[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

                                   ON

                               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

                              ----------                              
                                                                   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]

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

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

    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 
project: $220,000 for visitors' quarters at Homestead Air 
Reserve Base, Florida.

                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.

                                
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