House Report 108-106 - NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2004

[House Report 108-106]
[From the U.S. Government Publishing Office]

108th Congress Report
1st Session HOUSE OF REPRESENTATIVES 108-106
_______________________________________________________________________

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2004

__________

R E P O R T

OF THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

H.R. 1588

together with

ADDITIONAL, DISSENTING, AND

SUPPLEMENTAL VIEWS

[Including cost estimate of the Congressional Budget Office]

May 16, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

HOUSE COMMITTEE ON ARMED SERVICES
One Hundred Eighth Congress

DUNCAN HUNTER, California, Chairman
CURT WELDON, Pennsylvania IKE SKELTON, Missouri
JOEL HEFLEY, Colorado JOHN SPRATT, South Carolina
JIM SAXTON, New Jersey SOLOMON P. ORTIZ, Texas
JOHN M. McHUGH, New York LANE EVANS, Illinois
TERRY EVERETT, Alabama GENE TAYLOR, Mississippi
ROSCOE G. BARTLETT, Maryland NEIL ABERCROMBIE, Hawaii
HOWARD P. ``BUCK'' McKEON, MARTY MEEHAN, Massachusetts
California SILVESTRE REYES, Texas
MAC THORNBERRY, Texas VIC SNYDER, Arkansas
JOHN N. HOSTETTLER, Indiana JIM TURNER, Texas
WALTER B. JONES, North Carolina ADAM SMITH, Washington
JIM RYUN, Kansas LORETTA SANCHEZ, California
JIM GIBBONS, Nevada MIKE McINTYRE, North Carolina
ROBIN HAYES, North Carolina CIRO D. RODRIGUEZ, Texas
HEATHER WILSON, New Mexico ELLEN O. TAUSCHER, California
KEN CALVERT, California ROBERT A. BRADY, Pennsylvania
ROB SIMMONS, Connecticut BARON P. HILL, Indiana
JO ANN DAVIS, Virginia JOHN B. LARSON, Connecticut
ED SCHROCK, Virginia SUSAN A. DAVIS, California
W. TODD AKIN, Missouri JAMES R. LANGEVIN, Rhode Island
J. RANDY FORBES, Virginia STEVE ISRAEL, New York
JEFF MILLER, Florida RICK LARSEN, Washington
JOE WILSON, South Carolina JIM COOPER, Tennessee
FRANK A. LoBIONDO, New Jersey JIM MARSHALL, Georgia
TOM COLE, Oklahoma KENDRICK B. MEEK, Florida
JEB BRADLEY, New Hampshire MADELEINE Z. BORDALLO, Guam
ROB BISHOP, Utah RODNEY ALEXANDER, Louisiana
MICHAEL TURNER, Ohio TIM RYAN, Ohio
JOHN KLINE, Minnesota
CANDICE S. MILLER, Michigan
PHIL GINGREY, Georgia
MIKE ROGERS, Alabama
TRENT FRANKS, Arizona
Robert S. Rangel, Staff Director

C O N T E N T S

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Page

Explanation of the Committee Amendments.......................... 1
Purpose.......................................................... 2
Relationship of Authorization to Appropriations.................. 2
Summary of Authorization in the Bill............................. 2
Summary Table of Authorizations................................ 3
Rationale for the Committee Bill................................. 11
Hearings......................................................... 16

DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION.................. 17

TITLE I--PROCUREMENT............................................. 18
OVERVIEW....................................................... 18
Aircraft Procurement, Army................................... 19
Overview................................................... 19
Items of Special Interest.................................. 23
Kiowa warrior............................................ 23
UH-60 blackhawk.......................................... 23
UH-60 modifications...................................... 23
Missile Procurement, Army.................................... 24
Overview................................................... 24
Items of Special Interest.................................. 27
Patriot PAC-3............................................ 27
Weapons and Tracked Combat Vehicles, Army.................... 27
Overview................................................... 27
Items of Special Interest.................................. 31
Counterattack corps modernization........................ 31
Ammunition Procurement, Army................................. 32
Overview................................................... 32
Items of Special Interest.................................. 36
Army ammunition procurement.............................. 36
Joint ammunition production base upgrades and capacity... 36
Other Procurement, Army...................................... 37
Overview................................................... 37
Items of Special Interest.................................. 47
Communications-electronics equipment fielding............ 47
Construction equipment ESP............................... 47
Family of heavy tactical vehicles........................ 47
Full tracked tractor..................................... 48
High mobility multi-purpose wheeled vehicles (HMMWVs).... 48
Joint tactical area command systems...................... 48
Knight family............................................ 49
Land warrior............................................. 49
Lightweight video reconnaissance system (LVRS)........... 50
Local area network upgrades.............................. 50
Logistic support vessel (LSV)............................ 50
Nonsystem training devices............................... 51
Warfighter information network-tactical (WIN-T).......... 51
Aircraft Procurement, Navy................................... 51
Overview................................................... 51
Items of Special Interest.................................. 56
AV-8B series modifications............................... 56
EA-6B modifications...................................... 56
Joint Primary Air Training System (JPATS)................ 57
P-3 series modifications................................. 57
T-45A to T-45C conversion................................ 58
Weapons Procurement, Navy.................................... 58
Overview................................................... 58
Items of Special Interest.................................. 62
Close-in weapon system (CIWS) block 1B upgrade........... 62
GQM-163A coyote supersonic sea skimming target........... 62
Tomahawk missile......................................... 62
Ammunition Procurement, Navy & Marine Corps.................. 63
Overview................................................... 63
Items of Special Interest.................................. 66
Marine Corps ammunition procurement...................... 66
Navy ammunition procurement.............................. 66
Shipbuilding and Conversion, Navy............................ 66
Overview................................................... 66
Items of Special Interest.................................. 70
Landing craft air cushion (LCAC) service life extension
program (SLEP)......................................... 70
Minehunter small waterplane area twin hull (SWATH) boats. 70
Other Procurement, Navy...................................... 70
Overview................................................... 70
Items of Special Interest.................................. 79
Fuel and engine maintenance savings system (FEMSS)....... 79
Law enforcement information exchange..................... 79
Naval fires control system (NFCS)........................ 79
Navy tactical data systems............................... 79
Non-lethal swimmer detection systems..................... 80
Operating forces industrial plant equipment.............. 80
Other supply support equipment........................... 80
Radar support............................................ 81
Procurement, Marine Corps.................................... 81
Overview................................................... 81
Items of Special Interest.................................. 86
Night vision equipment................................... 86
Radio systems............................................ 86
Weapons and combat vehicles under $5.0 million........... 86
Aircraft Procurement, Air Force.............................. 87
Overview................................................... 87
Items of Special Interest.................................. 94
Air Force air refueling transfer account................. 94
B-1B modifications....................................... 95
B-2 modifications and development........................ 95
C-5 modifications and force structure.................... 96
C-17..................................................... 97
C-130 modifications...................................... 98
E-8C joint surveillance and target attack radar system
(JSTARS) reengining.................................... 98
F-15 modifications....................................... 98
F-16 Air National Guard (ANG) force structure............ 99
F-16 modifications....................................... 99
F/A-22................................................... 100
Fixed aircrew standardized seats (FASS).................. 101
H-60 modifications....................................... 101
Predator B unmanned aerial vehicle (UAV)................. 102
Ammunition Procurement, Air Force............................ 102
Overview................................................... 102
Items of Special Interest.................................. 104
Air Force ammunition procurement......................... 104
Missile Procurement, Air Force............................... 104
Overview................................................... 104
Other Procurement, Air Force................................. 107
Overview................................................... 107
Items of Special Interest.................................. 113
Air Force information technology procurement............. 113
Combat arms training system (CATS)....................... 113
General information technology........................... 113
Miniature-multiple threat emitter system (Mini-MUTES).... 114
Point of maintenance initiative (POMX)................... 114
Procurement, Defense-Wide.................................... 114
Overview................................................... 114
Items of Special Interest.................................. 119
Chemical/biological defense procurement program.......... 119
Defense wide information technology procurement.......... 119
Department of defense budget justification documentation. 119
Information technology................................... 121
Military tactical radio procurement...................... 121
Operation Iraqi Freedom lessons learned.................. 121
Secure wireless technology............................... 122
Special operations forces (SOF) ordnance................. 122
Special operations forces (SOF) weapons improvements..... 123
LEGISLATIVE PROVISIONS......................................... 123
Subtitle A--Authorization of Appropriations.................. 123
Sections 101-104--Authorization of Appropriations.......... 123
Subtitle B--Army Programs.................................... 123
Section 111--Stryker Vehicle Program....................... 123
Subtitle C--Navy Programs.................................... 123
Section 121--Multiyear Procurement Authority for F/A-18
Aircraft Program......................................... 123
Section 122--Multiyear Procurement Authority for Tactical
Tomahawk Cruise Missile Program.......................... 123
Section 123--Multiyear Procurement Authority for Virginia
Class Submarine Program.................................. 124
Section 124--Multiyear Procurement Authority for E-2C
Aircraft Program......................................... 124
Section 125--LPD-17 Class Vessel........................... 124
Subtitle D--Air Force Programs............................... 124
Section 131--Air Force Air Refueling Transfer Account...... 124
Section 132--Increase in Number of Aircraft Authorized to
be Procured Under Multiyear Procurement Authority for Air
Force C-130J Aircraft Program............................ 125
Section 133--Limitation on Retiring C-5 Aircraft........... 125
Section 134--Limitation on Obligation of Funds for
Procurement of F/A-22 Aircraft........................... 125

TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION............ 125
OVERVIEW....................................................... 125
Army Research, Development, Test, & Evaluation............... 128
Overview................................................... 128
Items of Special Interest.................................. 140
Advanced battery technology initiative................... 140
Advanced cluster energetics.............................. 140
Advanced electric drive.................................. 140
Advanced precision kill weapon system (APKWS)............ 141
Armored Systems Modernization............................ 141
Army Centers of Excellence............................... 142
Army Evaluation Center................................... 142
Army information dominance center expanded processing for
advanced data analysis................................. 143
Army integrated broadcast service integration............ 143
Army manufacturing and maintenance organization.......... 143
Army unmanned aerial vehicle advocacy.................... 143
Asbestos pilot project................................... 144
Brilliant anti-armor submunition......................... 144
Broad area unmanned responsive re-supply operations...... 145
Brooks Energy and Sustainability Lab..................... 145
Cadmium zinc telluride detectors......................... 145
Commercial-off-the Shelf (COTS) fuel filtration device... 145
Defense Language Institute research and development...... 146
Desert terrain analysis.................................. 146
Electromagnetic Gun Initiative........................... 146
Hemoglobin-based oxygen carrier.......................... 147
Intelligence and Security Command global information
portal................................................. 148
Legacy parts reinvention................................. 148
Medium Extended Air Defense System....................... 148
Metallic particles in defense applications obscurant
smokes................................................. 149
Micro electro-mechanical systems inertial measurement
unit/global positioning system......................... 149
Modular multi function laser system...................... 149
Non system training devices and constructive simulation
systems development.................................... 149
Objective force bandwidth report......................... 150
Palletized synthetic aperture radar moving target
indicator radar sets................................... 150
Patriot PAC-3............................................ 150
Patriot PAC-2............................................ 151
Portable and mobile emergency broadband system........... 151
Pseudofollicullitus Barbae Research...................... 151
Reconfiguring tooling.................................... 151
Remote acoustic hemostasis............................... 152
Rugged textile electronic garments for combat casualty
care................................................... 152
ScramFire 120mm powered munition......................... 152
Wire detection, wind sensor and obstacle avoidance system
for helicopters........................................ 153
Navy Research, Development, Test & Evaluation................ 153
Overview................................................... 153
Items of Special Interest.................................. 167
Advanced cable design for mine and submarine warfare..... 167
Advanced composite sail phase II......................... 167
Advanced Navy materials.................................. 167
Advanced sensor initiative............................... 167
Advanced WaterJet-21..................................... 168
Aegis open architecture.................................. 168
Affordable towed array construction (ATAC) program....... 169
Affordable weapons system................................ 169
Airborne buried mine detection........................... 170
ALE-55 development testing............................... 170
All optical underwater segments.......................... 171
Anti-surface warfare improvement program (AIP) phased
capability update (PCU)................................ 171
Automated wire analysis.................................. 171
Autonomous naval support round........................... 171
AV-8B engine life management program (ELMP).............. 172
Battle force tactical training coalition interoperability 172
Biomedical Research Imaging.............................. 173
Claymore Marine.......................................... 173
COBRA JUDY............................................... 173
Combat systems integration/battle force interoperability. 173
Consolidated undersea situational awareness system....... 174
Cruise missile real time retargeting/laser radar
technology............................................. 174
DD(X) multi-mission surface combatant.................... 175
Deployable joint command and control..................... 175
Digital intelligence situation mapboard.................. 176
DP-2 thrust vectoring system............................. 177
Emerging/Critical interconnection technology............. 177
Fire-retarded POSS composites............................ 178
Formable aligned carbon thermosets....................... 178
Global Hawk maritime demonstration....................... 178
High performance electric brush.......................... 179
High temperature superconducting AC synchronous ship
propulsion motor....................................... 179
IMPRINT.................................................. 180
Integrated Maritime Picture System of Systems............ 180
Integrated radar optical surveillance and sighting system 180
Joint integrated satellite communications technology
(JIST)................................................. 181
Joint warfare experiments................................ 181
Joint warfare experimentation program.................... 181
Knowledge projection for fleet maintenance............... 182
Littoral combat ship..................................... 182
Littoral combat ship mission module development.......... 183
Littoral support craft-experiment........................ 184
Low acoustic signature motor/propulsor................... 185
Low-power mega-performance unmanned aerial vehicle
processing engines..................................... 185
Low probability of intercept surveillance radar
demonstration.......................................... 185
Manned reconnaissance aircraft replacement............... 186
Marine mammal research program........................... 186
Metrology................................................ 187
Mobile expandable shelters............................... 187
Modeling and simulation of surgical procedures for
battlefield trauma..................................... 187
Multi-mission maritime aircraft.......................... 187
Naval architecture and engineering....................... 188
Naval collaboration tool set............................. 188
Naval fires network tactical dissemination module........ 189
Navy circuit breaker electronic trip unit second source.. 189
Navy information technology research and development..... 189
Nonlinear dynamics stochastic resonance.................. 189
Offshore mobile basing................................... 190
Open architecture wireless sensors....................... 190
Organ transfer technology................................ 190
Project M................................................ 191
Quad hull security caisson technical demonstration....... 192
Rapid deployment fortification wall live-fire testing.... 192
Reduction of catapult post-retraction exhaust discharge.. 192
Remote ocean surveillance system......................... 193
Shadow 200 system components for the Marine Corps........ 193
Shipboard fire protection................................ 193
Silver Fox unmanned aerial vehicle....................... 194
Station-keeping ocean environment sensors................ 194
Submarine payloads and sensors........................... 194
Submarine sonar improvements............................. 195
Superconducting DC homopolar motor....................... 195
Surface Navy integrated undersea tactical technology--
mine warfare trainer................................... 195
Theater undersea warfare initiative...................... 196
Unmanned aerial vehicle joint operational test bed system 197
Unmanned aerial vehicles concept of operations........... 197
Vacuum electronics....................................... 197
Virginia class multi-mission module...................... 198
Wide band gap semiconductor power electronics............ 198
Air Force Research, Development, Test, & Evaluation.......... 199
Overview................................................... 199
Items of Special Interest.................................. 212
3D Bias Woven Preforms................................... 212
Advanced extremely high frequency MILSATCOM.............. 212
Advanced spacecraft technology........................... 212
Advanced Threat Alert Receiver (ATAR)/Lightweight Modular
Support Jammer (LMSJ).................................. 212
Advanced wideband system................................. 213
Aircraft turbine engine sustainment...................... 213
Air Force information technology research and development 213
Air Force space fence.................................... 213
Ballistic missile technology program..................... 214
Central measurement intelligence office.................. 214
Civil reserve space service.............................. 214
Common aero vehicle...................................... 214
Distributed common ground system......................... 215
Distributed mission interoperability toolkit (DMIT)
program................................................ 215
Enhanced techniques for detection of explosives.......... 215
F-15 C/D radar block upgrade............................. 216
F-16 squadrons........................................... 216
F-16 theater airborne reconnaissance system (TARS)....... 217
Flexible display and integrated communications devices... 217
Force protection and survivability for deployed forces... 217
Fusion SIGINT enhancements for network-centric
intelligence, surveillance and reconnaissance.......... 218
Global Hawk advanced imagery architecture................ 218
Hardening technologies for satellite protection.......... 218
High Accuracy network determination system............... 218
Hybrid bearings.......................................... 219
Integrated broadcast service............................. 219
Integrated High Payoff Rocket Propulsion Technology
(IHPRPT) program....................................... 219
Link 16 weapon data terminal............................. 219
Low emission/efficient hybrid aviation refueling truck
propulsion............................................. 220
Metals affordability..................................... 220
Nanomaterials............................................ 220
National operational signature production and research
capability............................................. 220
NAVSTAR Global positioning system III.................... 220
Next generation bomber program........................... 221
Nuclear detonation detection system...................... 221
Operationally responsive launch.......................... 221
Precision location and identification (PLAID) technology
program................................................ 222
Space based radar........................................ 222
Defense-Wide Research, Development, Test, & Evaluation....... 222
Overview................................................... 222
Items of Special Interest.................................. 233
Advanced Micro/Nano-Electromechanical Systems Technology. 233
Advanced sensor applications program..................... 233
Advanced solid-state dye laser........................... 233
Advanced target identification capability for AC-130U
gunships............................................... 233
Air to air technology.................................... 234
Anti-radiation drug development and trials program....... 234
Asymmetric protocols for biological defense.............. 234
Ballistic missile defense................................ 235
Technology and advanced concepts....................... 235
Terminal defense segment............................... 236
Midcourse defense segment.............................. 236
System interceptor..................................... 237
System core segment.................................... 237
Products............................................... 238
Ballistic missile defense testing........................ 238
Ballistic missile defense reporting requirements......... 238
Blast mitigation and analysis technology................. 239
Chemical/biological defense research, development, test
and evaluation program............................... 239
Chemical biological defense applied research initiative 240
Chemical biological defense advanced technology
development initiative............................... 240
Chemical biological electrostatic decontamination system. 241
Cobra blue force tracking................................ 241
Connectory for rapid identification of technology sources 241
Department of Defense information technology research and
development............................................ 242
Defense science and technology funding................... 242
Advanced concept technology demonstrations and
technology transition................................ 243
Devolvement............................................ 243
Navy science and technology program.................... 244
Defense Advanced Research Projects Agency.............. 244
Facial recognition access control technology............. 244
Integrated nano- and micro-manufacturing technology...... 245
Magnetic Quadrupole Resonance Explosives Detection....... 245
Man Portable Air Defense System (MANPADS) Defense Program 245
Medical free electron laser.............................. 245
Multi-wavelength surface scanning biologics sensor....... 246
National Defense University sponsored research program... 246
Nuclear weapons effects.................................. 247
``PackBot'' tactical mobile robot........................ 247
Primate biomedical laboratory test and evaluation
capability............................................. 247
Re-defined Assistant Secretary of Defense (Command,
Control, Communications and Intelligence) role......... 248
Special Operations Advanced Technology Development....... 249
Support to homeland security............................. 249
Technology development................................... 249
Unmanned aerial vehicle acquisition management........... 249
Operational Test and Evaluation, Defense..................... 250
Overview................................................... 250
LEGISLATIVE PROVISIONS......................................... 252
Subtitle A--Authorization of Appropriations.................. 252
Section 201--Authorization of Appropriations............... 252
Section 202--Amount for Defense Science and Technology..... 252
Subtitle B--Program Requirements, Restrictions, and
Limitations................................................ 252
Section 211--Collaborative Program for Development of
Electromagnetic Gun Technology........................... 252
Section 212--Authority to Select Civilian Employees of
Department of Defense as Director of Department of
Defense Test Resource Management Center.................. 253
Section 213--Joint Tactical Radio System................... 254
Section 214--Future Combat Systems......................... 254
Section 215--Army Program To Pursue Technologies Leading To
The Enhanced Production Of Titanium By The United States. 254
Section 216--Extension of Reporting Requirement for RAH-66
Comanche Aircraft Program................................ 254
Section 217--Future Fleet Architecture Studies............. 255
Subtitle C--Ballistic Missile Defense........................ 257
Section 221--Ballistic Missile Defense System.............. 257

TITLE III--OPERATION AND MAINTENANCE............................. 257
READINESS OVERVIEW............................................. 257
ITEMS OF SPECIAL INTEREST...................................... 290
Budget Request Adjustments--Readiness........................ 290
Budget Request Display Issues--Readiness..................... 291
Base Operating Support..................................... 291
Civilian Career Program Relocations--Air Force............. 291
Civilian Personnel Budget--Army............................ 291
Civilian Separation Incentives--Air Force.................. 291
Commercial Technologies for Maintenance Activities--Defense
Logistics Agency......................................... 292
Consumable Repair Parts--Army.............................. 292
Contingency Operations Funding--Southwest Asia............. 292
Defense Information Systems Agency......................... 292
Defense Policy Analysis Office............................. 292
Depot Funding.............................................. 293
Army..................................................... 293
Air Force................................................ 293
Navy..................................................... 294
Marine Corps............................................. 294
Fuel Costs--Defense Logistics Agency....................... 294
Initial Issue Equipment--Marine Corps...................... 295
Office of Secretary of Defense, Contracts and Other Support
Services................................................. 295
Overseas Contingency Operations Fund....................... 295
Supply Management Activity Group--Air Force................ 295
Transportation Working Capital Fund--Air Force............. 296
Working Capital Fund Cash Management....................... 296
Budget Request--Other Matters................................ 296
Chemical Agents and Munitions Destruction.................. 296
Defense and Security Cooperation with Poland, Bulgaria, and
Romania.................................................. 298
Expansion of Export Control Database....................... 298
Information Technology Issues................................ 299
Overview................................................... 299
Budget Displays............................................ 300
General Reductions......................................... 300
Global Information Grid Bandwidth Expansion................ 300
Information Technology Specific Reductions................. 301
Nationwide Dedicated Fiber Optic Network (NDFON)........... 302
Other Issues................................................. 302
Budget Justification Exhibit Materials..................... 302
Cash Management............................................ 303
Depot Maintenance Long-Term Strategy....................... 304
Expansion of Export Control Database....................... 304
Facility Sustainment, Renovation and Modernization......... 305
Foreign Currency Accounts.................................. 305
Maintaining the Strategic Domestic Beryllium Supply........ 305
Ship Intermediate and Depot Maintenance Funding............ 306
LEGISLATIVE PROVISIONS......................................... 306
Subtitle A--Authorization of Appropriations.................. 306
Section 301--Operation and Maintenance Funding............. 306
Section 302--Working Capital Funds......................... 306
Section 303--Other Department of Defense Programs.......... 306
Subtitle B--Environmental Provisions......................... 306
Section 311--Reauthorization and Modification of Title I of
Sikes Act................................................ 306
Section 312--Authorization for Defense Participation in
Wetland Mitigation Banks................................. 307
Section 313--Inclusion of Environmental Response Equipment
and Services in Navy Definitions of Salvage Facilities
and Salvage Services..................................... 307
Section 314--Clarification of Department of Defense
Response to Environmental Emergencies.................... 307
Section 315--Requirements for Restoration Advisory Boards
and Exemption from Federal Advisory Committee Act........ 307
Section 316--Report Regarding Impact of Civilian Community
Encroachment and Certain Legal Requirements on Military
Installations and Ranges................................. 307
Section 317--Military Readiness and Conservation of
Protected Species........................................ 308
Section 318--Military Readiness and Marine Mammal
Protection............................................... 308
Section 319--Limitation on Department of Defense
Responsibility for Civilian Water Consumption Impacts
Related to Fort Huachuca, Arizona........................ 309
Section 320--Construction of Wetland Crossings, Camp Shelby
Combined Arms Maneuver Area, Camp Shelby, Mississippi.... 309
Subtitle C--Workplace and Depot Issues....................... 310
Section 321--Exclusion of Certain Expenditures from
Percentage Limitation on Contracting for Performance of
Depot-Level Maintenance and Repair Workloads............. 310
Section 322--High-Performing Organization Business Process
Reengineering Pilot Program.............................. 310
Section 323--Delayed Implementation of Office of Revised
Management and Budget Circular A-76 by Department of
Defense Pending Report................................... 311
Section 324--Naval Aviation Depots Multi-Trades
Demonstration Project.................................... 311
Subtitle D--Information Technology........................... 311
Section 331--Performance-based and Results-based Management
Requirements for Chief Information Officers of Department
of Defense............................................... 311
Subtitle E--Other Matters.................................... 311
Section 341--Cataloging and Standardization for Defense
Supply Management........................................ 311
Section 342--Space-Available Transportation for Dependents
of Members Assigned to Overseas Duty Locations for
Continuous Period in Excess of One Year.................. 312
Section 343--Preservation of Military Weather
Reconnaissance Mission................................... 312

TITLE IV--MILITARY PERSONNEL AUTHORIZATIONS...................... 312
OVERVIEW....................................................... 312
ITEM OF SPECIAL INTEREST....................................... 313
Military Manpower Reductions............................... 313
LEGISLATIVE PROVISIONS......................................... 314
Subtitle A--Active Forces.................................... 314
Section 401--End Strengths for Active Forces............... 314
Section 402--Revision in Permanent Active Duty End Strength
Minimum Levels........................................... 315
Subtitle B--Reserve Forces................................... 315
Section 411--End Strengths for Selected Reserve............ 315
Section 412--End Strengths for Reserves on Active Duty in
Support of the Reserves.................................. 315
Section 413--End Strengths for Military Technicians (Dual
Status).................................................. 316
Section 414--Fiscal Year 2004 Limitation on Non-Dual Satus
Technicians.............................................. 316
Section 415--Permanent Limitations on Number of Non-Dual
Status Technicians....................................... 316
Subtitle C--Authorization of Appropriations.................. 316
Section 421--Military Personnel............................ 316
Section 422--Armed Forces Retirement Home.................. 317
TITLE V--MILITARY PERSONNEL POLICY............................... 317
OVERVIEW....................................................... 317
ITEMS OF SPECIAL INTEREST...................................... 317
Department of Defense Education Partnerships............... 317
Department of Defense Overseas Schools Teacher Recruitment
Incentives............................................... 317
Electronic Voting Demonstration............................ 318
Federal Write-In Absentee Ballot........................... 318
Joint Advertising and Market Research...................... 318
Warrant Officer Appointments for the Army National Guard... 319
LEGISLATIVE PROVISIONS......................................... 319
Subtitle A--General and Flag Officer Matters................. 319
Section 501--Standardization of Qualifications for
Appointment as Service Chief............................. 319
Subtitle B--Other Officer Personnel Policy Matters........... 319
Section 511--Repeal of Prohibition on Transfer Between Line
of the Navy and Navy Staff Corps Applicable to Regular
Navy Officers in Grades Above Lieutenant Commander....... 319
Section 512--Retention of Health Professions Officers to
Fulfill Active-Duty Service Commitments Following
Promotion Nonselection................................... 320
Section 513--Increased Flexibility for Voluntary Retirement
for Military Officers.................................... 320
Subtitle C--Reserve Component Matters........................ 320
Section 521--Streamlined Process for Continuation of
Officers on the Reserve Active-Status List............... 320
Section 522--Consideration of Reserve Officers for Position
Vacancy Promotions in Time of War or National Emergency.. 320
Section 523--Simplification of Determination of Annual
Participation for Purposes of Ready Reserve Training
Requirements............................................. 321
Section 524--Authority for Delegation of Required
Secretarial Special Finding for Placement of Certain
Retired Members in Ready Reserve......................... 321
Section 525--Authority to Provide Expenses of Army and Air
Staff Personnel and National Guard Bureau Personnel
Attending National Conventions of Certain Military
Associations............................................. 321
Subtitle D--Military Education and Training.................. 321
Section 531--Authority for the Marine Corps University to
Award the Degree of Master of Operational Studies........ 321
Section 532--Expanded Educational Assistance Authority for
Cadets and Midshipmen Receiving ROTC Scholarships........ 321
Section 533--Increase in Allocation of Scholarships Under
Army Reserve ROTC Scholarship Program to Students at
Military Junior Colleges................................. 322
Section 534--Inclusion of Accrued Interest in Amounts that
May be Repaid Under Selected Reserve Critical Specialties
Education Loan Repayment Program......................... 322
Section 535--Authority for Nonscholarship Senior ROTC
Sophomores to Voluntarily Contract for and Receive
Subsistence Allowance.................................... 322
Section 536--Appointments to Military Service Academies
from Nominations Made by Delegates from Guam, Virgin
Islands, and American Samoa.............................. 322
Section 537--Readmission to Service Academies of Certain
Former Cadets and Midshipmen............................. 322
Section 538--Authorization for Naval Postgraduate School to
Provide Instruction to Enlisted Members Participating in
Certain Programs......................................... 323
Section 539--Defense Task Force on Sexual Harassment and
Violence at the Military Service Academies............... 323
Subtitle E--Administrative Matters........................... 323
Section 541--Enhancements to High-Tempo Personnel Program.. 323
Section 542--Enhanced Retention of Accumulated Leave for
High-Deployment Members.................................. 324
Section 543--Standardization of Time-in-Service
Requirements for Voluntary Retirement of Members of the
Navy and Marine Corps with Army and Air Force
Requirements............................................. 324
Section 544--Standardization of Statutory Authorities for
Exemptions from Requirement for Access to Secondary
Schools by Military Recruiters........................... 324
Section 545--Procedures for Consideration of Applications
for Award of the Purple Heart Medal to Veterans Held as
Prisoners of War Before April 25, 1962................... 324
Section 546--Authority for Reserve and Retired Regular
Officers to Hold State and Local Elective Office
Notwithstanding Call to Active Duty...................... 324
Section 547--Clarification of Offense Under the Uniform
Code of Military Justice Relating to Drunken or Reckless
Operation of a Vehicle, Aircraft or Vessel............... 324
Section 548--Public Identification of Casualties No Sooner
than 24 Hours After Notification of Next-of-Kin.......... 325
Subtitle F--Benefits......................................... 325
Section 551--Additional Classes of Individuals Eligible to
Participate in the Federal Long-Term Care Insurance
Program.................................................. 325
Section 552--Authority to Transport Remains of Retirees and
Retiree Dependents Who Die in Military Treatment
Facilities Outside the United States..................... 325
Section 553--Eligibility for Dependents of Certain
Mobilized Reservists Stationed Overseas to Attend Defense
Dependents Schools Overseas.............................. 325
Subtitle G--Other Matters.................................... 326
Section 561--Extension of Requirement for Exemplary Conduct
by Commanding Officers and Others in Authority to Include
Civilians in Authority in the Department of Defense...... 326
Section 562--Recognition of Military Families.............. 326
Section 563--Assistance to Local Educational Agencies that
Benefit Dependents of Members of the Armed Forces and
Department of Defense Civilian Employees................. 326
Section 564--Permanent Authority for Support for Certain
Chaplain-Led Military Family Support Programs............ 326
Section 565--Department of Defense--Department of Veterans
Affairs Joint Executive Committee........................ 326
Section 566--Limitation on Aviation Force Structure Changes
in the Department of the Navy............................ 327
Section 567--Impact-Aid Eligibility for Heavily Impacted
Local Educational Agencies Affected by Privatization of
Military Housing......................................... 327
Section 568--Investigation into the 1991 Death of Marine
Corps Colonel James E. Sabow............................. 327
Subtitle H--Domestic Violence................................ 327
Section 571--Travel and Transportation for Dependents
Relocating for Reasons of Personal Safety................ 327
Section 572--Commencement and Duration of Payment of
Transitional Compensation................................ 327
Section 573--Flexibility in Eligibility for Transitional
Compensation............................................. 328
Section 574--Types of Administrative Separations Triggering
Coverage................................................. 328
Section 575--On-Going Review Group......................... 328
Section 576--Resources for Department of Defense
Implementation Organization.............................. 328
Section 577--Fatality Reviews.............................. 328
Section 578--Sense of Congress............................. 328

TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS.............. 328
OVERVIEW....................................................... 328
ITEMS OF SPECIAL INTEREST...................................... 329
Survivor Benefit Program................................... 329
LEGISLATIVE PROVISIONS......................................... 329
Subtitle A--Pay and Allowances............................... 329
Section 601--Increase in Basic Pay for Fiscal Year 2004.... 329
Section 602--Computation of Basic Pay Rate for Commissioned
Officers with Prior Enlisted or Warrant Officer Service.. 329
Section 603--Special Subsistence Allowance Authorities for
Members Assigned to High-Cost Duty Location or Under
Other Unique and Unusual Circumstances................... 330
Subtitle B--Bonuses and Special and Incentive Pays........... 330
Section 611--One-Year Extension of Certain Bonus and
Special Pay Authorities for Reserve Forces............... 330
Section 612--One-Year Extension of Certain Bonus and
Special Pay Authorities for Certain Health Care
Professionals............................................ 330
Section 613--One-Year Extension of Special Pay and Bonus
Authorities for Nuclear Officers......................... 330
Section 614--One-Year Extension of Other Bonus and Special
Pay Authorities.......................................... 330
Section 615--Computation of Hazardous Duty Incentive Pay
for Demolition Duty and Parachute Jumping by Members of
Reserve Components Entitled to Compensation Under Section
206 of Title 37.......................................... 330
Section 616--Availability of Hostile Fire and Imminent
Danger Pay for Reserve Component Members on Inactive Duty 331
Section 617--Expansion of Overseas Tour Extension Incentive
Program to Officers...................................... 331
Section 618--Eligibility of Appointed Warrant Officers for
Accession Bonus for New Officers in Critical Skills...... 331
Section 619--Incentive Pay for Duty on Ground in Antarctica
or on Arctic Icepack..................................... 331
Section 620--Special Pay for Service as Member of Weapons
of Mass Destruction Civil Support Team................... 331
Section 621--Incentive Bonus for Agreement to Serve in
Critically Short Military Occupational Specialty......... 331
Section 622--Increase in Rate for Imminent Danger Pay and
Family Separation Allowance Related to Service in
Operation Iraqi Freedom or Operation Enduring Freedom.... 331
Subtitle C--Travel and Transportation Allowance.............. 332
Section 631--Shipment of Privately Owned Motor Vehicle
Within Continental United States......................... 332
Section 632--Payment or Reimbursement of Student Baggage
Storage Costs for Dependent Children of Members Stationed
Overseas................................................. 332
Section 633--Reimbursement for Lodging Expenses of Certain
Reserve Component and Retired Members During Authorized
Leave From Temporary Duty Location....................... 332
Subtitle D--Retired Pay and Survivors Benefits............... 332
Section 641--Funding for Special Compensation Authorities
for Department of Defense Retirees....................... 332
Subtitle E--Commissary and Nonappropriated Fund
Instrumentality Benefits................................... 333
Section 651--Expanded Commissary Access for Selected
Reserve Members, Reserve Retirees Under Age 60, and Their
Dependents............................................... 333
Section 652--Defense Commissary System and Exchange Stores
System................................................... 333
Section 653--Limitations on Private Operation of Defense
Commissary Store Functions............................... 333
Section 654--Use of Appropriated Funds to Operate Defense
Commissary System........................................ 333
Section 655--Recovery of Nonappropriated Fund
Instrumentality and Commissary Store Investments in Real
Property at Military Installations Closed or Realigned... 333
Section 656--Commissary Shelf-Stocking Pilot Program....... 334
Subtitle F--Other Matters.................................... 334
Section 661--Repeal of Congressional Notification
Requirement for Designation of Critical Military Skills
for Retention Bonus...................................... 334

TITLE VII--HEALTH CARE PROVISIONS................................ 334
OVERVIEW....................................................... 334
ITEMS OF SPECIAL INTEREST...................................... 335
Cost Containment in Department of Defense and Department of
Veterans Affairs Health Care System...................... 335
Force Health Protection and Surveillance................... 336
Military-Civilian Education Programs Related to Sexual
Health Decision-Making................................... 336
Population-Based Medical Research.......................... 337
Study of Cost and Feasibility of TRICARE Eligibility for
Adult Disabled Family Members............................ 337
Study of TRICARE Options for Puerto Rico................... 337
TRICARE Provider Participation............................. 338
LEGISLATIVE PROVISIONS......................................... 338
Section 701--Revision of Department of Defense Medicare-
Eligible Retiree Health Care Fund to Permit More Accurate
Actuarial Valuations..................................... 338
Section 702--Transfer of Certain Members from Pharmacy and
Therapeutics Committee to Uniform Formulary Beneficiary
Advisory Panel Under the Pharmacy Benefits Program....... 338
Section 703--Permanent Extension of Authority to Enter into
Personal Services Contracts for the Performance of Health
Care Responsibilities at Locations Other than Military
Medical Treatment Facilities............................. 339
Section 704--Plan for Providing Health Coverage Information
to Members, Former Members and Dependents Eligible for
Certain Health Benefits.................................. 339
Section 705--Working Group on Military Health Care for
Persons Reliant on Health Care Facilities at Military
Installations to be Closed or Realigned.................. 339
Section 706--Acceleration of Implementation of Chiropractic
Health Care for Members on Active Duty................... 340
Section 707--Medical and Dental Screening for Members of
Selected Reserve Units Alerted for Mobilization.......... 340

TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND
RELATED MATTERS.............................................. 340
ITEM OF SPECIAL INTEREST....................................... 340
Medical Equipment and Supplies............................... 340
LEGISLATIVE PROVISIONS......................................... 341
Subtitle A--Amendments to General Contracting Authorities,
Procedures, and Limitations.............................. 341
Section 801--Extension of Authority to Carry Out Certain
Prototype Projects....................................... 341
Section 802--Elimination of Certain Subcontract
Notification Requirements................................ 341
Section 803--Elimination of the Requirement to Furnish
Written Assurances of Technical Data Conformity.......... 341
Section 804--Limitation Period for Task and Delivery Order
Contracts................................................ 341
Section 805--Additional Authorities Relating to Obtaining
Personal Services........................................ 341
Subtitle B--United States Defense Industrial Base Provisions. 342
Part I--Critical Items Identification and Domestic Production
Capabilities Improvement Program......................... 342
Section 811--Assessment of United States Defense Industrial
Base Capabilities........................................ 342
Section 812--Identification of Critical Items: Military
System Breakout List..................................... 343
Section 813--Procurement of Certain Critical Items from
American Sources......................................... 343
Section 814--Production Capabilities Improvement for
Certain Critical Items Using Defense Industrial Base
Capabilities Fund........................................ 343
Part II--Requirements Relating to Specific Items............. 344
Section 821--Domestic Source Limitation for Certain
Additional Items......................................... 344
Section 822--Requirements Relating To Buying Specialty
Metals from American Sources............................. 344
Section 823--Elimination of Unreliable Sources of Defense
Items and Components..................................... 345
Section 824--Congressional Notification Required Before
Exercising Exception to Requirement to Buy Specialty
Metals from American Sources............................. 345
Section 825--Repeal of Authority for Foreign Procurement of
Para-Aramid Fibers and Yarns............................. 346
Section 826--Requirement for Major Defense Acquisition
Programs to use Machine Tools Entirely Produced within
the United States........................................ 346
Part III--General Provisions................................. 346
Section 831--Definitions................................... 346

TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT...... 346
ITEMS OF SPECIAL INTEREST...................................... 346
Commandant of the Coast Guard and the Joint Chiefs of Staff 346
LEGISLATIVE PROVISIONS......................................... 347
Section 901--Change in Title of Secretary of the Navy to
Secretary of the Navy and Marine Corps................... 347
Section 902--Redesignation of National Imagery and Mapping
Agency as National Geospatial-Intelligence Agency........ 347
Section 903--Pilot Program for Provision of Space
Surveillance Network Services to Non-United States
Government Entities...................................... 347
Section 904--Clarification of Responsibility of Military
Departments to Support Combatant Commands................ 347
Section 905--Biennial Review of National Military Strategy
by Chairman of the Joint Chiefs of Staff................. 347
Section 906--Authority for Acceptance by Asia-Pacific
Center for Security Studies of Gifts and Donations from
Non-foreign Sources...................................... 348
Section 907--Repeal of Rotating Chairmanship of Economic
Adjustment Committee..................................... 348
Section 908--Pilot Program for Improved Civilian Personnel
Management............................................... 348
Section 909--Extension of Certain Authorities Applicable to
the Pentagon Reservation to Include Designated Pentagon
Continuity-of-Government Locations....................... 349
Section 910--Defense Acquisition Workforce Reductions...... 349
Section 911--Required Force Structure...................... 349

TITLE X--GENERAL PROVISIONS...................................... 350
ITEMS OF SPECIAL INTEREST...................................... 350
Counter-Drug Activities...................................... 350
Overview................................................... 350
Items of Special Interest.................................. 350
Intelligence, surveillance, and reconnaissance and tanker
support................................................ 350
Ground based end game operations......................... 351
Airborne Reconnaissance Low.............................. 351
Maritime patrol aircraft upgrades........................ 351
Hemispheric radar system................................. 351
Counter-Drug Command and Management System............... 351
Pacific command operations support....................... 352
Southwest Border Fence................................... 352
Intelligence analysts and mobile training teams.......... 352
Counter-drug airborne intelligence systems............... 352
Expanded use of National Guard counter-drug aircraft..... 353
Global War on Terrorism...................................... 354
Overview................................................... 354
Effective use of the National Guard...................... 354
Integration of Departments of Defense and Homeland
Security Activities.................................... 355
United States Northern Command........................... 355
United States Special Operations Command................. 355
Strategic Force Structure.................................... 356
LEGISLATIVE PROVISIONS......................................... 357
Subtitle A--Financial Matters................................ 357
Section 1001--Transfer Authority........................... 357
Section 1002--Authorization of Supplemental Appropriations
for Fiscal Year 2003..................................... 357
Section 1003--Authority to Transfer Procurement Funds for a
Major Defense Acquisition Program for Continued
Development Work on that Program......................... 357
Section 1004--Restoration of Authority to Enter into 12-
month Leases at any Time During the Fiscal Year.......... 357
Section 1005--Authority for Retention of Additional Amounts
Realized from Energy Cost Savings........................ 357
Section 1006--Repeal of Requirement for Two-Year Budget
Cycle for the Department of Defense...................... 358
Section 1007--Authority to Provide Reimbursement for
Cellular Telephones When Used for Official Government
Business................................................. 358
Subtitle B--Naval Vessels and Shipyards...................... 358
Section 1011--Repeal of Requirement Regarding Preservation
of Surge Capability for Naval Surface Combatants......... 358
Section 1012--Enhancement of Authority Relating to Use for
Experimental Purposes of Vessels Stricken from Naval
Vessel Register.......................................... 358
Section 1013--Authorization for Transfer of Vessels Sticken
From the Naval Vessel Register for Use as Artificial
Reefs.................................................... 358
Section 1014--Pilot Program for Sealift Ship Construction.. 359
Subtitle C--Reports.......................................... 359
Section 1021--Repeal and Modification of Various Reporting
Requirements Applicable to the Department of Defense..... 359
Section 1022--Department of Defense Report on the Conduct
of Operation Iraqi Freedom............................... 359
Section 1023--Report on Department of Defense Post-Conflict
Activities in Iraq....................................... 359
Section 1024--Report on Development of Mechanisms to Better
Connect Department of Defense Space Capabilities to the
War Fighter.............................................. 360
Subtitle D--Procurement of Defense Biomedical Countermeasures 360
Section 1031--Research and Development of Defense Bio-
Medical Countermeasures.................................. 360
Section 1032--Procurement of Defense Biomedical
Countermeasures.......................................... 361
Section 1033--Authorization for Use of Medical Products in
Emergencies.............................................. 361
Subtitle E--Other Matters.................................... 361
Section 1041--Codification and Revision of Defense
Counterintelligence Polygraph Program Authority.......... 361
Section 1042--Codification and Revision of Limitation on
Modification of Major Items of Equipment Scheduled for
Retirement or Disposal................................... 362
Section 1043--Additional Definitions for Purposes of Title
10, United States Code................................... 362
Section 1044--Inclusion of Annual Military Construction
Authorization Request in Annual Defense Authorization
Request.................................................. 362
Section 1045--Technical and Clerical Amendments............ 362
Section 1046--Authority to Provide Living Quarters for
Certain Students in Cooperative and Summer Education
Programs of the National Security Agency................. 362
Section 1047--Use of Drug Interdiction and Counter-Drug
Funds to Support Activities of the Government of Colombia 362
Section 1048--Authority for Joint Task Forces to provide
Support to Law Enforcement Agencies Conducting Counter-
Terrorism Activities..................................... 363
Section 1049--Use of National Driver Register for Personnel
Security Investigations and Determinations............... 363
Section 1050--Protection of Operational Files of the
National Security Agency................................. 363
Section 1051--Assistance for Study of Feasibility of
Biennial International Air Trade Show in the United
States and for Initial Implementation.................... 363
Section 1052--Continuation of Reasonable Access to Military
Installations for Personal Commercial Solicitation....... 364
Section 1053--Commission on Nuclear Strategy of the United
States................................................... 364
Section 1054--Extension of Counterproliferation Program
Review Committee......................................... 365

TITLE XI--DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL............... 365
LEGISLATIVE PROVISIONS......................................... 365
Subtitle A--Department of Defense Civilian Personnel
Generally.................................................. 365
Section 1101--Modification of the Overtime Pay Cap......... 365
Section 1102--Military Leave for Mobilized Federal Civilian
Employees................................................ 365
Section 1103--Common Occupational and Health Standards for
Differential Payments as a Consequence of Exposure to
Asbestos................................................. 365
Section 1104--Increase in Annual Student Loan Repayment
Authority................................................ 365
Section 1105--Authorization for Cabinet Secretaries,
Secretaries of Military Departments, and Heads of
Executive Agencies to be Paid on a Biweedly Basis........ 365
Section 1106--Senior Executive Service and Performance..... 366
Section 1107--Design Elements of Pay-for-Performance
Systems in Demonstration Projects........................ 366
Section 1108--Federal Flexible Benefits Plan Administrative
Costs.................................................... 366
Section 1109--Clarification to Hatch Act: Limitation on
Disclosure of Certain Records............................ 367
Section 1110--Employee Surveys............................. 367
Subtitle B--Department of Defense National Security Personnel
System..................................................... 367
Section 1111--Department of Defense National Security
Personnel System......................................... 367

TITLE XII--MATTERS RELATING TO OTHER NATIONS..................... 368
OVERVIEW....................................................... 368
ITEMS OF SPECIAL INTEREST...................................... 368
LEGISLATIVE PROVISIONS......................................... 369
Section 1201--Expansion of Authority to Provide
Administrative Support and Services and Travel and
Subsistence Expenses for Certain Foreign Liaison Officers 369
Section 1202--Recognition of Superior Noncombat
Achievements or Performance by Members of Friendly
Foreign Forces and Other Foreign Nationals............... 369
Section 1203--Expansion of Authority to Waive Charges for
Costs of Attendance at George C. Marshall Center for
Security Studies......................................... 370
Section 1204--Goods and Technologies Critical for Military
Superiority.............................................. 370
Section 1205--Report on Iraqi Acquisition of Advanced
Weapons.................................................. 370
Section 1206--Authority for Check-Cashing and Currency
Exchange Services to be Provided to Foreign Military
Members Participating in Certain Activities with United
States Forces............................................ 371
Section 1207--Requirements for Transfer to Foreign
Countries of Certain Specified Types of Excess Aircraft.. 371
Section 1208--Limitation on Number of United States
Military Personnel in Colombia........................... 371

TITLE XIII--COOPERATIVE THREAT REDUCTION WITH STATES OF THE
FORMER SOVIET UNION............................................ 371
OVERVIEW....................................................... 371
LEGISLATIVE PROVISIONS......................................... 374
Section 1301--Specification of Cooperative Threat Reduction
Programs and Funds....................................... 374
Section 1302--Funding Allocations.......................... 374
Section 1303--Limitation on Use of Funds until Certain
Permits Obtained......................................... 374
Section 1304--Limitation on Use of Funds for Biological
Research in the Former Soviet Union...................... 374
Section 1305--Authority and Funds for Nonproliferation and
Disarmament.............................................. 375
Section 1306--Requirement for On-site Managers............. 375
Section 1307--Provisions Relating to Funding for Chemical
Weapons Destruction Facility in Russia................... 376

TITLE XIV--SERVICES ACQUISITION REFORM........................... 377
LEGISLATIVE PROVISIONS......................................... 377
Section 1401--Short Title.................................. 377
Section 1402--Executive Agency Defined..................... 377
Subtitle A--Acquisition Workforce and Training............... 377
Section 1411--Definition of Acquisition.................... 377
Section 1412--Acquisition Workforce Training Fund.......... 377
Section 1413--Acquisition Workforce Recruitment Program.... 377
Section 1414--Architectural and Engineering Acquisition
Workforce................................................ 378
Subtitle B--Adaptation of Business Acquisition Practices..... 378
Part I--Adaptation of Business Management Practices.......... 378
Section 1421--Chief Acquisition Officers................... 378
Section 1422--Chief Acquisition Officers Council........... 378
Section 1423--Statutory and Regulatory Review.............. 379
Part II--Other Acquisition Improvements...................... 379
Section 1426--Extension of Authority to Carry Out Franchise
Fund Programs............................................ 379
Section 1427--Agency Acquisition Protests.................. 379
Section 1428--Improvements in Contracting for Architectural
and Engineering Services................................. 379
Section 1429--Authorization of Telecommuting for Federal
Contractors.............................................. 380
Subtitle C--Contract Incentives.............................. 380
Section 1431--Incentives for Contract Efficiency........... 380
Subtitle D--Acquisition of Commercial Items.................. 380
Section 1441--Preference for Performance-Based Contracting. 380
Section 1442--Authorization of Additional Commercial
Contract Types........................................... 380
Section 1443--Clarification of Commercial Services
Definition............................................... 381
Section 1444--Designation of Commercial Business Entities.. 381
Subtitle E--Other Matters.................................... 381
Section 1451--Authority to Enter into Certain Procurement-
Related Transactions and to Carry Out Certain Prototype
Projects................................................. 381
Section 1452--Authority to Make Inflation Adjustments to
Simplified Acquisition Threshold......................... 382
Section 1453--Technical Correction Related to Duplicative
Amendments............................................... 382
Section 1454--Prohibition on Use of Quotas................. 382
Section 1455--Applicability of Certain Provisions to Sole
Source Contracts for Goods and Services Treated as
Commercial Items......................................... 382
Section 1456--Public Disclosure of Noncompetitive
Contracting for the Reconstruction of Infrastructure in
Iraq..................................................... 382
DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS................. 382
PURPOSE........................................................ 382
MILITARY CONSTRUCTION OVERVIEW................................. 383
TITLE XXI--ARMY.................................................. 399
SUMMARY........................................................ 399
ITEMS OF SPECIAL INTEREST...................................... 399
Planning and Design........................................ 399
Unspecified Minor Construction............................. 399
LEGISLATIVE PROVISIONS......................................... 399
Section 2101--Authorized Army Construction and Land
Acquisition Projects..................................... 399
Section 2102--Family Housing............................... 399
Section 2103--Improvements to Military Family Housing Units 399
Section 2104--Authorization of Appropriations, Army........ 399
Section 2105--Modification of Authority to Carry Out
Certain Fiscal year 2002 Projects........................ 400

TITLE XXII--NAVY................................................. 400
SUMMARY........................................................ 400
ITEMS OF SPECIAL INTEREST...................................... 400
Planning and Design........................................ 400
Unspecified Minor Construction............................. 400
LEGISLATIVE PROVISIONS......................................... 400
Section 2201--Authorized Navy Construction and Land
Acquisition Projects..................................... 400
Section 2202--Family Housing............................... 400
Section 2203--Improvements to Military Family Housing Units 400
Section 2204--Authorization of Appropriations, Navy........ 401

TITLE XXIII--AIR FORCE........................................... 401
SUMMARY........................................................ 401
Reserve Associate Program.................................. 401
Planning and Design........................................ 401
LEGISLATIVE PROVISIONS......................................... 402
Section 2301--Authorized Air Force Construction and Land
Acquisition Projects..................................... 402
Section 2302--Family Housing............................... 402
Section 2303--Improvements to Military Family Housing Units 402
Section 2304--Authorization of Appropriations, Air Force... 402

TITLE XXIV--DEFENSE AGENCIES..................................... 402
SUMMARY........................................................ 402
ITEM OF SPECIAL INTEREST....................................... 402
Departments of Defense and Veterans Affairs Health Care
Sharing.................................................. 402
Planning and Design........................................ 403
LEGISLATIVE PROVISIONS......................................... 403
Section 2401--Authorized Defense Agencies Construction and
Land Acquisition Projects................................ 403
Section 2402--Family Housing............................... 403
Section 2403--Improvements to Military Housing Units....... 403
Section 2404--Energy Conservation Projects................. 403
Section 2405--Authorization of Appropriations, Defense
Agencies................................................. 403

TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION INFRASTRUCTURE..... 404
OVERVIEW....................................................... 404
LEGISLATIVE PROVISIONS......................................... 404
Section 2501--Authorized NATO Construction and Land
Acquisition Projects..................................... 404
Section 2502--Authorization of Appropriations, NATO........ 404

TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES.................. 404
SUMMARY........................................................ 404
ITEMS OF SPECIAL INTEREST...................................... 404
Planning and Design, Air National Guard.................... 404
Planning and Design, Air Reserve........................... 405
Planning and Design, Army National Guard................... 405
Unspecified Minor Construction, Army National Guard........ 405
LEGISLATIVE PROVISIONS......................................... 405
Section 2601--Authorized Guard and Reserve Construction and
Land Acquisition Projects................................ 405

TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS.......... 405
LEGISLATIVE PROVISIONS......................................... 405
Section 2701--Expiration of Authorizations and Amounts
Required to be Specified by Law.......................... 405
Section 2702--Extension of Authorizations of Certain Fiscal
Year 2001 Projects....................................... 406
Section 2703--Extension of Authorizations of Certain Fiscal
Year 2000 Projects....................................... 406
Section 2704--Effective Date............................... 406

TITLE XXVIII--GENERAL PROVISIONS................................. 406
ITEMS OF SPECIAL INTEREST...................................... 406
Housing Privatization Programs............................. 406
U.S.-Mexico Border Airspace................................ 407
Base Realignment and Closure............................... 407
LEGISLATIVE PROVISIONS......................................... 408
Subtitle A--Military Construction Program and Military Family
Housing Changes.......................................... 408
Section 2801--Increase in Maximum Amount of Authorized
Annual Emergency Construction............................ 408
Section 2802--Authority to Lease Military Family Housing
Units in Italy........................................... 408
Section 2803--Changes to Alternative Authority for
Acquisition and Improvement of Military Housing.......... 408
Section 2804--Additional Material for Annual Report on
Housing Privatization Program............................ 408
Section 2805--Authority to Convey Property at Military
Installations Closed or to be Closed in Exchange for
Military Construction Activities......................... 409
Section 2806--Congressional Notification and Reporting
Requirements and Limitations Regarding Use of Operation
and Maintenance Funds for Construction................... 409
Section 2807--Increase in Authorized Maximum Lease Term for
Family Housing and Other Facilities in Certain Foreign
Countries................................................ 410
Subtitle B--Real Property and Facilities Administration...... 410
Section 2811--Real Property Transactions................... 410
Subtitle C--Land Conveyances................................. 411
Section 2821--Termination of Lease and Conveyance of Army
Reserve Center, Conway, Arkansas......................... 411
Section 2822--Actions to Quiet Title, Fallin Waters
Subdivision, Eglin Air Force Base, Florida............... 411
Section 2823--Modification of Land Conveyance, Eglin Air
Force Base, Florida...................................... 411
Section 2824--Land Conveyance, Fort Campbell, Kentucky and
Tennessee................................................ 411
Section 2825--Land Conveyance, Army and Air Force Exchange
Service Property, Dallas, Texas.......................... 411
Section 2826--Land Conveyance, Naval Reserve Center,
Orange, TX............................................... 412
Subtitle D--Other Matters.................................... 412
Section 2841--Redesignation of Yuma Training Range Complex
as Bob Stump Training Range Complex...................... 412
Section 2842--Modification of Authority to Conduct a Round
of Realignments and Closures of Military Installations in
2005..................................................... 412
Section 2843--Use of Force-Structure Plan for the Armed
Forces in Preparation of Selection Criteria for Base
Closure Round............................................ 412
Section 2844--Requirement for Unanimous Vote of Defense
Base Closure and Realignment Commission to Recommend
Closure of Military Installation not Recommended for
Closure by Secretary of Defense.......................... 413

DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATION
AND OTHER AUTHORIZATIONS..................................... 413

TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS...... 413
OVERVIEW....................................................... 413
ITEMS OF SPECIAL INTEREST...................................... 427
National Nuclear Security Administration..................... 427
Overview................................................... 427
Adjustments to the Budget Request.......................... 427
Reductions............................................... 427
Increases................................................ 429
Advanced Weapons Concepts.................................. 429
Coordination of Nonproliferation and Threat Reduction
Programs................................................. 430
Management of Stockpile Life Extension Programs............ 430
NNSA Management Structure.................................. 431
Support for Los Alamos Public Schools...................... 431
Test Readiness............................................. 432
Environmental and Other Defense Activities................... 432
Overview................................................... 432
Adjustments to the Budget Request.......................... 432
Reductions............................................... 432
Increases................................................ 432
Cleanup Acceleration....................................... 433
Energy Supply................................................ 433
LEGISLATIVE PROVISIONS......................................... 434
Subtitle A--National Security Programs Authorizations........ 434
Section 3101--National Nuclear Security Administration..... 434
Section 3102--Defense Environmental Management............. 434
Section 3103--Other Defense Activities..................... 434
Section 3104--Defense Nuclear Waste Disposal............... 434
Section 3105--Energy Supply................................ 434
Subtitle B--Program Authorizations, Restrictions, and
Limitations................................................ 434
Section 3111--Modification of Prohibition Relating to Low-
Yield Nuclear Weapons.................................... 434
Section 3112--Termination of Requirement for Annual Updates
of Long-Term Plan for Nuclear Weapons Stockpile Life
Extension Program........................................ 434
Section 3113--Extension to All DOE Facilities of Authority
to Prohibit Dissemination of Certain Unclassified
Information.............................................. 435
Section 3114--Department of Energy Project Review Groups
Not Subject to Federal Advisory Committee Act by Reason
of Inclusion of Employees of Department of Energy
Management and Operating Contractors..................... 435
Section 3115--Availability of Funds........................ 435
Section 3116--Limitation on Obligation of Funds for Nuclear
Test Readiness Program................................... 435
Section 3117--Requirement for On-Site Managers............. 435
Subtitle C--Consolidation of National Security Provisions.... 436
Section 3121--Consolidation and Assembly of Recurring and
General Provisions on Department of Energy National
Security Programs........................................ 436

TITLE XXXII--DEFENSE NUCLEAR FACILITIES SAFETY BOARD............. 436
LEGISLATIVE PROVISION.......................................... 436
Section 3201--Authorization................................ 436

TITLE XXXIII--NATIONAL DEFENSE STOCKPILE......................... 436
LEGISLATIVE PROVISION.......................................... 436
Section 3301--Authorized Uses of National Defense Stockpile
Funds.................................................... 436
Section 3302--Revisions to Objectives for Receipts for
Fiscal Year 2000 Disposals............................... 437

TITLE XXXIV--NAVAL PETROLEUM RESERVES............................ 437
LEGISLATIVE PROVISIONS......................................... 437
Section 3401--Authorization of Appropriations.............. 437

TITLE XXXV--MARITIME ADMINISTRATION.............................. 437
ITEMS OF SPECIAL INTEREST...................................... 437
Authorization of Maritime Security Program................. 437
Obsolete Vessel Disposal................................... 439
Merchant Mariner Training to Meet Sealift Requirements..... 440
LEGISLATIVE PROVISIONS......................................... 441
Subtitle A--General Provisions; Maritime Administration
Authorization.............................................. 441
Section 3501--Short Title.................................. 441
Section 3502--Definitions.................................. 441
Subtitle B--Maritime Security Fleet.......................... 441
Section 3511--Establishment of Maritime Security Fleet..... 441
Section 3512--Award of Operating Agreements................ 441
Section 3513--Effectiveness of Operating Agreements........ 441
Section 3514--Obligations and Rights Under Operating
Agreements............................................... 441
Section 3515--Payments..................................... 442
Section 3516--National Security Requirements............... 442
Section 3517--Regulatory Relief............................ 442
Section 3518--Special Rule Regarding Age of Former
Participating Fleet Vessel............................... 442
Section 3519--Authorization of Appropriations.............. 442
Section 3520--Amendment to Shipping Act, 1916.............. 442
Section 3521--Regulations.................................. 443
Section 3522--Repeals and Conforming Amendments............ 443
Section 3523--Effective Dates.............................. 443
Subtitle C--National Defense Tank Vessel Construction
Assistance................................................. 443
Section 3531--National Defense Tank Vessel Construction
Program.................................................. 443
Section 3532--Application Procedure........................ 443
Section 3533--Award of Assistance.......................... 443
Section 3534--Priority for Title XI Assistance............. 443
Section 3535--Authorization of Appropriations.............. 444
Subtitle D--Maritime Administration.......................... 444
Section 3541--Authorization of Appropriations for Maritime
Administration for Fiscal Year 2004...................... 444
Section 3542--Authority to Convey Vessel USS Hoist (ARS-40) 444
Departmental Data................................................ 444
Department of Defense Authorization Request.................... 444
Military Transformation Authorization Request.................. 445
Committee Position............................................... 445
Communications From Other Committees............................. 445
Fiscal Data...................................................... 458
Congressional Budget Office Estimate........................... 458
Congressional Budget Office Cost Estimate...................... 459
Committee Cost Estimate........................................ 483
Oversight Findings............................................... 483
General Performance Goals and Objectives......................... 484
Constitutional Authority Statement............................... 485
Statement of Federal Mandates.................................... 485
Roll Call Votes.................................................. 486
Changes in Existing Law Made by the Bill, as Reported............ 514
Additional, Dissenting, and Supplemental Views................... 515
Additional views of Ike Skelton, John Spratt, Gene Taylor, Lane
Evans, Marty Meehan, Neil Abercrombie, Silvestre Reyes, Ciro
D. Rodriguez, Vic Snyder, Loretta Sanchez, Susan A. Davis,
Rick Larsen, Jim Cooper, Baron P. Hill, Ellen O. Tauscher,
John B. Larson, Kendrick B. Meek, Jim Langevin, Tim Ryan,
Adam Smith, Robert A. Brady, Rodney Alexander, Jim Turner,
Steve Israel, Madeleine Z. Bordallo, Mike McIntyre, Solomon
P. Ortiz, Jim Marshall....................................... 515
Additional views of Ike Skelton, John Spratt, Gene Taylor, Lane
Evans, Marty Meehan, Neil Abercrombie, Silvestre Reyes, Vic
Snyder, Loretta Sanchez, Adam Smith, Robert A. Brady, Rodney
Alexander, Jim Turner, Rick Larsen, Jim Cooper, Baron P.
Hill, Ellen O. Tauscher, John B. Larson, Kendrick B. Meek,
Jim Langevin, Tim Ryan, Steve Israel, Madeleine Z. Bordallo,
Susan A. Davis, Solomon P. Ortiz............................. 518
Additional views of Susan A. Davis, Lane Evans, Neil
Abercrombie, Ciro D. Rodriguez, Loretta Sanchez, Ellen O.
Tauscher, Jim Langevin, Tim Ryan, John B. Larson............. 522
Additional views of Jim Cooper, Ike Skelton, John Spratt, Gene
Taylor, Ciro D. Rodriguez, Silvestre Reyes, Neil Abercrombie,
Susan A. Davis, Adam Smith, James Langevin, John B. Larson,
Steve Israel, Robert A. Brady, Kendrick B. Meek, Solomon P.
Ortiz, Rick Larsen, Tim Ryan, Ellen O. Tauscher.............. 524
Additional and Supplemental views of Tim Ryan.................. 526
Dissenting views of Lane Evans................................. 527

108th Congress Report
1st Session HOUSE OF REPRESENTATIVES 108-106
======================================================================

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2004

_______

May 16, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

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

R E P O R T

together with

ADDITIONAL, DISSENTING, AND SUPPLEMENTAL VIEWS

[To accompany H.R. 1588]

[Including cost estimate of the Congressional Budget Office]

The Committee on Armed Services, to whom was referred the
bill (H.R. 1588) to authorize appropriations for fiscal year
2004 for military activities of the Department of Defense, to
prescribe military personnel strengths for fiscal year 2004,
and for other purposes, having considered the same, report
favorably thereon with amendments and recommend that the bill
as amended do pass.
The amendments are as follows:
The amendment strikes all after the enacting clause of the
bill and inserts a new text which appears in italic type in the
reported bill.
The title of the bill is amended to reflect the amendment
to the text of the bill.

EXPLANATION OF THE COMMITTEE AMENDMENTS

The committee adopted an amendment in the nature of a
substitute during the consideration of H.R. 1588. The title of
the bill is amended to reflect the amendment to the text of the
bill. The remainder of the report discusses the bill, as
amended.

PURPOSE

The bill would--(1) Authorize appropriations for fiscal
year 2004 for procurement and for research, development, test
and evaluation (RDT&E); (2) Authorize appropriations for fiscal
year 2004 for operation and maintenance (O&M) and for working
capital funds; (3) Authorize for fiscal year 2004: (a) the
personnel strength for each active duty component of the
military departments; (b) the personnel strength for the
Selected Reserve for each reserve component of the armed
forces; (c) the military training student loads for each of the
active and reserve components of the military departments; (4)
Modify various elements of compensation for military personnel
and impose certain requirements and limitations on personnel
actions in the defense establishment; (5) Authorize
appropriations for fiscal year 2004 for military construction
and family housing; (6) Authorize appropriations for fiscal
year 2004 for the Department of Energy national security
programs; (7) Modify provisions related to the National Defense
Stockpile; and (8) Authorize appropriations for fiscal year
2004 for the Maritime Administration.

RELATIONSHIP OF AUTHORIZATION TO APPROPRIATIONS

The bill does not generally provide budget authority. The
bill authorizes appropriations. Subsequent appropriation acts
provide budget authority. The bill addresses the following
categories in the Department of Defense budget: procurement;
research, development, test and evaluation; operation and
maintenance; working capital funds, military personnel; and
military construction and family housing. The bill also
addresses Department of Energy National Security Programs and
the Maritime Administration.
Active duty and reserve personnel strengths authorized in
this bill and legislation affecting compensation for military
personnel determine the remaining appropriation requirements of
the Department of Defense. However, this bill does not provide
authorization of specific dollar amounts for personnel.

SUMMARY OF AUTHORIZATION IN THE BILL

The President requested budget authority of $399.7 billion
for the national defense budget function for fiscal year 2004.
Of this amount, the President requested $379.6 billion for the
Department of Defense, including $9.1 billion for military
construction and family housing. The defense budget request for
fiscal year 2004 also included $17.3 billion for Department of
Energy national security programs and the Defense Nuclear
Facilities Safety Board.
The committee recommends an overall level of $400.5 billion
in budget authority. This amount represents an increase of
approximately $17.7 billion from the amount authorized for
appropriation by the Bob Stump National Defense Authorization
Act for Fiscal Year 2003 (Public Law 107-314).

SUMMARY TABLE OF AUTHORIZATIONS

The following table provides a summary of the amounts
requested and that would be authorized for appropriation in the
bill (in the column labeled ``Budget Authority Implication of
Committee Recommendation'') and the committee's estimate of how
the committee's recommendations relate to the budget totals for
the national defense function. For purposes of estimating the
budget authority implications of committee action, the table
reflects the numbers contained in the President's budget for
proposals not in the committee's legislative jurisdiction.

RATIONALE FOR THE COMMITTEE BILL

The fiscal year 2004 National Defense Authorization Act is
the first defense authorization act prepared in the aftermath
of Operation Iraqi Freedom. That victory, combined with the
extraordinary defeat of the Taliban in Afghanistan, has placed
the ongoing debate about the future of the U.S. armed forces in
sharper focus.
Advocates of rapid transformation argue that Operation
Enduring Freedom's unique combination of airpower and special
operations forces, networked with advanced sensors and
communication systems, constituted a new ``transformational''
model for waging warfare. The new model stresses speed and
information over firepower and mass in conducting military
operations. Many such advocates would reduce our current force
structure as a means of freeing up resources to accelerate a
transformation in the U.S. military to lighter, faster forces.
An alternative view points to the success of well-armored
Army and Marine divisions in toppling Saddam Hussein's regime
and the critical contributions of long-range conventional
bombers to victory over Taliban and Al Qaeda forces in
Afghanistan as evidence of our continued dependence on the
existing force structure. This school of thought argues that
transformation should be pursued at a more measured pace, lest
it undermine the effectiveness of our current systems, which
have proven their worth repeatedly in combat. The debate among
defense analysts, both inside and outside the Department of
Defense, presents the committee with an interesting dilemma.
Outside forces urge Congress to adopt one position to the
exclusion of the other.
At its core, the current debate revolves around the
assumption and management of near- and long-term risk. Most
analysts agree that the U.S. armed forces must change in order
to meet the challenges of the 21st century. However,
accelerating transformation by reducing current force structure
to pay for future systems may undermine the readiness and
capabilities of the forces we rely on today. This approach
could endanger our current security if those forces develop
vulnerabilities or are called on to perform missions for which
they are no longer prepared. Thus, rapid transformation
involves increased near-term risk. On the other hand, focusing
on modernizing our current force structure at the expense of
transformation creates long term risks if it precludes the
military from adopting technologies or creating capabilities
that improve its future effectiveness against adversaries
developing asymmetric means of countering existing forces.
The committee believes that discussions of U.S. national
security cannot, and must not, be reduced to such an
oversimplified and unrealistic choice. Instead, the United
States must strike a balance between: (1) modernizing and
enhancing the combat forces that have demonstrated their
lethality to America's adversaries and (2) developing
transformational capabilities that ensure the United States
military maintains its effectiveness advantages over all future
adversaries. H.R. 1588, therefore, contains provisions that
will invest in key transformational capabilities for the long
term, while recommending increased spending on our currently
deployed capabilities to ensure their continued battlefield
dominance. Drawing on early lessons from the war in Afghanistan
and Operation Iraqi Freedom, H.R. 1588 authorizes incremental
improvements to sustain current capabilities and force
structure while investing in transformational technologies and
initiatives.

Transformation

The Committee has a long and bipartisan history of
supporting the development of transformational technologies and
capabilities. The success of transformational systems, ranging
from the enhanced intelligence, surveillance, and
reconnaissance capabilities made possible by Unmanned Aerial
Vehicles to the increased lethality of Precision Guided
Munitions (PGMs) demonstrates the wisdom of that approach.
Overall for fiscal year 2004, the committee recommends an
increase of $663 million over the Administration's request for
defense Science and Technology programs, which traditionally
drive long-term improvements in U.S. military capability. The
increases are spread across several categories, including
strike systems, advanced munitions, sensors, and
communications.
During Operation Desert Storm nine percent of all weapons
dropped by the United States were PGMs. Conversely, PGMs
constituted 67 percent of all weapons employed by the Air Force
during Operation Iraqi Freedom, a clear indicator of their
superior value to the U.S. military. Combined with an
innovative campaign strategy and the best soldiers in the
world, precision strike capabilities enabled the coalition
during Operation Iraqi Freedom to achieve a broader and
significantly more challenging objective with fewer forces,
when compared to their Operation Desert Storm predecessors.
Thus, the bill would add $376 million to the Administration's
request for procurement of such successful transformational
technologies as the Tactical Tomahawk cruise missile and $178
million for the Affordable Weapon System, a committee
initiative to reduce the cost of PGMs through the development
of more affordable military systems. Additionally, the
committee recommends beginning research and development on new
strike platforms; in particular it recommends $100 million to
begin research and development work on a new deep strike bomber
to complement or succeed the current fleet of B-1, B-2, and B-
52 bombers. Such systems represent an investment in 21st deep
strike capabilities and will help address basing problems
highlighted during Operation Iraqi Freedom.
In addition to transformational delivery platforms and
munitions, the committee recognizes the transformational value
of advanced sensor, network, and positioning systems in their
role as force multipliers. Therefore, the committee recommends
approving the budget request for E-2 Hawkeye aircraft, and
increasing funding by $132 million over the request for the EA-
6B Prowler, by $27 million for the E-8C Joint Surveillance and
Target Attack Radar System (JSTARS), by $10 million for surface
combatant systems engineering to improve the development of an
open architecture for the Aegis system and $17 million for a
new Littoral Surveillance System. The committee also recommends
authorizing the funds requested for the Global Hawk Unmanned
Aerial Vehicle (UAV), an $18 million increase over the request
for the Predator UAV, and a $20.9 million increase for advanced
research and development for the Shadow 200 Tactical UAV. The
committee also recommends full funding for the Space-Based
Radar, a program that could revolutionize our sensor
capabilities and reduce the demands made on tactical
surveillance systems in the long term. These systems are
increasingly important high-demand, low-density systems that
give U.S. military forces a decisive information advantage over
their adversaries and should continue to be improved. To the
degree that information technologies enable the long-term
transformation of U.S. military forces, these funding levels
will help enable the Department of Defense to continue
transformation in the information age.
Just as the military services are creating new capabilities
to deal with the security environment of the 21st century, the
Administration requested authority to transform the very
management structures and processes of the Department of
Defense, many of which trace their heritage back to the lessons
of World War II and the National Security Act of 1947. Given
the radical changes in the international security environment,
the committee believes it is vital to transform the way the
Department of Defense operates. Consequently, after careful
consideration and coordination with the other relevant
committees of the House of Representatives, the committee
recommends approving significant portions of the
Administration's proposed ``Defense Transformation for the 21st
Century Act'' as elements of the fiscal year 2004 national
defense authorization act.
The committee recommends development of a modernized
national security personnel system. In particular, in
cooperation with the Committee on Government Reform and
Oversight, it adopted provisions creating a more flexible
merit-based pay system to attract and retain talented
individuals in government service. It also recommends the
establishment of an early retirement program and greater
flexibility for the Secretary of Defense to hire experts with
critical scientific, technical, or management skills at
appropriate pay for a period of up to five years. Taken
together, these provisions would help retain, protect, and
support the current civilian workforce in the Department of
Defense while giving the Secretary of Defense greater personnel
flexibility to reward exceptional performance and address key
skill shortfalls.
Taken together, these initiatives will enable the United
States military to continue on the path of transformation and
develop those capabilities needed to maintain, and extend, the
U.S. military advantage over potential adversaries in the long
term.

Modernizing the Existing Force

At the same time, the bill recognizes that the success of
transformational capabilities in operations in Afghanistan and
Iraq built upon the foundation of a broad range of existing
capabilities to engage adversaries across the range of
conflict. Current force structure and weapons platforms, some
of which are nearly four decades old, were the backbone upon
which new capabilities in precision, communications, and
intelligence created their transformational impact. The war in
Afghanistan, for example, became famous for its horse-riding
special operations forces directing modern precision-guided
munitions, delivered by forty-year-old B-52 bombers onto
Taliban and Al Qaeda fighting positions. That chain of
capabilities is only as strong as its weakest link, which may
soon prove to be the aging delivery platforms upon which we
rely to deliver firepower around the world. In Afghanistan and
Iraq, the B-52, B-1, and B-2 strategic bombers proved the value
of long-range airpower able to operate independently of forward
bases that may not be available in future conflicts. Similarly,
in Operation Iraqi Freedom, the deployment of heavily armored
ground forces demonstrated the seriousness of coalition intent,
while their firepower, mobility, and protective capabilities
were key in demonstrating to Saddam Hussein and his regime that
resistance was futile. By moving about at will throughout
Baghdad, the coalition deprived Saddam Hussein's regime of its
control over the capital, contributing to its quick downfall.
Recognizing these realities, and that transformational
technologies work when married to proven systems, the committee
recommends several measures that will sustain and improve the
lethality of our existing forces. In particular, the committee
recommends provisions to preserve our existing deep-strike
capabilities, which make fewer demands on forward operating
bases. Therefore, the committee recommends an increase of $20.3
million to the administration's request for improvements in the
B1-B Lancer in order to begin the regeneration process for 23
B1-Bs currently slated for retirement. This provision would
enable the United States military to retain more than the 60
B1-Bs it currently plans to protect from retirement.
Additionally, thecommittee recommends increasing funding for
the B-2 Spirit bomber by $85.3 million to sustain its mission
capability rates and invest in communications capabilities.
The committee is particularly concerned about redressing
shortfalls in the improvement in our ground systems experienced
over the last decade. In Iraq, heavy armor proved that the
combination of mass, speed, and firepower remain decisive.
Abrams tanks and Bradley Fighting Vehicles operating in Baghdad
demonstrated the seriousness of American purpose while ensuring
that all units were strong enough to deal with any type of
resistance. As the President noted in a speech at the Lima,
Ohio M-1 Abrams plant, ``In the liberation of Iraq, we've
applied powerful weapons, like the tank you build here, to
strike our enemy with speed and precision. In the use of the
Abrams tank we have got a vehicle that is the most safe vehicle
for our fighting personnel, precise enough to protect innocent
lives. . . . Throughout the campaign, our enemy learned that
when Abrams tanks are on the battlefield, America means
business.'' Thus, the committee believes it is vital to sustain
this critical and unique capability and recommends an increase
of $726.8 million for heavy forces modernization. Of these
funds, the committee recommends $424 million for the M1A2
Abrams systems enhancement program, $258.8 million for M3A2
upgrades, and $44 million for combat support and service
support improvements.
Finally, the committee continues to believe that military
personnel are the U.S. armed forces' greatest asset. Therefore,
it recommends an average increase of 4.1% in base pay for our
men and women in uniform and placing housing allowances on a
path to eliminate out-of-pocket expenses completely by fiscal
year 2005. The committee also recommends supplemental
subsistence allowances for military personnel assigned to areas
with a high cost of living and extending active duty special
pay and bonuses.
The committee also notes that our total force policies
developed after the Vietnam war have combined with the global
war on terror to make increasing demands on personnel and units
located in the reserves and national guard. Therefore, the
committee recommends increasing the budget request by $196.7
million for reserve component training and readiness and
extending certain special pay and bonuses for reserve personnel
through the end of calendar year 2004.
Collectively, these initiatives will maintain and enhance
the military advantages that our current forces have over
potential adversaries, ensuring that when the President and
Congress contemplate sending the nation's young men and women
into combat, those personnel will have the best equipment and
training that the United States can provide.

Force Structure

During much of the last decade, the U.S. military was
subjected to force structure reductions that have increasingly
stressed it. At the same time, changes in the international
security environment are making increased demands on the
Department of Defense. As a result of ongoing peacekeeping
operations in the Balkans and Sinai Peninsula, Cold War
deployments in Korea and Europe, and the need to deploy and
conduct operations in the global war on terror in places as
diverse as Afghanistan and Iraq, U.S. military units find
themselves facing an extraordinary operational tempo. For
example, during the first quarter of fiscal year 2003, the U.S.
Navy exceeded its planned number of steaming days by roughly 18
percent. While the U.S. Navy has performed magnificently under
these conditions, they cannot be endured indefinitely. Other
services are under similar stress.
While the committee retains full confidence that the men
and women of the United States military will continue to
perform their missions successfully and admirably, it is
concerned that the increased demands made on individual units
may make it more difficult for them to achieve their missions
in the future. This creates risk for U.S. national security. In
1991, the Defense Department development the concept of a
``base force'' to guide our post-Cold War force structure. As
the official history of the development of the base force
notes, certain elements in the Department of Defense believed,
``this force option provided the minimum force structure that
the United States could adopt without incurring undue risk.''
The committee notes that the 1991 base force was slightly
larger than our current force structure, and that in 1991 the
United States was a country at peace, not in the midst of a
global war on terror.
While transformation and modernization may reduce some
strains, ultimately it will be necessary to explore changes in
the current force structure in order to ensure the security of
the American people. Therefore, the committee recommends two
provisions that will factor into this process.
First, the committee recommends a provision that would
establish the current force structure of the Army, Navy, and
Air Force as a legislative minimum, just as Congress did for
the Marine Corps. Given the growing demands on our current
forces, uncertainty about the security environment, and
uncertainty about the success of certain transformational
efforts, the committee believes that cutting force structure
below current levels would create an unacceptable degree of
risk to U.S. national security.
Second, the committee recommends a more aggressive look
into the future in order to assess the force structure that
will be needed in the new security environment. It endorsed a
provision calling for a national military strategy to be
prepared by the Chairman of the Joint Chiefs of Staff and the
respective service chiefs. The national military strategy will
help connect broad policy guidelines contained in the
President's National Security Strategy and the Quadrennial
Defense Review to more specific military capabilities,
deployments, basing decisions, and force structure.
Additionally, the committee recommends a measure that would
connect future military forces to the Department of Defense's
global infrastructure. The bill contains a provision that would
specify the assumptions to be made during the Base Realignment
and Closure (BRAC) process. The provision would direct the BRAC
Commission to consider the need to surge U.S. capabilities over
and above our current force structure and the possibility that
it may become necessary to base our forces entirely in the
United States when assessing DOD infrastructure within the BRAC
process. The committee believes that doing so will ensure that
the Department of Defense retains sufficient infrastructure to
accommodate a larger force structure, should one prove
necessary.

Conclusion

Some might argue that the United States cannot afford to
both modernize its existing force structure while developing
the transformational capabilities needed for the future. The
committee believes that as a country at war with global
terrorism, the United States can ill afford not to do both. In
1983, the United States spent roughly six percent of its gross
domestic product on defense. In 2004, in the midst of a war on
global terrorism that has already required it to eliminate
threats from two nation-states, the United States is projected
to spend roughly 3.4 percent of gross domestic product on
defense. In that context, it is vital that defense budgets
properly manage risks by funding the long-term transformation
of the military forces critical to our future security while
sustaining and modernizing those forces upon which our security
rests today. H.R. 1588 does that.

HEARINGS

Committee consideration of the National Defense
Authorization Act for Fiscal Year 2004 results from hearings
that began on February 5, 2003 and that were completed on May
2, 2003. The full committee conducted 11 sessions. In addition,
a total of 25 sessions were conducted by six different
subcommittees on various titles of the bill.

DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION

TITLE I--PROCUREMENT

OVERVIEW

The amended budget request for fiscal year 2004 contained
$72,653.5 million for procurement. This represents a $1,315.8
million decrease from the amount authorized for fiscal year
2003.
The committee recommends authorization of $74,910.0
million, an increase of $2,256.5 million from the fiscal year
2004 request.
The committee recommendations for the fiscal year 2004
procurement program are identified in the table below. Major
issues are discussed following the table.

Aircraft Procurement, Army

Overview

The budget request for fiscal year 2004 contained $2,128.5
million for Aircraft Procurement, Army. The committee
recommends authorization of $2,194.6 million, an increase of
$66.1 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Aircraft Procurement, Army program are identified in the table
below. Major changes to the Army request are discussed
following the table.

Items of Special Interest

Kiowa warrior

The budget request contained $45.1 million for the
procurement of Kiowa Warrior safety modifications, but included
no funds to procure helmet-mounted displays for OH-58D Kiowa
Warrior aircrew.
The committee understands that a commercial-off-the-shelf
(COTS), daylight readable, see-through display, which can be
mounted to exiting Army aircrew helmets is capable of being
integrated into the OH-58D Kiowa Warrior. The committee
believes this system would improve aircrew operational
effectiveness and safety and provide a low-cost, aircraft
sensor targeting capability.
The committee recommends $54.1 million for the Kiowa
Warrior program, an increase of $9.0 million for procurement of
COTS, daylight readable, see-through, helmet-mounted displays
for Kiowa Warrior aircrew.

UH-60 blackhawk

The budget request contained $138.9 million for the
procurement of 10 UH-60L Blackhawks for the Army, but no funds
were requested for additional helicopters for the Army National
Guard (ARNG).
The committee notes that the Army's ongoing deployments in
both Operations Enduring Freedom and Iraqi Freedom have
precluded the cascading of certain active component unit's
aircraft to the ARNG, as directed by the Army's aviation
modernization plan. Accordingly, the committee notes that the
ARNG continues to have an outstanding requirement for
additional Blackhawk helicopters.
The committee recommends $251.7 million, an increase of
$52.0 million for 5 UH-60L utility variants, and $60.8 million
for 4 HH-60L medical evacuation aircraft, for a total increase
of $112.8 million, for additional ARNG Blackhawk helicopters.

UH-60 modifications

The budget request contained $136.5 million for UH-60
modifications, of which $113.5 million is for the UH-60M
recapitalization and upgrade program.
The committee understands that the UH-60M upgrade program,
which will incorporate airframe and engine power improvements,
as well as a digitized cockpit for enhanced long-range
precision navigation, command and control interoperability, and
future worldwide air traffic management requirements, has
experienced cost growth as a result of added requirements and
the implementation of earned value management on the
development program. The committee is concerned with cost
growth for an upgrade program of an aircraft which has been in
production for over 25 years and will closely monitor the
progress of the restructured development program through fiscal
year 2004.
The committee recommends a transfer of $100.0 million from
UH-60 modifications to PE 23744A for continued development and
procurement of additional prototype aircraft, in the hopes of
mitigating the impact of the delay of fielding this upgrade to
soldiers.

Missile Procurement, Army

Overview

The budget request for fiscal year 2004 contained $1,459.5
million for Missile Procurement, Army. The committee recommends
authorization of $1,594.7 million, an increase of $135.2
million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Missile Procurement, Army program are identified in the table
below. Major changes to the Army request are discussed
following the table.

Items of Special Interest

Patriot PAC-3

The budget request contained $561.6 million for Patriot
PAC-3 procurement.
The committee is encouraged by the performance of Patriot
PAC-3 in testing and actual operations. Therefore, the
committee recommends $687.6 for the Patriot PAC-3 system, an
increase of $126.0 million, of which $90.0 million is to be
used for procurement of 30 additional PAC-3 missiles, and $36.0
million is to be used for upgraded radars and launch
communication enhancements.

Weapons and Tracked Combat Vehicles, Army

Overview

The budget request for fiscal year 2004 contained $1,640.7
million for Weapons and Tracked Combat Vehicles, Army. The
committee recommends authorization of $2,197.4 million, an
increase of $556.7 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Weapons and Tracked Combat Vehicles, Army program are
identified in the table below. Major changes to the Army
request are discussed following the table.

Items of Special Interest

Counterattack corps modernization

The budget request included $113.3 million for fielding
M2``A3'' Bradley Fighting Vehicle upgrades procured in prior
fiscal years. The budget request also included no funds in the
M1A2 System Enhancement Program (SEP) for upgrading M1A2 Abrams
tanks to the M1A2 SEP tank variant. The budget request also
included $268.6 million for M1 Abrams tank modifications, of
which $154.4 million is for the procurement of the LV100
engine. However, both the M2 Bradley upgrade and M1A2 Abrams
tank upgrade programs were terminated in the fiscal year 2004
budget request.
In light of the dominant role that heavy armored forces
played in Operation Iraqi Freedom and their ability to employ
rapid maneuver and lethality, as well as support infantry in
urban combat, the committee is concerned that the Army has
chosen to terminate its heavy armor digitized upgrades at two
divisions. In prior years, and in its fiscal year 2003 budget,
the Army originally planned to field a counterattack corps
comprised of three and one third heavy armored, digitized
divisions. However in the fiscal year 2004 budget request, the
Army terminated its heavy armored force digital upgrades. The
committee is extremely concerned with both the force structure
and industrial implications that this new plan may have.
The committee understands that the Army was faced with a
series of difficult choices in the construct of its fiscal year
2004 budget request in order to fund Future Combat Systems
(FCS) and fulfill other current modernization goals. However,
the committee is very concerned that the Army has now abandoned
its counterattack corps digital upgrade initiative and not
developed a transition plan for the heavy armor production
industrial base before it determines what type of FCS ground
vehicle technologies and production requirements are needed in
order to both sustain its legacy force, which is planned to be
maintained through at least 2030, and if required, also
transition to be able to produce the next generation FCS ground
vehicles.
The committee also understands that an armored cavalry
regiment (ACR), the reconnaissance and scout ``eyes and ears''
of its counterattack corps, was originally scheduled to receive
digital upgrades in prior year plans. Currently, this unit has
approximately 130 analog M3A2 Bradley scout vehicles and 129
M1A2 Abrams tanks, which can be upgraded with improved digital
technologies, such as a second generation forward looking
infrared sensor, Force XXI Battle Command, Brigade and Below
situational awareness system, and a zero-mile vehicle
refurbishment. The committee understands that a M1A2 to M1A2
SEP upgrade unit cost would be $3.6 million per tank and the
committee's recommended increase herein for SEP upgrades is
based on that cost.
The committee notes that the current AGT-1500 engine in the
Abrams tank is the highest operations and support (O&S) cost
driver of the vehicle and represents approximately 60 percent
of the O&S costs. The committee also notes that the replacement
LV100 engine, once fully tested and integrated into the Abrams
tank, is expected to result in a 20 percent improvement in fuel
consumption and a 43 percent reduction of parts. While the
committee is supportive of this program and understands its
benefits, it notes that the LV100 is not ready to enter into
procurement because of technical delays due to power
shortfalls, and therefore, recommends a decrease of $108.0
million from the Abrams Modification program for the
procurement of LV100 engines and a transfer of these funds to
the M1A2 SEP program for the procurement of 43 M1A2 Abrams SEP
upgrades. Additionally, the committee notes $32.0 million for
Abrams Integrated Management refurbishment within the Abrams
Upgrade Program is not required if M1A2 SEP tank upgrades are
continued and recommends a transfer of this amount to the M1A2
SEP program.
Additionally, the committee notes that $108.0 million for
procurement of LV100 engines may become available depending on
the outcome of engine reliability testing scheduled for the
fourth quarter of fiscal year 2003. Also, the committee
understands that up to $68.0 million for SEP program components
of fiscal year 2003 funds has not been executed. In order to
accelerate Abrams SEP tank upgrades, the committee strongly
urges the Secretary of the Army to reprogram these funds if
they are available to begin upgrades of 43 M1A2 Abrams tanks to
the M1A2 Abrams SEP configuration in fiscal year 2003.
The committee recommends $372.1 million, an increase of
$258.8 million, for Bradley M3A2 Operation Desert Storm ``D+''
upgrades, and, an increase of $424.0 million for M1A2 Abrams to
M1A2 Abrams SEP tank upgrades, both for counterattack corps
modernization and to maintain a warm heavy armor production
industrial base. An increase of $44.0 million is also
recommended within Other Procurement, Army, for combat support
and combat service support equipment for counterattack corps
modernization.

Ammunition Procurement, Army

Overview

The budget request for fiscal year 2004 contained $1,310.0
million for Ammunition Procurement, Army. The committee
recommends authorization of $1,429.0 million, an increase of
$119.0 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Ammunition Procurement, Army program are identified in the
table below. Major changes to the Army request are discussed
following the table.

Items of Special Interest

Army ammunition procurement

The budget request contained $1,310.0 million for
procurement of ammunition and production base support. The
committee recommends $1,429.0 million, an increase of $119.0
million, for the following types of ammunition programs, of
which ammunition production is among the top unfunded
requirements identified by the Army Chief of Staff in fiscal
year 2004:

Small/Medium Caliber Ammunition:ions of dollars]
CTG 25mm, APFSDS-T M919................................... 25.0
Mortar Ammunition:
CTG 60mm Full Range Practice, M769........................ (1.0)
CTG 120mm M930A1 Illum.................................... 5.0
CTG 120mm M931 Full Range Practice........................ 2.0
CTG 120mm M934A1 HE....................................... 5.0
Artillery Ammunition:
Cartridge, Artillery 105mm Illum M314..................... 4.0
Modular Artillery Charge System........................... 20.0
Rockets:
HYDRA-70, All Types....................................... 11.0
Demolition Munitions, All Types:
Modernization Demolition Initiators....................... 4.0
Production Base Support:
Flexible LAP for modern munitions......................... 15.0
Small Caliber production line upgrades.................... 24.0
Medium Caliber Links manf. die sets....................... 5.0

Joint ammunition production base upgrades and capacity

The budget request contained $138.5 million for ammunition
production base support, of which $33.6 million is for the
provision of industrial facilities. However, no funds were
requested for flexible load, assemble, and pack (LAP) upgrades
for modern munitions or small and medium caliber production
line upgrades.
In the committee report on H.R. 4546 (H. Rept. 107-436),
the committee directed the Secretary of the Army to provide a
report to the congressional defense committees by January 15,
2003, which would outline the conventional ammunition
industrial base requirements, including LAP capacity, to
fulfill the ammunition requirements for the Department of
Defense's new capabilities-based strategy and Army Chief of
Staff unfunded requirements. The service secretary requested an
extension on February 25, 2003, for submission of the report to
the congressional defense committees because the strategy
needed to be briefed to the Office of the Secretary of Defense
prior to its submission to the congressional defense
committees. The committee did not receive the report prior to
its action on the fiscal year 2004 budget request.
Absent this information, the committee firmly believes that
the Department of Defense has not adequately funded or
addressed the requirements for production line upgrades to the
nation's ammunition production industrial base. Further, the
committee believes that these upgrades are required, to not
only update World War II-era production lines, but are also
needed to fulfill the increased production requirements of the
growing shortfalls in war reserve and training ammunition,
which have occurred from increased ammunition use in the war on
terrorism. These increased requirements span the spectrum, from
small to large caliber conventional ammunition, as well as
conventional bombs and other explosive materials. The increased
ammunition use rate, combined with the atrophy of the
ammunition production industrial base, which occurred as a
result of the reduction of procurement funds during the 1990's,
has resulted in a limited production capacity in the United
States, as well as an increased reliance on foreign sources for
ammunition for U.S. soldiers, sailors, airmen, and marines. The
committee is disturbed with these trends.
Absent the Secretary's input, which would have aided the
committee in determining where additional resources could have
been properly applied, the committee recommends $182.5 million
for production base support, an increase of $44.0 million for
the following ammunition production base upgrades:
(1) $15.0 million for flexible LAP for modern munitions;
(2) $24.0 million for small caliber production line
upgrades; and
(3) $5.0 million for medium caliber links manufacturing die
sets.
The committee understands that additional resources will be
required to complete these production line upgrades and
strongly urges the Secretary of Defense to provide the
resources necessary in future fiscal year budgets to complete
these upgrades in order to ensure that the U.S. conventional
ammunition production base will support the transformational
requirements of the nation's 21st Century military.

Other Procurement, Army

Overview

The budget request for fiscal year 2004 contained $4,216.9
million for Other Procurement, Army. The committee recommends
authorization of $4,321.5 million, an increase of $104.6
million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Other Procurement, Army program are identified in the table
below. Major changes to the Army request are discussed
following the table.

Items of Special Interest

Communications-electronics equipment fielding

The budget request contained $15.9 million for the
procurement and fielding of communications-electronics
equipment, but included no funds for the procurement of the AN/
PRC-148 Multiband Inter-Team Radio (MBITR).
The AN/PRC-148 MBITR is the interim platoon, squad and
specials operations team leader radio for selected light
infantry units, which provides small unit secure and non-secure
communications. The committee notes that this radio will
provide small unit communications until the Joint Tactical
Radio System handheld ``cluster II'' requirements are
identified and developed and that additional requirements for
the MBITR exist in infantry units. The committee also notes
that the Army Chief of Staff has identified a $9.4 million
fiscal year 2004 unfunded requirement for the AN/PRC-148 MBITR
as part of the rapid fielding initiative.
The committee recommends $23.9 million, an increase of $8.0
million, for additional AN/PRC-148 MBITR systems for the rapid
fielding initiative and notes that this increase is a transfer
of funds from the Land Warrior program.

Construction equipment ESP

The budget request contained no funds for a construction
equipment service life extension program (SLEP) for the Army
National Guard or Army Reserve.
The committee notes that this SLEP has been an extremely
successful program in prior fiscal years for both the active
and reserve components and provides for an overhaul and ``zero-
mile'' refurbishment of aging combat construction equipment.
The committee also notes that the Army Chief of Staff has
identified a $10.2 million fiscal year 2004 unfunded
requirement for this purpose.
The committee recommends an increase of $10.0 million for
construction equipment SLEP for the reserve component.

Family of heavy tactical vehicles

The budget request contained $133.0 million to procure
palletized load systems, heavy equipment transporter systems,
heavy expanded mobility tactical trucks and other related
equipment of which $10.4 million was included to procure 656
movement tracking systems (MTS). However, no funds were
budgeted for the Army Reserve.
The MTS is a satellite-based tracking, communication system
providing combat service support units with total asset
visibility, global positioning system vehicle location, and
tracking and two-way text messaging between stationary base
locations and vehicles.
The committee understands the MTS significantly enhances
the Army's ability to strategically position vehicles based on
battlefield requirements, monitor, and track re-supply items,
while providing near real-time command and control of in-
theater logistical requirements and assets. As Army Reserve
deployments increase, the committee believes there is an
increasing need for better communications interoperability
between the digitized Counterattack Corps and mobilized Reserve
combat service support units directly participating in real
world scenarios. The committee also notes the Chief of the Army
Reserve has identified a fiscal year 2004 unfunded requirement
for MTS.
The committee recommends $142.0 million for the family of
heavy tactical vehicles, an increase of $9.0 million, to
accelerate procurement of MTS for the Army Reserve.

Full tracked tractor

The budget request contained no funds to procure full
tracked tractor dozers for either the Counterattack Corps or
the Army National Guard (ARNG).
The full tracked tractor dozer provides a heavy dozing and
clearing capability for combat heavy construction battalions
and construction support companies in support of heavy forces
and national emergency response by the ARNG. The committee
notes that the Army Chief of Staff has identified a fiscal year
2004, $18.4 million unfunded requirement for these vehicles.
The committee recommends an increase of $10.0 million, $5.0
million for active component dozers, and, $5.0 million for ARNG
dozers to field additional capability in support of heavy
counterattack corps and ARNG requirements.

High mobility multi-purpose wheeled vehicles (HMMWVs)

The budget request contained $137.8 million for HMMWVs, of
which $38.4 million was included to procure 250 of the M1114
Up-Armor variant.
The Up-Armor HMMWV is a multi-service, four wheel drive
utility vehicle that provides proven ballistic protection for
soldiers from anti-personnel and anti-tank mines and armored
piercing munitions. The committee notes the Chief of the
National Guard has identified a critical shortfall of 3,410
vehicles, and the Chief of the Army Reserve has identified this
program as a top unfunded requirement. The committee
understands these additional vehicles will supplement deployed
Army Reserve units in combat support missions and also
accelerate fielding to the National Guard, now performing
expanded homeland security duties.
The committee recommends $155.8 million, an increase of
$18.0 million for additional M1114 Up-Armor HMMWVs to address
guard and reserve shortfalls, recognizing the ongoing
importance of force protection and in light of lessons learned
from previous urban and combat operations.

Joint tactical area command systems

The budget request contained $900,000 for management of
joint tactical area command systems, but included no funds to
upgrade existing AN/ARS-6 (V) personnel locator communications
systems with state-of-the-art, commercial-off-the-shelf (COTS)
technology.
The AN/ARS-6 (V) personnel locator communications system is
an airborne electronic locator, which can precisely locate
survivors on the ground equipped with AN/PRC-112 survival
radios. The committee understands that this COTS upgrade will
include a global positioning system waveform for currently
fielded systems, but is also required as well to provide
interoperability with next generation Combat Survivor Evader
Locator survival radios. The committee believes that this
capability may aid in the rescue and recovery of personnel and
survivors in extremis situations.
The committee recommends $8.9 million for joint tactical
area command systems, an increase of $8.0 million, for AN/ARS-6
(V) COTS insertion upgrades.

Knight family

The budget request contained $6.7 million for engineering
support and fielding of the Knight command and control and
targeting system, but included no funds for the procurement of
Knight systems for the Army National Guard (ARNG).
The Knight system is a high mobility multi-purpose wheeled
vehicle mounted system, which incorporates a Bradley fire
support vehicle mission equipment package of a laser
rangefinder/designator, thermal sight, handheld computer, and
both inertial navigation and global positioning systems. The
Knight system is operated by combat observation lasing teams as
an integral part of heavy and light division and ARNG enhanced
separate brigade reconnaissance teams to locate and designate
targets for laser-guided ordnance.
The committee notes that the system will be terminated in
fiscal year 2004, which will only allow this system to be
fielded to Counterattack Corps units and that funds
appropriated in prior years for the ARNG Knight systems enabled
the fielding of only approximately 50 percent of the
requirement for an ARNG enhanced separate brigade.
The committee recommends $35.2 million, an increase of
$28.5 million for 39 Knight family systems to accelerate
fielding to the ARNG.

Land warrior

The budget request contained $94.8 million for the
procurement of Land Warrior systems. The committee notes that
this system failed developmental tests and that the program has
been restructured in fiscal year 2003 to continue development
of system software to correct reliability deficiencies which
resulted in the developmental test failure. The committee also
notes that this is the Army's second unsuccessful attempt to
enter into procurement of the Land Warrior system, the last of
which occurred six years ago in fiscal year 1999. The committee
understands that technologies incorporated into this system,
which would enhance a soldier's situational awareness, are
continually improving. As a result, the committee is very
concerned with these continued program delays and that the Army
has not structured this program to field capabilities in a
block format. The committee strongly urges the Army to freeze
an achievable design so this system can enter into procurement
and be fielded to warfighters who would benefit from it. The
committee will monitor the system's progress through fiscal
year 2004 and will consider less costly alternative
technologies in the future, which are readily available and can
be rapidly fielded, if this system does not show improvement in
development.
Consequently, the Army has restructured the program and
requested, and the committee recommends, that $58.5 million be
transferred from procurement to PE 64713A for continued system
development and demonstration. Further, the committee
recommends no funds for the procurement of the Land Warrior
system, however, it recommends a transfer of $6.9 million to
Weapons and Tracked Combat Vehicles for the procurement of
Squad Automatic Weapons, and, $8.0 million to Other
Procurement, Army, Communications-Electronics Equipment
Fielding for AN/PRC-148 radios.

Lightweight video reconnaissance system (LVRS)

The budget request contained no funds for LVRS.
The LVRS provides scouts, long range surveillance units,
and special operations forces the capability to capture still
frame photographic images in all light conditions, especially
low light and low visibility situations, and then transmit
those images via military radio to higher headquarters for near
real-time information, intelligence and enhanced situational
awareness. The committee notes this system was terminated by
the Secretary of the Army in the fiscal year 2004 budget
request because the Land Warrior system was to replace its
capability. However, the committee notes that the Land Warrior
system will not enter into procurement in fiscal year 2004 as
originally planned, and notes that an increase of $10.7 million
would procure enough LVRS to complete fielding to the United
States Army Special Operations Command (USASOC).
The committee recommends an increase of $10.7 million for
the procurement of LVRS to complete the fielding of this system
to USASOC.

Local area network upgrades

The budget request contained $96.5 million to upgrade the
local area networks at several Army installations. The local
area network forms the communications backbone of an
installation, and is a critical component that enables an
installation to rapidly and efficiently deploy the combat units
resident at that installation. The committee is concerned that
the installations hosting XVIII Airborne Corps major units have
not received necessary upgrades to ensure that the Army's
combat power can move quickly when needed and believes that
additional effort is required to fully upgrade these local area
networks. At some locations, outmoded asynchronous transmission
mode switching equipment has not been replaced by gigabit
ethernet switching with open standard spaced software. The
committee believes the installations hosting these important
units should be upgraded as soon as possible to ensure
compatibility with Army-wide open standard systems.
The committee recommends $104.5 million for upgrades of
Army installation local area networks, an increase of $8.0
million.

Logistic support vessel (LSV)

The budget request contained no funds for procurement of an
LSV.
The Department of the Army's eight-ship LSV fleet provides
worldwide transport of its combat vehicles, personnel and
sustainment cargo, and is capable of ship-to-shore operations
including those in remote areas with unimproved beaches or
inland waterways. The committee notes that the recent
Operations Enduring Freedom and Iraqi Freedom have highlighted
the importance of LSV's to the Army's strategic vision of rapid
brigade and division deployment, and believes that an
additional LSV would meet emerging requirements to support the
global war on terrorism.
The committee recommends an increase of $33.0 million for
an additional LSV.

Nonsystem training devices

The budget request contained $165.3 million to procure
nonsytem training devices, but included no funds to procure
BEAMHIT laser marksmanship training systems (LMTS) for the Army
Reserve.
The committee understands that the Army Reserve lacks
adequate BEAMHIT LMTS to maintain marksmanship training skills.
The committee notes that the Army Chief of Staff increased
marksmanship training and readiness requirements for combat
service support (CSS) and combat support (CS) units to fight
the global war on terrorism, after the September 11,
2001,terrorist attacks on the United States. The committee also notes
that the Army Reserve comprises a substantial amount of the Army's CSS
and CS units.
The committee recommends $175.3 million, an increase of
$10.0 million, for additional BEAMHIT LMTS for the Army
Reserve.

Warfighter information network-tactical (WIN-T)

The budget request contained $3.2 million for the
procurement of ``prototype sensor particulate, noble gas
detection equipment and associated field station infrastructure
for automated, remote operation for WIN-T.''
The committee notes that the justification for this program
does not fit the information system requirements outlined in
the WIN-T operational requirements document and notes that
procurement was not planned to begin until fiscal year 2005.
The committee recommends a decrease of $3.2 million for
WIN-T.

Aircraft Procurement, Navy

Overview

The budget request for fiscal year 2004 contained $8,788.1
million for Aircraft Procurement, Navy. The committee
recommends authorization of $9,050.0 million, an increase of
$261.9 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Aircraft Procurement, Navy program are identified in the table
below. Major changes to the Navy request are discussed
following the table.

Items of Special Interest

AV-8B series modifications

The budget request contained $20.9 million for AV-8B series
modifications, but included no funds for Litening advanced
airborne targeting and navigation (AT) pods or for the upgrade
of Litening II pods to the Litening AT configuration.
The Litening AT pod is the next generation Litening pod
system that will incorporate an advanced forward-looking infra-
red radar and other enhancements to the existing multi-sensor
and precision strike capability. The committee understands that
the Marine Corps has a requirement for 98 Litening targeting
pods but has thus far only procured 76, for a shortfall of 22.
Additionally, the committee understands that the Marine Corps
has a requirement to upgrade eight Litening II pods to the
Litening AT configuration so that all AV-8B Litening pods
maintain the same configuration. The committee notes that both
the 22 Litening AT pods and the upgrade of eight Litening II
pods to the Litening AT configuration are included among the
Commandant of the Marine Corps' unfunded priorities for fiscal
year 2004.
The committee recommends $57.9 million for AV-8B series
modifications, an increase of $37.0 million for this purpose.

EA-6B modifications

The budget request contained $207.1 million for EA-6B
modifications, of which $89.6 million was included for improved
capabilities (ICAP) III modification kits, but included no
funds to replace the outer wing panel (OWP), or for the on-
board oxygen-generating system (OBOGS). The Department of the
Navy's fleet of 121 EA-6B aircraft is the Department of
Defense's only aircraft configured to provide the electronic-
jamming capability to deny and degrade the acquisition of
friendly forces by enemy air defense systems.
The ICAP III modification significantly improves the EA-
6B's ability to suppress and destroy modern enemy air defenses
by accurately identifying the specific emitter type, and by
providing the enemy emitter's range and bearing thereby
allowing timely employment of suppression or destruction
weapons. The committee notes that both the Chief of Naval
Operations and the Commandant of the Marine Corps have included
additional ICAP III modification kits among their unfunded
priorities for fiscal year 2004, and therefore recommends an
increase of $66.4 million for eight additional ICAP III
modification kits.
The committee understands that recent EA-6B fatigue life
inspections have revealed that OWPs are aging more rapidly than
expected due to fatigue cracking, and that this situation has
prompted the Navy to ground eight of its EA-6Bs in December
2002, and to restrict EA-6B flight operations in 23 aircraft to
less than three times the force of gravity, or ``g's,'' rather
than its full operating envelope of 5.5 g's. To restore these
aircraft to their full operating envelope, OWPs must be
replaced and the committee notes that the Chief of Naval
Operations has included replacement EA-6B OWPs among his
unfunded priorities for fiscal year 2004. Accordingly, the
committee recommends an increase of $60.0 million to procure
and install 18 OWP sets.
The OBOGS replaces the antiquated liquid oxygen system by
creating a continuous supply of breathing oxygen to aircrews by
using pressurized engine bleed air routed through a molecular
sieve which removes nitrogen, yielding 93 percent pure oxygen.
The committee understands that the EA-6B is one of two
remaining non-OBOGS equipped carrier wing aircraft,and that
additional funds are required in fiscal year 2004 to complete non-
recurring engineering to fully integrate OBOGS in the EA-6B.
Consequently, the committee recommends an increase of $6.0 million for
this purpose.
In total, the committee recommends $339.5 million for EA-6B
modifications, an increase of $132.4 million.

Joint Primary Air Training System (JPATS)

The budget request contained $2.4 million for procurement
of JPATS support equipment, but included no funds to procure T-
6A aircraft or associated ground-based training systems.
The JPATS, consisting of both the T-6A aircraft and a
ground-based training system, will be used by the Navy and Air
Force for primary pilot training. The T-6A will replace both
the Navy's T-34 and Air Force's T-37B fleets, providing safer,
more economical and more effective training for future student
pilots.
Despite the Department of the Navy's intention not to
continue JPATS procurement until fiscal year 2007, the
committee continues to believe that its procurement for the
Navy would not only reduce procurement costs for both the Navy
and the Air Force but would also reduce operations and
maintenance costs.
The committee recommends $17.1 million for JPATS, an
increase of $14.7 million for T-6A aircraft and associated
ground-based training systems.

P-3 series modifications

The budget request contained $95.0 million for P-3 series
modifications but included no funds for procurement of electro-
optic sensors and communications upgrades for non anti-surface
warfare improvement program (AIP) equipped aircraft.
The AIP upgrade improves the P-3's communications,
survivability, and over-the-horizon targeting capabilities
through the installation of commercial-off-the-shelf
components. The committee understands that AIP-equipped P-3s
are the theater commander's platform of choice for overland
intelligence, surveillance and reconnaissance (ISR) missions,
and that, as a result of extensive tasking, AIP-equipped P-3s
are rapidly consuming aircraft life. The committee notes,
however, that of the Navy's 288-aircraft P-3 inventory, only 69
aircraft have been, or are planned to be, modified with the AIP
upgrade leaving 219 aircraft that have been subject to a
diminished theater commander demand. The committee understands
that some of the remaining 219 non-AIP equipped aircraft could
be upgraded with electro-optic sensors and communication
upgrades allowing those P-3 aircraft to assume lower priority
ISR missions thereby conserving aircraft life on AIP-equipped
P-3 aircraft.
The committee recommends $104.0 million, an increase of
$9.0 million for procurement of electro-optic sensors and
communication upgrades for one non-AIP equipped P-3 aircraft
and its associated non-recurring engineering.

T-45A to T-45C conversion

The budget request contained $22.3 million for T-45 series
modifications, but included no funds for the conversion of T-
45A aircraft to the T-45C configuration. The T-45 is a two-
seat, aircraft carrier-capable aircraft used for the Navy's
intermediate-level undergraduate pilot training. The T-45A has
an analog cockpit, while the T-45C is equipped with digital
cockpit displays.
The committee understands that the T-45A's analog cockpit
display configuration does not provide the same quality of
training provided by the T-45C's digital cockpit display design
since current aircraft such as the F/A-18E/F are equipped with
digital cockpit displays and future aircraft such as the F-35
are also planned to have digital cockpit displays. The
committee also understands that the Navy Chief of Naval Air
Training has identified the conversion of T-45A's to the T-45C
configuration as his number two priority.
The committee recommends $41.4 million for T-45 series
modifications, an increase of $19.1 million for conversion of
T-45A aircraft to the T-45C configuration, to improve the
quality of T-45 pilot training.

Weapons Procurement, Navy

Overview

The budget request for fiscal year 2004 contained $1,991.8
million for Weapons Procurement, Navy. The committee recommends
authorization of $2,529.8 million, an increase of $538.0
million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Weapons Procurement, Navy program are identified in the table
below. Major changes to the Navy request are discussed
following the table.

Items of Special Interest

Close-in weapon system (CIWS) block 1B upgrade

The budget request contained $41.4 million for CIWS
modifications, all of which is for the CIWS block 1B upgrade.
The CIWS is a high-fire rate weapon system that
automatically acquires, tracks and destroys anti-ship missiles
that have penetrated all the other ship's defenses. The CIWS
block 1B upgrade incorporates a thermal imager, to further
improve anti-ship missile defense, and an automatic acquisition
video tracker that provides the additional capability to engage
small, high-speed maneuvering surface craft and low, slow
aircraft and helicopters. The committee notes that the
Department of the Navy plans to increase CIWS block 1B upgrade
annual budgets by over 350 percent for fiscal years 2005
through 2009, and believes that, since this upgrade provides
significant anti-terrorism and force protection capability, it
should be accelerated in fiscal year 2004.
The committee recommends $50.4 million for CIWS
modifications, an increase of $9.0 million to accelerate
procurement of CIWS block 1B systems.

GQM-163A coyote supersonic sea skimming target

The budget request contained $70.7 million for procurement
of Navy aerial targets, including $17.6 million for procurement
of supersonic sea skimming targets (SSST).
The Navy is developing the GQM-163A Coyote SSST to replace
the VANDAL SSST, which is now out of production and the supply
of which is almost exhausted. The GQM-163A is a high-fidelity
target that will replicate the performance of sophisticated
anti-ship cruise missiles.
The committee recommends $85.7 million for procurement of
Navy aerial targets, including an increase of $15.0 million to
accelerate the procurement of the GQM-163A Coyote SSST.

Tomahawk missile

The budget request contained $277.6 million for 267
tactical tomahawk (TACTOM) missiles.
The Tomahawk missile is a long-range, precision-strike
cruise missile launched from surface ships or submarines. The
TACTOM missile will provide improved performance at a lower
unit cost than previous missile versions. The existing maximum
TACTOM production capacity is 450 missiles per year.
The committee notes that the Department of the Navy's
programmed budget for Tomahawk missiles would result in an
inventory that is significantly below the Navy's stated
Tomahawk required inventory levels, and that recent Tomahawk
missile expenditures, which have been in excess of 700 for
Operation Iraqi Freedom, have exacerbated this shortfall. The
committee also notes that the Emergency Wartime Supplemental
Appropriations Act for Fiscal Year 2003 (Public Law 108-11)
established a $15.7 billion Iraqi Freedom Fund to provide for
additional expenses associated with the ongoing military
operations in Iraq including the replacement of munitions.
Additionally, the statement of the managers accompanying the
conference report on H.R. 1559 (H. Rept. 108-76) specifically
identified TACTOM missiles among those precision guided
munitions that should be procured from the funds provided.
Since the committee believes that the Tomahawk missile shortage
is severe and should be aggressively addressed in fiscal year
2003, it directs the Department of Defense to obligate at least
$24.0 million from funds provided in the Iraqi Freedom Fund by
Public Law 108-11 to increase TACTOM production capacity to 600
missiles per year and to obligate at least $336.0 million for
an additional 300 TACTOMs. The committee understands that the
additional TACTOMs can be delivered beginning in January 2005
with an associated production rate increase to 600 missiles per
year beginning in November 2006.
To sustain TACTOM production at a rate of 600 missiles per
year for fiscal year 2004, the committee recommends an increase
of $336.0 million for an additional 333 TACTOM missiles.
The committee also believes that future wartime
expenditures may require inventory replenishment rates up to
900 missiles per year. Accordingly, the committee recommends an
increase of $40.0 million for further tooling and test
equipment, and understands that a contract award in the second
quarter of fiscal year 2004 would allow a 900-missile-per-year
production capacity to be achieved by the second quarter of
fiscal year 2006.
The committee recommends $653.6 million for the TACTOM
missile, an increase of $376.0 million.

Ammunition Procurement, Navy & Marine Corps

Overview

The budget request for fiscal year 2004 contained $922.4
million for Ammunition Procurement, Navy & Marine Corps. The
committee recommends authorization of $963.4 million, an
increase of $41.0 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Ammunition Procurement, Navy & Marine Corps program are
identified in the table below. Major changes to the Navy &
Marine Corps request are discussed following the table.

Items of Special Interest

Marine Corps ammunition procurement

The budget request contained $232.4 million for procurement
of ammunition. The committee recommends $253.4 million, an
increase of $21.0 million for the following types of
ammunition, which were identified as top unfunded requirements
by the Commandant of the Marine Corps for fiscal year 2004:

5.56mm, All Types: [In millions of dollars]
M855 lead-free............................................ 5.0
60mm, All Types:
M720A1 HE................................................. 6.0
Artillery, All Types:
155mm M795 HE............................................. 10.0

Navy ammunition procurement

The budget request contained $690.0 million for the
procurement of conventional ammunition. The committee
recommends $710.0 million, an increase of $20.0 million for the
procurement of ammunition, which was a top unfunded requirement
identified by the Chief of Naval Operations for fiscal year
2004:

[In millions of dollars]

General Purpose Bombs......................................... 20.0
(to be used only for the procurement of bomb bodies to
synchronize with precision guided munitions kits)

Shipbuilding and Conversion, Navy

Overview

The budget request for fiscal year 2004 contained $11,439.0
million for Shipbuilding and Conversion, Navy. The committee
recommends authorization of $11,472.4 million, an increase of
$33.4 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Shipbuilding and Conversion, Navy program are identified in the
table below. Major changes to the Navy request are discussed
following the table.

Items of Special Interest

Landing craft air cushion (LCAC) service life extension program (SLEP)

The budget request contained $73.1 million for three LCAC
SLEPs.
The LCAC is the only surface platform that can provide
high-speed, heavy lift for Marine Corps amphibious operations
from over-the-horizon. The SLEP, which includes hull, engine
and communications upgrades, would extend the LCAC's service
life from twenty years to thirty years. The committee
understands that an annual quantity of three LCAC SLEPs is one
less than the minimum production sustainment level and that
production of four LCAC SLEPs in fiscal year 2004 would prevent
a production line break. The committee believes that
uninterrupted production is critical to a cost-effective LCAC
SLEP program.
The committee recommends $94.1 million, an increase of
$21.0 million for the procurement of one additional LCAC SLEP.

Minehunter small waterplane area twin hull (SWATH) boats

The budget request contained no funds for procurement of
second generation Minehunter SWATH boats or for their
associated mine countermeasures equipment suites.
The Minehunter SWATH boat is a 40-foot, twin-hull vessel
that can operate in very shallow water with increased stability
in rough seas compared to a similar size mono hull ship. The
second generation Minehunter SWATH boat will be capable of
remote operation, greatly reducing manning requirements. The
Navy's mine hunting fleet includes one Minehunter SWATH boat,
which is its only surface mine warfare vessel capable of
operating in very shallow water or capable of transport by C-5
aircraft for operational deployment within 24 hours. The
committee believes that the capability to provide prompt mine
hunting support to United States harbors is critical to the
homeland security mission.
The committee recommends an increase of $9.4 million for
the procurement of two second generation Minehunter SWATH boats
and their associated mine countermeasures equipment suites.

Other Procurement, Navy

Overview

The budget request for fiscal year 2004 contained $4,679.4
million for Other Procurement, Navy. The committee recommends
authorization of $4,614.9 million, a decrease of $64.6 million,
for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Other Procurement, Navy program are identified in the table
below. Major changes to the Navy request are discussed
following the table.

Items of Special Interest

Fuel and engine maintenance savings system (FEMSS)

The budget request included no funds for FEMSS. The
committee understands that the request for fiscal year 2004 has
been slipped to 2006.
The FEMSS has demonstrated a savings of more than $200,000
per ship per year in fuel and maintenance costs, paying for
itself in five years.
The committee recommends an authorization of $3.0 million
to procure three ship sets of FEMMS for the procurement and
installation of FEMS on three LSD 41/49 class of ships.

Law enforcement information exchange

The budget request contained $15.4 million for items less
than $5.0 million, but contained no funding for the Law
Enforcement Information Exchange system. This system would
allow the Naval Criminal Investigation Service to share law
enforcement information with other federal, state, and local
law enforcement agencies to detect and deter terrorist
activities.
The committee recommends $19.4 million for items less than
$5.0 million, an increase of $4.0 million.

Naval fires control system (NFCS)

The budget request contained $4.3 million for the
procurement of the NFCS, however, no funds were requested for
the Littoral Surveillance System (LSS).
The LSS is a high mobility multipurpose wheeled vehicle-
based node within the Joint Fires Network which provides
intelligence, surveillance, reconnaissance, and targeting from
imagery, signals, and measurement/signature intelligence data.
The LSS receives its data from both manned and unmanned
aircraft and unmanned ground, underwater and space-based
sensors. The committee notes that the Chief of Naval Operations
has identified a fiscal year 2004 unfunded requirement of $14.7
million for LSS hardware, software, and communications
upgrades, which would make LSS units 1 and 2 fully operational.
The committee is supportive of networked fire support that will
provide targeting data and solutions for naval and joint assets
to employ precision guided munitions in support of time
critical strike and time sensitive targeting missions.
The committee recommends $9.0 million for NFCS, an increase
of $4.7 million, for LSS hardware, software, and communications
upgrades to make LSS units 1 and 2 fully operational.

Navy tactical data systems

The budget request contained no funds for Navy tactical
data systems.
The committee is aware of the high cost of replacing
peripheral sub systems and equipment in the front line Aegis
platforms that are currently globally deployed. Obsolescing
equipment used to load programs into the Aegis weapons system
are incurring high maintenance costs as they continue to be
utilized beyond their anticipated life cycles. Digital support
equipment based on commercial-off-the-shelf technologies would
significantly reduce maintenance costs and would increase
weapons systems availability.
The committee recommends $6.5 million for Navy tactical
data systems to replace Aegis Combat System peripheral
equipment.

Non-lethal swimmer detection systems

The budget request contained $74.6 million for physical
security equipment, but included no funds for non-lethal
swimmer detection systems.
Non-lethal swimmer detection systems include a variety of
new technologies and systems that provide shipboard force
protection for pier side or anchored Navy ships, when they are
most vulnerable to submerged swimmer threats. The committee
understands that the Navy does not have any non-lethal swimmer
detection capability for its ships at pier side or at
anchorage, and that non-lethal swimmer detections systems would
automate the detection and identification of underwater
threats, allowing the ship's crew to take the necessary actions
to prevent the placement of underwater devices intended to
cause damage to a ship or injury to its crew.
To address this shortfall, the committee notes that the
Chief of Naval Operations included non-lethal swimmer detection
systems among his top four unfunded priorities for fiscal year
2003.
The committee recommends $91.6 million for physical
security systems, an increase of $17.0 million for non-lethal
swimmer detection systems.

Operating forces industrial plant equipment

The budget request contained $5.5 million for operating
forces industrial plant equipment, but included no funds for
expeditionary maintenance facilities (EMF).
The committee is aware that the Navy has decommissioned the
majority of its repair tenders to include all tenders
associated with surface combatant repair. This significantly
impacts the ability of the Navy to repair and perform depot
level maintenance for forward deployed fleet units. The
committee is aware of the capabilities imbedded in the
expeditionary maintenance facilities (EMF) in that the EMF is
air transportable, modular and capable of being configured to
meet specific requirements based on deployment geography. The
committee is also aware that this system can be deployed within
72 hours to any theater of operations where repair and
maintenance support is needed. The committee believes that the
EMF concept will enhance forward deployed repair requirements.
The committee recommends $13.5 million for operating forces
industrial plant equipment, an increase of $8.0 million, for
procurement of two EMF sets.

Other supply support equipment

The budget request contained $13.9 million for the
procurement of other supply support equipment, of which no
funds were allocated for the automatic identification
technology (AIT) in support of the serial number tracking
system (SNTS).
The SNTS uses commercial AIT to provide web-based, cradle-
to-grave, total asset visibility on individual components
throughout the supply, maintenance, and transportation transfer
process within the Naval and Marine Corps aviation depots and
enhances the maintenance, remanufacture, and rebuild process of
Navy and Marine Corps aircraft. The committee believes that
streamlining business processes, such as SNTS, can be readily
achievedby implementing AIT and has recommended increases for
this technology for maintenance and ammunition tracking systems for
other military services in prior fiscal years.
The committee recommends $19.9 million for other supply
support equipment, an increase of $6.0 million for the SNTS.

Radar support

The budget request contained $9.7 million for procurement
of one A/N-SPQ-9B Radar. The A/N-SPQ-9B radar is designed to
provide early and reliable detection of sea skimming missiles
so that they can be tracked, targeted, and neutralized. This
expanded capability is added with no degradation to the
original function of highly accurate surface gunfire support
and navigation utilization. The committee believes that the
anti-sea skimming mission is vital to the defensive
capabilities of ships operating in the near coast and littoral
areas of the maritime environment.
The committee recommends $29.5 million for upgrades to the
remaining 20 fleet radar sets, an increase of $19.8 million.

Procurement, Marine Corps

Overview

The budget request for fiscal year 2004 contained $1,071.0
million for Procurement, Marine Corps. The committee recommends
authorization of $1,154.3 million, an increase of $83.3
million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Procurement, Marine Corps program are identified in the table
below. Major changes to the Marine Corps request are discussed
following the table.

Items of Special Interest

Night vision equipment

The budget request contained $24.4 million to procure night
vision equipment, but included no funds to procure either AN/
PVS-14 night vision goggles or AN/PVS-17 miniature night
sights.
The AN/PVS-14 is a state-of-the-art, lightweight, helmet-
mounted, image-intensification, monocular night vision device
used by light forces for night visual enhancement and
situational awareness.
The AN/PVS-17 is a lightweight, rifle-mounted, generation
III, image intensification night vision sight that replaces
obsolete, post-Vietnam era AN/PVS-4 sights.
The committee notes that the Commandant of the Marine Corps
has identified fiscal year 2004 unfunded requirements of $5.4
million to procure additional AN/PVS-14 monocular night vision
devices, and $10.5 million for additional AN/PVS-17 night
vision sights. In support of the Commandant of the Marine Corps
unfunded requirements and consistent with prior year actions,
the committee continues to recognize the increased benefits of
night vision technology.
The committee recommends $34.8 million for night vision
equipment, an increase of $5.4 million for AN/PVS-14 monocular
night vision devices and an increase of $5.0 million for AN/
PVS-17 miniature night vision sights, for a total increase of
$10.4 million.

Radio systems

The budget request contained $10.6 million to procure radio
systems, but included no funds to procure AN/PRC-148 Tactical
Hand Held Radios (THHR) for the Marine Corps Reserve.
The AN/PRC-148 THHR is a multi-band, secure voice and data
radio that provides Marine reconnaissance teams and squad/
platoon-size units with a lightweight, standardized,
maintainable communications capability that is interoperable
with numerous Department of Defense legacy communications
radios. The committee notes that the Commandant of the Marine
Corps has identified a fiscal year 2004 unfunded requirement
for AN/PRC-148 THHRs.
The committee recommends $20.2 million for radio systems,
an increase of $9.6 million, for both active and reserve Marine
Corps forces.

Weapons and combat vehicles under $5.0 million

The budget request contained $5.0 million for the
procurement of weapons and combat vehicles under $5.0 million,
of which $3.1 million was for the procurement of the M249 squad
automatic weapon (SAW). The M249 SAW is a lightweight machine
gun capable of delivering a sustained volume of automatic,
accurate, and highly lethal fire up to 800 meters in range. The
committee notes that this has been one of the infantry's
critical weapon systems in both Operations Enduring Freedom and
Iraqi Freedom. Further, the committee notes that the Commandant
of the Marine Corps has identified a $8.1 million fiscal year
2004 unfunded requirement to alleviate an increasing failure
rate of currently fielded weapons.
The committee recommends $13.1 million for procurement of
weapons and combat vehicles under $5.0 million, an increase of
$8.1 million to replace obsolete M249 SAWs.

Aircraft Procurement, Air Force

Overview

The budget request for fiscal year 2004 contained $12,079.4
million for Aircraft Procurement, Air Force. The committee
recommends authorization of $12,604.5 million, an increase of
$525.1 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Aircraft Procurement, Air Force program are identified in the
table below. Major changes to the Air Force request are
discussed following the table.

Items of Special Interest

Air Force air refueling transfer account

The budget request contained no funds for an Air Force air
refueling transfer account.
The Air Force air refueling tanker fleet is comprised of 59
KC-10 aircraft and 544 KC-135 aircraft. While the first KC-10
aircraft were delivered in 1981 and the fleet's average age is
about 17 years, the KC-135s were delivered to the Air Force
between 1957 and 1965 and the KC-135 fleet's average age is 42
years. Since the KC-135 comprises most of the Air Force's air
refueling tanker fleet, the committee is concerned that a
substantial portion of the Air Force's air refueling fleet will
reach simultaneous maturity, and will require substantial
investment to operate, maintain, and eventually replace this
fleet.
The committee also notes that air refueling aircraft have
been used extensively during the past four years in Operations
Allied Force, Noble Eagle, Enduring Freedom and Iraqi Freedom.
Accordingly, the committee believes that recent operational
demands have further consumed aircraft life and will increase
costs for future maintenance and repair activity. As recent Air
Force combat operations have demonstrated, the committee
further believes that future Air Force air combat operations
are likely to require increased air refueling tanker capacity.
Moreover, the committee notes that the Tanker Requirements
Study for Fiscal Year 2005, which was released before the
current defense planning guidance increased combat capability
requirements to conduct theater operations and homeland defense
activities, identified tanker shortfalls driven in large part
by the high number of KC-135 aircraft in a depot status.
Consequently, the committee is perplexed by the Air Force's
decision to retire, rather than upgrade, 44 KC-135E aircraft in
fiscal year 2004 and a remaining 22 KC-135E aircraft within the
future years defense program.
Additionally, the committee notes that the Air Force budget
would only provide for seventy-nine percent of depot purchased
equipment maintenance (DPEM) in fiscal year 2004, and that the
Air Force Chief of Staff has included $516.0 million to provide
for increased DPEM funding for the Air Force's aircraft fleet
as his first, of sixty-six, unfunded priorities for fiscal year
2004. The committee understands that of the $516.0 million
amount, thirty-five percent would be planned for KC-135
aircraft depot-level repairs to sustain the aircraft's mission
readiness.
To replace the KC-135 fleet, the Air Force has informed the
committee that it supports a lease or procurement of
replacement tanker aircraft, but the committee is puzzled by
the Air Force's decision not to budget funds in fiscal year
2004 for this purpose. However, the committee notes that the
Air Force Chief of Staff has included $132.0 million for the
necessary expenses to prepare for the lease, or $154.0 million
for the necessary expenses to prepare for the purchase, of
replacement tanker aircraft as his sixth unfunded priority for
fiscal year 2004.
To address the Air Force's air refueling tanker fleet
requirements for fiscal year 2004 within a flexible funding
framework, the committee recommends a provision (Section 131)
that would establish a $229.2 million Air Force air refueling
transfer account which would authorize the Secretary of the Air
Force to use these funds for the necessary fiscal year 2004
expenses to proceed with any combination of the following that
best meets tanker requirements: (1) lease preparation: $132.0
million; (2) purchase preparation: $154.0 million; (3)
retaining 44 KC-135E aircraft: $75.2 million; and/or (4) KC-135
DPEM: $180.6 million.

B-1B modifications

The budget request contained $91.6 million for B-1B
modifications but included no funds for the modifications
required to regenerate 23 additional aircraft. The B-1B is a
multi-engine, supersonic, long-range bomber capable of
delivering nuclear or conventional munitions.
The committee notes that the Air Force plans to retire 32
of its 92 B-1B aircraft fleet by the end of fiscal year 2003.
However, the committee observed the B-1B's long-range
capability to deliver conventional precision-guided munitions
against strategic and tactical targets during the recent
Operations Enduring Freedom and Iraqi Freedom, and believes
that the B-1B's contributions were crucial to the success of
both operations. Moreover, the committee believes that future
conflicts will require an increased number of long-range bomber
aircraft to deliver precision-guided munitions since basing for
shorter range aircraft may not be assured.
To address the need for additional long-range bomber
aircraft, the committee understands that 23, of the 32 B-1B
aircraft to be retired in fiscal year 2003, are available to be
regenerated, and that the Air Force-preferred force structure
would be to reconstitute one 12-aircraft squadron, with two
additional training aircraft and nine additional attrition
reserve or back-up aircraft.
Accordingly, the committee recommends $111.9 million for B-
1B modifications, an increase of $20.3 million, for the
additional fiscal year 2004 modification costs to begin the
regeneration of the 23 B-1B aircraft. Elsewhere in this report,
the committee recommends increases for military construction,
personnel and base operating support for this purpose.
In making this recommendation to reconstitute the
additional 23 B-1B aircraft,the committee understands that the
Department of the Air Force would need to budget for an
additional $1.1 billion in its B-1B future years defense
program, and the committee strongly urges the Department to
take this action.

B-2 modifications and development

The procurement budget request contained $76.5 million for
various B-2 modifications, but included no funds to modify the
B-2's aft deck. Additionally, the research, development, test
and evaluation (RDTE) budget request contained $152.1 million
in line 68 in PE 64240F for B-2 system development, but
included no funds to complete development activities to modify
the B-2's aft deck or to develop the extremely high frequency
(EHF) satellite communications (SATCOM) system. Also, the RDTE
budget request contained $24.7 million in line 116, again
labeled PE 64240F, for the B-2 advanced technology bomber. The
B-2 is the Department of Defense's most advanced long-range
strike aircraft, capable of global force projection in a highly
defended target environment.
The committee understands that recently-discovered crack
growth in the B-2's aft deck requires a modification to improve
its durability and to sustain both its existing mission capable
rates and low-observable performance characteristics.
Accordingly, the committee recommends an increase in RDTE line
68 in PE 64240F of $3.9 million to complete development and
design of aft deck repair kits, and an increase in B-2
modifications of $27.1 million to procure aft deck repair.
The EHF SATCOM system is being developed to provide high
bandwidth communications for both nuclear and conventional B-2
missions. The committee understands that the Air Force's
programmed EHF SATCOM development budget will not deliver any
EHF SATCOM equipped B-2 aircraft at the time required by the
Commander of the Strategic Command, and therefore recommends an
increase of $29.6 million in line 68 RDTE PE 64240F to
accelerate development of the EHF SATCOM system by one year to
deliver 17 EHF SATCOM equipped B-2 aircraft by the need date
established by the Commander of the Strategic Command.
Subsequent to submission of the budget request, the Air
Force informed the committee that it had inadvertently placed
$24.7 million in RDTE line 116 in PE 64240F, which should have
been included for B-2 procurement modifications. Accordingly,
the committee recommends no funds for PE 64240F in RDTE line
116, a decrease of $24.7 million, and a corresponding increase
of $24.7 million for B-2 procurement modifications.
The committee recommends $128.3 million for B-2 procurement
modifications, an increase of $51.8 million; $185.6 million in
line 68 RDTE PE 64240F, an increase of $33.5 million; and no
funds in line 116 RDTE PE 64240F, a decrease of $24.7 million.

C-5 modifications and force structure

The budget request contained $92.0 million for C-5
modifications, of which $79.9 million was included for 18 C-5
AMP kits.
The C-5 AMP replaces unreliable and unsupportable engine
flight instruments and flight system components. The committee
notes that the budget request is 32 kits lower than projected
for fiscal year 2004 when the fiscal year 2003 budget request
was submitted last year, and that the Air Force Chief of Staff
has included 12 C-5 AMP kits among his unfunded priorities for
fiscal year 2004.
The committee recommends $131.4 million for C-5
modifications, an increase of $39.4 million for 12 C-5 AMP
kits.
Additionally, the committee notes that the Secretary of the
Air Force testified before the committee on February 27, 2003,
that the Air Force hypothesizes that its fleet of C-5As will
prove too costly to maintain. However, the committee
understands that current Air Force plans include the retention
of at least 62 C-5A's and 50 C-5B's for a total of 112 C-5
aircraft, and that a reliability and re-engining program (RERP)
is underway to develop and test a RERP configuration for two C-
5B's and one C-5A. Subsequent to the test and evaluation of
both the RERP-configured C-5A and the C-5B aircraft, the
committee understands that the Department of the Air Force will
then decide whether its fleet of C-5A's are too costly to
maintain, and believes that this course of action is prudent to
sustain the required strategic airlift capability. To ensure
that the Air Force's current C-5 force structure plan is fully
evaluated before C-5A retirement decisions are made, the
committee recommends a provision (section 133) that would limit
the Secretary of the Air Force from proceeding with a decision
to retire C-5A aircraft from the active inventory if the active
inventory of such aircraft would fall below 112, until a RERP-
configured C-5A aircraft completes a dedicated initial
operational test and evaluation, and the Department of
Defense's Director of the Operational Test and Evaluation has
provided his assessment of the RERP-configured C-5A's
performance to both the Secretary of Defense and the
congressional defense committees.

C-17

The budget request contained $2,027.6 million to procure 11
C-17 aircraft and $504.1 million for advance procurement of 14
aircraft in fiscal year 2005. The budget request also contained
$42.8 million for C-17 modifications.
The C-17 is a strategic cargo aircraft, capable of rapid
delivery to main operating bases, or directly to forward bases
in the deployment area, and is also capable of performing
tacticalairlift and airdrop missions. The C-17 is currently
procured under a multiyear procurement contract that ends in fiscal
year 2008 at a delivery rate of 15 aircraft per year.
The committee notes that the January 2001 Mobility
Requirements Study 2005 (MRS-05) concluded that the airlift
capacity to transport 54.5 million ton miles per day (MTM/D) is
needed to execute the national military strategy with a
moderate degree of risk, but understands that currently airlift
capacity is approximately 47.4 MTM/D. While the committee
further understands that the Department of the Air Force plans
to achieve 54.5 MTM/D airlift capacity in fiscal year 2012 by
procuring a total of 180 C-17s and modernizing the C-5 aircraft
fleet, it notes that the MRS-05 was completed before the global
war on terrorism began, and believes that achieving a 54.5 MTM/
D airlift capacity should be accelerated to meet emerging
airlift requirements. Consequently, the committee recommends an
increase of $182.0 million for procurement of one additional
aircraft in fiscal year 2004. In making this recommendation,
the committee expects that the Department of the Air Force will
increase its C-17 production rate in order to deliver 16
aircraft per year for the remaining years of the current
multiyear procurement contract.
Subsequent to submission of the budget request, the
Department of the Air Force informed the committee of an error
in both its C-17 aircraft procurement and its C-17 modification
budget lines and requested that the committee make the
appropriate corrections. Consistent with the Department's
request, the committee recommends a decrease of $10.0 million
for C-17 procurement and an increase of $6.3 million for C-17
modifications.
In total, the committee recommends $2,199.6 million for C-
17 procurement, an increase of $172.0 million; and $49.1
million for C-17 modifications, an increase of $6.3 million.

C-130 modifications

The budget request contained $195.7 million for C-130
modifications but included no funds for the AN/APN-241 radar
for the Air National Guard's (ANG) C-130 fleet.
The AN/APN-241 is a weather and navigation radar that
replaces the 1950's-era 1AN/APN-59 radar currently installed on
the ANG's C-130 aircraft fleet. The committee understands that
the AN/APN-59, in addition to being obsolete, has a mean-time-
between-failure (MTBF) rate of 50 hours and is very costly to
maintain while the AN/APN-241 radar has significantly improved
performance capabilities, and a MTBF rate of 1000 hours.
Additionally, the committee notes that the Air National Guard
director has included the AN/APN-241 radar as his highest
unfunded C-130 modernization priority for fiscal year 2004.
The committee recommends $201.8 million for C-130
modifications, an increase of $6.1 million for eight AN/APN-241
radars for the ANG's C-130 fleet.

E-8C joint surveillance and target attack radar system (JSTARS)
reengining

The budget request contained $36.0 million for E-8
modifications, but included no funds to reengine the E-8C Joint
STARS aircraft.
The E-8C Joint STARS aircraft provides near real-time
surveillance and targeting information on moving and stationary
ground targets, enabling battlefield commanders to quickly make
and execute engagement decisions. The committee understands
that the E-8C's current engines are old, inefficient, provide
marginal power to support the E-8C's mission tasking, and are
expensive to operate and maintain compared to new engines
currently available in the commercial marketplace. The
committee believes that new, replacement engines would allow
the E-8C to climb more rapidly to the operationally required
altitudes, maintain longer on-station times, provide improved
aircraft availability, and would be more economical to operate
and maintain.
The committee recommends $63.0 million for E-8
modifications, an increase of $27.0 million to begin a
reengining program for the E-8C Joint STARS aircraft.

F-15 modifications

The budget request contained $197.6 million for F-15
modifications, of which $67.8 million was included for 32 F100
conversion kits and $17.1 million was included for four ALQ-135
band 1.5 modification kits, but included no funds to convert
the Air National Guard's (ANG) F100 engines in their F-15
aircraft to the F100-220E configuration.
The ALQ-135 band 1.5 countermeasures system modification
provides a self-protection jamming capability against modern
surface-to-air enemy missiles and is integrated with the F-
15E's existing internal countermeasure set and its ALR-56C
radar warning receiver to provide full threat coverage. The
committee believes that improved self-protection capability
such as the ALQ-135 band 1.5 countermeasures system
modification addresses critical deficiencies identified
subsequent to Operation Allied Force in 1999, and that the ALQ-
135 band 1.5 countermeasures system should be produced at the
most efficient rates and installed in all F-15E aircraft as
rapidly as possible. Accordingly, the committee recommends an
increase of $10.0 million to procure four additional ALQ-135
band 1.5 modification kits, and encourages the Air Force to
complete ALQ-135 band 1.5 production and installation all F-15E
aircraft by fiscal year 2006.
Conversion kits for the F-15's F100 engine, also known as
``E-kits,'' provide increased thrust, greater reliability,
better fuel efficiency, and reduced operations and maintenance
costs. The committee notes that the ANG's F-15 aircraft make a
critical contribution to the both the Air Force's Air
Expeditionary Forces and to homeland security in the air
defense mission, and believes that engine conversion kits for
the ANG's F-15 aircraft should be continued. Consequently, the
committee recommends an increase of $30.0 million to continue
to convert the ANG F-15's F100 engines to the F100-220E
configuration.
In total, the committee recommends $237.6 million for F-15
modifications, an increase of $40.0 million.

F-16 Air National Guard (ANG) force structure

The committee notes that the 177th Fighter Wing (FW) in
Atlantic City, New Jersey has recently been designated as one
of the several full time combat air patrol (CAP) alert sites by
the United States Northern Command. The 177th FW currently
possesses a primary assigned aircraft (PAA) strength of only 15
F-16 aircraft, but the committee believes that an increase to
24 PAA would enable the 177th FW to meet its CAP commitments to
protect the citizens and property located on the east coast of
the United States.
The committee understands that the 144th FW at Fresno,
California, which currently flies the F-16 block 25 aircraft,
is scheduled to convert to the F-15 aircraft, and the committee
encourages the Air Force to accelerate the 144th FW's planned
conversion and to transfer 11 of the 144th FW's block 25 F-16
aircraft to the 177th FW in order to increase the 177th FW's
PAA by nine aircraft and to provide two aircraft as back up
inventory.

F-16 modifications

The budget request contained $300.6 million for F-16
modifications, of which $43.0 million was included for the
Falcon structural augmentation roadmap (STAR), but included no
funds to retrofit the Air Reserve Component's (ARC) F-16
aircraft with the on-board oxygen-generating system (OBOGS).
The ARC is comprised of both the Air National Guard and the Air
Force Reserve.
Falcon STAR is a depot-level upgrade program that replaces
or modifies known life-limited F-16 aircraft structure to
preclude the onset of widespread fatigue damage, maintain
safety of flight, enhance aircraft availability, and extend the
life of affected components to 8,000 hours. The committee notes
that the Air Force Chief of Staff has included additional
funding for the Falcon STAR program to address depot labor rate
cost increases among his unfunded priorities for fiscal year
2004, and therefore, the committee recommends an increase of
$5.8 million for this purpose.
The F-16 OBOGS replaces the antiquated liquid oxygen system
by creating a continuous supply of breathing oxygen to pilots
by using pressurized engine bleed air routed through a
molecular sieve which removes nitrogen, yielding 93 percent
pure oxygen. The committee understands that Air Force studies
project that each aircraft equipped with OBOGS will result in a
$12,000 per year savings, and the investment to install the
OBOGS will be returned within three to five years.
Consequently, the committee recommends an increase of $8.4
million to install the OBOGS on ARC F-16 aircraft.
The committee recommends $314.8 million for F-16
modifications, an increase of $14.2 million.

F/A-22

The budget request contained $3,727.1 million for 22 F/A-22
aircraft.
The committee notes that although $4,061.9 million was
appropriated for 23 F/A-22 in fiscal year 2003, the Department
of Defense requested a recent reprogramming to decrease that
amount by $27.9 million leaving $4,034.0 million and sufficient
funds for a planned quantity of only 20 F/A-22 aircraft in
fiscal year 2003. However, the Department of the Air Force
informed the committee that, as a result of increased
efficiencies and lower negotiated vendor costs, actual
contracted unit costs for the airframe, engine and avionics
were reduced, and the Air Force will procure an additional
aircraft in fiscal year 2003.
Since the fiscal year 2003 unit costs have been reduced,
the committee believes that fiscal year 2004 unit costs will
also be reduced due to increased learning curve efficiencies
and lower negotiated vendor costs, and that the F/A-22 budget
request exceeds requirements by $161.0 million for the planned
quantity of 22 aircraft.
Therefore, the committee recommends $3,566.1 million for 22
F/A-22 aircraft, a decrease of $161.0 million.
Additionally, the committee notes that the Air Force
testified before the Subcommittee on Tactical Air and Land
Forces on April 2, 2003, that the F/A-22 program's key
challenge is to deliver a stable and fully tested avionics
software operational flight program (OFP) that runs for a
sufficient period of time before an instability event occurs.
Also in testimony before the subcommittee, the General
Accounting Office stated that software instability had hampered
efforts to integrate advanced avionics capabilities into the F/
A-22 system, and that in its research on the F/A-22 program,
the Air Force acknowledged that avionics have failed or shut
down during numerous tests of F/A-22 aircraft due to software
problems and that these shutdowns have occurred when the pilot
attempts to use the radar, communication, navigation,
identification, and electronic systems concurrently. The
committee further notes that the Air Force testified that its
then-current avionics software OFP version was only performing
at a rate of 1.3 hours mean time between instability events
(MTBIE), but understands that the Air Force plans to introduce
avionics software OFP version 3.1.2, or a later version, that
would achieve a goal of 20 hours MTBIE before the commencement
of dedicated initial operational test and evaluation (DIOT&E),
currently scheduled for October 2003. As a result of this
testimony, the committee believes that attaining a goal of at
least 20 hours MTBIE before the commencement of the F/A-22
DIOT&E program is critical to successful completion of DIOT&E,
for introduction of the F/A-22 into the Air Force's operational
fleet, and for continuation of F/A-22 production at requested
rates.
Consequently, the committee recommends a provision (section
134) that would limit the obligation of $136.0 million of the
amount appropriated for fiscal year 2004 F/A-22 aircraft
procurement, or an amount for one F/A-22 aircraft, until the
Under Secretary of Defense for Acquisition, Technology, and
Logistics certifies to the congressional defense committees
that the four primary aircraft designated to participate in the
F/A-22's DIOT&E program have been equipped with the avionics
software OFP version 3.1.2, or a later version, and that before
the commencement of the DIOT&E, those four aircraft
demonstrate, on average, an avionics software MTBIE of at least
20 hours. If the Under Secretary notifies the Secretary of
Defense that the Under Secretary is unable to make the
certification described above, then the Secretary of Defense
may waive the limitation by notifying the congressional defense
committees of his reasons therefore, and funds may be obligated
at the end of a 30-day period beginning on the date on which
the Secretary's notification is received by the committees.

Fixed aircrew standardized seats (FASS)

The budget request contained $69.7 million for other
modifications, but included no funds for FASS.
FASS would provide crewmembers and passengers on C-130, C-
135, C-141, C-5, E-3, KC-10, C-17, and E-8 aircraft protection
against aircraft crash loads up to 16 times the force of
gravity. In prior years, the committee has supported the
development of the FASS, and understands that production-ready
seats can be procured for the C-130 and KC-135 aircraft by the
second quarter of fiscal year 2004. The committee continues to
believe that FASS procurement would not only increase safety,
but would also reduce supply and maintenance costs through
commonality and interchangeability of parts.
The committee recommends $74.5 million for other
modifications, an increase of $4.8 million for procurement of
240 FASS.

H-60 modifications

The budget request contained $44.7 million for H-60
modifications, but included no funds to upgrade the AN/ARS-6
personnel locator system (PLS) with version 12 capability.
The AN/ARS-6 PLS is a radio system which has been in use
with the Air National Guard for the past 15 years, used to
detect and locate downed military and civilian aviators. The
version 12 upgrade would allow operation with all current and
future survival radios, including emergency beacons in both the
defense and civil environments. The committee understands
thatthe AN/ARS-6 PLS version 12 upgrade also includes technology
upgrades making the system lighter and more powerful.
The committee recommends $49.7 million for H-60
modifications, an increase of $4.7 million to upgrade the AN/
ARS-6 PLS with version 12 capability and to conduct an
operational evaluation of this system for the search and rescue
mission.

Predator B unmanned aerial vehicle (UAV)

The budget request contained $193.6 million for procurement
of 16 Predator UAV systems.
The Predator UAV system provides long-dwell, real-time
intelligence information to Joint Task Force Commanders. The
committee notes that the employment of the Predator UAV system
in Operation Enduring Freedom and Operation Iraqi Freedom
demonstrated both Predator system intelligence, surveillance
and reconnaissance capabilities and Hellfire missile delivery
capability. As missions for the Predator UAV system expand, the
committee believes that the improved speed and payload capacity
of the Predator B UAV is critical to future combat operations.
The committee recommends $211.6 million, an increase of
$18.0 million for Predator B UAV systems and associated spare
parts.

Ammunition Procurement, Air Force

Overview

The budget request for fiscal year 2004 contained $1,284.7
million for Ammunition Procurement, Air Force. The committee
recommends authorization of $1,324.7 million, an increase of
$40.0 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Ammunition Procurement, Air Force program are identified in the
table below. Major changes to the Air Force request are
discussed following the table.

Items of Special Interest

Air Force ammunition procurement

The budget request contained $1,265.7 million for
procurement of ammunition. The committee recommends $1,305.7
million, an increase of $40.0 million for the following types
of ammunition programs, which were identified as top unfunded
requirements by the Chief of Staff of the Air Force for fiscal
year 2004:

Rockets: [In millions of dollars]
2.75 inch War Reserve/Training rounds.................... 10.0
Bombs:
General Purpose Bombs..................................... 20.0
(to be used only for the procurement of bomb bodies to
Flares:ynchronize with precision guided munitions kits)
War Reserve/Training Pyrotechnics......................... 10.0

Missile Procurement, Air Force

Overview

The budget request for fiscal year 2004 contained $4,393.0
million for Missile Procurement, Air Force. The committee
recommends authorization of $4,348.0 million, a decrease of
$45.0 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Missile Procurement, Air Force program are identified in the
table below. Major changes to the Air Force request are
discussed following the table.

Other Procurement, Air Force

Overview

The budget request for fiscal year 2004 contained $11,583.7
million for Other Procurement, Air Force. The committee
recommends authorization of $11,376.1 million, a decrease of
$207.6 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Other Prucurement, Air Force program are identified in the
table below. Major changes to the Air Force request are
discussed following the table.

Items of Special Interest

Air Force information technology procurement

The budget request for Other Procurement, Air Force,
contained $48.9 million for high performance computing
modernization, $119.5 million for general information
technology, and $268.4 million for base information
infrastructure.
The committee is concerned about the excessive and
unjustified growth in the Air Force's procurement for
information technology (IT) programs. While the committee
supports the procurement of IT systems that will transform the
way the Air Force plans and tasks weather, intelligence
gathering, targeting and airspace information, the committee is
also concerned that some of the programs lack credible evidence
to justify the double or triple amount of growth in this
budget.
The committee recommends $23.9 million for high performance
computing modernization, a decrease of $25.0 million; a
decrease of $17.0 million in the Joint Personnel Adjudication
System requested in general information technology; and $243.4
million for base information infrastructure, a decrease of
$25.0 million in the Defending the Enclave Boundary Program.

Combat arms training system (CATS)

The budget request contained $9.6 million for base procured
equipment, but included no funds for CATS. CATS is a computer-
based simulation system that provides both marksmanship and
tactical situation scenario training for security force
personnel.
The committee understands that since September 11, 2001,
Air National Guard (ANG) bases, which are each equipped with
one CATS, are used daily to train security force personnel, and
that, as a result of this daily use, two additional systems are
required at each ANG base leaving a shortfall of 184 systems.
With limited access to firing ranges and training munitions,
the committee believes that the CATS is proving to be an
essential asset to meet the ANG personnel marksmanship and
weapons certification training, and to meet situational
scenario readiness requirements.
The committee recommends $18.6 million for base procured
equipment, an increase of $9.0 million for the CATS.

General information technology

The budget request contained $119.5 million for general
information technologies, but included no funds for procurement
of the science and engineering lab data integration (SELDI)
program.
The Air Force Material Command's science and engineering
lab captures, analyzes and disseminates lab test data to the
Air Force's engineering and system overhaul operations, and the
committee notes that the SELDI program facilitates this mission
by providing more rapid lab data access affecting overhaul
operations, providing accident investigators with immediate
access to lab results of failed components, enabling component
failure trend analysis, and implementing new acoustic signature
sensors to ensure the proper chemical composition of materials
and equipment.
The committee recommends an increase of $12.0 million for
the SELDI program, and understands that the SELDI program would
improve operational aircraft readiness, increase flight safety
and reduce support costs.

Miniature-multiple threat emitter system (Mini-MUTES)

The budget request contained $23.4 million for combat
training ranges, but included no funds for Mini-MUTES initial
spares.
The Mini-MUTEs is an electronic warfare training system
which simulates radar emissions for use in aircrew training.
The committee understands that the Mini-MUTES is undergoing a
modernization program to improve its capabilities to simulate
advanced surface-to-air missile threats, but that initial
spares for the modernization program have not been budgeted.
The committee further understands that providing for initial
spares in fiscal year 2004 would save an additional $3.0
million in future years, and notes that the Air Force Chief of
Staff has included Mini-MUTES initial spares among his unfunded
priorities for fiscal year 2004.
The committee recommends $32.2 million for combat training
ranges an increase of $8.8 million for initial spares for Mini-
MUTES modernization program.

Point of maintenance initiative (POMX)

The budget request contained $13.9 million for mechanized
material handling equipment, but included no funds for
procurement of the POMX.
The POMX is a maintenance data collection program that uses
equipment and methodologies that are currently in widespread
commercial use to increase the timeliness and accuracy of the
critical data collected. Examples of POMX equipment include:
hand-held terminals, bar codes, and wireless local area
networks. The committee notes that the POMX objective is to
increase the timeliness and accuracy of maintenance data
collection while reducing the administrative burden on
maintenance technicians, and understands that its use has
already been validated at one Air Force base.
The committee recommends $25.9 million for mechanized
material handling equipment, an increase of $12.0 million, to
continue the POMX.

Procurement, Defense-Wide

Overview

The amended budget request for fiscal year 2004 contained
$3,665.5 million for Procurement, Defense-Wide. The committee
recommends authorization of $3,734.8 million, an increase of
$69.3 million, for fiscal year 2004.
The committee recommendations for the fiscal year 2004
Procurement, Defense-Wide program are identified in the table
below. Major changes to the Defense-Wide request are discussed
following the table.

Items of Special Interest

Chemical/biological defense procurement program

The budget request contained $505.7 million for chemical/
biological defense (CBD) procurement, including $85.0 million
for procurement of individual protection equipment, $12.6
million for decontamination equipment, $72.0 million for the
joint biological defense program, $17.6 million for collective
protection equipment, and $318.5 million for contamination
avoidance equipment.
The committee recommends an increase of $15.0 million for
procurement of the Joint Chemical Agent Detector (JCAD), an
increase of $10.0 million for procurement of the M22 Automatic
Chemical Agent Alarm for the Army National Guard, and a total
of $53.6 million for collective protection equipment, including
an increase of $31.0 million for procurement of chemical
biological protective shelters for field medical treatment,
forward surgical teams, and battalion medical units, and $5.0
million for M28 collective protection equipment.

Defense wide information technology procurement

The budget request contained $21.6 million for procurement
for Washington Headquarters Services, including $10.4 million
for the Case Control Management System.
This program supports the Defense Security Service's (DSS)
mission to handle personnel security investigations by
providing the processing of military, civilian, and contractor
personnel security actions for the Department of Defense. The
committee is concerned that the overall plan to incorporate
this system with the Air Force Joint Personnel Adjudication
System has not been clearly defined in order to seamlessly
merge these two systems into one functioning system that will
serve the entire Department.
The committee recommends $16.6 million for procurement for
Washington Headquarters Services procurement, a decrease of
$5.0 million in the Case Control Management System.

Department of defense budget justification documentation

The committee notes the delayed submission, perfunctory
content, conflicting budgetary data, and administratively-
challenged display of many of the exhibits included in the
budget justification documentation provided to the
congressional defense committees by the Office of the Secretary
of Defense (OSD) and the military services.
Several OSD exhibits dated February 2003 were provided to
the committees in April. Individual programs were often
randomly organized, misidentified, duplicated item numbers, and
aggregated unrelated projects. In the OSD submission for
procurement, Patriot is identified as item 23 in the P-1
summary table exhibit and item 10 in the budget estimate
exhibit. Also in the OSD procurement submission, there are two
items identified as 15. Under the second, ``Items under $5
million,'' one item requested is for $16.054 million, one item
for $9.75 million, one item for $6.5 million, etc. The total
for this P-1 line item is $70.0 million. The total requested in
the budget estimate displays is $61.592 million. The committee
recommends $61.592 million, a reduction of $8.408 million.
Since December 2002, the Department has been unable to
provide a cross walk between budget lines items and the $27.0
billion identified in its ``Information Technology FY 2003
Budget Estimates'' exhibit. The Department has similarly failed
to provide the same requested information for the fiscal year
2004 submission of $27.9 billion. As a result, it is not
possible to validate the $27.9 billion request.
Numerous inconsistencies in program identification and item
enumeration exist between the OSD provided tables; P-1 and R-1;
and justification in the biennial budget estimate exhibits. OSD
and the military services increasingly aggregate large numbers
of often unrelated projects in common program elements,
effectively limiting congressional oversight.
The Navy identified a request in its R-1, line 111, for
``unguided conventional air launched weapons'' of $9.701
million. Examination of the R-2, line 108, indicated that the
request was for the precision guided Standoff Land Attack
Missile. The Navy also requested $25.137 million for the Tri-
Service Standoff Attack Missile, a program cancelled ten years
ago. Further examination of the backup material indicated the
request was for the Joint Air to Surface Standoff Missile.
Similarly, the budget request for EA-18G, a projected multi-
billion dollar program, is subsumed in the budget request for
electronic warfare with five other projects. The committee
directs that a new program element be established for the EA-
18G of PE 64271N of $204.822 million, with a corresponding
reduction in PE 64270N.
The Air Force used the same program element numbers for the
same program in different phases of development, one in
advanced technology development, the other in operational
systems development, and randomly aggregated and incorrectly
enumerated much of the materials provided in the research and
development submission. Further, programs were frequently
placed in research and development budget activities without
regard to the actual phase of development, e.g., MC2A.
The Army request included extraneous, unrelated descriptive
material for the Warfighter Information Network request and
identified many of its special access programs using program
element numbers unrelated to the provided R-1 exhibit.
Taken individually, these examples may seem trifling. Yet,
they involve billions of taxpayer dollars. Taken together,
these inconsistencies and mistakes call into question the
effectiveness of the oversight provided by OSD. As noted above,
the procurement and research and development displays for
similar items in the military services are more often than not
arrayed and consolidated differently, making meaningful
comparisons among service programs more difficult for Congress,
the Executive Office of the President, and OSD. Given the
Secretary of Defense's emphasis on transformation, joint
warfighting, and auditable financial systems and the
responsibilities of senior executive branch officials and
members of Congress to make reasoned judgments about spending
taxpayer dollars, the committee believes that more rigorous
oversight of budget exhibits by responsible OSD officials is
required. Accordingly, the committee directs the Secretary of
Defense to report to the Senate Committee on Armed Services and
the House Committee on Armed Services by December 1, 2003 his
recommendations for providing timely, consistent, clear, and
meaningful budget presentations to Congress.

Information technology

The budget request included $10.8 billion, $28.9 billion,
and $29.3 billion in Army, Navy, and Air Force, respectively,
in procurement and $9.1 billion, $14.1 billion, $20.3 billion,
and $17.1 billion, respectively, in Army, Navy, Air Force, and
defense-wide Research, Development, Test and Evaluation
(RDT&E), including information technology (IT) systems and
programs. The committee is concerned about the lack of
oversight and managementattention in many of these IT programs.
Therefore the committee recommends the following reductions:

Other procurement

[In millions of dollars]

Army.......................................................... 68.0
Navy.......................................................... 100.0
Air Force..................................................... 200.0

RDT&E

[In millions of dollars]

Military tactical radio procurement

The committee is aware that the Secretary of Defense
requires a waiver prior to a military service purchase of
tactical radios that are not compliant with the joint tactical
radio system (JTRS) standards. The committee notes that delay
in fielding JTRS has created a need for the military services
to purchase non-compliant radios to bridge the gap until JTRS
is fielded. The committee further notes that the existing
waiver process may hinder timely replacement of radios and
place an undue administrative burden on the military services.
The committee directs the Secretary of Defense to simplify or
hold in abeyance the requirement for waivers for tactical radio
systems until JTRS deployment is more predictable and delivery
dates make JTRS purchase in lieu of legacy radios logical, as
was originally intended by the waiver requirement.

Operation Iraqi Freedom lessons learned

As a result of early lessons learned emerging from
Operation Iraqi Freedom, military officials reviewed the
performance of their respective weapon systems and determined
that certain programs would benefit from increased funds, many
of which were official, Service chiefs' unfunded priorities for
fiscal year 2004. Upon cessation of hostilities in Iraq, the
senior operations officers for each of the military services,
in testimony before the committee, highlighted that Operation
Iraqi Freedom combat operations validated the need to
accelerate procurement of both new systems and ongoing upgrade
programs for several weapon systems, many of which will remain
in the United States' (U.S.) inventory for the foreseeable
future. The committee has responded with increases for several
programs, noted elsewhere in the report.
The Army highlighted the benefits of 2nd generation forward
looking infrared sensors, for additional Bradley A2 Operation
Desert Storm ``D+'' Fighting Vehicles and for M1A2 Abrams
System Enhancement Program tank upgrades; Soldier Rapid
Fielding Initiative weapons and communications equipment; and
night vision devices for light infantry brigades, which are
addressed elsewhere in the report.
The Navy identified a requirement to accelerate procurement
of additional F/A-18 E/F aircraft armament equipment kits and
that limited numbers of these kits inhibited combat operations
for these aircraft due to the seven carrier air wings deployed
for this operation. The Marine Corps outlined the need to
accelerate procurement of H-1 helicopter infrared (IR)
suppressors to mitigate IR surface-to-air-missile threats and
Amphibious Assault Vehicle and Light Armored Vehicle
reliability, availability, and maintainability (RAM) upgrades
for its pre-positioned equipment.
Finally, the Air Force identified both Global Positioning
System (GPS) III satellite program upgrades, to counter GPS
jammers (covered elsewhere in the report), which can inhibit
the guidance and accuracy of GPS precision guided munitions,
and additional wiring kits and targeting pods for B-52 bombers,
which enable these aircraft to carry targeting pods, in order
to provide a rapid, precise onboard target acquisition
capability for precision guided munitions.

Navy: [In millions of dollars]
F/A-18 E/F Aircraft Armament Equipment.................... 25.0
Marine Corps:
H-1 IR Suppressors........................................ 12.0
Amphibious Assault Vehicle RAM............................ 25.0
Light Armored Vehicle RAM................................. 12.7
Air Force:
B-52 wiring kits/targeting pods........................... 19.0

Secure wireless technology

The committee believes that homeland security could be
greatly enhanced through the increased use of National Security
Agency (NSA) approved secure cell phones for communications.
The committee is aware that the faster-than-expected
development of the next-generation, nationwide, integrated Type
1 secure digital cell phones provides an opportunity to fill
this urgent security requirement. The committee encourages the
Department of Defense and NSA to take advantage of this
opportunity and accelerate the deployment of these next
generation secure cell phones.

Special operations forces (SOF) ordnance

The budget request contained $22.5 million to procure SOF
weapons, but included no funds to procure the AT4-confined
space (CS) anti-armor and bunker defeat and breeching weapon.
The committee notes that the AT4-CS is the primary shoulder
fired SOF weapons system for use in confined space and is high
on the unfunded priority list of the commander of the Special
Operations Command.
The committee recommends $33.0 million for SOF ordnance
acquisition, an increase of $10.5 million for additional AT4-CS
weapons.

Special operations forces (SOF) weapons improvements

The budget request contained $16.0 million to procure
Special Operations Forces (SOF) small arms and weapons, but
included no funding to procure the AN/PVS-17A mini night sight,
no funding to procure the infrared zoom laser illuminator/
designator, and no funding to procure the light weight counter
mortar radar, all of which promise to increase the combat
capability of special operations tactical units. The AN/PVS-17A
mini night sight will be a very effective addition to the M-4
carbine Special Operations Peculiar Modification (SOPMOD) kit
and the infrared zoom laser illuminator/designator will permit
the surgical delivery of global positioning system guided
weapons onto targets identified by special forces operators. In
addition, the light weight counter mortar radar will allow
special forces under mortar attack to neutralize the enemy with
accurate, timely counter fire. The committee notes that all
three of these items are on the unfunded priority list of the
commander of the Special Operations Command.
The committee recommends $32.5 million for SOF small arms
and weapons procurement, an increase of $8 million in the M-4
carbine SOPMOD kit program for the procurement of mini night
vision sights, an increase of $3.5 million for the procurement
of infrared zoom laser illuminator/designator, and an increase
of $5.0 million for initial fielding of the light weight
counter mortar radar.

LEGISLATIVE PROVISIONS

Subtitle A--Authorization of Appropriations

Sections 101-104--Authorization of Appropriations

These sections would authorize the recommended fiscal year
2004 funding levels for all procurement accounts.

Subtitle B--Army Programs

Section 111--Stryker Vehicle Program

This section would authorize appropriations of $655.0
million of the $955.0 million fiscal year 2004 budget request
for the Stryker Vehicle Program and condition authorization of
the remaining $300.0 million upon receipt by the congressional
defense committees of a report and certification.

Subtitle C--Navy Programs

Section 121--Multiyear Procurement Authority for F/A-18 Aircraft
Program

This section would authorize the Secretary of the Navy to
enter into a multiyear procurement contract for F/A-18E, F/A-
18F and EA-18G aircraft beginning with the fiscal year 2005
program year.

Section 122--Multiyear Procurement Authority for Tactical Tomahawk
Cruise Missile Program

This section would authorize the Secretary of the Navy to
enter into a multiyear procurement contract for Tactical
Tomahawk missiles beginning with the fiscal year 2004 program
year for a quantity of missiles to be determined by the
Secretary of the Navy.

Section 123--Multiyear Procurement Authority for Virginia Class
Submarine Program

This section would authorize the Secretary of Navy to enter
into a multiyear procurement contract for seven Virginia Class
submarines beginning with the fiscal year 2004 program year
subject to a certification to the congressional defense
committees that each of the conditions specified in Section
2306b(a) of title 10, United States Code have been satisfied
with respect to that contract, and a period of thirty days has
elapsed after the date of the transmission of such
certification.

Section 124--Multiyear Procurement Authority for E-2C Aircraft Program

This section would authorize the Secretary of the Navy to
enter into a four-year multiyear procurement contract for E-2C
and TE-2C aircraft and their associated engines beginning with
the fiscal year 2004 program year.

Section 125--LPD-17 Class Vessel

This section would, if after May 7, 2003, Congress enacts a
Department of Defense supplemental appropriations Act for
fiscal year 2003 that includes appropriations for Tomahawk
missiles, reduce the amount authorized to be appropriated for
the Tomahawk missile by an equivalent amount of the
supplemental request, or $200.0 million, whichever is less. The
reduction in Tomahawk missile authorization would be applied to
advance procurement of long lead items, to include the advance
fabrication of components for one LPD-17 class vessel.

Subtitle D--Air Force Programs

Section 131--Air Force Air Refueling Transfer Account

This section would establish a $229.2 million Air Force air
refueling transfer account which would authorize the Secretary
of the Air Force to use these funds for the necessary fiscal
year 2004 expenses to prepare for either the lease or purchase
of replacement tanker aircraft; retaining, rather than
retiring, KC-135E aircraft; or for KC-135 depot purchased
equipment maintenance. Funds provided from the Air Force air
refueling transfer account would be limited so that they would
not be used to enter into contracts for either the lease or
purchase of tanker replacement, and the Secretary of the Air
Force could not transfer funds until the congressional defense
committees were notified of the proposed transfer and thirty
days had elapsed after the notice was received by those
committees.

Section 132--Increase in Number of Aircraft Authorized to be Procured
Under Multiyear Procurement Authority for Air Force C-130J Aircraft
Program

This section would amend section 131(a) of the Bob Stump
National Defense Authorization Act for Fiscal Year 2003 (P.L.
107-314) by striking ``40 C-130J aircraft'' and inserting ``42
C-130J aircraft''.

Section 133--Limitation on Retiring C-5 Aircraft

This section would limit the Secretary of the Air Force
from proceeding with a decision to retire C-5A aircraft from
the active inventory if the active inventory of such aircraft
would fall below 112, until a reliability and reengining
program (RERP)-configured C-5A aircraft completes a dedicated
initial operational test and evaluation, and the Department of
Defense's Director of the Operational Test and Evaluation has
provided his assessment of the RERP--configured C-5A's
performance to both the Secretary of Defense and the
congressional defense committees.

Section 134--Limitation on Obligation of Funds for Procurement of F/A-
22 Aircraft

This section would limit the obligation of $136.0 million
of the amount appropriated for fiscal year 2004, F/A-22
aircraft procurement until the Under Secretary of Defense for
Acquisition, Technology, and Logistics certifies to the
congressional defense committees that the four primary aircraft
designated to participate in the dedicated initial operational
test and evaluation (DIOT&E) program for the F/A-22 aircraft
have been equipped with the version of the avionics software
operational flight program known as version 3.1.2 or a later
version, and that before the commencement of the DIOT&E, those
four aircraft demonstrate, on average, an avionics software
mean time between instability events of at least 20 hours. If
the Under Secretary notifies the Secretary of Defense that the
Under Secretary is unable to make the certification described
above, then the Secretary of Defense may waive the limitation
by notifying the congressional defense committees of his
reasons therefor, and funds may be obligated at the end of a
30-day period beginning on the date on which the Secretary's
notification is received by the committees.

TITLE II--RESEARCH, DEVELOPMENT, TEST, & EVALUATION

OVERVIEW

The budget request contained $61,826.7 million for
research, development, test, & evaluation (RDT&E). The
committee recommends $62,685.7 million, an increase of $859.0
million to the budget request.

Army Research, Development, Test, & Evaluation

Overview

The budget request contained $9,122.8 million for Army
research, development, test, and evaluation (RDT&E).
The committee recommends $9,332.4 million, an increase of
$209.6 million to the budget request.

Items of Special Interest

Advanced battery technology initiative

The budget request contained $33.7 million in PE 62705A for
applied research in electronics and electronic devices.
The committee notes continuing requirements for small,
light-weight, efficient, and portable battery and non-battery
power sources for U.S. forces and of on-going applied research
and development activities of the military departments that
address these requirements. The committee is aware of a number
of emerging battery and non-battery power technologies that
have the potential for meeting the requirements of the military
services, including but not limited to alkaline cylindrical
cells, cylindrical zinc air batteries, high capacity nickel/
zinc rechargeable cells, lithium oxyhalide and lithium ion
thin-film technology, lithium carbon monoflouride cells, and
proton exchange membrane fuel cells.
The committee urges that these technologies be considered
for potential funded research and development under the
services' on-going programs on the basis of technical merit,
cost effectiveness, and the potential of the particular
technology to meet service needs. The committee also urges
establishment of a battery/portable power technology initiative
in the Army that will address Department of Defense needs for
small, light-weight, efficient, portable battery and non-
battery power sources. The initiative should be conducted under
the RDT&E Reliance process to insure that the program meets the
needs of all the military services.
The committee recommends an increase of $20.0 million in PE
62705A for the battery/portable power technology initiative.

Advanced cluster energetics

The budget request contained $19.9 million in PE 65805A for
munitions standardization, effectiveness, and safety, including
$2.5 million for development and assessment of munitions life
cycle pilot processes.
The committee notes the development of innovative processes
in cluster munitions production engineering that have resulted
in the ability to manufacture uniform energetic products
without the need for high stress and inherently dangerous
mixing processes. These processes will result in reductions in
the cost to manufacture propellants and explosives, as well as
improvements in manufacturing performance and safety.
The committee recommends an increase of $5.0 million in PE
65805A for continued development of advanced cluster energetics
manufacturing technology.

Advanced electric drive

The budget request contained $80.9 million in PE 62601A for
combat vehicle and automotive advanced technology, but included
no funds for advanced electric drive.
The committee notes that present military drive systems
require greater vehicle efficiency and performance. The
committee is aware that the advanced electric drive (AED)
project is to develop intelligent electric wheel-end and axle
designs with integral drive motors that would yield higher
vehicle efficiencies, greater power densities, and greater
torque.
The committee recommends $83.9 million in PE 62601A, an
increase of $3.0 million for AED.

Advanced precision kill weapon system (APKWS)

The budget request contained $35.1 million in PE 64802A for
continued block I systems development and demonstration of the
APKWS.
The APKWS upgrade will provide a family of precision guided
rockets by combining a newly designed semi-active laser section
with the air-launched, unguided 2.75 inch HYDRA-70 rocket. The
APKWS block I upgrade entered systems development and
demonstration in fiscal year 2003 and is planned to develop,
test and qualify the laser-guided HYDRA-70 rocket. However, the
committee notes that funds for future block II improvements,
which would include development and qualification of an
improved warhead and advanced fuzing, are not planned to be
budgeted for until fiscal years 2006 and 2007. The committee
understands that by adding additional funds in fiscal year
2004, the Army could accelerate technology demonstrations for
block II improvements and thereby ensure continuity between
fiscal years 2005 and 2006 in block I and block II development
schedules. Therefore, the committee recommends $44.1 million in
PE 64802A, an increase of $9.0 million, to accelerate
technology demonstrations of critical technologies for APKWS
block II improvements.

Armored Systems Modernization

The budget request included $1.7 billion in PE 64645A for
Armored Systems Modernization for three projects: Future Combat
System (FCS), Networked Fires Systems Technology, and Objective
Force Indirect Fires.
The committee supports the Army's transformational
objectives of achieving a more agile, light, and lethal
objective force. The Army envisions a highly interdependent
system that will be required to interface with other FCS units;
complementary systems using the Joint Tactical Radio System and
the Warfighter Information Network-Tactical; other systems of
the objective force; and joint forces.
However, the committee has several concerns with the
Armored Systems Modernization Program, as requested:
(1) The Army is embarking on a System Development and
Demonstration program of major technical complexity,
which to date is largely undefined with regard to
architecture, requirements, schedule and cost;
(2) The key performance parameters are of such a
general nature, lacking any metrics, that many current
Army systems meet the key performance parameters,
precluding a need for a new program;
(3) The Army's performance in major programs of
significantly less complexity like Land Warrior and the
Comanche helicopter program has been lacking;
(4) The intended construct of the program, placing
all FCS projects in the same program element limits
quantitative and qualitative congressional oversight;
(5) The Army's budget request for FCS is not
supported by the program descriptive material provided
to justify the budget request of $1.7 billion for the
three projects. As an example, the $1.25 billion
requested for FCS includes $439.0 million for fiscal
year 2004, for detailed system design that at present
consists of one element: thecommunications network
intended to link FCS systems. The Army was unable to provide the scope
of work for the $439.0 million requested; and
(6) Layered management overly insulates senior Army
management from FCS program managers--the only relevant
Army officials that did not appreciate the original
timeline for fielding the first unit equipped by 2008
was not executable were the Army's senior leadership;
Consequently, the committee recommends a provision
(section 214) that would:
(7) Restructure the current three projects within the
Armored Systems Modernization program into three
program elements and require any future additional FCS-
related programs to be requested by program element, in
the appropriate budget activity;
(8) Preclude authorization of appropriations until
thirty days after the congressional defense committees
are provided sufficient budget descriptive detail to
justify a $1.7 billion budget request.

Army Centers of Excellence

The budget request contained $84.8 million in PE 61104A for
university and industry research centers and included $2.5
million to establish a center of excellence for optimizing
cognitive readiness under combat conditions and to improve
tactical mobility through innovative research initiatives.
The committee has long supported the Army's Center of
Excellence program and is particularly supportive of the Army's
new effort to leverage current research in the areas of
modeling and simulation, protective materials, and health and
human performance. The committee encourages further work in
this area.
The committee recommends $87.3 million in PE 61104A for
university and industry research centers, an increase of $2.5
million for competitive establishment of a center of excellence
for cognitive research under the Army center of excellence
program.

Army Evaluation Center

The budget request contained $57.1 million for the Army
Evaluation Center.
This program funds evaluations of all major Army
acquisition programs. The evaluation provides information and
data on individual systems' performance, effectiveness, and
survivability to the Army's senior leadership and Congress. The
committee is concerned that the growth in this program's
research, development, testing, and evaluation's budget is
unclear and not supported in the documentation submitted.
The committee recommends $47.1 million in PE 65716A, a
decrease of $10.0 million in this program.

Army information dominance center expanded processing for advanced data
analysis

The budget request contained no funding in PE 33028A for
the Army information dominance center's (IDC) expanded
processing for advanced data analysis.
The committee is aware that additional funding would allow
integration of the IDC's software analysis tools onto mainframe
platforms with much higher computing capability which would
increase mission effectiveness.
The committee recommends $5.0 million in PE 33028A, an
increase of $5.0 million for the Army IDC's expanded processing
for advanced data analysis.

Army integrated broadcast service integration

The budget request contained $2.1 million in PE 63850A for
integrated broadcast system (IBS) (JMIP/DISTP), specifically
for modules for the joint tactical radio system (JTRS) IBS
function.
The committee notes that Army JTRS funding in PE 64280A
increases 214 percent over last year, and contains sufficient
funding to tailor JTRS to the IBS for the Army. The committee
supports the need for IBS, however, it believes that the JTRS
program is sufficiently funded to develop the minor
modifications necessary to process the IBS waveform within the
JTRS radio.
The committee recommends no funds in PE 63850A, a decrease
of $2.1 million.

Army manufacturing and maintenance organization

The budget request contained $111.3 million in PE 63313A
for missile and rocket advanced technology, but included no
funds for the Army maintenance and manufacturing organization
(AMMO).
The committee is aware that the AMMO of the Army Aviation
and Missile Command has initiated seven projects to extend the
life of weapons systems such as helicopters and missiles.
The committee recommends $116.3 million in PE 63313A, an
increase of $5.0 million for the AMMO to continue its weapons
systems life extension programs.

Army unmanned aerial vehicle advocacy

The committee notes that until now the Army unmanned aerial
vehicle (UAV) advocacy has been in the Army military
intelligence branch. The committee is aware that the Army
intends to transfer UAV advocacy, including that for the
tactical UAV (TUAV) program, to the Army aviation directorate
as part of overall Army reorganization. The committee
understands that the Army believes that UAV's can best be
developed by the aviation directorate because that directorate
is fully aware of the totality of UAV missions, including those
related to intelligence.
The committee is informed that only UAV advocacy is
changing, and that funding for UAV's and related components
will remain as is.
The committee is concerned that UAV program funding may
suffer in budget competition with manned programs within the
directorate, as a result of the advocacy transfer.
Additionally, while assigning the Communications and
Electronics Command responsibility for UAV sensor development
may be an appropriate decision, there remains a strong
possibility that the split responsibility may lead to schedule
conflicts between the platform and sensor programs.
The committee directs the Secretary of the Army to ensure
that UAV and sensor programs are not weakened as a result of
the proposed transfer of responsibility.

Asbestos pilot project

The budget request contained $11.5 million in PE 63779A for
environmental quality technology, but included no funds for the
asbestos pilot project. The committee supports research and
development to improve asbestos waste reduction and reduce
disposal cost.
The committee recommends $13.5 million in PE 63779A, an
increase of $2.0 million for the asbestos pilot project.

Brilliant anti-armor submunition

The budget request contained $55.1 million in PE 64768A for
the development of an Army Tactical Missile System (ATACMS)
Penetrator program. The committee notes that $30.4 million is
also included in PE 64327N in the future years defense program
(FYDP) to develop the system concept and architecture and
demonstrate and validate an ATACMS encapsulated launch
capability from a Ship, Submersible, Guided Nuclear (SSGN)
platform.
The committee understands that the ATACMS Penetrator
program was developed from an advanced concept technology
demonstration and originated from a fiscal year 1998 Defense
Threat Reduction Agency study, which identified the need to
attack a finite target set in one worldwide theater of
operation. The committee also understands that an adequate
number of ATACMS Penetrator missiles have been produced to
fulfill this requirement. However, the Army now has been
burdened with a development and procurement program to produce
180 missiles to service hardened and deeply buried targets in
multiple theaters of operation, which is well beyond the scope
of the initial requirement. The committee understands the
original requirement, however, it notes that initially the
Army, Department of Energy, and the Department of the Navy were
equal partners at the program inception. Now the Army alone has
been directed to fund $425.2 million for this project through
the FYDP out of existing budget authority for a vaguely defined
Office of the Secretary of Defense project.
While the committee understands the need for options to
service hardened and deeply buried targets, it believes that
this weapon may have limited effectiveness against these types
of targets based on technical data provided to the committee by
the Department of Defense, and that other, less costly
capabilities exist in the United States' inventory to better
address these threats. The committee notes that the operational
requirements document (ORD) is not expected to be completed
until February 2004, and that it is only planned to be an Army
ORD, yet an extended range variant may be developed by the
Army, which would be incorporated into Navy SSGN platforms. The
committee also questions the incorporation of this capability
into SSGNs, which the committee believes may unnecessarily
expose these submarines to threats in littoral regions when
required to operate close to shore to ensure that these
missiles can be effectively employed against targets in
interior regions of potentially hostile countries.
Prior to the obligation of any fiscal year 2004 funds for
ATACMS Pentrator in PE 64768A, the committee strongly urges the
Secretary of Defense to review the ATACMS Penetrator program to
determine if a more efficient and cost effective ATACMS
capability could be fielded versus a system with a projected
$1.1 million unit cost, which only provides a limited
capability to penetrate earthen or reinforced structures up to
20 feet deep. The Secretary is also urged to review the utility
of the program with regards to the missile's operational ranges
and the impact of those ranges on the weapon's employment by
both ground forces as well as from SSGNs.

Broad area unmanned responsive re-supply operations

The budget request contained $72.1 million in PE 63003A for
aviation advanced technology, but included no funds for broad
area unmanned re-supply operations (BURRO).
The committee is aware that the Army aviation technology
directorate is working to develop an autonomous external lift
unmanned aerial vehicle. The committee is also aware that the
Marine Corps has previously conducted similar work including
BURRO. The committee recommends an increase of $9.7 million in
PE 63003A to include BURRO in the quick delivery advanced
concept technology demonstration.

Brooks Energy and Sustainability Lab

The budget request included $45.4 million in PE 62784A for
military engineering technology but no funding for the Brooks
Energy and Sustainability Lab.
The committee supports energy conservation initiatives of
the Department of Defense, encourages further efforts to
enhance infrastructure life cycle operations and cost
effectiveness, and to improve energy efficiency on military
installations.
The committee recommends $47.4 million in PE 62784A, an
increase of $2.0 million for the Brooks Energy and
Sustainability Lab.

Cadmium zinc telluride detectors

The budget request contained $19.9 million in PE 65805A for
munitions standardization, effectiveness and safety, and
included $2.5 million for lifecycle pilot processes.
The committee is aware that an important part of lifecycle
cost reduction efforts is developing and prototyping critical
technologies that can be transferred to the ammunition
industrial base. The committee notes that cadmium zinc
telluride technology holds promise of affordable x-ray
detectors for both munitions inspection and baggage
surveillance.
The committee recommends an increase of $3.5 million in PE
65805A for cadmium zinc telluride detector development.

Commercial-off-the-Shelf (COTS) fuel filtration device

The budget request included $25.0 million in PE 62601A for
leveraging commercial investments in automotive technology
research and development to support the Army's current and
future combat and tactical wheeled vehicle fleet.
The committee has long supported efforts to advance the
operational performance and overall life cycle costs of defense
weapon systems and tactical vehicles. The committee is aware of
and supports current Department of Defense affordability
initiatives, including efforts aimed at fuel efficiency
improvements. The committee is aware of a commercially-
developed air/fuel separation and filtration technology
offering improvements in engine performance and fuel savings in
diesel, JP-8, and potential biodiesel applications. Performance
tests to date indicate fuel savings as high as 40 percent in
some scenarios. Tests also suggest improvements in engine
torque output, horsepower, particulate emissions, and throttle
response. The committee believes a comprehensive scientific
test of the technology on current Army tactical vehicles would
be beneficial, encourages further work in this area, and
supports a collaborative effort between the Department of the
Army and the Center for Environmental Science and Technology.
Therefore, the committee recommends an increase of $2.5
million in PE 62601A to conduct a comprehensive collaborative
test of filtration technology.

Defense Language Institute research and development

The budget request contained no research and development
funds for the Defense Language Institute (DLI).
The committee is aware that DLI has been using operations
and maintenance funding to support language training research
and development. The committee notes that emerging technology
offers potential to greatly improve language training, increase
instructor efficiency, and support better maintenance of
language proficiency. The committee believes that appropriate
research and development funding should be provided to develop
better language training capability.
The committee recommends an additional $5.0 million for
language training technology development in PE 63748A, and
directs the Secretary of Defense to establish a permanent
program element for this purpose.

Desert terrain analysis

The budget request contained $128.8 million in PE 61102A
for Defense research sciences, but included no funds for desert
terrain analysis (DTA).
The committee is aware that the desert terrain analysis
project is to develop technologies for predicting terrain
conditions and surface responses in desert regions for the
purpose of supporting military operations.
The committee recommends $132.8 million in PE 61102A, an
increase of $4.0 million for DTA.

Electromagnetic Gun Initiative

The budget request contains $5.9 million in PE 61104A for
electromagnetic gun basic research, $4.9 million in PE 62618A
for applied research in electromagnetic gun technology and
$19.7 million in PE 63004A for electromagnetic gun advanced
technology development. The budget request also contained $50.6
million in PE 63123N for force protection advanced technology
development, including $30.0 million for surface ship and
submarine hull, mechanical, and electrical advanced technology
development. The Navy's descriptive summary accompanying the
budget request states that the Navy will initiate a program for
the development of electromagnetic gun technology in fiscal
year 2004; however, no specific funds were designated for this
activity.
Elsewhere in this report, the committee has recommended a
legislative provision that would require the Secretary of
Defense to establish a collaborative program to develop and
demonstrate advanced technologies and concepts that would lead
to advanced guns systems that use electromagnetic propulsion
for direct and indirect fire applications. The committee
believes that the development of electromagnetic gun technology
would have potentially high payoff for U.S. armed forces in
both direct and indirect fire weapons system, and that the
major investment made by the Department of Defense (principally
by the Army) in this technology over the last 20 years is
beginning to provide significant returns. The committee
believes that stable funding for continuing technology
development and demonstration is needed to establish the
viability of the technology for potential applications,
including ground combat vehicle main guns, air defense, long-
range ship-to-shore fire support, and precision air-to-ground
standoff weapons.
Accordingly, the committee recommends the budget requests
of $4.9 million in PE 62618A for electromagnetic gun applied
research and $19.7 million in PE 63004A for electromagnetic gun
advanced technology development. The committee also recommends
$8.0 million in PE 61104A for electromagnetic gun basic
research, an increase of $2.1 million, and an increase of $7.6
million in PE 63123N for electro-magnetic gun advanced
technology development.

Hemoglobin-based oxygen carrier

The budget request contained $35.2 million in PE 63002A for
medical advanced technology development and $9.1 million in PE
64771N for medical system development and demonstration. No
funds were specifically requested to continue the development
of hemoglobin-based oxygen carrier technology.
The committee notes the Department of Defense (DOD)
Inspector General's audit of DOD's blood program in 2001 that
highlighted programmatic shortfalls in the Department's ability
to meet its stated requirements and noted specifically that
hemoglobin-based oxygen carriers could minimize or eliminate
the storage and transportation problems identified in the
report. Congress provided $1.0 million in fiscal year 2002 to
initiate a program for evaluation of hemoglobin-based oxygen
carriers for the treatment of trauma casualties and an
additional $4.5 million in fiscal year 2003 for an Army
advanced medical technology program of phase II clinical
trials. The committee understands that based on the progress in
the program the Navy has established a cooperative research and
development agreement for a definitive Phase III clinical
trial.
The committee recommends an increase of $5.0 million in PE
63002A and $5 million in PE 64771N to continue the program for
development and clinical trials of hemoglobin-based oxygen
carriers for treatment of trauma casualties.

Intelligence and Security Command global information portal

The budget request contained no funding in PE 33028A for
security and intelligence activities, including no funding for
the U.S. Army Intelligence and Security Command (INSCOM) global
information portal. The committee recommends an increase of
$5.0 million in PE 33028A to accelerate the Army INSCOM global
information portal development.

Legacy parts reinvention

The budget request contained $66.0 million in PE 78045A for
end-item industrial preparedness activities.
The committee notes growing logistics problems caused by
the aging fleet of legacy systems and the increased cost and
delays in the retooling and manufacture of specialty
replacement parts because the original manufacturers either no
longer produce the parts or are no longer in business. The
committee is aware that by combining the capability of laser
data acquisition and reverse engineering, manufacturing-ready
technical data can be offered to multiple approved sources for
the rapid manufacturing of obsolete components at significantly
reduced costs. Laser processes utilizing scanning of parts to
produce digital three-dimensional, computer aided design and
manufacturing (CAD/CAM) models permit the rapid prototyping of
replacement parts and development of parts technical data
packages where parts data packages and design specification may
not have existed.
The committee recommends $69.0 million in PE 78045A, an
increase of $3.0 million to further develop the capability for
use of laser data acquisition and reverse engineering for
legacy parts and technical data packages in Army arsenals and
depots.

Medium Extended Air Defense System

The budget request contained $276.3 million in PE 63869A
for the Medium Extended Air Defense System (MEADS).
The committee does not believe that MEADS has reached a
level of technical maturity that would recommend it for
transfer to the Army. In August 2000, MEADS began a three year
risk reduction effort as a follow on to the program definition
and validation phase, and has not yet entered the system
development and demonstration phase. MEADS will use the PAC-3
missile, which has undergone some operational testing, but many
other system components simply do not exist in any form. For
example, the committee is unaware of even a prototype C-130
transportable radar with 360 degree coverage capable of pacing
the maneuver force. Pursuant to subsection 224(c) of title 10,
United States Code, the Department of Defense notified the
committee of its intent to transfer responsibility for the
program from Missile Defense Agency (MDA) to the Army on April
2, 2003. However, the committee believes the Department falls
short in its obligation under subsection 224(b) to certify
technical maturity. As one of a very few international
cooperative efforts in ballistic missile defense, the committee
takes a special interest in the viability of this program.
The committee recommends the transfer of these funds to the
MDA under the terminal defense segment PE 63881C. This is the
third year that the committee makes this recommendation.

Metallic particles in defense applications obscurant smokes

The budget request contained $3.5 million in PE 62622A for
chemical, smoke and equipment defeating technology, but
included no funds for the metallic particles in defense
applications (MPDA) obscurant smokes project.
The committee is aware that the MDPA project is to develop
metallic or metal-based composites which can be used on the
battlefield where smoke screens are used to hide troops or
equipment from enemy view.
The committee recommends $8.5 million in PE 62622A, an
increase of $5.0 million for MDPA.

Micro electro-mechanical systems inertial measurement unit/global
positioning system

The budget request contained $43.3 million in PE 62303A for
missile technology, and included $8.9 million for a micro
electro-mechanical systems based integrated inertial
measurement unit combined with a global positioning system
(MEMS IMU/GPS).
The committee notes that the Army was selected by the
Secretary of Defense to lead the joint service program to
develop a MEMS IMU/GPS. The MEMS IMU/GPS is essential for
precision guided weapons, and this competitive program is
developing a single chip device that would reduce the cost of
such capability by a factor of 50-100.
The committee recommends $53.3 million in PE 62303A, an
increase of $10.0 million to accelerate MEMS IMU/GPS
development.

Modular multi function laser system

The budget request contained $2.0 million in PE 64710A for
continued development of the modular multi function laser
system.
The modular multi function laser system development program
would miniaturize existing laser rangefinder, laser aiming-
light, and digital compass technologies and combine all these
capabilities into one unit, which is presently not available
for soldiers. Currently, multiple different systems which
provide these separate functions must be carried by soldiers or
be attached to their rifles. This new technology would reduce
the weight of weapons by reducing the number of modular
attachments carried on those weapons and simultaneously provide
enhanced lethality. The committee understands that additional
funds would continue form, fit, and function development of
lightweight laser applications, increase laser range finding
distances, and improve target marking and designation
accuracies.
The committee recommends $5.0 million in PE 64710A, an
increase of $3.0 million for continued development of the
modular multi function laser system to support enhanced
lethality in soldier systems.

Non system training devices and constructive simulation systems
development

The budget request contained $8.8 million for Non System
Training Devices and $14.7 million for Constructive Simulations
Systems Development. These two systems are also known
collectively as Warfighter's Simulation system (WARSIM). WARSIM
is a computer-based simulation with associated hardware to
support the training of unit commanders and their battle
staffs, from battalion through theater-level, as well as for
the use of command post training events in educational
institutions. WARSIM is intended to provide a comprehensive
training environment capable of linking its simulation-based
constructive entities with virtual and live entities. WARSIM
was initially planned to fit into the larger, more
comprehensive Joint Simulation system (JSIM) which has been
cancelled. The committee is concerned that the Army has not
taken the appropriate steps to re-evaluate WARSIM and what role
this system will play now that JSIM no longer exists.
The committee recommends a reduction of $8.8 million for PE
64715A and a decrease of $14.7 million in PE 64742A.

Objective force bandwidth report

The committee directs the Secretary of the Army to provide
to the congressional defense committees a report, on an annual
basis starting February 13, 2004, identifying Objective Force
bandwidth requirements, the manner in which development and
testing progress will be measured against the requirements, and
how bandwidth and frequency allocations will be made to the
many systems that will be considered part of the network. The
report should also identify and differentiate organic systems
from assets borrowed or shared from other sources such as those
in the commercial, national, and international domain.
The committee is aware that the Army's Objective Force will
require a significant amount of bandwidth, throughput, and
communications technologies improvements in order to achieve
the interconnectivity among all of the components within the
proposed network. This requirement will be a significant part
of the Future Combat Systems design and directly affects its
lethality, survivability, and effectiveness. The committee
notes that a high level of risk existswith the concepts due to
the need to simultaneously develop a number of technologies and
operational concepts.

Palletized synthetic aperture radar moving target indicator radar sets

The budget request contained $20.3 million in PE 63772A for
advanced technology development of advanced tactical computer
and science technologies, but included no funds for Lynx
palletized radar equipment sets.
The committee understands that commercially-available Lynx
radar sets packaged in a palletized form would provide an
affordable, state-of-the-art, synthetic aperture radar, ground
moving target indicator to evaluate capabilities and
requirements for potential unmanned aerial vehicle UAV sensors
as part of the development of Future Combat Systems (FCS). The
committee also understands that an increase in funds in fiscal
year 2004 may accelerate additional situational awareness
capabilities for Army combat units prior to the fielding of any
FCS UAV's.
The committee recommends $24.3 million in PE 63772A, an
increase of $4.0 million, for Lynx palletized radar equipment
sets.

Patriot PAC-3

The budget request contained $174.5 million in PE 64865A
for Patriot PAC-3.
The committee recognizes the need for additional funds for
countermeasure improvements and aircraft identification friend
or foe (IFF).
The committee recommends $253.5 million in PE 64865A, an
increase of $79.0 million for Patriot PAC-3, including $10.0
million specifically for improved aircraft IFF. The committee
directs that no funds for Patriot PAC-3 IFF improvement may be
obligated until completion of the Army investigation into
friendly fire incidents involving Patriot during Operation
Iraqi Freedom.

Patriot PAC-2

The budget request contained $44.5 million in PE 23801A for
missile/air defense product improvement.
The committee is aware that additional funding is required
for Patriot PAC-2 aircraft identification friend or foe (IFF)
improvements.
The committee recommends $54.5 million in PE 23801A, an
increase of $10.0 million for Patriot PAC-2 aircraft IFF
improvements. The committee directs that no funds for Patriot
PAC-2 aircraft IFF improvement may be obligated prior to
completion to the Army investigation of alleged mishaps
involving Patriot during Operation Iraqi Freedom.

Portable and mobile emergency broadband system

The budget request contained $40.3 million in PE 63008A for
electronic warfare advanced technology, but included no funding
for the portable and mobile emergency broadband system. The
committee is aware that the portable and mobile emergency
broadband system provides a wide-area, rapidly deployable
wireless voice and data network.
The committee recommends $48.9 million in PE 63008A, an
increase of $8.6 million for the portable and mobile emergency
broadband system.

Pseudofollicullitus Barbae Research

The budget request included $35.2 million in PE 63002A for
medical advanced technology but no funding for the development
of a treatment for Pseudofollicullitus Barbae.
The committee recognizes the importance of
Pseudofollicullitus Barbae research, particularly as it affects
military personnel deployability rates.
The committee recommends an increase of $1.0 million in PE
63002A for Pseudofollicullitus Barbae research.

Reconfiguring tooling

The budget request contained $72.1 million in PE 63003A for
aviation advanced technology, but included no funds for the
reconfiguring tooling system.
The committee recognizes the impact on the Army's aviation
logistic and supply system from the increase in aviation
deployments world-wide. The committee notes that development of
a reconfigurable tooling system (RTS) that would allow repair
of aviation composite materials at the deployed site would be
beneficial to aviation readiness.
The committee recommends an increase of $3.0 million in PE
63003A for RTS.

Remote acoustic hemostasis

The budget request contained $58.9 million in PE 62787A for
medical technology applied research.
The committee notes the results of research in high-
intensity focused ultrasound technology that promises to
provide a highly effective means of controlling internal
bleeding. Lightweight, portable, and highly effective, remote
acoustic hemostasis technology provides the capability to
identify, and then eliminate the source of internal bleeding.
Ongoing applied research and development has produced
technologies and initial devices for advanced remote acoustic
hemostasis that promises to improve battlefield combat casualty
care and reduce battlefield and other trauma mortality among
members of the armed services and among civilian personnel.
The committee recommends an increase of $8.2 million in PE
62787A to continue the development of this highly successful
remote acoustic hemostasis technology.

Rugged textile electronic garments for combat casualty care

The budget request contained $35.2 million in PE 63002A for
medical advanced technology development, including $1.5 million
for advanced field medical protection technology. No funds were
provided for development of rugged textile electronic garments
for combat casualty care.
The committee notes advances in sensor technology, textile
electronics, information management, and medical science that
have opened up the potential for remote diagnosis, monitoring,
and treatment of a range of medical conditions. Positive
results from combat casualty care and electronic textiles
research strongly suggest that major improvements can be made
in the survival of wounded soldiers through the use of these
technologies in an integrated system. Congress provided $1.0
million in fiscal year 2003 to initiate a program to develop
thetechnology for, and assess the contribution that can be made
by the use of advanced textile electronic garments in combat casualty
care.
The committee recommends an increase of $3.0 million in PE
63002A to continue the program for development, demonstration,
and evaluation of rugged textile electronic garments for combat
casualty care.

ScramFire 120mm powered munition

The budget request contained $47.8 million in PE 63004A for
weapons and munitions advanced technology, but included no
funds for the ScramFire 120mm powered munition.
The committee is aware that powered munitions that
accelerate throughout flight to the target offer increased
velocity at the target for direct fire weapons or increased
range for indirect fire. The committee notes that both the
increased velocity for higher lethality and increased range for
greater survivability are desirable characteristics for the
Future Combat Systems.
The committee recommends $52.8 million in PE 63004A, an
increase of $5.0 million for the ScramFire 120mm powered
munition.

Wire detection, wind sensor and obstacle avoidance system for
helicopters

The budget request contained $47.1 million in PE 63710A for
night vision advanced technology, but included no funds for the
wire detection, wind sensor and obstacle avoidance system for
helicopters.
The committee is aware that the wire detection, wind sensor
and obstacle avoidance system for helicopters offers the
potential to substantially reduce helicopter accidents and also
improve weapons delivery accuracy.
The committee recommends an increase of $5.0 million in PE
63710A for the wire detection, wind sensor and obstacle
avoidance system for helicopters.

Navy Research, Development, Test, & Evaluation

Overview

The budget request contained $14,106.7 million for Navy
research, development, test, and evaluation (RDT&E).
The committee recommends $14,343.4 million, an increase of
$236.7 million to the budget request.

Items of Special Interest

Advanced cable design for mine and submarine warfare

The budget request contained $66.8 million in PE 64212N for
anti-submarine warfare and other helicopter improvements.
The committee notes that anti-submarine warfare and mine
countermeasures helicopters currently use heavy, steel
reinforced tow cables that vibrate when deployed and degrade
overall system performance. To address these shortcomings
Congress added $1.2 million in fiscal year 2003 to initiate a
program for development and evaluation of improvements in the
cables used for towing mine and submarine warfare sensors and
countermeasures.
The committee recommends $67.8 million in PE 64212N, an
increase of $1.0 million to continue the program for
development and evaluation of improvements in mine and
submarine warfare sensor and countermeasure tow cables.

Advanced composite sail phase II

The budget request contained $52.7 million in PE 63561N for
advanced submarine system development.
The advanced composite sail program for the Virginia class
submarine is intended to demonstrate substantial additional
payload capacity and low-observable improvements over
conventional submarine sails. Phase II of the program addresses
the incorporation of full-scale design features and load
specifications that would be encountered by operational
submarines, including damage assessment and repair.
The committee recommends an increase of $5.0 million in PE
63561N to continue the program for development, demonstration,
and validation of technologies and techniques for advanced
monitoring of the operational condition of composite sails,
repair procedures, and procedures for enabling future payloads
to be inserted into a composite sail without major redesign of
the sail structure.

Advanced Navy materials

The budget request included $15.3 million in PE 62236N for
advanced Navy materials.
Leadership in aerospace advanced materials technology is
fundamental to U.S. competitiveness in the global economy. The
Aerospace Materials Technology Consortium consisting of over 30
government, industry, and academic institutions is organized to
provide synergy across the aerospace materials community in the
development and application of advanced aerospace materials.
The committee recommends $19.3 million in PE 62236N, an
increase of $4.0 million to support partnered projects for
advanced technology materials development and demonstration
projects.

Advanced sensor initiative

The budget request contained $13.3 million in PE 35206N for
airborne reconnaissance systems, but included no funds for the
advanced sensor initiative.
The advanced sensor initiative is a product improvement
program to the existing shared reconnaissance pod (SHARP)
carried on the Navy's F/A-18E/F aircraft. The SHARP provides
continuous and immediate intelligence support to the battle
group commander by employing a suite of sensors to collect
infrared, visible, and synthetic aperture radar digital imagery
at medium and high altitudes. The advanced sensor initiative
would further develop SHARP capabilities by improving its
efficiency and maintainability and by providing enhanced
processing and dissemination capabilities. The committee
understands that such improvements could include replacement of
existing mechanical camera shutters with semiconductor computer
chips, miniaturizing separate medium- and high-altitude cameras
into one zoom lens, and upgrading image processing to provide
more rapid data dissemination capabilities. The committee also
understands that reconnaissance products developed through the
advanced sensor initiative could be adapted for use on smaller
and lighter platforms such as unmanned aerial vehicles.
The committee recommends $24.3 million in PE 35206N, an
increase of $11.0 million for the advanced sensor initiative,
to improve the capabilities of the SHARP and to develop smaller
reconnaissance architecture for other platforms.

Advanced WaterJet-21

The budget request contained $55.8 million in PE 63123N for
force protection advanced technology. No funds were included to
continue development and demonstration of the Advanced
WaterJet-21 (AWJ-21).
The AWJ-21 is an advanced technology development program by
the Office of Naval Research to validate the capability of the
technology to meet the Navy's rigorous requirements for
increased speed, stealth, maneuverability, and shallow draft
that will be needed for 21st century ships operating in the
littorals. Funding to date has supported construction of a one-
quarter scale demonstrator and testing in the laboratory and in
a water tunnel. The results to date indicate the potential for
AWJ-21 technology as a low cost, low risk, and high performance
propulsor for future ships.
The committee recommends an increase of $3.0 million in PE
63123N for AWJ-21 ship integration and at-sea testing to
complete the AWJ-21 advanced technology demonstration.

Aegis open architecture

The budget request contained $205.7 million in PE 64307N
for surface combatant combat system engineering, of which $80.4
million was included to continue development of the computer
programs for the cruiser conversion program, but included no
funds for Aegis open architecture.
The Aegis open architecture program maximizes software
component interoperability for cross-platform re-use. The
committee understands that the budget request is not sufficient
to develop the open architecture required for introduction into
the cruiser conversion program in fiscal year 2005, thereby
ensuring timely introduction of the Aegis open architecture
capabilities by fiscal year 2008 as required by both the Navy's
and the Missile Defense Agency's sea-based missile defense 2010
plan.
The committee recommends an increase of $10.0 million in PE
64307N for the Aegis open architecture program.

Affordable towed array construction (ATAC) program

The budget request contained $80.8 million in PE 64503N for
submarine systems equipment development, of which $5.7 million
was included to continue development of affordable towed array
technology initiatives, but included no funds for the ATAC
program.
The ATAC program would accelerate an already planned and
budgeted development of a fiber optic upgrade to the TB-29 and
TB-29A towed arrays which are used as external acoustic sensors
on the Navy's Los Angeles and Ohio Class submarine fleets. The
committee understands that the ATAC program would accelerate
system performance verification testing, implement automated
manufacturing equipment, and qualify commercial suppliers for
production of new highly reliable and low cost fiber optic
towed arrays. The committee further understands that the ATAC
program's methodology would result in a 50 percent reduction in
unit cost and provide fleet life cycle cost savings of over
$100.0 million.
The committee recommends $87.3 million in PE 64503N, an
increase of $6.5 million for the ATAC program, to improve towed
array reliability and significantly increase cost savings.

Affordable weapons system

The budget request contained $63.4 million in PE 63795N for
land attack technology advanced component development and
prototypes.
The Office of Naval Research (ONR) Affordable Weapon System
(AWS) program is an advanced technology initiative to
demonstrate the ability to design, develop, and build a capable
and affordable precision guided weapon system at a cost that
would be an order of magnitude cheaper than comparable weapon
systems and in production would achieve a stable unit
production cost very early in the production cycle.
The committee notes that the ONR program has been
successful in all respects. In less than four years, the AWS
program has demonstrated the use of commercial-off-the-shelf
(COTS) components to construct a 400-600 mile range, subsonic
(180-220 knot), ``loitering, 200 pound payload, precision
strike missile with global positioning system/inertial
navigation system guidance and control and a data link.'' The
missile has both line of sight and satellite data links for
interaction with ground stations and forward observers and is
reprogrammable in flight. In operational use the missile would
be launched from CONEX-type containers that hold between six
and twenty missiles and could be carried on land, sea, or air
platforms. The initiative has demonstrated that the COTS
approach can reduce costs by an order of magnitude from
traditional cruise missiles. The current missile cost in large
scale production, exclusive of warhead, is estimated to be
$60,000. Within the last 16 months there have been ten
successful flight tests that have demonstrated the missile's
range, accuracy and other capabilities.
The committee believes that the AWS has enormous potential
both for continued development and procurement as a weapon
system to fill the gap between cannons and multiple launch
rockets and missile systems such as Tomahawk that have longer
range and larger warheads and in developing a new paradigm for
the rapid development, transition to production, and fielding
of new and innovative weapons systems. The committee notes that
there are still significant issues to be resolved in
transitioning AWS through system development into production:
selection and integration of warhead(s); launcher development;
production engineering; logistics supportability; training
development; and development and operational test. The
committee understands that the program is under review by the
Navy for transition in the fiscal year 2006 budget. The
committee believes that the success demonstrated by the
systemto date and the operational contribution that the capability
would provide to U.S. forces justify seeking new ways to accelerate
transition from science and technology to fielded capability.
Accordingly, the committee recommends an increase of $40.0
million in PE 63795N to continue development of the AWS, and
$138.0 million in Weapons Procurement Navy for AWS procurement.

Airborne buried mine detection

The budget request contained $56.5 million in PE 35204N for
tactical unmanned aerial vehicle development.
The committee understands that emerging technology for
small imaging synthetic aperture radars has the potential
capability for detecting the location of buried metallic and
plastic land mines with relatively high accuracy. When mounted
in an unmanned aerial vehicle, such a capability could meet the
requirements of the Army, Navy, and Marine Corps for airborne
detection of buried land mines. The committee further
understands that the Department of Defense has allocated $1.0
million for the demonstration of an airborne prototype of such
a radar in an unmanned aerial vehicle.
The committee recommends an increase of $2.0 million in PE
35204N to accelerate the development and demonstration of the
mine detection capability of small, imaging synthetic aperture
radars mounted in an unmanned aerial vehicle.

ALE-55 development testing

The budget request contained $256.7 million in PE 64270N
for electronic warfare development, but included no funds for
ALE-55 development testing. Elsewhere in this report the
committee directs that the budget request of $204.8 million,
for development of the EF-18G aircraft, be established in a new
program element, PE 64271N, leaving $51.9 million in PE 64270N
or electronic warfare development.
The ALE-55 is a fiber optic towed decoy being developed for
the integrated defensive electronic countermeasures system,
which is planned for future installation on the Navy's F/A-18E/
F aircraft fleet. The committee understands that the ALE-55
development program has been significantly delayed due to
funding limitations and terminated Air Force participation, and
that further ALE-55 development delay will place F/A-18E/F
aircrews at increased surface-to-air missile attack risk.
In order to complete ALE-55 development testing and
operational evaluation and achieve a ALE-55 F/A-18E/F initial
operational capability by fiscal year 2005, the committee
recommends $66.9 million in PE 64270N, an increase of $15.0
million.

All optical underwater segments

The budget request contained $14.3 million in PE 24311N for
integrated surveillance system operational systems development.
The committee notes continuing developments in optical
fiber array technology and the Navy's application of that
technology to both towed and fixed array underwater
surveillance systems.
The committee recommends $21.8 million in PE 24311N, an
increase of $7.5 million to accelerate the development of all-
optical underwater surveillance systems.

Anti-surface warfare improvement program (AIP) phased capability update
(PCU)

The budget request contained $7.3 million in PE 64221N for
the P-3 modernization program, but included no funds for the
AIP PCU program.
The AIP upgrades the P-3's communications, survivability,
and over-the-horizon targeting capabilities through the
installation of commercial-off-the-shelf components, and the
PCU program systematically improves the AIP to meet new and
emerging operational needs. The committee understands that the
next PCU phase would develop a real-time targeting capability
in AIP-equipped P-3 aircraft by improving sensor performance to
provide precise target locations for dissemination to strike
platforms.
The committee believes that real-time targeting capability
is critical to the P-3's effectiveness.
The committee recommends $24.8 million in PE 64221N, an
increase of $17.5 million for the AIP PCU program.

Automated wire analysis

The budget request contained $60.1 million in PE 25633N for
aviation improvements operational systems development,
including $1.4 million for development of aircraft equipment
reliability and maintainability improvements.
The committee notes that in meeting today's operational
requirements many Navy aircraft are flown beyond their design
life, and mechanical, chemical, and thermal stress and the
maritime environment degrade aircraft wiring systems. The
committee is aware of automated capabilities for analysis of
wiring systems, developed in conjunction with the National
Aeronautics and Space Administration, that can provide instant
processing, and highly accurate identification and location of
faults in wiring harnesses. The committee believes that the
improvement in troubleshooting capabilities provided by such
technology would reduce operational and logistics costs and
also, contribute to the reduction of in-flight failures by
providing the ability to predict where a potential failure is
most likely to occur.
The committee recommends $63.1 million in PE 25633N, an
increase of $3.0 million for the evaluation of automated wire
analysis technology in the Navy's aircraft equipment
reliability and maintainability program.

Autonomous naval support round

The budget request contained $63.4 million in PE 63795N for
land attack technology, including $10.0 million to begin
development of the Extended Range Munition.
The Navy's Extended Range Guided Munition (ERGM) program is
developing a long-range, precision munition for fire support of
ground forces ashore and for surface strike missions. ERGM will
be capable of being fired from newer DDG-51 destroyers equipped
with the 5-inch, 62 (5"/62) caliber gun, but will not be
compatible with older ships equipped with the 5-inch, 54
caliber (5"/54) guns. The Autonomous Naval Support Round (ANSR)
is a rolling airframe, gun-fired projectile that has been used
to demonstrate advanced gun-launched projectile and guidance
and control technology and is capable of being employed from
all Navy 5"/54-equipped ships as well as from new 5"/62-
equipped ships. The committee notes that a successful ANSR
demonstration program has led the Navy to plan a $70.0 million,
24-month system development and demonstration program for an
Extended Range Munition and has included $10.0 million inthe
budget request to begin the program. The committee further understands
that the Navy intends to include funding for the balance of the program
in the fiscal year 2005 program objectives memorandum.
The committee recommends an increase of $20.0 million in PE
63795N to accelerate system development and demonstration for
the Extended Range Munition.

AV-8B engine life management program (ELMP)

The budget request contained $10.5 million in PE 64214N for
AV-8B design, development, integration and test, of which $2.3
million was included for the AV-8B ELMP.
The AV-8B ELMP is a comprehensive F402 engine program to
improve its safety and reliability, and to increase the mean
time between engine removals from 275 hours to 800 hours. The
F402 is the single engine installed on all AV-8B aircraft. The
committee understands that an increase is required in fiscal
year 2004 to allow a third F402 accelerated simulated mission
endurance test, to continue engine design improvements, and to
provide improvements to the engine monitoring systems. The
committee notes that both the Chief of Naval Operations and the
Commandant of the Marine Corps have included the AV-8B ELMP
among their unfunded priorities for fiscal year 2004.
Consequently, the committee recommends $17.5 million in PE
64214N, an increase of $7.0 million.

Battle force tactical training coalition interoperability

The budget request contained $21.7 million in PE 24571N for
consolidated training systems development.
The Battle Force Tactical Training (BFTT) Programs provides
realistic joint warfare training across the spectrum of armed
conflict; realistic unit level team training in all warfare
areas; a means to link together ships that are in different
homeports for coordinated training; external stimulation of
shipboard training systems; and simulation of non-shipboard
forces. The committee believes that extending the BFTT training
capability to allied forces and providing an enhanced
capability for battle force and combat system team training in
coalition naval operations would significantly enhance the
operational capability of United States and allied naval
forces.
The committee recommends $22.7 million in PE 24571N, an
increase of $1.0 million to initiate a program to develop and
demonstrate in the BFTT program a training systems methodology
and architecture that would facilitate combined battle force
and combat systems team training among U.S. and allied naval
forces.

Biomedical Research Imaging

The budget request contained $11.4 million in PE 63729N for
warfighter protection advanced technology development.
The committee continues to note the progress being made in
the use of advanced imaging technology in biomedical research.
New imaging technology has allowed the observation of tumors as
small as 1 mm in diameter and has allowed scientists to observe
critical bio-chemical changes associated with tumors, strokes,
and other disease states. The committee believes that these
findings have important implications for advances in real-time
medical diagnosis and treatment.
The committee recommends an increase of $5.0 million in PE
63729N to continue research in the applications of advanced
imaging technology to biomedical research.

Claymore Marine

The budget request contained $11.1 million in PE 63254N for
anti-submarine warfare (ASW) systems development.
The committee notes that the Navy established the Claymore
Marine program to investigate and demonstrate a new littoral
antisubmarine warfare (ASW) system that integrates the
previously developed ATD-111 airborne ASW and mine hunting
system with new signal processing algorithms to achieve a
significant increase in performance. Results to date indicate
that the concept should succeed. The Navy's fiscal year 2004
unfunded priorities list includes the need for an additional
$2.0 million for the Claymore Marine program to support an at-
sea demonstration and transition of the program to system
development and demonstration.
Accordingly, the committee recommends an increase of $2.0
million in PE 63254N for the Claymore Marine program.

COBRA JUDY

The budget request contained $69.4 million in PE 35149N for
COBRA JUDY.
The committee notes that following an analysis of
alternatives (AoA) for a COBRA JUDY replacement, the Secretary
of Defense, in agreement with the Director of Central
Intelligence, has established a replacement program. The
committee believes that even though the Air Force is conducting
an additional AoA, the present program to provide a COBRA JUDY
replacement is well founded and should go forward.
The committee is concerned that cost and schedule be
maintained, and directs the Secretary of Defense to report to
the congressional defense committees any changes to the present
program as a result of the AoA in progress.

Combat systems integration/battle force interoperability

The budget request contained $86.8 million in PE 63582N for
combat systems integration/battle force interoperability (CSI/
BFI) advanced component development and prototyping, including
$25.0 million for the small business innovative research (SBIR)
Phase III common network interface (CNI) program.
The committee believes that this program, like the
multipurpose process/advanced processing build process used in
the submarine acoustic rapid commercial-off-the-shelf insertion
program, can offer significant alternative approaches to AEGIS
combat system modernization which will permit the rapid and
affordable introduction of new capabilities and competitive
alternatives.
The committee recommends $86.8 million in PE 63582N for
CSI/BFI advanced component development and protyping, including
$25.0 million for the SBIR Phase III program for development of
CNI capabilities for theater missile and air defense.

Consolidated undersea situational awareness system

The budget request contained $69.2 million in PE 63235N for
common picture advanced technology development.
The committee notes that command and control in combat is a
complicated undertaking across all military problem domains,
and it is particularly hard for those domains where the
commander must make decisions based on a mass of dynamically
changing, uncertain, and at best, partially correct critical
data. The Consolidated Undersea Situational Awareness System
(CUSAS) is an agent-based decision support system under
development for submarine operations that uses an innovative
hybrid Bayesian/differential game modeling approach. The
resulting theory and technology will facilitate submarine
operations by addressing such practical problems as tradeoff
evaluation for course of action and maintaining tactical
advantage while avoiding counter detection. In addition, the
CUSAS system incorporates environmental data by integrating
existing Navy programs and sonar operator training systems. The
committee believes that successful development of the CUSAS
decision support system would provide a capability that
significantly assists submarine commanders who are under the
stress of critical combat operations to make rapid, informed,
and superior decisions.
The committee recommends an increase of $7.0 million in PE
63235N to continue the program for development and
demonstration of the consolidated undersea situational
awareness system.

Cruise missile real time retargeting/laser radar technology

The budget request contained $173.5 million in PE 63114N
for power projection advanced technology development, including
$67.9 million advanced development of time-critical strike
technologies.
The committee notes progress in the Navy's program for
development of low-cost, active terminal seekers for cruise
missile real time retargeting. The combination of the three-
dimensional mapping capability of a laser radar seeker,
automated target recognition algorithms, and mission planning
software which is used to relay new target search areas and
retarget the missile while it is in flight provides the
capability for rapid and accurate engagement of time-critical
targets.
The committee recommends an increase of $10.0 million in PE
63114N to accelerate the Navy's program for cruise missile
real-time retargeting.

DD(X) multi-mission surface combatant

The budget request contained $1 billion in PE 64300N to
continue the program for development of the DD(X) class of U.S.
Navy surface combatants, advanced development of component
technologies and systems that are integral to DD(X), and
preliminary and system design for the first DD(X) class ship.
DD(X) is a multi-mission surface combatant tailored for land
attack in support of the ground campaign and maritime
dominance. The program is in the pre-systems acquisition phase
of development, leading to design reviews in fiscal year 2004
and a Milestone B acquisition decision in fiscal year 2005.
Delivery of the first ship of the class to the fleet is planned
for fiscal year 2011.
The committee notes that the DD(X) program will provide the
baseline for spiral development of technology and engineering
required to meet future maritime requirements and for
development of a range of future ships such as the future
cruiser CG(X) and the Littoral Combat Ship (LCS). Just as its
predecessor the DD-21, DD(X) will be the advanced technology
platform for transformational technologies including an
integrated power system and electric drive; the Advanced Gun
System; the new Multi-Function Radar/Volume Search Radar suite;
optimal manning through advanced system automation; stealth
through reduced acoustic, magnetic, infrared, and radar cross-
section signature; and enhanced survivability through automated
damage control and fire protection systems.
The original concept for DD-21 that carried over into the
DD(X) program included an Advanced Gun System and an Advanced
Land Attack Missile System (ALAM) to provide naval surface
fires for support of ground forces ashore and precision strike
capabilities. These requirements have been major factors in
driving a ship design for a DD(X) of approximately 17,000 tons,
significantly larger than the current DDG-51 Arleigh Burke
Class destroyer. However, an interim land attack missile system
based on the Navy's Standard Missile was terminated in the fall
of 2001 and there is no funding for development of ALAM in
FY2003 or in the FY2004 budget request.
The committee notes that the Navy is currently engaged in a
reassessment of the DD-21 operational requirements document and
key performance parameters as a part of the DD(X) Spiral
Development review, and that the results of the review may lead
to decisions with regard to the design and size of the ship.
The committee requests that the Secretary of the Navy inform
the congressional defense committees on the results of the
review and impact on the design and capabilities of DD(X).
The committee recommends $1 billion in PE 64300N as
requested in the budget to continue the development of DD(X).

Deployable joint command and control

The budget request contained $79.4 million in PE 63237N for
advanced component development and prototyping of the
Deployable Joint Command and Control System (DJC2) and $46.6
million for procurement of a DJC2 suite for Pacific Command and
of a technology update for the prototype DJC2 suite deployed
with Central Command.
DJC2 is a Secretary of Defense and Chairman, Joint Chiefs
of Staff, priority transformation initiative that would provide
a standardized, deployable command and control capability for
each regional combatant commander and one maritime variant,
replacing the ad hoc command and control arrangements that are
drawn from deploying forces and brought together at the last
minute during a crisis. DJC2 supports the standing joint forces
headquarters concept and doctrine developed by Joint Forces
Command (JFCOM) in coordination with other regional combatant
commanders and the Joint Staff, as directed in the Defense
Planning Guidance, and would support day-to-day operations
(including peacetime), as well as training and contingency
operations.
The committee has supported the concept of establishing a
standing joint force headquarters in each of the regional
combatant commands and of providing standing and standardized
joint command and control capabilities for the commands.
The committee, however, questions the acquisition strategy
and program plan that has been proposed for DJC2. The committee
notes that the initial DJC2 prototype was fielded in Central
Command and used during Operation Iraqi Freedom and believes
that there is much to be learned from the experience gained
with the prototype. The committee notes further that because of
the late establishment of the program office, the program is
following an accelerated, highly parallel and overlapping
schedule for concept formulation, analysis of alternatives, and
operational requirements documentation leading to a Defense
Acquisition Milestone B in April-June2003, at the same time
that the military services are compiling and prioritizing service
command and control applications to create a DJC2 baseline and
establish benchmarks for determining future needs. The fiscal year 2004
program includes procurement of two DJC2 equipment suites for JFCOM for
testing and for experimentation, while at the same time developing a
third suite for Pacific Command and upgrading the Central Command
prototype. In order to make use of the lessons learned from the Central
Command experience and to provide the opportunity for meaningful
testing and experimentation before establishing the requirements for
and fielding the next generation system, the committee believes a more
deliberate development and acquisition process should be followed. The
committee also questions the wisdom of separating the program office
from the technical capabilities of the military departments' command,
control, and communications research, development, and engineering
activities.
Accordingly, the committee recommends $32.4 million in PE
63237N for continued development of DJC2, a reduction of $47.0
million, and no funding for DJC2 procurement, a reduction of
$46.6 million. The committee directs the Secretary of the Navy
in coordination with the Commander, Joint Forces Command, to
report to the congressional defense committees by December 31,
2003, the operational requirement, program plan and schedule,
funding required, and management plan for development of DJC2.

Digital intelligence situation mapboard

The budget request contained $235.7 million in PE 26313M
for Marine Corps communications systems, but included no
funding for the digital intelligence situation mapboard (DISM).
The committee strongly endorses the use of commercial-off-
the-shelf (COTS) technology to meet the needs of the Marine
Corps, while reducing development costs and schedules. The
committee notes that DISM is a map-based situational awareness
system employing standard military maps and messaging, that
runs on ruggedized palmtop computers and connects to the
existing Marine Corps SINGARS and other tactical radio
networks. The committee is aware that after successful
demonstration, DISM production was accelerated to equip
deploying Marines.
The committee supports continued development of this
capability, and recommends $239.7 million in PE 26313M, an
increase of $4.0 million for DISM development.

DP-2 thrust vectoring system

The budget request contained $173.5 million in PE 63114N
for power projection advanced technology development, but
included no funding for continuation of the DP-2 thrust
vectoring system demonstration.
DP-2 is a proof-of-concept program to demonstrate the use
of jet-powered, thrust vector control in a light weight
composite airframe to achieve vertical takeoff and short
takeoff and landing in a one-half scale flight test vehicle.
The committee notes the progress to date in the DP-2 program
and believes that the potential of the DP-2 proof-of-concepts
justifies continuation of the program.
The committee recommends an increase of $10.0 million in PE
63114N to continue development and demonstration of the DP-2
thrust vector system concept, leading to potential flight tests
of the one-half scale airframe.

Emerging/Critical interconnection technology

The budget request contained $54.8 million in PE 63236N for
warfighter sustainment advanced technology development, but
included no funds for continuation of the emerging/critical
interconnection technology program.
The committee notes that printed circuit boards are
fundamental components of military navigation, guidance and
control, electronic warfare, missile, and surveillance and
communication equipment. Most printed circuit boards for
military systems are characterized by the need for high
performance, high reliability and the ability to operate under
extreme environmental conditions, and require the use of high
density, highly rugged and highly reliable interconnection
technology. The committee also notes that the commercial
printed circuit board industry focuses on the design and high-
volume production of low-cost boards, and that the United
States has lost much of its printed circuit board manufacturing
capability to overseas sources. Recognizing the need to enhance
the U.S. capability for development and production of high
density, highly reliable printed circuit boards for use in U.S.
military systems, Congress provided an increase of $1.0 million
to the fiscal year 2003 budget request to accelerate
improvements in printed circuit board technology to meet U.S.
military requirements now and in the future.
The committee recommends an increase of $5.0 million in PE
63236N to continue the program for development of emerging and
critical printed circuit interconnection technology.

Fire-retarded POSS composites

The budget request contained $75.9 million in PE 62123N for
force protection applied research.
The committee notes that the use of composite materials in
naval aircraft continues to increase and the use of composites
for ship and submarine applications is becoming more
acceptable. Organic polymers are the main component of the
composite resin technology that is currently in use; however,
the limited capability of composites to survive the effects of
a shipboard fire is the main obstacle to more extensive use and
there are no resin systems which entirely meet military
standards. The committee notes that hybrid (organic-inorganic)
POSS polymers have been demonstrated that meet the fire
retardance standard of Military Specification 2031, but have
not yet been qualified for use on board ships.
The committee recommends an increase of $2.5 million in PE
62123N for applied research in the design, fabrication,
testing, and qualification of POSS composites for shipboard use
by the Navy.

Formable aligned carbon thermosets

The budget request contained $52.2 million in PE 62236N for
warfighter sustainment applied research, but included no funds
for formable aligned carbon thermosets (FACTS).
The committee notes that composite materials used in
aircraft construction have been demonstrated to save weight and
operation and maintenance costs. However, production using
existing composite products and composite lay-up procedures is
expensive, with costs several times that of conventional metal
structures. FACTS, a new product, employs stretch broken fibers
to give the material plasticity akin to metals and makes it
much easier to form parts. The new product is expected to
significantly increase the percentage of the airframe that can
befabricated from composites, to reduce the cost of the
composite structure, permit the use of more efficient designs, and
significantly lower the weight of the airframe. Congress added $1.0
million for FACTS applied research in the fiscal year 2003 budget.
The committee recommends an increase of $1.5 million in PE
62236N to continue the development and demonstration of FACTS
product technology.

Global Hawk maritime demonstration

The budget request contained $101.4 million in PE 35205N
for endurance-unmanned vehicles, for the Global Hawk maritime
demonstration (GHMD).
The committee notes that the GHMD is a program to determine
what a high altitude endurance UAV (HAEUAV) can contribute to
the Navy maritime surveillance mission. However, the committee
also notes that the Air Force's Global Hawk program is an
established program that is addressing many of the developments
that the Navy is considering. In particular, the Air Force is
addressing survivability suites and towed decoys. The committee
cannot justify funding for duplicative efforts for the
identical purpose by the Navy and Air Force, and encourages
close cooperation.
The committee supports joint experimentation efforts
between the Navy and the Air Force in their Global Hawk
programs for all applications and missions, to include
survivability.
The committee recommends $93.0 million in PE 35205N, a
decrease of $8.4 million.

High performance electric brush

The budget request contained $52.7 million in PE 63561N for
advanced submarine system development.
The committee notes that advanced high performance metal
fiber brushes have demonstrated the capability to significantly
enhance performance and reduce maintenance costs in a variety
of naval motors and generators. The technology reduces
environmental hazards associated with carbon brushes, improves
operating efficiency and personal safety, and significantly
reduces equipment failures. Advanced metal fiber brush
technology is also a key element in the development of
superconducting direct current homopolar motor technology for
ship propulsion that is discussed elsewhere in this report.
The committee recommends an increase of $8.7 million in PE
63561N to accelerate the development and installation of high
performance electric brush technology in electric motors and
motor-generators for Navy submarines and other systems.

High temperature superconducting AC synchronous ship propulsion motor

The budget request contained $55.8 million in PE 63123N for
force protection advanced technology development, including
$34.2 million for advanced development of surface ship and
submarine hull, mechanical, and electrical systems.
The committee notes that development of component
technologies for the all electric warship is one of the major
goals of the Navy's science and technology program. To this end
the Navy has pursued the development of several different
technologies for ship main propulsion electric motors,
including permanent magnet motors, high temperature
superconducting alternating current (AC) synchronous motor
technology, and low temperature superconducting direct current
homopolar motor technology. The committee notes that permanent
magnet motor technology is more mature and represents a
potential near-term candidate for a ship main propulsion motor.
However, the committee also notes that superconducting motor
technology presents a number of advantages with respect to size
and power density that, if realized, would make that technology
potentially advantageous for certain applications.
The Navy recently awarded a contract for development and
demonstration of high temperature, superconducting AC
synchronous motor technology in a 36.5 megawatt propulsion
motor and drive system that would be designed to be compatible
with Navy electric warship concepts and performance
requirements. The committee understands that the Navy's budget
request includes $10.0 million for this project in fiscal year
2004.
The committee recommends an increase of $15.8 million in PE
63123N to provide a total of $25.8 million in fiscal year 2004
to continue the development of the AC synchronous High
Temperature Superconducting motor.

IMPRINT

The budget request contained $54.8 million in PE 63236N for
warfighter sustainment advanced technology development,
including $6.9 million for manpower, personnel, and human
factor advanced technology development. No funds were requested
to continue adaptation for Navy uses of non-Navy methodologies,
such as the Army's MANPRINT program.
The committee believes that the use of the IMPRINT
methodology will improve Navy modeling tools that optimize the
classification of sailors to jobs and thereby improve job
performance and satisfaction. In the long run, the committee
also believes that improvements in performance and job
satisfaction will result in improvements in total ownerships
costs of Navy systems.
Accordingly, the committee recommends an increase of $1.5
million in PE 63236N to continue the development and
integration of Navy manpower and personnel classification
tools.

Integrated Maritime Picture System of Systems

The budget request contained $69.2 million in PE 63235N for
common operational picture advanced technology development.
The committee notes ongoing activities in the Navy and in
the other military departments to improve situational awareness
and develop an integrated common operational picture for air,
land, and sea commanders and their staffs. The committee also
notes that the emphasis on increasing force protection for the
fleet both in port and at sea will require the integration of
information about sea ports, harbors, anchorages, and the
maritime operational environment in an integrated maritime
operational picture.
The committee recommends an increase of $5.0 million in PE
63235N for advanced development of an integrated maritime
common operational picture that will include both force
protection and seaport security information and systems.

Integrated radar optical surveillance and sighting system

The budget request contained $40.9 million in PE 64755N for
ship self defense (detect and control) system development and
demonstration.
The committee notes that, in view of the current world
situation and the worldwide deployment of United States naval
forces, protection of high value surface assets has
becomehighly important. Current shipboard force protection measures are
conduced by use of roving patrols and watch standers armed with small
caliber crew-served weapons and short-range visual aids. Besides being
labor intensive, current force protection measures using small caliber
weapons have been shown to be ineffective against small boat threats
and short-range visual aids do not provide adequate detection and safe
stand-off ranges for the user.
The committee is aware that the Navy regards the Integrated
Radar Optical Sighting and Surveillance System (IROS3) as a
capable solution for shipboard force protection while a ship is
alongside the pier, at anchorage, or transiting congested and
restricted waters ways. IROS3 integrates commercial off-the-
shelf systems in a non-proprietary, network architecture to
provide a digital radar picture, electro-optical sensor, non-
lethal deterrence, and remote engagement by small arms and
minor caliber guns. In addition to providing a capability to
detect and classify asymmetric surface threats, maintain 360-
degree situational awareness around the ship, and effectively
engage small close-in threats, IROS3 will also enhance the
capability for surface warfare, navigation, maritime intercept
operations and related naval missions. In fiscal year 2002,
$4.5 million was provided in Defense Emergency Response Funds
for IROS3 and the Chief of Naval Operations fiscal year 2004
unfunded requirements list includes IROS3 as the Navy's #11
priority for funding.
The committee recommends $56.9 million in PE 64755N, an
increase of $16.0 million to complete system development,
integration, and test and evaluation of the IROS3 system.

Joint integrated satellite communications technology (JIST)

The budget request contain $379.5 million in PE 33109N for
the Navy's Satellite Communications (SPACE) program, including
$585,000 for fleet satellite communications.
The Joint Integrated Satellite Communications (SATCOM)
Technology (JIST) is a web-based satellite communications
planning and management technology that utilizes the Department
of Defense's existing internet protocol router to expand the
flexibility and efficiency of military satellite communications
across a broad spectrum of radio frequencies. The committee
believes that developmental systems like JIST, based on common
standards, are key to increased satellite communications
efficiency and maximizing the utilization of available spectrum
resources across legacy and follow-on satellite communications
systems.
The committee recommends $389.5 million in PE 33109N, an
increase of $10.0 million to continue the JIST program for
development of a uniform web-based architecture for SATCOM
mission planning and resource allocations.

Joint warfare experiments

The budget request contained $13.7 million in PE 63757N for
Joint Warfare Experiments, all of which is programmed to create
a software support facility for delivery and maintenance of
Block I of the Joint Simulation System (JSIMS).
The committee notes that JSIMS was considered to be the
next generation modeling and simulation tool to support
training for combatant commanders, their components, joint task
force staffs, other joint organizations, Department of Defense
agencies and the military services. JSIMS and all partner
programs have been revised to discontinue development in fiscal
year 2003 and the program is to be closed out.
The committee recommends no funding in PE 63757N for JSIMS
software support, a decrease of $13.7 million.

Joint warfare experimentation program

The budget request contained $151.1 million in PE 63727N
for the Joint Warfare Experimentation Program Experiments.
The Combatant Commander, U.S. Joint Forces Command (JFCOM)
is chartered ``as the Executive Agent for conducting joint
warfighting concept development and experimentation within the
Department of Defense.'' The Joint Warfare Experimentation
Program implements this transformation mission through a
process of discovery, innovation, concept development, and
experimentation to provide for optimal joint future force
capabilities.
The committee has closely monitored the progress in and
strongly supports the Joint Warfare Experimentation Program.
The committee notes that military service and joint experiments
leading up to the major exercise Millenium Challenge 2002 and
the exercise itself developed and confirmed a number of
operational concepts and changes to military service and joint
doctrine that had immediate application in Operation Iraqi
Freedom.
The committee notes, however, that funding for this joint
program is reflected in the budget as an element of the Navy's
science and technology program. The amount budgeted for the
Joint Warfare Experimentation Program has increased
significantly in the last two years and has now reached a point
that it creates a false impression of the budget in the Navy
science and technology account for support of Navy missions.
The committee recommends that the program element for the Joint
Warfare Experimentation Program be transferred to a Defense-
wide Account.
Accordingly, the committee recommends no funding in PE
63727N for the Joint Warfare Experimentation Program and $151.1
million in a new Defense-wide program element, PE 63xxxD8Z, for
the program.

Knowledge projection for fleet maintenance

The budget request contained $1.0 billion in PE 64300N for
DD(X) multi-mission destroyer system development and
demonstration, but included no funds to continue the
``Knowledge Projection for Fleet Maintenance'' project.
Congress provided $2.5 million in fiscal year 2002 and $1.5
million in fiscal year 2003 to support a collaborative program
for development of a new system to remotely monitor Navy ships
and enable off-board technical experts to assist ship's crew
on-board technicians in ship maintenance and repair. The
committee believes that the successful development and
implementation of this approach to knowledge-based system
diagnosis and repair could be increasingly important as the
Navy makes the transition to ships with reduced numbers of
personnel and as electronic equipment and other ships systems
continue to become more complex.
The committee recommends an increase of $4.0 million in PE
64300N to complete development and demonstration of the
``Knowledge Projection for Fleet Maintenance'' project.

Littoral combat ship

The budget request contained $158.0 million in PE 63581N
for Littoral Combat Ship (LCS) advanced component development
and prototypes.
The Littoral Combat Ship (LCS) is a planned new Navy
surface combatant for fighting in heavily contested littoral
waters, and would be the smallest member of the Navy's DD(X)
familyof next generation surface combatants. The committee
notes that prior to announcing the DD(X) family in November 2001, the
Navy had no plans to acquire a smaller combatant like the LCS. The
primary intended missions of the LCS are countering enemy mines,
submarines, and fast attack craft (i.e. ``swarm boats'') in heavily
contested littoral waters. Secondary missions include intelligence,
surveillance, and reconnaissance; homeland defense/maritime intercept;
special operations forces support; and logistic support for movement of
personnel and supplies. LCS would be the first Navy ship to separate
capability from hull form, and modular mission payloads and open-system
architecture are intended to be used to configure the LCS for
particular missions. LCS will displace 2,000 to 3,000 tons--about the
size of a Coast Guard cutter or a corvette, have a reduced crew size of
15 to 50 ``core'' crewmembers, and have a maximum speed of 40 to 50
knots.
The budget request indicates a total funding requirement of
$4.1 billion in the fiscal year 2004-fiscal year 2009 Future
Years Defense Program to accelerate development and
construction of nine LCS. The desired cost of each ship with a
representative mission module payload is estimated to be no
more than $220 million. The Navy plans a spiral development
acquisition strategy that will support construction of multiple
flights of focused mission LCS with progressive capability
improvements. The Navy wants to procure a total of 30 to 60 LCS
toward its goal of achieving an overall fleet of 375 ships.
Prior to announcing the LCS program, the Navy did not
conduct a formal analysis of alternatives to demonstrate that a
ship like the LCS would be more cost-effective for performing
the stated missions than potential alternative approaches. In
the statement of managers (H. Rept. 107-772) that accompanied
the Bob Stump National Defense Authorization Act for Fiscal
Year 2003 (Public Law 107-314), the conferees raised a number
of issues with respect to development of LCS: meeting the
requirements of a major defense acquisition milestone decision
for initiation of concept and technology development; the
acquisition strategy for development of the ship; development,
integration and evaluation of the mission module packages that
would be employed on the ship; and the program acquisition
strategy. The Navy's February 2003 report that was submitted in
response to the legislation was a brief, summary document that
provided little detail with regard to the analysis performed by
the Navy in developing the requirement and the concept for LCS.
The committee expects that the Secretary of the Navy will
address more completely the issues raised in the statement of
managers prior to proceeding to an Acquisition Program
Initiation decision in mid-fiscal year 2004.
The committee recommends an authorization of $158.0 million
in PE 63581N to continue LCS development.

Littoral combat ship mission module development

The budget request contained $158.1 million in PE 63581N
for Littoral Combat Ship (LCS) advanced component development
and prototyping.
The committee notes unfunded requirements in the Navy's
budget request for development risk reduction of anti-submarine
warfare (ASW), anti-surface warfare (SUW), and mine warfare
(MIW) mission modules for the LCS class ships.
In the statement of managers accompanying the conference
report on H.R. 4546 (H. Rept. 107-772), the conferees expressed
concern that the Navy's strategy for the LCS does not clearly
identify the plan and funding for development and evaluation of
the mission modules upon which the operational capability of
the LCS will depend. The conferees expressed the belief that
the strategy for LCS development must provide for the
identification, transition, and integration of the component
technologies and subsystems to be included in the several
mission modules and for the evaluation of each mission module
as a system before its deployment on the LCS.
The committee notes that additional funds for development
risk reduction for LCS mission modules would permit more mature
entry of mission module technologies into the spiral
development process, and would facilitate early identification
and mitigation of programmatic risks associated with
incorporation and integration of these systems into the basic
ship design. The committee understands that the additional
funds would specifically support interface and SUW, ASW, and
MIW mission module development, experimentation, testing, and
adaptation of the modules for incorporation into LCS Flight 0
ships. The additional funds would also support mission module
experimentation and testing focused on use of offboard vehicles
and Flight I mission module concept development for LCS Flight
I ships.
The committee recommends an increase of $35.0 million in PE
63581N for LCS mission module development.

Littoral support craft-experimental

The budget request contained $55.8 million in PE 63123N for
force projection advanced technology development, including
$5.0 million to continue the development and construction of
the Littoral Support Craft--Experimental (LSC-X).
LSC-X is an Office of Naval Research program for
development and demonstration of technologies for a small,
fast, experimental ship designed to operate in the littorals.
Designed to carry a variety of mission modules, the ship will
serve as a test bed for new technologies and new operational
concepts that would provide enhanced capabilities for anti-
submarine warfare, mine countermeasures, and other operations
in the littoral. The Navy has issued a contract for
construction of the ship, which according to the Navy's plan
should be ready for initial sea trials in the summer of 2004.
The Secretary of the Navy submitted a report, dated August
6, 2002, that provides the Navy's plan for the development of
the LSC-X. Since that report was prepared, the design for the
LSC-X has matured and the size of the ship has grown, as has
the expected cost to complete construction of the ship.
In the committee report on H.R. 4546 (H. Rept. 107-436),
the committee expressed the view that a littoral support craft
demonstrator such as the LCS-X design could be an effective
experimental test bed for many of the technologies that might
be chosen for use on a littoral combat ship. In the statement
of managers accompanying the conference report on H.R. 4546 (H.
Rept. 107-772), the conferees directed the Secretary of the
Navy to develop LSC-X as a complete system, including such
combat, communications and weapons systems interfaces as may be
required to demonstrate technologies and modular payloads, such
as the affordable weapon system, that might be considered for
the Littoral Combat Ship program. The conferees also directed
the Secretary to update his report on the LSC-X development
plan, identify any funding required for the LSC-X program, and
submit the updated report with the budget request for fiscal
year 2004. The Secretary's report has not been received by the
committee.
The committee recommends an increase of $20.0 million in PE
63123N to continue the program for development and construction
of the LSC-X as a complete system as directed in the conference
report referenced above.

Low acoustic signature motor/propulsor

The budget request contained $62.6 million in PE 62747N for
undersea warfare applied research.
The committee notes that the low acoustic signature motor/
propulsor for electrically powered undersea vehicles (LAMPREY)
plans to demonstrate an integrated motor-propulsor and power
converter with extremely low acoustic signature for undersea
vehicles. When integrated with an already developed, high power
lithium-ion battery system, the LAMPREY program will represent
a new propulsion system for an upgraded MK-48 Advanced
Capability torpedo. The LAMPREY test vehicle will also
represent a 1/20th-scale submarine and will provide valuable
data for a larger scale version of the propulsion system that
could ultimately be used in Virginia class submarines. The
committee believes that a successful LAMPREY program would
yield a propulsion system that provides a means of upgrading
the existing torpedo inventory to a safer, lower cost electric
propulsion system, improved torpedo stealth and reduced
acoustic interference, and a small scale demonstrator for an
advanced electric propulsion/integrated propulsor configuration
for future submarines. Congress provided $2.1 million in fiscal
year 2003 for the LAMPREY program.
The committee recommends $65.1 million in PE 62747N, an
increase of $2.5 million to continue development and
demonstration of the low acoustic signature motor/propulsor.

Low-power mega-performance unmanned aerial vehicle processing engines

The budget request contained $173.5 million in PE 63114N
for power projection advanced technology, but included no
funding for low-power mega-performance unmanned aerial vehicle
processing engines.
The committee supports development of improved signal
processing capability for unmanned aerial vehicles to support
precision targeting and other missions.
The committee recommends an increase of $7.5 million in PE
63114N for low-power mega-performance unmanned aerial vehicle
processing engines.

Low probability of intercept surveillance radar demonstration

The budget request contained $45.5 million in PE 63271N for
force protection advanced technology development.
The committee notes that the ability to detect small
targets in a cluttered sea environment in the littoral is a
major problem in military operations in the littoral and in
coastal surveillance operations. The application of low
probability of intercept radars capable of covert detection of
small threat ships operating in the sea clutter and against the
background of the land radar clutter enhances the capability
for both detection and intercept of such threats in defensive
operations and for avoidance of such threats in covert
offensive operations.
The committee recommends an increase of $10.0 million in PE
63271N for demonstration and evaluation of the use of advanced
low probability of intercept, surveillance radars in littoral
operational and coastal surveillance environments.

Manned reconnaissance aircraft replacement

The committee is aware that the military services are each
facing requirements to replace existing manned reconnaissance
aircraft, to include Army Guard Rail Common Sensor and Aerial
Reconnaissance Low systems, the Navy Orion and the Air Force
Rivet Joint. The committee is concerned that the services not
only validate their future manned reconnaissance requirements,
but also that these requirements be harmonized throughout the
Department of Defense to prevent unnecessary duplication and
assure interoperability, and take into consideration projected
ground, unmanned and space-based capabilities.
The committee believes that this broad coordination and
validation must be completed prior to selection of appropriate
platforms by each service. The committee recognizes that
platform selection is important, but believes that such a
decision cannot properly be made until the required capability
of that platform has been determined. While platform
commonality is desirable, the committee recognizes that due to
differences in mission requirements that may not be practicable
or preferable across services. The committee understands that
more important than selecting a single aircraft is selecting
the proper aircraft to meet the mission requirements for each
service.
The committee strongly encourages the Secretary of Defense
to ensure that acquisition of future manned reconnaissance
aircraft is based on a well defined mission capability the
particular platform must meet, rather than a desire to use a
particular type of aircraft, and then fitting the mission to
it.

Marine mammal research program

The budget request contained $52.2 million in PE 62236N for
warfighter sustainment applied research.
The committee notes continuing public concern about the
effect of sound on the behavior and well-being of marine
mammals and continues to support research in marine mammal
behavior and the effects of sound on marine mammals. Fatal
whale strandings over the past several years have been assumed
to be the result of the introduction of loud sounds into the
ocean, and have led to restrictions on scientific research and
naval test and training activities that inject such acoustic
signatures into the ocean environment. The committee also notes
that limited data is available on the effects of such noise and
that there is a need for greater understanding of the effects
of human-generated and naturally-generated sounds on marine
mammals.
Accordingly, the committee recommends an increase of $2.2
million in PE 62236N to continue the program for research in
marine mammal behavior and the effects of sound on the behavior
of marine mammals.

Metrology

The budget request contained $50.1 million in PE 64215N for
standards development, including $1.3 million for calibration
standards development. The budget request supports Navy lead-
service responsibilities in the Department of Defense Joint
Services metrology research and development program.
The Department of Defense's metrology research and
development program develops new measurement standards and
capabilities to support the development, test, evaluation, and
maintenance of emerging military systems. The committee notes
that continuing shortfalls in the metrology budgets of all the
military departments have led to the erosion of critical
calibration standards development and measurement services to
the detriment of the development and support of new weapons
systems. The committee is aware that while recent efforts to
improve research and development funding are helping, a backlog
of $22.0 million inprojects exists for fiscal year 2004 and is
expected to increase in fiscal year 2005 unless additional funding is
made available.
The committee recommends $56.1 million in PE 64215N, an
increase of $6.0 million for the Navy's metrology research and
development program.

Mobile expandable shelters

The budget request contained $56.4 million in PE 63640M for
Marine Corps advanced technology demonstrations (ATD), but
included no funds for mobile expandable rooms.
The committee is aware of the need for highly mobile
structures to support military operations including use as
tactical shelters, emergency medical treatment clinics, food
service facilities, and command centers.
The committee recommends an increase of $500,000 in PE
63640M to demonstrate expandable portable shelters.

Modeling and simulation of surgical procedures for battlefield trauma

The budget request contained $11.4 million in PE 63729N for
warfighter protection advanced technology development.
The committee notes continuing advances in the use of
modeling and simulation for the development of advanced
surgical procedures for battle trauma and the utility of such
simulations for the training of field medical personnel.
The committee recommends an increase of $4.5 million in PE
63729N to continue the program for development of new protocols
for modeling surgical procedures applicable to battlefield
trauma.

Multi-mission maritime aircraft

The budget request contained $76.2 million in PE 65500N for
multi-mission maritime aircraft (MMA) replacement systems for
the aging P-3/EP-3 aircraft.
The committee is aware that the Navy intends to pursue only
the P-3 variant replacement system within MMA, and does not
intend to continue the EP-3 replacement initiative within the
line. Therefore, the committee understands that funding for the
special reconnaissance technology insertion, replacements, and
test articles for the EP-3 mission is no longer required.
The committee recommends $58.7 million in PE 65500N, a
decrease of $17.5 million for the MMA program.

Naval architecture and engineering

The budget request contained $70.7 million in PE 61103N for
University Research Initiatives.
The committee notes increased interest by the Navy in
smaller, high-speed ships, such as the Littoral Combat Ship,
for operations in the world's littoral regions. The Coast Guard
also has requirements for such vessels for coastal security and
drug intercept operations. At the same time that Navy interest
in such ships is increasing, the numbers of naval architects
and naval engineers being trained by the nation's colleges and
universities with maritime engineering programs is decreasing
and some institutions of higher learning are considering
deleting such programs from their curricula. The committee
believes that unless these trends are reversed, it is
inevitable that U.S. Naval ships will eventually lag in both
innovation and technical development. The committee is aware
that the root causes of this phenomenon are complex and include
the loss of career opportunities and university curricula in
naval architecture and engineering. The committee believes
there has been little focus on integrating all the engineering
disciplines associated with shipbuilding, such as composite
materials, hull design, propulsion systems, ship systems
integration and automation. The committee also believes there
is an urgent need for undergraduate and graduate instruction in
the various disciplines that have contributed to the nation's
preeminence in maritime systems, including naval architecture,
hydrodynamics, and ocean engineering. The committee notes that
the National Research Council recently issued a report on the
status of this nation's facilities in the area of naval
hydromechanics that called for significant national investment
directed at improving U.S. capabilities in naval
hydromechanics, and also called for ``a more active
collaborative relationship between university and (Navy) center
researchers. . . .''
To address these issues, the committee recommends an
increase of $6.0 million in PE 61103N for a grant for
improvements in high-speed hydrodynamic research capabilities
and university research programs in naval architecture,
hydrodynamics, and ocean engineering.

Naval collaboration tool set

The budget request contained $30.6 million in PE 65013N for
Navy information technology development.
The committee notes the development and application of
network centric information systems and collaboration tools
that use basic internet worldwide web technology and
commercial-off-the-shelf computer and software products to
enable operational commanders and their staffs to rapidly share
battlespace information and situational awareness, thereby
achieving greater mission effectiveness and speed of command
and control. The ongoing application of information sharing and
collaboration tools creates the opportunity for the Navy to
capitalize on the experience gained in prototype web-based
information systems now being used in the fleet in various
warfare areas and develop a ``best of breed,'' web-based set of
collaboration tools that will enhance the ability of naval
commanders and their staffs to operate in a common, integrated
data environment. Congress provided $5.6 million in fiscal year
2003 to accelerate the development of naval collaboration tools
that can be used in all naval warfare areas and domains.
The committee recommends an increase of $8.0 million in PE
65013N to continue the program for development of a common
collaboration toolset that will be useable across all Navy
warfare areas and domains.

Naval fires network tactical dissemination module

The budget request contained $63.4 million for land attack
technology advanced component and prototype development,
including $14.7 million for the Naval Fires Network (NFN).
The Naval Fires Network is a system that will automate,
coordinate, and correlate, in real time, the processing of
multiple tactical data streams from various surveillance and
intelligence sources to provide time-critical fire control
solutions for advanced weapon systems and sensors, and will
provide the Navy an ability to quickly target and retarget
precisions weapons, thereby greatly enhancing their
effectiveness and lethality. The tactical dissemination module
willprovide the capability for transmitting target data
directly from the NFN to the weapon system chosen to engage the target.
As a part of the tactical dissemination module development and
integration with NFN, concept of operations and operational deployment
tactics are also being developed.
The committee recommends an increase of $5.0 million in PE
63795N to continue the development of the NFN tactical
dissemination module.

Navy circuit breaker electronic trip unit second source

The budget request contained $20.4 million in PE 63513N for
shipboard system component development.
The committee notes the development of circuit breakers
with communicating electronic trip units and the planned use of
such ``smart circuit breakers'' on the next-generation CVN-X
aircraft carrier and perhaps on the DD(X) multi-mission
destroyer as well.
The committee recommends an increase of $1.5 million in PE
63513N to develop and qualify a second source for Navy circuit
breaker electronic trip units.

Navy information technology research and development

The budget request contained $78.7 million for PE 65014N to
support the development of the Defense Integrated Military
Human Resource System (DIMHRS).
The committee is seriously concerned about the lack of
management oversight of this program. DIMHRS is already fifteen
months behind schedule and a contract has not been awarded.
Thus, when this information technology system begins initial
operating capacity, the program will be two years behind
schedule.
The committee recommends $50.7 million for PE 65014N, a
decrease of $28.0 million.

Nonlinear dynamics stochastic resonance

The budget request contained $11.1 million in PE 63254N for
anti-submarine warfare (ASW) systems development, including the
continued development and evaluation of nonlinear dynamics and
stochastic resonance (NDSR) for acoustic, magnetic, and other
ASW sensor and signal processing applications.
The committee notes the continuing progress in the
application of nonlinear dynamics science and technology to
nonacoustic shallow water ASW and the potential for greatly
improved ASW system performance as a result of significantly
increased electromagnetic detection ranges, enhanced sonar
target discrimination, and improved signal processing.
The committee recommends an increase of $4.0 million in PE
63254N to continue development and evaluation of nonlinear
dynamics and stochastic resonance for acoustic, magnetic, and
other ASW sensor and signal processing applications.

Offshore mobile basing

The budget contained no funding for conceptual studies to
examine the operational viability, costs and technological
feasibility for mobile basing concepts.
The committee believes that based on real world lessons
learned from both Operation Enduring Freedom and Operation
Iraqi Freedom, maritime sea basing that removes dependence on
host country willingness to allow U.S. forces to access host
country facilities is a growing option that deserves
consideration.
Accordingly, the committee authorizes an additional $10.0
million in PE 63123N for the purposes of examining concepts
such as the Rapidly Deployable Inter-modal Facility for
potential development by the Department.

Open architecture wireless sensors

The budget request contained $30.6 million in PE 65013N for
information technology system development and demonstration.
The committee notes that the applications of wireless
networking have achieved significant cost reductions and
benefits to the U.S. Navy in ship building through the use of
wearable computers, personal data assistants, and wireless
communications devices that enable supervisors, engineers,
technicians, and construction workers to coordinate their
activities more efficiently. The committee believes that the
future insertion of wireless network applications through the
shipboard environment and the converging of multiple networks
into a single ship-wide network could facilitate significant
improvements in ship operations, damage control, maintenance,
and other activities.
The committee recommends an increase of $1.0 million in PE
65013N for development and demonstration of open architecture
wireless sensors and their applications to improvements in ship
operations, maintenance and monitoring of ship systems, damage
control, and other activities.

Organ transfer technology

The budget request contained $11.4 million in PE 63729N for
warfighter protection advanced technology development. No funds
were requested for continuation of the organ transfer
technology program.
The committee continues to note progress in the development
of immune therapies by investigators at the Naval Medical
Research Center that have been shown to prevent the rejection
of tissue and organ transplants without the need for continuous
use of immuno-suppressive drugs. In fiscal year 2001 the Chief
of Naval Research initiated a program to capitalize on these
newly developed methods of treatment and Congress has provided
a total of $8.0 million in support of the clinical trials
program since fiscal year 2001.
The committee notes the continuing progress in the clinical
trial program. The committee believes that the ability to
transplant massive tissue segments without rejection could
revolutionize the treatment of combat casualties who suffer
significant tissue loss or organ damage from blast, missile
fragments or burns.
The committee recommends an increase of $3.0 million in PE
63729N to continue the organ transfer technology clinical
trials program.

Project M

The budget request contained $55.8 million in PE 63123N for
force protection advanced technology development.
The committee notes the progress in the Office of Naval
Research (ONR) program to evaluate the ability of Project M
technology to mitigate the high shock and vibration
experiencedby the Navy SEALS Mark V patrol craft crew and passengers in
high-speed special operations. Project M is an active noise and
vibration cancellation system that was developed in the Navy's advanced
submarine technology program. Proof-of-principle laboratory tests using
advanced six degree-of-freedom simulators developed in the program have
demonstrated the clear ability of the technology to reduce Mark V
patrol craft shock loading and vertical acceleration to acceptable
levels and reduce the potential for crew and passenger injury that
would otherwise occur. The committee believes that the technology is
ready for transition from the science and technology base and should be
considered favorably by the Navy and by the Special Operations Command
for implementation in the Mark V patrol craft and in other systems in
which the acceleration levels and shock loading that would be
experienced by passengers and crew are dangerously high.
The committee also notes the application of Project M
technology to reduce the magnetic signature (``degauss'') of
electric propulsion motors. As the Navy places increased
emphasis on the introduction of the ``electric'' ship and the
use of electric motors for ship propulsion, reduction of the
magnetic signature of the ship as a defense against magnetic-
influence mines, particularly in littoral operations, will
become increasingly important. Project M technology has been
demonstrated in the laboratory to reduce the pronounced
magnetic signature present in a relatively large (1,000
horsepower) electric motor to the magnetic intensity of the
earth's magnetic field with the result that the motor's
magnetic signature disappears into the background of the
earth's magnetic field. The committee strongly recommends that
the Navy consider the exploitation of the Project M technology
for magnetic signature reduction in new construction ships such
as the DD(X) destroyer and the Littoral Combat Ship.
The committee recommends an increase of $4.0 million in PE
63123N to continue the development and demonstration of Project
M technology. The committee directs the Secretary of the Navy,
in coordination with the Commander, Special Operations Command,
to report to the congressional defense committees by March 1,
2004, plans for transition of Project M shock reduction
technology to potential operational use. The committee also
directs the Secretary to report Department of the Navy plans
for further development, evaluation, and exploitation of
Project M technology for magnetic signature reduction.

Quad hull security caisson technical demonstration

The budget request contained $55.8 million in PE 63123N for
force protection advanced technology development.
The committee notes that many strategic ports in the United
States have military pre-positioned ships, sensitive land-based
resources, and facilities that are highly vulnerable to
waterside terrorist attacks. In high volume, higher threat
locations where Navy and other strategic ships share the port
in close proximity to commercial containers, international
tankers, and other watercraft, and in ports with international
commercial shipping, Navy and military strategic ships may
require the use of additional protective measures that could
minimize the potential for damage to the ships and their crews.
The committee is aware of initial studies and analysis of the
ability of caisson security barriers to provide robust and
economical protection against attack, both above and below the
waterline of the protected ship.
The committee recommends an increase of $16.0 million in PE
63123N to initiate a program for development and evaluation of
caisson security barriers for ship and port protection.

Rapid deployment fortification wall live-fire testing

The budget request contained $56.4 million in PE 63640M for
Marine Corps advanced technology demonstration (ATD), but
included no funds for rapid deployment fortification wall live-
fire testing.
The committee is aware that the rapid deployment
fortification wall, if proven in live-fire testing, offers
significantly faster means to provide force protection compared
to sand bagging.
The committee recommends an increase of $3.5 million in PE
63640M for rapid fortification wall.

Reduction of catapult post-retraction exhaust discharge

The budget request contained $54.8 million in PE 63236N for
warfighter sustainment advanced technology development.
The committee notes that, prior to an aircraft carrier
catapult launching stroke, lubricating oil is applied to the
catapult cylinder. Over the course of multiple launchings the
circulation of oil and water through the water brake cylinder
and tanks leads to the formation of an oil layer in the water
brake tank, which must be skimmed off and discharged overboard
periodically. The committee believes that today's technology
allows for the use of dry lubricants on sliding mechanisms that
have the potential to reduce the overall discharge of
lubricants into the sea, while at the same time improving
catapult system performance and reducing maintenance
requirements. The committee recommends that the Secretary of
the Navy establish a project to analyze failure modes in
existing aircraft carrier systems and the potential for
replacement of current petroleum based lubricants with dry
lubricants that might be more environmentally safe. The
committee also believes that this project should be accompanied
by the development of a wireless system that would permit real-
time monitoring of catapult performance.
Accordingly, the committee recommends an increase of $2.0
million in PE 63236N for reduction of catapult post-retraction
exhaust discharge and development of a real-time catapult
performance monitoring system.

Remote ocean surveillance system

The budget request contained $45.5 million in PE 63271N for
radio frequency systems advanced technology development.
The committee notes developments in high contrast, high
resolution multi-spectral sensors and image processing
technology that indicate potential capabilities for detection
of objects in the ocean in real time, at various depths, and
with relatively high search rates. Realization and employment
of these technologies in littoral areas, estuaries, and ports
would provide the capability for a remote ocean surveillance
system for mine detection and avoidance, force protection, and
identification and dissemination of information on surface/sub-
surface threat to ports and harbors.
The committee recommends an increase of $3.0 million in PE
63271N to initiate a proof-of-concept demonstration of multi-
spectral sensor and image processing technology for a remote
ocean surveillance system.

Shadow 200 system components for the Marine Corps

The budget request contained $56.5 million in PE 35204N for
tactical unmanned aerial vehicles but included no funds for
Shadow 200 system components for the Marine Corps.
The committee is aware that operation and maintenance of
Marine Corps Pioneer unmanned aerial vehicle systems could be
greatly enhanced if upgraded with certain Shadow 200
components.
The committee recommends an increase of $8.5 million in PE
35204N for Shadow 200 vehicle control system software and
ground data terminals for the Marine Corps.

Shipboard fire protection

The budget included $114.1 million in PE 62114N for applied
research, in part, to support the protection of naval shipboard
assets and expeditionary forces ashore. Shipboard and ashore
fires threaten sailors and valuable assets. Current thermal
imaging technology suffers thermal bloom and inhibits
firefighters attempting to rescue personnel and contain fires.
Technology exists that offers promise of providing non-thermal
light detection and ranging technology that provides both the
visualization of victims that are obscured by the glare and
thermal bloom of fire and their surroundings (steps,
obstructions, missing floors, fallen objects, etc.). The same
technologies could provide operational utility by providing the
ability to visualize targets through flame and smoke obscured
battlefields.
The committee recommends an increase of $2.0 million in PE
62114N for applied research into promising non-thermal imaging
technologies, to include firelidar, for military and civilian
firefighting and operational applications.

Silver Fox unmanned aerial vehicle

The budget request contained $114.1 million in PE 62114N
for power projection applied research, and included no funds
for the Silver Fox unmanned aerial vehicle (UAV).
The committee is aware that the Office of Naval Research
accelerated development of the Silver Fox UAV to support urgent
military requirements. The committee notes that early reports
indicate that Silver Fox has been very effective in the combat
environment.
The committee recommends an increase of $15.0 million in PE
62114N for development and initial fielding of the Silver Fox.

Station-keeping ocean environment sensors

The budget request contained $48.8 million in PE 62435N for
ocean warfighting environment applied research, including $8.1
million for applied research in battlespace environment sensors
and data.
The committee notes the capability to observe the ocean
environment at a known location over an extended period of time
contributes significantly to understanding the ocean
temperature, currents, wave height, sound levels, and other
physical phenomena at that location and the impact of those
phenomena on the global environment. However, such capabilities
today are primarily dependent upon the use of moored sensors or
sensors emplaced on the ocean floor.
The committee believes that geolocation technologies such
as the global positioning system when combined with station-
keeping and intra-sensor communications technologies, could
provide the capability for establishing individual or fields of
long-term ``station-keeping'' ocean environment sensors that
would sense and maintain their location and could significantly
improve our knowledge of the ocean environment in the area
where the sensors were emplaced. When applied to undersea
warfare sensors, such station-keeping technologies could
provide the capability for rapidly emplacing a floating field
of ``smart'' sensors to observe the undersea environment in an
area, including the presence of submarines and other undersea
vehicles, and maintain the position of the individual sensors
and the sensor field in the area over an extended period of
time without the need to lay or anchor such a field on the
ocean floor.
The committee believes that there is a range of
technologies that could be considered to enable the capability
for such station-keeping sensors and sensors fields, including
some that might rely upon local environmental effects (such as
wind, solar energy, of temperature differentials) for their
motive power, miniaturized geolocation technologies, and
technologies for sensor data storage, transmission, and intra-
field communication.
The committee recommends an increase of $1.0 million in PE
62435N to establish a program to assess the feasibility of such
station-keeping sensors and their potential application to
oceanographic research and enhanced undersea warfighting
capabilities.

Submarine payloads and sensors

The budget request contained $52.7 million in PE 63561N for
advanced submarine system development.
The committee notes that the Defense Advanced Research
Projects Agency/Navy submarine payloads and sensors program
resulted in the development of a number of innovative but
realistic payload, sensor, and platform concepts that could
enable a revolutionary expansion of capabilities and allow the
submarine to play a more decisive role in Joint Force
operations, especially in the ability to exert greater
influence over events on shore. The concepts provide a
potential roadmap to the future through successive
implementations that would use the Virginia class nuclear
attack submarine as a baseline point of departure. The SSGN
conversion of the SSBN ballistic missile submarine would
provide additional volume that could also be used for
significant payload increases. Congress provided $3.5 million
in fiscal year 2003 for follow-on studies and demonstration of
advanced submarine payload, sensors, and employment concepts,
some of which were demonstrated in the Navy's GIANT SHADOW
exercise. The committee is aware that increased funding in
fiscal year 2004 would be used for at sea demonstrations of
these transformational concepts and to begin development of
those new payloads that would provide the most value to the
joint warfighter.
Accordingly, the committee recommends an increase of $25.0
million in PE 63561N for submarine payloads and sensors.

Submarine sonar improvements

The budget request contained $80.8 million in PE 64503N for
submarine sonar improvements system development and
demonstration, including $29.1 million for continuation of the
acoustic rapid commercial-of-the-shelf insertion (A-RCI)
program.
The A-RCI program upgrades current sonar systems with open
architecture commercial-off-the-shelf computer technology that
uses advanced processing builds (APB) and multipurpose
processor (MPP) middleware developed under a small business
innovative research (SBIR) Phase III program to provide
continued upgrades as technology develops. The committee notes
the significant improvements in sonar system capabilities that
have resulted from the application of MPP/APB technology to
Navy submarine sonar systems. The committee has strongly
supported the Navy's selection of the MPP as the cornerstone
for sonar upgrades for existing submarines the development of
advanced MPP signal processing technology and
advancedprocessing builds and the integration of these capabilities in
submarine, airborne, surface sonar, and undersea surveillance systems.
The committee believes that the Navy's funding of the MPP/APB process
as part of its core anti-submarine warfare research and development
program demonstrates the Navy's commitment to transformation of its
anti-submarine warfare capabilities.
The committee recommends $80.8 million in PE 64503N,
including $29.1 million for continued development of the MPP/
APB SBIR Phase III program for submarine sonar improvements.

Superconducting DC homopolar motor

The budget request contained $55.8 million in PE 63123N for
force protection advanced technology development, including
$34.2 million for advanced development of surface ship and
submarine hull, mechanical, and electrical systems. No funds
were requested to continue the program for development and
demonstration of a superconducting direct current homopolar
motor.
As noted elsewhere in this report, development of component
technologies for the all electric warship is one of the major
goals of the Navy's science and technology program. To this end
the Navy has pursued the development of several different
technologies for ship main propulsion electric motors. The
committee notes that superconducting motor technology presents
a number of advantages with respect to size and power density
that make that technology potentially advantageous for certain
applications. The committee also notes that low temperature
superconducting direct current (DC) homopolar motor technology
has the potential technical advantages of being smaller,
lighter, and quieter than alternating current (AC) electric
motors that, if realized, would make the superconducting DC
homopolar motor a potentially more suitable alternate for use
in submarines or in other ship applications where these
attributes are desired.
The committee notes the progress that has been made in the
Office of Naval Research project for development of
superconducting DC homopolar motor technology, and recommends
that the Navy continue to extend the technology to design,
development, demonstration, and evaluation of a full-scale
motor ship main propulsion motor.
The committee recommends an increase of $8.0 million in PE
63123N to continue the development of Superconducting DC
Homopolar motor technology.

Surface Navy integrated undersea tactical technology--mine warfare
trainer

The budget request contained $140.7 million in PE 63502N
for surface and shallow water mine counter measures advanced
component development and prototypes.
The committee notes the critical role played by sonar and
mine warfare systems operators' proficiency in distinguishing
between mines and mine-like objects and in distinguishing
between different types of mines. The Surface Navy Integrated
Undersea Tactical Technology--Mine Warfare (SNIUTT-MIW) trainer
is a comprehensive training demonstration test-bed that is
designed to address recognized deficiencies in the sonar
operator's proficiency. SNIUTT-MIW leverages and integrates the
capabilities of existing surface combatant and aircraft carrier
mine and sonar systems and the lessons learned from those
systems to provide a common, coordinated baseline training
system capability that is not currently available in the Navy
mine and undersea warfare force. Congress provided $3.8 million
in fiscal year 2003 for development of a test-bed demonstration
to enhance mine warfare operator training and performance.
The committee recommends an increase of $9.0 million in PE
63502N to continue development and evaluation of the SNIUTT-MIW
test bed undersea warfare systems trainer.

Theater undersea warfare initiative

The budget request contained $59.0 million in PE 62235N for
common picture applied research. No funds were requested to
continue the Theater Undersea Warfare Initiative.
The committee notes that Congress added $8.5 million in
fiscal year 2003 for the Theater Undersea Warfare Initiative,
which seeks to enhance the Navy's network centric capability
for maritime patrol aircraft (MPA) and provide a near real-
time, collaborative communication, command and control
capability for MPA operations in the theater. The current
program focuses on research, development and test of prototype
sensor data fusion and automation technology for MPA, improved
bandwidth utilization, and incorporation of electro-optical/
infrared, radar, magnetic, and other onboard digital sensor
data. The committee understands that upon completion of the
initiative, the capabilities developed and demonstrated in the
project will transition into the common undersea picture
program of record.
The committee recommends an increase of $6.0 million in PE
62235N to complete the Theater Undersea Warfare Initiative and
provide MPA a beyond-line-of-sight, secure digital
communications, command and control capability with increased
capability for sensor data fusion and automation.

Unmanned aerial vehicle joint operational test bed system

The budget request contained $56.5 million in PE 35204N for
tactical unmanned aerial vehicles, but included no funding for
the Joint Forces Command (JFCOM) unmanned aerial vehicle (UAV)
joint operational test bed system (JOTBS).
The committee is aware that UAV interoperability is
fundamental to optimal joint operations. The Joint Forces
Command UAV JOTBS was established to further development of
various service UAV's to ensure interoperability under
realistic conditions, and the committee strongly supports this
mission.
The committee recommends an increase of $7.0 million in PE
35204N for the JFCOM JOTBS.

Unmanned aerial vehicles concept of operations

The budget request contained $7.1 million in PE 63261N for
tactical airborne reconnaissance unmanned aerial vehicle (UAV)
concept of operations studies for the Navy.
The committee notes that both the Navy's broad area
maritime surveillance (BAMS) and Global Hawk maritime
demonstration system (GHMD) programs contain funding for
concept of operations and interoperability studies. The Navy
has covered the course for UAV concept of operations through
the years, and naval UAV integration has shown scant benefit
from such efforts. The committee believes that the funding is
better applied within the UAV programs themselves.
The committee supports the requirement for UAV integration
into the naval environment but believes that this program is
duplicative of other Navy efforts.
The committee recommends no funds in PE 63261N, a decrease
of $7.1 million.

Vacuum electronics

The budget request contained $44.0 million in PE 62271N for
radio frequency systems applied research, including $4.5
million for applied research in radio frequency vacuum
electronics power amplifiers.
The committee report on H.R. 1402 (H. Rept. 106-162) noted
the committee's support for a robust vacuum electronics
research and development program in the Department of Defense
and other federal agencies. The committee endorses the
criticality of support for both vacuum electronics and solid-
state power technologies and recommendations for increased
funding in the tri-service vacuum electronics program and for
advanced wide bandgap semiconductor technology development.
The committee expects the Under Secretary of Defense
(Acquisition, Technology, and Logistics) through the Director
of Defense Research and Engineering to ensure a balanced
investment strategy for vacuum electronics and solid state
power technologies that will meet Department of Defense
requirements for current and future systems that use radio
frequency power electronics.
The committee recommends an increase of $9.5 million in PE
62271N for applied research in vacuum electronics.

Virginia class multi-mission module

The budget request contained $112.4 million in PE 64558N
for Virginia class submarine design development system
development and demonstration.
The committee notes the experience gained in the
development, design, and implementation of multi-mission
capabilities in the USS Jimmy Carter (SSN-23). The committee
believes that the modular design of the Virginia class
submarine lends itself to the evaluation of multi-mission
module concepts for that submarine that could be considered for
insertion in selected hull numbers of the class to increase
payload capacity, capability for technology insertion, and
adaptability to new missions.
The committee recommends $122.4 million in PE 64558N, an
increase of $10.0 million for the evaluation of modular payload
concepts and multi-mission modules for Virginia class submarine
variants that would increase payload capacity and mission
capability.

Wide band gap semiconductor power electronics

The budget request contained $32.1 million in PE 62712E and
$3.5 million in PE 62271N for applied research in wide band gap
semiconductor electronics. Section 212 of the National Defense
Authorization Act for Fiscal year 2002 (Public Law 107-107)
required the Secretary of Defense to carry out a cooperative
program to develop and demonstrate advanced technologies and
concepts for future Navy radar systems and other applications
with particular emphasis on development of high frequency and
high power wide band gap semiconductor materials and devices.
The committee continues to place a high priority on the
development of the technology for advanced wide band gap
semiconductor materials and devices for future naval radar and
other applications. The December 2000 Special Technology Review
on Radio Frequency Applications for Wide Band Gap Technology by
the Office of the under Secretary of Defense (Acquisition,
Technology, and Logistics) recommended an increased science and
technology investment in wide band gap materials, devices,
circuits, and packaging that would total approximately $30.0
million per year over a five-year period, beginning in fiscal
year 2002, in order to develop the technologies necessary to
field advanced radar systems in time to meet the Navy's and the
Department's requirements in 2015.
The committee recommends an increase of $6.0 million in PE
62271N for wide band gap semiconductor power electronics
applied research.

Air Force Research, Development, Test, & Evaluation

Overview

The budget request contained $20,336.3 million for Air
Force research, development, test, and evaluation (RDT&E).
The committee recommends $20,548.9 million, an increase of
$212.6 million to the budget request.

Items of Special Interest

3D Bias Woven Preforms

The budget request contained no funding for 3D Bias Woven
performs.
The committee believes that fiber weaving technology
incorporating +/-45 degree fibers in 3D composite fiber
reinforcements for use in aircraft structural joints could
increase joint strength and damage tolerance, enabling
incorporation of low cost composite structures technology to
highly loaded joint applications.
The committee recommends an authorization of $34.1 million
in PE 63211F, an increase of $3.0 million for three dimensional
bias woven performs phase III.

Advanced extremely high frequency MILSATCOM

The budget request contained $778.1 million in PE 63430F
for advanced extremely high frequency (AEHF) MILSATCOM (SPACE).
The committee is aware of the increased importance of
satellite communications for the warfighter and the increased
capability AEHF would provide. The committee notes that
additional funding is required for program risk reduction and
spare parts for the first two satellites.
The committee recommends $838.1 million in PE 63430F, an
increase of $60.0 million for AEHF.

Advanced spacecraft technology

The budget request contained $72.1 million in PE 63401F for
advanced spacecraft technology, but included no funds for small
launch vehicle thermal protection technology.
The committee notes that thermal protection system (TPS)
technology risk reduction activities such as subscale component
and flight demonstration are a significant part of the critical
path to development of low cost small launch vehicles (SLV) for
Department of Defense spacelift. The committee is aware that
small satellite technology has been hindered by the lack of
affordable and reliable spacelift.
The committee recommends $74.0 million in PE 63401F, an
increase of $1.9 million for SLV thermal protection technology.

Advanced Threat Alert Receiver (ATAR)/Lightweight Modular Support
Jammer (LMSJ)

The budget request contained $28.5 million in PE 63270F for
electronic combat technology, including $2.8 million for ATAR/
LMSJ.
ATAR will provide scalable, open architecture, affordable
digital receiver technology to multiple electronic warfare
platforms. LMSJ will provide next-generation digital technique
generators and solid state power module technology in a
scalable, open architecture for electronic jammers. Several new
platforms are being envisioned as a follow-on replacement to
the EA-6, requiring acceleration of ATAR/LMSJ technology to
ensure the delivery of a brass board, conduct risk reduction
research, and generate high fidelity threat emitter
environments.
The committee recommends $33.3 million in PE 63270F, an
increase of $4.8 million for ATAR/LMSJ.

Advanced wideband system

The budget request contained $439.3 million in PE 63845F
for the advanced wideband system (AWS).
The committee notes that the transformational
communications system (TCS) architecture within which AWS use
is envisioned is still being developed. The committee further
notes that underlying systems engineering for AWS faces
significant challenges and much of the AWS technology base is
very immature.
While the committee supports the goal of TCS, the committee
believes that a slower program start for AWS will be beneficial
to allow maturation of TCS architecture and AWS technology.
The committee recommends $359.3 million in PE 63845F, a
decrease of $80.0 million for AWS.

Aircraft turbine engine sustainment

The budget request included no funding in PE 78026F for the
productivity, reliability availability, maintainability (PRAM)
program for aircraft turbine engine sustainment.
The committee believes that investments in technologies for
nondestructive inspection of aircraft engines show the
potential of saving millions of dollars.
The committee recommends $7.0 million in PE 78026F, an
increase of $7.0 million for the PRAM program.

Air Force information technology research and development

The budget request contained $62.3 million for PE 28006F to
support the Air Force Mission Planning Systems and an
unspecified amount to support information technology (IT)
research and development.
The committee is concerned about excessive and unjustified
growth in the Air Force's research, development, testing, and
evaluation expenditures for IT programs. While the committee
supports innovative research into emerging technologies that
will support combat and business systems modernization, the
committee is nonetheless concerned that the Mission Planning
Systems research and development expenditures increased four
fold in one year, and notes similar increases in other IT
programs.
The committee recommends $39.3 million for PE 28006F, a
decrease of $23.0 million.

Air Force space fence

The budget request contained $118.2 million in PE 35910F
for SPACETRACK, but included no funds to upgrade the Air Force
space fence.
The committee notes that responsibility for the legacy Navy
fence developed in the 1950's has recently been transferred to
the Air Force. The committee directs the Secretary of the Air
Force to continue to fully operate the fence and the alternate
space control center through fiscal year 2004. The committee
also directs the Secretary of the Air Force to conduct a
thorough evaluation of options during fiscal year 2004 to
upgrade or replace the existing fence in the near future in
order to better meet the critical space situational awareness
requirements. Thisevaluation should study options for applying
different technologies as well as different basing concepts and
locations.
The committee supports the requirement for improved space
control and recommends $138.2 million in PE 35910F, an increase
of $20.0 million for Air Force space fence.

Ballistic missile technology program

The budget request contained no funds in PE 63311F for the
ballistic missile technology program.
The committee is aware that the ballistic missile
technology program supports development of critical
technologies related to advanced guidance, range safety
instrumentation and common guidance sensors.
The committee recommends $10.0 million in PE 63311F for the
ballistic missile technology program.

Central measurement intelligence office

The budget request contained $71.7 million in PE 62702F for
command, control and communications, but included no funds for
laser intelligence or passive coherent location.
The committee is aware that the central measurement and
signature intelligence (MASINT) office (CMO) supports two
initiatives: the first at the National Air Intelligence Center
(NAIC) to establish a laser intelligence effort on current and
emerging laser technologies, and the second to accelerate
development of passive coherent location (PCL) capability to
include:
(1) Augmentation of the national airspace,
(2) Provide expansion to deployable integrated air
defenses, and
(3) Further evaluate the capabilities that PCL will
provide the war fighter.
The committee recommends an increase of $2.5 million in PE
62702F to establish a laser intelligence effort on current and
emerging laser technologies, and to accelerate development of
passive coherent location (PCL).

Civil reserve space service

The budget request contained $18.6 million in PE 35110F for
satellite control network (space), but included no funding for
civil reserve space service.
The committee recommends $21.6 million in PE 35110F, an
increase of $3.0 million for civil reserve space service.

Common aero vehicle

The budget request contained $12.2 million in PE 64856F for
Common Aero Vehicle (CAV).
The committee notes that the CAV program is a joint Defense
Advanced Research Projects Agency-Air Force program to develop
an on demand conventional prompt global strike capability. The
committee is aware that CAV could appear to be a non-
conventional launch and directs the Secretary of Defense to
develop and provide a concept of operations for CAV that
precludes any misperception of CAV launch intent to the
congressional defense committees, prior to conducting any
developmental launches of CAV and no later than March 31, 2004.
The committee recommends $24.2 million in PE 64856F, an
increase of $12.0 million for CAV.

Distributed common ground system

The budget request contained a total of $65.0 million in PE
35208F and other program elements for distributed common ground
system (DCGS).
The committee is aware that the Navy, Air Force and Army
had embarked on a collaborative effort to develop and acquire a
joint, interoperable DCGS by providing requirements to the Air
Force for incorporation into its DCGS Block 10.2. The committee
believes that though service applications and subsystems may
vary as a consequence of differing missions and employment
concepts, a joint architectural framework and common data
management system is necessary to ensure a transparent exchange
of information and to achieve service interoperability.
The committee applauds this unified approach, but is
concerned that the Navy has recently withdrawn from this
initiative. The committee believes that it is imperative that
the services act together in their approach to DCGS, and that
separate service standards are inherently wrong.
Therefore, the committee approves the request, but directs
the Secretary of Defense to stipulate a single architectural
standard for the DCGS program that meets the ASD (C3I)
requirements and maintains a common, open, non-proprietary
standard. The committee directs the Secretary of Defense to
report the status of establishing a single DCGS standard to the
congressional defense and intelligence committees no later than
January 31, 2004.

Distributed mission interoperability toolkit (DMIT) program

The budget request contained $239,000 in PE 64740F for
development of integrated command and control applications, but
included no funds for the DMIT program.
The DMIT is a suite of software tools that enables
interoperability among and between air mission command,
control, communication, computer and intelligence (C4I) systems
and mission simulator models. The committee understands that
DMIT program leverages best practices from the commercial
sector including the use of open architectures, existing and
emerging web standards, and state-of-the-art technologies to
provide a more efficient translation of air mission tasks from
C4I systems into a format compatible with mission simulator
formats; and notes that the Congress appropriated an increase
of $4.0 million in fiscal year 2003 for this purpose.
The committee recommends $5.2 million in PE 64740F, an
increase of $5.0 million for continuation of the DMIT program.

Enhanced techniques for detection of explosives

The budget request contained $24.5 million in PE 63287F for
physical security equipment advanced component development and
prototyping.
Detection of explosives is a major concern in today's post
cold war environment, both from the standpoint of the war on
terrorism and with respect to the detection of land mines and
unexploded ordnance on the world's battlefields. The committee
believes that a multi-disciplinary approach to research and
development in advanced technologies for the detection
ofexplosives, improvised explosive devices, landmines, and unexploded
ordnance could result in the development of new and novel approaches
for using existing explosive detection technologies and to the
development of new, more effective technologies.
The committee recommends $27.5 million in PE 63287F, an
increase of $3.0 million for enhanced techniques for detection
of explosives.

F-15 C/D radar block upgrade

The budget request contained $112.1 million in PE 27134F
for development of new capabilities for the F-15 series
aircraft, but included no funds for the F-15C/D radar block
upgrade program.
The F-15C/D radar block upgrade program, which began in
fiscal year 2002, develops the next-generation active
electronically scanned array (AESA) radar for F-15C/D aircraft.
The committee understands that the AESA radar will provide
improved F-15C/D radar performance, including a new capability
to detect and engage cruise missiles.
The committee recommends $128.6 million in PE 27134F, an
increase of $16.5 million for continuation of pre-production
development on the F-15C/D radar block upgrade program.

F-16 squadrons

The budget request contained $87.5 million in PE 27133F for
development of new capabilities for the F-16 series aircraft,
but included no funds for the AN/APG-68(V)9 radar upgrade
program or for F-16 block 40/42 AN/APX-113 integration.
The AN/APG-68(V)9 radar upgrade program will provide
improved performance and savings compared to the F-16's
existing AN/APG-68(V)5 radar. The committee understands that
the AN/APG-68(V)9's increased reliability features combined
with newer, more available digital parts will significantly
decrease annual operations and support costs. Additionally, the
committee understands that the AN/APG-68(V)9 will provide the
F-16 with high-resolution synthetic aperture radar maps that
will allow the employment of precision-guided munitions in all-
weather conditions, and that this upgrade is strongly supported
by the Air Force's Air Combat Command. Accordingly, the
committee recommends an increase of $10.0 million for the AN/
APG-68(V)9 radar upgrade program.
The AN/APX-113 is an advanced electronic identification
system used at long ranges to determine whether aircraft are
friendly or enemy. If the data received from the AN/APX-113
notifies the pilot that the aircraft is enemy, then the pilot
can engage the enemy aircraft with beyond-visual-range anti-
aircraft missiles. The committee notes that most F-16 block 40/
42 aircraft belong to the Air National Guard (ANG) and
participate in homeland defense combat air patrol (CAP)
missions, and that Congress appropriated $2.0 million in fiscal
year to begin F-16 block 40/42 AN/APX-113 integration to
improve the ANG's capabilities to accomplish the CAP mission.
The committee understands that an additional $10.0 million will
complete F-16 block 40/42 AN/APX-113 integration in fiscal year
2004, and recommends that amount for this purpose.
In total, the committee recommends $107.5 million in PE
27133F, an increase of $20.0 million.

F-16 theater airborne reconnaissance system (TARS)

The budget request contained $77.8 million in PE 35206F for
airborne reconnaissance systems, but included no funds for the
TARS pre-planned product improvement (P3I) program.
The two ANG F-16 units equipped with TARS pods provide a
responsive under-the-weather reconnaissance capability to
support intelligence and targeting requirements of military
users. The TARS P3I program will develop an upgrade to the TARS
pods providing a data link system upgrade that will connect
with the joint force air component commander's command and
control ( JFACC C2) structure. The TARS P3I will also develop a
synthetic aperture radar to enable night and all-weather
reconnaissance capability.
The committee believes that night and all-weather
reconnaissance operations and the ability to data link to the
JFACC C2 structure are essential to identify and engage time-
critical targets.
The committee recommends an increase of $6.8 in PE 35206F
for the TARS P3I.

Flexible display and integrated communications devices

The budget request included $33.8 million in project 7184
in PE 62202F for crew system interface and biodynamics.
Integration of ground targeting cueing through data link to
combat aircraft to reduce the ``target-to-shooter'' time-line
is critical to improving close air support, target
identification, and designation and to reduce ``blue-on-blue''
casualties. Flexible displays and integrated communications
devices are key to realizing this capability.
The committee authorizes an increase of $2.0 million in PE
62202F for integration of leading-edge global positioning,
communications components, voice messaging, displays, and
related technologies to provide flexible display and integrated
communications devices.

Force protection and survivability for deployed forces

The budget request included $838,000 in PE 62102F for
development of cost effective technologies for deployed forces.
The important and growing use of composite materials,
especially graphite composites in aircraft, motor vehicles,
mass transit and marine applications creates new and often
unrecognized hazards for firefighters and the general public.
Firefighting research has not placed sufficient emphasis on
this issue.
The committee recommends an additional $2.0 million in PE
62102F for the Composite Fire Safety Initiative Consortium to
develop a better understanding of composite combustion
processes and provide civilian and military firefighters with
the technologies needed to assure rapid and safe extinguishment
of composite fire materials.

Fusion SIGINT enhancements for network-centric intelligence,
surveillance and reconnaissance

The budget request contained $31.5 million in PE 63789F for
Command, Control, Communication, and Intelligence (C3I)
advanced development but included no funds for fusion signals
intelligence (SIGINT) enhancements for network-centric
intelligence, surveillance and reconnaissance (ISR).
The committee is aware of the requirement for automated,
intelligent sensor data and intelligence information fusion to
implement network centric ISR.
The committee recommends an increase of $2.0 million in PE
63789F for fusion SIGINT enhancements for network-centric ISR.

Global Hawk advanced imagery architecture

The budget request contained $398.6 million in PE 35205F
for endurance unmanned aerial vehicles, and included $357.6
million for Global Hawk, but included no funds for Global Hawk
advanced imagery architecture.
The committee is aware that Global Hawk is a significant
user of communication bandwidth. The committee notes that
Global Hawk provides both synthetic aperture radar and electro-
optical infrared data and that the Global Hawk advanced imagery
architecture is to enable effective bandwidth utilization to
support multiplatform, collaborative intelligence, surveillance
and reconnaissance operations.
The committee recommends $403.2 million in PE 35205F, an
increase of $4.6 million to develop, integrate, test and fly
the advanced imagery architecture on Global Hawk.

Hardening technologies for satellite protection

The budget request contained $83.2 million in PE 62601F for
space technologies, but included no funds for hardening
technologies for satellite protection (HTSP).
The committee is aware that disruption or denial of
Department of Defense (DOD) data over unprotected space systems
could severely impact DOD operations. The committee believes
that protection parameters need to be defined and low cost
satellite hardening technology solutions need to be developed
and implemented for next generation satellites. The committee
is aware that the objectives of HTSP are to ensure that all
satellites carrying DOD data can operate in expected threat
environments.
The committee recommends $87.2 million in PE 62601F, an
increase of $4.0 million for HTSP.

High Accuracy network determination system

The budget request contained $6.3 million in PE 63444F for
the Maui space surveillance system, but included no funds for
the high accuracy network determination system (HANDS).
The committee is aware that HANDS offers the potential to
increase the accuracy of orbit determinations of space objects
using relatively low-cost optical sensing systems.
The committee recommends $16.3 million in PE 63444F, an
increase of $10.0 million for HANDS.

Hybrid bearings

The budget request included $10.0 million in PE 63112F for
materials transition within the advanced materials for weapons
systems program.
The committee is aware of hybrid metal and composite
bearing technology that may provide for aerospace applications
for significantly increased turbine engine durability, wear
resistance, and fracture toughness at high speeds and
temperatures.
The committee recommends an increase of $3.0 million in PE
63112F for hybrid bearings.

Integrated broadcast service

The budget request contained $8.5 million in PE 63850F for
the integrated broadcast service (IBS).
The committee has been supportive of the IBS program since
its inception, and notes the significant progress made in the
spiral-development of the IBS information management element
(IME). The Air Force Test and Evaluation Center found the IME
to be potentially operationally effective and suitable for
network dissemination of time-critical threat warnings,
supporting the Department of Defense network-centric warfare
objective.
The committee supports regional deployments of the IME's to
combatant commands starting in fiscal year 2004 and recommends
the budget request for IBS.

Integrated High Payoff Rocket Propulsion Technology (IHPRPT) program

The budget request included $14.3 million in PE 62203F for
the Air Force for the Integrated High Payoff Rocket Propulsion
Technology (IHPRPT) program. While the Navy has previously
funded the IHPRPT program as part of a coordinated technology
program within the department, NASA, and industry, no funds
were included in the fiscal year 2004 request.
The committee believes that critical propellant, nozzle,
case, and thrust vector technologies require continued emphasis
to provide increased capability to the warfighter and
recommends an additional $3.0 million each in PE 62114N and PE
63114N and an additional $4.0 million in PE 62203F for IHPRPT.

Link 16 weapon data terminal

The committee notes that precision guided munitions (PGMs)
have revolutionized the strike capabilities of weapon delivery
platforms, and that today's global positioning satellite and
inertial navigation system (GPS/INS)-guided weapons, such as
the joint stand-off weapon (JSOW) and joint direct attack
munition (JDAM), can very accurately engage fixed targets.
However, the committee also notes that the JSOW and JDAM do not
have the capability to be retargeted inflight or to engage
mobile targets, and understands that the Defense Advanced
Research Projects Agency has recently completed a successful
test integrating a Link-16 weapon data terminal to a GPS/INS-
guided PGM demonstrating that a PGM could receive target
position updates after launch over the Link-16 network to
engage a mobile target.
The committee believes that the capability to couple the
PGM with the Link 16 network to engage mobile targets is a
transformational capability, and strongly urges the Department
of Defense to continue this development.

Low emission/efficient hybrid aviation refueling truck propulsion

The budget request contained $54.0 million in PE 78611F for
support systems development, but included no funds for low
emission/efficient hybrid fuel truck propulsion.
The committee is aware that existing Air Force aviation
refueling trucks operate over short distances in a manner that
causes high fuel use, high emissions and decreased engine life.
The committee notes that a heavy-duty hybrid drive technology
has been developed for aviation refueling trucks.
The committee recommends $59.0 million, an increase of $5.0
million in PE 78611F for the continued refinement in simulation
and modeling of low emission/efficient hybrid aviation
refueling truck propulsion.

Metals affordability

The budget request included $1.2 million in PE 62102F for
the metals affordability initiative.
The committee is aware that a government-industry
collaboration provides significant improvements in the
manufacturing of specialty metals for aerospace applications.
The committee fully supports the metals affordability
initiative and recommends $15.2 million, an increase of $14
million, including $7.0 million each in program elements 63112F
and 78011F. An additional $4.0 million is authorized in PE
78011S for continued development of high quality titanium
reduction processes, such as the Armstrong process, to produce
titanium that will support modern fabrication techniques.

Nanomaterials

The budget request included $38.9 million in PE 62102F for
materials applied research for structures, propulsion, and
subsystems.
Nanostructured materials are superior to conventional
materials and allow for inexpensive manufacturing for uses in
sensors, stealth and microelectronics. The committee recommends
an increase of $5.5 million in PE 62102F for nanomaterials
research.

National operational signature production and research capability

The budget request contained $36.6 million in PE 63203F for
advanced aerospace sensors, but included no funds for the
national operational signature production and research
capability.
The committee supports this effort to enhance
identification of friend, foe, and neutral parties.
The committee recommends $40.1 million in PE 63203F, an
increase of $3.5 million for the national operational signature
production and research capability.

NAVSTAR Global positioning system III

The budget request contained no funds for NAVSTAR global
positioning system (GPS) III in PE 63421F.
The committee notes that GPS has demonstrated its increased
importance to modern warfare during the campaign in Iraq. The
committee is also aware that GPS has also become essential for
civilian uses. The committee is informed that a new GPS III
will provide significantly better anti-jam capability for the
military, improved civil capabilities, and offer reduced
lifecycle costs. The committee strongly supports fielding an
improved GPS.
The committee recommends $45.0 million in PE 63421F, an
increase of $45.0 million, to accelerate start of GPS III
development and launch.

Next generation bomber program

The budget request contained no funds for a next generation
bomber program.
The committee understands that the Air Force future years
defense program (FYDP) includes science and technology funding
for basic and applied bomber research in fiscal year 2006 to
identify investments required to initiate a next generation
bomber development program in the 2012 to 2015 timeframe, and
notes that prior to 2012, the Air Force plans to upgrade its
current bomber force to provide improved capabilities. The
committee also notes that most of the Air Force's bomber fleet
consists of 94 B-52 aircraft which are approximately 41 years
old, and believes that beginning a bomber development program
in fiscal year 2012, when the B-52 fleet is approximately fifty
years old, would be too late to assure a sufficient bomber
force structure to meet future requirements for long-range
strike aircraft in light of the prospect that future basing for
shorter range aircraft may not be assured.
Consequently, the committee recommends $100.0 million in a
new program element, PE 63XXXF, to begin a next generation
bomber program, and expects that the Department of the Air
Force will include funding in its FYDP to develop and procure a
next generation bomber well prior to the 2012 to 2015
timeframe.

Nuclear detonation detection system

The budget request contained $35.8 million in PE 35913F for
the nuclear detonation detection (NUDET) system (space)
integrated correlation and display system (ICADS).
The committee notes that responsibility for the development
of the sensor, analysis payload and ground segments integration
to the NDS payload is funded elsewhere, and that the Air Force
contribution is limited to the ICADS ground segment. The
committee believes that the increase above the original cost
estimate is unjustified.
The committee supports the requirement for development and
production of the ground terminal, and believes that the
development can be completed within the original cost estimate.
The committee recommends $26.6 million in PE 35913F, a
decrease of $9.2 million for Air Force ICADS ground segment
development.

Operationally responsive launch

The budget request contained $24.4 million in PE 64855F for
an operationally responsive launch system.
The committee strongly supports operationally responsive
launch and its objective of developing an affordable simple,
reliable time responsive launch system. The committee is aware
that the Air Force mission needs statement for operationally
responsive spacelift was issued in December 2001.
The committee recommends $36.4 million in PE 64855F, an
increase of $12.0 million for an operationally responsive
launch to expedite development of this important capability to
meet the defined mission need.

Precision location and identification (PLAID) technology program

The budget request contained $74.0 million in PE 64270F for
electronic warfare (EW) development, but included no funds for
the PLAID technology program.
The PLAID technology program will improve aircrew
situational awareness by providing accurate ground emitter
location and unambiguous identification for existing radar
warningreceivers. The committee understands that additional
funds are required in fiscal year 2004 to mature the PLAID hardware and
software to a production-ready state, and that, upon completion of the
PLAID technology program, the PLAID upgrade may be installed on more
that 5,190 Air Force aircraft. The committee notes that the Air Force
Chief of Staff has included the PLAID technology program among his
unfunded priorities for fiscal year 2004.
Consequently, the committee recommends $86.6 million in PE
64270F, an increase of $12.6 million for the PLAID technology
program.

Space based radar

The budget request contained $274.1 million in PE 63858F
for space based radar.
The committee is aware that the space based radar (SBR)
radar system will provide persistent, near real-time high
resolution surveillance deep into enemy territory and denied
areas critical to the military and the intelligence community.
The committee is aware that situational awareness will be
dramatically improved by integrating the SBR output with
products from other military sensors such as Joint STARS
surveillance aircraft and unmanned aerial vehicles.
The committee recommends the budget request.

Defense-Wide Research, Development, Test, & Evaluation

Overview

The budget request contained $17,974.3 million for Defense-
wide research, development, test, and evaluation (RDT&E).
The committee recommends $18,174.4 million, an increase of
$200.1 million to the budget request.

Items of Special Interest

Advanced Micro/Nano-Electromechanical Systems Technology

The budget request contained $151.0 million in PE 61101E
for defense research sciences, including $18.7 million for
basic research in electronic sciences.
The committee notes the phenomenal progress in
microelectronic innovation that has characterized the last
decade in the exploration and demonstration of micro
electromechanical machines, electronic and optoelectronic
devices, circuits and processing concepts. Research areas
include new electronic and optoelectronic devices and circuit
concepts, operation of devices at higher frequency and lower
power, development of innovative optical and electronic
technologies for interconnecting modules in high performance
systems, electronically controlled micro-instruments that offer
the possibility of nanometer-scale probing, sensing and
manipulation for ultra-high density information storage ``on-a-
chip,'' for nanometer-scale patterning, and for molecular level
analysis and synthesis.
The committee recommends an increase of $5.0 million in PE
61101E for basic research in advanced micro- and non-
electromechanical systems technology.

Advanced sensor applications program

The budget request contained $16.7 million in PE 63714D8Z
for the advanced sensor applications program (ASAP). The
committee is concerned that promising projects executed by the
Navy's PMA264 program office are appreciably under funded for
special programs under development.
Therefore, the committee recommends an increase of $10.0
million in PE 63714D8Z for ASAP.
Additional details are contained in the classified annex to
this report.

Advanced solid-state dye laser

The budget request contained $16.7 million in PE 63714D8Z
for the advanced sensor applications program.
The committee recommends an increase of $6.5 million to
continue development and demonstration of advanced solid-state
dye laser technology.

Advanced target identification capability for AC-130U gunships

The budget request contained $256.0 million for special
operations tactical systems development, but included no
funding for the advanced target identification capability for
AC-130U gunships. This enhancement to the gunship radar will
enable the crew to make accurate and near instantaneous
identification of friendly and enemy vehicles on the
battlefield. To complete the project, funding is needed to
collect data during flight tests on military ranges, develop
the recognition algorithms, and integrate the algorithms into
the gunship radar system.
The committee recommends $262.5 million in PE 1160404BB, an
increase of $6.5 million.

Air to air technology

The budget request included a new program, air to air
technology, in PE 63943D8Z. The purposes for which this
authorization is requested is redundant to the over $68.0
million authorization requested for foreign material
acquisition and exploitation and foreign comparative testing.
The committee recommends no funding for this program, a
reduction of $2.0 million to the budget request.

Anti-radiation drug development and trials program

The budget request contained $5.0 million in PE 63002D8Z
for medical advanced technology development.
The medical advanced technology development program
supports applied research by the Armed Forces Radiobiology
Research Institute (AFRRI) for advanced development of
biomedical strategies to prevent, treat, and assess health
consequences from exposure to ionizing radiation. The program
addresses critical gaps in the ability to effectively prevent,
assess, and treat the spectrum of injuries induced by ionizing
radiation and capitalizes on discoveries in basic research and
from academia and industry to identify, develop, and advance
medical countermeasures into and through pre-clinical studies
toward newly licensed products. Additionally, AFRRI supports
accredited defense-wide training programs for medical personnel
and provides advice and guidance to the Joint Staff and
combatant commanders for operational contingencies. Because
national laboratories operated by the Department of Energy no
longer support advanced research relevant to military medical
radiobiology, AFRRI is currently the only national resource
carrying out this mission.
The committee notes progress in the development of an
advanced radioprotectant (``anti-radiation'') drug (5-
androstenediol) that shows great promise and the initiation in
fiscal year 2003 of preclinical safety and toxicity assessment
and small and large animal trials. Fiscal year 2004 plans
include extension of the work to preclinical trials in nonhuman
primates and submission of investigational new drug
applications to the Food and Drug Administration.
The committee recommends $12.1 million in PE 63002D8Z, an
increase of $7.1 million to continue the program for
development and trials of radioprotectant drugs by the Armed
Forces Radiobiology Research Institute.
The committee also understands that the lack of operations
and maintenance funding for the AFRRI physical plant (a 108,000
square foot DOD research facility) and indirect support
activities critically reduces the amount of the research,
development, test and evaluation funds available for direct
research activities. The committee directs the Director of
Defense Research and Engineering to address this shortcoming in
the execution of the fiscal year 2004 budget and in future
budget requests.

Asymmetric protocols for biological defense

The budget request contained $137.3 million in PE 62383E
for biological warfare defense applied research.
A military or terrorist scenario in which aerosolized
biological agents such as anthrax spores or smallpox virus are
used would almost certainly result in mass casualties.
Weaponized forms of the agents offer significant challenges to
medical treatment that are not found in naturally occurring
forms. While antibiotics are the only approved method for
treating anthrax, the recent bioterrorist anthrax attack in
Washington showed that antibiotics are unfortunately not
adequate to provide full treatment against inhalation anthrax.
The committee also notes that there are a number of biological
agents that could, with appropriate development and
weaponization, be used in biological warfare, or in a terrorist
attack and developing specific protection against all possible
biological agents presents a significant challenge. As a
result, the committee believes there is a need for therapeutics
that would provide broad spectrum protection against a range of
possible biological agents and that would also work in concert
with other methods of treatment.
The committee notes research in therapeutics that shows
good results from laboratory testing in mice against pox virus
and against anthrax and appears to have the potential for
providing broad spectrum protection. Other tests have involved
therapeutics that may reinforce the innate immunity of the
host. The committee believes that the results of the research
to date are promising and the research should continue.
Accordingly, the committee recommends an increase of $12.0
million in PE 62383E to continue research in asymmetric
protocols that would provide broad spectrum protection for
biological defense.

Ballistic missile defense

The committee supports the budget request of $9.1 billion
for ballistic missile defense. However, the committee has made
some adjustments within the budget request to transfer funds
from longer-term, less well defined efforts to increase support
for programs with nearer-term benefit to the warfighter.
Technology and advanced concepts
The budget request contained $240.8 million in PE 63175C
for ballistic missile defense (BMD) technology and $151.7
million in new PE 63879C for Advanced Concepts, Evaluations,
and Systems. Taken together, the fiscal year 2004 request for
crosscutting technology and concepts development represents an
increase of $241.4 million over the comparable fiscal year 2004
request.
The committee notes that the budget request is
significantly above the fiscal year 2004 projection in the
fiscal year 2003 budget request, without detailed justification
for the increase. The committee believes that a portion of this
increase should be used to fund nearer term projects.
The committee recommends $185.0 million in PE 63175C for
technology, a decrease of $55.8 million.
Within funds available for BMD technology in PE 63175C, the
committee recommends $5.5 million for silicon carbide wide
band-gap semiconductor development for advanced power
electronics, communications and sensor applications, and $2.0
million for ``silicon brain architecture'' development to
condense circuitry for target signature comparison and
recognition applications.
Terminal defense segment
The budget request contained $810.4 million in PE 63881C
for the ballistic missile defense terminal defense segment; the
committee recommends $1,123.7 million.
The committee recommends an increase of $276.3 million as a
result of transferring the Medium Extended Air Defense System
(MEADS) program from the Army to the Missile Defense Agency.
MEADS is discussed elsewhere in the committee report.
The committee notes that the theater high altitude area
defense (THAAD) program is proceeding at a slower pace than
other elements of the ballistic missile defense system, and
that despite a recent redesign that requires flight testing,
tests are still scheduled at large intervals. The committee is
further aware an opportunity exists to compress the testing
schedule while adding a flight test and reducing program risk.
The committee recommends an increase of $37.0 million for THAAD
to accelerate testing.
The budget request for the terminal defense segment
contained $64.8 million for the Arrow program. The Arrow anti-
tactical ballistic missile defense system has been under
development since 1988 under an agreement between the
governments of the United States and Israel. The committee has
supported this development program, and continues to support
the evolution of the system to counter more challenging threats
under the Arrow System Improvement Program. The committee has
also supported procurement of three Arrow batteries, funding
for the last of which was completed in fiscal year 2002. Most
recently, Congress has provided in fiscal year 2003 funds for
co-production of Arrow in the United States. All told, more
than $2.0 billion has been invested in Arrow, arguably most by
the United States either through direct appropriations or
military assistance grants to the government of Israel. The
committee has reservations about recent interest shown by
Israel in the sale of Arrow to third parties. In the more
general context of international cooperative missile defense
programs, the committee has concerns regarding how such sales
comport with the obligations of the United States under
international treaties and agreements, the possibility of
technology transfers that might assist foreign offensive
missile programs, and the rights of the United States to share
in revenue generated through third party sales. The committee
urges the administration to give serious consideration to
policy development in this area prior to approving third party
sales of missile defense technologies co-developed by the
United States.
Midcourse defense segment
The budget request contained $3,613.3 million in PE 63882C
for the ballistic missile defense (BMD) midcourse defense
segment. This PE provides funding for key elements of the
President's program to begin fielding an initial defensive
operational capability in fiscal year 2004, including the block
2004 ground-based midcourse defense test bed and the block 2004
Aegis ballistic missile defense element. The committee supports
the intent of the Department of Defense to make use of the
inherent capability of the BMD system test bed to provide a
limited defense, but urges the Department to focus this asset
on the developmental and operational testing that will lead to
effective defenses over the long term.
The committee is aware that a need exists for additional
funding for Aegis ballistic missile defense radar improvements
such as an additional receive antenna to enable two-way
communications with in-flight missiles and to allow for off-
board cueing. This capability is now being tested using a
partial installation of the S-band phased array antenna system
(SPAAS) on USS Lake Erie, but a complete installation is not
funded.
The committee also notes that the sea-based X-band radar
(SBX) will enter testing with a minimal number of transmit/
receive modules. In order to promote more realistic testing,
the committee recommends funding for additional transmit/
receive modules and software development.
The committee recommends $3,643.2 million in PE 63882C, an
increase of $7.0 million for Aegis to complete the four-panel
SPAAS array and four-corner distributed controller installation
on USS Lake Erie, and an increase of $22.9 million for ground
based missile defense SBX.
The Aegis BMD program is upgrading the Aegis SPY-1 radar
system with a common signal processor to track both air and
ballistic missile threats. The committee recommends, from
within funds available for the midcourse defense segment, $4.8
million for development of a common radio frequency scene
generation capability to support the common signal processor
program.
System interceptor
The budget request contained $301.1 million in PE 63886C
for system interceptor.
The committee notes that the budget request includes a new
start program, the ballistic missile defense (BMD) system
interceptor, intended to develop a new family of ground-based,
sea-based and space-based interceptors. The committee notes
that testing and development of the first generation of
defensive missiles has barely begun, and observes that the
requested amount is quite substantial for a program that has
not yet gone through concept definition.
The committee recommends $151.1 million in PE 63886C for
concept definition and technology development, a decrease of
$150.0 million.
Systems core segment
The budget request contained $484.0 million for ballistic
missile defense system core activities in PE 63890C.
The committee notes that funding for the national team is
not detailed in a way that allows an understanding of what
projects the national team works on, why its funding
requirement has grown, or offers ways to measure performance.
Therefore, the committee believes that funding for the national
team should be held to the fiscal year 2003 level.
The committee recommends $439.0 million in PE 63890C for
systems core, a decrease of $45.0 million.
From within funds available for command and control, battle
management and communications, the committee recommends $9.5
million for wide bandwidth technology for development and
demonstration of secure, high bandwidth satellite
communications in support of the Pacific ballistic missile
defense test bed.
The committee notes the advantages of canisterized launch
systems to ground maneuver forces and recommends, from within
funds available for producibility and manufacturing technology,
$5.0 million for domestic industrial base development for the
manufacture of modern composite missile canisters.
Products
The budget request contained $343.6 million in PE 63889C
for products.
The committee notes that proposed funding for the joint
national integration center and missile defense national team
has increased significantly without clear justification. The
committee believes that a portion of the additional funding can
be used more effectively for other projects.
The committee recommends $312.5 million in PE 63889C, a
decrease of $31.1 million.

Ballistic missile defense testing

On December 17, 2002, President Bush directed the Secretary
of Defense to proceed with fielding an initial set of missile
defense capabilities. These capabilities included using the
testbed for the Ballistic Missile Defense System (BMDS) in an
operational role, should events warrant, including up to 20
ground-based and up to 20 sea-based defensive missiles.
The committee understands the Department's intent to make
use of the inherent defensive capability of the BMDS testbed.
The committee is concerned, however, about the use of test
assets in an operational role. The committee appreciates the
different objectives of developmental and operational testing,
and notes that other Department programs have recently
experienced significant setbacks by conducting such testing
concurrently.
The committee strongly urges the Department to ensure that
assets used in an operational defense role undergo the full and
rigorous testing required by law, prior to being placed in an
operational status.

Ballistic missile defense reporting requirements

The language in the committee report on H.R. 4546 (H. Rept.
107-436) urged the Department of Defense to include budgetary
and developmental baseline reports for the various block
components of the Ballistic Missile Defense System (BMDS). This
language became the basis for Section 221 of the Bob Stump
National Defense Authorization Act for Fiscal Year 2003,
(Public Law 107-314), requiring performance goals and
development baselines for each block component of the BMDS and
budget justification materials that relate to these goals and
baselines.
The committee believes that the Department has made a good-
faith effort to comply with Section 221. The committee is
encouraged by the sharp improvement in the budget justification
materials, and believes that the fiscal year 2004 submission
contains much more information on BMDS performance goals and
development baselines than was provided in the previous two
budget submissions. While the committee commends the Department
for the improvement in the justification materials, it notes
several shortcomings that should be addressed in future years.
The most serious shortcoming was the lack of system
performance goals in the classified ``Systems Capability
Statement'' for several block 2004 BMD elements, notably
Ground-Based Midcourse (GMD) and Aegis Ballistic Missile
Defense (Aegis BMD). While some specific subcomponent
performance goals were provided, the overall performance goals
for GMD and Aegis BMD were difficult to understand. The 2004
block performance goals for the Airborne Laser (ABL) in the
``Systems Capability Statement'' were much closer to what the
committee is seeking, as were the performance goals in the
``BMDS Statement of Goals'' submitted to the committee with the
Missile Defense Agency's January 27, 2003 briefing to the Joint
Requirements Oversight Council. The committee urges the Missile
Defense Agency to use these examples as a model for specifying
the system performance goals for all other program blocks under
development.
In addition, neither the development baselines in the
classified ``Systems Capability Statement'' nor the budget
justification materials adequately summarized the testing
objectives for the systems under development.
The committee also notes that the budget proposals and
justification materials for activities of the missile defense
national team (MDNT) contained much less detail than other
activities within the MDA, and hopes that future budgets will
offer a better understanding of how MDNT resources are
expended.
The committee is generally pleased with the compliance with
Section 221, but urges the Department to pay special attention
to these areas of concern.

Blast mitigation and analysis technology

The budget request contained $60.5 million in PE 63122D8Z
for the combating terrorism technology support program.
The committee notes the continuing threat posed to military
and civilian personnel, buildings, and other infrastructure by
the terrorist use of conventional and improvised explosives.
Congress provided an additional $3.5 million in fiscal year
2003 for blast mitigation testing, including the development of
new materials for protecting buildings and other infrastructure
and new testing techniques and technologies for the
qualification of new structural designs.
The committee recommends an increase of $5.0 million in PE
63122D8Z to continue the program for development and evaluation
of blast mitigation and analysis technology.

Chemical/biological defense research, development, test and evaluation
program

The budget request contained a total of $599.0 million for
chemical/biological defense research, development, test, and
evaluation, including $35.8 million in PE 61384BP for basic
research, $106.5 million in PE 62384BP for applied research,
$103.7 million in PE 63384BP for advanced technology
development, $162.1 million in PE 63884BP for demonstration/
validation, $148.1 million for engineering and manufacturing
development, and $39.3 million in PE 65384BP for RDT&E
management support. The budget request also contained $137.3
million in PE 62383E for the Defense Advanced Research Projects
Agency (DARPA) biological defense research program.
The committee notes that the changing chemical and
biological threat, both to U.S. armed forces on the world's
battlefields and to U.S. homeland security, places more
emphasis on the need for responsive technology options that
could address the threat; the ability to quickly assess,
develop, and demonstrate the technology; and then, the ability
to rapidly insert or deploy the technology in fielded systems.
The committee also notes the wealth of new concepts and
technologies of varying levels of maturity that emerge annually
from the nation's science and technology base and the
recommendations that the committee receives for exploitation of
particular technologies to improve the capabilities of U.S.
forces or to address homeland security issue issues. The
committee recommends the establishment in the chemical
biological defense program of two initiatives, one in the
applied research category and one in the advanced technology
development category, that would provide the opportunity for
emerging technologies and concepts to compete for funding on
the basis of technical merit and on the contribution that the
technology could, if implemented, make to the chemical
biological defense capabilities of the armed forces and to
homeland defense. During its review of the fiscal year 2004
budget request the committee has received proposals for
establishment of a number of projects that the committee
recommends be considered for possible funding under the
appropriate initiative.
Chemical biological defense applied research initiative
The committee recommends that the projects and technologies
to be considered for funding under the applied research
initiative include, but are not limited to the following:
(1) Air contaminant monitoring technology
(2) Automated liquid phase detectors for toxic
compounds
(3) Biological detection system technology
(4) Chemical biological regenerative air filters
(5) Chemical biological protective garment technology
(6) Engineering pathogen identification and
countermeasures
(7) Multivalent Ebola, Marburg fiolovirus vaccine
technology
(8) Rapid anti-body based biological countermeasures
(9) Rapid decontamination system for nerve agents
(10) Rapid vaccine development technology
The committee recommends $131.5 million in PE 62384BP, an
increase of $25.0 million for the chemical biological defense
applied research initiative.
Chemical biological defense advanced technology development
initiative
The committee recommends that the projects and technologies
to be considered for funding under the advanced technology
development initiative include, but not be limited the
following:
(1) Biological defense gene knockout technology
(2) Decontamination using atmospheric plasmas
(3) Hand-held biological agent detectors
(4) High intensity pulsed radiation for defeat of
chemical and biological agents
(5) Immunochemical biological/chemical threat agent
detectors
(6) Non-toxic, non-corrosive chemical biological
decontamination
(7) Polymer based biological micro-lectromechanical
machines
(8) Transportable collective protection shelters
(9) Low cost biological particle sensors
The committee recommends $128.7 million in PE 63384BP, an
increase of $25.0 million for the chemical biological defense
applied research initiative.

Chemical biological electrostatic decontamination system

The budget request contained $60.5 million in PE 63122D8Z
for the Combating Terrorism Technology Support program. No
funds were included to continue the development and
demonstration of the chemical biological electrostatic
decontamination system.
The committee notes that the electrostatic decontamination
system uses a photosensitive, electrostatically charged mist,
which when sprayed onto a contaminated surface and illuminated
with ultraviolet light destroys the chemical or biological
agents that are present. Successful development and
demonstration of the system could result in a field expedient
decontamination capability that would be less dependent on
water and would not require the deployment of post-
decontamination waste disposal equipment. Congress added $6.3
million in fiscal year 2003 that is being used to complete
laboratory and field tests of the technology. The committee
notes the progress made to date in the program and recommends
continued development and evaluation of the technology for
potential transition to a fielded system.
The committee recommends an increase of $4.8 million in PE
63122D8Z to continue development and evaluation of the
electrostatic decontamination system.

Cobra blue force tracking

The budget request contained $256.0 million in PE 116404BB
for special operations advanced technology development, but
included no funding for Cobra blue force tracking.
The committee notes that Special Operations Command (SOCOM)
has acquired several thousand blue force tracking transmitters
that enable real-time tracking of friendly forces throughout
the world. The committee is aware that a second generation
prototype mini-blue force tracking receiver is being developed
to reduce size and weight by half and improve performance.
The committee supports improved blue force tracking and
recommends an increase of $3.5 million for the mini-blue force
tracking receiver.

Connectory for rapid identification of technology sources

The budget request contained $22.4 million for generic
logistics research and development demonstrations, but included
no funding for the connectory of rapid identification of
technology sources for the Department of Defense. The
connectory pilot would provide the Department with one stop
access to the industrial technology base, permitting rapid
identification of promising sources of new, creative technical
solutions.
The committee recommends $23.4 million in PE 63712S, an
increase of $1.0 million. Department of Defense information
technology research and development.

Department of Defense information technology research and development

The committee is highly concerned about how defense-wide
information technology (IT) systems are managed. In particular,
two IT systems are of the committee's concern. The Defense
Message System is severely behind schedule, has not met user
requirements, and has just projected an additional amount of
$5.0 billion over the original cost of $9.0 billion. The other
is a command and control system that should already be
accessible by all of the military services, but is not, and
therefore, the Department of Defense is requesting funding to
accomplish that objective. In light of these IT issues, the
committee recommends a reduction of $81.4 million for these and
other programs.

Defense science and technology funding

The budget request contained $10.2 billion for the
Department of Defense science and technology program, including
all defense-wide and military service funding for basic
research, applied research, and advanced development. The
request included $1.8 billion for the Army, $1.7 billion for
the Navy, $2.2 billion for the Air Force, and $4.5 billion for
Defense Agency science and technology [including $2.9 billion
for the Defense Advanced Research Projects Agency (DARPA)]. The
committee recommends $10.9 billion for the Department of
Defense science and technology program, an increase of $661.9
million to the budget request. The committee's recommendation
includes $2.0 billion for the Army (an increase of $241.5
million), $1.8 billion for the Navy (an increase of $79.4
million), $2.3 billion for the Air Force (anincrease of $114.4
million), and $4.7 billion for Defense Agency science and technology,
an increase of $226.7 million (including $2.9 billion for DARPA, an
increase of $226.7 million).
The committee views defense science and technology
investment as critical to maintaining U.S. military
technological superiority in the face of growing and changing
threats to U.S. national security interests around the world.
The committee notes that the budget request at a level of 2.7
percent of the total DOD budget does not meet the goal of 3
percent established by the 2001 Quadrennial Defense Review.
The committee notes that the military departments are
responsible for approximately 56 percent of the defense science
and technology budget (Army 17 percent, Navy 17 percent, and
Air Force 22 percent) and Defense Agencies account for 44
percent, including 29 percent in DARPA. Defense agencies focus
on science and technology specific to the particular agency or,
in the case of DARPA on national-level problems, operational
dominance, and exploitation of high-risk, high-payoff
technologies. The military departments' science and technology
programs focus on the development and transition of more mature
technologies into future weapons systems that are key to the
ability of the military departments to achieve their
transformation objectives.
Advanced concept technology demonstrations and technology
transition
The committee notes that the Department continues to
explore innovative and transformational concepts associated
with the need to rapidly develop and field new technological
capabilities. Advanced concept technology demonstrations are
low-to-moderate risk capability demonstration and evaluation
programs in which the material developer and a warfighting
sponsor jointly explore applications of the technology and the
military utility of a proposed capability prior to commitment
to a major acquisition program. The committee notes that since
the commencement of the program in 1994, a total of 115
unclassified ACTD's have been initiated; forty-five of these
were completed as of the end of fiscal year 2002, resulting in
120 distinct products. Of this number, eight entered
engineering and manufacturing development; thirty-three
transitioned to acquisition; forty-five have integrated with
current operational software systems, such as the Global
Command and Control System and the Global Combat Support
System; and thirty-six hardware-based solutions have previously
been or currently are operationally deployed.
The committee also notes and commends the manner in which
the Deputy Under Secretary of Defense (Advanced Systems and
Concepts) in coordination with the military services' science
and technology executives have, in addition to the ACTD
program, integrated a number of innovative programs for the
transition of new and innovative technologies across the
product and process life cycle of defense weapon and materiel
systems.
Devolvement
As a part of its realignment of the fiscal year 2004
budget, the Department of Defense devolved responsibility for
fifteen RDT&E programs and one procurement program from the
Office of the Secretary of Defense to the military departments.
Programs totaling $543.0 million were transferred to the
military services. The University Research Initiative (URI) was
split among the services (Army $72.0 million, Navy $71.0
million, and Air Force $105.0 million). The Army received
science and technology programs totaling $115.0 million (URI,
Force Health Protection, Defense Experimental Program to
Stimulate Competitive Research, Historically Black Colleges and
Universities, and Explosive Demilitarization Technology); the
Navy received programs totaling $73.0 million (URI and In-House
Laboratory Independent Research); and the Air Force received
programs totaling $355.3 million (URI, High Energy Laser
Program, and High Performance Computer Modernization). In the
Department's view devolvement will improve efficiency because
it will expedite the flow of funds and improve program
execution. Transferring the programs will also permit the
Office of the Secretary to achieve internal staff and budget
goals. The committee notes, however, that the transfer
artificially inflates the fiscal year 2004 science and
technology budgets of the military departments compared to
fiscal year 2003. The committee plans to monitor closely the
execution of the fiscal year 2003 budget for the devolved
programs by the military departments and the oversight provided
to the devolved programs by the Director, Defense Research and
Engineering.
Navy science and technology program
The budget request provides $1.7 billion for the Navy's
science and technology program, $316.0 million less than last
year's appropriated level. The amount is 1.5 percent of the
total Department of the Navy budget and only half of the
Defense Department's goal that the science and technology
program represents three percent of total obligation authority.
If funding for the Joint Forces Command experimentation program
(which is contained in the Navy's science and technology
account) and for the University Research Initiative
(transferred from the OSD science and technology account in
this year's budget request) is deducted, the Navy's core
science and technology program is reduced to $1.48 billion,
$460.0 million less than last year's appropriated level, 1.3
percent of the total Department of the Navy budget, and the
lowest in total and percentage funding of the military
departments. The budget request represents the second straight
year of a significant reduction in the Navy's science and
technology program. The committee is particularly concerned
about this trend and its impact on the availability of new
technologies that will ensure the superiority of the future
Navy and Marine Corps, and directs the Secretary of the Navy to
give particular attention to Department of Defense science and
technology funding level goals and objectives for the Navy's
science and technology program.
Defense Advanced Research Projects Agency
Although the committee is pleased with the overall progress
in the defense science and technology program, the committee
continues to be disturbed by the continuing growth in the
budget of the Defense Advanced Research Projects Agency in
comparison to the science and technology accounts of the
military departments. Since the beginning of the decade the
DARPA budget has increased over 50 percent ($1.0 billion) to a
total of $2.9 billion in the fiscal year 2004 budget request.
The rate of increase far exceeds the proportionate increase in
the science and technology accounts of the military
departments. The committee's concern is directed not at the
content of the DARPA program, which is at the core of the
technological superiority of U.S. armed forces, but at the
disproportionate growth in the DARPA budget. The imbalance that
growth represents in the distribution of science and technology
funds between the defense-wide science and technology accounts
and those of the military departments will undoubtedly affect
the ability of the military departments to achieve their
transformation goals. To address these concerns the committee
continues to encourage the establishment of memoranda of
agreement and cooperative programs between DARPA and the
military departments in support of service transformation goals

Facial recognition access control technology

The budget request contained $60.5 million in PE 63122D8Z
for the Combating Terrorism Technology Support program. No
funds were requested for the development of facial recognition
technology.
The committee notes the surveillance and force protection
benefits that would result from the ability to identify an
individual in a crowd, who might be a terrorist, by the ability
to automatically recognize that individual by comparison of the
individual's facial features to data contained in a facial
recognition library. The committee notes the progress that has
been made in the development of facial recognition technology,
but also notes that further work is required in the areas of
image quality and automatic recognition performance for the
technology to be truly useful.
The committee recommends an increase of $3.0 million in PE
63122D8Z to continue the program for development of facial
recognition technology.

Integrated nano- and micro-manufacturing technology

The budget request contained $151.0 million in PE 61101E
for Defense Research Sciences.
The committee notes on-going basic research in novel
nanotechnologies that, when combined with innovative
micromanufacturing materials and processes, could result in the
ability to produce microsystems and nanosystems for a broad
range of military and civilian applications.
The committee recommends an increase of $2.0 million in PE
61101E to continue basic research in integrated nano- and
micro-manufacturing technology.

Magnetic Quadrupole Resonance Explosives Detection

The budget request contained $60.5 million in PE 63122D8Z
for the Combating Terrorism Technology Support program.
The committee notes the development, demonstration, and
employment of scanning explosives detection systems that use
nuclear quadrupole resonance technology to detect the presence
of explosives in luggage and mail with a greatly enhanced
detection probability and reduced false alarm rate.
The committee recommends an increase of $2.0 million in PE
63122D8Z to accelerate the development and evaluation of
magnetic quadrupole resonance technology for screening
personnel and luggage for the presence of explosives and to
extend the applications of the technology to the screening of
cargo and vehicles.

Man Portable Air Defense System (MANPADS) Defense Program

The budget request included $25.0 million for the man
portable air defense system defense program in PE 64618D8Z. An
authorization request in fiscal year 2005 is projected at more
than $500 million in research and development and procurement.
No DOD validated scope of work exists for the fiscal year 2004
request and the Department was unable to provide any
substantive basis for the fiscal year 2005 projected request.
The committee recommends an authorization of $3.0 million
for fiscal year 2004, a decrease of $22.0 million.

Medical free electron laser

The budget request contained $9.5 million in PE 62227D8Z
for medical free electron laser applied research.
The committee notes that the medical free electron laser
program seeks to develop advanced, laser-based applications for
military medicine and related materials research. Because free
electron lasers provide unique pulse features and tunable
wavelength characteristics that are unavailable in other laser
devices, their use broadens the experimental options for the
development of new laser-based medical technologies. The
program is a merit-based, peer-reviewed, competitively awarded
research program, the majority of which is focused on
developing advanced procedures for rapid diagnosis and
treatment of battlefield related medical problems.
The committee recommends $19.5 million in PE 62227D8Z for
medical free electron laser applied research, an increase of
$10.0 million.

Multi-wavelength surface scanning biologics sensor

The budget request contained $16.7 million in PE 63714D8Z
for the advanced sensor applications program.
The committee notes on-going research in the use of multi-
wavelength excitation spectral technology for the detection and
identification of biologic agents that are not discernible with
conventional sensors and understands that successful
demonstration of this technology could provide a significant
improvement in the scanning and screening of potentially
contaminated locations. Congress added $1.0 million in fiscal
year 2003 to continue previously funded work on the technology
and support evaluation of a laboratory test bed system with a
wide range of simulate and target pathogens and environmental
backgrounds.
The committee recommends an increase of $2.0 million in PE
63714D8Z for development of a prototype multi-wavelength
surface scanning biologics sensor and evaluate the performance
of the prototype under various background conditions.

National Defense University sponsored research program

The budget request contained $30.2 million in PE 65104D8Z
for Office of the Secretary of Defense (OSD) technical studies,
support, and analysis.
The committee notes that the National Defense University
(NDU), supported by funding provided by the Director of Defense
Research and Engineering, has established a pilot research and
analysis program focused on defense policy issues that have a
significant technology component. The objective of this program
is to examine the links between technology and national
security policy by supporting research at civilian institutions
of higher learning and by building relationships between these
institutions and NDU. In fiscal year 2002, Congress funded a
separate, but related pilot program for NDU to develop a pilot
program ``to find practical ways in which the defense
information technology community can gain a mutual
understanding of defense needs and industry capabilities and
identify opportunities to integrate information technology
innovations into the U.S. military strategy. The results of
these programs providesnational security policy decision makers
with analyses necessary to make informed decisions on policy and the
implications of technology on national security. The committee notes
with pleasure the results of the programs to date.
The committee recommends $32.2 million in PE 65104D8Z, an
increase of $2.0 million to continue National Defense
University sponsored research and related programs. The
committee encourages the Director of Defense Research and
Engineering to provide sustained funding for these programs as
an integral part of the OSD technical studies, support, and
analysis program.

Nuclear weapons effects

The budget request contained $183.2 million in PE 62716BR
for applied research in weapon of mass destruction defeat
technology, including $16.6 million for nuclear phenomenology
and nuclear weapons effects.
The committee notes that the budget for nuclear weapons
effects applied research has declined dramatically since the
early 1990's and the decline in the budget has been accompanied
by a decline in the capability for and expertise in analysis of
nuclear weapons effects. The current program uses a combination
of computer analysis, simulation and protection technology to
address key issues regarding the survivability of critical U.S.
systems in a potential nuclear environment, including missile
defense interceptors, satellite electronics, and warfighting
command, control, communications and intelligence (C3I) systems
and facilities. The committee believes that the United States'
nuclear weapons effects analysis capability needs to be
revitalized to address emerging 21st Century threats to U.S.
territories and interests, such as the potential for terrorist
use of radiological dispersion devices (so called ``dirty
bombs'') or crude nuclear weapons in an urban environment; the
potential effect of electromagnetic pulse generated by a
nuclear weapon on C3I and other electronic systems; and
analysis of requirements for defense of critical assets. The
committee understands that the Defense Threat Reduction Agency
plan has realigned the limited funding available for nuclear
weapons effects applied research in fiscal year 2003 and in the
fiscal year 2004 budget request and plans to increase funding
in the area in the fiscal year 2005 program objective
memorandum.
The committee recommends $193.2 million in PE 62716BR, an
increase of $10.0 million for nuclear weapons effects applied
research.

``PackBot'' tactical mobile robot

The budget request contained $13.6 million in PE 64709D8Z
for the joint robotics program, but included no funding for the
PackBot, Tactical Mobile Robot. The committee is aware that the
PackBot robot has proven itself in both by use in disaster and
by Army and Special Forces in combat for a variety of purposes.
The committee supports further development to refine the
PackBot and provide additional sensors based on operational
experience, and to rapidly procure 50 PackBots for Army and
SOCOM use.
The committee recommends $26.1 million in PE 64709D8Z, an
increase of $12.5 million for ``PackBot.''

Primate biomedical laboratory test and evaluation capability

The budget request contained $162.1 million in PE 63884BP
for chemical biological defense, including $68.0 million for
medical biological defense and $4.8 million for medical
chemical defense.
The medical biological and medical chemical defense
programs fund advanced component development and prototyping
for vaccines, drugs, and diagnostic medical devices that are
directed against biological warfare agents (including bacteria,
viruses, and toxins of biological origin) and countermeasures
for chemical agents (including life support equipment,
diagnostic equipment, pretreatment and therapeutic drugs, and
individual/casualty decontamination compounds). Fielding of
vaccines, prophylactics and therapeutic drugs requires Food and
Drug Administration approval, supported by multiple long term
studies of investigational new drugs that require testing in
animal models of successively higher orders (culminating in
testing in primates), before testing on human subjects can be
conducted and the drug approved for use.
The committee notes that there currently exists a national
shortage of primate facilities required to develop realistic
animal models for biological threat agents, which have the
biocontainment level required for testing of vaccines, drugs,
and therapeutics against the biological warfare threat that
could be encountered on the battlefield and against the
biological agents that could be used in a biological terrorism
event.
In view of the increased priority given to the Department
of Defense's biological defense program and the time required
to establish such a facility under conventional military
construction procedures, the committee believes that the
Department of Defense should establish in the public sector a
strategically located primate laboratory test and evaluation
facility that could support medical biological countermeasures
research and development and other medical research activities
by the U.S. Army Medical Research Institute for Infectious
Diseases (USAMRID), and also respond to other Federal needs.
The committee anticipates that a cooperative research and
development agreement would be established between the facility
and USAMRID to guide the research activities of the primate
biomedical laboratory. The committee also believes that such a
facility could also support other Department of Defense medical
research missions, in addition to those included in the
chemical and biological defense program.
Accordingly, the committee recommends $177.1 million in PE
63884BP, an increase of $15.0 million to establish a secure,
high-containment primate biomedical laboratory for support of
Department of Defense chemical-biological defense and medical
programs.

Re-defined Assistant Secretary of Defense (Command, Control,
Communications and Intelligence) role

The committee is aware that because the Under Secretary of
Defense (Intelligence) has been established to manage and
oversee intelligence within the Department of Defense, the role
of the Assistant Secretary of Defense (Command, Control,
Communications and Intelligence) (ASD (C3I)) role is being re-
defined.
The committee notes the increasing importance of network
centric warfare, and believes that establishing an overarching
architecture including space-based, airborne and surface
transformational communications is the foundation for future
warfare.
The committee strongly encourages the Secretary of Defense
to emphasize responsibilities for creating and maintaining the
new infrastructure necessary to transform warfare operations
when re-defining the role of ASD (C3I). The committee notes the
success of the recent campaign based on time-critical strike
and notes that despite recent successes, resultsof lessons that
can be learned should be included in the transformation communication
system architecture.

Special Operations Advanced Technology Development

The budget request contained $67.0 million for special
operations advanced technology development, but included no
funding for the multi-band multi-mission radio and no funding
for the special operations medical diagnostic system. The
radio, which will be the primary mission radio for special
operations forces tactical units, reduces the communications
gear requirement for forward operating units by replacing
multiple manpack radios. The committee believes that the multi-
band multi-mission radio will substantially increase special
forces small unit communications capability and should receive
continued funding. Similarly, the special operations forces
medical diagnostic system shows great promise in quickly
diagnosing medical emergencies for deployed troops. The
recommended funding will enable the Special Operations Command
to further refine the operational requirements for this system.
The committee recommends $78.5 million in PE 1160402BB, an
increase of $10.0 million for the multi-band multi-mission
radio and an increase of $1.5 million for the medical
diagnostic system.

Support to homeland security

The budget contained $476.7 million in PE 33140G for the
information security systems program (ISSP), but included no
funds for support to the Department of Homeland Security.
The committee is aware that according to National Security
Policy 42, the National Security Agency (NSA) is the executive
agent for information assurance services and products to the
federal government. The committee recognizes that providing a
secure infrastructure outside the federal government was not a
great concern until the events of September 11, 2001,
demonstrated that a secure infrastructure between federal and
local officials (first responders- including law enforcement,
medical, rescue) is necessary to provide the free exchange of
communications to help in preventing future terrorist
activities. The committee notes that National Security Agency
requires additional personnel and funding to develop an
appropriate secure infrastructure for homeland defense.
The committee encourages the Secretary of Defense and the
Director of Central Intelligence to work with the Secretary of
Homeland Security to provide NSA the resources to develop a
crypto product line to support homeland security.

Technology development

The budget request contained $249.2 million in PE 35191D8Z
for technology development for classified projects.
The committee believes that funding is in excess of
requirements. Further details are in the classified annex to
this report.
The committee recommends $226.7 million in PE 35191D8Z for
technology development, a decrease of $22.5 million for
technology development.

Unmanned aerial vehicle acquisition management

The committee has reviewed the Department of Defense (DOD)
unmanned aerial vehicle (UAV) roadmap and sees significant
progress since the previous version. However, a recent
committee hearing disclosed that within the office of the Under
Secretary of Defense (Acquisition and Technology), the
Director, Unmanned Aerial Vehicles has not been given
sufficient authority to ensure that the military services
comply with the provisions approved UAV roadmap.
The committee believes that having a good UAV roadmap is
essential to most effectively fielding complementary, non-
redundant, fully jointly interoperable UAV capabilities and
that the Secretary of Defense should ensure that only approved
UAV systems are acquired.

Operational Test and Evaluation, Defense

Overview

The budget request contained $286.7 million for Operational
Test and Evaluation, Defense.
The committee recommends $286.7 million, no change to the
budget request.

LEGISLATIVE PROVISIONS

Subtitle A--Authorization of Appropriations

Section 201--Authorization of Appropriations

This section would establish the amounts authorized to be
appropriated for Research, Development, Test, and Evaluation
for the Department of Defense for fiscal year 2004.

Section 202--Amount for Defense Science and Technology

This section would establish the amounts authorized to be
appropriated for Defense Science and Technology, including
basic research, applied research, and advanced technology
development for fiscal year 2004.

Subtitle B--Program Requirements, Restrictions, and Limitations

Section 211--Collaborative Program for Development of Electromagnetic
Gun Technology

This section would require the Secretary of Defense to
establish and carry out a collaborative program among the
Department of the Army, the Department of the Navy, and the
Defense Advanced Research Projects Agency for evaluation and
demonstration of advanced technologies and concepts for
advanced gun systems that use electromagnetic propulsion for
direct and indirect fire applications.
For the past 20 years, the Department of Defense
(principally the Army) has been conducting research and
developing technology for the use of electromagnetic propulsion
in advanced gun systems that would capitalize on the
significantly higher velocity, longer range, greater lethality,
and reduced ammunition weight and volume that would be
achievable with such guns compared to those that use
conventional explosive charges. Once proven, electromagnetic
guns (EMG) could provide multi-role, survivable weapon systems
capable of growing to meet a range of future threats in line-
of-sight (direct fire) and non-line-of-sight and beyond-line-
of-sight (indirect fire) applications. Recently, the Navy has
also developed linear electric motor (rail gun) technologies
for advanced catapult systems for new aircraft carriers.
The committee is aware of Army interest in developing EMG
technology for the Future Combat System, in the Marine Corps
for using EMG technology to increase the lethality of its
legacy M1A1 120mm gun tank, and in the Navy for very long-range
ship-to-shore fire support from an EMG on an all-electric ship.
The committee notes the results of a recent independent
review team's technical assessment on the Army's EMG program
which concluded that the major Army investment in
electromagnetic launchers, projectiles, pulsed power supplies,
and other EMG technologies are showing significant and
noteworthy progress. Much of the enabling technology has
reached a technology maturity or readiness level (TRL) of 3 to
4 (A TRL of 6 is the maturity level generally regarded as
necessary for initiation of a system development program that
should result in a successful acquisition program.) The
assessment team concluded that continued work is needed to
mature EMG technology and to establish the viability of EMG
technology for potential military applications, including
ground combat vehicle main armament, air defense, long-range
ship-to-shore fire support, and precision air-to-ground
standoff weapons. The team recommended stable program funding
and a continuing research and development program that would
support initiation of a full-scale advanced technology
demonstration in the fiscal year 2006 time-frame, leading to a
Milestone B acquisition decision in fiscal year 2011.
The committee further notes that the justification books
submitted with the budget request indicate a Department of the
Army investment in its EMG program of $127.9 million through
fiscal year 2009 and a Department of the Navy investment of $
$85.6 million. The Army's fiscal year 2004 budget includes
$31.0 million for EMG technology research and development. No
funds were requested for the Navy's program in fiscal year
2004. Elsewhere in this report, the committee has recommended
an increase of $7.6 million for the Navy program and an
increase of $2.1 million in the Army program.
In view of the interest of the Army, the Navy, and the
Marine Corps in the development and application of EMG
technology, the committee believes that a collaborative program
should be established among the military departments and the
Defense Advanced Research Projects Agency for the development
of common enabling technologies and their exploitation to meet
service operational requirements. The committee believes that
such a program should build upon military service and agency
strengths with DARPA taking on those high risk/high payoff
technologies such as advanced projectiles and projectile
guidance and control and each military department taking the
lead in those areas for which they have the most experience
and/or expertise. The committee also believes that industry
could and should play a significant role in the program. The
committee expects that each military department would define
and execute its own focused maturation and demonstration
program, incorporating the products of the most promising
common technology maturation efforts.

Section 212--Authority to Select Civilian Employees of Department of
Defense as Director of Department of Defense Test Resource Management
Center

This section would amend section 196(b)(1) of title 10,
United States Code (section 231 of the Bob Stump National
Defense Authorization Act for Fiscal Year 2003, Public Law 107-
314) to provide that, in addition to a commissioned officer of
the armed forces serving on active duty, the Secretary of
Defense may also consider for possible selection as Director of
the Department of Defense Test Resource Center a senior
civilian official or employees of the Department of Defense who
have substantial experience in the field of test and
evaluation. The committee believes that limiting the selection
of the Director to active duty commissioned officers is unduly
restrictive and does not make use of the test and evaluation
experience that is also available among the Department's senior
civilian officials or employees.

Section 213--Joint Tactical Radio System

This section would establish an independent joint tactical
radio system (JTRS) joint program office (JPO) under rotating
military service leadership. It would also centralize program
funding and place all JTRS cluster development under JPO
control. In addition, the JPO would ensure a joint JTRS concept
of operations.

Section 214--Future Combat Systems

This section would require the budget request for projects
within the Armored Systems Modernization Program within the
Department of the Army to be displayed in separate
programelements. Further, this section would preclude authorization of
appropriations until the Secretary of Defense provides to the
congressional defense committees more detailed justification for the
$1.7 billion program.

Section 215--Army Program to Pursue Technologies Leading to the
Enhanced Production of Titanium by the United States

This section would require the Secretary of Defense to
assess promising technologies leading to the enhanced
production of titanium by the United States and select on a
competitive basis the most viable technologies. The Secretary
of the Army would be required to serve as the executive agent
in this effort.
The budget request contained $39.5 million for weapons and
munitions technologies in PE 62624A for improved weapon and
munitions technologies to enable combat superiority for the
objective force, but no funds were included to enhance U.S.
industrial capabilities to produce low cost titanium alloys.
The titanium extraction mining and process engineering
research (TEMPER) initiative is intended to enhance U.S.
industrial capabilities for the efficient production of
inexpensive titanium for systems designed as part of the Army's
Objective Force.
The committee is aware that light weight materials used to
increase survivability and reduce system weight are expensive
to produce. The committee notes that new production methods
have become available within industry and recommends that the
Secretary of Defense develop an integrated plan to improve
related technologies in a centralized manner.
The committee recommends $47.5 million in PE 62624A, an
increase of $8.0 million for the Secretary of the Army to lead
an effort to assess and select the most viable methods to
produce titanium through the TEMPER initiative.

Section 216--Extension of Reporting Requirement for RAH-66 Comanche
Aircraft Program

This section would extend the requirement for the Secretary
of the Army to provide a quarterly report through fiscal year
2004 to the Committees on Armed Services of the Senate and the
House of Representatives regarding the progress of the
restructured RAH-66 Comanche aircraft program.

Section 217--Future Fleet Architecture Studies

Although total Navy capability is increasingly a product of
sensors and networking technology rather than individual
platforms, the Navy at its most fundamental level, will
continue to be built around ships of various kinds and sizes,
along with its supporting aircraft. For example, the Navy force
structure set forth in the 2001 Quadrennial Defense Review can
be defined as one built around 12 large-deck aircraft carriers
of approximately 100,000 tons displacement each, 116 major
surface combatants displacing 4,000 to 9,500 tons each, 55
nuclear-powered attack submarines and 36 amphibious support
ships organized into 12 amphibious ready groups with a combined
lift capability of 2.5 Marine Expeditionary Brigades. Together
with associated mine warfare, combat logistics and support
ships, this force structure would total about 310 ships.
Additionally, this force structure includes 11 carrier air
wings, additional surface-combatant-based helicopters, and
land-based maritime patrol aircraft.
This basic combination of ships and aircraft represents the
Navy's platform architecture. Given the long lead times needed
to design and build ships and aircraft, their long operational
life cycles, and the relatively low annual rates (relative to
the existing inventory) at which new ships and aircraft can be
procured, the Navy's overall platform architecture tends to
evolve gradually over time.
The committee is concerned that the Navy's current vision
of its future platform architecture may be, to a great extent,
determined by inertia and momentum. As an example, the
committee understands that the decision on establishment of the
Littoral Combat Ship (LCS) program was made prior to an
analysis of alternatives for the mission. The committee
believes that new technologies and operational concepts,
including network-centric operations, and emerging threats,
including asymmetric threats, could result in a Navy platform
architecture that is significantly different than envisioned
today. The committee is also concerned that the Navy, while
considering emerging threats, evolving technologies, and new
operational concepts, in determining its future platform
architecture, may be too tradition-bound and thereby limit the
opportunities available to leverage technologies and
operational concepts.
While the fiscal year 2004 future years defense plan
assumes operational concepts and associated hardware that
represent departures in some respects from today's
architecture, the committee is concerned that in other
respects, the Navy's current planning for the future may be
excessively bounded by the features of its current platform
architecture. The committee is also concerned that, as a
result, the Navy's future overall platform architecture may
turn out in many respects to be too much of a linear descendent
of today's architecture. While such a fleet would no doubt be
more capable than today's fleet, it may not be the most capable
fleet that could be produced for a given level of resources, or
the most appropriate fleet for addressing tomorrow's threats.
Numerous proposals have been put forth in recent years,
including sea-based platforms of sizes and kinds that are
significantly different from those that make up today's overall
fleet platform architecture. These include, to name only a few
examples, small surface combatants and aircraft carriers; UAV/
UCAV carriers; high speed surface combatants and amphibious
ships; ships that combine the features of today's surface
combatants and amphibious ships; and mobile sea bases based on
oil platform technology. Proposals like these, if pursued,
could lead to a wide variety of potential future overall fleet
platform architectures. The committee is concerned that the
Navy has not sufficiently explored the universe of
possibilities for what this architecture might look like, and
thus cannot speak to Congress about them in sufficient detail.
The committee is also concerned that no one entity, either
inside or outside the Navy, is necessarily best positioned to
know which alternative architecture might be the most
promising, and that the understanding of the issue would
benefit from a variety of informed views.
Accordingly, the committee has recommended a provision
(section 215) directing the Secretary of Defense to commission
a collection of eight independent studies on future overall
fleet platform architectures. Each study would be funded at a
cost of up to $200,000, and be completed in both classified and
unclassified versions, as required.
Four of the studies would be performed by qualified
analytical organizations external to the Navy, such as the RAND
Corporation, the Institute for Defense Analysis, the Johns
Hopkins University Applied Physics Laboratory, and the Center
for Strategic and Budgetary Analysis. One of the studies would
be done by an in-house Navy organization, such as the Ship &
Force Architecture Concepts program office within the Naval Sea
Systems Command. And three ofthe studies would be done by
defense firms or teams of defense firms, so as to take advantage of the
knowledge and creativity in the private sector.
The study efforts shall be ``fire walled'' from one another
to ensure eight independent analyses. In performing the
studies, participants would take into account the National
Security Strategy of the United States, potential future
threats to the United States and to U.S. Naval forces, the
traditional roles and missions of the U.S. Naval forces,
alternative roles and missions, and the role of evolving
technology on future naval forces. Participants, while
cognizant of today's overall fleet platform architecture, would
not let the current features of the architecture constrain in
any way their analysis. The goal is to achieve a ``clean
sheet'' vision of potential platform architectures for the
future--to provide possible answers to the question: What would
the ideal Navy of the future look like in terms of overall
fleet platform architecture if we didn't have to bound our
thinking by the features of today's architecture?
Each of the eight studies would present one or two possible
overall platform architectures, which shall be described in
terms of the numbers, kinds, and sizes of ships involved,
numbers and types of associated manned and unmanned platforms,
and the basic capabilities of these ships and platforms. The
studies shall also include other top-level information needed
to understand the architecture in basic form, and the analysis
that led to the architecture.

Subtitle C--Ballistic Missile Defense

Section 221--Ballistic Missile Defense System

This section would amend subsection (a) of section 223 of
title 10, United States Code to allow the President flexibility
in designating program elements for the Missile Defense Agency.
The section would make conforming changes, including those to
related reporting requirements, and other technical amendments.

TITLE III--OPERATION AND MAINTENANCE

READINESS OVERVIEW

The fiscal year 2004 budget request for operation and
maintenance of $117.0 billion represents an overall increase
across the Department of Defense of $1.4 billion (1.3 percent)
over spending levels authorized and appropriated for fiscal
year 2003. Of the $117.0 billion request, $3.4 billion is
attributable to price increases for general and fuel inflation,
civilian pay raises, depot maintenance rates, contracts, and
working capital fund activities to name only a few. In short,
these price increases directly relate to maintaining the same
level of effort from fiscal year 2003. The committee is
concerned that these price increases, some as high as 18
percent, are eroding the ability of the services to fund their
core readiness programs. The budget request lists a total of
$1.9 billion in program reductions from fiscal year 2003.
Accordingly, while the increase in funding for readiness
accounts is $1.4 billion, that increase does not compensate the
price growth. In fact, some important readiness programs have
had programmatic reductions just to fund these pricing
increases. In summary, the overall level of funding for
operation and maintenance in the budget, existing operational
tempo, and the chiefs of the military departments' unfunded
requirements for fiscal year 2004, indicates that the services'
readiness will be adversely affected as they attempt to
reconstitute the force following recent contingencies.
The Department's budget request is a peacetime budget that
takes substantial risk in the operation and maintenance arena.
This risk will become most evident as military forces returning
from wartime operations are faced with significant challenges
in Navy shipyard capacity, Army spare parts availability, and
Air Force and Marine Corps depot funding limitations. In this
budget important areas including facility sustainment,
renovation and modernization, depot maintenance programs, and
repair parts continue to be funded at levels that will make it
difficult to sustain readiness in the services in the short and
long term. Also, in hearings held this year to review the state
of military readiness, testimony was received that strongly
suggests that the aging weapons systems across the services and
the funding necessary to sustain these systems has not been
fully recognized in recent budget requests. Frequent and
lengthy deployments associated with the current operational
tempo have exacerbated the impact of under-funding on readiness
for over a decade. The likelihood of future continued
deployment requirements, coupled with large post-war ship and
aircraft maintenance workload, portends greater readiness risk
than the Department has acknowledged or accommodated in the
fiscal year 2004 budget request.
As an example of this risk, the Department's budget request
for the Army places execution of the tank miles goal in
jeopardy due to under-funding for consumable repair parts by
$156 million. Also, Army aviation is unable to execute 14.5
hours per crew, per month due to grounded aircraft and spare
parts shortages. More broadly, the Army's management and
funding of spare parts is an example of a decade of neglect
that has created an urgent requirement to replenish these
stocks. A more prudent approach toward resolving the parts
shortages would be a long-term, disciplined approach that
includes routinely adequate funding, rather than a $1.5
billion, two-year remedy. The committee notes the Army's
current effort to address the repair parts shortage but
cautions that consistent funding, rather than precipitous
funding changes and poorly implemented policy changes, are more
likely to produce the desired return on investment.
The budget request for the Navy is lower than the Navy's
own required estimate by nearly $1.0 billion. In the first
quarter of fiscal year 2003 the Navy exceeded its 54.0 steaming
days per quarter funding level by nearly 10 days. By the end of
the current year that average is expected to climb even further
due to the midyear deployment of 207 of the Navy's 306 ships.
This level of operational tempo adds to the maintenance
challenges associated with many depot availability deferments.
The Navy also faces readiness challenges due to the length and
frequency of deployments, the modest size of the 306 ship fleet
relative to global security requirements, the age of many of
its aircraft, and the disruption of the planned maintenance
schedule for ships and aircraft. The surge in operations in
fiscal year 2003 can be expected to generate a large post-surge
ship and aircraft workload. Despite this fact, however, the
Navy has reduced its shipyard depot maintenance accounts by
$600.0 million in fiscal 2004 while increasing funding for the
Navy flying hour program by only $115.0 million over fiscal
year 2003 levels, principally for spare parts rather than
flying hours. Clearly, the Navy has under-resourced its actual
requirements in view of current and projected operational
tempo.
Over the last decade, readiness rates for Air Force major
combat units have dropped from an average of 91 percent to a
low of 65 percent. While readiness rates have since climbed to
an average of 70 percent, the committee heard testimony that
increased spare parts funding, fleet modernization and process
improvements were necessary to achieve even this modest
improvement. Although the achievement of more appropriate
readiness rates will take evenhigher levels of resources, the
Air Force has significantly under-funded depot maintenance accounts,
and has identified $516.0 million for its depots as its number one
unfunded requirement.
The Marine Corps' budget request for fiscal year 2004 would
fund only 67 percent of depot maintenance requirements. Even a
critical requirement such as initial issue equipment has been
identified by the Marine Corps as a high priority unfunded
requirement.
Adequate resourcing of the Department's training
infrastructure continues to lag behind requirements in the
fiscal year 2004 budget request. While the results of such
under-funding may not become fully apparent for some time, the
erosion of infrastructure undermines the quality of training
and degrades mission performance and readiness. The
Department's $179.9 million investment the Joint National
Training Center and training transformation may provide
innovative training opportunities, including more joint inter-
service training, and address some infrastructure and
instrumentation limitations by leveraging training resources.
However, existing training facilities across the Department are
not adequately resourced in this budget request.
A final area of note continues to be encroachment of
training areas and ranges of the Department caused by
environmental restrictions. While the Department has sought to
work within the existing restrictions, there is a steady
detriment in the quality and realism of many training
activities. In some cases, training activities are curtailed,
rescheduled or cancelled due to environmental issues, with
considerable fiscal and readiness impacts. The Department and
the services have done much to bring attention to the scope of
the problem. The committee will continue to examine
encroachment concerns and will make further adjustments to
provide the Department and the services relief, as warranted.

ITEMS OF SPECIAL INTEREST

Budget Request Adjustments--Readiness

The committee recommends the following adjustments to the
fiscal year 2004 amended budget request:

Department of the Army Adjustments:s of dollars]
BA-1 Hydration on the Move (Camelbak).................... 2.0
BA-1 Controlled Humidity Preservation (CHP) Program...... 4.0
BA-1 Consumable Parts.................................... 90.0
BA-1 Depot Maintenance................................... 231.3
BA-3 U.S. Army Engineer School........................... 4.0
BA-3 Army's Defense Language Institute................... 2.5
BA-3 Flight School XXI................................... 148.0
BA-4 Military Vehicle Tires.............................. 2.0
BA-4 Army Military Vehicle Batteries..................... 2.0
BA-4 American Red Cross.................................. 3.0
BA-1 Fuel................................................ (20.5)
BA-1 Working Capital Fund--Cash.......................... (50.0)
BA-1 Contingency Operations, Southwest Asia.............. (200.4)
BA-4 Administration...................................... (7.9)
BA-4 Other Support Services.............................. (7.1)
BA-4 Civilian Personnel Underexecution................... (26.6)
Army National Guard Cold Weather Clothing (ECWCS)......... 2.0
Army Reserve Cold Weather Clothing (ECWCS)................ 2.0
Department of the Navy Adjustments:
BA-1 Ship Depot Maintenance.............................. 76.0
BA-1 Flight Operations................................... 172.5
BA-1 Fuel................................................ (122.7)
BA-1 Contingency operations, Southwest Asia.............. (76.1)
BA-3 Training Support.................................... (15.0)
BA-4 Administration...................................... (10.0)
BA-4 Planning, Engineering, and Design................... (10.0)
United States Marine Corps Adjustments:
BA-1 Hydration on the Move (Camelbak).................... 2.0
BA-1 Depot Maintenance................................... 35.9
BA-1 Initial Issue....................................... 51.0
BA-1 U.S. Joint Maritime BEQ Facility.................... 0.6
BA-1 Deployable Virtual Training Environment............. 2.5
BA-1 Individual First Aid Kit............................ 6.2
BA-1 Restrictive Use Easements........................... 5.8
BA-1 Air Command and Control Sustainment................. 1.1
BA-1 Corrosion Control and Prevention Program............ 6.0
BA-1 USMC Reserve--Depot Level Maintenance............... 7.3
BA-1 USMC Reserve--Initial Issue......................... 13.2
BA-1 USMC Reserve--Cartridge, 5.56 Ball M855............. 5.0
Department of the Air Force Adjustments:
BA-1 Depot Maintenance................................... 329.7
BA-1 Flying Hour Spares.................................. 90.0
BA-1 Base Operations Support............................. (300.0)
BA-1 Working Capital Fund--Cash.......................... (26.0)
BA-1 Fuel................................................ (225.0)
BA-1 Supply Management................................... (344.4)
BA-1 Working Capital Fund--Transportation................ (946.3)
BA-1 Contingency Operations, Southeast Asia.............. (707.6)
BA-4 Civilian PCS........................................ (20.8)
BA-4 Early Outs.......................................... (10.0)
BA-1 Air National Guard Cold Weather Clothing (ECWCS).... 2.0
Defense-wide Activities Adjustments:
BA-4 Defense Logistics Agency (CTMA)..................... 10.0
BA-1 Fuel................................................ (40.9)
BA-1 Contingency Operations, Southwest Asia.............. (58.1)
BA-4 Defense Logistics Agency (DPAO)..................... (15.7)
BA-4 Office of Secretary of Defense, Contract of Support
Service................................................. (13.0)
BA-4 Office of Secretary of Defense, Long-range planning. (6.8)
BA-4 Defense Information Systems Agency.................. (10.6)
BA-4 Defense Security Cooperation Agency................. (200.0)
Transfer Accounts and Miscellaneous:
Overseas Contingencies.................................... (50.0)

Budget Request Display Issues--Readiness

Base Operating Support

Base operating support is a vital aspect of community
support affecting the ability of installations to support
resident missions and execute quality of life programs
affecting service members and their families. Each of the
services has established installation management structures to
implement overarching strategies and programs designed to
achieve service-wide efficiencies. The services are encouraged
to continue their efforts to find efficiencies in base
operating support functions through standardization and
adoption of ``best practices.'' The committee notes that
funding for base operating support in fiscal year 2004
decreases in all but one service. The committee urges the
Department to ensure that all the services focus their
installation management structures on achieving additional
efficiencies. The committee recommends a decrease of $300.0
million to the proposed budget in order to fund other higher
priority requirements.

Civilian Career Program Relocations--Air Force

The committee does not support a 52 percent increase in
civilian career program relocations. The proposed increase is
to fund real estate expenses associated with the government's
purchase of homes that government employees are not able to
sell as a result of accepting a position of employment in a
different geographical location. The committee notes that this
is an optional entitlement used in recruiting government
employees. The budget material presented states there will be
1,375 projected civilian relocations in FY 2004. Accordingly,
the committee recommends a reduction of $10.0 million to the
proposed budget and recommends funding other higher priority
programs.

Civilian Personnel Budget--Army

The General Accounting Office has projected that the Army
has overstated the cost for civilian personnel by $26.6
million. The projections are based on the Department's February
28, 2003 civilian personnel staffing report. The committee,
therefore, recommends a reduction of $26.6 million to the
proposed budget.

Civilian Separation Incentives--Air Force

The committee is concerned that the Air Force is requesting
additional funds for civilian separations. Section 4436 of the
National Defense Authorization Act for Fiscal Year 1993 (Public
Law 102-484) authorizes the use of civilian separation
incentives. The committee notes the source of the payments
shall be paid by an agency out of any funds or appropriations
available for salaries and expenses of such agency. The
committee recommends that the AirForce fund this program with
prudent management of civilian under execution. Accordingly, the
committee recommends a reduction of $20.8 million to the proposed
budget.

Commercial Technologies for Maintenance Activities--Defense Logistics
Agency

It is vital for depot level activities to have access to
modern and advanced manufacturing capabilities. The Commercial
Technologies for Maintenance Activities program is designed to
allow depot level activities to participate in manufacturing
technology demonstration projects with the leading United
States manufacturers. The committee recommends the addition of
$10.0 million for the Defense Logistics Agency to continue this
program.

Consumable Repair Parts--Army

The committee recommends an increase of $90 million to the
proposed budget in order for the Army to fund adequately the
Army's projected orders for consumable repair parts. The Army
projected an increase growth in consumable repair parts when
they updated the annual average for fiscal year 2004 budget.
The Army updates this average each year based on the actual
demand data from the three previous years. However, the Army
made a decision to suppress the demand identified and instead
used a ten year average to project demands for the operating
tempo model. The committee is concerned that the Army is
assuming unnecessary risk.
The committee notes that the Army has made significant
improvements in the execution of ground operational tempo
combined arms training strategy mile requirements in fiscal
year 2001 and fiscal year 2002. The committee recommends, at a
minimum, that the Army continue to use a three-year moving
average to project consumable repair part demands for its
ground operational tempo requirements.

Contingency Operations Funding--Southwest Asia

The proposed budget includes a funding request for
contingency operations in Bosnia, Kosovo, and Southwest Asia.
Recent operations in Iraq have obviated the requirement for
such funds for Southwest Asia. The committee, therefore,
recommends a reduction in the following accounts.

[In millions of dollars]

Army Operations............................................... (200.4)
Navy Operations............................................... (76.1)
Air Force Operations.......................................... (707.6)
Defense-Wide Operations....................................... (58.1)

Defense Information Systems Agency

The budget request proposed an additional $10.6 million for
the Defense Information Systems Agency for increased backbone
fiber in support of the war effort. This cost, incurred in
fiscal year 2003, should not be included in the budget request
for the upcoming fiscal year. The committee, therefore,
recommends a reduction of $10.6 million to the Defense
Information Systems Agency budget request.

Defense Policy Analysis Office

In fiscal year 2003, the Defense Logistics Agency received
the mission of the Defense Policy Analysis Office, which is to
``review, analyze, and assess DLA support and serve policies,
plans, concepts, procedures, and operations to provide the most
efficient, cost-effective, and responsive support to Department
of Defense components and other federal departments and
agencies.'' The mission of this office is also to ``address the
development of DOD support policies, plans, concepts,
procedures, and operations as requested by supported
organizations.'' The committee believes that the described
functions are inherent functions of management and headquarters
and that a unique office is not necessary. The committee
recommends a reduction of $15.7 million in this program.

Depot Funding

The depot accounts of the Army, Navy and Air Force are
under-resourced in the fiscal year 2004 budget request despite
the likelihood that depot workload will increase as equipment
returns from the recent war with Iraq. At or near the top of
each service's unfunded requirements list are important depot
funding items. The committee is disappointed that the
Department has submitted a budget that allows these critical
components of readiness to lack the requisite resources. The
committee, therefore, recommends the following increases to the
proposed budget.

[In millions of dollars]

Army Depots................................................... 231.3
Navy Depots................................................... 76.0
Air Force Depots.............................................. 329.7
United States Marine Corps.................................... 35.9
United States Marine Corps, Reserve........................... 7.3

Army

The committee notes that the Army continues to have funding
shortfalls in depot maintenance which directly impacts near-
term readiness. The committee recommends an additional $231.2
million to maintain organic and contractor critical industrial
base skills necessary to perform depot maintenance.

Air Force

The committee notes that the Secretary of the Air Force has
at the top of the unfunded priority list a requirement for an
additional $516.0 million in depot equipment maintenance. The
committee does not consider it acceptable to take such a risk
with depot maintenance. The committee notes that in fiscal year
2003 the Air Force funded its depot maintenance requirement at
73 percent, but midway through this fiscal year was forced to
transfer $227 million out of its flying hour program into the
depot maintenance program. The committee believes it is more
appropriate to adequately fund depot maintenance at the
beginning of the fiscal year. The committee believes that it is
appropriate to reduce program growth and program funding for
baseoperating support in order to minimize the size of the
depot maintenance unfunded requirement. The committee recommends a
reduction of $300 million to the Air Force base operating support
program and recommends an increase of $329.7 million to the Air Force
depot maintenance program.
The committee expects the additional funding for depot
maintenance to fund the most critical shortfalls, such as
aircraft and engines. The committee notes that without this
additional funding the Air Force would defer depot maintenance
on 42 aircraft and 76 engines. The committee also notes that
the fiscal year 2002 aircraft breakage rates were unusual. The
committee is concerned that the fiscal year 2004 projections
are erroneously based on this data. Accordingly, the committee
recommends an increase of $90 million for flying hour spare
parts.

Navy

The proposed budget requests a reduction of $600 million in
the Navy's ship depot maintenance account. The Chief of Naval
Operations, however, asserts that this reduced level of funding
will adequately fund ship depot maintenance accounts.
Nevertheless, there are particular classes of ships that the
Chief of Naval Operations has identified as critical programs
that are not funded in fiscal year 2004.
First, the LHA 1 class of ships requires additional funding
to support midlife depot maintenance program to ensure that the
ships can attain their estimated service life of 35 years. The
LHA plays a vital and unique role. Troops, vehicles, and
equipment can all land simultaneously on the LHA, as the ship
has aviation and landing components. The committee recommends
an additional $33 million to fund the LHA midlife depot
maintenance program.
Second, the AOE-1 class of ships, also known as fast combat
support ships, have a service life of 35 years. The average age
of this ship is beyond 35 years. The committee recognizes that
these ships, which have high operational tempo, will need to be
utilized for several more years. Chief of Naval Operations has
also identified depot maintenance for this class of ships as a
critical program not funded in fiscal year 2004. The committee
recommends an additional $43 million to fund depot maintenance
for the AOE-1 class of ships.
In addition the committee notes that the Navy has not
adequately funded flight operations to allow the fleet to train
to the prescribed level of training. Accordingly, the committee
expects that $90 million will be applied to flight operations.

Marine Corps

The proposed budget would only fund 67 percent of the
Marine Corps' depot maintenance requirement. The committee does
not consider this acceptable. The committee recommends an
additional $35.9 million and 7.3 million to fund the Marine
Corps and Marine Corps Reserve depot maintenance programs
respectively.

Fuel Costs--Defense Logistics Agency

In preparing the fiscal year 2004 budget request, the
Department projected fuel costs that have since trended
downwards. The General Accounting Office believes that the
projected fuel shortfall due to price fluctuation for fiscal
years 2003 and 2004 would be $825.6 million. The committee
notes that the fiscal year 2003 supplemental appropriation will
provide funds that exceed the fuel costs now anticipated for
both fiscal years. In addition, the committee understands the
Defense Logistics Agency (DLA) set aside $541.7 million of
their accumulated operating result in fiscal year 2004. These
funds were to pay the difference between the rate DLA will
charge the Department's customers and the price it costs to
purchase the fuel. In light of the supplemental appropriations
available to fund fuel in fiscal years 2003 and 2004, along
with the excess funds in DLA's working capital account, the
committee recommends the following reductions and directs that
the Defense Logistics Agency reimburse the customers listed
below by December 31, 2003.

[In millions of dollars]

Army Operations............................................... (20.5)
Navy Operations............................................... (122.7)
Air Force Operations.......................................... (225.0)
Defense-wide Operations....................................... (40.9)

Initial Issue Equipment--Marine Corps

The Commandant of the Marine Corps has an unfunded
requirement for initial issue equipment. Under this category of
equipment are load bearing equipment, all purpose environmental
clothing systems, outer tactical vests, small arms protective
inserts, light weight helmets, tents, command posts, and
camouflage systems. The committee recommends an additional
$51.0 million for the Marine Corps and $13.2 million Marine
Corps Reserve to fund this requirement.

Office of Secretary of Defense, Contracts and Other Support Services

The budget request proposes an additional $59.6 million in
program growth for contracts and other support services. A
significant portion of this growth, $23.0 million, would fund
Joint Public Affairs Task Force and Defense News Network. The
committee does not believe DOD has adequately explained or
justified this request, particularly the need to develop a
Defense News Network. The committee, therefore, recommends a
reduction of $13.0 million for this program.

Overseas Contingency Operations Fund

The Department has budgeted $50.0 million in the Overseas
Contingency Operation Fund to finance unanticipated costs for
contingency operations. The committee expects that these
unforeseen costs will be requested in either the annual omnibus
reprogramming request or supplemental requests in fiscal year
2004. Accordingly, the committee recommends a reduction in this
account by $50.0 million.

Supply Management Activity Group--Air Force

The committee notes that the Air Force supply management
activity group is projected to have a positive accumulated
operating result of $668.7 million in fiscal year 2004. The
budget material presented no rationale to justify maintaining
such profit levels. Specifically, page six of the Air Force
Working Capital Fund budget exhibit reads, ``Our cash on hand
at the end of FY 2002 was $1,323.3 million, which was
considerably higher than our FY 03 PB projected ending balance
of $810 million.'' The fiscal year 2004 cash requirement, as
outlined in the budget material, is between $756-989 million,
which equates to seven to ten days of operating cash. The
committee was informed that the ending cash balance on March
31, 2003 was $800 million. The committee is concerned that
these funds are not being returned to the customer in the form
of lower rates. Therefore, the committee recommends a reduction
in the proposed budget of $344.4 million and directs the
Secretary of the Air Force to use the excess accumulated
operating results to offset this price adjustment.

Transportation Working Capital Fund-Air Force

In fiscal year 2002, the transportation working capital
fund experienced $680 million of positive operating results
from increased customer orders from Operation Enduring Freedom.
Similarly, significantly higher customer orders have been
recorded as a result of Operation Iraq Freedom. The committee
projects that the combination of these two operations will
continue to generate positive operating results. Therefore, the
committee recommends a reduction in the proposed budget by $1.3
billion and directs the Secretary of the Air Force to use the
excess accumulated operating results to offset this price
adjustment.

Working Capital Fund Cash Management

The committee notes that the working capital funds serve a
vital role in providing financial transaction flexibility for
critical defense customer support activities. When working
capital funds produce an annual operating result involving a
surplus, consideration should be given to adjusting customer
rates in future years. Working capital funds that do not
appropriately return surplus funds to the supported
departments, commands, and agencies through rate-change
mechanisms artificially inflate the cost of support and deprive
the supported units of limited resources. The committee,
therefore, recommends a reduction in the proposed budget, as
identified below, and directs that the excess cash balances in
those working capital funds be returned to the respective
service to offset this pricing adjustment. In addition, the
committee has reduced funds where there is cash in excess of
the ten-day level.

Army Working Capital Fund (Excess Cash)....................... (50.0)
Air Force Working Capital Fund (Excess Cash).................. (26.0)
Air Force Working Capital Fund Supply Management.............. (344.4)
Air Force Working Capital Fund Transportation................. (946.3)

Budget Request--Other Matters

Chemical Agents and Munitions Destruction

The budget request contained $1,530.3 million in Other
Defense Accounts for Chemical Agents and Munitions Destruction,
including $1,199.2 million for operations and maintenance,
$251.9 million for research, development, test, and evaluation
and $79.2 million for procurement. The budget request also
contained $119.8 million in military construction for the
chemical agents and munitions destruction program.
The committee recommends $251.9 million for Chemical Agents
and Munitions Destruction research, development, test and
evaluation, and $79.2 million for Chemical agentsand Munitions
Destruction procurement. The committee also recommends $1,249.2 million
for Chemical Agents and Munitions Destruction operations and
maintenance, including an increase of $50.0 million for the Chemical
Stockpile Emergency Preparedness Program. Elsewhere in this report the
committee recommends $119.8 million, the budget request, for military
construction for the chemical agents and munitions destruction program.
The committee notes the following activities with respect
to the chemical demilitarization program:
(1) To date, more than 8,000 tons of chemical agent,
over 25 percent of the total U.S. stockpile, has been
safely destroyed in operational demilitarization
facilities at Johnston Atoll Chemical Agent Disposal
System and Tooele Chemical Agent Disposal Facility,
Utah, using the baseline incineration process.
Stockpile demilitarization operations at the Johnston
Atoll facility have been completed and shutdown of that
facility is all but completed. A major safety review of
Tooele operations, which was precipitated by the
exposure of a maintenance worker to a nerve agent last
year, has been completed and live agent destruction
operations at that facility have been resumed.
(2) Construction of demilitarization faculties at
Anniston Chemical Agent Disposal Facility, Alabama, and
Umatilla Chemical Agent Disposal Facility, Oregon, has
been completed and systematization operations required
to test the facilities prior to beginning live agent
destruction operations are in progress. Construction of
the facility at Pine Bluff Chemical Agent Disposal
Facility, Arkansas, is nearing completion.
(3) Actions are underway to accelerate the disposal
of bulk mustard agent at Aberdeen Chemical Agent
Neutralization Facility, Maryland, and of bulk VX nerve
agent at the Newport Chemical Agent Neutralization
Facility, Indiana. Live agent neutralization operations
have begun at Aberdeen.
(4) Decisions have been made regarding the use of
alternate technologies developed under the Assembled
Chemical Weapons Assessment program (chemical
neutralization of the agent) for the stockpiles stored
at Pueblo, Colorado and Lexington-Blue Grass Army
Depot, Kentucky.
(5) The resolution of disagreements between the Army,
the Federal Emergency Management Agency, and local
authorities over chemical stockpile emergency
preparedness measures in Anniston, Alabama, could delay
the start of chemical agent destruction operations at
that site.
The fiscal year 2004 budget request supports the following
major efforts under the chemical demilitarization program:

[In millions of dollars]

Closure of Johnston Atoll..................................... 77.3
Ongoing demilitarization operations at Tooele................. 165.7
Ongoing demilitarization operations at Anniston............... 143.2
Ongoing demilitarization operations at Umatilla............... 143.7
Start-up of demilitarization operations at Pine Bluff......... 132.9
Final operations and closure at Aberdeen...................... 117.0
Complete operations at Newport................................ 144.0
Continued construction at Pueblo.............................. 122.8
Chemical stockpile emergency preparedness program............. 132.6
Non-stockpile chemical materiel destruction program........... 176.0
Construction.................................................. 119.8
The committee is aware of unfunded requirements of $54.1
million for the Chemical Stockpile Emergency Preparedness
Program for additional enhancements to the ability of state and
local governments to respond to a chemical accident or incident
at chemical stockpile storage sites in Arkansas, Oregon, and
Alabama. To address these requirements the committee has
recommended an increase of $50.0 million to the budget request.
The committee also notes that the program has undergone a
major management reorganization to consolidate both
demilitarization and chemical site storage operations under a
single head who reports to both the Assistant Secretary of the
Army (Acquisition, Technology, and Logistics) and the
Commander, Army Materiel Command. The committee believes that
the new management structure will provide the capability to
better integrate the activities of each chemical stockpile
storage site and the chemical demilitarization facility located
at that site. The new organization will also significantly
improve coordination of the plans and activities of the
chemical stockpile disposal program and the assembled chemical
weapons assessment program.
The committee notes further that the program is funded in a
new Appropriation Title ``054 Other Defense Programs'' that is
separate from that of the Army or any of the other military
departments, thereby meeting the guidance in section 1412 of
the Department of Defense Authorization Act, 1986 (Public Law
99-145).

Defense and Security Cooperation with Poland, Bulgaria, and Romania

The committee recognizes the diplomatic, political, and
military support provided by Poland, Bulgaria, and Romania
leading up to, and during, Operation Iraqi Freedom. Their
leadership in supporting efforts to end Saddam Hussein's threat
to international security demonstrates their value as emerging
allies and their commitment to preserving international peace.
Given their commitment to a democratic, peaceful, and secure
world, and their demonstrated willingness to take substantive
action to support it, the committee believes it is important to
expand defense and security cooperation with these countries.
Therefore, the committee recommends an additional $3.4 million
for the Chairman of the Joint Chiefs of Staff exercise program
to fund, where appropriate, exercise-related minor construction
in Poland, Bulgaria, and Romania.

Expansion of Export Control Database

The committee recommends an additional $1.4 million to the
Defense Threat Reduction Agency in order to strengthen and
expand the existing federal effort to help foreign governments
improve their export control performance through an export
control database currently used by some 16 countries in Eastern
Europe and the former Soviet Union. The committee recommends
the funds be used to continue existing subscriptions of the
export control database for foreign countries, supply the
database to additional countries, provide education and
training for its use, enhance the quality and utility of the
database by expanding its coverage of weapons of
massdestruction information focusing more on terrorism threats, produce
a secure intranet version of the database to encourage countries to
share information more readily, and perform related research and public
education initiatives on export control policy.

Information Technology Issues

Overview

The committee believes that information technology (IT) is
critical to Department of Defense transformation in the 21st
century. The first sentence of the Department's recently
published Transformation Planning Guidance states, ``the United
States is transitioning from an industrial-based military to an
information-age military.'' Our combat forces in Iraq used
information dominance to devastating advantage over enemy
units. The committee strongly supports the Department's efforts
to continue to expand that advantage and also supports several
promising technological programs to that end.
The committee is concerned, however, that the Department
has not maintained sufficient scrutiny over its IT program as a
whole. For example, the committee has received testimony that
there are a multitude of legacy systems in the Department
seemingly invulnerable to displacement by the more
comprehensive architecture of modern systems that the
Department is building. However, the Department continues to
spend monies for development modernization of these legacy
systems while simultaneously investing in future capabilities
such as information and communication systems. Furthermore, the
Department has difficulty explaining to the committee exactly
how IT funding is expended each year--or what project, for what
purpose, and what the rationale is for the expenditure.
The Department has made a strong case for information
dominance, supported by a dynamic, interconnected backbone of
networks, computers, satellites, communications, and other
information and communications devices.
Against pressure from legitimate commercial users, the
committee has supported maintaining the Department's bandwidth
needs, and continues to support the Department's continued
emphasis on information dominance through robust funding. At
the same time, the committee expects the Department to exercise
strong oversight of these programs and to strictly scrutinize
legacy programs and swiftly terminate them if new systems are
replacing them. Additionally, the committee strongly believes
the Department and military department Chief Information
Officers should have more responsibility and accountability
towards programs and systems under their jurisdiction and
review.
In this regard, the committee has proposed legislation that
will increase the level of scrutiny exercised by the
Department's Chief Information Officers, and recommends a
series of reductions in apparently redundant IT programs and
those that have failed to meet performance standards. The
committee supports real transformation--transformation that not
only develops innovative solutions, but also has the discipline
to abandon techniques and procedures that have not resulted in
cost-effectiveness nor having met performance deadlines.

Budget Displays

Elsewhere in this report, the committee expressed serious
concerns with the accuracy and clarity of the Department of
Defense's budget displays and documentation. In that regard,
the committee is particularly dissatisfied with the information
technology (IT) budget submission display in light of the
requirements imposed by section 351 of the Bob Stump National
Defense Authorization Act for Fiscal Year 2003 (Public Law 107-
314).
As technology evolves and matures, complex IT systems have
become an ever more important element of Department of Defense
transformation and expenditures. Therefore, the committee
believes that both the Office of the Secretary of Defense and
Congress should have a comprehensive budget explanation of IT
expenditures.
Accordingly, the committee directs the Secretary of Defense
to supplement future budget submission displays of IT programs
with a summary spreadsheet for each military service or defense
agency that lists each IT program, proposed expenditures by
appropriation, budget authority and line number, the program
element number, whether the program is in developmental
modernization or current services, whether the program is an IT
system or a national security system, and the budget requests
from the two previous fiscal years, the present fiscal year,
and the next fiscal year.

General Reductions

The committee notes that the Army's budget request
contained $31.1 billion for operations and maintenance,
including information technology (IT) programs and systems; the
Navy's budget request contained $33.0 billion; the Air Force's
budget request was for $34.4, and defense-wide request
contained $16.6 billion.
While the committee supports transformational initiatives
that modernize IT systems and programs, the committee has
serious concerns about the lack of management and proper
oversight into many of the IT programs and systems at the
various military departments and defense-wide. Therefore, the
committee recommends a total reduction of $568.0 million for
all information technology activities in the Army, Navy, Air
Force, and defense-wide operations and maintenance accounts as
noted in the table below:

[In millions of dollars]

Army.......................................................... 68.0
Navy.......................................................... 200.0
Air Force..................................................... 200.0
Defense-Wide.................................................. 100.0

Global Information Grid Bandwidth Expansion

The committee believes that the Department of Defense
should move to a fully integrated information technology
architecture, and that the Global Information Grid Bandwidth
Expansion (GIG-BE) is a critical part of that effort. However,
the committee is troubled by the manner in which the
procurement is presently conducted. The committee notes that
the Department is requesting $386.1 million to fund this high
priority modernization effort in fiscal year 2004. The
committee understands that the Defense Information Systems
Agency (DISA), which is administering the project, intends to
establish system requirements that are inconsistent with
industry standards, may favor antiquated legacy systems, may
potentially have a bias for non-domestic providers, and may be
suboptimal. To cite two examples, the committee has been
informed that DISA may establish non-industry standard
environmental requirements regardingoperations in humid
environments, and that DISA's proposed power level requirements are a
generation behind current technology. The committee is deeply concerned
that DISA would deliberately set a lower power level requirement that
would work against the very reason for building the GIG-BE--
essentially, the ability to handle greater bandwidth. Accordingly, the
committee directs the Secretary of Defense to review the system
requirements for the GIG-BE to ensure that the requirements
contemplated are open and fair, and reflect current technological and
industry standards to meet the Department's future bandwidth needs.

Information Technology Specific Reductions

The Department of Defense's budget request for information
technology (IT) includes both IT and national security systems
(NSS). The committee supports the Department's goal of
protecting the U.S. homeland and critical bases of operations,
projecting and sustaining power in other theaters, denying our
enemies sanctuary, leveraging IT, improving and protecting
information operations, and enhancing space operations. In
addition, the committee supports the Department's initiative to
attain these objectives by implementing network-centric
activities and programs. However, the committee is highly
concerned that the Department does not have proper oversight
and accountability for these systems and programs. Therefore,
multiple systems exist that perform the same or similar tasks,
new systems are not given realistic schedules to meet
identified requirements, and IT investments are not given
enough scrutiny to determine if costs justify the project.
While the committee commends the Department for attempting
to phase-out its legacy systems and modernize by creating
joint-IT systems that would serve more than one agency or
military department, the committee is concerned about the
growth in the operations and maintenance budget with particular
programs--specially since the Department is in the midst of
planning for new IT systems that would perform the same
functions with new capabilities. The committee strongly
believes that the Department must exercise dynamic leadership
and fiscal oversight into all IT programs, systems, and
policies. Therefore, the committee recommends reductions in the
following programs:

[In millions of dollars]

Army Knowledge Management..................................... 20.0
Army Guardnet................................................. 40.0
Navy Military Manpower/Personnel Systems...................... 4.3
Navy Reserve Integrated Military Personnel Management......... 2.3
Navy Military Personnel Distribution System................... 5.0
Other Navy Military Manpower/Personnel........................ 30.0
Navy Marine Corps Intranet (NMCI)............................. 160.0
Air Force Reserve Base Level Communications................... 9.0
National Imagery and Mapping Agency, Archive and Dissemination
Systems................................................... 10.0
National Imagery and Mapping Agency, Production Information
Systems Support........................................... 10.0
Defense Health Programs....................................... 25.0
Defense Security Service Case Control Management.............. 4.0

Nationwide Dedicated Fiber Optic Network (NDFON)

The budget request contained no funding for the Nationwide
Dedicated Fiber Optic Network (NDFON) for the national guard.
While some policy questions regarding the precise role of
the national guard for homeland defense and homeland security
missions remain unresolved, there is no doubt that national
guard armories throughout the nation must be serviced with a
robust communications backbone to allow rapid, coordinated
responses to potential incidents.
Since the committee understands that NDFON will fit into
the architecture of the Global Information Grid, the committee
recommends an increase of $5.0 million in operation and
maintenance for the Army National Guard to complete engineering
studies for the NDFON program.

Other Issues

Budget Justification Exhibit Materials

The committee notes that the quality of the budget exhibits
differ widely from one service to another despite the existence
of guidelines and regulations that prescribe requirements for
the preparation of budget materials. In addition, the committee
understands that all budget materials are due to the committee
within 30 days of the budget request. This year, in all but the
case of one service, three services and the Office of the
Secretary of Defense submitted budget materials well beyond 60
days after the submission of the budget request. It is also
important to note that the Office of the Secretary of Defense's
Operation and Maintenance Overview was the last exhibit
delivered to the committee on April 24, 2003. The committee
directs the Office of the Secretary of Defense (Comptroller) to
provide a complete list of all budget exhibits and their
expected delivery dates to the committee by December 15, 2003.
With regard to the Department's operation and maintenance
overview, the committee notes that parts of this overview are
redundant. Specifically, the appropriation highlights should be
a summary of the key changes of each service instead of a
simple listing of every change in the budget. The detailed
changes are already listed in each of the budget exhibits
provided by the services. The committee encourages the Office
of the Secretary of Defense (Comptroller) to use the overview
exhibit to convey overarching trends that outline program
changes for each of the services.
The committee directs the Office of the Secretary of
Defense (Comptroller) and the service's assistant secretaries
of financial management to include in the submitted budget
justification material the baseline costs of programs where
program change is identified and explained. To assess the merit
of program growth, the committee must have not only an
explanation for the changes but the ability to review and
evaluate the significance and relativity of the highlighted
changes.
The committee notes that the performance criteria and
evaluation summaries provided in the budget exhibits often fail
at providing measurable performance metrics. In many cases,
this part of the budget exhibit has become a simple accounting
report of the number of systems currently being used. The
committee directs the Office of the Secretary of Defense
(Comptroller) and the service's assistant secretaries of
financial management to review performance criteria in their
respective operations and maintenance budget exhibits and
ensure that measurable metrics are developed for the fiscal
year 2005 budget. Specifically, the committee requests that
summary analysis is provided explaining each criterion and how
the service is performing against that criterion. Furthermore,
the committee directs the Office of theSecretary of Defense
(Comptroller) and the service's assistant secretaries of financial
management to provide a report that outlines the current performance
criteria and the proposed changes by subactivity group to the committee
by September 12, 2003.
The committee is concerned that the reporting of civilian
personnel budgets continues to be either overstated or
understated in the budget exhibits. Accordingly, the committee
directs the Office of the Secretary of Defense (Comptroller)
and the service's assistant secretaries of financial management
to develop and include in the fiscal year 2005 budget exhibits
an average salary cost for each subactivity group as a
component of the personnel summary.
The committee is troubled by the continued growth in the
other costs and other contracts' line items in the service's
summary of price and growth exhibit. The committee directs the
Office of the Secretary of Defense (Comptroller) and the
service's assistant secretaries of financial management to
provide a detailed listing of all the component costs of these
two existing line items to the committee by October 21, 2003.
The committee also notes some services do not list the foreign
currency costs associated with each of the subactivity group
budget exhibits. The committee directs the Department's
assistant secretaries of financial management to ensure that
these costs are correctly displayed in the fiscal year 2005
budget exhibits.
The committee notes that there is not uniformity among the
service's summary of increases and decreases. The committee
directs the Office of the Secretary of Defense (Comptroller)
and the service's assistant secretaries of financial management
to ensure each specific program change is listed by the
required category for the summary of increases and decreases in
the fiscal year 2005 budget exhibits.
Finally, the committee directs the Office of the Secretary
of Defense (Comptroller) and the service's assistant
secretaries of financial management to ensure that program
transfers from one subactivity group to another or transfers
from one appropriation to another be listed in the transfer
portion of reconciliation of increases and decreases section
for each subactivity group. Currently, many of these transfers
are included in program changes and artificially influence the
reconciliation of program increases or decreases.

Cash Management

The Navy Working Capital Fund budget justification material
shows that the Navy plans to transfer $448 million from the
working capital fund to the operation and maintenance account
in fiscal year 2004. The Navy plans on using this excess cash
to finance the operation and maintenance requirements. Funding
defense accounts from excess working capital fund cash removes
direct congressional oversight and decision-making.
Furthermore, the Navy does not state what it plans on using the
$448 million for in its budget. This is not a new issue. This
committee raised similar concerns 10 years ago when it
discussed this issue in its fiscal year 1993 committee report.
The committee also noted that the Army, Navy, and Air Force
working capital fund budget justification materials provide
information on cash management. This information includes
beginning cash balances, disbursements, collections, transfers,
and ending cash balances. This information enables the
committee to perform its oversight responsibilities. However,
the DOD-wide working capital fund does not provide any
information on cash management even though the DOD-wide working
capital fund incurs about $25 billion of expenses each year.
The committee directs the Office of the Secretary of Defense
(Comptroller) to provide a cash management exhibit in the
fiscal year 2005 defense-wide working capital fund budget
justification material similar to the format provided by the
Army, Navy, and Air Force. In addition, the committee requests
the Office of the Secretary of Defense (Comptroller) and the
service's assistant secretaries of financial management update
their respective cash management budget exhibits by November 3,
2003 to reflect the status as of the end of fiscal year 2003.

Depot Maintenance Long-Term Strategy

The committee understands that the Department of Defense
has taken initial steps to develop a long term public sector
depot maintenance strategic plan. This initiative is critical
and the committee encourages the Secretary of Defense to
continue its review. This review should include an evaluation
of future workload, to include workload projections through
fiscal year 2009, and how the Department of Defense shall
maintain a core logistics capability to perform the workload.
The review should also contain a workforce revitalization plan
in light of the size of the retirement-eligible workforce.
The committee directs the Secretary of Defense to submit
this report no later than November 1, 2004, to the House
Committee on Armed Services and the Senate Committee on Armed
Services.
The Comptroller General shall evaluate this report and
provide comments and analysis to the House Committee on Armed
Services and the Senate Committee on Armed Services no later
than 90 days after the Secretary of Defense submits the report.

Expansion of Export Control Database

The committee recommends an increase of $1.4 million to the
Defense Threat Reduction Agency for the expansion of an export
control database. The funds should be used to strengthen and
expand the existing federal effort to help foreign governments
improve their export control performance through an export
control database currently used by some 16 countries in Eastern
Europe and the former Soviet Union.
Specifically, the increase of funds should be made
available to continue existing subscriptions of the export
control database for foreign countries through 2006, supply the
database to additional countries and provide education and
training for its use, and perform related research and public
education initiatives on export control policy. It would also
enhance the quality and utility of the database by expanding
its coverage of weapons of mass destruction information,
focusing more on terrorism threats, and producing a secure
intranet version of the database to encourage countries to
share information more readily.

Facility Sustainment, Renovation and Modernization

The Department of Defense (DOD) has established a goal of
funding facility sustainment at 93 percent of the requirements.
However, in order to achieve this level of facility sustainment
resourcing, the services have decremented renovation and
modernization programs dramatically. Throughout DOD, existing
facilities and infrastructure continue to fail to meet
applicable industry standards for recapitalization. This
practice exacerbates mission and quality of life deficiencies
in the short-term and creates a more extensive backlog of
required facility maintenance in the long-term. Moreover, the
committee has concerns about the Defense Facilities Strategic
Plan currently being used by DOD. In a recent General
Accounting Office report on defense infrastructure (February
2003), several concerns were highlighted ranging fromthe lack
of consistency in the services' information on facilities, to the wide
latitude the services have to assess facility conditions, to the
funding controls placed on the resources allocated for facility
sustainment, renovation and modernization. Given the importance of this
effort, the committee directs that the Secretary of Defense provide a
report to the Senate Committee on Armed Services and the House
Committee on Armed Services on how DOD intends to address the issues
outlined in the General Accounting Office report no later than the end
of the first quarter of fiscal year 2004.

Foreign Currency Accounts

The committee encourages the Department to use more
realistic foreign currency rate projections in future budgets
as year of execution challenges are known to exist that have
had an unfavorable impact on service budgets. The committee
directs the Office of Secretary of Defense (Comptroller) to
submit a report by October 1, 2004, outlining the procedure and
process used to establish the annual foreign currency rates.

Maintaining the Strategic Domestic Beryllium Supply

The committee is aware that the domestic supply of the
strategic and critical metal beryllium is in danger of being
depleted. Metallic beryllium is used extensively in DOD weapons
systems, DOE strategic nuclear applications and several
critical civilian applications. Moreover, the only domestic
producer of metal beryllium has closed its primary metal
production plant because of obsolescence. Therefore, the
committee directs that the DOD conduct an in-depth study of the
beryllium supply issue and make recommendations regarding how
future access to beryllium could be assured. The study should
include recommendations regarding how industry might modernize
capacities for the primary production of beryllium and consider
innovative means to partner with industry to solve this
critical issue. Recommendations may include, but not be limited
to, use of funding under the Defense Production Act, Title III,
and judicious use of the National Defense Stockpile. The
Department will submit a report containing the conclusions and
recommendations of the study to the Senate Committee on Armed
Services and the House Committee on Armed Services not later
than March 1, 2004.

Ship Intermediate and Depot Maintenance Funding

The Navy intends to stop distinguishing between
intermediate and depot maintenance costs in the budget
materials. The committee believes it is important to understand
the costs associated with each type of work and, therefore,
directs the Secretary of Navy to continue to distinguish the
costs associated with intermediate maintenance and depot
maintenance for ships and to continue to maintain separate sub-
activity groups in the budget justification material.

LEGISLATIVE PROVISIONS

Subtitle A--Authorization of Appropriations

Section 301--Operation and Maintenance Funding

This section would authorize $114.0 billion in operations
and maintenance funding for the Armed Forces and other
activities of the Department of Defense.

Section 302--Working Capital Funds

This section would authorize $2.8 billion for working
capital funds of the Department of Defense.

Section 303--Other Department of Defense Programs

This section would authorize $15.3 billion for the Defense
Health Program, of which $14.9 billion is for operations and
maintenance funding; $65.8 million is for research,
development, test and evaluation funding, and $327.8 million is
for procurement.
This section would also authorize $1.58 billion for
Chemical Agents and Munitions Destruction, of which $1.25
billion is for operations and maintenance funding, $251.9
million is for research, development, test, and evaluation
funding, and $79.2 million is for procurement funding. Funding
for military construction related to this program is authorized
in defense-wide military construction.
This section would also authorize $817.4 million for the
defense-wide drug interdiction and counter-drug activities.
This section would also authorize $162.4 million for the
Defense Inspector General.

Subtitle B--Environmental Provisions

Section 311--Reauthorization and Modification of Title I of Sikes Act

This section would amend section 670f of title 16, United
States Code, to reauthorize section 108 of the Sikes Act,
(Public Law 86-797), by striking ``fiscal years 1998 through
2003'' and in each place it appears inserting ``fiscal years
2004 through 2008.'' This section expresses the Sense of
Congress regarding the Department's practice of outsourcing the
functions of natural resource managers on its military
installations. This section further requires creation of a
five-year pilot program for invasive species management for
military installations on Guam.

Section 312--Authorization for Defense Participation in Wetland
Mitigation Banks

This section would amend Chapter 159 of title 10, United
States Code, to permit the secretaries of the military
departments to participate in wetland mitigation banking
programs and consolidated user sites (``in-lieu-fee'' programs)
as an alternative to creating a wetland for mitigation on
federal property for construction projects.

Section 313--Inclusion of Environmental Response Equipment and Services
in Navy Definitions of Salvage Facilities and Salvage Services

This section would amend sections 7361 and 7363 of title
10, United States Code, to clarify the Secretary of the Navy's
authority to provide salvage facilities and to assert claims
for salvage services encompassing environmental response
equipment and activities.

Section 314--Clarification of Department of Defense Response to
Environmental Emergencies

This section would amend sections 402, 404 and 2561(a) of
title 10, United States Code, to clarify the discretionary
authority of the Secretary of Defense to respond to
environmental emergencies by providing humanitarian assistance,
including the authority to transport supplies or provide
assistance intended for use to respond to or mitigate the
effects of an event such as an oil spill that threatens serious
harm to the environment.

Section 315--Requirements for Restoration Advisory Boards and Exemption
from Federal Advisory Committee Act

This section would amend section 2705(d)(2) of title 10,
United States Code, to amend the regulations relating to the
establishment, characteristics, composition, and funding of
Restoration Advisory Boards and to exempt Restoration Advisory
Boards from application of the Federal Advisory Committee Act,
(5 U.S.C. App.).

Section 316--Report Regarding Impact of Civilian Community Encroachment
and Certain Legal Requirements on Military Installations and Ranges

This section would require the Secretary of Defense to
study and provide a one-time report to Congress regarding the
impact of civilian community encroachment on the readiness
requirements and normal operations at military installations
that are required to maintain safety buffer zones or safety
arcs as part of their functional mission activities. The report
would also include results of a study on the impact on
activities at military installations and operational ranges, if
any, due to compliance by the Department with State
Implementation Plans for air quality under section 110 of the
Clean Air Act (42 U.S.C. 7410), the Solid Waste Disposal Act
(42 U.S.C. 6901), and the Comprehensive Environmental
Restoration, Compensation and Liability Act (42 U.S.C. 9601).

Section 317--Military Readiness and Conservation of Protected Species

This section would amend the Endangered Species Act of 1973
(Public Law 93-205) at section 1533 of title 16 United States
Code, to provide that the Secretary of the Interior, after
making a determination that a species is endangered or
threatened, would make future designations or revise existing
designations of critical habitat to the maximum extent
necessary. This section would prohibit further designations of
critical habitat for endangered species in areas for which an
Integrated Natural Resources Management Plan has been prepared
under section 101 of the Sikes Act (Public Law 86-797). This
section would also require regulatory agencies to consider
national security concerns in addition to economic impact prior
to designating future areas of critical habitat. This section
would not annul existing critical habitat designations, but it
would permit the Secretary of the Interior to exercise
discretion to revise existing critical habitat designations on
military installations. No existing critical habitat can be
revised, however, if such action would result in the extinction
of an endangered or threatened species.

Section 318--Military Readiness and Marine Mammal Protection

This section would amend the Marine Mammal Protection Act
of 1972 (Public Law 92-522) at sections 1362 and 1371 of title
16 United States Code, by clarifying the definition of
``harassment.'' The new definition would provide greater
clarity and notice regarding the application of the Marine
Mammal Protection Act to Department of Defense activities,
especially military readiness activities.
The new definition reflects the position of the National
Research Council (NRC). In a report published in 2000, the NRC
stated that there was no valid reason for regulating minor
changes in behavior having no significant impact on the
viability of the marine mammal stock. Rather, regulation of
marine mammal behavior should be focused on minimizing injury
and biologically significant disruptions to behavior critical
to survival and reproduction.
The new definition follows the NRC report by requiring that
Level A harassment, related to injury, involve ``any act that
injures or has the significant potential to injure'' a marine
mammal. Likewise, for Level B harassment, related to changes in
behavior, the new definition would cover an action that
``disturbs or is likely to disturb'' a marine mammal by causing
disruptions of biologically important behaviors related to
survival and reproduction ``to a point where such behavioral
patterns are abandoned or significantly altered.''
This section creates an exemption that would allow the
Secretary of Defense, after conferring with the Secretary of
Commerce, the Secretary of the Interior, or both, as
appropriate, to exempt the Department of Defense's military
readiness activities from the requirements of the Marine Mammal
Protection Act when necessary for national defense for up to
two years with renewable two-year periods of exemption.
This section cures deficiencies that currently exist when
the `small take' authorization provisions of the Marine Mammal
Protection Act are applied to military readiness and other
activities. This section eliminates the ``specified geographic
regions'' and ``small numbers'' requirements and would focus
impact determinations on a scientifically based ``negligible
impacts'' standard. The underlying rulemaking process would
still analyze the impacts and scope of military readiness and
other activities.
The committee believes that the deletion of ``specified
geographical regions'' and ``small numbers'' requirements from
the Marine Mammal Protection Act affect the current regulatory
definition of ``specified activity,'' set forth in 50 CFR
216.103, and would require revision to ensure consistency with
the Marine Mammal Protection Act as amended.
This section also amends the requirements of the Marine
Mammal Protection Act concerning public notice for the `small
take' authorization process. For military readiness activities
only, public notice will be limited to the Federal Register. In
referring to military readiness activities, the committee means
those activities as defined in section 315(f) of the Bob Stump
National Defense Authorization Act for Fiscal Year 2003 (Public
Law 107-314), see also title 16 United States Code 703 note. A
requirement for public notice in local papers could compromise
national security and thus would be eliminated. References in
the section to military readiness activities ``authorized by
the Secretary of Defense'' do not require a specific
authorization of each activity by the Secretary of Defense and
do not prohibit the Secretary of Defense from delegating such
authority. Finally, none of these changes requires the public
disclosure of classified information under any circumstances.

Section 319--Limitation on Department of Defense Responsibility for
Civilian Water Consumption Impacts Related to Fort Huachuca, Arizona

This section would amend section 7 of the Endangered
Species Act of 1973 (16 U.S.C. 1536) in the case of Fort
Huachuca, Arizona. Novel application of the Endangered Species
Act is having unintended consequences on Fort Huachuca's
readiness and training activities due to efforts of third
parties to hold the installation accountable for water usage in
the surroundingcommunity over which it has no authority and
control. This section clarifies that the Secretary of the Army cannot
be held responsible under the Endangered Species Act for water
consumption that occurs outside of the Fort and is beyond the direct
authority and control of the Secretary of the Army.
This section specifies that the Secretary of the Army may
voluntarily undertake efforts to mitigate water consumption
related to Fort Huachuca.

Section 320--Construction of Wetland Crossings, Camp Shelby Combined
Arms Maneuver Area, Camp Shelby, Mississippi

This section would authorize the Secretary of the Army to
use operation and maintenance funds to construct wetlands
crossings at Camp Shelby, Mississippi. Although current law
permits the use of up to $750,000 in operation and maintenance
funds for military construction activities, the cost of
providing sufficient crossing sites at Camp Shelby to ensure
that training is conducted with the spirit and intent of
environmental laws would exceed this statutory cap.

Subtitle C--Workplace and Depot Issues

Section 321--Exclusion of Certain Expenditures from Percentage
Limitation on Contracting for Performance of Depot-Level Maintenance
and Repair Workloads

Currently, section 2474(f) of title 10, United States Code,
excludes work performed by non-federal personnel at Department
of Defense maintenance and repair depots from the percentage
limitations (50/50) on contracting for depot-level maintenance
by the private sector. The exclusion applies for the duration
of all public-private partnership depot maintenance contracts
that are signed before the end of fiscal year 2006. This
section would remove the date limitation. The committee
believes that the date limitation impedes the ability of both
the public and the private sectors to achieve fully the
benefits of public-private partnerships.

Section 322--High-Performing Organization Business Process
Reengineering Pilot Program

This section would authorize the Secretary of Defense to
implement a pilot program whereby Department of Defense
organizations are incentivized to follow a business process re-
engineering initiative in order to become a high performing
organization. Under the pilot program, functions within an
organization that are part of a BPR, shall not undergo a
public-private competition during the design and implementation
phase of the BPR. After a BPR is completed, those functions
shall not undergo a public-private competition for a period of
five years.
Business process redesign, or business process re-
engineering, (BPR) is an organization's analysis and redesign
of existing business processes to achieve improvements in
performance measures. Business processes may include:
developing a new product, repairing aircraft engines,
processing and paying a vendor. The committee believes that a
BPR is more than downsizing, automating, or realigning, rather,
it is fundamental reshaping of the way work is done by a given
organization. Within the Department of Defense, therefore, a
BPR would require an analysis of core and non-core functions.
The committee notes that significant obstacles, including lack
of sustained commitment and leadership, lack of incentive,
unrealistic scope and expectations, and resistance to change,
may hinder or cause to fail numerous attempts at a BPR. The
committee is aware that Naval Surface Warfare Center, Crane
Division, underwent a successful BPR; and the committee
recommends that this facility be considered for the pilot
program.

Section 323--Delayed Implementation of Office of Revised Management and
Budget Circular A-76 by Department of Defense Pending Report

This section would require the Secretary of Defense to
report to the Senate Committee on Armed Services and the House
Committee on Armed Services on the new Office of Management and
Budget Circular A-76 and then wait for a period of 45 days
before implementing the Circular.

Section 324--Naval Aviation Depots Multi-Trades Demonstration Project

This section would require the Secretary of Navy to conduct
a demonstration project to evaluate the benefits of promoting
workers who perform multiple trades. Wage grade journeymen at
any of the three naval aviation depots can qualify to learn an
additional trade and be rewarded with a one-grade promotion.
The section explains that the worker must use the new trades at
least 25 percent of the time during the worker's work week.

Subtitle D--Information Technology

Section 331--Performance-based and Results-based Management
Requirements for Chief Information Officers of Department of Defense

This section would amend section 2223(b) of title 10,
United States Code, to give the Chief Information Officers
(CIO) of the Department of Defense (DOD), military departments,
defense agencies, and field activities more responsibility and
accountability to review their individual agency's information
technology (IT) programs, projects, and systems. The committee
expects CIOs throughout the Department to have more input and
oversight into their respective agency's IT programs and
policies, focusing on results and ensuring that IT investments
make their agencies more innovative, efficient, and responsive.

Subtitle E--Other Matters

Section 341--Cataloging and Standardization for Defense Supply
Management

This section would amend the current method the Secretary
of Defense follows in the cataloging and coding, for
identification purposes, of supply items. Pursuant to chapter
145 of title 10, United States Code, the Secretary of Defense
cataloged supply items with a national stock number (NSN). An
NSN is a Department of Defense unique combination of letters
and numbers used to identify a supply part. Commercial
practices, however, dictate that the Secretary of Defense
should adopt commercially accepted universal codes for such
supply items, rather than dictating a DOD unique code. The
committee recognizes that this is a change to long existing
practice within the Department and therefore recommends a
thorough transition and training plan be developed and
disseminated to all appropriate organizations before making
such changes. The committee also encourages the Secretary of
Defense to work closely with industry in the adoption of
universal supply codes. This section would amend section 2451
of title 10,United States Code, and repeal sections 2452, 2453,
and 2455 of title 10, United States Code, in order to provide the
Secretary of Defense a considerable level of flexibility in the
adoption of commercially available and universally accepted codes for
supply items.

Section 342--Space-Available Transportation for Dependents of Members
Assigned to Overseas Duty Locations for Continuous Period in Excess of
One Year.

This provision would authorize the dependents of service
members who are assigned overseas for a continuous period in
excess of one year, to use space-available transportation to
travel between the overseas duty location and the United States
and return, or between the overseas duty location and another
overseas location and return.

Section 343--Preservation of Military Weather Reconnaissance Mission

This section would prohibit the Secretary of Defense from
transferring, discontinuing, or disestablishing the weather
reconnaissance mission, currently performed within the Air
Force Reserve, unless another organization has the ability to
perform that mission as it is currently performed.

TITLE IV--MILITARY PERSONNEL AUTHORIZATIONS

Overview

The committee's military personnel recommendations build
not only on the emerging lessons learned from both the global
war on terrorism and the war with Iraq, known as Operation
Iraqi Freedom, but also on long-standing committee concerns
about the inadequacy of military manpower for the missions
assigned to both the active and reserve components.
The inadequacy of military manpower, especially active
component strengths, is highlighted in a number of areas. For
example, since 1995, the peacetime demands of the national
military strategy have exceeded the ability of the active
components to such an extent that reserve component personnel,
in numbers equivalent to 33,000 full-time active duty
personnel, are required to be ordered to active duty annually.
As a further indicator of active duty manpower inadequacy,
the military services ended fiscal year 2002 with 24,500
personnel in excess of the strengths requested by the
Department of Defense and authorized by Congress. More
recently, at the time of the budget submission for fiscal year
2004, the services were projecting they would end fiscal year
2003 with active component strengths that exceeded authorized
levels by 28,000, some 2 percent to 7.1 percent above
authorized levels, depending on the service.
The global war on terrorism has expanded existing manpower
requirements and added a host of new ones, especially those
related to homeland security. To meet those requirements, the
services mobilized more than 100,000 reservists, many on short
notice for up to one year, with thousands required to serve for
up to two years because the active component lacks the
qualified manpower. In light of the global war on terrorism and
changes to the national security strategy, each of the military
services undertook efforts to quantify total force (active,
national guard and reserve) requirements. Each service found
significant manpower shortfalls. The Army estimated the
shortfall to be at least 41,000 and as much as 123,000. The Air
Force estimated a shortfall ranging from 31,000 to 52,000. The
Marine Corps estimated its shortfall to be about 15,000, and
the Navy identified a shortfall of about 4,500.
Notwithstanding the unequivocal evidence of manpower
shortfalls, the Secretary of Defense has promulgated a so-
called ``net-zero'' policy. This policy holds that military end
strength should not increase beyond the fiscal year 2002
authorized levels, and that any new military manpower
requirements should be met by the conversion of military and
civilian spaces in lower priority units and missions to fill
higher priority requirements.
While the committee supports the Secretary's effort to
require the services to re-examine their manpower requirements,
the committee notes that any conversion of military spaces will
be a costly multi-year effort, and that the fiscal year 2004
budget request provides little in the way of additional
resources to the services for military manpower conversions.
Furthermore, the committee understands that the services have
identified high priority manning requirements that should be
met quickly, including increases in special operating forces,
intelligence, communications, military police, force protection
personnel, and other skills important to conducting the global
war on terrorism. However, the committee is disturbed to learn
that rather than being provided additional resources to cover
these high priority manpower requirements, the Army and Air
Force were directed to fund new special operations force
requirements from existing manpower and resource levels over
the course of the six years of the future years' defense
budgets. The committee also is surprised to learn that among
the $831.0 million in unfunded military personnel requirements
for fiscal year 2004 identified by the Chief of Naval
Operations, were the costs of adding to the active components
some 3,800 Naval Coastal Warfare unit personnel who are now in
the Naval Reserve.
Given all this, the committee believes that it is
imperative to now begin addressing known manpower shortfalls.
To that end, the committee's recommendation would increase
active component end strength by 6,240 above the requested
levels.

ITEM OF SPECIAL INTEREST

Military Manpower Reductions

In light of the committee's belief that there are
unequivocal shortfalls in military manpower, the committee is
disturbed to see the Navy's proposal in the budget request to
begin reducing active end strength in fiscal year 2004 in
direct contravention of the statutory end strength floors. The
committee's recommendations contained in this title reject the
Navy proposal and reaffirm the committee's long-held belief in
the need for a larger military force in all the military
services. Given this, the committee is highly concerned that
within the Department of Defense, consideration may already be
developing for the fiscal year 2005 budget request for further
substantial reductions to active and reserve component military
manpower, not only in the Navy, but also in the other military
services. The basis for such considerations appear to be early
lessons learned from recent combat operations in Afghanistan
and Iraq that significant force structure reductions, with
concurrent manpower reductions, can be made.
The committee believes that such conclusions are premature,
if for no other reason than the certainty that both the ongoing
Operation Enduring Freedom in Afghanistan and the continuing
Operation Iraqi Freedom will require the commitment of tens of
thousands of U.S. military personnel--some early estimates
suggest more than 125,000 for Iraq alone--for the foreseeable
future. Beyond that, the committee believes that dynamic,
unpredictable challenges will present themselves in other
regions of the world that will require the commitment of U.S.
military resources. Thus, considering today's existing military
force levels, with no certainty about the end of current
requirements, and the near certainty of a growth in new
requirements, the committee is forced to conclude that
reductions to military manpower would ultimately damage the
long-term ability of the military forces to meet the full range
of missions assigned them by the national security strategy.
For these reasons, the committee strongly urges the Secretary
of Defense and the Chairman of the Joint Chiefs of Staff to
fully consult with the committee before undertaking any
reductions to manpower levels authorized by Congress.

LEGISLATIVE PROVISIONS

Subtitle A--Active Forces

Section 401--End Strengths for Active Forces

This section would authorize the following end strengths
for active duty personnel of the armed forces as of September
30, 2004.

----------------------------------------------------------------------------------------------------------------
FY 2004 Change from
FY 2003 ------------------------------------------------------
Service authorized Committee FY 2004 FY 2003
and floor Request recommendation request authorized
----------------------------------------------------------------------------------------------------------------
Army........................................ 480,000 480,000 482,375 2,375 2,375
Navy........................................ 375,700 373,800 375,700 1,900 0
USMC........................................ 175,000 175,000 175,000 0 0
Air Force................................... 359,000 359,300 361,268 1,968 2,268
DOD......................................... 1,389,700 1,388,100 1,394,343 6,243 4,643
----------------------------------------------------------------------------------------------------------------

The Army increases reflect the committee's support for the
results of a Total Army Analysis that identified more than
6,000 active Army requirements in special operations, chemical,
signal, military police and other priority needs. The Navy
increase reflects the committee's opposition to the fiscal year
2004 budget request that proposed to reduce Navy end strength
1,900 below the statutory floor, as well as the committee's
belief that the Navy should begin aggressively addressing known
shortfalls in active strength related to unfilled requirements
for Naval Coastal Warfare units. The increased Air Force
strength follows from the committee's support for growth in Air
Force special operations forces and in high priority Air Force
manpower needs in such specialties as airborne refueling,
combat control, airborne systems maintenance, loadmaster,
flight engineer, security forces, aerial port logistics,
intelligence exploitation and analysis, and firefighters. To
support the increases in active end strengths, the committee
recommends an additional $291.3 million for the military
personnel accounts of the military services above the amounts
requested in the budget.

Section 402--Revision in Permanent Active Duty End Strength Minimum
Levels

This section would establish new permanent minimum end
strengths for active duty personnel of the Army, Navy and Air
Force as of September 30, 2004. These minimum strengths reflect
the committee recommendations for active end strength shown in
section 401.

Subtitle B--Reserve Forces

Section 411--End Strengths for Selected Reserve

This section would authorize the following end strengths
for selected reserve personnel, including the end strength for
reserves on active duty in support of the reserves, as of
September 30, 2004:

----------------------------------------------------------------------------------------------------------------
FY 2004 Change from
FY 2003 ------------------------------------------------------
Service authorized Committee FY 2004 FY 2003
Request recommendation request authorized
----------------------------------------------------------------------------------------------------------------
Army National Guard......................... 350,000 350,000 350,000 0 0
Army Reserve................................ 205,000 205,000 205,000 0 0
Naval Reserve............................... 87,800 85,900 85,900 0 -1,900
Marine Corps Reserve........................ 39,558 39,600 39,600 0 42
Air National Guard.......................... 106,600 107,000 107,000 0 400
Air Force Reserve........................... 75,600 75,800 75,800 0 200
DOD Total................................... 864,558 863,300 863,300 0 -1,258
Coast Guard Reserve......................... 9,000 10,000 10,000 0 1,000
----------------------------------------------------------------------------------------------------------------

Section 412--End Strengths for Reserves on Active Duty in Support of
the Reserves

This section would authorize the following end strengths
for reserves on active duty in support of the reserves as of
September 30, 2004:

----------------------------------------------------------------------------------------------------------------
FY 2004 Change from
FY 2003 ------------------------------------------------------
Service authorized Committee FY 2004 FY 2003
Request recommendation request authorized
----------------------------------------------------------------------------------------------------------------
Army National Guard......................... 24,562 25,386 25,386 0 824
Army Reserve................................ 14,070 14,374 14,374 0 304
Naval Reserve............................... 14,572 14,384 14,384 0 -188
Marine Corps Reserve........................ 2,261 2,261 2,261 0 0
Air National Guard.......................... 11,727 12,140 12,140 0 413
Air Force Reserve........................... 1,498 1,660 1,660 0 162
DOD Total................................... 68,690 70,205 70,205 0 1515
----------------------------------------------------------------------------------------------------------------

The committee recommendation would provide for a 2.2
percent growth in the strength of these full-time reservists
above the levels authorized in fiscal year 2003.

Section 413--End Strengths for Military Technicians (Dual Status)

This section would authorize the following end strengths
for military technicians (dual status) as of September 30,
2004:

----------------------------------------------------------------------------------------------------------------
FY 2004 Change from
FY 2003 ------------------------------------------------------
Service authorized Committee FY 2004 FY 2003
Request recommendation request authorized
----------------------------------------------------------------------------------------------------------------
Army National Guard......................... 24,102 24,589 24,589 0 487
Army Reserve................................ 6,599 6,699 7,844 1,145 1,245
Air National Guard.......................... 22,495 22,806 22,806 0 311
Air Force Reserve........................... 9,911 9,991 9,991 0 80
-------------------------------------------------------------------
DOD Total 63,107 64,085 65,230 1,145 2,123
----------------------------------------------------------------------------------------------------------------

The committee's recommendation would provide for a 3.4
percent growth in the strength of military technicians above
the levels authorized in fiscal year 2003.

Section 414--Fiscal Year 2004 Limitation on Non-Dual Status Technicians

This section would establish the maximum end strengths for
the reserve components of the Army and Air Force for non-dual
status technicians as of September 30, 2004.

Section 415--Permanent Limitations on Number of Non-Dual Status
Technicians

This section would increase to 595 the permanent limit on
the number of non-dual status military technicians who are
allowed to be employed by the Army Reserve on or after October
1, 2007. It would also establish a separate permanent limit of
90 non-dual status technicians who are allowed to be employed
by the Air Force Reserve on or after October 1, 2007. The
committee recommends this increase from the current combined
limit of 170 for both the Army Reserve and Air Force Reserve as
a necessary follow-on to previous changes in law in the Floyd
D. Spence National Defense Authorization Act for Fiscal Year
2001 (Public Law 106-398), that revised the mandatory
separation age for certain non-dual status technicians from 55
to 60.

Subtitle C--Authorization of Appropriations

Section 421--Military Personnel

This section would authorize $98.94 billion to be
appropriated for military personnel. This authorization of
appropriations reflects both reductions and increases to the
budget request for military personnel that are itemized below.

Total Force: Military Personnel Amount (in millions)
Army: Increase active end strength (2,375).............. 117,967,000
Army National Guard: Sustain AGR growth................. 27,417,000
Navy: Increase active end strength (1,900).............. 98,000,000
Air Force: Increase active end strength (1,968)......... 75,300,000
Army: End of certain SW Asia contingency operations..... -74,200,000
Navy: End of certain SW Asia contingency operations..... -1,200,000
Naval Reserve: End of certain SW Asia contingency
operations.......................................... -800,000
Marine Corps: End of certain SW Asia contingency
operations.......................................... -500,000
Air Force: End of certain SW Asia contingency operations -241,984,000
Offset O&M increase for Army National Guard military
technicians......................................... -16,000,000
Offset O&M increases in Defense Health Program.......... -1,554,000

Section 422--Armed Forces Retirement Home

This section would authorize $65,279,000 to be appropriated
for the operation of the Armed Forces Retirement Home during
fiscal year 2004.

TITLE V--MILITARY PERSONNEL POLICY

OVERVIEW

The committee recommendations contained in this title build
on emerging lessons learned from not only the global war on
terrorism, but also the war with Iraq. To that end, the
committee recommends important changes to reserve component
personnel policy, including a simplified, more flexible system
for measuring a reservist's annual training requirements. The
committee also recommends that the process for managing and
compensating personnel experiencing extended or frequent
deployments be restructured to make it a more useful and cost-
effective tool.

ITEMS OF SPECIAL INTEREST

Department of Defense Education Partnerships

The committee continues to believe that the use of web-
based technology is essential to both the retention and
recruitment of military personnel for the armed forces. The
committee support for such web-based technology efforts is
reflected in the statement of the managers in title V of the
conference report for the Bob Stump National Defense
Authorization Act for Fiscal Year 2003 (H. Rept. 107-772). That
report encouraged the Department of Defense to foster web-based
technology partnerships with high schools and institutions of
higher learning. In that context, the committee is especially
pleased with the initiative of the United States Recruiting
Command to work with a national consortium of high schools and
institutions of higher education to facilitate the enrollment
and transfer of students with full recognition of credits among
two-year and four-year institutions of higher education. If
implemented, the committee believes such a partnership may
assist Army recruiting and retention, while enhancing higher
education opportunities for Army personnel.

Department of Defense Overseas Schools Teacher Recruitment Incentives

The committee is concerned that United States citizens
recruited from an overseas location to teach in Department of
Defense (DOD) overseas schools are not provided the same
allowances as American citizen teachers recruited in the United
States. The committee is aware, based on the General Accounting
Office report entitled, ``DOD Overseas Schools--Compensation
Adequate for Recruiting and Retaining Well-Qualified
Teachers,'' as directed by the National Defense Authorization
Act for Fiscal Year 2002 (Public Law 107-107), that differences
can arise because allowances are used as recruitment
incentives. The committee also understands that both the
Secretary of Defense and the Secretary of State share the
authority for prescribing regulations governing allowances for
the overseas teachers. To ensure that the recruitment
incentives do not place United States citizens recruited
overseas at an undue disadvantage compared to U.S. citizens
recruited in the United States, the committee directs the
Secretary of Defense, in coordination with the Secretary of
State, to review the allowances and recruitment incentive
practices and report the findings to the Senate Committee on
Armed Services and House Committee on Armed Services no later
than April 15, 2004.

Electronic Voting Demonstration

The committee remains committed to ensuring that the 2004
electronic voting demonstration project authorized in section
1604 of the National Defense Authorization Act for Fiscal Year
2002 (Public Law 107-107) is robust, technologically advanced,
and statistically significant. The committee strongly believes
that electronic voting systems are the best way to overcome the
long-standing problems associated with military absentee voting
and guarantee military voting rights in the future. The
committee urges the Secretary of Defense to closely monitor
preparation for the demonstration project and to commit the
resources that are needed to make the project a success.

Federal Write-In Absentee Ballot

The committee has noted that military commanders have not
effectively emphasized the use of the Federal Write-In Absentee
Ballot (FWAB) for military voters who have not received their
local election ballots in a timely manner. The committee
believes that military voters have been denied a valuable tool
that can provide the opportunity to vote while assigned to the
most austere locations when they otherwise would be denied the
right to vote because of mail delays or administrative
problems. The committee urges the Secretary of Defense and the
secretaries of the military departments to initiate programs to
educate commanders, service voting officials, service members,
and their family members about the availability and appropriate
use of the FWAB. For example, the committee believes that all
deploying units should consider the timing of future elections
and ensure that an adequate supply of Federal Write-In Absentee
Ballots is available during the deployment.

Joint Advertising and Market Research

The committee believes that the Department of Defense has
an important corporate-level role to play in complementing the
recruiting advertising programs of the individual services. In
that light, the committee commends the Department's joint
advertising and market research reinvention effort, believing
the program will have a direct, positive long-term impact on
the ability of the Department and the military services to
recruit quality personnel. Reflecting its belief in the
Department's joint advertising and market research effort, the
committee worked to sustain funding for the program in the Bob
Stump National Defense Authorization Act for Fiscal Year 2003
(Public Law 107-314). The committee notes with dismay, however,
that the Department's budget request for fiscal year 2004
contains only minimal funding for the joint advertising and
market research program, leaving a shortfall of some $41.5
million. Such a one-year reduction is not justified, and the
committee strongly urges the Department to fully fund this
important program through reprogramming at the earliest
opportunity.

Warrant Officer Appointments for the Army National Guard

The committee has noted that the Army National Guard has
not been able to fill all warrant officer vacancies. The
committee is concerned that many qualified senior
noncommissioned officers within the Army National Guard are
being overlooked for warrantofficer appointments. The committee
believes that the Army National Guard has adequate educational
institutions and resources to prepare noncommissioned officers for
appointment as warrant officers. However, the Army has only one
appointment source for warrant officers and the capability of the Army
National Guard to prepare noncommissioned officers for warrant officer
appointment is not utilized. The committee recommends that the
Secretary of the Army review the process for appointing warrant
officers and consider authorizing the Army National Guard to make
warrant officer appointments.

LEGISLATIVE PROVISIONS

Subtitle A--General and Flag Officer Matters

Section 501--Standardization of Qualifications for Appointment as
Service Chief

This section would require that candidates for selection as
the Chief of Naval Operations and the Commandant of the Marine
Corps be chosen from the flag officers of the Navy or general
officers of the Marine Corps. Current law specifies that
candidates for the position of Chief of Naval Operations be
chosen from among active duty officers who, among other
qualifications, hold the grade of rear admiral (O-8) or above,
and that candidates for the position of Commandant of the
Marine Corps be chosen from among active duty officers in the
grade of colonel (O-6) or above. The committee recommendation
would make qualification criteria with respect to grade
consistent across all four of the military services.

Subtitle B--Other Officer Personnel Policy Matters

Section 511--Repeal of Prohibition on Transfer Between Line of the Navy
and Navy Staff Corps Applicable to Regular Navy Officers in Grades
Above Lieutenant Commander

This section would repeal the prohibition against regular
officers in the grade of captain and above from moving between
the line of the Navy and the Navy staff corps.

Section 512--Retention of Health Professions Officers to Fulfill
Active-Duty Service Commitments Following Promotion Nonselection

This section would authorize the secretary concerned to
retain officers serving in health professions until the end of
their active duty service obligations, notwithstanding the
requirement under law to discharge them on an earlier date due
to nonselection for promotion. This section would allow the
secretary to decline to retain an officer if retention of the
officer is not in the best interests of the service.

Section 513--Increased Flexibility for Voluntary Retirement for
Military Officers

The amendment would authorize the Secretary of Defense and
the secretaries of the military departments greater flexibility
in determining the grade in which active duty and reserve
officers may be retired. Specifically, this section would:
(1) Make permanent the authority of the Secretary of
Defense to reduce from three to two the number of years that
must be served in grades above major, or lieutenant commander
in the Navy, and below brigadier general, or rear admiral
(lower half) in the Navy, before retiring in those grades.
(2) Require officers serving in grades above colonel, or
captain in the Navy, to serve a minimum of one year time-in-
grade before being allowed to retire in that grade.
(3) Replace the requirement for the Secretary of Defense to
notify Congress that officers have performed satisfactorily in
grades above major general, or rear admiral (upper half) in the
Navy, before being allowed to retire in those grades with an
authority for the secretary of the military department
concerned to approve retirement of officers in those grades
with the concurrence of the Secretary of Defense.

Subtitle C--Reserve Component Matters

Section 521--Streamlined Process for Continuation of Officers on the
Reserve Active-Status List

This section would remove the requirement for the secretary
concerned to conduct a selection board to identify officers
eligible for continuation on the reserve active-status list
after being subject to separation or retirement due to
nonselection for promotion, selection for early separation, or
other reason.

Section 522--Consideration of Reserve Officers for Position Vacancy
Promotions in Time of War or National Emergency

This section would authorize the secretary concerned to
consider reserve officers ordered to active duty in support of
a contingency operation for vacancy promotions for a period of
up to two years of active duty service.

Section 523--Simplification of Determination of Annual Participation
for Purposes of Ready Reserve Training Requirements

This section would restate (in terms of days of duty to be
performed) the annual training requirement for all members of
the ready reserve, which is comprised of members of the
selected reserve and individual ready reserve. At present, the
typical member of the selected reserve is required to perform
the equivalent of 38 training days of duty in the form of 48
periods of inactive duty for training (traditionally performed
at the rate of four periods over a weekend) and 14 days of
annual training. Other reservists fulfill training and active
duty requirements in at least 32 different categories of duty
status. This section would provide one measure of annual
participation--38 days per year.

Section 524--Authority for Delegation of Required Secretarial Special
Finding for Placement of Certain Retired Members in Ready Reserve

This section would allow the secretaries of the military
departments to delegate determinations of whether retired
members possess a skill so critical that they will be permitted
to serve in a reserve component following retirement. However,
this section would limit the delegation authority to no lower
than the level of assistant secretary of the military service,
or the level of lieutenant general or vice admiral in an armed
force charged with responsibility for military personnel
policy.

Section 525--Authority To Provide Expenses of Army and Air Staff
Personnel and National Guard Bureau Personnel Attending National
Conventions of Certain Military Associations

This section would authorize the secretary concerned to
fund the necessary expenses of regular members assigned to the
National Guard Bureau or the Army General Staff or the Air
Staff to attend the national convention of the Enlisted
Association of the National Guard of the United States in the
same manner as funding is provided to support attendance at the
national conventions of the National Guard Association of the
United States and the Adjutants General Association.

Subtitle D--Military Education and Training

Section 531--Authority for the Marine Corps University to Award the
Degree of Master of Operational Studies

This section would authorize the president of the Marine
Corps University to confer the degree of master of operational
studies upon graduates of the Command and Staff College's
School of Advanced Warfighting who fulfill the requirements for
that degree.

Section 532--Expanded Educational Assistance Authority for Cadets and
Midshipmen Receiving ROTC Scholarships

This section would authorize the secretary of the military
department concerned to provide Senior Reserve Officer Training
Corps scholarship students financial assistance in the form of
room and board or other expenses required by the educational
institution, so long as the total amount of assistance does not
exceed what the student would have otherwise received for
tuition, fees, books, and laboratory expenses.

Section 533--Increase in Allocation of Scholarships Under Army Reserve
ROTC Scholarship Program to Students at Military Junior Colleges

This section would expand from 10 to 17 the number of
cadets attending each military junior college on a Reserve
Officer Training Corps scholarship. Such cadets are required to
serve in the reserve components upon graduation.

Section 534--Inclusion of Accrued Interest in Amounts that May be
Repaid Under Selected Reserve Critical Specialties Education Loan
Repayment Program

This section would clarify that the interest accrued on a
student loan should be included in the loan amount used as the
basis for calculating the annual payment to reserve members
under the selected reserve education loan repayment program.

Section 535--Authority for Nonscholarship Senior ROTC Sophomores to
Voluntarily Contract for and Receive Subsistence Allowance

This section would authorize the secretary of the military
department concerned to enter into a service contract with a
Senior Reserve Officer Training Corps student who is not on a
scholarship for the purpose of making the student eligible to
receive a monthly subsistence allowance.

Section 536--Appointments to Military Service Academies from
Nominations Made by Delegates from Guam, Virgin Islands, and American
Samoa

This section would increase from two to three the number of
appointments to each of the military service academies that can
be made as a result of nominations made by the Delegate in
Congress from Guam and the Delegate in Congress from the Virgin
Islands. It would also increase from one to two the number of
appointments to each of the military service academies that can
be made as a result of nominations made by the Delegate from
American Samoa.

Section 537--Readmission to Service Academies of Certain Former Cadets
and Midshipmen

This section would authorize the secretary of a military
department to readmit a former cadet or midshipman to a service
academy on the basis of a formal report by an inspector general
in the Department of Defense, if that report found that while
attending that service academy, the cadet or midshipman had
suffered a reprisal or other injustice that led to the
resignation from the service academy.

Section 538--Authorization for Naval Postgraduate School to Provide
Instruction to Enlisted Members Participating in Certain Programs

This section would permit enlisted members of the armed
services to receive instruction at the Naval Postgraduate
School in connection with the information security scholarship
program. This Department of Defense (DOD) program is conducted
as part of an effort to recruit and retain DOD personnel who
have the computer and network security skills to meet DOD
information assurance requirements.

Section 539--Defense Task Force on Sexual Harassment and Violence at
the Military Service Academies

This section would require the Secretary of Defense to
establish a task force to examine matters related to sexual
harassment and violence at the United States Military Academy
and the United States Naval Academy. This section would require
that the task force report findings and recommendations to the
Secretary of Defense, and the secretaries of the Army and Navy,
within 12 months of the initial meeting of the task force.
Within 90 days of receiving the task force report, the
Secretary of Defense would be required to provide the report,
together with the Secretary's evaluation of the report, to the
Senate Committee on Armed Services and the House Committee on
Armed Services. At the same time, the Secretary also would be
required to provide to those committees an assessment of the
effectiveness of the corrective actions being taken at the
United States Air Force Academy as a result of various
investigations conducted at that academy into matters involving
sexual assault and harassment. Based on that report, the
committee will be in a position to judge whether it should
subsequently direct additional evaluation and assessment of the
Air Force Academy.

Subtitle E--Administrative Matters

Section 541--Enhancements to High-Tempo Personnel Program

This section would restructure the program to manage
service members subject to extended or frequent deployments.
This section would require the deployment of members beyond 400
days out of the preceding 730 days to be approved, as a
minimum, by a member of the Senior Executive Service or an
officer serving in the grade of colonel, or in the case of the
Navy, captain, when they have been selected for promotion and
are serving in a billet authorized a general or flag officer.
This section would also authorize a monthly payment of up to
$1,000 to service members for each month during which the
member is deployed for 191 or more consecutive days or for 401
days out of the preceding 730 days, or a reservist serves on
active duty for more than 30 days during the second or
subsequent mobilization for the same contingency operation.

Section 542--Enhanced Retention of Accumulated Leave for High-
Deployment Members

This section would increase the accumulated leave that may
be retained by a member serving at least 120 consecutive days
in an area authorized payment of imminent danger pay, or
similar assignment, from 90 to 120 days.

Section 543--Standardization of Time-in-Service Requirements for
Voluntary Retirement of Members of the Navy and Marine Corps with Army
and Air Force Requirements

This section would correct a minor disparity in the method
for determining eligibility for retirement among the services
by authorizing members of the Navy and Marine Corps to retire
using the same years of service standard as used by the Army
and Air Force. This section would authorize the Secretary of
the Navy to determine the effective date of the correction in
order to minimize implementation costs.

Section 544--Standardization of Statutory Authorities for Exemptions
from Requirement for Access to Secondary Schools by Military Recruiters

This section would remove the authority for local
educational agencies to vote to deny military recruiters access
to secondary schools and student information and would bring
the recruiter access policy established in section 503 of title
10, United States Code in line with the policy established in
the No Child Left Behind Act (Public Law 107-110).

Section 545--Procedures for Consideration of Applications for Award of
the Purple Heart Medal to Veterans Held as Prisoners of War Before
April 25, 1962

This section would instruct the secretary concerned to
consider the length of time between captivity and application
and the duration of captivity when reviewing cases where
individuals are seeking the award of the Purple Heart for
periods when they were held as prisoners of war before April
25, 1962. This section would also require the secretary to
provide information on prisoner of war camps to assist
individuals in assembling applications.

Section 546--Authority for Reserve and Retired Regular Officers to Hold
State and Local Elective Office Notwithstanding Call to Active Duty

This section would remove the restriction barring
reservists or retirees serving on active duty for more than 270
days from holding elective office.

Section 547--Clarification of Offense Under the Uniform Code of
Military Justice Relating to Drunken or Reckless Operation of a
Vehicle, Aircraft or Vessel

This section would make a technical correction to section
911 of title 10 of the United States Code, clarifying that an
alcohol concentration level in a person's blood or breath that
was 0.10 grams or more of alcohol per 100 milliliters of blood
(or 210 liters of breath) is a punishable offense under the
Uniform Code of Military Justice.

Section 548--Public Identification of Casualties No Sooner than 24
Hours After Notification of Next-of-Kin

This section would prohibit the Secretary of Defense from
publicly releasing the name or other personally identifying
information about military personnel who become casualties
until 24 hours after official notification of the service
member's next-of-kin has taken place.

Subtitle F--Benefits

Section 551--Additional Classes of Individuals Eligible to Participate
in the Federal Long-Term Care Insurance Program

This section would authorize reservists and federal
civilian employees who have not reached the minimum age
required to begin receiving a retired annuity and certain other
civilian employees to be eligible for the Federal Long-Term
Care Insurance Program.

Section 552--Authority To Transport Remains of Retirees and Retiree
Dependents Who Die in Military Treatment Facilities Outside the United
States

This section would expand the authority of the secretary
concerned to transport the remains of armed forces retirees and
their dependents that die in military health care facilities
from departure and destination locations within the United
States to include locations overseas.

Section 553--Eligibility for Dependents of Certain Mobilized Reservists
Stationed Overseas to Attend Defense Dependents Schools Overseas

This section would expand the eligibility for space-
available, tuition-free attendance at Department of Defense
Dependents Schools (DODDS) overseas to the dependents of
mobilized reservists who are called to active duty from a
continental United States location and whose overseas tour is
voluntarily or involuntarily extended beyond one year. The
committee makes this recommendation to address a disparity in
an admissions policy that now permits the dependents of
reservists called to active duty from an overseas location to
enroll in DODDS on a space-available, tuition-free basis, but
denies such admission to reservists mobilized from the
continental United States.
It is the committee's intent to ensure that the dependents
of mobilized reservists who become eligible for attendance at
DODDS overseas under this section be admitted at the earliest
feasible date. This section would also require the Secretary of
Defense to prescribe final implementation regulations at the
earliest opportunity for the dependents to begin schooling, but
in no case later than the beginning of the school term closest
to the date of enactment.

Subtitle G--Other Matters

Section 561--Extension of Requirement for Exemplary Conduct by
Commanding Officers and Others in Authority to Include Civilians in
Authority in the Department of Defense

This section would establish exemplary standards for all
commanding officers and others in authority in the Department
of Defense by broadening the scope of the statutory standards
that now are individually codified for the Army, the Naval
services, and the Air Force. The provision would also establish
the standard for exemplary conduct for civilian leaders in the
Department of Defense and the military departments.

Section 562--Recognition of Military Families

This section would require the Secretary of Defense to
implement and sustain programs, including appropriate annual
ceremonies and events, to celebrate the contributions and
sacrifices of military families in the active and reserve
components. The committee believes that it would be appropriate
for the Secretary to focus this effort annually by designating
that ceremonies and events take place during a specific month.

Section 563--Assistance to Local Educational Agencies that Benefit
Dependents of Members of the Armed Forces and Department of Defense
Civilian Employees

This section would provide $35.0 million for assistance to
local educational agencies. The committee makes this
recommendation in connection with its continuing strong support
of the need to help local school districts with significant
concentrations of military students.

Section 564--Permanent Authority for Support for Certain Chaplain-Led
Military Family Support Programs

This section would authorize the secretary of a military
department to provide support services to active duty and
reserve members and their immediate family members to
facilitate their participation in chaplain-led programs
designed to build and maintain strong families.

Section 565--Department of Defense-Department of Veterans Affairs Joint
Executive Committee

This section would expand the scope of responsibilities of
the Department of Defense--Department of Veterans Affairs (DOD-
VA) Health Executive Committee beyond health care matters to
include collaborative efforts between the departments in
matters of benefits and other areas as determined by the co-
chairs. Reflecting these broader responsibilities, this section
would rename the committee as the Department of Defense--
Department of Veterans Affairs Joint Executive Committee. The
committee believes the expanded responsibilities of the
committee promote improved cooperation and greater flexibility
by the DOD and VA in managing personnel and fiscal requirements
of the collaborative endeavors of both departments.

Section 566--Limitation on Aviation Force Structure Changes in the
Department of the Navy

This section would preclude reductions in active and
reserve component aviation force structure in the Navy until 90
days after the Secretary of the Navy provides the Senate
Committee on Armed Services and the House Committee on Armed
Services two reports. One report would clarify the details of
the Navy's aviation force structure plan for fiscal years 2004
through 2009. The second report would provide the secretary's
concept of operations for improving the integration and use of
Naval Reserve units and personnel with active component forces
in carrying out operational missions across the peacetime and
wartime spectrum of naval operations during the period of 2004
through 2005.

Section 567--Impact-Aid Eligibility for Heavily Impacted Local
Educational Agencies Affected by Privatization of Military Housing

This section would clarify the eligibility for impact aid
to schools whose student population was affected during the
construction of military family housing by public-private
partnerships.

Section 568--Investigation into the 1991 Death of Marine Corps Colonel
James E. Sabow

This section would require the Secretary of Defense to open
a new investigation into the January 1991 death of Colonel
James E. Sabow at the Marine Corps Air Station, El Toro,
California, focusing the effort on determining the colonel's
cause of death. The committee believes that previous
investigations did not address a range of issues that could
clarify whether murder, not suicide, caused Colonel Sabow's
death. The committee has compiled a list of significant issues
and questions that must be addressed as part of this new
investigation, as well as witnesses that must be interviewed.
The committee expects the Secretary of Defense, prior to
beginning the new investigation, to consult with the committee
to ensure that the new investigation fully and comprehensively
addresses these matters.

Subtitle H--Domestic Violence

Section 571--Travel and Transportation for Dependents Relocating for
Reasons of Personal Safety

This section would allow travel and transportation
allowances to dependents of uniformed service members who are
victims of domestic violence and have agreed upon property
division by written agreement or court order.

Section 572--Commencement and Duration of Payment of Transitional
Compensation

This section would allow transitional compensation to
commence upon sentencing, except when a pretrial agreement
includes a disapproval or suspension of a sentence. In such
cases, transitional compensation will commence upon approval of
the convening authority. Itwould also allow eligible
individuals to receive transitional compensation for 36 months, unless
terminated earlier as required by law.

Section 573--Flexibility in Eligibility for Transitional Compensation

This section would allow transitional compensation to
certain dependents of a member or former member of the armed
forces due to extenuating circumstances, as prescribed under
regulations developed by the secretary concerned.

Section 574--Types of Administrative Separations Triggering Coverage

This section would expand coverage to a service member on
active duty for more than 30 days, who is voluntarily or
involuntarily administratively separated.

Section 575--On-Going Review Group

This section would require the Secretary of Defense to
convene a working group within two years from the date of
enactment to review and assess the progress of the Department
of Defense in implementation of the recommendations of the
Defense Task Force on Domestic Violence.

Section 576--Resources for Department of Defense Implementation
Organization

This section would require the Secretary of Defense to
provide the necessary resources in order to implement the
recommendations of the Defense Task Force on Domestic Violence.

Section 577--Fatality Reviews

This section would require the Secretary of Defense to
conduct multidisciplinary fatality reviews for each fatality
that involves a member of the armed forces, a current or former
dependent of a member, or a current or former intimate partner
who has a child in common or has shared a common domicile with
a member, and is suspected or known to have resulted from
domestic violence or child abuse.

Section 578--Sense of Congress

This section would express the sense of Congress that the
Secretary of Defense should adopt the strategic plan proposed
by the Defense Task Force on Domestic Violence. Furthermore,
the service secretaries should establish and support a Victim
Advocate Protocol for victims of domestic violence.

TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS

OVERVIEW

The committee continues to support the fully funded and
flexible compensation programs needed to recruit and retain a
quality force in a wartime environment. Accordingly, the
committee would include a pay raise that combines an across-
the-board raise with targeted increases for mid-grade and
senior noncommissioned officers, increases in pay and
allowances for the warfighters, and additional incentives for
mobilized reserve forces.
The committee remains committed to protecting military
exchange and commissary benefits. Accordingly, the committee
would include a series of provisions to clarify the requirement
to operate resale activities and protect the level of benefit
provided to service members and their families.

ITEMS OF SPECIAL INTEREST

Survivor Benefit Program

The committee is deeply concerned that implementation of
the Survivor Benefit Program (SBP) by the services has created
certain inequities among eligible beneficiaries. Although
Congress has enacted legislation designed to correct such
inequities, many similarly situated survivors continue to
receive disparate treatment under SBP. Specifically, the
committee is aware that survivors of some seriously ill or
injured service members who live long enough to be disability
retired receive a better level of benefit than those where the
member's death was instantaneous. The committee desires to
correct such inequities. Accordingly, the committee directs the
Secretary of Defense to review active duty SBP benefit levels
awarded to survivors under different circumstances of death,
the procedures used by the Department of Defense to operate the
program, and the desired objectives of the program, and to
propose legislation to ensure equitable treatment for the
survivors of all members, regardless of the circumstances of
death. The Secretary shall report his findings and
recommendations to the Senate Committee on Armed Services and
the House Committee on Armed Services by March 31, 2004.

LEGISLATIVE PROVISIONS

Subtitle A--Pay and Allowances

Section 601--Increase in Basic Pay for Fiscal Year 2004

This section would increase basic pay for members of the
armed forces by an average of 4.1 percent. This section would
provide enhanced increases for mid-grade and senior
noncommissioned officers and select warrant officers to enhance
retention.
This raise would continue to fulfill Congress' commitment
to increasing pay for the armed forces and would reduce the pay
gap between military and private sector pay increases from 6.4
percent to 5.5 percent.

Section 602--Computation of Basic Pay Rate for Commissioned Officers
with Prior Enlisted or Warrant Officer Service

This section would correct an inequity by authorizing
mobilized reserve junior officers with extended prior enlisted
or warrant officer service to be paid at the same increased
rates of pay that they receive when serving in the active
reserves.

Section 603--Special Subsistence Allowance Authorities for Members
Assigned to High-Cost Duty Location or Under Other Unique and Unusual
Circumstances

This section would authorize commanders to pay service
members a supplemental allowance for subsistence to compensate
for additional expenses encountered when assigned to high-cost
and unique duty locations.

Subtitle B--Bonuses and Special and Incentive Pays

Section 611--One-Year Extension of Certain Bonus and Special Pay
Authorities for Reserve Forces

This section would extend the authority for the selected
reserve reenlistment bonus, the selected reserve enlistment
bonus, special pay for enlisted members of the selected reserve
assigned to certain high priority units, the selected reserve
affiliation bonus, the ready reserve enlistment and
reenlistment bonus, and the prior service enlistment bonus
until December 31, 2004.

Section 612--One-Year Extension of Certain Bonus and Special Pay
Authorities for Certain Health Care Professionals

This section would extend the authority for the nurse
officer candidate accession program, the accession bonus for
registered nurses, the incentive special pay for nurse
anesthetists, the special pay for selected reserve health care
professionals in critically short wartime specialties, and the
accession bonus for dental officers until December 31, 2004.
The provision would also extend the authority for repayment of
educational loans for certain health professionals who serve in
the selected reserve until January 1, 2005.

Section 613--One-Year Extension of Special Pay and Bonus Authorities
for Nuclear Officers

This section would extend the authority for the special pay
for nuclear-qualified officers extending the period of active
service, nuclear career accession bonus, and the nuclear career
annual incentive bonus until December 31, 2004.

Section 614--One-Year Extension of Other Bonus and Special Pay
Authorities

This section would extend the authority for the aviation
officer retention bonus, the reenlistment bonus for active
members, the enlistment bonus for active members, the retention
bonus for members with critical military skills, and the
accession bonus for new officers in critical skills until
December 31, 2004.

Section 615--Computation of Hazardous Duty Incentive Pay for Demolition
Duty and Parachute Jumping by Members of Reserve Components Entitled to
Compensation Under Section 206 of Title 37

This section would authorize reservists to be paid
hazardous duty pay at the same monthly rates paid to members
serving on active duty for explosives demolition and parachute
jumping duties when they maintain the same qualification
standards as required for active duty members.

Section 616-Availability of Hostile Fire and Imminent Danger Pay for
Reserve Component Members on Inactive Duty

This section would authorize reservists to be paid hostile
fire and imminent danger pay at the same monthly rate paid to
members serving on active duty when serving in an inactive duty
for training status at duty locations authorized the pay.

Section 617--Expansion of Overseas Tour Extension Incentive Program to
Officers

This section would authorize officers to receive the same
compensation or rest and recuperative leave benefits as granted
to enlisted members who extend their overseas tours of duty at
designated locations.

Section 618--Eligibility of Appointed Warrant Officers for Accession
Bonus for New Officers in Critical Skills

This section would authorize individuals appointed in the
grade of Warrant Officer (W1) to receive the accession bonus
for new officers in critical skills.

Section 619--Incentive Pay for Duty on Ground in Antarctica or on
Arctic Icepack

This section would authorize service members performing
duty on the ground in the Antarctic or on the icepack in the
Arctic to be paid an additional $5 for each day of that duty.

Section 620--Special Pay for Service as Member of Weapons of Mass
Destruction Civil Support Team

This section would authorize members assigned by orders to
duty as members of Weapons of Mass Destruction Civil Support
Teams to be paid a special pay of $150 per month.

Section 621--Incentive Bonus for Agreement to Serve in Critically Short
Military Occupational Specialty

This section would authorize the secretary concerned to pay
an incentive bonus of not more than $4,000 to certain enlisted
members of the armed forces who agree to serve for not less
than two years in a critically short military occupational
specialty.

Section 622--Increase in Rate for Imminent Danger Pay and Family
Separation Allowance Related to Service in Operation Iraqi Freedom or
Operation Enduring Freedom

This section would increase the rate of imminent danger pay
from $150 per month to $225 per month and the rate of family
separation allowance from $100 per month to $250 per month paid
to service members performing duty in the combat zones
designated for Operation Iraqi Freedom and Operation Enduring
Freedom. The increase in these pays would be effective October
1, 2003, and would expire on the date the President terminates
the operation.

Subtitle C--Travel and Transportation Allowances

Section 631--Shipment of Privately Owned Motor Vehicle Within
Continental United States

This section would authorize the secretary concerned to pay
a monetary allowance in lieu of transportation to service
members who elect to arrange for transportation of a privately
owned vehicle during a permanent change of station move between
duty locations within the continental United States. The member
would be responsible for any transportation costs in excess of
the monetary allowance paid in lieu of transportation.

Section 632--Payment or Reimbursement of Student Baggage Storage Costs
for Dependent Children of Members Stationed Overseas

This section would expand the eligibility for dependent
children of members stationed overseas to store student baggage
to include storage at any point during the same fiscal year and
not just at the time of the dependent student's annual trip to
the member's overseas duty station.

Section 633--Reimbursement for Lodging Expenses of Certain Reserve
Component and Retired Members During Authorized Leave From Temporary
Duty Location

The committee is troubled that mobilized reservists and
recalled retirees serving on active duty for extended periods
away from their homes are not authorized to be reimbursed for
lodging costs during periods of leave when those costs are paid
by the member on a monthly basis. Accordingly, this section
would authorize the secretaries of the military departments to
reimburse reservists and retirees serving on active duty at
duty locations away from their homes the lesser of the lodging
portion of the applicable per diem rate or the actual cost of
lodging paid by the member for periods during which the member
is in a leave status.

Subtitle D--Retired Pay and Survivors Benefits

Section 641--Funding for Special Compensation Authorities for
Department of Defense Retirees

This section would require that payments made to retirees
eligible for either the special compensation for the severely
disabled or the special compensation for the combat disabled
would be paid from the Military Retirement Trust Fund. These
payments are now paid from the military services' personnel
accounts. This section would also provide that any increase in
the Department of Defense's annual accrual payment to the
Military Retirement Trust Fund resulting from the payment of
the two special compensations, or from concurrent receipt,
should it be enacted, would be provided by a contribution from
the United States Treasury.

Subtitle E--Commissary and Nonappropriated Fund Instrumentality
Benefits

Section 651--Expanded Commissary Access for Selected Reserve Members,
Reserve Retirees Under Age 60, and Their Dependents

This section would authorize members of the selected
reserve, reserve retirees qualified to receive retired pay,
except that they are not age 60, and their dependents to use
commissaries to the same extent as active duty members and
their dependents.

Section 652--Defense Commissary System and Exchange Stores System

The committee has noted the absence of a basic authority
for the operation of commissaries and exchange stores and
believes that such authority should be installed in the law.
Accordingly, this section would require the Secretary of
Defense to operate separate defense commissary and exchange
store systems.

Section 653--Limitations on Private Operation of Defense Commissary
Store Functions

The committee is concerned that current law does not
provide Congress sufficient oversight of initiatives to
privatize commissary store functions. Accordingly, this section
would clarify that only selected store functions may be
considered for privatization and that the private operation of
a store function may not take effect until the Secretary of
Defense submits written notice of the proposed change to
Congress and a period of 90 days of continuous session of
Congress expires following the date on which the Secretary's
notice is received.

Section 654--Use of Appropriated Funds to Operate Defense Commissary
System

The committee believes that the value of the commissary
benefit to service members is derived from consistent
appropriated funding support of commissary operations.
Accordingly, this section would require the use of appropriated
funding to support commissary operating expenses.

Section 655--Recovery of Nonappropriated Fund Instrumentality and
Commissary Store Investments in Real Property at Military Installations
Closed or Realigned

This section would authorize the use, without further
appropriation, of funds resulting from the transfer or disposal
(during base closures or realignments prior to 2005) of real
property or facilities that had been acquired, constructed or
improved with nonappropriated or commissary store funds. The
committee makes this recommendation believing it to be fully
consistent with the National Defense Authorization Act for
Fiscal Year 2002 (Public Law 107-107) governing the disposition
of funds resulting from the transfer or disposal of
nonappropriated or commissary store real property or facilities
during the upcoming 2005 round of base closures and
realignments.

Section 656--Commissary Shelf-Stocking Pilot Program

The committee believes that the current practice of relying
on vendors and brokers to provide a significant portion of
commissary shelf stocking denies commissary managers effective
control over an important element of cost. Accordingly, this
section would authorize the Secretary of Defense to conduct a
pilot program to stock shelves at three commissary stores using
federal civilian employees or employees contracted by
commissary managers. This section would require the Secretary
to submit a plan to the Senate Committee on Armed Services and
the House Committee on Armed Services for the conduct of the
pilot program not later than six months after the enactment of
the bill and would authorize the Secretary to begin the pilot
program 30 days after the plan was received by the committees.
The committee believes that the success of the pilot
program relies on the Secretary of Defense requesting and the
Office of Personnel Management approving a targeted civil
servicedemonstration project under chapter 47 of title 5,
United States Code. The committee does not favor the use of
nonappropriated fund employees in commissaries and would not support
the use of such employees to stock shelves during operation of the
pilot program.

Subtitle F--Other Matters

Section 661--Repeal of Congressional Notification Requirement for
Designation of Critical Military Skills for Retention Bonus

This section would repeal the requirement for the Secretary
of Defense, and the Secretary of Homeland Defense with respect
to the Coast Guard when it is not operating as a service in the
Navy, to provide Congress 90 days advance notice before
implementing a critical skills retention bonus.

TITLE VII--HEALTH CARE PROVISIONS

OVERVIEW

The committee recognizes the challenges faced by the
Department of Defense in providing health care to a full range
of beneficiaries at home and overseas, while caring for service
members engaged in hostile operations. The committee is pleased
that the Department's budget request for the Defense Health
Program is based on appropriate inflation rates resulting in a
realistic assessment of its requirements. Nonetheless, with the
national phenomenon of escalating health care costs, the
committee challenges the Department to aggressively explore
innovative cost control methods.
In addition, the committee's recommendations address a
number of concerns. For example, the committee believes that
the Department has not fully demonstrated a commitment to
carrying out force health protection and surveillance
requirements that emerged from the lessons learned during the
first Gulf War. The committee encourages the Department to
ensure participation from the highest levels of leadership to
ensure that operational commanders can track military units and
individuals during operations; that personnel and medical
systems provide complete documentation of health care
encounters in medical records and that information systems for
integrating every aspect of a service member's activity in
theater (to include environmental data) and at home station are
available.
Our Nation relies heavily on the reserve components to
supplement the capabilities of our active duty forces as
evidenced by the activation of thousands of reserve component
personnel for operations in the Gulf. The committee is pleased
with the Department's actions to enroll into TRICARE Prime the
family members of reserve component service members who receive
active duty orders for more than 30 days. Moreover, the
committee continues to support and monitor the medical
readiness efforts for the reserve components. However, the
committee is concerned that many of the reserve component
personnel do need significant medical and dental care to meet
deployment standards once activated. To that end, the committee
recommends new authority for the Department to provide pre-
mobilization medical and dental screening and care to members
of the Selected Reserve who are assigned to a unit that has
been alerted or notified for mobilization in support of certain
operations.
The committee recognizes the progress the Department has
made toward selecting and establishing the next generation of
TRICARE managed care support contracts. Yet, the Department
faces the formidable task of awarding the contracts and
executing a seamless transition to the new contracts that
include a modified governance structure. The committee is
encouraged by the efforts of the Department's transition team
and implementation plan. The committee continues to expect the
Department to provide ongoing, outreach programs regarding the
full array of TRICARE programs to all categories of
beneficiaries, beneficiary representative organizations, and
health care providers.

ITEMS OF SPECIAL INTEREST

Cost Containment in Department of Defense and Department of Veterans
Affairs Health Care System

The committee is concerned about the growing cost of health
care for active and retired military personnel and their
families. Given this concern, the committee remains interested
in exploring cost containment measures which may have
application in both the Department of Defense and the
Department of Veterans Affairs' health care systems. Therefore,
the committee believes that both departments should be
receptive to the examination and the controlled testing of
innovative proposals for cost containment. Such innovative
proposals could include the use of alternative treatment
regimes, observation units, increased use of paramedics and
other protocols that have proven effective at reducing cost
while maintaining quality health care. Therefore, the committee
directs the Secretary of Defense, in coordination with the
Secretary of Veterans Affairs, to consider establishing centers
of excellence in both departments as a means of examining and
testing innovative cost containment proposals and report to the
Senate Committee on Armed Services and the House Committee on
Armed Services the Secretary's plan for carrying out this
directive.

Force Health Protection and Surveillance

The committee remains strongly committed to the force
health protection and surveillance of members of the armed
forces. While the Department of Defense (DOD) and the military
services have made notable strides since 1991 in improving the
force health protection and surveillance system, the emerging
results of oversight efforts by the General Accounting Office
(GAO) indicate that much more remains to be done to overcome
shortfalls in a system found lacking following the first
Persian Gulf War. As service members return from a second
conflict in the Persian Gulf, it is imperative that the
Department has systems in place to avoid repeating the mistakes
of the past.
In 1997, Congress established a number of program
requirements. For example, the law requires the Secretary of
Defense to institute a system of assessing the medical
conditions of service members, including the use of pre- and
post-deployment examinations, to provide for a centralized
location of such records, to establish a quality assurance
program to evaluate the system, and to create a mechanism for
the tracking of members in a theatre of operations.
Ongoing reviews by the GAO indicate that while the services
and the Department have made efforts to meet the intent of the
law, especially in the promulgation of policy, the Department
is not meeting the full requirement of the law and the military
services are not effectively carrying out many of the
Department's policies. For example, the GAO has found that many
service members are not getting pre- and post-deployment health
assessments. Centralized location of health care records
remains a significant shortfall, and the requiredquality
assurance program has yet to be established. Recent testimony by the
Assistant Secretary of Defense for Health Affairs indicates that the
Department is committed to resolving these issues. Yet, the committee
remains concerned that the Department's focus on these issues will fade
as the war with Iraq draws to a close.
Therefore, the committee, while awaiting the final report
of the General Accounting Office, directs the Secretary of
Defense to establish a quality control program to begin
assessing implementation of the force health protection and
surveillance program, and to provide a strategic implementation
plan, including a timeline for full implementation of all
policies and programs, to the Senate Committee on Armed
Services and the House Committee on Armed Services by March 31,
2004.

Military-Civilian Education Programs Related to Sexual Health Decision-
Making

The committee is aware of collaborative civil-military
partnership education programs related to sexual health
decision-making that demonstrate benefits through the reduction
of unintended pregnancies and sexually transmitted infections
among military personnel. The committee's support for such
collaborative programs was demonstrated in the statement of
managers accompanying the conference report on H.R. 4546 (H.
Rept. 107-772), which directed the Secretary of Defense to
examine such collaborative programs and consider their use by
the services. The committee continues to be aware of on-going
innovative, effective partnership education programs,
particularly in the Army. As a measure of support for those
efforts, and to further encourage the Secretary of Defense to
examine civil-military partnership programs related to sexual
health decision making, the committee recommends an increase in
the funding for the Army medical department of $150,000.

Population-Based Medical Research

The committee is encouraged by the collaboration of the
Department of Defense and the Department of Veterans Affairs to
increase the capability to conduct population-based medical
research and disease surveillance on the health of military
personnel deployed in overseas conflicts both during and after
their active military service. Such a capability was identified
as essential after the first Gulf War. The committee encourages
the Department of Defense to continue adapting existing
information systems that leverage Department of Defense and
Department of Veterans Affairs capabilities to improve their
population-based research.

Study of Cost and Feasibility of TRICARE Eligibility for Adult Disabled
Family Members

The committee is aware of beneficiary concerns that certain
family members who are no longer eligible for TRICARE benefits
and subsequently become incapacitated may have limited options
for health care coverage. The committee directs the Secretary
of Defense to conduct a study of the cost and feasibility of
providing TRICARE benefits to adult family members or adopted
adult family members of active duty and retired military
service members who became incapacitated after they were no
longer eligible for TRICARE benefits. The study would include
information on the number of families affected by current
restrictions and the cost and feasibility of any
recommendations for implementing the proposed change to TRICARE
eligibility. The Secretary shall submit the report by March 31,
2004 to the Senate Committee on Armed Services and the House
Committee on Armed Services.

Study of TRICARE Options for Puerto Rico

The committee is aware that the recent termination of the
Federal Employee Health Benefits Program Demonstration may have
had a greater impact on eligible beneficiaries in Puerto Rico
compared with other demonstration sites because of the large
percentage of participants in the program. The termination of
the demonstration may have had a particular impact on military
retirees under the age of 65 and their dependents, whose
primary option is now TRICARE Standard. The committee is aware
that it may be possible to expand TRICARE options for all
beneficiaries who reside in Puerto Rico. The committee urges
the Department of Defense to conduct a review of the current
TRICARE options and access to health care services in Puerto
Rico, including an analysis of the feasibility of providing
TRICARE Prime and TRICARE Extra in Puerto Rico, as well as the
costs to the federal government and the benefit to the military
retiree.

TRICARE Provider Participation

Over the past several years, the committee has heard from
multiple sources not only that TRICARE beneficiaries are having
increasing difficulty finding civilian health care providers
who will accept them as patients, but also that civilian health
care providers increasingly are leaving the TRICARE program or
refusing to accept new TRICARE patients. In response, Congress,
in the Bob Stump National Defense Authorization Act for Fiscal
Year 2003 (Public Law 107-314), directed the Comptroller
General to review the extent of and reasons for provider
instability within the TRICARE network. Recently, a General
Accounting Office (GAO) witness, testifying before the
committee on GAO's preliminary findings, made it clear that
data does not exist within the Department of Defense's (DOD)
health care system, or within the data maintained by the
TRICARE managed care support contractors, to objectively
measure trends in provider participation or adequacy for
network needs. Although the final report has yet to be
completed, GAO's preliminary findings already raise serious
concerns, especially since the Department has consistently
reported that TRICARE provider networks are meeting contract
standards. Therefore, the committee directs the Department to
review and improve the current methodology used to ensure
network adequacy. In addition, while the committee supports the
Department's effort to provide greater responsibilities to
local lead agents, it does not absolve the Department from
ensuring that the managed care support contractors meet the
reporting requirements of the contracts. The committee also
directs the Department to systematically collect and evaluate
beneficiary complaints to assist in determining whether there
are systematic access problems.

LEGISLATIVE PROVISIONS

Section 701--Revision of Department of Defense Medicare-Eligible
Retiree Health Care Fund To Permit More Accurate Actuarial Valuations

This section would give the Secretary of Defense more
flexibility in calculating the required per-capita normal cost
contributions to the Department of Defense Medicare-Eligible
Retiree Health Care Fund. Current law limits the Secretary of
Defense to use only per-capita costs for the uniformed
services, which include the Coast Guard, the U.S. Public Health
Service and the National Oceanic and Atmospheric
Administration. Members of these non-DODuniformed services have
a higher per capita cost of health care than do DOD military personnel,
and the requirement to use a ``uniformed services'' per-capita cost
results in DOD's actuarial contribution being larger than necessary to
fund the future cost of health care for Medicare-eligible military
beneficiaries.

Section 702--Transfer of Certain Members from Pharmacy and Therapeutics
Committee to Uniform Formulary Beneficiary Advisory Panel Under the
Pharmacy Benefits Program

This section would realign the membership of the Pharmacy
and Therapeutics Committee and the Uniform Beneficiary Advisory
Panel to improve the ability of both to more effectively meet
their statutory roles.

Section 703--Permanent Extension of Authority to Enter into Personal
Services Contracts for the Performance of Health Care Responsibilities
at Locations Other than Military Medical Treatment Facilities

This section would make permanent the authority for the
Secretary of Defense to enter into personal services contracts
to carry out health care responsibilities at locations other
than medical treatment facilities, such as military entrance
processing stations. The existing authority expires December
31, 2003.

Section 704--Plan for Providing Health Coverage Information to Members,
Former Members and Dependents Eligible for Certain Health Benefits

This section would require the Secretary of Defense to
develop and submit to Congress by March 31, 2004, a plan to:
(1) Provide TRICARE Standard beneficiaries
information concerning the extent of health care
coverage under the benefit, the associated costs,
sources of information for locating TRICARE-authorized
providers, and methods to obtain assistance in
resolving difficulties encountered with billing,
eligibility, locating TRICARE-authorized providers, and
collection actions;
(2) Ensure that beneficiaries receive assistance in
locating a TRICARE-authorized provider;
(3) Institute a systematic approach to identify the
number and location of TRICARE Standard eligible
beneficiaries;
(4) Provide information to recruit and retain health
care providers within TRICARE Standard; and
(5) Provide an implementation schedule for the plan
to be executed with respect to any contract in the
TRICARE program entered into after May 31, 2003.
The committee, based on testimony it has received and
ongoing work of the General Accounting Office (as directed by
the National Defense Authorization Act for Fiscal Year 2003,
Public Law 107-314), believes that an active outreach program
by the Department of Defense to beneficiaries and health care
providers would be helpful to improve access to care and
beneficiary satisfaction with TRICARE Standard.

Section 705--Working Group on Military Health Care for Persons Reliant
on Health Care Facilities at Military Installations to be Closed or
Realigned

This section would require the Secretary of Defense to
establish a working group to provide input to the Secretary on
the provision of health care to persons in the United States
and overseas who rely on military health care facilities on
installations that are selected for closure or realignment. The
working group, which would include independent representatives
from each TRICARE region, would:
(1) Provide input to the Secretary in developing the
selection criteria and recommendations for the 2005
round of base closures;
(2) Assist the Defense Base Closure and Realignment
Commission; and
(3) Provide a plan to the Secretary for the provision
of health care to those persons affected by the closure
or realignment of a military installation.

Section 706--Acceleration of Implementation of Chiropractic Health Care
for Members on Active Duty

This section would require the Secretary of Defense to
accelerate the availability of chiropractic health care
services and benefits through medical treatment facilities
within the Defense Health Program (DHP) to members on active
duty. The committee authorizes funds to be appropriated for the
DHP above the budget request in the amount of $6.0 million for
this purpose.

Section 707--Medical and Dental Screening for Members of Selected
Reserve Units Alerted for Mobilization

This section would allow the Department of Defense, to
provide medical and dental screening and care for members of
the selected reserve who are assigned to a unit that has been
alerted or otherwise notified that the unit will be mobilized
for an operational mission or a contingency operation, or
during a national emergency, or in time of war.

TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED
MATTERS

ITEM OF SPECIAL INTEREST

Medical Equipment and Supplies

The committee is aware that the Director, Defense Logistics
Agency, is considering using a group purchasing organization
(GPO) to provide electronic access to GPO prices for medical
equipment and supplies. These group purchase organizations use
the leverage of their members' combined buying power as a means
to purchase items at a discounted price. The committee
recognizes the benefits of a GPO, but also recognizes the
continued need for competition and the need to support small
and small disadvantaged businesses. The committee therefore
directs the Director, Defense Logistics Agency, to insure that
small businesses receive special emphasis by retaining
visibility of their medical equipment and supplies on national
and/or regional pricing agreements within the electronic
catalog/purchasing system. Further, any GPO selected to provide
service will be required to foster small and small
disadvantaged business participation within the portfolio of
the organization, and the Defense Logistics Agency shall
monitor this participation.

LEGISLATIVE PROVISIONS

Subtitle A--Amendments to General Contracting Authorities, Procedures,
and Limitations

Section 801--Extension of Authority To Carry Out Certain Prototype
Projects

This section would extend authority for the Director of the
Defense Advanced Research Projects Agency, the Secretary of a
military department, or any other official designated by the
Secretary of Defense, to carry out prototype projects under
section 845 of the National Defense Authorization Act for
Fiscal Year 1994 (P.L. 103-160) until September 30, 1998.

Section 802--Elimination of Certain Subcontract Notification
Requirements

This section would amend section 2306 of title 10, United
States Code, by eliminating the requirement that contractors
with a cost contract notify the agency before awarding a
subcontract for a cost-plus-a-fixed-fee or a fixed price
subcontract greater than the simplified acquisition threshold
or five percent of the estimated cost of the prime contract.
The requirement would no longer apply in those instances where
the Secretary of Defense approves the contractor's purchasing
system.

Section 803--Elimination of the Requirement to Furnish Written
Assurances of Technical Data Conformity

This section would amend section 2320 of title 10, United
States Code, by eliminating the requirement that contractors
that provide technical data under a contract furnish written
assurances that the data is complete, accurate, and satisfies
the requirements of the contract. This section is not intended
to diminish the contractor's obligation to provide technical
data that meets contractor requirements or the Secretary of
Defense's ability to enforce contractual obligations.

Section 804--Limitation Period for Task and Delivery Order Contracts

This section would amend section 811 of the Bob Stump
National Defense Authorization Act for Fiscal Year 2003 (P.L.
107-314) in order to clarify the committee's intent to
proscribe the period of time for which task and delivery order
contracts can be awarded.

Section 805--Additional Authorities Relating to Obtaining Personal
Services

This section would amend section 129 of title 10, United
States Code, to authorize the Secretary of Defense to award
personal service contracts without application of section 3109
of title 5, United States Code. Personal service contracts can
be awarded for experts and consultants, as well as for other
work that is not considered of a consultant or expert nature.
In this latter case contracts can be awarded for work to be
performed outside the United States and for work to be
performed inside the United States. In those instances where
work is to be performed inside the United States the contract
must support special operations, intelligence and counter
intelligence missions. The committee believes that personal
service contracts should be awarded only when there are no
Department of Defense officials available to perform the
function. The committee also encourages the Department of
Defense Inspector General to audit the use of this authority to
ensure its appropriate use and application.

Subtitle B--United States Defense Industrial Base Provisions

Part I--Critical Items Identification and Domestic Production
Capabilities Improvement Program

Section 811--Assessment of United States Defense Industrial Base
Capabilities

This section would direct the Secretary of Defense and the
secretaries of each military department to establish a program
to assess the ability of the United States industrial base to
produce military systems necessary to support national security
requirements.
This section would also require the Secretary of Defense
and the Secretary of each military service to designate a
person with the authority and responsibility to maintain an
awareness of the degree to which the United States is dependent
on foreign sources for military products, and pursue
initiatives to bolster United States industrial base
capabilities.
This section would further require the Secretary of Defense
to collect data with respect to the procurement of covered
military systems. The data collected would include information
about the critical item or items included in that system,
whether the items in question are from domestic or foreign
sources, the identification of foreign contractors and the
reason for the selection of that contractor, and the location
of work to be completed by a U.S. contractor outside the United
States. Based on this data collection, the Secretary of Defense
would submit an assessment of his findings to the Senate
Committee on Armed Services and the House Committee on Armed
Services. This report would be required every two years, with
the first report due on November 1, 2004, covering the fiscal
years 2002 and 2003. This first report would provide critical
baseline data for understanding the current strengths and
vulnerabilities of the defense industrial base and for
measuring the impact of initiatives undertaken through other
sections in this subtitle.
The committee is concerned that the U.S. industrial base is
becoming more dependent on foreign sources and that there are
fewer indigenous capabilities available for the design and
fabrication of critical components, systems, and materials used
in military systems. The committee is aware that the U.S. needs
to maintain sovereign capabilities to design, develop, test,
integrate, and manufacture military systems in the quality and
quantity necessary to support war time requirements.

Section 812--Identification of Critical Items: Military System Breakout
List

This section would direct the Secretary of Defense to
identify all items and components of military systems and to
identify which of these are essential and critical to the U.S.
industrial base. Essential items and components would be those
essential for the proper functioning and performance of a
military system or those involving a defense critical
technology. Critical items would be those items already deemed
essential that also pose high barriers to entry for the
production of the item or component in question. This section
would also require an annual report, beginning with November 1,
2004, that would compile the lists required under this section,
including a list of items and components that are manufactured
and produced outside the United States. The committee is
concerned that the U.S. is becoming dependent on foreign
sources for many essential and critical items and has limited
means to assess risks related to this dependency.
The committee is also concerned by a lack of visibility by
both industry and the Department of Defense of the sources of
items or components typically provided by subcontractors. Such
visibility is unavailable using current methods. The lists
compiled through this section, however, can provide a first
step to providing this information by first identifying those
items and components that are essential and critical to the
U.S. defense industrial base.

Section 813--Procurement of Certain Critical Items from American
Sources

This section would require the Secretary of Defense to
purchase certain critical items only if they are entirely
produced in the United States. For such critical items, there
would have to be limited sources of production capability of
the item in the United States. The section would provide an
exception by which the Secretary could procure such an item
from a foreign source if the Secretary determines in writing
that the need for the item is of such an unusual and compelling
urgency that the United States would be seriously injured
unless the Department of Defense permitted to procure the item
from sources outside the United States.
The committee is concerned that the United States military
is becoming dependent on critical parts produced in foreign
countries. Therefore the committee seeks to require the
Secretary of Defense to bolster those parts of the defense
industrial base that have limited production sources but that
nonetheless produce critical items. The committee sees this
effort as a step in the direction of revitalizing our defense
industrial base and limiting U.S. dependence on foreign sources
for critical military items.

Section 814--Production Capabilities Improvement for Certain Critical
Items Using Defense Industrial Base Capabilities Fund

This section would establish within the Department of the
Treasury, the Defense Industrial Base Capabilities Fund that
would be used to develop U.S. capabilities for the production
of items, components, or materials that are determined to be
critical to the operation and performance of military systems.
The fund's activities would focus on items currently available
only from foreign contractors and those available only from a
limited number of United States contractors.
This section would authorize $100.0 million for the fund in
fiscal year 2004. Prior to the obligation of any monies from
the fund, the Secretary of Defense must submit to Congress his
plans for executing this activity, including the priorities for
which the Secretary will obligate funds; the criteria for
determining to whom funds shall be obligated; and the
mechanisms through which funds may be provided to the
recipients.
The committee believes that it must aggressively seek to
build the U.S. industrial base for critical items. The fund
established in this section would provide the resources to
revitalize portions of the United States industrial base and
would provide the Department of Defense with a flexible
mechanism for more directly assisting critical industries that
are currently struggling.

Part II--Requirements Relating to Specific Items

Section 821--Domestic Source Limitation for Certain Additional Items

This section would expand the list of items in 10 U.S.C.
2534 that are currently required to be procured from a source
within the National Technology and Industrial Base. This
section would limit the conditions under which the Secretary of
Defense could waive the domestic source requirements and would
conform the waiver authority of this section of the U.S. Code
with other provisions in this subtitle.
The committee recognizes that there are certain items
required by the Department of Defense that should be purchased
from domestic sources. The committee believes that the waiver
authority in existing law is overly broad and should be limited
to a more narrow set of conditions.
This section would redefine the term National Technology
and Industrial Base to include only those contractors engaged
in research, development, production, and maintenance
activities conducted within the United States.

Section 822--Requirements Relating To Buying Specialty Metals from
American Sources

This section would define the requirements by which the
Secretary of Defense could procure commercial items containing
specialty metals. Under the terms of this section, the
Secretary of Defense would be able to procure a commercial item
containing specialty metals from a foreign source if the
Secretary determines in writing that there is an unusual and
compelling urgency to the Department of Defense's need for the
item containing foreign metals or if the contractor in question
agreed to purchase an equivalent amount from a United States
source over an 18-month period beginning on the date of
contract award.
The committee is aware of the difficulty of accounting for
all of the specialty metal within an end item and requires the
Secretary to establish a method for a prime contractor to
account for specialty metal contained within an end item at an
aggregate level.
The committee is aware of the need to protect and maintain
United States capabilities to produce critical raw materials
such as specialty metals resulting in product forms from a melt
or smelt production process. The committee is aware that
specialty metal ingots, vary in terms of grade, type, and form,
and the measure of an equivalent amount may be fungible to
interchange one product form for another to satisfy an
obligation plus ten percent. The committee directs the
Secretary of Defense to publish a notice in the Federal
Register on the method that the Department of Defense will use
to measure an equivalent amount.
This section would also require the Secretary to notify the
Senate Committees on Armed Services and the House Committee on
Armed Services when the Secretary applies the exception created
here and wait 15 days before entering into a contract pursuant
to this section. Finally, this section would provide that the
new exception shall apply to any contract entered into before,
on, or after the date of the enactment of this Act.
This section would clarify the term clothing by adding
associated materials and components to the existing
requirement.

Section 823--Elimination of Unreliable Sources of Defense Items and
Components

This section would identify foreign countries that
restricted the provision or sale of military goods and services
to the United States because of the U.S. policy toward, or
military operations in, Iraq after September 12, 2002. On this
date, President Bush addressed the United Nations Security
Council and articulated the U.S. approach to dealing with the
continued failure of Iraq to disarm itself of its weapons of
mass destruction and to comply with 12 years of Security
Council resolutions. This provision would prohibit the
Secretary of Defense from procuring any items or components
contained in military systems that are manufactured in
thesecountries. This provision would apply to all contracts in effect
on the date of the enactment of this Act or entered into subsequently.
This provision would, however, allow the Secretary 24 months to bring
all contracts into compliance with this section. Finally, this section
would provide the Secretary with the authority to waive this section if
failure to do so would seriously injure the United States.
The committee notes that many countries stood with the
United States in requiring the disarmament of Iraq and in
acting to liberate the Iraqi people. Several other countries
did not and chose to express their disagreement with U.S.
policy by prohibiting the sale of military goods and services
to the United States. The committee believes that U.S. defense
funds should not be used to contract with companies from these
countries, unless the need for the item from that source is of
an unusual and compelling need that would harm our interests.

Section 824--Congressional Notification Required Before Exercising
Exception to Requirement To Buy Specialty Metals from American Sources

This section would require the Secretary of Defense or the
Secretary of the military department concerned to notify
Congress and to publish in the Federal Register notice of the
exception authorized within this subtitle and waits for 15 days
before awarding the contract.

Section 825--Repeal of Authority for Foreign Procurement of Para-Aramid
Fibers and Yarns

This section would repeal section 807 of the National
Defense Authorization Act for Fiscal Year 1999 (Public Law 105-
261), which authorized competition for para-aramid fibers and
yarns between foreign and domestic sources in order to avoid a
domestic sole source procurement.

Section 826--Requirement for Major Defense Acquisition Programs to use
Machine Tools Entirely Produced within the United States

This section would require that within four years the
defense contractors fulfilling procurement contractors for
major defense acquisition programs shall use only machine tools
produced entirely within the United States.

Part III--General Provisions

Section 831--Definitions

The committee provides definitions and clarifications for
terms that are used within this subtitle.

TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT

ITEMS OF SPECIAL INTEREST

Commandant of the Coast Guard and the Joint Chiefs of Staff

The committee recognizes the important contribution the
United States Coast Guard makes to our national security. In
accomplishing its mission, the Coast Guard has extensive
interaction with the Department of Defense (DOD), the Joint
Staff, the Unified Commands, and the military services. Coast
Guard units are apportioned for use in the Unified Command Plan
(UCP) and Coast Guard flag officers command Joint Interagency
Task Forces East and West that include DOD assets. Coast Guard
personnel are assigned to the staffs of many of the unified
commands and train with the four DOD military services at a
variety of levels.
The committee notes the unique dual nature of the Coast
Guard as a uniformed military service and law enforcement
agency. It is this unique nature that makes it ideally suited
for its role in homeland security and argues for even closer
interaction between the Coast Guard and the Department of
Defense. Currently, the Commandant of the Coast Guard acts as a
consultant to the Joint Chiefs of Staff when matters affecting
the Coast Guard are under consideration. The committee strongly
believes that closer interaction between the Department of
Defense and the Coast Guard is vital to our national security.
It therefore strongly encourages the Joint Chiefs of Staff to
even more closely consult and work with the Commandant of the
Coast Guard on issues relating to the defense of our nation,
both overseas and at home.

LEGISLATIVE PROVISIONS

Section 901--Change in Title of Secretary of the Navy to Secretary of
the Navy and Marine Corps

This section would redesignate the title of the Secretary
of the Navy to the Secretary of the Navy and Marine Corps

Section 902--Redesignation of National Imagery and Mapping Agency as
National Geospatial-Intelligence Agency

This section would rename the National Imagery and Mapping
Agency (NIMA) the National Geospatial-Intelligence Agency and
make conforming changes to existing statute.

Section 903--Pilot Program for Provision of Space Surveillance Network
Services to Non-United States Government Entities

This section would allow United States and foreign,
governmental and non-governmental entities to purchase
satellite tracking services from assets owned or controlled by
the Department of Defense. The Department already tracks most
earth orbiting objects. The provision would make that tracking
information available for a fee, consistent with national
security requirements as determined by the Secretary of
Defense. Sales to foreign entities would also require the
approval of the Secretary of State.

Section 904--Clarification of Responsibility of Military Departments to
Support Combatant Commands

This section would clarify the responsibility of the
secretaries of the military departments. Current law only
requires the secretaries to provide support to the combatant
commands ``to the maximum extent practical.'' This section
would remove the phrase ``to themaximum extent practical'' in
order to clarify that the war-fighting function of the combatant
commands is the principal responsibility of the Department of Defense.

Section 905--Biennial Review of National Military Strategy by Chairman
of the Joint Chiefs of Staff

This section would require the Chairman of the Joint Chiefs
of Staff in conjunction with the Chiefs of the Armed Services
and the commanders of the unified and specified commands to
prepare a national military strategy that describes the threats
to our national military objectives, and assesses the
capabilities and adequacy of our forces and resources, basing
and support necessary to achieve those objectives. It also
requires an assessment of risk and the identification of the
assumptions used in developing the assessment. A classified
annex may be included, as necessary.
Section 108 of the National Security Act of 1947 (50 U.S.C.
404) and Section 118 of the National Defense Authorization Act
for the Fiscal Year 2001 (Public Law 106-65) requires the
President to prepare and provide Congress with a National
Security Strategy and for the Secretary of Defense to submit a
Quadrennial Defense Review to Congress every four years.
However, there is no legal requirement for the Chairman of the
Joint Chiefs of Staff to provide Congress with a national
military strategy which would reflect the collective military
judgment to meet the requirements, goals and missions set forth
in the President's National Security Strategy and the Secretary
of Defense's Quadrennial Defense Review. Nevertheless, two
national military strategy reports were issued in 1995 and
1997, thus establishing a precedent.
This provision would require submission of an initial
report on the national military strategy not later than
February 15, 2004, and every even numbered year thereafter. The
provision also would request the Secretary of Defense to append
his assessment of the report before submission to Congress.
This section would require a risk assessment, which in the
years in which the National Military Strategy is submitted,
would fulfill the requirement for an annual risk assessment
under 10 U.S.C. 153(c). In all other years, the annual risk
assessment would still be required as a stand-alone document.
The committee notes with concern the failure of the
Chairman of the Joint Chiefs of Staff to produce the required
annual assessment for the last two years. The Secretary of
Defense submitted a letter to the committee on July 19, 2002,
indicating that the risk assessment required by the time of the
President's Fiscal Year 2002 budget request would not be
submitted; and the 2003 assessment has not been submitted. The
committee considers the annual risk assessment an important
tool for assessing the adequacy of military capabilities to
execute the National Security Strategy and the intent of the
Quadrennial Defense Review, and strongly urges the Chairman to
comply with this requirement by submitting the 2003 report as
soon as possible.

Section 906--Authority for Acceptance by Asia-Pacific Center for
Security Studies of Gifts and Donations from Non-foreign sources

This section would allow the Asia-Pacific Center for
Security Studies to accept gifts from domestic sources. The
center is currently allowed to accept gifts from foreign
sources. This authority would allow the center to receive
funds, research materials, and lecture and faculty services
that would enhance the mission of the center and defray costs.
The Army and Naval War Colleges, the Naval Postgraduate
Schools, and the Military Academies are already authorized to
receive gifts from domestic sources.

Section 907--Repeal of Rotating Chairmanship of Economic Adjustment
Committee

This section would authorize the Secretary of Defense to
serve as the permanent chairman of the Economic Adjustment
Committee.

Section 908--Pilot Program for Improved Civilian Personnel Management

This section would require the Secretary of Defense to
establish a pilot program for Improved Civilian Personnel
Management to assess the utility of an automated civilian
personnel management program to provide needed improvements in
the Department's current management performance. The committee
is aware of the existence of automated workforce management
systems for civilian personnel management that have, in other
governmental entities, demonstrated the capacity to
substantially reduce hiring cycle times, lower labor costs,
increase efficiency, improve performance management, and
provide better management reporting. This section would
authorize the Secretary to establish a pilot program at one
regional civilian personnel center in each of the military
departments using an automated civilian personnel management
system with the objective of assessing the potential utility of
the automated system to provide the desired improvements.

Section 909--Extension of Certain Authorities Applicable to the
Pentagon Reservation to Include Designated Pentagon Continuity-of-
Government Locations

This section would expand the current definition of
Pentagon Reservation to include property at the Raven Rock
Mountain Complex, and other parcels of land within a 100 mile
radius of the District of Columbia, to the extent such property
may be utilized as a facility relating to continuity of
operations and continuity of government. The committee believes
it is appropriate to consider this off-site facility an
extension of the Pentagon and it is therefore appropriate to
apply similar personnel and funding rules.

Section 910--Defense Acquisition Workforce Reductions

This section would require the Secretary of Defense to
institute a reduction in the size of the defense acquisition
workforce by twenty-five percent over a period of five years.

Section 911--Required Force Structure

This section would establish force structure floors for the
U.S. Army, Navy and Air Force at the levels outlined in the
2001 Quadrennial Defense Review. U.S. Marine Corps force
structure of three active divisions and three active air wings
is already established in section 5063 of title 10 United
States Code. The Army would be required to maintain 10 active
and eight National Guard divisions or their equivalents, one
active armored cavalry regiment, one light cavalry regiment, 15
National Guard enhanced brigades and other such active or
reserve component combat, combat support and combat service
support formations as are required. The Navy would consist of a
force of not less than 305 active vessels. This fleet would
include not less than 12 aircraft carrier battle groups, 12
amphibious ready groups, 55 attack submarines, 108active and 8
reserve surface combatants and other such active and reserve forces as
are necessary to support the fleet. The Air Force would consist of not
less than 46 active and 38 National Guard and Reserve fighter squadrons
or their equivalents, 96 active combat-coded bomber aircraft, and other
such active and reserve component formations as may be necessary to
support the force.
The committee notes that the terrorist attacks on September
11, 2001, the global war on terrorism, the fall of the Taliban
in Afghanistan, and the elimination of Saddam Hussein's regime
in Iraq have significantly altered the strategic landscape
facing the United States. As such, the committee understands
that the Department of Defense has undertaken a series of
studies to understand the ramifications of these events and to
develop a new force structure and global military posture. At
the same time, the committee understands the Department's
desire to accelerate the transformation of the force to meet
the challenges of the 21st century, as well as to adjust the
location and number of military bases both overseas and in the
United States. Given the fluid nature of the current security
environment, the committee feels it would be premature for the
Department to reduce or radically change the current military
force structure and its related basing posture until these
studies are complete and their findings have been examined.
Therefore, the committee recommends that the force structure
outlined in the 2001 Quadrennial Defense Review be maintained
until the Congress can review the findings of the on-going
studies in order to determine the proper force structure and
global military posture needed to meet this new security
environment.

TITLE X--GENERAL PROVISIONS

ITEMS OF SPECIAL INTEREST

Counter-Drug Activities

Overview

The budget request contained $817.3 million for drug
interdiction and counter-drug activities, in addition to $159.9
million, for operational tempo which is included within the
operating budgets of the military services. The budget is
organized in fiscal year 2004 to address three broad national
priorities: (1) demand reduction; (2) domestic support; and (3)
international support.
The committee recommends an authorization for fiscal year
2004 Department of Defense counter-drug activities as follows:

FY04 Drug Interdiction and Counter-Drug Request............... $817,300
Demand Reduction.......................................... 116,000
Domestic Support.......................................... 172,700
International Support..................................... 528,600
Recommended Decreases:
Intelligence, surveillance, reconnaissance and tanker
support................................................. 2,000
Ground based end game operations (infrastructure)......... 3,500
Airborne Reconnaissance Low (ARL)......................... 2,000
Maritime patrol aircraft upgrades......................... 2,000
Hemispheric radar system.................................. 1,000
Counter-drug Command Management System.................... 2,000
Pacific command operations support........................ 1,200
Recommended Increases
Southwest Border Fence.................................... 6,700
Intelligence analysts and mobile training teams........... 5,000
Counter-drug airborne intelligence systems................ 2,000
Recommendation................................................ 817,300

Items of Special Interest

Intelligence, surveillance, and reconnaissance and tanker support

The budget request contained $4.6 million for KC -135
tanker operations in support of counter-drug Airborne Early
Warning and Control System (AWACS) missions. Reductions in
support activities are planned, in light of other worldwide
commitments. Accordingly, the committee recommends a decrease
of $2.0 million for this activity.

Ground based end game operations

The budget request contained $38.1 million for ground based
end game operations (GBEGO). This program provides counter-drug
training to develop or sustain operational capabilities,
including the Colombian aviation training program.
Infrastructure projects are also provided for in this activity.
The committee notes that the prior year budget request for this
activity was $29.8 million. The committee understands that
certain infrastructure projects that were initially programmed
in this year's budget request will not be started in the
upcoming fiscal year. Accordingly, the committee recommends a
decrease of $3.5 million for this activity.

Airborne Reconnaissance Low

The budget request contained $10.6 million for funding of
the airborne reconnaissance low (ARL) program. This budget
request for this activity in fiscal year 2003 was $10.9
million. The budget request for similar activities in fiscal
year 2002 was only $6.3 million. The committee understands, as
the result of better cost estimates, that the budget request of
$10.6 million can be reduced without affecting the operation or
the effectiveness of the program, and that similar revisions in
the fiscal year 2003 budget for this activity are also being
planned. Accordingly, the committee recommends a decrease of
$2.0 million for this activity.

Maritime patrol aircraft upgrades

The budget request contained $7.7 million for maritime
patrol aircraft (MPA) upgrades to the Navy's P-3 counter-
narcotic operations radar upgrades.
This program plans to upgrade 10 of the current APS-115 on
board these aircraft to the APG-66 pulse-doppler radar, however
the committee understands that due to a technical problem
within the identification friend or foe (IFF) interrogator, the
APG-66 will not be ready forinstallation within the upcoming
fiscal year. Therefore, the committee recommends a decrease of $2.0
million for this activity.

Hemispheric radar system

The budget request contained $24.1 million for the
hemispheric radar system. The committee is aware that three
radar sites are proposed for closure and that the revised costs
estimates for this project as well as others, are lower than
initially expected. Therefore, the committee recommends a
decrease of $1.0 million for this activity.

Counter-Drug Command and Management System

The budget request contained $18.6 million for voice and
date communications capabilities to support U.S. counter-drug
operations in source and transit zones. The committee
understands the importance of secure communications to counter-
drug activities, but notes the redundancy of this system with
others in the region that link embassies and other key players.
The committee therefore recommends a decrease of $2.0 million
for this activity.

Pacific command operations support

The budget request contained $2.4 million for services and
training support to U.S. and participating nation law
enforcement entities in Southeast and Southwest Asia. While the
committee supports expanding counter-drug programs in the
Pacific Command area of responsibility, the committee
understands that this is not yet a mature program and looks
forward to receiving future details. For fiscal year 2004,
however, the committee recommends a decrease of $1.2 million
for this activity.

Southwest Border Fence

As part of the San Diego 14-Mile Border Infrastructure
System, the Southwest Border Fence has served as an invaluable
counter-narcotics resource for United States Border Patrol
agents since the project's inception in 1997. However, the
border fence construction project is still under construction,
and the area remains one of the nation's most heavily utilized
drug smuggling corridors. Since 1998, the California National
Guard and other military personnel have been responsible for
fence construction and general support of the border
infrastructure system. Completion of the border fence would
constitute a cohesive barrier against vehicle and pedestrian
narcotics trafficking and allow counter-drug assets to be
redeployed in other areas. Accordingly, the committee
recommends an increase of $6.7 million for this purpose.

Intelligence analysts and mobile training teams

At the present time the United States Northern Command
(USNORTHCOM) conducts over 200 intelligence analysts missions
each year through Joint Task Force-6 located at Fort Bliss,
Texas. These intelligence analysts support investigative law
enforcement centers nationwide and their actions have resulted
in law enforcement agencies seizing illicit drugs and cash, as
well as making thousands of arrests. The mobile training teams
help train federal, state, and local law enforcement agencies
across the country on a wide variety of subjects. The committee
is concerned that current funding levels will reduce the number
of intelligence analyst missions that will be performed in
fiscal year 2004. The committee believes this result is not
acceptable. The committee also believes that the expansion of
the mobile training teams will assist USNORTHCOM in its
homeland defense mission. Accordingly, the committee recommends
an increase of $5.0 million for the intelligence analyst and
mobile training team missions to be conducted by Joint Task
Force-6.

Counter-drug airborne intelligence systems

The budget request contained $135.6 million to support
operations and maintenance, personnel and procurement for the
Defense Intelligence Counter-drug Program (DICP) for airborne
and analysis support to Department of Defense (DOD) counter-
drug operations.
The committee is well aware of the military role in the
National Drug Control Strategy in countering transnational
narcotic and narco-terrorist threats, but is also aware that
these efforts are not adequately managed throughout the DOD.
The committee believes that DICP surveillance aircraft, their
tactical operations, and support personnel issues are often
critically overlooked within this program. The committee notes
that specifically, the Senior Scout and the P-3 Orion
collection platforms are not well equipped to perform their
missions effectively. The P-3 Orion has the endurance for the
counter-narcotics mission profile, but has none of the
collection gathering equipment on board to ensure its success.
The Senior Scout has all of the equipment however no dedicated
carrier to perform the mission. Furthermore, Senior Scout has a
limited and finite number of trained reserve analysts to deploy
during extended operations.
Accordingly, the committee recommends an increase of $2.0
million to enable the Secretary of Defense to provide the
Senior Scout mission with a permanent carrier. Additionally,
the committee recommends that $500,000 of this increase be used
to support an active/reserve joint component to the Senior
Scout support element. This unit will be used to provide
specialized airborne mission support personnel for extended
operations. The committee remains concerned with the lack of
investment in the Navy's maritime P-3 data transfer
capabilities. Therefore the committee recommends that the
Secretary of Defense develop a plan that will allow for the
basing of tactical data link capabilities on board these
aircraft in order to allow for improved imagery and data
transfer within the operational theater, as well as the
capability to reach back to locations outside the theater.

Expanded use of National Guard counter-drug aircraft

The committee is aware that the Department of Defense (DOD)
is considering utilizing
Air National Guard C-26 aircraft in support of a deployment
in the United States Southern Command (SOUTHCOM) area of
responsibility which could lead to operational deficiencies
within their present tasking.
These C-26 aircraft currently perform aerial detection,
intelligence, reconnaissance, and surveillance in support of
federal, state and local law enforcement counter-drug
activities operating within the United States. The aircraft and
aircrews are based in 11 states and are available to carry out
their mission on a 24-hour, seven days a week basis.
The committee recognizes the unique capabilities of the C-
26 and its effectiveness in support of the war on drugs in the
United States. The committee is concerned that the depletion of
such air assets to SOUTHCOM may have a negative impact upon
ongoing and future counter-narcotics investigations and
operations conducted by federal, state and local law
enforcement agencies within the United States.
The committee has questions about the suitability of the C-
26 to successfully meet the performance criteria for the
proposed mission in SOUTHCOM. The C-26 personnel and aircraft
may be placed at great risk as a result of tactical and
operational threats they will face in such a mission.
Additionally, the committee believes that the possibility of a
long-term deployment commitment to SOUTHCOM is likely.
Therefore the committee expects the Secretary of Defense to
prepare an assessment that will address the following matters:
(1) The impact of the depletion of such assets performing
aerial detection, intelligence, reconnaissance, and
surveillance upon the federal, state and local law enforcement
agencies currently supported by the National Guard C-26
aircraft.
(2) Suitability of C-26 aircrew and aircraft to perform
missions outside of the contiguous United States, particularly
in the SOUTHCOM area of responsibility.
(3) Adequacy of crew training, equipment and aircraft
defensive systems to perform the proposed mission.
(4) Limitations of airframe performance with respect to
tactical and operational threats faced in proposed area of
operations.
(5) Potential use of alternative platforms to perform the
proposed SOUTHCOM mission.
Accordingly, the committee also expects the Secretary of
Defense to develop a plan to address the issues raised in the
assessment prior to establishing any deployments of the C-26
aircraft to the SOUTHCOM area of responsibility. A copy of the
assessment and the plan should be submitted to the House Armed
Services Committee as soon as feasible.

Global War on Terrorism

Overview

The committee believes that the men and women who serve in
the armed forces have made the world immeasurably safer for
Americans and all the people of the world through their heroic
actions of the last two years. Indeed, the Department of
Defense has led the way in the global war on terrorism,
achieving significant victories. While the Department of
Homeland Security will have a leading role in defending the
nation from terrorist activities, the committee believes the
Department of Defense will continue to be the nation's most
important asset in this war. In that regard, the Subcommittee
on Terrorism, Unconventional Threats and Capabilities has held
a series of hearings, briefings, trips, and informal meetings
in order to stimulate thinking and advance promising
initiatives, and has heard several compelling ideas.
In general terms, the subcommittee has found,
unsurprisingly, that America's best defense lies in keeping
terrorists and their weapons far from our shores. Several
policy initiatives have been suggested to advance that goal.
Among them are insuring the Department has the means to thwart
terrorists overseas through robust and integrated intelligence
gathering and synthesizing activities and providing the forces
and weapons necessary to use that intelligence at the right
time. The committee supports a broad range of these ideas,
which are discussed in more detail below.

Effective use of the National Guard

The committee believes that the national guard will
continue to play a key role in the war on terrorism and be
mobilized in both a federal and state capacity for missions
ranging from overseas deployment for combat operations to
responding to potential or actual terrorist events within the
United States. On one hand, the committee has heard testimony
urging modification of title 32 United States Code to permit
the national guard to perform operational missions for homeland
security under the control of the respective state governor.
Such a change, it is argued, not only facilitates state actions
in homeland defense, but also avoids the limitations of the
posse comitatus law prohibiting the use of federal troops for
law enforcement purposes. On the other hand, the committee has
heard the concern that allowing the national guard to conduct
operational missions under title 32 status would not allow
clear command relationships and responsibilities to function,
and would not facilitate the establishment and accomplishment
of consistent requirements among national guard units. The
committee believes that legislation may be needed to address
the situation, and directs the Secretary of Defense to examine,
in consultation with the Chief, National Guard Bureau, the
manner in which the national guard is called to active duty for
homeland defense missions and recommend any changes he believes
are necessary to the Committee on Armed Services of the Senate
and the Committee on Armed Services of the House of
Representatives.

Integration of Departments of Defense and Homeland Security Activities

The committee is encouraged by the rapid progress the
Department of Homeland Security is making in assuming
operational control of its disparate activities. The committee
noted earlier and restates the importance of the Department of
Defense in the homeland security effort, and encourages the
departments to coordinate their activities as seamlessly as
possible. Inevitably, there will be some duplication of effort
until the best solutions are agreed upon, but the secretaries
of these departments should coordinate as much as possible such
important activities as border defense, use of actionable
intelligence, plans for use of the national guard as a first
responder, and development of vaccines and various other
countermeasures that have been suggested to the committee.

United States Northern Command

The committee believes that the Northern Command (NORTHCOM)
is another key component of the war on terrorism. In addition
to the ongoing work of the command to establish relationships
with first responders and the several states, the committee
believes the command could play an important role in
interdicting the importation of weapons of mass destruction.
The command already has that mission for the defense of the
nation from air attack, by virtue of its close relationship
with the North American Aerospace Defense Command. While
recognizing the need to maintain an effective defense against
conventional maritime threats, the committee further believes
that during the global war on terrorism, the threat of a weapon
of mass destruction arriving unchecked at a U.S. port aboard a
foreign vessel is a serious concern and, therefore, supports
the development by NORTHCOM of a maritime defense strategy that
will ensure the defeat of asymmetric terrorist threats at
maximum distance from the United States coastline.

United States Special Operations Command

The Special Operations Command (SOCOM) is clearly a
treasured national asset in the war on terrorism and our best
asset in disrupting the enemy in foreign lands. This highly
trained,but relatively small force, has undertaken and
brilliantly executed the difficult missions in both Operation Enduring
Freedom in Afghanistan and Operation Iraqi Freedom. The committee fully
supports the increases in SOCOM's budget and have recommended increases
to several SOCOM unfunded requirements. While the committee understands
that there are relatively few SOCOM operators and supports the proposed
end strength increases, the committee concurs with SOCOM senior
commanders that personnel standards must not be compromised in order to
achieve a larger force.
The committee applauds the Secretary of Defense's decision
to designate SOCOM as a supported command in some cases. The
committee notes, however, that section 167 of title 10, United
States Code, requires that SOCOM missions be carried out under
the command of the respective combatant commander unless the
President or Secretary of Defense directs that SOCOM undertakes
the mission. The committee is concerned that the language of
the statute may be too restrictive to permit the timely
execution of selected missions and directs the Secretary of
Defense to review the law and report to the Committee on Armed
Services of the Senate and the Committee on Armed Services of
the House of Representatives by February 1, 2004, whether any
changes are necessary.

Strategic Force Structure

The Treaty between the United States of America and the
Union of Soviet Socialist Republics on the Reduction and
Limitation of Strategic Offensive Arms of July 31, 1991 (the
START Treaty) currently limits the United States and Russia to
6000 accountable strategic warheads.
As required by section 1041 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (Public Law 106-
398), the most recent Nuclear Posture Review (NPR) was
submitted to Congress on January 8, 2002. The NPR describes a
future deployed, strategic stockpile of 1700 to 2200 warheads
in fiscal year 2012, with an intermediate objective of 3800
warheads in fiscal year 2007.
The Moscow Treaty on Strategic Offensive Reduction (the
Moscow Treaty), signed by President Bush of the United States
and President Putin of the Russian Federation on May 24, 2002,
reaffirms the provisions of the START Treaty, and on
ratification will commit the United States and Russia to a
reduction of deployed, strategic stockpiles to 1700 to 2200
warheads by December 31, 2012. The United States Senate
approved the Moscow Treaty on March 6, 2003, and its
consideration by the Russian Federal Assembly is pending.
Section 1031 of the Bob Stump National Defense
Authorization Act for Fiscal Year 2003 (Public Law 107-314)
required the Secretary of Defense and the Secretary of Energy
to jointly prepare a force structure plan for nuclear weapons
and delivery systems covering fiscal years 2003 to 2012. The
section further required submission of a report on that plan to
the congressional defense committees by March 1, 2003. The
committee has not received this report, and has recently been
informed that it could take through the end of fiscal year 2003
to complete.
The committee finds it disturbing and unacceptable that the
administration intends to commit to dramatic changes to the
strategic nuclear deterrent of the United States absent a clear
path forward. The committee admonishes the Departments of
Defense and Energy to move forward expeditiously in their
planning processes.

LEGISLATIVE PROVISIONS

Subtitle A--Financial Matters

Section 1001--Transfer Authority

This section would provide fiscal year 2003 transfer
authority to the Department of Defense for amounts up to $2.5
billion.

Section 1002--Authorization of Supplemental Appropriations for Fiscal
Year 2003

This section would authorize amounts enacted in the
Emergency Wartime Supplemental Act, 2002 (Public Law 108-011)
for the Department of Defense and for the national security
activities of the Department of Energy.
This section would also authorize those defense items
appropriated pursuant to any fiscal year 2003 emergency wartime
supplemental appropriations legislation enacted during the
first session of the 108th Congress.

Section 1003--Authority To Transfer Procurement Funds for a Major
Defense Acquisition Program for Continued Development Work on that
Program

This section would amend section 2114 of title 10, United
States Code, to provide the Secretary of Defense additional
flexibility to correct specific acquisition funding problems
that occur during the transition phase of an acquisition
program from development to production. Currently, there is no
management flexibility to resolve last-minute development
problems quickly before a program transitions into production.
This section would allow the transfer of $20.0 million per
acquisition program and up to $250.0 million for a single
fiscal year from procurement appropriations to research,
development, test and evaluation appropriations for the purpose
of continuing development efforts. The section shall not apply
with respect to funds appropriated for a fiscal year before
fiscal year 2004.

Section 1004--Restoration of Authority to Enter into 12-month Leases at
any Time During the Fiscal Year

This section would restore the authority of the Department
of Defense to enter into 12-month leases at any time during the
fiscal year.

Section 1005--Authority for Retention of Additional Amounts Realized
from Energy Cost Savings

This section would allow the Department of Defense to
obligate all funds representing energy cost savings, not just
two-thirds of such funds, through the end of the fiscal year
without additional authorization or appropriation.

Section 1006--Repeal of Requirement for Two-Year Budget Cycle for the
Department of Defense

This section would repeal the requirement for the
Department to submit a two-year budget every other year. This
requirement was established in Section 1405 of the Department
of Defense Authorization Act for Fiscal Year 1986 (Public Law
99-145; section 1105 of title 10 United States Code). The
purpose of implementing a two-year budget cycle was to increase
efficiencies in planning and management of Department funds.
The Department has complied with submitting a two-year budget
every other year, but continues to submit a budget request in
the intervening year. As a result of real world events during
the 1990s and the continuing global war on terrorism, the
Department often significantly revised its budget request in
the intervening year. This appreciably changes the programs
outlined in the second year of a two-year budget. The committee
realizes that if the Department continues to submit a budget
every year, any efficiency gained in presenting a two-year
budget is not realized. Accordingly, the committee recommends
that the Department submit one-year budgets on an annual basis.

Section 1007--Authority To Provide Reimbursement for Cellular
Telephones When Used for Official Government Business

This section would allow the Department of Defense to
reimburse individuals with a validated need for an official
government cellular telephone using a flat rate or monthly
stipend for such individuals' use of their personal cellular
telephone.

Subtitle B--Naval Vessels and Shipyards

Section 1011--Repeal of Requirement Regarding Preservation of Surge
Capability for Naval Surface Combatants

This section would repeal subsection (b) of section 7296 of
title 10, United States Code, and would include associated
clerical amendments.

Section 1012--Enhancement of Authority Relating to Use for Experimental
Purposes of Vessels Stricken from Naval Vessel Register

This section would allow a contractor or designated agent
to sell equipment taken from a stricken vessel on behalf of the
Navy and would authorize those funds to be returned to the
Navy.

Section 1013--Authorization for Transfer of Vessels Stricken From the
Naval Vessel Register for Use as Artificial Reefs

This section would authorize the Secretary of the Navy to
transfer vessels stricken from the Naval Vessel Register to
States or other political entities of the United States for use
as artificial reefs. This section would also authorize the
Secretary of the Navy to tailor transfer agreements between the
Navy and recipient, based upon the specific circumstances and
characteristics of the vessel. Additionally, this section would
authorize the Secretary of the Navy to provide financial
assistance for the transfer and preparation of vessels for
reefing. Nothing in this section should be construed as
amending or repealing any existing environmental rules or
regulations.

Section 1014--Pilot Program for Sealift Ship Construction

This section would establish a pilot program administered
by the Navy that would provide loan guarantee assistance to
construct militarily useful sealift ships in the United States.
Approval would be handled by the Department of Defense, and
administered by the Department of Transportation.

Subtitle C--Reports

Section 1021--Repeal and Modification of Various Reporting Requirements
Applicable to the Department of Defense

This section would repeal or modify a number of reporting
requirements contained in title 10, United States Code, annual
National Defense Authorization Acts, and other statutes.

Section 1022--Department of Defense Report on the Conduct of Operation
Iraqi Freedom

This section would require the Secretary of Department of
Defense to provide a report to the Congress on the conduct of
Operation Iraqi Freedom. On March 19, 2003, U.S. forces
initiated operations in Iraq in order to overthrown the regime
of Saddam Hussein. Major combat Operations ceased on April 14,
2003, with U.S. forces having defeated Iraqi military forces
and removed the regime from power.
The lessons learned from this operation will have far
reaching implications for U.S. military strategy, doctrine,
equipment procurement and force structure in the years to come.
The committee believes that Congress must have detailed
information and analysis concerning operation Iraqi Freedom in
order to apply the lessons learned to future defense funding
and policy decisions. Therefore, the committee would require a
report to Congress by June 15, 2004 on the conduct of Operation
Iraqi Freedom. A preliminary report would be submitted by
January 15, 2004.

Section 1023--Report on Department of Defense Post-Conflict Activities
in Iraq

This provision would require the Secretary of Defense to
report to Congress, within 90 days of the enactment of this
Act, on the range of Department of Defense (DOD) civilian and
military activities in post-conflict Iraq. The report should
include explanations of the organizational structure by which
the Defense Department has managed post-conflict activities in
Iraq and the relationship of these institutions with other
departments and agencies of the U.S. government and with
intergovernmental and nongovernmental organizations. The report
should also describe the progress to date of U.S. efforts in
the humanitarian, infrastructure, civil administration, and
governance fields, as well as of the efforts to account for
Iraq weapons of mass destruction programs and to provide
security until Iraqi institutions can adequately take over this
function. Finally, the report asks for the Secretary's
assessment of DOD resources needed on an ongoing basis,
including an estimate of total expenditures expected, and of
the scope of tasks remaining to be completed by U.S. government
civilian employees in Iraq.
The committee recognizes that the effort to help rebuild
and assist in the development of governing institutions in Iraq
is a significant undertaking requiring a variety of resources.
Uniquely among recent reconstruction efforts, the Department of
Defense is providing overall direction of the U.S. government's
effort to assist in Iraq's post-conflict transition. The
committee therefore seeks to understand better how these
efforts have been coordinated and howthe Department has
incorporated the expertise of other U.S. departments and agencies, as
well as those of the intergovernmental and nongovernmental
organizations. The Secretary's assessment of the progress made to date
and of the ongoing force and civilian support needs will allow Congress
to make more informed decisions about future force and policy needs.

Section 1024--Report on Development of Mechanisms to Better Connect
Department of Defense Space Capabilities to the War Fighter

This section would require the Secretary of Defense to
submit a report to the congressional defense committees on
development of Department of Defense space-based capabilities
for the war fighter.

Subtitle D--Procurement of Defense Biomedical Countermeasures

This subtitle would authorize the Secretary of Defense to
develop, procure, and prescribe conditions for use of available
biomedical countermeasures to chemical, biological,
radiological, or nuclear agents that could cause military
health emergencies affecting national security.

Section 1031--Research and Development of Defense Bio-Medical
Countermeasures

This section would require the Secretary of Defense to
establish and carry out a program to accelerate the research
and development of biomedical countermeasures, including
therapeutics and vaccines, for protecting members of the Armed
Forces from attack by chemical, biological, radiological, or
nuclear (CBRN) agents. The Secretary would be permitted to
enter into interagency agreements and other collaborative
programs with other Federal agencies and must also ensure that
the activities of the Department of Defense are coordinated,
complement, and do no unnecessarily duplicate those of the
Department of Health and Human Services and of Homeland
Security. The provision would authorize to the Secretary
expedited authority for procurement of property and services in
executing the program. The Secretary would also be authorized
to acquire laboratories, other research facilities, and
equipment that he determines are necessary to carry out the
program. Streamlined personnel authority outside the civil
service would be granted for hiring up to 30 personnel to carry
out research and development under the program.

Section 1032--Procurement of Defense Biomedical Countermeasures

This provision would require the Secretary of Defense, in
consultation with the Sectaries of Health and Human Services
and of Homeland Defense, to assess emerging threats of the use
of CBRN agents, identify those agents for which biomedical
countermeasures are need to protect the health of members of
the Armed Forces, and those specific qualified countermeasures
that should be procured for the DOD stockpile of biomedical
countermeasures. Qualified biological countermeasures would
include those already approved or licensed for use and those
developmental products that could reasonably be expected to
qualify for such approval within five years. The provision
would also authorize for procurement of such qualified
biological countermeasures the use of funds appropriated for
the Department of Defense and available within the Secretary's
transfer authority.

Section 1033--Authorization for Use of Medical Products in Emergencies

This provision would define the conditions under which the
Secretary of Defense cold declare a state of emergency
regarding a military emergency involving a heightened risk to
the Armed Forces of attach by a chemical, biological,
radiological, or nuclear agent, and would permit the Secretary
of Defense to authorize the use on members of the Armed Forces
of a drug or device intended for use in an actual or potential
emergency. Criteria for the authorization would include a joint
determination that the agent can cause a serious or life-
threatening disease or condition and it is reasonable to expect
that the biological countermeasure may be effective or the
benefits of using the countermeasure outweigh the risks of
using the countermeasure, and there is no alternative
available. The conditions under which the countermeasures could
be used are identical to those current in effect under section
731(a) of the Strom Thurmond National Defense Authorization Act
for Fiscal year 1999 for the use of investigational new drugs.

Subtitle E--Other Matters

Section 1041--Codification and Revision of Defense Counterintelligence
Polygraph Program Authority

This section would remove existing limits on the number of
polygraph examinations that the Department of Defense may
administer in any fiscal year. Under the current program
established in section 1121 of the National Defense
Authorization Act for Fiscal Years 1988 and 1989 (P.L. 100-180)
and amended in section 1073(d)(5) of the National Defense
Authorization Act for Fiscal Year 1998 (P.L. 105-85), no more
than 5,000 polygraph examinations may be conducted per fiscal
year. Section 1041 would expand the categories of individuals
who may be required to undergo polygraph examinations. These
two categories include persons who are applying for positions
within the Department and persons who are assigned or detailed
to the Department. This section would also instruct the
Secretary of Defense to institute a process to monitor
responsible and effective application of polygraphs within the
Department of Defense. In lieu of the existing reporting
requirement, this section would require the Secretary to make
information on the use of polygraphs available to the
congressional defense committees.

Section 1042--Codification and Revision of Limitation on Modification
of Major Items of Equipment Scheduled for Retirement or Disposal

This section would revise existing reporting requirements
on modifications to aircraft, weapons, vessels, and other items
of equipment scheduled to be retired or disposed of within five
years. This section would relieve the secretary of a military
department from reporting on any modification for which the
cost is less than $1.0 million.

Section 1043--Additional Definitions for Purposes of Title 10, United
States Code

This section would define in section 101 of title 10 United
States Code, the definitions of the terms ``congressional
defense committees'' and ``base closure law.''

Section 1044--Inclusion of Annual Military Construction Authorization
Request in Annual Defense Authorization Request

This section would require the Secretary of Defense to
transmit to Congress the annual military construction
authorization request as part of the annual defense
authorization request,and that this request be transmitted
within 30 days of the date the President transmits to Congress the
budget request for that fiscal year.

Section 1045--Technical and Clerical Amendments

This section would make a number of technical and clerical
amendments to existing law of a non-substantive basis.

Section 1046--Authority to Provide Living Quarters for Certain Students
in Cooperative and Summer Education Programs of the National Security
Agency

This section would amend section 2195 of title 10, United
States Code, to allow the National Security Agency to provide
and pay for living quarters for qualifying students who are
employed at the National Security Agency under a Student
Educational Employment Program or a similar cooperative or
summer education program.

Section 1047--Use of Drug Interdiction and Counter-Drug Funds to
Support Activities of the Government of Colombia

This section would authorize the Secretary of Defense to
use funds available for drug interdiction and counter drug
activities to provide assistance to the government of Columbia
to support not only a unified campaign against narcotics
trafficking, but to also support a unified campaign against
activities by organizations designated as terrorist
organizations.

Section 1048--Authority for Joint Task Forces To Provide Support to Law
Enforcement Agencies Conducting Counter-Terrorism Activities

This section would authorize those joint task forces (JTFs)
of the Department of Defense that provide support to law
enforcement agencies conducting counter-drug activities, namely
JTFs 4, 5, and 6, to provide similar support to law enforcement
agencies conducting counter-terrorism activities. Any support
provided under this section must be consistent with all
applicable laws and regulations, and the support may only be
provided in the geographic area of responsibility of the joint
task force. The committee notes that these JTFs have made
critical contributions to the counter-drug mission and notes
that their focus on drug flows into the United States could
have great relevance to terrorist movements across our borders
as well. The committee believes that Northern Command should
make use of these capabilities as it develops counter-terrorism
programs.

Section 1049--Use of National Driver Register for Personnel Security
Investigations and Determinations

This section would authorize access to the National Driver
Register by federal agencies for use in personnel security
investigations and determinations and for use in personnel
investigations with regard to federal employment. The National
Driver Register is a cooperative system managed by the
Secretary of Transportation under which the chief driver
licensing official in each state provides driver licensing
records to the Register. Access to the information is currently
provided to multiple federal agencies.

Section 1050--Protection of Operational Files of the National Security
Agency

This section would allow the Director of the National
Security Agency, in coordination with the Director of the
Central Intelligence Agency, to exempt limited categories of
sensitive National Security Agency files from the search,
review, and disclosure provisions of the Freedom of Information
Act, contained in section 552 of title 5 United States Code.
This authority parallels the authority currently available to
the Central Intelligence Agency, National Imagery Mapping
Agency, and the National Reconnaissance Office.

Section 1051--Assistance for Study of Feasibility of Biennial
International Air Trade Show in the United States and for Initial
Implementation

This section would require the Secretary of Defense to
select and provide assistance to a community in conducting a
joint study to determine the feasibility of establishing an
international air trade show in that community. The committee
believes that international air trade shows are an important
component of efforts to demonstrate the effectiveness of United
States military equipment to other nations and seeks to
increase the importance of U.S. based air trade shows in the
conduct of international aerospace trade. This provision would
also require that the Secretary make his selection through
competitive procedures, while giving preference to communities
that already host an air show, such as Dayton, Ohio, and have
demonstrated a history of supporting air shows with local
resources.

Section 1052--Continuation of Reasonable Access to Military
Installations for Personal Commercial Solicitation

The committee has become aware of concerns from private
sector insurance and financial planning companies that the
Department of Defense intends to revise the Department's
regulations on commercial solicitation on military
installations to limit the access of service members to
competitive insurance and financial planning services and
unfairly restrict the ability of private sector companies to
compete for the business of service members in these important
areas. Accordingly, this section would require the Secretary of
Defense to submit to the Congress any amendments or other
revisions, along with supporting rationale, relating to access
to military installations for the purpose of conducting limited
personal commercial solicitation. The amendment would further
require that any changes may not be effective until 90 days
have expired beginning on the date the Secretary submits the
changes to the Congress.

Section 1053--Commission on Nuclear Strategy of the United States

This section would establish a Commission on Nuclear
Strategy of the United States to assess and make
recommendations about current United States strategy as
described by the Nuclear Posture Review and other planning
documents, as well as possible alternative strategies that
could be pursued over the next 20 years. The Commission would
have broad purview to consider matters of policy, force
structure, stockpile stewardship, and estimates of threats and
force requirements, and would have the authority to hold
hearings and take testimony.
The Secretary of Defense, in consultation with the chairmen
and ranking minority members of the Committees on Armed
Services of the Senate and House of Representatives, would
appoint 12 members to serve on the Commission, and designate
one of the commissionmembers as chairman. The Commission would
convene its first meeting not later than 60 days after the appointment
of all its members. The Commission would report its findings to the
Secretary of Defense and the Committees on Armed Services of the Senate
and House of Representatives not later than 18 months after the date of
its first meeting, and terminate 60 days after reporting. Not later
than one year after the Commission reports, the Secretary would submit
to Congress a report commenting on the Commission's findings and
recommendations, and explaining what actions, if any, the Secretary
intends to take with respect to each of those recommendations.
The Secretary of Defense, in consultation with the
Secretary of Energy, would contract with a Federally Funded
Research and Development Center to provide for the
organization, management, and support of the Commission. The
Commission would receive the cooperation of all agencies and
departments of the United States government.

Section 1054--Extension of Counterproliferation Program Review
Committee

This section would amend section 1605(F) of the National
Defense Authorization Act for Fiscal Year 1994 (Public Law 106-
65) to extend the charter for the interagency Counter
Proliferation Program Review Committee through September 30,
2008.

TITLE XI--DEPARTMENT OF DEFENSE CIVILIAN PERSONNEL

LEGISLATIVE PROVISIONS

Subtitle A--Department of Defense Civilian Personnel Generally

Section 1101--Modification of the Overtime Pay Cap

This section would amend section 5542(a)(2) of title 5,
United States Code, to ensure that Federal employees who are
exempt from the Fair Labor Standards Act, and are paid above
step five of grade 12, do not suffer a pay cut when they work
overtime.

Section 1102--Military Leave for Mobilized Federal Civilian Employees

This section would amend sections 6323, 5343(c)(4) and
5545(d) of title 5, United States Code, to assist mobilized
Federal civilian employees, whose military pay is less than
their Federal civilian salary, transition to military service
by allowing them to receive 22 additional workdays of military
leave.

Section 1103--Common Occupational and Health Standards for Differential
Payments as a Consequence of Exposure to Asbestos

This section would amend sections 5343 and 5545 of title 5,
United States Code, to establish a common standard for payment
of hazardous duty differential pay for reason of exposure to
asbestos for prevailing rate and general schedule federal
employees.

Section 1104--Increase in Annual Student Loan Repayment Authority

This section would amend section 5379(b)(2)(A) of title 5,
United States Code, to increase the annual amount that an
agency can repay a highly qualified employee for a student loan
from $6,000 to $10,000 per year without increasing the overall
limit of $40,000.

Section 1105--Authorization for Cabinet Secretaries, Secretaries of
Military Departments, and Heads of Executive Agencies to be Paid on a
Biweekly Basis

This section would amend section 5504 of title 5, United
States Code, to permit Cabinet Secretaries, Secretaries of the
military departments and heads of Executive agencies to be paid
on the same biweekly basis as most Federal employees rather
than on a monthly basis.

Section 1106--Senior Executive Service and Performance

This section would amend provisions of chapter 53 of title
5, United States Code, relating to pay of senior executives.
First, this section would remove the Senior Executive Service
(SES) and the Federal Bureau of Investigation/Drug Enforcement
Agency (FBI/DEA) SES from the list of employees eligible for
locality pay. Second, the section would provide for a range of
rates of basic pay for the SES, established according to OPM
regulations. Each senior executive's pay would be set by the
employing agency at one of the rates of the range on the basis
of individual performance, contribution to agency performance,
or both, as determined under a rigorous performance management
system. The amendment would raise the maximum rate for Senior
Executive Service positions from level IV to level III of the
Executive Schedule. The provision would also provide for the
adjustment of the applicable maximum to level II of the
Executive Schedule for any agency that is certified as having a
performance appraisal system that makes meaningful distinctions
among senior executives, based on their relative performance as
that system is both designed and applied. Finally, this section
would provide a new standard for determining the applicability
of one of the post-employment restrictions to those who are in
the Senior Executive Service or equivalent positions in other
pay systems. The restriction would apply to those individuals
whose rate of basic pay exceeds 96 percent of the rate for
level II of the Executive Schedule. Employees in positions
currently described by section 207(c)(2)(A)(ii) would continue
to be subject to this one-year, post-employment restriction
upon leaving that senior position at any time during the two
years following enactment of this Act. When that two-year
period is complete, any such individual who is still an officer
or employee in the executive branch in a position other than
that described in clauses (i), (iii), and (iv) of section
207(c)(2)(A), will be a senior employee only if he or she meets
the new salary threshold in clause (ii) of that section.

Section 1107--Design Elements of Pay-for-Performance Systems in
Demonstration Projects

This section would provide specific elements to be
incorporated into any pay-for-performance system established in
a demonstration project under chapter 47, including adherence
to merit principles, a fair, credible and transparent employee
appraisal system, a link between the pay-for-performance system
and the agency's strategic plan, adequate training, a means for
ensuring employee feedback, and effective safeguards.

Section 1108--Federal Flexible Benefits Plan Administrative Costs

This section would prohibit agencies that provide or plan
to provide flexible benefits plans for its employees from
imposing any fees related to the program on its employees in
order to defray the administrative costs associated with such
option. This section would also require a number of reporting
requirements associated with the benefits plans.

Section 1109--Clarification to Hatch Act; Limitation on Disclosure of
Certain Records

This section includes legislation introduced by Chairman
Davis (H.R. 1509) that would clarify that a federal employee
who voluntarily separates from the civil service shall not be
subject to the enforcement provisions of the Hatch Act unless
he or she re-enters the civil service.

Section 1110--Employee Surveys

This section would authorize executive agencies to conduct
annual surveys of their employees in order to assess: the
leadership and management practices that contribute to agency
performance; employee satisfaction with leadership policies and
practices, work environment and rewards and recognition for
professional accomplishment and personal contributions to
achieving organization mission; opportunity for professional
development and growth; and opportunity to contribute to
achieving organizational mission. OPM would issue regulations
prescribing survey questions to address these issues. Results
of such surveys would be available to the public and posted on
agency websites, unless the head of an agency determines that
doing so would jeopardize or negatively impact national
security.

Subtitle B--Department of Defense National Security Personnel System

Section 1111--Department of Defense National Security Personnel System

This section would amend title 5 of the United States Code
by adding a new chapter 99 at the end of subpart I of part III.
The new chapter would contain the following sections.
Section 9901 would provide definitions of various terms
used throughout the new chapter.
Section 9902 would authorize the Secretary of Defense to
establish a civilian human resources management system, based
on the system created in section 841 of the Homeland Security
Act of 2002 (Public Law 107-296) for the Department of Homeland
Security, to enable the Department to fulfill its national
security mission. This system would be merit-based. It also
would protect veterans' preference and provide for collective
bargaining at the national level in addition to local
collective bargaining. In developing this system, the Director
of the Office of Personnel and Management would serve as a
strategic and collaborative partner. Consistent with the
Secretary's broad authority to manage military personnel, the
Secretary also would exercise broad authority to manage DOD
civilian personnel, subject to the decision of the President,
provided he certifies that such authority would be essential to
the national security. This section would further:
(1) Provide for a collaborative process, based on the
model established in the Homeland Security Act of 2002,
(Public Law 107-296), for ensuring inclusion of
employee representatives in the planning, development,
and implementation of the human resources management
system, while allowing the Secretary to conduct such
collaboration at the national level;
(2) Require the establishment of an appeals process
that provides that employees of the Department of
Defense are entitled to fair treatment in any appeals
they bring in decisions relating to their employment,
which would include an independent review panel;
(3) Establish a program under which employees would
be eligible for early retirement, offered separation
pay to separate from the service voluntarily, or both,
for purposes of reducing or restructuring the
workforce;
(4) Require the system developed under this chapter
to comply with provisions in current law relating to
political activity, oath of office, access to criminal
history records for national security and other
purposes, the Ethics in Government Act, and Inspector
General Act;
(5) Allow annuitants who become employed in the
Department to retain their annuities;
(6) Cap DOD Senior Executive Service pay, allowances,
differentials, bonuses, awards and other payments at no
more than the Vice President's total annual
compensation; and
(7) Authorize the Secretary of Defense to waive those
provisions of title 5, United States Code, including
chapters 71, 75, and 77, not specifically listed in the
section as unwaivable.
Section 9903 would authorize the Department to hire highly
qualified experts for up to five years, with the possibility of
a one-year extension, and to prescribe the appropriate pay
rates. It is consistent with the authority now available to the
Defense Advanced Research Projects Agency and military
departments for hiring scientists and engineers.
Section 9904 would authorize the Secretary of Defense to
hire American citizens 55 years of age and older to work for
the Department of Defense for up to two years, without a
reduction in any annuity, pension, retirement pay, or similar
payment, to fill needs that are not otherwise met by civilian
employees.
Section 9905 would authorize DOD to align the allowances
and benefits of certain employees outside the United States
with those of the Foreign Service and the Central Intelligence
Agency.

TITLE XII--MATTERS RELATING TO OTHER NATIONS

OVERVIEW

As part of the global war on terrorism, the Department of
Defense frequently finds itself working in cooperation with the
military forces of other friendly nations. Title XII contains
provisions that will streamline that cooperation and enhance
United States national security.

ITEMS OF SPECIAL INTEREST

Euro-NATO Joint Jet Pilot Training (ENJJPT) Program

Over the past decade, the North Atlantic Treaty
Organization (NATO) has evolved and expanded to reflect the
changes in the world. Four years ago, Poland, the Czech
Republic, and Hungary joined the other 16 member nations to
enhance European regional security.
One important mission of NATO is to protect the alliance's
air space. In the past 22 years, NATO partners have come
together in the Euro-North Atlantic Treaty Organization
JointJet Pilot Training (ENJJPT) program to provide flight training to
over 250 student pilots and 120 instructor pilots annually. ENJJPT not
only produces skilled pilots, but also strengthens the NATO alliance
through common training, exercises, and routine operations. The
benefits of such a program, that brings a large number of future
leaders together from allied nations in a common endeavor that builds
character and long-term professional bonds, as well as technical
skills, is difficult to overstate.
The leadership of the Department of Defense should work
within NATO to encourage and facilitate active participation in
ENJJPT by newer NATO members.

LEGISLATIVE PROVISIONS

Section 1201--Expansion of Authority to Provide Administrative Support
and Services and Travel and Subsistence Expenses for Certain Foreign
Liaison Officers

This section would remove a provision of existing law that
limits the Secretary of Defense's ability to provide
administrative support services to those foreign liaison
officers from a nation involved in a coalition with the United
States. The provision would also authorize the Secretary to pay
the travel, subsistence, and similar personal expenses of a
liaison officer from a developing nation in coalition with the
United States. ``Similar personal expenses'' constitutes an
expansion to the allowable expenses the Secretary may pay, but
adds the requirement that the foreign liaison officer be from a
coalition nation, effectively narrowing the class of eligible
recipients.

Section 1202--Recognition of Superior Noncombat Achievements or
Performance by Members of Friendly Foreign Forces and Other Foreign
Nationals

This section would authorize the Department of Defense to
expend operations and maintenance funds to recognize superior
noncombat achievements or performance by members of foreign
forces and other foreign nationals that significantly enhance
or support the National Security Strategy of the United States.
The committee understands that during Operation Enduring
Freedom, U.S. military personnel were required to contact and
gain the support of various foreign military and civilian
personnel in the conduct of their missions. In many
circumstances, the local customs of the various countries
required U.S. military personnel to bestow gifts as recognition
for the services or support that these foreign nationals
provided. Failure to adhere to such customs could undermine
mission accomplishment. Therefore, the committee believes that
this authority will materially contribute to the ability of the
armed forces to accomplish assigned missions.

Section 1203--Expansion of Authority to Waive Charges for Costs of
Attendance at George C. Marshall Center for Security Studies

The Secretary of Defense currently has the authority to
waive reimbursement of costs for military officers and civilian
officials from North Atlantic Cooperation Council (a component
of NATO) and Partnership for Peace (PfP) countries
participating in Marshall Center programs. The Secretary of
Defense cannot currently waive reimbursement for poorer
countries in the Balkans, however. The Department of Defense
believes that increased participation by Balkan states in
Marshall Center programs will serve U.S. security goals in the
region. This provision would permit the Secretary to waive
reimbursement costs for participants from states in Europe and
the former Soviet Union, effectively making Balkan-state
participants eligible to have their costs waived.

Section 1204--Goods and Technologies Critical for Military Superiority

This section would direct the Secretary of Defense to
establish a Goods and Technologies Critical for Military
Superiority (GTCMS) list--a catalog of goods, materials,
weapons systems technologies and developing critical
technologies, and know-how that either could enhance a
potential adversary's military capabilities or are critical to
the United States maintaining its military superiority and
qualitative advantage. The GTCMS list should include, but not
be limited to, advanced conventional weapons, weapons of mass
destruction, and traditional and untraditional delivery
systems, and the means to manufacture them.
The Committee notes that the Office of the Under Secretary
of Defense for Policy is best suited to compile the Goods and
Technologies Critical for Military Superiority list given the
breadth of this matter. The list should be comparable to the
Commerce Control List and its different Categories, Groups, and
Export Control Classification Numbers, and should use an
updated version of the Militarily Critical Technologies List as
a starting point. The list should be updated on a bimonthly
basis, starting in June 2004, and be made available to the
public on an official Department of Defense website. Classified
versions of the list should be sent to the Senate Committee on
Armed Services and the House Committee on Armed Services, as
necessary.

Section 1205--Report on Iraqi Acquisition of Advanced Weapons

This section would require the Secretary of Defense to
conduct a study of how Iraq acquired weapons of mass
destruction and associated delivery systems, to include
unmanned aerial vehicles and cruise missiles, and advanced
conventional arms in violation of multilateral and unilateral
sanctions, arms control agreements, international weapons
inspections and export control measures. From 1979, when
International Atomic Energy Agency inspections in Iraq began,
until the fall of the government of Saddam Hussein, Iraq
obtained the materials, technology, and know-how for weapons of
mass destruction and advanced conventional armaments both
legally and illegally from entities outside of Iraq, including
Iraqi citizens operating on foreign soil. The report should
explain why nonproliferation processes failed to stop the
spread of dangerous and destabilizing weapons to Iraq, how Iraq
circumvented multilateral technology control and inspections
regimes after the first Gulf War, and how Iraq exploited
limitations in export control processes around the world. The
report should also address the illegal transfer of militarily
useful goods to Iraq during Operation Iraqi Freedom.

Section 1206--Authority for Check-Cashing and Currency Exchange
Services To Be Provided to Foreign Military Members Participating in
Certain Activities with United States Forces

This section would provide authority to foreign military
personnel to obtain United States currency in exchanges for
their negotiable instruments while on joint training or
operations if the foreign nation has guaranteed payment and if
the senior United States commander approves.

Section 1207--Requirements for Transfer to Foreign Countries of Certain
Specified Types of Excess Aircraft

This section would amend section 2581 of title 10, United
States Code, to expand transfer requirements for excess UH-1
Huey and AH-1 Cobra helicopters to include T-2 Buckeye aircraft
and the T-37 Tweet aircraft.

Section 1208--Limitation on Number of United States Military Personnel
in Colombia

This section would restrict funds available to the
Department of Defense to support or maintain more than 500 U.S.
military personnel in Colombia at any time. The provision would
provide an exemption from the limitation for any members of the
armed forces in Colombia for a period not to exceed 30 days to
rescue or retrieve U.S. military or civilian Government
personnel. The provision would also exempt military personnel
assigned to the U.S. Embassy in Colombia as attaches, as part
of the security assistance office, or the Marine Corps security
contingent, as well as those participating in natural disaster
relief efforts, those involved in non- operational transit
through Colombia, or making a port call. The provision would
also provide the Secretary of Defense the authority to waive
the military personnel limitation should the Secretary
determine that such a waiver is in the national security
interests of the United States and notify the congressional
defense committees within 15 days.

TITLE XIII--COOPERATIVE THREAT REDUCTION WITH STATES OF THE FORMER
SOVIET UNION

OVERVIEW

The budget request included $450.8 million for cooperative
threat reduction (CTR) activities in fiscal year 2004, an
increase of almost 9 percent over fiscal year 2003. The amount
included $57.6 million for the elimination of strategic nuclear
delivery systems in Russia; $48.0 million for nuclear weapons
storage security in Russia; $23.2 million for strategic nuclear
weapons transportation security; $3.9 million for strategic
nuclear delivery systems elimination in Ukraine; $54.2 million
for biological weapons proliferation prevention throughout the
former Soviet Union; $200.3 million for chemical weapons
destruction in Russia; $39.4 million for weapons of mass
destruction proliferation prevention programs outside of
Russia, but within the former Soviet Union; $11.1 million for
defense and military contacts; and $13.1 million for
administrative costs.
The Committee recommends the budget request with two
exceptions. First, it would increase funding for the
elimination of strategic nuclear delivery systems in Russia by
$28.8 million to $86.4 million. Second, it would decrease
funding for chemical weapons destruction in Russia by $28.8
million, to $171.5 million.
The committee continues to support the original and
overriding goal of the CTR program: to reduce the threat to the
United States posed by the former Soviet Union's strategic
weapons of mass destruction and their associated delivery
systems. It notes significant progress in reaching that goal.
However, it remains concerned that progress on eliminating
strategic nuclear delivery vehicles has slowed. The fiscal year
2004 request for strategic nuclear weapons elimination in
Russia represents a decrease of almost 18 percent from fiscal
year 2003 and nearly 57 percent from fiscal year 2002.
Similarly, the request for $3.9 million for strategic arms
elimination in Ukraine represent a 39 percent reduction from
fiscal year 2003 and a 92 percent reduction from fiscal year
2002. The committee recommends reversing these trends as they
relate to Russia, which continues to possess inordinate numbers
of Soviet-era strategic nuclear delivery systems. Therefore, it
recommends increased funding for these efforts in order to keep
them the top priority for the Cooperative Threat Reduction
program.
While the committee has long supported the Cooperative
Threat Reduction program, it has noted several problems that
threaten the program's continued utility under the Department
of Defense. These include a broadening of its mission from
definable goals, such as the dismantlement of delivery systems,
to more amorphous and undefined goals, such as eliminating
environmental dangers; the Department's continued willingness
to absorb costs that are more appropriate for taxpayers in the
former Soviet Union; the continuing difficulty in determining
whether programs are making measurable progress towards
achieving definable goals; the lack of necessary transparency
and access agreements; the challenge in ensuring that CTR
funding does not inadvertently free up resources for strategic
modernization by states of the former Soviet Union; frequent
lapses in management that lead to wasteful spending; and, the
tendency to pursue nonproliferation activities that are not
critical to the Department's primary war-fighting missions or
expertise and more appropriately belong with other government
departments and agencies. Events over the last year have only
heightened these concerns.
The facts surrounding the Liquid Propellant Disposition
Project in Krasnoyarsk, Russia clearly demonstrate this waste
and lack of cooperation. Russia asked for assistance, and the
United States spent over $137.2 million to dispose of rocket
fuel from old ballistic missiles. As a part of this effort, the
United States built Russia a $106.0 million plant to convert
the fuel into commercially-useful materials. However, according
to the Department of Defense Inspector General, without telling
the United States, the Russian government turned most of the
fuel over to its space program for commercial launches before
the project was completed. The Russian government even helped
reprocess the fuel inside of former fuel-production plants in
order to make it safer for use in space launches. As a result,
there is no fuel for the U.S.-funded plant to eliminate.
Because the facility cannot be used for anything else, its
value now is reduced to its scrap--valued roughly at $1.2
million.
Russia's duplicity, or--at best--negligence, in this
episode signals a clear difference in views about the utility
of some elements of the Cooperative Threat Reduction program
between Russia and the United States and suggests that the two
countries may have different goals for parts of the program. In
fact, in January 2003, the President exercised authority
established by the National Defense Authorization Act for
Fiscal Year 2003 to waive certification requirements contained
in the Cooperative Threat Reduction Act of 1993 and the FREEDOM
Support Act for one year. The certification requirements make
the President determine that a state of the former Soviet Union
is committed to fulfilling six reasonable responsibilities
before the U.S. Government may expend CTR funds in that
country. In 2003, the President determined that Russia is not
committed to two of the six requirements:
(1) Foregoing any military modernization program that
exceeds legitimate defense requirements and foregoing
the replacement of destroyed weapons of mass
destruction; and,
(2) Complying with all relevant arms control
agreements,'' including the Chemical Weapons Convention
and the Biological and Toxin Weapons Convention, to
which Moscow is a party.
In the same Presidential Determination, the Administration
found that ``Russia continues a biological weapons program,''
and that Russia has ``failed to fully declare its chemical
weapon stockpiles and chemical weapon-related facilities.''
These facts show that Russia does not share U.S.
nonproliferation intentions and goals for the CTR program.
The key element to the success of the Cooperative Threat
Reduction programs is cooperation. As indicated by progress in
dismantling strategic nuclear delivery systems that threatened
the United States and that the successor states of the Soviet
Union no longer wanted, success is possible when all
participants share a common set of assumptions, interests, and
clearly defined goals. When participants do not share the same
assumptions, interests, or goals, as may be the case in CTR
biological and chemical weapons destruction programs, success
is impossible and resources committed to such efforts are
wasted.
To avoid that outcome, the Committee recommends limitations
and conditions on a few CTR programs as a means of assessing a
CTR recipient's commitment to the goals of the program and its
willingness to act in a truly cooperative fashion. First, it
would prioritize those activities where the United States and
Russia have historically demonstrated success due to shared
goals, such as the elimination of strategic nuclear delivery
vehicles. Second, it would limit those programs to which
Russia's commitment is less than complete. In general, the
Committee adopted principles of accountability, transparency,
accessibility, and cooperation when drafting these provisions.

LEGISLATIVE PROVISIONS

Section 1301--Specification of Cooperative Threat Reduction Programs
and Funds

This section would specify the kinds of programs to be
funded under this title and would make fiscal year 2004
Cooperative Threat Reduction program funds available for three
years.

Section 1302--Funding Allocations

This section would allocate fiscal year 2004 funding for
various Cooperative Threat Reduction purposes and activities.

Section 1303--Limitation on Use of Funds until Certain Permits Obtained

The committee notes that multi-million dollar
demilitarization projects in the Russia Federation have been
stalled or cancelled due to a failure to obtain in advance all
necessary land-use permits. For example, the United States
spent $94.6 million toward the construction of a solid rocket
motor disposition facility near the city of Votkinsk, Russia
before the Department learned that it could not obtain the
necessary land-use permits to operate the facility. While the
Administration believes Russia was forthcoming about problems
at Votkinsk, the decision to proceed with construction in the
absence of all necessary permits resulted in yet additional
waste in the Cooperative Threat Reduction program. This section
would require the Secretary of Defense to determine what
permits will be needed and that the Russian government obtain
and transmit copies of those permits to the Secretary of
Defense before he obligates more than 35 percent of a project's
total cost. This would enable the Department of Defense to
spend those funds needed to enable it to obtain a permit, while
limiting the potential for waste in the event that the permits
are not forthcoming.

Section 1304--Limitation on Use of Funds for Biological Research in the
Former Soviet Union

This section would limit spending by the Department of
Defense's cooperative biodefense research or bioattack early
warning and preparedness to those sites to which the Department
has sufficient access to (1) determine that no prohibited
weapons research is being conducted; (2) determine the
vulnerability of a site to illicit external or internal
attempts to obtain dangerous pathogens; and, (3) implement
security measures needed to prevent the diversion of dangerous
pathogens from legitimate research. All told, these limitations
apply to $32.2 million. Funds requested for the purposes of
dismantling sites or improving safety and security at a site
would be unaffected.
In March 2003, the General Accounting Office released a
report entitled, ``Weapons of Mass Destruction: Additional
Russian Cooperation Needed to Facilitate U.S. Efforts to
Improve Security at Russian Sites.'' The General Accounting
Office determined that the United States lacked sufficient
access to Russia's biological research facilities to secure
those sites at which the United States and Russia had
collaborative programs. It further noted that Russia routinely
denied the United States access to those sites receiving
funding from U.S. taxpayers, and that negotiations to secure
such access had stalled. As a result, the Department of Defense
cannot be sure that its funding of Russian biological research
facilities will not undermine U.S. security by creating
circumstances in which U.S. resources support inappropriate
activities or sustain activities vulnerable to inappropriate
applications. The corrective measures contained in this section
would help prevent those circumstances from arising and create
incentives for Russia to grant U.S. access to those biological
research facilities pursuing U.S. funding.

Section 1305--Authority and Funds for Nonproliferation and Disarmament

The Department of Defense (DOD) requested authority to
obligate and expend up to $50.0 million of Cooperative Threat
Reduction program funds, including prior fiscal year funds,
outside the states of the former Soviet Union if the President
determines such funds would help the United States resolve
critical emerging proliferation threats or would otherwise
allow the United States to take advantage of opportunities to
achieve long-standing nonproliferation goals. While the
committee supports nonproliferation efforts, there is concern
that an expansion of DOD's Cooperative Threat Reduction program
beyond the borders of the former Soviet Union will distract the
Department from its primary, warfighting mission. Moreover, the
committee notes that nonproliferation efforts have historically
been a function of the Department of State, and that Congress
expanded the authority of the State Department's
Nonproliferation and Disarmament Fund beyond the territory of
the former Soviet Union. Therefore, rather than expanding a DOD
program that would duplicate State Department efforts, this
section would authorize the Secretary of Defense to transfer
$50.0 million of prior fiscal year Cooperative Threat Reduction
funds to the Department of State Nonproliferation and
Disarmament Fund for disarmament and nonproliferation purposes
outside of the former Soviet Union. The committee recommends
that future growth in government-wide nonproliferation efforts
occur among programs that the Department of State is already
authorized to undertake.

Section 1306--Requirement for On-Site Managers

This section would require the Secretary of Defense to
appoint an on-site manager to oversee Cooperation Threat
Reduction projects involving a dismantlement, destruction,
orstorage facility or construction of a facility in the former Soviet
Union whose total U.S. costs will exceed $25 million over the life of
the project. The committee believes that the presence of a full-time
U.S. manager on-site will prevent repeats of wasteful programs such as
the Krasnoyarsk heptyl plant and Votkinsk solid rocket motor
dismantlement facility, while giving the United States greater insight
into a recipient partner's degree of cooperation and commitment to a
CTR project. The section would apply to both existing and future
facilities, but would not take effect until six months after enactment
in order to give the Department of Defense sufficient time to identify
the needed on-site managers.
To empower the on-site manager, increase transparency into
Russia's contributions to cooperative threat reduction, and
enhance accountability in program execution, this section
further lays out responsibilities for the on-site manager, who
would be directed to work with partner governments to identify
the steps and activities needed to successfully accomplish a
nonproliferation goal, establish a schedule for completing
those steps, and conduct meetings of assurance with
participants in order to ensure that the necessary steps are
completed on schedule. The on-site manager would further be
directed to suspend U.S. participation in a project when a non-
U.S. participant fails to meet its obligations, but the
Secretary of Defense would retain the ability to direct a
project to continue in the face of such failure.

Section 1307--Provisions Relating to Funding for Chemical Weapons
Destruction Facility in Russia

This section would extend for a period of one year the
President's authority to waive existing certification
requirements before obligating funds for the construction of
the Shchuch'ye Chemical Weapons Deconstruction Facility in
Russia. However, the need for such authority continues to raise
concerns about Russia's commitment to fully disclosing and
dismantling its chemical weapons stockpile and infrastructure.
Ultimately, Cooperative Threat Reduction (CTR) programs
undertaken in the absence of such a commitment will fail to
improve the security of the American people. Therefore, the
committee urges the Department of Defense to assess Russia's
commitment to these goals, and, should it determine that
Russia's commitment remains lacking, to restructure the program
accordingly.
The committee further notes that the Russian Federation
agreed to provide $25.0 million annually for the construction
and operation of the chemical weapons deconstruction facility
at Shchuch'ye, Russia, but that it has frequently failed to
meet this goal. The United States and the Russian Federation
initially planned to share the costs of the Shchuch'ye project,
with the United States spending approximately $750.0 million to
build and begin operations at the facility, with the Russian
Federation spending approximately $240.0 million. The fiscal
year 2004 budget requests $190.3 million for the Shchuch'ye
project, with the Russian Federation expected to pay $25.0
million, a ratio of roughly 7.6 to 1. The committee believes
this is unacceptable, particularly since building the
Shchuch'ye facility is in the interests of Russia and its
European neighbors. Therefore, the committee recommends a $28.8
million reduction of Shchuch'ye funding in order to bring
authorized U.S. expenditures in fiscal year 2004 into line with
the project's overall three to one funding ratio.
The committee notes that several countries recently
committed to provide $10 billion in additional disarmament and
nonproliferation resources. The committee applauds the
President for securing these promises from other states with an
interest in disarmament and nonproliferation, but is concerned
by early signs that these countries may not meet their
commitments. Accordingly, to create incentives for other states
to contribute to nonproliferation and disarmament, the
committee proposes a new funding mechanism for Shchuch'ye. This
section would allow the Secretary of Defense to obligate $71.5
million of the $171.5 million authorized for Shchuch'ye
immediately, and establish the remaining funds as a two-for-one
matching fund. This section would match every dollar Russia or
another country contributed to Shchuch'ye with two dollars.
Such a mechanism would increase the likelihood that other
countries will step forward to meet their nonproliferation and
disarmament promises, and limit the possibility that the
American taxpayer will be left with paying the entire costs of
a program designed to benefit the entire world.

TITLE XIV--SERVICES ACQUISITION REFORM

LEGISLATIVE PROVISIONS

Section 1401--Short Title

This section would provide that this title may be cited as
the ``Services Acquisition Reform Act of 2003.''

Section 1402--Executive Agency Defined

This section would use the term ``executive agency'' as is
defined in section 4 of the Office of Federal Procurement of
Policy Act (41 U.S.C. Sec. 403).

Subtitle A--Acquisition Workforce and Training

Section 1411--Definition of Acquisition

This section would amend section 4 of the Office of Federal
Procurement Policy Act (41 1U.S.C. Sec. 403) by defining the
term ``acquisition.'' The new definition would encompass the
entire spectrum of acquisition starting with the development of
an agency's requirements through management and measurement of
contract performance.

Section 1412--Acquisition Workforce Training Fund

This section would amend section 37 of the Office of
Federal Procurement Policy Act (41 U.S.C. Sec. 433) to
establish within the General Services Administration an
acquisition workforce-training fund to be managed by the
Federal Acquisition Institute (FAI). The fund is to be financed
by depositing 5 percent of the fees collected by various
executive agencies under their government-wide contracts. This
will provide the funding needed by FAI to develop training
resources needed to support new acquisition initiatives. The
fund can only be used for sorely needed acquisition workforce
training across the civilian government agencies. This
provision does not apply to the Department of Defense.

Section 1413--Acquisition Workforce Recruitment Program

This section would authorize the head of an agency to
determine, for purposes of sections 3304, 5333, and 5753 of
title 5, United States Code, that certain federal acquisition
positions are in a ``shortage category'' in order to recruit
and directly hire persons with high qualifications.Personnel
actions under this section would be subject to Office of Personnel
Management policies. In addition, the Administrator for Federal
Procurement Policy would be required to submit to Congress a report by
September 2007 concerning the efficacy of the program and recommending
whether the authority should be extended.

Section 1414--Architectural and Engineering Acquisition Workforce

This section would require the Administrator for Federal
Procurement Policy, in consultation with the Secretary of
Defense, the Administrator of General Services, and the
Director of the Office of Personnel Management, to develop and
implement a plan to assure that the federal government
maintains the necessary capability to contract effectively for
the performance of architectural and engineering services. This
section, however, is not intended to authorize the hiring of
additional government employees.

Subtitle B--Adaptation of Business Acquisition Practices

Part I--Adaptation of Business Management Practices

Section 1421--Chief Acquisition Officers

This section would amend section 16 of the Office of
Federal Procurement Policy Act (41 U.S.C. Sec. 414) to provide
for the appointment of a non-career employee as the chief
acquisition officer for each executive agency other than the
Department of Defense. The Department of Defense currently has
a comparable position established in title 10, United States
Code. The chief acquisition officer would have acquisition as
the official's primary duty and advise and assist the agency
head and other senior officials to ensure that the agency
mission is achieved through the management of the agency's
acquisition activities. The functions of the chief acquisition
officer would include monitoring the agency's acquisition
activities, evaluating them based on applicable performance
measurements, increasing the use of full and open competition
in agency acquisitions, making acquisition decisions consistent
with applicable laws, and establishing clear lines of
authority, accountability, and responsibility for acquisition
decision making and developing and maintaining an acquisition
career management program. The chief acquisition officer, as a
part of the statutorily required annual strategic planning and
performance evaluation process, would assess agency
requirements for agency personnel knowledge and skills in
acquisition resources management and, if necessary, develop
strategies and plans for hiring, training and professional
development.

Section 1422--Chief Acquisition Officers Council

This section would establish a chief acquisition officers
council to monitor and improve the federal acquisition system.
Deputy Director for Management (DDM) of the Office of
Management and Budget (OMB) shall chair the council, and
membership shall include the Administrator for Federal
Procurement Policy (Administrator), the Chief Acquisition
Officers created under section 16 of the Office of Federal
Procurement Policy Act (41 U.S.C. 414), the Under Secretary of
Defense of Acquisition, Technology, and Logistics, and any
chair designated federal officer or employee. The Administrator
shall lead the activities of the council on behalf of the DDM.
The General Services Administration shall provide
administrative and other support to the council. The council
will, among other things, develop recommendations for OMB on
acquisition policies and requirements, assist the Administrator
in the identification, development, and coordination of multi-
agency and other innovative acquisition initiatives, promote
effective business practices to ensure timely delivery of best
value products and services to the federal government, and work
with the Office of Personnel Management to assess and address
hiring, training, and professional development needs related to
acquisition.

Section 1423--Statutory and Regulatory Review

This section would require the Administrator for Federal
Procurement Policy to establish an advisory panel to review
acquisition laws and regulations with a view toward ensuring
greater use of commercial practices and performance-based
contracting, as well as enhancing the performance of
acquisition functions across agency lines, and the use of
federal government- wide contracts. The advisory panel shall
consist of at least nine experts in acquisition law and policy
who represent diverse public and private sector experiences.

Part II--Other Acquisition Improvements

Section 1426--Extension of Authority to Carry Out Franchise Fund
Programs

This section would amend section 403(f) of the Federal
Financial Management Act of 1994 (P.L. 103-356) to reauthorize
the federal government's franchise funds until October 1, 2006.

Section 1427--Agency Acquisition Protests

This section would amend Chapter 137 of title 10, United
States Code, and the Federal Property and Administrative
Services Act of 1949 (Public Law 81-152) to provide statutory
authority for an agency-level acquisition protest process. This
section would provide for a stay of the award or of contract
performance during the 20 working day period in which an agency
is to evaluate the protest. The stay could be lifted by the
head of the agency procuring activity upon a written finding
that urgent and compelling circumstances do not permit waiting
for the decision. This section would provide that filing an
agency-level protest would not affect the right of an
interested party to file a protest with the Comptroller General
or in the United States Court of Federal Claims. This section
would also amend section 3553(d)(4) of title 31, United States
Code, to provide that an interested party filing a protest on
the same matter with the Comptroller General within five days
of the issuance of the agency protest decision would qualify
for a stay of performance in connection with such protest.

Section 1428--Improvements in Contracting for Architectural and
Engineering Services

This section would amend section 2855(b) of title 10,
United States Code, to raise from $85,000 to $300,000 the
threshold for a participation incentive for small business
concerns in acquisitions for architectural and engineering
services. This section would also require that architectural
and engineering services offered under multiple-award schedule
contracts awarded by the General Services Administration or
under federal government-wide task and delivery order contracts
be performed under the supervision of a licensed professional
engineer and be awarded pursuant to the quality-based selection
procedures in chapter 11 of title 40, United States Code.

Section 1429--Authorization of Telecommuting for Federal Contractors

This section would require an amendment to the federal
acquisition regulations to provide that solicitations for
federal contracts should not contain any requirement or
evaluation criteria that would render an offeror ineligible or
would reduce the scoring of the offeror's proposal based upon
the offeror's inclusion of a plan to allow its employees to
telecommute, unless the contracting officer determines in
writing that the needs of the agency could not be met without
the requirement. This section would require the General
Accounting Office to report to Congress on the implementation
one year after the amendment is published.

Subtitle C--Contract Incentives

Section 1431--Incentives for Contract Efficiency

This section would amend the Office of Federal Procurement
Policy Act (Public Law 93-400) by adding a new section
authorizing agencies to include in service contracts options to
extend the contract by one or more performance periods based on
exceptional performance as measured by standards set forth in
the contract. The contract should be, to the maximum extent
practicable, performance-based.

Subtitle D--Acquisition of Commercial Items

Section 1441--Preference for Performance-Based Contracting

This section would amend the Office of Federal Procurement
Policy Act (Public Law 93-400) by authorizing a performance-
based contractor for the procurement of services or a
performance-based task order for services to be treated as a
contractor for the procurement of a commercial item if each
task is defined in measurable, mission related terms with
specific products or outputs, and the contractor provides
similar services to the general public. This section would also
require the Administrator for Federal Procurement Policy to
establish a center of excellence for service contracting to
assist the acquisition community in identifying best practices
in service contracting.

Section 1442--Authorization of Additional Commercial Contract Types

This section would amend section 8002(d) of the Federal
Acquisition Streamlining Act of 1994 (Public Law 103-355) to
provide that the federal acquisition regulations include
authority for time and material contracts or labor hour
contracts to be used for the acquisition of a commercial
service commonly sold to the general public through such
contracts.

Section 1443--Clarification of Commercial Services Definition

This section would amend section 4 of the Office of Federal
Procurement Policy Act [41 U.S.C. Sec. 403(12)] by modifying
the criteria that must be applied to purchase a commercial
service pursuant to the procedure available for the purchase of
a commercial item. Under this section a service would be
considered a commercial service if the service is of a type
customarily used by the general public and sold in substantial
quantities. This change in definition is intended to affect the
procurement process by which federal agencies purchase
services. This section is not intended to amend government
regulations or policy that dictate whether public sector
functions are commercial in nature.

Section 1444--Designation of Commercial Business Entities

This section would amend section 4 of the Office of Federal
Procurement Policy Act (Public Law 93-400) to authorize federal
agencies to treat the purchase of items produced or services
provided by a commercial entity as a procurement of a
commercial item or commercial service. A commercial entity
would be defined as any enterprise whose primary customers are
other than the federal government, that is, at least 90 percent
of its sales over the past three business years must have been
to the private sector. This section would also require the
General Accounting Office to evaluate the effectiveness of this
authority in increasing the availability of commercial items
and services to the federal government at fair and reasonable
prices.

Subtitle E--Other Matters

Section 1451--Authority To Enter into Certain Procurement-Related
Transactions and To Carry Out Certain Prototype Projects

This section would amend title III of the Federal Property
and Administrative Services Act of 1949 (Property Act) (Public
Law 81-152) to allow the head of a civilian executive agency,
if authorized by the Director of the Office of Management and
Budget (OMB), to enter into transactions (other than contracts,
cooperative agreements, and grants) to carry out basic,
applied, and advanced research and development projects that
are otherwise authorized and necessary to the responsibilities
of the agency that may facilitate defense against, or recovery
from, terrorism or nuclear, biological, chemical, or
radiological, attack. This authority would be similar to that
exercised by the Secretary of Defense under section 2317 of
title 10, United States Code, with certain exceptions.
This section would further amend the Property Act to
provide that the head of an executive agency, designated by the
Director of OMB to enter into transactions (other than
contracts, cooperative agreements, and grants) may, with the
approval of the Director of OMB, carry out prototype projects
in accordance with the same requirements and conditions for
prototype projects as are provided under section 845 of the
National Defense Authorization Act for Fiscal Year 1994 (Public
Law 103-160).

Section 1452--Authority To Make Inflation Adjustments To Simplified
Acquisition Threshold

This section would provide that the Administrator for
Federal Procurement Policy may adjust the simplified
acquisition threshold as defined in section 4(11) of the Office
of Federal Procurement Policy Act (Public Law 93-400) every
five years to an amount equal to $100 thousand in constant
fiscal year 2003 dollars.

Section 1453--Technical Correction Related to Duplicative Amendments

This section would repeal superceded provisions and provide
conforming amendments.

Section 1454--Prohibition on Use of Quotas

This section would prohibit the Office of Management and
Budget from establishing, applying, or enforcing quotes on
federal agencies with respect to the number of employees that
should be part of a public private competition.

Section 1455--Applicability of Certain Provisions to Sole Source
Contracts for Goods and Services Treated as Commercial Items

This section would require that cost accounting standards
and cost or pricing data requirements would apply to contracts
for commercial items or commercial services, in those instances
when an award is made on a sole source basis and the value of
the contract $15.0 million or more.

Section 1456--Public Disclosure of Noncompetitive Contracting for the
Reconstruction of Infrastructure in Iraq

This section would require that for contracts for the
repair, maintenance, or construction of infrastructure awarded
without full and open competition the head of the appropriate
executive agency shall publish either in the Federal Register
or the Commerce Business Daily and otherwise make public
specific information within 30 days of the award of the
contract. Published information includes the value and scope of
the contract, a discussion on how solicited offers were
evaluated, and a copy of the justification and approval
determination to use procedure other than full and open
competition.

DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

PURPOSE

The purpose of Division B is to provide military
construction authorizations and related authority in support of
the military departments during fiscal year 2004. As approved
by the committee, Division B would authorize appropriations in
the amount of $9,789,530,000 for construction in support of the
active forces, reserve components, defense agencies, and the
North Atlantic Treaty Organization security infrastructure fund
for fiscal year 2004.

MILITARY CONSTRUCTION OVERVIEW

The Department of Defense requested $5,221,076,000 for
military construction and $4,030,811,000 for family housing for
fiscal year 2004. The committee recommends authorization of
appropriations of $5,758,719,000 for military construction and
$4,030,811,000 for family housing in fiscal year 2004.
Including the impact of anticipated rescissions requested by
the Department, the committee's recommendations are consistent
with a total budget authority level of $9,528,324,000 for
military construction and family housing in fiscal year 2004.
The military construction total contains $119,815,000 for
chemical agents and munitions destruction construction
projects. Although this amount matches the Department's request
for chemical agents and munitions destruction construction
projects, the Department had requested authorization for these
funds elsewhere in the bill. The committee believes that all of
the Department's construction activities should be authorized
in the military construction portion of the annual defense
authorization bill. As such, the committee recommends the
transfer of the authorization for chemical agents and munitions
destruction construction to Division B--Military Construction
Authorizations.
Even after several years of congressional increases to the
Department's military construction and family housing budgets,
the poor state of U.S. military installations and facilities
remains an issue of significant concern. Visits to military
installations around the United States and overseas confirm
that America's service members continue to live and work in
aging and substandard facilities. Of further concern are
indications that efforts to increase budgets for sustainment,
modernization, and restoration have had little impact on the
ability of the military services to maintain the condition of
their facilities. According to the Department, more than two-
thirds of the services' facilities are classified at ``C-3'' or
``C-4'' readiness levels, indicating that their ability to
conduct their missions has been significantly degraded.
For the second consecutive year, the budget request
contained only sufficient funding to support new mission
beddowns and a few quality of life projects. This underfunded
approach to military construction and family housing reflects
the Department's intent to slow military construction
investment until the 2005 base realignment and closure process.
This approach severely impacts America's military personnel who
must live and work in the housing and facilities available
today.
The Department also submitted a remarkable request
pertaining to overseas construction projects. Based upon this
request, and limited briefings from the Department, the United
States military is in the midst of the most significant
restructuring of overseas basing strategy since the end of
World War II. However, the Department has conducted its work
largely behind closed doors, and has not provided Congress with
the details of its work.
By submitting a budget to Congress that effectively
implements the initial stages of a major overseas realignment,
the Department is asking Congress to endorse an undefined plan
that will have a dramatic impact on the Department's spending,
policies, and operations for the coming decades. Although the
committee recommends the Department's request for overseas
construction programs, it does so not as an endorsement of the
Department's overseas plans, but as a placeholder marked for
further review once the committee receives sufficient
information to adequately assess and understand the details of
the Department's plans.
A tabular summary of the authorizations provided in
Division B for fiscal year 2004 follows:

TITLE XXI--ARMY

SUMMARY

The budget request contained $1,678,210,000 for Army
military construction and $1,452,217,000 for family housing for
fiscal year 2004. The committee recommends authorization of
appropriations of $1,604,480,000 for military construction and
$1,452,217,000 for family housing for fiscal year 2004.

ITEMS OF SPECIAL INTEREST

Planning and Design

The committee recommends that, within authorized amounts
for planning and design, the Secretary of the Army complete
planning and design activities for the following projects:
$158,000 for a munitions training facility at Redstone Arsenal,
Alabama, $500,000 for a barracks complex (hospital area) at
Fort Carson, Colorado, $740,000 for a satellite communications
operations center at Fort Detrick, Maryland, and $720,000 for
an aircraft corrosion control facility at Corpus Christi Army
Depot, Texas.

Unspecified Minor Construction

The committee recommends that, within authorized amounts
for unspecified minor construction, the Secretary of the Army
execute the following projects: $1,050,000 for a general
instruction building at Anniston Army Depot, Alabama, and
$1,500,000 for an explosive ordnance disposal operations
facility at Fort Irwin, California.

LEGISLATIVE PROVISIONS

Section 2101--Authorized Army Construction and Land Acquisition
Projects

This section contains the list of authorized Army
construction projects for fiscal year 2004. 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
2004.

Section 2103--Improvements to Military Family Housing Units

This section would authorize new improvements to existing
units of family housing for fiscal year 2004.

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
2004. This section also provides an overall limit on the amount
the Army may spend on military construction projects.

Section 2105--Modification of Authority To Carry Out Certain Fiscal
Year 2002 Projects

This section would amend the table in section 2101 of the
Military Construction Authorization Act for Fiscal Year 2002
(division B of Public Law 107-107) to provide for an increase
in the amount authorized for construction at Fort Richardson,
Alaska.

TITLE XXII--NAVY

SUMMARY

The budget request contained $1,147,537,000 for Navy
military construction and $1,036,971,000 for family housing for
fiscal year 2004. The committee recommends authorization of
appropriations of $1,251,946,000 for military construction and
$1,036,971,000 for family housing for fiscal year 2004.

ITEMS OF SPECIAL INTEREST

Planning and Design

The committee recommends that, within authorized amounts
for planning and design, the Secretary of the Navy complete
planning and design activities for the following project:
$970,000 for a full scale electric drive test facility at the
Naval Surface Warfare Center Shipyard Systems Engineering
Station, Philadelphia, Pennsylvania.

Unspecified Minor Construction

The committee recommends that, within authorized amounts
for unspecified minor construction, the Secretary of the Navy
execute the following project: $1,290,000 for aviation
maintenance officer school modifications at Naval Air Station
Whiting Field, Florida.

LEGISLATIVE PROVISIONS

Section 2201--Authorized Navy Construction and Land Acquisition
Projects

This section contains the list of authorized Navy
construction projects for fiscal year 2004. 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
2004.

Section 2203--Improvements to Military Family Housing Units

This section would authorize new improvements to existing
units of family housing for fiscal year 2004.

Section 2204--Authorization of Appropriations, Navy

This section would authorize specific appropriations for
each line item contained in the Navy's budget for fiscal year
2004. This section also provides an overall limit on the amount
the Navy may spend on military construction projects.

TITLE XXIII--AIR FORCE

SUMMARY

The budget request contained $830,671,000 for Air Force
military construction and $1,491,533,000 for family housing for
fiscal year 2004. The committee recommends authorization of
appropriations of $986,076,000 for military construction and
$1,491,533,000 for family housing for fiscal year 2004.

ITEMS OF SPECIAL INTEREST

Reserve Associate Program

The committee commends the Air Force for its commitment to
meeting mission requirements through its reserve associate
program. The committee encourages the Air Force to consider
expanding the reserve associate program to include additional
facilities and platforms. Finally, the committee urges the Air
Force to consider, in addition to its active bases, the use of
one or more of its reserve bases in a reserve associate
arrangement.

Planning and Design

The committee recommends that, within authorized amounts
for planning and design, the Secretary of the Air Force
complete planning and design activities for the following
projects: $1,350,000 for an air mobility operations group
global reach deployment center at Travis Air Force Base,
California, $486,000 for a leadership development center at
Buckley Air Force Base, Colorado, $1,098,000 for a cadet area
protective perimeter at the United States Air Force Academy,
Colorado, $729,000 for a consolidated security forces training
complex at Schriever Air Force Base, Colorado, $612,000 for
force protection and access control at the west gate of
Peterson Air Force Base, Colorado, $792,000 for a security
forces operation facility at Patrick Air Force Base, Florida,
$603,000 for a child development center at Patrick Air Force
Base, Florida, $2,520,000 for a tanker airlift control center
at Scott Air Force Base, Illinois, $1,350,000 for fire crash
rescue stations at Holloman Air Force Base, New Mexico,
$990,000 for a consolidated fire and crash rescue station at
Wright Patterson Air Force Base, Ohio, $580,000 for a tri-
service research facility at Brooks Air Force Base, Texas,
$990,000 for a fire crash rescue station at Dyess Air Force
Base, Texas, $531,000 for an air expeditionary force deployment
center at Hill Air Force Base, Utah, and $1,200,000 for a
mission support complex at Fairchild Air Force Base,
Washington.

LEGISLATIVE PROVISIONS

Section 2301--Authorized Air Force Construction and Land Acquisition
Projects

This section contains the list of authorized Air Force
construction projects for fiscal year 2004. 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 2004.

Section 2303--Improvements to Military Family Housing Units

This section would authorize new improvements to existing
units of family housing for fiscal year 2004.

Section 2304--Authorization of Appropriations, Air Force

This section would authorize specific appropriations for
each line item contained in the Air Force's budget for fiscal
year 2004. This section also provides an overall limit on the
amount the Air Force may spend on military construction
projects.

TITLE XXIV--DEFENSE AGENCIES

SUMMARY

The budget request contained $655,381,000 for defense
agency military construction and $49,790,000 for family housing
for fiscal year 2004. The committee recommends authorization of
appropriations of $802,549,000 for military construction and
$49,790,000 for family housing for fiscal year 2004.

ITEMS OF SPECIAL INTEREST

Departments of Defense and Veterans Affairs Health Care Sharing

The committee continues to believe that significant
efficiencies are possible if the Department of Defense and the
Department of Veterans Affairs (VA) share health care
facilities. However, the Department and VA operate only 7 joint
ventures, even though the 2 departments operate approximately
240 hospitals. Such incremental progress is representative of
the significant bureaucratic challenges facing the health care
sharing effort. Nevertheless, the committee believes that the
Department and VA should take advantage of health care sharing
opportunities whenever possible.
The committee understands that the Colorado University
School of Medicine has begun relocation to the site of the
closed Fitzsimons Army Hospital. The Department of Veterans
Affairs is currently considering replacement of the Denver VA
Medical Center, a 50-year-oldstructure now co-located with the
Colorado medical school, as a part of that relocation. The committee
understands that the Department is also considering participation in
the VA Medical Center's new facility. As such, the committee believes
that the Department of Defense should participate in design and
construction of this facility, which would provide ambulatory and acute
care medical services to military personnel attached to Buckley Air
Force Base. Such an approach would allow the Department to leverage
construction, operations, and maintenance costs of a joint facility
with VA, and eliminate the Department's need to construct an additional
medical treatment facility at Buckley Air Force Base. In this
particular case, a joint facility would further benefit by sharing
significant assets with the Colorado University School of Medicine
Facility, resulting in further savings.
With the expectation that the Department of Defense and the
Department of Veterans' Affairs will reach an agreement on
sharing design and construction costs at levels representative
of their medical requirements, the committee recommends
authorization of $4,000,000 for planning and design of a DOD-VA
medical treatment facility at the site of the closed Fitzsimons
Army Hospital.

Planning and Design

The committee recommends that, within authorized amounts
for planning and design, the Secretary of Defense complete
planning and design activities for the following projects:
$470,000 for a boat launch facility at Naval Air Station North
Island, California and $4,000,000 for a DOD-VA medical
treatment facility at Fitzsimons Campus, Colorado.

LEGISLATIVE PROVISIONS

Section 2401--Authorized Defense Agencies Construction and Land
Acquisition Projects

This section contains the list of authorized defense
agencies construction projects for fiscal year 2004. 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--Family Housing

This section would authorize new construction and planning
and design of family housing units for defense agencies for
fiscal year 2004.

Section 2403--Improvements to Military Family Housing Units

This section would authorize new improvements to existing
units of family housing for fiscal year 2004.

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 contained in the defense agencies' budgets for
fiscal year 2004. This section also provides an overall limit
on the amount the defense agencies may spend on military
construction projects.

TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION INFRASTRUCTURE

OVERVIEW

The budget request contained $169,300,000 for the North
Atlantic Treaty Organization (NATO) infrastructure fund (NATO
Security Investment Program) for fiscal year 2004. The
committee recommends authorization of $169,300,000 for fiscal
year 2004.

LEGISLATIVE PROVISIONS

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
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 $169,300,000
as the U.S. contribution to the North Atlantic Treaty
Organization Security Investment Program.

TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES

SUMMARY

The budget request contained $369,550,000 for military
construction of guard and reserve facilities for fiscal year
2004. The committee recommends authorization for fiscal year
2004 of $573,941,000 to be distributed as follows:

Army National Guard..................................... $253,788,000
Air National Guard...................................... 123,408,000
Army Reserve............................................ 89,840,000
Naval and Marine Corps Reserve.......................... 45,762,000
Air Force Reserve....................................... 61,143,000
Total............................................. 573,941,000

ITEMS OF SPECIAL INTEREST

Planning and Design, Air National Guard

The committee recommends that, within authorized amounts
for planning and design, the Secretary of the Air Force
complete planning and design activities for the following
projects:$954,000 for an operations and training complex at
Savannah International Airport, Georgia, $754,000 for a composite
training facility at the Greater Peoria Regional Airport, Illinois,
$468,000 for a fire station at Pease International Tradeport, New
Hampshire, and $602,000 for a fire station at Stewart International
Airport, New York.

Planning and Design, Air Reserve

Planning and Design, Army National Guard

The committee recommends that, within authorized amounts
for planning and design, the Secretary of the Army complete
planning and design activities for the following projects:
$2,500,000 for an armed forces reserve center at Moreno Valley,
California, $1,772,000 for an armed forces reserve center in
Lawrence, Indiana, $844,000 for a joint armed forces reserve
center at Gary/Chicago Airport, Indiana, $726,000 for an
aviation support facility at Bangor International Airport,
Maine, $7,849,000 for an aviation classification and repair
activity depot in Springfield, Missouri, $651,000 for a
Blackhawk support facility in Bismarck, North Dakota, $480,000
for a readiness center in Waynesburg, Pennsylvania, and
$767,000 for an armed forces reserve center at Fort Jackson,
South Carolina.

Unspecified Minor Construction, Army National Guard

The committee recommends that, within authorized amounts
for unspecified minor construction, the Secretary of the Army
execute the following projects: $1,498,000 for a one stop
personnel center at Papago Park Military Reservation, Arizona
and $1,114,000 for readiness center upgrades at Pontiac Armory,
Michigan.

LEGISLATIVE PROVISIONS

Section 2601--Authorized Guard and Reserve Construction and Land
Acquisition Projects

This section would authorize appropriations for military
construction for the guard and reserve by service component for
fiscal year 2004. The state list contained in this report is
intended to be the binding list of the specific projects
authorized at each location.

TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS

LEGISLATIVE PROVISIONS

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 guard and reserve projects will
expire on October 1, 2006 or the date of enactment of an act
authorizing funds for military construction for fiscal year
2007, whichever is later. This expiration would not apply to
authorizations for which appropriated funds have been obligated
before October 1, 2006 or the date of enactment of an act
authorizing funds for military construction for fiscal year
2007, whichever is later.

Section 2702--Extension of Authorizations of Certain Fiscal Year 2001
Project

This section would extend one fiscal year 2001 military
construction authorization until October 1, 2004, or the date
of enactment of an act authorizing funds for military
construction for fiscal year 2005, whichever is later. The
extended authorization applies to the following project:
$250,000 for new construction of General and Flag Officers
Quarters at Fort Jackson, South Carolina.

Section 2703--Extension of Authorizations of Certain Fiscal Year 2000
Projects

This section would extend certain fiscal year 2000 military
construction authorizations until October 1, 2004, or the date
of enactment of an act authorizing funds for military
construction for fiscal year 2005, whichever is later. The
extended authorizations apply to the following projects:
$13,500,000 for construction of a multi-purpose range at Fort
Pickett,Virginia, and $6,000,000 to replace family housing at
Tinker Air Force Base, Oklahoma.

Section 2704--Effective Date

This section would provide that titles XXI, XXII, XXIII,
XXIV, XXV, and XXVI of this bill shall take effect on October
1, 2003, or the date of enactment of this act, whichever is
later.

TITLE XXVIII--GENERAL PROVISIONS

ITEMS OF SPECIAL INTEREST

Housing Privatization Programs

The committee commends the Department of Defense (DOD) for
its efforts to privatize military family housing facilities. To
date, these efforts have resulted in notable improvements in
the quality of life for military families and an achievable
approach to meeting the Department's military housing
requirements over the next decade.
However, the committee is concerned that the military
services have not consistently taken a comprehensive approach
to privatization projects. As a result, the services have
missed opportunities to include vital community facilities,
such as schools, in their privatization contracts. While
including such facilities may not be economically feasible in
some cases, the committee believes that the services should
include integral facilities, particularly schools, whenever
possible and necessary.
Unfortunately, in at least one case, a military service and
the Department have not agreed upon a funding source for a
school to serve a privatized housing site. While the committee
prefers to give the Department maximum flexibility in handling
such matters, legislation to require a consistent approach to
funding military schools may become necessary if the Department
does not take a comprehensive view of community planning in
privatization.
Therefore, the committee directs the Secretary of Defense
to develop clear guidelines for the military services to use in
determining when schools must be included in
privatizationcontracts and, in those cases where schools are not
included, determine whether the Department or the service shall be
responsible for funding educational facilities. In addition, the
committee urges the Secretary to ensure that the services and the DOD
Education Activity have sufficient resources to meet the school
construction needs of the United States military.
Finally, the committee is concerned that the Department did
not respond to the committee's direction in the Bob Stump
National Defense Authorization Act for Fiscal Year 2003 (Public
Law 107-314) to report on the impact of privatized housing on
local school systems. The committee again directs the
Department to provide such a report to Congress and urges the
Department to address school budgeting issues in its fiscal
year 2005 budget request.

U.S.-Mexico Border Airspace

The committee is troubled by reports that the Department of
Homeland Security (DHS) and the Department of Defense have been
unable to reach agreement on access to airspace controlled by
the Department of Defense along certain portions of the U.S.-
Mexico border. Given the heightened importance of border
patrols to homeland security since September 11, 2001, the
committee directs the Secretary of Defense to work with DHS to
develop an access plan that meets both DOD's training and
readiness requirements and DHS's requirements to patrol the
nation's borders.

Base Realignment and Closure

The committee recognizes that the United States military
must possess the facilities, land, and air space necessary to
support its forces in order to maintain national security and
remain capable of winning future conflicts. In 1991, the Joint
Chiefs of Staff and the Secretary of Defense proposed shaping
the military into the ``Base Force,'' a force that included 1.6
million active duty personnel and 900,000 reserve component
personnel, 12 active Army divisions, 12 aircraft carrier
battlegroups, 3 active divisions for the Marine Corps, and 15
active fighter wings for the Air Force. Although today's United
States military is somewhat smaller than the Base Force, the
Base Force represents a level to which the military might
reasonably be expected to ``surge'' in a future crisis or
significant permanent change in the global security
environment. Therefore, the committee recommends a series of
provisions to ensure that the United States military retains
the resources and facilities it needs to defend the nation's
interests. The first provision, contained in title 9 of this
bill, would establish a military force structure ``floor'' at
the current level.
The remaining provisions are contained in title 28 of this
bill, and specific descriptions may be found in the section-by-
section portion below. These provisions would modify current
Base Realignment and Closure (BRAC) law to ensure that the 2005
BRAC round results in a national inventory of installations
capable of supporting a Base Force-size military that is
stationed entirely within the United States. The committee
believes that such an inventory will ensure that the United
States military has the infrastructure necessary to meet future
crises, and that dropping below this level would jeopardize the
military's ability to adapt to meet evolving and future threats
to U.S. national security.

LEGISLATIVE PROVISIONS

Subtitle A--Military Construction Program and Military Family Housing
Changes

Section 2801--Increase in Maximum Amount of Authorized Annual Emergency
Construction

This section would amend section 2803 of title 10, United
States Code, to increase from $30,000,000 to $45,000,000 the
annual limit on the amount a service secretary may obligate for
emergency military construction projects not otherwise
authorized by law.

Section 2802--Authority To Lease Military Family Housing Units in Italy

This section would amend section 2828 of title 10, United
States Code, to increase from 2,000 to 2,800 the number of
family housing units the Secretary of the Navy may lease in
Italy for not more than $25,000 per unit per year.

Section 2803--Changes to Alternative Authority for Acquisition and
Improvement of Military Housing

This section would amend section 2880 of title 10, United
States Code, to provide increased flexibility for the
Department of Defense to determine the amount of space provided
to each person in on-base unaccompanied housing built under the
privatization program.
This section would also amend section 2883 of title 10,
United States Code, to merge the Department of Defense Family
Housing Improvement Fund and the Department of Defense
Unaccompanied Housing Improvement Fund into a single Department
of Defense Housing Improvement Fund. This single fund will give
the Department increased flexibility in managing its housing
resources.
Finally, this section would increase the cap on budget
authority for contracts and investments to military housing
privatization projects from $850,000,000 to $900,000,000.

Section 2804--Additional Material for Annual Report on Housing
Privatization Program

This section would require the Department to include
additional information in its annual report on housing
privatization programs. The additional information would
include a review of privatization activities entered into in
previous years, privatization activities planned in the future,
authorities necessary to improve the program, and additional
facilities planned as part of each privatization project.
Finally, the report must include an explanation for each case
in which a privatization effort does not include additional
facilities, such as schools, in the contract.

Section 2805--Authority To Convey Property at Military Installations
Closed or to be Closed in Exchange for Military Construction Activities

This section would expand the Department's existing
authority to transfer property at a military installation that
has been closed or will be closed to persons who construct or
provide family housing in exchange. The expanded authority
would permit the Department to transfer property at such
installations in exchange for family housing, unaccompanied
housing, and authorized military construction activities.
Although the Department has had the authority to make land-
for-family housing trades for several years, it has rarely
taken advantage of the opportunity to do so. The committee
believes that the Department should utilize land-for-
construction trades to leverage maximum return for excess lands
at military installations that have been closed or realigned by
the base closure process.
As such, this section would require the Department to
utilize the authority for land-for-construction trades in at
least 20 percent of base closure disposals of property that has
not been identified as essential to a redevelopment plan. This
section would also require each of the services to endeavor to
use the authority provided for at least $200,000,000 worth of
exchanges annually. In meeting the requirements of this
section, the fair market value of the housing or facilities
received by the Department must equal or exceed the fair market
value of the real property conveyed. If not, the Department
must receive payments equal to the difference, to be deposited
into the Department of Defense Housing Improvement Fund. In
order to count a land-for-construction trade towards the 20
percent and $200,000,000 per year requirements of this section,
at least 90 percent of the payment for the land must be in the
form of new construction.
Finally, this section would require the Department to
provide an annual report to Congress on the use of this
authority. The committee expects the Department to utilize this
exchange authority to support construction programs already
authorized by Congress, and that the Department would request
that funds not obligated as a result of land for construction
trades be reprogrammed to support authorized military
construction and family housing projects in future years.

Section 2806--Congressional Notification and Reporting Requirements and
Limitations Regarding Use of Operation and Maintenance Funds for
Construction

This section would limit the Department's ability to
utilize operation and maintenance funds for certain
construction purposes. First, the section would prohibit the
Department from spending more than $5,000,000 of operation and
maintenance funds on any single construction project. Second,
it would prohibit the annual use of more than $200,000,000 of
operation and maintenance funds for such purposes. Third, it
would require the Department to notify Congress 14 days before
obligating more than $1,500,000 of operation and maintenance
funds for construction purposes. However, a service secretary
may waive the notice and wait requirement in those cases where
a delay would jeopardize national security, health, or safety.
If such a waiver is issued, this section would require the
secretary to report to Congress within five days.
Finally, this section would require the Department to
provide a quarterly report to Congress on the worldwide use of
operation and maintenance funds for construction purposes.
This section reflects the committee's concern about the
Department's interpretation of authorities provided by the
United States Code for the use of operation and maintenance
funds to build ``temporary'' military facilities to meet
operational requirements. The committee believes that the
Department's actions in this regard do not reflect
congressional intent and, in fact, contradict military
construction authorities contained within title 10, United
States Code.
Therefore, this section does not codify the Department's
practices of using operation and maintenance spending for
construction purposes. Rather, it is intended to allow the
Department time to reconsider its use of operation and
maintenance funds, while limiting the scope of such activities
during fiscal year 2004.
Over the coming year, the committee will closely monitor
the Department's operation and maintenance spending for
construction purposes, and expects the Department to develop
and request a military construction legislative proposal and
budget that would allow for the flexibility required by the
Department. Finally, the committee encourages the Department to
report to Congress quarterly on its worldwide use of operation
and maintenance funds for construction until enactment of the
National Defense Authorization Act for Fiscal Year 2004.

Section 2807--Increase in Authorized Maximum Lease Term for Family
Housing and Other Facilities in Certain Foreign Countries

This section would increase from 10 to 15 years the maximum
length of lease that the Department may enter for housing
facilities in Korea. This section would also increase from 5 to
15 years the maximum length of lease that the Department may
enter for other militarily-related facilities in Korea.

Subtitle B--Real Property and Facilities Administration

Section 2811--Real Property Transactions

This section would amend section 2672 of title 10, United
States Code, to increase from $500,000 to $1,500,000 the limit
on the amount a service secretary may obligate to acquire land
in the interest of national defense. This section would also
amend section 2672a of title 10, United States Code, to require
a service secretary who utilizes the section to acquire land to
notify Congress within 10 days of determining that such an
acquisition is necessary. Finally, this section would amend
section 2662 of title 10, United States Code, which requires
service secretaries to report to Congress before entering into
certain real estate transactions (including acquisition,
leases, and transfers of real property), to shorten
congressional notification requirements and increase spending
levels at which reports are required.

Subtitle C--Land Conveyances

Section 2821--Termination of Lease and Conveyance of Army Reserve
Center, Conway, Arkansas

This section would authorize the Secretary of the Army to
convey, without consideration, a parcel of real property in
Conway, Arkansas to the University of Central Arkansas. This
section would also authorize the Secretary of the Army to
terminate a lease between the Secretary and the University for
the property on which the facility is located.

Section 2822--Actions To Quiet Title, Fallin Waters Subdivision, Eglin
Air Force Base, Florida

This section would authorize the Secretary of the Air Force
to quiet title to tracts of land at Eglin Air Force Base,
Florida by conveying, acquiring, or exchanging small parcels of
land. This authorization is intended to allow the Secretary to
resolve longstanding encroachment issues with local communities
that resulted from inaccurate surveys.

Section 2823--Modification of Land Conveyance, Eglin Air Force Base,
Florida

Public Law 91-347, directed the Secretary of the Air Force
to transfer certain real property to the Okaloosa County School
Board on the condition that the property would be usedfor
public schools and that any portion of the property not used as such
would be returned to the United States. This section would amend Public
Law 91-347 to authorize the Okaloosa County School Board to lease the
undeveloped portion of this property to Okaloosa County for other
public purposes.

Section 2824--Land Conveyance, Fort Campbell, Kentucky and Tennessee

This section would authorize the Secretary of the Army to
convey a parcel of real property to the Department of
Transportation of the State of Tennessee for consideration. The
property is to be used to realign and upgrade United States
Highway 79 from a two-lane highway to a four-lane highway. The
costs incurred during conveyance of the property, including
administrative costs and acquisition of 200 acres of mission-
essential replacement property, shall be borne by the State.

Section 2825--Land Conveyance, Army and Air Force Exchange Service
Property, Dallas, Texas

This section would authorize the Secretary of Defense to
authorize the Army and Air Force Exchange Service (AAFES) to
sell a parcel of real property, including improvements, at 1515
Roundtable Drive in Dallas, Texas. The section would require
that AAFES sell the property at fair market value, and that
proceeds be retained as AAFES nonappropriated funds.

Section 2826--Land Conveyance, Naval Reserve Center, Orange, TX

This section would authorize the Secretary of the Navy to
convey a parcel of real property to the City of Orange, Texas
for consideration. The 2.5 acre parcel of property, located at
the Naval Reserve Center, Orange, Texas, may be used for
construction of an access road, economic development, or other
public purposes.

Subtitle D--Other Matters

Section 2841--Redesignation of Yuma Training Range Complex as Bob Stump
Training Range Complex

This section would rename the Yuma Training Range Complex
the Bob Stump Training Range Complex in honor of the former
chairman of the House Committee on Armed Services, Congressman
Bob Stump. The committee notes that renaming the Yuma Training
Range Complex in Congressman Stump's honor is particularly
fitting, as the congressman was a cosponsor of legislation in
1985 that created the Barry M. Goldwater Range as it stands
today. The Goldwater Range is used, in part, by the Yuma
Training Range Complex, and is supported by Luke Air Force
Base, the most significant military installation in the
district served by former Congressman Stump.

Section 2842--Modification of Authority To Conduct a Round of
Realignments and Closures of Military Installations in 2005

This section would amend current base realignment and
closure law to define the parameters by which the Secretary of
Defense determines military force structure and infrastructure
requirements. Under current law, the Secretary of Defense must
submit a force structure plan and description of necessary
supporting infrastructure with the fiscal year 2005 defense
budget request. This provision would require the Secretary of
Defense to submit a force structure plan that assumes, at a
minimum, the 1991 Base Force structure plan. In addition, the
Secretary's description of supporting infrastructure must be
capable of sustaining the entire planned force structure if no
U.S. forces were permanently based outside of the United
States.
This provision would also amend current law to require the
Secretary of Defense to submit, not later than April 1, 2005, a
list of core military installations considered absolutely
essential to national defense, to the base closure commission.
This list must contain at least 50 percent of the total number
of installations within the United States. Following
consideration and approval of this list by the base closure
commission and the President, this list of installations would
be eliminated from consideration for closure or realignment.

Section 2843--Use of Force-Structure Plan for the Armed Forces in
Preparation of Selection Criteria for Base Closure Round

This section would require the Secretary of Defense, when
making closure and realignment recommendations, to use the
force structure plan required by base realignment and closure
law, as amended by section 2842 of this act.

Section 2844--Requirement for Unanimous Vote of Defense Base Closure
and Realignment Commission to Recommend Closure of Military
Installation not Recommended for Closure by Secretary of Defense

This section would amend section 2914(d) of the Defense
Base Closure and Realignment Act of 1990 to require a unanimous
vote of the base closure commission to add an installation to
the list of bases recommended for closure by the Secretary of
Defense.

DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND
OTHER AUTHORIZATIONS

TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

OVERVIEW

The budget request contained $16,679.2 million for the
national security activities of the Department of Energy for
fiscal year 2004 (excluding a rescission of $75.0 million of
balances remaining available for Cerro Grande fire activities).
Of this amount, $8,834.6 million is for the programs of the
National Nuclear Security Administration, $7,734.1 million is
for environmental and other defense activities, and $110.5
million is for energy supply. The committee recommends the
budget request of $16,679.2 million, representing an increase
of $1,103.2 million from the amount authorized for fiscal year
2003. The following table summarizes the budget request and the
committee recommendations.

ITEMS OF SPECIAL INTEREST

National Nuclear Security Administration

Overview

The budget request contained $8,834.6 million for the
National Nuclear Security Administration for fiscal year 2004.
The committee recommends $8,822.1 million, representing an
increase of $783.6 million from the amount authorized for
fiscal year 2003.

Adjustments to the Budget Request

Reductions

The budget request contained $66.0 million for the Advanced
Radiography campaign. The committee recommends $61.0 million, a
decrease of $5.0 million. The committee notes a substantial
increase in the request for advanced radiography requirements
and technology development, including requirements studies for
an Advanced Hydrotest Facility. The committee understands that
the Dual-Axis Radiographic Hydrotest facility is critical to
high priority stockpile life extension efforts, particularly
plutonium pit certification. The committee urges the National
Nuclear Security Administration to focus on delivering the
radiographic tools essential to its nearer term production
requirements.
The budget request contained $466.8 million for the
Inertial Confinement Fusion Ignition and High Yield campaign.
The committee recommends $461.8 million, a decrease of $5.0
million. The committee notes the more than 100 percent growth
in the request for experimental support technologies for
development of National Ignition Facility diagnostics and
target fabrication capabilities. The committee believes this
area has been underemphasized in the past, but questions
effective executability of the increase. The committee cautions
that these funds should be used for their stated purpose.
The budget request for operations of facilities in
Readiness in the Technical Base and Facilities (RTBF) contained
$37.0 million for ``other sites'', a more than four fold
increase over the comparable fiscal year 2003 request. The
committee does not believe the request has been adequately
justified, and recommends $17.0 million, a decrease of $20.0
million.
The budget request contained $50.0 million in RTBF to begin
construction of a national security sciences building at Los
Alamos National Laboratory (project 04-D-104). This is a
construction new start that has not previously been authorized
by the committee. The committee is aware that this project
received an advance appropriation in fiscal year 2003 of $12.0
million, and accordingly recommends $38.0 million for the
project, a decrease of $12.0 million.
The operations and maintenance budget request for
Safeguards and Security contains $8.0 million to initiate a
physical security research and development program, and $2.0
million to initiate a similar cybersecurity effort. The
committee views Safeguards and Security as an important but
supporting element to the defense nuclear complex, which
already spends billions of dollars annually on research and
development. The committee further notes that the proposed
activities would be largely duplicative of the technology and
systems development program, for which the Department of Energy
has requested $20.9 million within Safeguards and Security
under other defense activities. The committee recommends no
funding for these initiatives.
The international safeguards budget request within the
Nonproliferation and International Security program contained
$15.7 million for International Atomic Energy Agency (IAEA)
safeguards and nonproliferation policy support, an increase of
$5.8 million from the comparable fiscal year 2003 request, and
6.0 million for nuclear noncompliance verification. The
committee believes that greater attention is required to
specific proliferant states, such as North Korea, rather than
to strengthening safeguards more globally. Consequently, the
committee recommends $10.7 million for IAEA safeguards and
nonproliferation policy support, a decrease of $5.0 million,
and $11.0 million for nuclear noncompliance verification, an
increase of $5.0 million.
The budget request contained $14.1 million for
International Nuclear Safety and Cooperation. The committee
recommends $11.6 million, a decrease of $2.5 million. The
committee notes that this program was originally established to
address safety deficiencies in Soviet-designed nuclear reactors
in states of the former Soviet Union. This effort is now
complete, and the committee believes that international
cooperation on nuclear safety, specifically in China and
elsewhere in Asia, is more appropriately addressed by other
federal departments and international agencies using non-
defense funding.
The budget request contained $30.0 million for Accelerated
Material Disposition (AMD). The committee recommends $5.0
million, a reduction of $25.0 million. The committee questions
the cost effectiveness of the proposed program and suggests
that NNSA rethink its approach. Under existing agreements
between the United States and the Russian Federation, most
notably the 1993 Highly Enriched Uranium (HEU) Purchase
Agreement, the United States Enrichment Corporation will
purchase low enriched uranium (LEU) down-blended from 500
metric tons of Russian weapon source HEU for resale as
commercial nuclear reactor fuel. Currently, approximately 30
metric tons of HEU is down-blended per year, and the process is
monitored under the HEU Transparency Implementation program at
a cost to the taxpayer of $18.0 million for fiscal year 2004.
The proposed AMD program would increase the present blend-down
rate by 1 to 1\1/2\ metric tons per year, at best an increase
of five percent, at a cost of $25.0 million per year, more than
the total cost of the existing program. The committee notes
that reaching NNSA's goal of doubling the blend down rate to 60
metric tons of HEU per year would cost approximately $600
million per year by this approach.
The committee also questions NNSA's priorities in
requesting additional funds under the Reduced Enrichment for
Research and Test Reactors program to accelerate development of
LEU fuel for five HEU-fueled research reactors in the United
States. The committee considers foreign HEU-fueled research
reactors to pose a more significant proliferation threat. The
committee notes that the list of potential nonproliferation
efforts worthy of some consideration is practically endless,
while resources are not. The committee advises NNSA in the
strongest terms to develop a strategy for analyzing the full
spectrum of proliferation risks, and a process for assessing
the cost versus the benefit of programs proposed to mitigate
those risks.

Increases

The committee remains concerned about the ability of an
aging defense nuclear complex infrastructure to meet increasing
requirements associated with four ongoing stockpile life
extension programs. The problem is especially acute in the
production plants. The committee understands that many years of
sustained funding will be required to reduce maintenance
backlogs and re-capitalize the complex. The committee makes a
number of recommendations. The committee recommends $295.1
million for production support within Directed StockpileWork,
an increase of $17 million to replace aging manufacturing process
equipment and support systems at Y-12. The committee recommends $57.2
million for the Stockpile Readiness campaign, an increase of $2.0
million for critical processing, machining, and inspection equipment
required for future directed stockpile work at Y-12. The committee
recommends a net increase of $16.3 million to operations of facilities
within RTBF for a total of $989.1 million, which includes an additional
$7.0 million for facilities maintenance and legacy material stewardship
at Y-12, an additional $14.3 million for plant maintenance at Pantex,
and an additional $15.0 million for plant projects and capital
equipment at Pantex.
The budget request contained $582.1 million for Safeguards
and Security operations and maintenance. The committee
recommends $583.8 million, a net increase of $1.7 million. The
committee provides additional funds of $11.7 million for
security enhancements at the Lawrence Livermore National
Laboratory, including physical security upgrades to facilities
for handling and storing special nuclear materials, cyber-
security improvements, and security systems maintenance and
replacement.

Advanced Weapons Concepts

The committee notes that the National Nuclear Security
Administration (NNSA) has requested $21.0 million to explore
advanced weapons concepts, including $15.0 million to continue
feasibility and cost studies for the Robust Nuclear Earth
Penetrator, and $6.0 million ($2.0 million per design
laboratory) for other concept definition studies. The committee
further notes that the budget request for these efforts is less
than half of one percent of the total request of $6.4 billion
for Weapons Activities, a small research and development
investment by most standards. The committee believes that NNSA
should consider more significant future investment in these
activities.
The committee believes that advanced concepts studies serve
a number of important purposes. First, the weapons laboratories
are the repository for certain skills critical to national
security, and although NNSA executes a wide range of
technically challenging and sophisticated weapons related
activities, there is still no substitute for actually
exercising the design process. Second, most weapons designers
with real test experience have retired or are eligible for
retirement, and there is a time critical requirement for the
next generation of scientists and engineers to gain proficiency
under the tutelage of those remaining. Third, nuclear weapons
in the hands of potential adversaries pose a grave and
proliferating threat to the security of the United States, and
in order to avoid technical surprise, NNSA must understand the
``art of the possible''. Finally, the present Cold War
stockpile may not meet future technical requirements for a
credible strategic deterrent.
While mindful of proliferation concerns, the committee does
not believe that artificial and arbitrary constraints on what
weapons designers may or may not consider serve the best
interests of the nation. Accordingly, section 3111 would repeal
the statutory prohibition on low yield weapon development under
section 3136 of the National Defense Authorization Act for
Fiscal Year 1994 (Public Law 103-160). The committee observes
that before any advanced concept enters engineering development
(phase 3/6.3), and prototype hardware is fabricated, NNSA
requires the formal approval of the Nuclear Weapons Council and
a budget authorization from Congress. Regardless of the outcome
of legislative action on section 3111, the committee is unaware
of restrictions on design work related to weapons with yields
in excess of five kilotons, and accordingly recommends that
NNSA proceed with its advanced concepts initiative forthwith.

Coordination of Nonproliferation and Threat Reduction Programs

The committee notes that a number of federal departments
(primarily the Departments of Defense, Energy, and State) fund
and participate in threat reduction and nonproliferation
programs. The committee remains concerned about the
coordination between these programs. The committee understands
that many if not most of these efforts are based on historical
relationships and access agreements. The committee observes
that merely de-conflicting activities is not equivalent to
development of an effective, efficient, integrated program with
well defined departmental roles and responsibilities. The
committee suggests that the administration designate a lead
department, and urges realignment of these efforts according to
distinct assigned departmental mission areas.

Management of Stockpile Life Extension Programs

The committee remains concerned that stockpile life
extension programs (SLEPs) for the B61, W76, W80, and W87
continue to be managed as loosely coordinated ``level-of-
effort'' activities spread across the defense nuclear complex.
Such an approach is more appropriate to research and
development than to a production effort with a well defined
quantity, schedule, and scope of work. The committee strongly
recommends that the SLEPs be ``projectized'' under strong
leadership, and with cost, schedule and performance milestones
against which progress can be measured.
The committee report on H.R. 5431, the Energy and Water
Development Appropriations Act, 2003 (H. Rept. 107-681) directs
the National Nuclear Security Administration (NNSA) to prepare
Selected Acquisition Reports (SARs) for each SLEP. The
committee believes that such planning and budgeting by warhead
type will bring some needed discipline to the refurbishment
process, and can help form the basis for ``projectizing'' these
efforts. The committee notes that NNSA submitted classified
SARs with the fiscal year 2004 budget request, but that those
reports are of a transitional nature. The committee urges NNSA
to commit to this approach in a timely and prudent manner.

NNSA Management Structure

Reform of the Department of Energy's organizational
structure for managing the defense nuclear complex was of
particular interest to Congress when it passed title XXXII of
the National Defense Authorization Act for Fiscal Year 2000
(Public Law 106-65), also known as the National Nuclear
Security Administration (NNSA) Act. Section 3153 of the
National Defense Authorization Act for Fiscal Year 2001 (Public
Law 106-398) required the NNSA Administrator to submit to the
Armed Services Committees a plan for assigning roles and
responsibilities among headquarters and field elements. The
Administrator submitted an interim plan on May 3, 2001 broadly
outlining plans for a reorganization of headquarters elements,
and provided a plan for reorganization of field elements on
February 25, 2002. On December 17, 2002, the Acting
Administrator announced implementation guidance for the
reorganization, which is expected to be complete by the end of
fiscal year 2004 and to eliminate one layer of management.
Noting that it has now been over three years since NNSA was
formally established, the committee remains concerned that the
slow pace continues to prejudice the process against success,
but believes that the intended reorganization could provide for
moreefficient, effective, and accountable management of the
complex. The committee encourages NNSA to follow through.

Support for Los Alamos Public Schools

As in previous years, the budget request includes $8.0
million for support of public schools in the vicinity of Los
Alamos National Laboratory. The Los Alamos school system is the
only one that continues to receive annual assistance from the
Department of Energy. Such annual payments ceased at other
previously government-owned communities years ago, specifically
in 1970 in the case of Richland, Washington, and in 1985 in the
case of Oak Ridge, Tennessee. In a May 2002 report submitted to
the congressional defense committees pursuant to section 3136
of the National Defense Authorization Act for Fiscal Year 2002
(Public Law 107-107), the Secretary of Energy recommended the
continuation of annual assistance for another ten years,
essentially indefinitely.
The historical record of efforts to achieve self-
sufficiency in the Los Alamos public school system and those of
surrounding communities includes buy-out proposals, multi-year
assistance plans, and endowment by the Department of a not-for-
profit educational enrichment foundation. The committee
recognizes some of the unique considerations specific to Los
Alamos, but has been, and continues to be, disappointed in
progress by all parties toward development of a viable exit
strategy for the Department. While fully appreciating the
recruitment value to the laboratory of an excellent school
system, the committee is also sensitive to the fact that,
according to recent census data, Los Alamos County already has
the fifth highest median household income in the United States.

Test Readiness

The committee believes the current lead time of nearly
three years for resumption of underground nuclear tests does
not present a realistic option should the President determine
that such tests are necessary. The committee notes the budget
request includes $24.9 million for test readiness, $7.0 million
above the fiscal year 2003 request, and that the National
Nuclear Security Administration intends to move toward an 18
month test readiness posture. The committee observes that test
readiness is of special interest to Congress, and section 3142
of the Bob Stump National Defense Authorization Act for Fiscal
Year 2003 (Public Law 107-314) requires the Secretary of Energy
to assess and report to Congress on test readiness options
ranging from 6 to 24 months. Section 3142 required submission
of that report with the fiscal year 2004 budget request. The
report is now overdue, and the committee expects a full
explanation of the basis for any final decisions regarding
options for enhanced test readiness.

Environmental and Other Defense Activities

Overview

The budget request contained $7,734.1 million for
environmental and other defense activities. The committee
recommends $7,746.6 million, representing an increase of $209.1
million from the amount authorized for fiscal year 2003.

Adjustments to the Budget Request

Reductions

The budget request contained $15.0 million for the Office
of Worker and Community Transition. The committee recommends
$14.0 million, a reduction of $1.0 million. The committee notes
that the request for programmatic funds drops 46 percent from
fiscal year 2003, while program direction remains level. The
committee recommends a proportional decrease to program
direction.
The budget request contained $4.3 million for the Office of
Energy Security and Assurance. The committee recommends $3.3
million, a reduction of $1.0 million. Many of the Department of
Energy's energy security and assurance functions move to the
new Department of Homeland Security. The committee observes
that the number of full time equivalent employees is expected
to drop from 22 to 8 in fiscal year 2004, while the request for
program direction remains the same as that for fiscal year
2003. The committee recommends a proportional decrease.

Increases

The budget request contained $1.2 billion for 2006
Accelerated Completions within Defense Site Acceleration
Completion. The committee recommends an increase of $9.5
million to accelerate environmental restoration and waste
management activities at Lawrence Livermore National Laboratory
(LLNL), as well as the transfer of newly generated waste
operations responsibility from the Office of Environmental
Management to the National Nuclear Security Administration
(NNSA). The committee understands that the Department of Energy
has developed a Performance Management Plan and signed a Letter
of Intent with state and federal regulatory agencies to support
completion of legacy waste disposal and remediation activities
at LLNL by 2006. The committee believes that assumption by NNSA
of responsibility for management of the waste stream from
ongoing operations at this site will lead to more judicious
generation of that waste.
The budget request contained $39.8 million in other defense
activities for Department of Energy Intelligence activities.
The committee recommends $44.8 million, an increase of $5.0
million, to match fiscal year 2003 funding. The committee urges
the Department to maintain the current level of effort
particularly in the area of technical nuclear intelligence
related to proliferation of weapons of mass destruction.

Cleanup Acceleration

The Department of Energy's environmental management (EM)
program is responsible for the cleanup of contamination at 114
sites resulting from more than 50 years of research,
development, production, and testing of nuclear weapons. In
February 2002, the Department completed the ``Top-to-Bottom
Review'' of EM programs directed by the Secretary of Energy.
The review found that the EM program emphasized ``. . .
managing risk rather than actually reducing risk to workers,
the public, and the environment''.
In the current fiscal year the Department has begun a
comprehensive restructuring of the cleanup program. The process
includes signing ``Letters of Intent'' with state and federal
regulatory authorities, and the development of Performance
Management Plans for each site to detail strategies, milestones
and commitments supporting accelerated cleanup. The Department
intends to complete revised site project baselines during the
current fiscal year based on thesePerformance Management Plans.
The Department projects that for three of the most heavily contaminated
sites--Savannah River Site, Idaho National Engineering and
Environmental Laboratory, and Hanford--cleanup completion can be
accelerated by 20, 35, and 35 years, respectively, and expects to
complete all work by 2035.
The committee supports the Department's aggressive schedule
to reduce risk to the public and the environment. The committee
believes that by moving quickly, where feasible, to reduce the
footprint of contaminated sites, substantial cost savings can
be realized in the long term.

Energy Supply

The budget request contained $110.5 million for Energy
Supply. In fiscal year 2004, Energy Supply is proposed as a
multi-function account split between defense (050) and energy
(270) functions. Landlord responsibilities for the Idaho
National Engineering and Environmental Laboratory (INEEL) have
passed from the Office of Environmental Management (EM) to the
Office of Nuclear Energy, Science, and Technology (NE). The
defense funding requested in this account supports continuing
national security activities at INEEL. The committee recommends
the budget request.

LEGISLATIVE PROVISIONS

Subtitle A--National Security Programs Authorizations

Section 3101--National Nuclear Security Administration

This section would authorize funds for the National Nuclear
Security Administration for fiscal year 2004, including funds
for weapons activities, defense nuclear nonproliferation
programs, naval reactor programs, and the Office of the
Administrator.

Section 3102--Defense Environmental Management

This section would authorize funds for defense
environmental management activities for fiscal year 2004,
including funds for defense site acceleration completion and
defense environmental services.

Section 3103--Other Defense Activities

This section would authorize funds for other defense
activities for fiscal year 2004.

Section 3104--Defense Nuclear Waste Disposal

This section would authorize funds for defense nuclear
waste disposal for fiscal year 2004.

Section 3105--Energy Supply

This section would authorize funds for defense energy
supply programs for fiscal year 2004.

Subtitle B--Program Authorizations, Restrictions, and Limitations

Section 3111--Modification of Prohibition Relating to Low-Yield Nuclear
Weapons

This section would amend section 3136 of the National
Defense Authorization Act for Fiscal Year 1994 (Public Law 103-
160). The amendment would maintain the prohibition on
development of new nuclear weapons with yields less than five
kilotons, but would allow research on such weapons, including
concept definition studies, feasibility studies, and detailed
engineering design. The amendment would allow development for
the purpose of assessing low- yield nuclear weapons development
by other nations that may pose a national security risk to the
United States.

Section 3112--Termination of Requirement for Annual Updates of Long-
Term Plan for Nuclear Weapons Stockpile Life Extension Program

This section would terminate certain annual reporting
requirements related to stockpile life extension programs,
effective December 31, 2004. The National Nuclear Security
Administration (NNSA) submitted with the budget request
preliminary Selected Acquisition Reports (SAR) for its
stockpile life extension programs. The committee understands
that NNSA intends to fully commit to the stockpile life
extension SARs in fiscal year 2005. Provided that they show
sufficient fidelity, the committee believes that the SARs will
provide an appropriate and sufficient substitute for the
current reporting requirement.

Section 3113--Extension to All DOE Facilities of Authority to Prohibit
Dissemination of Certain Unclassified Information

This section would amend section 148 of the Atomic Energy
Act of 1954 (Public Law 83-703) to expand the range of
situations under which the Department of Energy could treat
information as sensitive unclassified nuclear information, and
consequently limit its dissemination.

Section 3114--Department of Energy Project Review Groups Not Subject to
Federal Advisory Committee Act by Reason of Inclusion of Employees of
Department of Energy Management and Operating Contractors

This section would allow an officer or employee of a
management and operating (M&O) contractor of the Department of
Energy, when serving on an advisory committee or review group
for the Department on matters related to the Department's M&O
contracts, to be treated as an officer or employee of the
Department for the purposes of determining whether the group is
an advisory committee within the meaning of the Federal
Advisory Committee Act (5 United States Code App.).

Section 3115--Availability of Funds

This section would amend the Atomic Energy Defense Act
(title XXXVI of the Bob Stump National Defense Authorization
Act for Fiscal Year 2003 (Public Law 107-314)) by limiting the
availability for obligation to three years for funds authorized
to be appropriated to the National Nuclear Security
Administration (NNSA) for operation and maintenance or forplant
projects. The limitation is consistent with the NNSA Act (title XXXII
of the National Defense Authorization Act for Fiscal Year 2000 (Public
Law 106-65)), which requires planning, programming and budgeting using
funds that are available for obligation for a limited number of years.
The section would not amend the one year limitation on the availability
of funds for obligation for an appropriation pursuant to a Department
of Energy national security authorization for program direction.

Section 3116--Limitation on Obligation of Funds for Nuclear Test
Readiness Program

This section would prohibit the obligation of more than 40
percent of funds available to the Secretary of Energy in fiscal
year 2004 for the nuclear test readiness program until the
Secretary submits the report on test readiness posture options
required by subsection 3142(c) of the Bob Stump National
Defense Authorization Act for Fiscal Year 2003 (Public Law 107-
314).

Section 3117--Requirement for On-Site Managers

This section would require the Secretary of Energy to
appoint a federal employee as an on-site manager before
obligation of funds for any defense nuclear nonproliferation
program that involves dismantlement, destruction, or storage
facilities, or construction of a facility, and that is executed
in a state of the former Soviet Union, if the total
contribution by the Department of Energy is expected to exceed
$25.0 million. The duties of the on-site manager would include
development, in cooperation with participating countries, of a
list of steps or activities critical to achieving the project's
disarmament or nonproliferation goals, and a schedule for
completing those steps or activities. The steps and activities
would include acquisition of necessary permits, verification of
materials, and provision of resources. The on-site manager
would have the authority to suspend United States participation
in a project if a non-United States participant fails to
complete a scheduled activity on time. The Secretary could
direct resumption of United States participation in a suspended
project with concurrent notification to Congress.

Subtitle C--Consolidation of National Security Provisions

Section 3121--Consolidation and Assembly of Recurring and General
Provisions on Department of Energy National Security Programs

The section would assemble together under the Atomic Energy
Defense Act (title XXXVI of the Bob Stump National Defense
Authorization Act for Fiscal Year 2003 (Public Law 107-314)),
without substantive amendment but with technical and conforming
amendments, recurring and general provisions of law on
Department of Energy national security programs that remain in
force. The transfer of a provision of law under this section
should not be construed as amending, altering, or otherwise
modifying the substantive effect of that provision. The
provisions of the Atomic Energy Defense Act, as amended by this
section, would be classified to a new chapter of title 50,
United States Code.

TITLE XXXII--DEFENSE NUCLEAR FACILITIES SAFETY BOARD

LEGISLATIVE PROVISIONS

Section 3201--Authorization

This section would authorize $19.6 million for the Defense
Nuclear Facilities Safety Board for fiscal year 2004.

TITLE XXXIII--NATIONAL DEFENSE STOCKPILE

LEGISLATIVE PROVISIONS

Section 3301--Authorized Uses of National Defense Stockpile Funds

This section would authorize $69.7 million from the
National Defense Stockpile Transaction Fund for the operation
and maintenance of the National Defense Stockpile for fiscal
year 2004. The provision would also permit the use of
additional funds for extraordinary or emergency conditions 45
days after a notification to Congress.

Section 3302--Revisions to Objectives for Receipts for Fiscal Year 2000
Disposals

This section would authorize increased sales of stockpile
materials through the end of fiscal year 2009.

TITLE XXXIV--NAVAL PETROLEUM RESERVES

LEGISLATIVE PROVISIONS

Section 3401--Authorization of Appropriations

This section would authorize $16.5 million for fiscal year
2004 for the operation and maintenance of the Naval Petroleum
and Oil Shale Reserves.

TITLE XXXV--MARITIME ADMINISTRATION

ITEMS OF SPECIAL INTEREST

Authorization of Maritime Security Program

The committee conducted a series of hearings during the
107th Congress to examine the operation of the current Maritime
Security program as enacted by the 104th Congress in Public Law
104-239. Those hearings examined not only the ability of the
current program to meet the sealift requirements of the
Department of Defense (DOD), but also the various changes that
had occurred in the commercial marketplace since the enactment
in 1996. In the 1995 and 1996 time frame, the makeup of the
maritime security fleet was one that was largely owned and
operated by U.S. citizen companies. Over the span of the next
several years, the two largest U.S. flag vessel operators were
purchased by foreign corporations. Indeed, of the 10 maritime
security program (MSP) contractors now participating in the
program, only five still meet the original ``section 2''
citizenship or documentation/defense contractor requirements
for award of a contract under the first priority as set forth
in the Maritime Security Act of 1996 (Public Law 104-239). None
of the remaining five ``section 2'' citizen operators, which
collectively hold 33 of the 47 current agreements, were even in
existence in 1995.
While the transition, at least from a commercial
standpoint, appears to have worked reasonably well, concern was
expressed by a number of witnesses over the reliability of
these foreign controlled carriers to respond to DOD sealift
requirements. These same concerns were not expressed by either
the Maritime Administration or the United States Transportation
Command. However, the committee, in drafting a new maritime
security program, has attempted to add mechanisms that will, to
the maximum extent possible, improve the likelihood that
existing MSP contractors will be responsive to DOD
requirements, and at the same time grant ``section 2'' citizen
owners and operators priority in the award of new contracts.
To meet DOD requirements for a better ``mix'' of ships in
the program, the committee is establishing a new program for
the construction of five new, U.S. built product tankers that
will be capable of carrying jet fuel during a conflict. The
committee notes that the Military Sealift Command chartered 26
product tankers for Operation Enduring Freedom and Operation
Iraqi Freedom. Only one of these tankers was documented under
the U.S. flag, the remaining 25 were foreign flag with foreign
crews. While the committee recognizes that these five ships
will only partially begin to fill the expected void in
available tankers, the committee intends to consider expanding
this program if it produces the desired results in a cost
effective manner. ``Section 2'' citizens are given a priority
for award of financial assistance to construct these vessels as
well as a priority for the award of an operating agreement.
The committee has also provided DOD with greater
flexibility in selecting vessels to meet its changing sealift
needs. The committee has increased the number of available MSP
contracts from 47 to 60. It is the committee's intention that
these additional contracts be used to address DOD shortfalls in
vessel type and capacity. In addition, the Secretary of Defense
can waive age requirements to allow a specific vessel, which is
otherwise eligible, to obtain an operating agreement. For
instance, it is apparent at this point in time, that additional
roll-on/roll-off vessels and lighter aboard ships (LASH) as
well as product tankers are required. Under the new legislative
formulation, the Secretary of Defense is also granted the
authority to reject a vessel that is not required under the
contingency plans. It is contemplated that this authority will
most likely be used as older vessels are phased out of the
program. A vessel operator will be given the opportunity to
offer an acceptable vessel, but if the vessel operator fails to
do so, the ``slot'' reverts to the open pool and is available
to other eligible companies. Slots that are not filled either
because a vessel owner or operator fails to offer a ship that
is acceptable to DOD, or if a current owner or operator simply
chooses not to participate in the new program, revert to the
open pool. The committee intends this selection process to be
conducted in a reasonably short time frame. These and other
provisions are designed to make the new program more responsive
to DOD requirements and to inject a greater degree of U.S.
citizen participation in the program.
Finally, the committee looked closely at funding for the
new program as well as the start up date for the new program.
To avoid disruption of current business relationships, the new
program does not begin until October 1, 2005. The committee
does however provide an earlier effective date only for the
purpose of issuing regulations and allowing application process
to begin. As noted above, the committee increases the number of
available contracts which results in additional costs.
Additional funding is also required to support the national
defense tanker construction program. While many in the industry
also suggested that the initial MSP payment should be greater
than the $2.6 million proposed in section 3515 of the new act,
the committee believes that additional increases should be
phased in over the next several years and should be increased
as the administration has additional time to assess its sealift
requirements, including the need to address critical and
anticipated U.S. citizen mariner shortfalls. Thus, the
committee authorizes $2.6 million per ship for fiscal years
2006 and 2007 and requires the Department of Transportation, in
consultation with the Department of Defense to seek additional
appropriations in the out-years based on the operational
requirements noted above. The committee believes this is a more
reasonable approach than simply including a cost of living
formula that may or may not be sufficient to meet the
operational requirements over the next ten years.

Obsolete Vessel Disposal

The budget request contained $11.4 million for the disposal
of obsolete vessels from the National Defense Reserve Fleet.
The committee recommends $20.0 million, an increase of $8.6
million above the budget request. The National Defense
Authorization Act for Fiscal Year 2001 (Public Law 106-398)
required the Maritime Administration to dispose of all vessels
in the National Defense Reserve Fleet that are not otherwise
assigned to the Ready Reserve Fleet or otherwise designated for
a specific purpose by September 30, 2006. Section 3102 of the
Bob Stump National Defense Authorization Act for Fiscal Year
2003 (Public Law 107-314), established a program to assist
states in the reefing of obsolete ships. In that same section,
a pilot program was established to allow for the
environmentally safe transfer of obsolete vessels to sites
outside the United States for disposal. Further, Section 3504
of that same act states that the establishment of these
programs does not constitute a preference for the reefing or
export of obsolete vessels over other means, such as domestic
scrapping. The Maritime Administration has three possible
routes for disposal of obsolete vessels and the committee
expects the agency to move aggressively to reach the above
noted deadlines.
The committee reiterates its support for this position and
recognizes that domestic scrapping may be the most competitive
and appropriate course of action. The committee expresses its
disappointment that the Maritime Administration has not yet
obligated the funds appropriated for disposal activities in the
last fiscal year, and, while several projects both within and
outside the United States are in the final stages of
negotiation, only 14 vessels have been scrapped over the last
two years. The committee understands that approximately $30
million remains available. This is in addition to the $20.0
million that the committee recommends for this fiscal year. The
committee remains concerned that any further delays could
result in harm to the marine environment and a potentially more
expensive disposal.
With respect to the domestic disposal of obsolete vessels,
the committee understands that the Maritime Administration has
suspended the use of a private integrator for the management of
ship scrapping projects in favor of managing these projects
directly. The committee believes that the use of a domestic,
private-sector integrator with experience in management of ship
scrapping projects for the U.S. government can facilitate the
efficient and environmentally sound disposal of these vessels,
and in the long term can result in cost savings to the Maritime
Administration. The committee directs the Maritime
Administration, to the maximum extent possible, to outsource to
domestic integrators the management of ship scrapping projects,
including: procurement, project oversight, environmental and
worker safety compliance monitoring, and quality control.
The Congress has provided the Department of Transportation
with substantial resources to assure these ships are disposed
of quickly and safely. The committee urges the Maritime
Administration to make progress quickly in meeting this
objective. If it does not do so, the committee will consider
taking additional steps to ensure this outcome.
The committee directs the Maritime Administrator to submit
a report to Congressional Defense Committees by November 1,
2003 on any specific financial and contractual details of
foreign contracts for ship scrapping.

Merchant Mariner Training to Meet Sealift Requirements

Section 1301 of title XIII of the Merchant Marine Act, 1936
(46 App. U.S.C. 1295) declares that it is the policy of the
United States that ``merchant marine vessels of the United
States should be operated by highly trained and efficient
citizens of the United States. . .'' In furtherance of that
policy, the Secretary of Transportation is authorized to take
the steps necessary to provide for the education and training
of citizens of the United States who are capable of providing
for the safe and efficient operation of the merchant marine of
the United States at all times and as a naval and military
auxiliary in time of war or national emergency. Recent events
in the world required the United States to activate over 50
government owned U.S. flag ships that were part of the Ready
Reserve Force and the Military Sealift Command Fleet. These
ships were crewed by very capable and well trained merchant
mariners drawn from the commercial mariner pool. By all
accounts, these mariners performed exceptionally well and the
United States was able to activate these ships with virtually
no problems. However, the committee is concerned that the
number of U.S. citizen mariners available for activations of
this type will drop dramatically over the next few years. The
committee is concerned that additional steps may need to be
taken to ensure that the United States has the well qualified
mariners, both licensed and unlicensed it needs to crew not
only its merchant ships but also the auxiliary ships. The
committee is also concerned that we present the young mariners
entering the profession with additional training opportunities
prior to licensing. In view of these concerns and the potential
for serious shortages of trained mariners in the near future,
the committee directs the Secretary of Transportation to
prepare an assessment that will address the following matters:
(1) The adequacy of current training opportunities
available for licensed and unlicensed mariners.
(2) The ability of student mariners to obtain the time at
sea to qualify for licensing or documentation.
(3) The number of trained and qualified mariners available
to serve on reserve vessels in time of war or national
emergency.
(4) An assessment of the number of qualified mariners
projected to be available over the next five years.
(5) Any proposals for legislation or administrative steps
that the Secretary considers necessary to ensure that the
United States maintains an adequate number of capable and well-
trained mariners to meet its future commercial and auxiliary
requirements.
This assessment shall be submitted to the Senate Committee
on Commerce, Science and Transportation and to the House
Committee on Armed Services not later than November 1, 2003.

LEGISLATIVE PROVISIONS

Subtitle A--General Provisions; Maritime Administration Authorization

Section 3501--Short Title

This section would provide that this title may be cited as
the ``Maritime Security Act of 2003''.

Section 3502--Definitions

This section would provide definitions for terms used in
the Maritime Security Act of 2003.

Subtitle B--Maritime Security Fleet

Section 3511--Establishment of Maritime Security Fleet

This section would establish the types of vessels that are
generally eligible to be included in the maritime security
fleet. Final determination of eligibility is vested in the
Secretary of Defense based on suitability for use by the United
States for national defense or military purposes. This section
would also establish specific requirements regarding
citizenship of vessel owners and charterers.

Section 3512--Award of Operating Agreements

This section would establish procedures for applying for an
operating agreement under the maritime security program. This
section would also establish a priority mechanism for the award
of operating agreements under the program based on both
citizenship criteria and vessel criteria.

Section 3513--Effectiveness of Operating Agreements

This section would provide authority for the Secretary of
Transportation to enter into operating agreements beginning in
fiscal year 2006. While the agreements are effective for one
year, the agreement is renewable subject to the availability of
appropriations for each subsequent fiscal year through the end
of fiscal year 2015.

Section 3514--Obligations and Rights under Operating Agreements

This section would provide that vessels operating in this
program are to be operated only in the foreign commerce of the
United States and may not otherwise be operated in the
coastwise trade. Each vessel covered by an operating agreement
is to remain documented under chapter 121 of title 46, United
States Code, until the date the operating agreement would
terminate according to its terms.

Section 3515--Payments

This section would provide that the each vessel covered by
an operating agreement shall be paid $2,600,000 for each of
fiscal years 2006 and 2007, and such amount for each fiscal
year thereafter for which the agreement is in effect as the
Secretary, with the concurrence of the Secretary of Defense,
considers to be necessary to meet operational requirements.

Section 3516--National Security Requirements

This section would require the Secretary of Transportation
to establish an Emergency Preparedness Program that is approved
by the Secretary of Defense. The section also requires that
each contractor enter into an emergency preparedness agreement
under that program. This agreement provides that the respective
vessel contractor will make available commercial transportation
resources including services upon the request of the Secretary
of Defense during time of war, national emergency, or
contingency operation as that term is defined in section 101 of
title 10, United States Code. The commercial transportation
resources include vessels, or capacity in vessels, intermodal
systems and equipment, terminal facilities, intermodal and
management services, and other related services. This section
would also authorize the contractor to substitute foreign flag
replacement vessels if its regular service is disrupted as a
result of an activation.

Section 3517--Regulatory Relief

This section would provide that a vessel may operate in the
foreign commerce of the United States without the restrictions
contained in section 901(b)(1) of the Merchant Marine Act, 1936
(46 App. U.S.C. 1241(b)(1)) concerning the building or
documentation of a vessel.

Section 3518--Special Rule Regarding Age of Former Participating Fleet
Vessel

This section would waive certain age requirements with
respect to vessels, provided that they will be replaced by
otherwise eligible vessels within a 30 month period after new
operating agreements are entered into.

Section 3519--Authorization of Appropriations

This section would provide an authorization of
appropriations for operating agreements in the amount of $156
million for each of fiscal years 2006 and 2007, and such sums
as may be necessary, based on operational requirements, for
each fiscal year thereafter through fiscal year 2015.

Section 3520--Amendment to Shipping Act, 1916

This section would amend section 9 of the Shipping Act,
1916 (46 App. U.S.C. 808) to allow a vessel to be registered
under a foreign flag provided that the Secretary of
Transportation, with the concurrence of the Secretary of
Defense, determines that a replacement vessel is documented
under the U.S. flag and is enrolled in an operating agreement
under this program.

Section 3521--Regulations

This section would authorize the Secretary of
Transportation and the Secretary of Defense to prescribe
permanent and interim rules necessary to carry out the Maritime
Security Program.

Section 3522--Repeals and Conforming Amendments

This section would repeal the existing maritime security
program, effective October 1, 2005.

Section 3523--Effective Dates

This section would establish dates that specific sections
of this act would become effective.

Subtitle C--National Defense Tank Vessel Construction Assistance

Section 3531--National Defense Tank Vessel Construction Program

This section would require the Secretary of Transportation
to establish a program to provide financial assistance for the
construction in the United States of a fleet of five privately
owned tank vessels for enrollment in an emergency preparedness
agreement.

Section 3532--Application Procedure

This section would establish procedures to obtain
competitive proposals for the construction of new tank vessels
to meet the commercial and national security needs of the
United States. This section would also require the Secretary to
give priority consideration to a proposal submitted by a person
that is a citizen of the United States under section 2 of the
Shipping Act, 1916 (46 App. U.S.C. 802).

Section 3533--Award of Assistance

This section would allow the Secretary to enter into a
contract to provide assistance for the construction of a new
tank vessel in the United States in an amount up to 75 percent
of the actual construction cost of the vessel, but in no case
more than $50 million per vessel. This section also provides
that a vessel constructed under this section is not eligible
for a certificate of documentation with a coastwise
endorsement. A vessel constructed under this section must also
enter into an emergency preparedness agreement under this
title.

Section 3534--Priority for Title XI Assistance

This section would require the Secretary of Transportation
to give priority to guarantees and commitments for new product
tank vessels that are otherwise eligible for a guarantee under
this section 1103 of the Merchant Marine Act, 1936 (46
App.U.S.C. 1273).

Section 3535--Authorization of Appropriations

This section would authorize appropriations to carry out
this subtitle in the amount of $250 million for fiscal years
after fiscal year 2004.

Subtitle D--Maritime Administration

Section 3541--Authorization of Appropriations for Maritime
Administration for Fiscal Year 2004

This section would authorize a total of $163.9 million for
fiscal year 2004, and increase of $43.6 million above the
budget request for the Maritime Administration. Of the funds
authorized, $104.4 million would be for operations and training
programs, $35 million would be for costs as defined in section
502 of the Federal Credit Reform Act of 1990 (Public Law 93-
344), of loan guarantees authorized by title XI of the Merchant
Marine Act, 1936, as amended, (46 App. United States Code 1271
et seq.), $4.5 million would be for administrative expenses
related to providing these loan guarantees, and $20 million
would be for the disposal of obsolete ships in the National
Defense Reserve Fleet.

Section 3542--Authority To Convey Vessel USS Hoist (ARS-40)

This section would authorize the Secretary of
Transportation to convey the vessel USS HOIST to the Last
Patrol Museum, located in Toledo, Ohio.

DEPARTMENTAL DATA

The Department of Defense requested legislation, in
accordance with the program of the President, as illustrated by
the correspondence set out below:

DEPARTMENT OF DEFENSE AUTHORIZATION REQUEST

Department of Defense,
Office of General Counsel,
Washington, DC, March 3, 2003.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: The Department of Defense requests that
the Congress enact the enclosed National Defense Authorization
Bill for Fiscal Year 2004.
The purpose of each legislative proposal included in the
Bill is stated in the accompanying section-by-section analysis.
In the coming weeks, the Department will propose a few
additional legislative initiatives for inclusion in the same
Bill.
The Office of Management and Budget advises that there is
no objection, from the standpoint of the Administration's
program, to the presentation of this Bill for your
consideration and the consideration of the Congress.
Sincerely,
William J. Haynes II, General Counsel.
------ --
----

MILITARY TRANSFORMATION AUTHORIZATION REQUEST

Department of Defense,
Office of General Counsel,
Washington, DC, April 10, 2003.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: The Department of Defense requests that
the Congress enact the enclosed Bill, ``The Defense
Transformation for the 21st Century Act.''
Each section of the Bill is accompanied by an explanatory
section-by-section analysis.
The Office of Management and Budget advises that there is
no objection, from the standpoint of the Administration's
program, to the presentation of this Bill for your
consideration and the consideration of the Congress.
Sincerely,
William J. Haynes II, General Counsel.
------

COMMITTEE POSITION

On May 14, 2003 the Committee on Armed Services, a quorum
being present, approved H.R. 1588, as amended, by a vote of 58-
2.

COMMUNICATIONS FROM OTHER COMMITTEES

House of Representatives,
Committee on Agriculture,
Washington, DC, May 15, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for forwarding a copy of
proposed language that would take appropriate action to quiet
title tracts of land located in the platted subdivision of
Falling Waters, Okaloosa County, Florida adjacent to Eglin Air
Force Base.
As you know, this land was at one time within the
Choctawatchee National Forest that was transferred in 1940 from
the control and jurisdiction of the Forest Service, Department
of Agriculture, to the control and jurisdiction of the War
Department for military purposes. However, according to the
Act, in the event the area transferred within or adjacent to
the national forest shall cease to be needed for military
purposes, it be restored to a national-forest status.
Aware of the reliance on inaccurate surveys, I have no
objection to the inclusion of this language to H.R. 1588, the
``National Defense Authorization Act for Fiscal Year 2004'', so
as to resolve any and all encroachments upon private property
by the United States and upon property of the United States by
private parties.
I do so with the understanding that this waiver does not
waive any future jurisdiction claim over this or similar
measures, and reserve the right to seek appropriate
representation in the event the measure should go to conference
to this section.
I greatly appreciate your cooperation in this matter.
Sincerely,
Bob Goodlatte, Chairman.
------

House of Representatives,
Committee on the Budget,
Washington, DC, May 8, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: It is my understanding that statutory
authority in Title 10, Section 2883 U.S.C. allows the
Department of Defense to execute Military Housing Privatization
Initiatives [MHPI] up to a limit of $850 million in budget
authority. DOD's legislative proposal for fiscal year 2004
would double that limit to $1.7 billion.
The Congressional Budget office has indicated its intent to
treat any legislative provision containing an increase in
budget authority for MHPI as direct spending. Such treatment
would give rise to a point of order under section 302(f) of the
Congressional Budget Act.
Should legislation increasing MHPI be reported to the House
during fiscal year 2004, it is my intention to direct CBO to
treat the MHPI provision as it has in the past, i.e., as if it
did not give rise to direct spending. This declaration of
intent is, however, contingent upon the following
understanding:
That the increase in budget authority for
MHPI in fiscal year 2004 be limited to $50 million, an
amount sufficient for DOD to execute its plan through
the end of fiscal year 2004;
That increases in budget authority for MHPI
in legislation reported in years after fiscal year 2004
shall be treated as direct spending. Should the Armed
Services Committee intend to legislate future increases
in budget authority for the program, it should include
this information in its annual ``Views and Estimates''
letter to the Budget Committee. This will enable the
Budget Committee to properly consider the matters prior
to markup for the Congressional Budget Resolution.
Let me emphasize that the Budget Committee does not intend
to hinder DOD's ongoing military housing program. Rather, I
want to clarify that for fiscal year 2004, the Committee
intends to adopt a one-year transition treatment of MHPI in the
budget. In future fiscal years that Budget Committee will work
with the Armed Services Committee to ensure that the needs of
DOD's military housing program are met, and that such
obligations are properly reflected in the budget.
Thank you very much for your attention to this matter.
Please do not hesitate to contact me if you have any questions.
Sincerely,
Jim Nussle, Chairman.
------

House of Representatives,
Committee on the Budget,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: This letter concerns the jurisdictional
interest of the Committee on the Budget in H.R. 1588, the
National Defense Authorization Act for Fiscal Year 2004. H.R.
1588, as ordered reported by the Committee on Armed Services,
contains several report-related requirements under the
jurisdiction of the Committee on Budget.
Recognizing your interest in bringing this legislation
before the House expeditiously, the Committee on the Budget
agrees not to seek a referral of the bill based on provisions
within its jurisdiction. By agreeing not to seek a referral,
the Committee on the Budget does not waive its jurisdiction
over these provisions or any other provisions of the bill that
may fall within its jurisdiction. In addition, the Committee on
the Budget reserves its right to seek conferees on any
provisions within its jurisdiction which are considered in the
House-Senate conference.
Sincerely,
Jim Nussle, Chairman.
------

House of Representatives,
Committee on Financial Services,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Chairman Hunter: On May 14, 2003, the Committee on
Armed Services ordered reported H.R. 1588, the National Defense
Authorization Act for Fiscal Year 2004. As you know, section
814 (relating to certain production capabilities for certain
critical items), section 907 (relating to the rotating
chairmanship of the Economic Adjustment Committee), and section
1206 (relating to check cashing and exchanges of foreign
currency) fall within the jurisdiction of the Committee on
Financial Services pursuant to the Committee's jurisdiction
under Rule X of the Rules of the House of Representatives.
While we continue to have some concerns about section 814,
because of your willingness to consult with the Committee on
Financial Services regarding all of these provisions, and the
need to move this legislation expeditiously, I will waive
consideration of the bill by the Financial Services Committee.
By agreement to waive its consideration of the bill, the
Financial Services Committee does not waive its jurisdiction
over H.R. 1588. In addition, the Committee on Financial
Services reserves its authority to seek conferees on any
provisions of the bill that are within the Financial Services
Committee's jurisdiction during any House-Senate conference
that may be convened on this legislation. I ask your commitment
to support any request by the Committee on Financial Services
for conferees on H.R. 1588 or related legislation.
I request that you include this letter and your response as
part of your committee's report on the bill and the
Congressional Record during consideration of the legislation on
the House floor.
Thank you for your attention to these matters.
Sincerely,
Michael G. Oxley, Chairman.
------

House of Representatives,
Committee on Armed Services,
Washington, DC, May 16, 2003.
Hon. Michael Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter of May 16,
2003 regarding H.R. 1588, the National Defense Authorization
Act for Fiscal Year 2004.
I agree that the Committee on Financial Services has valid
jurisdictional claims to certain provisions in this important
legislation, and I am most appreciative of your decision not to
request such a referral in the interest of expediting
consideration of the bill. I agree that by foregoing a
sequential referral, the Financial Services is not waiving its
jurisdiction. Further, as you requested, this exchange of
letters will be included in the Committee report on the bill.
With best wishes.
Sincerely,
Duncan Hunter, Chairman.
------

House of Representatives,
Committee on International Relations,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I understand that on Thursday, May 15,
2003, the Committee on Armed Services ordered favorably
reported H.R. 1588, the National Defense Authorization Act for
Fiscal Year 2004. The bill includes a number of provisions that
fall within the legislative jurisdiction of the Committee on
International Relations pursuant to Rule X of the House of
Representatives.
The specific provisions within our committee's jurisdiction
are: (1) Section 1023, Report on Department of Defense Post-
Conflict Activities in Iraq; (2) Section 1047, Use of Drug
Interdiction and Counter-Drug Funds to Support Activities of
the Government of Colombia; (3) Section 1201, Expansion of
Authority to Provide Administrative Support and Services and
Travel and Subsistence Expenses for Certain Foreign Liaison
Officers; (4) Section 1202, Recognition of Superior Noncombat
Achievements or Performance by Members of Friendly Foreign
Forces and Other Foreign Nationals; (5) Section 1205, Report on
Acquisition by Iraq of Advanced Weapons; (6) Section 1207,
Requirements for Transfer to Foreign Countries of Certain
Specified Types of Excess Aircraft; (7) Title XIII, Cooperative
Threat Reduction; and (8) Section 3121, Transfer and
Consolidation of Recurring and General Provisions on Department
of Energy National Security Programs.
Pursuant to Chairman Dreier's announcement that the
Committee on Rules will move expeditiously to consider a rule
for H.R. 1588, and your desire to have the bill considered on
the House floor next week, the Committee on International
Relations will not seek a sequential referral of the bill as a
result of including these provisions, without waiving or ceding
now or in the future this committee's jurisdiction over the
provisions in question. I will seek to have conferees appointed
for these provisions during any House-Senate conference
committee.
I would appreciate your including this letter as a part of
the report on H.R. 1588 and as part of the record during
consideration of the bill by the House of Representatives.
With best wishes,
Sincerely,
Henry J. Hyde, Chairman.
------

House of Representatives,
Committee on the Judiciary,
Washington, DC, May 15, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
Washington, DC.
Dear Chairman Hunter: In recognition of the desire to
expedite floor consideration of H.R. 1588, the Department of
Defense authorization bill, the Committee on the Judiciary
hereby waives consideration of the bill with the understanding
that proposed section 1004 (relating to litigation costs for
agencies that receive third party discovery requests), 1042
(relating to the establishment of the Defense Heritage
Foundation), 1402 (relating to the sunset for section 204 of
the USA Patriot Act), and an unnumbered section (relating to
attorneys fees for cases involving pay differentials because of
exposure to asbestos) will not be included in the bill. These
sections contain matters within the Committee on the
Judiciary's Rule X jurisdiction.
I further understand that proposed sections 1050 (relating
to court procedures for FOIA requests for NSA operational
files) and 2827 (relating to an exemption from Justice
Department screening of a land conveyance in Orange, Texas)
will be included in the bill. These sections also contain
matters within the Committee on the Judiciary's Rule X
jurisdiction. If these sections are added to the bill, I will
not seek a sequential referral based on their inclusion.
The Committee on the Judiciary takes this action with the
understanding that the Committee's jurisdiction over these
provisions is in no way diminished or altered. I would
appreciate your including this letter in your Committee's
report on H.R. 1588 and the Congressional Record during
consideration of the legislation on the House floor.
Sincerely,
F. James Sensenbrenner, Jr., Chairman.
------

House of Representatives,
Committee on Armed Services,
Washington, DC, May 16, 2003.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter of May 15,
2003 regarding H.R. 1588, the National Defense Authorization
Act for Fiscal Year 2004.
I agree that the Committee on the Judiciary has valid
jurisdictional claims to certain provisions in this important
legislation, and I am most appreciative of your decision not to
request such a referral in the interest of expediting
consideration of the bill. I agree that by foregoing a
sequential referral, the Committee on the Judiciary is not
waiving its jurisdiction.
Further, as you requested, this exchange of letters will be
included in the Committee report on the bill.
With best wishes.
Sincerely,
Duncan Hunter, Chairman.
------

House of Representatives,
Committee on Education and the Workforce,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
Washington, DC.
Dear Chairman Hunter: Thank you for working with me in your
development of H.R. 1588, the ``National Defense Authorization
Act for Fiscal Year 2004,'' specifically:
(1) Section 544, ``Standardization of Statutory
Authorities for Exemptions from Requirement for Access
to Secondary Schools by Military Recruiters;''
(2) Section 553, ``Eligibility for Dependents of
Certain Mobilized Reservists Stationed Overseas to
Attend DOD Dependents Schools Overseas;''
(3) Section 567, Impact Aid Eligibility for Heavily
Impacted Local Educational Agencies Affected by
Privatization of Military Housing;
(4) Section 907, ``Repeal of Rotating Chairman of
Economic Adjustment Committee;'' and
(5) Section 3121, ``Transfer and Consolidation of
Recurring and General Provisions on Department of
Energy National Security Programs.''
As you know, these provisions are within the jurisdiction
of the Education and the Workforce Committee. While I do not
intend to seek sequential referral of H.R. 1588, the Committee
does hold an interest in preserving its future jurisdiction
with respect to issues raised in the aforementioned provisions
and its jurisdictional prerogatives should the provisions of
this bill or any Senate amendments thereto be considered in a
conference the Senate. We would expect to be appointed as
conferees on these provisions should a conference with the
Senate arise.
Again, I thank you for working with me in developing the
amendments to H.R. 1588 and look forward to working with you on
these issues in the future.
Sincerely,
John Boehner, Chairman.
------

House of Representatives,
Committee on Energy and Commerce,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
Washington, DC.
Dear Chairman Hunter: On May 14, 2003, the Committee on
Armed Services ordered reported H.R. 1588, the National Defense
Authorization Act for Fiscal Year 2004. As ordered reported by
the Committee on Armed Services, this legislation contains a
number of provisions that fall within the jurisdiction of the
Committee on Energy and Commerce. These provisions include the
following:
Section 316 Report regarding impact of civilian community
encroachment and certain legal requirements on military
installations and ranges.
Section 601 Increase in basic pay for fiscal year 2004.
Section 3113 Extension of all DOE facilities of authority
to prohibit dissemination of certain unclassified information.
Section 3121 Transfer and consolidation or recurring and
general provisions on Department of Energy national security
programs.
Section 3201 Defense Nuclear Safety Board Authorization.
I understand that one provision within my jurisdiction that
is in the bill as ordered reported will be deleted in the
reported version of H.R. 1588. That provision is section
3116,which deals with the discretion of the Secretary of Energy
concerning certain personnel security matters.
Recognizing your interest in bringing this legislation
before the House expeditiously, the Committee on Energy and
Commerce agrees not to seek a sequential referral of the bill.
By agreeing not to seek a sequential referral, the Committee on
Energy and Commerce does not waive its jurisdiction over these
provisions or any other provisions of the bill that may fall
within its jurisdiction. In addition, the Committee on Energy
and Commerce reserves its right to seek conferees on any
provisions within its jurisdiction which are considered in the
House-Senate conference, and asks for your support in being
accorded such conferees.
I request that you include this letter as part of the
report on H.R. 1588 and as part of the Congressional Record
during consideration of this bill by the House.
Sincerely,
W.J. ``Billy'' Tauzin, Chairman.
------

House of Representatives,
Committee on Government Reform,
Washington, DC, May 8, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
Washington, DC.
Dear Mr. Chairman: I appreciate your willingness to work
with me on the 2004 Defense Authorization bill and I value the
working relationship that we have built in our cooperation on
this bill. I am pleased that the Government Reform Committee
was able to favorably report H.R. 1836, Civil Service and
National Security Personnel Improvement Act, and H.R. 1837, the
Services Acquisition Reform Act of 2003. I look forward to
working with you to include this legislation in the 2004
Defense Authorization bill.
You have shared with me a number of additional provisions
where the committee on Armed Services and the Committee on
Government Reform have a shared jurisdictional interest. I will
not seek a sequential referral to the Committee on Government
Reform on many of these proposed provisions with the
understanding that I am not waiving the committee's prerogative
to be represented on any conference that may occur on the 2004
Defense Authorization bill and that you will support the
committee's request to have it's representatives appointed to
the conference on the appropriate sections. However, I cannot
support a few of the provisions that you have shared with me
and consequently I cannot commit to not seeking a sequential
referral on these few provisions. The following lists detail
the provisions that I am willing to waive the right to
sequential referral on and those that I am not.
One of proposals that I am willing to waive a sequential
referral of is the BioMedical Countermeasures provision. I
would like to work with you to explore the possibility of
expanding these provisions to provide government-wide
applicability.
In addition, I have reviewed the Administration's proposal
to eliminate many unnecessary reports, and I support the
elimination of reports that no longer serve any legitimate
purpose. However, some of the reports provide invaluable
insight and transparency into complex acquisition processes.
The elimination of these reports would impede the Government
Reform Committee in carrying out its mandated oversight role. I
have attached a list of the reports that this committee has and
continues to find very valuable.

Committee on Government Reform will waive sequential referral of the
following provisons:

(1) Enhanced Authority for Defense Intelligence Components
and Special Operations Command to obtain needed personnel
services overseas (amends 10 U.S.C. Sec. 167 and Chapter 21,
partial exemption from 5 U.S.C. Sec. 3109).
(2) Department of Energy Project Review Groups not subject
to FACA by reason of inclusion of employees of department of
energy management and operating contractors (Amends 31 U.S.C.,
exemptions from 5 U.S.C. Sec. 552, Federal Advisory Committee
Act).
(3) Expediting process by which the Secretary of Interior
and Agriculture may utilize military aircraft to fight
wildfires and for other purposes (H.R. 575, the Wildfire
Response Act of 2003, exemption from 31 U.S.C. Sec. 1534).
(4) Authority to provide living quarters for certain
students in cooperative education programs of the National
Security Agency (Amends 10 U.S.C. Sec. 2195, exemption from 5
U.S.C. Sec. 5911).
(5) Authority to Convey Property at Military Installations
in Exchange for Military Construction Activities (Amends 10
U.S.C. Chapter 169).
(6) Research and Development of Defense Biomedical
Countermeasures, Procurement of Defense Biomedical
Countermeasures, and Authorization for Use of Medical Products
in Emergencies.
(7) Section 403: Reassignment of Retired Members of the
Armed Forces to Positions in the Department of Defense (Repeals
5 U.S.C. Sec. 3326).
(8) Amends reporting requirements under 10 U.S.C.
Sec. 2410m regarding retention of amounts collected from
contractor during the pendency of contract dispute.
(9) Land Conveyance, Naval Reserve Center, Orange, Texas
(Amends 10 U.S.C. Sec. Sec. 2693 and 2696, partial exemption
from the Federal Property Act and Administrative Services Act
of 1949).
(10) Projects to Accelerate Closure Activities at Defense
Nuclear Facilities (Amends Section 3143 of Public Law 104-201).
(11) Authority for Appointment of Certain Scientific,
Engineering and Technical Personnel by the Secretary of Energy.

Committee on Government Reform will not waive sequential referral of
the following provisions:

(1) Requirement for Restoration Advisory Boards and
Exemption From Federal Advisory Committee Act (Amends Title 10,
Section 2709, exemption from 5 U.S.C. Sec. 552).
(2) Protection of operational files of the National
Security Agency (Amends Title I of the National Security Act of
1947, partial exemption from 5 Sec. 552, the Freedom of
Information Act).
(3) Section 103: Priority Placement of Displaced Civilian
Employees (Amends 10 U.S.C. Chapter 81, exemptions from 5
U.S.C.).
(4) Employee Incentives for Workers at Closure Project
Facilities (Amends 5 U.S.C. Sec. Sec. 5754 and 8905).
I thank you for your attention to these matters. If you
have any questions please do not hesitate to contact me or
Ellen Brown, my Legislative Director and Senior Policy Counsel.
Sincerely,
Tom Davis, Chairman.
------

House of Representatives,
Committee on Government Reform,
Washington, DC, May 13, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing to follow-up on my letter
of May 8, 2003 regarding committee jurisdiction of provisions
included in H.R. 1588, the National Defense Authorization Act
for Fiscal Year 2004. In that letter, I indicated that I would
seek a sequential referral of H.R. 1588 to the Committee on
Government Reform if the following provisions were included in
the reported bill:
--Protection of operational files of the National Security
Agency (Amends Title I of the National Security Act of 1947,
partial exemption from 5 U.S.C. Sec. 552, the Freedom of
Information Act).
--Employee Incentives for Workers At Closure Project
Facilities (Amends 5 U.S.C. Sec. Sec. 5754 and 8905).
Due to the additional information your staff has provided
me, I am now satisfied that the inclusion of these provisions
in H.R. 1588 is appropriate, and I will not seek a sequential
referral of these provisions. In addition, I am now satisfied
that Section 3121, ``Transfer and Consolidation of Recurring
and General Provisions on Department of Energy National
Security Programs'' is not substantive and I will not seek a
sequential referral of H.R. 1588 due to the transfer of these
provisions to a new chapter of title 50 of the United States
Code. If you have any questions please do not hesitate to
contact me or Ellen B. Brown, my Legislative Director and
Senior Policy Counsel.
Sincerely,
Tom Davis, Chairman.
------

House of Representatives,
Committee on Government Reform,
Washington, DC, May 13, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing with regard to H.R. 1588,
the National Defense Authorization Act for Fiscal Year 2004.
Last week, the Committee on Government Reform ordered reported
H.R. 1836, Civil Service and National Security Personnel
Improvement Act, and H.R. 1837, the Services Acquisition Reform
Act of 2003. I have worked with you to include the provisions
of H.R. 1836 and H.R. 1837 in this year's National Defense
Authorization Act.
I appreciate your willingness to work with me on these
provisions that are within the jurisdiction of the Committee on
Government Reform. I will not seek a sequential referral of
H.R. 1588 based on the inclusion of any provision from H.R.
1836 or H.R. 1837, as ordered reported. Also, I will not seek a
sequential referral of H.R. 1588 due to technical and
clarifying changes to section 102 of H.R. 1836 relating to the
new subsection 5 U.S.C. Sec. 9902(j). Should there be any
changes beyond these reported bills and other agreed upon
provisions, I will request that H.R. 1588 is referred
sequentially to the Committee on Government Reform for its
consideration.
If I can be of any further assistance, please do not
hesitate to contact me or Ellen B. Brown, my Legislative
Director and Senior Policy Counsel.
Sincerely,
Tom Davis, Chairman.
------

House of Representatives,
Committee on Veterans' Affairs,
Washington, DC, May 2, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I wish to inform the Committee on Armed
Services that the Committee on Veterans' Affairs hereby waives
any jurisdiction it may have over the provisions of section
1021 of Title X of the National Defense Authorization Bill for
Fiscal
Year 2004 regarding the repeal of report requirements for
Joint Telemedicine and Telepharmacy Demonstration Projects and
for Educational Assistance for Members of the Select Reserve,
has no objection to them and does not desire their referral.
Copies of these provisions are enclosed.
Sincerely,
Christopher H. Smith, Chairman.
------

House of Representatives,
Committee on Veterans' Affairs,
Washington, DC, May 12, 2002.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I wish to inform the Committee on Armed
Services that the Committee on Veterans' Affairs hereby waives
referral of a measure which includes language identical to that
contained in H.R. 1911, a bill to amend title 38, United States
Code, to enhance cooperation and the sharing of resources
between the Department of Veterans Affairs and the Department
of Defense. Our Committee plans to report H.R. 1911 with a
favorable recommendation, and supports its inclusion in the
Fiscal Year 2004 Defense Authorization bill which the Committee
on Armed Services plans to report.
Sincerely,
Christopher H. Smith, Chairman.
------

House of Representatives,
Committee on Resources,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Congratulations on your successful 21-
hour markup of H.R. 1588, the National Defense Authorization
Act for Fiscal Year 2004. You should be commended for your
leadership in marshaling this important legislation through
your committee.
I have reviewed the following provisions that are within
the jurisdiction of the Committee on Resources:
Section 317, Military Readiness and Conservation of
Protected Species.
Section 318, Military Readiness and Marine Mammal
Protection.
Section 319, Limitation on Department of Defense
Responsibility for Civilian Water Consumption Impacts Related
to Fort Huachuca, Arizona.
Section 601, Increase in Basic Pay for Fiscal Year 2004 (as
it relates to the National Oceanic and Atmospheric
Administration Corps).
Because of the continued cooperation and consideration you
have afforded me and my staff in developing these provisions, I
will not seek a sequential referral of H.R. 1588 based on their
inclusion in the bill. Of course, this waiver does not
prejudice any future jurisdictional claims over these
provisions or similar language. I also reserve the right to
seek to have conferees named from the Committee on Resources on
these provisions, should a conference on H.R. 1588 or a similar
measure become necessary.
Once again, it has been a pleasure to work with you, Rusty
Johnston and Virginia Johnson of your staff. I look forward to
seeing H.R. 1588 enacted soon.
Sincerely,
Richard W. Pombo, Chairman.
------

House of Representatives,
Committee on Science,
Washington, DC, May 15, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I understand that the Armed Services
Committee has requested that the Committee on Science waive its
right to a referral on several sections of H.R. 1588, the
National Defense Authorization Act for Fiscal Year 2004. It is
also my understanding that the Parliamentarian's office has
confirmed that the Science Committee has jurisdiction over
several provisions in H.R. 1588.
To expedite the consideration of this bill by the House,
the Committee is willing to waive its right to a referral,
provided that the Science Committee's right to participate as
conferees on those provisions within its jurisdiction is also
protected. I would also appreciate if this exchange of letters
could be included in the record of debate on H.R. 1588 during
floor consideration.
Thank you for your consideration in this matter.
Sincerely,
Sherwood Boehlert, Chairman.
------

House of Representatives,
Committee on Small Business,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Chairman Hunter: On May 14, 2003, the Committee on
Armed Services ordered reported H.R. 1588, the National Defense
Authorization Act for Fiscal Year 2004. The provisions of
Section 804 (``Limitation Period on Task and Delivery Order
Contracts''), Section 806 (``Evaluation of the Prompt Payment
Provisions''), and Section 1428 (``Improvements In Contracting
For Architectural and Engineering Services'') refer to small
businesses or the Small Business Act and, therefore, fall
directly within the jurisdiction of the Committee on Small
Business pursuant to the Committee's jurisdiction under Rule X
of the Rules of the House of Representatives. Section 812
(``Identification of Critical Items: Military Systems Breakout
List'') is closely allied to the ``Breakout Program'' contained
in the Small Business Act (15 U.S.C section 644). Also, since
small businesses comprise the vast majority of our defense
industrial base, Section 811 (``Assessment of United States
Defense Industrial Base Capabilities'') of H.R. 1588 is of
great interest to the Committee on Small Business as is Section
1452 (``Authority to Make Inflation Adjustments to Simplified
Acquisition Threshold'').
I appreciate your willingness to consult and work with the
Committee on Small Business regarding these provisions and
other provisions of H.R. 1588 that impact small businesses,
this nation's defense industrial base, and the economy. Because
of the need to move this legislation expeditiously, I will
waive consideration of the bill by the Committee on Small
Business. By agreeing to waive its consideration of the bill,
the Committee on Small Business does not waive its jurisdiction
over H.R. 1588. In addition, the Committee on Small Business
reserves its authority to seek conferees on any provisions of
the bill that are within the Committee on Small Business's
jurisdiction during any House-Senate conference that may be
convened on this legislation. I ask your commitment to support
any request by the Committee on Small Business for conferees on
H.R. 1588 or related legislation.
I request that you include this letter and your response as
part of your committee's report on the bill and the
Congressional Record during consideration of the legislation on
the House floor. Thank you for your kind attention to these
matters.
Sincerely,
Donald A. Manzullo, Chairman.
------

House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC, May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: I am writing to you concerning the
jurisdictional interest of the Transportation and
Infrastructure Committee in matters being considered in H.R.
1588, the National Defense Authorization Act for Fiscal Year
2004.
Our Committee recognizes the importance of H.R. 1588 and
the need for the legislation to move expeditiously. Therefore,
while we have a valid claim to jurisdiction over a number of
provisions of the bill, I do not intend to request a sequential
referral. This, of course, is conditional on our mutual
understanding that nothing in this legislation or my decision
to forego a sequential referral waives, reduces or otherwise
affects the jurisdiction of the Transportation and
Infrastructure Committee, that every effort will be made to
include any agreements worked out by staff of our two
Committees in amendments as the bill is taken to the House
Floor, and that a copy of this letter and of your response
acknowledging our jurisdictional interest will be included in
the Committee Report and as part of the Congressional Record
during consideration of this bill by the House.
The Committee on Transportation and Infrastructure also
asks that you support our request to be conferees on the
provisions over which we have jurisdiction during any House-
Senate conference.
Thank you for your cooperation in this matter.
Sincerely,
Don Young, Chairman.
------

House of Representatives,
Committee on Armed Services,
Washington, DC, May 16, 2003.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter of May 16,
2003 regarding H.R. 1588, the National Defense Authorization
Act for Fiscal Year 2004.
I agree that the Committee on Transportation and
Infrastructure has valid jurisdictional claims to certain
provisions in this important legislation, and I am most
appreciative of your decision not to request such a referral in
the interest of expediting consideration of the bill. I agree
that by foregoing a sequential referral, the Committee on
Transportation and Infrastructure is not waiving its
jurisdiction. Further, as you requested, this exchange of
letters will be included in the Committee report on the bill.
With best wishes.
Sincerely,
Duncan Hunter, Chairman.

FISCAL DATA

Pursuant to clause 3(d) rule XIII of the Rules of the House
of Representatives, the committee attempted to ascertain annual
outlays resulting from the bill during fiscal year 2003 and the
following four years. The results of such efforts are reflected
in the cost estimate prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974, which is included in this
report pursuant to clause 3(c)(3).

CONGRESSIONAL BUDGET OFFICE ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the House
of Representatives, the cost estimate prepared by the
Congressional Budget Office and submitted pursuant to section
402 of the Congressional Budget Act of 1974 is as follows:

May 16, 2003.
Hon. Duncan Hunter,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1588, the National
Defense Authorization Act for Fiscal Year 2004.
The CBO staff contact is Kent Christensen. If you wish
further details on this estimate, we will be pleased to provide
them.
Sincerely,
Douglas Holtz-Eakin,
Director.

Congressional Budget Office Cost Estimate

Summary: H.R. 1588 would authorize appropriations totaling
$398 billion for fiscal year 2004 for the military functions of
the Department of Defense (DoD) and the Department of Energy
(DOE). It also would authorize an additional $0.7 billion over
the 2005-2008 period for the Maritime Administration. In
addition, the bill would prescribe personnel strengths for each
active-duty and selected reserve component of the U.S. armed
forces. CBO estimates that appropriation of the authorized
amounts would result in additional outlays of $394.1 billion
over the 2004-2008 period.
The bill also contains provisions that would both increase
and decrease costs of discretionary defense programs over the
2005-2008 period. CBO estimates that those provisions combined
would reduce the requirements for discretionary spending by
about $850 million over those four years, assuming that net
appropriations are reduced by the estimated amounts.
The bill contains provisions that would increase direct
spending, primarily from increasing the amount that DoD can
spend to finance special authorities for the construction and
renovation of military family housing. We estimate that the
increase in direct spending resulting from provisions of H.R.
1588 would total $420 million over the 2004-2008 period and
$466 million over the 2004-2013 period. Those totals include
estimated net receipts from asset sales of $20million over the
2004-2005 period.
H.R. 1588 contains an intergovernmental mandate as defined
in the Unfunded Mandates Reform Act (UMRA). However, CBO
estimates that any costs to state, local, or tribal governments
from the mandate would be insignificant and would not,
therefore, exceed the threshold established in UMRA for such
mandates ($59 million in 2003, adjusted for inflation). The
bill would impose no private-sector mandates as defined in
UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 1588 is shown in Table 1. Most of the
costs of this legislation fall within budget function 050
(national defense).

TABLE 1.--BUDGETARY IMPACT OF H.R. 1588, THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2004
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for Defense Programs:
Budget Authority \1\............................ 453,197 0 0 0 0 0
Estimated Outlays............................... 419,249 150,324 45,599 13,941 5,593 2,702
Proposed Changes:
Estimated Authorization Levels.................. 0 398,081 5 411 161 166
Estimated Outlays............................... 0 267,452 89,160 26,747 7,743 3,031
Spending Under H.R. 1588 for Defense Programs:
Estimated Authorization Levels ²................ 453,197 398,081 5 411 161 166
Estimated Outlays............................... 419,249 417,776 134,759 40,688 13,336 5,733

CHANGES IN DIRECT SPENDING (EXCLUDING ASSET SALES)

Estimated Budget Authority.......................... 0 171 296 6 7 2
Estimated Outlays................................... 0 23 99 169 104 45
ASSET SALES \2\
Estimated Budget Authority.......................... 0 -15 -5 0 0 0
Estimated Outlays................................... 0 -15 -5 0 0 0
----------------------------------------------------------------------------------------------------------------
For 2004-2008, the figures under ``Proposed Changes'' include amounts specifically authorized by the bill plus
an inferred authorization in 2004 for the Coast Guard Reserve based on authorized endstrength levels. The bill
also implicitly authorizes programs in 2005-2008; those authorizations are not included above (but are shown
in Table 3) because funding for those programs would be covered by specific authorizations in future years.
The 2003 level is the amount appropriated for programs authorized by the bill (including $62,808 million in
appropriations in Public Law 108-11, the Emergency Wartime Supplemental Appropriations Act, 2003).
Asset sale receipts are a credit against direct spending.

Basis of Estimate

Spending Subject to Appropriation. The bill would
specifically authorize appropriations totaling $398.0 billion
in 2004 (see Table 2). Most of those costs would fall within
budget function 050 (national defense). Other costs--some
occurring beyond 2004--would fall within other budget
functions; they include: $65 million in 2004 for the Armed
Forces Retirement Home (function 600--income security); $17
million in 2004 for the Naval Petroleum Reserves (function
270--energy); $5 million annually from 2004 to 2008 for the
Sikes Act (both function 300--natural resources and
environment, and function 050--national defense); and a host of
authorizations for the Maritime Administration (both function
400--transportation, and function 050--national defense).
Authorizations for the Maritime Administration are discussed
later in the estimate, just before the section on direct
spending. The estimate assumes that the amounts authorized for
2004 will be appropriated before the start of fiscal year 2004.
Outlays are estimated based on historical spending patterns.
For 2003, the bill authorizes the appropriation of the
$62.8 billion in supplemental funding for DoD and DOE as
provided in Public Law 108-11, the Emergency Wartime
Supplemental Appropriations Act, 2003, plus other supplemental
appropriations that may be necessary before the end of the
year. Because the wartime supplemental funding has been enacted
into law, Table 1 includes those appropriations in the figures
for ``Spending Under Current Law.'' Since DoD has recently
stated that under current circumstances it does not anticipate
needing further supplemental funding for 2003, this estimate
assumes no such appropriations will be enacted for the
remainder of this fiscal year.
The bill is silent regarding additional appropriations for
2004 that DoD indicates will be required to fund ongoing
operations relating to Iraq and the global war on terrorism.
CBO expects that those amounts, which would be additions to
appropriations authorized by the bill, will likely be provided
in supplemental appropriations enacted during 2004.

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
Category -------------------------------------------------
2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
Military Personnel:
Authorization Level....................................... 98,939 0 0 0 0
Estimated Outlays......................................... 94,261 3,958 198 99 0
Operation and Maintenance:
Authorization Level....................................... 130,324 0 0 0 0
Estimated Outlays......................................... 99,603 24,895 3,779 1,058 331
Procurement:
Authorization Level....................................... 76,490 0 0 0 0
Estimated Outlays......................................... 22,726 28,966 15,209 4,900 1,899
Research, Development, Test, and Evaluation:
Authorization Level....................................... 62,686 0 0 0 0
Estimated Outlays......................................... 33,755 22,909 4,711 759 197
Military Construction and Family Housing:
Authorization Level....................................... 9,790 0 0 0 0
Estimated Outlays......................................... 2,615 3,545 2,000 823 407
Atomic Energy Defense Activities:
Authorization Level....................................... 16,699 0 0 0 0
Estimated Outlays......................................... 11,493 4,341 863 2 0
Other Accounts:
Authorization Level....................................... 3,033 5 411 161 166
Estimated Outlays......................................... 2,016 722 362 290 260
General Transfer Authority:
Authorization Level....................................... 0 0 0 0 0
Estimated Outlays......................................... 875 -188 -375 -188 -63
-------------------------------------------------
Total:
Authorization Levels \1\.............................. 397,961 5 411 161 166
Estimated Outlays..................................... 267,344 89,148 26,747 7,743 3,031
----------------------------------------------------------------------------------------------------------------
After adding the $120 million estimated authorization for the Coast Guard Reserve, the bill would authorize
appropriations of slightly less than $398.1 billion for 2004.
These amounts comprise nearly all of the proposed changes for authorizations of appropriations for 2004 shown in
Table 1; they do not include the estimated authorization of $120 million for the Coast Guard Reserve, which is
shown in Table 3. For 2005-2008 they include various authorizations for the Maritime Administration discussed
later in the estimate and shown in Table 4, plus $5 million in annual authorizations for the Sikes Act.

The bill also contains provisions that would both increase
and decrease various costs, mostly for personnel, that would be
covered by the fiscal year 2004 authorization and by
authorizations in future years. Table 3 contains estimates of
those amounts. In addition to the costs covered by the
authorizations in the bill for 2004, CBO estimates that these
combined provisions would reduce estimated costs by $850
million over the 2005-2008 period. These amounts do not include
the costs of sections 541, 617, 618, 908, 1031, 1032, 1038, or
1111 because CBO cannot estimate the costs at this time. Those
sections of the bill pertain primarily to military and civilian
pay and benefits. The provisions identified in Table 3 are
described below, including information about CBO's estimates of
costs for those provisions.
Multiyear procurement
In most cases, purchases of weapon systems are authorized
annually, and as a result, DoD negotiates a separate contract
for each annual purchase. In a small number of cases, the law
permits multiyear procurement; that is, it allows DoD to enter
into a contract to buy specified annual quantities of a system
for up to five years. In those cases, DoD can negotiate lower
prices because its commitment to purchase the weapons gives the
contractor an incentive to find more economical ways to
manufacture the weapon, including cost-saving investments.
Annual funding is provided for these multiyear contracts, but
potential termination costs are covered by an initial
appropriation.
Section 121 would authorize the Secretary of the Navy to
enter into a multiyear contract to purchase 234 F/A-18 aircraft
beginning in 2005 in the F/A-18E, F/A-18F, and EA-18G
configurations. Based on information provided by the Navy, CBO
assumes that the Navy would procure 168 aircraft over the 2005-
2008 period. CBO estimates that savings from buying these
aircraft under a multiyear contract would total $818 million,
or about $204 million a year, over the 2005-2008 period.
Funding requirements to purchase these aircraft would total
just under $12.9 billion over the 2005-2008 period (instead of
the $13.7 billion that would be needed under annual contracts).
CBO also estimates that additional savings of $235 million
would accrue in 2009 if the Navy completes its planned purchase
of 42 more aircraft under this multiyear procurement authority.
Section 122 would authorize the Secretary of the Navy to
enter into a multiyear contract to purchase tactical Tomahawk
cruise missiles starting in fiscal year 2004 and would direct
the Secretary to purchase no more than 900 missiles a year.
Based on information provided by the Navy, CBO assumes that the
Navy would buy 1,784 missiles over the 2004-2008 period. CBO
estimates that savings from buying these missiles under a
multiyear contract would total about $135 million over the
2004-2008 period, or about $75,000 a missile. Funding
requirements to purchase these missiles would total just over
$1.6 billion over the 2004-2008 period (instead of the almost
$1.8 billion that would be needed under annual contracts).
Multiyear procurement of tactical Tomahawk missiles would raise
costs in 2004 because the Navy would need to provide for
advance purchases of components for missiles it would purchase
later in the 2004-2008 period.

TABLE 3.--ESTIMATED AUTHORIZATIONS OF APPROPRIATIONS FOR SELECTED PROVISIONS IN H.R. 1588
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars
Category ------------------------------------------------------
2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
MULTIYEAR PROCUREMENT
F/A-18E/F Aircraft....................................... 0 -166 -205 -211 -236
Tactical Tomahawk Missile................................ 3 -40 -43 -32 -23
Virginia Class Submarines................................ 275 210 -64 -613 -613
E-2C and TE-2C Aircraft and Engines...................... -62 2 0 2 0
FORCE STRUCTURE
DoD Military Endstrengths................................ 248 510 527 544 562
Coast Guard Reserve Endstrength.......................... 120 0 0 0 0
Required Force Structure................................. 20 268 269 340 281
COMPENSATION AND BENEFITS (DoD)
Military Pay Raises...................................... 190 269 279 288 298
Coast Guard Pay Raises................................... 6 8 9 9 9
Expiring Bonuses and Allowances.......................... 624 550 327 217 151
Special Pays for Service in Iraq and Afghanistan......... 263 112 81 81 57
Lodging Expenses for Reservists.......................... 132 13 10 7 5
Undermanned Occupation Bonus............................. 8 2 0 0 0
Other Provisions......................................... 5 6 6 6 6
CIVILIAN PROGRAMS
Reduce Acquisition Workforce............................. -70 -479 -911 -1,367 -2,110
Modification of Overtime Pay Cap......................... 107 147 151 156 161
Senior Executive Service Pay............................. 23 31 31 31 31
Administration of Flexible Spending Accounts............. 22 28 33 39 44
Asbestos Differential Pay................................ -290 -290 -290 -290 -290
DEFENSE HEALTH PROGRAM
Uniformed Services Medicare Eligible Retiree Healthcare 0 14 0 0 0
Fund....................................................
OTHER PROVISIONS
Base Realignment and Closure Property.................... 68 53 27 27 27
Expanded Commissary Benefits for Reservists.............. 4 4 4 4 4
Assistance for Victims of Domestic Abuse................. 3 3 3 3 3
Chaplain-Led Programs.................................... 3 5 6 6 6
Construct Wetlands Crossings at Camp Shelby.............. 5 0 0 0 0
Services Acquisition Reform.............................. 6 6 6 6 6
BILL TOTAL
Estimated Authorization Level \1\........................ 1,713 1,266 256 -747 -1,621
----------------------------------------------------------------------------------------------------------------
For every item in this table except the authorization for the Coast Guard Reserve, the 2004 levels are included
in Table 2 as amounts specifically authorized to be appropriated in the bill. Amounts shown in this table for
2005 through 2008 are not included in Table 1.
These amounts do not include the costs of sections 541, 617, 618, 908, 1031-1033, or 1111 because CBO cannot
estimate such costs at this time.

Section 123 would authorize the Secretary of the Navy to
enter into a multiyear contract for procurement of Virginia
class submarines starting in fiscal year 2004. Based on
information provided by the Navy, CBO assumes that the Navy
would buy seven submarines over the 2004-2008 period. CBO
estimates that savings from buying these submarines under a
multiyear contract would total $805 million, or about $115
million a submarine, over the 2004-2008 period. CBO estimates
that funding requirements to purchase these submarines, as well
as funding the advance purchase of components for future boats,
would total about $15.4 billion over the 2004-2008 period
(instead of the $16.2 billion that would be needed under annual
contracts). Multiyear procurement of Virginia class submarines
would raise costs in 2004 and 2005 because the Navy would need
to provide increased funding in each of those years for advance
purchases of components for the submarines that it would
purchase later in the 2004-2008 period.
Section 124 would authorize the Secretary of the Navy to
enter into a four-year multiyearcontract to purchase four E-2C
aircraft, four TE-2C aircraft, and 16 engines for these aircraft,
beginning in 2004. CBO estimates that savings from buying these
aircraft and engines under a multiyear contract would total almost $60
million, or about $15 million a year, over the 2004-2007 period.
Funding requirements would total just over $950 million over the 2004-
2007 period (instead of the roughly $1 billion that would be needed
under annual contracts).
Military endstrength
The bill would authorize active and reserve endstrength
levels for 2004 and would increase the minimum endstrength
authorization in permanent law. The authorized endstrengths for
active- duty personnel and personnel in the selected reserve
would total about 1,400,000 and 863,000, respectively. Of those
selected reservists, about 70,000 would serve on active duty in
support of the reserves. The bill would specifically authorize
appropriations of $98.9 billion for the discretionary costs of
military pay and allowances in 2004. The authorized endstrength
represents a net increase of 3,385 servicemembers that would
boost costs for salaries and other expenses by $248 million in
the first year and about $535 million annually in subsequent
years, compared to the authorized strengths for 2003.
The bill also would authorize an endstrength of 10,000
servicemembers in 2004 for the Coast Guard Reserve. This
authorization would cost about $120 million and would fall
under budget function 400 (transportation).
Required force structure
Section 911 would require that the Army, Navy, and Air
Force maintain a certain force structure. It would specifically
direct the Navy to have not less than 305 vessels in active
service. The current Navy fleet consists of about 300 ships,
but the Navy plans to reduce that amount to 292 ships in 2004
after retiring several surface combatants including Spruance-
class destroyers and Ticonderoga-class cruisers. This provision
would require the Navy to keep those ships in the fleet for
several more years until new ships that are under construction
arrive to replace them. Based on information from the Navy, CBO
estimates that implementing this provision would require the
Navy to keep nine destroyers, two cruisers, and two landing
ship docks in the fleet over much of the 2004-2008 period
instead of retiring them. CBO estimates that the operations and
maintenance costs to keep these ships in the fleet would total
about $1.1 billion over the 2005-2008 period. There would be no
costs in 2004 because CBO estimates the operating costs would
be offset by the savings from forgoing the decommissioning of
these ships.
Section 911 also would require the Air Force to maintain 46
fighter squadrons in its active force. Currently, the Air Force
has 45 active squadrons. It plans to add one squadron of F/A-22
aircraft in 2004 and retire one squadron of A-10 aircraft,
sustaining a force of 45 squadrons. CBO assumes that the Air
Force would retain the A-10 squadron over the 2004-2008 period
to meet the bill's requirement to maintain 46 active squadrons.
CBO estimates that the cost to keep the A-10 squadron in active
service would be about $100 million over the 2004-2008 period.
Compensation and Benefits. H.R. 1588 contains several
provisions that would affect military compensation and benefits
for uniformed personnel.
Military Pay Raises. Section 601 would raise basic pay for
individuals in the Army, Navy, Marine Corps, and Air Force with
specific ranks and years of service by 2 percent across-the-
board, and would authorize additional targeted pay raises for
2004, ranging from 1.2 percent to 4.25 percent for 2004. CBO
estimates that implementing this provision would cost about
$2.1 billion in 2004. Because the pay raises would be above
those projected under current law, CBO estimates that the
incremental costs associated with the larger pay raise would be
about $190 million in 2004 and total $1.3 billion over the
2004-2008 period.
This section also would raise basic pay for members of the
Coast Guard by the same across-the-board and targeted pay rates
for a total cost of $60 million in 2004. Because these pay
raises also would be above those projected under current law,
CBO estimates that the incremental costs associated with the
larger pay raises would be about $6 million in 2004 and $41
million over the 2004-2008 period.
Expiring Bonuses and Allowances. Several sections of H.R.
1588 would extend DoD's authority to pay certain bonuses and
allowances to current personnel. Under current law, most of
these authorities are scheduled to expire in December 2003, or
three months into fiscal year 2004. The bill would extend these
authorities through December 2004. Based on data provided by
DoD, CBO estimates that the costs of these extensions would be
as follows:
Payment of reenlistment bonuses for active-
duty personnel would cost $305 million in 2004 and $171
million in 2005; enlistment bonuses for active-duty
personnel would cost $113 million in 2004 and $163
million in 2005;
Various bonuses for the Selected and Ready
Reserve would cost $78 million in 2004 and $89 million
in 2005;
Special payments for aviators and nuclear-
qualified personnel would cost $73 million in 2004 and
$78 million in 2005;
Retention bonuses for officers and enlisted
members with critical skills would cost $14 million in
2004 and $9 million in 2005; and
Authorities to make special payments and
give bonuses to certain health care professionals would
cost $41 million in 2004 and $40 million in 2005.
Most of these changes would result in additional, smaller
costs in subsequent years because payments are made in
installments.
Special Payments for Service in Iraq and Afghanistan.
Section 622 would increase certain special payments to
servicemembers who serve in a combat zone designated for
Operation Iraqi Freedom or Operation Enduring Freedom effective
October 1, 2003. (Public Law 108-11 raised these payments for
fiscal year 2003 but that authority expires at the end of the
fiscal year.) Under current law, the rates for imminent danger
pay and the family separation allowance are set at $150 per
month and $100 per month, respectively, for fiscal year 2004
and subsequent years. Section 622 would increase those
respective rates to $225 per month and $250 per month for those
servicemembers serving in the designated combat zones until the
President calls an end to the operations. Based on information
from DoD about current troop levels in those two areas and CBO
assumptions about future troop levels, CBO estimates that
implementing this section would cost $263 million in 2004 and
$594 million over the 2004-2008 period. Should the President
change the name of these operations to reflect a change in
mission, CBO expects that the costs would be less than the
estimated amounts because the provision would only apply to the
operations so named.
Lodging Expenses for Reservists. Under current law, a
member of the Reserve Components who is called to active duty
is eligible for lodging per diem if he or she is assigned to
duty away from home. The member is not eligible for lodging per
diem while on leave, however. Section 633 would allow DoD to
reimburse a reservist called to active duty for lodging
expenses incurred while on leave. This section also would apply
retroactively to reservists who served on active duty away from
home between September 11, 2001, and the date of enactment of
the bill.
Since September 11, 2001, over 300,000 reservists have been
called to active duty according to DoD. CBO assumes that 90,000
reservists will be on active duty in 2004 and that the number
will decline to about 15,000 reservists by 2008, assuming no
hostilities occur elsewhere in the world. Based on data from
DoD, CBO assumes that about 50 percent of these reservists on
active duty are away from home and receive an average lodging
per diem of $55 a day. With an average tour length of one year
and one leave day a month, CBO estimates that implementing this
section would cost $132 million in 2004 and $167 million over
the 2004-2008 period. Of these amounts, about $100 million
would be paid to qualified reservists who were called up before
this bill is enacted.
Undermanned Occupation Bonus. Section 621 would give DoD
the authority to offer an incentive bonus of up to $4,000 to
encourage certain enlisted members to convert from their
current occupational specialty to an occupational specialty
where there is a critical shortage of personnel. The new
authority would expire on December 31, 2004. According to DoD,
the Navy is the only service with the immediate intention to
offer this bonus. The Navy plans to scale the amount of the
bonus to the degree that an occupational speciality is
critically short of personnel. In other words, the Navy would
offer a smaller bonus to servicemembers who convert to
occupational specialties where there is less of a critical
shortage in personnel. Given the number of occupation
conversions experienced in previous years, the Navy estimates
that about 2,500 enlisted servicemembers would receive this
bonus in 2004. Assuming the average bonus is $3,000, CBO
estimates that implementing this section would cost $8 million
in 2004 and $2 million in 2005.
Other Provisions. Section 620 would authorize DoD to grant
special pay of $150 a month to servicemembers who are assigned
to duty as members of Weapons of Mass Destruction Civil Support
Teams. Section 615 would give reservists the same full monthly
hazardous duty pay for performing demolition duty or parachute
jumping that active-duty servicemembers receive. Section 534
would give DoD the authority to pay the interest on student
loans for reservists with critical skills. Section 535 would
allow students in the second year of a four-year Senior Reserve
Officer Training Course to receive a monthly stipend. CBO
estimates the cost of these increased authorities would total
$5 million in 2004 and $29 million over the 2004-2008 period.
Section 541 would change the payment amount that
servicemembers who are deployed away from their home base
receive if they are gone more than 400 days out of a two-year
period and add two additional categories of eligibility for
this payment--deployment over 190 consecutive days and call up
to active duty for the second time for the same contingency
operation. Section 617 would expand to officers an incentive
program which encourages enlisted servicemembers to extend the
length of their overseas assignments. Section 618 would allow
DoD to offer this bonus of up to $60,000 to newly appointed
officers with critical skills. CBO cannot estimate the
budgetary impact of implementing these provisions, however,
since DoD is unable to provide information about how the
department would implement these provisions.

National Security Personnel System

Section 1111 would create a new human resources management
system for DoD; would allow DoD to give certain employees
outside the United States the same pay and benefits as the
Foreign Service or Central Intelligence Agency; would require
DoD, to the maximum extent practicable, adjust rates of
compensation for civilian employees at the same rate as
military personnel; and would allow DoD to provide additional
pay to attract highly qualified experts. All of these
authorities could potentially affect federal spending.
CBO cannot estimate the budgetary impact of implementing
these provisions since DoD has not indicated how it would
supplant--or improve upon--the personnel system currently
governing the department; how many employees would benefit from
receiving the same pay and benefits as the Foreign Service or
Central Intelligence Agency as the number is classified;
whether or how it might institute pay parity between its
civilian employees and military members; or how many people it
might hire under the authority to provide additional pay to
attract highly qualified experts.
Section 908 would require DoD to conduct a pilot program
using an automated workforce management system to manage its
civilian personnel. CBO cannot estimate the budgetary impact of
implementing this provision since DoD has not indicated what
automated system it would use nor indicated what it might cost
to acquire this system.

Defense acquisition workforce reductions

Section 910 would direct DoD to reduce the number of
defense acquisition and support personnel within the department
by 5 percent each fiscal year over the 2004-2007 period. These
reductions would be measured against a baseline workforce
defined as the number of defense acquisition and support
personnel employed by the department as of October 1, 2003.
Based on data from DoD, CBO assumes that the baseline workforce
would total about 131,000 personnel on that date and that about
20 percent of that number would be military personnel who would
be reassigned to other jobs within the department over the
2004-2008 period. Thus, under the provision, CBO estimates that
about 5,300 civilians would need to be cut from the defense
acquisition workforce each year. Assuming that these reductions
would occur evenly throughout the year and that the average
cost of a civilian employee within DoD would be about $77,000
in 2004, CBO estimates that the savings in salaries and
benefits that would accrue from this reduction would total
about $200 million in 2004 and $5.5 billion over the 2004-2008
period. If DoD chose to replace these workers with contract
personnel, these savings would not be realized.
Those potential savings would be offset somewhat by the
cost of severance packages that DoD would offer. Based on
historical attrition data provided by DoD for its civilian
workforce, CBO assumes that about 1 percent of this population
would leave the acquisition workforce each year for reasons
unrelated to the mandated reductions and would not be replaced.
CBO assumes that the remaining 5,200 workers that must leave
DoD each year would be offered severance packages of about
$25,000 each, for a total cost of about $130 million each year
or $520 million over the 2004-2007 period. Thus, CBO estimates
that the net savings under this provisions would total about
$70 million in 2004 and almost $5 billion over the 2004-2008
period.

Modification of the overtime pay cap

Under current law, overtime pay for work in excess of 40
hours per week for federal managers, supervisors, and other
employees exempted under the Fair Labor Standards Act (FLSA) is
limited to a set rate of roughly $32 an hour (one and a half
times the normal rate for a general schedule (GS) grade 10 (GS-
10), step 1, employee). Employees who earn salaries above GS-
12, step 5, receive overtime pay at a rate that is, on an
hourly basis, less than their regular pay.
Section 1101 would raise the overtime pay rate to either
one and one-half times the hourly rate of a GS-10, step 1, or
the hourly rate of the basic pay of the employee, whichever is
greater. Although this change would not affect employees at GS-
12, step 5, and lower, those above this pay rate would earn
their hourly rate of pay for overtime work. Based on
information from the Office of Personnel Management (OPM) on
the number of FLSA-exempted employees at each grade and
information on overtime worked, CBO estimates that implementing
the proposal would cost approximately $100 million in 2004 and
$0.7 billion over the 2004-2008 period. About 680,000 federal
employees at GS-10 and above are exempt from the FLSA, which is
about 36.7 percent of the general schedule (and related)
workforce. For this estimate, CBO assumes that this employee
group worked 37 percent of all overtime performed by FLSA-
exempt employees. We also assume that those overtime hours are
distributed proportionately across GS-10 through GS-13
employees, with GS-14 and GS-15 employees working one-third of
the hours.
CBO estimated the cost of the proposal by calculating the
cost of those overtime hours at the set rate under current law
and then calculating the cost of that same amount of overtime
at the set rate or the employee's hourly rate, whichever is
greater.

Senior Executive Service (SES) performance provisions

Under current law, SES employees are paid at six different
pay levels. Base pay is capped at Level IV of the Executive
Schedule ($134,000) and the maximum pay with the locality-based
comparability adjustment is set at Level III of the Executive
Schedule ($142,500). SES employees receive the same annual
across-the-board pay raises and locality-based comparability
adjustments that GS employees receive.
Effective January 1, 2004, section 1107 would eliminate the
six SES pay levels and raise the cap on base pay to $142,500.
Locality adjustments to SES pay would be eliminated. The
proposal would affect roughly 7,900 employees.
The legislation specifies that no SES employee would
experience a reduction in the rate of basic pay in the first
year after this legislation is enacted, and CBO assumes that
this would continue to be true after the first year. Because
the salaries of many SES employees are at the current caps (or
are expected to reach such caps over the next few years),
raising the cap on base pay would allow those employees to get
pay raises. Assuming that executive level salaries (and thus
the caps) are raised by the full amount authorized under
current law by the Ethics Reform Act, CBO estimates that the
legislation would cost $147 million in authorizations over the
2004-2008 period.

Federal Flexible Benefits Plan administrative costs

Under current law, federal employees will be allowed to
enroll in a flexible spending account (FSA) program offered
through OPM beginning in May 2003. An FSA is an employee
benefit that allows employees to set aside money, on a pre-tax
basis, for health care and dependent care expenses. The
administrative costs to the program will be paid by
participating employees based on a formula to collect $48
annually for each health care account and 1.5 percent of the
total dependent care account.
Section 1108 would prevent any fees from being charged to
federal employees for the administrative costs to operate the
FSAs. Based on information from the federal judiciary's FSA
program and the operation of private FSAs, CBO estimates that
about 10 percent of federal employees will initially enroll in
the plan, and we expect participation to grow to about 20
percent of federal employees over the next five years. Under
the bill, administrative costs of operating the plans would be
subject to appropriation of the necessary amounts. Based on the
fees OPM plans to charge participants and expected employee
participation rates, we estimate that implementing this
provision of the bill would cost about $160 million over the
2004-2008 period.

Asbestos differential pay

Under section 1104, federal wage-grade employees would be
subject to the same standards as general schedule employees
when determining eligibility for environmental differential pay
(EDP), based on exposure to asbestos. Under current law,
general schedule employees are entitled to 8 percent hazard
differential pay if they are exposed to asbestos that exceeds
the permissible exposure limits established by the Occupational
Safety and Health Administration (OSHA). The current EDP
standard for wage-grade employees entitles them to the same 8
percent of pay, but does not set an objective measure for
determining the level of asbestos exposure necessary to qualify
for EDP. In several instances where wage-grade employees have
sought back pay for EDP, arbitrators found in favor of the
employees when asbestos levels were below those consistent with
OSHA standards. Based on information from DoD on prior and
pending arbitration rulings, CBO expects that implementing
section 1104 would reduce the amount of back pay federal
agencies would be required to pay for EDP based on asbestos
exposure. Assuming these cases would be handled
administratively, CBO estimates establishing OSHA standards for
asbestos EDP would save $290 million in 2004 and about $1.5
billion over the 2004-2008 period, assuming appropriations are
reduced by the estimated amounts.

Defense Health Program

Title VII contains a number of provisions that would affect
DoD health care and benefits. TRICARE For Life (TFL) is a
program that provides health care benefits to all retirees of
the uniformed services, their dependents, and survivors who are
eligible for Medicare and enroll in Medicare Part B. TFL
provides a generous prescription drug benefit and covers all
out-of-pocket costs for those benefits that are provided by
both Medicare and TRICARE.

Uniformed Services Medicare-Eligible Retiree Healthcare Fund

Under current law, this fund provides the amounts necessary
to pay for the TFL benefit. The fund is financed through
monthly payments from DoD, annual amortization payments by the
Treasury, and interest earned on the fund's current balances.
The amount that DoD must pay into the fund is determined by the
Secretary of Defense, who must use methods and assumptions
approved by an independent board of actuaries to calculate the
payment amount or rate. The payment rate is calculated using a
number of factors including the probability that servicemembers
currently on active duty will retire from military service.
Under current law, the Secretary of Defense is not allowed to
establish separate payment rates for each of the uniformed
services, even though the overall probability of retiring from
the Public Health Service (PHS) and the National Oceanic and
Atmospheric Administration (NOAA) is higher than the
probability of retiring from the Army, Navy, Air Force, or
Coast Guard.
Section 701 would allow DoD to calculate separate payment
rates for the different services if the Secretary determines
that doing so improves the quality of the actuarial estimate.
CBO estimates that implementing this provision would have no
effect on payments to the fund in 2004 but would likely
increase the payments PHS and NOAA make to the fund in 2005.
CBO estimates that implementing this provision would have
no effect on payments into the fund in 2004 because the payment
amounts have already been established and it appears unlikely
that the independent board of actuaries would approve any
change in assumptions and methods necessary to revise the
amounts for that year for the proposed change in law. Although
the payment amounts for 2005 may be determined before the
enactment of this bill--the board approved the assumptions and
methods on May 2, 2003, and the Secretary is expected to
determine the rates shortly--CBO believes that the board would
likely meet to approve the assumptions and methods necessary
for the Secretary of Defense to set new payment rates if they
were authorized. CBO expects that separate payment rates for
NOAA and PHS would be higher than the rate currently set for
fiscal year 2005 because the recommended rate does not
presently incorporate information about the higher retirement
probabilities for NOAA and PHS.
Using information from the respective organizations, CBO
estimates that there are about 6,000 uniformed officers in the
PHS and NOAA, with most in PHS. Based on data from DoD's Office
of the Actuary, CBO estimates that implementing separate
payment rates for PHS and NOAA would increase the payments
these organizations must make to the fund in 2005 by almost
$2,400 an officer or about $14 million, assuming appropriation
of the estimated amounts.
CBO estimates there would be no change in the level of
payments made by DoD or the Coast Guard because the current
method for calculating the payment relies solely on DoD data.
CBO does not estimate an impact from having separate
payment rates over the 2006-2008 period. The Secretary
currently uses only DoD retirement experience to calculate the
probability of retiring from the uniformed services, primarily
because the fund initially only covered DoD beneficiaries. As
data for the other uniformed services becomes available, CBO
expects that, absent this provision, DoD would consider that
new data when determining the single rate it would charge all
of uniformed services for 2006 and subsequent years.
Incorporating that data would likely raise the single rate
charged to all services somewhat. CBO expects that using
separate rates for each service as provided for in the bill
would increase costs to PHS and NOAA each year, but would lower
costs to DoD and the Coast Guard by approximately the same
amount. Thus, total payments into the trust fund would not
likely change much over the 2006-2008 period.

Medical and dental screening

Section 707 would allow DoD to provide medical and dental
screening to members of the selected reserve who are assigned
to units that have been alerted for mobilization. Under current
law, DoD cannot provide this screening until the reservist has
been mobilized. CBO does not expect that speeding up these
evaluations would increase the overall amount of medical and
dental screening DoD provides to reservists. Because this
provision would allow DoD to provide some medical and dental
screening earlier than it otherwise would, CBO estimates that
implementing the authority would likely affect the timing of
outlays but that the net effect would be insignificant.

Sources of supply

Several sections of Title VIII would require the Department
of Defense to procure certain raw materials, parts, and
components solely from sources within the United States. It
also would require companies that produce major defense systems
to use only U.S-manufactured machinery in the production of
those systems. By restricting the sources of supply and
imposing a new inventory management burden on defense
contractors, CBO expects that implementing these provisions
could increase the costs of supplies, parts, and overall
weapons systems, and could increase the requirement for future
appropriations. CBO has insufficient data to estimate the cost
impact but we think it might be large given the number and
complexity of weapon systems that DoD plans to develop and
purchase over the 2004-2008 period.

Base realignment and closure (BRAC) property

Section 2805 would authorize DoD to convey to any
nonfederal entity property at closed military installations or
at military installations identified for closure. In exchange
for that property, the recipient would be required to construct
military facilities or family housing at another military
installation or provide services associated with the
construction of these facilities. Section 2805 would stipulate
that projects received under the barter arrangement must be
ones already authorized by the Congress and must be equal to
the fair market value of the property conveyed. The provision
also would direct each of the military services to use this
authority to the maximum extent possible to convey at least 20
percent of the property that they plan to dispose of each year
to obtain up to $200 million worth of military facilities and
family housing projects each year.
Under current law, DoD has the authority to sell this
property and spend the offsetting collections, without further
appropriation, on environmental cleanup and caretaker expenses
at installations that are being closed under previous BRAC
authorities. CBO expects that, under section 2805, conveying
these properties in exchange for military construction or
family housing projects would eliminate a portion of the
collections that would normally be used to offset BRAC cleanup
expenses, thus increasing the requirement for discretionary
appropriations to pay for these expenses.
Over the last 15 years, the Department of Defense has
collected and spent about $30 million a year on average from
the disposal of BRAC property. According to budget documents,
the department plans to collect and spend $68 million in 2004
and $53 million in 2005 under these authorities. Assuming that
DoD exchanges BRAC property as stipulated under section 2805,
CBO estimates that implementing this provision would increase
requirements for appropriated funds for environmental cleanup
and caretaker expenses at closed installations by $68 million
in 2004 and about $200 million over the 2004-2008 period.

Expanded commissary benefits for reservists

Section 651 would eliminate restrictions on commissary use
by members of the ready reserve, retirees of the ready reserve
who are less than 60 years of age, and their dependents.
Currently, members of the ready reserve who meet their yearly
training requirements and retirees of the ready reserve who are
under the age of 60 are allowed to shop at a commissary 24
times a year. Members of the ready reserve who do not meet
their yearly training requirements do not have commissary
privileges.
Section 651 would eliminate these restrictions so that
reservists in good standing and retirees of the ready reserve
who are less than 60 years of age would have the same
commissary privileges as active-duty servicemembers. Based on
information from the Defense Commissary Agency, CBO estimates
that reservists and reserve retirees who are currently allowed
24 commissary visits a year would not significantly alter their
commissary usage if this restriction were lifted. Thus, CBO
estimates would have no significant impact on the cost of
operating defense commissaries if this restriction were lifted.
This section also would allow members in the ready reserve
who do not meet the yearly training requirements to have
commissary privileges, but their access would be subject to the
policies established by the local base commander (similar to
current policies in effect for the use of morale, welfare, and
recreation facilities). CBO estimates about 87,000 reservists
in the ready reserves who currently have no commissary
privileges would be affected by this provision. Because most
reservists do not live close to commissaries and would not use
the benefit, CBO estimates the additional cost of operating the
commissary system associated with these additional reservists
would only be about $40 per person a year, or about $4 million
each year over the 2004-2008 period.

Biomedical countermeasures

Three sections of the bill would address DoD's ability to
protect the Armed Forces from biological, chemical, nuclear,
and radiological threats by making it easier to use current
authorities to research, develop, and procure biological
countermeasures for these threats. Although these provisions
could speed up or increase subject to appropriation spending,
CBO does not have enough information to estimate the net effect
on spending over the 2004-2008 period.
Section 1031 would increase the simplified acquisition
threshold for procurement that supports biomedical research and
development from $100,000 to $25 million. The section also
would authorize DoD to use personal services contracts to
employ up to 30 individuals for research and development and
appoint up to 30 professional and technical employees without
regard to certain sections of title 5, United States Code, that
govern appointments in the competitive service, classification,
and General Schedule pay rates. Section 1032 would allow DoD to
procure biological countermeasures even if they had not yet
been approved by the Food and Drug Administration (FDA), as
long as the Secretary of Defense, in consultation with the
Secretary of HHS, determines that the countermeasures have the
potential to be licensed or approved by the FDA within five
years. For 2004, section 1032 would authorize such sums as are
available under DoD's general transfer authority to purchase
these qualified countermeasures and for every year thereafter
it would authorize such sums as may be necessary. Section 1033
would allow DoD to use biomedical countermeasures that are not
licensed or approved by the FDA in an emergency setting if the
Secretary of Defense, in consultation with the Secretary of
HHS, determines that there is no adequate, approved, or
alternative countermeasure available.

Assistance for victims of domestic violence

Section 572 would increase the length of time that a victim
of domestic violence receives assistance from DoD. Under
current law, the department provides transitional compensation
to the spouse and any children of a servicemember who must
separate from the military because of dependent-abuse offenses.
The amount of the compensation is linked to the dependent and
indemnity compensation benefit provided by the Department of
Veterans Affairs (VA) and is paid for 36 months or the
remainder of the unserved portion of the servicemember's
military obligation, whichever is shorter. According to DoD,
families of enlisted servicemembers often receive less than 36
months of compensation. Section 572 would allow for all
recipients of transitional compensation to receive it for the
full 36-month period. Based on information from DoD indicating
that the majority of recipients receive the benefit for 24
months on average and that the total amount of transitional
compensation paid in fiscal year 2000 was less than $6 million,
CBO estimates implementing this section would cost about $2
million per year.
Section 571 would require DoD to pay to move a spouse and
any dependent children who have been abused by a servicemember
if the victim's safety is at risk. Costs would include travel
costs for the family and transportation of household goods and
a vehicle. Based on information about the amount of
transitional compensation paid in fiscal year 2000 and the
average benefit amount for that year, CBO estimates that about
400 spouses receive assistance each year for being victims of
domestic violence. Using the average cost to move a
servicemember with dependents (about $2,000 in 2004), CBO
estimates that implementing this section would cost about $1
million per year.

Chaplain-led family support programs

Section 564 would expand and permanently extend chaplain-
led programs to assist servicemembers in building and
maintaining strong families. Under authority provided in Public
Law 107-248, DoD may use appropriated funds to pay for
transportation, food, lodging, supplies, fees, and training
materials for servicemembers and their family members who
participate in such programs. The authority expires at the end
of fiscal year 2003. The bill would make these programs
permanent and also would include the cost of child care as an
eligible expense. Basedon information from DoD, CBO estimates
that the Army would expand its program from the current level of about
$1 million (serving 48 brigades) to about $6 million a year by 2006
(serving 144 brigades). The Navy- and Air Force-sponsored family
support programs pre-date Public Law 107-248. The Navy currently spends
roughly $1 million a year on family support programs and the Air Force
spends less than $500,000 annually. Neither branch has any immediate
plans to use the new authority provided in the bill, but if they were
to do so, there would be modest additional costs.

Wetland crossings at Camp Shelby

Section 320 would authorize the Army to use operation and
maintenance funds to construct water crossings for use by
armored vehicles at Camp Shelby, Mississippi, to protect
wetland areas located there. Based on information from the Army
National Guard, CBO estimates it would cost about $5 million in
2004 to construct these crossings. According to the Army
National Guard, the construction in 2004 would likely
constitute the first phase of a potentially larger project
which would require further Congressional authorization.

Services acquisition reform

Title XIV contains sections that address service
acquisition reform; some of which have cost. Section 1412 would
authorize the establishment of an Acquisition Workforce
Training Fund. Under the bill, 5 percent of the fees collected
by the General Services Administration (GSA) from other,
nondefense agencies that procure goods and services through
GSA's governmentwide contracts would be deposited in the new
fund. GSA generates most of those fees by charging other
federal agencies approximately 1 percent of the cost of
purchases made through GSA's contracts for supply schedule
services and data processing. That fee is designed to recover
administrative costs incurred by GSA. In 2002, GSA collected
$88 million in fees from agencies other than the Department of
Defense. Thus, CBO estimates that this provision would
authorize GSA to charge agencies a fee sufficient to establish
a $5 million Acquisition Workforce Training Fund each year, as
well as continuing to cover the administrative costs of GSA's
contracting programs.
Other provisions in Title XIV would establish a new
advisory panel to review procurement policies, a Chief
Acquisition Officers Council, and a center of excellence in the
Office of Federal Procurement Policy; would require GSA, the
Office of Personnel Management, and the Office of Management
and Budget to issue implementing regulations; and would require
the General Accounting Office to prepare certain studies on
procurement issues. In total, CBO estimates that implementing
these provisions would cost $1 million annually over the 2004-
2008 period.

Funding for special compensation for disabled retirees of the uniformed
services

Under current law, veterans who retire from the military,
the Coast Guard, PHS, or NOAA cannot receive both full
retirement annuities and disability compensation from the VA.
To receive the non-taxable veterans' compensation benefit,
retirees must forgo an equal amount of their taxable retirement
annuity. Allowing the receipt of both benefits is often
referred to as ``concurrent receipt.'' Two programs currently
offer special benefits to retirees who are affected by the ban
on concurrent receipt.
The first is a program of special compensation for severely
disabled retirees of the uniformed services that pays a monthly
stipend to certain retirees who are rated by VA as 60 percent
or more disabled. The second program, scheduled to begin June
1, 2003, will pay a monthly benefit to retirees who receive
disability compensation from VA for the injury for which they
were awarded a Purple Heart or have certain combat- or
training-related disabilities for which they receive
compensation from VA. The benefit will equal the amount of
retirement annuity forgone as a result of the ban on concurrent
receipt. CBO estimates these programs will together pay
military retirees about $300 million in 2004, and $2.8 billion
over the 2004-2008 period. Such payments for both programs are
currently made from DoD's military personnel accounts. Under
section 641, payments under these programs would become a
liability of the Military Retirement Fund.
The military retirement system is financed in part by an
annual payment from appropriated funds to the Military
Retirement Fund, based on an estimate of the system's accruing
liabilities. If these special compensation payments were to
become a liability of the Military Retirement Fund, DoD's
yearly contribution to the fund (paid from the military
personal accounts) would normally increase to reflect the added
liability from the expected increase in payments to future
retirees. This increase--or accrual payment--would recognize
the additional costs of deferred compensation in the years
during which servicemembers are working, rather than when the
benefits are actually paid. Accrual budgeting provides
decisionmakers with more complete information about the full
costs of labor and provides incentives to use labor cost-
effectively.
Under section 641, however, the incremental increase in the
accrual payment would be paid by the Secretary of the Treasury
and, therefore, not recognized in DoD's budget. Using
information from DoD, CBO estimates that the accrual payment
from the Treasury would be $100 million in 2004, and total
about $930 million over the 2004-2008 period.

Fast ships

Section 1014 would authorize the appropriation of $40
million to the Secretary of the Navy to pay the subsidy costs
of guaranteeing a loan to construct two high-speed ships in a
U.S. shipyard. Under the bill the Secretary would be authorized
to issue a 25-year guarantee that would cover up to 87.5
percent of the principal of the loan. CBO expects that
construction and related acquisition costs for this project
would be around $1 billion. Based on information provided by
the Maritime Administration (MARAD) and potential participants
in this project, CBO expects that construction would involve a
very high subsidy cost because of the expense of the project as
well the market and financial uncertainties inherent in the
proposal. As a result, we estimate that the $40 million amounts
made available under the bill and about $34 million previously
appropriated to the Navy for this purpose would be sufficient
to guarantee only a portion of the project's full costs. CBO
estimates that the subsidy costs for guaranteeing 87.5 percent
of the entire project would require appropriations of more than
$100 million.

Maritime administration

Title XXXV would authorize appropriations for programs
carried out within the Department of Transportation by MARAD
(see Table 4).
Subtitle B of title XXXV would reauthorize and amend the
maritime security program beginning in fiscal year 2006. This
program, which expires at the end of fiscal year 2005, provides
operating subsidies to owners or operators of U.S. flag vessels
carrying cargo between the United States and foreign ports. In
exchange, eligible vessel owners or operators agree to keep
their ships in the U.S. flag fleet and make them available to
DoD when needed for national security purposes.
Subtitle C would expand the maritime security program from
the current 47 ships to 60 ships, including up to five tankers.
The annual subsidy payment also would increase from its present
$2.1 million per ship to $2.6 million per ship for each of
fiscal years 2006 and 2007, and to whatever amounts the
Secretary of Transportation deems necessary for each ensuing
year that a vessel remains in the program. For these payments,
the bill would authorize the appropriation of $156 million for
each of fiscal years 2006 and 2007 and whatever sums are
necessary for each thereafter through 2015 for these programs.
Subtitle C also would authorize, after fiscal year 2004,
the appropriation of $250 million to subsidize the cost of
constructing five commercial product tankers in a U.S.
shipyard. The tankers would operate as U.S. flag vessels in the
U.S.-foreign trade and would be available to DoD for national
defense purposes upon request.
Subtitle D would authorize appropriations for fiscal year
2004 for routine MARAD activities, including $104 million for
operations and training, $39 million for loan guarantees and
associated administrative expenses under Title XI of the
Merchant Marine Act, 1936, and $20 million for disposal of
obsolete ships in the national defense reserve fleet. (The $39
million for the Title XI program is not shown in Table 4
because such costs are already authorized under the 1936 act
and do not require annual authorization.)

TABLE 4.--SPECIFIC AUTHORIZATIONS OF APPROPRIATIONS FOR THE MARITIME ADMINISTRATION IN H.R. 1588
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
Current Law Authorization for the Maritime
Administration:
Authorization Levels ^a, ^b....................... 201 100 100 0 0 0
Estimated Outlays............................... 195 120 105 0 0 0
Proposed Changes
Maritime Security Program:
Estimated Authorization Levels.............. 0 0 0 156 156 161
Estimated Outlays........................... 0 0 0 143 156 160
Tanker Construction:
Authorization Level......................... 0 0 0 250 0 0
Estimated Outlays........................... 0 0 0 63 63 63
Regular MARAD Authorization:
Authorization Level......................... 0 124 0 0 0 0
Estimated Outlays........................... 0 99 20 5 0 0
-----------------------------------------------------------
Subtotal, Proposed Changes ^c:
Estimated Authorization Levels.......... 0 124 0 406 156 161
Estimated Outlays....................... 0 99 20 211 219 223
Authorizations Under H.R. 1588 for the Maritime
Administration:
Authorization Levels ^a.......................... 201 224 100 406 156 161
Estimated Outlays............................... 195 219 125 211 219 223
----------------------------------------------------------------------------------------------------------------
^a The level for 2003 is the amount currently appropriated for programs authorized by the bill; that amount is
also contained in Table 1.
^b The levels for 2004 and 2005 are authorizations of appropriations in current law for the Maritime Security
Program. These amounts are contained in Tables 1 and 2.

Direct Spending

The bill contains provisions that would increase direct
spending, primarily by increasing the amount that DoD can spend
to finance special authorities for the construction and
renovation of military family housing. We estimate that the
increase in direct spending (excluding asset sales) resulting
from provisions of H.R. 1588 would total $440 million over the
2004-2008 period and $486 million over the 2004-2013 period
(see Table 5).

TABLE 5.--ESTIMATED DIRECT SPENDING FROM MILITARY HOUSING PRIVATIZATION AUTHORITIES AND OTHER PROVISIONS IN H.R.
1588
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING (EXCLUDING ASSET SALES)
Military Housing Privatization Initiative:
Estimated Budget Authority...................... 0 120 290 0 0 0
Estimated Outlays............................... 0 15 85 151 91 35
Recovery of Funds from Sale of Nonappropriated Fund
Facilities:
Estimated Budget Authority...................... 0 51 6 6 6 1
Estimated Outlays............................... 0 8 14 18 12 9
Reduction in Time-in-Grade for Retirement:
Estimated Budget Authority...................... 0 * * * 1 1
Estimated Outlays............................... 0 * * * 1 1
-----------------------------------------------------------
Subtotal:
Estimated Budget Authority.................. 0 171 296 6 7 2
Estimated Outlays........................... 0 23 99 169 104 45
ASSET SALES ^a
National Defense Stockpile:
Estimated Budget Authority...................... 0 -15 -5 0 0 0
Estimated Outlays............................... 0 -15 -5 0 0 0
TOTAL CHANGES IN DIRECT SPENDING
Estimated Budget Authority 0 156 291 6 7 2
Estimated Outlays 0 8 94 169 104 45
----------------------------------------------------------------------------------------------------------------
* = less than $500,000.
^a. Asset sale receipts are a credit against direct spending.

Military Housing Privatization Initiative (MHPI)

Section 2803 would raise the statutory limit on the amount
that DoD can invest in projects to build or renovate military
family housing. DoD is authorized to use direct loans, loan
guarantees, long-term outleases, rental guarantees, barter,
direct government investment, and other financial arrangements
to encourage private-sector participation in building military
housing. Funding for those activities comes from the Family
Housing Improvement Fund, which is financed by appropriations
made to the fund, transfers from other accounts, receipts from
property sales and rents, returns on any capital, and other
income from operations or transactions connected with the
program.
Currently the amounts in the fund are available for use by
DoD to acquire housing using the various techniques mentioned
above, but the total value of commitments for all contracts and
investments undertaken is limited to $1 billion ($850 million
for family housing and $150 million for unaccompanied housing).
Under the bill, the limit for family housing would increase to
$900 million. CBO estimates that enacting section 2803 would
increase direct spending by $377 million over the 2004-2008
period and by $409 million over the 2004-2013period.
Governmentwide Accounting Principles. Most of DoD's housing
projects under the MHPI authority have involved private-sector
financing that is backed by various kinds of government
commitments. Some of these commitments may have the
characteristics of a capital lease or lease-purchase, others
may be public-private partnerships with substantial government
control. According to standard principles of federal
accounting, obligations of the Family Housing Improvement Fund
should reflect the full amount of the financial liability
incurred when the government makes such a commitment. In the
case of a capital lease, for example, obligations equal to the
asset cost should be recorded up front and an amount equal to
the interest costs should be recorded on an annual basis over
the life of the lease term. Outlays should be recorded over the
lease term in an amount equal to the annual lease payments. For
commitments that take the form of a lease-purchase, obligations
are recorded in the same manner as a capital lease, but outlays
should be recorded over the period it takes to construct the
asset. In CBO's view, most ventures that borrow private funds
to construct or refurbish military family housing should be
treated as governmental and their investments should be
recorded up front, equivalent to borrowing authority--a form of
budget authority. Amounts expended by these public-private
arrangements should be recorded in the budget as outlays at the
time they occur.
To date, the Office of Management and Budget (OMB) has
primarily treated DoD's use of these authorities as
transactions that have relatively little estimated cost in
terms of the obligations and outlays recorded in the federal
budget, allowing DoD to obligate the government for
significantly more than it records in its budget. In effect,
the Administration's accounting enables DoD to record the costs
of the projects incrementally over time rather than up front.
CBO continues to believe that OMB's accounting practices for
MHPI projects are at odds with governmentwide standards.
Although the contractual terms vary from project to project,
CBO considers most MHPI projects to be governmental
undertakings, the purpose of which is to finance and manage the
acquisition, construction, or renovation of a government asset,
specifically, family housing for military personnel. There are
several factors that support treating these arrangements as
governmental. For instance, most of the housing constructed or
renovated under this authority is on government property. Many
deals include government guarantees against base closure. In
some instances, rental payments are made to the property
manager directly by the government. Likewise, in most deals,
title to the property vests with the government at the end of
the contract. In the case of public-private partnerships, the
debt of the entity is implicitly or explicitly backed by the
federal government. Following standard principles of federal
accounting, CBO believes the MHPI program should reflect the
full amount of the financial liability incurred at the time the
government makes such commitments.
For the last few years, CBO has stated that DoD was
obligating the government for significantly more than it was
recording. After consultation with the Committees on the Budget
in both the House and the Senate, CBO has decided to show the
full cost of MHPI projects up front in our cost estimates for
legislation related to such projects. Thus, expansion or
extension of this authority is counted as direct spending in
this estimate, since it would allow DoD to obligate the
government without appropriations for the full amount of those
obligations in advance.
Cost of Activities Under Current Law. To date, DoD has
signed contracts for 18 family housing projects and is
proceeding with solicitations for or considering plans for
close to 60 other projects over the next few years. According
to OMB's accounting method, DoD has only recorded obligations
of about $300 million--well below the current $850 million
limit. Given DoD's plans for future projects, it estimates that
it could reach the $850 million limit as early as the end of
2004. However, CBO estimates that the full amount of DoD's
commitments to date exceeds $2 billion. Using the current
method of accounting for only the initial investment costs of
these projects, DoD could acquire or modify approximately
60,000 more units and record only $550 million in obligations.
CBO estimates that the true cost of these additional projects,
which could be awarded under the current investment cap, would
total approximately $4.5 billion dollars. Since DoD can pursue
these projects without additional legislative authority, their
costs are not counted against this bill.
Cost of Activities Under the Increased Limitation. Section
2803 would increase the limit on total investment in family
housing projects by $50 million to $900 million, allowing DoD
to pursue MHPI projects after it exhausts the authority in
current law. Given OMB's accounting practice of recording only
the initial investment, CBO assumes that DoD would be allowed
to commit the government for much more than the additional $50
million provided. Since DoD could enter into these obligations
without further appropriations for the full amount of the
obligation, CBO estimates that the additional $50 million
investment authority provided in this section would allow DoD
to acquire or modify almost 5,500 additional housing units,
obligating the government for an additional $410 million. Thus,
CBO estimates that these obligations would increase outlays by
$15 million in 2004 and by $410 million over the 2004-2013
period.

Recovery of Funds Due to Sale of Nonappropriated Fund Facilities

Section 655 would allow DoD to spend (without further
appropriation) collections from the sale or lease of commissary
or nonappropriated fund assets that have been closed under Base
Realignment and Closure. The collections are currently
deposited into a reserve account established by the Defense
Base Closure and Realignment Act of 1988 and, under current
law, cannot be spent without further appropriation. Based on
information from the Department of Defense, CBO estimates that
there will be $51 million in the reserve account at the
beginning of fiscal year 2004, and that the reserve account
will gain an additional $19 million in collections through
2008. Based on information from DoD, CBO expects that the funds
in the account would be used primarily for facility
improvements and construction. Using historical outlay
patterns, CBO estimates that, under section 655, outlays from
the fund would total $8 million in 2004 and $70 million over
the 2004-2013 period.
Section 3005 of the National Defense Authorization Act for
Fiscal Year 2002 (Public Law 107-107) authorized expenditures
from the reserve account for base closures that are schedules
to occur after 2005. Therefore, enacting this section would
have no impact on collections from the sale of commissaries or
nonappropriated fund facilities in future base closure rounds.

Reduction of Time-in-Grade for Retirement

Section 513 would reduce, from three years to one year, the
length of time senior officers must serve in a grade before
being allowed to retire in that grade. Based on information
from DoD,CBO estimates that reducing the time-in-grade
requirement would cause about 15 officers in the ranks O-7 to O-10 to
retire one grade higher than they normally would otherwise. CBO
estimates that enacting this measure would cost less than $500,000 in
2004, $2 million over the 2004-2008 period, and $7 million over the
2004-2013 period.

Land Conveyance and Other Property Transactions

Title XXVIII would authorize a variety of property
transactions involving both large and small parcels of land.
CBO estimates that implementing these provisions would not
result in significant costs to the federal government because
they would authorize DoD to receive fair market value for the
property to be conveyed, to exchange one piece of property for
another, or to convey land that under current law is unlikely
to be declared excess and sold or is likely to be given away.
Other Provisions. The following provisions would have an
insignificant budgetary impact on direct spending:
Section 545 would instruct DoD to assist former prisoners
of war in obtaining information to support their applications
for the award of the Purple Heart. Purple Heart recipients are
eligible to have their retirement annuities increased by any
amount currently withheld to offset their receipt of veterans
disability compensation, to the extent that disability pay is
related to the injury for which they received the Purple Heart.
Thus, if this measure increased the number of Purple Heart
recipients, it could potentially increase retirement outlays.
However, since this measure does not change the criteria for
eligibility for the Purple Heart award, CBO assumes that at
most a few additional Purple Hearts would be awarded if it were
to be enacted, and that any additional retirement outlays would
be negligible.
Section 651 would eliminate restrictions on commissary use
by members of the ready reserve, retirees of the ready reserve
who are less than 60 years of age, and their dependents. CBO
estimates enactment of this provision would increase commissary
sales, which are deposited into the commissary revolving fund
and used to replenish commissary stock. Commissaries also
charge a 5 percent surcharge on all sales which is credited to
the commissary surcharge account. Funds in the commissary
surcharge account are used to renovate and construct commissary
facilities and can be collected and spent without
appropriation. CBO estimates the net result of the collection
and expenditure of these proceeds would be insignificant.
Sections 801 and 1451 would extend and expand authority for
government agencies to provide services to nongovernmental
organizations and enter into nonconventional cooperative
agreements with private contractors for research into advanced
weapons systems and homeland security. These agreements would
include the authority for the government agencies to collect
and spend reimbursements for any services rendered. While
outlays would lag behind receipts, CBO does not have enough
information to estimate the net outlay effects in any specific
year.
Section 903 would allow the Secretary of Defense to carry
out a three-year pilot program to determine the feasibility of
providing satellite tracking services with DoD assets to non-
U.S. government entities. Under such a pilot program, DoD would
be allowed to charge fees for these services and spend these
payments. According to the Air Force, the proceeds from selling
these services would likely be insignificant. CBO estimates
that implementing this provision would have no net effect on
direct spending because it would allow DoD to spend any
payments that it collects.
Section 906 would allow the Asia-Pacific Center for
Security Studies to accept and spend gifts from U.S. sources,
similar to the authority they have to accept gifts from foreign
sources. Based on information from DoD, CBO estimates any gifts
received under this section would be less than $500,000
annually. (Gifts and donations are recorded in the budget as
revenues.)
Section 1012 would allow the Navy to spend the proceeds
received from selling the materials and equipment stripped from
naval vessels that are to be used for experimental purposes.
Under current law, the Navy may only recover their costs from
such activities and any receipts in excess of those costs are
required to be deposited into the general fund of the Treasury.
The Navy has not deposited any excess funds into the general
fund from these activities in recent years. Section 1012 also
would allow the Navy to use contractors to sell this material
and equipment. Based on information from the Navy, CBO
estimates that receipts from the expanded authority would
likely total less than $500,000 a year. Enacting this provision
would have no net effect on direct spending, however, because
it would allow the Navy to spend any payments it collects.
Section 1046 would allow the National Security Agency (NSA)
to contract for living quarters for co-op students, and would
allow the NSA to charge the students for this service and
credit the proceeds to appropriated accounts. CBO estimates the
net result of the collection and expenditure of these proceeds
would be insignificant.

Asset Sales

Section 3302 would increase by $20 million the targets
contained in the National Defense Authorization Act for Fiscal
Year 2000 (Public Law 106-65) for sales from the National
Defense Stockpile through 2009. CBO estimates that there will
be sufficient quantities of materials in the stockpile to
achieve $15 million in receipts in 2004 and the remaining $5
million in receipts in 2005.

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

Title XI would authorize the Secretary to appoint older
Americans into positions in the excepted service, and--
notwithstanding any other provision of law--protect any other
retirement benefits they may be receiving from being reduced as
a result of that appointment. To the extent that under current
law retirement benefits provided by state, local, or tribal
governments might be reduced for a beneficiary hired by the
Secretary, enacting this provision would prohibit such
reductions and thereby impose an intergovernmental mandate as
defined in UMRA. However, according to the National Association
of State Retirement Administrators, few if any jurisdictions
require such benefit reductions under current law. Therefore,
CBO estimates that any costs to state, local, or tribal
governments from the mandate would be insignificant and would
not exceed the threshold established in UMRA ($59 million in
2003, adjusted for inflation).
Other provisions in H.R. 1588 contain no intergovernmental
or private-sector mandates as defined in UMRA and would impose
no costs on state, local, or tribal governments.

PREVIOUS CBO ESTIMATES

On May 12, 2003, CBO transmitted a cost estimate for H.R.
1497, the Sikes Act Reauthorization Act of 2003, as ordered
reported by the House Committee on Resources on May 7, 2003.
Both H.R. 1497 and section 311 of H.R. 1588 would authorize the
appropriation of up to $4.5 million a year over the 2004-2008
period for DoD and the U.S. Fish and Wildlife Service to
develop and implement plans to manage natural resources on
certain military lands.
On May 14, 2003, CBO transmitted a cost estimate for H.R.
1837, the Services Acquisition Reform Act of 2003, as ordered
reported by the House Committee on Government Reform on May 8,
2003. Both bills would authorize the establishment of an
Acquisition Workforce Training Fund; would establish a new
advisory panel to review procurement policies, a Chief
Acquisition Officers Council, and a center of excellence in the
Office of Federal Procurement Policy; would require GSA, the
Office of Personnel Management, and the Office of Management
and Budget to issue implementing regulations; and would require
the General Accounting Office to prepare certain studies on
procurement issues. The difference in the other estimated costs
reflect differences in the legislation.
On May 15, 2003, CBO transmitted a cost estimate for H.R.
1836, the Civil Service and National Security Personnel
Improvement Act of 2003, as ordered reported by the House
Committee on Government Reform on May 8, 2003. Sections 1111,
1101, 1104, 1107, and 1108 of H.R. 1588 are identical to
sections 102, 201, 204, 209, and 211 of H.R. 1836, as are the
cost estimates.
Estimate Prepared by: Federal Costs: Defense Outlays: Kent
Christensen. Military Construction: David Newman. Military and
Civilian Personnel: Michelle Patterson and Sunita D'Monte, and
Ellen Hayes. Military Training: Sarah T. Jennings. Health
Programs: Sam Papenfuss. Multiyear Procurement: David Newman
and Raymond Hall. Maritime Administration: Deborah Reis.
Stockpile Sales: Raymond Hall. Operation and Maintenance:
Matthew Schmit. Services Acquisition Reform: Matthew Pickford.
Impact on State, Local, and Tribal Governments: Victoria Heid
Hall. Impact on the Private Sector: Allison Percy.
Estimate Approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.

COMMITTEE COST ESTIMATE

Pursuant to clause 3(d) of rule XIII of the Rules of the
House of Representatives, the committee generally concurs with
the estimates as contained in the report of the Congressional
Budget Office.

OVERSIGHT FINDINGS

With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, this legislation results from
hearings and other oversight activities conducted by the
committee pursuant to clause 2(b)(1) of rule X.
With respect to clause 3(c)(2) of rule XIII of the Rules of
the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974, this legislation does not
include any new spending or credit authority, nor does it
provide for any increase or decrease in tax revenues or
expenditures. The bill does, however, authorize appropriations.
Other fiscal features of this legislation are addressed in the
estimate prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974.
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the committee has not received a
report from the Committee on Government Reform and Oversight
pertaining to the subject matter of H.R. 1588.

GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, this legislation would address
several general and outcome-related performance goals and
objectives. The general goal and objective of this legislation
is to improve the quality of life for military personnel and
their families, military readiness, the modernization and
eventual transformation of the armed forces, to enhance the
development of ballistic missile defenses, and to improve the
condition of military housing and facilities.
With respect to the outcome-related goal of improving the
quality of life for military personnel and their families, the
objective of this legislation is to:
(1) Add 6,240 personnel, enabling the military
services to begin meeting long-standing manpower
shortages, as well as new manning requirements;
(2) Provide every military service member an
average pay raise of 4.1 percent and up to 6.25 percent
for targeted raises effective January 1, 2004; and
(3) Reduce out-of-pocket housing costs for military
personnel to less than 3.5 percent during fiscal year
2004.
With respect to the outcome-related goal of improving
military readiness, the objective of this legislation is to:
(1) Increase funding for key readiness accounts by
approximately $3.7 billion above the fiscal year 2003
level; and
(2) Satisfy approximately $1.1 billion of the
service chiefs' unfunded readiness requirements.
With respect to the outcome-related goal of improving the
modernization and eventual transformation of the armed forces
and enhancing the development of ballistic missile defenses,the
objective of this legislation is to:
(1) Increase funding for military procurement
accounts by $2.25 billion;
(2) Satisfy approximately $1.5 billion of the
unfunded procurement and research and development
requirements identified by the service chiefs; and
(3) Increase funding for military research and
development accounts by $200.0 million.
With respect to the outcome-related goal of improving
military housing and facilities, the objective of this
legislation is to:
(1) Provide $9.8 billion for military construction
and military family housing programs; and
(2) Provide several enhancements to the authority
provided by current law to privatize military housing
that will provide the military services more
flexibility to procure adequate military family
housing.
With respect to the outcome-related goal of increasing
homeland and troop defenses against terrorist and ballistic
missile attacks, the objective of this legislation is to:
(1) Increase the President's request of $9.8
billion for combating terrorism by $202 million; and
(2) Support the approach of the President's
ballistic missile defense program and to match the
Administration's funding request of $9.1 billion.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to rule XIII, clause 3(d)(1) of the Rules of the
House of Representatives, the committee finds the authority for
this legislation in Article I, Section 8 of the United States
Constitution.

STATEMENT OF FEDERAL MANDATES

Pursuant to section 423 of Public Law 104-4, this
legislation contains no federal mandates with respect to state,
local, and tribal governments, nor with respect to the private
sector. Similarly, the bill provides no federal
intergovernmental mandates.

RECORD VOTES

In accordance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, record and voice votes were taken
with respect to the committee's consideration of H.R. 1588. The
record of these votes is attached to this report.
The committee ordered H.R. 1588 reported to the House with
a favorable recommendation by a vote of 58-2, a quorum being
present.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

The Committee intends to take steps to make available the
analysis of changes in existing law made by the bill, as
required by clause 3(e) of rule XIII of the Rules of the House
of Representatives.

ADDITIONAL VIEWS

We write to express our profound disappointment over the
process and partisanship that characterized the mark-up of H.R.
1588, the National Defense Authorization Act for Fiscal Year
2004.
The Armed Services Committee has a well-established record
of adhering to a structured legislative process that has
resulted in deliberate and fulsome consideration of major
legislative initiatives. The Goldwater-Nichols Department of
Defense Reorganization Act of 1986 (Public Law 99-433) and the
Reserve Officer Personnel Management Act (Public Law 103-337)
are just two examples of laws that resulted from a thoughtful
series of committee hearings, consideration of views beyond
those of the Department of Defense, and adequate time to
scrutinize major proposals for change.
The committee also has stood out as one of the few
remaining bastions of bipartisanship in the House of
Representatives. Over the years, many contentious issues have
come before the committee. From the debates over the Midgetman
and MX missiles in the 1980s to allied burdensharing and
building the B-2 bomber in the early 1990s to
counterproliferation and peacekeeping activities more recently,
Armed Services Committee members have invariably been able to
work through politically charged issues. Resolving these issues
has not been easy, but the atmosphere of bipartisanship, mutual
respect and cordiality among members has always pervaded the
committee authorization process.
The committee's historical practice has been to achieve
compromise on all but the most intractably divisive measures,
recognizing that national security is too important for
partisanship, and that the committee's independence from the
administration of the day was both its strength and its
constitutional charge.
Unfortunately, the committee's consideration of H.R. 1588
has placed these traditions in jeopardy.
This year, the committee brought difficulty upon itself by
accepting legislation beyond the traditional scope of a defense
authorization, and then not allowing time for it to be properly
considered. Over the years, the defense authorization bill has
often included provisions that fall within the legislative
jurisdiction of other committees. However, the inclusion in
this bill of provisions dramatically changing our civil service
laws and rewriting major environmental laws without limited
application to the Department of Defense is extraordinary if
not unprecedented. Equally troubling is that the Armed Services
Committee held fewer than five hearings on the Department's
``transformation'' proposals, and two of those were on short
notice or on a day when the House was not in session. These
legislative proposals were submitted to Congress barely a month
before the Committee marked up H.R. 1588 and immediately before
a two week House recess period. The actual text of the language
in this bill was available for Members to review just a few
days before mark up. Consideration of such broad, sweeping
policy changes on short notice, with scant opportunity for
review, is a dramatic departure from the Committee's history of
careful, deliberate evaluation of significant legislation. This
process will not produce prudent policy. Our committee has not
operated in this fashion in the past, and consideration of the
Department's ``transformation'' proposals warranted more
thoughtful review in this instance. There was no committee
interest in including this legislation in the authorization
bill rather than a separate vehicle, and no committee interest
in hastening its consideration. We urge the committee to return
to its history of regular order process as we undertake future
legislation.
The deterioration in bipartisanship, a hallmark of the
Armed Services Committee's operations for decades, was
evidenced in the mark up of H.R. 1588. During the 24-hour mark
up of this bill, there were 29 roll call votes, and almost all
of them were straight party-line or mostly party-line.
Moreover, during consideration of the first and most important
amendment to the civil service provisions in the bill--the most
contentious aspect of this legislation--the previous question
was moved in an effort to curtail debate. Both of these
occurrences are unprecedented in the modern history of this
committee, and we hope that they do not portend a sea change in
the way this committee conducts its business. They are,
however, symptoms of an underlying deterioration in the
committee's legislative process.
It is axiomatic that the legislative process is
consultative, and compromise among the parties is key to
crafting sound policy that will stand the test of time. The
Armed Services Committee's historical bipartisanship is a
testament that consultation and compromise work. The mark up of
this bill suggests a pronounced decline in these areas.
Symptomatic of this decline was the series of three party-line
roll call votes to the Service Acquisition Reform Act
provisions in the bill. These provisions were included in the
bill without consultation. The subject matter was not so
inherently partisan that compromise should have been out of the
question. Resolution of policy differences should have been
easily attained without defaulting to a partisan outcome.
The motion for the previous question is equally disturbing.
After full and substantive debate on myriad amendments
throughout this mark-up, moving the previous question during
the first amendment on the subject of greatest concern to the
minority sends a signal of intolerance and unwillingness to
respect or even hear opposing views, despite the fact that
those views are widely and sincerely held by many members of
the Committee. Such action is highly uncharacteristic and
disappointing. Despite many contentious and partisan battles on
issues in the past, not one member can recall a single instance
in which the previous question has been moved during debate on
an amendment in this committee. We view this development with
sadness and regret.
The universal aim of members who serve on this committee,
Republican and Democrat, is to enact policies to provide for
our national security. We all endeavor to ensure that the men
and women who serve in our military and make such great
sacrifices for our nation have the training, equipment and
means to best protect our country. Attaining our mutual goals
should not be a partisan enterprise, certainly not to the
extent reflected in this bill and in this mark-up. We strongly
urge a careful rethinking of the approach the committee has
taken so far this year. A decline in one of the paragons of
bipartisanship and collegiality in the House--the Armed
Services Committee--will occur if this trend continues. Damage
to the wisdom of our defense policy will be the unfortunate and
inevitable long-term result for the country.

Ike Skelton.
John Spratt.
Gene Taylor.
Lane Evans.
Marty Meehan.
Neil Abercrombie.
Silvestre Reyes.
Ciro D. Rodriguez.
Vic Snyder.
Loretta Sanchez.
Susan A. Davis.
Rick Larsen.
Jim Cooper.
Baron P. Hill.
Ellen O. Tauscher.
John B. Larson.
Kendrick B. Meek.
Jim Langevin.
Tim Ryan.
Adam Smith.
Robert A. Brady.
Rodney Alexander.
Jim Turner.
Steve Israel.
Madeleine Z. Bordallo.
Mike Mcintyre.
Solomon P. Ortiz.
Jim Marshall.

ADDITIONAL VIEWS

We write to express our concerns about the Cooperative
Threat Reduction (CTR) and nuclear weapons provisions included
in H.R. 1588. While, in both areas, the committee took some
positive actions, we believe that on the whole the bill does
not sufficiently advance the United States' nonproliferation
policy goals. On the one hand, the bill does not provide all
that the administration has requested to achieve the national
security objectives of the CTR program. On the other, by
advancing policies that aim to develop new and more usable
nuclear weapons, the committee sends a dangerous signal to
nations who might seek nuclear weapons and weakens U.S.
credibility to push for nuclear restraint by others. Both of
these elements of the bill are troubling on their own; when
considered together they underline the dangers of these
policies.
Cooperative Threat Reduction Issues
We are pleased that the committee fully funded the
President's budget request for Cooperative Threat Reduction
programs. We also commend the committee's decision to approve a
one-year extension of waiver authority for certification
conditions for the chemical weapons destruction facility at
Shchuch'ye, Russia. Waiver authority will allow the
construction of this facility--which currently stores 5,400
tons of the world's most dangerous and easily stolen weapons--
to continue while still keeping pressure on Russia to comply
all of the conditions imposed.
Yet while the bill permits the chemical weapons program to
move forward, it also puts serious constraints on the funds
needed to construct the Shchuch'ye facility. The chairman's
mark, as presented to the committee, moved $28.8 million from
the chemical weapons destruction program to the strategic
offensive arms elimination program--a program already fully
funded in the President's request. Mr. Spratt offered two
amendments--one that would restore the administration's request
and one that would put the $28.8 million in a separate line
item that could be used for either the chemical or the
strategic nuclear programs. The latter approach would have
given the Secretary of Defense the flexibility to fund
Shchuch'ye, while still allowing some members of the committee
to express their preference for funding strategic nuclear
programs. The bill also contains a complicated and unwieldy
cost-sharing system for obligating the money that remains.
While we believe that Russia and other members of the
international community must remain active and committed
partners in this effort, the bill's approach to achieving this
outcome is overly complex and likely to slow efforts to
dismantle these weapons. Both of these amendments failed on
party line votes. We are deeply disappointed that the [national
security benefits] value of the nonproliferation efforts to be
achieved at Shchuch'ye--which President Bush has ordered to be
accelerated--are not understood or accepted by the majority of
this committee.
We are also distressed that the administration's request to
allow $50 million in CTR funds to be used outside the former
Soviet Union to take advantage of near-term nonproliferation
opportunities or to advance our long-standing nonproliferation
policies was stripped from this bill. Instead the bill allows
for the transfer of such funds to the State Department's
Nonproliferation and Disarmament Fund. We believe that the
State Department undertakes important nonproliferation
activities, but it does not have the deep expertise in securing
and dismantling the weapons and infrastructure of weapons of
mass destruction programs. The administration specifically
asked for the Department of Defense to have this authority and
we concur with their assessment. Ms. Tauscher offered an
amendment that would have restored the requested approach. All
committee Democrats and a Republican supported the President's
request, but the amendment still failed.
Beyond these amendments, we have concerns about other
provisions that may be well-intentioned, but are constraining
in their effect. We are aware of and troubled by the waste
incurred by the troubles at CTR programs in Votkinsk and
Krasnoyarsk. We believe that there must be better program
accountability and a renewed commitment by our Russian partners
to ensure these problems do not recur. The Defense Department
acknowledges this as well and has instituted a series of new
procedures and policies designed to achieve this goal which
they described to the committee on in testimony on March 4,
2003. The approach taken by this bill including its requirement
that the Department identify, for all new or ongoing CTR
programs, every permit or license that will ever be needed for
a project, and then obtain such permits, regardless of when
they would be most appropriately obtained, will hamstring
numerous CTR programs, ultimately extending the completion time
for these projects and leaving more weapons at proliferation
risk. We share the majority's interest in enhanced
accountability, but the existing efforts of the Department will
achieve this, without risking the health of existing programs.
We hope some of these weaknesses will be reversed in floor
consideration of H.R. 1588. Doing so would advance the
administration's and Congress' goal of preventing the
proliferation of some of the world's most dangerous weapons.
Nuclear Weapon Issues
We are pleased that the committee accepted the amendment
offered by Rep. Spratt to retain the prohibition on developing
new nuclear weapons with yields below five kilotons. Although
the amendment permits research of such weapons, it prohibits
development engineering (referred to as Phase 6.3 activities by
the Department of Energy) and later stages of development. More
importantly, the amendment reaffirms that it is the policy of
the United States not to develop or produce low-yield nuclear
weapons. This bipartisan action in the House sends an important
message: the United States is not backsliding towards
development of new battlefield nuclear weapons.
Unfortunately, bipartisan agreement on this amendment did
not extend to three other amendments on nuclear weapons. On
nearly party-line votes, the majority refused to accept the
following amendments:
1. A Tauscher Amendment to put in place a one-year
moratorium on the development of new nuclear weapons
(although research short of phase 6.3 would have been
permitted);
2. A Tauscher Amendment to transfer funding from two
nuclear weapon studies--the Robust Nuclear Earth
Penetrator and Advanced Concepts--to conventional
alternatives for addressing hard and deeply buried
targets; and
3. A Spratt Amendment to require notification of
Congress 18 months prior to a resumption of underground
nuclear testing.
In rejecting these common-sense amendments, the committee
has effectively endorsed the Bush Administration's policy to
examine new uses for nuclear weapons. We believe this policy is
a reversal of the positive trend since the end of the Cold War
to rely less and less on nuclear weapons. If the United States
starts seeking new nuclear weapons, it signals that nuclear
weapons are still desirable and legitimate weapons of war. If
other existing nuclear nations--such as Russia, China, India,
and Pakistan--follow our lead, the odds increase that terrorist
groups will obtain these weapons or the critical fissile
materials used to build them. In addition, our pursuit of new
nuclear weapons may weaken international resolve to prevent
nations such as North Korea, Iran, Syria, and Libya from
obtaining nuclear weapons (or more weapons in the case of North
Korea).
Instead of developing new nuclear weapons, the United
States should redouble its efforts to discourage the
development and use of nuclear weapons and reduce the stores of
fissile materials available for theft or unauthorized transfer.
We are disappointed that the bill as currently drafted heads in
the wrong direction, and will continue to seek changes to the
bill on the House floor and in conference.

Ike Skelton.
John Spratt.
Gene Taylor.
Lane Evans
Marty Meehan.
Neil Abercrombie.
Silvestre Reyes.
Vic Snyder.
Loretta Sanchez.
Adam Smith.
Robert A. Brady.
Rodney Alexander.
Jim Turner.
Rick Larsen.
Jim Cooper.
Baron P. Hill.
Ellen O. Tauscher.
John B. Larson.
Kendrick B. Meek.
Jim Langevin.
Tim Ryan.
Steve Israel.
Madeleine Z. Bordallo.
Susan A. Davis.
Solomon P. Ortiz.

ADDITIONAL VIEWS

As members of the Armed Services Committee we clearly
understand the importance of a strong national defense. Our
record of support is unambiguous. Realistic and rigorous
training underpins the capabilities of our military services,
forms one of the most important components of readiness, and
provides for our repeated successes.
We have an obligation to protect this training. We also
have an obligation to protect the natural environment--air,
water, and land--upon which all life depends. The protection of
our environment has profound consequences on our economic well
being and our quality of life.
No one can dispute the importance of military readiness and
protecting the environment. However, the current law
effectively balances the two. If a case were made that current
law was not balanced we would certainly be sympathetic to
adjusting the law. Nothing points to an imbalance.
We have heard much rhetoric on the issue, but the truth is
the Department of Defense's evidence is fundamentally
anecdotal. Moreover, that anecdotal evidence stands in sharp
contrast to the successes in Iraq. Should training have been
adversely impacted, we would have expected to see evidence of
that impact in combat operations. None exists.
We looked for analysis to inform the debate. While metrics
exist to measure readiness, no one has presented any measure of
reduced readiness resulting from the Department's compliance
with existing law. In fact, in an April 2003 Report, the
General Accounting Office noted ``Despite concerns voiced
repeatedly by DOD officials about the effects of encroachment
on training, DOD's readiness reports did not indicate the
extent to which encroachment was adversely affecting training
readiness and costs.''
Supplementing this absence of data suggesting an adverse
impact on readiness are the statements of Administration
officials. In Senate testimony earlier this year, Christine
Whitman, administrator of the Environmental Protection Agency,
said, ``I don't believe that there is a training mission
anywhere in the country that is being held up or not taking
place because of environmental protection regulation.''
Further, the Deputy Secretary of Defense wrote in a March 3
memorandum ``In the vast majority of cases, we have
demonstrated that we are both able to comply with environmental
requirements and to conduct necessary military training and
testing.''
Finally, if an adverse impact existed or arose, current law
provides a number of exemptions that the Administration could
exercise. Rather than support a substantial shift in
environmental law, we call upon the Department to exercise its
ability to use the existing exemptions in the rare cases in
which those exemptions might be needed. Apparently Deputy
Secretary Wolfowitz agrees. He wrote ``In those exceptional
cases where we cannot [train] and the law permits us to do so,
we owe it to our young men and women to request an appropriate
exemption.''
Instead of addressing those rare cases by supporting
existing exemptions or proposing a surgical fix, the majority
included far-reaching changes in environmental laws, whose
application extends well beyond the Department of Defense and
well beyond any determinable national security requirement.
The unfortunate and counterproductive result of exempting
all Federal activity from these important protections will be
to further exacerbate the threat to endangered species and
marine mammals, curtail valuable public, State and local
consultation, and in all likelihood increase litigation.

Susan A. Davis.
Lane Evans.
Neil Abercrombie.
Ciro D. Rodriguez.
Loretta Sanchez.
Ellen O. Tauscher.
Jim Langevin.
Tim Ryan.
John B. Larson.

ADDITIONAL VIEWS

These additional views express our concerns regarding the
proposal for a new Department of Defense National Security
Personnel System included in H.R. 1588. We recognize the need
for some changes in the personnel management system at the
Department of Defense (DoD) that help the department adapt to
today's international security and employment environment. In
particular, we feel that more flexibility in hiring practices
and a fair pay-for-performance system that does a better job of
rewarding the best DOD civilian employees could be very
important steps toward creating a more effective Department of
Defense. However, we believe that the proposal included in H.R.
1588 goes too far, too fast. Rather than presenting Congress
with a plan to address specific problems in the current
civilian personnel system, the Department has requested blanket
authority to create an entirely new system with only the
flimsiest safeguards for fundamental employee rights. We
believe that this ``blank check'' approach to reform is not the
way to proceed.
As recently demonstrated by the performance of our military
forces in Iraq, the Department of Defense is a highly effective
organization that is producing superb military capability.
Civilians at DOD--numbering more than 700,000--were a critical
part of this military success. The quality of this performance
demonstrates that Congress has time to do this right. Simply
put, there is no ``crisis'' in the DOD civil service system
that requires the ill-considered, rushed, and unclear reform
effort embodied in H.R. 1588. Our concern is that in trying to
go too fast in this critical area of reform, the Department
risks undermining the morale and effectiveness of a patriotic
and loyal civilian workforce that is a key part of the
outstanding military capabilities our nation enjoys today.
In addition to our concerns with the overly broad and
rushed approach to reform of the civilian personnel system
inherent in H.R. 1588, we are troubled by the lack of explicit
protections for fundamental workers' rights in the legislation.
The proposal grants broad authority to the current--and every
future--Secretary of Defense to create and manage a new
personnel system that is exempt from many current employee
protections embodied in Title 5, United States Code: the right
to true collective bargaining, the right to a fair appeals
system, premium payment for employees in hazardous jobs,
adequate overtime and weekend compensation, preferences for
veterans in hiring and retention, equal pay for equal work, and
protection from adverse actions due to political affiliation.
We believe that an effective approach to reform does not
require casually tossing aside these critical protections,
which are now protected in statute, in exchange for the
promises and good intentions of the current and future
leadership of the Department of Defense. We fear that if the
Department of Defense fails to use this new authority in a
responsible manner, we risk returning the nation's most
important government department to a ``spoils'' system where
political loyalty and favoritism are more important than
competence and merit.
During floor consideration of H.R. 1588, we hope to present
amendments that address our concerns regarding the overly broad
and sweeping provisions that grant the Department of Defense
unprecedented authority to establish an entirely new personnel
system. Informed and carefully considered reform of the DOD
civil service system may be needed, but we feel that the
approach represented by H.R. 1588 may place America's current
military strength at risk by trying to change too much, too
fast. We feel that Congress owes it to our Department of
Defense civilian employees, our Armed Forces, and the American
people to get these critical reforms right.

Jim Cooper.
Ike Skelton.
John Spratt.
Gene Taylor.
Ciro D. Rodriguez.
Silvestre Reyes.
Neil Abercrombie.
Susan A. Davis.
Adam Smith.
James Langevin.
John B. Larson.
Steve Israel.
Robert A. Brady.
Kendrick B. Meek.
Solomon P. Ortiz.
Rick Larsen.
Tim Ryan.
Ellen O. Tauscher.

ADDITIONAL AND SUPPLEMENTAL VIEWS OF REPRESENTATIVE TIM RYAN

This statement is to clarify any inconsistency found in the
amendments pertaining to subsection 2533a(c) of the Berry
Amendment. My intent is to have consistency throughout
2533a(c), as amended, by having the authority found in
2533a(c), as amended, rest exclusively with the Secretary of
Defense, and not with the Secretary of the military department
concerned. Hence, the phrase ``or the Secretary of the military
department concerned'' should be stricken throughout 2533a(c)
of the Berry Amendment.

Tim Ryan.

DISSENTING VIEW OF REPRESENTATIVE LANE EVANS

The Fiscal Year 2004 National Defense Authorization as
reported out of this committee goes a long way in giving our
troops and their commanders the tools to transform our military
for the 21st century. But, I remain very concerned about the
latitude given to the Secretary of Defense and the enveloping
changes to the Department of Defenses' personnel system. My
overwhelming concern in handing over so much power to the
Pentagon and eliminating vital labor protections forced me to
vote against the chairman's mark up.
Section 1111 of the Fiscal Year 2004 National Defense
Authorization as reported waives 12 major federal civil service
protections for workers in Title 5 of the United States Code.
These sweeping changes and others more drastic were presented
to the committee for consideration by the Secretary of Defense
less than two weeks before we began the mark up process. This
gave the members of the committee an extremely short period to
listen to expert witnesses and deliberate the effect of this
wide ranging rollback. While the creation of the current civil
service rules took years to implement and perfect, this major
rollback took only a few hours of hearings, with little actual
debate.
Section 1111 gives the Department of Defense authority to
scrap local bargaining agreements and replace them with one
rigid national system. Denying local agreements does not take
into account unique workplaces that a national agreement will
not incorporate. Further, it scraps the long established
General Schedule (GS) wage system and the grade step increases
with a system the Secretary of Defense will draw up. Neither
the Armed Services Committee nor the Government Reform
Committee have given any guidance or parameters over a wage
system that will effect over 700,000 government workers.
The hallmark of our nation's civil service system is due
process and rights of appeal. This legislation waives a
Department of Defense employee's right to appeal a disciplinary
discriminatory action to either the Equal Employment
Opportunity Commission or the Merit Systems Protection Board.
Many of these changes to the civil service in this
legislation are based upon the ``Homeland Security'' model that
has not even been tested, much less implemented. We are about
to extend these experimental rollbacks to the 700,000
Department of Defense civilian employees. These effected
civilian employees performed tremendously during Operation
Enduring Freedom and Operation Iraqi Freedom, but upon the
recent cessation of hostilities, their rights and protections
will now be rolled back, without justification being presented
in this committee.
This legislation as reported out of the committee places an
unprecedented amount of trust with the Secretary of Defense
that would apply to all future Secretaries of Defense in the
area of labor management and civilian protections. This
committee should not hand off wide-ranging and absolute
authority on the enforcement of veterans' preference in hiring,
setting wage and pay classifications, and the definition of
merit and performance to the Secretary of Defense and his or
her subordinate bureaucrats. It is within the jurisdiction and
the assigned role of this committee to define these standards.
I believe that in the future, more than likely based upon a
negative and publicized experience with these rollbacks, this
committee will revisit the broad latitude in the personnel
system handed to the Secretary of Defense.
I am aware that the Senate Armed Services Committee has not
included these changes to the personnel system and it is my
strong desire that the Senate position on this issue prevails.

Lane Evans.