the Reserve forces; grow in 
size by 74,000 soldiers; implement the latest base realignment 
and closure (BRAC) round, the base realignment round; repair 
and upgrade its equipment damaged in combat; and fix serious 
readiness problems of some units.
    Now, that is, by anybody's measure, an extraordinarily deep 
and heavy challenge. And, while doing all that, the Army is 
expected to maintain additional ready troops for other combat 
missions and domestic emergency response.
    Each of these efforts, even in peacetime, would be a major 
undertaking requiring many billions of dollars. The fact that 
the Army is trying to do all these things at once during two 
major wars requires this subcommittee and Congress to look at 
the big picture, not just the merits or demerits of any one 
particular program.
    Finding the proper balance between the many needs of the 
Army is an ongoing challenge but has perhaps never been as 
difficult as the situation the Army now faces. In the American 
system of government, making choices and finding balance is the 
primary duty of elected officials.
    President Eisenhower said in 1961 just before leaving 
office--and I am repeating a portion of the speech that I read 
into the record when we first began our deliberations with the 
new Congress. And I quote President Eisenhower: ``Each proposal 
must be weighed in the light of a broader consideration--that 
is, the need to maintain balance in and among national 
programs, balance between the private and the public economy, 
balance between cost and hoped-for advantage, balance between 
the clearly necessary and the comfortably desirable, balance 
between our essential requirements as a Nation and the duties 
imposed by the Nation upon the individual, balance between 
actions of the moment and the national welfare of the future. 
Good judgment seeks balance and progress. Lack of it eventually 
finds imbalance and frustration,'' unquote.
    And in a situation, I would like to say that I hope that 
that is going to be the guiding thesis of our deliberations. 
And in a situation like the one the Army finds itself in today, 
leaders in the Army and in the Congress have to have clear 
priorities so that informed and wise choices between many 
different opinions and options are possible.
    While the Congress reviews one budget year at a time, 
choices are made in any given year that can have significant 
implications in the future. For example, by the end of the 
fiscal year 2008, the Army will have spent $15 billion on the 
Future Combat Systems (FCS) program, a program with great 
potential in the future but one which has yet to develop and 
field pieces of operational combat equipment up to the mark.
    Initial funding for the FCS began in 2003, so it is 
reasonable to ask what else the Army could have spent that $15 
billion on over the past 6 years. Perhaps the Army could have 
started to add combat brigades in 2003 so that troops in Iraq 
today would not have to stay as long or go to Iraq as often. 
Perhaps the Army could have instead invested in more rapid 
upgrades and current research and development (R&D) equipment 
so that troops in combat today would have better versions of 
tanks and other equipment than is currently available. Perhaps 
the Army could have begun years earlier the ongoing effort to 
provide more and better equipment to the Army National Guard 
and the Army Reserve.
    My point is not to argue with what has been done where the 
FCS is concerned nor to argue about the efficacy of the FCS, 
but, rather, that choices have consequences. So it is vitally 
important for this subcommittee to take into account the big 
picture, which requires looking beyond advocacy of any 
individual program, no matter how desirable it may seem if 
looked at in isolation.
    While members of this subcommittee have different 
priorities, they all share the same goal: an Army that is ready 
and properly equipped for all the missions the Nation has asked 
it to accomplish. However, divining what those future missions 
will be or what those future missions might have been in 
retrospect and how often they may happen is a critical first-
order question that must be addressed as Congress reviews the 
Army's budget request and one that is sometimes overlooked in 
Congress's zeal to support the Armed Forces.
    For example, the Army Chief of Staff foresees an 
environment, and I quote, ``of persistent conflict'' over the 
next 20 years that he believes will require the U.S. Army 
forces to be constantly deployed in a very large number all 
over the world, conducting both combat missions and other 
tasks. I want to repeat that. He believes over the next 20 
years there will be an environment of persistent conflict that 
will require constant deployment of the United States Army.
    While that is one possible future, there are other possible 
futures as well, including one where the United States, as a 
result of its experience in Iraq, chooses to put fewer U.S. 
troops on the ground in hostile countries worldwide, not more. 
If one assumes this different perspective on the future, or any 
different perspective on the future than one of persistent 
conflict, then the Army's budget request may need major 
adjustments.
    Obviously, a great deal rests upon the Army and the 
Congress getting these assumptions about the future right. If 
the Army and the Congress are wrong--and you notice I say the 
Army and the Congress. I do not put the Army in conflict with 
the Congress here. I think we have a common duty here to act in 
the best strategic interests and national interests of the 
United States. If the Army and the Congress are wrong, the 
Nation might either spend too little or perhaps too much on the 
Army and other Armed Forces or spend it in the wrong places. 
Or, even worse, we may spend money on the wrong kinds of 
forces, even if we spend ever more money on defense.
    One might say all the military services constantly 
overstate and worst-case the potential threats to the Nation, 
not out of any effort to deceive the American people but, 
instead, as a result of the constant fight between the armed 
services for funding inside the Pentagon's budget. It is 
probably not too far-fetched to say that the worst struggle the 
Army has at the moment is in the Pentagon, not necessarily 
elsewhere in the world.
    Another view would be that the Congress, in effect, 
encourages leaders of the military to imagine the worst-case 
scenarios in an endless effort to reduce risk to as close to 
zero as possible, no matter what the cost.
    Regardless of one's view on the issue, having created and 
maintained a massive defense establishment, Congress must 
constantly remain on guard, and Congress is responsible to 
ensure, that the demands of maintaining the military industrial 
complex as first described by President Eisenhower in 1961 do 
not overwhelm Congress's capacity to make clear judgments 
between what is truly necessary for our defense and what is 
simply desirable.
    One example of a possible choice between what is desired 
versus what is truly necessary is the Army's current plan to 
field, maintain and modernize four different types of Army 
combat brigades: infantry, Stryker, heavy, and Future Combat 
Systems. The cost of maintaining one fleet of vehicles is not 
small, so it is a question whether or not the Army will be able 
to afford to maintain four different types of brigades, three 
of which have different combat vehicles over the next decade 
or, if the Army Chief is to be believed, over the next two 
decades, given the Army's many other expensive initiatives.
    Many of the most expensive elements of the Army's plan to 
maintain these four types of brigades are not even in the 
Army's current five-year budget plan. For example, the full 
cost of and funding for all the FCS spinouts--upgrading Stryker 
vehicles, procuring the next-generation M1 tank and M2 Bradley 
vehicle, and replacing the current wheeled vehicle fleet--are 
simply not yet known or not yet in the budget.
    In addition, the Army also has ambitious plans to continue 
to modernize its fleet of aircraft, helicopters and unmanned 
aerial vehicles, as well as major investments in new 
communications equipment, all of which are set to coincide in 
the next decade with plans to upgrade ground combat vehicles.
    I hope you are beginning to see that we are trying to take 
a comprehensive look here at what our actual responsibilities 
are in terms of the dollars that are going to be available and 
the programs that are contemplated.
    As supplemental budgets may decline--and this is another 
factor that we have to take into account. We are dealing with, 
maybe by default, congressional default especially, falling 
into a pattern of budgeting and supplemental budgeting, which 
causes havoc, I think, in our being able to make sensible 
judgments, especially where weapons systems are concerned. And 
supplemental budgets may decline over the next four years. They 
may not expand, as they have been doing to this point. What if 
they start declining?
    Choices between these different efforts will be forced upon 
the Army and the Congress--again, I am saying Army and the 
Congress, because both the Pentagon in the person of the 
administration, regardless of the administration, Democrat or 
Republican, and the Congress, again, regardless of who is in 
control of the Congress, they are all guilty in this open 
conspiracy against, from my point of view, good budget order.
    And if these supplemental budgets decline, we are 
immediately going to be in all kinds of budget trouble, I can 
tell you, because we have gotten used to it, that supplemental 
budgets cover all sins of omission. So it is imperative to 
begin to consider these issues now, rather than to continue to 
put billions into programs that may be desirable but are not 
realistic or affordable, given the Army's many other needs in 
coming years.
    We also plan today, as an addendum to--and I feel the 
necessity of addressing this, because we have to constantly 
deal with the media looking for sensation--the findings from a 
recent Department of Defense Inspector General report that 
determined there were deficiencies in some of the Army contract 
awards for body armor, and states that we cannot be given 
assurances that body armor procured under these deficient 
contracts have met required performance specifications.
    The Army has acknowledged there were some documentation 
errors but maintains that all body armor has been adequately 
tested and meets required performance specifications. This 
represents a major disagreement between the two parties that 
gives me some cause for concern. We need to understand the 
facts regarding this report as well as the required test 
procedures used to qualify body armor systems. We can then 
determine a way forward. It is my hope the witnesses today will 
clarify this issue for us and for the public and we can get it 
settled once and for all.
    Before we continue further, I would like to turn to my good 
friend and colleague from New Jersey, the Honorable Jim Saxton.

STATEMENT OF HON. JIM SAXTON, A REPRESENTATIVE FROM NEW JERSEY, 
        RANKING MEMBER, AIR AND LAND FORCES SUBCOMMITTEE

    Mr. Saxton. Mr. Chairman, thank you very much.
    And to our witnesses, thank you for being here. We 
appreciate your participation. We are very fortunate to have 
each of you serving our country, and it has been good to get to 
know you and to experience your high levels of dedication.
    Lieutenant General Thompson, nice to see you again.
    Lieutenant General Speakes, I guess the 12 hours we spent 
last Friday going to Fort Bliss wasn't enough. Here you are, 
back again for more of the same. Thank you for being here. And 
thanks for taking us out to Fort Bliss, by the way.
    And, by the way, Silvestre Reyes, thank you, my great 
friend, for escorting the Chairman and I. We appreciate it very 
much. It was a great trip, and the Chairman and I both agree 
that we learned a great deal. And thanks for your help in 
getting us to do that.
    To our GAO witnesses, thank you for being here. Mr. 
Francis, Ms. St. Laurent and Ms. Ugone, thank you for your 
participation. We appreciate that as well. I know it was short 
notice, and I appreciate all of you taking your time to come 
before our committee to discuss the very important issues of 
DOD's procurement policy of body armor. It was great for you to 
be here.
    Given the overall national fiscal realities that the 
Chairman mentioned, the challenges of simultaneously funding 
the global war on terror and resetting our current force, the 
question has been in the past, and is still valid today, how do 
we reduce the risk of developing complex weapons systems, such 
as the Future Combat System, so that we can afford to provide 
the necessary funding without sacrificing the capability of the 
current force?
    And just because we ask hard questions on the committee 
does not mean that we have a fundamental objection to 
modernization requirements. We ask hard questions because it is 
our responsibility to provide oversight of DOD programs and 
ensure taxpayer dollars are spent productively.
    Today, we are here to discuss many important Army programs. 
However, there are at least two areas that I would like to 
mention in this statement. The first is in regard to the DOD 
Inspector General's report on body armor.
    It should be no surprise to anyone that any time this 
committee learns about potential issues with force protection 
ramifications, we immediately engage. Nothing is more important 
to us than the force protection of our soldiers and Marines.
    I am not an expert, and that is why our witnesses are here 
today. But what I have been told, it appears that the Army and 
the IG had, or have, a difference of opinion in terms of what 
constitutes proper testing in accordance with the Federal 
Acquisition Regulation. In addition--and I don't believe the 
Army questions this--the Army failed to provide certain 
documentation. It is also my understanding the Army and the IG 
are continuing to work this issue in terms of the Army 
providing the proper documentation.
    Here is a problem. Given the sensitivity of this subject, 
why is the dialogue taking place after the final report was 
released? I must say that I don't understand why that needs to 
be a question. Should it have happened before the report was 
published? I think it probably should have. Surely both 
organizations have a review process. And while I know that 
hundreds of reports are always in play, given the nature of 
this subject, shouldn't have both organizations worked out 
these issues before it was published? Shouldn't this have 
happened before it found its way into the press and possibly 
planted doubt in the minds of soldiers and their families that 
we are not providing the best body armor? Which, I believe we 
are.
    The second area I would like to briefly mention is in 
reference to the Future Combat System. In years past, the House 
Armed Services Committee legislative provisions in funding 
reductions in regards to the Future Combat System were meant to 
provide better oversight of the program and to steer the 
program in the right direction.
    For example, the committee highlighted three years ago that 
the Army had traded off too much survivability in order to fit 
the vehicle into a C-130 aircraft. Consequently, the Army has 
added more survivability back into the vehicles, and the 
current requirement is to put three on a C-17.
    In addition, the committee was concerned that the program 
entered the system development phase too early, with immature 
technologies and undefined requirements, and thus directed the 
Secretary of Defense to conduct a go/no-go review of the FCS 
program following its preliminary design review in 2009.
    I believe this congressionally mandated review in 2009 will 
be a critical event for the Army and for the program. I would 
like to hear assurances from both the Army and the GAO 
witnesses that the Army is setting the conditions necessary to 
complete this review. And, if they have any additional thoughts 
about the review, we would like to hear them.
    Thank you for being here again today, and I look forward to 
all of your testimony.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you very much.
    We are going to proceed to the panel's testimony, including 
the testimony on the armor. We will go right down the line, if 
that is all right, so that we can handle everything at once 
rather than separate out the armor, because you were kind of an 
added starter to this, but we will do it that way.
    Because I think there are lots of questions and only a few 
members here at the moment, and they are senior members--we 
were going to go by order of seniority today anyway. You know, 
we alternate between least seniority to top seniority in 
hearings. If you could limit your testimony to the five 
minutes, I would be grateful. You have senior members here who 
are serious-minded individuals, and I assure you that the 
questions will illuminate anything else you might not have been 
able to get into.
    General Speakes, we will start with you. And thank you, 
again, for your many kindnesses, courtesies and always your 
willingness and ability to be an advocate.

   STATEMENT OF LT. GEN. STEPHEN M. SPEAKES, DEPUTY CHIEF OF 
                     STAFF, G-8, U.S. ARMY

    General Speakes. Sir, I thank you.
    Chairman Abercrombie, Ranking Member Saxton and 
distinguished Members of Congress, on behalf of the United 
States Army, it is General Thompson's and my great pleasure to 
represent the Army at today's hearing. As requested, sir, I am 
going to terminate my remarks with just a couple of key points 
that I would like to make.
    First, you brilliantly summarized the challenges we face. 
You obviously have a deep understanding of the challenges that 
we are going to address in the immediate moment and in the 
future.
    Congressman Saxton, you also highlighted the challenges 
that have been identified to us by the GAO. We identified the 
GAO and the DOD IG as key partners in a process that ensures we 
are accountable to the taxpayer and to you to deliver the best 
that we can. We believe, in that sense of responsible 
partnership, that we are better. And we thank them for their 
help.
    I would like to also highlight the importance of the recent 
publication of FM3-0 as a key hallmark in terms of the Army's 
affirmation of the role that doctrine plays in helping us to 
understand the operating environment today and in the future. 
That doctrinal role that we have to fight in today's operating 
environment and plan for the future is never more important 
than as we look at the modernization programs of our Army. And 
I would assure you gentlemen that we are looking very carefully 
at those, that we are trying to balance exactly the issues that 
you illuminated as we weigh investments in the current with the 
need to also plan responsibly for the future.
    We also are aware of the many elements of Army capability. 
Specifically, I would like to single out our responsibility to 
provide for the Army Guard and Army Reserve. Those are two key 
components of our force that are never more important than they 
are today. We count on them from the sense of homeland defense, 
in the case of the Army Guard. We count on them as a part of 
our operational force. We, therefore, have to properly outfit, 
equip and train them. We take that seriously, and I think you 
have witnessed, with your support, the incredible improvements 
we have made in support.
    Sir, we look forward to your questions.
    And I will pass this off to Lieutenant General Thompson, 
asking that my statement be admitted for the record.
    Mr. Abercrombie. Without objection.
    [The prepared statement of General Speakes can be found in 
the Appendix on page 47.]
    Mr. Abercrombie. General.

STATEMENT OF LT. GEN. N. ROSS THOMPSON III, MILITARY DEPUTY TO 
   THE ACTING ASSISTANT SECRETARY OF THE ARMY (ACQUISITION, 
  LOGISTICS AND TECHNOLOGY), AND DIRECTOR, ACQUISITION CAREER 
                           MANAGEMENT

    General Thompson. Chairman Abercrombie, Congressman Saxton 
and distinguished members of the subcommittee, I want to thank 
you for holding this hearing today because the Army's 
acquisition programs are absolutely essential to preparing our 
soldiers for a future persistent conflict.
    Every day, our soldiers make great sacrifices to help win 
this global war on terror and to fulfill our other worldwide 
commitments.
    I want to thank you, as General Speakes said, for your 
strong and steadfast support of our men and women in uniform. 
We are meeting the equipping demands of our soldiers because of 
the guidance and the resources that are provided by this 
committee and the Congress.
    I have a longer written statement that I respectfully 
request be made a part of the record for today's hearing.
    Mr. Abercrombie. Without objection.
    General Thompson. We are a high-technology Army, Mr. 
Chairman, and we have a comprehensive strategy to modernize. Of 
all high-priority programs, force protection is our number-one 
priority, including the joint light tactical vehicles, 
rotocraft technology, research and development, and lightweight 
enhanced performance systems, to include ammunition and body 
armor.
    Our Future Combat Systems, as we have discussed in the 
previous hearings and in one-on-one dialogue with you and your 
professional staff members and personal staff members, is the 
foundation of our Army transformation and, really, the 
cornerstone of the Army's future modular force.
    The FCS program is structured to bring advanced 
capabilities to today's force as rapidly as possible in a 
process known as spinouts. The first spinout equipment set--you 
witnessed some of that last week at Fort Bliss--is currently in 
the hands of our soldiers in the Army Evaluation Task Force. 
The FCS program is currently undergoing 75 tests, and each test 
is a precursor to the fielding of capabilities to our soldiers.
    Just yesterday on the House side and today on the Senate 
side we have demonstrated some of those capabilities here on 
the Hill for those Members of Congress and staffers that were 
not able to go to Fort Bliss or haven't been out there on a 
Congressional Delegation (CODEL) in order to see some of those 
great capabilities that are being fielded to soldiers today.
    We have demonstrated the credibility of our cost estimate 
in FCS over time by consistently operating within the budget. 
One of the questions that I know may come up today is the 
synchronization with the Joint Tactical Radio System and the 
Warfighter Information Network-Tactical (WIN-T), and we will 
discuss that as the questions arise. But we are delivering FCS 
Joint Tactical Radio System and Warfighter Information Network-
Tactical on a phased approach and making sure those programs 
are all synchronized.
    The Army is continuing to conduct our wartime operations in 
preparing for future commitments. I really do appreciate the 
quote that you made from President Eisenhower about balance. It 
really is all about balance, not just in modernization 
programs, but balance between the current and the future.
    Mr. Chairman, that concludes my opening remarks, and I look 
forward to your questions.
    [The prepared statement of General Thompson can be found in 
the Appendix on page 56.]
    Mr. Abercrombie. Thank you very much.
    Ms. St. Laurent.

 STATEMENT OF JANET A. ST. LAURENT, MANAGING DIRECTOR, DEFENSE 
 CAPABILITIES AND MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. St. Laurent. Chairman Abercrombie, Ranking Member 
Saxton and Members of Congress, I am pleased to be here today 
to discuss equipping issues related to the Army's efforts to 
restructure and rebuild the force while supporting ongoing 
operations.
    The Army has established four key initiatives that have 
significant implications for equipment costs. These initiatives 
include: establish and equip modular units; expanding the size 
of the Army; resetting equipment damaged or worn beyond repair 
during operations; and replacing prepositioned equipment.
    My statement today is based on numerous GAO studies and 
reports that have been published on these topics during the 
past few years, and I would like to focus my comments on two 
issues: the cost of the Army's plans to implement these 
initiatives, and actions needed to improve their management.
    With regard to cost, our work shows that restructuring and 
rebuilding the Army will require many billions of dollars for 
equipment and take many years to complete. However, the total 
cost of these efforts is uncertain.
    Based on our analysis of Army data, it appears that the 
cost of implementing these four initiatives alone is likely to 
cost at least $190 billion from fiscal years 2004 to 2013. 
These estimated costs include $43 billion for new equipment for 
modular units; $18.5 billion to equip six new additional 
brigades and additional support units; about $118 billion to 
reset equipment; and at least $10 billion to replace 
prepositioned equipment.
    However, these cost estimates have some limitations and may 
change as a result of the unknown length of operations in Iraq 
and Afghanistan. Further, the Army is likely to request 
additional funds for some initiatives beyond 2013.
    Several factors are contributing to the uncertainty about 
future equipment costs and the potential for costs to increase. 
Although the Army's $43 billion estimate to equip modular units 
is a significant downpayment, it will not fully equip modular 
units because it was based on some outdated assumptions and 
conditions and was developed in 2004.
    For example, the Army's estimate was developed before some 
modular unit designs had been finalized. The Army has since 
added requirements for force protection and other equipment. 
Second, the Army did not fully consider requirements at the 
time for National Guard units, which had longstanding equipment 
shortages and which the Army now wants to equip similar to 
active units given their important roles in supporting overseas 
and domestic operations. Third, the Army assumed initially that 
significant quantities of equipment would be returned from Iraq 
in good enough condition to help equip modular units. This 
assumption may no longer be valid. As a result, the Army now 
plans to request additional funds to meet equipment shortfalls 
in modular units through fiscal year 2017.
    Also, the Army's equipment reset costs have the potential 
to change, perhaps significantly. Reset costs have grown from 
about $3.3 billion in fiscal year 2004 to more than $17 billion 
in fiscal year 2007. However, the Army has reported that future 
reset costs will depend on the amount of forces committed 
overseas and the amount of equipment destroyed or damaged. The 
Army has also stated it will need reset funds for at least two 
to three years after operations cease.
    Finally, the Army has estimated that it will need $10 
billion to $12 billion to replace prepositioned equipment that 
it used to support operations and accelerate the creation of 
additional brigades. However, it is not clear whether these 
costs have been reflected in DOD's funding request to date, and 
this amount could be modified.
    Turning to management issues, we have identified a need for 
the Army to develop a more integrated plan for equipping that 
promotes greater transparency in its cost estimates and ensures 
that funding requests are based on sound plans with measurable 
goals, realistic time frames, prioritized resource needs, and 
performance measures to gauge progress.
    The Army currently lacks aspects of such an overall plan. 
For example, we have reported that the Army lacks a 
comprehensive plan for equipping modular units that clearly 
shows equipment requirements, the progress made to date, and 
how additional funding requests will help to address unmet 
requirements.
    In addition, oversight of the Army's equipment initiatives 
has been complicated by multiple funding requests that make it 
difficult to obtain the full picture of Army equipment needs 
and to track how the funds were actually used.
    As a result of these problems, it is very difficult to 
determine progress overall that the Army is making with funds 
already appropriated. For example, despite a significant amount 
of funds appropriated to date, our readiness work has shown 
that DOD is still struggling to meet the equipment needs of 
next-deploying units and that nondeployed units continue to 
have significant equipment shortages to the point that senior 
military leaders have recently expressed concerns about ground 
units' ability to perform other missions if required.
    What is needed is an integrated equipment plan that will 
position the Army, first, to achieve measurable improvements in 
near-term readiness. In addition, the Army needs to find a way 
to better identify and report on its equipping needs over the 
next decade so that it can balance requirements for the modular 
force with other longer-term modernization initiatives.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. St. Laurent can be found in 
the Appendix on page 67.]
    Mr. Abercrombie. Thank you very much.
    Mr. Francis.

    STATEMENT OF PAUL L. FRANCIS, DIRECTOR, ACQUISITION AND 
     SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Francis. Thank you, Mr. Chairman, Mr. Saxton and 
members of the subcommittee. I appreciate your having me here 
this afternoon to participate in the discussion of Army 
modernization.
    I am going to focus my remarks on the Future Combat 
Systems. And I think I will be giving you, I think, a more 
somber assessment of FCS than the Army would, but I think our 
differences are really more in how the Army is going about it 
versus what they are trying to do. Because on what they are 
trying to do, I think the Army deserves a lot of credit for 
what they are trying to do. Because, with FCS, they have 
decided to do what is hard and not what is easy.
    It would have been much easier, I think, on to embark on 
replacements for all the ``big five'' systems and, kind of, do 
business the way they used to. But they didn't. They came up 
with a vision on how they want to do things in the future, 
which cut across their own cultural lines. And they had the 
courage and the leadership to do it, and I think they deserve 
credit and our admiration for that.
    With that, and maybe at the risk of being labeled a 
Luddite, I will talk a little bit about, I think, a pretty----
    Mr. Abercrombie. You know how to strike an empathetic note, 
don't you?
    Mr. Francis. Yes. You are a fellow Luddite?
    Mr. Abercrombie. Start at the top of the alphabet. I would 
prefer we did everything with parchment and quill pens. How 
does that strike you? [Laughter.]
    Mr. Francis. You don't have an iPod yet then?
    Mr. Abercrombie. What is that? [Laughter.]
    Mr. Francis. On FCS, I want to just talk a little bit about 
where we have come. I think, while much progress has been 
made--and we can talk about requirements, technology, design, 
software; a lot has been done--but we need to put this in 
context. Cost and schedule on the program has doubled. 
Technology is going to take about twice as long as we thought 
it would. Software code estimates, depending on how you measure 
them, are going to double or triple. Vehicle weights are up by 
about 50 percent.
    And I think, to me, what that means is things haven't gone 
as planned. And that is not to say we think they should have 
gone faster or smoother, but I think that accurately reflects 
the maturity of the program. We are in, still, a period of 
discovery; yet this is our basis for predicting how the program 
is going to finish. I think at this point, about halfway 
through, we still don't know yet if FCS is going to work, and 
the stakes for it working are quite high.
    I will talk a little bit about some of the specific program 
challenges.
    Right now, the program is maturing about 44 critical 
technologies. At this time, many of those are still not mature. 
The Army is developing an unprecedented ad hoc mobile network, 
which I think is largely to be invented at this point. It is 
developing several small and light combat systems whose 
performance depends on the success of the technology efforts 
and the success of the information network. The Army has 
defined the unit of analysis as the brigade combat team, that I 
think is so large they are having to make some real 
breakthroughs in modeling and simulation.
    All of this is proceeding simultaneously. All of these 
challenges are attempted to be met at once and within a 
schedule that is faster than a single system normally takes. 
And the Army is doing this right now with the lead system 
integrator, which is innovative, for both development and now 
production.
    The approach that the Army is taking on this I think put 
decisions phase ahead of where the information is. So let me 
give you an example. In 2003, when we had the Milestone B to 
begin the program, I think the information at that time was 
more like a Milestone A. In 2009, as we approach the go/no-go 
decision, I think we are looking at a decision that is more 
like a real Milestone B, even though at that point we will be 
about 60 percent through our schedule and our costs, our 
funding.
    Much actual demonstration is going to follow production 
commitments. So, relative to decisions, I think development is 
going to finish late but production commitments are going to 
start early. And as tight as the Army's schedule is, I think 
your schedule, that of the Congress, is even tighter.
    So, for example, at this time in 2010, the spring of 2010, 
you will be just a few months after the go/no-go decision. We 
will not have developed any manned ground vehicle prototypes 
yet, and we will not have gone through critical design review. 
But you will be asked to provide the first year of advanced 
procurement money for FCS core systems.
    The next year, 2011, when we will just be getting to take 
delivery of the first manned ground vehicles, and possibly 
still before critical design review, you will be asked to 
provide the second year of advanced procurement for FCS.
    And then, in 2012, when the manned ground vehicle 
prototypes are just about halfway through qualification testing 
and before the network demonstration that you have mandated, 
you will be asked to provide the first year's funding of FCS 
core systems. So that will be your Milestone C.
    Mr. Abercrombie. You mean the system of systems, at that 
point?
    Mr. Francis. Yes. So the first couple years is advanced 
production for long-lead items. That third year is actually 
funding the produced and delivered items. So that is----
    Mr. Abercrombie. For purposes of the record, we know what 
we are talking about when we say ``system of systems.'' Could 
you elaborate just a moment on that, as to what we mean in 
relation to what you were just providing as an example?
    Mr. Francis. Certainly. The system of systems relates to 
the fact that, while we are buying 14 individual systems, which 
I think in the old days, when we weren't Luddites, would have 
been individual acquisition programs, but FCS is being 
conceived in such a way that all of these systems are related 
to one another and integrated with the network.
    So what the FCS requires is a system comprised of all these 
individual systems. But when we get into the actual production, 
we will be producing individual vehicles and sensors and so 
forth.
    In 2013, when DOD makes its Milestone C production 
decision, Congress will have appropriated about $39 billion and 
possibly up to $47 billion for FCS. So if you are thinking 
about waiting until that production decision, I think that is 
going to be too late, because we will be very heavily invested, 
to think about what you can do.
    So I see you as really having about two years of oversight 
leverage, looking at the program, right now. And I think a real 
key point will be next year, 2009, the go/no-go decision.
    And I think there is two things that you will have to look 
at there, if I may. One is there will have to be a 
demonstration that the FCS can work as planned. If there are 
some questions remaining, significant questions, then I think 
we need to be looking at what alternatives we may have. And 
they may not be rivals to FCS, but different ways of proceeding 
forward.
    If FCS does show that it can deliver what it needs to 
deliver, then I think we have to take a serious look at the 
remaining part of development. Because, as I said, right now 
only about 40 percent of the schedule and money will be left in 
2009, yet the latter half of development is often the most 
expensive and difficult part of an acquisition. And so I think 
our analysis of past programs shows about two-thirds of your 
cost growth occurs in that phase of a program. And both the 
Institute of Defense Analysis and the Cost Analysis Improvement 
Group I think are estimating that FCS are $12 billion to $13 
billion more then.
    Mr. Abercrombie. I am not trying to trap you in anything. 
Do you know just who is in or what institutional elements are 
in the group? Because that is a Pentagon group, right?
    Do you know, General Speakes, who constitutes the group or 
what institutional entities within the Pentagon constitute the 
group?
    Mr. Francis. The Cost Analysis Improvement Group (CAIG)?
    Mr. Abercrombie. Yes.
    General Thompson. Yes, sir. The Cost Analysis Improvement 
Group works for the DOD head of Program Analysis and 
Evaluation. And their charter----
    Mr. Abercrombie. They are an independent group, ostensibly, 
are they not?
    General Thompson. Yes, sir.
    Mr. Abercrombie. I am not sure what that means inside the 
Pentagon. Does that mean they have to come in a separate door?
    General Thompson. No, sir. I know the head of the Cost 
Analysis Improvement Group, and he usually comes in the same 
door that I do. But they do----
    Mr. Abercrombie. But you are not allowed to eat together, 
though, right? No, no, that is Members of Congress. I am sorry, 
I forgot.
    General Thompson. We do talk to one another, surprising as 
that may be.
    Mr. Abercrombie. Oh, okay.
    General Thompson. But, no, seriously, they work for the 
PA&E, the Program Analysis and Evaluation, director in the 
Pentagon, which is designed to provide that independent 
analysis----
    Mr. Abercrombie. Sort of like your own GAO where cost is 
concerned?
    General Thompson. They are focused on cost of programs. 
They are focused on looking at historical programs, looking at 
the content that we are trying to----
    Mr. Abercrombie. In any event, their charge is to come up 
with analysis and conclusions independent of a particular 
service or something of that nature, right?
    General Thompson. On every program, FCS being a large 
program, the program office makes an estimate of what it is 
going to cost. And then the Army and the other services have an 
independent cost organization that grades that paper, if I can 
put it in that parlance, and then the CAIG grades the services 
paper.
    So it is the reconciliation of those three views on cost. 
And at the end of the day, you know, the CAIG, being positioned 
at the Office of the Secretary of Defense (OSD) level, has more 
of a vote in how that paper is graded.
    Mr. Abercrombie. Okay. The reason I worry about that a 
little bit, again, for purposes of the record, is that this is 
not just a pro forma operation in there. This is something that 
is taken seriously. And so we need to take into account what 
they are saying, because, certainly, the Secretary of Defense 
does. Is that correct?
    General Thompson. Yes, sir, he does, as well as the defense 
acquisition executive, who looks at the cost estimating that is 
done by the CAIG as part of his decision review process.
    Mr. Abercrombie. Would that be Mr. Young?
    General Thompson. Yes, sir.
    Mr. Abercrombie. Okay. Thank you.
    Sorry, Mr. Francis. You can conclude now.
    Mr. Francis. Mr. Chairman, that concludes my remarks.
    [The prepared statement of Mr. Francis can be found in the 
Appendix on page 90.]
    Mr. Abercrombie. Oh, okay. I didn't mean it literally, 
necessarily.
    By the way, just for purposes, speaking of Luddites, the 
current context, I think, in which it might be appropriate is 
because we are trying to get rid of the modern alchemists.
    Mr. Francis. Ah.
    Mr. Abercrombie. Food for thought.
    Mr. Francis. Yes.
    Mr. Abercrombie. Thank you.
    Ms. Ugone, thank you for being here.

   STATEMENT OF MARY L. UGONE, DEPUTY INSPECTOR GENERAL FOR 
   AUDITING, OFFICE OF THE INSPECTOR GENERAL, DEPARTMENT OF 
                            DEFENSE

    Ms. Ugone. Thank you very much, Mr. Chairman.
    Chairman Abercrombie and distinguished members of the House 
Armed Services Subcommittee on Air and Land Forces, thank you 
for the opportunity to appear before you today to address our 
audit report on DOD procurement policy for body armor.
    The report is in response to a congressional Member request 
to review DOD procurement of body armor to determine whether 
officials followed contracting policies. The report addresses 
the contract documentation supporting the award of 28 Army and 
12 Marine Corps contracts with a total value of more than $5.2 
billion for various body armor components during the period 
January 2004 to December 2006. We also reviewed the contract 
documentation and information provided by the Army supporting 
the adequacy of first article testing. We did not review other 
testing requirements or safety issues.
    Body armor components include the outer tactical vest, 
deltoid and axillary protectors that provide protection to the 
shoulder area, small arms protective inserts that provide 
ballistic protection to the torso, and enhanced side ballistic 
inserts that provide ballistic protection to the sides of the 
torso.
    The Federal Acquisition Regulation requires contracting 
organizations to maintain adequate contract documentation to 
provide a complete acquisition history. This includes 
documentation to support acquisition planning, market research, 
source selection planning, and testing and evaluation of the 
products.
    First article testing is used to test a first article from 
production and verifies the manufacturing process has generated 
an acceptable item and corrects any defects in the 
manufacturing process before more items are produced.
    The Marine Corps awarded 12 contracts for inserts and side 
inserts, valued at about $248 million. The files for the 12 
contracts reviewed contained a complete history of the 
contracts, including first article test acceptance.
    The Army awarded 28 contracts, valued at about $5 billion. 
Of these 28 contracts, we had concerns on the adequacy of first 
article testing on 13 contracts based on our review of the 
documentation. For example, three contracts for vests used 15-
inch-by-15-inch pieces of material to conduct first article 
testing rather than the complete vest as required by the 
purchase description.
    Another example is where a contract for deltoid protectors, 
which protects the shoulder area, did not contain 
specifications to test against. However, documentation showed a 
first article test as completed by relying on the previously 
mentioned tests of 15-inch-by-15-inch pieces of material for a 
vest instead of testing a protector.
    Another example where we had concerns with first article 
testing was on a contract for inserts where the documentation 
showed support for only 2 of 24 required first article tests.
    Finally, for side inserts, an example was where 1 contract 
used product samples instead of the contractually required 35 
units for first article tests.
    As a result of this and other work to date on body armor, 
we plan to initiate an audit of the sustainability and 
durability of body armor used by our Armed Forces.
    This concludes my oral testimony. I will be happy to answer 
any questions that you may have.
    [The prepared statement of Ms. Ugone can be found in the 
Appendix on page 107.]
    Mr. Abercrombie. Thank you very much, Ms. Ugone.
    General Thompson, I think what I would like to do, without 
holding you to specifics, is I will take my time that I would 
have taken to ask questions, and I would like to turn it over 
to you, not so much for a response or rejoinder, but if you 
have any observations at this stage. I saw you taking notes, 
and I would like to give you the opportunity to do that at this 
point, if that is all right. If you would rather not, that is 
okay, too.
    General Thompson. No, Mr. Chairman, I would like to do 
that, and I welcome that opportunity.
    Mr. Abercrombie. Okay. Then why don't you take my time to 
do that, and then we will go to Mr. Saxton, all right?
    General Thompson. You brought up in your remarks at the 
beginning of the hearing the concern that we are having this 
discussion in the public without reconciling the different view 
between the DOD IG report and the Army. I, too, regret that 
that reconciliation wasn't done prior to the report being 
issued to a Member of Congress and then put out in the press.
    Mr. Abercrombie. Well, I would like to take credit, but I 
think it was Mr. Saxton that made that point specifically. But 
I certainly agree with it.
    General Thompson. The meeting at the higher levels of the 
Army between the DOD IG and the Army unfortunately did not 
occur before the report was issued. There is a meeting this 
afternoon at the conclusion of this hearing, at 5:30 tonight, 
between the Under Secretary of the Army and senior 
representatives of the DOD IG. And then tomorrow afternoon the 
Secretary of the Army and the DOD IG, Lieutenant General 
Kicklighter, are meeting to understand the differences between 
the report and the Army's view on the testing.
    The Army does stipulate there were items that were missing 
from the contract files. I think the issue boils down--I spent 
about an hour and a half with the professional staff members 
both on the House and the Senate side and a lot of personal 
staff members the other night, explaining where we think the 
difference is in the interpretation of the Federal Acquisition 
Regulation (FAR).
    The Army has tested all of the body armor, and all of the 
body armor that is issued to the soldiers in the field today 
has passed a rigorous test, and it is the best body armor that 
is available in the world today. And I can say that without 
qualification.
    The scope of the DOD IG audit--and you can see that in the 
audit report--was on the presolicitation and the solicitation. 
They did not look at the postsolicitation, postcontract, so 
they did not look at the totality of the testing process that 
goes on with body armor.
    And if I can quote here from the Federal Acquisition 
Regulation, because the essence of the difference of opinion 
comes down to what constitutes a first article test. And I am 
going to quote from the First Acquisition Regulation here: 
``First article means a preproduction model, initial production 
sample, a test sample, first lot, pilot lot, or pilot models. 
First article testing means testing and evaluating the first 
article for conformance with specified contract requirements 
before or in the initial stage of production.''
    We conducted the first article test or preproduction test 
before the contract was awarded. The DOD IG interprets the 
regulation as we should have conducted it after the contract 
award. But the testing was done. We offered the DOD IG the 
complete documentation on all of the 28 contracts they looked 
at for first article testing and also the lot acceptance 
testing, because the testing for body armor is done by the 
manufacturer in order to just come to the table with a 
qualified product. We do the first article of preproduction 
testing before we let a contract. We test it before we buy it.
    And then after we go into production we do lot acceptance 
tests. And lot acceptance tests are different in size, but 
every manufacturer of any of the components on the body armor, 
either the vest or the deltoid protectors or the plates, we 
test the lot samples, and any lot that fails the ballistic 
testing that we put it through is rejected. And there are some 
cases where they are rejected. And if two lots are rejected in 
a row, the manufacturer has to go back and do the complete 
first article testing over again.
    So the documentation is there. The contract files that they 
looked at were with the contracting officer, which was in the 
Acquisition Center at Aberdeen Proving Ground, Maryland. The 
rest of the contracting file, which included the testing 
documentation, was with the program executive officer and the 
project manager.
    And so part of the difference of opinion is they looked 
narrowly at the contracting officer file. We do have the 
testing documentation. And the contracting file, in our view, 
is the entire file. It is not all physically located with the 
contracting officer.
    There were errors in the file where the contracting officer 
should have put a statement in there that waived the first 
article testing because it had already been done. Those pieces 
of paper were missing. That has been reconciled. That was an 
error by the contracting organization, and we don't disagree 
with that.
    But the testing on the body armor was done, and we have got 
volumes of books--and I brought an example of that to show the 
staffers the other day--where there was at least four or five 
binders of testing on just one contractor.
    Mr. Abercrombie. Thank you, General. I would hate to have 
to contend with you when you actually have time to prepare. 
Very good.
    General Thompson. Sir, I will say that there is about 
almost 700 programs in the Army. Every week or so, there is one 
or two that consumes about 50 percent of my time. In the last 
week, since that report was issued, this has consumed probably 
50 percent of my time.
    Mr. Abercrombie. You obviously absorbed a lot. And we can 
understand why. I appreciate that. And we will go on with the 
questions, but it is distressing if it turns out to be--and I 
don't mean to diminish its importance--a paper issue or a 
process issue, as opposed to a substantive qualitative issue, 
with regard to whether or not something was neglected to be 
done that was fundamental or necessary to the certification of 
the product.
    But I take it from your answer or your observations that 
that is not the issue, in your point of view.
    General Thompson. And one of the professional staffers the 
other night pointed out that maybe it would be good for us to 
codify in a written policy the way we are doing this and the 
way we are interpreting the FAR so that becomes a matter of the 
record for future DOD IG or other----
    Mr. Abercrombie. Maybe something good will come of all this 
then. Thank you.
    Mr. Saxton.
    Mr. Saxton. Mr. Chairman, thank you.
    Let me just divide my questions into two areas: one 
regarding the modernization program that the Army is presently 
preparing to field; and, second, the subject of how the Army is 
working to equip or re-equip the Army National Guard and the 
Army Reserve, as well as the Army's plan to pay back Reserve 
component equipment that was taken and left in Iraq.
    Let me start with the modernization program. And let me 
begin, Mr. Chairman, my question by saying that I think Mr. 
Francis's characterization of the situation was very frank and 
very objective and very fair. This is, in fact, a difficult 
modernization program to put together.
    And, Mr. Chairman, you and I have served here together for 
a long time, along with many other members of the committee. 
And we have observed and helped to resource several very 
difficult modernization programs. In fact, in some cases, I 
would call them revolutionary. I would call the FCS program a 
program with revolutionary objectives and goals.
    We have had other programs that have been similar in 
nature, in terms of their difficulty. When I was elected to 
Congress, Mr. Chairman, in 1984, one of the first weapons 
systems that I saw, which was in the design program at the 
time, was a C-17. It was different because it provided 
capabilities that no other airlifter had ever provided. It was 
said to be able to take off on a 3,000-foot runway, paved or 
unpaved. It was said to be able--they were developing the 
capability to back up on the tarmac and configure itself 
without having to be pushed or towed around. It was to have 
redundant systems. In case one system suffered a breakage from 
fire or military activity, the other system would work to 
provide safety for the people who were in the airplane. It was 
a revolutionary system.
    Mr. Chairman, you and I sat here in this room, along with 
many of our other colleagues, and watched as McDonnell Douglas 
had a difficult time putting that system together, engineering 
it and making it work properly. As a matter of fact, it was 
probably 5 to 10 years into the development system when I first 
learned about it in 1984, and the first production model came 
off the line in 1991. And it was because it was, as the Army is 
doing now, trying to produce something with capabilities that 
reach far beyond what we have now.
    The other short example that I would like to use, and this 
involved one of our great colleagues that you and I were very 
fond of, Curt Weldon, who is no longer here. In 1986, Curt 
Weldon--you can feel his presence? Right.
    The V-22. The V-22 was a revolutionary system. It was a 
fixed-wing aircraft that could take off vertically and fly at 
300-plus miles per hour and carry a heavy load. That was a 
capability that we had never had before, and it was difficult 
to put it together. As a matter of fact, in 1986 or 1987, I 
can't remember which, Mr. Weldon and I went to the Pentagon to 
visit with Secretary Cheney at the time, because Secretary 
Cheney favored canceling the system because it was too 
difficult.
    We today have that capability, in a revolutionary sense. 
The FCS is difficult, but it provides capabilities that we 
don't have today. It will have a command vehicle that will be 
available to small units, where soldiers will be inside and be 
able to see the enemy, be able to see our own soldiers, be able 
to direct fire over a 40-kilometer distance with precision fire 
munitions, and just many other networked capabilities that none 
of our weapons systems today are fortunate enough to have.
    And many people who are not familiar with this system, as 
we are because we have looked at it and studied it, people 
don't have a clue. And why should they, because nobody has made 
this information available to the public yet. But it is a 
revolutionary system.
    So let me ask this. Several years ago, this committee wrote 
language into an authorization bill as to the necessity of 
making decisions on how we were going to go forward at some 
point--turned out to be 2009--on a go/no-go review of the 
program. And my question is, how is the Army planning to 
conduct this successful go/no-go review of this program? And 
how is the Office of the Secretary of Defense involved?
    Generals, would you like to take a crack at that?
    General Speakes. Congressman Saxton, what I would like to 
do is ask for clarification. You asked us two questions. One 
was the role of Army modernization focused on FCS. The other 
element was the discussion on Reserve component equipment. 
Would you like me to take on Reserve component equipment first, 
take care of that, and then move on?
    Mr. Saxton. Actually, I was going to ask that question 
second.
    General Speakes. Okay, sir. I apologize.
    Let me start it off. The reason I am going to start it off 
is my responsibility is to set the conditions for General 
Thompson to be successful. Let me begin by going back in recent 
history.
    The Army Chief of Staff and the Secretary of the Army have 
placed more time with us on the subject of Army modernization 
than we have had, probably, with the Army leadership over the 
past several years. It is their personal focus. We are 
accountable to them.
    What they asked us to first of all do is to find an 
integrated modernization strategy. That has four elements: 
first, continue to field the best equipment to forces in 
combat; second, to continue to improve our existing or legacy 
equipment--we can't let the existing platforms that are in 
combat get behind; third, field FCS spinouts; and, fourth, 
bring the future combat brigade system as a brigade entity into 
the Army.
    Within that, we have the responsibility to set conditions 
for FCS.
    First, the question is, what is FCS? Because that is very 
important for us all to understand. First, it is a system that 
provides a network-based capability to operate. We view the 
network, as Mr. Francis said, as absolutely essential to our 
concept for being successful.
    Second, it is a common platform. The benefits of a common 
platform are realized by all of us. Instead of stovepipe 
systems, we now have an integrated concept where we have a 70-
percent common platform with enormous efficiencies that enable 
us to leverage other capabilities. That platform is 
specifically designed to operate in a modern operating 
environment, not the last decade.
    Third and fourth, unmanned air and ground systems. It is 
absolutely essential we separate the soldier from the thing 
that is seeking to cause the soldier harm. We have seen the 
benefit of robotics in all of our operating environments in 
both Iraq and in Afghanistan. They have proven out as a 
concept.
    And then, finally, the concept of bringing capability 
across the force in spinouts, so we have an integrated approach 
that brings an integrated set of capabilities. And you saw on 
Friday what we are talking about: the concept of a sensor, the 
primitive version of the network, and then the ability through 
that network to trigger precision fires. That is the 
illustration of what Spin Out 1 will bring to us, and you saw 
it, as its preliminary form is already taking shape at Fort 
Bliss.
    So the next obligation I have, then, is to set the fiscal 
conditions for success. The fundamental issue with FCS is we 
have to make it affordable so that we can bring the maturity to 
the program over time by a steady application of fiscal 
resources. Our plan right now says that we have an integrated 
strategy that provides for FCS is never more than a third of 
our basic research, development and acquisition strategy. So it 
is a third of our overall investment program in the base 
budget, now through 2015. We are putting the specific 
trajectory on that program here as we update it through fiscal 
year 2015 in our Project Objective Memorandum (POM) bill that 
is under way now.
    The other element of all this, then, is we have to separate 
that element of it from the volatility of supplemental funding. 
In other words, concerns over funding should not address the 
basic trajectory of what we are doing right now in our base 
program. So we have set conditions where we are bringing FCS 
and its complementary systems along the desired rates of 
maturity to support the development of the program as a part of 
our base program. And that is my responsibility to resource 
those, as the resourcer of the Army who builds the POM, the 
integrated approach.
    Let me turn now to General Thompson to address the 
specifics of the kinds of technology and the preparation for 
technology that Mr. Francis addressed in his report that 
General Thompson now is addressing.
    General Thompson. Sir, just to amplify some of the things 
that General Speakes said, when he is talking about the common 
platform, he is really talking about the manned ground vehicle 
part of FCS. So when you look at the FCS program, it is a 
systems of systems. It is not just a vehicle. And that is a 
part of the misperception that is out there. It is eight 
different manned ground vehicles, it is a couple of unmanned 
aerial vehicles, it is the network, it is the unmanned ground 
vehicles, and it is a lot of these sensors that are out there. 
So there are major components of FCS.
    Your specific question, I think, was about the 2007 
authorization language on section 214. Every year since 2003, 
we have had an annual review with the Defense Acquisition 
Executive--in this case, this year, it will be Mr. Young--
working at the FCS program. Even though Milestone B was in 
2003, we have an annual review at that level where we look at 
all aspects of the program.
    As a matter of fact, I will meet next week with General 
Cartwright, the program manager for this year's annual review, 
to lay out the timeline of meetings with all concerned 
organizations inside the Office of Secretary of Defense--the 
testers, the people that look at networks, the people that look 
at manned ground vehicles, the people that do the costing.
    We will do this for this year's annual review. And we will 
begin to set the conditions for, as you pointed out, the go/no-
go decision that was put in the authorization language for the 
2009 review, which the culminating event prior to that review 
is going to be the preliminary design review on the systems of 
systems on how all these things are going to work together.
    So we are working that on an annual basis. We will work 
that for the 2009 review with the Office of the Secretary of 
Defense. And I am confident that, just like we have done in the 
last couple of years, we will have our disagreements, they will 
point out some things that we could have been doing better, and 
we go back and make adjustments, and we balance the risk across 
the program.
    One other thing I would like to say, and then I will let 
General Speakes answer the Reserve component equipping 
question.
    On the complementary systems, there are the 14 major 
systems inside of the FCS program, but we looked at, a number 
of years ago, in 2004, to find then the 58 other modernization 
programs in the Army that had to align themselves and 
synchronize with FCS. We have increased that number. And in the 
last year, we have done a deep dive into 67 of those programs 
that we label as ``complementary systems'' to make sure that, 
operationally and technically--my concern is on the technical 
acquisition side--that those systems all work together, not 
just work together at the end state, but work together over 
time.
    And we have done those deep dives. And that was part of the 
realignment of the WIN-T program that was done last year, now 
broken up into four increments. We have done that deep dive 
with the Joint Tactical Radio System, which has had some 
concerns, another major part of the complementary systems that 
have to be aligned with FCS. And then there are 65 other 
systems that we have looked at, as well.
    Mr. Saxton. Thank you.
    Let me just turn to the second question.
    General Speakes, you know that we are, as you are, very 
concerned about Army readiness. Could you explain what the Army 
has done to increase the commitment to equipping the Army 
National Guard and the Army Reserve, or re-equipping I guess I 
should say? And I guess I would say, ``comma,'' can we do it 
faster?
    General Speakes. Sir, I appreciate the chance to address 
the question of the Army's commitment to properly equip the 
Army Guard and the Army Reserve. Let me recapitulate what has 
happened over the course of the past several years.
    As we entered into the events of post-9/11, what we quickly 
realized is that, as a part of the reorganization of the Army 
and the execution of the transformation of the Army in modular 
designs, we created one standard, and that is the modular Table 
of Organization and Equipment (TO&E), or documentation for a 
standard unit across the Army applied to everybody. It wasn't 
something that was applied differently, Active Guard and 
Reserve.
    That is important, because, as you know, prior to the start 
of this decade, we had a different way of approaching the 
organizational requirements for Guard and Reserve formations. 
We believe we had more time to get them ready, that they didn't 
need to have a full set of equipment as a part of their 
peacetime training requirements.
    Now we see it very differently. We see common application 
across the total force of the modular design. That is very 
important, because now what we have is one measuring stick to 
use for everybody. It is the same.
    The second thing we created was an Army campaign plan that 
essentially put the Army as an entity through a phased 
execution of the modular transformation of the Army. We are set 
now to complete that modular transformation of the Army by 
reorganizing our units in 2013. That is important, because it 
means the blueprint of success is now going to be effective 
universally across the Army by 2013. We are about two-thirds of 
the way through that transformation right now, as we realign 
units in accordance with this new standard.
    The next thing we did is developed a plan that said that 
the other evil practice of the past that was something we 
wanted to abandon was the concept of cascading equipment. You 
know the deal, which is we took the new stuff, gave it to the 
active component, and then we took the older stuff that was 
deemed still serviceable and useful and sent it to the Reserve 
component.
    That was a very negative practice for a bunch of reasons. 
We now send new equipment to whatever unit is in the 
transformation process or is in the Army force-generation 
process, getting ready to go to war. That is vital, because it 
means that all are treated equally with respect to their access 
to new equipment.
    The next thing we had to do was address the legacy of the 
previous generations. We had a disparate share of what we call 
``holes in the yard'' or missing equipment in the Guard and 
Reserve. So what we had to do was try to make up that 
differential. So what we are now seeing, thanks to the 
incredible support we have achieved from this committee, among 
others, is enormous progress in terms of our overall ability to 
equip the Guard.
    We just completed an Army equipping and reuse conference 
this January. What we do is specifically apply known 
distributions of items that have already been authorized and 
appropriated to the Army, which we now can base a specific 
document flow to enable us to project the arrival of equipment 
at the unit level. Based upon that, as we look out for the next 
two years, we see incredible benefits occurring to our Reserve 
component. What we saw, for example, is that----
    Mr. Abercrombie. Excuse me, General. I think we are 
slipping a little past the question at this point.
    General Speakes. Yes, sir. Let me go ahead then and focus 
it.
    What we are doing then is distributing the capabilities 
that the Army Guard and Army Reserve to execute their missions, 
and we are doing it on an accelerated basis. At this point, 54 
percent of our equipment is going to the active component, but 
46 percent is going to the Reserve component. Over 60 percent 
of the trucks that we are distributing right now are going to 
the Reserve component this year and next year.
    So what we believe is, in the next 2 years we will source 
93 percent of the equipment that went to replace the theater-
provided equipment that was left in-theater. So the idea that 
we have got enormous amounts of Guard and Reserve equipment now 
still over in-theater will no longer be in effect, because, 
thanks to you, we have been able to replace it with new 
equipment, 93 percent in the next 2 years.
    So the overall end state then is that we believe we will 
achieve the needs we have to support both an active role in 
force generation and homeland defense. At this point right now, 
we see the Army Guard at about 79 percent of equipment on hand 
against current organizational designs. That is a substantial 
improvement over where we stood even a year or two ago.
    Mr. Saxton. Just one follow-up, Mr. Chairman. On medium 
trucks, I understand this is one of the big needs. And I 
understand that the production capacity is pretty much maxed 
out, however it might be possible to increase production, but 
it would increase costs fairly dramatically as well, is that 
correct?
    General Speakes. Sir, at this point for the next 24 months, 
16,000 trucks are going to the Army Guard. We are approaching 
max capacity right now for medium trucks. We have realigned 
some of our priorities with available dollars to go after heavy 
trucks because of the fact we are approaching max production.
    Mr. Saxton. Mr. Chairman, thank you.
    Mr. Abercrombie. Mr. Gingrey.
    Dr. Gingrey. Mr. Chairman, thank you.
    Mr. Abercrombie. Mr. Reyes will defer to you. I understand 
you have a time problem.
    Dr. Gingrey. Mr. Chairman, I really appreciate that 
courtesy. And I want to thank Mr. Reyes for his courtesy as 
well. And gentlemen, I want to direct my question primarily to 
General Speakes and General Thompson. Since the submission of 
the President's Budget Request, certain media reports indicate 
the Army may be reviewing plans for major changes to Future 
Combat Systems programs, including the acceleration of some 
elements and additional delays for others. Can you elaborate on 
this and which systems may be cut, how it may change the cost 
of FCS?
    General Speakes. Sir, in general terms, the Army is always 
looking to accelerate the benefits of capabilities to the force 
once they prove themselves. Right now we have Spin Out 1 in 
evaluation this summer. We will make every effort to deliver it 
as fast as we can within existing processes to the Army. We are 
also evaluating the other capabilities that are a part of FCS. 
At this point, we do not have any definitive plans to do that, 
but the issues that have been identified by the GAO are first 
and foremost in our mind, that is the stability of 
requirements, the readiness of technology, and therefore our 
ability to pass tough testing before anything goes to the 
soldier. We assure you that nothing will happen without 
compliance with those processes.
    Dr. Gingrey. General Thompson, did you want to comment on 
that? If not, let me do a follow-up and maybe you can respond 
to this. What was the basis for terminating the Land Warrior 
Program? And if the demand and positive feedback for Land 
Warrior exists, then why not consider restoring that program?
    General Thompson. Sir, we will do a tag team on this one 
probably. In my previous job as director of Army Program 
Analysis and Evaluation, General Speakes's previous job as the 
head of Force Development, when we built the program objective 
memorandum for fiscal year 2008 to 2013 we were resource 
constrained. It gets back to the question of balance that 
Chairman Abercrombie brought up at the beginning. We had so 
many dollars to apply to the Army's investments, their 
modernization accounts. The Land Warrior Program at that time 
had some negative reports from the testing. And because of 
budget constraints we terminated that program.
    We had enough of the individual systems to outfit one 
battalion, a Stryker battalion, fourth battalion second 
infantry, the four nine infantry, I am sorry. That battalion 
has been in Iraq, has used that capability very successfully. 
The soldiers love it, the commanders love it. We have had the 
program manager for that program, Lieutenant Colonel Cummings 
embedded with that unit almost the whole time that they have 
been there. We now have an operational needs statement, which 
is a statement from the operational commander that says I would 
like to have a brigade's worth of that capability for the 5/2 
Stryker Brigade, which is getting ready to deploy. We have in 
the supplemental request a request for around $100 million for 
a brigade's worth of the Land Warrior capability.
    We will continue to evaluate not just the weight reduction, 
but how that system works. And right now we are working as we 
build the program objective memorandum for 10 to 15 for the 
follow on to Land Warrior, which is the incremental capability 
that we will call Ground Soldier System. So in short, you got a 
battalion's worth that we are using today. We would like to be 
able to buy a brigade's worth and continue to learn. And that 
becomes the learning point that we springboard into the Ground 
Soldier System for the future.
    Dr. Gingrey. I am encouraged to hear that. Regarding the 
Joint Cargo Aircraft (JCA), the NDAA for 2008 restricted the 
program from obligating funds until submission of six DOD-
initiated studies to the Congressional Defense Committee. What 
is the status of providing those six studies to Congress 
regarding the JCA?
    General Speakes. Sir, at this point, as you know, we have a 
joint effort, us and the Marine Corps--us and the Air Force 
linked together. We have moved through the submission of the 
six studies. And at this point now we are prepared to move 
forward. We are waiting the actual ability to obligate the 
money.
    General Thompson. Sir, it is my understanding right now 
that both the Army acquisition executive and the Air Force 
acquisition executive have sent a memo to Mr. Young to approve 
the acquisition program baseline now that studies are done. So 
I think the actual award of the dollars and moving forward in 
that program is imminent.
    Dr. Gingrey. Real quickly in the remaining few seconds I 
have got, the total acquisition unit costs of $6.6 billion for 
development and procurement of 78 JCA is about $84 million per 
each. A new C-130 J costs approximately $62 million. Given that 
the JCA is one half the capability that the C-130 J can 
provide, why should the taxpayer pay 1.4 times the cost and 
purchase JCAs?
    General Speakes. Sir, the first issue that we have is a 
common basis for calculating. At this point the basic cost of 
the aircraft itself that the Army and Air Force are procuring, 
which is the same aircraft, is about $33 million. We believe 
that compares with a figure for the C-130 of in the mid-60's.
    Dr. Gingrey. Did you say, General, $33 million?
    General Speakes. Yes, sir. The basic cost of the aircraft 
is 33. The additional figure that you have accounts for other 
items in life cycle costing beyond the actual purchase price of 
the aircraft.
    General Thompson. Items, Mr. Congressman, such as the 
training base, the depot maintenance, the way we sustain the 
aircraft. But it is a joint program. Everything that we are 
doing in that program is together between the Army and the Air 
Force. There is a common view of the production costs of the 
aircraft, which is the $33 million that General Speakes quotes.
    Dr. Gingrey. Thank you, gentlemen. Mr. Chairman, thank you 
again for your hospitality and letting me go ahead. I thank Mr. 
Reyes for that, and I yield back.
    Mr. Abercrombie. Thank you. Before we go to Mr. Reyes, 
General Thompson, I am not quite clear on the answer you gave 
to Mr. Gingrey about the Land Warrior and the Ground Soldier 
System with regard to why it was eliminated from your request 
for this year.
    General Speakes. Sir, that is my responsibility overall. 
Let me explain what happened. When we built the 8-13 POM we had 
a limited users test that was just underway. We went informally 
and surveyed soldiers in the field, to include the command 
sergeant major of that outfit who was here in the last couple 
days demonstrating its capability. The results were very 
lukewarm. Soldiers did not endorse the capability at the time, 
he among them.
    Mr. Abercrombie. This is part of the Army Battle Command 
Network?
    General Speakes. Sir, they had basic problems with size, 
weight and capability. It was cumbersome, bulky, and 
ineffective. And so soldiers voted and said no.
    Mr. Abercrombie. You are talking about the Land Warrior at 
this stage or the Ground Soldier? Which?
    General Speakes. Land Warrior, sir.
    Mr. Abercrombie. Okay.
    General Speakes. And so we didn't have a completed task, 
but we had preliminary results. We sent senior officers off to 
talk to the soldiers on the ground to see what they thought. 
The results were lukewarm. We had a cash squeeze. We had only 
limited programs we could support as we did the final planning 
for 8-13. That was a program terminated based on two issues: 
Number one, initial results in the local user terminal (LUT), 
and number two, the issue of affordability. We couldn't keep 
the program going. As General Thompson covered then in 
execution in combat the program number one changed 
significantly in terms of the minor issues that soldiers were 
finding with it. It became much more compatible to soldiers, 
much more usable. They voted enthusiastically for it. We have 
taken----
    Mr. Abercrombie. What took place to change it from lukewarm 
to enthusiasm?
    General Speakes. Sir, first weight.
    Mr. Abercrombie. You made some changes?
    General Speakes. Yes, sir. Weight in terms of the overall 
originally about 19 pounds, then down to 12, now down to about 
7 pounds overall.
    Mr. Abercrombie. So you weren't going ahead until you got 
something that you could use?
    General Speakes. Yes, sir.
    General Thompson. And received the positive endorsement 
from the soldiers that use it.
    Mr. Abercrombie. And by that time your 2008 budget cycle 
had passed in terms of----
    General Thompson. And it was terminated, and therefore 
didn't show up in the 2009 budget.
    Mr. Abercrombie. All right. Fine. So now you are looking at 
a supplemental budget, is that correct?
    General Speakes. That is correct, sir.
    Mr. Abercrombie. Now, is the supplemental budget 
principally an equipment question?
    General Speakes. Yes, sir. It is to specifically outfit one 
brigade combat team worth of equipment. The price that we have 
asked for is $102 million.
    Mr. Abercrombie. Okay. In that context then I am not 
concerned--not concerned--so now we are moving from--that is 
the Ground Soldier System or Land Warrior?
    General Speakes. Sir, that is Land Warrior?
    Mr. Abercrombie. Or are they interchangeable?
    General Speakes. No, sir, they are not. This would be the 
first increment. What you have, for example, is legacy radios, 
for example, not Joint Tactical Radar Systems (JTRS).
    Mr. Abercrombie. I was going to ask that next. In other 
words, this is the Ground Soldier System then.
    General Speakes. This is the precursor to Ground Soldier 
System, sir.
    Mr. Abercrombie. Okay. Land Warrior is now a relic of the 
past.
    General Speakes. Sir, the program that we are asking for 
support in this supplemental is Land Warrior. It is an 
intermediate solution to Ground Soldier System.
    General Thompson. If it would help, Chairman Abercrombie, I 
would categorize the Land Warrior as the early program. As we 
do with all programs, we continue to improve it, drop the 
weight, make it more operable. This is an improved Land Warrior 
that is in the supplemental request.
    Mr. Abercrombie. You are calling it Ground Soldier.
    General Thompson. No, sir. I am calling it improved Land 
Warrior. And Ground Soldier System will be what we evolve to 
after this brigade set up capability.
    Mr. Saxton. May I ask one quick question, Mr. Chairman?
    Mr. Abercrombie. Sure.
    General Thompson. We are not very good at naming 
conventions.
    Mr. Saxton. Generals, would you one of you or both of you 
describe the evolutionary process that is taking place with--
this is high-tech equipment, essentially, with high-tech 
equipment involving soldiers so that everybody can understand 
how soldiers play an important role in developing the 
configuration of these systems?
    General Speakes. Yes, sir. As General Thompson was 
mentioning, this is Army Evaluation Task Force kind of a 
demonstration. We were forced to take this to soldiers on their 
way to combat, have them evaluate it, and then try to derive 
Army lessons learned. We didn't get the answers on the right 
timeline. What the Army will do now with Army Evaluation Task 
Force is move into a process by which we cycle programs over to 
Fort Bliss to a formal evaluation is the proper way to evaluate 
equipment, and not give it to soldiers incident to deployment.
    Mr. Saxton. The soldiers get input during the developmental 
stage of these systems.
    General Speakes. Absolutely, sir. And as you saw on Friday, 
soldiers are going to help us determine, for example, what the 
basis of issue plan is, the specifics of what we call the TTP, 
or tactics, techniques and procedures to operate the equipment 
are that enable us then to field it right when we actually go 
through this evaluation.
    General Thompson. And Congressman Saxton, if I can just add 
a little bit here, this gets back to sort of the FCS argument. 
Not just are the capabilities transformational, the whole 
acquisition approach is transformational. And it is hard for 
the existing processes in the Defense Department. And I would 
submit part of the difference in view between the GAO and the 
Army is that we are embedding soldiers in this process, 
constantly evaluating. We are not doing things in the 
traditional way. So the soldier evaluates it, we make changes. 
We are in a constant cycle of making improvements to this 
thing, not that we don't have a stable acquisition baseline, 
but we are always looking for improving the capability so that 
when we do get it out there the soldiers accept it, it works. 
And that is really transformational in my view.
    Mr. Abercrombie. All right. But I am still not clear, and I 
want--we got to move on, still not clear what this Ground 
Soldier new start is in the context of the Land Warrior. Is the 
Ground Soldier, the position that you are now supporting here, 
part of the Land Warrior or not?
    General Speakes. No, sir, it is not.
    Mr. Abercrombie. That is what you are asking for funding 
for now, though.
    General Speakes. Yes, sir, it is. This will be incident to 
the needs of war as a concept right now that is not a formal 
Army program that has been evaluated in combat and now----
    Mr. Abercrombie. Okay. Then what is the Fourth Stryker 
Brigade the second infantry division now doing? Is that part of 
the Land Warrior System or is it part of the Ground Soldier 
System?
    General Thompson. Sir, the one battalion of Land Warrior 
was bought with fiscal year 2008 and prior year funds. The 
brigade's worth of improved Land Warrior capability is in the 
request for the 2000--is in the request for the supplemental 
for 2008 in the main supplemental. The Ground Soldier System, 
which new term----
    Mr. Abercrombie. You guys are messing yourself up with this 
stuff. You know there is an iron rule in politics if you are 
explaining you are losing. They ought--people ought to be able 
to grasp what you are talking about when you say it. They don't 
have to know the details, but they got to figure it out.
    General Thompson. Yes, sir. And----
    Mr. Abercrombie. And right now you are in the explanation 
stage and you are losing.
    General Thompson. Right. And we do a poor job of naming 
things.
    Mr. Abercrombie. All right. Now, that said then, say for me 
you got your Army Battle Command Network. Help the soldier with 
position and all the rest of that, right? And the whole 
argument behind the Land Warrior System, among other things, as 
I understand it, is you got multiple capabilities, like you 
were showing me the other day. You got the wearable computer, 
you have got the network radio, right? Now is this connected 
then, what your Land Warrior and/or your Ground Soldier System, 
how are they connected to the FCS Joint Tactical Radio System 
and the Warfighter Information Network? And does that come in 
the context of the Army Battle Command Network?
    General Speakes. Sir, across the Army right now we are 
operating Army Battle Command Network. What you saw is Spin Out 
number one is the first preliminary elements of what will be 
the FCS-enabled network. What we are asking for the authority 
to do is to continue to take legacy capabilities based upon 
ABCS, Army Battle Command Systems, put them in the hands of 
soldiers, and take them to a war. We then as a part of our 10 
POM will go ahead and develop and bring into reality Ground 
Soldier System, which will be linked with the future vision of 
the network, which is JTRS-enabled and is supportable and 
compatible with FCS.
    Mr. Abercrombie. So now they are using your existing 
systems. Are they supposed to be using this JTRS system, this 
WIN-T system if and when they ever come into being?
    General Speakes. Yes, sir, but that will be in Ground 
Soldier System. See that is the difference. Right now you are 
dealing with the last of the old. We are validating concepts. 
We are ensuring we got----
    Mr. Abercrombie. Are they working?
    General Speakes. Yes, sir they are.
    Mr. Abercrombie. They are working?
    General Speakes. Absolutely.
    Mr. Abercrombie. That's why the soldiers like them.
    General Speakes. Absolutely.
    Mr. Abercrombie. Okay.
    General Speakes. Yes, sir.
    Mr. Abercrombie. Mr. Reyes, your patience is now to be 
rewarded by unlimited time.
    Mr. Reyes. What about the Admiral down there? He is waiting 
his turn too.
    Mr. Abercrombie. The Admiral's middle name is Mr. Patience. 
He is waiting for the next hearing to occur, when he gets the 
first question.
    Mr. Reyes. Thank you, Mr. Chairman. I want to thank both 
you and Ranking Member Saxton for agreeing to go to El Paso to 
see firsthand the Future Combat System on the ground that is 
being actually utilized by soldiers. I always think that 
soldiers are the best ambassadors, as both of you saw. The 
Future Combat Systems we got a chance to see both indoor 
sensors, outdoor sensors, the robot, the UAV. We even got to 
see the remote controlled mule that is a couple of years down 
the road. Is that in Spin Out 2? The mule?
    General Speakes. Spin Out 3, sir, is its formal.
    Mr. Reyes. And you saw that it is very capable even at this 
point. You also got to see the connectivity with the simulators 
where they are already training to be able to take the first 
delivery, I believe General Speakes, it is this summer of the 
vehicles coming in?
    General Speakes. Sir, yes. The actual Manned Ground Vehicle 
(MGV) you are going to see here in Washington, D.C., in June 
for the Army birthday, the first prototype.
    Mr. Reyes. And then in Fort Bliss this summer as well? So 
we are a lot closer on this system, Mr. Chairman, than people 
had thought. And I guess the most impressive thing is the fact 
that soldiers have always told us, and I have been out there 
multiple times with different members, including Chairman 
Murtha, and the most important, impressive thing is the 
capabilities that these systems bring to our soldiers in places 
like Iraq and Afghanistan.
    Mr. Saxton and I were together when we visited Fallujah at 
the height in September a couple years ago, at the height of 
the fighting. And we were there with Chairman Hunter. And we 
spoke to some of the Marines that had had to go down the alleys 
and were taking casualties that way both by Improvised 
Explosive Devices (IEDs), and also by snipers. The robots, and 
I asked them later when I went back there, the robots would 
have been lifesavers for them. And I think we saw in that 
demonstration in the building that the robot with its infrared 
(IR) capability can see into even those hiding places where the 
insurgents were taking the major casualties on our troops.
    So I believe that the Future Combat Systems and just the 
Spin Out products that we were able to see and the way that it 
is evolving, and I know you and I, Mr. Chairman, had a 
discussion about the software. And that is really one of the--
probably the only question that I will ask both General Speakes 
and General Thompson to address, because we want to make sure 
that any questions that the Chairman has is answered. I was 
telling him that the simulator is already connected with 
software where the command vehicle, the officer in charge on 
the small unit scale, and I will have to depend on you for the 
definition of small unit, I know that there is at least five 
other vehicles that are connected to the command vehicle, and 
he is able to direct them as he will be able to later this 
summer with the FCS capabilities to plan the operations. And at 
the same time, when they dismount they will be able to count on 
the sensors, the outdoor sensors that will be force multipliers 
that will all be connected back to the command vehicle so that 
there is a view of the battlefield by the officer in charge in 
that vehicle where he can direct the multiple vehicles, the 
ground forces that have dismounted, and also see the threat 
that is coming at him both by the cameras and also by the 
sensors. So I am a very ardent supporter of the Future Combat 
Systems because I have actually seen them, seen the soldiers 
using it. And they have told me, like they told Chairman 
Abercrombie, Chairman Murtha and Ranking Member Saxton, that 
these tools, these systems will save lives in the future. And 
it is the way forward as we talk about the asymmetrical 
challenges that we think we are going to be facing with the 
global war on terror.
    So again, thank you both for going, and I will continue to 
ask other members to go, because I think there is no substitute 
for them seeing the soldiers who come from the what I call X 
Box 360 generation, they take to these robotics and capability 
of controlling these multiple systems with the X box like ducks 
take to water.
    So I just would like General Speakes and maybe General 
Thompson to talk about the software and where we are with it 
and anything else that maybe will clear it up for the chairman.
    General Speakes. Sir, I would be delighted to do that. What 
we saw in the simulator at Fort Bliss on Friday was very 
important. It was about four-fifths of software build one. What 
was significant about that is we are on the path now to a 
totally new way of building a battle command architecture. Army 
Battle Command System or ABCS, which was referred to by 
Chairman Abercrombie, was the way we fought the war up until 
now. The problem is it is a set of stovepipes that have been 
loosely linked. What that means is intel, fire support, and 
maneuver, for example, all operate by different code and they 
are linked in a very awkward way. What it means is we don't 
have a universal operating picture. The COP, or common 
operating picture, is what every commander desires so that he 
has all staff officer synchronized. What you saw on Friday was 
the first of that synchronization, albeit in a primitive 
fashion. So now what we are doing is we are harmonizing all the 
elements of the staff into a common view so that the enemy, the 
fire support, the friendly situation is all brought into one 
picture. And that has enormous application for efficiency and 
effectiveness and avoidance of fratricide that are very, very 
important. Now the issue that has been raised by the GAO is are 
we actually on a path to build the code to do this on the right 
timelines to meet the requirements? That is a sophisticated 
answer. I will ask General Thompson to help me on that.
    General Thompson. Sir, in the overall picture on software, 
one of the things that the GAO points out is there is roughly 
90 million lines of code in FCS. Well, the first point is FCS 
is a system of systems, so it is somewhat of an unfair 
comparison in our view to compare that to an individual system, 
an individual aircraft system in this case. But the equivalent 
source lines of code, the new code that we are writing that is 
unique to the FCS program has actually gone down since we 
started this program. Right now we are at about 16.7 million 
equivalent source lines of code. Most of the code that we are 
using in the FCS program is commercial off the shelf code or 
operating system code that we are integrating with the FCS.
    So it is not something we are starting from scratch to 
develop ourselves. We are using what is out there already that 
works in making sure that we incorporate it and include it with 
the FCS-developed software. That is the commercial best 
practice. And that is a key strategic point. We are just about 
through with the block one of the software build for about 5.1 
million lines of the 16.7 million. We have got a software block 
two. We are managing the risk in the software build by the test 
process that we have got right now.
    There is another software block of code after that. And 
then we will finish up. And so every couple of years we put 
ourselves on a developmental path to develop the software. We 
test it, we test it with soldiers. When it proves out we go to 
the next software block. So I am very confident in the 
acquisition approach that we have got. And that gets looked at 
by the experts and the DOD IG. As I pointed out to Congressman 
Saxton, that is part of the annual review process and will be 
part of the 2009 review process.
    Mr. Reyes. Thank you, Mr. Chairman. You can follow-up if 
you want to.
    Mr. Abercrombie. Yes, just quickly on that, I am concerned. 
As I said, I am concerned about alchemy more than anything 
else. One of the reasons I am as suspicious as I am or 
reluctant as I am to fling myself into the Internet pool is 
that there are two people, not one, it used to be one, there 
are two people, I thought they were working for me. It turns 
out they are under contract. They are in my office virtually 
every week--maybe that is not right, maybe every 10 days--
because the equipment in my office doesn't work. The computers 
don't work. They crash. The copiers don't work. The fax machine 
doesn't work. These are commercial enterprises. When we were 
down there at Fort Bliss, yes, I was at the simulation, I saw 
it, there was a roomful of computers, a roomful of activity 
going on there.
    If I understood you correctly, what you are saying is you 
are taking pieces of commercial off the shelf code as embodied 
in one form or another of a modular instrument and you are 
combining them with freshly done code or contracted code from 
another outfit, another commercial outfit, and you are rigging 
this all together to come up with your Joint Tactical Radio 
System and your Warfighter Information Network. Is that right?
    General Thompson. Sir, inside of the FCS program itself we 
are doing what I described on using and leveraging the 
commercially developed software that meets our needs.
    Mr. Abercrombie. Are you sure? The reason I am asking this 
is someone who is one of your contractors came to my office the 
other day and told me essentially that we were ready to go. 
That my concerns about the Joint Tactical Radio System and the 
Warfighter Information System, in fact he was so adamant that 
he was--I guess he put me in the Luddite category--he was 
condescending enough to tell me that this was already done and 
why I didn't understand that was a little bit beyond his 
imagination. Now, is that true then that you are essentially 
ready, that my concerns about whether or not you have 
accomplished what you need to do with the JTRS system and the 
WIN-T is essentially already accomplished? And you are ready to 
go I guess to start manufacturing soon? I didn't see that at 
Fort Bliss.
    General Thompson. The WIN-T program, Congressman, was 
evaluated last year and broken into four increments of 
capability that will be delivered over time.
    Mr. Abercrombie. That's right. From what this guy was 
telling me, one of these subcontractors, that is essentially 
all over. Now is he taking a flight of fancy?
    General Thompson. I don't know who that individual was.
    Mr. Abercrombie. You are paying him several hundred million 
dollars, so he was quite content to take the money. I am just 
trying to get it straight here, you know, because it is serious 
business. Is this ready to go or not? If you are telling me you 
are taking commercial code as embodied in existing systems from 
I don't know, Sony, Samsung, whatever, that I can go down and 
buy it at Wal-Mart, and then you are going to put this together 
with something that is supposed to protect soldiers, I want to 
know whether that in fact is going to work. I am suspicious of 
that. It sounds like alchemy to me.
    General Thompson. Sir, it will work when it is designed to 
work. We put----
    Mr. Abercrombie. How fast is that? Are you close to doing 
that? I don't think so.
    General Thompson. In block one of the software build, yes, 
we are. We have done the iterative testing. We are just about 
finished with the block one.
    Mr. Abercrombie. How many blocks to go? Three more, right?
    General Thompson. There are three more blocks to go. And so 
when we need the code developed, it will be not just developed, 
but it will be integrated and tested and deliver the capability 
or it won't get to the next phase.
    Mr. Abercrombie. So we are not going to go into production 
then before that is done?
    General Speakes. Correct, sir. And that is the value of 
what you saw out there, that whatever you saw soldiers doing, 
when you saw that picture being moved, that was on this 
essentially three-quarters of the first build. We will have the 
complete----
    Mr. Abercrombie. First build. You mean you are integrating 
the vehicles in the network.
    General Speakes. Exactly. Yes, sir. And so the great news 
about this is none of this is going anywhere until soldiers 
operate it and we get a chance to see it increment by 
increment. That is a part of the issue----
    Mr. Abercrombie. Okay. If that is the case then wouldn't it 
make sense in terms of the vehicle then, because I was in the 
Bradley, wouldn't it make sense then to go with a modified 
Bradley that you also have on the drawing boards before you get 
to the--and go ahead and start building that before you get to 
the infantry fighting vehicle?
    General Speakes. Sir, what we showed you out at Fort Bliss 
was the illustration of the Manned Ground Vehicle that will be 
the common chassis for the FCS. And then what we explained is 
that 70 percent commonality enables us to take not just to 
develop the cannon you will see this summer, but then the other 
elements of it, the infantry vehicle, the recon vehicle----
    Mr. Abercrombie. I understand that, General, but do you not 
already have on the boards right now funding for an upgraded 
Bradley?
    General Speakes. Sir, we are investing in continued 
research and development to essentially maintain the 
survivability and viability of the tank and Bradley as we bring 
FCS on. So the research and development you see in our current 
2009 budget does that. It is not designed to take us all way 
through the future.
    Mr. Abercrombie. I didn't say that. I understand, General. 
Occasionally we do, in fact, understand up here. I am asking 
you in the context of, you know, block one, and then three 
blocks coming of code and all the rest of it that goes into the 
vehicle I saw in the drawing, but I was in a Bradley, and 
barely, with the equipment that you have now to start using the 
things that you already have now. I am trying to help you here. 
And we have choices that we need to make. And what I am asking 
is does it make sense to push for funding for an upgraded 
Bradley? I am saying upgraded, I may not have this exactly 
correct in the nomenclature, but and that Bradley can 
accommodate some--it is a legacy vehicle, I understand that, 
but from what I understand the people who drive it are damn 
glad to have it. I mean it is a good vehicle, is it not? Has it 
not served honorably and well for the United States Army to 
this point?
    General Speakes. Yes, sir, it has.
    Mr. Abercrombie. And all I am saying is that pending the 
day when the new vehicle comes off from being a drawing to 
being a prototype to going to low production rate to being 
integrated with the off the shelf code, which apparently has 
taken on iconic proportions right now, pending that, do you 
want to stay just with the Bradley you have now or would the 
new and improved version of the Bradley that I understand you 
are ready to move on in terms of manufacture, is that something 
you could use?
    General Speakes. Sir, the key element of this, before I 
turn it over to General Thompson, is what you saw put into the 
Bradley was the Internal Communications System (ICS). That ICS 
gives exactly what you are asking, which is it takes this 
primitive version of the new network and brings it into our 
existing legacy platforms.
    Mr. Abercrombie. That is the kind of thing your soldiers 
are now using, are they not?
    General Speakes. Exactly. They are using it right now at 
Fort Bliss to essentially validate we can do this. You are 
exactly right, sir.
    Mr. Abercrombie. Good. Mr. Francis, I have a couple things 
I would to ask you and then I am going to go to Mr. Sestak. If 
you can just confirm this for me so I make sure I have my facts 
lined up. In fiscal year 2003, when the FCS program was 
initiated by the Army, the target date for fielding the first 
brigade for the 18 FCS element programs was December of 2010. 
Is that right?
    Mr. Francis. Yes, sir.
    Mr. Abercrombie. Okay. Since 2003 the Army has eliminated 
4, I believe I got this right from your statement, eliminated 4 
of the original planned 18 system elements, is that right?
    Mr. Francis. Yes, Mr. Chairman.
    Mr. Abercrombie. Two of the Unmanned Aerial Vehicles (UAVs) 
and two of the ground robots?
    Mr. Francis. I think one of those--yeah, I think that's 
correct, Mr. Chairman.
    Mr. Abercrombie. Okay. Of the original 18 system elements, 
2 will be fielded by the 2010 date.
    Mr. Francis. Yes.
    Mr. Abercrombie. The remainder won't be ready until 2014 in 
the case of the four elements.
    Mr. Francis. I believe that is about the right schedule, 
yes.
    Mr. Abercrombie. Or 2015 for the remaining eight.
    Mr. Francis. Yes.
    Mr. Abercrombie. Okay. If everything goes right.
    Mr. Francis. Correct.
    Mr. Abercrombie. Overall the first brigade has been delayed 
five years then.
    Mr. Francis. Yes, sir.
    Mr. Abercrombie. I am not asking these questions because I 
am trying to go so there, I am trying to figure out when things 
get put down the line in terms of choices we got to make now 
where the funding goes. That's what I am trying to get 
straight. So again, in 2003, the Army said it would field 15 
FCS brigades by 2020. Is it correct, do I have it correct that 
the figure is now 2029?
    Mr. Francis. I believe that's correct. The production rates 
have been lowered and stretched out.
    Mr. Abercrombie. Provided everything goes right.
    Mr. Francis. Correct.
    Mr. Abercrombie. Now this is important to me. Now, the cost 
estimate for all development costs and the 15 brigades 5 years 
ago was about $90 billion, a little over $90 billion.
    Mr. Francis. Yes.
    Mr. Abercrombie. Right? Now the Army cost estimate now is 
$161 billion. Right?
    Mr. Francis. Yes.
    Mr. Abercrombie. Now, this doesn't include all the funding 
for the Spin Outs. Is that your understanding?
    Mr. Francis. Yes, that is correct.
    Mr. Abercrombie. Okay. And now the independent estimates we 
talked to, that is why I went over this group thing from the 
Pentagon, there is at least two, right? One is--one of the 
think tank group.
    Mr. Francis. The Institute for Defense Analysis (IDA).
    Mr. Abercrombie. Who funds them? Do you know?
    Mr. Francis. I believe they are an FFR----
    Mr. Abercrombie. They aren't one of these Washington groups 
that you don't know where the money comes from?
    Mr. Francis. I think it is DOD-funded.
    Mr. Abercrombie. So they contract with an outside agency?
    Mr. Francis. No, actually this was--IDA was mandated by--
well, DOD was mandated by law to have an independent estimate 
done, and they contracted----
    Mr. Abercrombie. So they chose these folks?
    Mr. Francis. Yes.
    Mr. Abercrombie. Do you know anything about them?
    Mr. Francis. We have had a number of dealings with them. 
They are generally very senior analysts who have been in and 
out of the defense industry. And I do find them independent.
    Mr. Abercrombie. Nonetheless they are a private entity?
    Mr. Francis. They are.
    Mr. Abercrombie. Okay. Then the other group, the cost group 
is an internal entity of the Pentagon?
    Mr. Francis. Correct. Works for the Office of the Secretary 
of Defense and reports to him.
    Mr. Abercrombie. And who expects them to give him or her an 
objective report regardless of their service affiliations 
previously or extent.
    Mr. Francis. Correct.
    Mr. Abercrombie. Okay. The reason I go into that, for the 
record, you have seen those. Now those two entities have come 
up with figures that are significantly higher, is that correct?
    Mr. Francis. Yes.
    Mr. Abercrombie. The outside figure I have is over 200 
billion.
    Mr. Francis. Yes. That was the Cost Analysis Improvement 
Group's number.
    Mr. Abercrombie. Do you disagree with any of those 
questions? Rather than repeat them all, I am sure you heard 
them, I should have asked you to listen at the same time. Not 
that you wouldn't be listening, General.
    General Speakes. Sir, we were certainly listening. The 
first point is that the technical discussion about the change 
in cost has to be balanced against the change in program 
content.
    Mr. Abercrombie. I understand all that. I am just asking am 
I accurate so far?
    General Speakes. Sir, you are accurate, but the inferences 
are not accurate.
    Mr. Abercrombie. You may be drawing inferences. I am not.
    General Speakes. No, sir. But the issue here is when you 
say they went from 90 to 160 billion, for example, we need to 
account for the change in scope of the program.
    Mr. Abercrombie. I quite agree. I understand.
    General Speakes. Yes, sir.
    Mr. Abercrombie. In fact, I would say again trying to look 
at the basis the best I can understand, I know they are taking 
into account inflation. They think they are. But I don't think 
they are taking into account the depression we are now entering 
into, thanks to the great fiscal stewardship that we have had 
over the last seven years. So it may get even more difficult. 
Thank you. Ms. St. Laurent, to think you were inches from a 
clean getaway. I was struck by your--if I can quote from the 
summary from your work. Although I have read the rest of it, 
but the summary I thought was pretty trenchant. And I want to 
quote a couple things back to you because I want to make sure I 
understand the information. And you may draw inferences from 
this, General Speakes.
    General Speakes. Yes, sir.
    Mr. Abercrombie. What we are dealing with here, or what you 
were dealing with with the modular restructuring, and I take 
that very, very seriously. This is not easy to do. And I am 
sure General Speakes will agree with this. That moving from the 
division concept to the brigade concept such as was done--is 
underway here is not an easy task organizationally. I am sure 
you agree with that.
    Ms. St. Laurent. Yes, very much. It is a major change in 
the way the Army is structured.
    Mr. Abercrombie. Not only that, but that means a major 
change in thinking and it can mean changes right down to where 
they put the furniture.
    Ms. St. Laurent. Correct. It has personnel, equipping, 
facilities, and other implications.
    Mr. Abercrombie. Right. All of which costs money. Okay. 
Now, if I have you correctly, you found that the funding plan 
to grow the Army by 74,000 personnel, let's suppose we can 
actually do that, we got to take into account bonuses and 
recruitment expenditures and all kinds of things, so you don't 
really need to count that in. I am thinking about that. Okay. I 
am trying to figure out how much we are going to spend. Is $70 
billion approximately what was set aside or is going to be 
asked for to grow the Army by that 70,000?
    Ms. St. Laurent. That was the initial estimate. The Army I 
believe has revised it to about a $72 billion estimate right 
now.
    Mr. Abercrombie. Okay. Does that take into account--I 
wasn't clear from reading what you said, forgive me if you said 
it in there, but as I got to my second or third hour of reading 
I might have missed it. Does that take into account the 
transition from modularity? That transition is already taking 
place without the 74,000.
    Ms. St. Laurent. Right. The $70 billion estimate is to add 
6 additional brigades and some support units. And the equipment 
costs associated with that are about $18 billion. The rest of 
the $70 billion is for personnel and other costs. But on top of 
the expansion costs for adding the additional brigades, the 
Army is proceeding with its overall effort to restructure. And 
that effort is expected to call, just for the equipment alone, 
$43 billion or so. And again in our estimation, that $43 
billion estimate is somewhat understated, in fact, probably 
quite a bit understated because it was developed so long ago. 
And when we look at beyond 2013 our analysis shows that Army 
units are going to continue to have fairly significant 
shortfalls in some of the key equipment items.
    Mr. Abercrombie. So are you saying that if they are 
successful, if the Army is successful in moving toward this 
acquisition of more personnel that this estimate will probably 
have to go up?
    Ms. St. Laurent. Yes. Even without considering the 
expansion efforts----
    Mr. Abercrombie. Of the 70.
    Ms. St. Laurent. Right--of the existing brigades prior to 
expansion, our analysis shows that it is going to cost 
significantly more to equip modular units.
    Mr. Abercrombie. Okay. Do you have an educated guess as to 
what that might be if you added the 74,000?
    Ms. St. Laurent. It is very difficult to do because the 
Army has not really updated its estimate at all since the 2004 
time frame. We have requested----
    Mr. Abercrombie. You mean the estimate of the cost of the 
equipment?
    Ms. St. Laurent. Yes. We have recommended that they do 
that. The Army's perspective now is that modular equipping is 
just part of the overall modernization effort of the Army. And 
what they plan to do is request equipment item by item in their 
subsequent budgets. And that will help them address subsequent 
shortfalls, but they don't have any overall estimate of what it 
is going to take to equip these units. And of course, that has 
readiness implications. And what we are seeing at this point is 
money is flowing in toward procurement to buy additional 
equipment, but we have not yet seen any significant 
enhancements in the readiness, particularly the nondeployed 
forces.
    Mr. Abercrombie. Is that a fair assessment, General 
Speakes? You see where I am going. I am trying to be helpful 
here. My guess is that we need to start figuring that there is 
more money that is going to be needed in the context of moving 
to modularity, in the context of modularity and increasing the 
personnel at the same time. In some respects--in other words, 
you are going to be hurt if you are successful?
    General Speakes. Yes, sir.
    Mr. Abercrombie. Or it will be more difficult for you if 
you are successful.
    General Speakes. Yes. Exactly right. Ms. St. Laurent is 
exactly right. We have two different ways of looking right now 
at this challenge that we are facing. One is to grow the Army. 
Seventy billion dollars given to the Army, it was a fully 
burdened cost. It is fully resourced. We have a plan now that 
not only creates 6 infantry brigades, but also creates 13 
support units, brigade size across the Guard and Reserve. That 
is a substantial capability that is on the books now, resourced 
appropriately, and is proceeding on plan.
    The other element then that she identifies is the challenge 
we have of continuing the transformation of the Army over time 
so that by 2013 we have taken 300 brigade-sized units, Active 
Guard and Reserve, combat all the way to service support, and 
brought them to a new organization.
    Mr. Abercrombie. I agree with you, General. I am sorry just 
because we have got the vote. What about the money then? Where 
are you in trying to come up with another figure?
    General Speakes. Sir, at this point what we have worked 
very hard is the issue of holes in the yard. And the holes in 
the yard challenge is basic because we are moving to a level 
now of equipping where we want to make sure everybody has got 
the stuff they are supposed to have. And we will continue the 
modernization issue over time. So at this point what we believe 
is that the Army Guard is owed about $9.9 billion after we have 
applied current plans through 13.
    Mr. Abercrombie. So the 70 goes to 80?
    General Speakes. Sir, what we have to do is we have got to 
apply about $10 billion to the Army Guard, about $2.4 billion 
to the Army Reserve, about $10 billion to Army Pre-Positioned 
Stocks (APS), and about $10 billion to the active. That comes 
to a total of $33 billion beyond our current program.
    Mr. Abercrombie. So it is $100 billion you need.
    General Speakes. Sir, this is right now in addition to our 
existing resource plan. So what I am saying----
    Mr. Abercrombie. $100 billion.
    General Speakes. No, sir. You have a Unfunded Report (UFR) 
right now of $33 billion to fill the holes in the yard at the 
end of 2013. That does not count any supplemental finding in 
2009. It only counts the planned supplemental funding in 2008.
    Mr. Abercrombie. To take care of your immediate needs.
    General Speakes. Yes, sir.
    Mr. Abercrombie. But you don't have the 74,000 yet?
    General Speakes. Yes, sir. We have already got that. That 
is in our base program. In other words, we are counting right 
now that you gave us all the money we need----
    Mr. Abercrombie. So you are telling me the $70 billion is 
okay. Why did you ask for 70 if you only needed 33?
    General Speakes. No, sir. I am trying to draw a 
distinction. The $70 billion accounts for the growth of the 
Army, that delta, that new capability we are bringing on, 6 
brigade combat teams and 13 support brigades. Seventy billion 
dollars total burden cost in our program resourced and fully 
funded. No problem. The next issue then is you got the whole 
rest of the Army.
    Mr. Abercrombie. Yes.
    General Speakes. What I outlined to you is the remaining 
bill that is beyond our existing program to put the right 
equipment in the force.
    Mr. Abercrombie. Okay. Then that is $100 billion.
    General Speakes. No, sir. That is $33 billion in addition 
to what you have already got planned. See the $70 billion you 
already talked about is already in the plan, you have already 
given it to us.
    Mr. Abercrombie. Yeah, I understand that. I am just asking 
what the overall cost is going to be. I know we have already 
given. I understand that part. So it is $100 billion all 
together.
    General Speakes. Yes, sir.
    Mr. Abercrombie. Now, where does preposition stocks come 
into this?
    General Speakes. Sir, that was $10 billion of the costs 
that I outlined. In other words, when I showed you the $33 
billion shortfall, I said about $10 billion in APS that has not 
yet been resourced.
    Mr. Abercrombie. So $10 billion will cover all that?
    General Speakes. Yes, sir, it will.
    Mr. Abercrombie. You think so.
    Ms. St. Laurent. Mr. Chairman, if I could try to go over 
our overall numbers and talk about what has already been 
requested and appropriated and what is from here on forward.
    Mr. Abercrombie. Yes.
    Ms. St. Laurent. And in our testimony we talk about a 
figure of about $190 billion for these four initiatives. Of 
that amount, the Department of the Army has probably already 
requested about $80 billion. So that means there are still $100 
billion or more of expenditure through fiscal--or of requested 
moneys through fiscal year 2013. And beyond that there is 
likely to be significant additional requirements for equipment.
    Mr. Abercrombie. Would you say the last sentence? I was 
distracted for a moment. I beg your pardon.
    Ms. St. Laurent. Certainly. There is about $110 billion 
more to come in terms of fiscal year 2009 to 2013. And beyond 
that point there is likely to be additional billions of dollars 
requested by the Army to support the modular force. What we 
can't do is estimate the amounts beyond fiscal year 2013 at 
this point based on the data we have seen.
    Mr. Abercrombie. Would you agree that that is in the 
ballpark, General?
    General Speakes. Yes, sir. She has identified a total 
requirement. I have applied planned resources against it.
    Mr. Abercrombie. You say you have applied planned 
resources. You mean you can accommodate that kind of money?
    General Speakes. Sir, what I can accommodate is everything 
less $33 billion.
    Mr. Abercrombie. So we should add $33 billion--so you 
accommodate approximately $150 billion in your planning?
    General Speakes. Yes, sir.
    Mr. Abercrombie. So we still got to find $33 billion then. 
Okay. Now we are getting somewhere.
    General Speakes. Or not fill the Army by 2013, sir.
    Mr. Abercrombie. Do you suppose we will have any other 
difficulties before 2013 that you have to address?
    General Speakes. Potentially, sir.
    Mr. Abercrombie. Yes. Anybody want to make any final 
remarks? Because I am not sure we can bring any other Members 
back after the vote. And inasmuch as I would like to obey the 
rules, one Member can't do it.
    Ms. Ugone. Mr. Chairman?
    Mr. Abercrombie. Yes.
    Ms. Ugone. I would like to just address, and unfortunately 
Mr. Saxton has left, I would like to mention that we did afford 
109 days when we first alerted the Army to this issue. We met 
with the Program Executive Officer (PEO) soldier twice. They 
provided information from their files. We considered them. And 
in fact, we scrubbed our draft report results and reduced the 
number of issues we had from 15 to 13. So I just wanted to 
address that issue.
    Mr. Abercrombie. So you think the situation--could you 
folks get together and continue to talk on this issue so that 
we can----
    Ms. Ugone. Frankly, the Army did agree with most of our 
recommendations. And I think dialogue, continued dialogue is 
good.
    Mr. Abercrombie. In a short order?
    Ms. Ugone. I don't see a real issue on this.
    Mr. Abercrombie. Okay. Could I ask you, I guess it is 
formally here, but could I ask you that when you finish up your 
talks and what you were talking about, General Thompson, in 
terms of your using that that you will let me know what the 
ultimate score is so we can then put something out that will 
hopefully relieve people's anxiety? In other words, as I said 
at the beginning, this is something that many people know about 
here and are familiar with and conversant with, but what 
happens is it gets translated to the public and to the republic 
in a manner that generally comes out oh, our soldiers are in 
danger and they are not being taken care of the way they 
should.
    I don't think that is really the issue here, but it becomes 
one unless we are able to clear it up, which I would like to 
do. And I think we can as a result of what has been said here 
today. I appreciate the work that you all do.
    [The information referred to can be found in the Appendix 
beginning on page 123.]
    Ms. Ugone. Thank you.
    Mr. Abercrombie. Thank you all very, very much. I think I 
will conclude the hearing rather than hold you to this any 
further. Once again, it has been very, very good, very, very 
enlightening for me. And I am grateful to all of you. Thank 
you.
    [Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
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                            A P P E N D I X

                             April 10, 2008

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             QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

                             April 10, 2008

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                 QUESTIONS SUBMITTED BY MR. ABERCROMBIE

    Mr. Abercrombie. Lieutenant General Thompson and Lieutenant General 
Speakes, in the fiscal year 2005 Joint Cargo Aircraft Analysis of 
Alternatives, the Army estimated the 25 year life-cycle cost for 56 C-
130J aircraft would be $6,803.6 million, or $121.5 million per 
aircraft. The Army estimates in fiscal year 2007 that the 25 year life-
cycle of 54 C-27 aircraft will be $7,085.7 million, or $131.2 million 
per aircraft. Given the life-cycle cost disparity between the two 
platforms and the greater capability of the C-130J, why did the Army 
choose the higher priced C-27 over the C-130J, and what specific 
scenarios would the C-130J aircraft not be able to meet Army airlift 
requirements?
    General Speakes and General Thompson. The Joint Cargo Aircraft 
(JCA) enables the Army to meet its inherent core logistics functions as 
described by Joint Publication 3-17. The Army needs a replacement 
aircraft for the aging C-23 Sherpa's that conduct the Army's time-
sensitive and mission critical resupply mission. For this mission, the 
C-27J is an appropriate size while the C-130J has significant excess 
cargo-carrying capability to address this Service-unique mission. Due 
in part to its smaller size, the C-27J can land at airfields and 
landing strips for which the C-130J is not built. This ability to land 
near Army Brigade Combat Teams in the field is an essential 
characteristic for the JCA.
    The disparity between the life cycle cost figures as described in 
the fiscal year 2005 (FY05) JCA Analysis of Alternatives (AOA) for the 
C-130J and the 2007 cost estimates for the C-27J were based on 
assumptions that do not provide a true comparison. To compare the cost 
estimates, one needs to insure that the same base assumptions are used 
in the calculations. At the time of the JCA AoA, FY05, the cost 
estimate for 56 C-27J was $4,703.30, or $84.0 million per aircraft. 
Using the same assumptions, the C-130J came in at the $6,803.60 figure 
above, or $121.5 million per aircraft. Both estimates were calculated 
in budget year dollars 2005 ($BY05). These figures included Research 
Development Testing and Evaluation (RDT&E), Procurement (PROC), 
Military Personnel (MILPER), Military Construction (MILCON), and 
Operations Maintenance Appropriations (OMA).
    Using the United States Air Force 2008 Rand study for a point of 
comparison, the Life Cycle Cost Estimate for C-130J, and C-130J-30 are 
$188 million and $195 million per aircraft, $BY08, based on 15,000 
operational hours. This analysis only considers PROC and OMA. The 2007 
C-27J cost position of $131.2 million per aircraft, $BY07 and based on 
15,000 operational hours includes RDTE, PROC, MILPER, MILCON, and OMA.
    Along with bringing greater size and cargo-carrying capability than 
is required for this mission, the C-130J brings with it a significantly 
higher per unit cost. The C-27J costs approximately $33 million per 
aircraft, while an equivalently equipped C-130J cost is in excess of 
$60 million per aircraft. In addition, it is not surprising that a 
four-engine C-130 has a higher per flight hour maintenance requirement 
than a two-engine C-27J.
    Mr. Abercrombie. Lieutenant General Thompson and Lieutenant General 
Speakes, what is the Army's long term acquisition strategy for body 
armor? And, will the current request for proposals address the 
theater's primary concern of providing a lighter-weight system without 
sacrificing survivability performance?
    General Speakes and General Thompson. The long term acquisition 
strategy for body armor is to continue the research and development of 
materials that will achieve better ballistic protection while reducing 
the overall weight of the system. As improved material technologies 
become available, the U.S. Army will rapidly transition the technology 
into body armor production. The current request for proposal for the 
next generation body armor solicitation closed on February 7, 2008, and 
source selection is ongoing. At this time, current materials technology 
is challenged to achieve significant weight savings for the same or 
better level of performance. The current Enhanced Small Arms Protective 
Insert worn with the Improved Outer Tactical Vest protects against the 
current threat and provides an increased area of coverage over the 
current Outer Tactical Vest with a weight reduction of greater than 
three pounds.
    Mr. Abercrombie. Lieutenant General Thompson and Lieutenant General 
Speakes, what is the Army's procurement strategy for the Improved Outer 
Tactical Vest (IOTV)? I understand two vendors were producing the vest 
but now are idle. Do you plan to award a bridge contract?
    General Speakes and General Thompson. The U.S. Army's procurement 
strategy is to procure the Army Acquisition Objective (AAO) to replace 
the 966,000 Outer Tactical Vests (OTVs) currently in the field. 
Procurement of the IOTV began in June 2007 for an initial Theater 
requirement of 230,000 vests. The IOTV production contracts were 
awarded to Point Blank Body Armor (PBBA), Oakland Park, Florida, and 
Specialty Defense Systems, Jefferson City, Tennessee (which was later 
acquired by BAE Systems). These companies are the only two sources that 
have passed U.S. Army first article tests and have sufficient 
production capacity to meet the Army's monthly production requirements. 
A contract will be awarded in 3rd quarter Fiscal Year 2008 to procure 
150,000 IOTV's as a bridge to a Full and Open competitive solicitation 
for the remaining U.S. Army requirement. The competitive solicitation 
will procure the remaining 586,000 IOTVs to complete the AAO, and 
contract awards for this IOTV solicitation are anticipated by August 
30, 2008.
    Mr. Abercrombie. Lieutenant General Thompson and Lieutenant General 
Speakes, please outline the Army's procurement strategy for small arms? 
Please comment on the results from the recent extreme dust chamber 
tests conducted at Aberdeen Proving Ground on the M4 Carbine? Are you 
planning to replace the M4 Carbine?
    General Speakes and General Thompson. The Army is a requirements-
based force and as such, the Army's small arms procurement strategy is 
designed to meet the materiel requirements generated by our proponent 
Schools and Centers within the U.S. Army Training and Doctrine Command. 
In the small arms arena, the U.S. Army Infantry Center at Ft. Benning, 
Georgia, serves as the proponent for all small arms for the Army. They 
recently completed their latest Small Arms Capability Based Assessment 
(CBA) to evaluate: current capability gaps; the methods to reduce or 
eliminate those gaps; and lastly, whether a new requirements document 
is necessary to close any capability gaps. While ongoing procurement 
programs are addressing many of the gaps identified, the changing face 
of warfare and the advancement in technologies has created 
opportunities to provide capabilities such as counter-defilade target 
engagement (the ability to engage and destroy targets behind cover such 
as walls, berms, vehicles, etc.) never possible in the past.
    The small arms procurement strategy remains based on proponent-
generated material requirements and during wartime, the Operational 
Need Statements (ONS) that come from the field, validated by the chain 
of command, and ultimately approved by the Army leadership for specific 
limited requirements. These ONS are also submitted to the formal 
requirements process with the proponent evaluating the ONS for 
applicability across the force. The ONS generated in Operations in 
Southwest Asia were also reviewed as part of the CBA that the U.S. Army 
Infantry Center recently completed.
    The current small arms procurement strategy focuses on: meeting the 
expanding requirements for machine guns for convoy protection and 
individual and crew-served weapons to meet the expansion of the Army; 
and increasing the fielding of the latest version of weapons to the 
whole Army. For instance, the Army and industry are developing a 
lighter weight .50 caliber machine gun (XM312) with increased safety 
features such as the Quick Change Barrel that eliminates the need to 
set head space and timing with each barrel change; and a lightweight 
7.62mm Machine Gun (M240E6) which reduces the weight of the weapon by 
five pounds through the incorporation of a titanium receiver and a 
metal polymer pistol grip and trigger assembly. We have been developing 
a counter-defilade capability, which will meet the highest priority 
materiel gap identified by the CBA. A new sniper weapon began fielding 
this year and a new 40mm Grenade Launcher will begin fielding later in 
the year. Next year, a new shotgun integrated with the carbine will 
begin fielding. The procurement strategy is a living document that 
constantly adjusts to meet the needs of the Army.
    The extreme dust test conducted last year highlighted the quality 
of the weapons tested with all of the weapons performing 98.4 percent 
of the time or better in a laboratory environment designed to push the 
weapons beyond their limits at a significantly accelerated pace. The 
test also confirmed that the maintenance regimen directed by the Army 
makes a significant impact on the reduction of malfunctions. The Army 
has taken the results of this test to analyze the data for possible 
engineering changes to further improve the Army's basic carbine, as we 
have continuously done since before the current carbine, the M4, was 
introduced into the force. In addition, on the basis of engineering 
data that the Army already had, an ongoing magazine program will begin 
fielding the new improved ammunition magazines in the 1st quarter 
Fiscal Year 2009.
    The Army currently does not have plans to replace the M4 carbine. 
The U.S. Army Infantry Center's CBA found no capability gaps that 
require a new materiel solution for the Soldier's basic carbine and 
rifle. Further, the reports from the field commanders and senior non-
commissioned officers constantly praise the M4 with their only request 
being that they want more of them.
    Mr. Abercrombie. Lieutenant General Thompson and Lieutenant General 
Speakes, the Air Force appears to be attempting to procure a new 
handgun. Does the Army plan to replace the M9mm? Does the Army support 
the Air Force initiative to procure a new modular handgun system?
    General Speakes and General Thompson. The Army has determined there 
is no immediate need to replace the current 9mm handgun. The current 
9mm pistol meets the Army requirements. Although improvements can be 
made, a new handgun is a lower priority than other small arms needs 
such as our desire to defeat defilade targets. Replacing a pistol for 
another pistol without significant improvements in operational 
capabilities and other attributes (sustainment) is of little value.
    Finally, the Army supports the Air Force initiative to procure a 
new handgun. As the Executive Agent for small arms, the Army has 
participated in the development of the Air Force handgun capability 
requirement documentation.
    Mr. Abercrombie. Lieutenant General Thompson and Lieutenant General 
Speakes, what is the Army's strategy for long term MRAP vehicle 
procurement and do you expect a change in current requirements? When 
does the Army plan to transition MRAP to an official program of record?
    General Speakes and General Thompson. It is too soon to assess the 
MRAP in the current fight. As Commanders in the field provide 
operational assessments of MRAPs, we will adjust the MRAP and Tactical 
Wheeled Vehicle strategy accordingly to further define MRAPs role in 
the future Army.
    Most recently, a Joint Requirements Oversight Council validated an 
interim requirement for 12,000 MRAP vehicles. The theater has requested 
a two-thirds fleet mix of MRAPs and a one-third fleet mix of High 
Mobility Multipurpose Wheeled Vehicles (HMMWVs) based on initial 
feedback from commanders that MRAP may not be suited to all missions 
because of its large size: HMMWVs are smaller and more maneuverable in 
densely populated areas. Theater commanders will complete their 
evaluation of the MRAP's performance and will provide feedback at a 
later date.
    Mr. Abercrombie. Lieutenant General Thompson, do all models and 
types of fielded body armor components meet first article test 
requirements?
    General Thompson. Unless waived by the contracting officer in cases 
where supplies identical or similar to those called for in the schedule 
have been previously furnished by the contractor and have been accepted 
by the Government, the Army conducts First Article Tests (FAT) for all 
models and types of fielded body armor components to ensure performance 
requirements are met before being accepted by the U.S. Army. The U.S. 
Army also conducts Lot Acceptance Tests and surveillance tests 
throughout the production and fielding cycle to confirm continued 
compliance.
    Mr. Abercrombie. Lieutenant General Thompson, do you agree with all 
the recommendations in the IG's report? For those recommendations you 
do agree with, what is the plan for their implementation?
    General Thompson. The Federal Acquisition Regulation (FAR) affords 
contracting officers with discretion when deciding whether to require 
first article testing (FAT) for a given acquisition. FAR 9.302 provides 
that before requiring FAT, the contracting officer shall consider the 
impact on cost or time of delivery, risk to the Government of foregoing 
such testing, and the availability of other, less costly, methods of 
ensuring the desired results. Pre-award testing techniques exist under 
the FAR that can be used in appropriate circumstances in lieu of FAT. 
Such pre-award testing can provide sufficient assurances that the 
contractor can furnish a product that conforms to all contract 
requirements for acceptance. Techniques for pre-award testing include: 
(i) the use of qualification requirements under FAR Subpart 9.2; and 
(ii) the inclusion of testing requirements as a solicitation evaluation 
factor or sub-factor in negotiated procurements under FAR Part 15. 
Based on the concerns in the Department of Defense Inspector General 
(DODIG) report, the Army is revising its internal procedures so that 
contracting officers ensure solicitation and contract documents 
precisely and consistently describe the testing approach being utilized 
and avoid terminology and procedures that are inapplicable to the 
selected approach. Implementing policy is currently under development.
    We concur with the DODIG recommendation to provide adequate 
documentation to support all contractual actions. The program office 
will assist contracting officers in their efforts to document all 
contractual actions and obtain all required documentation that may be 
generated and kept on file by other organizations (e.g., Army Test and 
Evaluation Center).
    We also concur with the DODIG recommendation to identify the steps 
that will be initiated to ensure that policies and procedures 
applicable to the use of non-DOD contracts are enforced. The Office of 
the Deputy Assistant Secretary of the Army (Policy and Procurement) 
issued policy alert 08-26 on April 28, 2008, which re-emphasizes the 
requirements associated with the use of non-DOD contracts and federal 
supply schedules, to include seeking discounts for orders and 
documenting contract files on market research efforts conducted. To 
provide oversight and periodic assessment of appropriate procedural 
application, these requirements will be added as inspection elements in 
conjunction with the Army's Contracting Operations Review Program by 
June 30, 2008. Based on the October 11, 2007, Army Audit Agency report, 
Proper Use of Non-DOD Contracts, the Office of the Deputy Assistant 
Secretary of the Army (Policy and Procurement) is revising the Army's 
July 12, 2005, policy on the use of non-DOD contracts. The revised 
policy will be distributed on or after June 2008 as a Secretary of the 
Army Directive to re-emphasize the requirements related to the use of 
non-DOD contracts.
    Mr. Abercrombie. Lieutenant General Thompson, under objective 1, 
the IG report also suggested other Federal Acquisition Regulations 
(FAR) deficiencies, according to the IG report: some contracts did not 
request a quantity discount or document why one was not requested; some 
contracts lacked market research; and some contracts contained internal 
control weaknesses, among others. Do you agree with the IG on these 
issues? In cases where you agree, how do these deficiencies affect the 
performance of the body armor?
    General Thompson. While we have acknowledged and are addressing the 
report's concern with various practices observed in the Army contracts 
reviewed by the DODIG, we are pleased that the DODIG did not call into 
question the effectiveness or safety of the various body armor 
components in use throughout the DOD. We concur with the DODIG 
recommendation to provide adequate documentation to support all 
contractual actions. We also concur with the DODIG's recommendation to 
identify the steps that will be initiated to ensure that policies and 
procedures applicable to the use of non-DOD contracts are enforced. The 
Office of the Deputy Assistant Secretary of the Army (Policy and 
Procurement) issued policy alert 08-26 on April 28, 2008, which re-
emphasizes the requirements associated with the use of non-DOD 
contracts and federal supply schedules, to include seeking discounts 
for orders and documenting contract files on market research efforts 
conducted. To provide oversight and periodic assessment of appropriate 
procedural application, these requirements will be added as inspection 
elements in conjunction with the Army's Contracting Operations Review 
Program by June 30, 2008. Based on the October 11, 2007, Army Audit 
Agency report, Proper Use of Non-DOD Contracts, the Office of the 
Deputy Assistant Secretary of the Army (Policy and Procurement) is 
revising the Army's July 12, 2005 policy on the use of non-DOD 
contracts. The revised policy will be distributed on or after June 2008 
as a Secretary of the Army Directive to re-emphasize the requirements 
related to the use of non-DOD contracts.
    Mr. Abercrombie. Lieutenant General Thompson, on page 16, DODIG 
recommends that PEO Soldier direct testing and evaluation of first 
articles for contract conformance before production on all (emphasis 
added) contracts. Do you believe this would be a good change? Why or 
why not? What changes would need to be made to the FAR, if any, to make 
FAT testing mandatory for all contracts after contract award as 
suggested by the DODIG?
    General Thompson. The Federal Acquisition Regulation (FAR) affords 
contracting officers with discretion when deciding whether to require 
first article testing (FAT) for a given acquisition. The FAR 9.302 
provides that before requiring FAT, the contracting officer shall 
consider the impact on cost or time of delivery, risk to the Government 
of foregoing such testing, and the availability of other, less costly, 
methods of ensuring the desired results. Preaward testing techniques 
exist under the FAR that can be used in appropriate circumstances in 
lieu of FAT. Such preaward testing can provide sufficient assurances 
that the contractor can furnish a product that conforms to all contract 
requirements for acceptance. Techniques for preaward testing include 
(i) the use of qualification requirements under FAR Subpart 9.2 and 
(ii) the inclusion of testing requirements as a solicitation evaluation 
factor or subfactor in negotiated procurements under FAR Part 15. Based 
on the concerns in the DODIG report, the Army is revising its internal 
procedures so that contracting officers ensure solicitation and 
contract documents precisely and consistently describe the testing 
approach being utilized and avoid terminology and procedures that are 
inapplicable to the selected approach. Implementing policy is currently 
under development. The FAR currently provides adequate authority to 
require preaward and post-award testing, thus we do not believe a 
change is necessary.
    Mr. Abercrombie. Lieutenant General Thompson, on some contracts, 
the DODIG stated that the Army used test results on the preliminary 
design models (PDMs) submitted under the solicitation to authorize 
production. What is your understanding of the FAR as it relates to PDMs 
and whether testing PDMs can satisfy FAT requirements? What assurances 
do you have that the initial production samples provided after contract 
measure up to or surpass the performance of PDMs provided before the 
contract? Has a manufacturer's PDMs ever passed a pre-contract test but 
failed a post-contract FAT? Do you have examples of such a situation? 
If such a situation occurs, how would the Army proceed and what 
modifications would the Army be responsible for? Please explain the 
impact, if any, of the FAT being conducted pre-award or post-award?
    General Thompson. The Federal Acquisition Regulation (FAR) affords 
contracting officers with discretion when deciding whether to require 
first article testing (FAT) for a given acquisition. The FAR 9.302 
provides that before requiring FAT, the contracting officer shall 
consider the impact on cost or time of delivery, risk to the Government 
of foregoing such testing, and the availability of other, less costly, 
methods of ensuring the desired results. Preaward testing techniques 
exist under the FAR that can be used in appropriate circumstances in 
lieu of FAT. Such preaward testing can provide sufficient assurances 
that the contractor can furnish a product that conforms to all contract 
requirements for acceptance. Techniques for preaward testing include 
(i) the use of qualification requirements under FAR Subpart 9.2 and 
(ii) the inclusion of testing requirements as a solicitation evaluation 
factor or subfactor in negotiated procurements under FAR Part 15.
    The test protocols are the same for preaward testing and post-award 
FAT, so there is no impact on testing and there have been no instances 
where PDMs have passed preaward testing and subsequently failed post-
award FAT. Only new producers or new designs are required to undergo 
FAT regardless of any preaward testing conducted.
    The Army conducts robust post-award surveillance testing, 
continuous lot sampling and Lot Acceptance Testing (LAT) to verify 
consistency of production items in meeting the performance 
specifications. FAR 52.209-3 and 52.209-4 discuss the Government's 
rights when a product fails FAT and is disapproved. The cost of any 
repeat FAT is borne by the contractor, and the Government retains 
equitable adjustment and default rights under the contract.
    Mr. Abercrombie. 1. The Army assessed it needed $52.5 billion 
($43.6 billion of which is allocated to equipment) to complete its 
restructuring to a modular force by 2011. In 2007 Army officials 
extended the timeline for fully equipping the modular force from 2011 
to 2019, but have not re-estimated the costs to accommodate this 
change.

          What is the Army's current cost estimate for fully 
        equipping modular units to authorized levels of equipment?

          To what extent is the Army's estimate reflected in the 
        Department of Defense's Future Years Defense Program?

          Why was the timeline for equipping modular units revised 
        from 2011 to 2019? To what extent will modular units be 
        equipped by then?

    2. GAO could not determine the extent to which the Army 
Prepositioned Stocks (APS) reconstitution strategy is reflected in 
current defense budget requests and cost estimates for restoring the 
prepositioned equipment sets to a posture that fully supports the 
Department of Defense's strategy.

          What is the Army's cost estimate for implementing APS 
        Strategy 2015 approved in November 2007?

          How can the Army be assured that the funding requested 
        for APS is used for APS requirements if APS funds are not 
        tracked separately from other equipment-related funds?

    3. The Secretary of Defense announced an initiative to expand the 
Army, 74,200 military personnel, in order to meet increasing strategic 
demands and to help reduce stress on the force. The Army is now 
considering accelerating the implementation timeline from fiscal year 
2013 to fiscal year 2010. Army officials stated that they expect to 
include acceleration costs in another emergency supplemental request 
for funds to prosecute Global War on Terror.

          What are the estimated costs for accelerating the 
        implementation timeline for expanding the force and what is 
        driving the costs?

          What are the equipment costs for expanding the force and 
        to what extent are they likely to change?

    General Speakes and General Thompson. [The information referred to 
was not available at the time of printing.]
    Mr. Abercrombie. Ms. Ugone, the report states that your first 
objective was to review ``the procurement history of body armor.'' 
Please explain what the specific audit objectives were with regard to 
this procurement history? In other words, what specific questions did 
you set out to address?
    Ms. Ugone. To answer the first audit objective, ``review the 
procurement history of body armor,'' we set out to address the 
following:

        Did contracting officials award Army and Marine Corps 
contracts and orders for body armor components between January 2004 and 
December 2006 in accordance with the Federal Acquisition Regulation, 
the Defense Federal Acquisition Regulation Supplement, Public Laws, and 
the United States Code?

        Specifically, did the contracting documentation for 
these body armor components from the presolicitation and solicitation 
and evaluation phases support compliance with the Federal Acquisition 
Regulation, the Defense Federal Acquisition Regulation Supplement, 
Public Laws, and the United States Code?

    Mr. Abercrombie. Ms. Ugone, given the findings from the report, 
would you recommend recalling body armor components procured and 
fielded under the 13 contracts found to be deficient?
    Ms. Ugone. As stated in the scope limitation section of the report, 
the scope was limited to reviewing the presolicitation and solicitation 
and evaluation phases of the acquisition process for specific 
contracts. We also reviewed contracting files as necessary to determine 
whether First Article Testing was completed in accordance with the 
Federal Acquisition Regulation and Defense Federal Acquisition 
Regulation Supplement. Since we did not evaluate other testing 
requirements or safety issues such as ballistics testing, we do not 
have a basis for recommending the recall of this body armor. I should 
note that the Army has assured us many times that the armor procured 
under these contracts has passed all testing and no evidence of deaths 
could be attributed to defective body armor.
    Mr. Abercrombie. Ms. Ugone, please elaborate on your findings 
presented in Appendix C regarding the Army's safety of use message. How 
did you reach your conclusions? And, in your opinion, is the safety of 
use message putting military personnel at risk?
    Ms. Ugone. Our second audit objective was to determine the effect 
the Army's ban on personally procured body armor had on the safety of 
our Service members. To respond to this request, we reviewed the 
circumstances leading to the Army's ban, and determined whether the 
Army had enough body armor in inventory to protect its soldiers.
    The safety of use message informed soldiers that commercially 
available body armor was not tested to the same military specifications 
for ballistic protection. As a result, the message directed the 
replacement of all commercially available body armor immediately with 
Army approved and issued body armor. We did not validate whether 
commercially bought body armor met military specifications for 
ballistic protection; however, we reviewed whether the Army had 
available stocks of body armor on hand to sustain the replacement. 
According to Army officials, sufficient stocks of Army issued body 
armor were available for Service members at the time of the ban. We 
reviewed the Army's recorded inventory against the U.S. Central Command 
theater requirements for body armor to determine that reported 
quantities were sufficient to issue one suit of body armor to each 
Service member and DOD civilian in the U.S. Central Command theater.
    Mr. Abercrombie. Ms. Ugone, in your report, you concluded that 
``specific information concerning testing and approval of first article 
was not included in 13 out of 28 Army contracts and orders reviewed.'' 
What is required by the federal acquisition regulations regarding 
testing and approval of first articles and the timing of the first 
article tests (FAT)? Which phase of the acquisition process do you 
consider FAT to fall under?
    Ms. Ugone. The Federal Acquisition Regulation allows contracting 
officials to use their judgment as to when to require First Article 
Testing, which is defined by the Federal Acquisition Regulation as 
``testing and evaluating the first article for conformance with 
specified contract requirements before or in the initial stage of 
production.'' Federal Acquisition Regulation Subpart 9.3, ``First 
Article Testing and Approval,'' also states that testing and approval 
may be appropriate when the product is described by a performance 
specification (i.e. body armor components).
    Additionally, the Purchase Description for each body armor 
component, which is part of the contract, states, ``when a first 
article is required, it shall be inspected under the appropriate 
provisions of Federal Acquisition Regulation 52.209.'' Because the body 
armor testing was conducted at an Independent National Institute of 
Justice certified ballistics laboratory and not by each contractor, the 
contracting officer was required by the Federal Acquisition Regulation 
to insert clause 52.209-4, ``First Article Approval--Government 
Testing,'' in the contract. The clause states:

        ``The Contractor shall deliver __ unit(s) of Lot/Item __ within 
        __ calendar days from the date of this contract to the 
        Government . . . for first article tests.''

    Based on the above text from the Federal Acquisition Regulation, we 
concluded that First Article Testing should be conducted after contract 
award (i.e. during the contract administration phase of the 
acquisition).
    Mr. Abercrombie. Ms. Ugone, would you consider first article tests 
of preliminary design models to be in compliance with FAR requirements 
for first article tests of initial production for body armor? Why or 
why not?
    Ms. Ugone. As stated in our report, Federal Acquisition Regulation 
Subpart 14.202-4 states that preliminary design models will be used to 
determine only the responsiveness of the bid and will not be used to 
determine a bidder's ability to produce the required item. For specific 
contracts that we reviewed and found deficient, evidence showed that 
when preliminary design models were evaluated during the solicitation 
and evaluation phase of the acquisition as part of the First Article 
Test, only ballistic requirements were tested. No evidence was 
presented to validate that a full First Article Test was performed on 
the identified contracts. Therefore, First Article Tests performed on 
preliminary design models were not in compliance with Federal 
Acquisition Regulation requirements, specifically for body armor 
components we reviewed and found deficient.
    Mr. Abercrombie. Ms. Ugone, did you examine documentation or other 
evidence outside of the Army contract files, or was their review 
limited to the information presented in the contract files?
    Ms. Ugone. The congressional request was for my office to determine 
whether proper policies were followed with regard to the procurement 
history for body armor. The Federal Acquisition Regulation Subpart 
4.801(b) states, ``the documentation in Government Contract files shall 
be sufficient to constitute a complete history of the transaction for 
the purpose of furnishing essential facts in the event of congressional 
inquiries.'' We reviewed contract files, conducted extensive interviews 
with program and contracting officials, and obtained information from 
the Program Executive Office Soldier that was not originally in the 
contract files.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. ORTIZ

    Mr. Ortiz.  Lieutenant General Thompson and Lieutenant General 
Speakes, the Department of the Army has approved a requirement for nine 
additional MEDEVAC companies in the Army. What is the procurement plan 
to resource the additional companies, specifically the Army Reserve and 
National Guard, with UH60Ms?
    General Speakes and General Thompson. The Army is committed to 
providing the best Medical Evacuation (MEDEVAC) aircraft to evacuate 
our wounded Soldiers, Marines, Sailors and Airmen from the 
battlefields. This commitment to procure HH-60M aircraft is part of our 
overall plan to field and modernize the Army National Guard (ARNG) and 
United States Army Reserve (USAR) concurrently with the Active Army. 
Indeed, the first unit equipped with the new HH-60M will be an ARNG 
unit from Vermont and Massachusetts, C Company, 1-126th (C/1-126th), 
which will receive its aircraft this fall.
    The next ARNG MEDEVAC companies from Arkansas, Florida, Montana and 
South Dakota are scheduled to receive the HH-60M MEDEVAC. C/1-111th 
(Florida and Arkansas ARNG) will start receiving HH-60M aircraft in 
late Spring 2009 and C/1-189th (South Dakota and Montana ARNG) will 
receive them in the Summer 2011.
    The USAR has a plan to build three new MEDEVAC units and plans to 
field detachments at four locations including Johnstown, Pennsylvania; 
Fort Knox, Kentucky; Kingsville, Texas; and Fort Carson, Colorado. The 
third USAR MEDEVAC unit is a HH-60L unit at Clearwater, Florida, and 
these are the Army's most capable integrated MEDEVAC aircraft, up until 
HH-60Ms are fielded. The Fiscal Year 2008 (FY08) Global War on Terror 
request would resource 21 of the required 24 HH-60M aircraft for the 
USAR. The USAR units will begin receiving the HH-60M aircraft in Spring 
2010 and continuing through Winter 2010.
    Units beyond these fieldings receive UH-60A cascaded aircraft from 
the Active component. As you know, we have instituted a 
recapitalization initiative at Corpus Christi Army Depot to convert UH-
60A aircraft to the more capable UH-60L configuration. The Army is in 
the final stages of validating this ``A to L Recapitalization'' 
initiative and once we confirm the process and expected long term 
savings, we will ensure the ARNG and USAR units receive these 
recapitalized aircraft.

                                  
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