[Senate Report 105-29]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 84
105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-29
_______________________________________________________________________


                     NATIONAL DEFENSE AUTHORIZATION
                        ACT FOR FISCAL YEAR 1998

                                 REPORT

                         [to accompany s. 924]

                                   on

AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 1998 FOR MILITARY ACTIVITIES 
   OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR 
DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL 
  STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER 
                                PURPOSES

                             together with

                            ADDITIONAL VIEWS

                               ----------                              

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                                     


                                     

                 June 17, 1997.--Ordered to be printed



         NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998



                                                        Calendar No. 84
105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-29
_______________________________________________________________________



                     NATIONAL DEFENSE AUTHORIZATION

                        ACT FOR FISCAL YEAR 1998

                                 REPORT

                         [to accompany s. 924]

                                   on

AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 1998 FOR MILITARY ACTIVITIES 
   OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR 
DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL 
  STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER 
                                PURPOSES

                             together with

                            ADDITIONAL VIEWS

                               __________

                      COMMITTEE ON ARMED SERVICES

                          UNITED STATES SENATE




                 June 17, 1997.--Ordered to be printed


                      COMMITTEE ON ARMED SERVICES

                     (105th Congress, 1st Session)

                STROM THURMOND, South Carolina, Chairman

JOHN W. WARNER, Virginia             CARL LEVIN, Michigan
JOHN McCAIN, Arizona                 EDWARD M. KENNEDY, Massachusetts
DAN COATS, Indiana                   JEFF BINGAMAN, New Mexico
BOB SMITH, New Hampshire             JOHN GLENN, Ohio
DIRK KEMPTHORNE, Idaho               ROBERT C. BYRD, West Virginia
JAMES M. INHOFE, Oklahoma            CHARLES S. ROBB, Virginia
RICK SANTORUM, Pennsylvania          JOSEPH I. LIEBERMAN, Connecticut
OLYMPIA J. SNOWE, Maine              MAX CLELAND, Georgia
PAT ROBERTS, Kansas

                      Les Brownlee, Staff Director

            David S. Lyles, Staff Director for the Minority



                            C O N T E N T S

                              ----------                              
                                                                   Page
Purpose of the Bill..............................................     1
Committee overview and recommendations...........................     2
Explanation of funding summary...................................     4

            Division A--Department of Defense Authorization

Title I--Procurement.............................................    11
Explanation of tables............................................    11
    Subtitle A--Authorization of Appropriations..................    12
        Section 107. Chemical Demilitarization Program...........    12
            Chemical Weapons Convention (CWC)....................    12
            Russian Ratification of the Chemical Weapons 
              Convention.........................................    13
    Subtitle B--Army Programs....................................    15
        Section 111. Army helicopter modernization plan..........    31
        Section 112. Multiyear procurement authority for AH-64D 
          Longbow Apache fire control radar......................    31
    Other Army Programs..........................................    31
        Army Aircraft............................................    31
            C-XX(UC-35)..........................................    31
            UH-60 Blackhawk helicopters..........................    32
            CH-47 cargo helicopter...............................    32
            UH-1 modifications...................................    32
            OH-58D Kiowa Warrior.................................    32
            Aircraft survivability equipment.....................    33
            Training devices.....................................    33
            Common ground equipment..............................    33
        Army Missile.............................................    33
            Avenger modifications................................    33
            Hellfire missile.....................................    34
            Extended range Multiple Launch Rocket System rockets.    34
            Multiple Launch Rocket System launchers..............    34
            Army Tactical Missile System.........................    34
            Stinger modifications................................    35
        Weapons and Tracked Combat Vehicles......................    35
            Bradley base sustainment.............................    35
            Carrier modifications-M113A3.........................    35
            M1 Abrams tank modifications.........................    35
            Small arms programs..................................    35
        Army Ammunition..........................................    36
            Army ammunition......................................    36
            Armament Retooling and Manufacturing Support.........    37
        Other Army Procurement...................................    37
            High Mobility Multi-Purpose Wheeled Vehicle..........    37
            Family of Medium Tactical Vehicles...................    37
            Family of Heavy Tactical Vehicles....................    37
            Army data distribution systems.......................    38
            Echelon Above Corps Communications-Warfighter 
              Information Network................................    38
            Information system security program..................    38
            Sentinel.............................................    38
            Night vision devices.................................    39
            Standard Army management information system tactical 
              computer platform..................................    39
            Reserve component automation system..................    39
            Dump truck...........................................    39
            Generators and associated equipment..................    40
            Simulation Network/Close Combat Tactical Trainer.....    40
            Special equipment for user testing...................    40
    Subtitle C-Navy Programs.....................................    41
        Section 121. New attack submarine program................    62
        Section 122. Nuclear aircraft carrier program............    64
        Section 123. Exception to cost limitation for Seawolf 
          submarine program......................................    67
        Section 124. Airborne self-protection jammer program.....    68
    Other Navy Programs..........................................    68
        Navy Aircraft............................................    68
            AV-8B Harrier remanufacture..........................    68
            Aircrew trainer/simulators...........................    69
            V-22 Osprey..........................................    69
            EC Hawkeye early warning aircraft....................    69
            T-45 trainer.........................................    69
            EA-6B support jamming upgrade........................    70
            Helicopter crash attenuating seats...................    70
            P-3C anti-surface warfare improvement program........    70
        Navy Weapons.............................................    72
            Tomahawk land attack missile.........................    72
            Penguin missile program..............................    73
            Standard missile modification........................    74
        Navy and Marine Corps Ammunition.........................    74
            Marine Corps ammunition..............................    74
            Shoulder Launched Multi-Purpose Assault Weapon.......    74
        Navy Shipbuilding and Conversion.........................    75
            Advanced submarine technology insertion..............    75
            Arleigh Burke class destroyer program................    75
            Oceanographic survey ship............................    76
        Other Navy Procurement...................................    76
            Submarine propulsor..................................    76
            AN/WSN-7 inertial navigation system..................    77
            Integrated combat weapons system.....................    77
            AN/BPS-15H submarine navigation radar................    78
            Cooperative engagement capability....................    78
            Information Technology-21............................    79
            Integration and test facility command and control 
              initiative.........................................    80
            Sonobuoy procurement.................................    81
            NATO Sea Sparrow missile system low light level 
              television.........................................    81
            NULKA anti-ship missile decoy system.................    82
            Oceanographic equipment..............................    83
        Marine Corps Procurement.................................    83
            Javelin..............................................    83
            Night vision equipment...............................    83
            Base telecommunications infrastructure...............    84
            Improved direct air support center...................    84
            Light Tactical Vehicle Replacement program...........    84
            International standards organization truck beds......    84
            Power equipment assorted.............................    84
            Shop equipment contact maintenance system............    85
            Combat rubber reconnaissance craft...................    85
            Chemical/biological incident response force equipment    85
            Combat vehicle appended trainer......................    85
            Items less than $2 million...........................    85
    Subtitle D--Air Force Programs...............................    86
        Section 131. B-2 bomber aircraft program.................    99
    Other Air Force Programs.....................................    99
        Air Force Aircraft.......................................    99
            F-15E attrition aircraft.............................    99
                F-22 requirements................................    99
            F-22 event-based decision making.....................    99
            C-130J...............................................   102
                Spares and support...............................   102
                C-130 remanufacture report.......................   102
                WC-130J..........................................   103
                EC-130J..........................................   103
                C-130J...........................................   103
            Joint Primary Aircraft Training System...............   103
            F-15 PW-220E modifications...........................   103
            F-16 targeting/navigation pods.......................   104
            Rivet Joint technology transfer......................   104
            SR-71................................................   104
            U-2 Sensor Upgrades..................................   105
        Air Force Missile........................................   105
            Titan IV space boosters..............................   105
        Air Force Ammunition.....................................   105
            Air Force ammunition.................................   105
        Other Air Force Procurement..............................   105
            Theater deployable communications....................   105
        Defense-Wide Programs....................................   106
            Common automatic recovery system.....................   112
            MH-47E helicopter replacement........................   112
            Night firing scopes..................................   112
            Counter proliferation/weapons of mass destruction....   112
        National Guard and Reserve Equipment.....................   112
    Subtitle E--Other Matters....................................   114
        Section 141. Prohibition on use of funds for acquisition 
          or alteration of private drydocks......................   114
        Section 142. Replacement of engines on aircraft derived 
          from Boeing 707 aircraft...............................   114
        Section 143. Exception to requirement for a particular 
          determination for sales of manufactured articles or 
          services of Army industrial facilities outside the 
          United States..........................................   115
    Other Items of Interest......................................   115
        Alternative fuel vehicles................................   115
            Automated data processing equipment..................   116
        Coast Guard port security units..........................   116
        Global Air Traffic Management............................   117
        Tactical aviation........................................   117
        Tactical trailers/dolly sets.............................   118
Title II--Research, Development, Test, and Evaluation............   119
    Explanation of tables........................................   119
    Subtitle A--Authorization of Appropriations..................   119
    Subtitle B--Program Requirements, Restrictions, and 
      Limitations................................................   119
        Section 211. Joint Strike Fighter program................   119
            Alternative engine program...........................   120
        Section 212. F-22 aircraft program.......................   120
            Cost analyses........................................   121
        Section 213. High Altitude Endurance Unmanned Vehicle 
          program................................................   121
            Tier II plus.........................................   122
        Section 214. Advanced Anti-Radiation Guided Missile 
          program................................................   123
        Section 215. Federally funded research and development 
          centers................................................   123
        Section 216. Goal for dual-use science and technology 
          projects...............................................   123
        Section 217. Transfers of authorizations for 
          counterproliferation support program...................   125
            Chemical and Biological Detection....................   125
            Mission Planning and Analysis........................   126
            Transfer Authority...................................   126
            Underground and Deep Underground Structures..........   126
        Section 218. Kinetic Energy Tactical Anti-Satellite 
          Technology Program.....................................   126
        Section 219. Clementine 2 Micro-Satellite development 
          program................................................   127
    Subtitle C--Ballistic Missile Defense Programs...............   127
        Section 221. National Missile Defense program............   127
        Section 222. Reversal of decision to transfer procurement 
          funds from the Ballistic Missile Defense Organization..   128
    Subtitle D--Other Matters....................................   128
        Section 231. Manufacturing Technology program............   128
        Section 232. Use of major range and test facility 
          installations by commercial entities...................   128
        Section 233. Eligibility for the Defense Experimental 
          Program to Stimulate Competitive Research..............   129
        Section 234. Restructuring of National Oceanographic 
          Partnership Program organizations......................   129
        Army.....................................................   130
            Army research institute..............................   136
            University and industry research centers.............   136
            Materials technology.................................   136
            National Automotive Center...........................   136
            Liquid propellant technology program.................   136
            Environmental technology.............................   136
            Innovative methods of energy conservation and the 
              economic efficiency of energy sources..............   137
            Military engineering technology......................   138
            Medical advanced technology..........................   138
            Nutrition research...................................   138
            Combat vehicle and automotive advanced technology....   138
            Wave net technology..................................   138
            Vehicular mounted mine detector......................   139
            Missile defense Battle Integration Center............   139
            All source analysis system...........................   139
            Force XXI tactical operation centers.................   139
            Force XXI architecture...............................   139
            Firefinder...........................................   140
            Tactical high energy laser program...................   140
            North Atlantic Treaty Organization (NATO) research 
              and development....................................   140
            Combat vehicle improvement program...................   141
            Aircraft modifications/product improvement program...   141
            Force XXI digitization...............................   141
            Force XXI battle command.............................   143
            Missile/air defense product improvement program......   143
            RDT&E infrastructure support.........................   143
        Navy.....................................................   144
            Power electronic building blocks.....................   151
            Materials technology.................................   151
            Second source for carbon fibers......................   151
            Titanium processing technology.......................   151
            National oceanographic partnership program...........   151
            Undersea weapons technology..........................   152
            Composite helicopter hangar..........................   153
            Commandant's warfighting laboratory..................   153
            Freeze-dried blood research project..................   153
            High frequency surface wave radar....................   153
            Remote minehunting system............................   154
            Advanced submarine technology........................   154
            Advanced Amphibious Assault Vehicle..................   155
            Navy tactical missile system.........................   155
            Land attack Standard missile.........................   156
            Naval surface fire support...........................   156
            Nonlethal weapons and technologies of mass protection 
              program............................................   157
            Advanced communications and information technologies.   158
            Parametric airborne dipping sonar....................   158
            Helicopter upgrade program...........................   158
            Integrated defensive electronic countermeasures......   159
            High power discriminator.............................   159
            Maritime fire support demonstrator...................   159
            Multi-purpose processor..............................   161
            Seawolf shock test...................................   161
            Future surface combatants............................   162
            Infrared search and track system.....................   164
            Ship self-defense system.............................   165
            Advanced deployable system...........................   165
            Classified program reduction.........................   166
            Communications interoperability and reliability......   166
            Marine common hardware suite.........................   166
            Manufacturing technology program.....................   166
        Air Force................................................   168
            Phillips laboratory exploratory development..........   175
            High frequency active auroral research program.......   175
            ALR-69 radar warning receiver........................   175
            Missile technology demonstration.....................   175
            Military space plane.................................   175
            Solar thermionic orbital transfer vehicle............   176
            Geo space object imaging.............................   176
            Asynchronous transfer mode program...................   176
            Variable stability in-flight simulator test aircraft.   176
            F-22 engineering and manufacturing development 
              program............................................   177
                Cost overruns and restructuring..................   177
                Placeholder status...............................   178
            B-2 Multi Stage Improvement Plan (MSIP)..............   178
                Situational awareness............................   178
                Maintainability..................................   178
            Minuteman safety enhanced reentry vehicle............   178
            Aging landing gear life extension....................   179
            Conventional Air-Launched Cruise Missile Block II 
              upgrade............................................   179
            Theater battle management system.....................   179
            Cruise missile defense...............................   179
            C-5 Modernization....................................   180
            Measurement and signature intelligence software 
              development and training facility..................   180
        Defense-Wide.............................................   181
            Defense experimental program to stimulate competitive 
              research...........................................   187
            Chemical and biological defense program..............   187
                Medical Defenses against Biological Agents.......   187
                Domestic Emergency Response Program..............   188
                Chemical-Biological Response Teams...............   189
            Ballistic Missile Defense Organization funding.......   190
                Support technology...............................   190
                Theater High Altitude Area Defense system........   191
                Navy Upper Tier (Theater Wide)...................   192
                Boost phase interceptor..........................   192
                National Missile Defense.........................   192
                Joint theater missile defense....................   193
            Reuse technology adoption program....................   194
            Tactical technology..................................   194
            High definition display systems......................   194
            Hard carbon-based coatings...........................   195
            Seamless high off-chip connectivity..................   195
            Defense Special Weapons Agency.......................   195
                Structural Response and Blast Mitigation.........   195
                Vulnerability of electronic technologies and 
                  space systems to radiation and electromagnetic 
                  pulse..........................................   196
            Counterterror technical support......................   196
                Research and Development for Combating Terrorism.   197
            Advanced lithography.................................   197
            Advanced concept technology demonstrations...........   198
            Electronic commerce resource centers.................   199
            High performance computing modernization program.....   199
            Reductions in new starts.............................   199
            Large millimeter-wave telescope program..............   199
            Land warfare technology..............................   199
            Vehicle teleoperation capability development program.   200
            Non-acoustic antisubmarine warfare...................   200
            Integrated data environment program..................   200
            Technical, studies, support and analysis.............   200
            Command Intelligence Architecture/Planning Program...   201
            Communications helmet................................   201
            Heavy sniper rifle...................................   201
            Improved limpet assembly modular.....................   201
            Remote activation munition systems...................   201
            USSOCOM joint threat warning system training system..   202
            Operational test and evaluation......................   202
    Other Items of Interest......................................   203
        600 gallon fuel tanks for F-16...........................   203
        Flat panel display technology............................   203
        Improved shipbuilding competitiveness....................   204
        Intercooled recuperated gas turbine engine...............   204
        Joint experimentation plan...............................   205
        Materials for micro system components....................   205
        Minimally invasive surgery...............................   205
        National crash survival data.............................   206
        National solar observatory...............................   206
        Software acquisition management practices................   206
        Terminal guidance systems for small munitions............   207
        Totally integrated munitions enterprise..................   207
        United States-Japan management training..................   207
        Wireless communications for the digital battlefield......   207
Title III--Operation and Maintenance.............................   208
    ``The Storm Clouds are on the Horizon''......................   208
        Readiness Crisis?........................................   208
        Causes and Solutions.....................................   209
    Overview.....................................................   210
    Subtitle A--Authorization of Appropriations..................   236
        Section 303. Armed Forces Retirement Home................   236
        Section 304. Transfer from National Defense Stockpile 
          Transaction Fund.......................................   236
        Section 305. Fisher House Trust Funds....................   236
    Subtitle B--Depot-Level Activities...........................   236
    Subtitle C--Environmental Provisions.........................   238
        Section 331. Clarification of authority relating to 
          storage and disposal of nondefense toxic and hazardous 
          materials on Department of Defense property............   238
        Section 332. Annual report on payments and activities in 
          response to fines and penalties assessed under 
          environmental laws.....................................   239
        Section 333. Annual report on environmental activities of 
          the Department of Defense overseas.....................   239
        Section 334. Membership terms for Strategic Environmental 
          Research and Development Program Scientific Advisory 
          Board..................................................   239
        Section 335. Additional information on agreements for 
          agency services in support of environmental technology 
          certification..........................................   240
        Section 336. Risk assessments under the Defense 
          Environmental Restoration Program......................   240
        Section 337. Recovery and sharing of costs of 
          environmental restoration at Department of Defense 
          sites..................................................   241
        Section 338. Pilot program for the sale of air pollution 
          emission reduction incentives..........................   242
        Section 339. Tagging system for identification of 
          hydrocarbon fuels used by the Department of Defense....   243
    Subtitle D--Commissaries and Nonappropriated Fund 
      Instrumentalities..........................................   243
        Section 351. Funding sources for construction and 
          improvement of commissary store facilities.............   243
        Section 352. Integration of military exchange services...   243
    Subtitle E--Other Matters....................................   244
        Section 361. Advance billings for working capital funds..   244
        Section 362. Center for Excellence in Disaster Management 
          and Humanitarian Assistance............................   244
        Section 363. Administrative actions adversely affecting 
          military training or other readiness activities........   245
        Section 364. Financial assistance to support additional 
          duties assigned to Army National Guard.................   247
        Section 365. Sale of excess, obsolete, or unserviceable 
          ammunition and ammunition components...................   247
        Section 366. Inventory management........................   247
        Section 367. Warranty claims recovery pilot program......   248
        Section 368. Adjustment and diversification assistance to 
          enhance increased performance of military family 
          support services by private sector sources.............   248
    Additional Matters of Interest...............................   248
        Army.....................................................   248
            Organizational clothing and individual equipment.....   248
            Aviation training....................................   249
            Logistics automation.................................   249
            Information systems security.........................   249
            Real property maintenance............................   250
            Support of other nations.............................   250
            Army enterprise architecture.........................   250
        Navy.....................................................   251
            Flying hour program..................................   251
            Naval oceanographic program..........................   251
        Marine Corps.............................................   251
            Marine Corps initial issue...........................   251
            Personnel support equipment..........................   251
        Air Force................................................   252
            KC-135 depot maintenance.............................   252
            Office of Special Investigation and Information 
              Protection.........................................   252
            Force protection.....................................   252
        Guard and Reserve Components.............................   252
            Reserve component training...........................   252
        Defense-Wide.............................................   253
            Joint exercises......................................   253
            Special Operations Command operations tempo 
              sustainment........................................   253
            Civilian personnel levels............................   253
        Miscellaneous Programs...................................   254
            Full funding of the defense health program...........   254
            Cooperative Threat Reduction program.................   254
                Chemical Weapons Convention......................   255
                Overseas humanitarian demining and Commander in 
                  Chief initiative activities....................   255
        National Defense Sealift Fund............................   256
            LMSR procurement.....................................   256
            National defense sealift fund........................   256
            Maritime prepositioning force recapitalization.......   256
    Other Items of Interest......................................   257
        Authorization for the Department of Defense to deposit 
          funds in the Foreign Military Sales Trust Fund Account 
          for Canada's purchase of military equipment............   257
        Continued operations at Fort Pickett, Virginia...........   257
        Contracted Flight Training Service.......................   258
        Defense environmental compliance.........................   258
        Defense Commissary Agency produce purchasing.............   259
        Department of Defense use of Ada computer language.......   259
        Department of Defense use of frequency spectrum..........   260
        Elimination of unnecessary training restrictions imposed 
          under the Endangered Species Act.......................   260
        Environmental cleanup of formerly used defense sites.....   261
        Environmental cleanup of lands conveyed by the Department 
          of Defense.............................................   261
        Environmental liabilities at Rocky Mountain Arsenal, 
          Colorado...............................................   261
        Environmental requirements at Department of Defense 
          demolition, construction, and renovation sites.........   262
        Indoor marksmanship training.............................   263
        Pollution prevention.....................................   263
        Potential depot maintenance savings......................   264
        Proposed revision of the standards for ozone and 
          particulate matter.....................................   264
        Removal of polychlorinated biphenyls from Navy vessels 
          prior to disposal......................................   265
Title IV--Military Personnel Authorizations......................   267
    Subtitle A--Active Forces....................................   267
        Section 401. End strengths for active forces.............   267
        Section 402. Permanent end strength levels to support two 
          major regional contingencies...........................   268
    Subtitle B--Reserve Forces...................................   268
        Section 411. End strengths for Selected Reserve..........   268
        Section 412. End strengths for Reserves on active duty in 
          support of the reserves................................   269
    Subtitle C--Authorization of Appropriations..................   269
        Section 421. Authorization of appropriations for military 
          personnel..............................................   269
Title V--Military Personnel Policy...............................   271
    Subtitle A--Personnel Management.............................   271
        Section 501. Officers excluded from consideration by 
          promotion board........................................   271
        Section 502. Increase in the maximum number of officers 
          allowed to be frocked to the grade of O-6..............   271
        Section 503. Availability of Navy chaplains on retired 
          list or of retirement age to serve as Chief or Deputy 
          Chief of Chaplains of the Navy.........................   272
        Section 504. Period of recall service of certain retirees   272
    Subtitle B--Matters Relating to Reserve Components...........   272
        Section 511. Termination of ready reserve mobilization 
          income insurance program...............................   272
        Section 512. Discharge or retirement of reserve officers 
          in an inactive status..................................   273
        Section 513. Retention of military technicians in grade 
          of Brigadier General after mandatory separation date...   273
        Section 514. Federal status of service by National Guard 
          members as honor guards at funerals of veterans........   273
    Subtitle C--Education and Training Programs..................   273
        Section 521. Service academies foreign exchange study 
          program................................................   273
        Section 522. Programs of higher education of the 
          Community College of the Air Force.....................   273
        Section 523. Preservation of entitlement to educational 
          assistance of members of the Selected Reserve serving 
          on active duty in support of a contingency operation...   274
        Section 524. Repeal of certain staffing and safety 
          requirements for the Army Ranger Training Brigade......   274
    Subtitle D--Decorations and Awards...........................   274
        Section 531. Clarification of eligibility of members of 
          Ready Reserve for award of service Medal for Heroism...   274
        Section 532. Waiver of time limitations for award of 
          certain decorations to specified persons...............   275
        Section 533. One-year extension of period for receipt of 
          recommendations for decorations and awards for certain 
          military intelligence personnel........................   275
        Section 534. Eligibility of certain World War II military 
          organizations for award of unit decorations............   275
    Subtitle E--Military Personnel Voting Rights.................   275
    Subtitle F--Other matters....................................   276
        Section 551. Sense of Congress regarding study of matters 
          relating to gender equity in the Armed Forces..........   276
        Section 552. Commission on Gender Integration in the 
          Military...............................................   276
        Section 553. Sexual harassment investigations and reports   276
        Section 554. Requirement for exemplary conduct by 
          commanding officers and other authorities..............   277
        Section 555. Participation of Department of Defense 
          personnel in management of non-federal entities........   277
        Section 556. Technical correction to cross reference in 
          ROPMA provision relating to position vacancy promotion.   277
    Other Items of Interest......................................   278
        Findings related to the investigations of deaths of 
          members of the armed forces from self-inflicted causes.   278
        Inspector General investigations of general and flag 
          officers...............................................   279
        Military leave for Federal employees who are members of a 
          reserve component unit.................................   280
        Revisions to missing persons authorities.................   280
        Sexual harassment........................................   281
        Virtual education approach to learning for employment....   281
Title VI--Compensation and Other Personnel Benefits..............   283
    Subtitle A--Pay..............................................   283
        Section 601. Military pay raise for fiscal year 1998.....   283
    Subtitle B--Subsistence, Housing, and Other Allowances.......   283
        Part I--Reform of Basic Allowance for Subsistence........   284
        Part II--Reform of Housing and Related Allowances........   284
        Park III--Other Amendments Relating to Allowances........   284
        Section 626. Revision of authority to adjust compensation 
          necessitated by reform of subsistence and housing 
          allowances.............................................   284
        Section 627. Deadline for payment of Ready Reserve muster 
          duty allowance.........................................   284
    Subtitle C--Bonuses and Special and Incentive Pays...........   285
        Section 631. One-year extension of certain bonuses and 
          special pay authorities for reserve forces.............   285
        Section 632. One-year extension of certain bonuses and 
          special pay authorities for nurse officer candidates, 
          registered nurses, and nurse anesthetists..............   285
        Section 633. One-year extension of authorities relating 
          to payment of other bonuses and special pays...........   285
        Section 634. Increased amounts for aviation career 
          incentive pay..........................................   285
        Section 635. Aviation continuation pay...................   285
        Section 636. Eligibility of dental officers for the 
          multiyear retention bonus provided for medical officers   286
        Section 637. Increased special pay for dental officers...   286
        Section 638. Modification of Selected Reserve 
          reenlistment bonus authority...........................   286
        Section 639. Modification of authority to pay bonuses for 
          enlistments by prior service personnel in critical 
          skills in the Selected Reserve.........................   287
        Section 640. Increased special pay and bonuses for 
          nuclear qualified officers.............................   287
        Section 641. Authority to pay bonuses in lieu of special 
          pay for enlisted members extending duty at designated 
          locations overseas.....................................   287
    Subtitle D--Retired Pay, Survivor Benefits, and Related 
      Matters....................................................   288
        Section 651. One-year opportunity to discontinue 
          participation in Survivor Benefit Plan.................   288
        Section 652. Time for changing survivor benefit coverage 
          from former spouse to spouse...........................   288
        Section 653. Paid-up coverage under Survivor Benefit Plan   288
        Section 654. Annuities for certain military surviving 
          spouses................................................   288
    Subtitle E--Other Matters....................................   288
        Section 661. Eligibility of reserves for benefits for 
          illness, injury, or death incurred or aggravated in 
          line of duty...........................................   288
        Section 662. Travel and transportation allowances for 
          dependents before approval of a member's court-martial 
          sentence...............................................   289
        Section 663. Eligibility of members of the uniformed 
          services for reimbursement of adoption expenses........   289
    Other Items of Interest......................................   289
         Health Professions Scholarship Program..................   289
         Review of the Quadrennial Review of Military 
          Compensation...........................................   290
Title VII--Health Care Provisions................................   291
        Section 701. Waiver of deductibles, copayments, and 
          annual fees for members assigned to certain duty 
          locations far from sources of care.....................   291
        Section 702. Payment for emergency health care overseas 
          for military and civilian personnel of the On-Site 
          Inspection Agency......................................   292
        Section 703. Disclosures of cautionary information on 
          prescription medications...............................   292
        Section 704. Health care services for certain Reserves 
          who served in Southwest Asia during the Persian Gulf 
          War....................................................   292
        Section 705. Collection of dental insurance premiums.....   293
        Section 706. Dental insurance plan coverage for retirees 
          of uniformed service in the Public Health Service and 
          NOAA...................................................   293
        Section 707. Prosthetic devices for dependents...........   293
    Other Items of Interest......................................   293
        Continued operation of the Uniformed Services University 
          of the Health Sciences.................................   293
        Dental research and development..........................   294
        Graduate School of Nursing building at the Uniformed 
          Services University of the Health Sciences.............   294
        Health care provisions...................................   294
        Maintenance medication dispensing policy.................   296
        Programs related to breast and prostate cancer...........   297
        Telemedicine in TRICARE Region 7.........................   297
Title VIII--Acquisition Policy, Acquisition Management, and 
  Related Matters................................................   299
    Subtitle A--Amendments to General Contracting Authorities, 
      Procedures, and Limitations................................   300
        Section 801. Streamlined approval requirements for 
          contracts under international agreements...............   300
        Section 802. Restriction on undefinitized contract 
          actions................................................   300
        Section 803. Expansion of authority to cross fiscal years 
          to all severable service contracts not exceeding a year   300
        Section 804. Limitation on allowability of compensation 
          for certain contractor personnel.......................   301
        Section 805. Increased price limitation on purchases of 
          right-hand drive vehicles..............................   301
        Section 806. Conversion of defense capability 
          preservation authority to Navy shipbuilding capability 
          preservation authority.................................   302
        Section 807. Elimination of certification requirement for 
          grants.................................................   302
        Section 808. Repeal of limitation on adjustment of 
          shipbuilding contracts.................................   302
    Subtitle B--Contract Provisions..............................   302
        Section 811. Contractor guarantees of major systems......   302
        Section 812. Vesting of title in the United States under 
          contracts paid under progress payment arrangements or 
          similar arrangements...................................   303
    Subtitle C--Acquisition Assistance Programs..................   303
        Section 821. Procurement technical assistance programs...   303
        Section 822. One-year extension of Pilot Mentor-Protege 
          Program................................................   303
        Section 823. Test program for negotiation of 
          comprehensive subcontracting plans.....................   304
        Section 824. Price preference for small and disadvantaged 
          businesses.............................................   304
    Subtitle D--Administrative Provisions........................   304
        Section 831. Retention of expired funds during the 
          pendency of contract litigation........................   304
        Section 832. Protection of certain information from 
          disclosure.............................................   305
        Section 833. Content of limited selected acquisition 
          reports................................................   305
        Section 834. Unit cost reports...........................   305
        Section 835. Central Department of Defense point of 
          contact for contracting information....................   305
    Subtitle E--Other Matters....................................   305
        Section 841. Defense business combinations...............   305
        Section 842. Lease of nonexcess property of Defense 
          Agencies...............................................   306
        Section 843. Promotion rate for officers in an 
          Acquisition Corps......................................   306
    Other Items of Interest......................................   307
        Multiple award task order and delivery order contracts...   307
Title IX--Department of Defense Organization and Management......   309
        Section 901. Principal duty of Assistant Secretary of 
          Defense for Special Operations and Low Intensity 
          Conflict...............................................   309
        Section 902. Professional military education schools.....   309
        Section 903. Use of CINC Initiative Fund for force 
          protection.............................................   309
        Section 904. Transfer of TIARA programs..................   310
    Other Items of Interest......................................   310
        Department of Defense Inspector General staffing levels..   310
Title X--General Provisions......................................   311
    Subtitle A--Financial Matters................................   311
        Section 1003. Authorization of prior emergency 
          supplemental appropriations for fiscal year 1997.......   311
        Section 1004. Increased transfer authority for fiscal 
          year 1996 authorizations...............................   311
        Section 1005. Biennial financial management strategic 
          plan...................................................   311
        Section 1006. Revision of authority for Fisher House 
          Trust Funds............................................   311
        Section 1007. Availability of certain fiscal year 1991 
          funds for payment of contract claim....................   312
        Section 1008. Estimates and requests for procurement and 
          military construction for the reserve components.......   312
    Subtitle B--Naval Vessels and Shipyards......................   312
        Section 1011. Long-term charter of vessel for 
          surveillance towed array sensor program................   312
        Section 1012. Procedures for sale of vessels stricken 
          from the Naval Vessel Register.........................   313
        Section 1013. Transfers of naval vessels to certain 
          foreign countries......................................   313
    Subtitle C--Counter-Drug Activities..........................   313
        Ongoing Initiatives......................................   314
        Riverine Interdiction Initiative.........................   315
    Subtitle D--Reports and Studies..............................   316
        Section 1031. Repeal of reporting requirements...........   316
        Section 1032. Common measurement of operations and 
          personnel tempo........................................   316
        Section 1033. Report on overseas deployment..............   316
        Section 1034. Report on military readiness requirements 
          of the Armed Forces....................................   317
        Section 1035. Assessment of cyclical readiness posture of 
          the Armed Forces.......................................   318
        Section 1036. Overseas infrastructure requirements.......   318
        Section 1037. Report on aircraft inventory...............   318
        Section 1038. Disposal of excess materials...............   319
        Section 1039. Review of former spouse protections........   319
        Section 1040. Completion of GAO reports for Congress.....   319
    Subtitle E--Other Matters....................................   319
        Section 1051. Psychotherapist-patient privilege in the 
          Military Rules of Evidence.............................   319
        Section 1052. National Guard Civilian Youth Opportunities 
          Pilot Program..........................................   320
        Section 1053. Protection of Armed Forces personnel during 
          peace operations.......................................   320
        Section 1054. Limitation on retirement or dismantlement 
          of strategic nuclear delivery systems..................   320
        Section 1055. Acceptance and use of landing fees for use 
          of overseas military airfields by civil aircraft.......   320
        Section 1056. One-year extension of international 
          nonproliferation initiative............................   321
        Section 1057. Assistance for facilities subject to 
          inspection under the Chemical Weapons Convention.......   321
        Chemical Weapons Convention..............................   321
        Emergency Health Care for OSIA Inspectors................   322
        Section 1058. Sense of Senate regarding the relationship 
          between environmental laws and United States' 
          obligations under the Chemical Weapons Convention. (See 
          report language in Section 107)........................   322
        Section 1059. Sense of Congress regarding funding for 
          reserve component modernization not requested in the 
          annual budget request..................................   322
        Section 1060. Authority of Secretary of Defense to settle 
          claims relating to pay, allowances, and other benefits.   323
        Section 1061. Coordination of access of commanders and 
          deployed units to intelligence collected and analyzed 
          by the intelligence community..........................   323
        Section 1062. Protection of imagery, imagery 
          intelligence, and geospatial information and data......   324
        Section 1063. Protection of air safety information 
          voluntarily provided by a charter air carrier..........   324
        Section 1064. Sustainment and operation of Global 
          Positioning System.....................................   324
        Section 1065. Law enforcement authority for special 
          agents of the Defense Criminal Investigative Service...   325
        Section 1066. Repeal of requirement for continued 
          operation of the Naval Academy dairy farm..............   326
        Section 1067. POW/MIA intelligence analysis cell.........   326
        Section 1068. Protection of employees from retaliation 
          for certain disclosures of classified information......   327
        Section 1069. Applicability of certain pay authorities to 
          members of the Commission on Service Members and 
          Veterans Transition Assistance.........................   327
        Section 1070. Transfer of B-17 aircraft to museum........   328
        Section 1071. Five-year extension of aviation insurance 
          program................................................   328
        Section 1072. Treatment of military flight operations....   328
        Section 1073. Naturalization of foreign nationals who 
          served honorably in the Armed Forces of the United 
          States.................................................   329
        Section 1074. Designation of Bob Hope as honorary veteran   329
    Other Items of Interest......................................   329
        Airborne strategic command and control...................   329
        Commercial satellite communications......................   330
        Department of Defense Education Technology Initiative 
          (DoDETI)...............................................   331
        Department of Defense space management...................   331
        Department of Defense strategy for curtailing spousal 
          abuse involving members of the armed forces............   332
        Global Positioning System alternate master control 
          station................................................   332
        International border security............................   332
        Orbital debris and the environmental restoration of space   333
        Safety of strategic nuclear forces.......................   333
Title XI--Department of Defense Civilian Personnel...............   335
        Section 1101. Use of prohibited constraints to manage 
          Department of Defense personnel........................   335
        Section 1102. Employment of civilian faculty at the 
          Marine Corps University................................   335
        Section 1103. Extension and revision of voluntary 
          separation incentive pay authority.....................   336
        Section 1104. Repeal of deadline for placement 
          consideration of involuntarily separated military 
          reserve technicians....................................   336
        Section 1105. Rate of pay of Department of Defense 
          overseas teacher upon transfer to General Schedule 
          position...............................................   336
        Section 1106. Naturalization of employees of the George 
          C. Marshall European Center for Security Studies.......   336
    Other Items of Interest......................................   336
        Health plan for nonappropriated fund employees...........   336
        Leadership...............................................   336
        Modernization and regionalization of civilian personnel 
          management functions...................................   337

             Division B--Military Construction Authorities

Committee Action.................................................   339
Base closure and realignment accounts............................   353
Title XXI--Army..................................................   361
Summary..........................................................   361
        Section 2101. Authorized Army construction and land 
          acquisition projects...................................   361
        Section 2102. Family housing.............................   361
        Section 2103. Improvements to military family housing 
          units..................................................   361
        Section 2104. Authorization of appropriations, Army......   361
        Section 2105. Authority to use certain prior year funds 
          to construct a heliport at Fort Irwin, California......   361
    Other Items of Interest......................................   361
        Funding for restoration of Forest Glen Annex, Walter Reed 
          Army Medical Center....................................   361
        Planning and design, Army................................   362
Title XXII--Navy.................................................   363
    Summary......................................................   363
        Section 2201. Authorized Navy construction and land 
          acquisition projects...................................   363
        Section 2202. Family housing.............................   363
        Section 2203. Improvements to military family housing 
          units..................................................   363
        Section 2204. Authorization of appropriations, Navy......   363
        Section 2205. Authorization of military construction 
          project at Pascagoula Naval Station, Mississippi, for 
          which funds have been appropriated.....................   363
    Other Items of Interest......................................   363
        Planning and design, Navy................................   363
Title XXIII--Air Force...........................................   365
    Summary......................................................   365
        Section 2301. Authorized Air Force construction and land 
          acquisition projects...................................   365
        Section 2302. Family housing.............................   365
        Section 2303. Improvements to military family housing 
          units..................................................   365
        Section 2304. Authorization of appropriations, Air Force.   365
        Section 2305. Authorization of military construction 
          project at McConnell Air Force Base, Kansas, for which 
          funds have been appropriated...........................   365
Title XXIV--Defense Agencies.....................................   367
    Summary......................................................   367
        Section 2401. Authorized Defense Agencies construction 
          and land acquisition projects..........................   367
        Section 2402. Military housing planning and design.......   367
        Section 2403. Improvements to military family housing 
          units..................................................   367
        Section 2404. Energy conservation projects...............   367
        Section 2405. Authorization of appropriations, Defense 
          Agencies...............................................   367
        Section 2406. Clarification of authority relating to 
          fiscal year 1997 project at Naval Station, Pearl 
          Harbor, Hawaii.........................................   367
        Section 2407. Authority to use prior year funds to carry 
          out certain Defense Agency military construction 
          projects...............................................   368
        Section 2408. Modification of authority to carry out 
          fiscal year 1995 projects..............................   368
        Section 2409. Availability of funds for fiscal year 1995 
          project relating to relocatable over-the-horizon radar, 
          Naval Station Roosevelt Roads, Puerto Rico.............   368
Title XXV-North Atlantic Treaty Organization Security Investment 
  Program........................................................   369
    Summary......................................................   369
        Section 2501. Authorized NATO construction and land 
          acquisition projects...................................   369
        Section 2502. Authorization of appropriations, NATO......   369
Title XXVI-Guard and Reserve Forces Facilities...................   371
    Summary......................................................   371
        Section 2601. Authorized Guard and Reserve construction 
          and land acquisition projects..........................   371
        Section 2602. Authorization of Army National Guard 
          construction project, aviation support facility, Hilo, 
          Hawaii, for which funds have been appropriated.........   371
    Other Items of Interest......................................   371
        Army aviation operating facility, Bethel, Alaska.........   371
        Planning and design, Guard and Reserve Forces facilities.   372
        Air National Guard.......................................   372
        Army Reserve.............................................   372
Title XXVII--Expiration and Extention of Authorizations..........   373
    Section 2701. Expiration of authorizations and amounts 
      required to be specified by law............................   373
    Section 2702. Extension of authorizations of certain fiscal 
      year 1995 projects.........................................   373
    Section 2703. Extension of authorizations of certain fiscal 
      year 1994 projects.........................................   373
    Section 2704. Extension of authorization of fiscal year 1993 
      projects...................................................   373
    Section 2705. Extension of authorizations of certain fiscal 
      year 1992 projects.........................................   373
    Section 2706. Effective date.................................   373
Title XXVIII--General Provisions.................................   375
    Subtitle A--Military Construction Program and Military Family 
      Housing Changes............................................   375
        Section 2801. Increase in ceiling for minor land 
          acquisition projects...................................   375
        Section 2802. Sale of utility systems of the military 
          departments............................................   375
        Section 2803. Administrative expenses for certain real 
          property transactions..................................   375
        Section 2804. Use of financial incentives for energy 
          savings and water cost savings.........................   376
    Subtitle B--Land Conveyances.................................   376
        Section 2811. Modification of authority for disposal of 
          certain real property, Fort Belvoir, Virginia..........   376
        Section 2812. Correction of land conveyance authority, 
          Army Reserve Center, Anderson, South Carolina..........   376
        Section 2813. Land conveyance, Hawthorne Army Ammunition 
          Depot, Mineral County, Nevada..........................   376
        Section 2814. Long-term lease of property, Naples, Italy.   377
        Section 2815. Land conveyance, Topsham Annex, Naval Air 
          Station, Brunswick, Maine..............................   377
        Section 2816. Land conveyance, Naval Weapons Industrial 
          Reserve Plant No. 464, Oyster Bay, New York............   377
        Section 2817. Land conveyance, Charleston Family Housing 
          Complex, Bangor, Maine.................................   377
        Section 2818. Land conveyance, Ellsworth Air Force Base, 
          South Dakota...........................................   378
    Subtitle C--Other matters....................................   378
        Section 2831. Disposition of proceeds of sale of Air 
          Force Plant No. 78, Brigham City, Utah.................   378
    Other Items of Interest......................................   378
        Report on land use, Navy Air Station, Brunswick, Maine...   378

 Division C--Department of Energy National Security Authorizations and 
                          Other Authorizations

Title XXXI--Department of Energy National Security Programs......   381
    Subtitle A--National Security Programs Authorizations........   404
            Section 3101. Weapons activities.....................   404
            Stockpile stewardship programs.......................   404
            Stockpile management programs........................   405
            Program Direction....................................   405
            Section 3102. Environmental restoration and waste 
              management.........................................   406
            Environmental Restoration............................   406
            Waste Management.....................................   406
            Nuclear Material and Facility Stabilization..........   406
            Technology Development...............................   406
            Environmental Management Science Program.............   407
            Program Direction....................................   407
            Policy Office........................................   407
            Project Closure Account..............................   407
            Privatization........................................   407
            Section 3103. Other defense activities...............   408
            Nonproliferation and verification research and 
              development........................................   408
            Russian Reactor Core Conversion Program..............   408
            Chemical and Biological Research and Development 
              Activities.........................................   409
            International Nuclear Safety Program.................   410
            Nuclear Smuggling and Counterterrorism...............   410
            Scientific Exchanges between the United States and 
              China and Russia...................................   411
            Materials, Protection, Control and Accountability....   412
            Naval Reactors.......................................   412
            Declassification Productivity Initiative.............   413
        Section 3104. Defense environmental management 
          privatization..........................................   413
        Section 3105. Defense nuclear waste disposal.............   414
    Subtitle B--Recurring General Provisions.....................   414
        Section 3121. Reprogramming..............................   414
        Section 3122. Limits on general plant projects...........   414
        Section 3123. Limits on construction projects............   414
        Section 3124.00Fund transfer authority...................   414
        Section 3125. Authority for conceptual and construction 
          design.................................................   414
        Section 3126. Authority for emergency planning, design, 
          and construction activities............................   415
        Section 3127. Funds available for all national security 
          programs of the Department of Energy...................   415
        Section 3128. Availability of funds......................   415
    Subtitle C--Program Authorizations, Restrictions, and 
      Limitations................................................   414
        Section 3131. Defense environmental management 
          privatization projects.................................   415
        Section 3132. International cooperative stockpile 
          stewardship programs...................................   416
        Section 3133. Modernization of enduring nuclear weapons 
          complex................................................   416
        Section 3134. Tritium production.........................   417
        Section 3135. Processing, treatment, and disposition of 
          spent nuclear fuel rods and other legacy nuclear 
          materials at the Savannah River Site...................   418
        Section 3136. Limitations on use of funds for laboratory 
          directed research and development purposes.............   419
        Section 3137. Permanent authority for transfers of 
          defense environmental management funds.................   420
        Section 3138. Prohibition on recovery of certain 
          additional costs for environmental response actions 
          associated with the Formerly Utilized Site Remedial 
          Action Project program.................................   420
    Subtitle D--Other Matters....................................   420
        Section 3151. Administration of certain Department of 
          Energy Activities......................................   420
        Section 3152. Modification and extension of authority 
          relating to appointment of certain scientific, 
          engineering, and technical personnel...................   420
        Section 3153. Annual report on plan and program for 
          stewardship, management, and certification of warheads 
          in the nuclear weapons stockpile.......................   421
        Section 3154. Submittal of biennial waste management 
          reports................................................   421
        Section 3155. Repeal of obsolete reporting requirements..   421
        Section 3156. Commission on safeguarding and security of 
          nuclear weapons and materials at Department of Energy 
          facilities.............................................   422
        Section 3157. Modification of authority on commission on 
          maintaining United States nuclear weapons expertise....   422
        Section 3158. Land transfer, Bandelier National Monument.   422
    Other Items of Interest......................................   423
        Asset disposition........................................   423
        Cuban nuclear reactors...................................   423
        Environmental Science Program............................   423
        Federally Funded Research and Development Centers........   424
         Fissile Materials Disposition...........................   425
         Funding for Greenville Road Improvement Project, 
          Livermore California...................................   425
         Improving collaboration between the Department of 
          Defense and Department of Energy laboratories..........   425
         Interagency acquisitions done under the Economy Act.....   426
         National Defense Fixed Assets Acquisition...............   427
         Reports on alternative fuel and renewable energy 
          technologies for military applications.................   427
         Report on Idaho Radioactive Waste Management Complex 
          Cleanup................................................   428
         Report on incentives for highly creative and innovative 
          laboratory scientists and engineers....................   428
         Robotics and Intelligent Machines Initiative............   428
         Supply of radiation-hardened microelectronics...........   429
         Technical exchange on defense-related transportation 
          technologies...........................................   429
Title XXXII--Defense Nuclear Facilities Safety Board.............   431
        Section 3201. Authorization..............................   431
Title XXXIII--National Defense Stockpile.........................   433
Title XXXIV--Naval Petroleum Reserves............................   435
Title XXXV--Panama Canal Commission..............................   437
    Subtitle A--Authorization of Expenditures from Revolving Fund   437
    Subtitle B--Facilitation of Panama Canal Transition..........   437
        Section 3511. Short title; references....................   437
        Section 3512. Definitions relating to Canal transition...   437
    Part I--Transition Matters Relating to Commission Officers 
      and Employees..............................................   437
        Section 3521. Authority for the Administrator of the 
          Commission to accept appointment as the Administrator 
          of the Panama Canal Authority..........................   437
        Section 3522. Post-Canal transfer personnel authorities..   438
        Section 3523. Enhanced authority of Commission to 
          establish compensation of Commission officers and 
          employees..............................................   438
        Section 3524. Travel, transportation, and subsistence 
          expenses for Commission personnel no longer subject to 
          Federal Travel Regulation..............................   438
        Section 3525. Enhanced recruitment and retention 
          authorities............................................   438
        Section 3526. Transition separation incentive payments...   439
        Section 3527. Labor-management relations.................   439
        Section 3528. Availability of Panama Canal Revolving Fund 
          for severance pay for certain employees separated by 
          Panama Canal Authority after Canal Transfer Date.......   440
    Part II--Transition Matters Relating to Operation and 
      Administration of Canal....................................   440
        Section 3541. Establishment of procurement system and 
          board of contract appeals..............................   440
        Section 3542. Transactions with the Panama Canal 
          Authority..............................................   440
        Section 3543. Time limitations on filing of claims for 
          damages................................................   441
        Section 3544. Tolls for small vessels....................   441
        Section 3545. Date of actuarial evaluation of FECA 
          liability..............................................   441
        Section 3546. Notaries public............................   441
        Section 3547. Commercial services........................   441
        Section 3548. Transfer from President to Commission of 
          certain regulatory functions relating to employment 
          classification appeals.................................   442
        Section 3549. Enhanced printing authority................   442
        Section 3550. Technical and conforming amendments........   442
Legislative Requirements.........................................   443
Departmental Recommendations.....................................   443
Committee Action.................................................   443
Fiscal Data......................................................   443
Congressional Budget Office Cost Estimate........................   446
Regulatory Impact................................................   446
Changes in Existing Law..........................................   446
Additional Views of Senator John McCain..........................   447
Additional Views of Senator James M. Inhofe......................   454
Additional Views of Senator Carl Levin...........................   456
Additional Views of Senator Edward M. Kennedy....................   462
Additional Views of Senator Jeff Bingaman........................   463
Additional Views of Senator John Glenn...........................   466
Additional Views of Senator Max Cleland..........................   469



105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-29
_______________________________________________________________________


AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 1998 FOR MILITARY ACTIVITIES 
   OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR 
DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL 
  STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER 
                                PURPOSES

                                _______
                                

                 June 17, 1997.--Ordered to be printed

                                _______


   Mr. Thurmond, from the Committee on Armed Services, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 924]

    The Committee on Armed Services reports favorably an 
original bill to authorize appropriations during the fiscal 
year 1998 for military activities of the Department of Defense, 
for military construction, and for defense activities of the 
Department of Energy, to prescribe personnel strengths for such 
fiscal year for the armed forces, and for other purposes, and 
recommends that the bill do pass.

                          PURPOSE OF THE BILL

    This bill would:
          (1) authorize appropriations for (a) procurement, (b) 
        research, development, test and evaluation, (c) 
        operation and maintenance and the revolving and 
        management funds of the Department of Defense for 
        fiscal year 1998;
          (2) authorize the personnel end strengths for each 
        military active duty component of the armed forces for 
        fiscal year 1998;
          (3) authorize the personnel end strengths for the 
        Selected Reserve of each of the reserve components of 
        the armed forces for fiscal year 1998;
          (4) authorize the annual average military training 
        student loads for the active and reserve components of 
        the armed forces for fiscal year 1998;
          (5) impose certain reporting requirements;
          (6) impose certain limitations with regard to 
        specific procurement and research, development, test 
        and evaluation actions and manpower strengths; provide 
        certain additional legislative authority, and make 
        certain changes to existing law;
          (7) authorize appropriations for military 
        construction programs of the Department of Defense for 
        fiscal year 1998; and
          (8) authorize appropriations for national security 
        programs of the Department of Energy for fiscal year 
        1998.

Committee overview and recommendations

    National security remains the federal government's most 
important obligation to its citizens. The Committee on Armed 
Services recognizes its critical role within the Senate in 
carrying out the powers relating to national security set out 
below which are granted to Congress in the Constitution:
          To declare war.
          To raise and support Armies.
          To provide and maintain a Navy.
          To make rules for the government and regulation of 
        the Land and Naval forces.
          To provide for organizing, arming and disciplining 
        the militia.
          To give its advice and consent to treaties and to the 
        nominations of Officers of the United States.
    The members of the committee further understand the 
importance of the committee's jurisdiction within the Senate 
over matters relating to the ``common defense,'' the Department 
of Defense, the Military Departments, and the national security 
programs of the Department of Energy.
    The budget agreement reached this year represents a 
historic endeavor by the Congress and the President to reach a 
balanced budget by fiscal year 2002. While the budget agreement 
protects our military forces from unrealistic and unwise cuts, 
the committee remains concerned that the funding levels for 
defense may not provide sufficient funds to adequately sustain 
over time the current force levels as well as the personnel, 
quality of life, readiness, and modernization programs critical 
to our military services. The committee intends that the 
achievement of a balanced budget will not adversely affect the 
readiness and capabilities of our military forces and will 
endeavor, within thefunds agreed upon for defense in the budget 
agreement, to ensure their essential readiness and capabilities. 
Changes in the world situation or threat, and adverse impacts from 
funding shortfalls on general readiness or on vital operational 
capabilities, are among the trends that might indicate a requirement 
for additional funds for defense. In such cases, the committee believes 
that national security requirements must take precedence over lesser 
priorities within the budget.
    As the committee embarked on its legislative 
responsibilities for the 105th Congress, the Chairman 
established a set of national security priorities to guide the 
committee through the authorization process for fiscal year 
1998.
    In the Defense Authorization Bill for Fiscal Year 1998, the 
committee worked to achieve an appropriate balance between 
near-term and long-term readiness through investments in 
modernization, infrastructure and research; maintenance of 
sufficient end-strengths at all grade levels and policies 
supporting the recruitment and retention of high quality 
personnel; fielding of the types and quantities of weapons 
systems and equipment needed to fight and win decisively with 
minimal risk to our troops; and ensuring an adequate, safe and 
reliable nuclear weapons capability.
    The committee modified the budget request to improve 
operations and achieve greater efficiencies and savings. The 
committee sought to eliminate defense spending that does not 
contribute directly to the national security of the United 
States. Savings were realized by accelerating programs where 
appropriate, and by limiting new program starts.
    The committee worked to protect the quality of life of our 
military personnel and their families. Quality of life 
initiatives include provisions designed to provide equitable 
pay and benefits to military personnel, including a 2.8 percent 
pay raise to protect against inflation, and the restoration of 
appropriate levels of funding for the construction and 
maintenance of troop billets and military family housing. This 
year, the committee increased funding for the repair and 
maintenance of barracks and dormitories to help alleviate 
critical funding problems in these areas.
    The committee remains concerned about military readiness, 
particularly with the underfunding of flying hours accounts in 
the Department of Defense. To ensure that U.S. armed forces 
remain the preeminent military power in the world, readiness 
requirements must be adequately funded, including sufficient 
opportunities to train.
    The committee notes with concern the continuing migration 
of modernization funds to operations and maintenance accounts. 
The committee believes a more robust, progressive modernization 
effort will not only provide capabilities requisite for future 
military operations, but will lower future operational and 
maintenance costs as well.
    The committee has increased investment in the broad 
spectrum of research and development activities to ensure that 
United States military forces remain superior in technology to 
any potential adversary. The committee believes that effective 
development of advanced technologies will be a key factor in 
determining the victors on future battlefields. A program of 
stable, long-term investment in science and technology will 
remain vital to United States dominance of combat on land, at 
sea, in the air, and in space.
    The committee also directed a more detailed programming and 
budgeting process for the reserve components. Efforts by this 
committee over the last several years have been unsuccessful in 
requiring proper programming and budgeting for the reserve 
components. The Department of Defense continues to provide 
testimony on the importance of these components, but has failed 
to provide the necessary resources to ensure their 
effectiveness. The utilization and effectiveness of reserve 
component forces are dependent on proper funding to reduce the 
backlog in maintenance and repair of equipment; adequately fund 
an appropriate quantity and quality of training; enhance 
infrastructure and base operations programs; and support 
efforts maintaining adequate stocks of supplies, repair parts, 
fuel, and ammunition.
    The Department's Quadrennial Defense Review (QDR) is based 
on a strategy which retains the requirement for a capability to 
fight two concurrent major regional contingencies. However, 
even with the higher funding provided in the outyears of the 
budget agreement, the QDR recommends force structure reductions 
of up to 130,000 military personnel as well as reductions in 
key modernization programs in order to provide funds for 
essential modernization. The committee is concerned that a 
mismatch may develop between the strategy and actual force 
capability.
    Finally, the committee sought to accelerate the development 
and deployment of theater missile defense systems and to 
provide adequate funding for a national missile defense system 
to preserve the option to deploy such a system in fiscal year 
2003. This bill also supports expeditious deployment of land 
and sea-based theater missile defense systems to protect U.S. 
and allied forces against the growing threat of cruise and 
ballistic missiles.
    The committee intends that, within the balanced budget 
agreement, we will provide adequately for our men and women in 
uniform to defend our nation. The committee will continue to 
examine the adequacy of the funds we allocate to our national 
security. At the same time, we must search for ways to improve 
the efficiency and effectiveness of our defense establishment--
especially in the support structure--so that we can achieve 
savings to devote to the cutting edge of our military combat 
forces.
    During the past several months, the committee has worked in 
its traditional bipartisan manner, placing the national 
security interests of the United States and the American people 
above other considerations. The National Defense Authorization 
Bill for Fiscal Year 1998 reflects a bipartisan approach to 
these priorities, and provides a clear basis and direction for 
U.S.national security policies and programs into the 21st 
century.

Explanation of funding summary

    The administration's budget request for the national 
defense function of the federal budget for fiscal year 1998 was 
$265.3 billion, of which $195.8 billion was for programs which 
require specific funding authorization.
    The committee's authorization recommendation is 
substantially larger ($268.2 billion in budget authority) than 
the amount requested. The primary reason for this difference is 
that the committee authorized an additional $4.2 billion in 
procurement and $1.0 billion in Research and Development.
    The following table summarizes both the direct 
authorizations and equivalent budget authority levels for 
fiscal year 1998 defense programs. The columns relating to the 
authorization request do not include funding for the following 
items: military personnel funding; military construction 
authorizations provided in prior years; and other small 
portions of the defense budget that are not within the 
jurisdiction of this committee or which do not require an 
annual authorization. As explained above, funding for military 
personnel is included in the amounts authorized by the 
committee, but not in the total funding requested for 
authorization.
    Funding for all programs in the national defense function 
is reflected in the columns relating to the budget authority 
request and the total budget authority implication of the 
authorizations in this bill. The committee recommends funding 
for national defense programs totaling $268.2 billion in budget 
authority, which is consistent with the fiscal year 1998 Budget 
Resolution, an increase of $2.6 billion above the President's 
budget request.


            DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

                          TITLE I--PROCUREMENT

    Last year the committee registered its concern over the 
continued deferral of procurement and again noted 
administration promises of a better future and the contrasting 
reality of each year's budget request. The fiscal year 1998 
request has an altogether too familiar theme of a better future 
while requesting reductions and restructures for the current 
year. The defense budget has been reduced drastically since 
1985 and the downward trend continues with no sign of 
improvement.
    The recently released Quadrennial Defense Review (QDR) 
avoided the question of modernization in the near term by 
making program reductions beyond the future years defense 
program (FYDP). The committee notes with concern that the 
panel's proposal to meet future modernization requirements 
relies on savings and efficiencies that may never be realized.
    The budget submitted by the administration does not provide 
the resources to equip the forces it says are needed for 
national security. This administration has once again prompted 
the committee to act to enhance modernization and future 
readiness of the military services.
    Last year, the committee gave priority to buying basics, 
investing to achieve savings, and investing in the future. This 
year, the committee has again adhered to this strategy. The 
committee's emphasis on acquiring equipment in economic lots 
and on efficient schedules is evident throughout this report.
    The committee continues to look for the Department of 
Defense and the individual services to provide essential 
modernization support to the reserve components. The committee 
has observed an apparent inability of the Department to include 
minimum reserve component modernization requirements in the 
FYDP. The committee believes it essential for both the active 
and reserve components to work together to identify and fund 
modernization of reserve component units that have served the 
Department and this nation so well in both domestic and 
overseas operations. As a result of the balanced budget 
agreement, future budgets will provide fewer opportunities for 
the Congress to supplement historically inadequate budget 
requests and address reserve component shortfalls. Both active 
and reserve components must recognize the criticality of a 
collective modernization plan in lieu of a segmented and 
unaffordable program, and take steps now toward that end.
Explanation of tables
    The tables in this title display items requested by the 
administration for fiscal year 1998 for which the committee 
either increased or decreased the requested amounts. As in the 
past, the administration may not exceed the amounts approved by 
the committee (as set forth in the tables or, if unchanged from 
the administration request, as set forth in the Department of 
Defense's budget justification documents) without a 
reprogramming action in accordance with established procedures. 
Unless noted explicitly in the report, all changes are made 
without prejudice.

              SUBTITLE A--AUTHORIZATION OF APPROPRIATIONS

Section 107. Chemical Demilitarization Program.
    The budget request included $741.2 million for the chemical 
agents and munitions destruction program for operations and 
maintenance ($472.2 million), procurement ($82.2 million), 
research and development ($66.3 million), and military 
construction ($120.5 million).
    The committee recommends a $5.0 million reduction to the 
budget request for operations and maintenance, a $5.0 million 
reduction to the budget request for procurement, and a $4.0 
million increase to the budget request for research and 
development to accelerate the development and fielding of the 
Army's mobile munitions assessment system.
Chemical Weapons Convention (CWC)
    On April 29, 1997, the Chemical Weapons Convention (CWC) 
entered into force, with the United States as a party. With the 
entry into force of the CWC, the United States is now obligated 
by international law to destroy its unitary chemical stockpile, 
binary chemical weapons, recovered chemical weapons, and former 
chemical weapons production facilities by April 29, 2007, and 
its miscellaneous chemical warfare materiel by April 29, 2002. 
The United States is required by the Convention to declare, 180 
days after entry into force to the Organization for the 
Prevention of Chemical Weapons (OPCW), the method of 
destruction that it will use to destroy its chemical weapons.
    In 1985, the Congress directed the Army to destroy its 
unitary stockpile because it was obsolete and becoming 
unstable. As a result, the Army developed a plan to incinerate 
the chemical agents and munitions on-site at the eight sites in 
the United States and on Johnston Atoll in the Pacific.
    The U.S. chemical stockpile also includes what is called 
``nonstockpile'' chemical warfare materiel. Most of this 
materiel dates back as far as World War II and includes the 
binary chemical weapons, miscellaneous chemical warfare 
materiel, recovered chemical weapons, former production 
facilities, and buried chemical warfare materiel. Under 
direction by the Congress, in 1992 the Army established the 
Nonstockpile Chemical Materiel Program, a plan to dispose of 
the chemical weapons materiel not stored in the eight chemical 
stockpile sites.
    The United States is committed to destroying its chemical 
stockpile and related warfare materiel. To date, of the 31,500 
tons in the U.S. chemical stockpile, 1,600 tons in the 
stockpile located at Johnston Atoll and Tooele, Utah, have been 
destroyed. Despite the recent success, the Congress remains 
concerned about the cost and schedule for the destruction 
program. A key factor in the progress of the program is the 
continuing disagreement between the affected states and 
localities and the Department of Defense on the method of 
destruction to be used.
    The committee remains concerned about the program cost and 
the ability of the Army to meet the destruction deadline for 
the unitary and nonstockpile items by the time frame indicated 
in the CWC. The cost increases and schedule delays of the 
Chemical Stockpile Disposal Program are driven largely by the 
ability of the Army to obtain environmental permits for the 
construction and operation of the disposal facilities and 
compliance with environmental laws and regulations.
    Currently, the combined life-cycle cost estimate for 
disposal of the unitary and nonstockpile programs is $27.6 
billion, which includes $12.4 billion for the chemical 
stockpile disposal program and $15.2 billion for the 
nonstockpile chemical materiel program. The estimated life-
cycle cost for the two programs does not include the costs of 
dismantling the nine chemical destruction facilities, as 
required by the National Defense Authorization Act of Fiscal 
Year 1986 (P.L. 99-145).
    It has historically taken the Army longer than anticipated 
to reach agreement with the states and local communities to 
obtain the necessary permits for construction and operation of 
the facilities. Of the nine proposed destruction facilities, 
two have been built and are operating: one is located on 
Johnston Atoll in the Pacific and the other facility is located 
at Tooele, Utah. For example, the Army originally anticipated 
that it would obtain permits for the systemization operation of 
the Tooele, Utah, facility by 1992. However, permits were not 
received and systemization operations at the Tooele Chemical 
Agent Disposal Facility did not begin until August 1993, 17 
months later than anticipated. The actual destruction of the 
chemical stockpile located at Tooele began in August 1996.
    Based on a report prepared by the General Accounting 
Office, the programs are likely to cost more than the estimated 
$27.6 billion planned for the two programs, because of delays 
in obtaining the permits for construction and operation of the 
facilities. The Committee believes it is necessary for the 
President to become more involved in the process at the 
federal, state and local levels, to overcome the significant 
delays in obtaining the necessary permits. In this regard, the 
committee recommends a provision that expresses its concern 
that the United States ensures that it complies with its 
obligations under the CWC and not place the U.S. in 
anticipatory breach of its obligations. The committee also 
recommends that the President submit to Congress a report 180 
days after enactment of this Acton the steps being taken to 
ensure compliance with the destruction obligations of the CWC. The 
report should also include a review of steps taken by the Army to 
minimize the escalating cost of the disposal program, as well as 
potential cost reduction initiatives.

Russian Ratification of the Chemical Weapons Convention

    The committee is extremely disappointed by the failure of 
the Russian Duma to ratify the Chemical Weapons Convention, 
prior to its entry into force on April 29, 1997. To date, the 
Congress has approved $145.5 million in the Cooperative Threat 
Reduction (CTR) program to assist the Russian government in 
destroying its chemical weapons stockpile. The committee would 
emphasize that it does not believe it is the responsibility of 
the United States to provide substantial financial assistance, 
or financial guarantees, to Russia to entice it to ratify the 
CWC. In short, the committee believes it is Russia's 
responsibility to finance the implementation of its arms 
control agreements.

                       SUBTITLE B--ARMY PROGRAMS


Section 111. Army helicopter modernization plan.
    The Committee recommends a provision that would limit the 
expenditure of more than 25 percent of funds authorized for 
modifications or upgrades to aircraft until such time as the 
Army provides an assessment of aviation requirements and 
reports on future modernization programs. The committee is very 
concerned about the lack of a definitive modernization plan for 
the utility helicopter fleet. While the Army has outstanding 
requirements for Blackhawk utility helicopters, it has failed 
to ensure that modernization requirements are funded in the 
future years defense program (FYDP) and continues to look for 
the Congress to address modernization shortfalls each year.
    The committee questions the Army's decision to cease 
procurement of Blackhawk helicopters without establishing a 
viable and funded plan to address an aging UH-1 Huey helicopter 
fleet. The committee notes proposals to buy an undetermined 
amount of additional Blackhawks, proposals to re-engine UH-1 
aircraft with Comanche engines, and proposals to conduct a 
service life extent program (SLEP) for UH-1 aircraft. While the 
committee remains supportive of Army rotary wing aircraft 
modernization, the committee is hesitant to support any 
specific investment strategy until an overall budget plan is 
provided.
    The recommended provision requires the Army to conduct an 
assessment of current and projected requirements, establish a 
baseline program for both new aircraft procurement and aircraft 
modification requirements, provide a plan for service extension 
programs, display aircraft retirement plans, and assess the 
implications of Army plans and funding for aircraft on the 
defense industrial base. Critical to this effort is the 
requirement for the Secretary of the Army to certify that the 
program highlighted in this report will be funded in the Future 
Years Defense Program (FYDP).
Section 112. Multiyear procurement authority for AH-64D Longbow Apache 
        fire control radar.
    The committee recommends a provision that would authorize 
the Army to enter into a multiyear procurement contract, 
beginning in fiscal year 1998, for procurement of the AH-64D 
Longbow Fire Control Radar. The committee understands that this 
action can be accomplished with existing funds for this program 
and that this multiyear authority will ultimately reduce 
program costs.

                          OTHER ARMY PROGRAMS

                             Army Aircraft

C-XX(UC-35)
    The budget request did not include funds for UC-35A 
aircraft (formerly known as the C-XX). The UC-35A is a fast, 
medium range air transport aircraft. The Army has a requirement 
for 35 UC-35A's, and has a total of seven either on order or 
delivered.
     Noting that there is an approved Mission Needs Statement 
and Operational Requirements Document to support the program, 
and that the Army has programmed for the procurement of the 
aircraft in the outyears, the committee recommends an increase 
of $23.0 million to procure an additional five UC-35A aircraft 
in fiscal year 1998.

UH-60 Blackhawk helicopters

    The budget request included $183.2 million to procure 18 
UH-60 Blackhawk helicopters. The committee notes that there is 
an existing multiyear contract for 18 aircraft per year with an 
option for an additional 18 aircraft at significantly lower 
cost. The committee strongly supports an additional 18 aircraft 
in fiscal year 1998 to support the industrial base until end-
state requirements can be identified after the Quadrennial 
Defense Review process is complete. If additional Blackhawk 
aircraft are required after the fiscal year 1998 buy, the 
pending Navy procurement along with supplemental Army 
participation could serve as a basis for increased procurement 
based on the currently authorized multi-year contract. In order 
to meet production rate requirements and span the gap between 
requirements and inventory, the committee recommends an 
additional $127.3 million to procure a total of 36 aircraft in 
fiscal year 1998. It is expected that procurement of these 
aircraft will result in a corresponding fielding of 36 UH-60 
aircraft from the Army to priority Army National Guard units.

CH-47 cargo helicopter

    The committee is concerned about the significant funding 
shortfalls in aircraft modernization accounts. Given a priority 
unfunded medium cargo helicopter requirement for the Army 
Reserve, the committee recommends an increase of $45.0 million 
to procure and support the fielding of two new CH-47 aircraft 
to the Army Reserve. The committee strongly encourages the Army 
to resource additional requirements in subsequent budget 
requests in accordance with its aircraft modernization plan.

UH-1 modifications

    The budget request included $4.7 million to resource new 
navigation and communication avionics for UH-1 helicopters. The 
committee continues to be very concerned about the current and 
projected state of the Army utility helicopter fleet and the 
lack of a definitive, funded modernization plan. The committee 
encourages the Army to develop a viable plan to meet future 
aviation modernization requirements for both active and reserve 
components and will closely review any funding requests for 
Army helicopters until this plan is provided. Therefore, the 
committee recommends a decrease of $2.0 million for UH-1 
modifications.

OH-58D Kiowa Warrior

    The budget request included $38.8 million for safety 
modifications to the existing Kiowa Warrior fleet. The 
committee recognizes the contribution that Kiowa Warriors 
provide as armed scouts for land forces. While the Army is in 
the process of developing a new armed scout helicopter, the 
Comanche, it is clear that Kiowa Warriors will be called on to 
perform the scout function for the Army well into the next 
century. The committee notes an outstanding requirement to 
apply safety modifications to these aircraft to ensure the 
continued safe operation of the fleet and enhance existing 
capabilities. Therefore, the committee recommends an additional 
$15.0 million to complete additional safety retrofit 
requirements.

Aircraft survivability equipment

    The budget request included $4.6 million to support 
fielding of self-protection equipment for Army aircraft. The 
committee strongly supports efforts to promote self-protection 
for aircraft and aircrews and believes that this area is not 
funded at an appropriate level. The committee recognizes 
continuing Army efforts to test and field the Suite of 
Integrated Radio Frequency Countermeasures (SIRFC) modular 
systems and Suite of Integrated Infrared Countermeasures 
(SIIRCM) designed to meet requirements for aircraft 
survivability systems. The committee also notes that there are 
significantly limited capabilities currently available in this 
area, and recommends an increase of $8.1 million to support 
SIRFC and SIIRCM testing and integration efforts.

Training devices

    The budget request did not include funding for aviation 
training devices. The committee is concerned about the non-
availability of a geographically focused flight simulator data 
base for flight training in the Korean theater of operations. 
The committee recalls the international incident created when a 
helicopter flight crew strayed over the international border 
into North Korea and was shot down by North Korean military 
forces. It is very possible that this incident could have been 
avoided had a Korean terrain data base been available to train 
flight crews. The committee understands that the Army has 
recognized the requirement for modifying existing flight 
simulators in Korea to a geographically specific data base and 
that this requirement has not been supported due to a severely 
constricted defense budget. Therefore, the committee recommends 
an increase of $18.6million to support the fielding of this 
updated database for Army aviation training in Korea and hopes this 
will serve to improve flight safety and combat readiness.

Common ground equipment

    The budget request included $30.6 million to procure ground 
and aviation support equipment. While the committee recognizes 
the need to modernize Army airfield support equipment, the 
significant increase in the airfield support equipment account 
cannot be supported in light of current year budget 
constraints. Therefore, the committee recommends a decrease of 
$3.0 million to bring funding in line with prior year spending 
levels.

                              Army Missile

Avenger modifications

    The budget request did not include funding for the Avenger 
slew-to-cue modification that enjoyed recent success during the 
Army's Advanced Warfighting Exercise (AWE) conducted at the 
National Training Center in April 1997. The slew-to-cue 
modification greatly enhances gunner effectiveness in acquiring 
and defeating air threats facing a ground force. The committee 
was pleased to note the success of this system during the AWE 
and encourages the Army to field these modifications to 
existing Avenger systems as soon as possible. The committee 
also notes the Army effort to develop effective and affordable 
training devices for the Avenger system, and understands that a 
new Table Top Trainer (TTT) has been developed and is available 
at very low cost. The committee recommends an increase of $2.0 
million to begin procurement of these training devices and 
suggests the principal focus for initial fielding of these 
training devices should be for reserve component units who must 
make the most efficient use of available training time. The 
committee recommends an additional increase of $13.0 million to 
begin the slew-to-cue modification effort and encourages the 
Army to resource outstanding requirements in future budget 
requests.

Hellfire missile

    The budget request included $279.7 million to procure 
Hellfire missiles. The committee understands that there are 
$10.7 million in unobligated funds from both 1996 and 1997. 
Therefore, the committee recommends a decrease of $10.7 million 
for this program.

Extended range Multiple Launch Rocket System rockets

    The budget request included $2.9 million for program 
support. No production has been funded for fiscal year 1998 and 
the Army is currently unable to exercise a fiscal year 1998 
option for additional missiles while remaining several thousand 
missiles short of established requirements. The committee 
recommends an increase of $12.0 million to support minimum 
production requirements for 1998 and notes the future year 
budget projections will maintain a baseline production effort.

Multiple Launch Rocket System launchers

    The budget request included $102.6 million to procure MLRS 
launchers necessary to meet Army requirements. The committee 
continues to support Army efforts to convert existing 
divisional MLRS structure to the new 2 x 9 configuration. This 
conversion resulted from lessons learned during the Gulf War 
and will enhance the organic fire support of division fire 
support units. The committee recommends an increase of $25.1 
million to accelerate the conversion process.

Army Tactical Missile System

    The budget request included $114.5 million to produce Army 
Tactical Missile System (ATACMS) missiles. The committee notes 
the recent decision by the Army to pursue annual procurements 
of the ATACMS missile in lieu of the multi-year contract 
authorized and funded in the National Defense Authorization Act 
for fiscal year 1997. The committee questions whether doubts 
expressed by the Department with respect to the ability of the 
ATACMS missile to destroy specific target sets will potentially 
lead to a future decrease in missile procurement. Given this 
uncertainty, the committee recommends a decrease of $5.0 
million from the fiscal year 1998 budget request, with the 
remaining funds to be used to resolve any outstanding issues 
associated with missile performance and procurement. The 
committee also directs the Army to certify missile performance 
for projected target sets and report the results to 
congressional defense committees no later than 1 December 1997.

Stinger modifications

    The budget request included $12.4 million to conduct 
materiel upgrades of the Stinger surface to air missile system. 
Noting an outstanding requirement to conduct Stinger Block 1 
upgrades to 549 missiles at an economic production rate, and 
recognizing the importance of these missiles, the committee 
recommends an increase of $9.3 million to support additional 
upgrades necessary to field Block 1 missiles to Force Package 2 
units.

                  Weapons and Tracked Combat Vehicles

Bradley base sustainment

    The budget request included $125.6 million to continue low 
rate initial production of the A3 configured Bradley Fighting 
Vehicle. The committee is concerned about the slip in fielding 
the first unit with these new vehicles and believes the 
original schedule should be maintained. These new vehicles 
provide a digital command and control capability, increased 
lethality and survivability, and improved sustainability. 
Therefore, the committee recommends an increase of $62.4 
million to maintain a smooth low-rate initial production rate 
prior to full scale production in fiscal year 1999.

Carrier modifications--M113A3

    The budget request included $20.2 million for upgrades to 
existing tracked carrier systems. The committee recognizes the 
important role that these systems play in ensuring troop safety 
on the battlefield and notes the significant outstanding 
requirements for M113 upgrades. Therefore, the committee 
recommends an increase of $20.0 million to maintain stable 
program funding.

M1 Abrams tank modifications

    The budget request included $29.8 million to apply 
modification kits to M1 Abrams tanks to improve lethality, 
survivability, and safety. The committee notes is an 
outstanding requirement for a safety interlock necessary to 
prevent tank drivers from being injured during turret movement. 
The committee believes this safety issue should be corrected 
and recommends an increase of $3.0 million to modify existing 
M1 tanks with an interlock safety device.

Small arms programs

    The committee remains concerned about the small arms 
industrial base and Department of Defense management of small 
arms industrial base issues. The committee believes it 
important to understand current and future requirements for 
small arms and industrial base implications in an era of 
declining resources. Therefore, the committee directs the 
Department of Defense to conduct an assessment of the small 
arms industrial base and to provide an update to the calendar 
year 1994 plan entitled, ``Preservation of Critical Elements of 
the Small Arms Industrial Base,'' which was prepared by the 
Army Science Board. This assessment should include 
consideration of the recommendation in the 1994 Army Science 
Board report on procurement of small arms, spares and repairs 
from the small arms industrial base and should assess minimum 
industrial base requirements necessary to support current and 
projected procurement of small arms in both peace and war. 
Further, the assessment should provide a list of options for 
consideration by the Congress necessary to preserve the small 
arms industrial base. The results of this assessment shall be 
provided to the Congress no later than March 1, 1998. The 
Department of Defense is prohibited from entering into any 
contract that exceeds a one year period of performance, 
including options, for the procurement of small arms, 
modifications to small arms, or spares and repairs for small 
arms until 90 days after the report is completed and forwarded 
to the Congress.
    The budget request did not include funding for either the 
MK-19 Grenade Launcher or the M240B Medium Machine Gun for 
fiscal year 1998, which could result in a break in production 
for these vital weapon systems, even though there are 
outstanding requirements for over 6,000 additional MK-19s and 
approximately 10,000 M240B Machine Guns. The committee believes 
that minimum production levels must be maintained and 
recommends an increase of $13.0 million to span the MK-19 
production funding gap and an additional $15.0 million for 
M240B production. The committee directs the Army to ensure that 
future year budgets sustain minimum production requirements 
until such time as outstanding requirements have been 
satisfied.

                            Army Ammunition

Army ammunition

    The committee is concerned with the inadequate funding for 
ammunition procurement that was contained in the President's 
budget request. Ammunition is an important contributor to 
military readiness for training and in anticipation of 
conflict. The committee recommends the following adjustments to 
the budget request for Army ammunition procurement:
Small Arms:                                                     Millions
    5.56 mm...................................................      $2.5
    7.62 mm...................................................       0.5
    50 cal....................................................       0.1
Mortar:
    120 mm HE, M734...........................................      20.0
Tank:
    120 mm TP-T M831/M831A1...................................       9.8
    120 mm TPCSDS-T M865......................................      12.7
Rockets:
    Hydra-70..................................................      36.2
Fuze:
    Fuze ARTY M767............................................      20.0
Other:
    Selectable Lightweight Attack Munitions...................      10.0
    Simulator Antitank M27....................................       0.5
Production Base:
    Armament Retooling & Manufacturing Support................      40.0
                    --------------------------------------------------------------
                    ____________________________________________________

  Subtotal....................................................     152.3

Armament Retooling and Manufacturing Support

    The committee is aware that although the budget request 
includes $5.0 million for the continuation of the Armament 
Retooling and Manufacturing Support (ARMS) program, a total of 
$45.0 million is necessary for the program to remain viable in 
fiscal year 1998. Therefore, the committee recommends an 
increase of $40.0 million for this program. The committee 
expects these funds to be utilized in the most effective manner 
to ensure preservation of those facilities most likely to be 
required to fulfill the military's needs to support the 
national military strategy. The committee expects the Army to 
provide adequate funding for this program in the future.

                         Other Army Procurement

High Mobility Multi-Purpose Wheeled Vehicle

    The budget request included $66.2 million to procure 774 
High Mobility Multi-Purpose Vehicles (HMMWVs). The committee is 
very concerned about the budget request funding level, which is 
$96.5 million less than fiscal year 1997 and clearly 
insufficient to maintain minimum production rates. Realizing 
the large number of HMMWVs in the force, over 92,000 vehicles, 
and an outstanding requirement of over 18,000 additional 
vehicles, the committee does not understand the Army's apparent 
acceptance of a break in production in fiscal year 1998. 
Additionally, the committee understands the Army is developing 
the next generation vehicle which will go into production in 
fiscal year 2000. Clearly, an inactive production capability in 
fiscal years 1998 and 1999 will not be able to meet outstanding 
short-term HMMWV requirements and will increase the funding 
level necessary to begin production of the new vehicle as 
start-up costs will be significant. The Army has recognized 
this issue and acknowledged an unfunded requirement for this 
program. Therefore, the committee recommends an increase of 
$75.0 million for the Army, along with a corresponding increase 
for the Marine Corps, to bridge the gap until the next 
generation system enters production. The committee strongly 
recommends the Army review fiscal year 1999 priorities and 
ensure that this vital production capability is adequately 
funded in future years. Additionally, the committee directs the 
Army to ensure that minimum production requirements for up-
armored HMMWV's are maintained.

Family of Medium Tactical Vehicles

    The budget request included $209.4 million to procure 1506 
Family of Medium Tactical Vehicles (FMTV) trucks. The committee 
notes that the funding level requested for fiscal year 1998 
will not sustain minimum production rates, resulting in a 
production break for this vital truck modernization effort. 
Therefore, the committee recommends an increase of $44.0 
million to support this critical underfunded Army requirement.

Family of Heavy Tactical Vehicles

    The committee, noting a request for additional funding to 
span a break in production for the heavy truck fleet, is very 
concerned about the apparent inability of the Army to maintain 
sufficient funding required to field critical wheeled vehicle 
programs and maintain a viable production base. The committee 
is concerned about Army budget decisions in this arena and 
questions the ability of the Army to pay for restart costs that 
would be necessary as a result of inadequate funding in the 
budget request. The committee recommends the following 
increases necessary to support outstanding requirements and 
maintain a viable industrial base: $50.0 million to procure 150 
Palletized Load System (PLS) trucks and 50 trailers, which will 
support the fielding of two additional transportation 
companies; $45.0 million to procure 96 Heavy Equipment 
Transporter Systems (HETS): to avoid a break in production, and 
to support fielding of an additional HETS transportation 
company; and $33.0 million for 103 Heavy Expanded Mobility 
Tactical Truck (HEMTT) wreckers required for fielding 
shortages.

Army data distribution systems

    The budget request included $37.3 million to procure 
additional enhanced position location reporting systems 
(EPLRS). EPLRS serves as the digital backbone for the Army and 
is critical to ongoing digitization efforts. The committee 
supports the fielding of these critical systems and recommends 
an increase of $37.3 million to meet Force Package 1 
requirements.

Echelon Above Corps Communications-Warfighter Information Network

    The budget request included $82.4 million to support 
ongoing modifications to the Area Common User System (ACUS) and 
support its migration to the Army's Warfighter Information 
Network (WIN) systems architecture. The committee has 
consistently supported this effort, which greatly enhances the 
range and linkage between warfighters in the tactical arena. 
Therefore, the committee recommends an increase of $33.0 
million for this critical activity.

Information system security program

    The budget request included $10.2 million to procure 
information security systems for the Army. The committee is 
concerned that the budget submission does not fund Airterm KY-
100 devices and that this will result in a break in production. 
The committee recognizes that some Force Package 1 requirements 
have not yet been filled and that secure communications are 
criticalto any warfight effort. The committee recommends an 
increase of $5.5 million to procure 400 Airterm (KY-100) devices.

Sentinel

    The budget request included $41.0 million to continue 
procurement of the AN/MPQ-64 Sentinel radar. These new air 
defense radars provide a ground sensor for deployed forces to 
ensure force protection. The committee notes an outstanding 
requirement for additional radars critical to preclude a 
fielding gap between these sensors and new communications 
equipment, and therefore recommends an increase of $20.2 
million to procure additional radars necessary to meet future 
fielding requirements.

Night vision devices

    The budget request included $85.3 million for night vision 
equipment vital to enhance combat effectiveness and save lives 
on the battlefield. The committee is encouraged by the Army 
effort to develop and field effective night vision equipment 
but remains concerned that sufficient quantities have not yet 
been obtained to meet warfighting and contingency requirements. 
The committee notes that there are outstanding requirements for 
this equipment and recommends the following increases:
          (1) $8.0 million to procure Infrared Aiming Lights 
        AN/PEQ-2;
          (2) $17.0 million to procure AN/PVS-7D systems;
          (3) $10.0 million to procure AN/PAS-13 Thermal Weapon 
        Sights;
          (4) $1.0 million to procure 2,900 borelights.

Standard Army management information system tactical computer platform

    The budget request included $36.1 million to continue 
efforts to automate various support functions for the Army. The 
committee has long supported work in this area and recognizes 
the efficiencies and savings that can be achieved through 
state-of-the-art automation support. Continued investment in 
this arena will serve to support warfighting capabilities and 
will save precious resources in peacetime. The committee 
understands that additional commercial equipment is available 
that is compatible with current generation software required 
for combat service support functions. Therefore, the committee 
recommends an increase of $33.0 million to support this 
critical underfunded Army requirement.

Reserve component automation system

    The budget request included $114.3 million to fund the 
Reserve Component Automation System (RCAS) that will support 
administration and management of Army National Guard and Army 
Reserve forces. While the committee recognizes the importance 
of this program to the reserve components, fiscal constraints 
for 1998 call for steady program funding. Significant 
increases, such as the $42.0 million budgeted for RCAS this 
fiscal year, cannot be supported. Therefore, the committee 
recommends a decrease of $30.0 million for RCAS which still 
provides a funding increase for this program.

Dump truck

    The budget request did not include funding for dump trucks. 
The committee has long supported the acquisition of some of the 
less glamorous items that enhance the ability of combat support 
units to perform critical functions both on and away from the 
battlefield. Noting the request from the Army for additional 
funding necessary to replace aging engineer equipment in both 
active and reserve components, the committee recommends an 
increase of $39.0 million to accelerate procurement of 200 
heavy dump trucks and to meet severe shortages throughout the 
fleet.

Generators and associated equipment

    The budget request included $7.7 million to procure 
generators to meet tactical electrical power requirements for 
the Army. The committee recognizes that requirements for new 
generators are significant and that current technology 
equipment provides greater operations and maintenance savings 
and enhances readiness. Clearly, new digitization initiatives 
require constant and reliable electrical power and the proper 
equipment is crucial to ensure the success of that effort. The 
committee recommends an increase of $31.0 million to fund 
economic order quantities and procure new generators necessary 
in Korea and Europe.

Simulation Network/Close Combat Tactical Trainer

    The budget request included $92.7 million to procure 
additional training modules for fixed site and mobile 
platforms. The committee notes an Army request to change a 
portion of fiscal year 1998 procurement funding to a research, 
development, and acquisition line to resolve outstanding issues 
associated with system reliability. These difficulties were 
outlined in a February 1997 Operational Test Readiness Review 
(OTRR) that identified 50 system stability items as unresolved. 
The committee understands the importance of this training 
system, but is concerned about the existence of these issues 
after investing $370.7 million in the program. The committee 
supports the transfer of $11.5 million from Other Procurement-
Army to PE 64780A (Combined Arms Trainer) to resolve 
reliability issues. The committee also recommends an additional 
decrement of $10.0 million from procurement and directs the 
Army to ensure that software reliability problems are resolved 
before proceeding withlarge expenditures for procurement of 
additional modules.

Special equipment for user testing

    The budget request included $14.9 million to support 
equipment necessary for user testing. The committee recognizes 
the importance of testing as the Army accelerates the 
development of new equipment to support the Force XXI 
initiative. In recognition of the importance of this function, 
the Army has requested additional funding necessary to ensure 
the requisite equipment is available through a combined 
procurement in fiscal year 1998 instead of a five-year 
procurement strategy. The committee recommends an increase of 
$33.2 million to support this important effort.
                       SUBTITLE C--NAVY PROGRAMS


Section 121. New attack submarine program.
    In the National Defense Authorization Act for Fiscal Year 
1996, Congress mandated competition for the future procurement 
of nuclear attack submarines, overruling a Department of 
Defense recommendation that would have assigned all future 
submarine construction to Electric Boat Corporation (one of the 
two contractors then capable of building nuclear submarines). 
Additionally, Congress established the framework for an 
advanced submarine technology program that would ensure Navy 
submarines remain technologically superior to any potential 
threat and directed the Secretary of Defense to develop a 
comprehensive plan for insertion of new technology into future 
nuclear attack submarines.
    The National Defense Authorization Act for Fiscal Year 1997 
reaffirmed congressional direction for competition in the 
procurement of future nuclear attack submarines. Confronted 
with a budget request that did not reflect its intent with 
respect to competition, Congress added additional funding for 
advance procurement and construction of nuclear attack 
submarines that would be authorized for construction at 
Electric Boat Corporation in fiscal year 1998 and at Newport 
News Shipbuilding and Dry Dock Company in fiscal year 1999. 
Congress also drew upon reports submitted by the Department of 
Defense and an independent technology review panel to 
substantially increase funding for advanced submarine 
technology.
    During the intervening period before submission of the 
budget request, informal discussions between the Navy and the 
committee made clear that the Navy was having great difficulty 
in developing its fiscal year 1998 budget proposal. Unfulfilled 
expectations about ship construction resources that would be 
available were disrupting the Navy's ability to carry out 
congressional direction for construction of nuclear attack 
submarines and still provide sufficient funds for other, high 
priority ships.
    Against this backdrop senior leaders of the Defense 
Department and the Navy called on members of the committee in 
February 1997 to describe an agreement between the two 
shipbuilders and the Navy on a new production teaming 
arrangement that would link Electric Boat and Newport News 
cooperatively rather than through competition. They reported 
that cost savings from the teaming arrangement would permit the 
Navy to present a balanced shipbuilding plan in the budget 
request with all ships fully funded. The Under Secretary of 
Defense for Acquisition and Technology also advised the 
committee that the Department of Defense (DOD) now considers it 
vital to national security to maintain two shipyards that are 
capable of building nuclear submarines.
    As structured, the production teaming arrangement and the 
Navy's proposed funding of it during the period from fiscal 
year 1998 to fiscal year 2002 would:
          (1) establish the framework for a contractual 
        relationship between the Navy, Electric Boat, and 
        Newport News for cooperative submarine construction;
          (2) eliminate the need for design transfer by 
        creating a single design database that will be used by 
        both shipyards;
          (3) provide for a production process in which 
        learning is enhanced by each shipyard repetitively 
        producing the same modules, such as bow, stern, command 
        and control, and propulsion machinery;
          (4) alternate assembly and outfitting of submarines 
        between the two yards;
          (5) construct four submarines over the five year 
        period on a schedule that will permit efficient level 
        loading of workload in each shipyard; and
          (6) reinforce a competition for ideas that will 
        encourage both shipyards to propose new technologies 
        for insertion into future nuclear submarine designs.
    The Navy projects that cost savings from the teaming 
arrangement relative to the present production plan for the 
first four submarines will be substantial. The Navy's 
procurement plan, comparing the costs of annual procurement of 
four submarines with those of the teaming arrangement, projects 
the following cost savings:

------------------------------------------------------------------------
                                                               Estimated
                    Item and Opportunity                        savings 
                                                              (millions)
------------------------------------------------------------------------
Learning Curve and Change Order Improvement--Construction of            
 modules by a single builder and avoidance of production                
 gaps.......................................................       $385 
Material Procurement--Block buy of ships allows more cost               
 effective purchase.........................................         40 
Reduced Profit--Teaming produces lower overall fees.........         45 
Design Transfer Cost Avoidance--Single design database                  
 available to both shipyards................................         15 
Stable Employment Levels at Hull Cylinder Facility--                    
 Continuous manufacture vice fluctuating employment profile.         75 
Facilities--Reduces duplication of most facilities and sets             
 of special equipment; minimizes non-recurring cost.........        300 
Overhead Rate--Reduced labor increases rate.................       (220)
                                                             -----------
      Net Estimated Savings.................................        640 
------------------------------------------------------------------------

    In summary, the budget request and associated draft 
legislative provisions submitted by the DOD proposed a teaming 
arrangement between Electric Boat Corporation and Newport News 
Shipbuilding and Dry Dock Company for construction of the next 
four nuclear attack submarines and a congressional commitment 
sufficient to begin execution of this plan. Such a commitment 
would be necessary to achieve the cost savings from economic 
order quantities of material and would markedly enhance 
workload and workforce planning and stability.
    While the committee has strongly supported competition for 
future procurement of nuclear attack submarines, it finds that 
the Navy and the shipbuilders have made a persuasive case for a 
production teaming arrangement for the first four submarines. 
Consequently, the committee recommends authorization of $2.3 
billion, the budget request, for the construction of a nuclear 
attack submarine and $284.8 million, also the budget request, 
for advance procurement of components for future nuclear attack 
submarines. The committee also recommends a provision that 
would authorize the Secretary of the Navy to enter into a 
contract or contracts for the construction of four nuclear 
attack submarines under the terms of the teaming arrangement 
that have been negotiated between Electric Boat and Newport 
News Shipbuilding. In order to ensure that maximum cost savings 
can be achieved for the fiscal year 1998 submarine, the 
committee directs the Secretary of the Navy to take the 
necessary actions to be prepared to enter into contracts under 
this provision as soon as it is enacted.

Sec. 122. Nuclear aircraft carrier program.

    During a hearing on Navy shipbuilding programs this year, 
the committee reviewed the current status of the Navy's 
aircraft carrier program. The post-Cold War carrier force 
structure includes 12 aircraft carriers, 11 in the active force 
and one in the reserves. Of these 12 aircraft carriers, three 
are conventionally-powered and nine are nuclear-powered. In 
fiscal year 1998 the average age of the conventional carriers 
of the active force will be 37 years, and the average age of 
the nuclear carriers will be 14 years. To maintain this force 
structure, the Navy must begin construction of its next 
carrier, CVN-77, by fiscal year 2002 in order to complete it by 
fiscal year 2008. Completion in this year is necessary to 
replace the last conventional carrier, USS Kitty Hawk (CV-73), 
that will still be in service in the active force. Kitty Hawk 
will be 47 years old at that time. Based on experience with the 
USS Midway (CV-41), which was also 47 years of age when 
decommissioned in 1992, maintaining aircraft carriers in an 
operational status to such an age is achievable, but at greatly 
increasing expense in the latter years.
    Driven by a strong operational requirement to sustain 
carrier force structure and a need to complete construction of 
CVN-77 in time for it to replace Kitty Hawk, senior leadership 
in the Navy and the Office of the Secretary of Defense mounted 
an intensive effort during preparation of the budget request 
and its associated Future Years Defense Program (FYDP) to 
identify sufficient resources for the task. The effort was 
successful, but it demanded that some very difficult choices be 
made. Funding was reduced for a number of other programs, some 
very important in their own right but of lesser priority. As 
presently structured, the FYDP submitted with the budget 
request would fund CVN-77 in the traditional manner by means of 
advance procurement funding of $695.0 million in fiscal year 
2000, with the remaining balance of $4.5 billion included in 
fiscal year 2002.
    Hearing testimony has made it clear that the planned 
construction schedule for CVN-77 has been primarily driven by 
resource constraints and has not been determined by cost or 
operational effectiveness considerations. The last nuclear 
aircraft carrier, CVN-76, was authorized in fiscal year 1995. 
The seven year gap between CVN-76 and CVN-77 exceeds any 
construction interval between individual carriers in the past 
thirty years. The longest previous gap was six years between 
USS Carl Vinson (CVN-70), a fiscal year 1974 ship, and USS 
Theodore Roosevelt (CVN-71), a fiscal year 1980 ship. Data 
points of note when considering the planned seven year gap 
between CVN-76 and CVN-77 are the facts that: (1) Theodore 
Roosevelt required more man-hours to complete, because of 
turnover and skill deterioration of the workforce; and (2) 
produced higher vendor costs than any other carrier of the 
class built to date.
    To explore the force structure, cost, and industrial base 
implications of the current plan, the Navy commissioned the 
RAND Corporation of Santa Monica, California, to perform an 
independent, quantitative analysis of the aircraft carrier 
industrial base with a focus on CVN-77. The study involved 
consultations with the Director of Naval Nuclear Propulsion and 
a detailed analysis of conditions at Newport News Shipbuilding 
and Drydock Company (NNS), the only shipyard now capable of 
building nuclear aircraft carriers. The results of this study 
were presented as testimony by a senior RAND analyst at the 
committee's fiscal year 1998 shipbuilding hearing. Principal 
findings were as follows:
          (1) without CVN-77, shipyard capabilities will be 
        reduced in scale, but remain viable;
          (2) current plans for construction of CVN-77 and the 
        following carrier, CVX, will maintain aircraft carrier 
        force structure at 12 if the USS Enterprise (CVN-65) 
        remains in service until age 52 when her nuclear fuel 
        will be exhausted;
          (3) a carrier has never been retained in active 
        service for 52 years, but the Navy is confident that it 
        can do so with Enterprise;
          (4) delaying CVN-77 would increase its cost by more 
        than $300 million in fiscal year 1998 constant dollars 
        if the delay were one year, rising to $400 million for 
        a three year delay;
          (5) delaying CVN-77 by one year would dictate the 
        start of two carriers, CVN-77 and CVX, within three 
        years of each other because of the need to complete CVX 
        before Enterprise's nuclear fuel is exhausted; and
          (6) starting advance procurement and construction of 
        components for CVN-77 in fiscal year 1998 without 
        altering the fiscal year 2008 delivery date can reduce 
        construction costs by about $390 million in fiscal year 
        1998 constant dollars and reduce vendor costs by about 
        $80 million, a potential total savings approaching $470 
        million in constant dollars from which inflation has 
        been excluded.
    In parallel with the RAND effort, the Navy conducted its 
own independent review of the potential cost benefits of 
accelerating the start date of CVN-77 while holding its 
delivery date constant. The Navy also evaluated a proposal for 
a ``smart buy'' funding profile that was submitted to the Navy 
by NNS. The NNS proposal asserts that approximately $450 
million in labor and material costs and $150 million in 
inflation costs could be saved by initiating advance 
procurement and construction for CVN-77 in fiscal year 1998. 
The NNS proposal identifies several reasons, also identified by 
the RAND study, that costs will be greater if the FYDP 
construction schedule prevails:
          (1) loss of learning;
          (2) layoff, rehiring, and retraining costs;
          (3) laying up and subsequent non-recurring cost of 
        reconstituting vendor production lines; and
          (4) loss of opportunity to achieve economic order 
        quantities for CVN-77 components by combining them with 
        procurement of materials for CVN-76.
    As an alternative to the current FYDP, the ``smart buy'' 
proposal would employ a tailored approach to procure major 
material items in conjunction with purchases for CVN-76 or in a 
manner that would allow principal suppliers to level load their 
production lines and avoid costly shutdowns. Similarly, an 
earlier start on construction of selected structural components 
would eliminate the need for costly layoffs and loss of 
learning at NNS.
    Correspondence from the Chief of Naval Operations to the 
committee summarizes the results of the Navy's independent 
review of potential savings that could be realized in 
construction of CVN-77. That correspondence states that the 
Navy's cost analysis of the underlying assumptions and methods 
used by NNS in developing its ``smart buy'' proposal shows that 
implementing the plan could produce savings of as much as $400 
million in constant dollars.
    As a separate but related matter, the committee evaluated a 
new initiative in the budget request to develop and insert new 
technologies into future carrier designs. During testimony 
insupport of the fiscal year 1997 budget request, a Navy witness 
deplored the limited amount, $6.0 million, being invested in research 
and development of carriers that would serve into the second half of 
the next century and characterized it as indicative of a persistent 
lack of intelligent investment by the Navy that has existed for over 
thirty years. The fiscal year 1998 budget request addresses this issue 
directly. It includes $125.1 million to develop new technologies for 
CVX and an additional $18.0 million designated for CVN-77 to realize 
CVN-77 as a transition carrier. The emphasis of this effort would be to 
evaluate new technologies that could reduce CVN-77's life-cycle cost, 
identify technology that could cost-effectively backfit into other 
carriers of the Nimitz class, and mature technology that could also be 
included in the design for CVX.
    The Chief of Naval Operations has emphasized the importance 
of using CVN-77 as a transition in correspondence to the 
committee. Technologies that have been identified for 
evaluation on CVN-77 include improved launch and recovery 
equipment, weapons handling upgrades, information system 
management upgrades, reduced manning initiatives, and combat 
systems technologies aimed directly at the CVX design.
    In evaluating the merits of accelerating the start of 
construction of CVN-77, it was necessary for the committee to 
determine whether an early start would have an unfavorable 
impact on CVN-77 as a transition carrier. In response to 
specific committee inquiries on this matter, the Navy 
thoroughly reviewed the advance procurement and construction 
proposed for CVN-77 against the timelines of its technology 
insertion program for the carrier, determined that there will 
be no conflict, and advised the committee to that effect.
    Based on its review of the Navy's aircraft carrier program, 
both in the short and long term, the committee recommends a 
provision that would authorize:
          (1) an increase of $345.0 million above the budget 
        request for the procurement and construction of nuclear 
        and non-nuclear components for the CVN-77 program;
          (2) the Secretary of the Navy to enter into a 
        contract or contracts with the shipbuilder for the 
        procurement and construction of such components; and
          (3) $35.0 million, an increase of $17.0 million, in 
        PE 63512N for research, development, test, and 
        evaluation of technologies that are candidates for 
        inclusion in CVN-77.
    The committee directs the Navy to develop its future 
budgets for CVN-77 in a manner that phases funding for its 
construction and produces the savings predicted by the 
contractor's ``smart buy'' proposal, RAND's analysis, and the 
Navy's own internal analysis. The committee expects the Navy to 
take the following table as a statement of the committee's 
intent:

                                              CVN-77 ANNUAL FUNDING                                             
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year--                               
                                               -------------------------------------------------------   Total  
                                                   1998       1999       2000       2001       2002             
----------------------------------------------------------------------------------------------------------------
FYDP..........................................          0          0        695          0      4,505      5,200
Committee.....................................        345        170        875        135      3,074      4,600
                                               -----------------------------------------------------------------
      Difference..............................       +345       +170       +180       +135     -1,430       -600
----------------------------------------------------------------------------------------------------------------

Section 123. Exception to cost limitation for Seawolf submarine 
        program.

    In the National Defense Authorization Act for Fiscal Year 
1996, Congress established a cost cap on procurement of the 
three Seawolf class submarines (SSN-21, SSN-22, and SSN-23) 
that Congress has authorized. The cost cap was put in place to 
impose discipline on a program that had experienced large 
amounts of cost growth and had yet to implement the financial 
and management controls needed to arrest them. The cost cap was 
discussed thoroughly with the Navy before its adoption, and its 
final dollar amount was based on cost estimates and projections 
provided to Congress by the Navy.
    This year the Navy has called the committee's attention to 
a concern that emerged as a result of the independent 
monitoring and review established by the Navy to verify that it 
is remaining within the cap. The issue derives from the fact 
that the Seawolf program went through an abrupt cancellation 
when the President submitted the budget request for fiscal year 
1993. Although six Seawolf submarines had been authorized and 
money had been spent on all six, the President chose to 
continue construction only on the lead ship of the class, SSN-
21.
    In subsequent years, Congress partially restored the 
program, eventually authorizing three Seawolf submarines. The 
last of the three, SSN-23, was authorized in fiscal year 1996, 
the same year in which Congress imposed the current cost cap. 
When the Navy assisted in developing the cost cap amount, it 
did not propose inclusion of the sunk costs that had been 
incurred on canceled submarines. However, unresolved questions 
have emerged as to whether some portion of these costs, such as 
those for detail design or for components that may eventually 
be used in the three Seawolf submarines, should be included in 
the cost cap. These are not hidden costs that have suddenly 
appeared. The Navy has routinely reported them as part of total 
program cost. Rather, the issue is their categorization.
    The committee became aware of this accounting issue for the 
first time in May 1996, at a point when the committee had 
almost completed its final review of the fiscal year 1997 
budget request. The committee chose to deal with the matter by 
acknowledging in the committee report on S. 1745 (S. Rept. 104-
267) that certain costs had not been included in the cost cap 
amount. This report language reflected the committee's 
judgementthat the cost cap had been put in place to safeguard 
against future cost growth, not as an accounting tool to document sunk 
cost.
    During its review of the fiscal year 1998 budget request, 
the committee has analyzed the wording of the cost cap and 
discussed the legal issues involved with the Navy. The 
committee has concluded that an amendment of the cost cap 
provision to clarify congressional intent with respect to sunk 
costs associated with now canceled submarines would be 
appropriate. The committee believes that the cost cap should be 
stringent and require constant vigilance, but should not be an 
impossible goal to achieve. Consequently, the committee 
recommends a provision that would reaffirm the existing cost 
cap but make clear that certain costs associated with now 
canceled Seawolf submarines should not be taken into account.

Section 124. Airborne self-protection jammer program.

    The statement of managers language accompanying the 
National Defense Authorization Act for Fiscal Year 1997 (H. 
Rept. 104-724) noted that the fiscal year 1997 authorization 
for the procurement of 36 airborne self protection jammer 
(ASPJ) systems was intended to provide a contingency response 
capability, and did not reflect the conferees'' commitment to 
additional procurement of ASPJ systems or to restarting series 
production for U.S. government customers at that time. 
Accordingly, the committee recommends a provision to end ASPJ 
procurement.
    The committee recognizes the contribution that the ASPJ has 
made to the continuing mission in Bosnia. However, the 
committee does not support restarting serial production of the 
ASPJ due to its past testing failures and the nature of its 
rapidly aging technology. The committee instead encourages the 
Department to continue its efforts in the development of the 
integrated defensive electronics countermeasure (IDECM) system 
for the F/A-18E/F, and a spinoff capability for the F/A-18C/D 
to capitalize on emerging technology and commonality.

                          OTHER NAVY PROGRAMS

                             Navy Aircraft

AV-8B Harrier remanufacture

    The budget request included $300.1 million to procure 11 
AV-8B remanufactured aircraft for the Marine Corps. The fiscal 
year 1997 plan for AV-8B remanufacture called for a procurement 
of 12 aircraft in fiscal year 1998. However, the budget request 
for fiscal year 1998 only included 11 aircraft, a further 
indication of the Department of Defense's inability to execute 
its own previously stated procurement program.
    In order to provide for the Department's own plan from last 
year, the committee is persuaded to recommend an increase in 
the budget request for AV-8B Harrier remanufacture of $24.6 
million in order to restore the procurement quantity to 12 
aircraft.

Aircrew trainer/simulators

    The committee continues to support the use of simulators to 
enhance training necessary for aircrew proficiency. The 
committee received a request for additional funding to buy a 
mobile aircrew procedures trainer (APT) and to upgrade an 
operational flight trainer (OFT), AV-8B weapons system trainer 
(WST) and a maintenance trainer at Cherry Point. These 
simulators are key elements of the Marine Corps aviation 
campaign plan. Therefore, the committee recommends an increase 
of $65.0 million to procure and upgrade these essential 
training devices.

V-22 Osprey

    The budget request for the V-22 was $597.1 million for 5 
MV-22 aircraft.
    In fiscal year 1997 the committee encouraged the Department 
of Defense to accelerate the procurement of the MV-22 to reap 
the savings available from a more efficient rate of production. 
Unfortunately, the budget request for fiscal year 1998 did not 
follow the committee's encouragement, but followed its previous 
course of inefficient production and had to reprogram 
additional funds authorized and appropriated for advanced 
procurement into development to provide for a sufficient 
management reserve to continue the program on schedule more 
efficiently.
    Noting the constrained circumstances in the near and far 
term, the committee is still persuaded that an addition to the 
procurement of MV-22s will result in efficiencies and increased 
capabilities for deployed Marines. Accordingly, the committee 
recommends an increase of $90.0 million to the budget request 
to procure an additional MV-22 in fiscal year 1998.

EC Hawkeye early warning aircraft

    The budget request included $257.0 million for the 
procurement of three Ec aircraft. The Ec is a carrier-based 
aircraft designed for early warning, interceptor and strike 
control, as well as other missions. The Navy resumed production 
of the Ec in 1995, with the intent of purchasing four aircraft 
per year for a total of 36 aircraft. However, the fiscal year 
1998 budget request only included three aircraft, with the 
rationale that there were not enough funds for the planned buy. 
The effect of this cut in the administration's own plan is an 
increase in the unit cost of the aircraft, so that restoring 
the fourth aircraft provides a $4.4 million per aircraft 
savings.
    Realizing that the Ec is a proven aircraft in its second 
production run, and not a developmental program, the committee 
recommends an increase of $68.0 million to acquire a total 
offour Ec aircraft for fiscal year 1998.

T-45 trainers

    The budget request included $269.7 million for 12 T-45 
trainer aircraft for the Navy. The committee notes with concern 
the recent grounding of the T-2 trainers because of flight 
control malfunctions. The T-2s are being replaced by the T-45. 
The committee has been informed that acceleration of fielding 
the T-45 will reap significant savings by avoiding up to $93.3 
million in shut down costs.
    Accordingly, the committee recommends an increase of $102.0 
million to procure six additional T-45 trainer aircraft to 
achieve operational and support cost savings.

EA-6B support jamming upgrade

    The budget request included $86.8 million for modifications 
to the EA-6B Prowler airborne electronic warfare aircraft. 
Subsequent to the budget request the committee learned of an 
emergent requirement to counter recently detected special radar 
techniques. Evidence indicates that a new family of threats has 
the potential to operate effectively in the presence of EA-6B 
or EF-111A jamming. However, there is now an opportunity to 
incorporate a low risk, affordable upgrade to the EA-6B in 
conjunction along with modifications already underway to 
counter the new family of threats.
    Accordingly, the committee recommends a increase of $25.0 
million to the budget request for EA-6B modifications, with 
$13.0 million to be used for nonrecurring costs including 
integration and test prototypes, and $12.0 million to produce 
the modified Band 9/10 transmitters to provide an initial 
capability for one carrier air wing.

Helicopter crash attenuating seats

    Section 136 of the National Defense Authorization Act for 
Fiscal Year 1996 directed the initiation of a program to 
provide crash attenuating troop seats for CH-53E helicopters, 
using commercially developed, energy absorbent seats. The 
committee recommended an increase of $14.0 million in fiscal 
year 1997 to continue the program and recommends an increase of 
$10.0 million to provide for the integration of crash 
attenuating troop seats into the CH-53E aircraft and for the 
procurement and retrofit of seats in 81 of the 165 helicopters 
now in the inventory.

P-3C anti-surface warfare improvement program

    The budget request contained $74.7 million for the 
procurement of four P-3C anti-surface warfare improvement 
program (AIP) kits and for associated installation, logistics 
support, engineering change proposals and training.
    In order to meet requirements set by the unified commanders 
in chief (CINCs) to provide 40 forward-deployed P-3C maritime 
patrol aircraft, the Navy has adopted a plan that demands a 
significant and continuous contribution from its reserve 
squadrons and also pursued a plan to modify its fleet of P-3C 
aircraft to a configuration that better meets the operational 
mission the aircraft are expected to perform. While the primary 
mission of the aircraft during the Cold War was anti-submarine 
warfare, its role as a surveillance asset is now emphasized. 
The P-3C anti-surface warfare improvement program (AIP), begun 
in fiscal year 1994, is designed to provide a commercial off-
the-shelf (COTS)/non-developmental item (NDI) upgrade to the 
Navy's existing fleet of P-3C aircraft to improve its 
capability to conduct anti-surface warfare (ASUW), over the 
horizon (OTH) targeting, and command and control interface with 
other command centers and fleet units. The P-3C AIP gives the 
aircraft a much better capability to execute littoral warfare 
missions at a reasonable price.
    Unfortunately, while the CINCs continue to strongly support 
the P-3C AIP program, the fierce competition for declining 
defense resources has produced persistent underfunding of this 
modernization program by the Navy. An operational requirement 
calls for the procurement of 68 kits between fiscal years 1996 
and 2001 at an economical procurement rate of 12 kits per year. 
However, the Navy budgeted resources for only one kit in fiscal 
year 1997. Exacerbating the impact of this underfunding is the 
price schedule of the modernization contract, which was 
optimized for a procurement rate of 12 aircraft per year at the 
expense of greatly increased unit cost for quantities less than 
12.
    In the committee report that accompanied S. 1745 (S. Rept. 
104-267), the committee expressed strong reservations about the 
Navy's increasing reliance on Congress to support a program 
with well-documented requirements. The committee also expressed 
concern about the concurrent Navy plan, also reflected in the 
fiscal year 1997 budget request, to further reduce its maritime 
patrol force structure from 13 active and 9 reserve (13/9) 
squadrons to 12 active and 8 (12/8) reserve. Based on its 
evaluation of the maritime patrol requirements being imposed by 
the CINCs and their desire for only the most capable aircraft 
to satisfy them, the committee recommended increases in funding 
to: (1) sustain the P-3C AIP program at a cost effective rate 
of 12 aircraft per year with a reduction in unit cost of more 
than 70 percent; and (2) maintain the Navy's maritime patrol 
force structure at 13/9. The committee also directed the 
Secretary of the Navy to submit a report to Congress on how he 
proposed to satisfy CINC requirements if the fiscal year 1998 
budget request funded less than 12 kits. In fact, the budget 
request continues the underfunding pattern of the recent past. 
It requests four kits vice 12 at a cost penalty of a 25 percent 
increase in unit cost. The Secretary of the Navy's report that 
accompanied the budget request acknowledges the difficulty the 
Navy is having in executing its original plan for modifying P-
3Cs to the AIPconfiguration and lays out a plan that will 
require an unprecedented commitment on the part of its reserve maritime 
patrol force structure to support the CINCs' forward deployed 
requirements.
    After reviewing the Navy's plan, the committee is skeptical 
about the Navy's ability to successfully execute it over the 
long-term. The plan requires a full commitment by two reserve 
squadrons to maintain one aircraft forward deployed on a 
continuous basis, has the potential for a relatively small 
cadre of modernized aircraft to rapidly accumulate flight hours 
far in excess of projections, and appears to have only limited 
ability to surge in response to an emergent requirement.
    The Navy has informed the committee that the four kits 
included in this year's budget request are insufficient to 
maintain a minimum sustaining production level. This would 
appear yet another indication that the Navy is unwilling to 
budget adequately for a priority CINC requirement. 
Consequently, the committee has chosen to recommend only a 
modest increment of additional funding, sufficient only to 
procure two additional AIP kits. Although there is a valid 
requirement for additional kits, and production at a higher 
rate would be more cost effective, the committee made clear in 
S. 1745 that there are many other programs in the queue with 
equally strong but unfunded requirements. The committee 
reiterates that it does not believe it appropriate that 
Congress become a primary funding source for the P-3C AIP, nor 
does the committee intend to take the program on as a 
continuing entitlement. Consequently, the committee will 
closely monitor the Navy's execution of the P-3C AIP program 
during fiscal year 1998 and revisit the matter during its 
review of the fiscal year 1999 budget request. During the 
intervening period, the committee will seek additional input 
from the CINCs on their method of establishing requirements for 
deployed P-3Cs and the priority of this requirement relative to 
others that they have levied for forward deployed forces.
    In summary the committee:
          (1) recommends an increase of $17.3 million above the 
        budget request for the procurement of two P-3C AIP 
        kits; and
          (2) directs the Secretary of the Navy to formally 
        evaluate the advisability of renegotiating the P-3C AIP 
        contract to eliminate the cost penalties that are being 
        incurred as a consequence of current Navy budgeting 
        practices.

                              Navy Weapons

Tomahawk land attack missile

    Tomahawk is a long range, autonomous, precision strike 
weapon launched from either surface ships or submarines. It has 
been used in Desert Storm, twice in Iraq in 1993, in Bosnia in 
September 1995, and in Iraq in September 1996. To maintain 
missile inventories and provide them with upgraded capability, 
the Navy has been remanufacturing older Block II and Tomahawk 
anti-ship missiles (TASM) to the newer Block III configuration. 
In correspondence to the committee, the Chief of Naval 
Operations has indicated that fiscal constraints have prevented 
the Navy from funding this remanufacture program at the rate 
needed to maintain afloat inventories.
    The committee has supported the Tomahawk program in the 
past for both new production and the remanufacturing of 
existing missiles. Tomahawk, with its proven performance, 
continues to make an enormous contribution to our national 
security and long- range, world-wide power projection, as 
demonstrated in Desert Storm, Iraq, and Bosnia.
    The committee notes that the budget plan would stop buying 
new missiles at the end of fiscal year 1998. Considering the 
likelihood that there could be additional demands for these 
land attack missiles to outfit a much greater number of 
vertical launch cells in the fleet, the cessation of new 
production may not be a prudent course of action. The committee 
is aware that the Navy is also considering innovative 
operational concepts that would involve:
          (1) firing missiles without having designated a 
        specific target and allowing forces deployed closer to 
        the target set to provide final guidance information, 
        or
          (2) launching missiles to allow them to loiter in a 
        target area until needed by on-scene forces.
    The capabilities of Tomahawk for both strategic and 
tactical missions, centered around its very long range and 
accuracy at an affordable cost, are unique in the inventory. 
The committee is concerned that the Navy may not have given 
adequate attention to continuing the new production program 
while pursuing guidance, sensor, munitions, long-range 
propulsion, reliability, and affordability enhancements or 
exploring the full effects of these innovative operational 
concepts on inventory objectives.
    The committee recommends an increase of $40.0 million to 
accelerate the remanufacture of approximately 115 Tomahawk 
missiles to the Block III configuration.
    Additionally, the committee directs the Secretary of the 
Navy to conduct a review of overall inventory objectives for 
Tomahawk missiles that takes into account:
          (1) potential new applications of warhead 
        technologies;
          (2) additional demands for missiles to fill an 
        expanding inventory of vertical launch cells; and
          (3) planned technology enhancements emphasizing 
        extended range and loitering and retargeting 
        capability.
    The Secretary should provide a report on this review prior 
to the submission of the fiscal year 1999 defense budget.

Penguin missile program

    Neither the budget request nor the Future Years Defense 
Program contained funding for additional procurement of Penguin 
missiles.
    The National Defense Authorization Act for Fiscal Year 
1997included a provision that authorized the Navy to enter into a 
contract for multiyear procurement of not more than 106 Penguin 
missiles and limited the amount that could be expended for such 
procurement to $84.8 million. This provision was based on the existing 
shortfall in Penguin missile inventory and the premise that the Navy 
would be able to negotiate a very favorable price, about 55 percent of 
the average unit procurement cost for previous lots. Congress 
subsequently appropriated $7.0 million to procure Penguin missiles in 
fiscal year 1997.
    Penguin is the only operational Navy helicopter-launched 
missile in the Navy's weapon inventory. It provides Navy 
surface combatants with a defense against surface threats armed 
with anti-ship missiles. A principal operational advantage of 
Penguin is its relatively long operational range, which permits 
a helicopter armed with Penguin to remain outside the launch 
envelopes of potential targets.
    The committee has learned that, while final contract 
negotiations on the fiscal year 1997 procurement are not yet 
complete, the proposed price submitted to the Navy by the 
contractor was even lower than the projected savings that 
motivated last year's congressional action. The committee has 
concluded that additional funding in fiscal year 1998 could 
produce even greater cost reductions through labor learning and 
production stability. To sustain procurement of the Penguin 
missile during fiscal year 1998, the committee recommends an 
increase in funding of $15.0 million for procurement of 
additional missiles to satisfy outstanding inventory objectives 
for both the tactical and telemetry variants.

Standard missile modification

    The budget request included $35.6 million for the 
modification of 80 Standard SM-2 Block II missiles to the Block 
IIIB configuration. These missiles are being modified to 
provide homing improvements for operations in a hostile 
electromagnetic countermeasures environment. The current 
shortfall versus inventory objective exceeds 700 missiles. 
Production of modified missiles began in fiscal year 1997 with 
an initial production lot of 40. Acceleration of procurement 
would not only provide the fleet with the capability to counter 
a threat that is already deployed, but would also produce 
savings through a more efficient production rate.
    The committee considered various options for accelerating 
procurement of Standard missile modification kits using 
improved operational capability, funding availability, and risk 
associated with the slope of the production ramp as variables. 
The committee recommends an increase of $15.3 million for the 
modification of 40 additional Standard SM-2 Block II missiles 
to the Block IIIB configuration. This increase would result in 
a total procurement for fiscal year 1998 of 120 missile 
modification kits and produce a resulting production increase 
between fiscal year 1997, the first year of limited rate 
initial production, and fiscal year 1998 of 80 missiles. The 
committee believes that this increase represents a prudent 
balance between production risk and increased operational 
capability.

Navy and Marine Corps Ammunition

Marine Corps ammunition

    The committee is concerned with the inadequate funding for 
ammunition procurement that was contained in the budget 
request. Ammunition is an important contributor to military 
readiness; for training and in anticipation of conflict. The 
committee recommends the following adjustments to the budget 
request for Marine Corps ammunition procurement:

                                                                        
                         Item                               Millions    
                                                                        
5.56 mm...............................................               3.0
40 mm.................................................               5.0
Charge, Demolition Assembly...........................              15.0
SMAW..................................................              10.0
                                                       -----------------
      Subtotal........................................              33.0
                                                                        

Shoulder Launched Multi-Purpose Assault Weapon

    The budget request did not include funding for the Shoulder 
Launched Multi-Purpose Assault Weapon (SMAW). The committee is 
aware of growing problems associated with Marine Corps SMAW 
system. Three problems are of particular concern to the 
committee. First, the existing SMAW launcher is becoming 
unreliable and unmaintainable. Second, the Marine Corps 
requires an improved high explosive dual purpose (HEDP) round 
with double the range of the existing round in the inventory. 
Third, the Marine Corps inventory currently includes over 
46,000 HEDP rounds which are restricted from use due to age and 
deficient design. Therefore, the committee recommends an 
increase of $10.0 million to address these concerns. Of the 
funds provided, $2.2 million shall be available for 
improvements to SMAW launchers, $2.2 million shall be available 
for procurement of improved HEDP rounds, and $5.6 million shall 
be for the repair of existing, restricted HEDP rounds within 
the current inventory.

                    Navy Shipbuilding and Conversion

Advanced submarine technology insertion

    The budget request contained $150.1 million in fiscal year 
1998 and $172.5 million in fiscal year 1999 in various program 
elements for advanced submarine technology.
    The committee has learned that, while the Navy has 
maintained its commitment to fund advanced submarine technology 
at a robust level relative to historic norms, the budget 
request included nofunding for the detailed design necessary to 
insert technologies that will mature in the near-term into nuclear 
attack submarines that are scheduled to begin construction in fiscal 
years 1998 and 1999.
    The committee recommends an increase of $15.0 million above 
the budget request for the detailed design necessary to insert 
near-term technologies into nuclear attack submarines scheduled 
for authorization in fiscal years 1998 and 1999.

Arleigh Burke class destroyer program.

     The budget request contained $2.7 billion for the 
procurement of three Arleigh Burke class guided missile 
destroyers and $157.8 million of advance procurement for an 
additional destroyer. These funds have been requested under 
authority provided in the National Defense Authorization Act 
for Fiscal Year 1997 for the Navy to enter into a multiyear 
contract for the procurement of a total of 12 destroyers at a 
procurement rate of three destroyers per year during the four 
year period from fiscal year 1998 to fiscal year 2001. This 
authorization for multiyear procurement was made after the Navy 
provided compelling testimony that a stable, predictable 
procurement profile over the four year period would produce 
savings of $1.0 billion.
    The DDG-51 destroyer is a centerpiece of the Navy's surface 
combatant force. It provides power projection, fleet air 
defense, and a formidable antisubmarine warfare capability. At 
committee hearings this year, Navy witnesses strongly affirmed 
the significant improvement in the Navy's readiness and 
warfighting capability that could be achieved by the 
authorization of a fourth DDG-51 class destroyer in fiscal year 
1998. They also stated that, as a result of the stability 
provided by the multiyear contract, the Navy could buy a fourth 
destroyer at a very favorable price. In subsequent 
correspondence to the committee, the Chief of Naval Operations 
reiterated the cost savings that could be achieved by buying a 
fourth DDG-51 in fiscal year 1998 to address validated surface 
combatant requirements. By way of specific example, he noted 
that, before Congress authorized the multiyear buy, the average 
constant year cost for a single DDG-51 destroyer was $950.0 
million. Conversely, his estimate of the marginal cost of an 
additional destroyer in fiscal year 1998 is $720.0 million, a 
25 percent reduction.
    The committee has been extremely concerned for several 
years about the low rate at which the Navy is procuring ships, 
including DDG-51 class destroyers. As funding in the 
procurement accounts has declined, building programs have been 
extended and annual quantities reduced. Inefficient procurement 
rates have caused unit costs to soar. The number of ships under 
construction in U.S. shipyards has declined by over 70 percent 
in the past 15 years and private-sector shipyard employment has 
fallen by over 60 percent in the same period of time. Ships are 
not being acquired at a rate necessary to sustain the Navy's 
long-term force structure. The committee is particularly 
concerned about the lack of a clear upward trend in procurement 
rates in the latter years of the Future Years Defense Program. 
The number of new ships in the Navy's budget this year is the 
lowest in a generation.
    In an effort to partially offset this trend, the committee 
has pursued a policy of accelerating planned ship construction 
to satisfy outstanding operational requirements and achieve 
cost savings through more efficient procurement. Based on 
strong Navy testimony on the improvements in readiness, 
warfighting capability, and cost savings that would result, the 
committee recommends an increase of $720.0 million above the 
budget request for the procurement of a fourth DDG-51 class 
destroyer in fiscal year 1998.

Oceanographic survey ship

    The budget request contained no funding for an additional 
oceanographic survey ship. The Navy has been procuring a new 
class, the TAGS-60 class, of oceanographic survey ships. The 
mission of this multi-purpose class is to collect deep ocean, 
littoral, and coastal oceanographic data essential for meeting 
existing and emerging requirements for precise survey data.
    In a 1995 report to Congress regarding the state of 
oceanography, the Navy confirmed a backlog of 360 ship-years of 
data collection requirements. Of this amount, 240 ship-year 
equivalents need to be accomplished by oceanographic survey 
ships. The remaining 120 ship-years can be accomplished by 
alternate means, such as remote sensing, international 
agreements, and cooperative data exchange. The Navy analysis 
also noted that a survey fleet of eight oceanographic ships 
could fulfill existing data collections requirements. To date, 
only seven relatively modern oceanographic survey ships are in 
service or under construction.
    Based on a well-documented requirement, the committee 
recommends an increase of $75.2 million above the budget 
request for procurement of an additional oceanographic ship, 
TAGS-65. Construction of this ship will satisfy the Navy's 
requirement for modern oceanographic survey ships.

                         Other Navy Procurement

Submarine propulsor

    The budget request contained no funding to complete 
procurement of a spare propulsor and an additional rotor 
assembly for the Seawolf class submarine. A propulsor consists 
of three major subassemblies: the forward fixed assembly; the 
aft fixed assembly; and the rotor. The Navy began procurement 
of a spare propulsor in fiscal year 1997 by contracting for an 
aft fixed assembly and a rotor. Funding constraints have caused 
the Navyto delay budgeting for the remaining components until 
fiscal years 1999 and 2000. Given the extensive schedule of tests 
planned for SSN-21, the lead ship of the class, the committee believes 
that earlier procurement of a complete spare propulsor and an 
additional spare rotor would be prudent.
    The committee recommends an increase of $38.3 million above 
the budget request for the procurement of a spare forward fixed 
propulsor assembly and an additional spare rotor in fiscal year 
1998.

AN/WSN-7 inertial navigation system

    The budget request included $12.3 million for procurement 
of additional AN/WSN-7 ring laser inertial navigation systems. 
The AN/WSN-7 continuously and automatically determines and 
indicates a ship's position, attitude (heading, roll, and 
pitch), and velocity. This system replaces three legacy 
navigation systems, providing equipment commonality between 
surface combatants, submarines, and aircraft carriers. The 
annual operating cost of the AN/WSN-7 is projected to be only 
ten percent of the cost of operating the legacy navigation 
systems it replaces. Accelerated procurement of the AN/WSN-7 
could produce a substantial savings in maintenance costs.
    The committee recommends an increase of $18.0 million above 
the budget request for the procurement of additional AN/WSN-7 
navigation sets. If this recommendation is adopted, the 
estimated savings in maintenance costs over the period of the 
Future Years Defense Program between fiscal years 1998 and 2003 
would be about $27 million.

Integrated combat weapons system

    The combat systems presently installed on the Navy's mine 
countermeasures ships are comprised of an assortment of 
independent subsystems developed by various manufacturers using 
technology that is now more than 20 years old. Financial 
constraints at the time of procurement prevented the Navy from 
employing a systems engineering and integration approach that 
could have provided for easy electronic communication between 
various combat systems sub-elements. Consequently, combat 
systems' performance falls short of requirement and 
expectations. Further, the fleet is experiencing an above 
average number of equipment failures with these systems, 
resulting in high maintenance costs.
    To resolve these maintenance and performance issues, the 
Navy is developing an integrated combat weapons system for its 
mine countermeasures ships. The system will establish one 
standard architecture for both the MCM and MHC classes of 
ships, reduce unique equipment racks and stations from 13 to 2, 
reduce line replaceable units from 788 to 53, provide digital 
data exchange via a fiber optic local area network, provide for 
easy connection to the Navy's battle force tactical trainer 
(BFTT), and permit easy access and operation of the fleet's 
joint combat information standard.
    The committee has previously encouraged the Navy to improve 
its mine countermeasures capabilities and has determined that 
additional funding in fiscal year 1998 would permit 
acceleration of the integrated combat weapons system by about 
one year. Accordingly, the committee recommends an increase of 
$10.3 million in PE 63502N to accelerate the following 
developmental efforts:
          (1) rehosting of mine countermeasures ship combat 
        systems to open architecture standards;
          (2) linkage of the mine warfare onboard trainers on 
        the mine countermeasures ships to the BFTT; and
          (3) development of needed modifications to the AN/
        SQQ-32 mine detection sonar towed body.

AN/BPS-15H submarine navigation radar

    There was no funding in the budget request for the 
procurement of AN/BPS-15H submarine radar navigation sets. The 
Navy has been procuring the AN/BPS-15H, a commercial off-the-
shelf (COTS) variant of the AN/BPS-15 radar navigation set, and 
its associated mast assembly for installation on new 
construction submarines and for backfit on SSN-688 class 
submarines. Procurement of the COTS variant has produced a 
substantial cost savings over a comparable system built to 
military specifications, has enhanced operational performance, 
and has improved navigational safety. Using funds provided in 
prior years, the Navy will be able to complete radar upgrades 
for the SSN-688 class. Continued procurement of additional AN/
BPS-15H radar sets in fiscal year 1998 would avoid a production 
break with its associated restart costs, and permit the Navy to 
complete an upgrade of 15 Trident class submarines.
    The committee recommends an increase of $9.0 million for 
the procurement of additional AN/BPS-15H radar sets for 
installation into Trident class submarines and for use as 
training and refit facility assets.

Cooperative engagement capability

    The cooperative engagement capability (CEC) has been 
developed to provide a major improvement in the Navy's battle 
force anti-air warfare (AAW) capability by coordinating 
information from all air and ship sensors into a single, real 
time, composite track picture that possesses fire control 
quality. CEC entered the engineering and manufacturing phase of 
development in May 1995. It achieved initial operational 
capability (IOC) in September 1996 and was approved for limited 
rate initial production beginning in fiscal year 1998. The 
Department of Defense has accorded high priority to development 
and fielding of CEC. In testimony to the committee in support 
of the fiscal year 1997 budget request, the Secretary of 
Defense singled it out as an important program with great 
potential for widespread jointapplication, particularly in 
satisfying requirements for theater ballistic missile defense.
    The budget request does not satisfy the previous timeline 
for CEC development and procurement, nor does it reflect the 
elevated priority accorded it by the Secretary of Defense. 
Despite the successful performance of CEC during IOC 
evaluation, there is no procurement funding for it in the 
budget request. The consequence will be at least a one year 
delay in providing the fleet with a very important operational 
capability. This importance has been emphasized by the Chief of 
Naval Operations in correspondence addressed to the committee.
    As an additional item for consideration, the committee 
received a report from the Secretary of the Navy on spectrum 
interference between CEC and other fleet weapons systems and 
data links. Among other matters, this report provided proposed 
options for resolving interference between CEC and the data 
link used by the SH-60B helicopter. The report concluded that 
the most effective method for eliminating this interference 
would be to shift the SH-60B data link to an alternate 
frequency band.
    The committee's review has determined that the Navy's 
decision to omit funding in the budget request was not caused 
by any emerging technical problems that could have increased 
the risk associated with production or performance. Rather, it 
appears that the elimination of procurement funding predicted 
in the fiscal year 1997 Future Years Defense Program occurred 
as the result of a diversion to satisfy the resource demands of 
contingency operations. The committee believes this budgeting 
approach is short-sighted, particularly when high priority 
programs with urgent operational requirements are decimated as 
a result. Accordingly, the committee recommends an increase of 
$114.8 million to restore the funds needed to keep CEC on 
schedule. The committee also recommends an increase of $14.5 
million in PE 63658N to:
          (1) $5.0 million to initiate development of a Ku-band 
        data link kit for the SH-60B helicopter;
          (2) $5.0 million to continue the transition of design 
        responsibility from its developer to the CEC 
        procurement contractor; and
          (3) $4.5 million to continue integration of CEC into 
        the Marine Corps Hawk missile system.

Information Technology-21

    The Navy has informed the committee of a new, fleet-driven 
initiative, Information Technology-21 (IT-21), that has emerged 
since formulation of the budget request. IT-21 will provide for 
accelerated introduction of command, control, communications, 
and computer (C4I) innovations that have been developed in the 
commercial marketplace and for merging them with existing 
systems and capabilities.
    As described by the Navy, the goal of IT-21 is to enable 
the warfighter to exchange classified and unclassified tactical 
and non-tactical information from a single desktop computer, 
shorten decision timelines, and increase combat power through 
more effective and coordinated use of relevant information. 
Through the IT-21 initiative the Navy intends to adapt and 
develop new operational concepts at a pace that remains abreast 
of the explosion of information technology that prevails in the 
commercial sector. The Navy's objective is to shift from 
platform-centric to network-centric warfare. The focus of 
platform-centric warfare tends to be mass on mass, extensive 
physical infrastructure, large overhead, and immense capital 
expenditure. Conversely, the Navy has concluded that a network-
centric approach will allow it to leverage intellectual 
capital, focus specific information on relevant tasks, and 
produce reductions in infrastructure and overhead.
    While the IT-21 concept evolved and was formulated too late 
to be incorporated into the budget request and its associated 
Future Years Defense Program (FYDP) as a coordinated budget 
initiative, numerous programs with existing budget lines will 
be drawn together as IT-21 sub-elements. Existing programs that 
would be accelerated, and to some extent redirected, include 
the joint maritime command information system (JMCIS), the Navy 
tactical command support system (NTCSS), the Navy switch and 
cable plant modernization program (NASCAMP), the Navy 
information systems security program (ISSP), the Challenge 
Athena commercial wideband satellite program, and the afloat 
telecommunications service (ATS). New capabilities, all 
available in commercial off-the-shelf (COTS) systems, such as 
the automated digital network system (a UHF modem upgrade to 
ensure adequate bandwidth for each ship) and asynchronous 
transmission mode (ATM) local area networks (LAN), represent 
emerging technologies that will make vital contributions to the 
IT-21 initiative.
    The Navy has informed the committee that it is in the 
process of realigning the C4I resources in its FYDP to bring 
them into consonance with IT-21 and provide strong out-year 
support for the initiative. The Chairman of the Joint Chiefs of 
Staff has also written to the committee to endorse the IT-21 
initiative.
    The Navy's goal is to have every battle group and 
amphibious ready group, including cruisers and guided missile 
destroyers, deploy with IT-21 capability by the year 2000.
    The committee is impressed with the Navy's vision for IT-21 
and the emphasis it places on the use of actual commercial 
products, vice the use of COTS technology that must still be 
adapted for specialized Navy use. However, the committee urges 
the Navy to use caution before committing significant resources 
to massive software reprogramming efforts that would simply 
convert from one programming language to another with little, 
if any, improvement in capability. To provide an initial 
impetus to the IT-21 initiative and to assist the Navy to 
achieve its goal of a fully outfitted fleet by the year 2000, 
the committee recommends an increase of $157.2 million above 
the budget request. Of this amount $147.9 would be for 
procurement and $9.3 million would be operations and 
maintenance funding.

Integration and test facility command and control initiative

    The Navy is pursuing a continuing initiative to provide 
fully integrated and supportable command, control, 
communications, computer, and intelligence (C4I) systems at its 
integration and test facilities. These facilities are used for 
architecture design, systems engineering, integration, and to 
provide life-cycle support for the fleet's C4I systems.
    The committee has learned that additional funding at the 
Navy in-service engineering (NISE) East facility would enhance 
the facility's ability to incorporate its integration 
facilities and laboratories into a baseline network that will 
allow much more effective application of its full product line. 
Additional communication nodes and terminal devices, as well as 
an increase in existing network bandwidth to accommodate 
additional users, would permit the facility to support the wide 
variety of operational protocols and physical interfaces 
associated with new fleet tactical C4I systems. Additional 
funding would also give NISE East the means to deliver fully 
integrated and tested systems to various shipbuilding programs 
and support integration strategies such as the Navy's 
Information Technology-21 initiative.
    The committee recommends an increase of $4.0 million above 
the budget request for engineering design; hardware and 
software procurement; and installation, testing, and 
documentation of the additional technical networking 
infrastructure that will enhance NISE East's ability to 
integrate all of its C4I product line laboratories. Of this 
amount $2.0 million would be for procurement and $2.0 million 
would be operations and maintenance funding.

Sonobuoy procurement

    The budget request contained $28.4 million for the 
procurement of AN/SSQ-53E passive sonobuoys and $24.3 million 
for the procurement of AN/SSQ-62E active sonobuoys.
    Use of sonobuoys during antisubmarine warfare (ASW) 
training and additional loss of inventory caused by expiring 
shelf-life have caused consumption to outstrip annual 
procurement for several years. Despite previous efforts by the 
committee to maintain sonobuoy inventory levels through 
additional funding and despite both an overall reduction in the 
Navy's ASW force structure and two year extensions beyond 
contract shelf-life, available inventories of the AN/SSQ-53E 
and AN/SSN-62E have fallen inexorably. The Navy's projected 
inventory of AN-SSQ-53 sonobuoys at the end of fiscal year 1998 
would not meet the inventory requirements of a single major 
regional crisis. The projected shortfall for the AN/SSQ-62E 
would be less critical, but would impose a major constraint on 
training expenditures. In correspondence with the committee, 
the Navy has stressed the importance of resolving shortages in 
these two types of sonobuoys.
    The committee recommends an increase of $19.0 million for 
the procurement of additional AN/SSQ-53E and $7.0 million for 
the procurement of additional AN/SSQ-62E sonobuoys.

NATO Sea Sparrow missile system low light level television

    The Navy has been upgrading the fire control systems of 
fleet ships equipped with the NATO Sea Sparrow missile. The 
change involves replacing the existing isocon-based low light 
level television (LLTV) with solid state multi-spectral 
electro-optics. This charge coupled device (CCD) ordnance 
alteration (ORDALT) has produced a three fold reduction in mean 
time between failure, reducing maintenance costs. The multi-
spectral capability provided by the CCD ORDALT significantly 
improves the ability of the NATO Sea Sparrow's fire control 
system to detect and engage modern cruise missiles. It also 
provides an improved capability for real-time threat 
identification, particularly at night, and manual target 
tracking in an emissions controlled environment.
    The committee has learned that funding constraints 
encountered by the Navy in developing the budget request caused 
it to terminate the CCD ORDALT upgrade program before it will 
be completed. Aside from the increased maintenance costs and 
reduced operational performance implicit in this decision, the 
Navy will be forced to maintain, at an additional expense, 
supply support for the old isocon-based LLTV. Consequently, to 
reduce future costs and improve the fleet's operational 
performance, the committee recommends an increase of $8.0 
million above the budget request for the procurement of 
additional CCD ORDALT kits.

NULKA anti-ship missile decoy system

    The budget request included $8.2 million for continued 
development of the NULKA active countermeasures decoy. It also 
contained $24.7 million to procure NULKA decoys, launch 
subsystems, and training systems.
    The NULKA decoy is scheduled to begin production during 
fiscal year 1997. It has been developed to improve surface ship 
survivability against anti-ship missiles (ASM). The ASM threat 
is growing rapidly. By the year 2000 an estimated 100 nations 
will possess more than 40,000 ASMs. These missiles will pose a 
potent threat to surface combatants and amphibious ships 
involved in littoral operations.
    In its review of the budget request, the committee has 
determined that additional procurement funding in fiscal year 
1998 would permit the Navy to acquire NULKA decoys at a more 
efficient rate and permit more complete outfitting of deploying 
battle groups. Additional development funding would accelerate 
fielding an electromagnetic capability, which will permit a 
more rapid upgrade of the NULKA round to accommodate new 
friendly emitters as they enter the fleet, and also deal with 
the evolving ASM threat.
    The committee recommends an increase of $9.0 million 
forprocurement of additional NULKA decoys and for installation of their 
launching subsystems. The committee also recommends an increase of $2.0 
million in PE 64755N for continued development of the NULKA decoy to 
improve the ease with which it may be adapted to the future 
electromagnetic spectrum associated with fleet operations.
    The committee has also learned that in November 1996, based 
on successful developmental testing and a concern about the 
proliferating ASM threat, the Navy designated NULKA as a 
cornerstone program that will lead surface electronic warfare 
into the next generation of combat systems and made a policy 
decision to accelerate its procurement and fleet introduction. 
This decision appears consistent with an overall strategy of 
maximizing surface ship combat capability in littoral 
operations and validates the priority that the committee has on 
the decoy's development for the past several years. However, 
the same policy decision that accelerated NULKA also rearranged 
its installation priority on Navy ships. Originally developed 
to provide protection to ships, such as amphibious ships, that 
are relatively poorly equipped to engage advanced ASMs, the 
Navy has now decided to give first priority to installation of 
NULKA on its most powerful surface combatants, guided missile 
cruisers, and destroyers, while assigning amphibious and fleet 
support ships the lowest priority. The reason for this decision 
remains unclear and is inconsistent with prior threat analysis.
    Further, the committee has become aware of cost growth that 
has occurred in the projected unit cost of the NULKA round. 
While some of this cost growth can be reasonably attributed to 
a decrease in projected yearly procurement quantities imposed 
by lower than expected procurement resources, the cause of the 
balance remains unclear. The committee is very concerned that 
the Navy did not inform the committee when this cost growth 
became apparent and also failed to acknowledge it in 
documentation submitted with the budget request.
    To ensure that all information needed for an informed 
decision is available, the committee directs the Secretary of 
the Navy to provide the analysis and rationale that led it to 
rearrange its priorities for installation of NULKA in Navy 
ships and to also provide a detailed report on cost growth that 
has occurred in the projected unit cost for NULKA rounds. These 
reports should be submitted no later than August 15, 1997.

Oceanographic equipment

    During its review of the fiscal year 1998 budget request, 
the committee determined that investment funding for 
oceanographic equipment was reduced significantly in fiscal 
years 1996 and 1997. Based on prior experience, the committee 
believes that regular funding for oceanographic equipment is 
necessary to keep up with commercial advances in technology, to 
routinely replace damaged equipment or equipment lost at sea, 
and to adjust to mission changes, such as a recent emphasis on 
littoral surveys, bottom characterization for mine 
countermeasures, and precise bottom imagery to support undersea 
war requirements. It would appear that funding in fiscal years 
1996 and 1997 and in the budget request is insufficient to 
maintain an adequate replacement program.
    The committee recommends an increase of $6.0 million above 
the budget request to provide additional funding for 
procurement of oceanographic survey equipment, such as shallow-
water multibeam systems, outfitting of hydrographic survey 
launches, high resolution acoustic imagery systems, upgraded 
survey and navigation equipment suites for use in cooperative 
international hydrographic programs, digital side-scan sonars, 
``fly away'' survey suites that can be mounted aboard small 
vessels for surveys of opportunity, and unmanned undersea 
vehicles used for ocean data collection.

                        Marine Corps Procurement

Javelin

    The budget request included $42.1 million to procure 194 
Javelin missiles. The committee supports the Marine Corps 
effort to replace aging Dragon missiles and has been pleased 
with the progress of this joint Army/Marine Corps program that 
has resulted in the production of an extremely capable anti-
armor missile system. The committee recommends an increase of 
$17.0 million to procure an additional 186 missiles in fiscal 
year 1998 and allow the Marine Corps to reach its acquisition 
objective with the projected funding in the Future Years 
Defense Program.

Night vision equipment

    The budget request did not include any funding for night 
vision equipment. The committee continues to support efforts to 
field night vision equipment to the armed forces to allow them 
to fight and win at night. The committee is concerned about the 
inadequate funding in fiscal year 1998 for unmet night vision 
requirements. The committee recommends an increase of $7.0 
million to procure the following:
          (1) 1.2 million for AN/PEQ-4 infrared aiming lights;
          (2) 2.2 million for 6,250 borelights;
          (3) 2.7 million for high power laser pointers;
          (4) 0.9 million for mounting brackets.

Base telecommunications infrastructure

    The budget request included $17.5 million to upgrade Marine 
Corps base telecommunications infrastructure, including 
completion of work at Camp Pendleton and Camp Butler. The 
committee recognizes the numerous outstanding requirements for 
infrastructure upgrades and the capabilities and 
efficienciesthat these upgrades bring to an installation. The committee 
recommends an increase of $24.8 million to support additional work at 
Marine Corps Air Station Cherry Point and Marine Corps Air Station 
Beaufort while allowing the Marine Corps to use an existing contract to 
facilitate these efforts.

Improved direct air support center

    The committee received a request for additional funding to 
field new satellite communication equipment. Such equipment is 
necessary to enhance future interoperability and capability as 
reliance on digital communications increases. These devices 
will also provide greater flexibility for Direct Air Support 
Central (DASC) operations. The committee recommends an increase 
of $0.4 million to support this fielding.

Light Tactical Vehicle Replacement program

    The budget request did not include any funding for the 
Light Tactical Vehicle Replacement (LTVR) program, which is 
currently scheduled to begin in 2000. The committee is very 
concerned about the current state of Marine Corps High Mobility 
Multi-Purpose Wheeled Vehicle (HMMWV) fleet that has aged 
considerably due to corrosion and wear. The committee notes the 
operational success of HMMWVs and strongly supports the LTVR 
program. The committee recommends an increase of $55.0 million 
to begin the critical LTVR program in fiscal year 1998.

International standards organization truck beds

    The committee recognizes Marine Corps efforts to improve 
deployment capabilities and the progress made to date toward 
fielding efficient International Standards Organization (ISO) 
beds for transporting cargo. The Marine Corps has successfully 
fielded 86 percent of requirements and can complete fielding of 
these beds for a modest investment. The committee recommends an 
increase of $6.2 million to support final fielding of ISO truck 
beds.

Power equipment assorted

    The committee notes ongoing efforts by the Marine Corps to 
field critical power generation equipment to the force. The 
Army has current contracts to acquire a variety of generators. 
The committee recommends an increase of $22.1 million to 
support an increasing demand for power generation equipment.

Shop equipment contact maintenance system

    The committee understands that current Marine Corps contact 
maintenance vehicles have reached the end of their service 
life. The Marine Corps has established a program to replace 
these vehicles with equipment that supports maintenance efforts 
for forward deployed forces. The committee believes that this 
critical equipment should be replaced as soon as practicable, 
and recommends an increase of $12.2 million to procure 122 shop 
equipment contact maintenance (SECM) systems.

Combat rubber reconnaissance craft

    The committee supports Marine Corps efforts to procure 
combat rubber reconnaissance craft (CRRC) capable of 
transporting eight combat loaded Marines from amphibious 
shipping to shore. The committee recommends an additional $1.6 
million to procure 72 boats and achieve the acquisition 
objective.

Chemical/biological incident response force equipment

    The committee supports the ongoing Marine Corps effort to 
field a well-equipped and capable force that can respond to 
chemical/biological incidents worldwide and assist in 
detection, decontamination, and medical missions associated 
with such an event. Marine efforts in fiscal year 1997 were 
successful in providing an initial core capability and the 
committee noted the successful deployment of this capability to 
the 1996 Olympic Games in Atlanta. The committee is concerned, 
however, that much of the equipment used by the Chemical/
Biological Incident Response Force has been diverted from other 
Marine units and believes that this equipment should be 
replaced. The committee, therefore recommends an increase of 
$15.0 million to provide for replacement equipment.

Combat vehicle appended trainer

    The committee supports training device programs that 
enhance combat readiness at low cost. The committee understands 
that there is an opportunity to modify existing Army training 
devices that could be used to train Marine crews on Marine 
Corps armored vehicles. The committee recommends an increase of 
$9.2 million to initiate the requisite changes that would 
accelerate fielding of these devices.

Items less than $2 million

    The committee was provided a list of miscellaneous 
equipment that the Commandant of the Marine Corps recommended 
for consideration should additional funds become available. 
These items included such equipment as underwater breathing 
equipment, advanced demolition kits, and logistics information 
systems.
    The committee believes that these types of lower visibility 
hardware are too often lost in the discussions of defense 
priorities, although such gear can make a significant 
contribution to war fighting capability.
    Therefore, the committee recommends an increase of$10.0 
million for these items in the Procurement, Marine Corps account.
                     SUBTITLE D--AIR FORCE PROGRAMS


Section 131. B-2 bomber aircraft program.
    The committee recommends a provision prohibiting the use of 
funds to procure any additional B-2 bomber aircraft or to 
maintain any part of the bomber industrial base solely for the 
purpose of preserving the option to procure additional B-2 
bomber aircraft in the future.
    The committee provided exceptions to the prohibition, by 
exempting any B-2 bomber aircraft that is covered by a contract 
for production as of the date of enactment of the National 
Defense Authorization Act for Fiscal Year 1998 or for any part 
of the industrial base needed to produce or upgrade the 21 
authorized B-2 bombers, for so long as necessary to complete 
the production of such aircraft.

                        OTHER AIR FORCE PROGRAMS

                           Air Force Aircraft

F-15E attrition aircraft
    The budget request included $159.0 million to continue the 
procurement of F-15E strike aircraft. Because of an ongoing 
foreign military sale of F-15 aircraft, the Air Force is able 
to achieve significant efficiency in procuring three additional 
F-15E aircraft, thus completing the planned buy of 18 attrition 
reserve F-15E aircraft. Accordingly, the committee recommends 
an increase of $100.8 million for procurement of three 
additional F-15E aircraft.
F-22 requirements
    The committee notes the delays and cost overruns in the F-
22 program, and views with concern inadequate Air Force 
programming to support the F-15 in future years. In briefings 
on the fiscal year 1998 budget request, the Air Force outlined 
funding plans for the F-15 that included reductions of $147.7 
million over the next three years, with a reduction of $72.6 
million in fiscal year 1998 alone. Changes to the F-15 program 
include elimination of Global Positioning System capability for 
the F-15 A-D, elimination of the heads-up display (HUD) for the 
F-15C/D, and cancellation of the ALQ-135 (Band 3) for the F-
15C/D.
    All of this occurs at a time when the Air Force is 
requesting additional F-15 aircraft to maintain force 
structure. The committee recognizes the need for adequate force 
structure in the Air Force, but questions the apparent effort 
to ``starve'' the F-15's future modifications in order to fund 
the F-22, or to prematurely retire F-15s because they are ``not 
capable,'' when the aircraft would be very capable with 
modifications and upgrades. Accordingly, the committee 
recommends an increase to the budget request of $72.6 million 
to restore canceled F-15 modifications in fiscal year 1998.
F-22 event-based decision making
    Section 218 of the National Defense Authorization Act for 
Fiscal Year 1997 required the Department of Defense to submit 
to Congress a report on event-based decision making for the F-
22 aircraft program (fiscal year 1997 events) by October 1, 
1996 and to submit the fiscal year 1998 event-based decisions 
with the budget request. As of April 1, 1997, neither report 
had been received by Congress--six months after the first 
report was due.
    The National Defense Authorization Act for Fiscal Year 1997 
also required reports on the estimated cost of F-22 production 
and the net benefits of developing the F/A-18E/F. Funds were 
fenced, or withheld, in each of those cases, pending receipt of 
the reports. Those reports were received in a timely fashion, 
and a hearing was held to examine those reports and their 
implications. The committee can only infer that the Department 
only responds in a timely fashion to congressional direction 
when it is accompanied by conditional penalties or statutory 
prohibitions.
    Accordingly, the committee recommends the elimination of 
procurement funds for the F-22 for fiscal year 1998. The 
committee encourages the Department to plan for F-22 
procurement in fiscal year 1999 and beyond, and to submit 
substantial reports on F-22 event-based decision making that 
will add to the committee's confidence in the oversight and 
control of the program. Considering the disparities found in 
the statements of official witnesses on the cost estimates for 
F-22 production and the lack of explanation of the program's 
$2.2 billion overrun in engineering and manufacturing 
development (EMD), failure to provide reports on the substance 
of the program does little to foster confidence in the 
program's management or cost estimates.
    In the last few years, Air Force witnesses have asserted 
that event-based decision making would guide the F-22 program 
through possible rough spots, yet when asked for the criteria 
or details of such decisions, there was no response. The 
silence is more troubling when it comes at a time of cost 
overruns and conflicting estimates of future production costs. 
Further, the Air Force's initiatives to control future 
production costs will not take effect until after fiscal year 
2004, thus leaving the intervening six years undefined, except 
for a recently disclosed $2.2 billion overrun in EMD. Providing 
the report required in section 218 would serve to create 
confidence in the program in the near term. There is currently 
a lack of confidence due to recently disclosed overruns and 
estimates of large overruns yet to come in the production.
    The report should be more than a projected calendar of 
contract awards. Increased development costs raise concerns 
about the program's long-term procurement costs. Increased 
developmentcosts tend to imply increased procurement costs 
throughout a program. The committee is concerned that the restructuring 
of EMD and transfer of funds from procurement to development may result 
in continuing cost problems.
     In recent testimony and public statements, Air Force 
representatives have alluded to using the lessons learned from 
the C-17 program to salvage the F-22. The C-17 program was also 
described as an event-based program. The following table 
describes the events, timing, and funding for the C-17 program 
as it appeared in the statement of managers accompanying the 
National Defense Authorization for Fiscal Year 1994 (S. Rept. 
103-112).

                                        C-17 EVENT-BASED CONTRACT AWARDS                                        
----------------------------------------------------------------------------------------------------------------
     Fiscal year          Lot      Lot size        Event        Original plan    Plan last year   Plan this year
----------------------------------------------------------------------------------------------------------------
FY 89...............  II........  4........  Mission Computer  Awarded........  ...............  ...............
                                              Software                                                          
                                              Critical Design                                                   
                                              Review.                                                           
FY 90...............  III.......  4........  R&D Aircraft (T-  Jan. 90........  Jul. 91........  ...............
                                              1) Assembly                                                       
                                              Complete.                                                         
FY 92 (was FY 91)...  IV........  4........  First Flight of   Oct. 90........  Aug. 92........  May 93         
                                              First                                               (actual).     
                                              Production (P-                                                    
                                              1) & R&D                                                          
                                              Aircraft (T-1).                                                   
FY 93 (was FY 92)...  V.........  6........  Acceptance of     Sep. 91........  Mar. 93........  Dec. 93.       
                                              Fifth                                                             
                                              Production                                                        
                                              Aircraft (P-5).                                                   
----------------------------------------------------------------------------------------------------------------

Although the event-based planning did not necessarily keep the 
C-17 program on track, it did at least provide useful 
visibility into the program's progress.
    The committee is aware that the F-22 program has $81.3 
million from fiscal year 1997 advance procurement funds that 
could be used to protect the schedule for the fiscal year 1999 
production, thus ensuring that there is no break in the early 
production of the F-22. Therefore, the committee recommends a 
reduction in the fiscal year 1998 budget request of $80.9 
million for F-22 advanced procurement. The committee encourages 
the Department to complete and submit substantive reports when 
required, and to request any remaining F-22 advanced 
procurement in the fiscal year 1999 budget request.

C-130J

    The budget request included $49.9 million for one Air Force 
C-130J. The committee recommends an increase to the budget 
request of $371.1 million and a restructuring of the budget 
request as mentioned below.

Spares and support

    Release of fiscal years 1996 and 1997 funds to purchase C-
130s had been delayed until recently because of insufficient 
programmed logistics support funding for the C-130s which had 
been authorized and appropriated. When questioned about the 
plan to provide logistics support for the 1996 and 1997, the 
Air Force responded that the plan to fund the spares relied 
upon Congress to increase the authorization and appropriations 
to pay for the shortfall.
    If the Congress should fail to provide the additional 
funds, the Air Force has indicated that it would withhold one 
of the aircraft that was previously authorized and 
appropriated. The committee sees the ``plan'' as more of a non-
plan, and accordingly, recommends a reduction of $49.9 million 
to the budget request as contained in line 11 of the aircraft 
procurement line (APAF) and an increase in line 12a, C-130 
logistics of $48.0 million.
    The committee expects the Air Force to program adequately 
for the spares for all its aircraft, and to refrain from 
including new aircraft in the budget request, when it cannot 
afford to support those already authorized and appropriated.

C-130 remanufacture report

    In the statement of managers accompanying the National 
Defense Authorization Act for Fiscal Year 1997 (S. Rept. 104-
267), the committee directed the Secretary of Defense to 
provide a report, no later than March 1, 1997, on the net 
benefits of pursuing a program to design, develop, and produce 
renewed C-130 aircraft through remanufacture of existing 
airframes. The report arrived at the committee on April 30, 
1997 and did not answer the question. Instead the report 
reviewed requirements, inventory, modernization, and disposal 
of C-130's, concluding that the present fleet of C-130's is 
sufficient, and modernization efforts are adequate. The report 
further concluded that the merits of the alternative approaches 
to C-130 fleet modernization would be thoroughly examined. 
Unfortunately, the report was requested for just such an 
examination and the Department's reply was unacceptable. The 
committee directs the Department to provide by January 1, 1998, 
the report examining the remanufacturing alternative as 
originally requested. If the Department fails to comply with 
explicit guidance again, the committee will feel compelled to 
recommend punitive actions.

WC-130J

    In order to complete the replacement of the aging weather 
reconnaissance aircraft in the Air Force Reserve, the committee 
recommends an increase of $177.0 million and $29.7 million for 
associated support.

EC-130J

    The committee also recommends an increase to the budget 
request of $70.5 to continue the modernization of the 193rd 
Special Operations Wing, which presently operates EC-130E 
aircraft that have been in service for over 33 years and will 
soon reach the end of their service life.

C-130J

    The committee also recommends an increase of $95.8 million 
to the budget request for two C-130Js to continue modernization 
of the Air National Guard.

Joint Primary Aircraft Training System

    The budget request included $65.4 million for 18 Joint 
Primary Aircraft Training System (JPATS) aircraft. The JPATS is 
a joint Air Force/Navy program to replace T-37 and T-34 primary 
flight training aircraft and associated ground based training 
systems. The committee has learned that an increase of $12.2 
million to the budget request would allow the Air Force to 
acquire the JPATS at the most efficient rate allowed, 22 
aircraft instead of 18 under the contract's variations in 
quantity (VIQ) matrix. Accordingly, the committee recommends an 
increase of $12.2 million to the budget request for an 
additional four JPATS aircraft. The recommended addition to the 
budget request requires no subsequent year funding. The 
increase was requested by the Air Force in its unfunded 
priorities.

F-15 PW-220E modifications

    The budget request included $169.6 million for F-15 
modifications, with $23.2 million was for F100-220E engine 
upgrades of F-15 aircraft. The PW-220E program is a 
modification program to change the F100-PW-100 engine on the F-
15C/D to a newer F100-PW-220 Equivalent, or ``E'' 
configuration. An additional $323.7 million ($22.8 million in 
fiscal year 1999) is programmed for the upgrades through fiscal 
year 2003. Because the F100-PW-220E engine is more reliable and 
maintainable than previous configurations, the committee 
recommends an increase of $22.8 million to the budget request 
to accelerate the engine modifications by one year.

F-16 targeting/navigation pods

    The Air Force uses the low-altitude navigation and 
targeting infrared for night (LANTIRN) systems to provide night 
attack capability for the F-15E and later models of the F-16. 
The LANTIRN system includes several additions to aircraft, 
including two pods (one with a wide field of view for 
navigation and one with a narrower field of view for 
targeting), plus software to enable the system to work with the 
aircraft carrying the pods.
    Earlier models of the F-16 aircraft (Blocks 25, 30, and 
32), however, are unable to carry both the navigation and 
targeting pod portions of the LANTIRN system simultaneously. 
This means that these aircraft have no ability to self-
designate precision guided munitions. The Air Force indicates 
that this inability precludes the Air Combat Command from 
including the squadrons operating these earlier model aircraft 
in the planning process for world wide rotational deployments.
    The Air Force has informed the committee that there are 
non-developmental item (NDI) systems that incorporate the 
targeting and navigation functions in one pod. The Air Force 
also indicates that some of these NDI systems use the LANTIRN 
software and have capability comparable to LANTIRN, but are 
cheaper than the LANTIRN pod system.
    The committee believes that improving the capability of 
existing F-16 squadrons to make them available to meet 
worldwide rotational deployments would help reduce demands on 
personnel operational tempo and improve warfighting ability. 
Therefore, the committee recommends an additional $8.66 million 
to be combined with prior year funding to procure pods and 
support equipment to equip one F-16 squadron. The recommended 
increase is shown in line 30 of the budget request for Aircraft 
Procurement, Air Force.

Rivet Joint technology transfer

    The committee believes that fusion of space and airborne 
infrared sensor data will significantly improve theater 
ballistic missile warning as well as active defense and attack 
operations. This need can be met by transferring operationally 
proven Cobra Ball infrared sensor system fusion technology to 
the Rivet Joint fleet. To initiate this effort, the committee 
recommends an increase of $20.0 million in Air Force 
Procurement for Rivet Joint modification.

SR-71

    The budget request did not include funds for SR-71 upgrades 
or modifications. The SR-71 provides a valuable capability for 
wide area surveillance from a unique platform, and the 
committee views its continued availability as crucial until 
there are operational unmanned aerial vehicles (UAV) in place 
and capable of providing the necessary coverage. Since high 
altitude endurance UAVs have so far not met expectations, the 
committee recommends an increase of $9.0 million to the budget 
request for upgrades and modifications of the SR-71. The 
committee encourages the Department to reprogram funds as 
necessary to continue the operation of the SR-71 in fiscal year 
1998.

U-2 Sensor Upgrades

    The budget request did not include funds to complete the 
conversion of older U-2 sensors to a common 
baselineconfiguration, which began last year. As a result of 
congressional action for fiscal year 1997 and a reprogramming within 
the Department, the U-2 reconnaissance program began a sustainment 
effort to allow the fielding of 11 fully capable Senior Glass sensor 
systems. The common baseline became necessary because previous systems 
and parts of the Senior Glass configuration had been experiencing 
vendor and support problems.
    The committee recommends an increase of $13.0 million to 
the budget request to complete the common baseline effort.

                           Air Force Missile

Titan IV space boosters

    The committee is aware of excess fiscal year 1997 funds in 
the Titan IV space booster program. In addition, the committee 
anticipates savings to accrue in fiscal year 1998 as a result 
of efforts to restructure the Titan IV program. Therefore, the 
committee recommends a reduction of $100.0 million in the 
fiscal year 1998 budget request for Titan IV procurement. 
Excess fiscal year 1997 funds should be used to offset the 
reduction in the fiscal year 1998 request. The committee is 
aware that DOD is considering the possibility of reprogramming 
these fiscal year 1997 funds. The committee will not approve 
such a request and directs the Secretary of Defense to leave 
excess fiscal year 1997 funds in the Titan IV program.

                          Air Force Ammunition

Air Force ammunition

    The committee is concerned with the inadequate funding for 
ammunition procurement that was contained in the President's 
budget request. Ammunition is an important contributor to 
military readiness for training and in anticipation of 
conflict. The committee recommends an additional $16.8 million 
to the Air Force budget request for ammunition procurement of 
GBU-28.

                      Other Air Force Procurement

Theater deployable communications

    The budget request included $17.0 million for procurement 
of theater deployable communications (TDC). The committee 
recommends an increase of $38.0 million to accelerate the 
procurement of TDC by acquiring an additional six sets.
    TDC is a compact, high bandwidth system used by forward 
deployed forces for communications. Procurement of TDC allows 
the retirement of aging, obsolete equipment, providing for a 30 
percent reduction in required airlift support for 
communications equipment. The current 12 year acquisition 
profile for TDC is inefficient and slow to provide necessary 
capabilities to forward forces.
                         DEFENSE-WIDE PROGRAMS


Common automatic recovery system
    The budget request did not include funding to continue 
common automatic recovery system (CARS) logistic support. Since 
CARS successful test program completion, the committee has 
encouraged the Department to complete procurement of the full 
nine CARS systems with previously provided funds. In order to 
field the full complement of previously provided CARS, the 
committee recommends an addition of the $3.0 million for 
logistic support.
    Additionally, the committee has learned of a proposal to 
capitalize on the success of this low cost landing system for 
unmanned aerial vehicles (UAV) by providing a lightweight, 
portable approach display system for expeditionary force 
helicopters. Accordingly, the committee recommends a $2.0 
million increase to the budget request to develop an 
expeditionary common automatic recovery system.
MH-47E helicopter replacement
    The committee notes a Special Operations Command 
requirement to modify an existing CH-47 to MH-47E configuration 
in order to replace an aircraft destroyed in a crash. The 
committee recommends an additional $40.5 million to support 
this MH-47E conversion effort.
Night firing scopes
    The Special Operations Command intends to procure night 
scopes for use on M4A1 carbines, beginning in fiscal year 1999. 
Recognizing the critical nature of this requirement and an 
overall shortage of night vision equipment, the committee 
supports an acceleration of this program. Therefore, the 
committee recommends an increase of $2.4 million to procure 600 
night scopes for improved target acquisition and fire control 
on the M4A1 carbine.
Counter proliferation/weapons of mass destruction
    The committee supports an increase of $4.2 million for this 
classified program.

                  National Guard and Reserve Equipment

    The budget request included $968.5 million for National 
Guard and Reserve Equipment, as shown in the table below:

           National Guard and Reserve Equipment and Aircraft:

        Item                                                    Millions
Aircraft Procurement, Army........................................    $0
Procurement of WTCV, Army.........................................  22.1
Procurement of Ammunition, Army................................... 143.8
Other Procurement, Army........................................... 382.9
                        -----------------------------------------------------------------
                        ________________________________________________
    Total, Army................................................... 548.7
Aircraft Procurement, Navy........................................  35.1
Procurement of Ammunition (Navy & Marine Corps)...................   6.0
Other Procurement, Navy...........................................   3.9
Procurement, Marine Corps.........................................  17.9
                        -----------------------------------------------------------------
                        ________________________________________________
    Total, Navy...................................................  62.9
Aircraft Procurement, Air Force................................... 238.2
Procurement of Ammunition, Air Force..............................  29.5
Other Procurement, Air Force......................................  89.2
                        -----------------------------------------------------------------
                        ________________________________________________
    Total, Air Force.............................................. 356.9
    Department of Defense Total................................... 968.5

    The committee continues to support modernization of the 
National Guard and reserve and recognizes the increasingly 
critical role that these forces play in worldwide deployments. 
In an era of limited resources, the most significant challenge 
facing the Congress in this arena is that of determining both 
system modernization priorities and appropriate funding levels.
    The committee is concerned about the level of funding for 
reserve component modernization in service budgets. Clearly, if 
the historical use of reserve component forces is a guide, the 
Congress should focus on modernization priorities associated 
with those key roles and functions performed by the reserve 
components in past and current operations and ensure that the 
equipment that these activities require is modern and 
comparable to that used by the active component counterpart. 
The committee recommends that the Army, in concert with the 
Army National Guard, concentrate on completion of the 
conversion of National Guard combat units to combat support and 
combat service support in accordance with the Total Army 
Analysis 2003 (TAA03) and the Army National Guard Division 
Redesign Study. The committee also recommends that the Army and 
the Army National Guard consider additional reorganization of 
National Guard combat force structure to meet critical 
artillery shortfalls. The committee understands that there is 
an additional requirement for 11 MLRS battalions beyond what 
has been currently fielded. The committee considers the 
artillery requirement to be critical to any future combat 
operation and believes that this function can be well supported 
by the Army National Guard.
    Additionally, the committee notes a significant amount of 
additional funding provided in this bill in support of reserve 
component modernization. Reserve component modernization will 
benefit from $45.0 million for two additional CH-47 Chinook 
helicopters for the Army Reserve; $127.3 million for 18 
additional UH-60 Blackhawk helicopters that will result in a 
fielding of a requisite number of aircraft to the Army National 
Guard; $45.0 million for an additional reserve component Heavy 
Equipment Transporter Systems (HETS); $50.0 million for an 
additional 150 Palletized Load System (PLS) trucks and 50 
trailers for reserve component units; and $2.0 million for 
Avenger Table Top Trainers for the Army National Guard. These 
congressional adds alone account for an additional $269.3 
million that will support reserve component modernization.
    The committee encourages both the active and reserve 
component leadership to work together to identify future 
modernization requirements and ensure that they are funded in 
accordance with Department of Defense funding guidance. 
Accordingly, the committee recommends an increase of $653.0 
million to the budget request for National Guard and reserve 
Miscellaneous Equipment and aircraft, as follows:

                                                                        
                Miscellaneous Equipment                     Millions    
                                                                        
    Army Reserve......................................             $40.0
    Navy Reserve......................................              40.0
    Marine Corps Reserve..............................              40.0
    Air Force Reserve.................................              40.0
    Army National Guard...............................              80.0
    Air National Guard................................              40.0
                                                                        


                   National Guard and Reserve aircraft                  
                                                                        
                         Items                              Millions    
                                                                        
WC-130J...............................................            $177.0
C-130J................................................              95.8
EC-130J...............................................              70.5
Logistics Support for WC-130J.........................              29.7
                                                                        

    The committee directs that miscellaneous funding will be 
allocated exclusively by reserve component chiefs. The 
committee recommends that the funding allocated for the Army 
National Guard be used for the following items: medium truck 
extended service programs (ESP); Heavy Equipment Transporter 
Systems (HETS); MLRS artillery systems; Avenger air defense 
systems; training simulators; night vision equipment, and the 
Deployable Universal Combat Earthmovers (DEUCE). 
Fundingallocated by reserve component chiefs or any alternative 
proposal for the funding provided for the Army National Guard must meet 
the criteria established in Section 1059, Sense of Congress regarding 
funding for reserve component modernization not requested in the annual 
request.
    The committee recommends a total of $1.9 billion for 
National Guard and Reserve equipment and aircraft.

                     ADDITIONAL MATTERS OF INTEREST

                       SUBTITLE E--OTHER MATTERS

Section 141. Prohibition on use of funds for acquisition or alteration 
        of private drydocks.

    The committee is concerned with the excess capacity in the 
nation's public and private shipyards. As the Navy force 
structure continues to decline, the requirement for shipyard 
maintenance capacity also declines. Unfortunately, funds 
provided to the Department of Defense (DOD) are sometimes used 
inadvertently to increase shipyard capacity without appropriate 
consideration of the long-term consequences. Therefore, the 
committee recommends a provision that will prevent the use of 
DOD funds to further increase excess capacity.

Section 142. Replacement of engines on aircraft derived from Boeing 707 
        aircraft.

    The budget request did not include funds for re-engining 
Boeing 707-type aircraft. Two years ago, the committee 
supported an initiative to re-engine two RC-135 aircraft and 
recommended funds for nonrecurring integration and procurement 
of two CFM56 engine kits for those aircraft. The committee is 
convinced of the merits of the program to re-engine RC-135 
aircraft. As a result, the committee recommends an increase to 
the budget request of $54.8 million for the installation of two 
CFM56 engine kits on RC-135 aircraft.
    The committee views with concern the large fleet of Boeing 
707-type aircraft derivatives in the Air Force inventory that 
are, or will be, in need of re-engining to reduce operation and 
support costs, to increase efficiency, and to meet Federal 
Aviation Administration (FAA) standard for noise. A recent 
review of 707-type airframes revealed that, of the 647 707-type 
airframes in the Air Force inventory, 402 have been reengined, 
and an additional 15 aircraft will be re-engined by fiscal year 
2000.
    While there have been re-engining programs for the Air 
Force's Boeing 707 type fleet over the years, there is a need 
for comprehensive analysis of costs, benefits, and programming 
for the remainder of the 707-type fleet. The requirement for 
modernizing its fleet of Boeing 707 derivative aircraft seems 
to have been omitted from the present and recent Air Force 
budget requests, possibly leading to a choice between a major 
procurement ``bow wave'' in future years or premature 
retirement of many aircraft. Accordingly, the committee 
recommends a provision that would require an analysis of re-
engining requirements, program requirements, and benefits to 
ensure that this vital requirement is not ignored in future 
planning and programming.

Section 143. Exception to requirement for a particular determination 
        for sales of manufactured articles or services of Army 
        industrial facilities outside the United States.

    The committee is concerned that with the end of the Cold 
War and the onset of reduced defense budgets, many of our 
military industrial facilities are operating inefficiently due 
to a lack of work. The committee understands that there are 
some cases where the excess capacity created by the lack of 
work can be utilized by allowing these facilities to provide 
commercial entities with articles and services for inclusion in 
weapon systems that will ultimately be procured by the 
Department of Defense. Utilizing this excess capacity will 
serve to reduce the current waste, create a more efficient 
facility, provide private industry with quality service, and 
maintain a critical work force. Therefore, the committee 
recommends a provision that would authorize Army industrial 
facilities to sell to commercial entities articles or services 
that will ultimately be incorporated into weapon systems 
procured by the Department of Defense.

                        OTHER ITEMS OF INTEREST

Alternative fuel vehicles

    The Energy Policy Act of 1992 (EPACT), Public Law 102-486, 
requires Federal agencies to purchase alternative fuel vehicles 
to meet 50 percent of their annual new vehicle acquisitions in 
fiscal year 1998. The goals of such acquisitions are to ensure 
that Federal agencies assist in meeting Federal goals to 
accelerate the reduction of incremental costs associated with 
alternative fuel vehicles, to propel alternative fuel vehicles 
into a position of standard manufacturers' models, and to 
expand the fueling infrastructure for alternative fuel vehicles 
into a nationwide network. Executive Order 13031, dated 
December 13, 1996, directed each agency to develop and 
implement plans to comply with the alternative fuel vehicle 
acquisition requirements of the Energy Policy Act by February 
13, 1997, and to submit the plans to the Office of Management 
and Budget.
    The Department of Defense, with its large fleet of 
vehicles, plays a significant role in achieving the goals of 
the program, particularly through its ability to purchase a 
wide variety of alternative fuel vehicle types, such as 
alcohol, electric, andnatural gas. According to information 
available to the committee, a total of 7,491 alternative fuel vehicles 
should be procured or acquired for use in fiscal year 1998. That figure 
is based upon the number of new vehicles intended to be purchased by 
the Department in fiscal year 1998 that are defined as EPACT ``covered 
fleet'' vehicles. The committee directs the Department of Defense to 
provide a report by January 1, 1998 that identifies the actual number 
and types of alternative fuel vehicles it intends to purchase in fiscal 
year 1998. The committee further directs the Department to provide an 
annual report, within 150 days after the beginning of each fiscal year, 
that identifies the number and type of alternative fuel vehicles that 
it plans to purchase in the following fiscal years.

Automated data processing equipment

    The budget request included $125.1 million to support 
modernization of the automation infrastructure. The committee 
is concerned that the Army has retained approximately 8000 
legacy secure facsimile systems that could become a burden to 
maintain as repair parts become scarce. The committee is also 
aware that new technology has resulted in secure facsimile 
machines that are lighter, easier to maintain, and more capable 
than existing systems. The Secretary of the Army is therefore 
directed to provide a report, no later than March 1, 1998, to 
the congressional defense committees that establishes future 
requirements for secure facsimile machines, displays the costs 
and benefits of replacing existing legacy systems with newer 
technology machines, and outlines the department funding plan 
for addressing future requirements.

Coast Guard port security units

    The budget request contained no funding for equipment for 
Coast Guard port security units (PSU).
    The Coast Guard has notified the committee of an unfunded 
requirement for $13.6 million to purchase the equipment 
necessary to field three new PSUs and to replace the equipment 
of three existing PSUs that were originally stood up in 1987. 
The PSUs are units of the Coast Guard Reserve that have been 
mobilized on several occasions, including during Desert Storm 
and Uphold Democracy operations in Haiti. Their missions 
include waterside security of ports and filling security 
perimeter gaps between land side security forces and coastal 
and barrier assets. There is no unit of the Coast Guard's 
active force that performs a comparable mission and could 
provide the PSUs with excess equipment by transfer. The Coast 
Guard has also informed the committee that requirements levied 
by the unified commanders in chief dictate the need to 
establish three new units to supplement those already in 
existence.
    While the committee was unable to identify funds to provide 
additional resources for Coast Guard port security units, the 
committee has no objection to the requirement being satisfied 
by the use of funds already included in the defense function 
for defense related activities (budget subfunction 054) in the 
budget request for support of the Coast Guard.

Global Air Traffic Management

    Global Air Traffic Management (GATM) is an Federal Aviation 
Administration (FAA) and International Civil Aeronautics 
Organization (ICAO) initiative that allows worldwide access for 
Department of Defense aircraft. To become GATM compliant, 
aircraft will have to modified and upgraded to incorporate 
digital data links, GPS receivers, and other modifications.
    The committee acknowledges the need to create a coherent, 
comprehensive plan for all cargo and passenger carrying DOD 
aircraft that must comply with near-term FAA and ICAO mandates 
to ensure continued access to worldwide airspace. Accordingly, 
the committee directs the Secretary of Defense to provide a 
report no later than March 3, 1998 to the congressional defense 
committees that describes the Department's plans to comply with 
GATM requirements, and the budget programming necessary to meet 
the outyear requirements of GATM. The report should explain the 
Department's plans for incorporation of commercial off-the-
shelf (COTS) systems and non-developmental item (NDI) solutions 
to ensure near-term and future compatibility with civilian 
systems and to reduce the cost of implementing non-tactical 
GATM requirements.

Tactical aviation

    Last year's Senate committee report on S.1745 (S. Rept. 
104-267) laid the foundation for a thorough examination of 
tactical aviation modernization through the requirement of 
reports on the costs of the F-22 and its event-based program. 
Later, the National Defense Authorization Act for Fiscal Year 
1997 (Public Law 104-201) added requirements to examine the net 
benefits of developing the F/A-18E/F, its unit costs for 
various production rates, and a report on the Joint Advanced 
Strike Technology (JAST) program, which has been renamed the 
Joint Strike Fighter (JSF) program.
    Of these reports, the reports on F-22 cost and F/A-18E/F 
net benefit included fences on program funding until the 
reports were provided to the Congress. Reports on F-22 event-
based decision making were due on October 1, 1996 and February 
3, 1997 with the submission of the budget request, and no 
restriction was placed on the program pending receipt of the 
event-based reports. As of April, 1997, those reports had not 
been received, leading the committee to believe that the 
Department only provides important background for decisions 
where there are penalties for noncompliance. The report on the 
JAST (now JSF) program is due on May 15, 1998.
    In addition to these reports, the committee is aware that 
theDepartment has formed a tactical aviation working group 
within the Joint Staff to assess various options for future decisions 
related to the Quadrennial Defense Review (QDR). The committee notes 
that before the QDR was completed, program requests had changed from 
calendar year 1996 to calendar year 1997, in part because of 
assumptions about the outcome of the QDR. Also, programs have changed 
without any reference to the strategy-based work of the QDR. For 
example, the restructure of F-22 engineering and manufacturing 
development (EMD) occurred through an infusion of production funds in 
development to make up for a $2.2 billion overrun, and the F/A-18E/F 
program has been cut by four aircraft.
    The Subcommittee on AirLand Forces held two hearings on 
tactical aviation modernization to receive testimony on both 
the broad strategic considerations of tactical aviation and 
programmatic considerations and the costs of the present 
administration plan. Many themes emerged from the hearings, 
especially:
          (1) the present program for modernization is 
        unaffordable;
          (2) the tactical aviation modernization program does 
        not seem to be based on a clear strategy; and
          (3) the Navy and Air Force have a different 
        assessment of future needs or a different approach to 
        meeting the future.
    While awaiting the preliminary results of the QDR, the 
committee intends to put the tactical aviation modernization 
program into a placeholder status for fiscal year 1998, pending 
clear decisions from the department on its future requirements 
and programs.

Tactical trailers/dolly sets

    The budget request included $8.0 million for tactical 
trailer equipment. The committee understands that there is 
promising new technology in trailer equipment that would allow 
a single operator to load and unload heavy equipment. One 
example of this new technology is a hydraulic traveling axle 
trailer system that positions a trailer so that equipment can 
be driven or winched onto the trailer platform. This new 
equipment is currently available on the commercial market and 
would reduce current Army crew requirements. The committee 
understands that the Army is in the process of establishing a 
new requirement that may allow for the use of these 
commercially available products. The committee encourages the 
Army to finalize work on requirements for new, simple to 
operate trailer equipment and to explore other products 
currently available to commercial contractors for potential 
military use.
         TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

    The committee recommends investments in research and 
development to address future mission needs by ensuring that 
military systems embody the most advanced technologies.
    Appropriate subcommittees of the full committee conducted 
hearings and reviewed information on various research and 
development program requests including: national and theater 
missile defense programs; Army general purpose programs; new 
ships and related ship programs; tactical and strategic 
aircraft and associated systems; counterproliferation programs; 
command, control, and communications programs; science and 
technology programs; and university and industry science and 
technology efforts. The committee's research and development 
priorities were to ensure future battlefield dominance by 
increased emphasis on advanced technology programs and to 
achieve future savings.
Explanation of tables
    The tables in this title display items requested by the 
administration for fiscal year 1998 for which the committee 
either increased or decreased the requested amounts. As in the 
past, the administration may not exceed the amounts approved by 
the committee (as set forth in the tables or, if unchanged from 
the administration request, as set forth in the Department of 
Defense's budget justification documents) without a 
reprogramming action in accordance with established procedures. 
Unless noted explicitly in the report, all changes are made 
without prejudice.

              SUBTITLE A--AUTHORIZATION OF APPROPRIATIONS

    SUBTITLE B--PROGRAM REQUIREMENTS, RESTRICTIONS, AND LIMITATIONS

Section 211. Joint Strike Fighter program.
    The budget request included $930.8 million in three program 
elements: $448.9 in PE 603800N; $458.1 million in PE 603800F; 
and $23.9 million in PE 603800E for development of the Joint 
Strike Fighter (JSF).
    Tactical aviation programs have been the subject of intense 
scrutiny during committee and subcommittee hearings. One theme 
that emerged consistently has been the overall cost of the 
three planned programs: the F-22; F/A-18E/F; and the JSF. The 
issue of requirements and the relationship to known or 
postulated threats has been a second consistent theme.
    Realizing that the JSF program emerged from an amalgam of 
developmental programs that were individually unaffordable, the 
committee has been encouraged by the program's consistent 
emphasis on unit cost and the incorporation of emerging 
technologies to provide improved capabilities within strict 
cost guidelines.
    The continued progress of the JSF program offers real hope 
foracquiring advanced aircraft designed to be efficiently 
manufactured and supported through a common support structure. While 
the concepts, goals, and progress to date have been encouraging, the 
committee views with concern the proposed order of fielding finished 
JSF aircraft. The program cancellations and combinations that led to 
the JSF most directly affected the Navy's strike capability. For 
example, the A-12 program cancellation that was the result of a program 
overrun that exceeded one billion dollars, and the subsequent tactical 
aviation restructurings led to a near-term situation that is the exact 
reverse of what it should be. Instead of a small number of stealth type 
aircraft based forward on aircraft carriers and a significant force of 
capable multi-role aircraft to wage the larger type campaigns such as 
Desert Storm, the stealth aircraft are based in the heart of America, 
where they can be moved forward only after a foothold has been 
established or host nations provide support and the multi-role aircraft 
are on board carriers.
    In an attempt to reset the balance in the future, the 
committee directs the Secretary of Defense to ensure that the 
Navy stealthy strike aircraft capable of carrier-based strike 
operations are expeditiously fielded as the first priority of 
the JSF program. The committee recommends a provision that 
would direct the Secretary of Defense to provide a report to 
the congressional defense committees that would describe the 
development and production sequencing for the various JSF 
aircraft, not later than February 15, 1998.

Alternative engine program

    The budget request included funds for the continuation of a 
program to establish an alternative engine for the joint strike 
fighter, but omitted funds for fiscal year 1998. The committee 
is persuaded that there is a need for an alternative engine for 
the JSF, but expects the Department to program sufficient funds 
in the future years for a robust, accelerated profile. 
Accordingly, the committee recommends an increase in the budget 
request of $28.0 million to accelerate the alternative engine 
program, with the understanding that the Department will 
provide for the accelerated program in fiscal year 1999 and 
beyond.

Section 212. F-22 aircraft program.

    The committee views with concern the recently revealed cost 
overruns of $2.2 billion in the F-22 engineering and 
manufacturing development (EMD) program. While the Air Force 
asserts that the restructure of the program leaves the overall 
program top line for the sum of development and production 
untouched, the restructure deletes the following:
          (1) the four pre-production verification (PPV) 
        aircraft (-$706.0 million), which were to have been 
        used for flight testing and to measure and validate 
        manufacturing techniques; and,
          (2) fifty four production aircraft (-$1.45 billion) 
        over the Future Years Defense Program (FYDP).
These steps were taken to prevent further schedule slips 
through a transfer of $2.2 billion to the EMD program.

Cost analyses

    The committee is also concerned about recent assertions by 
the Secretary of the Air Force that any further discussion of 
cost analyses of the F-22 are ``not useful at this point.'' On 
the contrary, the committee is convinced that discussions of a 
potential $16.0 billion overrun in production and an 
acknowledged $2.2 billion overrun in EMD are not only useful, 
but vital in framing decisions on present and future defense 
spending.
    A review of the F-22 program history related to unit cost 
estimates shows clearly why cost analyses are critical at this 
point. In 1985, the USAF established an average unit flyaway 
cost goal of $35.0 million in fiscal year 1985 dollars ($41.2 
million in fiscal year 1990 dollars). The goal provided an 
affordability restraint on proposed designs, and was based on a 
buy of 750 aircraft at a production rate of 72 per year, 
produced between 1992 and 2005.
    As a result of the 1990 Major Aircraft Review, the 
production rate was reduced from 72 to 48, and the unit flyaway 
cost was revised to $51.2 million. In 1991, the Milestone II 
Defense Acquisition Board decision reduced the total planned 
buy to 648, with production scheduled between 1996 and 2012. 
While the flyaway costs continued to increase, so also did the 
program acquisition unit costs (PAUC), defined as total program 
cost divided by total units. PAUC represents the total amount 
paid by the taxpayers, divided by the units delivered in a 
program, and is the most inclusive measure of program costs, 
since stretch-outs and intra-program transfers are all included 
in the PAUC. No amount of transfers of funds from production to 
development, or vice versa, will affect the PAUC, hence it is 
the best measure for overall program costs.
    As outlined in hearings on tactical aviation, present 
estimates of PAUC depend on the validity of as-yet-undefined 
cost savings measures. Present Air Force estimates of F-22 PAUC 
would be $161.1 million per aircraft, under the best 
circumstances. If the Air Force's cost saving initiatives are 
not successful, then the more substantial CAIG estimate for 
cost should be used, as it is based in part on costs actually 
incurred on the first EMD aircraft.
    It is imperative that the program, already suffering from 
an over two billion dollar overrun, be closely monitored as it 
proceeds through development. Accumulated cost data during the 
remaining development phase and early low rate production 
should serve to build confidence in the Air Force's proposed 
initiatives. Accordingly, the committee recommends a provision 
to ensure future costs are controlled, using cost cap similar 
inscope to those applied to the B-2 program.

Section 213. High Altitude Endurance Unmanned Vehicle program.

    The budget request included $216.7 million for High 
Altitude Endurance (HAE) unmanned air vehicles (UAVs). The two 
HAE UAVs are the Global Hawk, formerly the Tier II plus, and 
the Dark Star, formerly the Tier III minus. Each has different 
characteristics, but both are designed for high altitude 
extended flights. The programs are presently managed by the 
Defense Advanced Projects Agency (DARPA), and are 
differentiated from tactical UAVs, which are designed for 
shorter flights, less endurance, and for use by field 
commanders.
    The committee has recently learned of slips in the program 
schedule and cost overruns in the overall program. Although the 
HAE program had been limited to $10.0 million in unit flyaway 
pricing, it now appears unlikely that the aircraft can be 
produced for that amount. The committee is concerned about the 
progress of the HAE program, from the crash of the Tier III 
minus to the overrun and delayed first flight in the Tier Two 
plus program.
    While there has been much written and said about the future 
of UAVs in gathering intelligence or providing timely 
battlefield awareness, the promises have not yet been 
fulfilled. A common theme in discussion of UAV program has been 
that the major expenses of systems are in the sensors, ground 
stations, and data links, rather than in the air vehicles. 
While this is true with respect to planned cost, it has 
resulted in an almost cavalier attitude toward air vehicle 
development.
    UAVs are struggling to graduate from small, ``disposable'', 
inexpensive aircraft to multi-million dollar systems, requiring 
a serious approach to testing and fielding. There is the added 
problem related to the use of advanced concept technology 
demonstrations (ACTD) to field complex, developmental systems, 
that barely fit the definition of mature technologies. The 
results have been discouraging so far, especially when compared 
with the promises and plans for UAV employment.

Tier II plus

    The committee was told that the Tier II plus was being 
developed under an entirely new acquisition approach. In 
exchange for the limiting military standards and procurement 
regulations, the contractor was free to trade operational and 
performance goals to maximize military utility, while adhering 
to only one requirement: a unit flyaway price of $10.0 million.
    Now it appears the contractor needs an additional infusion 
of money to produce the systems, and the committee has been 
reminded that the $10.0 million unit flyaway price applies to 
production after successful completion of the ACTD. The 
reasoning seems inconsistent since there is no requirement for 
the program to go to production; ACTD's are intended to be 
limited demonstrations. Under the circumstances, the need for 
additional funds for the ACTD strains credibility.
    The committee has recently learned that the Defense 
Airborne Reconnaissance Office is preparing contingency plans 
for the entire HAE program, reducing the planned eight Global 
Hawks, six Dark Stars, and three ground stations to five Global 
Hawks, three Dark Stars and two ground stations. The 
restructuring would be required if:
          (1) there are continued delays in substantial flight 
        testing;
          (2) there are high cost overruns; or
          (3) further unforseen technical difficulties arise; 
        or
          (4) there are unsuccessful first flights.
    While the committee agrees with the Department of Defense 
that there is a need to proceed cautiously until a record of 
success is established, there are questions about what is to be 
done in the near term. Accordingly, the committee recommends a 
provision that would aid the Department in it's efforts to 
control and stabilize the programs.

Section 214. Advanced Anti-Radiation Guided Missile program.

    The statement of managers accompanying the National Defense 
Authorization Act for Fiscal Year 1997 (H. Rept. 104-247) 
included an additional $50.0 million in PE 205601N, Harm 
Improvement, to continue development of the advanced anti-
radiation guided missile (AARGM). The conferees noted that 
funds were to be spent only for design reviews and support for 
test and evaluation. The report also encourages the Secretaries 
of the Navy and Air Force to fund the fiscal year 1998 
requirements for the program. The Department did not do so. 
Accordingly, the committee recommends a provision that would 
direct that $25.0 million of fiscal year 1997 funds be used for 
higher priority programs.

Section 215. Federally funded research and development centers.

    The committee notes the continued progress of the 
Department of Defense (DOD) in overseeing the management of the 
Federally funded research and development centers (FFRDC) by 
their sponsoring organizations within the department and the 
military services. As a result of the of the DOD commitment to 
the five-year plan established in 1995 for the management of 
such organizations, the committee has recommended a provision 
that would impose a ceiling on the total staff years of 
technical effort that may be funded for Defense FFRDC's in 
fiscal year 1998. This is intended to provide the DOD with a 
more appropriate and flexible management framework than would a 
ceiling on total annual funding for DOD work conducted in 
defense FFRDC's.
    The committee will continue to monitor this issue closely 
toensure that DOD maintains appropriate management controls on 
the work performed by the Defense FFRDC's. Such organizations should be 
limited to performing work within their core competencies and should 
not compete with the private sector. The committee is prepared to 
consider reimposing annual funding ceilings should past management 
problems recur.

Section 216. Goal for dual-use science and technology projects.

    The committee remains interested in dual-use strategies for 
research and development of technologies applicable to the 
missions of the Department of Defense (DOD). That interest has 
been reflected in the passage of legislation to expand the use 
of other transactions authority in section 2371 of title 10, 
United States Code, as well as the authorization of continued 
funding for the dual-use applications program in the Office of 
the Secretary of Defense. The committee notes the continued 
pressure on science and technology funding in the Department of 
Defense and believes that appropriate dual-use strategies 
within the military services have the potential to use 
constrained defense resources to leverage commercial investment 
in technologies critical to future battlefield dominance.
    The DOD dual-use program is at a critical turning point. 
The Under Secretary of Defense for Acquisition and Technology 
has announced that the DOD intends to cease funding dual-use 
applications as a separate program in the budget of the Office 
of the Secretary of Defense at the end of fiscal year 1999. 
After that point, the services will be expected to carry out 
dual-use projects within their core science and technology 
programs. Unfortunately, the DOD has developed no specific 
process to ensure that such a transition will take place, 
despite the military services' resistance to dual-use 
technology development. The committee commends the DOD for 
structuring the dual-use program in fiscal year 1997 to create 
a strong incentive for the military services to use their core 
science and technology funds for dual-use projects. However, 
that initiative alone will not be sufficient to achieve the 
integration of significant, sustained dual-use activity in the 
services' science and technology programs.
    There are several major barriers to the greater use of 
dual-use strategies by the military services. For example, 
contracting officers are reluctant to depart from the use of 
contracts or grants due to a lack of understanding of the other 
transactions authority. Also, the military services are 
required to develop technologies to meet operational 
requirements that do not have commercial analogs. Current 
constrained science and technology budgets do not allow the 
services to pursue technologies for which dual-use strategies 
might be more appropriate. Finally, there remain significant 
barriers between commercial technology developers and the 
systems requirements of operational users within the military 
services.
    For these reasons, the committee recognizes that there will 
be a transition process that involves the shifting of dual-use 
programs from OSD to the military services. As a first step in 
the process of that transition, the committee recommends a 
provision that would establish a set of goals with increasing 
levels of funding for new starts in the applied research (6.2) 
accounts of the military services to be devoted to dual-use 
projects in each of fiscal years 1998, 1999, and 2000. The 
committee believes strongly that this approach will yield more 
effective long-term success than an approach that would direct 
the military services to fund dual-use technologies at a 
required percentage of their science and technology programs, 
beginning in FY 1998. For purposes of this section, those dual-
use projects entered into by the military services would have 
to require a minimum cost-share of 50 percent from non-federal 
participants in order to count toward meeting the specified 
goal. The provision would also assign oversight responsibility 
for implementation of dual-use technologies to the official who 
reports directly to the Under Secretary of Defense for 
Acquisition and Technology.
    In light of the recent rescission of the $50.0 million 
appropriated for dual-use programs in fiscal year 1997 and the 
lack of definition of the dual-use program request for fiscal 
year 1998, the committee recommends an authorization of $125.0 
million for the dual-use applications program in fiscal year 
1998, a reduction of $100.0 million below the amount of the 
request. The committee urges the Secretary of Defense to 
administer the program in fiscal year 1998 in the same fashion 
as the dual-use program is being administered in fiscal year 
1997.

Section 217. Transfers of authorizations for counterproliferation 
        support program.

    The fiscal year 1998 budget request included $65.2 million 
for the Counterproliferation Support Program to accelerate the 
development and deployment of essential military 
counterproliferation technologies and capabilities in the 
Department of Defense (DOD) and the military services.
    The committee recommends an increase of $20.0 million to 
the counterproliferation support program: $3.0 million for the 
high frequency active auroral research program (HAARP); $1.0 
million for development of a portable trace element detection 
system that utilizes a laser plasma technique that enables 
quick sampling of reflected light, which could be used for on-
site inspections of chemical and biological facilities; $6.0 
million for continuation of the SAFEGUARD program; $10.0 
million for the continuation of the counterproliferation 
mission planning analysis and planning system (CAPS) to support 
theater commanders and special operations forces in preparing 
for regional contingencies involving weapons of mass 
destruction.
    In addition, the committee recommends a $7.0 million 
increase to the budget request for defense operations and 
maintenance for the U.S. Special Operations Command (USSOCOM) 
for equipment to detect, attack, and destroy underground 
facilities, and fortraining activities to locate, identify, 
seize, destroy, render safe, transport, capture, or recover weapons of 
mass destruction from deep underground structures.
    The committee is concerned about the amount of funds 
expended by the government for government administrative and 
Systems Engineering and Technical Assessments (SETA) support 
under the HAARP program. Of the funds made available last year 
for HAARP, the committee understands that roughly twenty 
percent went for government overhead and SETA support. The 
committee understands that these activities are necessary. 
However, the committee is concerned that the amounts authorized 
for HAARP to conduct experiments and to demonstrate its utility 
for DOD requirements is being diverted. The committee directs 
that the combined government overhead/SETA support costs be no 
more than ten percent.

Chemical and Biological Detection

    The potential use of chemical agents and weapons continues 
to pose a serious threat to the survivability and effectiveness 
of U.S. forces. The committee supports efforts by the 
Department to improve our ability to detect and identify 
chemical agent production and storage facilities. National 
capabilities and technologies such as the SAFEGUARD sensor 
suite could provide a near-term, low risk capability to detect, 
confirm, and monitor certain weapons of mass destruction 
effluents. The committee supported proof of concept activities 
in fiscal years 1996 and 1997. To complete the proof of concept 
activities, the committee recommends an increase of $6.0 
million to PE 62384BP for the SAFEGUARD program.

Mission Planning and Analysis

    The proliferation of weapons of mass destruction remains a 
continuing national security concern and challenge for the long 
term. To address this challenge, the committee has supported 
funding for a counterproliferation analysis planning systems 
(CAPS). The committee recommends an increase of $10.0 million 
in the counterproliferation support program (PE 63160D) for 
counterproliferation analysis planning systems: $4.0 million 
for U.S. Strategic Command (USSTRATCOM) and $6.0 million for 
USSOCOM.

Transfer Authority

    The committee recommends a provision that would allow the 
Department of Defense to transfer up to $50.0 million from 
fiscal year 1997 defense-wide research and development accounts 
for counterproliferation support activities that are determined 
by the Counterproliferation Review Committee to be necessary 
and in the national security interests.

Underground and Deep Underground Structures

    The committee has recommended the use of $4.5 million 
available in the counterproliferation support program ($1.5 
million in fiscal year 1996 and $3.0 million in fiscal year 
1997) for the exploration of a ``deep digger'' concept for hard 
target characterization. The committee continues to support 
efforts by the Department to focus its research and development 
efforts aggressively on programs to detect and discriminately 
attack and destroy underground facilities. The committee 
continues to believe the ``deep digger'' concept could possibly 
address a critical gap in our armed forces' capabilities. The 
committee understands that only a small portion of funds has 
been released to conduct a feasibility study for theoretical 
validation of the program. ``Deep digger'' has the potential 
for use in a variety of missions, because it could be delivered 
either by ground forces or by aircraft. The committee directs 
the Department to report to the committee by October 31, 1997, 
on the status of the program.

Section 218. Kinetic Energy Tactical Anti-Satellite Technology Program.

    The committee notes that in testimony before the committee 
on March 12, 1997, witnesses from the Department of Defense 
expressed support for proceeding with the kinetic energy anti-
satellite (KE-ASAT) program and the Department's intention to 
obligate additional funds appropriated in fiscal year 1998 for 
this program, even though no funds were requested. Based on 
this indication of support from DOD and the level of investment 
already achieved, the committee believes that it would be wise 
for DOD to complete the development of the KE-ASAT program and 
preserve the option of fielding a limited operational 
capability in the future. Therefore, the committee recommends a 
provision that would authorize $80.0 million in PE 63892D to 
continue this effort in fiscal year 1998. The provision also 
prohibits the obligation of funds in PE 65104D, relating to 
technical studies and analyses, until the funds appropriated 
for the KE-ASAT program in fiscal year 1998 have been released 
to the KE-ASAT program manager.
    The committee directs the Secretary of Defense to submit a 
report to the congressional defense committees by May 1, 1998, 
detailing the environmental and operational impacts in space of 
the debris that would result from a successful use of a KE-ASAT 
weapon by the United States, or other anti-satellite weapon by 
any other nation. The report should also describe features of 
the KE-ASAT program designed to mitigate this potential 
problem.

Section 219. Clementine 2 Micro-Satellite development program.

    The committee has supported the Clementine 2 micro-
satellite near-earth asteroid interception mission. In fiscal 
year 1996, the U.S. Air Force Space Command, in conjunction 
with the Air Force Phillips Laboratory, initiated the 
Clementine 2 micro-satelliteprogram as a follow-on to the 
highly successful Clementine 1 mission. The Clementine 2 program is 
intended to develop, test, and flight-validate a variety of 
miniaturized spacecraft technologies with applications to a wide number 
of military and intelligence space programs. By using near-earth 
asteroids as sensor demonstration targets, the mission will also 
provide benefits to the civil science community. The budget request did 
not include any funds for this program. Therefore, the committee 
recommends a provision that would increase funding for the Clementine 2 
program by $50.0 million (in PE 63401F) to continue this effort under 
the control of the Space Warfare Center, with execution by the 
Clementine team (Phillips Laboratory, the Naval Research Laboratory, 
and the Lawrence Livermore National Laboratory). The provision would 
also prohibit the obligation of more than $35.0 million of funds 
authorized in PE 64480F for the Global Positioning System Block IF 
satellite system until the Secretary of Defense certifies to Congress 
that the Secretary has made available for obligation funds appropriated 
for fiscal year 1998 for the Clementine 2 Micro-Satellite program.

             SUBTITLE C--BALLISTIC MISSILE DEFENSE PROGRAMS

Section 221. National Missile Defense program.

     The committee continues to support a focused effort to 
develop and deploy a National Missile Defense (NMD) system to 
defend the United States against limited ballistic missile 
attacks. The committee acknowledges that the Secretary of 
Defense has recently reiterated his commitment to preserving 
the option of deploying such a system in fiscal year 2003. 
Recognizing the continuing controversy over NMD deployment 
policy, the committee recommends a provision that would 
strengthen the option to deploy an NMD system in fiscal year 
2003 without specifically establishing an overarching 
deployment policy.
    This provision would require the Secretary of Defense to 
structure and fund the NMD program so as to support an 
integrated NMD system test in fiscal year 1999. The provision 
would also require the Secretary of Defense to prepare a plan 
for the development and deployment of an NMD system that could 
achieve initial operational capability in fiscal year 2003. 
Finally, the provision recommends an authorization of $978.1 
million for NMD in fiscal year 1998.

Section 222. Reversal of decision to transfer procurement funds from 
        the Ballistic Missile Defense Organization.

     On December 23, 1996, Program Budget Decision 224C3, 
signed by the Under Secretary of Defense (Comptroller), 
transferred all procurement funds for ballistic missile defense 
programs from the Ballistic Missile Defense Organization (BODO) 
to the military services. The committee strongly opposes this 
decision and recommends a provision that would reverse it.
     The committee has concluded that, for purposes of 
continuity and management coherence, BODO should continue to 
manage the program procurement funds in cases where BODO 
already manages the program research, development, test, and 
evaluation funds. This is a basic principle dating back to the 
creation of the Strategic Defense Initiative Organization. The 
committee is concerned that transferring procurement funds from 
BODO to the military services will force unhealthy and 
unnecessary tension between missile defense programs and 
already under funded service modernization programs. This 
tension will be particularly acute in the years beyond the 
Future Years Defense Program when the services would be 
required to identify and dedicate the needed ballistic missile 
defense procurement funds from within service accounts that are 
likely to be under funded.

                       SUBTITLE D--OTHER MATTERS

Section 231. Manufacturing Technology program.

     The committee is concerned that the Department of Defense 
and the military services have not made sufficient progress in 
implementing the requirement in section 2525 of title 10, 
United States Code, to seek the participation of manufacturers 
of manufacturing equipment in the projects under the 
manufacturing technology program. Therefore, the committee 
recommends a provision that would amend section 2525 to clarify 
the rationale for the current requirement. The committee 
directs that the Defense Logistics Agency and each of the 
military services provide to the congressional defense 
committees, no later than February 15, 1998, a report 
describing their respective procedures for implementing the 
requirement in 2525(c)(2) of title 10, United States Code, as 
amended, including the manner in which the requirement is 
addressed in solicitations for contracts under the program.

Section 232. Use of major range and test facility installations by 
        commercial entities.

     The committee recommends a provision that would extend the 
current authority in 10 U.S.C. 2681 for the Department of 
Defense (DOD) to provide for the use of test and evaluation 
installations by commercial entities from September 30, 1998 to 
September 30, 2001. The committee also recommends a provision 
that would require the DOD to submit a report identifying 
procedures to ensure that the commercial use of DOD major range 
and test facilities testing services is not competing with 
private sector testing services.

Section 233. Eligibility for the Defense Experimental Program to 
        Stimulate Competitive Research.

    The committee recommends a provision that would amend 
section 257 of the National Defense Authorization Act for 
Fiscal Year 1995 (Public Law 103-337) to ensure the eligibility 
of the Commonwealth of Puerto Rico and other U.S. territories 
to participate in the Defense experimental program to stimulate 
competitive research.

Section 234. Restructuring of National Oceanographic Partnership 
        Program organizations.

     Section 282 of the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201) added chapter 665, 
National Oceanographic Partnership Program, to title 10 of the 
United States Code. Section 7902 of chapter 665 provided for 
the establishment for the National Ocean Leadership Council, 
whose duty it would be to coordinate national oceanography 
programs, partnerships and facilities, and to coordinate policy 
efforts of all Federal activities involved in oceanographic 
surveys and research.
    The National Ocean Leadership Council was to be made up of 
the Secretary of the Navy, who would serve as chairman for the 
first two years, and 17 officers representing: eleven federal 
agencies with significant roles in oceanographic research; the 
National Academy of Sciences, the National Academy of 
Engineering and the Institute of Medicine; and representatives, 
appointed by the chairman, to represent the interests of State 
government, academia, and ocean industries.
    In signing the National Defense Authorization Act for 
Fiscal Year 1997, the President issued a statement that the 
statute's method for the appointment of certain members of the 
National Ocean Leadership Council would violate the 
Appointments Clause of the Constitution. Although the statement 
provided that the Council should not exercise significant 
governmental authority, the administration allowed the Council 
to be convened with the 12 members whose appointment did not 
raise any constitutional issue, pending the enactment of 
corrective legislation.
     The committee recommends a provision that would amend 
section 7902(b) revising the membership of the Council to 
remove the members whose appointment would raise constitutional 
questions. The National Oceans Leadership Council would remain 
as currently established by the administration, with members 
representing the 12 Federal agencies with significant 
oceanographic interest. The committee recommends that the 
membership of the Council's advisory panel be expanded to 
include representatives from the National Academy of Sciences, 
the National Academy of Engineering, and the Institute of 
Medicine, as well as government, academia, and the oceans 
industry.
                                  ARMY


Army research institute
     The committee recommends an increase of $3.6 million to 
fully fund an array of research activities at the Army Research 
Institute related to personnel recruitment and training as well 
as issues related to gender and racial integration. The 
additional funds are recommended to be authorized as follows: 
PE 61102A, $0.5 million; PE 62785A, $0.3 million; PE 63007A, 
$1.3 million; PE 65803A, $1.5 million.
    The committee directs that any significant reductions in 
the Army Research Institute activities be carried out only 
after the Army has conducted a formal assessment of its 
continuing needs for the research carried out by the institute.
University and industry research centers
     The committee recommends an increase of $2.3 million in PE 
61104A to restore funding for the advanced telecommunications 
and information distribution research program (ATIRP) and the 
advanced sensors consortium. The committee intends this funding 
to allow the Army Research Laboratory to achieve its program 
objectives by providing the funding stability necessary to 
allow non-federal participants to make long-term commitments to 
the program.
Materials technology
     The committee recommends an increase of $4.0 million in PE 
62105A to continue exploratory development of hardened 
materials for use on high performance missile systems. The 
development of an all-composite shroud and integrated missile 
structure offers the potential for significant weight reduction 
in such critical military programs.
National Automotive Center
     The committee recommends an increase of $4.0 million in PE 
62601A to expand the activities of the National Automotive 
Center. The committee directs the Army to develop a management 
plan to accelerate the infusion of commercial automotive 
technology into Army land warfare systems through the 
activities of the center. The committee directs that the 
management plan be submitted to the committee no later than 
February 15, 1998.
Liquid propellant technology program
     The committee recommends an increase of $5.0 million in PE 
62618A to complete the liquid propellant technology program in 
fiscal year 1998. The committee intends the increased funding 
to be used to address the issues of reliable ignition of the 
propellant and to complete work on material compatibility 
research.

Environmental technology

    The committee supports the ongoing joint effort between the 
U.S. Army Environmental Center/Environmental Technology 
Division and the Tennessee Valley Authority/Muscle Shoals 
Environmental Research Center to develop, demonstrate, and 
validate the Plasma Energy Pyrolysis System (PEPS) technology. 
The committee recommends an additional $8.7 million in PE 
62720A for that purpose.
    Although environmental applications of plasma technology 
are at an early stage of development, plasma heating was used 
to make metal products and refine nitrogen for fertilizer 
production at the turn of the century. The purpose of PEPS is 
to develop plasma technology as a method of producing heat for 
the breakdown of waste materials.
    The Army has identified various complex military waste 
streams that have significant disposal costs. Waste streams 
resulting from incineration processes associated with 
conventional furnaces raise environmental concerns regarding 
toxic air emissions and the disposal of ash contaminated with 
heavy metals.
    The Muscle Shoals Environmental Research Center provides a 
level of technical expertise that stems from forty years of 
experience in working with electric arc furnaces, a thermal 
process similar to PEPS. For that reason, the participation of 
the Muscle Shoals Environmental Research Center is a necessary 
element of PEPS. However, the committee directs that no more 
than 15 percent of the PEPS funds be made available for the 
participation of the Muscle Shoals Environmental Research 
Center.
    The goals of the PEPS program are to evaluate the 
capability of plasma technology for the destruction of 
hazardous components, verify slag suitability for regular 
landfill disposal, identify potential hazards associated with 
the process emissions, and develop qualified cost estimates for 
the future use of the process on large scale operations. The 
committee expects a report on the progress made in meeting 
these goals with fiscal year 1998 funds.
    The committee also supports the initiation of the Radford 
Environmental Development and Management Program (REDMAP) at 
the Radford Army Ammunition Plant, Virginia, for the 
development of an integrated environmental and pollution 
prevention management and control system. The committee 
recommends an additional $6.0 million in PE 62720A for that 
purpose.
    It should be noted that some of the basic research 
necessary for REDMAP has already been done through the Facility 
Environmental Management and Monitoring System (FEMMS) at 
Tobyhanna Army Depot, Pennsylvania. It is the committee's 
expectation that REDMAP will use relevant information developed 
through FEMMS.

Innovative methods of energy conservation and the economic efficiency 
        of energy sources

    The committee recognizes the need for technology 
development to enhance the military application of innovative 
methods of energy conservation and the economic efficiency of 
energy sources. It is essential that the Federal Government 
keep pace with the private sector developments in this area.
    The committee recommends $1.75 million in PE 603712N to 
establish a cooperative research and development effort between 
Naval Surface Warfare Center (NSWC) in Crane, Indiana and 
private industry. The committee further recommends $4.0 million 
in PE 602784A for additional technology development of energy 
efficient military applications between the U.S. Army Corps of 
Engineers, Construction Engineering Research Laboratories and 
private industry. In each instance, participants from the 
private sector shall contribute an amount of funding that is 
equivalent to the federal funding level.

Military engineering technology

    The committee recommends an increase of $1.0 million in PE 
62784A to enhance research in combat support, combat 
engineering, and base facility construction, operation and 
maintenance in winter and in cold regions of the world. Recent 
experiences in Bosnia have highlighted the significant increase 
in resources required to deploy a military force in a winter 
environment, especially for operations in an area with degraded 
infrastructure. The armed forces of the United States could 
face similar challenges in many other areas of national 
security interest, such as Korea and the northern flank of the 
North Atlantic Treaty Organization.

Medical advanced technology

    The committee recommends an increase of $1.0 million in PE 
63002A to continue development of intravenous membrane 
oxygenator (IMO) technology for the treatment of lung injuries 
as a result of combat. The committee believes that this 
artificial lung technology has the potential to significantly 
reduce combat deaths resulting from exposure to trauma and 
chemical agents.

Nutrition research

    The committee recommends an increase of $3.6 million in PE 
63002A to continue nutrition research in support of 
improvements to the Meals Ready-to Eat (MRE) system. The 
committee views this research as increasingly important for 
maintaining the health and readiness of deployed forces and 
expects the Army to include funding for this program in future 
budget requests.

Combat vehicle and automotive advanced technology

    The budget request included $32.7 million to develop new 
technologies designed to enhance the effectiveness of Army 
combat systems. The committee has noted with great interest the 
technological developments in aluminum metal matrix composites 
that have a great potential to strengthen armored vehicle track 
shoes and engine components at significantly reduced weight. 
This effort was decremented in the Department effort to fund 
ongoing operations in Bosnia. The committee believes this 
program should be maintained and recommends an increase of $9.0 
million in PE 63005A (project D440).

Wave net technology

    The committee recommends an increase of $4.0 in PE 63006A 
to continue development of wave net technology to increase 
communications bandwidth utilization in selected applications. 
The committee believes that wave net technology is a promising 
candidate for, among other applications, compression of second 
generation forward-looking infrared video from scout sensors 
for near-real time transmission over combat net radios with 
minimal errors. The committee expects that the Army will 
request funds to continue the development and deployment of 
this technology in its budget request for fiscal year 1999.

Vehicular mounted mine detector

    The budget request included $19.3 million for research on 
countermine technologies and for continued development of three 
vehicular mounted mine detector prototypes for comparative 
performance testing. The committee strongly supports 
countermine technology exploration and believes the vehicular 
mounted mine detection technology shows great promise. The 
committee recommends an increase of $6.6 million to support 
enhancement of automatic mine detection capabilities and to 
facilitate more extensive field testing for this much needed 
equipment.

Missile defense Battle Integration Center

    The committee has supported the missile defense Battle 
Integration Center (BIC) at the Army's Space and Strategic 
Defense Command for integrating missile defense and space 
capabilities for the warfighter through synthetic battlefield 
environments. The role of the BIC has expanded to numerous 
exercises, experiments, demonstrations, and training 
activities. To continue this important capability, the 
committee recommends an increase of $22.0 million in PE 63308A. 
The committee directs the Director of the Ballistic Missile 
Defense Organization to provide a report to the committee by 
February 1, 1998, detailing how the BIC is integrated into 
overall U.S. missile defense programs and efforts.

All source analysis system

    The budget request included $24.0 million for the All 
Source Analysis System (ASAS). This system plays a key role in 
providing the means to receive, process, and forward 
battlefield intelligence to the warfighter. The committee 
understands that great progress was made last year in 
developing fusion technologies for this effort and was pleased 
to note the outstanding capabilities that this system provided 
to field commanders during the recent Army Advanced Warfighting 
Experiment. The committee believes that the Army should 
continue the effort to expand the potential applications for 
advanced fusion technology insertion and recommends an increase 
of $3.2 million to continue this effort.

Force XXI tactical operation centers

    The budget request included $18.4 million to support 
development of air defense command and control systems. The 
committee recognizes the significant advancements made in 
digitizing air defense tactical operation centers and notes a 
request for additional funding necessary to capitalize on 
existing work and begin development of a next generation 
digitized facility required for Force XXI units. The committee 
recommends an increase of $5.0 million to initiate this 
critical development effort.

Force XXI architecture

    The Army continues to make great progress in evaluating new 
technologies and potential applications for the 21st century 
force. The Force XXI Advanced Warfighting Experiment has 
demonstrated that information age technologies can be 
integrated into battlefield operating systems. Great potential 
has been demonstrated in this Army effort to enhance 
situational awareness. The committee understands that 
additional work is required to design the architecture 
necessary to ensure interoperability on the digital 
battlefield. Therefore, the committee recommends an increase of 
$14.0 million in PE 64805A to meet funding requirements for 
Army Architecture development.

Firefinder

    The budget request included $2.6 million to support 
preplanned product improvements to existing AN/TPQ-37 
Firefinder systems. The committee recognizes the importance of 
the Firefinder system in providing accurate and timely 
targeting information to our forces on enemy artillery and 
missile positions and notes a request for supplemental funding 
to conduct critical work in reducing target error factors and 
support acquisition of 13 modification kits necessary to meet 
Army requirements for upgraded systems. The committee 
recommends an increase of $8.0 million in PE 64823A to support 
these efforts and encourages the Army to resource any remaining 
outstanding requirements to fieldthe most effective system 
possible.

Tactical high energy laser program

    The committee recommends an increase of $10.0 million in PE 
65605A and an increase of $35.0 million in PE 63308A to fully 
support efforts in the tactical high energy laser (THEL) 
program for follow-up testing and the provision of software 
upgrades necessary for designing a self-defense capability for 
the system.

North Atlantic Treaty Organization (NATO) research and development

    The budget request for North Atlantic Treaty Organization 
(NATO) research and development activities in the Department of 
Defense and the military services included $13.5 million for PE 
63790D, $13.1 million for PE 63790A, $13.1 million in PE 
63790N, and $13.4 million in PE 63790F.
    In addition to the funds requested for NATO research and 
development activities, the budget request for fiscal year 1998 
included $1.5 million in the Army program for international 
cooperative research and development and $3.7 million in the 
Air Force program element for international activities. These 
resources are to be used to support general research and 
development activities not allocable to specific research and 
development (R&D) missions. The resources would also be used to 
fund travel costs and administrative support for participation 
in international forums, such as NATO, and to pay U.S. costs 
associated with negotiating international agreements, overseas 
R&D liaison and coordination offices, and NATO armaments 
groups.
    The committee recommends that all costs of implementing the 
NATO research and development activities be included in a sub-
element of the program elements for the separate military 
service and defense accounts. Therefore, the committee 
recommends that no funds requested for the Army international 
cooperative research and development program and the Air Force 
international activities program be authorized. Further, the 
committee recommends an increase of $700,000 increase to the 
budget request for the Army NATO R&D program and $2.0 million 
to the Air Force NATO R&D program.

Combat vehicle improvement program

    The budget request included $136.5 million for critical 
improvements to combat systems. The committee notes a critical 
requirement for the continued effort to upgrade the computer 
core of the M1A2 Abrams tank, including the second generation 
Forward Looking Infrared Radar (FLIR), through the Abrams 
System Enhancement Program (SEP). Without additional funding, 
the scope of the development effort will be significantly 
reduced with a possible slippage in the schedule for the 
overall upgrade program.
    The committee also notes the Army has been working to 
develop improvements to information display systems for the 
M1A2 Abrams tank and began to evaluate advanced field emission 
display technology earlier this year. These devices, designed 
to provide more effective displays of tactical information for 
tank commanders, have shown great promise. The committee is 
encouraged by the development work completed to date and 
recognizes the potential that these systems have to reduce per 
unit cost and improve information display clarity. Therefore, 
the committee recommends an increase of $8.0 million in PE 
23735A for the M1 Abrams SEP effort and an increase of $12.0 
million in PE 23735A to continue development of the Field 
Emission Display devices.

Aircraft modifications/product improvement program

    The budget request included $2.6 million for aircraft 
modification/product improvement programs. The committee 
recognizes the need for the Army to expedite the remanufacture 
of its aging fleet of CH-47 Chinook helicopters. The committee 
is very concerned about the actions of the Department to defer 
this program for an additional year in light of other 
priorities. Aircraft safety and reliability is of paramount 
importance and the Army has established a viable plan that 
should be maintained. The committee recommends an increase of 
$30.0 in PE 23744A million to restore this program to the 
previously planned funding level and to address these issues as 
soon as practicable.

Force XXI digitization

    The committee supports Army initiatives designed to 
digitize the future force. The Army has made considerable 
progress toward that goal over the past year and demonstrated 
the potential that digitization offers in the recent brigade-
sized Advanced Warfighting Experiment (AWE) that was conducted 
at the National Training Center. At this experiment the 
Experimental Force (EXFOR), which was equipped with 87 
different digital systems and over 5,000 individual pieces of 
equipment, conducted combat operations in the most realistic 
training environment that could be provided, short of an actual 
war. This digital equipment included unmanned aerial vehicles, 
a networked computer system, global positioning satellite 
receivers, position reporting transmitters, digital radios, and 
advanced night vision and thermal imaging equipment. Members of 
the EXFOR were able to utilize unprecedented real-time friendly 
situational awareness from individual fighting vehicles all the 
way up to division level, as well as unprecedented intelligence 
on enemy operations. Digital equipment also provided the EXFOR 
with integrated and automated mission planning, mission 
execution, and command and control capabilities never before 
available to any Army in the world.
    In recognition of the importance of this Army initiative, 
thecommittee has added nearly $150.0 million to the budget 
request to increase the level of funding for digitization programs. 
Additional funding was provided for Force XXI Architecture, Force XXI 
Battle Command and Tactical Operation Centers, the Warfighter 
Information Network, Enhanced Position Locator Systems, and Sentinel 
radars.
    There are a number of questions that must be addressed 
before the decision is made to expand this technology 
throughout the Army, including: cost; vulnerabilities; the 
integration of new technology into existing systems; the impact 
of this technology on the Army's organizational structure and 
doctrine, and on tactics, techniques and procedures to execute 
this doctrine; the impact on the training base; and the impact 
on personnel systems, including leader development.
    Realizing that the Army is currently analyzing the data 
collected during the exercise, the committee is concerned about 
comments from the Director of Operational Test and Evaluation 
(DOT&E) that there was no increase in lethality, survivability, 
and operational tempo attributable to digitization. Preliminary 
reports also suggested that fratricide may have been higher 
during the experiment. While the committee is concerned about 
this observation, it notes that these comments were based on 
observation only and were not based on data collected during 
the exercise.
    The May 1997 Report of the Quadrennial Defense Review (QDR) 
indicates that the results of the AWE will be used to determine 
force structure, materiel requirements, and doctrine for 
digitized units and that the fielding of the first digitized 
corps will be several years sooner than the original calendar 
year 2006 deadline.
    Accordingly, the committee directs the Army to report by 
February 1, 1998, on the plan for fielding both a digitized 
division and a digitized corps. The report should address the 
DOT&E critique and detail the analysis of AWE results, 
including vulnerabilities to potential countermeasures. 
Finally, the report should provide the force structure, 
materiel requirements with a requisite fielding plan, 
anticipated impact on the training base and the personnel 
system, required doctrinal and tactical changes, and 
comprehensive cost estimates and those portions of the fiscal 
year 1999 Future Years Defense Program that are attributable to 
the fielding of the digitized division and corps. The committee 
further directs the Army to update the digitization report on 
an annual basis and provide this report to the congressional 
defense committees by February 1.
    Additionally, the Army will report, not later than October 
1, 1997, on plans to include jamming and electronic 
countermeasures in the next division-level AWE currently 
scheduled to be conducted in November 1997. Included in this 
report will be a long-term plan for developing the ``red team'' 
countermeasures activity to keep pace with AWE efforts. The 
committee must understand potential vulnerabilities of 
digitization systems and be confident that these 
vulnerabilities are being addressed to allow for reasoned 
judgments on the appropriate architecture, equipment, and pace 
for fielding new systems. This long-term plan will also be 
addressed in all subsequent annual digitization reports to the 
Congress. The committee directs that not more than 25 percent 
of the $14.0 million authorized for Force XXI Architecture be 
obligated until 30 days after the Secretary of the Army submits 
the ``red team'' report to the congressional defense 
committees.

Force XXI battle command

    The budget request included $156.9 million to support 
ongoing digitization efforts within the Army. The committee is 
encouraged by the results of digitization experiments conducted 
this year and recommends an increase of $11.0 million in PE 
23758A to support procurement of applique requirements. The 
committee notes additional costs associated with a revised 
acquisition strategy associated with fielding the first 
digitized division.

Missile/air defense product improvement program

    The budget request included $17.4 million for missile 
modification/product improvement programs. The committee 
recommends an increase of $10.0 million in PE 23801A to 
complete work on the advanced cruise missile seeker for the 
Patriot system.
    The committee continues to support Army efforts to improve 
capabilities in the missile defense arena. The committee 
recognizes a growing cruise missile threat and the limited 
capabilities that ground forces have to defend against these 
threats. Ongoing efforts to develop an improved seeker capable 
of detecting and engaging cruise missiles are near completion 
and require an additional $10.0 million to complete work and 
provide the Army with a viable option for cruise missile 
defense.

RDT&E infrastructure support

    The committee remains concerned about the proportion of 
RDT&E funding allocated to infrastructure support. In an effort 
to slow this trend until a more comprehensive infrastructure 
rationalization process is initiated, the committee recommends 
a total reduction of $31.7 million to be allocated as follows:

                                                                        
                                                                Millions
                                                                        
Army:                                                                   
    PE 65801A................................................       $4.0
Navy:                                                                   
    PE 65853N................................................        5.0
    PE 65864N................................................       12.0
Air Force:                                                              
    PE 64259F................................................        6.0
    PE 65808F................................................        1.5
    PE 65878F................................................        3.2
                                                                        

                                  NAVY


Power electronic building blocks

    The committee recommends an increase of $6.0 million in PE 
62121N to accelerate the development of power electronic 
building block (PEBB) technology through virtual prototyping. 
The committee supports PEBB and its contribution to meeting the 
goals of the Department of Defense and the Navy to reduce 
manning, reduce cost, and enhance survivability for future 
shipboard architectures.

Materials technology

    The committee recommends a decrease of 4.0 million in PE 
62234N in the vacuum electronics in order to balance the 
investment strategy for vacuum electronics and solid state 
technologies.

Second source for carbon fibers

    In fiscal year 1997, Congress added $3.0 million in PE 
62234N for the qualification of new processes for aviation 
platforms and the development of a second source for carbon 
fibers. The budget request for fiscal year 1998 did not include 
the funds necessary to complete this qualification process. The 
committee supports the Navy's increased efforts to address 
science and technology materials development in support of 
Naval platform affordability, supportability, and mission 
performance. The committee recommends an increase of $2.0 
million in PE 62234N to complete the qualification of new 
processes, such as resin transfer molding, and the 
establishment of a second source for carbon fibers and prepreg 
systems.

Titanium processing technology

    The committee recommends an increase of $2.0 million in PE 
62234N to support the development of the plasma quench process 
for use in the production of ultra-fine titanium powder and in 
the injection molding process. The committee believes the 
plasma quench process offers the defense and aerospace 
industries a cost-effective and environmentally sound means of 
meeting growing titanium requirements while ensuring that 
domestic sources of titanium metal remain viable into the 
future. The committee directs that all applicable competitive 
procedures be used in the award of contracts or other 
agreements under this program, and that cost-sharing 
requirements for non-federal participants be utilized where 
appropriate.

National oceanographic partnership program

    The National Oceanographic Partnership Program (NOPP), was 
established in the National Defense Authorization Act for 
Fiscal Year 1997, for the purpose of leveraging all U.S. 
oceanographic efforts in the Navy, in industry, and in academia 
to benefit national security. The President's fiscal year 1998 
budget request included $5.0 million in the Navy's 
Oceanographic and Atmospheric Technology program (PE 62435N) 
for NOPP. The committee recommends an increase of $16.0 million 
in PE 62435N to fully fund NOPP in fiscal year 1998 at $21.0 
million. The committee expects other Federal agencies involved 
with NOPP to begin budgeting for this program in fiscal year 
1999. The committee recommends that the partnership focus the 
additional funding in the following areas: global observation; 
training programs and career guidance for ocean scientists; 
scientific utilization of military data; and marine information 
data basing and networking; and partnership among federal 
agencies, academia, industry and other members of the 
oceanographic scientific community.
    Global observation of ocean processes is recognized as the 
foundation for forecasting environmental conditions in support 
of forward-deployed Naval operations. The committee recommends 
that $10.0 million be used for ocean observation systems in 
order to establish the means for continuous, high resolution 
measurements of oceanic physical, biological, chemical and 
geological processes. Focus should be placed on exploitation of 
existing military observational systems (including the 
Integrated Undersea Surveillance System), development of 
networking sensors, real-time data transmission/assimilation 
and broad accessibility to data.
    Emphasis should be placed on the education of civilian and 
military oceanography students and future scientists. The 
committee recommends that $2.5 million be used to develop 
training programs and career guidance for ocean scientists, 
primarily within the graduate research community, emphasizing 
career sectors of interest to the Navy. Participation in such 
programs shall be determined using a merit-based, competitive 
selection process.
    Support is required for oversight groups, such as the 
government-industry MEDEA Ocean panel, to continue defining the 
best mechanism for declassifying Navy data holdings as well as 
access to operational systems for a broad range of educational 
and research activities. The committee recommends that $1.0 
million be used to further scientific utilization of military 
data.
    Current technologies provide a range of applications that 
could facilitate the transmission of existing information on 
the oceans. The need for this network is supported by national 
security concerns regarding an array of marine-related issues, 
such as coastal hazard mitigation and safe harbor navigation. 
The committee recommends that $2.5 million be used to support 
marine information databasing and networking.
    The committee recommends that $5.0 million be used for 
partnerships among Federal agencies, academia, industry, and 
other members of the oceanographic scientific community 
tostrengthen the coordination of oceanographic research and development 
activities and Navy operational requirements.
    The committee directs that all applicable competitive 
procedures be used in the award of contracts or other 
agreements under this program, and that cost-sharing 
requirements for non- federal participants be utilized where 
appropriate.

Undersea weapons technology

    The committee recommends an increase of $4.0 million in PE 
62633N to accelerate technology leading to the development of a 
quick reaction anti-submarine/anti-torpedo weapon needed for 
close-range engagements and for the protection of surface ships 
and submarines from torpedo attack. The additional funding 
should be used to mature hydrodynamics and propulsion 
technologies for the 6.25,, Torpedo vehicle and expand guidance 
and control technologies to accelerate fleet introduction of 
this versatile weapon.

Composite helicopter hangar

    The Office of Naval Research's surface ship technology 
program has developed enabling technologies that can lead to 
reduced radar signatures and improved sensor performance. The 
potential cost and weight savings of composite materials make 
them an attractive alternative to thin, high-strength steel 
plate and beam construction. An additional potential benefit 
would be the reduction in radar cross section that could be 
obtained by shaping and contouring that can not be achieved 
with steel. While technical challenges such as durability, 
maintenance and repair, outfitting, fire survivability in a 
manned space, and local loading due to shock from mounted 
equipment must be addressed, development of composite 
technology for future surface combatants appears to offer great 
promise. A logical first step would be the fabrication of a 
composite helicopter hangar for DDG-51 class ships.
    The committee recommends an increase of $10.0 million above 
the budget request in PE 63508N to begin a developmental effort 
to design and fabricate the outer shell of a DDG-51 helicopter 
hangar structure using composite materials.

Commandant's warfighting laboratory

    The budget request included $20.0 million to continue a 
highly successful effort that began in fiscal year 1997 with 
the formation of the Commandant's Warfighting Laboratory. The 
committee notes the wide range of Marine Corps experimentation 
efforts conducted over the course of fiscal year 1997 and 
recognizes that the lessons learned today will lead to a more 
capable Corps in the future. The Commandant has charted a 
vigorous path for fiscal year 1998 and identified additional 
experimentation opportunities that are not supportable within 
current budget constraints. The committee recommends an 
increase of $15.0 million in PE 63640M to support the more 
robust experimentation efforts proposed for this program.

Freeze-dried blood research project

    The committee recommends an increase of $2.5 million in PE 
63706N to continue research on freeze-dried blood processes to 
develop a safe and reliable supply of blood for combat 
casualties. The technology will freeze-dry blood platelets for 
the purpose of extending shelf-life, destroying potential 
contaminating viruses, and reducing space required for storage 
of blood stocks. The committee recognizes the commercial 
potential of this technology and encourages the Navy to pursue 
dual-use application and cost-sharing in this program to the 
maximum extent practicable.

High frequency surface wave radar

    The high frequency surface wave radar (HFSWR) is an 
advanced technology demonstration (ATD) designed to improve 
over the horizon cruise missile detection and tracking of low-
flying, high speed anti-ship cruise missiles, aircrafts, and 
ships. This technology shows great promise not only for ship 
protection but also for anti-tactical ballistic missile and 
counter-drug efforts. In fiscal year 1997, Congress authorized 
$84.4 million for the ATD program, reducing the budget request 
by $20.0 million. The reduction was not intended to impact 
mature technologies. The committee recommends an increase of 
$4.0 million in PE 63792N to complete the high frequency 
surface wave radar advanced technology demonstration.

Remote minehunting system

    The remote minehunting system (RMS) is a remotely operated 
system that is being developed to detect and classify mines. It 
will operate from surface combatants and provide the Navy with 
an organic means of finding and avoiding mines. The program is 
pursuing an evolutionary acquisition strategy that achieves 
capability in steps. The RMS(V)2, a prototype, was deployed in 
fiscal year 1997 onboard a Spruance class destroyer to evaluate 
its operational utility and ability to operate with other fleet 
units. The RMS(V)3 is currently in development, with fleet 
introduction scheduled for fiscal year 1999. RMS(V)4, the final 
pre-production prototype, is projected to have a coverage 
capability five times the results that RMS(V)2 produced in 
fiscal year 1997.
    As noted in the committee report on S. 1745 (S. Rept. 104-
267), the committee has been concerned with the Navy's lack of 
progress in resolving serious gaps in its mine countermeasures 
capabilities. These deficiencies were highlighted during Desert 
Storm. Reports provided to the committee on the performance 
ofRMS(V)2 during its operational evaluation in fiscal year 1997 are 
encouraging. The Navy has informed the committee that additional 
funding for the RMS would:
          (1) provide for completion of a second engineering 
        development model, including an over-the-horizon 
        communications subsystem that would greatly extend 
        employment options for the system; and
          (2) support integration into the DDG-51 class 
        destroyer and its AN/SQQ-89 combat system.
    The committee recommends an increase in procurement funding 
of $7.9 million in PE 63502N to accelerate development of the 
RMS and reflect the high priority that the committee places on 
the introduction of an organic mine countermeasures capability 
into the Navy's battle groups and amphibious ready groups.

Advanced submarine technology

    The budget request contained $150.1 million in fiscal year 
1998 and $172.5 million in fiscal year 1999 in various program 
elements for advanced submarine technology.
    The committee has learned that, while the Navy has 
maintained its commitment to fund advanced submarine technology 
at a robust level relative to historic norms, much of the 
funding is concentrated on command, control, communications, 
computer, and intelligence (C4I) systems or improvements to 
various sensors. Relatively little has been budgeted for 
improvements in the hydrodynamic and propulsion technologies 
that could lead to new breakthroughs toward achieving the goal 
of more capable but less expensive design.
    To accelerate the development of what are now considered 
far-term technologies, such as an advanced propulsor, rim 
driven motors, and advanced hull forms, the committee 
recommends an increase of $15.0 million above the budget 
request in PE 63561N.

Advanced Amphibious Assault Vehicle

    The budget request included $60.1 million to support the 
ongoing development of the next generation amphibious armored 
personnel carrier for the Marine Corps. The committee 
recognizes the need to conduct an aggressive testing and 
development effort for this system and the inherent risk in 
conducting this type of evaluation with only two prototypes. 
The committee recommends an increase of $10.1 million in PE 
63611M to procure a third prototype vehicle to support the 
maturation of the Advanced Amphibious Assault Vehicle design 
and provide for risk mitigation efforts.

Navy tactical missile system

    A series of recent Navy studies have indicated that a naval 
variant of Army tactical missile system (ATACMS), christened 
NTACMS by the Navy, could greatly enhance the effectiveness of 
naval strike warfare and fire support. The proposed NTACMS 
would adapt the Army Block IA missile with the M74 submunition 
for naval use. Additionally, the potential exists for future 
variants that would be equipped with anti-armor submunitions or 
a hard target penetrator. During 1995, a successful proof-of-
concept ATACMS test shot was conducted from a Navy ship. In 
November 1996, an ATACMS, modified to the proposed NTACMS 
configuration, was successfully launched from a Navy MK 41 
vertical launcher at White Sands, New Mexico. Further, a 
feasibility study has shown that a common naval variant can be 
developed for both surface and submerged launch.
    In addition to studies focused specifically on NTACMS, a 
comprehensive program review, conducted earlier this year by 
the Navy, has generated an increased emphasis on the mission of 
land attack from the sea by surface ships and submarines. In 
the committee's view, a higher priority for maritime strike is 
consistent with the Navy's strategic emphasis on littoral 
warfare. Although there is no funding in the budget request or 
its associated Future Years Defense Program for development of 
NTACMS, the Navy has advised the committee that the budget 
request being developed for fiscal year 1999 will contain 
substantial resources for it. This funding has come about as 
the result of a memorandum of agreement that has been 
negotiated between the surface warfare and submarine warfare 
divisions of the Navy staff to provide jointly resources for an 
NTACMS development program that will be executed by the 
Director, Strategic Systems Programs (DIRSSP). The DIRSSP will 
serve as the sole contracting authority within the Navy for all 
dealings related to NTACMS missiles. As a further sign of its 
commitment to developing NTACMS, the Navy has realigned about 
$7.0 million of fiscal year 1997 funds to begin concept 
development work.
    The Navy has advised the committee that additional funding 
in fiscal year 1998 would be of great value in pursuing the 
program for developing NTACMS that has evolved since 
preparation of the budget request. Accordingly, the committee 
recommends an increase of $20.0 million in PE 63795N for this 
purpose.

Land attack Standard missile

    The Navy has notified the committee of its desire to pursue 
a new technology demonstration for a land attack Standard 
missile (LASM). The goal of this program would be to determine 
the feasibility of converting existing Standard missiles into 
land attack missiles. It would consist of an engineering 
technology demonstration and a series of four risk-reduction 
flight demonstrations. The Navy asserts that in order to 
expedite the effort, reduce its risk, and dramatically reduce 
non-recurring demonstration costs, it could integrate these 
flight demonstrations into the Terrier target flight 
demonstrations that commence in August 1996. Such integration 
would permit the concurrent use of common hardware, software, 
and flight algorithms for both programs and completion of the 
demonstrationby the fall of 1998. The results could then be 
used in preparation of the fiscal year 2000 budget request.
    The committee recommends an increase of $5.0 million in PE 
63795N to permit the Navy to pursue a flight demonstration 
program for the LASM.

Naval surface fire support

    The Navy has been developing an improved version of its 5-
inch naval gun to strengthen its ability to provide shore fire 
support for amphibious operations and land attack. The effort 
has involved an upgrade to the existing 5-inch/54 caliber gun 
to give it the capability to shoot higher energy, rocket-
assisted rounds; develop an extended range guided munition 
(ERGM); apply advanced propellants; and provide modifications 
to the fire control system, needed to accommodate longer ranges 
and times of flight of the rounds.
    A program review conducted by the Navy earlier this year 
has caused it to place increased emphasis on the land attack 
mission. This review identified a requirement for a naval 
surface fire support warfare control system (NWCS). This 
mission planning system will be able to receive digital target 
information provided by systems such as the Army's advanced 
field artillery tactical data system (AFATDS), make the 
necessary translation, and transmit it to a ship's gun fire 
control system (GFCS) in a form that will permit the GFCS to 
compute necessary gun control orders. As presently envisioned 
by the Navy, NWCS would be hosted on an advanced tactical 
weapons control system (ATWCS) console. Fiscal year 1997 
funding of $2.0 million has been made available for this 
effort, but no funding for it was included in the budget 
request for fiscal year 1998. Consequently, the timeline for 
NWCS is not complementary to the development effort for the 
other subsystems of the 5-inch naval gun upgrade.
    The committee supports the Navy's efforts to improve its 
naval surface fire support capability, an area of notable 
weakness that has been discussed at length in previous 
committee reports. Additional funding in fiscal year 1998 would 
reduce overall program risk in development of NWCS and help to 
ensure that the multiple initiatives needed to develop the 5-
inch naval gun weapons system remain on complementary 
timelines. Information received from the Navy indicates that it 
intends to support continued development of NWCS in future 
budget submissions. Accordingly, the committee recommends an 
increase of $15.1 million in PE 63795N.

Nonlethal weapons and technologies of mass protection program

    The committee notes that U.S. military forces are 
increasingly confronted by unorthodox, non-traditional, and 
asymmetrical threats. These challenges, and an increase in low 
and medium-intensity conflict, require the Department of 
Defense to evaluate new technologies and doctrine for the use 
of force. In particular, the committee believes that the 
Department should focus on the development of weapons that 
facilitate the containment of conflict across the operational 
continuum, while promoting national interests worldwide.
    In reviewing technologies for research and development, the 
nonlethal weapons (NLW) program should include as principles 
for consideration that collateral damage and noncombatant 
casualties are highly undesirable in contemporary conflicts, 
and that nuclear based deterrence is ill-suited to regional and 
subnational conflicts in which units are small, dispersed, and 
the enemy is embedded. At times, the enemy may be an affinity 
group, not a state-centered entity, and it may be extremely 
difficult to distinguish the enemy from host population.
    An essential element of this concept is the development of 
advanced technologies to provide U.S. military forces with 
greater flexibility to manage, shape, deter, or contain future 
conflicts. These technologies include acoustics, lasers, 
counterbattery systems, magnetics, kinetics, entanglements, and 
nonlethal chemical systems such as foam, adhesives and markers.
    The committee commends the efforts of the military 
services, particularly the Marine Corps through the Sea Dragon 
experiments, to evaluate advanced technology options and new 
doctrine to enhance operational effectiveness. The committee 
encourages the Department to increase its investments in this 
area, and to undertake associated doctrinal and training 
initiatives to better leverage technology development.
    For the past two years, the committee has taken steps to 
consolidate and streamline the Department of Defense and 
military service programs for research, development, and 
procurement of nonlethal weapons technologies. To that extent, 
Congress established a single program element for nonlethal 
weapons technologies, with the Marine Corps designated as the 
executive agent for the program. In addition, the Congress 
supported dramatic increases in funding for the nonlethal 
weapons and technologies program.
    Despite these efforts, the Department continues to 
underfund many key efforts in the nonlethal weapons program. It 
is the committee's view that the Department continues to 
interpret its directions as a license to coerce the military 
services to fund NLW programs out of existing funds, rather 
than provide additional funds. The actions of the Department 
have undermined other priority requirements identified by the 
military services and resulted in a reluctance on the part of 
the services to request additional funding for NLW activities. 
In this regard, the committee has identified a deficit of 
funding in the NLW program for research, development, testing 
and evaluation of acoustics bio-effects testing, active denial 
technology, foam applications and the vortez ring generator, as 
well as for modeling and simulation and technology investment.
    The budget request for fiscal year 1998 included $16.8 
million for the Department of Defense nonlethal weapons (NLW) 
program. To address the deficit identified by the committee for 
researchand development of NLW technologies, the committee 
recommends an increase of $3.3 million in PE 63851M to the budget 
request.

Advanced communications and information technologies

    Recognizing the need for strengthening integrated systems 
development in reliable, secure communications and efficient 
design and operations, the committee recommends an increase of 
$5.0 million in PE 64707N for an advanced communications and 
information technology initiative. This initiative will allow 
the Secretary of the Navy to enter into an agreement with a 
qualified institution having strong, integrated research 
capabilities in broad user communications testbeds, systems 
engineering, fiber optic sensors and transmission devices, 
secure and reliable wireless communications, effective user-
friendly human computer interfaces, and scientific 
visualization. This initiative will improve the Navy's 
capabilities to support distributed computing, integrated 
services training, education, information dissemination and 
simulation. The committee directs the Secretary to follow all 
applicable competitive procedures in awarding this agreement, 
require the institution awarded the agreement to contribute at 
least twice the amount of funding provided by the federal 
government to execute the program, and stipulate in the 
agreement specific savings in research or other federal 
expenditures that will accrue from accelerating research 
covered under the agreement.

Parametric airborne dipping sonar

     The budget request contained no funding for the parametric 
airborne dipping sonar (PADS).
    The committee remains concerned at the Navy's slow progress 
in developing PADS technology. As previous committee reports 
have noted, the committee believes that the PADS technology has 
potential for improving weapon systems performance in 
applications such as dipping sonars installed in helicopters.
    The committee recommends an increase of $10.0 million in PE 
604212N for the continued development of PADS. The committee 
expects the Navy to continue testing of the PADS prototype, 
perform the studies needed to evaluate the technical 
feasibility of integrating PADS into the AN/AQS-22 sonar 
system, examine the logistics implications of such integration, 
evaluate manufacturing capability, determine the potential 
improvement in the Navy's readiness and warfighting 
capabilities that PADS could provide, and develop an estimate 
of the future costs associated with continued development and 
procurement of PADS if development is successful. The committee 
directs the Secretary of the Navy to submit a report that 
addresses these questions no later than February 15, 1998.

Helicopter upgrade program

    The committee supports ongoing efforts by the Marine Corps 
to maintain commonality between the AH-1W and UH-1N as these 
aircraft are upgraded to meet future warfighting requirements. 
The committee notes Marine Corps plans to restructure the UH-1N 
cockpit configuration to increase the commonality with the AH-
1W aircraft. The committee supports this effort and agrees to a 
Marine Corps request to realign $5.6 million from procurement 
to research and development in PE 64245N to complete the 
development of a common cockpit.

Integrated defensive electronic countermeasures

    The budget request included $51.8 million for the 
continuing development of the integrated defensive electronic 
countermeasures (IDECM) system. Though designed for the F/A-
18E/F, the IDECM radio frequency countermeasures (RFCM) system 
may be a cost effective solution for the needs of the F/A-18C/
D, and allow for efficiencies through commonality and reduced 
support costs. The committee recommends an increase of $15.0 
million to the IDECM program in order to expand operational 
tests of the basic system to include the onboard configuration 
for the F/A-18C/D, thus accelerating the low rate initial 
production decision to June 1999 for both configurations.

High power discriminator

    The committee supports the concept of using existing X-Band 
radar technology in support of the Navy's theater ballistic 
missile defense effort. The proposed high power discriminator 
(HPD) would consist of a solid state X-Band radar for long-
range acquisition and discrimination for theater ballistic 
missile defense and cruise missile defense. This concept would 
leverage the significant investment already made in the Army's 
ground-based radar. The committee recommends an increase of 
$35.0 in PE 64307N to initiate HPD development.

Maritime fire support demonstrator

    The budget request includes $103.0 million of Navy funding 
in PE 64310N and $47.2 million of Defense Advanced Research 
Projects Agency (DARPA) funding in PE 63763E for continued 
development of an arsenal ship demonstrator. The arsenal ship 
is a joint Navy and DARPA program to develop and demonstrate a 
ship that is low cost, has minimal crew size, and can deliver 
massive, immediate land attack firepower.
    Phase I, the concept development phase, was completed in 
January 1997. Three industry teams were selected to proceed to 
Phase II, the detailed functional design phase, which is 
scheduled for completion in January 1998. At that point a 
single team will be selected to build the arsenal ship 
demonstrator. Construction is scheduled for completion in 
fiscal year 2000.
    The original operational concept, published in April 
1996,called for a force of about six arsenal ships that would be 
forward deployed, on station in support of a unified commander in 
chief. However, evolutionary evaluation of the concept and future 
budget realities have caused the Navy to abandon its plan for a 
relatively near-term objective force of six arsenal ships. Instead, 
guided by the results of a recently completed cost and operational 
effectiveness analysis (COEA) for the next generation of surface 
combatant, the SC-21 or DD-21, the Navy has realigned the arsenal ship 
program and redesignated the arsenal ship demonstrator as a maritime 
fire support demonstrator (MFSD). The Navy plans to use it to evaluate 
the ``leap ahead'' technologies the Navy intends to incorporate into 
DD-21.
    Technologies now planned for the MFSD include:
          (1) fully integrated sensor-to-shooter connectivity 
        that enables remote targeting and assignment of 
        missiles and guns;
          (2) an advance hull form providing for improved fuel 
        economy, reduced ship motion, and greatly improved 
        survivability;
          (3) automated propulsion and weapons control 
        functions coupled with remote monitoring and minimum 
        maintenance equipment to permit significantly reduced 
        manning;
          (4) a ship-wide integrated advanced computing system 
        architecture employing commercial off-the-shelf (COTS) 
        technology that will provide a common computing 
        environment for all systems;
          (5) improved battle hardening through double or 
        triple hulling, damage tolerant girders and structures, 
        automated and remotely operated damage containment and 
        suppression systems, and a ship-wide wide area network 
        for damage control assessment and monitoring; and
          (6) ship signature reduction through an integrated 
        topside design and acoustic and the use of hull 
        coatings, active noise control, isolation mounting, and 
        commercial monitoring to achieve infrared and acoustic 
        signature reduction.
    The Navy concept for execution of land attack missions has 
evolved into delivery by a closely interconnected, distributed 
network of multi-mission surface combatants, rather than 
through massive firepower, concentrated in a limited number of 
single-mission hulls. This evolved concept is reflected in the 
preferred option of the SC-21 COEA that will become DD-21, a 
multi-mission destroyer optimized for land attack.
    The Navy now considers that the newly designated MFSD lies 
on the critical path to successful development of a DD-21 
design in time for lead ship construction in the fiscal year 
2003 or 2004 time-frame. As envisioned by the Navy, virtually 
all of the technologies that its concept development phase 
identified for the MFSD will be relevant to DD-21. By 
aggressively pursuing development, construction, and at-sea 
evaluation of the MFSD, the Navy thinks it will be able to 
significantly reduce technological and design risk for DD-21, 
maximize access to new technologies through the energetic 
competition in progress for the demonstrator, obtain the 
benefit of industry expertise, and directly support the results 
of the SC-21 COEA.
    While many of the technologies envisioned for DD-21 are 
already reflected in the MFSD concept, there are some that are 
not. In correspondence to the competing contractors, the MFSD 
joint program office has identified several that are candidates 
for DD-21 but are still in the early stages of development. 
These include advanced integrated electronic warfare system 
(AIEWS), integrated power system, advanced human computer 
interface, multi-function radar (X band), lightweight broadband 
variable depth sonar, volume search radar (L band), and 
vertical gun for advanced ships (VGAS). Additional capabilities 
that must also be incorporated into the MFSD and the DD-21, if 
they are to fully realize their potential, include a firm set 
of sensor-to-shooter links and the command and control systems 
needed for real-time execution of land attack missions by a 
distributed network of ships.
    The Future Years Defense Program that accompanied the 
budget request calls for lead ship authorization of the first 
DD-21 in fiscal year 2003. In order for the MFSD to make the 
contribution to the DD-21 design effort that the Navy considers 
essential, it is crucial that the demonstrator remain on 
schedule and be available for at-sea testing in fiscal year 
2000. Given that the development schedule for the demonstrator 
is very accelerated and entails the incorporation of a number 
of new technologies for the first time, schedule risk must be 
considered high. To mitigate this risk, the committee 
recommends an increase of $25.0 million in PE 64310N to ensure 
sufficiently robust funding is available early in Phase III, 
the construction phase, to ward off schedule risk and promote 
the introduction of additional new technologies into the MFSD.

Multi-purpose processor

    In its review of the fiscal year 1997 budget request, the 
committee identified the multi-purpose processor (MPP), a small 
business innovative research (SBIR) initiative developed under 
the sponsorship of the New SSN Submarine (NSSN) Program, as a 
very successful initiative that has not only been incorporated 
into the NSSN command, control, computer, communications, and 
intelligence system, but has also been adopted as a cornerstone 
for acoustic processing upgrades to the SSN-688, SSN-688I, and 
SSBN-726 class submarines. Using commercial off-the-shelf 
(COTS) hardware and an open software architecture, the MPP 
provides a capability to easily transport new, advanced 
software to existing hardware installations. It now lies at the 
heart of the Navy's acoustic rapid COTS insertion program 
(ARCI), a program designed to permit the SSN-688 class to 
regain acoustic superiority over the diesel and nuclear 
submarines of other navies.
    Although the Navy has accorded priority to the MPP by 
allocating $27.4 million to it in the budget request, 90 
percentof these funds are for its procurement for installation 
in ARCI kits. The committee's review indicates that additional 
investment for continued development of the MPP would be of great 
benefit, particularly within the Navy's research and development 
community. Accordingly the committee recommends an increase of $25.0 
million above the budget request in PE 64503N to be used as an SBIR 
follow-on for advanced development of MPP transportable software 
technology, technology insertion, advanced processor software builds, 
and for providing MPP units and training throughout the fleet and the 
Navy research and development community.

Seawolf shock test

    The committee has learned that technical difficulties with 
the titanium torpedo tube doors and the wide aperture array 
fairing during pre-delivery testing of the Navy's first Seawolf 
class submarine, SSN-21, have consumed funds originally 
budgeted for shock testing of the submarine in fiscal year 1997 
and delayed delivery until June 1997. Consequently, the 
scheduled testing date has slipped into fiscal year 1998. Shock 
testing is an integral part of the Seawolf live fire test and 
evaluation program. It is necessary to establish a battle 
damage survivability benchmark for the entire class.
     The Navy has notified the committee of this emergent 
requirement that was not included in the fiscal year 1998 
budget request and stressed the importance of completing the 
testing in fiscal year 1998. The Navy has stated that 
additional delays would seriously disrupt the extensive program 
of post-delivery testing that is scheduled for SSN-21.
    The committee recommends an increase of $17.0 million above 
the budget request in PE 64561N to permit shock testing of the 
Seawolf class submarine, SSN-21, in fiscal year 1998.

Future surface combatants

    The six year shipbuilding plan submitted by the Navy with 
the budget request provides for authorization of the lead ship 
of the next generation of surface combatant, identified as the 
SC-21, in fiscal year 2003. The budget request included $55.0 
million in PE 63564N for design development for SC-21. The 
Future Years Defense Program (FYDP) that accompanied the budget 
request projects total research and development funding for SC-
21 of about $730 million over the six year period from fiscal 
year 1998 to fiscal year 2003. Prior funding for SC-21 has been 
minimal, on the order of $30 million, and has been expended 
primarily for various studies and analyses.
    At the time the budget request was submitted, a cost and 
operational effectiveness assessment for (COEA) SC-21 was still 
in progress. Budget briefings that the Navy provided to the 
committee could only discuss a range of COEA options for the 
ship. These varied from a very robust, full capability 
combatant, comparable to an evolved DDG-51, to a cheaper ship 
of more limited capability. While still possessing a multi-
mission capability, this less robust option emphasized maritime 
fire support as its primary mission.
    By the time the committee convened a hearing on 
shipbuilding in April 1997, SC-21 COEA results were available, 
and the Navy was prepared to discuss its intentions for the SC-
21 design in more detail. The Navy reports that the maritime 
fire support option, now called DD-21 by the Navy, has emerged 
as the preferred option. In pursuing a design for DD-21, the 
Navy intends to emphasize ``leap ahead'' technologies, minimum 
manning, the lowest possible life-cycle cost, and maximum 
practical use of commercial practices for technology insertion 
and construction. As discussed elsewhere in this report, the 
primacy of the land attack and fire support mission for DD-21 
has provided a far greater relevance to the arsenal ship or 
maritime fire support demonstrator as a bridge between DDG-51, 
which is optimized for area air defense, and DD-21, which will 
be expected to fill a role much more comparable to the arsenal 
ship's mission of land attack through massive firepower.
    Based on information developed at this year's shipbuilding 
hearing and historical analysis, the committee believes that, 
given the current state of the design effort for DD-21 and the 
funding currently programmed to develop it, a lead ship 
authorization in fiscal year 2003 will be quite difficult to 
achieve, particularly if bold advances in ship, command and 
control, and weapons system design are the stated objectives. 
Funding constraints alone could severely inhibit the Navy's 
ability to realize its objectives for DD-21, which is poorly 
funded in the FYDP, for a fiscal year 2003 lead ship award. By 
way of comparison to the approximately $730 million allocated 
to DD-21, over $2.2 billion will be spent to bring the next 
generation nuclear attack submarine (NSSN) to a point where it 
will be ready for lead ship authorization. Similarly, the Navy 
is already investing almost $150 million per year for 
development of a design for the next generation aircraft 
carrier, CVX, which is not scheduled to begin construction 
until fiscal year 2008. The Navy's planned effort to make CVN-
77 a transition carrier, funded at about $120 million over the 
FYDP, will also make many important contributions to the design 
of CVX. Consequently, the committee has concluded that 
development of a design for DD-21 that is in consonance with 
the Navy's objectives for the ship at the current level of 
funding is fraught with risk. Even with expected design 
contributions from the arsenal ship or maritime fire support 
demonstrator, which the Navy now considers crucial to 
successful development of DD-21, the development timeline for 
DD-21 remains high risk.
    Although the committee has detected a clear disparity in 
funds programmed for the designs of these future combatants 
(DD-21, CVX and NSSN), it appears that, in the aggregate, the 
Navy has committed itself to greater emphasis on technology 
investment, active participation by industry, and better 
specification ofdesign objectives to guide its commitment of 
resources. However, the committee has become concerned, based on 
testimony and briefings, that an environment is not in place or a 
process in operation that will actively facilitate a rapid and ready 
exchange of information between these development efforts in a manner 
that will avoid duplication. While numerous integrated process teams 
have been conceived or are already at work, their efforts appear to be 
suboptimized within various stovepipes in the Chief of Naval Operations 
(CNO) staff or within directorates in the Navy's systems commands. 
Communication between them seems to occur more on an ad hoc basis than 
as the result of a cohesive management process. For example, it is not 
clear to the committee that many of the numerous lessons learned from 
the ``smart ship'' experiment, which has been underway for the past two 
years under the sponsorship of the surface warfare division of the 
CNO's staff, have been proliferated in a way that would permit them to 
contribute to the development efforts that are in progress for CVN-77 
and CVX. Similarly, the model of the Submarine Technology Oversight 
Council that has been put in place to explore advanced submarine 
technology has not been incorporated in an analogous role into other 
ship design activities.
    An additional item for committee consideration late in the 
budget review process was a Navy plan for sustaining future 
combatant force structure that has been developed to 
accommodate the results of the Department of Defense's 
Quadrennial Defense Review (QDR), completed in May 1997. The 
QDR identified the need for the Navy to perform a mid-life 
conversion of its Aegis cruiser force. The objective of the 
conversion will be to package theater ballistic missile defense 
(TBMD), area air defense command and control, land attack, and 
crew reduction technologies into a class-wide upgrade, thereby 
assuring a useful role for the Aegis cruiser force into the 
third decade of the next century. The Navy has concluded that 
this conversion program will enable otherwise unaffordable 
acceleration of TBMD and land attack capability into the Navy's 
surface combatant force, while providing critical industrial 
work prior to full rate production of DD-21. The Navy has 
indicated that a modest increment of initial funding in fiscal 
year 1998 could provide significant leverage in bringing the 
planning for this conversion program to early fruition.
    To deal with the funding and schedule risk that the 
committee has associated with development of DD-21 and to 
provide design funding that will permit the Navy to initiate 
its cruiser conversion program, the committee recommends an 
increase of $25.0 million above the budget request in PE 
64567N. The committee also strongly encourages the CNO and the 
Secretary of the Navy to review thoroughly the management 
practices currently in place for ship design development to 
ensure that the Navy is deriving maximum benefit from its 
research and development investment. The committee intends to 
examine this area in more detail at future hearings and 
strongly desires that ongoing results of this management review 
be provided to the committee through interim briefings that 
will facilitate an open exchange of ideas.

Infrared search and track system

    The budget request included no funding for continued 
development of the infrared search and track system (IRST). The 
Navy has been developing IRST to provide a passive detection 
and tracking system, operating in a different portion of the 
electromagnetic spectrum from radar, that will complement 
existing shipboard radars by continuously scanning the horizon 
for threat platforms or sea-skimming missiles. Horizon search, 
for which IRST would be optimized, is an area of relative 
weakness for active radars.
    Although various studies have repeatedly validated that 
IRST could provide a major improvement in ship survivability 
against sea-skimming cruise missiles, a succession of Navy 
budget requests has provided only subsistence level funding. 
Congressional intervention in the form of additional funding 
has been necessary to keep the program alive, albeit with a 
much extended developmental timeline. Without benefit of any 
supporting analysis, the budget request and its associated 
Future Years Defense Program terminates funding for IRST. 
Information provided by the Navy indicates that prior year 
funding should be sufficient to complete Phase I of the current 
two-phase program through its land-based testing stage but is 
insufficient to conduct at-sea tests. The Phase II program for 
engineering and manufacturing development would be unfunded, 
and no funding would be available to preserve the option to 
continue development in the future.
    The committee has supported IRST with recommendations for 
additional funding in fiscal years 1996 and 1997 because the 
committee strongly believes that developing a search and track 
system, not dependent on active transmissions by either 
friendly or threat emitters, could make an extremely important 
contribution to successful naval operations. The potential 
utility of an infrared capability is demonstrated by the 
emphasis that the Navy is placing on developing an upgrade to 
its rolling air frame missile that will employ an infrared 
seeker for the entire target engagement and the infrared homing 
capability being incorporated into its Standard missile. 
Lacking any supporting rationale from the Navy other than 
budget constraints, the committee disagrees with the Navy's 
relative priorities. Consequently, the committee recommends an 
increase of $13.0 million in PE 64755N for continued 
development of the IRST system. Of this amount the committee 
recommends that $6.5 million would be provided from a reduction 
in funding in PE 64307N. The remainder would be provided by an 
increase above the budget request. The committee would direct 
that none of the $6.5 million provided from PE 64307N be from 
funds included in the budget request for the smart ship 
project, project K2308. The committee would also direct that, 
absent a new and compelling study that somehow reverses the 
results of a rich body of prioranalysis that supports the 
potential utility of IRST, the Navy will continue to fund and execute 
the development of IRST in future budget requests.

Ship self-defense system

    The budget request included $31.3 million for continued 
development of the ship self-defense system (SSDS). This system 
introduces a distributed processing, open architecture combat 
system based on a local area network. It uses commercial off-
the-shelf equipment and reuses a substantial amount of software 
that was developed for the cooperative engagement capability 
(CEC).
    The committee has been informed that additional funding for 
SSDS could be used to fully integrate SSDS, the advanced combat 
direction system (ACDS), and CEC in the Navy's mission critical 
ships. Current funding allows only an elementary degree of 
integration via simple interfaces.
    The committee recommends an increase of $19.0 million in PE 
64755N to pursue the system integration needed to integrate 
CEC, ACDS, and SSDS local area networks to create a single 
tactical picture and a central integrated combat direction 
system.

Advanced deployable system

    The advanced deployable system (ADS) is being developed by 
the Navy to deal with a growing worldwide proliferation of 
diesel submarines. It will be a system that can be rapidly and 
covertly deployed in littoral waters. Its next major 
developmental milestone decision is scheduled for fiscal year 
1999.
    ADS development has proceeded well to date. Additional 
funding for ADS in fiscal year 1998 would not only reduce risk, 
but could strongly reinforce the possibility that a milestone 
decision now scheduled for fiscal year 1999 could produce an 
early decision for initial production. Such a decision could 
provide a fleet operational capability two years earlier than 
planned and save some $95 million in acquisition costs. To 
improve the probability of this favorable outcome, the 
committee recommends an increase of $44.0 million above the 
budget request in PE 64784N.

Classified program reduction

    The committee recommends a reduction of $10.0 million in a 
classified Navy program. Details are provided in the classified 
annex to this report.

Communications interoperability and reliability

    In reviewing the budget request, the committee has noted 
Department of the Navy plans for introducing new multimedia 
communications capabilities including digital voice, text, 
data, video imagery, and graphics that will be incorporated 
into a diverse mix of networks, transmission media, and 
transmission terminals. Advancements in computing capability 
and the integration of commercial off-the-shelf (COTS) 
technology offer new opportunities to increase operational 
capability at reduced cost. However, the committee has 
concluded that the Department needs to place greater emphasis 
on ensuring compatibility between emerging COTS technology and 
legacy systems that are likely to remain in service for at 
least another decade, if not longer. The committee believes 
that taking action as new systems are introduced to ensure the 
continuing reliability and security of hybrid networks would be 
a prudent course to follow.
    The committee recommends an increase of $3.7 million above 
the budget request in PE 24163N to pursue a program of 
independent testing and evaluation of COTS wired and wireless 
multimedia communications components and systems suitable for 
joint/combined military and civilian networked applications. 
The committee encourages the Department to utilize these funds 
to conduct a demonstration project to verify the utility of the 
concept, while upgrading the communications network for the 
Navy's Northeast Regional Maintenance Center at Portsmouth 
Naval Shipyard. The committee directs that all applicable 
competitive procedures be used in the award of contracts or 
other agreements under this program and that cost-sharing 
requirements for non-federal participants be utilized where 
appropriate.

Marine common hardware suite

    The committee understands that the Marine Corps is 
exploring new requirements and procurement strategies for 
computers and peripherals. The committee received a request for 
additional funding necessary to allow the Marine Corps to 
evaluate and test Marine common hardware suite (MCHS) products. 
The committee recommends an additional $0.7 million in PE 
26313M to support this effort.

Manufacturing technology program

    The committee is once again disappointed in the Navy's 
budget request for the manufacturing technology (MANTECH) 
program. This program has traditionally focused on making 
weapon systems and equipment more affordable through the 
application of advanced manufacturing methods to weapon systems 
production. In this time of severe budget constraints, the 
committee would expect the Navy to make every effort to pursue 
programs directed at lowering the long-term cost of weapon 
systems.
    In 1994, at the request of the military services, the 
committee shifted the management of MANTECH from the Office of 
the Secretary of Defense to the military services. Congress has 
made every effort to provide the military services with the 
authority and flexibility to direct MANTECH in order to make 
the program more responsive to the military services' specific 
manufacturing needs. Despite the Department of Defense stated 
policy of makingthe affordability of future systems a key 
priority for research and development programs, the Navy did not 
provide funding for MANTECH in the fiscal year 1998 budget request.
    In the February 26, 1997 hearing before the Senate Armed 
Services Committee, the Navy leadership admitted that the lack 
of funding was an oversight that they planned to rectify. The 
committee directs that the Navy provide the committees with its 
plan to strengthen the MANTECH program. That report should 
include a future years funding profile for the stabilization of 
this program at the fiscal year 1997 and 1996 funding levels.
    In order to address funding shortfalls for fiscal year 1998 
the committee recommends a transfer of $50.0 million into PE 
78011N from the following sources: $15.0 million from the 
Advanced Technology Transition program (PE 63792N); $5.2 
million from Other Procurement, Navy, DD-963 modernization; 
$3.6 million Other Procurement, Navy, AOJ modernization; $6.2 
million from Weapons Procurement Navy, BQM-74 targets; and 
$20.0 million from Other Procurement Navy, Spares and Repair 
Parts.

                               AIR FORCE


Phillips laboratory exploratory development
    The committee recommends an increase of $10.0 million in PE 
62601F for the reusable space launch program for the 
development and demonstration of military unique reusable space 
launch technologies.
High frequency active auroral research program
    The committee recommends increases in a number of program 
elements to support continued experimentation in the high 
frequency active auroral research program. The recommended 
increases are as follows: PE 62601F, $5.0 million; PE 63160D, 
$3.0 million; PE 63714D, $3.0 million.
ALR-69 radar warning receiver
    The budget request included $25.6 million for electronic 
combat technology research and development. The committee 
recommends an increase of $14.0 million in PE 0603270F for 
development of the ALR-69 radar warning receiver. The committee 
has been made aware of an initiative to incorporate research 
done at Wright Laboratories into a precision location and 
identification (PLAID) upgrade program for ALR-69 radar warning 
receivers. The initiative offers the chance to bring reserve 
and guard aircraft capability into parity with active forces 
through a cost-effective upgrade program.
Missile technology demonstration
    The committee has supported past missile technology 
demonstration (MTD) experiments, which have contributed to the 
ballistic missile technology program and demonstrated 
capabilities to attack hardened and deeply buried targets. The 
budget request did not include funds to continue this program. 
In order to complete MTD-3 and begin planning of MTD-4, the 
committee recommends an increase of $8.3 million in PE 63311F.
Military space plane
    The committee is aware of ongoing efforts in the Department 
of Defense on the part of the Air Force and U.S. Space Command 
to define a concept for development of a military space plane. 
The committee has supported DOD involvement in NASA's Reusable 
Launch Vehicle (RLV) program and continues to believe that DOD 
must coordinate technology development with NASA. Nonetheless, 
the committee believes that DOD should begin to define a space 
plane concept that meets military requirements yet exploits 
progress made in NASA's RLV program. The committee is aware 
that U.S. Space Command has begun to develop operational 
concepts and requirements for such an effort. However, the 
budget request didnot include funds for this program. To 
support technology and operational concept development as part of an 
overall military space plane effort, the committee recommends an 
increase of $10.0 million in PE 63401F. The committee strongly urges 
the Secretary of Defense to identify additional resources to support 
these efforts in the future years.

Solar thermionic orbital transfer vehicle

    The committee has supported thermionics technology 
development for space applications. The solar powered orbital 
transfer vehicle program has been identified by the Air Force 
as a Third Millennium initiative. This program combines 
thermionic technology for electricity production and thermal 
propulsion which can be used to move spacecraft to higher 
orbits or new orbits. To continue this important effort, the 
committee recommends an increase of $10.0 million in PE 63401F.

Geo space object imaging

    To support the growing emphasis on global surveillance and 
control of space, the committee recommends an increase of $15.0 
million in PE 63605F to complete the development of a high 
power illuminator laser imaging system to satisfy deep space 
mission military requirements.

Asynchronous transfer mode program

    Asynchronous transfer mode (ATM) is a commercially 
supported technology that provides a means to efficiently 
distribute multimedia (voice, video, data) digital information 
to field users and is designed for use over very low noise 
fiber optic interconnections. The Air Force is augmenting the 
emerging commercial networking technology so that it can be 
used during tactical deployments. The committee recommends an 
increase of $0.4 million in PE 63789F to provide ATM prototype 
units for Air Force and joint service needs.

Variable stability in-flight simulator test aircraft

    The budget request did not include funds for the variable 
stability in-flight simulator test aircraft (VISTA) in fiscal 
year 1998.
    Initial investigations of the integration of thrust 
vectoring (TV) for basic control of an advanced fighter 
aircraft have been completed in a variety of programs. The 
Russian SU-37 demonstration at the Paris Air Show indicated 
that potential adversaries realize the benefits that TV can 
provide if properly implemented. To date there has been no 
program to develop or evaluate the requirements for:
          (1) the use of TV integrated with the flight control 
        system;
          (2) the flying qualities necessary for operation in 
        the high angle of attack (AOA) environment;
          (3) trade-off of the tactical utility of thrust 
        vectoring in air to air combat;
          (4) evaluate the potential reduction or elimination 
        of tail control surfaces; and
          (5) replicate the performance and qualities of 
        potential adversaries in a tactical environment.
In order to continue U.S. technological advancement in thrust 
vectoring and flight control technology, the committee 
recommends the Air Force continue the VISTA program as a stand-
alone research project to explore the issues listed above.
    The committee recommends an increase of $8.0 million in PE 
64237F to continue development of VISTA as a TV test aircraft 
because of the high payoff of VISTA as a research vehicle and 
its low program cost compared with similar programs. Currently 
the VISTA is nearing completion of the first phase of a three 
phase program to install and integrate TV into its variable 
stability system and flight test the system. Presently, only 
the first phase is funded. The committee expects the Air Force 
to program for completion of the three year VISTA program to 
install and integrate TV into its variable stability system.

F-22 engineering and manufacturing development program

    The budget request included $2,071.2 million for 
engineering and manufacturing development (EMD) of the F-22. 
The future years defense program (FYDP) last year programmed 
$1,651.0 million for F-22 EMD, exclusive of the four pre-
production verification vehicles (PPV). The increase in EMD 
funding for fiscal year 1998 is a result of the cancellation 
and transfer of the funds for the PPV, aircraft that were to be 
used in the test program to verify manufacturing methods as 
well as conduct test flights.
    The committee has repeatedly noted its concerns with the F-
22 program, and in the statement of managers accompanying the 
National Defense Authorization Act for Fiscal Year 1997 (S. 
Rept. 104-267) expressed concern related to the Defense Science 
Board (DSB) report on concurrency and risk in the F-22 program. 
Specifically, the DSB noted that the engine development and 
passive surveillance electronics are the highest risk areas 
and, that in the event of inadequate progress, the program 
could be slipped.

Cost overruns and restructuring

    Consistent with the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201), the Air Force began a 
cost review of the program at about the same time as the Cost 
Analysis and Improvement Group (CAIG) of the Office of the 
Secretary of Defense (OSD) began work on a cost study of the 
program. Both the Air Force and the CAIG estimated increased 
costs for F-22 production, and the estimates were explained in 
a hearing before the Subcommittee on Airland Forces. However, 
not only has theestimate for production increased, the Air 
Force has also requested an infusion of production funds into the EMD 
program to complete development.
    A total of $2,159.0 million transferred to the EMD program 
derives from elimination of four test aircraft, or pre-
production verification (PPV) vehicles, and from foregoing 
production of 54 operational aircraft during the period of the 
FYDP. The result will be no change to the overall program cost 
over the FYDP, but at the cost of removing content; four test 
aircraft and 54 production aircraft. These changes are required 
for the development program to continue.
    The Air Force and the contractor team have proposed a 
series of initiatives to bring the estimated production costs 
back to the levels of the fiscal year 1997 request. The Air 
Force expects to finalize these initiatives in August 1997 when 
negotiations determine the pricing of the first five production 
lots of the F-22.
    In testimony prior to the National Defense Act for Fiscal 
Year 1997, the Air Force informed the committee that 
restructuring of the program had been costly in the past and 
had resulted in future cost escalations, estimated at three 
times the amount of the cut to the program. Now, the Air Force 
and the manufacturer want to slip the program and add funds to 
the development program, before negotiating the price for the 
first five lots of aircraft.

Placeholder status

    The committee views the infusion of PPV funds into the 
development program as premature, and recommends funding be 
provided at the level requested for fiscal year 1998 
development as requested in Fiscal Year 1997. The committee's 
recommended funding at this level provides for a stable 
program, as previously outlined. Accordingly, the committee 
recommends $1,651.0 million, a reduction of $420.0 million, for 
the development of the F-22. The committee looks forward to 
receiving information regarding the outcome of definitized cost 
data on EMD and the completion of contract negotiations for the 
first five lots of aircraft.

B-2 Multi Stage Improvement Plan (MSIP)

Situational awareness

    The budget request included $355.8 million for continued 
development of the B-2 bomber. The committee recommends an 
increase in the budget request of $ 15.0 million, as requested 
in the Chief of Staff of the Air Force's unfunded priorities 
list.
    The B-2's evolving role as a multipurpose bomber has 
required the reexamination of its specific capabilities, 
especially with regard to connectivity and situational 
awareness. Recent developments in situational awareness, 
especially the emergence of practical, jam resistant data links 
have greatly enhanced tactical aviation's capabilities. The 
incorporation of Link 16 data links in the B-2 would greatly 
enhance the crew's ability to change in tactical situations by 
using updated threat status, target information, and allied 
aircraft locations.
    Data displayed in real time would be especially important 
to B-2 crews involved in long duration flights to combat areas 
and when mission planning could be overtaken by events during 
transit.

Maintainability

    The budget request included $355.8 million for development 
of the B-2 bomber. The committee recommends an increase of $6.8 
million to the budget request for B-2 development. Realizing 
that stealth aircraft require careful maintenance to achieve 
their maximum potential, the committee supports studies to 
evaluate an advanced exhaust lip and hot trailing edge (HTE) 
thermal protections systems for the B-2 and directs the Air 
Force to program for such upgrades, should the studies prove 
the benefits of these improvements.

Minuteman safety enhanced reentry vehicle

    In fiscal year 1997, Congress authorized and appropriated 
$13.7 million to ensure the cost-effective addition of the Mk-
21 warhead capability to the ongoing Minuteman III Guidance 
Replacement Program. These funds were authorized and 
appropriated for the initial prototype and testing of the 
modification required to protect the option for the possible 
use of the Mk-21 reentry vehicle on Minuteman III once the 
Peacekeeper missile is retired. The budget request did not 
include funds to complete the initial prototype and testing. 
Therefore, the committee recommends an increase of $15.0 
million in PE 64851F for this purpose.

Aging landing gear life extension

    The committee is concerned that the Air Force has been 
extending the use of aircraft landing gear far beyond their 
original design life. The KC-135 was designed for a 30-year 
lifetime, but will retire at 86 years and the B-52, designed 
for a 30-year life, will retire at 94 years.
    The committee recommends an increase of $6.0 million in PE 
65878F to develop the necessary engineering tools to 
efficiently overhaul aircraft landing gear equipment. The 
committee directs that all applicable competitive procedures be 
used in the award of contracts or other agreements under this 
program, and that cost-sharing requirements for non-federal 
participants be utilized where appropriate.

Conventional Air-Launched Cruise Missile Block II upgrade

    The budget request did not include funds for Conventional 
Air-Launched Cruise Missile (CALCM) research and development or 
production funding for fiscal year 1998. However, the committee 
has been informed that the Air Force intends to use fiscal year 
1997 funds for CALCM Block II development and two other related 
CALCM projects. By combining the CALCM Precision Strike 
Demonstration technology with a new warhead concept, the Air 
Force hopes to be able to attack hard and buried targets from 
long range. Accordingly, the committee recommends an increase 
of $3.5 million to the budget request to complete Block II 
engineering and manufacturing development. Moreover, the 
committee encourages the Air Force to reprogram funds as 
necessary to procure Block II CALCM should development efforts 
prove successful.

Theater battle management system

    The budget request included $24.0 million for theater 
battle management command and control research and development. 
Theater battle management system (TBM) is designed to integrate 
air support for ground forces through the air support 
operations center (ASOC). The committee understands that an 
additional $4.0 million would accelerate TBM development in 
fiscal year 1998, especially the prototyping of connectivity to 
provide improved information flow between Army corps elements 
and the ASOC, including flow of Air Force information to 
support targeting and resource allocation decisions. 
Accordingly, the committee recommends an increase of $4.0 
million to the budget request for TBM.

Cruise missile defense

    Given the growing threat posed by cruise missiles, the 
committee continues to support development of a comprehensive 
cruise missile defense architecture, integrated into DOD's 
overall air and theater missile defense efforts. Because 
counter cruise missile technologies have matured at the Defense 
Advanced Research Projects Agency (DARPA), and because DARPA 
funding to support key sensor technologies ends in fiscal year 
1998, the committee strongly urges the Air Force to begin to 
integrate these technologies into operational platforms. 
Specifically, the committee recommends an increase of $10.0 
million in PE 27417F to begin the necessary upgrades to the 
Airborne Warning and Control System (AWACS), and an increase of 
$10.0 million in PE 27581F to begin necessary upgrades to the 
Joint Surveillance and Target Attack Radar System (JSTARS). The 
committee expects the Air Force to continue these two important 
initiatives in the future.

C-5 Modernization

    The budget request included $83.0 million for C-5 
modifications in fiscal year 1998, and the future years defense 
program (FYDP) plans for $75.6 million in fiscal year 1999, 
$147.0 million in fiscal year 2000, $117.2 million in fiscal 
year 2001, $119.8 million in fiscal year 2002, and $81.8 
million in fiscal year 2003 for C-5 modifications. In view of 
the substantial funds already programmed for the C-5 
incremental modernization, the committee is persuaded that a 
robust program to increase the service life of the C-5 could be 
developed to improve total C-5 performance and delay retirement 
of the C-5 to 2025 or later, thus providing outsize and heavy 
cargo load carrying capability (tanks, helicopters, etc.), 
while saving on the procurement of new transport aircraft.
    The committee has learned of studies that predict a service 
life of greater than 50,000 hours is achievable for the C-5 if 
steps are taken now. Cost estimates of $32.4 million for each 
aircraft's modernization could not only yield the extended 
service life, but also significant increases in load carrying 
capability and reliability through the incorporation of newer 
engines and components in the aircraft.
    Accordingly, the committee recommends an increase of $20.4 
million to the budget request, with $8.0 million provided to 
definitize the program and $12.4 million for prototype 
development, to begin the modernization of the existing C-5 
fleet as a low cost alternative for long-term air mobility.

Measurement and signature intelligence software development and 
        training facility

    The committee recommends an increase of $4.2 million in PE 
31315F for the measurement and signature intelligence (MASINT) 
software development and training facility (SDTF). This funding 
will continue the fiscal year 1997 effort to develop and refine 
collection methodologies and analysis tools and provide the Air 
Force with a capability for training MASINT system operators 
and analysts.

                              DEFENSE-WIDE


Defense Experimental Program to stimulate competitive research

    The committee commends the Department of Defense for 
including $10.0 million in the budget request to continue 
research under the Defense Experimental Program to Stimulate 
Competitive Research (DEPSCoR) in fiscal year 1998. The 
committee directs, that of the funds authorized to be 
appropriated in PE 61103D, an additional $10.0 million be used 
to fund this program, with a total of $20.0 million available 
for DEPSCoR.

Chemical and Biological Defense Program

    The budget request included $530.9 million for the 
chemical-biological defense program, including $320.9 million 
in research and development, test and evaluation and $210.0 
million in procurement. In addition to the funds requested for 
the chemical-biological defense program, the budget request 
included $61.0 million for the biological warfare defense 
program (PE 62383E).
    The committee recommends an increase of $6.5 million for 
chemical and biological research and development activities and 
a $6.5 million reduction for biological defense activities in 
PE 62383E.
    The Department of Defense (DOD) identified an excess of 
$16.1 million of the fiscal year 1997 funds within procurement 
for the chemical and biological defense program that are not 
executable until the end of fiscal year 1999. The planned 
acquisition strategy for the biological integrated defense 
systems (BIDS) in fiscal year 1997 included procuring 36 
systems and spares. However, only 14 systems are to be 
assembled by the Army's Chemical and Biological Defense Command 
by the end of fiscal year 1998, with the remaining 22 systems 
being assembled by the end of fiscal year 1999. According to 
the Department, there is no need to procure systems far in 
advance of assembly, and the reduction would not affect the 
chemical and biological defense program. The committee believes 
this source should be redirected to procurement and research 
and development efforts in the chemical-biological defense 
program, and counterproliferation and counterterrorist research 
and detection efforts to protect against the use of weapons of 
mass destruction.

Medical defenses against biological agents

    Gaps exist in the biological warfare defense capability of 
the United States and should be corrected in an expedited and 
cost- 
effective manner. Recent developments in therapeutic human 
antibody technologies offer a possible solution. The Senate 
report on the National Defense Authorization Act of Fiscal Year 
1997 (S.Rept. 104-267) required the Department of Defense to 
report on the utility and possible benefits of this medical 
technology in reducing the biological agent threat. However, to 
date, the committee has not received any information from DOD 
on this technology. The committee understands that private 
medical industry can provide the expertise and support to 
initiate a program of this nature in a timely manner. The 
committee has urged the Department on many occasions to 
leverage the expertise resident in private industry, 
particularly when there is experience and a proven track record 
can be shown.
    The Department's current plans are built around the use of 
vaccines. However, the pool of vaccine producers is small. 
Biological warfare threats can evolve much faster than the 
vaccine development cycles. The committee understands that the 
development and production of therapeutic human antibodies has 
a proven track record. Work in this area has been established 
and is available in FDA licensed commercial firms. The 
committee recommends that DOD leverage the resident expertise 
within private industry to conduct a feasibility study on the 
use of therapeutic human antibodies in the Department's plan to 
protect U.S. forces against the evolving biological threat. The 
Department should submit a report to Congress on its findings 
by December 31, 1998. At a minimum, the study should include an 
analysis of the threats, agents, the enemy stocks to select 
target candidates against which to develop antibodies and the 
possible tradeoff of the use of human monoclonal antibodies as 
a medical defense against biological agents. Of the funds 
requested in fiscal year 1998 in PE 62383E, the committee 
directs that $1.5 million be used to conduct a study on the use 
of antibodies as medical defenses against biological agents.
    Additionally, the committee recommends an increase of $2.0 
million in PE 61384BP for a joint service core research program 
to develop a prototype hybrid integrated sensor array for 
chemical and biological point detection. The committee 
understands that this program would integrate metal-oxide and 
biochemical film technologies with piezoelectric/optical 
sensors and study the response of sensor prototypes to chemical 
and biological agent simulants, such as organophosphorus, 
bacteria and ovalbumin. The committee supports efforts to 
expand the knowledge in military relevant fields of chemical 
and biological research that could improve the operational 
performance of present and future DOD components.

Domestic Emergency Response Program

    The budget request for fiscal year 1998 included $48.7 
million for domestic emergency response activities. The 
committee recommends authorization of the requested amount.
    Since 1993, the Congress has expressed its concern with the 
potential domestic terrorist use of nuclear, chemical, 
biological and radiological agents and weapons against 
civilians, as well as military forces in the United States. Due 
to the Department of Defense expertise in the chemical and 
biological defense area, Congress requested a report on how DOD 
could use its expertise to assist in domestic terrorist 
incidents. On June 13, 1996, in consultation with the Federal 
Emergency Management Agency, ajoint report was submitted to 
Congress by the Department of Defense and the Department of Energy, 
entitled `` Preparedness and Response to a Nuclear, Radiological, 
Biological, or Chemical Terrorist Attack.'' In response to the 
recommendations made in the report, the Congress included a provision 
in the National Defense Authorization Act for Fiscal Year 1997 (Public 
Law 104- 201), that required the President to take immediate action to 
enhance the ability of the Federal Government to respond to domestic 
terrorist attacks involving nuclear, chemical, biological or 
radiological agents and weapons. The Congress appropriated $42.6 
million for the establishment of a Domestic Emergency Response Program 
to provide enhanced support to improve the capabilities of State and 
local authorities to respond and provide assistance during these 
incidents, including $9.8 million for DOD to conduct interagency 
domestic emergency response exercises.
    The Assistant Secretary of Defense for Special Operations 
and Low Intensity Conflict (SO/LIC) has overall supervision of 
the domestic emergency response program, to include oversight 
of policy and resources. The Secretary of the Army has been 
designated as the executive agent of the program and will take 
the lead in coordinating DOD training assistance to Federal, 
State and local officials in responding to chemical and 
biological weapons threats. The Army Director of Military 
Support (DOMS) will serve as the focal point for coordination, 
and the Chemical and Biological Defense Command (CBDCOM) has 
been appointed as the program director for management execution 
of the program. The committee understands that the Army will 
also take the lead in coordinating DOD assistance to the 
Department of Energy, in domestic terrorist incidents involving 
nuclear weapons.

Chemical-biological response teams

    Section 1414 of the National Defense Authorization Act for 
Fiscal Year 1997 required DOD to establish at least one 
chemical-biological emergency response team, similar in concept 
to the Nuclear Emergency Search Team and Accident Response 
Groups. The committee understands that DOD is in the process of 
establishing a consequence management response task force under 
the unified command structure that will consist of several DOD 
consequence management response elements. The committee also 
understands that this consequence management response task 
force will include elements from the U.S. Army's Technical 
Escort Unit (TEU), the U.S. Army Medical Research Institute of 
Chemical Defense (USAMRICD), the U.S. Army Medical Research 
Institute for Infectious Diseases (USAMRIID), and the U.S. 
Marine Corps Chemical/Biological Incident Response Force 
(CBIRF). The Navy/Marine Corps activated the Chemical/
Biological Incident Response Force (CBIRF) in June 1996 to 
respond to chemical and biological incidents occurring on Naval 
installations and Department of State legations around the 
world. In order to maintain the necessary capabilities to 
support Federal response to threats or acts of chemical or 
biological weapons terrorism, the committee believes that it is 
important that DOD ensure the effective coordination of the 
expertise resident within the Chemical and Biological Defense 
Command, DOD medical organizations, the TEU, and the CBIRF, so 
that resources and funds are leveraged to the fullest extent 
possible to ensure the ability to respond to an incident 
involving chemical and biological weapons.
    Recognizing the achievements of the Technical Support 
Working Group (TSWG), a subgroup of the Interagency Working 
Group on Counter Terrorism, in coordinating interagency and 
international research and development requirements for 
combating terrorism, and SO/LIC's Counterterror Technical 
Support (CTTS) Program in developing responsive solutions to 
these requirements, the committee directs the DOD to use the 
TSWG and CTTS program to coordinate the research and 
development requirements of the DOD response elements for 
chemical and biological terrorism. To ensure that programs and 
requirements address the highest priority deficiencies, SO/LIC 
will continue to coordinate its efforts in the CTTS program 
with the Counterproliferation Support Program (CPSP) and the 
Chemical and Biological Defense Program (CBDP).
    The U.S. Marine Corps has identified a $4.5 million 
unfunded research and development requirement for biological 
detectors to support the CBIRF. The committee recommends an 
increase of $4.5 million to the chemical and biological defense 
program (PE 62384BB). The committee directs the Marine Corps to 
coordinate this, and other Marine Corps research and 
development requirements for combatting terrorism, with the 
TSWG. The committee understands that the TSWG will ensure that 
all research, development and acquisition efforts in support of 
the CBIRF are fully integrated and coordinated with other DOD 
research and development efforts for combatting terrorism, as 
well as with overall DOD technology efforts related to chemical 
and biological defense.

Ballistic Missile Defense Organization funding

    The fiscal year 1998 budget request included approximately 
$2.6 billion for the Ballistic Missile Defense Organization 
(BODO), including funds for research, development, test, and 
evaluation (RDT&E), and military construction. The budget 
request also included $386.4 million in procurement funds 
formerly managed by BODO that were transferred to the military 
services. As addressed elsewhere in this report, the committee 
recommends that these procurement funds be transferred back to 
BODO. Consistent with this recommendation, the committee will 
address these fiscal year 1998 procurement funds as part of the 
budget request for BODO.
    The committee's recommended funding allocations for BODO in 
fiscal year 1998 are summarized in the following table. 
Additional programmatic and funding guidance are also provided 
below.

                                             BODO FUNDING ALLOCATION                                            
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                             Program                                  Request         Change      Recommendation
----------------------------------------------------------------------------------------------------------------
Support Technology..............................................           249.5          +188.4           437.9
THAAD \3\.......................................................           560.7          -202.7           358.0
TMD-BM/C3 \1\...................................................            20.2  ..............            20.2
Navy Lower Tier \2\.............................................           283.3  ..............           283.3
Navy Upper Tier.................................................           194.9           +80.0           274.9
MEADS...........................................................            48.0  ..............            48.0
BPI.............................................................            12.9            +5.0            17.9
NMD \3\.........................................................           504.6          +474.0           978.6
Joint TMD \3\...................................................           544.6           +34.0           578.6
PAC-3 \2\.......................................................           556.8  ..............           556.8
      BODO total................................................         2,975.5          +578.7        3,554.2 
----------------------------------------------------------------------------------------------------------------
\1\ Procurement only.                                                                                           
\2\ Procurement and RDT&E.                                                                                      
\3\ RDT&E and Military Construction.                                                                            

Support technology

    The committee continues to support BODO's wide bandgap 
electronic material development program. Higher speed and 
higher temperature operation afforded by wide bandgap 
electronic materials could enhance the miniaturization and 
functionality of advanced sensors and processing systems for 
space-based ballistic missile defense (BMD) sensors and ground-
based radar systems. The committee recommends an increase of 
$14.0 million in PE 62173C to support this important activity.
    The committee continues to support the Atmospheric 
Interceptor Technology (AIT) program to develop and flight test 
advanced kill interceptors with potential applications for a 
wide range of theater missile defense (TMD) programs. The 
committee recommends an increase of $40.0 million in PE 63173C 
to continue the AIT program.
    The committee supports the efforts of the U.S. Air Force 
and BMDO to develop a joint program for proceeding toward a 
space-based laser (SBL) flight demonstrator. The committee 
notes that the Director of BMDO commissioned an independent 
review team (IRT) to study the space-based laser program and 
recommend a preferred course of development. According to the 
SBL-IRT, the most prudent course for the SBL is to proceed on a 
low risk program that could lead to a launch of an ABM Treaty 
compliant space demonstrator in fiscal year 2005. To achieve 
this goal, the SBL-IRT recommended a funding level of $148.0 
million for the SBL program in fiscal year 1998. The committee 
endorses the SBL-IRT recommendations and recommends an increase 
of $118.0 million in PE 63173C to begin implementing them. The 
committee believes that such an SBL readiness demonstrator can 
be conducted without violating the ABM Treaty. In addition, 
proceeding with a readiness demonstrator will not commit the 
United States to development or deployment of an operational 
SBL program, but will preserve this option for future 
consideration.
    The committee is concerned that, following an investment of 
approximately $800.0 million to develop and launch the 
Midcourse Space Experiment (MSX) satellite, BMDO and the Air 
Force now have not allocated funding to continue operation of 
this system following the failure of the cryo-cooler system. 
The committee notes that the Air Force has developed a proposal 
for an advanced concept technology demonstrator (ACTD) to 
continue MSX operation to exploit the sensors that remain 
operational. The Air Force has estimated that such an ACTD 
would require $6.4 million in fiscal year 1998. The committee 
is disappointed that these funds were not identified by the 
Department of Defense. Given the degree of useful life 
remaining in the MSX system and the amount of valuable data it 
could still collect, the committee recommends an increase of 
$6.4 million in PE 63173C to continue operations of the MSX 
satellite. However, the committee expects the Department of 
Defense to request the necessary funding to continue MSX 
operations in fiscal year 1999 and beyond.
    The committee has supported BMDO's efforts to evaluate 
innovative launch concepts, especially those utilizing 
pressure-fed rocket engine technology. The committee recommends 
an increase of $10.0 million in PE 63173C to support low cost 
launch concepts, including the Scorpius concept.

Theater High Altitude Area Defense system

    The committee continues to support the development, 
production, and fielding of Theater High Altitude Area Defense 
(THAAD) as a matter of highest priority. The committee notes 
that, notwithstanding recent failures to achieve an intercept 
of a target, the THAAD system has accomplished virtually all 
other test objectives to date. The committee is encouraged by 
the recent findings of the two review teams that have evaluated 
the THAAD design and development program: specifically, that 
the THAAD system design and operational requirements are 
fundamentally sound.
    The committee understands that, due to delays in the THAAD 
flight schedule, funds appropriated in fiscal year 1997 and 
funds contained in the budget request for fiscal year 1998 for 
THAAD are currently excess to the THAAD program in those 
specific fiscal years. The committee, therefore, recommends a 
reduction of $202.7 million in fiscal year 1998 and directs 
BMDO to use excess fiscal year 1997 funds to cover necessary 
fiscal year 1998 requirements, as requested by the Secretary of 
Defense. This reduction is made without prejudice to the THAAD 
program and with the expectation that DOD will make up these 
funds in the outyears. The committee also recommends the 
transfer of the remaining $58.8 million fiscal year 1998 THAAD 
Engineering and Manufacturing Development (EMD) funds to the 
THAAD Demonstrationand Validation (Dem/Val) account, for a 
total authorization of $353.4 in PE 63861C. The committee understands 
that approximately $340.0 million will need to be added to the THAAD 
program in fiscal years 1999 and 2000 to properly realign THAAD 
funding. The committee expects the Department of Defense to add such 
funds in the Future Years Defense Program, and to take such measures as 
may be possible to accelerate fielding of the THAAD first unit equipped 
(FUE), consistent with a moderate risk program.

Navy Upper Tier (Theater Wide)

    The committee continues to strongly support the Navy Upper 
Tier program. The committee welcomes the administration's 
decision to increase funding for this program and to position 
it to become a major defense acquisition program. The 
committee, however, does not believe that sufficient funding 
has been added or sufficient priority attached to this program. 
The committee notes that the Chief of Naval Operations has 
recommended an increase of $80.0 million for this program in 
fiscal year 1998. Such an increase would enable acceleration of 
the AEGIS/Lightweight Exo- Atmospheric Projectile (LEAP) 
intercept test to the maximum extent now achievable. The 
committee supports this acceleration and recommends an increase 
of $80.0 million in PE 63868C.

Boost phase interceptor

    The budget request includes $12.9 million for the U.S.-
Israeli boost phase intercept system based on an unmanned 
aerial vehicle (UAV). This level of funding, however, is 
insufficient to adequately support necessary risk reduction 
efforts. Therefore, the committee recommends an increase of 
$5.0 million in PE 63870C to support such efforts.

National Missile Defense

    The budget request for the National Missile Defense (NMD) 
program was $504.1 million. The committee has maintained for 
the last several years that the NMD program is severely 
underfunded. In the context of the Quadrennial Defense Review, 
the Department of Defense has acknowledged this funding 
shortfall and recommended an increase of $474.0 million for NMD 
in fiscal year 1998, and approximately $2.3 billion over the 
years of the Future Years Defense Program (FYDP). The committee 
notes that this does not include any funding for the actual 
deployment of an NMD system.
    Although the committee is pleased that the Secretary of 
Defense has sought to clarify actual NMD funding requirements, 
it is disappointed that it has taken so long. Even with 
significant congressional increases over the last two years, 
the NMD program remains high risk, largely due to the 
Department's failure to adequately fund robust testing 
activities. Unfortunately, the addition of $474.0 million in 
fiscal year 1998 will do little in the near-term to compensate 
for this neglect. The committee is concerned by the lack of 
detail accompanying the Secretary of Defense's request to 
increase the NMD program budget by $2.3 billion over the FYDP. 
In addition, the committee is not satisfied with the degree of 
information provided to date on how past NMD funding increases 
have been spent. Therefore, the committee directs the Secretary 
of Defense to submit a report to the congressional defense 
committees, not later than November 1, 1997, providing a 
detailed accounting of how NMD funds have been spent since the 
beginning of fiscal year 1996 and a detailed plan for the 
allocation of NMD funding in the FYDP. In addition, the 
Secretary shall provide a detailed description of the cost 
estimating and cost control mechanisms in place within DOD for 
the NMD program, and an assessment of whether they are 
adequate.
    The committee supports the NMD Joint Program Office and the 
decision to award a contract for a lead system integrator 
(LSI). The committee urges BMDO to proceed expeditiously with 
selection of an LSI contractor and the overall NMD program. 
Therefore, the committee recommends an increase of $474.0 
million in PE 63871C.
    The committee believes that BMDO should continue to explore 
sea-based NMD options. The committee is aware of analysis that 
shows that a version of the Navy Upper Tier theater missile 
defense (TMD) system could be employed in an NMD role. 
Therefore, the committee directs the Director of BMDO to submit 
a report to the congressional defense committees by February 
15, 1998, describing whether and how the Navy Upper Tier 
program could be upgraded in the future to provide a limited 
NMD capability. The report should address the technical issues 
associated with a sea-based NMD option as well as costs 
associated with such a concept. The report should also address 
whether and how a sea-based NMD system could be integrated into 
and supplement a ground-based NMD system, and whether and how a 
sea-based system could provide additional capabilities in 
support of the requirements for the existing NMD program.

Joint theater missile defense

    The committee supports the efforts being performed at the 
Army Space and Strategic Defense Command's Advanced Research 
Center (ARC). The ARC continues to be a valuable tool in 
support of the Army's development of both theater and national 
missile defense systems. Therefore, the committee recommends an 
increase of $7.0 million in PE 63872C for support of the ARC.
    The budget request includes $38.7 million for BMDO's 
Israeli Cooperative Project, which includes funding for the 
Arrow ballistic missile defense system. The committee 
recommends an increase of $15.0 million in PE 63872C to support 
interoperability design so the Arrow can operate alongside 
forward deployed U.S. missile defense systems. The committee 
urges BMDO to identify additional funds in the outyears to 
continue this important cooperative effort to ensure that U.S. 
systems are fully complemented by the Arrow system.
    The committee notes that the Secretary of Defense has 
requestedthat an additional $12.0 million be added to the 
budget request to support the Department's efforts to develop a theater 
air and missile defense integrated systems architecture. The committee 
supports this request and recommends an increase of $12.0 million in PE 
63872C for this purpose.

Reuse technology adoption program

    The committee recommends an increase of $2.5 million in PE 
62301E to continue efforts focused on software reuse 
technology, methodologies, and education programs in the 
Department of Defense. The program should focus on using 
evolutionary approaches to the use of software recycling for 
constructing new systems based on a common architecture.
    The committee believes that there is significant 
application for reuse technology in the commercial sector. 
Therefore, the committee directs the Secretary of Defense to 
require that each non-federal provider under this program 
prepare and submit a management plan for transitioning its 
program to 100 percent non-federal funding within an 
appropriate time period specified by the Secretary.

Tactical technology

    The committee recommends an increase of $3.0 in PE 62702E 
to provide for lethality demonstration and the definition of a 
tactical configuration of the small low-cost interceptor device 
(SLID). This will allow for an assessment of integration and 
configuration of SLID on the Abrams, Bradley, and HMMWV 
platforms.

High definition display systems

    The committee recommends an increase of $18.0 million in PE 
62708E to accelerate the development of rugged and flexible 
high definition displays for use in military applications. The 
committee also intends that the additional funds be used to 
increase the number of evaluations of emerging display 
technologies in such applications.

Hard carbon-based coatings

    The committee recommends an increase of $1.0 million in PE 
62712E to ensure effective transition of technologies using 
pulsed laser deposition of hard carbon coatings to specific 
applications in the Department of Defense.

Seamless high off-chip connectivity

    The committee recommends an increase of $7.5 million in PE 
62712E for continued research and development of Seamless High 
Off-Chip Connectivity (SHOCC)to improve the price and 
performance characteristics of computing capability for the 
military. The committee directs that all applicable competitive 
procedures be used in the award of any contract or other 
agreement under this program, and that robust cost-sharing 
requirements for non- federal participants be used where 
applicable. The committee believes that this technology has a 
number of significant commercial applications and intends that 
any future funding be contingent on strong commercial 
investment in the technology.

Defense Special Weapons Agency

    The committee recognizes that the end of the Cold War has 
changed the risk to the United States from a nuclear weapons 
attack. However, the threat is evolving, not disappearing. The 
committee is concerned that budget reductions and a resulting 
loss in technical expertise have caused the nation's ability to 
analyze the effects of a nuclear weapons attack on military and 
other systems and structures, and to provide reliable and 
timely technical guidance to drop below acceptable levels. As 
noted previously by the committee, the Department of Defense 
(DOD) must take concrete steps to ensure that the military 
services and civilian personnel retain their nuclear core 
competencies and critical scientific and engineering skills.
    The committee believes that additional funding is necessary 
to maintain stewardship of this national capability and 
recommends a $15.0 million increase to the budget request for 
fiscal year 1998 for the Defense Special Weapons Agency 
(DSWA)for research and development activities related to 
maintaining critical core competencies and skills in nuclear 
weapons effects. Additionally, the committee believes the 
Department should increase its annual fiscal year funding 
levels in this area by $10.0 million annually in order to 
sustain a more robust program to understand, predict, and 
mitigate effects of nuclear explosions.

Structural Response and Blast Mitigation

    Research and development on weapon effects, weapon and 
target interaction, and force protection technologies have wide 
antiterrorism applicability. Expeditious identification of 
promising technologies and materials by the Technical Support 
Working Group (TSWG), could provide the means to reduce the 
vulnerability of key military, government, and public buildings 
to terrorist attacks involving conventional explosives. In 
particular, Defense Special Weapons Agency's (DSWA) expertise 
in the area of weapon and target interaction represents an 
investment which should be leveraged to the fullest extent 
possible to advance further the understanding of structural 
response to blast and to develop blast and shock mitigation 
technologies, including those which can be retrofitted to 
existing structures.
    The committee encourages the Department to utilize DSWA 
expertise and unique testing capabilities to accelerate the 
fielding of new protective technologies including affordable 
andpractical retrofit options for existing structures. 
Additionally, the committee suggests the Department leverage existing, 
promising technologies designed to mitigate earthquake and corrosion 
related damage. The committee recommends that the Department consider 
developing a set of structural engineering design guidelines and 
standards modeled after those developed by other Federal agencies, like 
those developed by the Department of State for new embassy office 
buildings, to prevent the collapse of buildings and structures 
subjected to heavy blast loads.

Vulnerability of electronic technologies and space systems to radiation 
        and electromagnetic pulse

    The United States continues to expand its military and 
commercial reliance on advanced electronic technologies and 
space systems. The committee has previously expressed its 
concern that the Department is not paying enough attention to 
the potential vulnerability of the next generation satellites 
and high technology upon which U.S. forces depend and in which 
industry is investing billions of dollars, to the effects of 
radiation and electromagnetic pulse (EMP).
    In response to the committee's concerns, the Defense 
Special Weapons Agency has conducted activities that have shown 
electronics, computers, and communication systems can be highly 
susceptible to disruption and damage from high altitude 
nuclear, as well as conventional, explosions. The committee 
notes that a potential adversary possessing only a few nuclear 
weapons could seriously impair or negate military operations, 
as well as critical civil and commercial activities, and is 
concerned that funding reductions have permitted only limited 
attention to this rapidly growing problem. The committee 
recommends an increase of $3.0 million to examine further the 
national implications of high altitude nuclear and conventional 
effects.

Counterterror technical support

    The budget request for fiscal year 1998 included $34.9 
million for the counterterror technical support program for 
antiterrorism and counterterrorism projects which support and 
are integrated into the national interagency response to 
national terrorism. The program also addresses deficiencies 
cited in response to questions about the adequacy of 
counterterrorism research and development posed in Presidential 
Decision Directive 39 (PDD-39).
    The committee recommends an increase of $6.0 million for 
structural response and blast mitigation research and 
development, $6.0 million for counterterrorist explosive 
research, and $3.0 million for the demonstration of non-
intrusive inspection technologies.
    The tragic Khobar Tower incident in Saudi Arabia 
highlighted the vulnerability of U.S. forces and the need for 
more adequate protection against these heinous acts of 
terrorism. In order to enhance the security of persons and 
property of the United States, the committee believes it is 
necessary to develop innovative security technologies.
    The committee supports collaborative efforts with allies 
who have demonstrated counter-terrorism capabilities, such as 
Israel and the United Kingdom, which can provide the United 
States a cost-effective way of remaining at the cutting edge of 
technology. The committee understands that the Department of 
Defense (DOD) recently collaborated with Israel and the United 
Kingdom on an international cooperative research and 
development program to strengthen existing structures against 
terrorist and ballistic missile attacks. The committee 
recommends an increase of $6.0 million to the budget request to 
examine retrofit options and to develop design guidelines for 
new and existing structures. This effort should include the use 
of composite systems and retrofit applications technologies 
such as those demonstrated for seismic retrofitting of highway 
columns and corrosion damage.
    The committee has supported funding for a non-intrusive 
inspection technology, known as pulsed fast neutron analysis 
(PFNA). The committee believes this technology could provide 
the Department with a broad spectrum of automated inspection/
detection operations capability, which could aid in the search 
for explosives, chemical and biological agents, toxic 
materials, and special nuclear materials. The committee 
recommends that the remainder of the increase recommended for 
this program be utilized for the demonstration of the PFNA.

Research and Development for Combating Terrorism

    The committee understands that the Office of the Assistant 
Secretary of Defense for Special Operations and Low-Intensity 
Conflict (SO/LIC) currently coordinates and is responsible for 
the execution of all aspects of the Department's interagency 
research and development (R&D) efforts for combating 
conventional and unconventional (weapons of mass destruction) 
terrorism within the Counterterror Technical Support (CTTS) 
Program. Through its role as the Executive Agent for the 
Technical Support Working Group (TSWG) and the CTTS Program, 
SO/LIC has the full perspective on multiagency and 
international R&D to combat terrorism. The TSWG, a subgroup of 
the Interagency Working Group on Counterterrorism, is 
responsible for the development of technologies to meet the 
needs for combating terrorism, while ensuring integration and 
coordination with all agencies across the government and with 
specified countries. Recognizing this success in coordinating 
among many agencies nationally and with three countries 
internationally, and acknowledging ongoing efforts that support 
state and local response requirements, the committee recommends 
that the DOD continue, through the TSWG, to work closely with 
Federal agencies responsible for addressing the equipment needs 
of state and local responders.

Advanced lithography

    One of the five principle components of the Revolution in 
Military Affairs, as outlined in the Secretary's 
QuarterlyDefense Review, is ``a robust multi-sensor information grid 
providing dominant awareness of the battlespace to our commanders and 
forces''. The new systems that will provide this battlefield awareness 
are dependent on the continued evolution of computer technology and 
particularly, the availability of smaller and faster microchips.
    The Navy's proximity x-ray lithography program is focused 
on producing microchips that enable processors with speeds 
thousands of times faster than current technology. The new 
microchips would make it possible for the Department of Defense 
(DOD) to develop and field: extremely high-speed processors for 
real-time threat identification, identification of friendly 
forces, automatic target recognition, and autonomous 
operational capabilities; microelectromechanical systems (MEMS) 
for remote sensing and countermeasures; multispectrual, 
infrared, and electro-optical sensors for threat and target 
identification; autonomous smart sensors and systems capable of 
self-preservation; and high-resolution displays for command 
centers and tactical operators.
    The demonstration of a related program for the development 
of a point-source x-ray lithography system capable of sub-0.15 
lithography is near completion. That technology has a number of 
near-term applications in the low volume production of 
monolithic microwave integrated circuits (MMIC) for military 
uses.
    The committee recommends an increase of $23.0 million to PE 
63739E to continue the proximity x-ray lithography program and 
an increase of $2.0 million in the same program element to 
complete the point-source x-ray lithography program in fiscal 
year 1998 under the current memorandum of understanding between 
the Defense Advanced Research Projects Agency (DARPA) and the 
Navy. The committee recommends a decrease of $3.0 million in 
project MT-06 in the same program element as a partial offset 
for these recommended increases. The committee directs the DOD 
to focus the funds for the proximity portion of the increase on 
the following priorities: (1) development of an e-beam pattern 
generator; (2) resist development, absorber stress control, and 
other key elements of process development; (3) stepper 
upgrades; (4) mask repair; and (5) mask inspection.
    The committee is concerned that the advanced lithography 
program has yet to bear fruit, despite substantial expenditures 
over an eight-year period. Therefore, the committee directs 
that Naval Air Systems Command, in consultation with the Naval 
Research Laboratory, submit to Congress, within 180 days of 
enactment of this Act, a plan to expeditiously complete the 
project with fieldable technology. The plan shall not exceed 
three years and should contemplate a minimum of 50% cost-share 
by industry in fiscal year 1998 and a substantially greater 
industry share in any subsequent effort. If it is not feasible 
to develop fieldable technology within the period specified, 
the DOD is directed to discontinue the effort after fiscal year 
1998. In light of the important defense implications of this 
technology, the committee directs the Navy to include 
provisions in research contracts or other agreements in this 
area to adequately protect against technology transfer to 
foreign nations.

Advanced concept technology demonstrations

    The committee notes that the budget request of $121.0 
million for advanced concept technology demonstrations is more 
than twice the amount of $56.9 million authorized and 
appropriated for fiscal year 1997. The committee recommends a 
reduction of $20.0 million in PE 63750D, without prejudice, to 
fund other higher priority programs.

Electronic commerce resource centers

    The committee recommends an increase of $3.0 million in PE 
63753D for the establishment of a new electronic commerce 
resource center to complement the existing network of centers. 
The committee urges the Department of Defense to consider 
establishment of the new center at an institution of higher 
learning that has a record of success in commercial electronic 
projects. The committee directs that all applicable competitive 
procedures be used in the award of contracts or other 
agreements under this program, and that cost-sharing 
requirements for non-federal participants be utilized where 
appropriate.

High performance computing modernization program

    The committee recommends an increase of $25.0 million in PE 
63755D to sustain the operations of supercomputing centers 
established with Department of Defense (DOD) funds. The centers 
can play an integral role in helping the Department meet its 
supercomputing capability requirements. The Air Force Phillips 
Laboratory and Air Force Space Command continue to rely on one 
such center to provide image processing and simulation 
capabilities. Another such center continues to provide key 
support to the Ballistic Missile Defense Organization and the 
Navy. The committee directs that the distributed centers that 
are the recipients of the funds included in this increase 
develop management plans that includes a reasonable period of 
transition to full sustainment funding by government and non-
government facility users. Therefore, the committee directs 
that the distributed centers, in conjunction with the DOD, 
prepare and submit such plans to the congressional defense 
committees no later than March 15, 1998.

Reductions in new starts

    The committee notes with concern the significant growth in 
funding for new starts in a number of programs managed by the 
Defense Advanced Research Projects Agency. Therefore, the 
committee recommends a reduction of $5.0 million in PE 63760E 
and $5.0 million in PE 63762E.

Large millimeter-wave telescope program

    The committee recommends an increase of $3.5 million in PE 
63762E to complete the Department of Defense (DOD) portion of 
the development of the large millimeter-wave telescope. The 
committee believes that future years DOD funding for this 
project should not be necessary.

Land warfare technology

    The committee recommends an increase of $4.4 million in PE 
63764E to complete wind tunnel testing of rotor technology 
under the active structural control program. The committee 
believes that this program has significant potential to reduce 
the acoustic signature as well as to lower life-cycle costs of 
rotary wing aircraft. The committee expects the Army to budget 
for the application of this technology on new systems and 
systems in the current inventory, should the technology 
complete successful testing.

Vehicle teleoperation capability development program

    The committee recommends an increase of $9.5 million in PE 
63709D to accelerate the development of the vehicle 
teleoperation capability (VTC) development program to allow for 
the fiscal year 1999 procurement of the VTC by the military 
services. This technology will allow near-term deployment of 
capabilities for the remote operation of vehicles to reduce 
risks to military men and women during hazardous operations. 
The technology has already demonstrated an ability to save 
lives during testing in Bosnia.

Non-acoustic antisubmarine warfare

    The budget request contained $15.4 million, a 40 percent 
decline from fiscal year 1997, for the Department of Defense 
(DOD) advanced sensor applications program (ASAP). This program 
emphasizes the application of non-acoustic technology to 
antisubmarine warfare. The ASAP operates within the DOD as an 
independent effort that complements a parallel Navy submarine 
security program. It provides an alternate emphasis and focus 
to ensure that a diverse array of antisubmarine technologies 
are evaluated and technological surprise does not occur.
    As discussed elsewhere in this report the committee has 
recommended an increase of $3.0 million in PE 63714D for the 
high frequency active auroral research program (HAARP). As a 
separate matter, based on testimony regarding the worldwide 
proliferation of modern diesel and air independent propulsion 
submarines and the increased capabilities of advanced nuclear 
submarines that the Director of Naval Intelligence provided 
during a committee hearing in April 1997, the committee is very 
concerned about the declining emphasis on the ASAP implied by 
the lower than expected budget request. The committee 
recommends authorization of $18.4 million, an increase of $3.0 
million, in PE 63714D for the ASAP to continue work on 
scattering theory, microwave radiometry, multispectral 
analysis, and ocean imaging investigations and other on-going 
advanced sensor application programs. Further, the committee 
expects that the DOD will proceed in accordance with the plan 
proposed to the committee by the Assistant Secretary of the 
Navy for Research, Development, and Acquisition in 
correspondence dated March 11, 1997, for the competitive 
evaluation of the ATD-111 light detection and ranging sensor 
and the April Showers sensor.

Integrated data environment program

    The committee recommends an increase of $4.0 million in PE 
63736D for the integrated data environment (IDE) program within 
the Continuous Acquisition and Life-cycle Support activities 
(CALS). The committee believes this program to have significant 
potential for increasing spare parts availability through 
improved electronic data exchange.

Technical, studies, support and analysis

    The committee recommends a reduction of $8.0 million for 
unnecessary funding growth in PE 65104D. The committee notes 
that the recommendation provides the same funding level as was 
authorized and appropriated for fiscal year 1997.

Command Intelligence Architecture/Planning Program

    The Command Intelligence Architecture/Planning Program 
(CIAP) was established by the Office of the Secretary of 
Defense to provide the unified commands with an intelligence 
planning process that documented intelligence requirements 
linkage to mission accomplishment, current and required future 
intelligence capabilities, and strategies to achieve required 
outyear capabilities. In view of CIAP's success, the focus of 
the program has been expanded to encompass command, control, 
communications, computers, intelligence, surveillance, and 
reconnaissance (C4ISR). The program now supports the broader 
goal of C4ISR integration throughout the Department of Defense, 
with special emphasis on supporting the nine unified commands. 
The committee endorses the broadened focus of CIAP and 
recommends an increase of $5.8 million in PE 35898L to ensure 
this vital effort is adequately funded. The committee directs 
the Secretary of Defense to fully fund this program in the 
outyears.

Communications helmet

    The budget request includes $1.7 million for research and 
development of special operations equipment advanced 
requirements. The committee received a Special Operations 
Command request for additional resources to procure prototype 
communications helmets for evaluation. The committee supports 
this effort and recommends an increase of $0.3 million in PE 
1160404BB.

Heavy sniper rifle

     The committee notes the ongoing effort of the Special 
Operations Command (SOCOM) to support Army efforts to test, 
evaluate, and type classify a new .50 caliber ball round for 
the heavy sniper rifle. The committee recommends an increase of 
$0.4 million in PE 1160606BB to support the SOCOM contribution 
to the joint effort, which is projected to save approximately 
$1.7 million annually in procurement unique to special 
operations.

Improved limpet assembly modular

     The budget request included $0.8 million to begin 
development of the improved limpet assembly modular (ILAM). 
This activity includes the design, fabrication, and testing of 
the ILAM system, a weapon designed to incapacitate ships in 
port. The committee notes an unfunded requirement to begin this 
program. Therefore, the committee recommends an increase of 
$1.0 million in PE 1160404BB to fund the initial development of 
this critical capability.

Remote activation munition systems

     The budget request includes $6.4 million to continue 
development and selective procurement of remote activation 
munition systems (RAMS). The committee notes an unfunded 
requirement to complete development of type B and type C 
receivers as well as an unfunded requirement for the 
procurement of type A receivers. The committee recommends an 
increase of $1.0 million in PE 1160404BB to complete 
development work on these receivers and $2.0 million in 
procurement to acquire the inventory objective for the type A 
receiver.

USSOCOM joint threat warning system training system

    The U.S. Special Operations Command (USSOCOM) is developing 
an integrated tactical system called the joint threat warning 
system (JTWS). When development is complete, the system will 
provide:
          (1) monitoring and direction finding of 
        communications and non-communications signals;
          (2) receipt and correlation of tactical intelligence 
        broadcasts; and
          (3) processing support for the tactical application 
        of received data.
    JTWS is being designed as a scaleable system that will 
consist of user-defined modules that are driven by a software 
system compatible with a variety of JTWS configurations matched 
to the needs of various USSOCOM weapons systems.
     To enhance crew and individual performance, USSOCOM is 
concurrently developing a JTWS training program. This effort, 
begun in fiscal year 1997, will develop embedded proficiency 
and operator tutorial training modules that can be used for 
garrison, enroute, and deployed training. Successful 
development of the JTWS training system will obviate the need 
for a separate and expensive training infrastructure for JTWS 
and a need to procure additional tactical systems solely to 
meet training requirements.
     The committee supports efforts to reduce training 
infrastructure costs, which can add considerably to a combat 
system's life cycle costs, and to maintain complimentary 
development schedules for the JTWS and its associated training 
system. Accordingly, the committee recommends an increase of 
$6.0 million in PE 1160405BB for continued development of the 
embedded JTWS training system. Of this amount, $4.0 million 
would be to complete the development of the training modules 
and an additional $2.0 million would support procurement of 
embedded proficiency trainer production models and operator 
training tutorial modules. The committee also recommends an 
additional increase of $1.0 million of operations and 
maintenance funding to support the developmental effort.

Operational test and evaluation

     The committee recommends an increase of $8.0 million in PE 
65118D to allow the Director, Operational Test and Evaluation, 
to more fully support the warfighting commanders through the 
CINC Operational Field Assessment program. The committee views 
this program as a primary mechanism to support the exploration 
of operational concepts and to address critical issues in a 
quick response mode. Given the apparent support for this 
program within the Department of Defense, the committee expects 
that the increase will only be necessary for fiscal year 1998 
and that the DOD will include adequate funding for the program 
in future year budget requests.

                        OTHER ITEMS OF INTEREST

600 gallon fuel tanks for F-16

     The Air Force is conducting a limited demonstration of 600 
gallon fuel tanks for certain F-16 missions. Once the initial 
tests and analysis are complete, a flight clearance with a 
limited flight envelope will be issued for further 
demonstrations.
    The committee understands that a preliminary study in 
calendar year 1993 suggested that flying with the 600 gallon 
tanks on Block 50 F-16 aircraft for up to 20 percent of its 
flight hours would be acceptable and would not reduce the 
useful service life of the aircraft. Because of concerns 
regarding structural limits and fatigue, the committee is not 
prepared to recommend additional funding for the 600 gallon 
tanks. The Air Force must first complete testing and 
recommendations regarding F-16 structural fatigue.
     Congress appropriated $4.0 million in fiscal year 1997 to 
buy additional tanks presuming that testing would have been 
completed in early calendar year 1997. Testing to date has been 
hampered by defective pylons delivered to the Air Force test 
officials.The delay has caused a slip in initial and follow-on 
testing. The committee supports the Air Force's intent to complete the 
testing and, if the testing is successful, the use of fiscal year 1997 
funds to purchase additional fuel tanks in fiscal year 1998.

Flat panel display technology

     In 1994, the Department of Defense Flat Panel Display 
Technology Task Force declared that flat panel display (FPD) 
technology was a critical technology. Because of their lower 
life-cycle costs and improved performance characteristics, FPD 
systems increasingly replace cathode-ray tubes in many U.S. 
military aircraft and ground combat vehicles. Suppliers within 
the U.S. have provided highly effective FPD systems that are 
custom designed to meet military requirements.
     The committee is aware that as a result of cost and 
schedule constraints, the Department of Defense (DOD) has 
procured some consumer-grade displays designed primarily for 
laptop computers, which are then ruggedized for military use. 
As in the case of any commercial insertion, these procurement 
decisions require careful analysis of life-cycle cost and 
performance tradeoffs to ensure that military user needs are 
met. Quantitative data to support such cost and performance 
tradeoffs are not always readily available. Therefore, the 
committee directs the Under Secretary of Defense for 
Acquisition and Technology to perform a study of the 
environmental and performance requirements and test data on 
performance of both custom and consumer-grade FPD systems in 
various military platform applications. Additionally, this 
study should assess life-cycle costs and support issues such as 
commonality, supportability, and availability of both custom 
and consumer-grade FPD systems. The study should specifically 
address the potential benefits of FPD system interface 
standards and open systems approaches.
     The Under Secretary should submit the results of this 
study to the committee by March 1, 1998. Weapon system program 
managers shall use data from this study in FPD system tradeoff 
decisions, with the objective of meeting user needs at the 
lowest life-cycle cost.

Improved shipbuilding competitiveness

    The committee is aware of the Navy's interest in working 
with the U.S. shipbuilding industry to coordinate efforts at 
improving the competitiveness of U.S. shipyards. Such efforts 
would involve the Navy, shipbuilders, suppliers, designers, and 
other experts in production and supply methods. Increasing the 
competitiveness of U.S. shipyards could yield more commercial 
contracts that would reduce the costs of Navy shipbuilding 
programs and increase stability in the domestic shipbuilding 
industry. The committee urges the Navy to develop a plan, 
working with industry, to improve the competitiveness of U.S. 
shipbuilding. The committee believes that this effort should 
involve the appropriate elements of the Office of Naval 
Research, the Naval Sea Systems Command, and the Defense 
Advanced Research Projects Agency's Maritech program.
    The Navy should report the results of this planning effort 
to the congressional defense committees prior to submission of 
the fiscal year 1999 budget request.

Intercooled recuperated gas turbine engine

    The budget request contained $32.3 million in PE 63573N for 
continued development of the intercooled recuperated (ICR) gas 
turbine engine. The ICR engine is a joint development effort of 
the United States and the United Kingdom. Considerable 
resources have been devoted to development of the ICR engine as 
a next generation propulsion system for surface combatants. The 
primary objective of the program has been to develop an engine 
that will produce substantial fuel savings and emission 
reductions. Having experienced technical problems, principally 
as a result of deficiencies in the design and manufacture of 
the pre-production recuperator, the ICR program has resumed its 
forward progress during fiscal year 1997, successfully 
completing a series of test milestones.
    The ICR engine was previously programmed for installation 
on later ships of the DDG-51 class. However, the program delays 
caused by the recuperator failure and a revised Navy plan for 
multiyear procurement of 12 DDG-51 destroyers at the lowest 
possible cost have caused the Navy to conclude that it is no 
longer cost-effective to incorporate the ICR engine into the 
DDG-51 class. However, the ICR engine remains a strong 
potential candidate for inclusion into future Navy ship 
designs.
    The budget request and the Future Years Defense Program 
(FYDP) provide for continuing development of the ICR engine 
through its land-based test phase. However, no provision has 
been made for continuing development of the ICR engine beyond 
the land-based test phase. Specifically, there is no funding in 
the FYDP for at-sea testing of the ICR engine, a necessary step 
for its introduction into fleet ships.
     The committee believes that at-sea testing is necessary to 
fully evaluate the operation and reliability of the ICR engine 
before a well-informed decision can be made regarding 
production and the engine's inclusion in future designs. To 
better evaluate this objective, the committee directs the 
Secretary of the Navy to prepare and submit, no later than 
September 30, 1997, a plan that makes provisions for at-sea 
testing, provides options for completion of development and 
introduction of the ICR engine into the fleet if testing proves 
successful, and contains estimates of the costs necessary to 
accomplish these objectives.

Joint experimentation plan

    The committee is familiar with the separate experimentation 
initiatives in which each of the military services are 
developing future capabilities. Ongoing initiatives include the 
Army's Advanced Warfighting Experiment, the Marine Corps' 
Hunter WarriorExercise, Battle Labs, and numerous other 
efforts. The committee is very concerned that there is little or no 
focus or effort on joint experimentation activities. Therefore, the 
committee directs the Secretary of Defense, in consultation with the 
Chairman of the Joint Chiefs of Staff, to review the experimentation 
efforts of the military departments and provide the committee with a 
joint experimentation plan directed at rapidly conceptualizing and 
developing the forces and joint operational capabilities needed through 
the 2010 timeframe.
    The report should address the following: how the fielding 
of advanced technologies are being synchronized across the 
military services to enable the development of new operational 
capabilities; how command, control, communications, and 
computer (C4), and intelligence, surveillance, and 
reconnaissance (ISR) capabilities are being integrated jointly 
to achieve information superiority; how military service 
experimentation efforts are being linked with the joint 
experimentation plan designed to implement the Chairman of the 
Joint Chiefs of Staff's Joint Vision 2010 operational 
capabilities; how the Department will conduct ``red team'' 
vulnerability assessments of new technologies and ensure that 
new systems are effective in countermeasure environments; and 
whether the Department should establish an Experimental Joint 
Task Force composed of units from each of the military services 
with the mission of experimenting with new technologies, 
organizational structures, and joint concepts of operations. 
The report on Joint Experimentation will be submitted to the 
congressional defense committees by March 30, 1998.

Materials for micro system components

    The committee is aware of the capabilities at the 
Department of Energy Idaho National Engineering and 
Environmental Laboratory (INEEL) to conduct research on issues 
associated with the development of materials for use in the 
microelectromechanical systems program currently under the 
direction of the Defense Advanced Research Projects Agency 
(DARPA). The committee urges DARPA to explore collaborative 
research efforts with INEEL to take advantage of these existing 
research capabilities.

Minimally invasive surgery

    Minimally invasive surgery refers to procedures that permit 
the extensive surgical treatment of patients while minimizing 
the requirement to open the body with long, deep incisions. The 
medical technology industry and medical research institutions 
have developed technologies, such as lasers, computers, optics, 
and robotics, and techniques to apply them, that hold great 
promise for advancing minimally invasive surgical capabilities. 
Such surgical techniques have direct and useful application for 
battlefield medicine, and could reduce the cost, pain, and 
danger of surgery performed in support of military health care 
during peacetime. The committee urges the Defense Department to 
study the benefits of sponsoring a collaborative effort of 
industry, medical research institutions, and the military 
services to identify and evaluate enabling technologies for 
minimally invasive surgery.

National crash survival data

    For nearly thirty years the Naval Biodynamics Laboratory 
(NBDL) focused its efforts on the test, study, and analyses of 
human body response to crashes. Using this research data, NBDL 
initiated development of a national data bank for use in 
ongoing endeavors to reduce crash-related fatalities and 
serious injuries. In 1996, the NBDL ceased operations before 
the data base was completed.
    The committee recognizes the great benefit of a national 
data base for the research community to better understand the 
effect of seat belts, air-bags, and seating systems on humans 
during crash conditions. In the United States alone, the annual 
toll from crash related trauma is 150,000 deaths and more than 
200,000 brain and spinal cord injuries. On a global scale, it 
has been estimated that half a million people die annually and 
about 15 million are injured as a result of traffic crashes 
alone.
    The committee believes that Department of Transportation 
would be a more appropriate repository for this data. The 
committee urges the Navy to enter into discussions to effect 
the transfer of this data to the Department of Transportation 
to make the greatest use of this valuable research.

National Solar Observatory

    The National Solar Observatory (NSO) is internationally 
recognized as the world's best site to study the sun. NSO 
scientists carry out frontier research in solar physics working 
to understand and predict the occurrences and effects of solar 
flares and other bursts of radiation. The committee understands 
that solar activity is increasingly vital for global 
communications, military surveillance, and navigation.
    The Air Force supports the NSO operations through its 
Science and Technology program in the amount of $650,000 that 
is then transferred to the National Science Foundation, to 
operate the NSO. The committee supports the continuation of 
this annual contribution for the support of the NSO.

Software acquisition management practices

    The committee recognizes that the Department of Defense is 
working to improve its management and maintenance of software 
intensive systems. These efforts are critical given the fact 
that a large percentage of the Department's software intensive 
programs continue to experience significant cost, schedule, and 
performance problems. The committee encourages the Department 
to increase the use of software acquisition management 
practices developed by the Software Engineering Institute and 
successfullypiloted by the military services.

Terminal guidance systems for small munitions

    The committee is aware of the potential for inexpensive 
terminal guidance systems for small munitions, such as Hydra 70 
and DRAGON, to improve the lethality of these munitions on the 
battlefield. Shrinking inventories of small munitions make 
increased lethality a vital interest of the nation's armed 
forces. The committee is also aware of a promising technology 
that may make terminal guidance systems for small, spinning 
projectiles realistic and affordable. The committee directs the 
Secretary of the Army to provide a report by March 1, 1998 to 
the congressional defense committees on the potential costs and 
benefits of terminal guidance systems for small munitions.

Totally integrated munitions enterprise

    The committee notes the successful initiation of the 
Totally Integrated Munitions Enterprise (TIME) project at the 
Institute for Manufacturing and Robotic Sciences, and continues 
to believe that this program has potential to be a significant 
component of the Army's plans to meet its munitions industrial 
base restructuring and reconfiguration needs. The committee 
urges the Army to consider reprogramming funds to continue this 
program beyond fiscal year 1997.

United States-Japan management training

    The committee continues to believe that the United States-
Japan management training program demonstrates significant 
potential for preparing young American scientists, engineers, 
and managers for positions in American industry and government. 
The program facilitates access to Japanese research and 
development institutions. The committee notes that $10.0 
million was appropriated in fiscal year 1997 to continue the 
program. Although no funding was included in the budget request 
for fiscal year 1998, the committee believes that continued 
investment in the program may be warranted. The Secretary of 
the Air Force may apply funds in PE 61102F, or the Secretary of 
Defense may apply funds in PE 61103D, to continue the program 
at a maximum level of $10.0 million.
    The committee notes the significant level of funds provided 
to the program by non-federal sources in compliance with 
statutory requirements. However, the committee believes that 
the program should expeditiously transition to reliance on 
funds provided by the Department of Commerce or the primary 
beneficiaries of the program in the commercial industry. Any 
DOD funding of the program should be provided only in relation 
to the actual participation by the Department and the military 
services.

Wireless communications for the digital battlefield

    The committee is aware of research and development work in 
the area of wireless communications for digital battlefield 
that was programmed to continue under the focused research 
initiative that was terminated in the Defense Appropriations 
Act for Fiscal Year 1997. The committee believes that this 
project has significant potential for supporting military 
service efforts to deploy emerging operational concepts on the 
future battlefield. The committee urges the Department of 
Defense to evaluate this project and to find the means to 
continue the project if it is determined that the research has 
sufficient promise.

                  TITLE III--OPERATION AND MAINTENANCE

                ``The Storm Clouds are on the Horizon''

    During the course of the year, the committee received 
testimony from the Secretary of Defense, the Chairman of the 
Joint Chiefs of Staff, the service chiefs, the unified 
commanders-in-chief, and several other high ranking military 
and civilian officials at the Department of Defense. 
Furthermore, members of the committee and staff spent 
significant time among the men and women of the operational 
forces, observing training operations and discussing issues 
that impact the readiness of these armed forces and their 
ability to carry out assigned missions.
    Although the Administration stated that ``strong support 
was provided for training, maintenance, supplies and other 
essentials needed to keep U.S. forces ready to fight and win 
decisively,'' its budget request for fiscal year 1998 reduced 
real funding for these areas by $1.4 billion. This is 
especially troubling at a time when the committee is beginning 
to hear of serious concerns expressed by U.S. military officers 
that the readiness of our armed forces is in jeopardy. If 
readiness truly remains the Administration's highest priority, 
the committee fears that the other accounts (modernization, 
quality of life, research and development) are even more 
seriously underfunded.

Readiness Crisis?

    Both commanders and personnel at operating units around the 
nation have expressed a great deal of concern regarding the 
readiness of the armed forces. Military units, and the 
personnel within them, are being overused and under funded to 
the point that, as one officer stated, ``we are returning to 
the days of the hollow force.'' One letter written to Senator 
Thurmond by a non-commissioned officer accurately captures this 
concern. In this letter, the individual relates the grueling 
pace that he has witnessed of both active and Reserve 
components in support of peacekeeping and other contingency 
operations. In one case, he noted the ``18-23 hour days, 7 days 
a week'' schedule that he and his companions endured while 
deployed to Southwest Asia. He also expressed concern regarding 
the condition of the equipment supplied to the armed forces. 
``We have old, worn out equipment that is difficult to maintain 
because we cannot always get the parts needed to repair them.'' He 
concludes by stating that ``it is the same way wherever we go; 
outdated, broken equipment, a lack of spare parts, overworked and 
underpaid GIs, resulting in an inability to perform our mission.''
    While there is no doubt that our military forces are the 
finest in the world, that they are performing their assigned 
missions, and are capable of defeating any potential enemy of 
today, there is concern that, given current trends, this state 
of affairs will not always remain true. This concern is best 
captured by the words of one military officer when he stated, 
``the storm clouds are on the horizon.''
    The concerns of this officer were echoed by a number of 
other commanders who remember with considerable distress the 
condition of the armed forces in the latter part of the 1970s. 
These concerns are not reflected in the official reports the 
committee has received from the Pentagon. In fact, rather than 
indicating that there are problems, these reports and 
statements indicate that the readiness of our military forces 
are at an all-time high. It is not clear why there is such a 
discrepancy between the concerns of some operational commanders 
and official reports. However, this discrepancy is troubling to 
the committee.

Causes and Solutions

    There are two key factors that threaten to undermine the 
readiness of our forces; a lack of adequate funding and, the 
over-commitment of a greatly reduced force structure. Unless we 
take the necessary steps to correct these problems, our 
military capability will incur significant degradation as we 
enter the 21st century.
    Although the entire defense budget is insufficient to meet 
the demands that this administration places upon the armed 
forces, it is the modernization accounts that provide us with 
the greatest challenge. The inadequate funding within these 
accounts, particularly with the procurement programs, 
exacerbates the problems caused by other funding shortfalls. 
For example, much of our military equipment is aging rapidly 
and requires increased maintenance, driving a need for 
increased operations and maintenance (O&M) funding. However, 
since additional funding is not available to increase the O&M 
accounts, training suffers in order to make available necessary 
maintenance funds.
    Without adequate modernization of the armed forces, 
increased amounts of maintenance funds will be required; 
causing a further drain on the procurement accounts and making 
it even more difficult to replace the aging equipment. In turn, 
this will require even more maintenance dollars as the 
equipment grows older; further reducing the amount of funds 
available for the procurement accounts; and so the cycle will 
continue in a constant, downward spiral.
    The funding crisis is further aggravated by the continual 
deployment of forces to contingency operations such as Southern 
Watch and Provide Comfort. Everyone who owns a car understands 
that the more you drive it, the more maintenance it requires, 
the more gas it consumes, and the faster it wears out. This is 
the situation in which our forces currently find themselves. 
According to the latest Quarterly Readiness Report provided to 
the Congress, ``the high operations tempo (OPTEMPO) experienced 
by some high demand, low-density systems accelerates wear and 
tear on equipment and places heavy demands on personnel.'' In 
fact, according to one senior officer, the armed forces ``do 
not have time to train'' because of these demands.
    These peacekeeping and contingency operations also restrict 
our ability to respond in the early stages of a major regional 
war. According to the same readiness report, ``the ability to 
quickly disengage and redeploy from ongoing contingencies 
continues to be a concern.'' ``In the event U.S. forces were 
required to withdraw from Bosnia, lift assets required for 
withdrawal could impact initial surge of forces, especially for 
a major regional contingency.''
    While the committee believes that there are situations in 
which the deployment of the U.S. military is necessary to 
protect America's vital interests, the committee is concerned 
that the administration may have set too low of a threshold for 
determining the need to commit these forces.
    Furthermore, the committee believes that it is important to 
consider the financial cost of these deployments. Over the past 
few years, the Department of Defense has spent billions of 
dollars on contingency operations that had little or no 
relevance to our vital national interests. Those funds could 
have greatly contributed to the modernization of the aging 
military equipment or the improvement of the facilities in 
which our military personnel must work and live.
    The U.S. cannot force its military to expend more resources 
than we are willing to provide and still expect it to remain a 
viable force for the future when it may be called upon to 
defend American interests. The committee is encouraged by 
Secretary Cohen's remarks which indicate that he understands 
this problem, and hopes that he is able to bring about a more 
responsible use of our military forces so that they are ready 
to respond to the needs of this nation.
    The committee is concerned, our military personnel are 
concerned, and the American people should be concerned. If we 
are to avoid losing our balance and finding ourselves on that 
constant downward spiral, we must act decisively and begin 
providing the resources necessary to support the missions we 
ask of our armed forces.

Overview

    The Operations and Maintenance (O&M) accounts include 
approximately 33 percent of the total Department of Defense 
budget. Expenditures from these accounts pay the costs for the 
day-to-day operations of our military forces; all individual, 
unit, and joint training for military members; maintenance and 
support of the weapons, vehicles and equipment in the military 
services; purchase and distribution of spare parts and supplies to 
support military operations; and support, maintenance, and repair of 
buildings and bases throughout the Department of Defense.
    The funding in these accounts has a direct impact on the 
combat readiness of U.S. military forces. While insufficient 
O&M funds would lead to problems with short-term or current 
readiness, excessive and unnecessary O&M expenditures for low 
priority or non-defense programs only serve to restrict the 
availability of funds for modernization programs.
    The budget request included $93,471.6 million for the 
operation and maintenance of the armed forces and component 
agencies of the Department of Defense in fiscal year 1998.
    The committee recommends authorization of $93,509.0 million 
for the O&M accounts for fiscal year 1998, an increase of $37.4 
million from the budget request. Due to the concern which was 
expressed by the Chief of Staff of the Army and the Commandant 
of the Marine Corps that the funding of their services was 
insufficient to meet requirements, the Army and the Marine 
Corps were given the highest priority for additional funding.
    The recommended amount authorized for the O&M accounts 
includes, to the extent provided in an appropriations act, 
transfer of $150.0 million from the National Defense Stockpile 
Transaction Fund.
    The committee recommends authorization of $1,488.1 million 
for the revolving and management funds.
    The recommended authorization for fiscal year 1998 is 
summarized in the following table:


              SUBTITLE A--AUTHORIZATION OF APPROPRIATIONS

Section 303. Armed Forces retirement home.

    The committee recommends a provision that would authorize 
$79.9 million from the Armed Forces Retirement Home Trust Fund 
to be appropriated for operation of the Armed Forces Retirement 
Home during fiscal year 1998.

Section 304. Transfer from National Defense Stockpile Transaction Fund.

    The committee recommends a provision that would authorize 
the Secretary of Defense, to the extent provided in an 
appropriation act, to transfer $150.0 million from the National 
Defense Stockpile Transaction Fund to the operations and 
maintenance accounts.

Section 305. Fisher House Trust Funds.

    The committee recommends a provision that would authorize 
funds to be appropriated for operation of the Fisher Houses 
during fiscal year 1998. The recommended provision authorizes 
$150,000 to be appropriated from the Fisher House Trust Fund, 
Department of the Army, and $150,000 to be appropriated from 
the Fisher House Trust Fund, Department of the Navy. No funds 
are authorized to be appropriated from the Fisher House Trust 
Fund, Department of the Air Force.

                   SUBTITLE B--DEPOT-LEVEL ACTIVITIES

    The committee is concerned that the administration 
continues to ignore the spirit of the law and the Base 
Realignment and Closure (BRAC) process by pursuing a policy of 
privatizing-in-place the depot maintenance workloads currently 
performed at the Kelly Air Logistic Center (ALC), Texas, and 
McClellan ALC, California. The actions of the Administration on 
this matter appear to have tainted the BRAC process by 
inserting politics into what was designed to be apolitical. At 
a time when the Department of Defense is seeking authority to 
conduct additional rounds of base closures, the committee finds 
it troubling that the Air Force continues to refuse to reduce 
its excess depot capacity by moving the Kelly and McClellan 
workloads to the remaining air logistics facilities. The 
committee is determined to ensure that excess capacity is 
reduced, the integrity of the BRAC process is preserved, and 
the Department of Defense (DOD) operates as efficiently as 
possible. Therefore, the committee recommends a series of 
provisions to improve the efficiency and effective management 
of DOD maintenance depots.
    Section 311, Definition of Depot-Level Maintenance and 
Repair, would codify the definition of depot-level maintenance 
and repair and essentially restates section 324 of the National 
Defense Authorization Act for Fiscal Year 1997 as passed by the 
Senate. This provision would simply codify the definition of 
depot maintenance contained in the DOD directive on the 
maintenance of military materiel (directive 4151.18), as 
including materiel maintenance or repair requiring the overhaul 
or rebuilding of parts, assemblies, or subassemblies and the 
testing and reclamation of equipment. This definition would 
apply to depot maintenance funded through interim contractor 
support or contractor logistics support which has not always 
been reported as depot maintenance in the past. This definition 
would not include ship modernization activities.
    Section 312, Restrictions on Contracts for Performance of 
Depot-Level Maintenance and Repair at Certain Facilities, would 
require that the Air Force utilize at least 75 percent of the 
remaining capacity at each air logistics center prior to 
privatizing-in-place the workload currently performed at Kelly 
and McClellan. Furthermore, in order for these workloads to be 
privatized-in-place, they could not have been core logistics 
capabilities prior to July 1, 1995. Finally, the Secretary of 
Defense must determine that performing the workloads at Kelly 
or McClellan would be cheaper for the Air Force than performing 
them at the other ALCs over the long-term. While these 
requirements apply to privatizing-in-place the workloads at 
Kelly or McClellan, they do not apply to the privatization of 
the workloads at any other location.
    Section 313, Core Logistics Functions of Department of 
Defense, would codify the current DOD definition of core 
logistics functions and require that the Department of Defense 
maintain sufficient capability (not actual repair) within the 
public depots to perform maintenance and repair of ``mission 
essential'' weapons systems and equipment required to support 
the Joint Chiefs of Staff contingency scenarios. This provision 
also requires the Department to calculate the required core 
maintenance levels annually and report to Congress the results 
of this determination, to include identification of mission 
essential systems and equipment, required core capabilities, 
actual number of direct labor hours required for each 
capability, and decision as to organic/private workload mix 
necessary to achieve the required core capability.
    Section 314, Percentage Limitation on Performance of Depot-
Level Maintenance of Materiel, changes the 60/40 ratio to 50/50 
as requested by the Secretary of Defense, effective October 1, 
1998, and changes the basis for calculating what is public 
depot maintenance from work performed by Federal employees to 
work performed in Federal facilities. This provision would 
allow more flexible arrangements with the private sector for 
participating in the performance of maintenance workloads in 
Department of Defense (Government-owned, Government-operated) 
organic depot maintenance facilities.
    Section 315, Centers of Industrial and Technical 
Excellence, would require the Secretary of Defense to designate 
thedepot-level activities of the Department of Defense as 
Centers of Technical Excellence and would encourage these centers to 
form public-private partnerships for the performance of depot-level 
maintenance and repair.
    Section 316, Clarification of Prohibition on Management of 
Depot Employees by Constraints on Personnel Levels, would 
clarify that current law (10 U.S.C. 129) requires employees at 
public depots be managed by funding levels and workloads rather 
than by any artificial constraints such as end-strength 
ceilings.
    Section 317, Annual Report on Depot-Level Maintenance and 
Repair, would require the Secretary of Defense to provide an 
annual report to Congress outlining the percentage of depot 
maintenance funding which was used for maintenance in public 
depots and the percentage of depot maintenance funding which 
was used for maintenance at private facilities.
    Section 318, Report on Allocation of Core Logistics 
Activities Among Department of Defense Facilities and Private 
Sector Facilities, requires DOD to evaluate an alternative set 
of criteria for distinguishing core from non-core maintenance.
    Section 319, Review of Use of Temporary Duty Assignments 
for Ship Repair and Maintenance, requires the General 
Accounting Office to review the Navy's rationale, conditions, 
and factors for using TDY shipyard workers to perform ship 
maintenance work at homeports.
    Section 320, Repeal of a Conditional Repeal of Certain 
Depot-Level Maintenance and Repair Laws and a Related Reporting 
Requirement, simply repeals a provision from the National 
Defense Authorization Act for Fiscal Year 1996 which is now 
irrelevant because the DOD failed to submit an acceptable plan.
    Section 321, Extension of Authority for Naval Shipyards and 
Aviation Depots to Engage in Defense-Related Production and 
Services, would extend through fiscal year 1998 the authority 
provided by section 1425 of the National Defense Authorization 
Act for Fiscal Year 1991, as amended, for naval shipyards and 
aviation depots of all military services to bid on defense-
related production and services.

                  SUBTITLE C--ENVIRONMENTAL PROVISIONS

Section 331. Clarification of authority relating to storage and 
        disposal of nondefense toxic and hazardous materials on 
        Department of Defense property.

    The committee recommends a provision that would amend 
section 2692 of title 10, United States Code, to clarify 
exemptions from the prohibition against Department of Defense 
(DOD) storage or disposal of toxic or hazardous material that 
is not owned by the Department. The administration recommended 
this provision to ensure that the Department has appropriate 
authority to control munitions stored or disposed of in 
connection with Defense activities.
    The amendment would address the following DOD related 
activities: (1) storage of explosive and hazardous materials in 
conjunction with space launch programs; (2) storage of member 
personal property, such as guns, ammunition, and related 
material, when such storage is in the interest of public 
safety; (3) storage of allied/foreign munitions during joint 
testing, exercises or coalition warfare; (4) storage of 
explosives and hazardous materials in support of other U.S. 
Government agencies, to include State and local law enforcement 
agencies; (5) storage of contractor owned explosive materials 
when performing a service for the benefit of the U.S. 
Government; and (6) storage of commercial explosives on DOD 
installations participating in full or partial privatization.
    The activities described are necessary for the routine and 
cost effective operation of DOD installations or will 
facilitate proper handling of the materials concerned. The 
amendment would ensure the Department's preservation of 
valuable resources and public safety. The provision does not 
create any competitive conflict with the private sector.

Section 332. Annual report on payments and activities in response to 
        fines and penalties assessed under environmental laws.

    The committee recommends a provision that would require an 
annual report of fines and penalties assessed against the 
Department of Defense (DOD) under Federal, State, or local 
environmental law. The use of DOD environmental program funds 
for these purposes should be the subject of careful 
congressional oversight. The report will facilitate scrutiny in 
this area.

Section 333. Annual report on environmental activities of the 
        Department of Defense overseas.

    The committee recommends a provision that would require the 
Department of Defense (DOD) to report on overseas environmental 
restoration, compliance, and other international environmental 
activities. The Department would be required to include the 
overseas environmental information in its annual environmental 
reports to Congress. The committee is interested in oversight 
of funds used in support of the Department's overseas 
environmental policy.
    Specifically, the committee is concerned about the level of 
DOD funding for international environmental activities, such as 
conferences, meetings, pilot studies, and bilateral cooperative 
efforts. Between fiscal years 1994 and 1997, the Department 
obligated or expended about $3.5 million in support of these 
international environmental activities. The use of these funds 
was not based on a specific need for overseas installation 
access or sustained operations, the preservation of the health 
and safety of U.S. troops overseas, or legal obligations 
directly related to current or former DOD functions overseas.
    The committee is concerned that there is a growing emphasis 
on the increased obligation and expenditure of limited DOD 
funds for international environmental activities, which reduces 
funds available for domestic and overseas environmental cleanup 
andcompliance requirements and other defense purposes. The 
Department's overseas environmental policy should be defined by legal 
requirements and fiscal responsibilities. Therefore, the committee has 
concluded that the international environmental activities described 
above would more appropriately be funded out of the budget of the 
Department of State.

Section 334. Membership terms for Strategic Environmental Research and 
        Development Program Scientific Advisory Board.

    The committee recommends a provision that would amend 
section 2904(b)(4) of title 10, United States Code, to provide 
that the length of service for members appointed to the 
Strategic Environmental Research and Development Program 
(SERDP) Scientific Advisory Board would be for not less than 
two years and not more than four years. The Department of 
Defense recommended this proposal to give the SERDP director 
the flexibility to fill unexpected vacancies on the Board.

Section 335. Additional information on agreements for agency services 
        in support of environmental technology certification.

    Section 327 of the National Defense Authorization Act for 
Fiscal Year 1997 authorized the Department of Defense to 
initiate a program to provide for agreements in support of 
multi-state and regional certification of environmental cleanup 
technology. It was anticipated that the agreements would be 
used as a vehicle to reimburse state regulatory agencies for 
their participation in multi-state and regional certification 
actions.
    The administration submitted a legislative proposal for 
fiscal year 1998 that would have provided authority to enter 
into similar agreements for cleanup and compliance 
technologies. However, the Department has failed to provide any 
guidelines or restrictions related to state reimbursements and 
has not yet used the section 327 authority. Under the 
circumstances it would be premature to expand the section 327 
authority.
    In addition, the committee notes that the certification of 
viable environmental technologies benefit commercial, state, 
and federal interests. Therefore, the committee directs the 
Department to develop a program that allows for cost-sharing 
among vendors, states, and the Department.
    In order to ensure accountability, a provision has been 
included that would require the Department to prepare 
guidelines for reimbursement and cost-sharing. The committee 
has also included a provision that would expand the reporting 
requirement under section 2706(a) of title 10, United States 
Code, as it relates to agreements in support of environmental 
technology certification.

Section 336. Risk assessments under the Defense Environmental 
        Restoration Program.

    The Department of Defense (DOD) has maintained that the 
relative risk site evaluation methodology provides a 
quantifiable basis for directing resources to remediate sites 
that pose the greatest risk to human health and the 
environment. The relative risk site evaluation involves three 
site categories: high; medium; and low. According to the 
Department, the high relative risk sites are given a greater 
funding priority than the medium and low relative risk sites.
    The General Accounting Office (GAO) conducted a review of 
the Department's relative risk method of justifying 
requirements and allocating funds. Based upon information 
provided to the committee, there is reason to question the 
credibility of the Department's risk-based approach and the 
degree to which it facilitates the establishment of legitimate 
funding priorities. Therefore, the committee recommends a 
provision that would direct the Secretary of Defense to define 
the elements of a relative risk assessment, to develop uniform 
guidance for site assessment and ranking, and to ensure 
consistent application of the guidance.
    In addition, the committee directs that the funds requested 
for the fiscal year 1998 administration of the Defense 
Environmental Restoration Account (DERA) be reduced by $30.0 
million to reflect concerns regarding the management and use of 
relative risk site evaluations. Moreover, the Defense 
Environmental Restoration Program Annual Reports to Congress 
for Fiscal Years 1995 and 1996 suggest that there are 
discrepancies underlying the relative risk information provided 
to the Congress. Another $30.0 million reduction of the overall 
fiscal year 1998 DERA request is directed because of an 
unexplained incongruence associated with a high relative risk 
ranking of sites with low contamination levels.
    The reduction of funds shall be reflected proportionately 
within the individual lines of the DERA account. Hopefully, the 
decreased funding will compel more effective program management 
and the elimination of inconsistencies.
    The committee expects the GAO to continue its review of the 
Department's relative risk assessments and report to the 
committee by February 1, 1998. The committee is particularly 
interested in ensuring that there is consistent application of 
uniform guidance in relation to the Department's use of the 
relative risk methodology.

Section 337. Recovery and sharing of costs of environmental restoration 
        at Department of Defense sites.

    The committee recommends a provision that would direct the 
Secretary of Defense to: (1) provide guidance to the military 
departments and the Defense Logistics Agency (DLA) that 
resolves current disparities; (2) require the military 
departments and DLA to aggressively pursue future cost 
reimbursement and recovery actions; (3) require the military 
departments and the DLA to identify contractors or other 
private third parties involved in contamination at Department 
of Defense (DOD) sites; (4) require the military departments 
and DLA to obtain all relevant dataregarding contractors or 
other responsible parties identified, regardless of wrongdoing; (5) 
require the military departments and DLA to gather and maintain the 
most timely and accurate cost data available to the departments and 
other agencies'' records; (6) require the military departments and DLA 
to provide consistent estimates, including all cleanup costs for DOD 
environmental reports to Congress, regardless of the source of funds; 
and (7) require the military departments to offset environmental 
restoration budget requirements with amounts recovered from liable 
third parties or contractors.
    According to a series of General Accounting Office (GAO) 
reports on DOD environmental cleanup, the Department has 
incurred a significant amount of cleanup expenses in instances 
in which a third party may have contributed to the 
contamination of government property. The GAO review of DOD 
cost-recovery efforts did not include formerly used defense 
sites (FUDS).
    The GAO reported that the DOD lacks uniform guidance 
regarding the policies and practices for recovery of such 
costs. In the absence of such guidance, the military 
departments have taken different approaches. Information 
provided to the committee suggests that inconsistent policies 
have contributed to a lack of focus and minimal cost-recovery 
or cost-sharing at third party sites, particularly at 
government-owned/contractor-operated facilities.
    It is the committee's view that the funds associated with 
the administration of the Defense Environmental Restoration 
Account (DERA) should be reduced by $30.0 million to reflect 
the inefficiencies and mismanagement inherent to the 
Department's inaction on third party cost-recovery actions. The 
decrease of the fiscal year 1998 DERA budget request shall be 
taken proportionately from individual lines within the account. 
The decreased funding should serve to motivate the DOD to 
immediately eliminate this and other DERA management 
inefficiencies.
    The committee expects the GAO to continue its review of DOD 
cost-recovery efforts and report to the committee by February 
1, 1998. The committee is particularly interested in the degree 
to which cost-recovery may offset projected environmental 
cleanup requirements throughout the Department.

Section 338. Pilot program for the sale of air pollution emission 
        reduction incentives.

    The committee recommends a provision that would support the 
administration's proposal to give the military departments the 
authority to sell emission reduction credits, also known as 
incentives. The provision directs the Secretary of Defense to 
promulgate regulations that would provide for the retention of 
the proceeds at the facility that developed the credits for 
sale. The provision would also allow for use of proceeds from 
the sale of emission reduction credits to pay for fees and 
other charges associated with identifying, quantifying, or 
valuing the credits. Subsequent to the development of credits, 
less than $500,000 may be retained Defense-wide.
    The Clean Air Act directs states to establish state 
implementation plans (SIPs) to attain and maintain the national 
ambient air quality standards (NAAQS), which are health based 
standards established for certain criteria pollutants (sulphur 
dioxide, nitrogen oxides, particulate matter, carbon monoxide, 
ozone, and lead). To further this mandate, the Clean Air Act 
Amendments of 1990 (CAAA) (42 U.S.C. 7410(a)(2)(A)) encourage 
the states to include ``economic incentive'' programs in the 
SIPs. Such programs serve to reduce air pollution by allowing 
for the sale of credits received for reduction of emissions of 
criteria pollutants.
    A number of State and local air quality districts have 
already established various types of emission trading systems 
that the private sector has been able to utilize. However, 
Federal agencies lack the authority to take full advantage of 
the economic incentives inherent to these emission trading 
opportunities.
    Federal fiscal law generally requires that proceeds from 
the sale of government property be deposited in the U.S. 
Treasury. That requirement precludes the military departments 
from retaining funds generated through the reduction of air 
emissions and the sale of resulting credits. Such fiscal 
constraints inhibit an agency's reasonable efforts to use the 
proceeds from the sale of emission reduction credits or 
economic incentives to purchase needed air credits in other 
areas and results in disparate treatment of Federal facilities.
    The administration maintains that the retention and use of 
proceeds at the facility level effectively encourages the 
successful use of pollution prevention measures through 
economic incentives. The committee concurs. The new authority 
for sale of emission credits and use of proceeds would be 
beneficial to active and closing facilities within the 
Department of Defense. The committee views the ability to 
retain proceeds at the facility level as a key element of this 
provision.

Section 339. Tagging system for identification of hydrocarbon fuels 
        used by the Department of Defense.

    The committee recommends a provision that would authorize 
the Department of Defense to conduct a pilot program to 
determine if hydrocarbon fuels used by the Department can be 
tagged. The tagging of these fuels would help deter theft and 
facilitate the determination of the source of surface and 
underground pollution in locations having separate fuel storage 
facilities from the Department and civilian companies.

  SUBTITLE D--COMMISSARIES AND NONAPPROPRIATED FUND INSTRUMENTALITIES

Section 351. Funding sources for construction and improvement of 
        commissary store facilities.

    The committee recommends a provision that would permit the 
Defense Commissary Agency to deposit revenues from fees paid by 
sources of products, known as business management fees, from 
certain activities of commissary store facilities and from 
products offered for sale in the commissary under consignment 
with exchanges as designated by the Department of Defense into 
the same account as the surcharge funds.

Section 352. Integration of military exchange services.

    The committee recommends a provision that would require the 
secretaries of the military departments to integrate the three 
military exchange systems by September 30, 2000.
    The committee appreciates the concerns expressed by the 
military services during discussions of integration of the 
military exchange systems. The committee intentionally gave the 
mission, to develop and implement a plan to integrate the 
exchanges, to the secretaries of the military departments, 
since the exchanges and the dividends are so critical to the 
quality of life programs within the services. The committee 
expects the Office of the Secretary of Defense to provide 
advice and expertise to assist the services in this endeavor.
    The goal of the integration is to achieve efficiencies 
which will offset increasing costs, ensure modernization of the 
facilities and management systems, and maintain a robust 
dividend to fund quality of life programs. In this way, the 
integrated military exchange system will provide enhanced 
service and better value to the uniformed service members while 
maintaining service specificity in certain areas. The committee 
recognizes that there are many complex issues which must be 
addressed in order to integrate the exchanges, while 
maintaining the unique character of the individual service 
exchange stores. There are a number of areas, such as human 
resources and distribution, which can be integrated early and 
efficiently. There are other areas, such as information 
management systems, which will take careful planning to 
integrate in a manner that optimizes the technology available 
in the current exchange systems and in the commercial market. 
The committee intends that ship stores would continue to 
operate separately from the exchange command as they do today.
    The committee does not intend for the integration process 
to be a ``take over'' by one exchange system, nor does the 
committee expect that exchange stores will change the names or 
logos in use today. The committee does expect, however, that 
the service secretaries and the three exchange commands will 
work together to find the most efficient manner in which to 
serve active, reserve, and retired soldiers, sailors, airmen 
and Marines and their families.

                       SUBTITLE E--OTHER MATTERS

Section 361. Advance billings for working capital funds.

    The committee recommends a provision to limit the use of 
advance billing in the working capital funds, except in cases 
of national emergencies or when necessary to support 
contingency operations. The military services would be required 
to notify the congressional defense committees within 30 days 
of advance billings being posted to the working capital funds 
for amounts equal to or less than $50.0 million, and would be 
required to notify the congressional defense committees 30 days 
prior to posting the billings in cases greater than $50.0 
million.
    Excessive advance billing has continued, not withstanding 
congressional guidance and initiatives to limit the practice. 
The Department of Defense has used advance billing to the 
working capital funds as a normal operating practice, rather 
than the exception. In the case of Navy Working Capital Funds, 
advance billing is continually used without any plans for 
significant reductions. Failure to properly budget for these 
activities and allowing these activities to operate in deficit 
spending each year is not in keeping with good business 
practices and risks the future readiness of the force. Removal 
of activities from the working capital funds, use of direct 
appropriations to fund these activities, or allowing working 
capital activities to change rates in the year of execution is 
not a viable solution to problems being experienced in working 
capital funds. Proper budgeting and using full costing policies 
allow for the proper financial management of working capital 
fund activities. The restrictions placed on the Department of 
Defense by this provision simply enforce the Department's 
existing policies.
    The committee notes that significant progress has not been 
made in liquidating advance billing liabilities, and is 
prepared to place further restrictions on working capital 
funds, if these financial problems are not corrected.

Section 362. Center for Excellence in Disaster Management and 
        Humanitarian Assistance.

    The committee recommends a provision that would authorize 
the Secretary of Defense to operate a Center for Excellence in 
Disaster Management and Humanitarian Assistance at Tripler Army 
Medical Center to address the military's role in a wide range 
of disaster initiatives throughout Southeast Asia and the 
Pacific Basin region.

Section 363. Administrative actions adversely affecting military 
        training or other readiness activities.

    The committee recommends a provision that would require the 
Secretary of Defense to provide the President, the Committee on 
Armed Services of the Senate, the National Security Committee 
of the House of Representatives, and the head of any relevant 
Federal agency with written notification of any Federal 
administrative action that has or would have a significant 
adverse effect on the military readiness of any of the armed 
forces or a critical component of the armed forces; such as 
aMarine battalion preparing for deployment as part of a Marine 
Expeditionary Unit, or Special Operations Forces dedicated to a 
specific mission. Notification would be provided as soon as the 
Secretary becomes aware of an adverse administrative action or proposed 
administrative action. The notification would delay the implementation 
of the action for a period of 30 days unless the Secretary determines 
that the compliance with the proposed action is in the best interest of 
the American public, or the President directs the Secretary to comply 
based on a determination that the implementation of the action is more 
important than the effects on military readiness.
    The committee has become aware of two administrative 
actions that could or would have a significant adverse impact 
on training and readiness activities. In those instances, an 
Executive agency acted without prior consultation with the 
Department of Defense. The committee's recommended notice 
provisions are intended to encourage Executive agency 
consultations in advance of such administrative actions. It is 
the committee's view that some form of Executive Branch process 
would facilitate communication and encourage reasoned 
resolution of issues that may arise among agencies. For 
example, the Comprehensive Environmental Response, Compensation 
and Liability Act of 1980 (42 U.S.C. 9606) provides an 
administrative process for any person, to include private or 
public entities, that receive and comply with an order issued 
under section 106(a) of the Act.
    The first administrative action involved regulatory 
waivers. In order to conduct certain types of training flight 
activities, the Department of Defense operates under certain 
waivers of Federal Aviation Administration (FAA) safety rules 
and must coordinate with the FAA in advance of utilizing those 
waivers. The FAA recently suspended regulatory waivers 
necessary for a major military training exercise. That action 
was based on an FAA assertion that the Department failed to 
coordinate in advance of the exercise. Documentation in 
possession of the Department of Defense indicated that the 
suspension was based on misinformation within the FAA. However, 
the FAA did not discover the internal error until after there 
had been a significant adverse impact on the training exercise. 
An interagency consultation process could have prevented the 
unnecessary suspension action and disruption of a major 
military training activity.
    The second administrative action involved an order that 
could adversely impact the training of two Army National Guard 
artillery battalions and one infantry brigade at the 
Massachusetts Military Reservation (MMR). That order was issued 
on April 10, 1997 by the Environmental Protection Agency (EPA), 
Region 1, Regional Administrator. The original effective date 
of the order, April 21, was stayed because of the Army's timely 
filed request for conference with the EPA Administrator. 
Recently, the EPA modified the order and it became effective.
    The April 10 order specifically directed the suspension of 
all training range and impact area weapons activities that 
involve lead munitions, high explosives, demolition's, 
pyrotechnics or the use of propellants. The order also included 
the submission of a work plan related to the covering of all 
berms with plastic, removal of lead from all berms, and a 
specific timetable for periodic unexploded ordnance clearance 
sweeps of the training range and impact area. The order was 
modified to allow for small arms training. The order would 
still suspend the firing of artillery and mortar at MMR until 
completion of an Impact Area Groundwater Study.
    The EPA order is based on a single groundwater sample from 
the MMR impact area that had traces of contaminants associated 
with pyrotechnics and propellants. The Army maintains that the 
sample evidence is limited and questionable, and therefore 
seeks an amendment to the order. Region 1 maintains that the 
adverse impact on readiness is justified by the fact that MMR 
is located over a sole source aquifer for the Cape.
    Historically, the sample site was used for disposal of 
pyrotechnics and propellants. Ground disposal is now 
prohibited. Region 1 has not attempted to confirm the results 
of the sample in question or to determine whether the trace 
indications of contaminants were the result of prior ground 
disposal activities. Rather than defer administrative action 
pending the continued site evaluation and collection of 
adequate sampling data, the EPA, Region 1, elected to shut down 
the MMR training range based on limited unconfirmed evidence of 
possible groundwater contamination. According to the EPA, the 
burden is on the Army to prove that the use of pyrotechnics and 
propellants do not contribute to further site contamination, 
and do not pose a threat to human health and the environment. 
In short, the EPA view would compel the Army to prove a 
negative.
    Prior to the issuance of the April 10 order, the Army 
National Guard responded favorably to all regulatory requests 
related to a February 27, 1997 Region 1 order that directed the 
development of the Impact Area Groundwater Study. Those 
requests resulted in escalated site investigation costs ranging 
from $3.5 million to approximately $10.0 to $20.0 million. The 
following activities were increased, with particular focus on 
the impact area: sampling wells from 33 to 43; groundwater 
samples from 86 to 146; soil samples from 53 to 576; and soil 
sampling analyses from 272 to 2370. Pending completion of the 
study, the Army National Guard voluntarily suspended live fire 
training with lead munitions and high explosive munitions. The 
EPA acknowledges that every requirement of the first order was 
met, and that they were satisfied with the Army National Guard 
performance.
    It is evident that Executive agency consultation should 
have preceded the issuance of the April 10 order at MMR. The 
Army National Guard responded to the first order in good faith, 
and the EPA, Region 1 reacted with an administrative hammer, 
the basis of which remains questionable. Interagency 
consultation should have been a condition precedent to issuance 
of the order.

Section 364. Financial assistance to support additional duties assigned 
        to Army National Guard.

    The committee understands the valuable maintenance and 
otherassistance that the Army National Guard can provide to the 
active components of the Army. Unfortunately, this assistance is 
limited because of the lack of clear authority for the Secretary of the 
Army to provide financial assistance to the Army National Guard out of 
funds appropriated to the Army in order to help defray the cost of such 
assistance. Therefore, the committee recommends a provision that would 
authorize the Secretary of the Army to contribute funds to the National 
Guard in order to pay for the costs of those services carried out by 
the Guard in the performance of maintenance and other responsibilities 
of the Secretary.

Section 365. Sale of excess, obsolete, or unserviceable ammunition and 
        ammunition components.

    The committee recommends a provision that will authorize 
the Secretary of the Army to competitively sell excess, 
obsolete, or unserviceable ammunition and ammunition components 
to licensed manufacturers that have the capability to modify, 
reclaim, transport, and either store or sell ammunition or 
ammunition components. The ammunition or ammunition components 
purchased under this authority must either be demilitarized or 
used in such a way as the Secretary of the Army determines is 
consistent with the public interest.
    Rather than the current practice of paying for the 
demilitarization of ammunition, this provision will allow the 
Army to receive funds, ammunition, ammunition components, or 
ammunition demilitarization services for ammunition or 
ammunition components that are sold. This will result in the 
savings of valuable defense dollars at a time when they are 
becoming increasingly scarce.
    The committee directs the Secretary of the Army to provide 
a report not later than March 31, 1999, outlining the amount of 
ammunition disposed of pursuant to this authority, and the 
disposition of any revenues or other receipts.

Section 366. Inventory management.

    The committee is concerned with recent reports that the 
Department of Defense continues to possess several billion 
dollars worth of excess inventory. While the committee 
understands that much of this inventory is the result of the 
dramatic drawdown in the size of the armed forces using these 
supplies and that they will be utilized over the next several 
years, the committee wants to be sure that the best commercial 
practices are used in the future to ensure that excess 
inventories are minimized. Therefore, the committee recommends 
a provision that would direct the Director of the Defense 
Logistics Agency to develop and submit to Congress a schedule 
for the implementation of the best inventory management 
practices found in the commercial sector that are consistent 
with military requirements.

Section 367. Warranty claims recovery pilot program.

    The committee is concerned that the Department of Defense 
is not receiving the appropriate refunds owed it by original 
equipment manufacturers for maintenance work performed in 
public depots on systems under warranty. At a time when funding 
for the Department of Defense is becoming increasingly scarce, 
it is important to ensure that all options for reducing the 
cost of maintaining military equipment are explored. Therefore, 
the committee recommends a provision authorizing a pilot 
program to recover any refunds owed the Air Force for 
maintenance work performed in public depots on aircraft engines 
while under warranty. Receipts under this program would be 
returned to the appropriations account from which the 
maintenance work was funded.

Section 368. Adjustment and diversification assistance to enhance 
        increased performance of military family support services by 
        private sector sources.

    The committee recommends a provision that would amend 
section 2391(b)(5) of title 10, United States Code, to 
authorize the Secretary of Defense, through the Office of 
Economic Development, to make grants, conclude cooperative 
agreements, and supplement other Federal funds to assist State 
or local governments in supporting the efforts of the 
Department of Defense in privatizing family support activities. 
These support services would include, but would not be limited 
to, privatization and outsourcing of military family housing, 
family housing referrals, child development centers, and 
library services. The committee is encouraged by the actions 
taken by the Department in this area and urges it to take 
advantage of the knowledge and expertise of State and local 
authorities in the privatization of family services.

                     ADDITIONAL MATTERS OF INTEREST

                                  Army

Organizational clothing and individual equipment

    The committee is aware of the significant benefits provided 
by the organizational clothing and individual equipment 
purchased through the Army Soldier Enhancement Program. These 
items include the bivy-sac modular sleeping bag, improved 
rainsuit, and the advanced combat vehicle crewman helmet, which 
were on the unfunded requirement list of the Chief of Staff of 
the Army, serve to improve the comfort and survivability of the 
soldiers in the field. Unfortunately, there has been a 
historical shortfall in funding for this program that has 
delayed the fielding of the equipment to the individual 
soldiers. Accelerating the purchase of this equipment will have 
the dual benefit of equipping oursoldiers earlier and reducing 
the outyear funding requirement. Therefore, the committee recommends an 
increase of $70.0 million to the Army's operations and maintenance 
account to accelerate the purchase of this equipment.

Aviation training

    The committee understands that the Army currently has more 
than 1600 pilots trained in older aircraft for which there is a 
requirement of only 900. To alleviate the excess number of 
pilots in the older systems, the Army has developed a program 
to retrain the pilots in modern aircraft. This program is 
intended to significantly improve the combat readiness of the 
total force by providing the Army highly trained aviators in 
more lethal, survivable, modernized systems. Unfortunately, 
there is a $14.0 million unfunded requirement for this program 
in fiscal year 1998 due to the cost of flight training for the 
entire Army aviation training program. Therefore, the committee 
recommends an increase of $14.0 to fully fund the retraining 
program.

Logistics automation

    The committee is aware of the requirement for additional 
funding in Army logistics automation programs, such as the 
Standard Army Retail Supply System, Standard Army Maintenance 
System, Unit Level Logistics System, and Integrated Combat 
Service Support System. Providing these additional funds will 
result in cost savings as well as improvements in the 
efficiency and effectiveness of the Army to perform assigned 
combat service support functions. Additional funding for the 
Standard Army Maintenance System would lead to an accelerated 
fielding of this system which is essential with the impending 
``Year 2000'' problem. Therefore, the committee recommends an 
increase of $21.9 million to the Army operations and 
maintenance account in order to provide the Army with the 
required funding to accelerate these important programs.

Information systems security

    The committee is aware of the $8.1 million unfinanced Army 
requirement for information systems security. Information 
systems security is a core function directly affecting the 
ability of the Army to sustain current operations and rapidly 
respond to crisis and contingency operations. If provided, the 
$8.1 million would be used for training, threat/vulnerability 
assessment, tools/risk management assessment, major command 
support (MACOM), and firewall upgrades. The committee 
understands that if the funding is not provided, the lack of 
training would increase operational risks to Army tactical and 
strategic systems by leaving them open to compromise and 
penetration by hackers. Failure to fund a technical 
vulnerability assessment will result in the fielding of a 
tactical information infrastructure that will be vulnerable to 
disruption and exploitation by an adversary. Furthermore, 
failure to fund the tools/risk management assessment will 
increase the overall operational risk to Army systems. In 
addition, Army MACOMs will be unable to comply with Department 
of Defense and Army directives to implement the required level 
of information systems security protection. Finally, if the 
additional funds are not provided, firewalls will rapidly 
become out of date and will lose their effectiveness in 
providing protection to Army information systems. Therefore, 
the committee recommends an additional $8.1 million to fund 
these important activities.

Real property maintenance

    The committee is concerned with the continuing growth in 
the backlog of real property maintenance (RPM) throughout the 
Department of Defense. If this necessary maintenance continues 
to go unfunded, the Department will be faced with even larger 
costs to repair damages caused by inclement weather and other 
environmental conditions. This problem is particularly serious 
within the Army and the Marine Corps. The condition of military 
facilities at places such as Fort Sill, Oklahoma; Fort Pickett 
and Quantico, Virginia; Parris Island, South Carolina; and 
Yuma, Arizona is indicative of the severity of the problem. 
Necessary repairs on barracks, roads, airstrips, rifle ranges, 
and other facilities at these and other locations are 
continually deferred because of insufficient funding. 
Therefore, the committee recommends an increase of $140.0 
million to the Army's operations and maintenance account and 
$30.0 million to the Marine Corps' operations and maintenance 
account for the maintenance of real property.
    Of the $140.0 million in additional real property 
maintenance funding for the Army, $100.0 million is to be used 
to bring forward barracks renovations projects at military 
installations including: $20.2 million for Fort Wainwright, 
Alaska; $25.0 million for Fort Sill, Oklahoma; and $41.3 
million for Fort Campbell, Kentucky. Accelerating these planned 
future renovation projects will have the dual benefit of 
improving the living conditions of our men and women in uniform 
and providing the Army with the flexibility to use those funds 
which were originally programmed to be used for these projects 
in the future for other high priority programs.

Support of other nations

    The committee is pleased by recent decisions by the 
Department of Defense to implement reductions in headquarters 
staffs of the military services. In anticipation of the savings 
that will be realized by this decision, the committee 
recommends a reduction of $15.0 million to the budget request 
for Army international headquarters in support of other 
nations.

Army enterprise architecture

    The committee understands that despite the priority which 
the Chief of Staff of the Army and the Chairman of the Joint 
Chiefs places on the Army Enterprise Architecture (AEA), there 
is a $4.0 million shortfall in the budget request for this 
program. AEA is composed of the technical (standards and 
protocols), systems (material solutions), and operational 
(information exchange requirements) architectures for Force 
XXI. The ultimate objective of the AEA is to provide the 
warfighter with a seamless, interoperable flow of timely, 
accurate, accessible, and secure information that will provide 
our forces a decisive edge in achieving information dominance. 
The committee understands the importance of this program to the 
Army and therefore, recommends an additional $4.0 million for 
this program in order to allow the Army to establish the first 
digitized force systems architecture for the fielding of a 
digitized division in fiscal year 2000.

                                  Navy

Flying hour program

    The committee is concerned with the funding shortfall in 
the flying hour program of the Navy and the Air Force. Concern 
has been expressed that this shortfall may force the Navy to 
curtail flying operations in the fourth quarter of fiscal year 
1997.
    However, this problem is not isolated to fiscal year 1997. 
The Secretary of Defense has identified a $350.0 million 
shortfall in the flying hour program of the Navy, and a $200.0 
million shortfall in the flying hour program of the Air Force 
for fiscal year 1998. This shortfall is surprising in light of 
the testimony of the Chief of Staff of the Air Force and the 
Chief of Naval Operations before the Committee on Armed 
Services of the Senate that indicated that the Air Force and 
Navy budget request for fiscal year 1998 was sufficient to meet 
the requirements of their services. The committee is 
disappointed that the Navy and Air Force are not able to 
accurately assess the sufficiency of their budget.
    However, in light of the severity of the shortfall, the 
committee recommends an increase of $200.0 million for the 
flying hour program of the Navy, and $30.0 million for the 
flying hour program of the Air Force. The committee hopes that 
future budget requests are more carefully reviewed to avoid 
such shortfalls.

Naval oceanographic program

    The committee recognizes the requirement to have adequate 
oceanographic survey data to support littoral operations. 
Unfortunately, the Navy currently has a survey backlog of 240 
ship-years. Therefore, the committee recommends an increase of 
$7.5 million to the National Oceanography Partnership program 
in order to reduce this backlog.
    The committee further recommends an additional $12.0 
million to the Naval Meteorology and Oceanography Command for 
equipment purchases, air operations, and contract support in 
order to support survey operations and other data collection 
requirements.

                              Marine Corps

Marine Corps initial issue

    The committee recommends an increase of $20.7 million in 
the operation and maintenance accounts for the Marine Corps to 
purchase items of individual combat clothing and equipment. 
This will help provide Marines in the field with the clothing 
and equipment they need to survive and sustain themselves 
during combat operations.

Personnel support equipment

    Personnel support equipment (PSE) provides for the 
replacement of furniture, furnishings, and equipment for 
existing quarters and mess halls. Presently, furniture and 
furnishings in quarters are antiquated and, in some cases, non-
functional. During fiscal years 1996 and 1997, the Marine Corps 
has tried to replace these items and thereby improve the 
quality of life of military personnel. Unfortunately, the 
budget request is insufficient to achieve the seven year 
replacement cycle standard established by the Department of the 
Navy. Instead, the budget only provides enough funding for a 
13.6 year replacement cycle. Therefore, the committee 
recommends an additional $25.4 million in order to bring the 
Marine Corps PSE replacement cycle more closely in line with 
the Department of the Navy standard.

                               Air Force

KC-135 depot maintenance

    The committee understands that the fiscal year 1998 budget 
request is insufficient to fund all of the KC-135 depot 
maintenance requirements. Increased depot maintenance costs due 
to additional maintenance requirements, unprogrammed repairs, 
and depot rate increases will result in 16 aircraft going 
without the required maintenance. If sufficient funding is not 
provided, aircraft will be grounded and availability to the 
warfighting Commanders-in-chief will be reduced. Therefore, the 
committee recommends an increase of $54.6 million to the Air 
Force operations and maintenance accounts in order to fully 
fund the required KC-135 depot maintenance.

Office of Special Investigation and Information Protection

    The committee is aware that the Air Force has a $2.7 
million shortfall in funding for the Office of Special 
Investigation (OSI) Computer Crime Lab. If not corrected, this 
shortfall will hinder OSI investigations. Therefore, the 
committee recommends an increase to the Air Force operations 
and maintenance budget in order to purchase the necessary 
equipment to enhance the capabilities of the OSI Computer Crime 
Lab.

Force protection

    The increasing threat of attack from non-state actors was 
made dramatically clear with the bombing of the Khobar Towers 
in Saudi Arabia. The initial effort of the Air Force to improve 
the protection of its military personnel was concentrated in 
Southwest Asia and other vulnerable overseas locations. 
Although $298.0 million was provided for force protection in 
the Air Force fiscal year 1998 budget request, an additional 
$57.6 million remains unfunded. The committee is disappointed 
that the Air Force budget did not include sufficient funding to 
pay for all force protection requirements. The committee 
recommends an increase of $25.8 million to the Air Force 
operations and maintenance (O&M) account to fully fund the O&M 
portion of the unfunded requirement. The committee expects the 
administration to sufficiently fund force protection programs 
in the future rather than relying upon congressional increases.

                      Guard and Reserve Components

Reserve component training

    The committee is aware of the shortfall in funding for the 
training of the reserve components of the Army. This shortfall 
currently places unacceptable risk on the Army's ability to 
successfully prosecute the second major regional conflict 
(MRC). In fact, only 37 percent of required training operations 
tempo in combat support and combat service support units 
required in the second MRC warfight is funded. Therefore, the 
committee recommends an increase of $50.0 million in the 
operations and maintenance accounts of the Army reserve 
components; $30.0 million for the Army National Guard and $20.0 
million for the Army Reserve.

                              Defense-Wide

Joint exercises

    The committee is concerned with reports that the high 
operations tempo (OPTEMPO) of the armed forces is further 
aggravated by the growth in exercises initiated by the Joint 
Chiefs of Staff (JCS) and the warfighting Commanders-in-chief 
(CINC). These exercises provide valuable training to the staffs 
of these organizations, however, they do not provide the same 
quality of training to the operational forces. The committee 
notes with support that the Quadrennial Defense Review has 
recommended a reduction in such exercises in order to reduce 
the high OPTEMPO demand upon the operational forces.
    The committee is also concerned with the 17.3 percent 
growth over the fiscal year 1997 funding level for the Joint 
Staff. At a time when we are trying to streamline the 
infrastructure and headquarters staffs within the Department of 
Defense in order to ensure adequate funding for the readiness 
and modernization of the operational forces, this dramatic 
increase is not sufficiently justified.
    Therefore, the committee recommends a reduction of $62.9 
million to the Joint Staff request. This level of funding would 
still provide an increase of 8 percent over the fiscal year 
1997 funding level. The committee further directs the Chairman 
of the Joint Chiefs of Staff to provide a report to the 
congressional defense committees outlining the number of JCS/
CINC exercises planned over the future year defense program, 
the cost of each of these operations, the sponsoring CINC or 
other entity, the numberof military personnel who will be 
involved in the exercises together with their units, and the training 
value that will be provided.

Special Operations Command operations tempo sustainment

    The committee is aware of the shortfall in funding for the 
operations tempo of the forces in the U.S. Special Operations 
Command (USSOCOM). This shortfall is the result of price 
changes in the Defense Working Capital Funds. The net effect of 
these price changes means it will cost USSOCOM $26.1 million 
more to accomplish its current mission. The committee 
understands that this shortfall, if not alleviated, will result 
in a drastic reduction in the combat readiness of the Special 
Operations Forces. Therefore, the committee recommends an 
increase of $26.1 million to the operations and maintenance 
account of the Special Operations Command.

Civilian personnel levels

    The committee notes that the Department of Defense civilian 
personnel drawdown continues faster than expected. During the 
past several years, civilian personnel levels in the Department 
of Defense have been reduced faster than anticipated when the 
budgets for each succeeding fiscal year were drafted. This 
drawdown means lower-than-budgeted civilian personnel levels, 
resulting in savings of approximately $392.0 million during 
fiscal year 1998. The committee has made the appropriate 
adjustments in the fiscal year 1998 budget to reflect these 
savings.

                         Miscellaneous Programs

Full funding of the Defense Health Program

    The committee has realigned funds as requested by the 
Department of Defense to fully fund the Defense Health Program 
in the amount of $274.0 million and to partially offset the 
underfunding of the Navy flying hour program in the amount of 
$24.0 million. The offset for this increase is the Military 
Personnel and Operation and Maintenance foreign currency 
fluctuation accounts in the following amounts:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                             Military      Operations & 
                                             personnel      maintenance 
------------------------------------------------------------------------
Army....................................            37.0           135.0
Navy....................................             9.0            21.0
Marines.................................             4.0             2.0
Air Force...............................            12.0            53.0
Defense Health Program..................  ..............            15.0
Defense Wide............................  ..............            10.0
      Totals............................            62.0           236.0
------------------------------------------------------------------------

Cooperative Threat Reduction Program

    The budget request included $382.2 million for the 
Cooperative Threat Reduction (CTR) program for activities in 
Russia related to the elimination of strategic offensive arms, 
weapons storage security, fissile material storage and fissile 
material storage containers, chemical weapons destruction, 
chemical weapons production facility conversion and 
dismantlement, plutonium production reactor core conversion, 
and defense and military contacts; in Ukraine for elimination 
of strategic nuclear arms and defense and military contacts; 
and for other activities related to elimination of weapons of 
mass destruction and defense and military contacts in the newly 
independent states (NIS) of the former Soviet Union.
    The committee recommends a $60.0 million reduction to the 
budget request for fiscal year 1998. The committee understands 
that funds authorized in prior years for the purchase of 
nuclear storage canisters for Russia and for activities in 
Belarus in the sum of $69.0 million remain available and will 
not be used as previously planned. With regard to the nuclear 
storage canisters, the committee understands that Japan plans 
to provide financial assistance for the purchase of these 
canisters. With regard to Belarus, the President was unable to 
certify to its compliance with certain requirements described 
in Section 1203(d) of the National Defense Authorization Act 
for Fiscal Year 1993 (Public Law 103-160). The committee 
recommends that funds previously authorized for activities in 
Belarus, but not expended, no longer be held in escrow, but 
rather be used for activities planned in fiscal year 1998.

Chemical Weapons Convention

    The budget request for CTR includes $51.0 million for the 
CTR chemical weapons (CW) destruction support program, which 
was established in July 1992 when the United States signed a 
CTR implementing agreement with the Russian Federation. CTR 
chemical weapons destruction support assistance is designed to 
assist the Russian Federation in destroying its chemical 
stockpile and fulfilling their obligations and responsibilities 
under the Bilateral Destruction Agreement (BDA) and the 
Chemical Weapons Convention (CWC). The committee understands 
that the objective of the CTR chemical weapons destruction 
program is to help Russia ``jump start'' its chemical 
destruction program, not to shift the financial burden of 
destroying Russia's stockpile to the United States. The Russian 
Federation must provide the majority of the resources and 
effort to destroy its own chemical stockpile.
    To date, the Congress has authorized and appropriated 
$145.5 million, of which $61 million has been obligated, for 
the development of a site specific comprehensive implementation 
plan (CIP), establishment of a fixed-site central chemical 
weapons destruction analytical laboratory (CAL), and to conduct 
a joint U.S./Russian assessment and validation of the Russian 
two-step CW destruction process of neutralization and 
bituminization to beused in the destruction of its chemical 
stockpile.
    Following the U.S. ratification of the CWC on April 24, the 
Russian Duma voted against ratification of the CWC, saying that 
they lacked the resources necessary to pay for the destruction 
of their chemical agent and weapons arsenal. The Russian Duma 
suggested that, if possible, it would approve the CWC later 
this fall if certain conditions are met. The Duma also asked 
for ``significant'' international financial assistance to help 
Russia destroy its stockpile. Condition 14 of the CWC 
resolution of ratification approved by the Senate expressed the 
view of the United States that Russia must maintain a 
substantial stake in financing the implementation of both the 
Bilateral Destruction Agreement and the CWC. The committee 
believes it is not the responsibility of the United States to 
provide financial guarantees so that Russia will ratify the 
CWC. The committee further believes that it is not the 
responsibility of the United States to pay for Russia's 
implementation of its commitments under the BDA and the CWC, if 
ratified by Russia.

Overseas humanitarian demining and Commander in chief initiative 
        activities

    The committee strongly supports the humanitarian demining 
and Commander in chief (CINC) initiative activities of the 
Department of Defense. These activities have enabled military 
personnel of the Department of Defense to forge valuable 
relationships with the armed forces and civilian populations of 
other nations. Therefore, the committee authorizes $25.1 
million to fully fund the planned humanitarian demining and 
$15.0 million for CINC initiative programs of the Department of 
Defense, including the Demining Center of Excellence.

                     National Defense Sealift Fund

LMSR procurement

    The budget request contained $812.9 million in the national 
defense sealift fund (NDSF). Of this amount $581.3 million 
would be for the procurement of two large medium speed roll-on/
roll-off (LMSR) strategic sealift ships, $131.5 million for 
resolution of cost growth that has occurred on LMSRs authorized 
in prior years, $70.0 million for advance procurement of 
components for an LMSR that is planned for authorization in 
fiscal year 1999, and $30.1 million for completion of prior 
year ships.
    In fiscal year 1997 Congress appropriated funds to 
accelerate the procurement of one LMSR strategic sealift ship 
from fiscal year 1999 to fiscal year 1997. This action 
reflected an emphasis on resolving shortages in strategic 
sealift that were identified in the Joint Chiefs of Staff's 
Mobility Requirement's Study (MRS) and subsequently reaffirmed 
by an update that the Joint Staff performed after completion of 
the Bottom-Up Review. However, the committee has now learned 
that the Commander in chief of the U.S. Central Command, the 
principal intended beneficiary of the Army's afloat 
prepositioning program, has recommended that the Army should 
preposition its third brigade set of heavy combat vehicles 
ashore, rather than afloat on LMSR strategic sealift ships. 
Additionally, the committee has reviewed the strategic sealift 
construction program and has found that there has been: (1) 
loss of efficiency, caused by the magnitude of work in progress 
in the two shipyards that are building LMSRs; (2) program cost 
growth of $131.5 million; and (3) construction delays of up to 
seven months in both shipyards. The committee believes that 
these problems and ongoing labor disputes will likely delay 
deliveries even longer and will seriously disrupt the phasing 
on the LMSR construction program. These combined factors: (1) 
verifying the appropriate prepositioning policy for Army 
equipment; and (2) construction disruption that will likely 
prevent proper execution of NDSF funds budgeted in fiscal year 
1998 for LMSR construction have caused the committee to 
conclude that a pause for reflection is prudent.
    Consequently, the committee recommends that the budget 
request for the NDSF be reduced by $651.3 million, the amount 
identified for procurement of two LMSR sealift ships in fiscal 
year 1998 and for advance procurement for an additional sealift 
ship in fiscal year 1999.

National defense sealift fund

    The committee has been informed that funds previously 
authorized and appropriated in the national defense sealift 
fund (NDSF) are in excess of requirements because of contract 
savings. Accordingly, the committee recommends a decrease of 
$25.0 million below the budget request in the NDSF.

Maritime prepositioning force recapitalization

    The committee notes that the oldest of the thirteen ships 
that currently constitute the Marine Corps maritime 
prepositioning force (MPF) are approaching the end of their 
service lives. The committee is aware that the Department of 
the Navy is evaluating advanced concepts for future preposition 
assets as part of the MPF 2010 initiative. The committee 
believes further attention to this issue is warranted and 
recommends an increase of $1.0 million in the national defense 
sealift fund (NDSF) to provide support for a Department study 
of future requirements and specifications for MPF 
recapitalization.

                        OTHER ITEMS OF INTEREST

Authorization for the Department of Defense to deposit funds in the 
        Foreign Military Sales Trust Fund Account for Canada's purchase 
        of military equipment

    The administration submitted a legislative proposal that 
would authorize payment of $100.0 million to Canada; $10.0 
million per year for ten years. The administration's proposal 
suggests thatthe $100.0 million would be spent for 
environmental cleanup of four former U.S. sites in Canada: 21 Distant 
Early Warning (DEW) Line sites; Goose Bay Airfield; Haines-Fairbanks 
Pipeline sites; and the U.S. Naval Station, Argentia. However, the 
entire $100.0 million would be paid into the Foreign Military Sales 
(FMS) Trust Fund Account and it appears that the Canadian Government 
could draw against this account to purchase unspecified military 
equipment from an undetermined manufacturing source, unrelated to 
environmental cleanup. The payment is contingent upon congressional 
authorization.
    Regardless of the purpose for which the $100.0 million 
would actually be spent, the Department of Defense (DOD) has 
indicated that it has no legal obligation to fund the cleanup 
of the four Canadian sites. The Department has also indicated 
that residual value of the former U.S. sites, such as the Naval 
Station, Argentia, was not considered in determining the $100.0 
million settlement. In addition, the Department has stated that 
despite the parties' inability to agree on the issue of legal 
liability, ``* * * the U.S. agreed to work toward an equitable 
settlement because of our uniquely close and long-standing 
relationship with Canada * * *.''
    The committee is concerned that by funding the $100.0 
million settlement, in the absence of any legal obligation, the 
Department could set an untenable precedent for other foreign 
country interests that fall into the same category as the 
Canadian sites. The committee concludes that it would be more 
fiscally responsible to use the constrained DOD budget to fund 
foreign environmental activities for which the Department has a 
legal obligation or requirement. The committee directs the 
Department to manage future issues of this nature in a manner 
that is consistent with its legal obligations and fiscal 
responsibilities.

Continued operations at Fort Pickett, Virginia

    Fort Pickett, Virginia, operated for decades as an Army 
post and training facility. Under the Base Realignment and 
Closure Act of 1990, Fort Pickett was recommended for closure, 
but with ranges, facilities, and training areas remaining for 
limited training. The committee is aware of ongoing discussions 
between the Army and the Commonwealth of Virginia to provide 
for the Virginia Department of Military Affairs to manage Fort 
Pickett for the Army, effective October 1, 1997, and to address 
the continuation of important military training activities.
    Virginia has raised concerns about the potential exposure 
to environmental liabilities associated with the new 
arrangement. The committee understands that environmental 
contamination already exists at Fort Pickett and that limited 
training activities may continue at the post. Accordingly, the 
committee urges the Army to work with Virginia to make sure 
that the Commonwealth's concerns are satisfactorily addressed.

Contracted Flight Training Service

    The committee notes that the Contracted Flight Training 
Service program has been reduced and will no longer support 
continuation of air-to-air electronic counter-measures training 
for active duty units and personnel. The committee has a 
history of supporting this program and believes that it has 
resulted in significant savings to the Air Force and the Air 
National Guard. The committee is concerned that this reduction 
might result in less flight training and higher per-hour flight 
training costs. Therefore, the committee directs the Air Force 
to review its electronic counter-measures training and report 
to the committee on its operational requirements and realized 
cost savings compared to substantially similar levels of 
training in prior years by March 1, 1998.

Defense environmental compliance

    In the Senate report (S. Rpt. 104-112) for the National 
Defense Authorization Act for Fiscal Year 1996, the committee 
gave the Department of Defense specific guidance on information 
to be included in future annual compliance reports submitted 
pursuant to section 2706(b) of title 10, United States Code. 
The impetus for that direction was the lack of consistent 
management of compliance accounts by the military departments. 
Over the course of the last two years, the Department has made 
some progress in attempting to develop uniform methods of 
tracking daily operational costs and classes of activities that 
require annual funding. There are some remaining concerns 
regarding the definitions of Class I and II.
    The Department of Defense environmental compliance policy 
is to fund all Class I projects, which are intended to address 
activities that are frequently out of compliance (whether or 
not they have received a notice of violation), and activities 
that will be out of compliance if not funded in the fiscal year 
of the current budget request. The Department's Class II 
definition includes projects and activities that are not 
presently out of compliance (deadlines or requirements have 
been established by applicable compliance requirements, but 
deadlines have not passed or requirements are not in force), 
but will be if not implemented in time to meet an established 
deadline beyond the current year.
    The Class I and Class II definitions overlap and may lead 
to confusion regarding funding priorities. In addition, the 
Department has informed the committee that all fiscal year 1998 
compliance projects have been given Class I funding priority. 
Any definition that places $2.0 billion worth of requirements 
in a single undifferentiated class is not a useful tool for 
distinguishing the Department's funding priorities. The 
committee directs the Department to clarify the Class I and 
Class II definitions and to eliminate overlap.

Defense Commissary Agency produce purchasing

    The Defense Commissary Agency (DeCA) has historically 
purchased produce for sale in commissaries from local produce 
growers.However, a recent study by the Hay Group under contract 
from DeCA suggests that DeCA could achieve considerable savings in 
produce purchasing by buying produce from a prime vendor. The committee 
continues to encourage DeCA to employ the best business practices to 
reduce its reliance on appropriated funding. However, the committee is 
aware that changing the produce buying procedures to a prime vendor may 
result in local produce growers losing their ability to provide local 
produce to the commissaries. Produce is a perishable commodity and many 
times consumers prefer to buy local produce in season. Some may suggest 
that a prime vendor supplier may supply produce that is not as fresh as 
locally grown produce.
    Therefore, the committee directs the Defense Commissary 
Agency to review the options available and submit a report 
through the Secretary of Defense to the congressional defense 
committees which describes the financial considerations 
associated with each option, the advantages and disadvantages 
of each option, the potential impact on local produce growers, 
and an assessment of customer preference. This report is to be 
submitted to the congressional defense committees not later 
than November 14, 1997. The committee directs the Secretary of 
Defense not to award a prime vendor produce contract for DeCA 
for at least 90 days after the required report is submitted to 
the Congress.

Department of Defense use of Ada computer language

    The committee is unclear about the changing policy of the 
Department of Defense (DOD) with respect to mandating use of 
the Ada computing language. A recently issued National Academy 
of Science National Research Council report, commissioned by 
the DOD, recommended, among other things, that funding of the 
Ada software program be continued at $15.0 million level in 
fiscal year 1998. Yet, the DOD requested no funding in fiscal 
year 1998 for the Ada Joint Program Office (AJPO), which 
oversees the Ada program. As recently as March of 1997, the 
Assistant Secretary for Command, Control, Communications and 
Intelligence, stated that the study is a good one and was 
prepared to accept and implement all of the report's 
recommendations with one exception---that ``DOD should no 
longer require Ada for any of its systems, but continue to 
support it as the preferred language, particularly for our 
weapons systems and C4ISR systems.'' The position of the 
Secretary is that by removing the mandate, the lone contentious 
point of resentment is also removed from the DOD software 
process. By requiring a software engineering plan, the desired 
results can be achieved without a mandate. Given the 
significant amount of money DOD has invested in both developing 
the Ada language and using it to build applications and the 
unclear message the committee has received regarding the future 
of the program, the committee directs the DOD to provide a 
report to Congress no later than March 1, 1998, with respect to 
its policy determination on whether or not the DOD views 
utilization of Ada software as an essential ingredient for 
current and future WAR FIGHTER and battlefield management 
systems.

Department of Defense use of frequency spectrum

    The trend toward a more information-based military requires 
that the Department of Defense (DOD) has adequate access to 
those portions of the frequency spectrum (primarily below 3.1 
Ghz) used by the Department's communications equipment. 
However, over the past five years, the Department has either 
relinquished or agreed to share over 500 Mhz of spectrum. This 
reallocation has already limited the capability of such systems 
as the Navy's Cooperative Engagement Capability (CEC).
    Additional spectrum currently used by the DOD is being 
sought for emerging telecommunications technologies and to gain 
revenue from spectrum auctioning.
    The committee is concerned that this continuing trend 
toward incrementally chipping away at the DOD and the 
intelligence community's assured use of the spectrum will 
severely impact critical national security systems. It may also 
inhibit training within the United States, which could 
ultimately reduce readiness.
    Therefore, the committee directs the Secretary of Defense, 
in consultation with the Director of Central Intelligence and 
the Chairman of the Joint Chiefs of Staff, to perform a 
systematic, detailed review of U.S. national security 
requirements, and the impacts of further reallocation of those 
portions of the spectrum currently used or dedicated to the 
Department of Defense and the intelligence community. The 
review should include the costs to the Department associated 
with past and potential future reallocations of spectrum 
frequency. The review should specify those systems that could 
be, or have been, adversely impacted.
    This review should be in accordance with U.S. national 
security requirements rather than driven by budgetary 
constraints or revenues from the sale of the spectrum. The 
results of this review should be provided to the Committee on 
Armed Services of the Senate and the Committee on National 
Security of the House of Representatives no later than March 
31, 1998. The report should be submitted in both classified and 
unclassified forms, as necessary.

Elimination of unnecessary training restrictions imposed under the 
        Endangered Species Act

    The Endangered Species Act of 1973 (16 U.S.C. 1532) 
provides for the listing and protection of species that are 
currently endangered or threatened with extinction. The listing 
of an animal or plant results in limitations on activities that 
could affect the species and in penalties for the ``taking'' of 
a species. The committee is concerned about the degree to which 
the Endangered Species Act has unnecessarily restricted 
military training activities.
    For example, there are currently 430 restricted training 
areas on Fort Bragg, N.C., that have been designated to protect 
the red-cockaded woodpecker. Of the 430 restricted training 
areas, there are about 160 areas that would be eligible 
forreconsideration because the red-cockaded woodpecker has abandoned 
these sites. The committee directs the military departments and the 
U.S. Fish and Wildlife Service to work closely together to eliminate 
unnecessary training restrictions at Fort Bragg and other military 
installations similarly impacted by the Endangered Species Act.

Environmental cleanup of formerly used defense sites

    Under the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980, the Department of 
Defense (DOD) remains responsible for the environmental cleanup 
of DOD related contamination at formerly used Defense sites 
(FUDS). These sites are not subject to the Base Closure and 
Realignment Act of 1990, but were formerly owned, leased, or 
otherwise operated by the Department of Defense, or any of its 
components. The FUDS properties are now owned by private 
citizens, states, local governments, or private organizations, 
for example: Massabesic National Guard Target Range, Auburn, 
New Hampshire; Black Hills Ordnance Depot, South Dakota; 
Castner Range, Texas; and Rotterdam Industrial Park, New York. 
The Army is the executive agency in charge of executing the 
program and the Army Corps of Engineers is responsible for 
managing the cleanup of FUDS sites.
    It is the committee's view that FUDS cleanup should receive 
full consideration for funding based on consistent assessment 
and ranking of the elements of relative risk: the level of site 
contamination; an identified receptor; and the evident pathway 
that connects the contaminant and the receptor.

Environmental cleanup of lands conveyed by the Department of Defense

    The Department of Defense (DOD) has been given authority to 
transfer or convey certain lands that are not subject to the 
Base Realignment and Closure Act of 1990, for example: Air 
Force Plant No. 3, Tulsa, Oklahoma; Naval Weapons Industrial 
Reserve Plant, McGregor, Texas; Naval Weapons Industrial 
Reserve Plant, Calverton, New York; Air Force Plan No. 85, 
Columbus, Ohio. Under the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980 (42 U.S.C. 9620(h)) the 
Department remains responsible for the environmental cleanup of 
DOD related contamination of these lands subsequent to 
transfer.
    It is the committee's view that lands subject to conveyance 
should receive full consideration for funding based on 
consistent assessment and ranking of the elements of relative 
risk: the level of site contamination; an identified receptor; 
and the evident pathway that connects the contaminant and the 
receptor.

Environmental liabilities at Rocky Mountain Arsenal, Colorado

    Rocky Mountain Arsenal (RMA), which borders the Denver 
metropolitan area, has been the focus of an aggressive soil and 
groundwater contamination cleanup program since the mid-1980's. 
The contamination is the result of two decades of on-site 
disposal of hazardous waste associated with manufacturing and 
testing chemical agents and other munitions. In addition, 
portions of the arsenal were leased to Shell Oil Company for 
the manufacture of pesticides from 1952 to 1987.
    The operational mission at RMA was discontinued in the mid- 
1970's, and in 1978 the Army initiated environmental 
restoration activities. In 1987, RMA was placed on the National 
Priority List (NPL). Based on a Federal Facility Agreement 
signed in 1989, the Army was put in charge of the cleanup. The 
Army and Shell have spent nearly $1.0 billion to date for 
cleanup activities at RMA. Shell agreed to pay a portion of the 
cleanup costs because of its contribution to the contamination 
problem at RMA.
    A portion of Shell's cleanup costs have been paid directly 
into an Army account established under section 1367 of the 
National Defense Authorization Act for Fiscal Year 1987 (Public 
Law 99-661). Funds deposited into that account are available 
without fiscal year limitations for the purposes of conducting 
environmental cleanup at RMA. As of December 1994, Shell 
contributed about $274.0 million and the GAO reported that 
about $116.0 million was deposited into the Army RMA account. 
Through the administration's budget process the Army reported 
that about $92.0 million remains in the Army RMA account for 
future obligations.
    The committee expects that the Army will conduct RMA 
cleanup in fiscal year 1998 and in the future years with 
available funds deposited in the Army account established under 
Public Law 99-661. The committee directs the Army and other 
military departments to ensure that any cost-sharing or cost-
recovery of cleanup funds at RMA or other Department of Defense 
facilities be used to offset future budget requirements.

Environmental requirements at Department of Defense demolition, 
        construction, and renovation sites

    Demolition, construction, and renovation activities 
conducted at Department of Defense facilities are potentially 
subject to a wide variety of environmental strictures, 
depending upon the condition of the work site and the extent of 
the activities at the site. Some of the more noteworthy 
environmental statutes that could apply to these activities 
include: the National Environmental Policy Act (NEPA); the 
Toxic Substances Control Act (TSCA); the Comprehensive 
Environmental Response, Compensation and Liability Act 
(CERCLA); and the Resource Conservation and Recovery Act 
(RCRA).
    The committee is particularly interested in the Navy's plan 
to relocate the Naval Systems Command to the Washington Navy 
Yard (WNY). The WNY, established in 1799, was used throughout 
most of its history as an industrial facility and the Naval Gun 
Factory. Weapons systems were produced at the WNY through the 
1950's. As a result of the heavy industrial use, there is a 
high potential that WNY has been contaminated with a variety of 
hazardoussubstances, such as polychlorinated biphenyls (PCBs), 
methylene chloride, lead, arsenic, cadmium, and beryllium. One of the 
lessons learned through the Love Canal tragedy was that hazardous waste 
sites pose a great risk to public health and the environment.
    The committee is concerned that the Navy could undertake 
$200.0 million in new construction and renovation at WNY 
without complying with the current environmental requirements 
to assess the impacts of a proposed action, to conduct site 
evaluations, to identify hazardous contamination, and to 
initiate remedial action. The committee expects the Navy to 
proceed with caution and to comply with all legal requirements 
in order to preserve the environment and the health and human 
safety of Navy military personnel, Navy civilian employees, 
construction workers, and the residents of the area surrounding 
WNY.

Indoor marksmanship training

    The Department of the Army currently operates the only 
remaining indoor small arms and rifle firing range in Military 
District Washington at Ft. Belvoir, Virginia. The all weather 
range is utilized for weapons qualifications by members of the 
military services, Department of Defense personnel, and members 
of other Federal agencies. Accordingly, any initiative to close 
or alter the operation of the facility should undergo careful 
scrutiny by the Department. Because the Ft. Belvoir facility is 
such a valuable resource to the Military District Washington, 
the committee directs the Department of Defense to conduct a 
cost-benefit study of the effectiveness of the facility in 
satisfying the training requirements of military and Federal 
users prior to any initiative to close the facility. Specific 
consideration should be given to the costs to the U.S. 
government associated of current facility operations as 
compared to costs associated with personnel travel, commercial 
range use, and personnel time off station. An examination of 
the operating costs of the Ft. Belvoir range should also be 
compared with the operating costs of similar all weather 
military range facilities.

Pollution prevention

    The Department of Defense has historically relied upon 
``end of pipe'' solutions to control and mitigate the effects 
of using environmentally harmful materials and procedures. The 
committee is encouraged that in recent years the Department has 
placed an increasing emphasis on the reduction or elimination 
of pollution problems at the outset through the use of 
pollution prevention approaches. The committee commends the 
Department for its recognition that prudent investments in 
pollution prevention can reduce life cycle environmental costs 
and liability, while improving environmental quality and 
program performance.
    For example, the Department appears to have recognized for 
the first time that the integration of environmental 
considerations into program management decisions can 
substantially reduce life-cycle costs for major weapons 
systems. The committee is particularly encouraged by the 
success of the Department's efforts to reduce hazardous wastes 
and air emissions through the development of paintless coating 
systems. Similarly, the Defense Logistics Agency has made great 
progress in implementing Executive Order 12873 by offering 
products and services, such as re-refined oil and more energy-
efficient lighting, that reduce or prevent pollution. Recently, 
the Army and the Air Force announced their preference for re-
refined oil and the Department made a strong commitment to 
buying only recycled paper, given a reasonable price.
    Despite the Department's commitment to pollution prevention 
approaches and the high pay-back from pollution prevention 
projects, no significant change in the pollution prevention 
portion of the budget has yet occurred. For example, the 
Department's fiscal year 1998 pollution prevention budget 
proposal is roughly the same as the Department's fiscal years 
1996 and 1997 pollution prevention budgets, adjusted for 
inflation. The committee believes that a greater investment in 
pollution prevention would reduce long-term compliance and 
clean-up costs and increase the resources available for the 
core requirements of the Department.
    For this reason, the Department can and should do more to 
build upon its record of purchasing items and services that 
prevent pollution and to implement other pollution prevention 
measures. While the ``green'' catalog issued by the Defense 
Logistics Agency has helped encourage the purchase of 
environmentally preferable products, that catalog currently 
lists only a few hundred products. The committee understands 
that the Department is considering a sustainable product 
initiative to help identify additional products and services 
that reduce or prevent pollution, resolve organizational and 
procurement system barriers to their purchase, and reduce 
environmental liability and compliance costs. The committee 
encourages this initiative.

Potential depot maintenance savings

    The 1995 Base Realignment and Closure Commission (BRAC) 
recommended closing the Sacramento, California and San Antonio, 
Texas, depots and transferring their workloads to the remaining 
depots or private sector commercial activities. The President, 
in forwarding the recommendations of the Commission to Congress 
for approval, indicated that the Sacramento and San Antonio 
depots should be privatized in place or in the local 
communities. In a September 1996 report, the General Accounting 
Office (GAO) stated that opportunities existed to reduce Army 
depot maintenance costs by transferring, rather than 
privatizing-in-place, workloads from closing and downsizing 
depots. The GAO estimated that this action would save the Air 
Force $182.0 million and the Army $51.0 million annually.

Proposed revision of the standards for ozone and particulate matter

    The Environmental Protection Agency (EPA) has proposed a 
revision to the National Ambient Air Quality Standards (NAAQS) 
for ozone and particulate matter that could significantly 
constrain training in nonattainment areas, require stringent 
controls on combustion sources, and result in conformity 
requirements that could negatively impact military operations, 
quality of life, base realignment and closure (BRAC), and 
community reuse. Some estimates indicate that one-third to one- 
half of the United States could be designated non-attainment 
for particulate matter, potentially affecting a large number of 
military installations.
    A Department of Defense witness at the April 15, 1997 
environmental program hearing before the Subcommittee on 
Readiness testified that implementation of the proposed 
standards for ozone and particulate matter could result in 
potential capital costs as high as $10.0 million per 
installation. Despite the projected costs and adverse impacts 
of the proposed standards, the Department of Defense (DOD) 
failed to submit written comments for the administrative record 
until approximately two weeks before the Readiness Subcommittee 
hearing.
    During the interagency review process, the Department of 
Transportation, the Department of Energy, the Treasury 
Department, the Council of Economic Advisers, and the Small 
Business Administration all submitted written comments on the 
proposed rulemaking. The Department of Defense refrained from 
submitting written comments until April 1, 1997, subsequent to 
the interagency review process and the public comment period.
    The April 1 comments submitted by the Department of Defense 
indicate that implementation of the proposed standards could 
have a significant impact on military training, readiness, 
quality of life, and environmental compliance budgets: (1) 
constraints on Army/Marine Corps use of obscurants (smoke) and 
off-road vehicles for training; (2) additional nonattainment 
(N/A) areas that would require the federal government to 
conduct more conformity analyses; (3) competition with 
industrial sources for offsets; (4) increased price of offsets; 
(5) more stringent controls on combustion sources; (6) 
increased capital costs for control technology; and (7) the 
inability to accommodate future BRAC and force structure 
changes. The committee is concerned that the implementation of 
the proposed standards could undermine Department of Defense 
training and readiness and in turn pose a threat to the 
national security. It is the committee's view that the 
Department has an obligation to protect the interests of the 
military departments and the DOD mission throughout the 
administrative rulemaking process. The Department's future 
actions in this area will be subject to careful scrutiny by the 
committee.

Removal of polychlorinated biphenyls from Navy vessels prior to 
        disposal

    The Toxic Substances Control Act (TSCA) 15 U.S.C. 1605(e) 
prohibits the manufacture, processing, use or distribution in 
commerce of polychlorinated biphenyls (PCBs) that are not 
``totally enclosed.'' The term ``totally enclosed'' means any 
manner that ensures ``insignificant'' human health and 
environmental exposures to PCBs, as determined by the 
Environmental Protection Agency (EPA). TSCA directed the EPA to 
promulgate rules for the disposal of PCBs.
    In vessels identified for sale, scrap, transfer, or 
sinking, the Navy has discovered minute quantities of PCBs that 
the Navy has concluded are bound and non-leachable. The 
existing EPA regulations make it difficult for the Navy to 
dispose of these vessels. Moreover, the EPA's proposed PCB 
``mega rule'' would not resolve the problem. The Navy has 
concluded that the 1994 proposal would require: (1) the 
labeling of all PCB uses, without thresholds; (2) EPA notice 
and Navy air monitoring of all leachable PCBs; (3) extensive 
shipboard wipe sampling; (4) removal of all concrete with PCB 
residue--cleaning the spill would be inadequate; and (5) 
special labeling, storage, packing, and transportation, even 
for low concentration non-leachables.
    The Navy has estimated that the 1994 proposed PCB rule 
could have a significant compliance price tag. Labeling, 
sampling, and air monitoring could cost $500.0 million the 
first year and $100.0 million annually thereafter. Management 
and disposal of PCB ``contaminated'' equipment and material 
from vessel maintenance could cost $450.0 million per year. 
Removal and disposal of concrete pads and other spill areas 
could involve a one time cost of $200.0 million. The overall 
projected Navy cost over ten years could be $5.7 billion.
    Since 1994 the Navy has been working with the EPA to 
address these concerns. The committee understands that a 
substantially revised rule is due to be published later this 
year. The committee directs the Navy to continue to work with 
the EPA and has the expectation that the two agencies will 
reach a reasonable resolution that satisfies concerns related 
to human health, the environment, and cost. In the absence of 
such a resolution, the committee is prepared to revisit this 
issue in relation to the Department's fiscal year 1999 budget 
request.
              TITLE IV--MILITARY PERSONNEL AUTHORIZATIONS

    The Congress, exercising its military manpower oversight 
responsibilities, authorizes the end strengths of the active 
and reserve forces annually. This year, in addition to the 
Subcommittee on Personnel hearings to examine the force 
structure plans of the Department of Defense and the military 
services, the committee held a series of hearings to receive 
testimony from the Secretary of Defense, the Chairman of the 
Joint Chiefs of Staff, and the Service Chiefs to review the 
results of the Quadrennial Defense Review. Based on those 
hearings, the administration's budget request, and other 
information, the committee recommended end strength ceilings 
for the active and reserve forces, including active component 
support for the reserves. Additionally, the committee 
recommended repeal of the endstrength floors in order to permit 
the secretaries and chiefs of the military services to implement the 
reductions in force structure recommended by the Quadrennial Defense 
Review.

                       SUBTITLE A--ACTIVE FORCES

Section 401. End strengths for active forces.

    The committee recommends a provision that would authorize 
active duty end strengths for fiscal year 1998 as shown below:

----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year--                     
                                                        --------------------------------------------------------
                                                                1997                                  1998      
                                                           authorization       1998 request      recommendation 
----------------------------------------------------------------------------------------------------------------
Army:                                                                                                           
    Total..............................................            495,000            495,000            485,000
    Officers...........................................             80,300  .................             80,300
Navy:                                                                                                           
    Total..............................................            407,318            390,802            390,802
    Officers...........................................             56,265  .................             55,695
Marine Corps:                                                                                                   
    Total..............................................            174,000            174,000            174,000
    Officers...........................................             17,978  .................             17,978
Air Force:                                                                                                      
    Total..............................................            381,100            371,577            371,577
    Officers...........................................             74,458  .................             72,732
----------------------------------------------------------------------------------------------------------------

    The committee recommends an active Army end strength below 
the 1998 request as a result of the Off-Site Review the Army 
announced on June 5, 1997, in which the active Army, the Army 
Reserve, and the Army National Guard agreed on personnel 
reductions recommended by the Quadrennial Defense Review.
    The committee notes that the Navy and the Air Force 
requested end strengths below the permanent end strength levels 
necessary to support two major regional contingencies. In 
response to questions during committee hearings, both Navy and 
Air Force witnesses testified that these reductions in end 
strength are directly related to force structure changes. 
Witnesses from both services testified that their services can 
support two major regional contingencies at the requested lower 
end strength levels.

Section 402. Permanent end strength levels to support two major 
        regional contingencies.

    The committee recommends a provision that would repeal 
section 691 of title 10, United States Code, as amended by 
section 402 of the National Defense Authorization Act for 
Fiscal Year 1997. The committee believes that statutory end 
strength ``floors'' are inappropriate at this time.

                       SUBTITLE B--RESERVE FORCES

Section 411. End strengths for Selected Reserve.

    The committee recommends a provision that would authorize 
Selected Reserve end strengths for fiscal year 1998 as shown 
below:

----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal Year                      
                                                        --------------------------------------------------------
                                                                1997                                  1998      
                                                           authorization       1998 request      recommendation 
----------------------------------------------------------------------------------------------------------------
The Army National Guard of the United States...........            366,758            366,516            361,516
The Army Reserve.......................................            215,179            208,000            208,000
The Naval Reserve......................................             96,304             94,294             94,294
The Marine Corps Reserve...............................             42,000             42,000             42,000
The Air National Guard of the United States............            109,178            107,377            107,377
The Air Force Reserve..................................             73,311             73,431             73,431
The Coast Guard Reserve................................              8,000              8,000              8,000
----------------------------------------------------------------------------------------------------------------

    The committee recommends an Army National Guard end 
strength below the 1998 request as a result of the Off-Site 
Review the Army announced on June 5, 1997, in which the active 
Army, the Army Reserve, and the Army National Guard agreed on 
personnel reductions recommended by the Quadrennial Defense 
Review.
    The committee has become increasingly aware of the unique 
capabilities of the Coast Guard Reserve and the value of the 
Coast Guard Reserve as an augmentee to the Department of 
Defense in times of national emergency.
    In view of the foregoing, the committee is concerned that 
the Coast Guard Reserve's end strength has fallen significantly 
below the authorized and appropriated level for fiscal year 
1996 and remains so for fiscal year 1997. It is apparent that 
this end strength shortfall stems from difficulties in 
recruiting Coast Guard reservists.
    The committee recognizes that Team Coast Guard has, with 
limited exceptions, seen the complete assimilation of Coast 
Guard reservists into the active duty force. Prior to Team 
Coast Guard, reserve unit commanding officers had specific 
responsibilities for recruiting. In Team Coast Guard, these 
recruiting responsibilities were not transferred to active duty 
commanding officers. In addition, reserve recruiting quotas 
have not been assigned to active duty Coast Guard recruiters. 
Prior to fiscal year 1996, no active duty Coast Guard recruiter 
in the system had ever recruited a reservist. Recruiting a 
reservist is more difficult than recruiting a new entrant 
because reservists must be recruited to a targeted billet at a 
specific location.
    Concomitantly, the Coast Guard has undertaken some effort 
to recruit reservists, including development of a formalized 
recruiting plan for reservists requiring Selected Reserve 
participation for 59 days following release from active 
duty;mailing out letters to over 6,000 members of the individual Ready 
Reserve; creating a reserve-specific recruiting web page; and engaging 
in limited advertising. Despite these efforts, while the active duty 
Coast Guard exceeded 100 percent of their goals, only 65 percent of 
those needed were recruited for the reserve force in fiscal year 1996 
and through January 31, 1997, only 32 percent of the monthly goals. 
Finally, the committee notes that the Coast Guard has not applied the 
various bonus programs that currently exist in law to recruit 
reservists up to authorized and appropriated end strengths.
    Given the foregoing, the committee directs that a report on 
the Coast Guard's reserve recruiting efforts be prepared. The 
report should address the difficulties encountered in 
recruiting reservists and recommend any additional initiatives 
that may require congressional action in order to bring the 
Coast Guard Reserve up to its authorized and appropriated end 
strengths.
    The committee urges the Coast Guard to focus its attention, 
leadership, and resources to achieving the Coast Guard reserve 
recruiting goals.

Section 412. End strengths for Reserves on active duty in support of 
        the reserves.

    The committee recommends a provision that would authorize 
full-time support end strengths for fiscal year 1998 as shown 
below:

----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year--                     
                                                        --------------------------------------------------------
                                                                1997                                  1998      
                                                           authorization      1998  request      recommendation 
----------------------------------------------------------------------------------------------------------------
The Army National Guard of the United States...........             22,798             22,310             22,310
The Army Reserve.......................................             11,729             11,500             11,500
The Naval Reserve......................................             16,603             16,136             16,136
The Marine Corps Reserve...............................              2,559              2,559              2,559
The Air National Guard of the United States............             10,403             10,616             10,616
The Air Force Reserve..................................                655                963                963
----------------------------------------------------------------------------------------------------------------

              SUBTITLE C--AUTHORIZATION OF APPROPRIATIONS

Section 421. Authorization of appropriations for military personnel.

    The committee recommends a provision that would authorize 
$69,265.0 million to be appropriated to the Department of 
Defense for military personnel.
    The committee notes that the fiscal year 1997 military 
manpower programs are not being executed as planned, with the 
services expected to be 10,000 work-years below previously 
budgeted levels.
                   TITLE V--MILITARY PERSONNEL POLICY

    The committee addressed a number of military personnel 
policy issues as a result of information received during 
hearings conducted by the full committee and the Subcommittee 
on Personnel. The committee recommended a number of military 
personnel policy changes that would improve management of 
reserve component personnel. The committee recommended 
termination of the Ready Reserve Mobilization Income Insurance 
Program and would require that all benefits accrued be paid and 
all premiums paid by reservists who do not receive any benefits 
be refunded. The committee also included a provision that would 
establish exemplary standards for commanders and others in 
positions of authority and responsibility.

                    SUBTITLE A--PERSONNEL MANAGEMENT

Section 501. Officers excluded from consideration by promotion board.
    The committee recommends a provision that would modify the 
eligibility criteria for promotion so that an officer who is 
currently on a promotion list is not simultaneously eligible 
for promotion to the same grade while awaiting processing of 
the current nomination. Under current statute an officer could 
be on a promotion list which is being processed and has not 
received the advice and consent of the Senate of the United 
States and remain eligible for consideration for promotion to 
the same grade by a subsequent promotion board. The recommended 
provision corrects this situation by making the officer 
ineligible for consideration by a subsequent selection board.
    The recommended provision modifies in a similar manner the 
eligibility criteria for a reserve component officer whose 
nomination does not require the advice and consent of the 
Senate of the United States but must be approved by the 
President.
Section 502. Increase in the maximum number of officers allowed to be 
        frocked to the grade of O-6.
    The committee recommends a provision that would increase 
the number of officers who may wear the grade and insignia of 
an O-6 (colonels in the Army, Air Force, and Marine Corps and 
captains in the Navy). While the committee supports limited 
frocking to fill command, international, and some key joint 
positions, it recognizes that the current limitation to one 
percent of the officers serving as an O-6 is unnecessarily 
restrictive.
Section 503. Availability of Navy chaplains on retired list or of 
        retirement age to serve as Chief or Deputy Chief of Chaplains 
        of the Navy.
    The committee recommends a provision that would repeal 
theprohibition of Navy chaplains on the retired list from serving as 
the Chief or Deputy Chief of Chaplains in the Navy. The recommended 
provision would also increase the mandatory retirement age for the 
Chief or Deputy Chief of Chaplains in the Navy from 62 to 68 years of 
age.

Section 504. Period of recall service of certain retirees.

    The committee recommends a provision that would clarify 
that officers who are recalled from retirement and assigned to 
the American Battle Monuments Commission, health care 
professional, or chaplain billets are excluded from the 12-
month recall tenure limit.

           SUBTITLE B--MATTERS RELATING TO RESERVE COMPONENTS

Section 511. Termination of ready reserve mobilization income insurance 
        program.

    The committee recommends a provision that would terminate 
the Ready Reserve Mobilization Income Insurance Program 
effective upon enactment of the National Defense Authorization 
Act for Fiscal Year 1998. The recommended provision requires 
the Secretary of Defense to pay all benefits that may have 
accrued before the termination date. It further requires the 
Secretary of Defense to refund all premiums paid by reservists 
who have not received benefits under the program.
    The committee notes with concern the sequence of events 
that has led to this recommendation. Congress authorized the 
Reserve Mobilization Income Insurance Program at the specific 
request of the Department of Defense in an effort to provide to 
the Department a tool that, properly managed, would serve as a 
valuable recruiting and retention incentive for reserve forces.
    Now, less than one year after the Department implemented 
this program, Congress is faced with another request from the 
Department: this time, to terminate the program in light of its 
$72.0 million of debt. The Department's handling of this matter 
has: 1) cast doubt on the credibility of the Department to 
manage major programs properly; 2) incurred a significant cost 
to the American taxpayer at a time when such a cost can least 
be afforded; and 3) brought into question the accountability 
and the oversight role of those in positions of responsibility 
in the Department of Defense.
    The Secretary of Defense is required to perform a study to 
determine the reasons the program required a $72.0 million 
``bail-out'' in the supplemental appropriations bill; whether 
there is a bonafide need for a mobilization income insurance 
program; and, if so, to recommend a program which reflects 
improvement from the current program. The results of the study 
are to be submitted to Congress not later than June 1, 1998.

Section 512. Discharge or retirement of reserve officers in an inactive 
        status.

    The committee recommends a provision that would permit the 
President to discharge or retire a reserve commissioned officer 
in an inactive status who cannot or will not retire. This 
authority closes a loophole that permitted retention of non-
participating members in the Standby Reserve with no benefit to 
the military department. This authority will eliminate the 
administrative costs associated with convening an 
Administrative Discharge Board to separate an inactive member.

Section 513. Retention of military technicians in grade of Brigadier 
        General after mandatory separation date.

    The committee recommends a provision that would permit 
brigadier general military technicians to serve up to the age 
of 60, when they would be eligible for their civil service 
retirement. This corrects an oversight in the development of 
the Reserve Officer Personnel Management Act legislation.

Section 514. Federal status of service by National Guard members as 
        honor guards at funerals of veterans.

    The committee recommends a provision that would permit 
National Guard members who serve on funeral details for 
veterans of the armed forces to receive credit as a period of 
drill or training otherwise required. The recommended provision 
would permit appropriated funds to be used to support National 
Guard honor guard functions at funerals for veterans.
    The committee notes that retired military personnel are 
authorized military honors for their funeral on a space 
available basis. The recommended provision will expand the 
opportunity for veterans, otherwise eligible for military 
honors, to receive those honors by authorizing National Guard 
personnel to perform the honor ceremony mission in a Federal 
status.

              SUBTITLE C--EDUCATION AND TRAINING PROGRAMS

Section 521. Service academies foreign exchange study program.

    The committee recommends a provision that would authorize 
service secretaries to enter into agreements with foreign 
governments in order to carry out a military academy foreign 
exchange program. The recommended provision limits the number 
of cadets or midshipmen who may receive instruction at a 
foreign military academy to 24 at any one time. The recommended 
provision further requires that the number of foreign students 
receiving instruction at a service academy be equal to the 
number of cadets/midshipmen receiving instruction from the 
military academy of that foreign government during an academic 
year.

Section 522. Programs of higher education of the Community College of 
        the Air Force.

    The committee recommends a provision that would permit 
enlisted members of the Army, Navy, or Marine Corps who are 
assigned as instructors in Air Force technical schools to 
participate in and receive associate degrees through the 
Community College of the Air Force.
    The committee recommends this provision in order to ensure 
that the Community College of the Air Force can maintain its 
accreditation. The committee believes that students from other 
services at Air Force technical schools should be able to 
receive credit for their training through the American Council 
on Education. The committee directs the Air Force to ensure its 
technical schools are evaluated by the American Council on 
Education to facilitate transfer of credit to other college and 
university programs.

Section 523. Preservation of entitlement to educational assistance of 
        members of the Selected Reserve serving on active duty in 
        support of a contingency operation.

    The committee recommends a provision that would ensure that 
members of the Selected Reserve who are ordered to active duty 
in support of a contingency operation and required to 
discontinue a course of study under the GI Bill benefit would 
not have those months charged against their GI Bill 
entitlement. Previously, Congress protected those ordered to 
active duty during the Persian Gulf War. The recommended 
provision extends the same protection to all other contingency 
operations.

Section 524. Repeal of certain staffing and safety requirements for the 
        Army Ranger Training Brigade.

    The committee recommends a provision that would repeal 
section 4303 of title 10, United States Code, which specified 
minimum manning levels for the Ranger Training Brigade and 
required the establishment of training safety cells. This 
requirement was enacted following the February 1995 training 
accident at the Florida Ranger Training Camp.
    The committee strongly supports adequate manning of the 
Ranger Training Brigade and believes that training safety cells 
may be prudent. The committee recognizes the inherent danger in 
training activities such as ranger training, SEAL training, and 
airborne training. While such training must be strenuous, 
realistic, and challenging, the military services must ensure 
that the students and cadre are safe during the training. The 
committee also believes the Secretary of the Army and the Chief 
of Staff of the Army should have the flexibility to establish 
the manning levels of units and organizations within the Army 
at the level they determine meets the requirements of the unit 
or organization.

                   SUBTITLE D--DECORATIONS AND AWARDS

Section 531. Clarification of eligibility of members of Ready Reserve 
        for award of service Medal for Heroism.

    The committee recommends a provision that would authorize 
members of the Ready Reserve to be awarded the service medal 
for heroism of their service on the same basis as active duty 
service members. Current interpretations of existing statute 
preclude members of the Ready Reserve not on active duty from 
being awarded the medal for heroism of their service in 
recognition of heroic acts. The recommended provision clarifies 
the statute to permit the services to award the service medal 
for heroism to members of the Ready Reserve.

Section 532. Waiver of time limitations for award of certain 
        decorations to specified persons.

    The committee recommends a provision that would waive the 
statutory time limitations for the award of military 
decorations to provide for the award of the Silver Star Medal, 
the Navy and Marine Corps Medal, and the Distinguished Flying 
Cross to certain individuals who have been recommended by the 
service secretaries for these awards.

Section 533. One-year extension of period for receipt of 
        recommendations for decorations and awards for certain military 
        intelligence personnel.

    The committee recommends a provision that would extend, by 
one year, the time in which military intelligence personnel 
could apply for consideration of an award for service in the 
Cold War era. The committee recommends the extension because 
the services did not adequately publicize the authorization for 
military intelligence personnel to apply for consideration of 
awards for their service during the Cold War.

Section 534. Eligibility of certain World War II military organizations 
        for award of unit decorations.

    The committee recommends a provision that would authorize 
the service secretaries to award a unit decoration to any unit 
or other organization of the armed forces of the United States 
that supported the planning or execution of combat operations 
during World War II. This authority would permit organizations 
such as the Military Intelligence Service of the Army to 
receive a unit award. The authority to approve unit awards is 
discretionary and requires that a recommendation be submitted 
within two years of enactment of the National Defense 
Authorization Act for Fiscal Year 1998.

SUBTITLE E--MILITARY PERSONNEL VOTING RIGHTS

    The committee recommends a provision (Sections 541 through 
543) that would address concerns related to absentee voting by 
members of the armed forces. In the November 1996 election in 
Val VerdeCounty, Texas, the site of Laughlin Air Force Base, 
two retired Air Force noncommissioned officers were elected to the 
offices of sheriff and county commissioner, in part due to absentee 
ballots from military personnel. In December, Texas Rural Legal Aid 
(TRLA) filed suit against Val Verde County in the United States 
District Court for the Western District of Texas, claiming that 800 
military absentee ballots were improperly counted in the election and 
that this unlawfully ``diluted'' Hispanic voting strength. The suit 
asked that the two successful candidates be prevented from taking 
office and that a new election be held. On December 30, 1996, U.S. 
District Judge H.F. Garcia issued a temporary restraining order 
preventing them from taking office.
    The committee is very concerned about these events. This 
lawsuit is a serious threat to the most basic civil right--a 
military member's right to vote. It could set a disturbing 
precedent across this nation about the rights of the men and 
women who serve in our armed forces. They deserve the same 
basic rights of citizenship as their civilian counterparts.
    In the Uniformed and Overseas Citizens Absentee Voting Act 
(P.L. 99-410, 42 U.S.C. 1973 ff et. seq.), Congress made it 
clear that both the Federal Government and the States were to 
take steps to maximize access to the polls by absentee voters 
serving in the armed forces. The recommended provision is 
consistent with that congressional intent.

                       SUBTITLE F--OTHER MATTERS

Section 551. Sense of Congress regarding study of matters relating to 
        gender equity in the Armed Forces.

    The committee recommends a provision that would express the 
sense of the Congress that the Comptroller General of the 
United States should conduct a study on any inequality, or 
perception of inequality, in the treatment of men and women in 
the armed forces and report to Congress within one year of 
enactment of the National Defense Authorization Act for Fiscal 
Year 1998.

Section 552. Commission on Gender Integration in the Military.

    The committee recommends a provision that would establish 
an 11 member commission to study issues related to gender-
integration in the military services. Six members would be 
recommended by the chairman of the Committee on Armed Services 
of the Senate and five recommended by the ranking member. At 
least two members will come from academia, at least four will 
be former military members, and at least two will be members of 
a reserve component. Duties of the commission include reviewing 
current military practices, relevant studies, and private 
sector training concepts pertaining to gender-integrated 
training; reviewing laws, regulations, policy directives, and 
practices which govern personal relationships between men and 
women in the armed services and between members of the armed 
services and non-military personnel; provide an assessment of 
the extent to which the laws, regulations, policies and 
directives have been applied consistently throughout the armed 
services; provide an independent assessment of the reports of 
the three efforts (the independent panel, a task force, and the 
legal review of adultery) announced by the Secretary of Defense 
in June 1997; and examine the experiences, policies, and 
practices of the armed forces of other industrialized nations 
regarding gender-integrated training.
    The recommended provision would require an initial report 
not later than April 15, 1998, and a final report would be due 
not later than September 16, 1998. The commission would be 
funded from funds appropriated for the Department of Defense.

Section 553. Sexual harassment investigations and reports.

    The committee recommends a provision that would establish 
rigorous reporting requirements and time lines for completing 
investigations into allegations of sexual harassment within the 
armed services. The secretaries of the military departments 
would provide a report of the sexual harassment investigations 
within their service each year for fiscal years 1998 and 1999.

Section 554. Requirement for exemplary conduct by commanding officers 
        and other authorities.

    The committee recommends a provision that would establish, 
in statute, exemplary standards for commanding officers and 
others in positions of authority and responsibility. The 
committee notes that these standards have applied to Naval and 
Marine Corps officers since they were first set forth in 
regulations drafted by John Adams and approved by the 
Continental Congress in 1775. The standards were later enacted 
by the United States Congress in 1799 and codified in title 10, 
United States Code, in 1956. While the statute has not included 
specific standards of conduct for Army and Air Force officers, 
the military services have established very high standards of 
conduct in internal regulations.
    The committee is disappointed to note that, in the past 
several years, some officers have shown reluctance to accept 
responsibility and accountability for their actions and the 
actions of their subordinates. This provision will not prevent 
an officer from shunning responsibility or accountability for 
an action or event. It does, however, establish a very clear 
standard by which Congress and the nation can measure officers 
of our military services. The committee holds military officers 
to a higher standard than other members of society. The nation 
entrusts its greatest resource, our young men and women, to our 
military officers. In return, the nation deserves complete 
integrity, moral courage, and the highest moral and ethical 
conduct.

Section 555. Participation of Department of Defense personnel in 
        management of non-federal entities.

    The committee recommends a provision that would authorize 
the service secretaries to permit officers to serve on the 
boards of directors of certain military welfare societies. The 
military welfare societies include the Navy-Marine Corps Relief 
Society, the Air Force Aid Society, Army Emergency Relief, and 
Coast Guard Mutual Assistance. The recommended provision 
permits officers to serve in the management of other nonfederal 
not-for-profit entities that regulate and support the athletic 
programs of the service academies, regulate international 
athletic competitions, accredit service academies and other 
schools of the armed forces, and which regulate the military 
health care system. Officers serving on the boards of these 
organizations may not receive compensation for their service.

Section 556. Technical correction to cross reference in ROPMA provision 
        relating to position vacancy promotion.

    The committee recommends a provision that would make a 
technical correction to a cross-reference in section 14317(d) 
of title 10, United States Code.

                        OTHER ITEMS OF INTEREST

Findings related to the investigations of deaths of members of the 
        armed forces from self-inflicted causes

    The Subcommittee on Personnel held a hearing on September 
12, 1996, related to the practices and procedures of the 
investigative services of the Department of Defense and the 
military departments concerning the investigations into the 
deaths of military personnel which may have resulted from self- 
inflicted causes. This hearing was another phase in the 
congressional review of the heart-wrenching issue of American 
soldiers whose lives were lost through tragic circumstances.
    Since 1982, over 3,000 military personnel died as a result 
of what military investigators have classified as self-
inflicted causes. Over 50 families of those who died disagree 
with the conclusions of the military services and how they were 
reached. As a result of the reviews of the investigations by 
the Inspector General of the Department of Defense, testimony 
by the families and the chiefs of the military investigative 
agencies, and the committee's analysis, the committee has 
identified the following areas which deserve careful 
consideration by the Department of Defense and the military 
services:
          (1) The cases are replete with accounts of 
        destruction and mishandling of potential evidence and 
        incomplete collection of evidence at the crime scenes 
        (fingerprints, photographs, basic procedures);
          (2) Psychological autopsies are not performed or 
        reviewed in a consistent manner;
          (3) Personal property of the deceased service members 
        has been subject to theft and loss and personal 
        property has been withheld, misplaced, stolen, or 
        destroyed;
          (4) Families have experienced difficulty obtaining 
        information and medical documents related to the 
        service member's death. Many have been forced to 
        request information under the Freedom of Information 
        Act, which can be difficult. Some information is still 
        being denied to families (photographs). Due to the 
        various military investigations, each piece or report 
        must be requested separately (service, medical 
        examiner, investigating office);
          (5) Deaths which occurred off-base are problematic 
        due to the lack of military jurisdiction. In most 
        cases, the military service offered to assist the local 
        law enforcement agency; however, the families expect 
        the military to take a more active role since the 
        deceased was an active duty service member;
          (6) There are frequently several ongoing military 
        investigations with disparate purposes: line of duty, 
        administrative, criminal, etc. These investigations are 
        not coordinated, resulting in different, and sometimes 
        conflicting, information being released to the families 
        and the media without coordination with the other 
        investigative agencies;
          (7) Autopsies are always conducted when a service 
        member dies. In some cases, certain organs are held for 
        a period of time for further testing; however, in many 
        of these cases, the families are not advised that the 
        organs were retained. In a few cases, the committee had 
        to insist that the military department return the 
        organs after the lab tests were complete. A military 
        pathologist should be available to assist when death 
        occurs in a civil jurisdiction, but this is not always 
        done;
          (8) The committee found that casualty notification 
        and assistance procedures varied widely among the 
        services. It also found insensitivity to the emotions 
        and needs of the families, inadequate training of those 
        selected for military personnel assigned these duties, 
        and a reluctance to share information with family 
        members; and
          (9) The chiefs of the military investigative services 
        testified that their investigators always investigate 
        the death as a potential homicide until evidence 
        establishes otherwise; however, some families pointed 
        to statements by investigators, commanders, and others 
        which indicate that this might not be the case.
    The committee requested a follow-up report which includes 
analysis of trends and shortcomings in investigative 
procedures, systemic corrections which should be made, and 
lessons learned after the Inspector General completes her 
review of the cases. The subcommittee chairman sent a letter to 
the service secretaries with the findings and recommendations 
pertaining to their service and requested their personal 
attention to ensuring appropriate corrective actions were 
taken. He also wrote to the chief of the local law enforcement 
agency of each case which occurred outside the jurisdiction of 
the military services requesting a review of the original 
investigation and a report of the findings. The local law 
enforcement agencies are respondingto these letters.
    The committee intends to continue to monitor the progress 
of the Department of Defense and the military services as they 
complete the reviews required by the National Defense 
Authorization Act for Fiscal Year 1994, implement the 
recommendations of the Inspector General of the Department of 
Defense, and respond to the families and the committee's 
findings. The Department of Defense must ensure that every step 
of the notification, investigation, and follow-on contacts with 
the families is conducted properly, professionally, and with 
sensitivity to the needs of the families.

Inspector general investigations of general and flag officers

    A long standing priority of this committee has been the 
integrity, professionalism and accuracy of investigations of 
allegations made against general and flag officers. The 
Congress and the American people hold military officers to a 
higher standard than other members of society. The nation 
entrusts its greatest resource, our young men and women, to our 
military officers. In return, the nation deserves complete 
integrity, moral courage, and the highest moral and ethical 
conduct.
    When a senior officer is alleged to have committed some 
infraction of law or regulation or to have misused his or her 
office, the service investigates the allegations under the 
auspices of the Inspector General. The committee understands 
that, in order to ensure complete, equitable, and legally 
sufficient investigations, the investigators must be cautious 
and thorough which takes time. However, it has been brought to 
the committee's attention that investigations involving a 
member of a reserve component seem to require more time to 
complete than similar investigations for active component 
officers. While there may be circumstances unique to cases 
involving reserve component officers, the committee is 
concerned about the perception that the Inspectors General are 
giving active component investigations preferential treatment.
    The committee directs the Department of Defense Inspector 
General (DODIG) to review the procedures, case load, available 
resources, and the actual performance of investigations of 
senior active and reserve component officers of the military 
departments and to report to Congress not later than February 
2, 1998. The DODIG should determine whether the senior officer 
investigation procedures in place in the military departments 
discriminate against reserve component officers; whether the 
military departments have sufficient personnel and resources in 
place to complete accurate, professional investigations in a 
timely manner; and, if appropriate, recommend any changes 
required to correct deficiencies noted during the review.

Military leave for Federal employees who are members of a Reserve 
        component unit

    The administration request included a legislative proposal 
that would have denied military pay to Federal employees who 
are members of a reserve component unit and elect to use the 
military leave authority under civil service law to attend 
annual training. The committee did not include this legislative 
request in the bill recommended to the Senate.
    Since Operation Desert Storm, the committee has been 
concerned about reserve component recruiting and retention and 
employer support as reserve components are called on more and 
more to support deployments and to relieve excessive active 
component PERSTEMPO. The administration's proposal to deny 
Federal civilian employees their military pay when they attend 
annual training sends precisely the wrong signal to reservists 
and to the employers of reservists. As the numbers of 
reservists on active duty continue to reach all time high 
levels, the Federal Government must continue to be the beacon 
by which other employers can guide their policies.
    The committee recognizes that the reserve component 
personnel accounts were debited by $85.0 million in 
anticipation of congressional support for the administration's 
legislative proposal. The committee does not intend that the 
services or the reserve components be forced to repay the 
reserve personnel accounts. The committee expects the 
Department of Defense to restore the funds using defense-wide 
operations and maintenance funds.

Revisions to missing persons authorities

    The committee confirms its continued strong support for the 
conference agreement contained in the National Defense 
Authorization Act for Fiscal Year 1997 regarding U.S. military 
personnel missing in action. This language is codified in 
Chapter 76 of title 10, United States Code.
    The committee notes that this issue has been exhaustively 
debated in Congress for many years. The committee also 
recognizes the continuing existence of differing views on the 
appropriate approach to resolve issues involving missing 
American service personnel from previous or future conflicts.
    The committee views with grave concern proposals in 
Congress to reopen the compromise reached less than a year ago. 
The committee believes that further protracted and divisive 
debate on this matter would not serve the best interests of the 
families of the missing nor would it contribute to the fullest 
possible accounting for all missing service personnel. The 
committee firmly believes the compromise language in current 
law should be preserved given the diversity of views and depth 
of emotions on all sides of this matter.
    Therefore, the committee restates its commitment to the 
provisions within the National Defense Authorization Acts for 
Fiscal Years 1996 and 1997 on this matter, and states clearly 
that it rejects all modifications which would alter the 
compromise already reached.

Sexual harassment

    The committee is concerned by an increasing number of 
reports that service members who refuse to participate in 
improper sexual activities or who report improper sexual 
activities by others are being labeled as being ``homosexual'' 
as a form of retaliation. Such labeling is especially insidious 
in its secondary effects which frequently include additional 
harassment, humiliation, ostracism, and, in extreme cases, 
improper investigation for homosexuality.
    The committee urges the Department of Defense and leaders 
at all levels to ensure that no individual experience the need 
to submit to unwanted sexual advances or harassment for any 
reason, and that any individual may report inappropriate 
activities without fear of retaliation in any of its many 
forms. Additionally, the committee urges the Department of 
Defense and leaders at all levels to ensure that the right to 
investigate individual conduct is not used as a threat or 
abused in any manner.

Virtual education approach to learning for employment

    The committee notes that many military personnel reentering 
civilian life experience unemployment or underemployment within 
the first year out of the service. More than 50 percent either 
change or lose their jobs in the first year after leaving the 
military. Many military personnel lack civilian job readiness 
and current workplace skills that match them with existing 
business and industry jobs.
    In Fall 1997, Clayton College and State University in 
Georgia will establish a ``virtual education program,'' 
including a civilian job-readiness program. Participating 
students would have readily available access to the Internet, 
World Wide Web, and job-readiness training programs offered 
through Clayton College and State University. In cooperation 
with major transportation employers, the virtual education 
program will: (1) identify categories of unfilled positions and 
establish training curricula (cooperatively with prospective 
employers) which will pre-qualify persons for employment; and 
(2) offer those training curricula via the Internet/World Wide 
Web, without regard to the student's geographic location or 
time of day.
    The committee directs the Department of Defense to review 
the Clayton College and State University program to determine 
the applicability of this approach to military personnel 
reentering civilian life. Should the Secretary of Defense 
desire, the Department of Defense is authorized to conduct a 
three-year demonstration to determine the extent to which 
information technology and public/private partnership can: (1) 
enable service members, while still on active duty, to learn 
job-readiness skills and work skills that will qualify them for 
and help them retain productive employment; and (2) facilitate 
the job placement of personnel upon separation or retirement 
from the service.
          TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS

    The committee addressed a number of pay, allowances, and 
other compensation issues. One of the committee's priorities 
this year was to continue to improve the quality of life for 
military personnel, their families, and retired service members 
and their families. The committee recommended a number of 
provisions that would significantly improve the quality of life 
and living conditions, and provide equitable compensation for 
military personnel to protect against inflation. Notably, the 
committee recommends provisions that would reform the basic 
allowance for subsistence and the basic allowance for quarters 
with the reforms phased in over five years. The committee also 
recommended several initiatives that address the Survivor 
Benefit Plan. In general, the committee's recommendations 
reflect a commitment to enhancing quality of life and a concern 
for the welfare of military personnel and their families.

                            SUBTITLE A--PAY

Section 601. Military pay raise for fiscal year 1998.
    The committee recommends a provision that would waive 
section 1009 of title 37, United States Code, and increase the 
rates of basic pay for members of the uniformed services by 2.8 
percent. This increase would be effective January 1, 1998.

         SUBTITLE B--SUBSISTENCE, HOUSING, AND OTHER ALLOWANCES

           PART I--REFORM OF BASIC ALLOWANCE FOR SUBSISTENCE

    The committee recommends a provision (Sections 611 through 
613) that would reform the basic allowance for subsistence for 
all members of the uniformed services. The recommended 
legislation would link the basic allowance for subsistence for 
officers and enlisted members to the Department of Agriculture 
food plan indexes. The annual increase would be effective on 
January 1 of each year.
    Additionally, the recommended provision would provide a 
transition period during which annual increases in the current 
enlisted allowance would be limited to one percent until such 
time as the transition period allowance equals the new 
Department of Agriculture based allowance. At that time, the 
shift to the new allowance would occur. The officer allowance, 
which is currently well below the Department of Agriculture 
based allowances, would increase annually by the same 
percentage as the enlisted allowance.
    The recommended provision also provides a new, partial 
subsistence allowance for junior enlisted personnel who are not 
currently eligible for any subsistence allowance.

           PART II--REFORM OF HOUSING AND RELATED ALLOWANCES

    The committee recommends a provision (Section 616 through 
622)that would adopt a single, price-based housing allowance 
based on a national index of housing costs. The recommended provision 
would authorize a housing allowance that would vary with pay grade and 
dependency status and would be based on local private sector housing 
costs. The housing costs would be collected by a private contractor and 
would be tailored to the neighborhoods and local housing conditions. 
Service members located in areas where the housing rates are projected 
to decline would be protected against receiving reduced allowances. The 
recommended provision would permit the Secretary of Defense to 
transition to the new allowance over a five year period.
    The committee urges the Secretary of Defense to assess the 
potential impact of the new rates on each area adjacent to a 
military installation and to work with the local community to 
mitigate any significant impact that might result from a sudden 
reduction of housing allowances in that community.

           PART III--OTHER AMENDMENTS RELATING TO ALLOWANCES

Section 626. Revision of authority to adjust compensation necessitated 
        by reform of subsistence and housing allowances.

    The committee recommends a provision that would make 
technical and conforming amendments related to the provisions 
that would reform the basic allowance for quarters and the 
basic allowance for housing within the uniformed services.

Section 627. Deadline for payment of Ready Reserve muster duty 
        allowance.

    The committee recommends a provision that would repeal the 
requirement that members of the Ready Reserve be paid for 
muster duty on or before the date on which they perform the 
duty. The recommended provision would require that the 
allowance be paid on or before, but not later than 30 days 
following the date on which the duty is performed. Currently, 
the services are required to prepare and issue checks for the 
duty before it is performed. In a number of cases each month, 
the checks must be canceled when reservists do not report for 
the scheduled duty. The recommended provision will save 
administrative processing time and money.

           SUBTITLE C--BONUSES AND SPECIAL AND INCENTIVE PAYS

Section 631. One-year extension of certain bonuses and special pay 
        authorities for reserve forces.

    The committee recommends a provision that would extend the 
authority to pay the special pay for critically short wartime 
health specialists in the Selected Reserve, the Selected 
Reserve reenlistment bonuses, the Selected Reserve enlistment 
bonuses, the special pay for enlisted members assigned to 
certain high priority units in the Selected Reserve, the 
Selected Reserve affiliation bonus, the Ready Reserve 
enlistment and reenlistment bonus, the repayment of loans for 
certain health professionals who serve in the Selected Reserve, 
and the prior service enlistment bonus until September 30, 
1999.

Section 632. One-year extension of certain bonuses and special pay 
        authorities for nurse officer candidates, registered nurses, 
        and nurse anesthetists.

    The committee recommends a provision that would extend the 
authority to pay certain bonuses and special pays for nurse 
officer candidates, registered nurses, and nurse anesthetists 
until September 30, 1999.

Section 633. One-year extension of authorities relating to payment of 
        other bonuses and special pays.

    The committee recommends a provision that would extend the 
authority to pay the aviation officer retention bonus, the 
reenlistment bonus for active members, the enlistment bonuses 
for critical skills, the special pay for nuclear qualified 
officers extending the period of active service, the nuclear 
career accession bonus, and the nuclear career annual incentive 
bonus until September 30, 1999.

Section 634. Increased amounts for aviation career incentive pay.

    The committee recommends a provision that would increase 
the aviation career incentive pay for aviators with more than 
14 years of service. The recommended provision would be 
effective October 1, 1998.

Section 635. Aviation continuation pay.

    The committee recommends a provision that would increase 
the maximum amount of the aviation officer continuation pay 
from $12,000 to $25,000. The aviation officer continuation pay 
is approved by a service secretary as an incentive to aviation 
career officers who agree to remain on active duty to complete 
14 years of commissioned service.
    The committee is concerned about the number of military 
aviation officers and enlisted crewmembers who are leaving the 
military services to accept positions with the commercial 
aviation industry. The high personnel tempo for air crews and 
the attractive salaries offered by the airlines combine to make 
commercial aviation an attractive alternative to military 
service.
    The committee directs the Secretary of Defense to review 
the structure and validity of aviation career retention and 
current aviation pay authorities and to provide the Congress a 
report, with legislative recommendations if necessary, 
concerning how to ensure the military services are able to 
retain sufficient qualified aviation officers and enlisted 
crewmembers to meetoperational and training requirements. The 
report should be provided to the congressional oversight committees not 
later than April 15, 1998. At a minimum the study should include an 
examination of alternatives which directly contribute to readiness and 
take into account total force requirements. Recommendations should be 
responsive to changing external (commercial airlines) and internal 
(force structure) pressures. Any recommendations must provide a cost-
effective approach to achieving an equitable return on the military 
services' investments in developing aviation resources by attaining 
greater retention of those resources at career decision points. The 
committee expects the Secretary to address compensation programs, the 
advisability of a separate career track for aviation officers and 
enlisted crewmembers, the question of whether bonuses should be paid to 
officers qualified to fly aircraft for which their service is not 
experiencing a shortage of pilots, and cooperative programs with the 
airline industry, such as the Phoenix program. The committee recognizes 
that the results of the Quadrennial Defense Review may have an impact 
on the aviation officer and enlisted crewmember requirements.

Section 636. Eligibility of dental officers for the multiyear retention 
        bonus provided for medical officers.

    The committee recommends a provision that would authorize 
multiyear retention bonuses for dental officers similar to 
those authorized for medical officers. The recommended 
provision is another initiative to enhance the ability of the 
services to retain quality dental officers.

Section 637. Increased special pay for dental officers.

    The committee recommends a provision that would increase 
the amount of the special pay for dental officers of the armed 
forces and modify the number of years of service required to 
qualify for certain levels of the special pay. The committee 
remains concerned with the decreased propensity for dentists to 
enter and to remain in the military services. The National 
Defense Authorization Act for Fiscal Year 1997 authorized a 
number of incentives to recruit and retain dental officers. The 
recommended provision builds on these incentives providing 
additional tools for the services to use to retain quality 
dental officers.

Section 638. Modification of Selected Reserve reenlistment bonus 
        authority.

    The committee recommends a provision that would provide 
service secretaries discretionary authority to determine the 
annual payment amounts for reserve reenlistment bonuses. The 
initial payment would be limited to not more than one-half of 
the total bonus. The recommended provision would also permit a 
member to receive a bonus when electing a three-year term of 
reenlistment twice in lieu of a single six-year term. The 
committee believes that this flexibility may assist the 
military services in retaining quality personnel who possess 
critical skills. A member opting for the three-year term would 
have no assurance that his or her skill would qualify for the 
bonus at the conclusion of the first three-year term. The total 
value of the bonus for a member electing a six-year term would 
be $5,000 and the combined value of two three-year terms, 
assuming that the bonus is in effect for the second three-year 
term, would be limited to $4,500. This continues the incentive 
to select a six-year term. The recommended provision would also 
extend the eligibility for receiving reenlistment bonuses from 
10 years of service to 14 years of service.

Section 639. Modification of authority to pay bonuses for enlistments 
        by prior service personnel in critical skills in the Selected 
        Reserve.

    The committee recommends a provision that would modify the 
Selected Reserve prior service enlistment bonus to permit a 
member to receive a bonus for a three-year term of enlistment 
and a subsequent three-year reenlistment in lieu of a single 
six-year enlistment option. The committee believes that this 
flexibility may assist the military services in recruiting 
prior service personnel who possess critical skills to serve in 
the Selected Reserve. The committee understands that a member 
opting for a three-year term would have no assurance that his 
or her skill would qualify for the bonus at the conclusion of 
the three-year term. Additionally, the total value of the bonus 
for a member electing a six-year term would be $5,000 and the 
combined value of two three-year terms, assuming that the bonus 
is in effect for the second three-year term, would be limited 
to $4,500. This continues the incentive for an individual to 
select a six-year term.

Section 640. Increased special pay and bonuses for nuclear qualified 
        officers.

    The committee recommends a provision that would increase 
the maximum authorized rate for three nuclear special pays and 
bonuses for nuclear qualified officers of the Navy.

Section 641. Authority to pay bonuses in lieu of special pay for 
        enlisted members extending duty at designated locations 
        overseas.

    The committee recommends a provision that would authorize 
the service secretaries to pay a lump sum payment of up to 
$2,000 per year to qualified enlisted members who extend their 
duty at designated overseas locations. The recommended 
provision:
          (1) authorizes the service secretaries to fix the 
        rate at which the date of the extension agreement is 
        accepted by the service;
          (2) establishes the government's ability to 
recoverpayments for which service agreements are not completed; and
          (3) removes the entitlement to such payment for those 
        members who elect to receive government-funded rest and 
        recuperative absences or transportation.

    SUBTITLE D--RETIRED PAY, SURVIVOR BENEFITS, AND RELATED MATTERS

Section 651. One-year opportunity to discontinue participation in 
        Survivor Benefit Plan.

    The committee recommends a provision that would permit a 
participant in the Survivor Benefit Plan to elect to 
discontinue participation at any time during a one-year period 
beginning on the second year anniversary of the date on which 
the member retired. The participant may not elect to 
discontinue participation without the written concurrence of 
the spouse. The Secretary of Defense may prescribe regulations 
requiring this written concurrence to be notarized. 
Participants who elect to withdraw are not entitled to a refund 
of premiums paid into the Survivor Benefit Plan.

Section 652. Time for changing survivor benefit coverage from former 
        spouse to spouse.

    The committee recommends a provision that would permit a 
military retiree to change the beneficiary of his or her 
Survivor Benefit Plan from a former spouse to a current spouse 
at any time after the retiree remarries. Currently, the change 
of election is required to be made within one year of the date 
of the marriage.

Section 653. Paid-up coverage under Survivor Benefit Plan.

    The committee recommends a provision that would terminate 
Survivor Benefit Plan payments following 30 years of payments 
and attaining the age of 70. The committee believes that, once 
a retiree has paid Survivor Benefit Plan premiums for a minimum 
of thirty years and has reached 70 years of age, he or she has 
met the actuarial obligation to support any benefit which may 
accrue to his or her beneficiary. The recommended provision 
returns the Survivor Benefit Plan subsidy to an appropriate 
level without detracting from current efforts to balance the 
budget by fiscal year 2002.

Section 654. Annuities for certain military surviving spouses.

    The committee recommends a provision that would authorize 
an annuity of $165 a month for surviving spouses of former 
active duty service members who died before March 21, 1974, and 
were retired from active duty. The recommended provision would 
also apply to surviving spouses of service members retired from 
the reserves between September 21, 1972, and October 1, 1978. 
These surviving spouses, known as ``Forgotten Widows,'' are the 
survivors of retired military personnel who died before any 
survivor benefit program was enacted.

                       SUBTITLE E--OTHER MATTERS

Section 661. Eligibility of reserves for benefits for illness, injury, 
        or death incurred or aggravated in line of duty.

    The committee recommends a provision that would authorize 
medical and dental care for the family member of a reservist 
who incurs or aggravates an injury or illness in the line of 
duty while serving on active duty for a period of 30 days or 
less and whose orders are subsequently modified to extend the 
period of active duty. The National Defense Authorization Act 
for Fiscal Year 1996 authorized medical and dental care for a 
member of a reserve component who incurs or aggravates an 
injury or illness in the line of duty while serving on active 
duty for a period of 30 days or less. The recommended provision 
extends the medical and dental benefit to the family members of 
the member who remains on active duty due to his or her injury 
or illness.

Section 662. Travel and transportation allowances for dependents before 
        approval of a member's court-martial sentence.

    The committee recommends a provision that would permit the 
service secretaries to move family members when a crime has 
been committed by the military sponsor. Currently, family 
members must remain on station until the court-martial sentence 
is approved. This forces some families to endure ostracism and 
criticism for the acts of the military sponsor. The recommended 
provision permits the service secretary to move the family when 
it is in the best interests of the family and the service.

Section 663. Eligibility of members of the uniformed services for 
        reimbursement of adoption expenses.

    The committee recommends a provision that would extend the 
authorization for reimbursement of adoption expenses in effect 
for the armed forces to the Public Health Service and the 
National Oceanic and Atmospheric Administration.

                        OTHER ITEMS OF INTEREST

Health Professions Scholarship Program

    The committee notes that the Department of Defense 
submitted two legislative proposals related to the Health 
Professions Scholarship Program (HPSP). One legislative 
proposal would have authorized the Secretary of Defense to 
reimburse participants in the HPSP for Federal, State, or local 
taxes paid based on thevalue of the scholarship. The other 
legislative proposal would have permitted the Secretary of Defense to 
pay participants in the HPSP a supplemental stipend to offset the tax 
liability related to the scholarship.
    The committee does not believe that the value of the HPSP 
scholarship should be considered taxable income for the young 
men and women who are committed to serve the armed forces as a 
health care professional. The committee notes that the 
administration can revise the Internal Revenue Code to make 
tuition and expenses paid on behalf of the HPSP participants 
excludable from taxable income without legislative authority. 
The committee urges the Secretary of Defense and the 
administration to exercise the discretion incumbent in the 
Executive Branch to resolve this situation.
    The Department budgeted a total of $87.6 million to support 
the two legislative proposals. The committee has applied these 
funds to quality of life improvements described in another 
section of this report.

Review of the Quadrennial Review of Military Compensation

    The committee notes that the Department of Defense is about 
to conclude work on the 8th Quadrennial Review of Military 
Compensation (QRMC). The committee also notes that, for the 
most part, the recommendations of the previous seven QRMCs have 
not been pursued either in policy or through legislative 
requests. Therefore, the committee directs the Secretary of 
Defense to review the requirement for and necessity to conduct 
a quadrennial review of military compensation and report the 
results, conclusions, and recommendations of this study to the 
congressional defense committees not later than March 16, 1998.
                   TITLE VII--HEALTH CARE PROVISIONS

    The committee addressed a number of health care issues. One 
of the committee's priorities this year was to continue to 
improve the quality of life for military personnel, their 
families, and retired service members and their families. The 
committee views health care as an important aspect of quality 
of life. The committee included a provision that would provide 
health care to military personnel assigned to duty in remote 
locations. The committee continues to support and work with the 
Committee on Finance of the Senate to provide for Medicare to 
reimburse the Department of Defense for care provided to 
Medicare eligible beneficiaries. The committee believes 
Medicare Subvention would be fiscally beneficial to Medicare 
and would enable the Department of Defense (DOD) to continue to 
provide health care to DOD beneficiaries within TRICARE. In 
general, the committee's recommendations reflect a commitment 
to enhancing quality of life and concern for the welfare of 
military personnel and their families.
Section 701. Waiver of deductibles, copayments, and annual fees for 
        members assigned to certain duty locations far from sources of 
        care.
    The committee recommends a provision that would make active 
duty service members assigned to certain remote duty locations 
eligible for health care under the Civilian Health and Medical 
Program of the Uniformed Services (CHAMPUS) and directs the 
secretaries of the military departments to waive the annual 
fees, deductibles, and copayments associated with CHAMPUS.
    The committee report accompanying S. 1026, the National 
Defense Authorization Bill for Fiscal Year 1996, expressed the 
committee's concern about the medical care for service members 
stationed away from major military installations. Additionally, 
the committee report encouraged the civilian and military 
leaders of the Department of Defense to develop initiatives to 
address this matter and other challenges faced by service 
members on independent duty.
    The committee commends the Secretary of Defense for the 
Department's efforts to provide acceptable medical care to 
individuals in remote locations through the TRICARE Remote 
initiative. Although this program is operational in only one 
region, the committee understands that the Department intends 
to extend this program to other regions provided that it 
remains cost effective. The committee encourages the Secretary 
of Defense to continue to search for ways to provide medical 
care to those service members and their families who are 
stationed away from major military installations. In that 
light, the Secretary should consider a number of options, 
including the Federal Employees Health Benefits Program, in an 
effort to find the optimal means of providing care to these 
individuals.
Section 702. Payment for emergency health care overseas for military 
        and civilian personnel of the On-Site Inspection Agency.
    The committee recommends a provision that would provide 
authority for the Secretary of Defense to pay for emergency 
medical health care costs of military and civilian personnel 
assigned to the On-Site Inspection Agency while participating 
in arms control inspections overseas from funds available to 
the On-Site Inspection Agency (OSIA).
    The mission of the On-Site Inspection Agency requires the 
frequent travel of military and civilian personnel assigned to 
the agency to many countries in the area of the former Soviet 
Union, including Russia, Ukraine, Belarus, and Kazakstan, as 
well as former Warsaw Pact nations. The agency has had 
difficulties having health insurance accepted overseas for 
medical assistance. Cash or credit card deposits for medical 
services have been required prior to the receipt of medical 
services. There have been instances where, in order to receive 
medical assistance, military and civilian personnel 
participating in the inspections conducted by OSIA have been 
required to deposit as much as ten thousand dollars.

Section 703. Disclosures of cautionary information on prescription 
        medications.

    The committee recommends a provision that would require 
that each prescription dispensed from the Military Health Care 
System, including the TRICARE and CHAMPUS programs, be 
accompanied by information containing cautions about use, 
possible side effects, and potential negative interaction with 
food or beverages. This information is to be in a form which is 
easy to read and understand.

Section 704. Health care services for certain Reserves who served in 
        Southwest Asia during the Persian Gulf War.

    The committee recommends a provision that would entitle a 
member of a reserve component who is a Persian Gulf War 
veteran; registers a symptom or illness in the Persian Gulf War 
Veterans Health Surveillance System of the Department of 
Defense; and is not otherwise entitled to medical and dental 
care from the Military Health Care System to medical and dental 
care to the same extent and under the same conditions as a 
member on active duty. The committee found that reservists who 
served in the Persian Gulf War, returned, and were discharged 
from active duty and now suffer from Persian Gulf Illness may 
not be eligible for care within the Military Health Care 
System. The recommended provision entitles these Persian Gulf 
War veterans to medical and dental care for the symptoms or 
illnesses that are presumed to be related to service in the 
Persian Gulf War from the Military Health Care System free of 
charge.

Section 705. Collection of dental insurance premiums.

    The committee recommends a provision that would modify the 
premium collection method prescribed for the Selected Reserve 
Dental Insurance Program and the Retiree Dental Insurance 
Program.
    The committee remains steadfast in its determination that 
these dental insurance programs be implemented in the most 
efficient and cost-effective manner possible. Commercial dental 
insurance providers estimate that premium collection from 
individual participants will increase the premium costs by 20 
to 25 percent. If direct collection was possible, these savings 
would be passed on to the selected reservist and retiree. The 
committee directs the Secretary of Defense to ensure that the 
determination of the method in which premiums are collected not 
unnecessarily inflate the amount of the premium. The committee 
expects to be apprised of the Department's plans for premium 
collection and the analysis upon which the decision was based 
before the plans are implemented.

Section 706. Dental insurance plan coverage for retirees of uniformed 
        service in the Public Health Service and NOAA.

    The committee recommends a provision that would extend 
eligibility for the retiree dental plan of the Department of 
Defense to retirees of the Public Health Service and the 
National Oceanic and Atmospheric Administration.

Section 707. Prosthetic devices for dependents.

    The committee recommends a provision that would remove 
prosthetic devices from the list of exclusions of care and 
devices which may be provided under the Civilian Health and 
Medical Program of the Uniformed Services (CHAMPUS). The 
recommended provision would permit certain prosthetic devices 
to be provided in response to conditions determined by the 
Secretary of Defense. Hearing aids, orthopedic footwear, and 
spectacles are not included in this authority, except that 
these items may be sold to family members at stations outside 
the United States where adequate civilian facilities are not 
available.

                        OTHER ITEMS OF INTEREST

Continued operation of the Uniformed Services University of the Health 
        Sciences

    The committee was disappointed to learn that, for the third 
consecutive year, the Department of Defense proposed closing 
the Uniformed Services University of the Health Sciences 
(USUHS). In fiscal years 1995, 1996, and 1997, the Congress 
spoke, in the most direct terms possible, that it is the will 
of the Congress that USUHS not be closed. Again this year, the 
committee will not support the proposed request to close USUHS.
    The Department of Defense decreased the Defense Health 
Program in fiscal year 1998 and in the Future Years Defense 
Plan to take projected savings, erroneously assuming USUHS 
would be closed. The committee directs that reductions to the 
Defense Health Program attributable to the projected closure of 
USUHS be reinstated from defense-wide operations and 
maintenance accounts. It is the intent of the committee that 
neither the military services nor the Defense Health Account be 
required to contribute to reinstating the USUHS closure 
savings.

Dental research and development

    It has come to the attention of the committee that, within 
the medical research and development community, dental research 
and development is compartmentalized. For instance, the Navy is 
restricted to dental research on dental disease and 
emergencies, and the Army is restricted to dental research on 
maxillofacial trauma. While the committee agrees that research 
and development must be coordinated to ensure that research 
projects are complimentary and do not duplicate other efforts, 
artificial restrictions by service do not appear to be the most 
efficient use of resources and talent. The committee urges the 
Assistant Secretary of Defense for Health Affairs and the 
Surgeons Generalto review the current policies and practices 
with regard to dental research and development to ensure that funds, 
facilities, and other resources are being used effectively and 
efficiently. If, upon completion of this review, the Assistant 
Secretary of Defense determines that legislative changes are required, 
these recommendations should be submitted to the congressional 
oversight committees not later than March 16, 1998.

Graduate School of Nursing building at the Uniformed Services 
        University of the Health Sciences

    The Uniformed Services University of the Health Sciences 
(USUHS) facilities were constructed in 1976 as a four building 
campus on the grounds of the National Naval Medical Center in 
Bethesda, Maryland. The facility was not constructed to the 
original design. Over 76,000 square feet of academic and 
laboratory space were excluded.
    The Graduate School of Nursing was initially funded in 
1993, was accredited by the Council on Accreditation of Nurse 
Anesthesia Educational Programs in 1994, and was fully 
accredited by the National League of Nursing in 1996. The 
Graduate School of Nursing programs are designed to relieve 
nursing shortages in the uniformed services, to prepare 
advanced practice nurses, and to address the special nursing 
needs of Federal nursing chiefs.
    The committee urges USUHS to submit a military construction 
project to construct a fifth building within the USUHS campus 
which will provide classrooms; administration, instructor, and 
staff offices; and laboratories to support the Graduate School 
of Nursing. This fifth building would support the additional 
missions assigned to USUHS, alleviate the shortage of space 
resulting from cuts to the initial design, and eliminate the 
requirements for leased facilities in the local area.

Health care provisions

    A longstanding priority of this committee has been the 
improvement of the military health care system. Health care is 
an important aspect of quality of life. The committee is 
committed to ensuring the quality and availability of medical 
care for all members of the military community including active 
duty personnel and their dependents, retirees, and veterans.
    However, the committee is concerned that the Department of 
Defense (DOD) faces significant constraints on its ability to 
meet the entire range of benefits expected by participants in 
the Military Health Service System. As Congress continues its 
efforts to balance the entire Federal budget, these constraints 
are likely to become more severe. As the committee continues to 
evaluate methods to improve the Military Health Service System 
in an environment of constrained resources, it is committed to 
the principle that in improving health care access to military 
beneficiaries, it does not improve access to some at the 
expense of others.
    The issue of health care for military retirees over 65 is 
of special concern to the committee. The nation has incurred a 
moral obligation to attempt to provide health care to military 
retirees who believed they were promised lifetime health care 
in exchange for a lifetime of military service. The nation 
fulfills its obligation through Medicare. However, under 
present law, retirees over 65 are not eligible for 
participation in Military Health Service System, except on a 
space-available basis at military treatment facilities. The 
Department of Defense is not reimbursed by Medicare for the 
cost of care provided to Medicare-eligible retirees.
    Several proposals have been offered to address this 
problem: (1) Medicare Subvention; (2) Federal Employees Health 
Benefit Program (FEHBP) Enrollment; and (3) TRICARE Enrollment.
    The committee supports Medicare Subvention and believes it 
would be fiscally beneficial to Medicare and would improve the 
ability of the Department of Defense to provide health care to 
military retirees over the age of 65. However, subvention has 
at least two shortcomings. First, it does not meet the needs of 
military retirees over 65 who do not live near military 
treatment facilities. Second, while reimbursement from Medicare 
accounts will partially alleviate fiscal pressures within the 
Military Health Service System, as the Department of Defense 
continues to reduce its health care infrastructure, maintaining 
access will increase in difficulty.
    Regarding enrollment in the FEHBP, the Congressional Budget 
Office has estimated that the cost of enrolling Medicare-
eligible military retirees in the FEHBP is $900 million 
annually. The primary advantage to FEHBP enrollment is the 
ability of beneficiaries to seek and obtain health care 
anywhere in the nation insurers in the FEHBP provide service. 
However, the committee is greatly concerned by additional costs 
this program would incur if offered in addition to the benefits 
currently available to retirees over the age of 65.
    Allowing military retirees over the age of 65 to enroll in 
TRICARE would require that additional resources be made 
available to military treatment facilities to ensure that all 
TRICARE beneficiaries were guaranteed access. The committee 
notes the estimated $274.0 million shortfall in the budget 
request to fund the Military Health Service System. Without 
corresponding changes in the TRICARE system, expanding 
enrollment in TRICARE is likely to exacerbate the current 
difficulties TRICARE faces in meeting all the needs of Military 
Health Service System beneficiaries.
    Despite the difficulties in choosing the optimal approach 
to addressing military health care concerns, the committee 
believes that a comprehensive approach to reforming the DOD 
health care system is required. In addition to ensuring access 
to health care coverage, it is also necessary to ensure that 
health care is available to beneficiaries wherever they serve 
or retire.
    The committee directs the Secretary of Defense to conduct a 
study of the cost and feasibility of authorizing the FEHBP for 
all non-active duty beneficiaries, while maintaining a wartime 
combat medicine capability for active duty personnel. The 
studyshould include cost estimates for including all active duty 
dependents and all retirees (both above and below the age of 65) and 
their dependents. It should also include an assessment for what impact 
this may have on the defense health care infrastructure. The Secretary 
must report to Congress not later than March 1, 1998. The report of the 
study should include a description of the assumptions used in the study 
as well as a recommendation as to whether such a proposal should be 
adopted.
    One possible alternative to addressing the issue of access 
to health care facilities is to enhance the growing cooperation 
and coordination between the Department of Defense and Veterans 
Administration (VA) health care systems. The committee supports 
the growing relationship between the Eisenhower Army Medical 
Center and the Veterans Administration Medical Center in 
Augusta, Georgia. These facilities have established a sharing 
agreement which allows each to provide certain health care 
services to the beneficiaries of the other. This type of joint 
approach has the potential to alleviate part of the 
accessibility problem, especially given the reduction in 
military medical treatment facilities.
    The committee directs the Secretary of Defense, in 
coordination with the Department of Veterans Affairs, to study 
the cost and feasibility of integrating all or part of the DOD 
and VA medical treatment provided. The study should include an 
assessment of whether improved geographical access to 
facilities would result in expanding the numbers of facilities 
available to beneficiaries. It should also include an 
assessment of the impact on utilization rates at all facilities 
and what costs would be entailed or whether savings might 
result from economies of scale. The study should address the 
issue of reimbursement between the Department of Defense and 
the Department of Veterans Affairs and how a Medicare 
Subvention program would affect reimbursement among the 
Departments of Health and Human Services, Defense, and Veterans 
Affairs. The Secretary of Defense must report to Congress not 
later than October 1, 1998.

Maintenance medication dispensing policy

    It has come to the attention of the committee that the 
Department of Defense (DOD) policy regarding dispensing of 
maintenance medications permits military treatment facilities 
to determine whether to dispense 30, 60, or 90 day supplies. As 
such, actual practice varies widely among military treatment 
facilities. The June 1995 DOD policy does direct military 
treatment facilities to implement local dispensing policies 
which provide that prescription quantities will be filled as 
written for up to a 90-day supply for maintenance medications.
    The committee directs the Assistant Secretary of Defense 
for Health Affairs, in conjunction with the Surgeons General, 
to review the maintenance medication dispensing policy with a 
view towards modifying the current policy to dispense 
maintenance medications for a 90-day period unless specifically 
determined by the local military treatment facility commander 
to be inappropriate for medical reasons. The committee directs 
the Assistant Secretary of Defense to report the results of the 
review and the new maintenance medication dispensing policy, if 
changed, to the congressional oversight committees not later 
than March 16, 1998.

Programs related to breast and prostate cancer

    The committee notes that the Department of Defense has been 
a leader in the nation's efforts to understand the causes of 
and to find cures for breast and prostate cancer. The Army's 
Peer-Reviewed Breast Cancer Research Program continues to 
advance the cause against this deadly disease. The Navy's 
Breast Care Center at the National Naval Medical Center has, 
after only one year, dramatically increased the early detection 
of cancer. The committee believes that there are additional 
opportunities for the Department of Defense to further research 
programs related to breast and prostate cancer, including the 
potential to establish a Breast and Prostate Cancer Center of 
Excellence. Such a center would use the latest diagnostic 
equipment, improved protocols, and educational outreach 
programs. The committee expects that such an activity could 
continue to find methods to permit early detection, reduce 
suffering and pain, reduce the necessity for complicated 
surgeries, enhance patient and physician cancer education, and 
reduce long-term health care costs for the Department of 
Defense. The combined effect of these outcomes would contribute 
to improved readiness and reduce service member man days lost 
to these diseases. The committee authorizes the Department of 
Defense to use such funds as may be appropriated for these 
purposes.

Telemedicine in TRICARE Region 7

    The committee is encouraged by the military services' 
effective use of telemedicine to provide needed health care to 
members serving in remote and rural areas. The committee 
supports the expansion of telemedical services into broader 
geographic areas. The committee authorizes the Department of 
the Air Force medical authorities to examine the potential for 
effective use of telemedicine in TRICARE Region 7 in 
consultation with the Army's Center for Excellence located in 
Augusta, Georgia. The committee directs the Secretary of the 
Air Force to submit a report to the congressional oversight 
committees by March 1, 1998, on its findings and 
recommendations regarding the establishment of a telemedicine 
program for Region 7.
  TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED 
                                MATTERS

    The committee recommends a number of provisions to improve 
the management of the process for acquiring goods and services 
in the Department of Defense and other federal agencies. 
Theseprovisions are a reflection of the committee's strong interest in 
continued acquisition management reform.
    On March 19, 1997, the Subcommittee on Acquisition and 
Technology convened a hearing to review the status of 
acquisition reform efforts in the Department of Defense. At the 
hearing testimony was presented by Dr. Paul Kaminski, Under 
Secretary of Defense for Acquisition and Technology as well as 
representatives from the military services. The subcommittee 
also received testimony from representatives of business 
associations and the legal community. The witnesses generally 
presented a positive picture of acquisition reform within the 
Department of Defense (DOD). The benefits of these reforms are 
evidenced by the improved DOD access to advanced commercial 
technologies and to commercial products priced in the general 
marketplace.
    The committee believes that the next two years are a 
critical period in which DOD managers should consolidate the 
reforms that have been achieved and reengineer acquisition 
business practices even further. Several negative factors could 
undermine what has already been accomplished. Budget pressures 
on the size of the professional acquisition workforce and the 
funds available for training and education could leave the DOD 
unable to implement systems that incorporate appropriate 
business practices. Attempts by some in industry to use catalog 
pricing mechanisms to justify unreasonable price increases for 
spare parts or other items would invite a return to the mid-
1980's legislative climate of strict regulation.
    The committee remains committed to a course of sustainable 
reform as a primary means of ensuring an affordable, strong 
defense as the Nation moves into the 21st century. It is the 
committee's view that there are a number of features that 
continuing reform must include:
          Preservation of high-level commitment to reform as 
        the new management team is nominated and confirmed;
          Management of the acquisition workforce to ensure 
        that further downsizing is carried out in a rational 
        manner: that education and training programs are 
        adequately funded and structured to prepare acquisition 
        professionals to work effectively in a less structured 
        business environment; that recruiting efforts are 
        sufficient to maintain the vitality of the workforce; 
        and that parity in promotion rates between acquisition 
        professionals and non-acquisition personnel is 
        considered to ensure retention of expertise in the 
        military services;
          Maintenance of the substance and appearance of 
        integrity in the acquisition workforce and compliance 
        with essential safeguards in the acquisition process in 
        the face of continued pressures to reduce oversight, 
        downsize organizations and streamline procedures;
          Preservation of robust competitive forces in light of 
        industry consolidation and focus on bringing greater 
        considerations of efficiency in acquisition decisions;
          Responsible exercise of the new flexibility and 
        discretion granted to acquisition professionals to 
        obtain the best value in products and services in the 
        interest of the taxpayers and the national defense; and
          Establishment of long-term funding stability for 
        major programs to make weapon systems more affordable 
        and to ensure that managers in government and industry 
        can be held more accountable for their individual 
        performance.

SUBTITLE A--AMENDMENTS TO GENERAL CONTRACTING AUTHORITIES, PROCEDURES, 
                            AND LIMITATIONS

Section 801. Streamlined approval requirements for contracts under 
        international agreements.

    The committee recommends a provision that would streamline 
documentation requirements under section 2304(f) of title 10, 
United States Code, in cases where the terms of an 
international agreement, treaty, or written instructions from a 
foreign government in connection with a foreign military sale 
would have the effect of requiring the use of other than 
competitive procedures. Under this provision, the head of the 
contracting activity would be required to document the 
circumstances compelling the use of non-competitive procedures, 
but the approval of the agency competition advocate would not 
be required.

Section 802. Restriction on undefinitized contract actions.

    The committee recommends a provision that would permit the 
head of a defense agency to waive the limitations on the use of 
undefinitized contract actions when such a waiver would be 
necessary to support contingency, peacekeeping, humanitarian 
assistance, and disaster relief operations.

Section 803. Expansion of authority to cross fiscal years to all 
        severable service contracts not exceeding a year.

    The committee recommends a provision that would broaden the 
current limited authority of the Department of Defense to 
expend appropriated funds for severable service contracts that 
cross fiscal years. The committee notes that such authority was 
provided to civilian agencies under the Federal Acquisition 
Streamlining Act of 1994.
    The committee directs that the Comptroller General review 
the operation of this provision and report to Congress no later 
than March 1, 2000. The report should address: (1) the total 
amount and sources of funds obligated under the provision; (2) 
the types of services procured under the provision; (3) the 
fiscal years in which the services were ordered and provided; 
(4) the reasons for which the provision was used; (5) any 
abuses of the provision (such as efforts to avoid year-end 
spending limitations); and (6) any recommendations for 
legislative or administrative changesthat the Comptroller 
General may believe to be appropriate.

Section 804. Limitation on allowability of compensation for certain 
        contractor personnel.

    In the statement of managers accompanying Public Law 104-
201 (Report 104-724), the conferees directed the Administrator 
for Federal Procurement Policy to develop and propose 
legislation establishing a limitation on the reimbursement of 
individual compensation on government contracts. The conferees 
directed that the proposal clarify the definition of 
compensation covered by such limitation. The administration has 
developed and submitted a proposal to Congress, as directed. 
The administration proposal would: 1) limit the reimbursement 
of senior executive salaries to the median salary of executives 
in companies of similar sizes; 2) define executive compensation 
to include the total amount of wages, salary, bonuses, and 
deferred compensation that is recorded in the contractor's cost 
accounting records for the year; 3) apply the limitations 
applicable to the five most highly-paid executives of a 
contractor, or any division of the contractor; and 4) make the 
limitations applicable to all cost-type contracts.
    The committee has carefully reviewed this proposal as well 
as a number of other approaches, such as a specified dollar 
limitation for compensation, as was imposed by Congress on an 
interim basis in the National Defense Authorization Act for 
Fiscal Year 1997. The committee believes that a limitation 
based on comparability with commercial industry practice is 
preferable to a specific limitation based on an arbitrary 
dollar amount. A comparability approach recognizes that defense 
must compete with the commercial sector for the same pool of 
experienced, skilled managers, scientists and engineers.
    However, the committee believes that the approach proposed 
by the administration is unsupportable because it would allow 
individual compensation of up to $4.0 million for large 
contractors. Therefore, the committee recommends a provision 
that would adopt the framework of the administration proposal, 
but would change the method of calculating the limitation on 
individual compensation by using the median salary of senior 
executives in all public corporations with annual sales in 
excess of $50.0 million, regardless of the size of the company. 
The Defense Contract Audit Agency has stated that the 
compensation limitation imposed by this formula would be 
$340,000 based on the most recently available data.
    The committee believes that this approach will provide 
appropriate flexibility for small and medium businesses that 
rely primarily on contracts with the Department of Defense.

Section 805. Increased price limitation on purchases of right-hand 
        drive vehicles.

    The committee recommends a provision that would amend the 
requirement in section 2253 of title 10, United States Code, by 
raising the limitation on the purchase price of right-hand 
drive vehicles from $12,000 to $30,000. Given inflationary 
trends and currency exchange rate fluctuations, the committee 
believes that this change will allow the purchase of vehicles 
that meet appropriate safety and other standards required under 
Department of Defense acquisition laws.

Section 806. Conversion of defense capability preservation authority to 
        Navy shipbuilding capability preservation authority.

    The committee recommends a provision that would amend 
section 808 of the National Defense Authorization Act for 
Fiscal Year 1996 to restrict its application to shipbuilding 
and to vest the Secretary of the Navy with the authority to 
enter into modified capability preservation agreements. The 
provision would also limit applicability of the agreements to 
costs incurred after the date of enactment of this Act for 
commercial contracts that became effective on or after January 
26, 1996.

Section 807. Elimination of certification requirement for grants.

    The committee recommends a provision that would eliminate 
the drug-free workplace certification requirements in relation 
to federal grants in a similar manner provided for federal 
contracts in section 4301(a)(3) of the National Defense 
Authorization Act for Fiscal Year 1996. The committee strongly 
supports the continued requirement that persons accept and 
enforce the drug-free workplace laws as a condition for the 
award of a contract or grant with a federal agency.

Section 808. Repeal of limitation on adjustment of shipbuilding 
        contracts.

    The committee recommends a provision that would repeal 
section 2405 of title 10, United States Code, effective upon 
the date of enactment of this Act. This provision would apply 
the current six-year limitation for the submission of claims in 
the Contract Disputes Act as the sole limitation on 
shipbuilding claims.

                    SUBTITLE B--CONTRACT PROVISIONS

Section 811. Contractor guarantees of major systems.

    The committee recommends a provision that would modify the 
requirements in section 2403 of title 10, United States Code, 
to provide flexibility to the Secretary of Defense and the 
secretaries of the military services to decide the appropriate 
use of warranties in contracts for the production of major 
weapon systems. The committee notes that a recent report issued 
by the General Accounting Office documented that, because of 
the restrictive requirements in statute, the benefits to the 
Department of Defense (DOD) from major systems warranties are 
far exceeded by the associated costs. The provision recommended 
bythe committee is intended to allow the DOD and the military 
services broad discretion to require major systems warranties only in 
cases where it is determined to be appropriate and cost effective.

Section 812. Vesting of title in the United States under contracts paid 
        under progress payment arrangements or similar arrangements.

    The committee recommends a provision that would clarify the 
rights of a federal agency to title to contractor work-in-
process under contracts where the agency has provided financing 
of the contract performance. The committee intends this 
provision to clarify what has been the usual practice with 
regard to federal agencies interpretation of rights under 
current contract provisions.

              SUBTITLE C--ACQUISITION ASSISTANCE PROGRAMS

Section 821. Procurement technical assistance programs.

    The committee recommends a provision that would provide 
$12.0 million in fiscal year 1998 to continue the Procurement 
Technical Assistance Center (PTAC) program administered by the 
Defense Logistics Agency. The PTAC program is a cost-shared 
venture supported by the Department of Defense (DOD) and 
states, local entities, non-profit and tribal organizations to 
assist predominantly small businesses interested in selling 
goods or services to federal agencies. An increasing part of 
the PTAC mission is to assist DOD in the deployment of 
electronic commerce and electronic data interchange (EC/EDI) 
networks.
    The committee is concerned that there may be significant 
duplication in these deployment efforts between the PTA centers 
and the Electronic Commerce Resource Centers (ECRC) funded 
elsewhere in this bill. The committee therefore directs the 
Secretary of Defense to submit a report not later than February 
1, 1998 on procedures to ensure the elimination of duplication 
between the PTAC and the ECRC networks in EC/EDI deployment. 
The report should also assess the feasibility and desirability 
of consolidating the PTAC and ECRC programs into a single 
network.

Section 822. One-year extension of Pilot Mentor-Protege Program.

    The mentor-protege program provides incentives to major 
Department of Defense prime contractors to assist small 
disadvantaged businesses and qualified organizations employing 
the severely disabled to enhance their capabilities as 
contractors or subcontractors on Department of Defense 
contracts. Under this program, more than 160 prime contractors 
have assisted small disadvantaged businesses in developing 
business processes and manufacturing capabilities.
    The committee recommends a provision that would extend the 
period in which mentor firms may incur costs for furnishing 
developmental assistance under the program until September 30, 
2000. The provision would also extend the period during which 
new agreements can be entered into until September 30, 1999.
    The committee believes that the mentor-protege program 
should be thoroughly evaluated before any further extensions of 
the program are contemplated. Therefore, the committee directs 
the General Accounting Office to review the implementation of 
the program and evaluate the extent to which the program is 
achieving the goals established by Congress in 1990. The report 
should also describe the manner in which program funds have 
been obligated, including a description of the average amount 
spent by the Department of Defense on individual mentor-protege 
agreements. The report should include a description of the 
benefits of the program to the Department and industry. 
Finally, the committee is interested in an evaluation of the 
effectiveness of the incentives provided to mentor firms under 
the program. The committee directs the report to be provided to 
the congressional defense committees no later than March 31, 
1998.

Section 823. Test program for negotiation of comprehensive 
        subcontracting plans.

    The committee recommends a provision that would extend the 
current test program for negotiating comprehensive 
subcontracting plans from September 30, 1998 to September 30, 
2000. The provision would also address participating 
contractors acting as subcontractors under a Department of 
Defense (DOD) prime contract by allowing them to include their 
major subcontracts within their comprehensive subcontracting 
plans. The committee believes that the DOD should expand the 
program in manner that would encourage prime contractors to 
enter the program on a plant or facility basis.

Section 824. Price preference for small and disadvantaged businesses.

    Section 2323 of title 10, United States Code, requires that 
the Secretary of Defense to obligate five percent of the total 
amount of funding for research and development, procurement, 
operations and maintenance, and military construction for 
contracts and subcontracts with small and disadvantaged 
businesses, historically Black colleges and universities, and 
minority institutions. Through its aggressive efforts, the 
Department of Defense (DOD) has met or exceeded this goal each 
year since fiscal year 1992. Preliminary figures for fiscal 
year 1996 indicate that the combined percentages for prime and 
subcontract awards are nearly nine percent of total prime and 
subcontract expenditures for the DOD.
    Among the tools available to the DOD within this program is 
the authority to pay up to 10 percent above fair market cost 
per contract for contractors or subcontractors who meet the 
preference criteria. DOD expenditures for the cost of 
preference payments are approximately $10.0 million per year. 
The committeebelieves that such an expenditure is unnecessary 
since the DOD appears to be awarding contracts far in excess of the 
statutory objective. Therefore, the committee recommends a provision 
that would condition the use of the section 2323 price preference 
criteria on the failure of the DOD to meet the goal in the prior fiscal 
year.

                 SUBTITLE D--ADMINISTRATIVE PROVISIONS

Section 831. Retention of expired funds during the pendency of contract 
        litigation.

    The committee recommends a provision that would permit 
federal agencies to retain amounts collected pursuant to the 
Contract Disputes Act of 1978 to satisfy a settlement reached 
between parties or a judgment rendered in favor of a contractor 
through the Federal Courts or the Armed Services Board of 
Contract Appeals. The provision would also require the 
Comptroller of the Department of Defense to provide an annual 
report to Congress on the amounts available for obligation 
under the authority of this provision.

Section 832. Protection of certain information from disclosure.

    The committee recommends a provision that would amend 
section 2371 of title 10, United States Code, to clarify that 
certain information submitted by outside parties in 
transactions governed by the authority under that section is 
protected from disclosure under section 552 of title 5, United 
States Code.

Section 833. Content of limited selected acquisition reports.

    The committee recommends a provision that would remove an 
unnecessary program completion status reporting requirement in 
section 2432 of title 10, United States Code.

Section 834. Unit cost reports.

    The committee recommends a provision that would eliminate 
duplicative cost reporting of requirements on unit costs of 
major weapon defense acquisition programs. The provision would 
also eliminate an unnecessary internal reporting requirement 
concerning contract cost growth. The committee notes that the 
Department of Defense has other, more meaningful systems for 
tracking cost and schedule variances in major programs.

Section 835. Central Department of Defense point of contact for 
        contracting information.

    The committee recommends a provision that would require the 
Under Secretary of Defense to designate an official in his 
office to serve as a central point of contact for persons 
seeking information about how and where to submit unsolicited 
proposals, how and where to respond to contract solicitations, 
procedures for being included on approved suppliers lists, and 
other contracting information.

                       SUBTITLE E--OTHER MATTERS

Section 841. Defense business combinations.

    On April 15, 1997, the Subcommittee on Acquisition and 
Technology conducted a hearing to examine a number of specific 
issues with respect to current consolidation trends in the 
national technology and industrial base supporting national 
defense. The witnesses at the hearing included Representative 
Chris Smith, representatives from the Department of Defense 
(DOD), the Chairman of the Federal Trade Commission, and 
representatives from the Wall Street investment community, 
public interest organizations, and industry associations.
    During the hearing, the subcommittee reviewed two issues in 
the area of industrial consolidation. First, the subcommittee 
considered the Executive Branch procedures for review of merger 
proposals to ensure preservation of competition. Based on that 
review, the committee determined that current procedures in the 
DOD, the Federal Trade Commission, and the Department of 
Justice appear to provide for a very detailed consideration of 
competition issues. The committee urges the Department of 
Defense and the antitrust agencies to maintain the current 
rigorous scrutiny on competition issues as downsizing 
continues. The committee believes that scrutiny of the vertical 
effects of mergers is particularly important in the current 
environment.
    The second issue the subcommittee considered during the 
hearing involved the DOD policy with respect to reimbursement 
of restructuring costs associated with mergers and 
acquisitions. After hearing the views of proponents and 
opponents of the current DOD policy, the committee concluded 
that the policy is sound and benefits the interests of the 
taxpayer by maintaining a strong, responsive national defense 
technology and industrial base through a process of rational 
downsizing. The committee notes with approval the current 
requirement that any reimbursement of restructuring costs 
associated with acquisitions and mergers be offset by contract 
savings at a rate of 2-1 from the industry and that these are 
the only reimbursed contract costs for which offsetting savings 
are required. The General Accounting Office raised a concern 
about the lack of documentation related to savings on 
individual weapon systems prices under the current DOD policy. 
The committee believes that this area requires further 
examination.
    In order to address the issues raised at the subcommittee 
hearing, the committee recommends a provision that would 
require a number of actions to be taken. The provision would 
extend for an additional two years the reporting requirement on 
the payment of restructuring costs under section 818 of the 
National Defense Authorization Act for Fiscal Year 1995 (Public 
Law 103-337). The provision would also require a report on the 
competitive effectof mergers and acquisitions approved in the 
prior year and a series of reports by the General Accounting Office 
(GAO) on any adverse effects of competition on major market areas of 
business combinations as well as the beneficial effects of mergers and 
acquisitions on contract weapon system prices. The committee recognizes 
the potential difficulties associated with DOD audit of the beneficial 
effects on weapon systems prices. As a result, the committee directs 
the GAO to include in its report detailed comments by the Department on 
the feasibility and desirability of devoting audit resources to develop 
such information.

Section 842. Lease of nonexcess property of Defense Agencies.

    The committee recommends a provision that would extend to 
the directors of defense agencies authority currently granted 
to the service secretaries to lease non-excess property under 
certain circumstances.

Section 843. Promotion rate for officers in an Acquisition Corps.

    The committee is concerned that promotion rates for members 
of the acquisition corps in the military services may be 
falling short of the goals Congress sought in the Defense 
Acquisition Workforce Improvement Act of 1990. If such trends 
go unchecked, the military services risk losing their most 
skilled acquisition professionals in the grades of 0-5 and 0-6 
as opportunities for further advancement are perceived to be 
foreclosed. Therefore, the committee recommends a provision 
that would require the Under Secretary of Defense for 
Acquisition and Technology to review reports of certain 
selection boards to grades above 0-4, upon approval by the 
President or his designee. The provision would also require the 
Under Secretary to report to Congress annually on the extent to 
which the military services are complying with section 1731(b) 
of title 10, United States Code.

                        OTHER ITEMS OF INTEREST

Multiple award task order and delivery order contracts

    The Department of Defense recommended a provision that 
would authorize the use of set-aside procedures in the 
placement of orders under multiple award task order and 
delivery order contracts. Such contracts, authorized in the 
Federal Acquisition Streamlining Act of 1994, are an innovative 
means to enable agencies to award parallel contracts to 
multiple bidders to preserve competition throughout the life of 
the contract.
    Federal agencies have used the new authority to issue 
``government-wide acquisition contracts'' bundling together 
large numbers of requirements into a single contract. The 
administration believes that the use of set-asides under such 
contracts will help provide small businesses with greater 
opportunities under government-wide acquisition contracts while 
preserving the economies and efficiencies of such vehicles.
    The committee shares the concern that the greater use of 
government-wide acquisition contracts may have the unintended 
effect of reducing contracting opportunities for small 
business. However, the committee notes that the General 
Accounting Office is currently conducting a comprehensive 
review of the legal and policy issues raised by multiple task 
order and delivery order contracts. For this reason, the 
committee believes that it would be premature to legislate on 
this issue.
      TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT

Section 901. Principal duty of Assistant Secretary of Defense for 
        Special Operations and Low Intensity Conflict.
    The committee has reviewed the original statutory scheme 
relating to the establishment of the Special Operations Command 
as a unified combatant command. That legislation established a 
four-star Commander in chief with unique authorities that no 
other combatant commander has. It also established an Assistant 
Secretary of Defense in order to ensure that the unique 
authorities of the combatant commander, which are akin to those 
possessed by the civilian service secretaries, are subject to 
civilian oversight and supervision. The original legislation, 
however, inadvertently put an emphasis on the Assistant 
Secretary's supervision on the operational rather than the 
budgetary, development, and acquisition activities of the 
combatant commander. The committee recommends a provision that 
would put the emphasis on the Assistant Secretary's supervision 
of the budgetary, development, and acquisition activities of 
the combatant commander.
Section 902. Professional military education schools.
    The committee recommends a provision that would designate 
the Information Resources Management College as a component of 
the National Defense University. The recommended provision 
would also make a technical change to the name of the Institute 
for National Strategic Study to read the Institute for National 
Strategic Studies.
Section 903. Use of CINC Initiative Fund for force protection.
    The committee is concerned with the information contained 
in the report of the Downing Assessment Task Force of August 
30, 1996, that inquired into the force protection of the U.S. 
Central Command area of responsibility, in general, and Khobar 
Towers, Saudi Arabia, in particular. That report revealed that 
``items such as Mylar, a shatter resistant window film coating, 
and surveillance systems for the fence line were deferred to 
budgets in later years.''
    Although the budget request for fiscal year 1998 identified 
over $1.0 billion for force protection issues such as combating 
terrorism, this is not sufficient to meet all of the needs of 
the Department of Defense. This led the Air Force Chief of 
Staff to identify force protection as his highest priority for 
any additional funding. Although the committee has provided 
these funds, we understand the difficulty in predicting all of 
the force protection requirements that may emerge over the 
course of the year. Therefore, the committee recommends a 
provision that would provide the regional Commanders in chief 
(CINCs) with the authority to utilize funding from the CINC 
Initiative Fund to provide for any force protection 
requirements which emerge in their respective areas of 
operation.

Section 904. Transfer of TIARA programs.

    The committee is concerned that the Tactical Intelligence 
and Related Activities (TIARA) aggregation includes several 
programs that are not intelligence programs and would be better 
managed elsewhere in the military services. In particular, the 
committee believes that targeting and target acquisition 
programs, tactical warning and attack assessment programs, and 
tactical communication programs do not belong in the TIARA 
aggregation. Therefore, the committee recommends a provision 
that would transfer such programs from the TIARA aggregation to 
other accounts of the military services.

                        OTHER ITEMS OF INTEREST

Department of Defense Inspector General staffing levels

    In November 1994, the Deputy Secretary of Defense directed 
a one-third reduction in Department of Defense (DOD) Inspector 
General manpower and funding by fiscal year 2001. In August 
1995, the Inspector General restructured the office and reduced 
the number of assistant Inspectors General from eight to four 
and eliminated 40 percent of the Defense Criminal Investigative 
Service (DCIS) field offices. Based on the Secretary's 
direction, the Inspector General expects to have eliminated 300 
positions by the end of fiscal year 1998.
    At the same time, Congress and the Department have 
continued to add to the Inspector General's workload. The Chief 
Financial Officers Act of 1990 and the Government Management 
Reform Act of 1994 placed substantial new burdens on agency 
Inspectors General in the area of financial management reform. 
The Federal Acquisition Streamlining Act of 1994 and the 
Federal Acquisition Reform Act of 1996 significantly increased 
the flexibility and discretion granted to acquisition 
officials, which arguably increases the need for vigorous 
oversight of the acquisition process. An additional round of 
base closures would further add to the workload of the DOD 
Inspector General's office.
    According to the Inspector General, planned reductions for 
fiscal years 1999 through 2001 could force the office to reduce 
coverage of large dollar fiscal crime issues such as defective 
pricing, cost mischarging, progress payment fraud and CHAMPUS 
abuses. In addition, continued cuts could require the Inspector 
General to reduce the DCIS personnel by 25 percent, reduce 
resources for audit coverage of acquisition and contracts by 50 
percent and reduce coverage of readiness issues by 50 percent.
    While every defense agency must contribute to the continued 
downsizing of the defense infrastructure, the committee is 
concerned that continued cuts within this office could prove 
more expensive for the Department in the long term. Therefore, 
the committee directs the Department to reexamine programmed 
reductions within the Inspector General's office and determine 
if they are appropriate in light of that office's 
responsibilities.
                      TITLE X--GENERAL PROVISIONS

                     SUBTITLE A--FINANCIAL MATTERS

Section 1003. Authorization of prior emergency supplemental 
        appropriations for fiscal year 1997.
    The committee recommends a provision that would authorize 
the emergency supplemental appropriations enacted in the 
Emergency Supplemental Appropriations Act of 1997 (Public Law 
105-18). This supplemental provided funding for fiscal year 
1997 expenses related to military operations in Southwest Asia 
and Bosnia.
Section 1004. Increased transfer authority for fiscal year 1996 
        authorizations.
    The provision would provide an increase in authorization 
transfer authority provided by section 1001 of the National 
Defense Authorization Act for Fiscal Year 1996. This increased 
transfer authority is necessary because of the substantial 
reprogramming requirements necessary for military operations in 
Bosnia during that fiscal year and to coincide with the 
appropriations transfer authority granted in the Defense 
Supplemental Appropriations Act for Fiscal Year 1996.
Section 1005. Biennial financial management strategic plan.
    The committee recommends a provision that would require a 
strategic financial management plan within the Department of 
Defense. While many improvements have been made in the 
financial management system within the Department of Defense, a 
multilevel strategic plan is critical to ensuring continued 
improvement in this area. The strategic plan should include 
goals, measurable performance measures, milestones, and 
accountable organizations and individuals.
    The strategic plan will be required on a biennial basis 
with the initial report submitted to the congressional defense 
committees by September 30, 1998.

Section 1006. Revision of authority for Fisher House Trust Funds.

    The committee recommends a provision that would amend 
section 914 of the National Defense Authorization Act for 
Fiscal Year 1996 (public law 104-106) to require the Secretary 
of the Air Force to deposit an appropriate amount of funds to 
establish the corpus on the Fisher House Trust Fund, Department 
of the Air Force.
    The committee was disappointed to learn that the Air Force 
had not deposited funds to establish the corpus of the Fisher 
House Trust Fund, Department of the Air Force, as required by 
the National Defense Authorization Act for Fiscal Year 1996. 
The committee directs that the Secretary of the Air Force 
continue to ensure that the Air Force Fisher Houses have 
sufficient operating funds during the period in which the 
corpus of the trust fund is being established and begins to 
earn interest. The committee expects that the Air Force will be 
able to use the earnings from the trust fund to operate the Air 
Force Fisher Houses beginning in Fiscal Year 2000.

Section 1007. Availability of certain fiscal year 1991 funds for 
        payment of contract claim.

    The committee recommends a provision that would authorize 
the Secretary of the Army to use certain fiscal year 1991 
procurement funds authorized in the Classified Annex to the 
National Defense Authorization Act for Fiscal Year 1991, 
subject to notification of the congressional defense 
committees, to reimburse the judgment fund established under 31 
U.S.C. 1304 for a potential judgment in a contract dispute.

Section 1008. Estimates and requests for procurement and military 
        construction for the reserve components.

    The committee recommends a provision that would require the 
Department of Defense to specify estimated expenditures and 
proposed appropriations for reserve component modernization in 
the annexes provided with the Future Years Defense Program 
(FYDP). For the last several years, the Congress has been faced 
with tough choices regarding the funding levels for inadequate 
budget requests from the Department. The provision will serve 
to provide the information necessary to fully understand 
Department modernization plans and to facilitate the decision 
making process for both the executive and legislative branches. 
Specifically, the provision directs that the annexes separately 
display reserve component modernization funding commensurate 
with the level of detail of the active component. Moreover, the 
committee has included in this provision language prohibiting 
the Secretary of Defense from providing less detail in any 
category in the FYDP for fiscal years 1999 and thereafter than 
that provided in the FYDP for fiscal year 1998.
    The committee has noted that the Department continues to 
emphasize the importance of the reserve components in 
fulfilling national security strategy requirements, but fails 
to program adequate funds to sustain necessary reserve 
component modernization. Over the last several years, the 
committee has urged the Department to correct this problem and 
every year there is resistance. The committee is very concerned 
about the Department's management of the modernization process 
for the reserve components. The lack of detailed information in 
the FYDP on proposed funding for reserve component 
modernization leads senior managers in the administration and 
Members of Congress to make suboptimal decisions.

                SUBTITLE B--NAVAL VESSELS AND SHIPYARDS

Section 1011. Long-term charter of vessel for surveillance towed array 
        sensor program.

    The Navy has been conducting ocean surveillance research 
through use of a privately owned United States flag vessel that 
has been on time charter since 1991. The vessel has been 
extensively modified and is currently fitted with about $20.0 
million of government equipment. The cost to transfer this 
equipment to another vessel would be about $6.9 million. The 
Navy will need to continue using a commercial charter for ocean 
surveillance research until fiscal year 2004 when TAGOS-23, now 
under construction, will become fully operational.
    Section 2401 of title 10, United States Code, prohibits the 
Secretary of the Navy from entering into a contract for the 
charter or lease of a vessel of longer than five years without 
statutory authority. The Navy's previous long-term lease for 
the ocean surveillance research ship expired in 1996. An 
interim short-term lease of 15 months is now in effect.
    Given the significant cost to modify another ship to carry 
out ocean surveillance research and the continuing need for the 
ship currently in service, the committee recommends a provision 
that would permit the Navy to enter into a long-term lease for 
a vessel to support the surveillance towed array sensor and low 
frequency active programs through fiscal year 2004.

Section 1012. Procedures for sale of vessels stricken from the Naval 
        Vessel Register.

    The committee recommends a provision that would authorize 
the sale of vessels stricken from the naval register using 
negotiation as an alternative to the sealed-bid process. This 
authority would allow such issues as environmental concerns to 
be addressed more effectively in the process of the sale.

Section 1013. Transfers of naval vessels to certain foreign countries.

    The committee recommends a provision that would transfer on 
a sale basis one Hunley class submarine tender, one Kaiser 
class
    (@) @oiler, six Knox class frigates, two Oliver Hazard 
Perry class guided missile frigates, and three Newport class tank 
landing ships to various countries. The Chief of Naval Operations has 
certified that these naval vessels are not essential to the defense of 
the United States. Any expense incurred by the United States in 
connection with these transfers would be charged to the recipient. The 
provision would also:
          (1) direct that, to the maximum extent possible, the 
        Secretary of the Navy shall require, as a condition of 
        transfer, that repair and refurbishment associated with 
        the transfer be accomplished in a shipyard located in 
        the United States; and
          (2) stipulate that the authority to transfer these 
        vessels will expire at the end of a two year period 
        that begins on the date of enactment of the National 
        Defense Authorization Act for Fiscal Year 1998.

                  SUBTITLE C--COUNTER-DRUG ACTIVITIES

    The budget request for drug interdiction and other counter-
drug activities of the Department of Defense totals $808.6 
million. This includes the $652.6 million drug interdiction 
account and $156.0 million in the operating budgets of the 
military services for authorized counter-drug operations. This 
compares with a total of $957.4 million for these activities 
during fiscal year 1997, including $796.5 million for the drug 
interdiction account and $160.9 million in the services, 
operating budgets. This reduction of $148.8 million equates to 
a real decline of 17.5 percent after accounting for inflation. 
The committee recommends an additional $8.34 million for the 
counter-drug activities of the Department of Defense.

Drug Interdiction and Counter-drug Activities, Operations and 
Maintenance

         [In thousands of dollars; may not add due to rounding]

                                                                  Amount
Fiscal Year 1998 Drug and Counterdrug Request.................   808,588
    Source Nation Support.....................................   183,031
    Detection and Monitoring..................................   238,149
    Disruption of Drug Mafia Organizations....................    54,306
    Law Enforcement Agency....................................   249,864
    Demand Reduction..........................................    83,238
Increases:
    Riverine Interdiction Initiative..........................     4,200
    Gulf States Counter-drug Initiative.......................     4,140
Recommendation................................................   816,928

Ongoing Initiatives

    In fiscal year 1997, the Congress authorized additional 
funding for three counter-drug initiatives: the Mexico-
Southwest Border Initiative; the Caribbean and South American 
Initiative; and the Domestic Counter-Narcotics Initiative. 
These were intended to provide enhanced capabilities to stem 
the flow of drugs into the United States and disrupt narcotics 
operations within our own borders.
    Although, the committee is pleased with the initial 
progress which has been made with these initiatives, the 
committee is concerned about the early difficulties in 
fulfilling some of the goals of the Mexico-Southwest Border 
Initiative. Due to the delay caused by these difficulties, the 
administration has requested an extension of the authority to 
provide assistance to the Government of Mexico. This was 
originally intended as a single year authority with the 
understanding that future support would be provided from funds 
available to the Department of State. Unfortunately, the 
administration failed to provide the necessary funds within the 
fiscal year 1998 budget request of the Department of State. If 
it is the intent of the administration to turn such 
international counter-drug activities of the United States over 
to the Department of Defense for execution, the committee 
believes that this intent should be demonstrated within the 
budget request. However, because the committee understands the 
value of this particular assistance and the need to explore all 
available options to stem the flow of drugs across the 
Southwest border, the committee recommends a provision (Section 
1021) that would extend for one year the authority to provide 
additional support for counter-drug activities of the 
government of Mexico.
    The committee continues to support the Gulf States Counter-
drug Initiative (GSCI) and is pleased to note that the budget 
request contains $3.4 million for this program. However, the 
committee is concerned that this funding level does not 
adequately cover the costs for required software maintenance, 
training, and network support. Therefore, the committee 
recommends an increase of $4.1 million over the requested 
amount to fund these activities.

Riverine Interdiction Initiative

    The committee is impressed with the effectiveness which has 
been demonstrated by the source nation governments in the 
interdiction of airplanes being used to transport narcotics and 
precursor materials. This has made a significant impact on the 
ability of the narcotraffickers to transport their goods from 
the fields of Peru to the processing labs in Colombia. However, 
the narcotraffickers have demonstrated an amazing capability to 
adapt to the closing of the airbridge by shifting their 
logistics operations to the vast Andean River network. Due to 
the increasing success of the Peruvian and Colombian 
governments in shutting down the airbridge during the past two 
years, the narcotraffickers have started to transport 
significant quantities of narcotics and precursor materials 
using these rivers.
    Unfortunately, these governments are ill-equipped and ill-
trained to interdict drug trafficking on their rivers and other 
waterways. If the United States and the source nation 
governments are going to continue to pursue their initial 
effortsto end, or at least greatly reduce, the trafficking of 
narcotics, they will be required to dedicate resources, including the 
creation of a number of Riverine Interdiction Units, to counter this 
new threat. Recognizing the important contribution the Department of 
Defense can make to this effort, the committee recommends an increase 
of $4.2 million to the Department's counterdrug program for Riverine 
operations and a provision (Section 1022) which would grant a five year 
authorization to the Department of Defense to assist the Peruvian and 
Colombian governments with the acquisition of the requisite equipment 
to actively engage in these activities. The committee directs the 
Department of Defense, in coordination with other Federal agencies 
involved in counter-narcotic activities, to develop an integrated 
regional plan to establish a Riverine program that can be sustained by 
the source nations at the end of the five-year period. The Department 
should provide the details of this plan to the Committees on Armed 
Services and Foreign Relations of the Senate and the Committees on 
National Security and International Relations of the House of 
Representatives before any assistance is provided pursuant to this 
authority. This plan should provide details as to how the Riverine 
program fits into the overall national drug strategy.
    Although the Government of Colombia was recently 
decertified by the United States, the committee notes that this 
equipment will be used for counter-narcotics purposes and is 
therefore exempt from the decertification requirements. 
However, the committee directs that 30 days prior to the 
provision of any assistance pursuant to this authority to the 
Government of Colombia, the Department of Defense notify the 
Committees on Armed Services and Foreign Relations of the 
Senate and the Committees on National Security and 
International Relations of the House of the measures to be 
taken to ensure that the equipment provided will be used for 
counter-narcotics purposes.
    Furthermore, the committee recognizes the valuable Riverine 
training that can be provided by the United States Marine Corps 
and the Special Operations Command to the military forces of 
the source nations. However, the committee is concerned that 
some of the personnel assigned to the Mobile Training Teams of 
the Marine Corps are not sufficiently proficient in the 
language skills necessary to provide the most effective 
training to foreign nationals. Therefore, if it is the intent 
of the Department of Defense to continue utilizing Marines in 
this capacity, the committee directs the Secretary of the Navy 
to provide the Committee on Armed Services of the Senate and 
the Committee on National Security of the House with a report 
outlining the measures which the Secretary intends to take to 
ensure that Marines assigned to these Teams have the 
appropriate language skills to train and operate with foreign 
nationals. This report should be provided no later than January 
31, 1998.

                    SUBTITLE D--REPORTS AND STUDIES

Section 1031. Repeal of reporting requirements.

    The committee recommends a provision that would repeal 
certain obsolete or superseded reporting requirements presently 
imposed by statute upon the Department of Defense.

Section 1032. Common measurement of operations and personnel tempo.

    The committee recommends a provision that would require the 
Chairman of the Joint Chiefs of Staff to develop, to the 
maximum extent practicable, a common measurement of operations 
tempo (OPTEMPO) and personnel tempo (PERSTEMPO).
    Service witnesses testified before the Subcommittee on 
Readiness that the services do not now employ common 
definitions of these terms, which are central to understanding 
the extent to which service members are required to spend time 
away from their families, and to determine whether the demands 
placed on service members are increasing or decreasing over 
time.
    The committee notes that the Under Secretary of Defense for 
Personnel and Readiness recommended earlier this year that the 
services adopt a single measure of PERSTEMPO, which would count 
each day away from home station as one day away. The committee 
believes that a common definition that would allow interservice 
comparisons of unit deployments is also a desirable goal, if an 
accurate common definition is possible given the inherent 
differences in the way the services operate.

Section 1033. Report on overseas deployment.

    In order to better determine the extent to which U.S. 
military operational demands are caused by overseas training 
requirements and the extent to which they are a result of 
contingency operations, the committee recommends a provision 
that would require the Department of Defense to report on the 
number of personnel deployed overseas as of June 30, 1996 and 
June 30, 1997. The report would distinguish between personnel 
who are forward deployed as their permanent duty station and 
those deployed overseas for temporary duty such as service-
specific exercises, joint exercises, exercises with allies, and 
deployments for contingency operations.

Section 1034. Report on military readiness requirements of the Armed 
        Forces.

    During its hearings over the past two years, the committee 
has heard repeated testimony from the service chiefs and 
service secretaries that the future readiness of our armed 
forces is jeopardized by a shortfall in modernization funding. 
Because of our failure to adequately fund the investment 
accounts, our forces today face a future armed with rapidly 
aging equipment which will be difficult and expensive to 
maintain and operate.
    To find the funds to develop weapons systems for the force 
structure of the next century, we must look for efficiency in 
thearmed forces of today. There are many approaches to 
streamlining defense operations and activities that could result in 
cost savings and which should be done to ensure the best value for the 
American taxpayer. Another approach which would save scarce defense 
resources and make available needed funding for critical modernization 
programs would be to reevaluate the readiness requirements of our 
military forces.
    Therefore, last year the committee recommended a provision 
which required the Department of Defense to report on the 
potential of ``tiered readiness'' as a means of redirecting 
scarce defense dollars from the operations and maintenance 
accounts to the modernization accounts. This provision 
established a requirement for a one-time report from the 
Chairman of the Joint Chiefs of Staff (JCS) on the military 
readiness requirements of all U.S. armed forces, including 
active and reserve components as well as support units, using a 
tiered readiness system. The provision also directed the 
service chiefs and the Commander in Chief of the U.S. Special 
Operations Command to prepare the report for the Chairman of 
the JCS.
    The report that they prepared assigned each force unit, 
described by type rather than unit name, to one of three tiers 
of combat readiness, which were defined in the provision, and 
listed all forces not assigned to one of the three readiness 
tiers.
    This report was provided to the Congress earlier this year, 
and, while making some significant progress in identifying the 
potential of tiered readiness, it left a number of issues 
unresolved. Therefore, the committee recommends a provision 
which would direct the Department to further explore the 
potential of tiered readiness. This provision would require the 
Chairman and the service chiefs, together with the Commander in 
Chief of the Special Operations Command and the commanders of 
the other unified commands, to prepare a second report that 
would examine the extent to which the readiness of the military 
forces could be tiered. Rather than looking at a generic major 
regional conflict, this report would require an examination of 
the tiered readiness concept within the force structure 
advocated by the Quadrennial Defense Review, including the 
forces required to deter or defeat a strategic attack upon the 
United States. The report should include an examination of the 
tiering of the forces (focusing on the brigade, battalion, and 
squadron levels), on a rotational basis within the Army and 
Marine Corps Divisions, the Air Force, Navy and Marine Corps 
Wings, and the Navy Fleets. In determining what lift would be 
available each year for the deployment of forces, the Joint 
Chiefs and the unified commanders should assume that the lift 
capacity is limited to that which is assumed to be available in 
each year of the Future Years Defense Program.
    Furthermore, the provision requires the Department to 
identify the total resources currently within the operations 
and maintenance accounts that would be available for 
modernization if a tiered system were adopted. The committee 
believes that the funding saved by a particular military 
service through the implementation of tiered readiness should 
be made available for the modernization activities of that 
service.
    The Chairman shall provide the report to the congressional 
defense committees no later than January 31, 1998.

Section 1035. Assessment of cyclical readiness posture of the Armed 
        Forces.

    The committee recommends a provision that would require the 
Secretary of Defense to report on the impact of moving to a 
cyclical readiness approach for major warfighting units. Under 
this approach, a high state of readiness alternates from one 
unit to another, as is already done with the blue and gold 
crews on ballistic missile submarines. The report should 
identify the savings and risks associated with cyclical 
readiness.

Section 1036. Overseas infrastructure requirements.

    The committee is concerned with the lack of planning on the 
part of the Department of Defense for overseas basing 
facilities. The national military strategy requires U.S. 
military forces to remain deployed in order to carry out the 
policy of deterrence and engagement.
    U.S. forces have departed from the Philippines, are 
scheduled to depart from Panama, and may be forced to depart 
from Okinawa, Japan. In fact, both the Department of Defense 
and the National Defense Panel recognize that we cannot assume 
access to our current overseas facilities. However, the 
Department has not performed any analysis to identify 
alternative basing solutions.
    Therefore, the committee recommends a provision that would 
require the Secretary of Defense to provide a report to the 
Committee on Armed Services of the Senate and the National 
Security Committee of the House of Representatives outlining 
the current and future forward-basing requirements of the 
Department of Defense along with the international agreements 
necessary to provide these facilities.

Section 1037. Report on aircraft inventory.

    In the statement of managers accompanying the National 
Defense Authorization Act for Fiscal Year 1997 (S. Rept. 104-
267), the committee noted the efforts of the Joint Chiefs of 
Staff to bring order to the terminology of aircraft inventory 
management, and encouraged the long overdue standardization of 
reporting.
    The committee believes that such changes could ultimately 
result in a streamlined budget review process, both for the 
administration and the Congress. Accordingly, the committee 
recommends a provision to implement new aircraft budget 
exhibits.

Section 1038. Disposal of excess materials.

    The committee is concerned with the recent reports 
identifying problems within the Department of Defense system to 
sell or otherwise dispose of excess materials. These reports 
outline aprocess that fails to properly demilitarize weapons 
before selling them to the public, adequately safeguard classified 
material, and prevent the theft of valuable equipment. Therefore, the 
committee recommends a provision that would require the Secretary of 
Defense to submit a report to the Congress outlining the actions 
required to ensure that the Department better manages the disposal 
system so as to eliminate, or at least minimize, the problems.

Section 1039. Review of former spouse protections.

    The committee recommends a provision that would require the 
Secretary of Defense to conduct a comprehensive review of the 
Uniformed Services Former Spouse Protection Act. The review 
must include other laws affecting Federal civil service 
retirement and current civil practices regarding division of 
retirement or pensions in order to access whether the Uniformed 
Services Former Spouse Protection Act should be amended. The 
recommended provision requires the report to be provided to 
Congress by September 30, 1998.

Section 1040. Completion of GAO reports for Congress.

    The committee is disappointed by the way the General 
Accounting Office (GAO) prioritizes its work, which indicates a 
lack of responsiveness to the concerns of Congress. Over the 
past year, the GAO has performed numerous self-initiated audits 
while seemingly relegating those requested by members of 
Congress to a lower priority. Therefore, the committee 
recommends a provision that would require the Comptroller 
General of the United States to certify to Congress that all 
audits, evaluations, other reviews, and reports requested by 
Congress or required by law are complete prior to the 
initiation of any audits, evaluations, other reviews, and 
reports that were not required by Congress.

                       SUBTITLE E--OTHER MATTERS

Section 1051. Psychotherapist-patient privilege in the Military Rules 
        of Evidence.

    The committee recommends a provision that would require the 
Secretary of Defense to submit to the President an amendment to 
the Military Rules of Evidence recognizing the evidentiary 
privilege regarding disclosure by a psychotherapist of 
confidential communications between a patient and the 
psychotherapist. The Secretary of Defense must submit such an 
amendment within 90 days of enactment of the National Defense 
Authorization Act for Fiscal Year 1998 or by January 1, 1998, 
whichever is later. The committee expects that, in general, the 
evidentiary privilege will be limited to family members. The 
Secretary may prescribe circumstances under which the privilege 
may be waived for any beneficiary of the Military Health Care 
System.

Section 1052. National Guard Civilian Youth Opportunities Pilot 
        Program.

    The committee recommends a provision that would extend the 
authorization for the National Guard Civilian Youth 
Opportunities Pilot Program until September 30, 1998. The 
recommended provision limits the number of programs to 15, 
limits the amount which may be obligated in support of the 
program during fiscal year 1998 to $20.0 million, and requires 
non-Federal funding to match the Federal Government 
contribution to the program in each state.
    The statement of managers accompanying the conference 
report on S. 1124 (H. Report 104-450) made it very clear that 
the 18-month extension of the authority to conduct the National 
Guard Youth Opportunities Pilot Program was to be used to 
develop non-Department of Defense sources of funding to 
continue operation after August 1997. The Department of 
Defense, the National Guard Bureau, nor the states which desire 
to maintain this program have developed non-Department of 
Defense sources of funding. The committee intends, by 
authorizing an additional year, that the Assistant Secretary of 
Defense for Reserve Affairs and the National Guard Bureau 
notify the participating states of the committee's intent and 
to assist, as appropriate, in transitioning this program from 
Department of Defense funding.

Section 1053. Protection of Armed Forces personnel during peace 
        operations.

    As a result of problems experienced in fielding adequate 
troop protection equipment during Operation Joint Endeavor and 
other contingencies, the committee recommends a provision that 
would require the Secretary of Defense to identify troop 
protection equipment that would be specifically useful for 
peace operations, to identify shortfalls in such equipment, to 
establish procedures for the services to more readily share 
such equipment, and to establish a single point of contact 
within DOD to monitor and ensure proper allocation of this 
equipment.

Section 1054. Limitation on retirement or dismantlement of strategic 
        nuclear delivery systems.

    The committee continues to support the Department of 
Defense policy of remaining at Strategic Arms Reduction Treaty 
(START I) levels of strategic forces until START II enters into 
force. Therefore the committee recommends a provision that 
would preclude the unilateral reduction of certain strategic 
delivery systems. The provision also prohibits early 
deactivation measures, such as warhead removal, unless the 
Secretary of Defense meets certain requirements as specified in 
the provision. Finally, the provision includes a requirement 
for the Secretary of Defense to prepare a plan for the 
contingency sustainment of a START I force beyond 1998, should 
START II not enter into force by 2004.

Section 1055. Acceptance and use of landing fees for use of overseas 
        military airfields by civil aircraft.

    The committee recommends a provision that would authorize a 
military service to accept payments for the use of foreign-
based military airfields by civil aircraft and to use those 
payments for the operation and maintenance of the airfield.

Section 1056. One-year extension of international nonproliferation 
        initiative.

    The committee recommends a provision that would extend the 
authority of the Department of Defense to provide support to 
the United Nations Special Commission (UNSCOM) on Iraq through 
the end of fiscal year 1998 and would provide the Department 
with authority to exceed the levels authorized in fiscal year 
1998 for DOD support to UNSCOM in the event of a significant 
unforeseen development. In that event, the Secretary of Defense 
would be required to notify the congressional defense 
committees in writing, prior to providing assistance that would 
exceed the levels authorized for DOD support. However, if the 
Secretary of Defense determines that prior notification of such 
action is not possible, the Secretary must notify the 
congressional defense committees of his actions no later than 
15 days after the date the additional assistance was provided.

Section 1057. Assistance for facilities subject to inspection under the 
        Chemical Weapons Convention.

    The budget request included $315.0 million in the 
procurement, operations and maintenance, and research and 
development accounts for the Department of Defense and the 
military services for implementation of arms control 
agreements. The budget request for these accounts is based on 
anticipated dates of implementation of the various arms control 
treaties.
    The committee recommends a reduction of $10.0 million of 
the budget request in the operations and maintenance account 
for the On-Site Inspection Agency and a $10.0 million reduction 
of the budget request for the Defense Special Weapons Agency 
(DSWA) for the verification demonstration technology program 
(PE63711H). Due to possible changes in the assumptions on the 
dates of entry into force of the arms control treaties, it is 
the intention of the committee to review the budget request 
during the conference between the House of Representatives and 
the Senate.

Chemical Weapons Convention

    On April 24, 1997, the Senate provided its consent to 
ratification of the Chemical Weapons Convention (CWC), and the 
Convention entered into force on April 29, 1997. Condition 21 
of Senate Executive Resolution 75, the CWC resolution of 
ratification, expressed the sense of the Senate that the 
Department of Defense should have authority to provide 
assistance to any facility in the United States that is subject 
to a routine inspection, or the object of a challenge 
inspection, under the CWC.
    The committee recommends a provision that would require 
reimbursement by the National Authority to the On-Site 
Inspection Agency (OSIA) for assistance it provides to 
facilities in the United States (for which it has no funds) 
that are the object of routine or challenge inspections under 
the CWC.
    Article X of the CWC requires each State Party to the 
Convention to provide assistance through the Organization for 
the Prohibition of Chemical Weapons (OPCW). That assistance can 
be provided in one or more of three ways: a State Party may 
contribute to a voluntary fund; a State Party may reach 
agreement with the OPCW on specific assistance that it would 
provide; or a State Party may declare the kind of assistance it 
might provide, in the event assistance is requested against a 
chemical weapons use or threat. The declaration of which type 
of assistance a State Party intends to provide must be made 
within 180 days after the CWC enters into force.
    Prior to the Senate providing its consent to ratification 
of the CWC, agreement was reached on Condition 15 which would 
prohibit the United States from contributing to the voluntary 
fund or providing any assistance to any State Party which is 
not eligible for assistance under chapters 2 and 4 of part II 
of the Foreign Assistance Act of 1961, other than medical 
treatment and antidotes.
    The committee requests the President to provide it with a 
copy of the declaration the U.S. submits pursuant to Article X, 
paragraph 7(c). Additionally, the committee directs that it be 
notified in writing whenever assistance is provided pursuant to 
Article X. The notification should include information on the 
specific incident which required the provision of assistance 
the cost of the assistance provided, the source of the funds 
and the impact on resources available to U.S. military forces 
for defense against the use of chemical weapons or agents.

Emergency health care for OSIA inspectors

    The committee has learned of cases where cash or credit 
card deposits for medical services have been required of 
military and civilian personnel assigned to OSIA participating 
in arms control inspections overseas, prior to the receipt of 
medical services. The mission of the On-Site Inspection Agency 
requires the frequent travel of military and civilian personnel 
assigned to the agency to many countries in the area of the 
former Soviet Union, including Russia, Ukraine, Belarus, and 
Kazakstan, as well as former Warsaw Pact nations. In an earlier 
section of the committee's report, the committee recommends a 
provision that would provide the Secretary of Defense authority 
to pay out of funds available to the OSIA for emergency medical 
health care costs of military and civilian personnel assigned 
to the On-Site Inspection Agency while participating in arms 
control inspections overseas.

Section 1058. Sense of Senate regarding the relationship between 
        environmental laws and United States' obligations under the 
        Chemical Weapons Convention.

    (See report language in Section 107.)

Section 1059. Sense of Congress regarding funding for reserve component 
        modernization not requested in the annual budget request.

    The committee recommends a provision that would require, to 
the maximum extent practicable, the Congress to consider 
authorization for the appropriation of funds for reserve 
component modernization activities not in the budget request, 
only if:
          (1) there is a Joint Requirements Oversight Council 
        (JROC) validated requirement for the equipment;
          (2) the equipment is included in the modernization 
        plan of the military reserve component department 
        concerned and is incorporated into the Future Years 
        Defense Program (FYDP);
          (3) the equipment is consistent with employment and 
        use of reserve component forces;
          (4) the equipment is necessary for reasons of U.S. 
        national security; and
          (5) the funds can be obligated in that fiscal year.
    It is also important that the Congress consider the views 
of the Chairman, Joint Chiefs of Staff, on whether the proposed 
procurement is necessary for U.S. warfighting plans. The 
provision will ensure that the Congress considers all relevant 
factors in deciding how to allocate available resources.

Section 1060. Authority of Secretary of Defense to settle claims 
        relating to pay, allowances, and other benefits.

    The committee recommends a provision that would provide the 
Secretary of Defense authority, upon request of a service 
secretary, to waive the time limits in the case of a claim for 
pay and allowances up to a maximum of $25,000. The recommended 
provision modifies the authority granted by section 607 of the 
National Defense Authorization Act for Fiscal Year 1997. The 
recommended provision clarifies the fiscal year 1997 provision 
to ensure that the Department of Defense has adequate authority 
to address these claims. The committee strongly urges the 
Secretary of Defense, upon enactment, to pay the claims 
expeditiously.

Section 1061. Coordination of access of commanders and deployed units 
        to intelligence collected and analyzed by the intelligence 
        community.

    The committee recommends a provision that would require the 
Secretary of Defense report to the Congress regarding the 
specific steps taken to enhance the coordination of operation 
intelligence for combattant commanders and deployed units.
    The committee believes that appointment of a Special 
Assistant to the Deputy Secretary of Defense for Gulf War 
Illnesses and the appointment of a Special Assistant the 
Director of Central Intelligence will result in significant 
contributions to the government's efforts to address the 
medical condition of our suffering Persian Gulf veterans as 
well as the numerous questions surrounding the possible causes 
of Gulf War illnesses. Although the committee remains concerned 
that these appointments have taken place over five years after 
the end of the war and the initial complaints by Persian Gulf 
veterans, the committee looks forward to working with these 
representatives of the executive branch in the pursuit of the 
truth regarding this difficult issue.
    In hindsight, it has become increasingly clear that 
coordination within the intelligence community, within the 
Department of Defense, and between the intelligence community 
and the Department of Defense during and after the Persian Gulf 
War was inadequate. As a result, intelligence regarding 
chemical weapons that should have been available was not 
available to operational units that would have benefitted from 
that information during the conduct of operations and after the 
cease-fire.

Section 1062. Protection of imagery, imagery intelligence, and 
        geospatial information and data.

    The committee is concerned about the possibility that 
adversaries or others hostile to the United States could 
potentially convert certain forms of unclassified imagery data 
to uses that threaten U.S. national security. The committee 
recommends a provision that would amend sections 455 and 457 of 
title 10, United States Code, to clarify the authority of the 
Secretary of Defense to permit selective releases of geospatial 
information representing little military value while protecting 
the most sensitive information.

Section 1063. Protection of air safety information voluntarily provided 
        by a charter air carrier.

    The committee recommends a provision that would exempt from 
disclosure under any other provision of law safety information 
voluntarily provided by an air carrier under contract with the 
Department of Defense for the charter air transportation of 
members of the armed forces. Section 2640 of title 10, United 
States Code, imposes detailed requirements upon such air 
carriers. Among other things, they must pass initial and 
recurring technical evaluations in order to become and remain 
eligible for Department of Defense contracts. The purpose is to 
ensure carriers have the programs and capabilities in place to 
provide safe and reliable airlift services to the Department of 
Defense. This requires access to a carrier's internal records, 
information, and data that are essential to determining whether 
the carrier meets safety and quality standards. Unfortunately, 
carriers have been increasingly reluctant to provide more 
thanthe minimum amount of information required for regulatory 
compliance based on concerns regarding third party access under the 
Freedom of Information Act. Similar ability to protect voluntarily 
provided safety data was given to the Federal Aviation Administration 
(FAA) and the National Transportation Safety Board (NTSB) in 1996. The 
lack of such express statutory authority in the Department of Defense 
threatens the continuation of essential information-sharing 
arrangements with the FAA and the NTSB. For the Department of Defense 
to effectively carry out its responsibilities under the statute, the 
Secretary of Defense must have the authority to protect such 
voluntarily provided safety related information.

Section 1064. Sustainment and operation of Global Positioning System.

    On March 29, 1996, the President approved a comprehensive 
national policy on the future management and use of the Global 
Positioning System (GPS) and related U.S. Government 
augmentations. The new GPS policy includes the following policy 
guidelines:
          (1) The United States will continue to provide GPS 
        standard positioning service for peaceful civil, 
        commercial and scientific use on a continuous, 
        worldwide basis, free of direct user fees.
          (2) The United States will discontinue the use of GPS 
        Selective Availability (SA) within a decade in a manner 
        that allows adequate time and resources for U.S. 
        military forces to prepare fully for operations without 
        SA.
          (3) The GPS and U.S. Government augmentations will 
        remain responsive to the National Command Authorities.
          (4) The United States will cooperate with other 
        governments and international organizations to ensure 
        an appropriate balance between the requirements of 
        international civil, commercial and scientific users 
        and international security interests.
          (5) The United States will advocate acceptance of GPS 
        and U.S. Government augmentations as standards for 
        international use.
          (6) To the fullest extent possible, the United States 
        will purchase commercially available GPS products and 
        services that meet U.S. Government requirements and 
        will not conduct activities that preclude or deter 
        commercial GPS activities, except for national security 
        or public safety reasons.
          (7) A permanent interagency GPS Executive Board, 
        jointly chaired by the Departments of Defense and 
        Transportation, will manage the GPS and U.S. Government 
        augmentations. Other departments and agencies will 
        participate as appropriate.
    The committee endorses these policy guidelines. The 
committee believes that the new policy appropriately balances 
the needs of U.S. national security with civil and commercial 
interests. The committee has consistently urged the Department 
of Defense to develop a plan for the eventual discontinuation 
of Selective Availability while developing capabilities to 
counter hostile exploitation of GPS and assure U.S. military 
access. As such, the committee applauds the requirement in the 
new GPS policy for the Department of Defense to develop such 
capabilities.
    The committee believes that such national security 
protections are possible within a framework that allows 
significantly expanded civil and commercial exploitation of 
GPS. The United States has a unique opportunity to establish an 
international framework that furthers U.S. national goals to 
promote national security, public safety, and ultimately to 
ensure a level playing field for fair market competition 
worldwide. In order to satisfy these goals, a long-term, stable 
and predictable commitment to the U.S. GPS is essential. In 
order to secure long-range U.S. leadership in the GPS 
marketplace, it is critical to promote international acceptance 
of GPS and GPS-related regional augmentations, as global 
standards. This will mitigate the proliferation of multiple 
technical standards that can be used as non-tariff barriers to 
U.S. exports.
    The committee recommends a provision that would place in 
statute the March 1996 presidential policy on GPS. This 
provision represents a clear endorsement of U.S. policy and 
strengthens the U.S. Government's ability to negotiate 
favorable agreements regarding GPS standards and related 
matters.

Section 1065. Law enforcement authority for special agents of the 
        Defense Criminal Investigative Service.

    The committee recommends a provision that would codify and 
assimilate existing statutory and regulatory law enforcement 
authority for special agents of the Defense Criminal 
Investigative Service (DCIS). This authority includes: the 
carrying of firearms; the execution and service of warrants or 
other process issued under Federal authority; and warrantless 
arrests for Federal felony offenses. These agents presently 
have statutory authority to carry firearms under delegation 
from the Secretary of Defense. (10 U.S.C. 1585). Under the 
Uniform Code of Military Justice, they may apprehend personnel 
of the armed forces. Under regulations issued by the Attorney 
General, and the Military Rules of Evidence, they may apply for 
and execute search warrants. While they presently have no 
statutory authority to make civilian arrests, they have done so 
since 1991 under annual blanket designation as Special Deputy 
U.S. Marshals by the Attorney General.
    The committee intends that the authorities codified in this 
provision be exercised in accordance with applicable 
regulations and guidance issued by the Secretary of Defense and 
by the Attorney General. If this provision is enacted, proposed 
guidelines should be submitted by the Department of Defense 
Inspector General (DOD/IG) to the Attorney General for approval 
in accordance with the provision as expeditiously as possible.
    DCIS is the criminal investigative arm of the DOD/IG. As 
the DOD/IG has broad authority under the Inspector General Act 
of 1978 to investigate matters related to DOD programs 
andoperations, DCIS has correspondingly broad criminal investigative 
responsibilities. While the bulk of its work has been in the area of 
procurement fraud, it often conducts joint investigations with non-
Defense agencies such as the Federal Bureau of Investigation, the Drug 
Enforcement Administration, and the Customs Service. The committee 
recognizes that DCIS should have clear statutory law enforcement 
authority commensurate with its broad investigative authority, and 
accordingly recommends such a provision.

Section 1066. Repeal of requirement for continued operation of the 
        Naval Academy dairy farm.

    The committee recommends a provision that would repeal 
subsection (a) of section 810 of the Military Construction Act 
of 1968 (Public Law 90-110) which required the Naval Academy to 
operate a dairy farm. Subsection (b), which prohibits the Naval 
Academy from declaring the land excess or selling the property, 
remains in effect. The recommended provision repeals the 
requirement to operate a dairy; however, the Naval Academy may 
continue to operate the dairy farm.

Section 1067. POW/MIA intelligence analysis cell.

    The committee welcomes the decision by the President to 
require the preparation of a Special National Intelligence 
Estimate (SNIE) on the Vietnam POW/MIA issue, and to ensure 
that collection requirements pertaining to the POW/MIA issue 
remain a high priority for the U.S. intelligence community. The 
committee is troubled, however, by the lack of a qualified 
cadre of intelligence analysts in the intelligence community 
capable of supporting the preparation of this SNIE. Since a 
National Intelligence Estimate, by definition, cannot be 
prepared by any single federal agency, it is incumbent upon the 
Director of Central Intelligence (DCI) to assemble the 
requisite expertise to support this effort and to provide 
intelligence analysis support to all affected federal agencies. 
The committee is concerned that if the Department of Defense 
appears to be preparing its own SNIE, the Department may be 
viewed as politicizing the intelligence process. Therefore, the 
committee recommends a provision that would require the DCI to 
establish a POW/MIA Intelligence Analysis Cell to support the 
preparation of the SNIE and to provide intelligence support to 
all affected federal agencies. The committee does not intend 
that functions of the Department of Defense POW/MIA Office be 
transferred to this new organization. The committee does, 
however, encourage any cooperative efforts between the 
intelligence analysis cell and the Department of Defense POW/
MIA Office that might be agreed upon between the Secretary of 
Defense and the DCI.

Section 1068. Protection of employees from retaliation for certain 
        disclosures of classified information.

    The committee recommends a provision that would amend the 
Whistleblower Protection Act of 1989 (WPA) to provide a 
balanced, limited protection to Executive Branch employees who 
disclose classified information to the Congress in the course 
of informing Congress of violations of law or policy, or 
mismanagement, waste, danger to public health, or one of the 
other factors listed in 5 U.S.C. 2302(b)(8)(A). Under this 
provision, the employee must reasonably believe that the 
information provided ``direct and specific evidence'' of a 
violation of law or one of the other listed factors. Moreover, 
the permissible disclosure to Congress would be limited to 
members of the committee having primary oversight over the 
agency to which the information related, a member authorized to 
receive information of the type disclosed, or an employee of 
Congress or the executive branch who holds the proper clearance 
for access to the information disclosed.
    In the WPA, Congress attempted to protect government 
employees from reprisal for disclosing information concerning 
violations of law, rule, regulation, gross mismanagement, gross 
waste of funds, abuse of authority, or substantial and specific 
danger to public health or safety. The WPA largely exempts from 
its protection the disclosure of classified information. The 
WPA does make an exception for disclosures of such information 
to an agency inspector general or to the Special Counsel, the 
official charged with the responsibility for protecting the 
civil service merit system. The committee believes that changes 
made by this provision strike the proper balance.

Section 1069. Applicability of certain pay authorities to members of 
        the Commission on Service Members and Veterans Transition 
        Assistance.

    The committee recommends a provision that would exempt 
retired federal employees and retired military personnel who 
have been appointed as members of the Commission on 
Servicemembers and Veterans Transition Assistance from 
limitations pertaining to receiving Federal pay while 
concurrently receiving a Federal retirement annuity.

Section 1070. Transfer of B-17 aircraft to museum.

    The committee recommends a provision that would authorize 
the Secretary of the Air Force to transfer the B-17 aircraft 
known as Picadilly Lilly to the Planes of Fame Museum in Chino, 
California. The provision would further require that before the 
aircraft can be transferred, the Air Force must ensure that it 
is properly demilitarized, the museum agrees it will not 
transfer the aircraft to a third party without the approval of 
the Air Force, and the museum would fully indemnify the United 
States from any liabilities connected to the conveyance of the 
aircraft. The Picadilly Lilly, which has been in the possession 
of the museum since 1959, is in need of repairs. During this 
period of constrained budgets, the Air Force does not have 
sufficient funding to provide the needed maintenance. 
Furthermore, before the museum can expend the resources to 
repair the aircraft, it must have clear title. Therefore, the 
committee believes that the most appropriate course of action 
is to transfer ownership of the aircraft to the museum, so that 
it can receive the necessary repairs in order to ensure that 
future generations have access to observe this valuable piece 
of military history.

Section 1071. Five-year extension of Aviation Insurance Program.

    The committee recommends a provision that would extend for 
a period of five years the authority of the Secretary of 
Transportation to provide insurance and reinsurance to 
commercial air carriers when necessary to carry out the foreign 
policy of the United States. This extension is intended to 
maintain stability for the Civil Reserve Air Fleet program.

Section 1072. Treatment of military flight operations.

    The Department of the Air Force experienced a significant 
delay in obtaining the Military Operational Airspace (MOA) 
sought for conducting military flights and training in Alaska. 
Some of the delay was the result of an unprecedented assertion 
by the Federal Aviation Administration (FAA) that section 4(f) 
of the Department of Transportation Act of 1966 (49 U.S.C. 
303(c)) applies to military airspace proposals. The Department 
of the Air Force has maintained that section 4(f) does not 
apply to military airspace actions.
    Specifically, section 4(f) requires the Department of 
Transportation to review transportation programs or projects 
that use parks, refuges, or historic sites and to determine 
that no alternative to the public land use is available and 
that harm to the public land is minimized. Review under section 
4(f) is similar to the analysis conducted under the National 
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321). The 
difference between section 4(f) and NEPA is one of statutory 
scope. NEPA requires the examination of the full range of 
environmental impacts related to major federal actions. Section 
4(f) analysis is triggered by use of certain lands, without 
regard to impact. The application of NEPA and section 4(f) 
results in unnecessary overlap.
    In relation to the Alaska MOA, the Department of the Air 
Force expended significant effort and funds over a three year 
period to comply with the NEPA. Before the airspace proposal 
could go forward, the NEPA process had to address the concerns 
of many environmental interest groups and ``stakeholders'' in 
Alaska, which resulted in the crafting of a delicate 
compromise.
    Recently, the Secretary of the Air Force signed the Record 
of Decision (ROD) for the Alaska MOA, the FAA concurred with 
the ROD, and the proposal was approved. However, the FAA 
approved the proposal based on its conclusion that the detailed 
NEPA analysis of the Alaska proposal met section 4(f) 
requirements. The FAA continues to maintain that, in addition 
to NEPA, section 4(f) analysis would be required for all future 
military airspace proposals.
    The FAA application of section 4(f) to military airspace 
proposals is not consistent with the congressional intent 
associated with the enactment of the Transportation Act of 
1966. It is this committee's view that military airspace 
proposals for national security-related activities are not a 
``transportation program or project'' to which section 4(f) 
applies. In addition, there is no basis for concluding that 
military overflights amount to a use of the types of public 
land that section 4(f) was intended to protect. Finally, NEPA 
analysis ensures consideration of environmental impacts of 
military airspace actions, and it is neither reasonable or cost 
effective to require section 4(f) analysis when there is no 
factual, legal, or historical basis for its application to such 
actions.

Section 1073. Naturalization of foreign nationals who served honorably 
        in the Armed Forces of the United States.

    The committee recommends a provision that would modify the 
Immigration and Naturalization Act, title 8, United States 
Code, to permit foreign national service members who reenlist 
on board U.S. public vessels to qualify for naturalization 
without regard to the location of the vessel. The current 
Immigration and Naturalization Service practice is to recognize 
only those reenlistments which occur on board U.S. vessels 
located in the territorial waters of the United States as 
qualifying for naturalization under section 1440 of title 8, 
United States Code. The recommended provision would be 
retroactive to cover those foreign nationals who reenlisted on 
board U.S. vessels since January 1, 1990.

Section 1074. Designation of Bob Hope as honorary veteran.

    The committee recommends a provision that would designate 
Mr. Bob Hope as an honorary veteran of the Armed Forces of the 
United States. The committee recognizes that Bob Hope has 
contributed many years of service to enhancing the morale and 
welfare of members of the armed forces of the United States. He 
has traveled to virtually every post, camp, and station where 
military personnel are assigned overseas, including those in 
war zones, bringing entertainment, laughter, cheer, and a touch 
of home, sometimes at great personal risk.
    Thanks for the memories, Bob.

                        OTHER ITEMS OF INTEREST

Airborne strategic command and control

    Given the downsizing of the U.S. strategic command and 
control system, the Navy's E-6 aircraft are an increasingly 
vital asset. E-6A/B will become even more critical as these 
aircraft take on additional missions. The committee believes 
that it is essential that attention to the E-6 system, 
operations, and infrastructure be assiduous to ensure this 
critical asset does not become less ready or capable. The 
committee expects that the Secretary of Defense will ensure 
continued well-coordinated programmatic and high-priority 
operations and infrastructure support to the Navy's E-6 force 
to ensure the survivability and robustness of the U.S. nuclear 
command and control system.

Commercial satellite communications

    The committee has consistently urged the Department of 
Defense to leverage the commercial satellite communications 
(SATCOM) market to help reduce the cost of satellite 
communications. The committee recognizes that the uses to which 
DOD may put the commercial market are limited (due to landing 
rights, protection, and survivability issues) if DOD is 
relegated to the role of simply executing short-term leases for 
existing services. At the same time, the committee believes 
that the substantial investments being made by the private 
sector in new commercial SATCOM services offer tremendous 
potential for satisfying certain DOD SATCOM requirements. The 
Department's recent effort under the Defense Information 
Systems Agency to modify an emerging mobile satellite service 
to leverage it to better support the Department's high priority 
point-to-point communications needs represents progress toward 
greater military-commercial cooperation. Over the next several 
years, the commercial sector will launch and deploy several new 
and innovative low, medium, and geostationary earth orbiting 
SATCOM systems. In addition, there are several new high data 
rate global SATCOM systems that have been filed with the 
Federal Communications Commission. It is imperative that DOD 
consider all these options as candidates for satisfying a 
number of SATCOM requirements.
    Given the limited funding available in the future for 
satisfying the Department's SATCOM requirements, the Department 
must consider new and innovative ways of acquiring these 
systems. DOD should consider not only direct acquisitions, but 
also investment strategies that the commercial world finds so 
cost effective, such as approaches where DOD forms joint 
ownership with the commercial sector.
    Several of the SATCOM services that DOD is considering, 
such as Global Broadcast, mobile wide-band, paging, and hand-
held point-to-point, are similar to emerging services offered 
in the commercial sector. But without some modifications to 
these commercial services and a long-term government 
commitment, it is unlikely that DOD will be able to leverage 
effectively this capability. At the same time, the committee is 
aware that there may be statutory, policy, and regulatory 
impediments to the Department's use of these commercial systems 
to meet military needs. The committee believes that DOD should 
move expeditiously to implement strategies to exploit 
commercial business practices. The committee directs the Under 
Secretary of Defense for Acquisition and Technology to submit a 
report to the congressional defense committees by February 15, 
1998, identifying any such impediments and recommending needed 
changesto remove these obstacles. If opportunities to exploit 
such commercial practices arise prior to submittal of the fiscal year 
1999 budget request, the committee would consider a reprogramming to 
cover unbudgeted costs.

Department of Defense Education Technology Initiative (DoDETI)

    The committee believes the Department of Defense Education 
Activity (DoDEA) has the potential to make DOD schools a 
national model of excellence in the use of technology in K-12 
education. This initiative would require the integration of 
national education standards, including tests for 4th and 8th 
grades, in all classrooms and should capitalize on the use of 
instructional products that are or will become available in the 
commercial marketplace.
    The Secretary of Defense is authorized to establish an 
Education Technology Office with its own program element, to 
direct and coordinate the integration of technology in the 
classroom. The committee expects that this office would 
oversee: (1) the development of plans for the use of 
instructional software and for a comprehensive and integrated 
instructional information system; (2) the establishment of 
criteria for evaluating instructional software based on 
national education standards; (3) the development of procedures 
for evaluating commercially available software; (4) the 
training of teachers to evaluate, select, and use instructional 
software; and (5) the expansion of computer access to all 
schools and classrooms.
    Of funds authorized for appropriation under Operations and 
Maintenance, Defense Wide (0100D 150), $10.0 million is 
authorized for this program.

Department of Defense space management

    The committee continues to support Department of Defense 
efforts to consolidate Office of the Secretary of Defense (OSD) 
policy and acquisition oversight functions. The Office of the 
Deputy Under Secretary of Defense (DUSD) for Space, the Joint 
Space Management Board (JSMB), and the DOD Space Architect have 
each played a significant role in ensuring a sharper focus on 
our national security space programs. The committee has become 
concerned, however, that this new organizational structure has 
begun to duplicate functions performed by the military services 
and the National Reconnaissance Office (NRO). The committee has 
always supported the concept of a single focal point for space 
policy in OSD, but does not believe that this is a mandate for 
replicating functions properly performed by the services and 
the NRO's research, development, and acquisition authorities. 
The committee is concerned that the Office of the DUSD (Space) 
may have grown beyond what is required for an office engaged 
merely in oversight activities.
    The committee encourages the Task Force on Defense Reform, 
commissioned by the Secretary of Defense, to evaluate the 
current space oversight structure in the Office of the 
Secretary of Defense and propose ways of improving space 
management. Additionally, the committee directs the Secretary 
of Defense to conduct a study of this issue and submit a report 
to the congressional defense committees by February 15, 1998. 
If the Task Force on Defense Reform provides recommendations on 
this topic to the Secretary in time, the Secretary shall 
include a response to these recommendations in the report.

Department of Defense strategy for curtailing spousal abuse involving 
        members of the Armed Forces

    The committee has noted with interest the ``Study of 
Spousal Abuse in the Armed Forces'' conducted pursuant to the 
National Defense Authorization Act for Fiscal Year 1995 and 
completed in September 1996. The committee recognizes the 
existence of spousal abuse in the armed forces, and thus 
directs the Department of Defense to fully implement the 
strategy as described in the study and to submit this report to 
the congressional oversight committees not later than June 1, 
1998.

Global Positioning System alternate master control station

    The Global Positioning System (GPS) has become or soon will 
be fully integrated into most facets of U.S. military planning 
and operational capabilities. GPS has also been integrated 
significantly into civil and commercial navigation planning. As 
such, the committee recognizes the expanding importance of GPS 
as a national asset, one that is critical to U.S. national 
security and economic interests. However, the committee is 
aware of potential command and control vulnerabilities 
associated with the GPS master control station at Falcon Air 
Force Base, Colorado. The committee understands that GPS is the 
only critical national satellite system that does not have an 
adequate separate and secure backup control station. The 
committee believes that the Department of Defense and the Air 
Force should pursue, as an urgent priority, a secure backup GPS 
system operations facility that is geographically separate from 
the existing facility. Therefore, the committee directs the 
Secretary of the Air Force to proceed in fiscal year 1998 with 
the development of an alternate master control station at a 
location outside the Colorado Springs area. The committee 
expects this new alternate master control station to be 
operational by fiscal year 2001. The committee further directs 
the Secretary of the Air Force to submit a report to the 
congressional defense committees on this issue not later than 
February 15, 1998.

International border security

    The Congress provided authority in the National Defense 
Authorization Act for Fiscal Year 1997 for the Department of 
Defense, in consultation with the Customs Service, to carry out 
a program to assist customs and border guard officials in the 
independent states of the former Soviet Union, the Baltic 
statesand other Eastern European countries in preventing the 
unauthorized transfer and transportation of nuclear, chemical, 
biological and chemical weapons, and related material. The committee 
understands that to date, no funds have been expended, nor has a plan 
been developed or implemented. The committee requests the Secretary of 
Defense to provide a report to Congress within 30 days after enactment 
of this Act on the Department's plan, on a country-by-country basis, to 
implement this program and the initiatives to be carried out in this 
program. In addition, the committee requests the Secretary of Defense 
to include in the report, the necessary certification required by 
section 1424 / of the National Defense Authorization Act for 
Fiscal Year 1997.

Orbital debris and the environmental restoration of space

    Throughout the space age, debris from space launches has 
been accumulating in low earth orbit. This debris can be as 
small as a fleck of paint or as large as a spent rocket motor. 
Since debris can impact spacecraft at speeds up to 17,000 miles 
per hour, there is a growing threat to U.S. military, civil, 
and commercial space systems.
    The committee finds that there is very little quantitative 
understanding of how much risk is posed by this growing debris 
field. Fragments larger than about 150 centimeters can be 
tracked by radar. U.S. Space Command maintains orbital tracks 
on about 7,000 of these objects. But small particles cannot be 
tracked practically by radars. The committee also finds that 
there are no government programs to address the potentially 
serious problem posed by small debris fragments. Although 
modern optical detectors, aided with laser radar, could 
undertake to catalogue this debris, neither the civil nor the 
military sectors propose to do so. In order to ensure that the 
U.S. has data sufficient to understand the scale of this 
problem, the committee directs the Secretary of the Air Force 
to undertake a design study of a system that could catalogue 
and track debris down to 1 centimeter in size out to 1,000 
kilometers in altitude. The committee understands that 
preliminary work on such a system by Phillips Laboratory, Los 
Alamos National Laboratory, and Lawrence Livermore National 
Laboratory indicates that such a system would cost less than a 
few million dollars. The committee expects the design study to 
be coordinated among these laboratories, and to include a 
detailed cost estimate. The committee directs the Secretary of 
the Air Force to submit the design study to the congressional 
defense committees by February 15, 1998.

Safety of strategic nuclear forces

    The committee is concerned by recent reports regarding the 
safety of strategic nuclear forces. Reports regarding safety 
and control of Russia's strategic command and control are 
particularly troubling. Additionally, the committee is aware 
that a number of non-governmental organizations and individuals 
have asserted that the alert posture of U.S. strategic nuclear 
forces poses certain risks. Therefore, the committee directs 
the Secretary of Defense, in consultation with the Director of 
Central Intelligence, to submit a report on these matters to 
the congressional defense committees by February 15, 1998. The 
report should include an assessment of the safety and control 
of the strategic nuclear forces of all countries possessing 
such forces. The report should also include a description of 
measures that the Secretary intends to pursue to address safety 
problems identified with regard to U.S. strategic forces. The 
report should be submitted in both unclassified and classified 
forms, as necessary.
           TITLE XI--DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL

Section 1101. Use of prohibited constraints to manage Department of 
        Defense personnel.
    The committee recommends a provision that would require the 
secretaries of the military departments and heads of defense 
agencies to certify directly to the Committee on Armed Services 
of the Senate and the National Security Committee of the House 
of Representatives that the civilian workforce under their 
jurisdiction is not and has not during the preceding six months 
been the subject of any constraint or limitation in terms of 
man years, full-time equivalent positions, or maximum number of 
employees.
    Section 129 of title 10, United States Code, provides that 
the management of civilian employees in the Department of 
Defense shall not be the subject of any constraint or 
limitation in terms of man years, full-time equivalent 
positions (FTEs), or maximum number of employees. The statement 
of managers accompanying the National Defense Authorization Act 
for Fiscal Year 1996 provided specific rationale for Congress' 
decision that Department of Defense civilian employees should 
not be managed by full-time equivalents or any other euphemism 
for full-time equivalents.
    The Office of the Secretary of Defense has continued, 
during 1997, to ignore the direction of the Congress and, in 
continuing to manage by FTEs, has chosen to maintain that the 
Department's FTE ceilings are somehow correlated with the 
workload of the military departments and defense agencies. The 
committee believes that this reliance on management by FTEs is 
an unwise effort to harvest near-term savings from the civilian 
personnel accounts while obscuring the fact that the Department 
of Defense has no means to measure workload or civilian 
personnel requirements. Additionally, such outdated management 
techniques destroy initiative, eliminate managerial 
flexibility, and result in activities turning away or 
outsourcing work for which funds are available, but for which 
sufficient FTEs have not been allocated.
    The required certification is due February 1, 1998, and 
every six months thereafter, and shall include a description of 
how the civilian work force is managed as well as a detailed 
description of the analytical tools used to determine civilian 
work force requirements during the preceding six months.
Section 1102. Employment of civilian faculty at the Marine Corps 
        University.
    The committee recommends a provision that would permit the 
``Marine Corps Command and Staff College'' to be referred to as 
a school of the Marine Corps University. This designation would 
permit the assignment of civilian faculty to the Marine Corps 
Command and Staff College.
Section 1103. Extension and revision of voluntary separation incentive 
        pay authority.
    The committee recommends a provision that would extend the 
authority for the Voluntary Separation Incentive Pay Program 
for the Department of Defense until January 1, 2002. The 
committee believes that the judicious use of this authority can 
be an important part of the Department of Defense's continuing 
efforts to reduce the size of the workforce without resorting 
to involuntary separation.
Section 1104. Repeal of deadline for placement consideration of 
        involuntarily separated military reserve technicians.
    The committee recommends a provision that would eliminate 
the time limitation within which involuntarily separated 
military reserve technicians would be given priority placement 
consideration. Therefore, this provision would eliminate the 
requirement to artificially create positions for separated 
military reserve technicians, and clarify a change to the law 
provided by section 1037 of the National Defense Authorization 
Act for Fiscal Year 1996.
Section 1105. Rate of pay of Department of Defense overseas teacher 
        upon transfer to General Schedule position.
    The committee recommends a provision that would authorize 
the Secretary of Defense to prescribe regulations to control 
the amount of salary increase awarded to certain overseas 
professional educators who transfer from positions compensated 
under the ``Teaching Pay'' system to positions compensated 
under the ``General Schedule'' pay system.
Section 1106. Naturalization of employees of the George C. Marshall 
        European Center for Security Studies.
    The committee recommends a provision that would permit 
employees of the George C. Marshall European Center for 
Security Studies to qualify for naturalization by waiving the 
permanent residency requirements. This authority previously 
existed for the U.S. Army Russian Institute, which was absorbed 
when theMarshall Center was established in 1994.

                        OTHER ITEMS OF INTEREST

Health plan for nonappropriated fund employees

    The committee supports the efforts of the Department of 
Defense to combine the health plans currently offered by the 
military services to nonappropriated fund employees into one 
uniform plan. The committee is concerned, however, that the 
Department of Defense may be planning to award the initial 
contract for the uniform health plan on a sole-source, non-
competitive basis. In this regard, the committee directs the 
Department to initiate a competitive bidding process for this 
contract.

Leadership

    The committee believes that effective leadership is one of 
the most fundamental keys to success in any professional 
organization. History has shown that the quality of a nation's 
military and civilian leaders can often determine the outcome 
of battle and other critical undertakings.
    Over the past several years, various events in each of the 
four armed services have caused elements of our society to call 
into question, to criticize, and to challenge the basic quality 
of military and civilian leadership in today's armed forces. 
While the committee remains strong in its belief that 
leadership in the American military is second-to-none, the 
committee also realizes that, both on an individual basis and 
at the organizational level, there is always room for 
improvement.
    With that in mind, the committee commends the Department of 
the Navy and, specifically, the Naval Sea Systems Command for 
their efforts to institute ``Principle Centered Leadership'' 
training for senior officers and civilian officials and 
managers. This initiative, which originated in and was 
coordinated by the Human Resources Center of the Naval Sea 
Systems Command (NAVSEA), is an excellent example of the type 
of innovative approach to leadership and management that is so 
important in today's challenging, multi-dimensional work 
environment. This initiative reflects an understanding that 
effective leadership training should be continuous, regardless 
of the grade and position one achieves. This initiative also 
reflects a willingness within the corporate leadership of 
NAVSEA to look beyond the traditional approaches to leadership 
and management in order to find something new, something better 
suited to the talents of today's leaders and the challenges of 
the next century.
    The committee encourages the military and civilian 
leadership of every part of the Department of Defense to take a 
fresh look at the training and development of senior military 
and civilian leaders. Where appropriate, the committee 
encourages the services to reject the status quo in favor of 
innovative, challenging leader development programs that are 
tailored to the specific needs of each individual service and 
service culture and that will help military and civilian 
leaders and managers to develop and to practice the most 
effective leadership skills possible.

Modernization and regionalization of civilian personnel management 
        functions

    In the committee report accompanying the National Defense 
Authorization Bill for Fiscal Year 1996 (H. Rept. 104-112), the 
committee expressed its concern that the consolidation of 
personnel servicing before a modern, standard personnel data 
system and its supporting communications network were in place 
would not result in substantial cost savings without an 
unacceptable degradation in customer service. Additionally, the 
committee expressed its concern that reductions in civilian 
personnel specialists coincided with efforts to modernize and 
regionalize would render the degradation in customer service 
even more probable.
    Information reaching the committee about the implementation 
of the modernization and regionalization programs in 1995 and 
1996 has done little to allay the concerns of the committee. 
The Office of the Secretary of Defense appears to be unwilling 
to describe the status and future of these programs in clear, 
unequivocal terms that facilitate understanding. An example 
would be the term ``Fully Operational Capable'' which is used 
to describe regional service centers that are clearly incapable 
of providing a complete range of intended services to their 
intended customers. In Office of the Secretary of Defense 
parlance, ``Fully Operational Capable'' means providing at 
least some service to all units. Meanwhile, field offices and 
customers report dissatisfaction with the level of customer 
service available.
    The committee is also concerned about the direction, cost, 
and duration of ongoing efforts at San Antonio, Texas, to 
develop and deploy an improved civilian personnel information 
system--that is, the modern, standard personnel data system 
integral to the success of the ongoing regionalization effort. 
The committee was advised that, to save developmental time, the 
new system would be based around commercial off the shelf 
(COTS) software applications. However, it appears that the 
Office of the Secretary of Defense is using over 175 
personnel--many in a costly temporary duty status--to modify 
over 60 percent of the COTS applications. The committee 
questions the choice of COTS applications that require 60-
percent modification if the focus of this effort is to use the 
best business practices of the private sector.
    Finally, the committee is concerned about the number and 
location of regional service centers. Given the relative size 
of the civilian workforce in each if the military departments, 
it is unclear why the Army and Navy require eight and six CONUS 
regional service centers, respectively, while the Air Force 
only requires one.
    The committee recognized early on the tremendous potential 
benefits that could be realized through a rational, 
requirements-driven approach to regionalization and 
modernization free of parochialism and bureaucratic 
aggrandizement. The committee believes that these benefits may 
still be salvageable and urges the leadership of the military 
departments to review their individual departmental efforts and 
to ensure that they are consistent with sound business 
practices and the goal of managing the Department of Defense's 
civilian workforce in the most effective and efficient manner 
possible.
            DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

    The purpose of Division B is to provide military 
construction authorization and related authority to support the 
military departments and defense agencies during fiscal year 
1998. The administration's budget request is reflected in S. 
451, the Military Construction Authorization Act for Fiscal 
Year 1998, as introduced by request. The military construction 
division of this bill, as recommended by the committee, totals 
$9.1 billion in authorization for appropriations for fiscal 
year 1998.
    This authorization provides funding for construction and 
military family housing operations for the military services, 
the Reserve components, the defense agencies, and the North 
Atlantic Treaty Organization Security Investment program. It 
also provides authorization for the Defense Base Closure and 
Realignment account that funds activities associated with the 
1991, 1993, and 1995 base closure recommendations.
Committee Action
    The committee recommends an overall authorization for the 
De partment of Defense military construction program that is 
above the administration's request for fiscal year 1998. For 
fiscal year 1998, the Department of Defense requested 
authorization of appropriations of $4.7 billion for military 
construction and $3.6 billion for family housing construction 
and support. These funding levels represent a reduction of 
approximately $700.0 million from the fiscal year 1997 request. 
The committee recommends $5.3 billion for military construction 
and $3.8 billion for family housing construction and support 
for fiscal year 1998.
    The committee reaffirms its support of the military 
services' efforts to modernize, renovate, and improve aging 
defense facilities and focuses its funding priorities on 
improving quality of life and readiness-related projects for 
the active and Reserve components. Of the $700.0 million added 
to the construction program, more than $218.0 million will fund 
unaccompanied personnel quarters, child development centers, 
dining facilities, education centers and military family 
housing. The funding increase also provides approximately 
$189.0 million for high priority projects submitted by the 
military services that could not be funded in the Department's 
budget request.
    The committee members are hopeful that the increased 
attention to funding for quality of life construction projects 
will enable the military services to expedite the replacement 
and modernization of these antiquated facilities, many of which 
are more than 40 years old and need to be refurbished to meet 
modern standards. The improvement of quality of life is 
essential to the morale of our service members as they endure 
deployment frequencies that exceed those during the height of 
the Cold War.
    The committee notes that the Department is relying on prior 
year savings to fund military construction projects rather than 
including the full funding in the budget request. This trend 
started in the fiscal year 1997 request with $12.0 million and 
has escalated in fiscal year 1998 to over $55.0 million. The 
use of prior year savings denies the services the flexibility 
to fund necessary cost variations and complete projects that 
have justifiable cost increases. The committee denied the use 
of prior year funds and expects the Department to fully fund 
the military construction requests in future budget requests.
    The following table identifies the committee's 
recommendations for fiscal year 1998 military construction and 
family housing construction projects.


Base closure and realignment accounts
    The committee recommends authorization of $2.1 billion in 
fiscal year 1998 for the Defense Base Closure and Realignment 
Account, 1990, that supports the recommendations of the 1991, 
1993, and 1995 Defense Base Closure and Realignment 
Commissions.
    The committee will continue to carefully monitor the 
justification for the construction projects funded within these 
accounts and the other cost elements of these accounts.
    Although funding is not specifically limited to projects 
identified in its budget justification, the Department of 
Defense identified the following construction projects for 
fiscal year 1998 that it plans to fund from these accounts.


                            TITLE XXI--ARMY

                                SUMMARY

    The Army requested authorization of $592,277,000 for 
military construction and $1,291,937,000 for family housing for 
fiscal year 1998. The committee recommends authorization of 
$631,277,000 for military construction and $1,325,852,000 for 
family housing for fiscal year 1998.
Section 2101. Authorized Army construction and land acquisition 
        projects.
    This section contains the list of authorized Army 
construction projects for fiscal year 1998. The authorized 
amounts are listed on an installation-by-installation basis. 
The state list contained in this report is intended to be the 
binding list of the specific projects authorized at each 
location.
Section 2102. Family housing.
    This section would authorize new construction and planning 
and design of family housing units for the Army for fiscal year 
1998.
Section 2103. Improvements to military family housing units.
    This section would authorize improvements to existing units 
of family housing units for fiscal year 1998.
Section 2104. Authorization of appropriations, Army.
    This section would authorize specific appropriations for 
each line item contained in the Army's budget for fiscal year 
1998. This section also provides an overall limit on the amount 
the Army may spend on military construction projects.
Section 2105. Authority to use certain prior year funds to construct a 
        heliport at Fort Irwin, California.
    The committee recommends a provision that would authorize 
the Secretary of the Army to construct a heliport at Fort 
Irwin, California, using funds authorized and appropriated in 
fiscal years 1995 and 1996 for construction of the National 
Training Center Airfield, Fort Irwin, California. The provision 
would make available $20.0 million for the construction of the 
heliport.

                        OTHER ITEMS OF INTEREST

Funding for restoration of Forest Glen Annex, Walter Reed Army Medical 
        Center
    The committee urges the Secretary of the Army to identify 
$9.8 million in fiscal year 1998 for the immediate repair and 
stabilization measures needed at the Forest Glen Annex of 
Walter Reed Army Medical Center. The committee remains 
concerned with the poor and unstable condition of some of the 
buildings at the Forest Glen Annex. The committee urges the 
Secretary to include funding in future budget requests for the 
continued maintenance of this property and ensure that no 
further deterioration occur to this historic facility.

Planning and design, Army

    The committee directs that, of the amount authorized for 
appropriations for Army planning and design, not more than the 
amount indicated for each respective project be directed toward 
the design of: HI: Pohakuloa Training Range, Saddle Road 
Improvement--$2,000,000 and NY: West Point, Gymnasium--
$1,000,000.
                            TITLE XXII--NAVY

                                SUMMARY

    The Navy requested authorization of $540,106,000 for 
military construction and $1,255,437,000 for family housing for 
fiscal year 1998. The committee recommends authorization of 
$610,614,000 for military construction and $1,297,810,000 for 
family housing for fiscal year 1998.
Section 2201. Authorized Navy construction and land acquisition 
        projects.
    This section contains the list of authorized Navy 
construction projects for fiscal year 1998. The authorized 
amounts are listed on an installation-by-installation basis. 
The state list contained in this report is intended to be the 
binding list of the specific projects authorized at each 
location.
Section 2202. Family housing.
    This section would authorize new construction and planning 
and design of family housing units for the Navy for fiscal year 
1998.
Section 2203. Improvements to military family housing units.
    This section would authorize improvements to existing units 
of family housing for fiscal year 1998.
Section 2204. Authorization of appropriations, Navy.
    This section would authorize specific appropriations for 
each line item in the Navy's budget for fiscal year 1998. This 
section also provides an overall limit on the amount the Navy 
may spend on military construction projects.
Section 2205. Authorization of military construction project at 
        Pascagoula Naval Station, Mississippi, for which funds have 
        been appropriated.
    The committee recommends a provision that would authorize 
the Secretary of the Navy, with amounts previously 
appropriated, to construct the West Quaywall Extension at the 
Pascagoula Naval Station, Mississippi, in the total amount of 
$4.9 million.

                        OTHER ITEMS OF INTEREST

Planning and design, Navy
    The committee directs that of the amount authorized for 
appropriations for Navy planning and design not more than the 
amount indicated for each respective project be directed toward 
the design of: MS: Stennis Space Center, War Fighting Center--
$437,000.
                         TITLE XXIII--AIR FORCE

                                SUMMARY

    The Air Force requested authorization of $495,782,000 for 
military construction and $1,083,362,000 for family housing for 
fiscal year 1998. The committee recommends authorization of 
$666,032,000 for military construction and $1,127,917,000 for 
family housing for fiscal year 1998.
    The committee recommends a general reduction of $23,858,000 
in the authorization of appropriations for the Air Force 
military construction account. The general reduction is to be 
offset by management efficiencies and by savings from favorable 
bids, and cancellations of projects due to force structure 
changes. The general reduction shall not cancel any military 
construction authorized by title XXIII of this bill.
Section 2301. Authorized Air Force construction and land acquisition 
        projects.
    This section contains the list of authorized Air Force 
construction projects for fiscal year 1998. The authorized 
amounts are listed on an installation-by-installation basis. 
The state list contained in this report is intended to be the 
binding list of the specific projects authorized at each 
location.
Section 2302. Family housing.
    This section would authorize new construction and planning 
and design of family housing units for the Air Force for fiscal 
year 1998.
Section 2303. Improvements to military family housing units.
    This section would authorize improvements to existing units 
of family housing for fiscal year 1998.
Section 2304. Authorization of appropriations, Air Force.
    This section would authorize specific appropriations for 
each line item in the Air Force's budget for fiscal year 1998. 
This section also would provide an overall limit on the amount 
the Air Force may spend on military construction projects.
Section 2305. Authorization of military construction project at 
        McConnell Air Force Base, Kansas, for which funds have been 
        appropriated.
    The committee recommends a provision that would authorize 
the Secretary of the Air Force, with amounts previously 
appropriated, to construct the Consolidated Education Center at 
McConnell Air Force Base, Kansas, with a total amount of $6.7 
million.
                      TITLE XXIV--DEFENSE AGENCIES

                                SUMMARY

    The Defense Agencies requested authorization of 
$673,633,000 for military construction and $37,674,000 for 
family housing for fiscal year 1998. The committee recommends 
authorization of $680,003,000 for military construction and 
$37,674,000 for family housing.
Section 2401. Authorized Defense Agencies construction and land 
        acquisition projects.
    This section contains the list of authorized Defense 
Agencies construction projects for fiscal year 1998. The 
authorized amounts are listed on an installation-by-
installation basis. The state list contained in this report is 
intended to be the binding list of the specific projects 
authorized at each location.
Section 2402. Military housing planning and design.
    This section would authorize the Secretary of Defense to 
carry out planning and design activities with respect to the 
construction or improvement of military family housing units in 
the amount of $50,000.
Section 2403. Improvements to military family housing units.
    This section would authorize the Secretary of Defense to 
make improvements to existing units of family housing for 
fiscal year 1998 in an amount not to exceed $4,950,000.
Section 2404. Energy conservation projects.
    This section would authorize the Secretary of Defense to 
carry out energy conservation projects.
Section 2405. Authorization of appropriations, Defense Agencies.
    This section would authorize specific appropriations for 
each line item in the Defense Agencies budget for fiscal year 
1998. This section also would provide an overall limit on the 
amount the Defense Agencies may spend on military construction 
projects.
Section 2406. Clarification of authority relating to fiscal year 1997 
        project at Naval Station, Pearl Harbor, Hawaii.
    The committee recommends a provision that would amend the 
table in section 2401 (a) of the Military Construction 
Authorization Act for Fiscal Year 1997, to change the location 
of the Special Operations Command construction project from 
Ford Island, Pearl Harbor, Hawaii, to Naval Station, Pearl City 
Peninsula, Pearl Harbor, Hawaii.
Section 2407. Authority to use prior year funds to carry out certain 
        Defense Agency military construction projects.
    The committee recommends a provision that would authorize 
the Secretary of Defense to use funds appropriated and 
authorized in fiscal year 1995 for life saving improvements at 
McClellan Air Force Base Hospital for the following purposes:
          (1) $3.7 million for the construction of an addition 
        to the Aeromedical Clinic, Anderson Air Force Base, 
        Guam; and
          (2) $6.5 million for the construction of an 
        occupational health clinic, Tinker Air Force Base, 
        Oklahoma.
The provision would make these funds available until October 1, 
2000, or the date for the enactment of an Act authorizing funds 
for military construction for fiscal year 2000, whichever 
occurs later.
Section 2408. Modification of authority to carry out fiscal year 1995 
        projects.
    The committee recommends a provision that would amend 
section 2401 of the Military Construction Authorization Act for 
Fiscal Year 1995, as amended. The provision would authorize an 
increase of funding for the construction of the Chemical 
Demilitarization Facilities at Pine Bluff Arsenal, Arkansas, 
from $115.0 million to $134.0 million, and at Umatilla Army 
Depot, from $186.0 million to $187.0 million, due to cost 
increases resulting from a delay in receiving the appropriate 
permits.
Section 2409. Availability of funds for fiscal year 1995 project 
        relating to relocatable over-the-horizon radar, Naval Station 
        Roosevelt Roads, Puerto Rico.
    The committee recommends a provision that would authorize 
and extend the funds appropriated by the Department of Defense 
Appropriations Act for Fiscal Year 1995, for the construction 
of a relocatable over-the-horizon-radar at Naval Station 
Roosevelt Roads, Puerto Rico. The funds would be available 
until October 1, 1998, or the date of enactment of an Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.
   TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION SECURITY INVESTMENT 
                                PROGRAM

                                SUMMARY

    The Department of Defense requested authorization of 
$176,300,000 for the North Atlantic Treaty Organization 
Security Investment Program for fiscal year 1998. The committee 
recommends $152,600,000.
Section 2501. Authorized NATO construction and land acquisition 
        projects.
    This section would authorize the Secretary of Defense to 
make contributions to the North Atlantic Treaty Organization 
(NATO) security investment program in an amount equal to the 
sum of the amount specifically authorized in section 2502 of 
this bill and the amount of recoupment due to the United States 
for construction previously financed by the United States.
Section 2502. Authorization of appropriations, NATO.
    This section would authorize appropriations of $152,600,000 
as the contribution of the United States to the North Atlantic 
Treaty Organization (NATO) security investment program. The 
committee recommends a reduction of $23,600,000 in budget 
authority based on the anticipated prior year savings and 
recoupments from the NATO Security Investment Program.
            TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES

                                SUMMARY

    The Department of Defense requested a military construction 
authorization of $172,886,000 for fiscal year 1998 for National 
Guard and Reserve facilities. The committee recommends 
authorization for fiscal year 1998 of $492,118,000 to be 
distributed as follows:

                                                                        
                                                                        
                                                                        
Army National Guard...................................      $155,416,000
Air National Guard....................................       193,269,000
Army Reserve..........................................        87,640,000
Air Force Reserve.....................................        34,580,000
Naval and Marine Corps Reserve........................        21,213,000
                                                       -----------------
      Total...........................................       492,118,000
                                                                        

Section 2601. Authorized Guard and Reserve construction and land 
        acquisition projects.
    This section would authorize appropriations for military 
construction for the National Guard and Reserve by service 
component for fiscal year 1998. The state list contained in 
this report is intended to be the binding list of the specific 
projects authorized at each location.
Section 2602. Authorization of Army National Guard construction 
        project, aviation support facility, Hilo, Hawaii, for which 
        funds have been appropriated.
    The committee recommends a provision that would authorize 
the Secretary of the Army, with amounts previously 
appropriated, to add/alter the Army Aviation Support Facility 
at Hilo, Hawaii, in the total amount of $5.9 million.

                        OTHER ITEMS OF INTEREST

Army aviation operating facility, Bethel, Alaska
    The Military Construction Act for Fiscal Year 1995 
authorized for appropriation $6.4 million for the construction 
of an Army aviation operating facility at Bethel, Alaska. The 
committee understands that due to recent deployment of new 
aircraft, changes in building codes and fire suppression 
requirements this project requires additional funding in the 
amount of $4.6 million. Since this additional funding is due in 
part to new mission requirements, the committee directs the 
Secretary of the Army to submit a cost variation report and 
reprogramming request to the congressional defense committees 
to fund the completion of the facility.
Planning and design, Guard and Reserve Forces facilities
    The committee directs that, of the amount authorized for 
appropriations for Army National Guard, Army Reserve, Naval 
Reserve, Marine Corps Reserve, Air National Guard and Air Force 
Reserve construction and land acquisition projects, not more 
than the amount indicated for each respective project be 
directed toward the design of:

                                                                        
                                                                        
                                                                        
Air National Guard:                                                     
OK: Will Rogers ANG Base, Base Supply Complex.........          $350,000
OK: Oklahoma City, Readiness Center...................           497,000
VT: Burlington IAP, Base Supply Complex...............           550,000
Army Reserve:                                                           
AS: Tafuna, Add/Alt Reserve Center....................        $2,000,000
                                                                        

        TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS

Section 2701. Expiration of authorizations and amounts required to be 
        specified by law.
    This section would provide that authorizations for military 
construction projects, repair of real property, land 
acquisition, family housing projects and facilities, 
contributions to the North Atlantic Treaty Organization 
infrastructure program, and National Guard and Reserve projects 
will expire on October 1, 2000 or the date of enactment of an 
Act authorizing funds for military construction for fiscal year 
2001, whichever is later. This expiration would not apply to 
authorizations for which appropriated funds have been obligated 
before October 1, 2000 or the date of enactment of an Act 
authorizing funds for these projects, whichever is later.
Section 2702. Extension of authorizations of certain fiscal year 1995 
        projects.
    This section would provide for selected extension of 
certain fiscal year 1995 military construction authorizations 
until October 1, 1998, or the date of the enactment of an Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

Section 2703. Extension of authorizations of certain fiscal year 1994 
        projects.

    This section would provide for selected extension of 
certain fiscal year 1994 military construction authorizations 
until October 1, 1998, or the date of the enactment of the Act 
authorizing funds for military construction for fiscal year 
1998, whichever is later.

Section 2704. Extension of authorization of fiscal year 1993 projects.

    This section would provide for selected extension of 
certain fiscal year 1993 military construction authorizations 
until October 1, 1998, or the date of the enactment of the Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

Section 2705. Extension of authorizations of certain fiscal year 1992 
        projects.

    This section would provide for selected extension of 
certain fiscal year 1992 military construction authorizations 
until October 1, 1998, or the date of the enactment of the Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

Section 2706. Effective date.

    This section would provide that titles XXI, XXII, XXIII, 
XXIV, and XXVI of this bill shall take effect on October 1, 
1997, or the date of the enactment of this Act, whichever is 
later.
                    TITLE XXVIII--GENERAL PROVISIONS

 SUBTITLE A--MILITARY CONSTRUCTION PROGRAM AND MILITARY FAMILY HOUSING 
                                CHANGES

Section 2801. Increase in ceiling for minor land acquisition projects.
    The committee recommends a provision that would amend 
section 2672 of title 10, United States Code, to increase the 
ceiling for minor land acquisitions from $200,000 to $500,000.
Section 2802. Sale of utility systems of the military departments.
    The committee recommends a provision that would authorize 
the service secretaries to convey all or part of government 
utility systems located on military installations to commercial 
or public utilities. The utilities that may be conveyed 
include, but are not limited to: electrical generation and 
supply; water treatment; water supply; wastewater collection 
and treatment; steam, hot, chilled water generation and supply, 
and natural gas supply. The conveyance would be for fair market 
value, either as a lump-sum payment or as a reduction in 
utility charges, consistent with applicable Federal and State 
laws or regulations, for a period sufficient to amortize the 
monetary value of the utility system, including any conveyed 
real property. Any lump sum payment received would be credited 
to an appropriation available for the purchase of like utility 
services or to an appropriation for the construction of energy 
and water conservation projects or improvements to other 
utility systems at the installation. The provision would waive 
the cost comparison study between civilian and government 
workers required by chapter 146 of title 10, United States 
Code. The secretaries would not be authorized to enter an 
agreement to convey until 21 days after the service secretaries 
submit an economic analysis to the congressional defense 
committees. The committee directs that prior to submission of 
the economic analysis, it be reviewed by the appropriate office 
within the Office of the Secretary of Defense.
Section 2803. Administrative expenses for certain real property 
        transactions.
    The committee recommends a provision that would amend 
chapter 159 of title 10, United States Code, to permit the 
military departments to accept reimbursement for administrative 
expenses incurred in real estate transactions at the request 
and benefit for non-Federal entities. The provision would apply 
to expensesincurred by the exchange of real property, granting 
of easements, and the leasing of government real property. The funds 
received from these transactions would be credited to the 
appropriation, fund, or account from which such expenses were paid. The 
provision would also make a conforming amendment to section 2667(d)(4) 
of title 10, United States Code.

Section 2804. Use of financial incentives for energy savings and water 
        cost savings.

    The committee recommends a provision that would amend 
section 2865 of title 10, United States Code, to authorize the 
Secretary of Defense to credit financial incentives received 
from gas or electric utilities to an appropriation designated 
by the Secretary. The impact of this authority would be 
reflected in the Secretary's annual energy report. The 
provision would also include a conforming amendment.

                      SUBTITLE B--LAND CONVEYANCES

Section 2811. Modification of authority for disposal of certain real 
        property, Fort Belvoir, Virginia.

    The committee recommends a provision that would repeal 
section 2821 of the Military Construction Act for Fiscal Years 
1990 and 1991 as amended by section 2854 of the Military 
Construction Authorization Act for Fiscal Year 1996. These 
provisions would have authorized the conveyance of the parcel 
of real property, including improvements thereon, at Fort 
Belvoir, Virginia, consisting of approximately 820 acres known 
as the Engineer Proving Ground. The committee is dismayed that 
the Army has not reached an agreement on the conveyance of this 
valuable piece of property. The committee directs the Secretary 
of the Army to expeditiously excess this property and dispose 
of it in accordance with the Federal Property and 
Administration Services Act of 1949.

Section 2812. Correction of land conveyance authority, Army Reserve 
        Center, Anderson, South Carolina.

    The committee recommends a provision that would amend 
section 2824 of the Military Construction Authorization Bill 
for Fiscal Year 1997, which authorizes the conveyance of the 
Army Reserve Center, Anderson, South Carolina, to the County of 
Anderson, South Carolina, for educational purposes. The 
provision would make a technical correction to change the 
recipient of the property from the County of Anderson to the 
Board of Education, Anderson County, South Carolina.

Section 2813. Land conveyance, Hawthorne Army Ammunition Depot, Mineral 
        County, Nevada.

    The committee recommends a provision that would authorize 
the Secretary of the Army to convey, without reimbursement, to 
Mineral County, Nevada, approximately 33.1 acres of real 
property and improvements that constitute the Schweer Drive 
Housing Area. The conveyance would be contingent upon the 
County's acceptance of the property subject to such easements 
or rights of way as the Secretary considers appropriate. The 
provision would also require the County to reimburse the United 
States in the event the property is sold within 10 years. The 
reimbursement would be equal to the lesser of:
          (1) the amount of the sale of the property sold; or
          (2) the fair market value of the property sold, 
        excluding the value of any improvements made by the 
        County.

Section 2814. Long-term lease of property, Naples, Italy.

    The committee recommends a provision that would authorize 
the Secretary of the Navy to lease a regional hospital complex 
in Naples, Italy, for no more than 20 years. The authority 
would expire on September 30, 2002.

Section 2815. Land conveyance, Topsham Annex, Naval Air Station, 
        Brunswick, Maine.

    The committee recommends a provision that would authorize 
the Secretary of the Navy to convey, without consideration, to 
the Maine School Administrative District No. 75, Topsham, 
Maine, a parcel of real property, consisting of approximately 
40 acres located at the Topsham Annex, Navy Air Station, 
Brunswick, Maine. The provision would require the district to 
use the conveyed property for educational purposes. It would 
further provide for an interim lease of the property until the 
property is conveyed. As compensation for the lease, the 
district would provide security and maintenance. The provision 
would include a reversion clause in the event that the 
Secretary determines that the conveyed property is not being 
used for educational purposes.

Section 2816. Land conveyance, Naval Weapons Industrial Reserve Plant 
        No. 464, Oyster Bay, New York.

    The committee recommends a provision that would authorize 
the Secretary of the Navy to convey, without consideration, to 
the County of Nassau, New York, all right, title, and interest 
of the United States in and to a parcel of real property 
consisting of approximately 110 acres and improvements 
comprising the Naval Weapons, Industrial Reserve Plant No. 464, 
Oyster Bay, New York. The purpose of the conveyance would be 
for economic development and would include equipment, fixtures, 
and other personal property located on the parcel as the 
Secretary determines not to be required by the Navy. The 
provision would authorize the Navy to enter into an interim 
lease with the County. The County would provide security 
services, fire protection, and maintenance work, as specified 
by the Secretary. The provision would specify that, if the 
Secretary determines within a 5-year period after the 
conveyance that the property is not used in accordance with the 
condition of the conveyance, the property would revert to the 
United States.

Section 2817. Land conveyance, Charleston Family Housing Complex, 
        Bangor, Maine.

    The committee recommends a provision that would authorize 
the Secretary of the Air Force to convey, without 
consideration, to the City of Bangor, Maine, a parcel of real 
property consisting of approximately 19 acres and improvements 
located in Bangor, Maine and known as the Charleston Family 
Housing Complex. The purpose of the conveyance would be for 
economic development. The provision would require the city to 
reimburse the United States in the event the property is sold 
within 10 years. The reimbursement would be equal to the lesser 
of:
          (1) the amount of the sale of the property sold; or
          (2) the fair market value of the property sold, 
        excluding the value of any improvements made by the 
        city.

Section 2818. Land conveyance, Ellsworth Air Force Base, South Dakota.

    The committee recommends a provision that would authorize 
the Secretary of the Air Force to convey, without 
consideration, to the Greater Box Elder Area Economic 
Development Corporation, Box Elder, South Dakota, all right, 
title and interest of the United States in five parcels of real 
property consisting of approximately 234 acres and 
improvements. The parcels included in the conveyance are: the 
Skyway Military Family Housing Area; the Renal Heights Military 
Family Housing Area; the East Nike Military Family Housing 
Area; the South Nike Military Family Housing Area; and the West 
Nice Military Family Housing Area. In regard to the conveyance 
of the Renal Heights Military Housing Area, the Secretary would 
retain that portion of the property for the construction of an 
access road between Ellsworth Air Force Base and an interchange 
on Interstate Route 90.
    The conveyance of these properties would be contingent on: 
(1) that the use of the property comply with the applicable 
provisions of the Ellsworth Air Force Base Air Installation 
Compatible Use Zone Study; and (2) that approximately 20 acres 
and improvement of the Skyway Military Housing Area be conveyed 
to the Douglas School District, South Dakota, for educational 
purposes.
    The provision would include a reversion clause in the event 
the that the Secretary determines that the conveyed property is 
not being utilized in accordance with the conditions and 
purposes of the conveyance.

                       SUBTITLE C--OTHER MATTERS

Section 2831. Disposition of proceeds of sale of Air Force Plant No. 
        78, Brigham City, Utah.

    The committee recommends a provision that would authorize 
the Secretary of the Air Force to use the funds deposited by 
the Administrator of General Services in the account 
established under section 204(h)(2)(A) of the Federal Property 
and Administrative Services Act of 1949 from the sale of Air 
Force Plant 78, Brigham City, Utah, for maintenance and repair 
of facilities, or environmental restoration, at other 
industrial plants of the Air Force. The committee understands 
that these funds are not required for the purpose intended at 
Air Force Plant 78. The committee expects the Secretary of the 
Air Force, as part of the annual request for authorization of 
appropriation, to notify the congressional defense committees 
of the purposes for and locations where these funds were used.

                        OTHER ITEMS OF INTEREST

Report on land use, Navy Air Station, Brunswick, Maine

    The committee recognizes there are initiatives by Federal 
and local agencies for dual commercial and military use of 
Federal property. Dual-use initiatives can be beneficial for 
both the Federal Government and local municipalities by 
maximizing land use at existing military installations. The 
committee believes a dual-use opportunity is feasible at Naval 
Air Station, Brunswick, Maine, and directs the Secretary of the 
Navy to evaluate the feasibility for dual military-civilian use 
and/or conveyance of real property at the Navy Air Station, 
Maine. The evaluation will include the operational impacts, 
financial factors, environmental issues, real estate 
requirements, and budget impacts of dual use or conveyance.
 DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND 
                          OTHER AUTHORIZATIONS

      TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS


         SUBTITLE A--NATIONAL SECURITY PROGRAMS AUTHORIZATIONS

Section 3101. Weapons activities.
    The fiscal year 1998 budget request included $3.6 billion, 
excluding funding for construction projects, for atomic energy 
defense weapons activities, which included $1.4 billion for 
stockpile stewardship activities; $1.8 billion for stockpile 
management activities; and $303.5 million for program 
direction.
    The committee recommends a provision that would authorize 
$4.0 billion, including funding for construction projects, for 
atomic energy defense weapons activities of the Department of 
Energy, which includes $1.7 billion for stockpile stewardship 
activities; $2.0 billion for stockpile management activities; 
and $268.5 million for program direction. The committee 
recommends a general reduction of $10.0 million that would be 
offset by prior year balances.

Stockpile stewardship programs

    The committee continues to be concerned that the Department 
is relying on the unproven science-based stockpile stewardship 
program at the expense of modernizing the proven, hands-on 
production engineering and surveillance approaches needed to 
maintain stockpile safety and reliability over the next 10 to 
15 years. The committee is pleased, however, that the 
Departments of Defense and Energy completed the first annual 
review of the stockpile and have certified to the President its 
safety and reliability. The committee is encouraged by the 
Department's progress in initiating subcritical experiments. 
These experiments are essential to maintaining the enduring 
stockpile in a safe and reliable condition.
    The ``science-based'' stockpile stewardship program is 
essential to maintain the U.S. nuclear stockpile in the absence 
of underground nuclear testing. This ``science-based'' 
approach, however, will not replace the need to maintain proven 
stockpile management capabilities. The committee directs the 
Department to seek a reasonable balance between new ``science-
based'' stockpile stewardship and management approaches and 
those proven approaches that will be carried out at DOE 
production sites. This balanced approach will ensure that the 
United States can maintain the safety and reliability of the 
nuclear weapons stockpile, as required by the Nuclear Weapons 
Stockpile Memorandum and the Nuclear Posture Review.
    The committee recommends a reduction of $14.0 million to 
the Advanced Strategic Computing Initiative (ASCI) program. The 
committee supports the objectives of the ASCI program and 
compliments the Department for its numerous successes in the 
area of supercomputing. The committee notes, however, that a 
principal objective of the ASCI program is to process and 
assimilate data to be obtained from new facilities that are not 
currently operational. The committee believes that the proposed 
reduction in this account will not adversely impact the 
Department's supercomputing needs and allows a significant 
growth in this program over fiscal year 1997 funding levels.

Stockpile management programs

    The committee believes that the United States must maintain 
viable weapons manufacturing capabilities and capacities to 
rebuild aging weapons and to retain the ability to reconstitute 
its nuclear forces, if necessary. The committee is concerned 
that the decisions resulting from the Department's Final 
Stockpile Stewardship and Management Programmatic Environmental 
Impact Statement might negatively impact production 
capabilities and capacities by downsizing the Department's 
existing production plants too rapidly. The committee believes 
that it is essential to maintain these vital capabilities to 
maintain the requirements of a START I or START II stockpile. 
The committee encourages the Department to maximize the use of 
existing capabilities and to give priority to maintaining those 
capabilities rather than unnecessarily recreating such 
capabilities at other sites.
    The committee notes that the average age of the DOE weapons 
complex workforce continues to be well above the national 
workforce average age. The committee is concerned that the 
Department has not taken all the steps necessary to ensure that 
critical knowledge and skills are maintained. Unless the 
effects of this trend are addressed, the weapons complex 
workforce may be unable to meet required deliverables in the 
near future. The committee is aware that the Department and its 
plant and laboratory managers share this concern and have taken 
preliminary steps to address this problem. The Department has 
not, however, fully implemented the Lab and Plant Fellowship 
programs authorized in fiscal years 1996 and 1997. The 
committee encourages the Department to fully implement these 
programs during fiscal year 1998.
    The committee recommends a $33.0 million increase to this 
account, which includes $15.0 million for the four traditional 
weapons production plants; $10.0 million for a surety program 
to improve waste minimization efforts related to the 
Department's stockpile management modernization program; and 
$8.0 million to continue tritium facility upgrades initiated in 
fiscal year 1997. Limitations on funds provided to the four 
traditional production plants are discussed in a separate 
section of this Act.
    Of the amount made available for technology transfer and 
education, the committee recommends $10.0 million for the 
American Textiles Partnership project. The committee is 
concerned that the Department is initiating a number of new, 
cooperative activities within the technology transfer and 
education account. The committee directs the Secretary to give 
first priority to completing those projects that were initiated 
prior to fiscal year 1996, before supporting or initiating 
additional cooperative research and development agreements.

Program Direction

    The committee recommends a reduction of $35.0 million to 
thebudget request for this account. The committee notes that 
recent independent assessments from the Institute for Defense Analysis 
and General Accounting Office have identified a number of 
recommendations regarding how best to streamline the management 
structure within the Office of Defense Programs. The committee believes 
that implementing such recommendations would reduce management costs 
and increase the effectiveness of the Department's weapons programs.

Section 3102. Environmental restoration and waste management.

    The fiscal year 1998 budget request included $5.0 billion, 
excluding funding for construction projects, for defense 
environmental restoration and waste management activities (the 
Environmental Management program), which included $1.7 billion 
for Environmental Restoration; $1.5 billion for Waste 
Management; $257.8 million for Technology Development; $1.1 
billion for Nuclear Material and Facility Stabilization; $23.1 
million for Policy and Management; $50.0 million for the 
Environmental Management Science Program; and $388.2 million 
for Program Direction.
    The Committee recommends a provision that would authorize 
$5.1 billion, including funding for construction projects, for 
defense environmental restoration and waste management 
activities of the Department of Energy (DOE). The amount 
recommended is for the following activities: $1.7 billion for 
Environmental Restoration; $1.6 billion for Waste Management; 
$252.8 million for Technology Development; $1.3 billion for 
Nuclear Material and Facility Stabilization; $18.1 million for 
Policy and Management; $40.0 million for the Environmental 
Management Science program; and $373.2 million for Program 
Direction. The committee recommends a general reduction of 
$109.0 million that would be offset by prior year balances.

Environmental Restoration

    The committee recommends an increase of $3.5 million to be 
utilized to meet commitments at the Fernald, Ohio site.

Waste Management

    The committee recommends an increase of $23.3 million to 
this account as follows: $8.3 million to support high-level 
waste research and development work at the Idaho National 
Engineering and Engineering Laboratory and $15.0 million to 
increase production rates at the Defense Waste Processing 
Facility, the Consolidated Incineration Facility, and the West 
Valley Site high-level waste vitrification plant.

Nuclear Material and Facility Stabilization

    The committee recommends an increase of $63.0 million to 
this account as follows: $48.0 million for nuclear material 
stabilization operations at the F- and H-canyon facilities and 
$15.0 million for the National Spent Fuel program.

Technology Development

    The committee recommends a reduction of $5.0 million to 
this account. This represents a 10 percent reduction to the 
requested Technology Deployment Initiative. The committee 
believes this reduction should be offset by greater 
contributions from technology user organizations within DOE. 
The committee is supportive of the Office of Science and 
Technology's efforts to move technologies from the late stages 
of research and development into use. The committee believes 
that the success of this effort depends on greater cooperation 
and cost sharing between technology developers and users.

Environmental Management Science Program

    The committee recommends a decrease of $10.0 million to 
this account. It is expected that this reduction will be offset 
by matching funds from the Office of Energy Research. The 
committee notes that one of the stated objectives of the Office 
of Energy Research is to carry out basic research in 
environmental restoration and waste management. Accordingly, 
the committee believes that the most effective method of 
integrating basic research carried out under the Environmental 
Management Science program with the research program in the 
Office of Energy Research is to require a small level of co-
funding from the Office of Energy Research.

Program Direction

    The committee recommends a decrease of $15.0 million to the 
budget request for this account.

Policy Office

    The committee recommends a reduction of $5.0 million to 
this account. The committee continues to believe that there is 
a considerable overlap in responsibility between the Policy 
Office and other Environmental Management organizations. The 
committee expects this reduction to be achieved through 
consolidation of overlapping programmatic responsibilities.

Project Closure Account

    The committee recommends no funds for the Project Closure 
account. The committee remains skeptical that this set-aside 
account can achieve real cost savings or significantly 
accelerate site closures. The committee notes that the 
Department has not identified appropriate performance measures 
for projects and is utilizing vague and unquantifiable criteria 
to select the closure projects. Further, the Department's Ten-
year Plan requires the environmental management program to 
focus cleanup activities on those projects that will result in 
near-term closure and mortgagereduction activities, making the 
usefulness of this account unclear.
    The committee believes that the amount of funding requested 
by DOE for this account ($15.0 million) will not appreciably 
reduce long-term cleanup costs at DOE facilities and encourages 
the Department to continue to focus the entire Environmental 
Management program on those projects and activities that will 
accomplish the closure goals identified in section 3143 of the 
National Defense Authorization Act for Fiscal Year 1997.

Privatization

    The committee recommends $215.0 million for the 
environmental management privatization account. The committee 
notes that the Department's new policy of privatizing the 
capital cost of large Environmental Management construction 
projects has the potential to save scarce cleanup funds over 
the long-term. The committee notes that the new concept's 
effectiveness has yet to be demonstrated. Consequently, the 
committee does not believe that a $1.0 billion investment in 
this new approach is justified at this time.

Section 3103. Other defense activities.

    The fiscal year 1998 budget request includes $1.6 billion, 
excluding funding for construction projects, for other defense 
activities in the Department of Energy (DOE), which includes 
$668.0 million for nonproliferation and national security; 
$103.8 million for fissile materials control and disposition; 
$81.0 million for nuclear energy; $70.5 million for worker 
community transition; $54.0 million for environment, safety and 
health; $2.6 million for hearings and appeals; and $626.0 
million for naval reactors.
    The committee recommends a $30.0 million reduction to other 
defense activities for arms control and nonproliferation and 
national security program direction and $50.0 million for 
nuclear energy. The committee recommends an increase of $43.0 
million for naval reactors and $5.0 million for nuclear 
smuggling and forensic analytical capability and domestic 
emergency preparedness exercises.
    The committee recommends a provision that would authorize 
$1.6 billion, including funding for construction projects, for 
other defense activities as follows:

Verification and control technology.....................    $458,200,000
Nuclear safeguards and security.........................      47,200,000
Security investigations.................................      20,000,000
Emergency management....................................      27,700,000
Program direction (Nonproliferation & National Security)      84,900,000
Office of Hearings and Appeals..........................       2,685,000
Environment, safety, and health.........................      54,000,000
Worker and community transition assistance..............      65,800,000
Program direction (worker transition)...................       4,700,000
Fissile materials.......................................      99,451,000
Program Direction (Fissile Materials)...................       4,345,000
Nuclear Technology research and development.............      25,000,000
Nuclear security........................................       4,000,000
Chernoybyl Shutdown Initiative..........................       2,000,000
Naval reactors..........................................     683,000,000

Nonproliferation and verification research and development

    The committee continues to believe that this program would 
benefit from broader participation by the Department of 
Energy's national laboratories. The Congress directed the 
Department, in the National Defense Authorization Acts for 
Fiscal Years 1996 and 1997, to include the entire laboratory 
and production complex, include production sites such as 
Savannah River, in this program, and, industry, where 
appropriate. The committee notes that the Department has failed 
to take this action.

Russian Reactor Core Conversion Program

    The Congress provided the Department of Energy authority in 
the National Defense Authorization Act for Fiscal Year 1997 to 
include a program to develop, in conjunction with the 
Department of Defense (DOD), a cooperative program with Russia 
and Ukraine to modify or replace the nuclear reactor cores at 
two plutonium production facilities. The DOD Cooperative Threat 
Reduction (CTR) program included $10.0 million in fiscal year 
1997 for core conversion. The fiscal year 1998 budget request 
for this activity in the CTR program includes $41.0 million.
    The objective of U.S. assistance to Russia and Ukraine in 
its safety assistance program is to reduce the risk of 
operating old, unsafe reactors until economic conditions allow 
them to be shut down, or alternative sources of power can be 
provided. The objective of the core conversion program is to 
close plutonium producing nuclear power reactors. The goal of 
this long-term program is to further U.S. international 
nonproliferation policy. Concerns have been raised in 
Government Accounting Office reports on nuclear safety that 
modifying or replacing the reactor cores will result in 
extending continued operations at these plants, rather than 
resulting in closure. The immediate goal of the core conversion 
program is to modify or replace the reactor cores, allowing the 
reactors to continue to operate, while preventing the reactors 
from producing weapons grade plutonium. The committee 
understands that the three reactors located at the Tomsk 
facility near the city of Seversk and one at the Krasnoyarsk 
facility near the city of Zheleznorgorsk, both in Russia, 
supply heat and electrical power to the nearby cities. A joint 
feasibility report was prepared by the United States and 
Russia, concluding that core conversion was the only feasible 
alternative to solve the problem of finding an alternative 
source of energy to provide heat and electricity to Seversk and 
Zheleznorgorsk and to stop production of weapons-grade 
plutonium.The committee understands that no agreement has been 
reached yet between the United States and Russia on the Reactor 
Shutdown Agreement.
    The committee directs the DOD and DOE to keep the committee 
informed on the status of the Reactor Shutdown Agreement with 
the Russian Federation Ministry of Atomic Energy and to submit 
a joint report to the committee on the agreement sixty days 
after agreement is reached. The report should include a status 
report on the project, as well as detailed information on the 
estimated cost to complete the program, the design of the core 
and program plan to complete the conversion. The information on 
Russia's specific contribution to the reactor core conversion 
program should also be included in the report submitted to the 
committee.
    Lastly, the committee understands that the program decision 
document will serve as the basis upon which a decision will be 
made by the United States on whether to continue and complete 
the remaining core conversion activities. The committee wants 
to ensure that it is kept informed on a regular basis on this 
program and that no actions be taken that would result in an 
expenditure of funds for activities that might be affected by a 
decision not to complete the core conversion activities.

Chemical and Biological Research and Development Activities

    The Congress provided authority in the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201) for 
DOE to conduct a research and development program on chemical 
and biological agent detection programs. In order to leverage 
Federal Government expertise resident at all the DOE national 
laboratories and throughout the DOD and the military services, 
the committee directs the DOE to consult and coordinate all its 
research and development activities related to chemical and 
biological defenses with the DOD. The committee understands 
that a number of the multipurpose national laboratories have 
expertise in the biological and effluent detection areas and 
directs DOE to utilize fully this expertise and to encourage 
and give equal consideration to their participation in the DOE 
chemical and biological defense research and development 
effort.

International Nuclear Safety Program

    The budget request for fiscal year 1998 includes $81.0 
million for nuclear energy activities. The committee recommends 
a reduction of $50.0 million to the budget request for the 
international nuclear safety program.
    The goals and objectives of the international nuclear 
safety program are laudable. However, the committee questions 
how extending the lives of the riskiest nuclear plants in 
Russia and other countries furthers U.S. nonproliferation 
goals. The committee believes making safety improvements to 
Soviet-designed nuclear power plants around the world are more 
appropriately funded in the non-defense portion of the 
Department of Energy budget and the foreign affairs budget.
    The committee continues to believe that this program is a 
foreign assistance program and, as such, should be conducted 
and funded under the auspices of such appropriations and 
authorization. This belief has been expressed in past National 
Defense Authorization Acts.

Nuclear smuggling and counterterrorism

    Countering or responding to the domestic terrorist use of 
weapons of mass destruction has been of great interest to this 
committee for many years. The budget request for fiscal year 
1998 includes a $12.6 million increase over the fiscal year 
1997 budget request to close gaps identified in the Department 
of Energy's nuclear smuggling program. The committee recommends 
a $3.0 million increase to enhance further and accelerate the 
Department's nuclear forensic analytical capability. In 
addition to training activities already planned by DOE to 
respond to domestic incidents involving nuclear material, the 
committee recommends an increase of $2.0 million to plan and 
conduct realistic exercises to prepare Federal, State, and 
local organizations to work effectively in response to domestic 
terrorist use of nuclear weapons or materials. The committee 
supports the use of existing national assets such as the Nevada 
Test Site (NTS) to train Federal, State and local first 
responders as part of the domestic emergency response program. 
The committee recommends that training exercises hosted at the 
Nevada Test Site use the most realistic scenarios possible. The 
DOE should coordinate the activities of these exercises with 
the executive agent and program manager for the Department of 
Defense domestic emergency preparedness program in order to 
integrate scenarios related to chemical and biological 
incidents in the exercises and take advantage of cost savings.

Scientific  exchanges  between  the  United  States  and  China  and 
        Russia

    The descriptive summary of the fiscal year 1998 budget 
request for arms control activities includes funds for 
cooperative scientific programs with Russian and Chinese 
counterparts. The committee is concerned about the use of 
defense funds in furthering cooperative scientific efforts with 
foreign entities who do not comply with international arms 
control agreement obligations. According to press reports, the 
DOE recently conducted a scientific exchange in nuclear reactor 
research and other areas with nuclear engineers from the 
government of the People's Republic of China. As the committee 
understands it, these engineers are from the China Nuclear 
Industry Corporation--a government entity accused of selling 
ring magnets to Pakistan, in violation of the Missile 
Technology Control Regime (MTCR).
    In October 1995, export controls on U.S. high-performance 
computers were loosened. The decision to relax export controls 
on these supercomputers was based on a DOD contracted study 
that determined that certain high-performance computing 
capabilitieswould be widely available overseas in the next two 
years. The study concluded that these capabilities were 
``uncontrollable'' and that efforts to control their export would be 
ineffective and damage global competitiveness.
    The conference report accompanying the National Defense 
Authorization Act for Fiscal Year 1996 expressed concerns about 
the potential impact of this decision on the United States' 
nonproliferation efforts and the ability of the United States 
to maintain its military technological edge. DOD was directed 
to submit a report to Congress describing the impact of the 
decision to relax export controls on supercomputing technology 
on the ability of nations to acquire and use high-performance 
computing capabilities to develop conventional weaponry and how 
this technology might enhance a nation's capability to develop 
weapons of mass destruction.
    The committee believes the report delivered to Congress in 
December 1996 did not satisfactorily address congressional 
concerns about relaxing export controls which enhance a 
nation's ability to acquire sophisticated weaponry, weapons of 
mass destruction, or delivery systems. The committee is 
concerned that deregulating exports of sensitive technologies, 
such as supercomputers, on the basis of economic considerations 
or arbitrary projections of future availability could unduly 
facilitate the spread of capabilities that could lead to the 
acquisition by others of dangerous weapons. It could also 
undermine U.S. nonproliferation policy by signaling that U.S. 
national security considerations take a back seat to 
international trade.
    With this in mind, the committee raises concerns about 
recent press reports that supercomputers were sold by a U.S. 
firm to nuclear weapons institutes in Russia and China. The 
committee directs the Department of Energy to provide it with a 
report on these two incidents, to include the rationale for 
continued cooperative scientific exchanges with entities of 
governments who do not comply with its arms control 
obligations; the status of the investigation into the sale of 
supercomputers to Russia and China, the impact of this sale on 
U.S. national security, and the ability of the United States to 
maintain a qualitative technological edge over possible 
adversaries; how these supercomputers may aid in the 
development of advanced conventional weapons, weapons of mass 
destruction, or delivery systems; that describes the steps 
being taken to place the supercomputers under safeguards to 
ensure that advanced computing capabilities are not used to 
enhance or accelerate the weapons development capabilities of 
these countries; and steps to ensure that these advanced 
computing capabilities are not passed on to other states.

Materials, Protection, Control and Accountability

    Prepared under the guidance of Presidential Directive 13 
and Presidential Directive 41, the budget request for fiscal 
year 1998 for nonproliferation and national security includes a 
$25.0 million increase for materials, protection, controls, and 
accountability (MPC&A) activities above the fiscal year 1997 
request. The purpose of the MPC&A program is to assist Russia, 
the Newly Independent States (NIS), and the Baltic States in 
strengthening their nuclear material protection, control, and 
accountability of materials that are directly usable in nuclear 
weapons. The program is implemented through government-to-
government and laboratory-to-laboratory activities related to 
technical collaboration with research institutes, development 
of regulatory activities, development of licensing and 
inspection programs, training, and implementation of modern 
safeguards at state facilities.
    The MPC&A program has increased dramatically since its 
inception, rapidly expanding the areas of nuclear material 
protection, control, and accounting activities in the former 
Soviet Union. In fiscal year 1995, the scope of the Department 
of Energy's activities included seven locations where MPC&A 
activities were taking place in Russia. By the end of fiscal 
year 1996, the DOE had added twenty more locations at which 
MPC&A activities would take place. As of January 16, 1997, the 
DOE has undertaken cooperative MPC&A activities at over forty 
locations in Russia, the NIS, and the Baltic States. The 
committee understands from the Department of Energy that of the 
$100.0 million allocated to the DOE in fiscal year 1996 for 
MPC&A activities, only $60.37 million has been spent. 
Additionally, of the $112.6 million authorized in fiscal year 
1997 funds for this activity, only 43.1 million had been spent 
as of March 30, 1997.
    The committee believes that activities in this area should 
remain funded at the fiscal year 1997 level and therefore 
recommends a $25.0 million reduction to the budget request for 
MPC&A.

Naval Reactors

    The committee recommends an increase of $43.0 million to 
the budget request for naval reactors to expedite 
decommissioning and decontamination activities at surplus 
training facilities. The recommended increase for this activity 
is offset by a reduction to the Nuclear Energy account.
    The committee considers the naval reactors program to be a 
critical defense activity. The committee is concerned that the 
Department of Energy has a demonstrated pattern of consistently 
underestimating funding requirements for this program in budget 
requests. The committee strongly encourages the Department to 
seek adequate authorization levels for this program in future 
fiscal years to allow this program to accomplish its stated 
objectives in an efficient manner.

Declassification Productivity Initiative

    The committee continues to support the Declassification 
Productivity Initiative. However, the committee is concerned 
that the Department of Energy lacks the technical staff and 
integrating components necessary to carry out successfully this 
program. Recognizing the complexities surrounding 
thedevelopment of a computer-aided system to improve the efficiency and 
security of the declassification process, the committee is concerned 
that the limited funds provided to this program are being allocated 
among numerous laboratories, universities, and industry without clear 
technical direction or coordination by the Department.
    The committee strongly recommends that the Director of the 
Office of Declassification begin development of a management 
and integration strategy to coordinate and streamline the 
various initiatives carried out within the Declassification 
Productivity Initiative. In addition, the committee strongly 
discourages any shift of funds from the Declassification 
Productivity Initiative to other declassification activities.

Section 3104. Defense environmental management privatization.

    The committee recommends a provision that would authorize 
$215.0 million for the Defense Environmental Management 
Privatization program. The funds shall be allocated as follows: 
$109.0 million for the tank waste remediation system project 
(Richland); $29.0 million for contact handled transuranic waste 
transportation (Carlsbad); $27.0 million for spent nuclear fuel 
dry storage (Idaho); $25.0 million for waste pits remedial 
action (Fernald); and $25.0 million for spent nuclear fuel 
transfer and storage (Savannah River).
    It is essential for the Department of Energy to pursue new 
ways of doing business, such as privatization, to improve its 
efficiency and effectiveness. Privatization, through the use of 
competitive, fixed price contracts and private financing, is 
expected to lead to significant cost savings when compared to 
the traditional, cost plus management and operating contractor 
approaches. By conveying to the contractor more control over 
day-to-day operations and increased financial incentives for 
successful completion of projects, privatization can be 
expected to lead to innovative cleanup approaches as well as 
improved technical and schedule performance.
    The committee supports the exploration and application of 
innovative contracting and financing mechanisms for Department 
of Energy capital projects. The committee supports the 
financing approach inherent in the Environmental Management 
Privatization request and commends the Assistant Secretary for 
Environmental Management for his efforts to meet the 
Department's cleanup obligations while maximizing the use of 
appropriated funds. The committee believes, however, that the 
proposed growth rate for the Environmental Management 
Privatization program is too high given the absence of 
empirical data regarding how the new approach might impact 
cleanup costs, program efficiencies, and compliance agreement 
schedules.

Section 3105. Defense nuclear waste disposal.

    The committee recommends a provision that would authorize 
$190.0 million as the fiscal year 1998 defense contribution to 
the defense nuclear waste fund.

                SUBTITLE B--RECURRING GENERAL PROVISIONS

Section 3121. Reprogramming.

    The committee recommends a provision that would prohibit 
the reprogramming of funds in excess of 110 percent of the 
amount authorized for any program, or in excess of $1.0 million 
above the amount authorized for the program, until the 
Secretary of Energy has notified the congressional defense 
committees and a period of 30 days has elapsed after the date 
on which the report is received.

Section 3122. Limits on general plant projects.

    The committee recommends a provision that would limit the 
initiation of a ``general plant project'' if the current 
estimated cost for that project exceeds $2.0 million. If the 
Secretary of Energy finds that the estimated cost of any 
project will exceed $2.0 million, the appropriate committees of 
Congress would have to be notified of the reasons for the cost 
variation.

Section 3123. Limits on construction projects.

    The committee recommends a provision that would permit any 
construction project to be initiated and continued only if the 
estimated cost for the project does not exceed 125 percent of 
the higher of: (1) the amount authorized for the project; or 
(2) the most recent total estimated cost presented to the 
Congress as justification for such project. To exceed such 
limits, the Secretary of Energy must submit a detailed report 
to the appropriate committees of Congress 30 days before any 
additional funds are obligated. This provision would specify 
that the 125 percent limitation does not apply to projects 
estimated to cost under $5.0 million.

Section 3124. Fund transfer authority.

    The committee recommends a provision that would permit the 
transfer of authorized funds from the Department of Energy to 
other agencies of the government for performance of work for 
which the funds were authorized. The provision would allow the 
transferred funds to be merged with the authorizations of the 
receiving agency. The provision would limit the transfer 
authority to five percent of amount authorized to be 
appropriated.

Section 3125. Authority for conceptual and construction design.

    The committee recommends a provision that would limit the 
Secretary of Energy's authority to request construction funding 
until the Secretary has completed a conceptual design of the 
project. This limitation would apply to construction projects 
with a total estimated cost in excess of $2.0 million. If the 
estimated cost of the design exceeds $3.0 million, the 
Secretarywould have to request funds for the design before 
requesting funds for the construction project. The provision would 
provide an exception in the case of emergencies.

Section 3126. Authority for emergency planning, design, and 
        construction activities.

    The committee recommends a provision that would permit the 
Secretary of Energy to perform planning and design with funds 
available for any Department of Energy national security 
program construction project, in addition to any funds 
authorized for advance planning and design, whenever the 
Secretary determines that the design must proceed expeditiously 
to protect the public health and safety, meet the national 
defense needs, or protect property.

Section 3127. Funds available for all national security programs of the 
        Department of Energy.

    The committee recommends a provision that would allow 
amounts appropriated for management and support activities and 
for general plant projects to be used, when necessary, in 
connection with all national security programs of the 
Department of Energy.

Section 3128. Availability of funds.

    The Committee recommends a provision that would authorize 
amounts appropriated for operating expenses or for plant and 
capital equipment to remain available until expended.

   SUBTITLE C--PROGRAM AUTHORIZATIONS, RESTRICTIONS, AND LIMITATIONS

Section 3131. Defense environmental management privatization projects.

    The committee recommends a provision that would limit 
execution of Department of Energy Defense Environmental 
Management Privatization contracts.
    This provision would prohibit the Department from incurring 
any contractual obligations for a privatization contract until 
30 days after the date on which the Department submits to the 
congressional defense committees a report on that privatization 
project that describes the Department's anticipated contractual 
commitments for such project. The reports should identify: (1) 
contract costs and fees, contractual milestones and other 
obligations, performance requirements, deliverable dates, 
liability provisions under the contract, and any planned or 
anticipated follow-on activities; (2) an estimate of the 
baseline project schedules and costs that would be incurred if 
the Department had not used privatization contracting 
practices; (3) an estimate and explanation of any cost savings 
that might be realized using the privatization approach; (4) 
assumptions underlying cost savings estimates; (5) schedule 
impacts arising from privatization projects, including 
adherence to agreed to milestones in compliance site 
agreements; and (6) a discussion of the Department's plans to 
maintain financial and programmatic accountability under the 
new contracting approach.
    This provision would direct the Department to examine and 
report to the congressional defense committees on the 
Department's authority to create an escrow account to set aside 
sufficient funds to offset any reasonably foreseeable costs to 
the Government that may arise if any privatization contracts 
are canceled or terminated for the convenience of the 
Government. The report should recommend any legislation needed 
to eliminate any potential conflicts arising from the anti-
deficiency provisions found in section 3191 of title 31, United 
States Code. Further, this provision would direct the 
Department to submit to the congressional defense committees an 
annual report, beginning on February 28, 1998, describing the 
status of each ongoing privatization project for which funds 
have been authorized.

Section 3132. International cooperative stockpile stewardship programs.

    The committee recommends a provision that would prohibit 
the Department of Energy from pursuing cooperative stockpile 
stewardship and management activities with certain nations.
    The committee remains concerned that an international 
cooperative stockpile stewardship and management program could 
have unintended detrimental effects on U.S. national security 
interests. This provision would extend the prohibition 
established by section 3138 of the National Defense 
Authorization Act for Fiscal Year 1997 to funds authorized to 
be appropriated or available to DOE for fiscal year 1998 and 
prevent international activities associated with cooperative 
stockpile stewardship, with the exception of such activities 
conducted with the United Kingdom and France or the activities 
carried out by DOE under cooperative threat reduction programs 
with nations of the Former Soviet Union. This prohibition would 
apply to all DOE activities, including but not limited to 
laboratory directed research and development funded studies.
    The committee remains strongly opposed to any programs 
intended to assist existing and threshold nuclear weapons 
nations in areas relating to nuclear weapons safety, 
reliability and effectiveness.

Section 3133. Modernization of enduring nuclear weapons complex.

    The committee recommends a provision that would make 
available an additional $15.0 million to support modernization 
efforts being carried out at the Department of Energy's four 
dedicated nuclear weapon production plants (Pantex, Kansas 
City, Y-12, and Savannah River). The provision would require 
the Department to submit, not later than 30 days after 
enactment of this provision, a report describing the 
Department's plans to allocate the funds authorized by this 
section and the relevance of each allocation to implementing 
the decisions in the Final ProgrammaticEnvironmental Impact 
Statement for Stockpile Stewardship and Management. The funds 
authorized for this activity could not be obligated until 30 days after 
the congressional defense committees receive the Department's proposed 
allocation report as required by of this provision.
    The committee concurs with the Department's goal to 
implement advanced manufacturing technology at DOE plants and 
laboratories to improve production efficiencies and maintain 
core competencies within the DOE nuclear weapons production 
complex. The committee understands that such modernization 
upgrades will require coordination among the four production 
plants and the three design laboratories.
    The committee remains concerned with the Department's plans 
to maintain the capability and capacity to refurbish and, when 
necessary, remanufacture nuclear weapons components in the 
Nation's enduring nuclear weapons stockpile. The committee is 
concerned that the Department may be over relying on new, 
unproven ``science-based'' stockpile stewardship and management 
approaches at risk of losing manufacturing capabilities and 
expertise.
    The committee is deeply troubled that the Department has 
failed to comply with congressional direction included in 
section 3137 of the National Defense Authorization Act for 
Fiscal Year 1996 and section 3132 of the National Defense 
Authorization Act for Fiscal Year 1997 calling for 
modernization of the four nuclear weapons production plants. 
The committee believes that the Department has not fully met 
the requirements or intent of these sections and related 
guidance provided in conference reports accompanying the Energy 
and Water Appropriations Acts. The committee notes that the 
General Accounting Office has identified certain Nuclear 
Weapons Stockpile Memorandum requirements that may not be met 
by the Department due to insufficient resources being provided 
to the production plants. The committee believes that the 
manufacturing facilities must be modernized as directed in the 
National Defense Authorization Act for Fiscal Year 1996 and the 
National Defense Authorization Act for Fiscal Year 1997, or 
these problems will continue.

Section 3134. Tritium production.

    The committee recommends a provision that would authorize 
funding for the tritium production program at the level 
requested. The provision would require the Department of Energy 
to select a tritium production technology not later than June 
30, 1998. It would prohibit the Department from obligating 
funds appropriated or otherwise made available pursuant to this 
Act for exploration of any additional tritium production 
options until July 30, 1998 or 30 days after such time that the 
Department selects a preferred technology option under its 
``dual path'' approach, whichever comes later.
    The committee continues to believe that the tritium 
production program must be accelerated to meet the requirements 
of the Nuclear Weapons Stockpile Memorandum, which identified a 
new tritium production date in the year 2005. While the 
committee recognizes that future tritium requirements could 
change if the United States enters into treaties that reduce 
the numbers of nuclear strategic and tactical weapons, the 
production capacity that the United States will need to 
maintain will remain constant.
    The Congress provided an increase of $60.0 million to the 
Department of Energy's fiscal year 1997 budget request to 
accelerate the Department's phased approach to restoring 
tritium production. This increase was intended to be used for: 
site preparation for a new tritium production accelerator, 
enhancement of ongoing accelerator research and development at 
the Los Alamos National Laboratory in conjunction with the 
Savannah River Site, expediting demonstration of accelerator 
technology, and to advance target development and other 
programmatic milestones in the commercial light water reactor 
program. The committee is concerned that despite this 
additional funding and enhanced research activities, the 
Department has failed to accelerate the decision date for 
selecting a preferred tritium production technology.

Section 3135. Processing, treatment, and disposition of spent nuclear 
        fuel rods and other legacy nuclear materials at the Savannah 
        River Site.

    The committee recommends a provision that would make 
available an additional $47.0 million above the budget request 
for the F- canyon and H-canyon facilities at the Savannah River 
Site to accelerate the stabilization of legacy materials at the 
Savannah River Site. The committee is concerned that the 
Department of Energy's fiscal year 1998 budget request did not 
include adequate funds to operate both the F-canyon and H-
canyon facilities. The provision would further require that the 
Secretary of Energy maintain a high state of readiness of the 
F-canyon and H-canyon facilities, as recommended by the Defense 
Nuclear Facilities Safety Board (DNFSB).
    The committee continues to be concerned that the safety-
related issues raised by the DNFSB in its ``Recommendation 94-
1'' have not been fully addressed by the Department and 
believes that the Nation's last remaining large-scale chemical 
processing facilities should operate until the Department has 
presented a complex-wide plan to convert excess nuclear 
materials into stable, non-proliferable forms and to prepare 
them for final disposition in a national repository.
    The committee notes that the Department is exploring many 
new missions which could use the Savannah River chemical 
processing capabilities. The committee notes that the DOE 
program for disposition of surplus fissile nuclear material 
could use the capabilities of the canyons regardless of whether 
the national program calls for disposition of plutonium through 
immobilization or production of mixed oxide (also known as 
``MOX'') fuel.
    The committee notes that the National Defense Authorization 
Act for Fiscal Year 1997 required the Department to prepare a 
multi-year program plan regarding the Department's plan to use 
the F-canyon and H-canyon facilities for the efficient 
managementstabilization, and disposition of nuclear materials, 
such as surplus uranium and plutonium, domestic and foreign research 
reactor spent fuel, and any other nuclear materials that may 
potentially be received at the Savannah River Site. The plan was to 
provide options for chemical processing, reduction and isolation of 
nuclear materials. The Department recently informed Congress that the 
report will be late. The committee believes that maximizing the use of 
both the F-canyon and H-canyon facilities could reduce outyear costs by 
accelerating the closeout of facilities with no remaining mission and 
by reducing the volume of waste currently planned to be shipped to 
permanent repositories. The committee directs DOE to complete the 
report on canyon utilization as quickly as possible to provide an 
opportunity for the committee to review the report prior to any 
decision which might foreclose continued use of the F-canyon and H-
canyon facilities.
    The committee believes that the long-term storage and 
direct disposal of spent nuclear fuel, currently in wet storage 
or being shipped to the Savannah River Site, as proposed by 
DOE's current plan presents significant risks and costs. The 
committee believes that these materials can be better addressed 
through chemical processing and stabilization at the canyon 
facilities. The committee notes that use of the canyons reduces 
the volume of high level waste sent to the national repository, 
thereby reducing costs, and produces stable waste forms that 
are suitable for permanent disposal. In addition, the committee 
is encouraged by the positive anti-proliferation feature of 
blending down the resulting highly enriched uranium to render 
it no longer suitable for weapons.

Section 3136. Limitations on use of funds for laboratory directed 
        research and development purposes.

    The Committee recommends a provision that would modify 
section 3136 of the National Defense Authorization Act for 
Fiscal Year 1997 by requiring the annual report on uses of 
Laboratory Directed Research and Development (LDRD) funds be 
provided to the congressional defense committees not later than 
February 1 of each year. The provision would also prohibit the 
Department of Energy from obligating more than 30 percent of 
the funds appropriated or otherwise made available to the 
Department of Energy in fiscal year 1998 for LDRD programs 
until the Department submits the annual report.
    The provision would limit the use of funds appropriated or 
otherwise made available to the Department of Energy under 
section 3101 of this Act to LDRD and technology transfer 
activities that support the weapons activities of the 
Department. The provision would similarly limit use of funds 
appropriated or otherwise made available to the Department of 
Energy under section 3102 of this Act to those activities that 
support the environmental restoration, waste management, or 
materials stabilization activities of the Department.
    The provision would require the Department to include in 
the fiscal year 1998 annual report an assessment of the funding 
required to carry out a vigorous LDRD program, including any 
recommendations for the percentage of funds that should be 
provided to the National Laboratories by the Federal 
Government.
    The committee recognizes that programs such as the LDRD 
program are essential to maintaining the core competencies of 
the National Laboratories. The committee continues to support a 
robust, multi-disciplinary research agenda for the National 
Laboratories. It is the committee's intent that the LDRD and 
technology transfer program continue to focus the talent and 
intellectual curiosity of the National Laboratories toward 
activities that address the challenges that face the 
Department's weapons and environmental management programs.

Section 3137. Permanent authority for transfers of Defense 
        environmental management funds.

    The Committee recommends a provision that would extend and 
make permanent law the one time authority to transfer defense 
environmental management funds originally authorized in section 
3139 of the National Defense Authorization Act for Fiscal Year 
1997. This provision would direct the Secretary of Energy to 
grant authority to Department of Energy site managers to make 
one annual transfer of up to $5.0 million between environmental 
program functions within the jurisdiction of that site manager.

Section 3138. Prohibition on recovery of certain additional costs for 
        environmental response actions associated with the Formerly 
        Utilized Site Remedial Action Project program.

    The committee recommends a provision that would limit the 
Department of Energy's ability to seek recovery from third 
parties for environmental cleanup costs at sites authorized 
under the Formerly Utilized Sites Remedial Action Program 
(FUSRAP). This limitation would apply only to those FUSRAP 
sites where the Federal Government and a private party have 
reached a binding agreement that apportions liability for 
response costs.

                       SUBTITLE D--OTHER MATTERS

Section 3151. Administration of certain Department of Energy 
        Activities.

    The committee recommends a provision that would amend 
sections 501 and 624 the Department of Energy Organization Act 
and repeal section 17 of the Federal Energy Act. This provision 
would bring the Department of Energy (DOE) under the full scope 
of the Federal Advisory Committee Act and would bring DOE under 
the full scope of the Administrative Procedure Act when issuing 
regulations dealing with public property, loans, grants, or 
contracts.

Section 3152. Modification and extension of authority relating to 
        appointment of certain scientific, engineering, and technical 
        personnel.

    The committee recommends a provision that would amend the 
National Defense Authorization Act for Fiscal Year 1995 by 
extending the authority to appoint excepted personnel for 
certain scientific, engineering, and technical positions 
through the end of fiscal year 1999. This provision would also 
strike the requirement for the Administrator of the 
Environmental Protection Agency to submit a report to Congress 
on the effects of this hiring authority on the cleanup carried 
out at sites listed on the National Priorities List (also known 
as ``Superfund'' sites).

Section 3153. Annual report on plan and program for stewardship, 
        management, and certification of warheads in the nuclear 
        weapons stockpile.

    The committee recommends a provision that would direct the 
Secretary of Energy to submit an annual report to the 
congressional defense committees detailing the status and 
condition of the enduring U.S. nuclear weapons stockpile, based 
on the requirements set forth in the Nuclear Weapons Stockpile 
Memorandum. Such annual report would include relevant 
information, that was previously required to be included in any 
reports that would be repealed by provisions elsewhere in this 
title. The report would be submitted in both classified and 
unclassified form.

Section 3154. Submittal of biennial waste management reports.

    The committee would amend section 3153 of the National 
Defense Authorization Act for Fiscal Year 1994 (Public Law 104-
360) by changing the future date for the biennial Baseline 
Environmental Management Report to fiscal year 1999, rather 
than fiscal year 1997.

Section 3155. Repeal of obsolete reporting requirements.

    The committee recommends a provision that would repeal 
requirements for the Department of Energy to submit to the 
Congress certain annual and other reports.
    The committee believes the Department of Energy's annual 
stockpile stewardship and management plan (also known as ``The 
Green Book'') has superseded the following reports and they are 
not longer necessary:
          (1) the annual report on the reliability of existing 
        nuclear weapons required by section 3138(d) of the 
        National Defense Authorization Act for Fiscal Year 1994 
        (Public Law 103-160);
          (2) the master plan on the certification, 
        stewardship, and management of warheads as required by 
        section 3153 of the National Defense Authorization Act 
        for Fiscal Year 1996 (Public Law 104-106);
          (3) an annual report on long-term and near-term 
        program plan for certification and stewardship of 
        nuclear weapons stockpile required by section 3159 of 
        the National Defense Authorization Act for Fiscal Year 
        1996 (Public Law 104-106;
          (4) an annual report on long-term and near-term 
        program plan for certification and stewardship of 
        nuclear weapons stockpile required by section 3156 of 
        the National Defense Authorization Act for Fiscal Year 
        1997 (Public Law 104-201;
          (5) a report on activities of the Atomic Energy 
        Commission as required by section 251 of the Atomic 
        Energy Act of 1954 (Public Law 83-703, as amended by 
        section 1 of Public Law 86-43);
          (6) a report on the test ban readiness program as 
        required by section 1436(e) of the National Defense 
        Authorization Act for Fiscal Year 1989 (Public Law 100-
        456);
          (7) a quarterly budget report on all DOE ``major 
        national security programs.'' as required by section 
        3143 of the National Defense Authorization Act for 
        Fiscal Years 1990 and 1991 (Public Law 101-189); and
          (8) a report on progress associated with a New 
        Production Reactor for tritium production. This program 
        was canceled in November 1992 as required by section 
        3134 of the National Defense Authorization Act for 
        Fiscal Year 1993 (Public Law 102-484).
    The report on research activities of the Department of 
Energy relating to environmental restoration and waste 
management technology development required by section 3141(c) 
of the National Defense Authorization Act for Fiscal Years 1990 
and 1991 (Public Law 101-189) would be addressed by the 
Department of Energy ``Annual Environmental Management Ten-year 
Plan'' report.

Section 3156. Commission on safeguarding and security of nuclear 
        weapons and materials at Department of Energy facilities.

    The committee recommends a provision that would establish a 
commission to review the sufficiency of Department of Energy 
(DOE) nuclear weapons and materials safeguards and security 
programs. The Commission on safeguards and security at 
Department of Energy facilities will review threat 
determinations and assumptions, relevant Department of Energy 
orders, and other requirements governing Safeguards and 
Security of nuclear weapons, weapons components, nuclear 
materials, and sensitive nuclear weapons information at DOE 
facilities. The Commission would make recommendations regarding 
any changes in security policy and procedures necessary to 
detect, deter and react to credible threats.
    The provision would require the Commission to provide its 
findings and any recommendations to the Secretary of Energy and 
congressional defense committees not later than February 15, 
1998.

Section 3157. Modification of authority on commission on maintaining 
        United States nuclear weapons expertise.

    The committee recommends a provision that would extend by 
one year the due date for the report to be prepared by the 
Commission on Maintaining United States Nuclear Weapons 
Expertise. Theprovision would amend section 3162 of the 
National Defense Authorization Act for Fiscal Year 1997, which 
established the Commission.
    This provision would direct the Senate Majority Leader to 
designate a chairman of the Commission after consultation with 
the Speaker of the House of Representatives upon appointment of 
the fifth member of the Commission. The provision would further 
direct the Commission to begin deliberations upon appointment 
of the fifth member.

Section 3158. Land transfer, Bandelier National Monument.

    The committee recommends a provision that would transfer 
ownership of approximately 4.5 acres from the Department of 
Energy's Los Alamos National Laboratory site in Los Alamos 
County, New Mexico, to the Department of the Interior. The 
Department of Interior constructed and manages sewage lagoons 
on this parcel of land. The transfer would allow the Department 
of the Interior to manage the lagoons in a more efficient 
manner.

                        OTHER ITEMS OF INTEREST

Asset disposition

    The committee supports the Department of Energy's efforts 
to identify surplus assets or real property that are excess to 
the needs of the Federal Government. In order to explore 
options for a potential pilot program, the committee requests 
that the Department initiate a pilot program to dispose of 
excess Department assets and utilize the proceeds from the sale 
of these assets to reduce the Federal deficit and conduct 
decontamination, decommissioning, and closure activities at 
Department of Energy-owned clean-up sites.
    The Department is directed to submit a report to the 
congressional defense committees identifying, to the extent 
possible, the following: (1) the assets and real property that 
are in excess of the needs of the Federal Government; (2) sites 
or asset categories that could be included in a pilot asset 
sales program; (3) a plan describing how revenues from surplus 
asset sales might be used for specified purposes, such as 
deficit reduction, decommissioning and deactivation of DOE 
facilities, or other activities with the potential to reduce 
outyear Departmental costs; (4) existing Departmental 
authorities to carry out the pilot program; and (5) any 
regulatory changes needed to accelerate and streamline disposal 
of surplus assets.
    The Department is directed to recommend any proposed pilot 
programs and legislative initiatives within six months of 
enactment of this section. Proposed pilot programs must be 
integrated with and support existing Departmental missions. 
Implementation of this initiative should be carried out through 
existing line organizations within the Department. It is not 
intended that new DOE organizations would be created as a 
result of this initiative.

Cuban nuclear reactors

    The committee is concerned about the construction of two 
Soviet-designed reactors in Cuba. Despite objections and 
concerns raised about the operational safety of the these 
reactors, the committee understands that the Cuban government 
intends to operate these plants. The potential for accidental 
release of radioactive material reaching south Florida and the 
Gulf States is of great concern. The committee urges the 
Department of Energy to evaluate the ability of existing early-
warning systems capable of detecting low levels of radioactive 
material, and to determine their usefulness in responding to 
potential dangers posed by operating these reactors. The 
committee further urges the administration to take appropriate 
steps to ensure the safety of American citizens who live in 
regions that might be exposed to accidental release of 
radioactive material from these reactors.

Environmental Science Program

    The committee is pleased with the cooperative efforts being 
carried out by technical staff in the Department of Energy's 
Office of Environmental Management (EM) and the Office of 
Energy Research (ER). The committee continues to support the 
goals of this program and compliments the responsible EM and ER 
managers and staff for creating a cooperative approach in 
carrying out this program.
    The committee agrees with the recent National Research 
Council finding that this program would benefit from a plan to 
apply the basic research results from this program to the DOE 
clean-up and waste management programs. The committee directs 
the Offices of Environmental Management and Energy Research to 
prepare jointly such a plan. The plan should include: a 
comprehensive list of cleanup needs by EM technology focus 
area, the basic research requirements associated with each of 
these needs, a near- and long-term strategy for the program, 
and a clear articulation of criteria to select projects for 
funding.
    The committee remains concerned that funds authorized for 
the EM Science program are not being fully applied to defense 
environmental cleanup priorities. To address this concern, the 
committee directs that management and implementation 
responsibility for this program reside within the Office of 
Environmental Management. The committee directs the Assistant 
Secretary for Environmental Management to establish project 
selection criteria, prioritize DOE defense clean up needs, and 
implement selected research projects. The Office of Energy 
Research should peer review proposed projects and integrate 
selected projects with other ongoing basic research activities 
carried out by the Department.
    The committee respectfully disagrees with the findings of 
the National Research Council that the Office of Energy 
Research not be required to co-fund projects carried out under 
this program. The committee believes that this program would 
benefit from more cooperative funding approaches to selected 
projects. A statedobjective of the Office of Energy Research is 
to ``conduct fundamental research'' necessary ``to support the mission 
of DOE's Environmental Management program.'' The committee believes 
that the Office of Energy Research should subject its environmental 
clean-up and waste management research projects to the same peer review 
and technology selection process utilized by the EM Science Program. 
The committee believes that this process would ensure all DOE-supported 
environmental restoration and waste management basic research 
activities are selected according to the same criteria and that those 
activities will fully support EM mission needs.
    The committee recommends a reduction of $10.0 million in 
this program. The committee believes that this reduction should 
be offset by fiscal year 1998 funds appropriated to the Office 
of Energy Research.
    The Department is directed to report within 90 days of 
enactment of this section on those programs and activities 
carried out within the Office of Energy Research which have 
application to the Office of Environmental Management mission 
requirements.

Federally funded research and development centers

    The committee is concerned that the Department of Energy 
(DOE) may unnecessarily eliminate Federally Funded Research and 
Development Center (FFRDC) designation for several DOE 
facilities. The committee strongly encourages the Department to 
maintain the FFRDC status of all DOE facilities until the 
Department provides the congressional defense committees a 
justification for taking such action. This justification should 
include a discussion of potential cost savings from such 
action.

Fissile materials disposition

    The committee is encouraged by the Department of Energy 
(DOE) program to develop a credible fissile materials 
disposition strategy to make inaccessible for future use those 
quantities of plutonium and highly enriched uranium declared 
excess to U.S. weapons production needs. The committee endorses 
the Department's ``dual track'' strategy to explore both 
immobilization and mixed oxide fuel (MOX) fabrication options. 
The United States must take a strong leadership role in 
developing and implementing a viable program to ensure that 
surplus fissile materials are no longer available for use in 
nuclear weapons activities. A viable, cost effective U.S. 
fissile materials disposition program is essential to ensure a 
timely drawdown of Russian plutonium stockpiles.
    The committee directs the Secretary of Energy to implement 
both the mixed oxide fuel and immobilization approaches for the 
disposition of surplus plutonium. In so doing, the committee 
recognizes that the extent to which these approaches are 
implemented will be determined by technical, institutional, and 
international considerations.
    In selecting final technical approaches, the Secretary 
should apply, to the greatest extent practicable, existing 
commercial technology to minimize the overall costs and risks. 
The committee urges the DOE to allow maximum flexibility to 
potential bidders regarding how consortia are formed in 
response to Department of Energy contract solicitations for 
materials disposition. The Department is encouraged to give 
preference to those sites with existing infrastructure and 
capabilities to support either a MOX fabrication or plutonium 
immobilization mission or both in making final decisions 
regarding disposition of surplus fissile materials.

Funding for Greenville Road Improvement Project, Livermore, California

    The committee did not adopt the Department of Energy's 
request for a provision that would authorize funds for 
improvements to Greenville Road in Livermore, California. The 
committee believes the Department may not have fully adhered to 
its own policy directive entitled ``Department of Energy Policy 
for Funding Public Road Work Off DOE-owned Sites'' in 
developing this request. Further, the committee is concerned 
that by authorizing the funds requested a precedent may be set 
for other communities to seek additional funds, not consistent 
with DOE policy, from the Department to meet local 
infrastructure needs.

Improving collaboration between the Department of Defense and 
        Department of Energy laboratories

    The committee notes that the United States continues to 
face major defense challenges whose solutions require long-term 
programs for the development and integration of technology. New 
forms of collaboration that cross traditional dividing lines 
between government departments, laboratories, and industry are 
essential, if we are effectively to use the resources of our 
reduced defense scientific, technological and industrial base 
to meet these challenges.
    The committee believes that the Department of Energy (DOE) 
National Laboratories and DOE sites have a significant role to 
play in meeting the threats posed by these challenges. In 
fulfilling their responsibility for science-based stockpile 
stewardship, Stockpile Life Extension and related programs, the 
laboratories have developed impressive capabilities in 
simulation and modeling; advanced munitions, warhead design and 
development; and an experienced-based understanding of the 
process of cradle to grave systems design, development and 
maintenance. These capabilities can make a central contribution 
to the design, development, testing, deployment, and operation 
of systems needed to master dynamic complex threats.
    The defeat of hard and deeply buried targets is one such 
emerging complex challenge. These targets are designed to 
shelter the war-making capabilities, including weapons of mass 
destruction, of the world's rogue states. There are a number of 
identified barriers to more DOE laboratory participation in 
Department of Defense programs to address the problem 
ofdefeating these targets. They include interagency procurement 
uncertainties and the potential charging of administrative fees that 
may exceed actual cost incurred.
     The committee directs the Under Secretary of Defense for 
Acquisition and Technology, working in consultation with the 
Assistant Secretary of Energy for Defense Programs and the 
Director of the Office of Energy Research, to prepare a pilot 
program proposal to allow for more direct collaboration between 
the Department of Defense and the DOE laboratories and sites. 
The pilot program proposal should include such objectives as 
the development of enabling technologies, risk reduction, 
precompetitive teaming with the DOD research, development, test 
and evaluation facilities and industry to maximize the 
expertise that can be brought to bear on this challenging 
problem. The proposal should also address the current 
regulatory and legislative barriers to effective collaboration 
under the pilot. The proposal should be submitted to the 
congressional defense committees no later than March 1, 1998. 
The committee intends this pilot to serve as a means of 
addressing the barriers to effective DOD-DOE partnership on a 
broader, more systemic basis.

Interagency acquisitions done under the Economy Act

    The committee encourages the Department of Defense (DOD) to 
utilize the resources of the Department of Energy (DOE) 
National Laboratories and facilities to fulfill DOD missions. 
The committee is aware that section 844 of the National Defense 
Authorization Act for Fiscal Year 1994 (Public Law 103-160) and 
section 1074 of the Federal Acquisition Streamlining Act 
provided for a revised process within the Department of Defense 
for interagency acquisitions under the Economy Act. Regulations 
implementing these provisions require a contracting officer 
determination prior to the decision of one agency to purchase 
goods and services under contracts entered into or administered 
by another agency.
    The committee wishes to clarify that it is not the intent 
of Congress to restrict the use of the DOE National 
Laboratories and facilities where such use enhances program 
objectives and meets technical needs that cannot be met 
effectively through contracts with private industry. In 
particular, the committee does not interpret the legislation to 
require a contracting officer determination prior to making an 
acquisition under the authority provided by the Economy Act 
from a DOE National Laboratory or facility, unless that 
acquisition would require subcontracting by the National 
Laboratory for goods or services, other than purchases of 
products incidental to the purposes of the contract.
    The committee expects the Department to comply with 
provisions of the Federal Acquisition Regulation that limit the 
National Laboratories to performing work that: (1) is within 
the DOE Laboratory or plant missions (or derived areas of 
expertise); and (2) cannot be effectively provided by the 
private sector. The Department should take particular care to 
ensure the appropriate administration and use of interagency 
cost reimbursement orders.

National Defense Fixed Assets Acquisition

    The committee did not adopt the Department of Energy's 
(DOE) request for full, up-front funding of its capital 
projects. While the committee supports efforts to reduce 
overall capital costs associated with DOE construction 
projects, this new funding approach has been applied 
inconsistently both within DOE and within other Federal 
agencies. The Department has not demonstrated that application 
of this new approach would result in reduced costs over the 
long-term. Until these concerns are addressed, the committee 
will authorize capital projects in accordance with procedures 
followed in previous years.

Reports on alternative fuel and renewable energy technologies for 
        military applications

    The committee notes that the Department of Defense could 
benefit greatly from the application of alternative fuel and 
renewable energy technology options. Accordingly, the committee 
directs the Secretary of Defense, in consultation with the 
Secretary of Energy, the director of the National Renewable 
Energy Laboratory, the director of Sandia National 
Laboratories, and the directors of other laboratories as the 
Secretary of Defense determines appropriate, to submit a report 
to the congressional defense committees on: (1) the potential 
for the use of renewable energy technologies for military 
applications, including reducing energy-related logistical 
requirements for long-term deployments to remote areas; and (2) 
the current level of funding by the Department of Defense on 
such technologies and their potential military uses. The report 
shall be due not later than February 1, 1998.
    Further, the Secretary of Defense is directed to submit a 
report to the congressional defense committees on programs 
within the Department of Defense to train personnel to maintain 
and repair alternative-fuel vehicles, fuel cells, and renewable 
energy technologies being used by the Department of Defense. 
The report should also contain a description of any such 
programs, including their location, cost, and the number of 
personnel trained in fiscal year 1997 and the preceding two 
fiscal years. The report shall be due not later than February 
1, 1998.

Report on Idaho Radioactive Waste Management Complex cleanup

    Not later than March 31, 1999, the Department of Energy 
shall deliver a report to the congressional defense committees 
on remediation plans for the Radioactive Waste Management 
Complex at the Idaho National Engineering and Environmental 
Laboratory. The report shall include analysis of proposed waste 
treatment options and disposal plans. The report shall also 
determine the threat of migration of radionuclides and any 
potential threat to ground water. The report will assess the 
suitability of a privatization program to treat waste at the 
site. The report shall also include an assessment of how the 
Pit Nine project has impacted plans to remediate the 
Radioactive Waste Management Complex.

Report on incentives for highly creative and innovative laboratory 
        scientists and engineers

    Not later than February 1, 1998, the Secretary of Energy, 
after consultation with the directors of the Los Alamos 
National Laboratory, the Lawrence Livermore National 
Laboratory, and Sandia National Laboratories, and after review 
by the Department of Energy Laboratory Operations Board, shall 
submit a report to the congressional defense committees with an 
analysis of, and recommendations on, the desirability of a 
program that would reward the most innovative and creative 
scientists and engineers in the Department of Energy 
laboratories with a limited period of funding to pursue 
research and development topics chosen at the sole discretion 
of the scientist or engineer receiving the reward. In carrying 
out the analysis and formulating recommendations under this 
provision, the Secretary shall study the success of similar 
programs in industrial research and development organizations, 
including the IBM Fellows program.

Robotics and intelligent machines initiative

    The committee notes that the Department of Energy (DOE) is 
the leading source of support within the Federal Government for 
the development of robotics and intelligent machines, but notes 
that this support is fragmented across a number of DOE 
organizations and is largely focused on niche applications. 
Fundamental and more broad-range advances in robotics and 
intelligent machines are vital to accomplish such DOE atomic 
energy defense missions as development of cost-effective and 
agile manufacturing techniques for stockpile management and 
remote sensing and handling techniques for radioactive waste 
management and site cleanup. Development of such robotic and 
intelligent machine technologies would benefit many other 
defense applications as well, such as the development of small, 
``smart'' robots for battlefield applications and advanced 
material handling systems for improved defense logistics 
support.
    The committee directs the Secretary of Energy to develop a 
comprehensive Robotics and Intelligent Machines Initiative that 
would integrate existing Departmental programs; develop a 
better underpinning of theory, generic software, and generic 
hardware; and stimulate the development of applications 
combining multiple concepts and advances in robotics and 
intelligent machines. In developing this initiative, the 
committee encourages the Department to work with the broad-
based Intelligent Machines Cooperative Consortium formed at the 
joint Department of Energy/National Science Foundation Workshop 
on Research Needs in Robotics and Intelligent Machines for 
Emerging Industrial and Service Applications in October 1996.

Supply of radiation-hardened microelectronics

    The committee is concerned about the Department of Energy's 
ability to ensure an adequate supply of radiation-hardened 
microelectronics for nuclear and non-nuclear weapon systems. 
The committee notes that radiation-hardened microelectronic 
components are critical elements in nuclear weapons and other 
defense systems. The committee further notes that many 
radiation-hardened microelectronic parts in current weapon 
systems were made by suppliers that are no longer in the 
business. At the present time, only two vendors are available 
to bid on production of new radiation-hardened circuits 
required for DOE's stockpile life extension program. In many 
cases, there may be as long as a three-year lead time to obtain 
replacement parts.
    To address this problem, the committee believes the 
Secretary of Energy and the Secretary of Defense should enter 
into an agreement to form a national defense electronics 
partnership to focus on those measures necessary to maintain a 
supply of radiation-hardened microelectronic components for 
current and future defense uses. The program should include an 
effort to develop technologies that can be transferred to 
private industry as a way of easing the entry of new suppliers 
into this specialized market. In addition, the Departments of 
Defense and Energy should initiate a program to maintain a 
limited in-house production capacity to fill near-term critical 
needs, should they arise. The joint program should use the 
Department of Energy's existing facilities and should maximize 
use of existing fabrication facilities.

Technical exchange on defense-related transportation technologies

    The committee notes that the National Transportation 
Program within the Department of Energy's Office of 
Environmental Management has developed a number of innovations 
in the transportation of hazardous materials that could be of 
broader benefit to the U.S. transportation industry. At the 
same time, the commercial U.S. transportation industry has 
expertise in areas such as logistical planning that could be of 
benefit to this program.
    The committee directs the Secretary of Energy to develop a 
program of technical exchange and cooperative research and 
development to facilitate information sharing on DOE best 
practices in areas such as safety and information systems and 
industry best practices in areas such as logistics. The program 
should seek to use existing forums for technological 
interchange in the transportation research and development 
community to the extent appropriate. The Department of Energy 
should submit a report to the congressional defense committees 
on this technical exchange program, including a list of 
potential pilot projects in this area, by April 1, 1998. The 
report should also include an estimate of potential benefits of 
each project to the Department and to private industry.
          TITLE XXXII--DEFENSE NUCLEAR FACILITIES SAFETY BOARD

Section 3201. Authorization.
    The committee recommends a provision that would authorize 
the budget request of $17.5 million for the Defense Nuclear 
Facilities Safety Board (DNFSB) for fiscal year 1998.
    The committee remains supportive of the DNFSB role in 
assessing and overseeing the Department of Energy's (DOE) 
defense-related activities and believes this role should 
continue. The committee is concerned with recently announced 
plans by the Secretary of Energy to bring the Department's 
national security programs under the jurisdiction of external 
regulatory organizations with no technical expertise or 
organizational capability to effectively oversee these critical 
defense activities. The Department has not adequately 
demonstrated the advantages of altering the legal framework 
initially established by the Atomic Energy Act of 1946 and 
continued in the Atomic Energy Act of 1954, as amended, in 
order to permit external regulation.
    The committee will carefully examine any proposed 
legislation that may be forthcoming from the Department to 
ensure that any new external regulation regime would not have 
adverse consequences on the Department's ability to carry out 
its vital national security missions. The committee will also 
examine closely any claimed advantages and likely ramifications 
of licensing or regulation together with the total costs 
involved, and will weigh these factors against the demonstrated 
advantages of non-punitive, low-cost external review entailed 
in the DNFSB's current approach. The responsibilities and 
obligations of the Secretary and those of the Department's 
contractors under any proposed regulatory regime must also be 
spelled out clearly.
    The committee notes that the DNFSB has successfully pushed 
the Department to improve nuclear safety and that the DNFSB's 
non-punitive review process has successfully created an 
improved safety culture at Department of Energy facilities. The 
committee believes the DNFSB serves an essential role in 
improving and making accountable DOE operations and should 
continue in its current capacity.
                TITLE XXXIII--NATIONAL DEFENSE STOCKPILE

Secs. 3301-3304.
    The committee recommends a provision that would authorize 
the Stockpile Manager to obligate $60.0 million from the 
National Defense Stockpile Transfer Fund during fiscal year 
1998 for the authorized uses of funds under section 9(b)(2) of 
the Strategic and Critical Materials Stockpiling Act.
    The committee also recommends a provision that would 
authorize the disposal of excess materials from the National 
Defense Stockpile. Under current law, the Stockpile Manager 
cannot dispose of excess materials unless the proposed disposal 
has been reviewed by the Market Impact Committee and included 
in the Annual Materials Plan or a revision of the Plan.
    In addition, the committee recommends a provision that 
would require any platinum contained within the National 
Defense Stockpile and loaned by the Department of Defense to 
the Department of Treasury to be made available to the 
Department of Defense upon request of the Secretary of Defense.
                 TITLE XXXIV--NAVAL PETROLEUM RESERVES

    The budget request included $117.0 million for operation of 
the naval petroleum reserves in fiscal year 1998. The committee 
recommends a provision that would authorize the full $117.0 
million for the operation of the naval petroleum reserves in 
fiscal year 1998.
    The committee also recommends a provision (Section 3402) 
that would authorize the Department of Energy to lease to 
commercial entities the United States interests in the Naval 
Oil Shale Reserves. The committee believes that the exploration 
and production of petroleum and natural gas in these reserves 
would achieve the maximum practicable financial return to the 
United States.
    Furthermore, the committee recommends a provision (Section 
3403) that would repeal the requirement for commissioned 
officers of the Navy to be assigned to key management 
positions, including the position of Director, within the 
Office of Naval Petroleum and Oil Shale Reserves in the 
Department of Energy.
                  TITLE XXXV--PANAMA CANAL COMMISSION

     SUBTITLE A--AUTHORIZATION OF EXPENDITURES FROM REVOLVING FUND

    The committee recommends provisions (Sections 3501 through 
3504) that would grant the Panama Canal Commission (the 
Commission) authority to make expenditures from the Panama 
Canal Commission Revolving Fund within existing statutory 
limits. The Commission operates as a wholly-owned U.S. 
Government corporation and is supervised by a nine member 
supervisory board, commonly referred to as the Panama Canal 
Commission Board of Directors. The Commission does not draw 
from U.S. taxpayer funds for the operation of the Canal, but 
receives funding to cover its operating, administrative, and 
capital improvement expenses from tolls and other revenues 
collected from its operations. The Commission's total operating 
costs including depreciation and interest payments for fiscal 
year 1998 are estimated at $673.8 million.

          SUBTITLE B--FACILITATION OF PANAMA CANAL TRANSITION

Section 3511. Short title; references.
    The committee recommends a provision that would establish 
the Act as the ``Panama Canal Transition Facilitation Act of 
1997''.
Section 3512. Definitions relating to Canal transition.
    The committee recommends a provision that would define 
terms used throughout the Panama Canal Transition Facilitation 
Act of 1997 that are related to the transfer of the Panama 
Canal under the Panama Canal Treaty of 1977 and related 
agreements.

    PART I--TRANSITION MATTERS RELATING TO COMMISSION OFFICERS AND 
                               EMPLOYEES

Section 3521. Authority for the Administrator of the Commission to 
        accept appointment as the Administrator of the Panama Canal 
        Authority.

    The committee recommends a provision that would authorize 
the Administrator of the Panama Canal Commission to serve 
simultaneously as the Administrator of the Panama Canal 
Authority (PCA), which is the body expected to be created this 
year under Panamanian law to operate the Canal after December 
31, 1999. The PCA is expected to be active before the 1999 
transfer in drafting, reviewing and adopting regulations that 
will be put in place at the time of transfer, as well as 
performing other important administrative functions. Allowing 
the Administrator of the Commission to also serve as 
Administrator of the PCA will greatly facilitate the smooth 
coordination and continuation of the Canal's administrative and 
operating systems by Panama well into the next century. This 
provision would also exempt the Administrator from selected 
ethics provisions that could interfere with his expected 
functions over the transition, given the special circumstances 
of the transfer of the Panama Canal on December 31, 1999.

Section 3522. Post-Canal transfer personnel authorities.

    The committee recommends a provision that would authorize 
exemptions to post-employment ethics rules for Panama Canal 
Commission employees who continue their Canal employment with 
the Panama Canal Authority (PCA) after December 31, 1999. 
Without these exemptions, these employees would be prohibited 
from direct contact with the U.S. Government on Canal-related 
matters, which would needlessly hinder any working 
relationships between Federal agencies and the PCA.
    The provision would also provide congressional consent for 
current Panama Canal employees who are military retirees, 
members of the reserve components of the U.S. armed forces, or 
members of the Commissioned Corps of the Public Health Service 
to continue employment after December 31, 1999 with the PCA. 
Otherwise, each employee so situated would individually have to 
gain consent by the Secretary of State and the Secretary of the 
concerned executive department. Comprehensive authority is 
appropriate to allow these employees to continue in their jobs 
if they have the opportunity to do so.

Section 3523. Enhanced authority of Commission to establish 
        compensation of Commission officers and employees.

    The committee recommends a provision that would revise the 
Panama Canal Commission's compensation authorities to no longer 
mandate a minimum two percent annual pay adjustment under 
certain circumstances. It would also, through a savings 
provision, maintain current levels of basic pay.

Section 3524. Travel, transportation, and subsistence expenses for 
        Commission personnel no longer subject to Federal Travel 
        Regulation.

    The committee understands that requiring the Panama Canal 
Commission to comply with the Federal Travel Regulation until 
the Canal Transfer Date will make it difficult to develop and 
implement new travel regulations suitable for the successor to 
the Commission. The committee recommends a provision that would 
exempt the Panama Canal Commission from the requirements of the 
Federal Travel Regulation as of January 1, 1999, so that the 
Commission can develop and implement travel regulations that 
are more business-like, will better facilitate the dissolution 
of the Commission's affairs, and will be more suitable for 
adoption by the Government of Panama.

Section 3525. Enhanced recruitment and retention authorities.

    The committee understands that the Panama Canal 
Commission's current authority with respect to personnel 
recruitment and retention are limited to narrow classes of 
employees, and cannot be used to attract and retain Panamanian 
citizens for most positions. The committee recommends a 
provision that would give the Commission broader authority for 
recruitment and retention incentives to facilitate stewardship 
of the Canal transfer.
    The committee believes that the period of the commitment 
should generally be at least four years for cases where the 
Commission determines that the maximum amount of the bonus that 
would be allowed by this provision is appropriate. The 
provision would also allow education benefits to be offered as 
part of a recruitment or retention package, when determined to 
be necessary by the Commission.

Section 3526. Transition separation incentive payments.

    The committee recommends a provision that would authorize 
the Panama Canal Commission to implement a limited and 
specialized transition separation incentive program, geared 
towards facilitating the critical succession planning necessary 
for an orderly transition. The program would differ from 
general Federal Government separation incentive programs in 
several respects.
    First, there would be no requirement to eliminate 
positions, as the purpose of the program is not related to 
downsizing. Second, the Commission would be allowed to make the 
offers during two three-month windows of time, for three months 
immediately after enactment of this Act and from October 1, 
1998 through December 31, 1998. Third, the general authority 
would be for payments of $25,000 or less, but the Commission 
would be authorized, for especially critical positions, to 
offer up to 50 percent of basic pay. The latter special 
authority may be used for no more than 15 incentive payments, 
and could be used only in the three-month window immediately 
after enactment of this Act.
    In many respects, the requirements for the Commission 
aresimilar to those applicable to Federal agencies generally: a 
strategic plan must be submitted to the Congress; an amount equal to 15 
percent of basic pay must be remitted to the Civil Service Retirement 
and Disability Fund for each payment made; and recipients of a 
separation incentive payment who are reemployed by the U.S. Government 
within five years must repay the amount in full to the U.S. Treasury.

Section 3527. Labor-management relations.

    The committee recommends a provision that would provide 
reasonable bounds of time for the mediation and impasse 
resolution processes, given the amount of time left for the 
agency to develop and implement changes that are important for 
the transfer of the Canal to Panama.
    The provision would provide a time limit of 45 days for the 
Federal Mediation and Conciliation Service to conclude its 
efforts, measured from the date its assistance begins. It would 
also provide a time limit of 90 days for a decision by the 
Federal Services Impasses Panel, measured from the date on 
which its services are requested. Both time limits may be 
decreased by mutual agreement of the parties.

Section 3528. Availability of Panama Canal Revolving Fund for severance 
        pay for certain employees separated by Panama Canal Authority 
        after Canal Transfer Date.

    The committee recommends a provision that would authorize 
the Panama Canal Commission to transfer funds to the Panama 
Canal Authority to cover periods of employment with the 
Commission of employees who may be separated from Canal 
employment after December 31, 1999. This authority would 
facilitate an agreement to have funds committed for this 
purpose, to address employee concerns that the Panama Canal 
Authority will have the funds in place to properly recognize in 
its severance pay program employees'' years of service for the 
U.S. Government.

PART II--TRANSITION MATTERS RELATING TO OPERATION AND ADMINISTRATION OF 
                                 CANAL

Section 3541. Establishment of procurement system and board of contract 
        appeals.

    The committee recommends a provision that would establish 
special authority for the Panama Canal Commission to issue its 
own procurement regulation for the purpose of facilitating 
Panama's adoption and continuous use of it beyond 1999. The 
Commission will be required to develop, in consultation with 
the Administrator of the Office of Federal Procurement Policy, 
an independent and comprehensive procurement system that 
preserves the fundamental operating principles and procedures 
of the Federal Acquisition Regulation, while adapting its 
details and form for use by Panama after December 31, 1999.
    This provision would enable the Commission to waive the 
application of U.S. procurement statutes in its new regulation, 
except for certain listed statutes and those laws relating to 
civil rights, labor standards, or environmental protection. 
This will permit the new regulation to be delinked from U.S. 
laws and references to them that, were they to remain in the 
regulation, would hinder the ability of Panama to adopt the 
body of rules for its own use. It would also authorize the 
formation of a Panama Canal Board of Contract Appeals, 
empowered to decide all contract appeals and bid protests. The 
Board would be established, and would function, with narrow 
exceptions, in accordance with the Contracts Disputes Act. It 
would constitute a forum for the expert, expeditious and 
transparent resolution of contract disputes that can be adopted 
and preserved by Panama as part of the Canal's comprehensive 
procurement system. Currently, these functions are handled, by 
the U.S. Army Corps of Engineers Board of Contract Appeals and 
the General Accounting Office, neither of which will be 
available to the Republic of Panama after December 31, 1999.

Section 3542. Transactions with the Panama Canal Authority.

    The committee recommends a provision that would allow U.S. 
Government agencies to sell services to, and be reimbursed for 
such services by the Panama Canal Authority. Currently, many 
Federal agencies provide services to the Panama Canal 
Commission on a reimbursable basis. This provision would enable 
those agencies to continue providing those services (or 
establish new services) to the new Panama Canal Authority on a 
reimbursable basis if they choose to do so. This provision 
would also allow the Commission to provide in-kind services to 
the Panama Canal Authority on a nonreimbursable basis during 
the remaining years of the Commission's existence. This will 
allow the Commission to provide fuller assistance to Panama in 
this critical period of intensive work on the regulations that 
will govern the Panama Canal after December 31, 1999, as well 
as numerous other administrative responsibilities. As with all 
of its expenses, funding for this in-kind assistance would be 
derived solely from Canal revenues.

Section 3543. Time limitations on filing of claims for damages.

    The committee recommends a provision that would shorten the 
time periods applicable to the filing of vessel accident 
claims. The provision would shorten the time for filing 
administrative claims against the Panama Canal Commission from 
two years to one year, as well as shorten the period for filing 
civil actions from one year to six months following the final 
administrative determination with respect to the claim. These 
shortened periods will facilitate the faster disposition of the 
final business of the Commission, while not significantly 
affecting the due process afforded claimants.

Section 3544. Tolls for small vessels.

    The committee recommends a provision that would authorize 
the Panama Canal Commission to charge a fixed minimum toll for 
yachts and other small craft, rather than basing tolls strictly 
on the tonnage of those vessels. The committee understands that 
the tolls generated on a tonnage basis from such vessels do not 
cover the actual handling and liability costs associated with 
their transit. It should be noted that before the Commission 
could implement a fixed minimum toll for small vessels, it 
would be required to first comply with its usual rulemaking 
process for adjusting tolls.

Section 3545. Date of actuarial evaluation of FECA liability.

    The committee recommends a provision that would change the 
date in section 5(a) of the Panama Canal Commission 
Compensation Fund Act of 1988 (Public Law 100-705) for the 
Department of Labor actuarial determination from December 31, 
1999 to March 31, 1998. This change would facilitate financial 
planning by allowing the Panama Canal Commission to liquidate a 
financial liability prior to the Canal Transfer Date.

Section 3546. Notaries public.

    The committee recommends a provision that would authorize 
the Panama Canal Commission to appoint notaries public. This 
authority would be similar to the authority provided to U.S. 
embassies in section 4221 of title 22, United States Code, and 
to military attorneys in sections 1044a and 1044b of title 10, 
United States Code.

Section 3547. Commercial services.

    The committee recommends a provision that would authorize 
the Panama Canal Commission to conduct and promote commercial 
activities related to the management, operation or maintenance 
of the Panama Canal, but only to the extent consistent with the 
Panama Canal Treaty of 1977 and related agreements.

Section 3548. Transfer from President to Commission of certain 
        regulatory functions relating to employment classification 
        appeals.

    The committee recommends a provision that would remove the 
President from responsibilities relating to position 
classification appeals. It is required to complete the change 
intended by section 3530 of the National Defense Authorization 
Act for Fiscal Year 1997, which removed the President from 
responsibilities in the administration of the Panama Canal 
Employment System, and reconfigured that system.

Section 3549. Enhanced printing authority.

    The committee recommends a provision that would provide the 
Panama Canal Commission with more flexibility in meeting its 
printing production needs.

Section 3550. Technical and conforming amendments.

    The committee recommends a provision that would carry out 
various technical and conforming amendments.
                        LEGISLATIVE REQUIREMENTS

                      Departmental Recommendations

    By letter dated March 12, 1997, the General Counsel of the 
Department of Defense forwarded to the President of the Senate 
proposed legislation ``To authorize appropriations for fiscal 
years 1998 and 1999 for military activities of the Department 
of Defense, to prescribe military personnel strengths for 
fiscal years 1998 and 1999, and for other purposes.'' The 
transmittal letter and proposed legislation were officially 
referred as Executive Communication 1432 to the Committee on 
Armed Services on March 17, 1997. Executive Communication 1432 
is available for review at the committee. Senators Thurmond and 
Levin introduced this legislative proposal as S. 450, by 
request, on March 17, 1997. The statement made by Senator 
Thurmond upon introduction of S. 450 appears in the 
Congressional Record of March 17, 1997, on pages S2358-2372.
    By letter dated February 14, 1997, the General Counsel of 
the Department of Defense forwarded to the President of the 
Senate proposed legislation ``To authorize construction at 
certain military installations for fiscal year 1998, and for 
other military construction authorizations and activities of 
the Department of Defense.'' The transmittal letter and 
proposed legislation were officially referred as Executive 
Communication 1155 to the Committee on Armed Services on 
February 25, 1997. Executive Communication 1155 is available 
for review at the committee. Senators Thurmond and Levin 
introduced this legislative proposal as part of S. 450, by 
request, on March 17, 1997.

                            Committee Action

    In accordance with the Legislative Reorganization Act of 
1946, as amended by the Legislative Reorganization Act of 1970, 
there is set forth below the committee vote to report the 
National Defense Authorization Act for Fiscal Year 1998.
    In favor: Senators Thurmond, Warner, McCain, Coats, Smith, 
Kempthorne, Inhofe, Santorum, Snowe, Roberts, Levin, Kennedy, 
Bingaman, Glenn, Byrd, Robb, Lieberman, and Cleland.
    Vote: 18-0.
    The other roll call votes on amendments to the bill which 
were considered during the course of the mark-up have been made 
public and are available at the committee.

                              Fiscal Data

    Section 252 of the Legislative Reorganization Act of 1970 
(Public Law 91-510) requires that the report accompanying each 
bill reported by a Senate committee contain certain information 
on five-year cost projections.
    The letter received in compliance with this statutory 
requirement is shown below. The bill is an annual authorization 
and does not, within its own terms, generate costs beyond 
fiscal year 1998 even though the funds authorized to be 
obligated by this act may not be expended for several years in 
the future. The fiscal year authorizations herein provided are 
reviewed annually by the committee and the Congress.


               Congressional Budget Office Cost Estimate

    It was not possible to include the Congressional Budget 
Office cost estimate on this legislation because it was not 
available at the time the report was filed. It will be included 
in material presented during floor debate on the legislation.

                           Regulatory Impact

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that a report on the regulatory impact of the 
bill be included in the report on the bill. The committee finds 
that there is no regulatory impact in the case of the National 
Defense Authorization Bill for Fiscal Year 1998.

                        Changes in Existing Law

    Pursuant to the provisions of paragraph 12 of rule XXVI of 
the Standing Rules of the Senate, the changes in existing law 
made by certain portions of the bill have not been shown in 
this section of the report because, in the opinion of the 
committee, it is necessary to dispense with showing such 
changes in order to expedite the business of the Senate and 
reduce the expenditure of funds.
                ADDITIONAL VIEWS OF SENATOR JOHN McCAIN

           politicization of service unfunded priority lists

    As Administration budget requests continue to reflect an 
exceedingly low priority on providing our men and women in 
uniform with the resources necessary to execute the missions 
assigned them by the National Command Authority, Congress has 
taken it upon itself to add funding to those requests. In order 
to best allocate the additional budget authority provided by 
Congress, the Senate and House oversight committees have 
adopted policies of requesting from the services lists of high 
priority programs and activities that otherwise would not be 
funded.
    The so-called ``wish lists'' that have resulted from 
Congress' request for service input on where to allocate funds 
added to the national defense budget have proven an effective 
means of ensuring that such funds are apportioned appropriately 
in terms of what is best for the national interest. There is, 
however, growing reason for concern that the process by which 
the wish lists are drafted is being politicized, possibly 
through lobbying of the services by Members of Congress.
    This further politicization of the process has resulted in 
lists, especially with regard to the Department of the Army, of 
increasingly questionable merit. The Department of the Army 
``unfunded requirements'' list includes 319 programs and 
activities--clearly well beyond the scope intended. The result 
has been a plethora of additions--some arguably justifiable in 
a far more expansive budget environment--to the defense 
spending bills of items clearly not of pressing importance to 
national security. These items, including continued funding of 
the National Automotive Center, increased procurement of DDG-51 
destroyers, and continued acquisition of C-130J aircraft, the 
latter despite Air Force Chief of Staff, General Ronald 
Fogelman's testimony that the service already possesses many 
more C-130s than it requires, are seriously impeding the 
military's ability to channel resources where they are most 
needed.
    Should the degradation in the quality and practical utility 
of service unfunded priority lists continue, it will become 
rapidly apparent that emphasis on receipt of these lists will 
have to decline or disappear altogether. That would be 
unfortunate, indeed. It would, however, be the direct result of 
the effort on the part of some Members of Congress to influence 
the process through which the lists are prepared.

                 competition in submarine construction

    Another area that is troubling concerns the quality of 
analysis supporting decisions by the Administration on major 
weapon systems, particularly as pertains to the acquisition of 
surface ships and submarines. The phenomenon whereby program 
acquisition rates and schedules are legislated one year on the 
basis of ensuring competition only to have new legislation 
introduced the following year mandating cooperative or teaming 
arrangements due to production levels insufficient to support 
competition hasundermined the confidence of some Members in the 
entire process. In the specific case of attack submarine construction, 
painstaking negotiating processes conducted in preparation of the 
fiscal years 1996 and 1997 defense authorization bills resulted in a 
detailed if dubious plan whereby the two submarine builders would 
alternate contracts for the first four of a new class of attack 
submarine. Each of those four submarines was to include technological 
innovations and reflect improved construction techniques. The intent 
was to develop a submarine more capable and less expensive than current 
designs. After the year 2003, submarine contracts were to be competed 
between the two shipbuilders.
    The impracticality of that plan was apparent to many, but 
it passed into law as seemingly the only politically tenable 
arrangement--particularly given the initial Clinton 
Administration proposal of consolidating all submarine work at 
Electric Boat at the expense of Newport News Shipbuilding, its 
competitor and sole builder of nuclear-powered aircraft 
carriers. In truth, it is highly questionable whether 
competition was ever a viable option given expected procurement 
rates and the considerable efforts needed to retain two 
nuclear-capable shipbuilders. In short, Congress rejected the 
Administration's submarine construction plan set forth in the 
Bottom-Up Review and passed in its place legislation 
establishing an extremely flawed construction plan.
    In recognition of this situation, the Navy urged the two 
shipbuilders to work together, each one specializing in 
specific sections of the submarine while alternating final 
assembly between them. The notion of competition was now 
determined to be dead, and the American taxpayer will soon find 
itself funding submarines less capable by design than the 
Seawolf but in all likelihood paying as much per unit as for 
Seawolf--itself a submarine that was never needed after the 
Cold War and was only procured to keep Electric Boat alive 
until the next generation submarine was in construction. 
Something definitely went awry here.

         Base Closure and Realignment Commission (BRAC) Process

    It was extremely disappointing that politics prevailed and 
prevented the Committee from approving additional base closure 
rounds. Senators Levin, Coats, and Robb joined me in offering 
an amendment to authorize two base closure rounds in 1999 and 
2001, but our amendment was defeated on a 9-to-9 tie.
    The amendment would have authorized two additional base 
closure rounds, in 1999 and 2001, consistent with the 
recommendations in the Quadrennial Defense Review (QDR). It 
also would have established a process identical to that 
contained in the 1990 law that mandated the last three BRAC 
rounds. An additional provision, however, addressed the 
politicization in the last BRAC process which permitted the 
President to implement privatization in place at Kelly and 
McClellan Air Force Bases.
    The United States clearly needs to correct the current 
imbalance between force structure and infrastructure. After 
four base closure rounds, only 21 percent of the military 
installations in the continental U.S. have been reduced. Force 
structure will be reduced by over 38 percent by the time the 
QDR recommendations are complete.
    Excess infrastructure wastes scarce defense resources. 
Realistically, defense budgets will, at best, remain stable in 
the foreseeable future. Maintaining that excess infrastructure 
drains scarce financial resources from much-needed 
modernization programs, like tactical aircraft, strategic lift, 
and technology development programs designed to maintain our 
edge over potential adversaries.
    The Pentagon clearly recognizes the need to eliminate 
excess base structure. The QDR recommended the 1999 and 2001 
rounds. The National Defense Panel endorsed this recommendation 
in their May 15 report accompanying the QDR. And the Chairman 
and Vice Chairman of the Joint Chiefs, as well as all four 
Service Chiefs, support the two base closure rounds.
    Communities in all of our states are understandably nervous 
about additional base closures. Base closures, however, do not 
have to cause long-term economic devastation. Arizonans are 
very familiar with the economic and personal pain caused by 
such closures. The East Valley of Phoenix felt the direct and 
devastating effects of the 1991 closure of Williams Air Force 
Base. A look at those communities today, though, reveals the 
economic potential that can follow the loss of military 
installations around which communities have grown. A thriving 
educational consortium and airport exists at the site of the 
former Williams Air Force Base, and the economic future of the 
East Valley looks very bright. This experience has proven that 
base closures can have a positive, long-term effect on a 
community.
    I share the concern of many of my colleagues about the 
politicization of the last base closure round. Frankly, I do 
not believe we would have to be debating this issue today if 
the integrity of the last round had not been undermined.
    Remember that the 1995 round was supposed to be the 
``mother of all base closure rounds'', but it did not live up 
to that expectation. The Department of Defense, instead of 
making the hard decisions, allowed the Services' parochial 
views to be reflected in their overall recommendation to the 
commission. Then, when the Commission took bold action and made 
recommendations to close Kelly and McClellan Air Force Bases, 
moving their workloads to what would have been the three 
remaining Air Logistics Centers, the President decided instead 
to implement privatization in place at the two installations, 
thus sparing them, and the jobs they represent in voter-rich 
states, from elimination.
    Politicization of the last base closure round was wrong, 
and the amendment offered in Committee would have ensured that 
no privatization in place could occur unless the Commission 
explicitly recommended it. The amendment contained many other 
provisions designed to eliminate the influence of politics and 
ensure the process focused on bases with excess capacity. There 
may be suggestions of other ways to eliminate politics from 
theprocess, and I would be willing to discuss any of those ideas, but 
such discussions have not been forthcoming.
    I fully expect that political influence and protectionism 
will make it very difficult to actually enact legislation to 
conduct additional base closure rounds. I intend to fight, 
however, to ensure that we do what is right, and that is to 
finish the job we started--eliminate excess defense 
infrastructure. It's the only way we can maintain a credible 
and capable military for the future.
    I intend to pursue this issue further on the Senate floor. 
In so doing, I hope that my colleagues will rethink their 
opposition to further base closure rounds and recognize the 
seriously adverse impact on modernization that will continue if 
we do not take steps now to reduce unnecessary expenditures 
associated with maintaining excess infrastructure.

                        Depot-Level Maintenance

    Closely related to the base closure issue, thanks in no 
small part to the aforementioned politicization of that 
process, is the subject of depot-level maintenance. Provisions 
relating to allocation of workload between public and private 
maintenance depots were included in the defense bill. The 
Committee adopted a compromise measure to revise the current 
statutorily-mandated 60/40 public/private workload allocation--
the ratio of maintenance work performed in government and 
privately-owned facilities--to a 50/50 formula. The compromise 
requires the Defense Department to preserve a core depot 
capability that could maintain the types of weapons systems 
that the warfighting commanders-in-chief identify as mission 
essential.
    This legislative provision includes Contractor Logistic 
Support (CLS) and Interim Contractor Support (ICS) in the 60/40 
public/private workload mix. The Navy and Army already wrap CLS 
and ICS into the 60/40 calculation. Additionally, this 
legislates a definition of ``core'' capability based on the 
Joint Chief of Staff (JCS) contingency scenarios as identified 
by the Chairman of the JCS and the combatant commanders. The 
Committee adjusted the law so that work performed by private 
companies at public depots will be counted as public sector 
depot maintenance rather than private sector depot maintenance. 
The Committee also adopted a provision that would require that 
the remaining publicly-owned Air Logistics Centers (ALCs) be 
operated at 75 percent capacity prior to implementation of any 
privatization-in-place at former ALC locations.

           Termination of the B-2 Spirit Heavy Bomber Program

    I was pleased that the Committee adopted an amendment, by a 
14 to 4 vote, that prohibits the expenditure of any defense 
dollars to procure additional B-2 bombers or to preserve the B-
2 industrial base. It is my understanding that the House bill 
contains $331 million to maintain the B-2 industrial base and 
preserve the option to procure additional B-2s. This could 
balloon into a $20.7 billion commitment over the next 20 years.
    The Air Force has consistently rejected Congressional 
inquiries targeted at increasing B-2 acquisitions. In fact, 
General Fogleman testified before the Senate Armed Services 
Committee this year that the Air Force opposes expansion of the 
B-2 fleet, and that it clearly has many higher priority 
applications for scarce defense dollars. Two comprehensive, in-
depth, quantitative analyses of the heavy bomber force over the 
past two years have determined that the U.S. could execute the 
national military strategy with the existing fleet of B-2, B-1B 
and B-52H bombers.
    Additionally, there quite simply is no compelling argument 
for keeping the B-2 production line open for industrial base 
reasons. Preservation of a bomber industrial base is largely 
inherent in the process of designing and building large 
commercial aircraft, albeit without some attributes of stealth 
aircraft. The techniques of design, engineering, and production 
for bombers is not unique to that industry. Companies that 
build aircraft can build bombers. Boeing, which has not built a 
bomber in over 30 years, is in competition today for the Joint 
Strike Fighter because the necessary skills are an integral 
part of the broader field of aircraft design and construction.
    A corollary to the above is the misleading argument 
advanced by proponents of preserving the industrial base unique 
to the B-2 that the United States needs to keep the production 
line open to preserve the ability to manufacture stealth 
technology aircraft. This argument has absolutely no merit. 
Stealth is alive and well, and will be preserved in the 
manufacture of the F-22 and Joint Strike Fighter, as well as 
other non-aircraft programs.
    The notion that the United States should preserve the B-2 
industrial base because of the uncertainty of future 
requirements ignores a very basic fact: This aircraft takes so 
long to produce that short of a multi-year global conflict on 
the scale of World War II, the prospects of reopening the line 
and producing operational bombers are extremely remote at best. 
Major regional contingencies will be fought with aircraft on-
hand, not with fighters and bombers that take a year or more to 
produce.
    I will work closely with the Chairman and my Committee 
colleagues to ensure that we are able to maintain this position 
on the Senate floor and in our conference with the House.

              Personnel Matters and Aviator Retention Pay

    There are many good personnel provisions that will 
favorably affect service members and their families in the 
defense bill that I intend to see through the legislative 
process. Among the highlights are health care provisions for 
service members assigned to remote areas (i.e., recruiters, 
ROTC instructors, and those stationed at reserve centers) and 
health care benefits for reserve service members and National 
Guardsmen who served in the Persian Gulf and are inflicted with 
the Gulf War Illness.
    The Committee also adopted an amendment that enhances 
aviation special pays. After compelling testimony from the 
Service Chiefs of the Navy, Air Force, and Marine Corps 
concerning aviator retention, it is clear that the provisions 
in this amendment willbe critical in retaining the skilled 
aviators necessary to operate the technically advanced aircraft of the 
future.

                        Reserve Component Issues

    I am very disappointed in the continuing ``empty'' rhetoric 
regarding the Defense Department's Total Force policy. For too 
long, the active component of the armed forces has disregarded 
the ``Total Force Policy'' of the armed forces, which includes 
the responsibility to modernize reserve component forces.
    Although I recognize that adequate funding for reserve 
component equipment modernization was not included in the 
President's budget as directed in last year's law, I will not 
support the $922 million plus-up of National Guard and Reserve 
Equipment (NG&RE) outside the unfunded priority lists provided 
by the service chiefs to Chairman Thurmond. I also acknowledge 
that reserve component military construction is not funded at 
previous levels. However, I will not support funding beyond the 
President's budget request. The reason I cannot support the 
add-ons is simply because, in most instances, National Guard 
and reserve force plus-ups are Members' pork and are not even 
required by the reserve components.
    A positive development, however, is the inclusion in this 
year's defense bill of language similar to what was in last 
year's authorization and appropriations bills requiring the 
Secretary of Defense to specify in each future-years defense 
plan (FYDP) the proposed appropriations for equipment and 
military construction for each of the reserve components of the 
armed forces. Additionally, the bill established new reporting 
requirements for the Department of Defense designed to identify 
the level of modernization funding established for each of the 
reserve components in both the budget request and future year 
defense program.

                     Military Construction Projects

    I am pleased that the Committee continued to follow the 
criteria regarding military construction add-ons that Senator 
Glenn and I established two years ago. However, I am very 
concerned that the Committee did not continue to submit land 
conveyances to the General Services Administration (GSA) for 
screening prior to their adoption. I urge the Committee to seek 
a review by the GSA prior to final action on this bill in the 
Senate.

            General Accounting Office Self-Generated Studies

    Another area of concern is the increasing practice by the 
General Accounting Office (GAO) of prioritizing self-generated 
audits and reports over those requested by Members of Congress. 
For example, last year's defense bill required GAO to conduct 
three studies on the Persian Gulf War illness. Twenty months 
after the report was initiated, it has still not been delivered 
despite its March 1, 1997 due-date. In an effort to restrain 
therogue activities of the GAO, the Committee included a 
provision that would require the Comptroller General to certify that 
all Congressionally requested work will be completed prior to the 
beginning of any self-generated work.

          Member-Adds Not Requested by the Defense Department

    As usual, this year's defense bill emerged from committee 
with a plethora of programs not requested by the Defense 
Department. Earlier, I discussed my concern about the growing 
role of congressional involvement in the drafting of service 
Unfunded Priority lists. In addition to questionable Member-
adds that are nevertheless reflected on those lists, there are 
a large number of programs included in the bill that were 
neither requested nor included on the wish lists.
    One such add-on is an $11 million increase for the High 
Frequency Active Auroral Research Program, or HAARP. This 
program thrives because of Congressional support since 1990, 
costing the taxpayer a total of $87 million over the past eight 
years. Another $100 million would be required before the 
project could be completed by 2001. It remains unclear what 
military benefit might accrue from the construction of a 
facility to study the aurora borealis. Proponents of the 
program argue that it should be a part of the counter 
proliferation program of the Department of Defense because it 
will be able to detect underground tunnels and structures. 
However, the Air Force, which manages the program for the 
Department of Defense, noted in April of last year that ``the 
research is not sufficiently mature to warrant its inclusion in 
the nonproliferation and counter-proliferation program.''
    Proponents of HAARP further argue that the program will 
have applications for communications, navigation, and 
surveillance activities. The Department of Defense, however, 
did not include this $11 million in its budget request for 
fiscal year 1997, and it was not included on their ``wish 
list'' for additional funds. That indicates to me that, in 
competition with other militarily relevant programs, HAARP is 
not a high priority for the military. In my view, the Congress 
should stop compelling the military to pursue research programs 
that do not meet their requirements. Spending hundreds of 
millions of defense dollars to study the energy of the aurora 
borealis is, in my view, an unconscionable waste of taxpayer 
dollars. This program should be turned over to a privately 
funded university, research institution, or other organization 
where it could be pursued as a purely scientific endeavor.
    Once again, the Committee included a provision in the bill 
that continues to fund an expensive bureaucracy the intended 
purpose of which is to coordinate the Navy's oceanographic 
research activities. The bill sets aside $16 million to 
continue to fund the National Oceanographic Partnership 
Program. The return on its investment is minimal from the 
Navy's perspective. The benefits that accrue to the Navy from 
this multi-tiered organization pale in comparison to the 
benefits enjoyed by nondefense agencies. Additionally, the out-
year funding from defense dollars are unknown, and I question 
whether the Navy can afford this potential funding drain in the 
future based on its many other unfunded requirements.
    Overall, I believe that the committee has produced a very 
good defense bill, and I voted in favor of reporting it to the 
Senate. It is critical that we maintain the additional $2.6 
billion added to the Administration's request as we move 
through the legislative process. How that additional money was 
allocated, however, warrants concern. I hope my colleagues will 
look carefully at these pork-barrel add-ons. We must protect 
the high priority military programs that contribute to the 
future readiness of our Armed Forces and reject those additions 
that detract from that essential goal.

                                                       John McCain.
              ADDITIONAL VIEWS OF SENATOR JAMES M. INHOFE

    On May 1, 1997, the Readiness Subcommittee conducted a 
hearing with witnesses from the Department of Defense and 
General Accounting Office which addressed many of the issues 
surrounding the outsourcing of Air Force depot maintenance 
workload currently performed at Kelly and McClellan Air Force 
Bases. The Subcommittee spent considerable time reviewing the 
bidding procedures the Air Force is using for these 
competitions.
    The DoD witness stressed that the Air Force is no longer 
pursuing a strategy of ``privatization in place,'' and that 
instead the department is now planning for public/private 
competitions. However, the Subcommittee and staff have received 
a great deal of reliable information which indicates that the 
manner in which the competitions have been structured strongly 
favors private sector bidders who propose to do the work in 
place. Indeed, many features of the planned competitions appear 
to both favor the private sector and create strong 
disincentives for moving the work from their present locations. 
In other words, the Air Force is still pursuing privatization 
in place, only by another name.
    This information was corroborated at our hearing by a panel 
of three GAO witnesses. For example, there appears to be a very 
large disparity between estimates of the cost to move equipment 
required to perform the engine workload at San Antonio Air 
Logistics Center. San Antonio officials estimate this 
``transition cost'' might be as high as $400 million while 
Tinker AFB officials indicate the cost may be as low as $60-70 
million. Clearly, high transition costs will drive private 
sector bidders to propose to keep the work in place. In 
addition, if the public depot is directed to use an 
exorbitantly high transition cost in its proposal (obviously 
they cannot propose to do the work in place) they will not be 
competitive. Furthermore, the source selection authority--the 
person with the latitude to select the ``correct'' estimate--
will be an individual who has been the Air Force's primary 
advocate of transitioning depot work to the private sector.
    Another concern is the Air Force's plan to ``bundle'' 
discrete workloads into a single package for competition. At 
Sacramento Air Logistics Center, for example, the Air Force 
originally planned to conduct separate competitions for several 
business areas--such as aircraft, hydraulics, software, etc. 
Under their revised plan, however, the Air Force has 
``bundled'' these diverse workloads into one competition. The 
Air Force depot system was structured to minimize redundancy 
between the air logistics centers, hence each has particular 
areas of expertise. Considering the fact that the Air Force 
will allow only one depot to compete during each public/private 
competition, the effect of bundling discrete workloads becomes 
apparent. While two depots together would likely be able to 
provide the most cost effective proposal for the entire 
package, it is very unlikely a single, specialized depot will 
be able to compete for the entire workload.
    Clearly, the bundling of workloads brings into question the 
fairness of public/private competition. Other issues include:
          Marginal pricing by private sector;
          Teaming and subcontracting restrictions on public 
        sector;
          Differing methods of depreciating capital assets;
          Protest procedures insufficient for public depots;
          Different evaluation methodology: low cost for public 
        sector, best value for private sector.
    While DOD pledged that the so called public/private 
competitions would be fair, GAO has identified specific aspects 
of the competitions which seem to guarantee the work will go to 
private bidders. After thoroughly considering this testimony, 
it would be irresponsible to support a competition which 
arbitrarily saddles one side with massive facilities costs, 
prohibits one side from having to achieve maximum savings for 
the taxpayers, and ignores the fundamental principle that 
increased savings and readiness will result from consolidation 
of excess capacity to the remaining public depots. Awarding 
contracts to private sector bidders who propose to perform the 
workload in place would further exacerbate the excess capacity 
problem for both the private sector and the Department of 
Defense.
    Today, our decreasing defense budget not only threatens 
readiness, it compelled DOD to request two additional rounds of 
base closings. It is therefore impossible to ignore the 
opportunity for hundreds of millions of dollars in savings 
which GAO testified would result from implementing the 1995 
BRAC recommendation to close McClellan and Kelly. For over a 
year, DoD has been unable to produce data to refute the GAO's 
figures. As Chairman of the Readiness Subcommittee, I must be 
concerned with ensuring the greatest possible levels of 
readiness and cost savings in the remaining public depots. As a 
result, and with strong bipartisan support on the Committee, 
the FY98 DoD Authorization markup includes provisions that will 
correct the excess capacity issue by requiring the remaining 
depots to be at a reasonable level of capacity prior to 
privatizing in place workloads the BRAC intended to transfer to 
other locations.

                                                   James M. Inhofe.
                 ADDITIONAL VIEWS OF SENATOR CARL LEVIN

    The National Defense Authorization Act for Fiscal Year 1998 
reported by the Armed Services Committee is consistent with the 
bipartisan budget agreement and with the FY1998 Budget 
Resolution. In several important aspects the bill begins to 
implement some of the recommendations of the recently completed 
Quadrennial Defense Review (QDR) to help keep our military 
forces the finest in the world.
    There are several critical areas, however, where I believe 
this bill needs to be improved, and I will be working to make 
these improvements during the floor debate in the Senate and in 
conference.

                             base closures

    I am disappointed that the committee could not agree on a 
process for future base closures in the Department of Defense. 
Although there was strong support in the Committee for more 
base closures, the amendment to authorize two additional base 
closure rounds--one in 1999 and one in 2001--failed on a 9-9 
tie vote.
    The case for closing more military bases is clear and 
compelling.
    From 1989 to 1997, DOD reduced total active duty military 
endstrength by 32 percent, a figure that will grow to 36 
percent by 2003 as a result of the QDR. Even after four base 
closure rounds, the domestic military base structure in the 
United States has been reduced only 21 percent.
    Both the QDR and the National Defense Panel concluded that 
further reductions in the DOD base structure are essential to 
free up the money we need to modernize our forces. Although we 
will not get the final report of the National Defense Panel 
until December, their May 15 Report accompanying the QDR 
concludes:

          We endorse the Secretary's plan to request authority 
        for two additional rounds of Base Closure and 
        Realignment (BRAC). We strongly urge the Administration 
        to support legislation that will start this process in 
        1999 and encourage Congress to approve the request 
        despite constituency challenges.

    Just last week, the Armed Services Committee received a 
letter signed by all six members of the Joint Chiefs of Staff--
the Chairman, the Vice Chairman, and the four Service Chiefs. 
They urged the Committee to ``strongly support further 
reductions in base structure proposed by the Secretary of 
Defense.''
    The senior civilian and military leadership of the Defense 
Department understand that reductions in the base structure are 
essential to the modernization of our forces. Every dollar we 
spend to keep open bases we don't need is a dollar we can't 
spend on modernization programs our military forces do need.
    Closing bases has saved and will save substantial amounts 
of money, although the savings have not come as quickly as DOD 
originally forecast for a number of reasons. CBO concluded in a 
report last year that ``BRAC actions will result in significant 
long-term savings.''
    Between 1990 and 2001, DOD estimates that BRAC actions will 
produce a total of $13.5 billion in net savings. After 2001, 
when all of the BRAC actions must be completed, steady state 
savings will be $5.6 billion per year. These BRAC savings are 
an important part of the funds that are going to finance the 
future modernization of our Armed Forces that will keep our 
military the most technologically advanced and lethal fighting 
force in the world.
    I know that closing bases is a painful process. But if we 
are serious about modernizing our military forces and 
maintaining their qualitative technological edge, we have to 
reduce our infrastructure costs. As Secretary Cohen pointed out 
in his testimony on the QDR, the choice is clear: we can 
maintain the current base structure and fail to meet our 
modernization goals, or we can reduce our base structure and 
achieve the savings that we need to pay for the modernization 
we all agree is necessary.

                            air force depots

    I oppose the provision in the committee bill dealing with 
the workload of the two Air Force maintenance depots closed by 
the 1995 Base Closure Commission--San Antonio Air Logistics 
Center and Sacramento Air Logistics Center. This provision 
prohibits the Defense Department from privatizing in place the 
workload of these two depots until the three remaining Air 
Force depots are operating at 75 percent of capacity. Since the 
remaining three Air Force depots are currently being utilized 
at 50-60 percent of capacity, the effect of the Committee 
provision would be to prohibit privatization in place of the 
workload of these two depots, even if there are specific 
workloads for which privatization in place proves, through a 
fair competition, to be the most cost effective alternative.
    The 1995 Base Closure Commission left it up to the Defense 
Department to decide how to redistribute the work of the two 
Air Force depots that the Commission recommended for closure. 
The wording of the Commission's recommendation concerning these 
two closing depots directs DOD to:

          Consolidate the workloads to other DOD depots or to 
        private sector commercial activities as determined by 
        the Defense Depot Maintenance Council. (Emphasis added)

    We should let a fair competition determine the most cost 
effective solution to redistribute the workload of these two 
depots, regardless of whether the result is privatization in 
place, privatization at some other location, or transfer to 
another government depot.
    Under the committee provision, privatization in place is 
effectively prohibited. The only options are privatization at 
another location or transfer to another government depot. I 
offered an amendment to allow the Secretary of Defense to 
determine how to redistribute the workload of these two 
closingdepots if the DOD Inspector General determined that the outcome 
was based on a fair and open competition. This amendment was defeated 
in Committee.
    I know that some believe that the White House politicized 
the base closure process by putting political pressure on DOD 
to privatize in place the work of the two closing Air Force 
depots. I think it would be just as bad for Congress to 
politicize the base closure process by attempting to legislate 
a particular outcome--as the committee provision would do.
    The presence of this provision in the bill will jeopardize 
the enactment of this bill. Ultimately, we to have to reach a 
compromise that moves beyond political solutions and is fair 
and equitable to all.

                 Cooperative Threat Reduction Programs

    One of the most cost effective and successful defense 
programs to reduce threats to our country and enhance our 
national security is the Cooperative Threat Reduction (CTR) 
program started in 1991 by Senators Sam Nunn and Richard Lugar. 
The CTR program at the Department of Defense and its companion 
program at the Department of Energy have produced important 
results in reducing the threat of proliferation of weapons of 
mass destruction, including nuclear, chemical and biological 
weapons and their materials.
    Since 1991, these CTR programs have helped three newly 
independent states, Ukraine, Belarus and Kazakstan, completely 
rid themselves of some 6,000 nuclear weapons they inherited 
from the former Soviet Union. The CTR program has also 
permitted Russia to implement the START I Treaty ahead of 
schedule, helping eliminate over 800 Russian nuclear missiles 
and bombers. These are weapons that will never again threaten 
the United States.
    The Department of Energy has worked to secure the tons of 
nuclear weapons materials, primarily plutonium and highly 
enriched uranium, that were--and to a significant extent, still 
are--under inadequate safeguards and vulnerable to theft or 
diversion. Keeping these dangerous materials out of the hands 
of would-be proliferators reduces the likelihood that nuclear 
weapons will threaten us.
    Although these are immensely important contributions to our 
security, the job is only partly finished, and much more needs 
to be done. That is why it is disappointing that the Committee 
bill reduces the budget request for these programs by $135 
million, including a reduction of $60 million for the DOD CTR 
program; a reduction of $25 million for the DOE Materials 
Protection, Control and Accounting (MPC&A) program; and a 
reduction of $50 million, the total amount requested, for the 
DOE International Nuclear Safety program.
    Given the great concern the Committee has appropriately 
expressed for the danger of proliferation of nuclear, chemical 
and biological weapons and materials, and the Committee's 
interest in taking steps to reduce this danger, these 
reductions are surprising. In my view, the Committee should be 
considering what additional efforts we can take to reduce these 
threats. While the threat from such proliferation is more 
likely and immediate than the threat from a ballistic missile 
attack on the United States, Congress has pushed to increase 
funding for national missile defense while reducing funding for 
cooperative threat reduction. We may be underfunding the latter 
problem at our peril.
    There are numerous CTR programs that need to be funded on 
an urgent basis. For example, Ukraine decided in mid-May to 
eliminate all its SS-24 intercontinental ballistic missiles 
(ICBMs), a decision which the United States encouraged and 
welcomed. We should help Ukraine eliminate these missiles so 
they can never be used by any nation. Furthermore, there remain 
large quantities of nuclear materials that need to be secured 
and accounted for. The list of unfunded CTR and related DOE 
projects is long and represents an urgent opportunity for the 
United States to take tangible and permanent steps to reduce 
threats to our security. For a tiny fraction of the defense 
budget, we can accomplish extraordinary gains.
    The proliferation and nuclear safety problems remain 
considerably larger and more serious than the response has been 
so far. I hope the Congress and the Administration are up to 
the challenge of taking advantage of this opportunity to 
eliminate some of the most serious threats to our security. To 
do so, we should fund these threat reduction and safety 
programs at a higher and more appropriate level.

                 Nimitz Class Aircraft Carrier (CVN-77)

    The Committee bill authorizes $345 million in FY1998 to 
begin incrementally funding construction of the next Nimitz 
class nuclear aircraft carrier, CVN-77, based on claims of cost 
savings by the shipbuilder. Unfortunately, the Committee did 
not adopt safeguards to insure that the taxpayers' actually 
receive the savings on which this unusual action is based.
    The Defense Department's current Future Years Defense 
Program includes a total of $5.2 billion for construction of 
the next aircraft carrier--$695 million in advanced procurement 
in FY2000, with the balance of $4.5 billion in FY2002.
    Earlier this year the CVN-77 shipbuilder came forward with 
a proposal to incrementally fund this carrier, beginning in 
FY1998 and continuing each year through FY2002. According to 
the shipbuilder, this alternative funding proposal would save 
$600 million in the cost of building CVN-77. This claim has 
been repeated over the last two months in highly visible media 
campaign.
    The normal method of funding major defense procurement 
programs is to provide full funding in one lump sum in the year 
in which the program is started, with the exception of certain 
limited long-lead items which are funded through advance 
procurement. As a general rule, incrementally funding major 
weapons programs reduces visibility over total program costs, 
and can lead to a ``buy in'' situation in which it becomes more 
difficult to control total program costs and future cost 
growth. Secretary Cohen indicated in a letter to me that:

          As a matter of fiscal policy, we do not normally 
        incrementally fund procurement programs. Therefore, the 
        Department plans to fully fund the construction of the 
        tenth and final Nimitz class nuclear aircraft carrier 
        in fiscal year 2002. This schedule, which is reflected 
        in the Future Years Defense Program (FYDP) accompanying 
        the FY1998 President's budget, is consistent with force 
        structure requirements and the end of the service life 
        of existing ships in the fleet.

    In the case of this proposal to incrementally fund CVN-77, 
the RAND Corporation did a study for the Navy substantiating 
the savings proposed by the shipbuilder. In addition, the 
Navy's own analysis confirmed that the savings could be 
achieved.
    I am willing to support incremental funding of CVN-77, but 
only if this incremental funding approach includes a guarantee 
that the government will receive the savings from this approach 
that have been promised by the contractor. For this reason, I 
offered an amendment in the Committee to guarantee the promised 
savings.
    My amendment would have established a cost cap of $4.6 
billion for CVN-77, $600 million below the Navy's current 
budget estimate for funding this ship under the normal full 
funding procedures. This cost cap would have excluded 
outfitting and post delivery costs, and would have been 
adjusted automatically to reflect changes in inflation or costs 
attributable to compliance with changes in Federal, State or 
local laws.
    I also included a provision to adjust this cost cap based 
on changes in costs that are incurred by inserting new items 
into CVN-77 that are not currently planned for this ship.
    The committee did not adopt this amendment. While I believe 
that incremental funding may be appropriate in the unique case 
of CVN-77 because of the anticipated savings, I am unwilling to 
support this approach without a mechanism to protect the 
interests of the taxpayers and guarantee the savings.

 Secretary of Defense Authority to Unilaterally Suspend Administrative 
                                Actions

    Section 363 of the committee bill would give the Secretary 
of Defense the unprecedented authority unilaterally to stop for 
30 days certain administrative actions of other federal 
agencies. The Secretary would have this authority without 
regard to the valid health or safety concerns that may have 
motivated the other agency in taking its action. This automatic 
stay could cover rules and orders intended to protect the 
environment, safeguard worker safety, preserve private 
property, or any other conceivable administration action or 
order. This provision exceeds the jurisdiction of the Armed 
Services Committee and creates the appearance of placing the 
Department of Defense above the law. For these reasons, I do 
not believe it should have been included in the bill.

                       Restrictions on GAO Audits

    I also oppose Section 1039 of the committee bill, which 
would prohibit the General Accounting Office (GAO) from 
undertaking any self-initiated audits unless it can certify 
that it has completed all congressional requests. Since GAO has 
hundreds of pending requests at any given time, this provision 
is, in effect, a total prohibition on any self-initiated work 
by GAO. This provision is outside the jurisdiction of the Armed 
Services Committee. If it remains in the bill, I am concerned 
that it could hamstring the GAO in its important efforts to 
identify waste, fraud, and abuse in government programs.

             United States--Canada Environmental Settlement

    The bill does not include a provision, requested by the 
Administration, to authorize the payment of $100 million to 
Canada--$10 million per year for ten years--to fund the cleanup 
of former U.S. defense sites in Canada, pursuant to an 
agreement negotiated with the Canadian government. I am 
concerned that political and military relations could be 
adversely affected if the agreement--reached after a year of 
intensive negotiations between the two governments--is not 
funded.

                    Readiness of Our Military Forces

    Finally, I am troubled by the section in the committee 
report entitled ``The Storm Clouds are on the Horizon''. This 
report language depicts a United States military in decline 
that is sharply at odds with the evidence provided to the 
committee by the Defense Department in the testimony of its 
military and civilian leadership and its quarterly readiness 
reports to the committee.
    This report language is critical of the funding levels 
recommended by the Administration for the Operation and 
Maintenance accounts, yet the committee bill increases funding 
in those areas by only $42 million, which represents just 1.6 
percent of the $2.6 billion increase to the original request 
that is included in this bill pursuant to the bipartisan budget 
agreement. This $42 million increases the funding for the 
readiness accounts by approximately 5/100ths of one percent 
over the amount requested. If the committee really believes the 
readiness of our force is in jeopardy, it should have devoted a 
more significant portion of the $2.6 billion in available funds 
to that purpose.
    To take a specific example, Secretary of Defense Cohen 
requested that the Congress add $550 million to correct a 
shortfall in Navy and Air Force flying hour funding that was 
identified subsequent to the preparation of the budget request. 
A shortfall in flying hour funding will directly affect the 
readiness of our tactical aviation units, yet the committee 
chose not to fully fund the Secretary's request for additional 
funds in this area. Only $230 million of the requested $550 
million was provided.
    Even before the recent bipartisan balanced budget 
agreement, the emerging bipartisan consensus on defense 
spending was evident, as the five year plan for defense 
spending in the President's fiscal year 1998 budget exceeds the 
levels contained in last year's budget resolution by just one 
percent. This recent budget agreement has ratified that 
bipartisan consensus on defense spending levels. I believe this 
section of the report is inconsistent with that bipartisan 
consensus and inconsistent with the facts and testimony 
presented to the committee.

                                                            Carl Levin.
             ADDITIONAL VIEWS OF SENATOR EDWARD M. KENNEDY

    I support this bill. I commend Republicans and Democrats 
for working closely together to prepare a bill that meets the 
terms of the budget resolution and has unanimous committee 
support.
    The bill does contain a glaring defect, however. It 
irresponsibly reduces funding for the Nunn-Lugar Cooperative 
Threat Reduction Program and related Department of Energy 
programs by $135 million below the requested level of $668 
million. Specifically, the bill takes $60 million from the 
Defense Department's Cooperative Threat Reduction Program, $50 
million from the Energy Department's International Nuclear 
Safety Program, and $25 million from the Energy Department's 
Materials Protection, Control, and Accounting Program.
    The funds for the Nunn-Lugar and related programs are the 
most cost-effective dollars in the entire defense budget. These 
programs support the destruction of nuclear weapons in the 
states of the Former Soviet Union, the strengthening of border 
controls to prevent the illegal transport of nuclear bomb-
making materials, and efforts to safeguard these materials from 
theft at their storage sites or during transport. They also 
provide employment and economic incentives for former Soviet 
weapons scientists, to avoid the temptation that they will sell 
their know-how to buyers from nations and organizations that 
support international terrorism.
    The National Research Council released a report this spring 
on U.S. proliferation policy and the Former Soviet Union. Its 
first recommendation is that funding for the Materials 
Protection, Control, and Accounting program be maintained at 
requested levels, and it expresses strong support for the 
overall DoE and DoD Nunn-Lugar programs.
    The United States faces the very real threat that loose 
controls over nuclear weapons and bomb-making material in the 
nations of the Former Soviet Union could result in a nuclear 
terrorist attack on the U.S. Even a crude weapon used in such 
an attack could have thousands or millions of times the 
destructive power of the truck bomb that destroyed the Federal 
building in Oklahoma City. We must do our utmost to prevent 
such a nuclear catastrophe. Restoring the funds that this bill 
takes from these programs is an indispensible first step 
towards that goal.

                                                 Edward M. Kennedy.
                ADDITIONAL VIEWS OF SENATOR JEFF BINGAMAN

    This year's defense bill reflects the continued 
unwillingness of the Senate to move beyond the Cold War. I am 
deeply concerned that we lack the shared vision we need in the 
Senate to move beyond the past to build a more secure and 
peaceful future.
    We live in a period of time that offers us a great 
opportunity to redirect our resources and expertise to meet 
changing national security requirements and to take important 
steps toward building a more peaceful international system. The 
annual budget deliberations in the Congress provide us in the 
Senate with an opportunity to address changing priorities and 
undertake new initiatives to meet emerging needs. 
Unfortunately, instead of moving toward the future, the 
committee and to a considerable extent the Administration, have 
chosen to stay the course and pursue the old agenda.
    This year's bill, for example, includes a number of 
provisions to spend tens of millions of dollars on items for 
which the Defense Department has no requirement while 
simultaneously cutting funds for programs which have tremendous 
importance to our national security. The committee funded $118 
million to accelerate development of the Space Based Laser 
program, a program for which no requirement exists and which is 
not included in current approved plans for the National Missile 
Defense program. The committee also added about $40 million for 
new dump trucks that the Army did not include in its budget 
request and which appeared near the bottom of its list of 
unfunded requirements. Many similar examples of spending for 
programs not required by the military services characterize 
this year's defense bill.
    Even more disappointing is the fact that the committee 
chose not to fully fund, or in many cases, to cut funding for 
programs for which legitimate military requirements exist and 
which are needed to meet current pressing national security 
needs. When given the option, the committee chose not to 
provide sufficient funds, for example, for our pilots to obtain 
the training necessary to meet highest performance standards. 
The committee chose to reject a plan to shift money from 
unnecessary programs to meet this basic need to meet our 
warfighting requirements.
    I am deeply disappointed that the committee chose to cut 
$135 million from the DoD Cooperative Threat Reduction (CTR) 
Program and related programs in the Department of Energy. The 
Congress initiated CTR programs, also known as Nunn-Lugar 
Programs, in November 1991. Our concerns about the safety and 
security of nuclear weapons and materials in Russia following 
the collapse of the Soviet Union contributed to a broad 
Congressional consensus supporting the United States' role in 
preventing the proliferation of nuclear materials and expertise 
from Russia to unfriendly states.
    Since that time, we have spent over $1 billion to provide 
assistance to Russia and former Soviet states to eliminate 
strategic nuclear weapons, to establish security, control and 
accounting systems to protect nuclear weapons and 
fissilematerials from unauthorized use or theft, to improve the 
operational safety of Soviet designed nuclear power reactors and to 
support Russian nuclear scientists' research in non-defense programs to 
meet their livelihood needs and prevent them from seeking alternative 
employment in an unfriendly state. The record shows that these programs 
are meeting their objectives. Although there is evidence of attempts, 
we have no evidence of successful theft of nuclear materials from 
Russia and application of nuclear materials or expertise to nuclear 
programs in unfriendly nations.
    Those who object to this program may believe that our 
support constitutes a form of foreign aid to a former (perhaps 
current, in the view of many) enemy. They maintain that such 
programs should be the concern and obligation of the Russian 
government. I concur that the Russian government is obligated 
to meet these security needs, but I am also persuaded that our 
actions to support the CTR programs are primarily in our own 
national security interest. Regardless of who may be at fault 
if nuclear materials are stolen from stockpiles in Russia, the 
threat of nuclear terrorism constitutes the most significant 
threat to the United States today. To the extent that the 
Russian economy is not able to fully support funding their 
nuclear security requirements, we should continue to assist 
them in our own national interest.
    I recently visited Russian nuclear facilities in 
Chelyabinsk-70 and near Moscow, and was able to observe 
firsthand the limitations of Russian technology in meeting 
their nuclear security needs. While in Russia, I observed the 
fruits of our cooperative programs at numerous facilities where 
our high technology security devices have been installed. Those 
facilities will serve as models for the hundreds of other 
nuclear research and storage facilities in Russia that are 
currently without effective security systems. No one knows the 
full extent of Russia's nuclear security needs at this point, 
but our effort to help meet those needs should continue until 
Russia is able to do so by itself or until the requirements are 
fully met. I am baffled by those who would want to curtail or 
abandon efforts to achieve this goal.
    As we continue to move to START II and then to START III we 
still have a need to maintain a safe and reliable nuclear 
deterrent. This committee has pushed the Department of Energy 
(DOE) very hard to accelerate its program to select a tritium 
production technology, either an existing reactor or an 
accelerator, and produce new tritium. (Tritium, a radioactive 
gas with a half life of 12.3 years and needed for all nuclear 
weapons, has not been made in the United States since 1988.) 
Paradoxically, even though the Secretary of Energy has both 
written and testified about the need for a legislative 
provision to clear the way to produce tritium in a commercial 
reactor, the committee refused to adopt the provision that 
would allow the Secretary to accelerate this technology 
decision.
    The committee has chosen to fund programs for which no 
requirement exists, to neglect fully funding programs for which 
current military requirements are not being met, and to cut 
funding for programs such as CTR which are dedicated to meeting 
our highest priority security needs. I regret those choices by 
the committee and intend to raise these issues when the Senate 
considers the bill.

                                                     Jeff Bingaman.
                 ADDITIONAL VIEWS OF SENATOR JOHN GLENN

    I am pleased the Committee supported the inclusion of 
criteria to be used in determining how to add funds for Reserve 
Component equipment. The criteria, not unlike those used for 
evaluating adding funds for military construction projects, are 
aimed at ensuring that added funding for Reserve Component 
equipment meets a joint requirement, is in the Department's 
Future Years Defense Plan, is consistent with the Reserve 
Component's planned operations, and can be obligated in the 
upcoming fiscal year. Every year we add hundreds of millions of 
dollars for Reserve Component equipment. I am pleased that this 
year the Committee also supports adding an objective standard 
by which we can measure requests for added funding.
    While I support the bill overall, there are a number of 
issues about which I must express my concern. First, I take 
strong exception to the section included in the General 
Provisions which would prevent the General Accounting Office 
(GAO) from conducting any self-initiated audits, under its 
basic legislative authority, until all other outstanding 
Congressional requests have been completed.
    This language amends Title 31 of the U.S. Code and is an 
unwarranted and unjustified intrusion into the jurisdiction of 
the Committee on Governmental Affairs. It represents a major 
policy shift in the operation and authority of GAO. One which 
this Committee adopted without any consultation or input from 
the Governmental Affairs Committee.
    The Governmental Affairs Committee held an oversight 
hearing on GAO last Congress. There were several Members on 
each side of the aisle at that time who served on both 
Committees. I don't recall any Member raising this as an issue 
or discussing problems regarding GAO's self-initiated audits to 
light. Moreover, the Committee, under my Chairmanship, 
contracted with the National Academy of Public Administration 
(NAPA), to comprehensively review GAO's management and 
operations. The NAPA study did not identify any problems 
related to GAO's conduct under their basic legislative 
authority, nor did it make any recommendations for our 
consideration on this issue. In fact, quite the contrary. Some 
analysts thought GAO should perform more, not less, self-
initiated audits. In their view, GAO was often subject to 
rather parochial and narrow Member requests which only drained 
GAO's time and resources. I would note that GAO currently 
conducts 80% of its work in response to Member requests. A few 
years ago, it was far more evenly split.
    Since 1921, the Comptroller General has had broad authority 
to evaluate programs and investigate on his own initiative 
``all matters relating to the receipt, disbursement, and use of 
public money''. Self-initiated authority has provided GAO the 
flexibility to pursue critical issues that auditors and 
investigators uncover in the course of their work. It is 
essential to the maintenance of generally accepted standards of 
independence and impartiality. Any restriction of this 
authority would be akin to us muzzling the auditor. The effect 
of this provision would be that, for example, work could not 
proceed onthe next set of ``High Risk'' list reports until all 
Member requests--just think if a Member requested GAO to examine 
``alien'' abductions--not only had been staffed, but had been 
completed. On large jobs, it may take well over a year to do the work.
    I know from my long service on the Governmental Affairs 
Committee that Members often disagree with GAO's conclusions on 
a particular report. That has happened to me more than once. 
But if we demand objectivity, and I think all of us do, then we 
must give GAO the independence and authority they need to do 
the job. We want them to be able to investigate mismanagement 
or fraud wherever it exists.
    I regret that this Committee did not see fit to consult 
with GAO's authorizing Committee before slipping this provision 
in a massive bill at the last moment. I know that I, during my 
Chairmanship of the Governmental Affairs Committee, would at 
least have consulted with the Armed Services Committee if we 
were going to act on legislation affecting Title 10.
    For these reasons, I will do all I can to strike this 
provision from this bill on the Senate floor, and I would hope 
colleagues on both Committees would join with me.
    The Committee's bill contains five land conveyance 
provisions--including one that was added at literally the last 
minute--and in their current form I am opposed to each of them. 
I am extremely disappointed that the Committee has discontinued 
a process to evaluate land conveyances which started when I was 
chairman of the Readiness subcommittee, and which was continued 
by Senator McCain when he was chairman. This informal process 
sought to ensure that taxpayer's interests were partially 
protected, by conducting an expedited 30-day screen conducted 
by the General Services Administration for other federal 
interest of each proposed conveyance. Because these land 
conveyance provisions waive the Federal Property and 
Administrative Services Act, the Committee cannot assure 
taxpayers that the Federal government is not seeking to acquire 
property that is similar to what the legislative provisions are 
giving away.
    In the past, we have also asked the General Services 
Administration to provide a preliminary estimate of the value 
of the property which the Committee is proposing to give away. 
I would note that each of the five conveyances included in the 
Committee's bill would convey the property for no 
consideration. I think, at a minimum, we should at least have a 
ball park estimate of how much money the government is losing 
with these provisions.
    I intend to ask GSA to conduct a 30-day screen for each 
property, and make an estimate, to the extent possible, of the 
value of each proposed conveyance. I will let my colleagues 
know of the results of this inquiry.
    In addition, I am strongly opposed to the Committee's 
action in raising the budget for the space based laser by $118 
million. Deployment of this dubious Star Wars hold-over would 
violate the ABM Treaty, cost an exorbitant amount, and not 
address any real current or anticipated near-term threat to our 
security. I have similar concerns about the $80 million that 
the Committee isrecommending for the antisatellite (ASAT) 
program.
    The Committee can find $118 for the Space Based Laser and 
$80 million for ASAT, but is slashing $135 million from one of 
our most valuable national security programs, the Cooperative 
Threat Reduction program. The proposal to cut $25 million from 
the Energy Department's Materials Protection, Control and 
Accounting (MPC&A) program, another $50 million from the 
department's international nuclear safety program, and $60 
million from the CTR program itself--are to me extremely ill-
advised. I strongly support the efforts by Senator Bingaman to 
restore and to increase funds for the MPC&A program and the 
Initiatives for Proliferation Prevention program.
    Perhaps most extraordinary of all was the Committee's 
agreement to increase the National Missile Defense program by a 
whopping $474 million without even first requiring a detailed 
explanation of how these funds would be spent. The Committee's 
action offers strong evidence of a double standard at work in 
the current Congress, in which social and environmental 
programs are being slashed and subjected to congressional 
micromanagement, while a massive and provocative defense 
program escapes close congressional scrutiny. The Committee is 
giving all the appearance here of handing the NMD program a 
blank check, at the same time another bill (S. 7) would force 
the President to deploy a NMD system by the year 2003. I regard 
these actions both as poor defense policy and poor management 
of the public's funds.
    Finally, I regret that the Committee has acceded to the 
Department's request to cut end strength further. I understand 
the rationale that is used to support continued end strength 
reductions, i.e. to cut end strength in order to generate cash 
savings that can help pay for modernization programs, and I 
agree completely that our service members deserve to have the 
best and most modern equipment available. However, I do not 
agree with the approach that we reduce the size of the force to 
pay for it.
    We are using the military more today than at any time 
during the Cold War. I believe that if we want to continue to 
deploy a superb and ready force, we cannot cut the size of the 
force year after year and operate at the same optempo. Even if 
modernization programs can reduce the manpower needed to 
conduct wartime or peacetime operations in the long term, in 
the near term, we still need people to carry out our important 
worldwide commitments. I am concerned that we are rapidly 
falling below the manning levels necessary to either conduct 
our peacetime operations or credibly maintain a combat force 
capable of carrying out two nearly simultaneous major regional 
contingencies. Unfortunately, I do not believe it is possible 
to build a consensus in the Congress to maintain the 
appropriate size force, which I believe to be about 1.6 million 
active duty, when the Defense Department, itself, argues that 
it does not need these personnel and views the savings from end 
strength reductions as a relatively easy way to fund its 
weapons programs.

                                                        John Glenn.
                ADDITIONAL VIEWS OF SENATOR MAX CLELAND

    I support most of the provisions in this bill. However, I 
am deeply concerned about the 25 percent reduction in 
Engineering and Manufacturing Development (EMD) funding for the 
F-22. The committee decided to spend $420 million on other 
military items none of which were rated higher in priority to 
the Department of Defense than the F-22. The Committee had a 
clear choice: Support our military leaders in upgrading and 
modernizing our tactical air capability with the F-22, or cut 
25 percent out of the program now and buy a bunch of dump 
trucks.
    In all the testimony this committee has received, the 
committee has been informed repeatedly that the F-22 is the 
number one priority of the Air Force. This includes a former 
Republican member of this committee who is now Secretary of 
Defense The F-22's stealthy features combined with its 
supercruise capability will allow the F-22 to not only achieve 
air-superiority, but air dominance. To put it in context, the 
United States achieved air-superiority in Korea and Vietnam. In 
the Gulf War, we achieved air dominance.
    Last year, the Joint Estimate Team, a joint team of 
contractors and Air Force leadership conducted a review of the 
program with an eye towards reducing costs in the EMD phase. 
The JET determined that EMD cost increases were driven by 
better information on touch labor, additional flight test time, 
increased timing for avionics integration and engineering 
changes on the engine. Additional costs due to inflation were 
also identified. To address these issues and reduce risk, the 
JET recommended reducing the cost of the program by eliminating 
the requirement for some pre-production vehicles and absorbing 
the remaining cost by slowing the production ramp.
    The recommendations set forth in this bill reduce funding 
for the EMD phase by $420 million. It essentially rejects the 
recommendations of the JET. In my view, it does so without 
offering a clear path for successful execution of the program. 
I fail to see how preventing the Air Force from making prudent 
adjustments in the program will increase the confidence in the 
F-22 program.
    I share the concerns raised by many regarding the cost of 
this aircraft, especially with regard to the growth of cost 
estimates for production of the F-22. I agree that we need to 
support efforts to restore our confidence in the program. In 
that regard, I supported the implementation of reporting 
requirements contained in this bill, which will allow this 
committee to closely monitor the development of this program, 
particularly with regard to the cost. I also believe it is 
reasonable to consider supporting a cap on funding for the 
Engineering and Manufacturing Development phase. This cap is 
essentially what the Air Force believes it will cost to 
complete this phase.
    However, the decision to reduce funding for the F-22 at a 
time when the Air Force is undergoing a restructure to the 
program sends the wrong message. It tells the Air Force that 
conscientious steps to reduce costs and restore confidence in 
the program will be met with budget cuts. This bill contains no 
incentive to restore costs. I have proposed authorizing the 
necessary funds to proceed with the program, but making such an 
authorization contingent on certain requirements aimed at 
bringing the program under control. I will continue to advocate 
such an approach for the F-22, and I hope the Congress will 
ultimately make the right decision on this matter.

                                                       Max Cleland.

                                
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