[House Report 108-553]
[From the U.S. Government Publishing Office]




108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-553
=======================================================================



                         DEPARTMENT OF DEFENSE
                       APPROPRIATIONS BILL, 2005

                               __________

                              R E P O R T

                                 of the

                      COMMITTEE ON APPROPRIATIONS

                        [to accompany h.r. 4613]

                             together with

                            ADDITIONAL VIEWS




 June 18, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-553
=======================================================================

 
            DEPARTMENT OF DEFENSE APPROPRIATIONS BILL, 2005

                               ----------                              

                              R E P O R T

                                 of the

                      COMMITTEE ON APPROPRIATIONS

                        [to accompany h.r. 4613]

                             together with

                            ADDITIONAL VIEWS




 June 18, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


                            C O N T E N T S

                              ----------                              
                                                                   Page
Bill Totals......................................................     1
Committee Budget Review Process..................................     4
Introduction.....................................................     4
Fiscal Year 2005 Budget Request..................................     4
Budget Amendment for Operations in Iraq and Afghanistan..........     5
Unfunded Demands.................................................     5
Committee Views..................................................     5
Major Recommendations in the Committee Bill......................     6
Committee Recommendations by Major Category......................     9
    Military Personnel...........................................     9
    Operation and Maintenance....................................     9
    Procurement..................................................     9
    Research, Development, Test and Evaluation...................    10
    Other Items of Interest Funded in the Bill...................    11
Reprogramming, Withholding, and ``Taxing'' Appropriated Funds....    11
Security and Financial Reviews Regarding Iraqi National Congress.    14
Forces to be Supported...........................................    14
    Department of the Army.......................................    14
    Department of the Navy.......................................    15
    Department of the Air Force..................................    16
TITLE I. MILITARY PERSONNEL......................................    17
    Programs and Activities Funded by Military Personnel 
      Appropriations.............................................    17
    Summary of Military Personnel Recommendations for Fiscal Year 
      2005.......................................................    17
    Adjustments to Military Personnel Account....................    19
        Overview.................................................    19
        End Strength Adjustments.................................    19
        Accuracy of Obligations..................................    20
        Personnel Strengths......................................    20
        Guard and Reserve Workyear Requirements..................    20
        Military Technicians Cost Avoidance......................    21
        Budget Justification Documents for Military Personnel....    21
        Reimbursement of Citizenship Fees........................    21
        Full-Time Support Strengths..............................    22
    Military Personnel, Army.....................................    22
    Military Personnel, Navy.....................................    25
    Military Personnel, Marine Corps.............................    28
    Military Personnel, Air Force................................    31
    Reserve Personnel, Army......................................    34
    Reserve Personnel, Navy......................................    36
    Reserve Personnel, Marine Corps..............................    38
    Reserve Personnel, Air Force.................................    40
    National Guard Personnel, Army...............................    42
    National Guard Personnel, Air Force..........................    44
TITLE II. OPERATION AND MAINTENANCE..............................    47
    Operation and Maintenance Overview...........................    49
        Recommendations to Address Shortfalls....................    50
        Operation and Maintenance Budget Exhibits................    50
        Operation and Maintenance Budget Execution Data..........    51
        Operation and Maintenance Reprogrammings.................    51
        Availability of Funds....................................    52
        Civilian Pay.............................................    52
        Unobligated Balances.....................................    53
        Reduction to Administration and Servicewide Activities...    53
        Base Operations Support..................................    53
        Civilian Pay Overstatement...............................    53
        Military to Civilian Conversions.........................    54
        Working Capital Fund Cash................................    54
        Transportation Working Capital Fund......................    54
        Other Contracts..........................................    54
        Contract Offsets.........................................    55
        Civilian Separation Incentive............................    55
        Fort Ticonderoga.........................................    55
        Presidio of San Francisco................................    55
        Corrosion Control........................................    55
        Joint Professional Military Education Level One..........    56
    Operation and Maintenance, Army..............................    57
        Online Technology Training Program.......................    62
        Philadelphia Military Academies..........................    62
        Vehicle Integrated Primary Electrical Resource...........    62
        Virtual Reality Spray Paint Simulator System and Training 
          Program................................................    62
        Fort Monmouth Telecommunications Infrastructure..........    62
        Controlled Humidity Program..............................    62
        One Soul: Holocaust Education Exhibit....................    62
        Sense and Respond Logistics..............................    63
        Integrated Digital Environments Information Portal.......    63
        Army Knowledge Online....................................    63
    Operation and Maintenance, Navy..............................    63
        Knowledge Management and Decision Support System.........    67
        Local Situational Assessment, NAS Lemoore................    68
        CDTEMS...................................................    68
        Single Torpedo Maintenance Facility......................    68
        Navy Region Southeast Integrated Safety Management System    68
        NAS North Island.........................................    68
        Global Hawk Maritime Demonstration.......................    69
        DoD NOAA Facility Clean-Up...............................    69
    Operation and Maintenance, Marine Corps......................    69
        Marine Corps Mountain/Cold Weather Clothing and Equipment    72
    Operation and Maintenance, Air Force.........................    72
        F-15E Oxygen Concentrator Reliability Improvement Program    76
        Defense Installation Spatial Data Infrastructure (DISDI).    76
        Air Show Study...........................................    77
        Threat Representation and Validation.....................    77
        Heavy Outsized Airlift Capacity..........................    77
        B-1 Aircraft Regeneration................................    77
    Operation and Maintenance, Defense-Wide......................    78
        Passive RFID Prototype Project...........................    82
        Norm Mineta Internship Immersion Program.................    82
        Commercial Technologies for Maintenance Activities (CTMA)    82
        George AFB...............................................    82
        Norton AFB...............................................    82
        Lewis Center for Educational Research....................    82
        Environmental Remediation of Unexploded Ordnance.........    83
        Building Protection......................................    83
        Victim Advocates.........................................    83
    Operation and Maintenance, Army Reserve......................    83
        US Army Reserve Command IT Consolidation.................    87
        Controlled Humidity Protection...........................    87
    Operation and Maintenance, Navy Reserve......................    87
    Operation and Maintenance, Marine Corps Reserve..............    90
    Operation and Maintenance, Air Force Reserve.................    92
        932nd Airlift Wing.......................................    94
    Operation and Maintenance, Army National Guard...............    94
        Homeland Operational Planning System.....................    97
        AVCRAD Replacement Equipment.............................    97
        Advanced Starting Systems................................    97
        Infantry Helmet Liner Retrofit...........................    97
    Operation and Maintenance, Air National Guard................    97
    Overseas Contingency Operations Transfer Account.............   100
    United States Court of Appeals for the Armed Forces..........   100
    Environmental Restoration, Army..............................   100
    Environmental Restoration, Navy..............................   101
    Environmental Restoration, Air Force.........................   101
    Environmental Restoration, Defense-Wide......................   101
    Environmental Restoration, Formerly Used Defense Sites.......   101
    DeWitt Center................................................   101
    Overseas Humanitarian, Disaster, and Civic Aid...............   102
    Former Soviet Union Threat Reduction Account.................   102
TITLE III. PROCUREMENT...........................................   103
    Estimates and Appropriations Summary.........................   103
        Special Interest Items...................................   105
        Reprogramming Guidance for Acquisition Accounts..........   105
        Classified Annex.........................................   105
        Multiyear Procurement Contracts..........................   105
        Ground Forces Recapitalization...........................   107
    Aircraft Procurement, Army...................................   108
        Comanche Termination and Budget Amendment................   110
    Missile Procurement, Army....................................   113
        Line of Sight Anti-Tank (LOSAT)..........................   115
        Hellfire.................................................   115
    Procurement of Weapons and Tracked Combat Vehicles, Army.....   118
        Stryker..................................................   120
    Procurement of Ammunition, Army..............................   123
        Ammunition Industrial Base...............................   125
        M169 Cartridge Casing Production.........................   125
        Hydra Rocket.............................................   125
    Other Procurement, Army......................................   129
        Tactical Unmanned Aerial Vehicle (TUAV)..................   134
        Rapid Equipping Force (REF)..............................   134
        Integrated Communications Navigation Identification 
          Avionics (ICNIA).......................................   134
    Aircraft Procurement, Navy...................................   141
        Ongoing Program Review...................................   145
        EA-18G Advance Procurement...............................   145
        MH-60R...................................................   145
        EA-6B Series.............................................   146
            Improved Capabilities (ICAP III) Program.............   146
        F/A-18 Advanced Tactical Reconnaissance System (ATARS)...   146
        F/A-18 LITENING Pod Downlink Development Program for AV-
          8B.....................................................   147
        F/A-18 LITENING Pod Advanced Targeting (AT)..............   147
        Naval Air Systems Command Metrology and Calibration 
          Program................................................   147
        Operational Flight Trainer Simulation Initiative.........   147
    Weapons Procurement, Navy....................................   152
        Northwest Undersea Range.................................   154
        Pioneer Unmanned Aerial Vehicle (UAV) Product Improvement 
          Program (PIP)..........................................   154
    Procurement of Ammunition, Navy and Marine Corps.............   157
    Shipbuilding and Conversion, Navy............................   162
        Shipbuilding Issues......................................   164
        DDG-51 Guided Missile Destroyer--Advance Procurement.....   164
        DDG-51 Guided Missile Destroyer--Modernization Program...   165
    Other Procurement, Navy......................................   167
        CVN Propeller Replacement Program........................   172
        TRIDENT Modifications....................................   172
        Unmanned Undersea Vehicle (UUV) Program..................   172
        Performance-Centric Mission Essential Content Delivery...   172
        Serial Number Tracking System............................   173
        Physical Security Equipment..............................   173
    Procurement, Marine Corps....................................   180
    Aircraft Procurement, Air Force..............................   188
        F/A-22 Raptor............................................   191
        F/A-22 Independent Cost Estimate.........................   191
        C-17 Aircraft............................................   191
        C-17 Interim Contractor Support..........................   193
        Tanker Replacement Transfer Fund.........................   193
        Global Hawk..............................................   193
        C-130 Gunship Link 16....................................   194
    Missile Procurement, Air Force...............................   198
        Joint Air-To-Surface Standoff Missile....................   200
        Evolved Expendable Launch Vehicle........................   200
    Procurement of Ammunition, Air Force.........................   204
        General Purpose Bombs....................................   206
    Other Procurement, Air Force.................................   208
        Theater Air Control System Improvement...................   211
    Procurement, Defense-Wide....................................   216
        SOF Rotary Wing Upgrades.................................   219
        Advanced Seal Delivery System (ASDS).....................   219
        Miscellaneous Equipment..................................   219
        Vulnerability Management Strategy........................   219
    National Guard and Reserve Equipment.........................   224
    Defense Production Act Purchases.............................   224
    Information Technology.......................................   224
        Information Technology and Business Management 
          Modernization Program..................................   226
        Navy Converged Enterprise Resource Planning..............   227
        U.S. Army Reserve Command IT Consolidation...............   227
TITLE IV. RESEARCH, DEVELOPMENT, TEST AND EVALUATION.............   229
    Estimates and Appropriation Summary..........................   229
        Reprogramming Guidance for Acquisition Accounts..........   231
        Joint Strike Fighter (F-35)..............................   231
        Preserving Growth Potential for the F-35.................   233
        F-35 Program Management..................................   234
        Joint Unmanned Combat Aerial System (JUCAS)..............   234
        Special Interest Items...................................   235
        Classified Annex.........................................   236
    Research, Development, Test and Evaluation, Army.............   236
        Future Combat System.....................................   253
        Non Line of Sight Cannon (NLOS-C)........................   254
        Theater Support Vessel...................................   254
        Joint Tactical Radio System (JTRS).......................   255
        Patriot PAC-3/Medium Extended Air Defense System (MEADS).   255
        Land Warrior and Future Force Warrior....................   256
        Guided Multiple Launch Rocket System (GMLRS)--Unitary....   256
        Nuclear Monitoring.......................................   257
        Defense Language Institute...............................   257
        Arizona Telemedicine Program.............................   257
    Research, Development, Test and Evaluation, Navy.............   264
        Bone Marrow Registry.....................................   287
        Naval Hospital Great Lakes and North Chicago Veterans 
          Affairs Medical Center.................................   287
        DD(X)....................................................   287
        Littoral Combat Ship (LCS)...............................   288
        Amphibious Assault Ship--LHA Replacement.................   289
        Advanced Hybrid Stored Energy Devices....................   290
        Blast Resistant Anechoic Sprayable Elastomeric Coatings..   290
        Cutting Tools for Aerospace Materials....................   290
        Low-Power Mega Performance UAV Processing Engines........   290
        Center for Critical Infrastructure Protection............   290
        High Performance Sandwich Panel Construction Techniques..   291
        Project M................................................   291
        Intelligent Systems Consortium (ISC) Initiative..........   291
        Cascading Vehicles Concept for Advanced Littoral 
          Operations.............................................   291
        Review of Multiple Missile Systems.......................   291
        Disruptive Technology Opportunities Fund (DTOF)..........   292
        Supply Chain Practices for Affordable Navy Systems 
          (SPANS)................................................   292
        Center for Coastline Security Technology.................   293
        Joint Operational Test Bed (JOTBS).......................   293
        Nano-Imprint at Manufacturing Scale (NIMS)...............   293
        Composite Ceramic Unmanned Underwater Vehicle............   293
        AH-1Y/UH-1Z Tailboom.....................................   293
        CV-22 Osprey.............................................   294
        VXX Helicopter Program...................................   294
        Navy Converged Enterprise Resource Planning..............   294
    Research, Development, Test and Evaluation, Air Force........   302
        Space Based Infrared System (SBIRS) High.................   312
        Space Based Radar........................................   312
        E-10A Multi-Mission Command and Control Aircraft.........   314
        Bomber Development.......................................   315
        Airborne Electronic Attack...............................   316
        Bomber Tactical Data Links...............................   316
        National Aerospace Leadership Initiative.................   317
    Research, Development, Test and Evaluation, Defense-Wide.....   326
        Comparative Genomics for National Security Goals.........   337
        Operationally Responsive Satellite.......................   337
        Chemical and Biological Defense Program..................   337
        California Manufacturing Technology Center (CMTC)........   337
        Defense Acquisition Challenge Program....................   337
        Business Management Modernization Program................   338
        Ballistic Missile Defense System (BMDS) Summary..........   338
        Aegis Missile Defense Program............................   340
        BMDS Operation and Maintenance...........................   340
        Integrated Flight Test--13C (IFT-13C)....................   340
        Advanced Multipurpose Microdisplay System................   341
    Operational Test and Evaluation, Defense.....................   347
TITLE V. REVOLVING AND MANAGEMENT FUNDS..........................   351
    Defense Working Capital Funds................................   351
        Defense Working Capital Funds Reduction..................   351
    National Defense Sealift Fund................................   351
        Maritime Pre-Positioning Force (Future)..................   351
TITLE VI. OTHER DEPARTMENT OF DEFENSE PROGRAMS...................   353
    Defense Health Program.......................................   353
        Defense Health Program--Reprogramming....................   357
        Walter Reed Army Medical Center--Amputee Patient Care 
          Program................................................   357
        Landstuhl Army Medical Center............................   357
        Army Fisher Houses.......................................   358
        Third-Party Collections..................................   358
        Mental Health Services...................................   358
        Limited Access to Military Treatment Facilities in Rural 
          Areas..................................................   359
    Chemical Agents and Munitions Destruction, Army..............   359
    Drug Interdiction and Counter-Drug Activities, Defense.......   361
        Volume Test Site for Point Sensors.......................   361
        Tethered Aerostat Program................................   361
        Hemispheric Radar System.................................   361
    Office of the Inspector General..............................   362
TITLE VII. RELATED AGENCIES......................................   363
    National Foreign Intelligence Program........................   363
        Classified Annex.........................................   363
    Central Intelligence Agency Retirement and Disability System 
      Fund.......................................................   363
    Intelligence Community Management Account....................   364
    Payment to Kaho'olawe Island Conveyance, Remediation, and 
      Environmental Restoration Fund.............................   364
    National Security Education Trust Fund.......................   364
TITLE VIII. GENERAL PROVISIONS...................................   365
    Definition of Program, Project, and Activity.................   365
TITLE IX. ADDITIONAL APPROPRIATIONS..............................   367
Chapter 1
    Submission of Budget Amendment...............................   367
    Committee Recommendations....................................   368
    Reporting Requirements.......................................   369
    Abuse of Prisoners...........................................   370
    INC Financial Review.........................................   370
    Military Personnel...........................................   371
    Operation and Maintenance....................................   372
    Iraq Freedom Fund............................................   372
    Procurement..................................................   372
        Miscellaneous Procurement................................   374
        Vehicle Force Protection.................................   375
    Defense Working Capital Funds................................   376
    Defense Health Program.......................................   376
    Outsourcing Oversight of Defense Contracts...................   377
Chapter 2
    Department of State..........................................   377
        Administration of Foreign Affairs........................   377
        Diplomatic and Consular Programs.........................   377
        Embassy Security, Construction, and Maintenance..........   378
Chapter 3
    Bilateral Economic Assistance................................   378
    Funds Appropriated to the President..........................   378
        United States Agency for International Development.......   378
        International Disaster and Famine Assistance.............   378
    Department of State..........................................   378
        Migration and Refugee Assistance.........................   378
        General Provisions--This Title...........................   379
HOUSE OF REPRESENTATIVES REPORTING REQUIREMENTS..................   381
    Changes in the Application of Existing Law...................   381
        Appropriations Language..................................   381
        General Provisions.......................................   383
    Appropriations Not Authorized by Law.........................   387
    Transfer of Funds............................................   388
    Rescissions..................................................   389
    Compliance With Clause 3 of Rule XIII (Ramseyer Rule)........   389
    Statement of General Performance Goals and Objectives........   393
    Constitutional Authority.....................................   393
    Comparison With the Budget Resolution........................   393
    Five-Year Outlay Projections.................................   394
    Financial Assistance to State and Local Governments..........   394
    Additional Views.............................................   408



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-553
=======================================================================



            DEPARTMENT OF DEFENSE APPROPRIATIONS BILL, 2005

                                _______
                                

 June 18, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Lewis of California, from the Committee on Appropriations, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 4613]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill making 
appropriations for the Department of Defense, and for other 
purposes, for the fiscal year ending September 30, 2005.

                              Bill Totals

    Appropriations for most military functions of the 
Department of Defense are provided for in the accompanying bill 
for the fiscal year 2005. This bill does not provide 
appropriations for military construction, military family 
housing, civil defense, or nuclear warheads, for which 
requirements are considered in connection with other 
appropriations bills.
    The President's fiscal year 2005 budget request for 
activities funded in the Department of Defense Appropriations 
Bill totals $417,807,305,000 in new budget (obligational) 
authority. This amount includes $392,807,305,000 requested on 
February 3, 2004, as part of the President's overall fiscal 
year 2005 budget submission, and $25,000,000,000 requested in a 
budget amendment on May 12, 2004.
    The amounts recommended by the Committee in the 
accompanying bill total $416,153,100,000 in new budget 
authority for the Department of Defense. This includes 
$25,000,000,000 for incremental costs of operations in Iraq and 
Afghanistan.\1\ This total is $47,458,539,000 above the sums 
made available for the Department of Defense in fiscal year 
2004.\2\ An additional $780,300,000 has been provided in title 
IX of the bill, for emergency funding requirements of the 
Department of State.
---------------------------------------------------------------------------
    \1\ If the bill is enacted before October 1, 2004, these amounts 
for Iraq and Afghanistan will be considered fiscal year 2004 budget 
authority.
    \2\ This amount does not include $62,906,554,000 in fiscal year 
2004 supplemental appropriations and rescissions provided in Public 
Laws 108-106 and 108-199.


                    Committee Budget Review Process

    During its review of the fiscal year 2005 budget, the 
Subcommittee on Defense held a total of nine hearings during 
the period of February 2004 to May 2004. Testimony received by 
the Subcommittee totaled 771 pages of transcript. Approximately 
half of the hearings were held in open session. Executive 
(closed) sessions were held only when the security 
classification of the material to be discussed presented no 
alternative.

                              Introduction

    The Committee's consideration of the fiscal year 2005 
Department of Defense Appropriations bill has been shaped by 
the need to carefully examine and balance the formidable array 
of challenges confronting America's armed forces.
    The Nation is at war on multiple fronts. Military 
operations in Iraq, Afghanistan, and the broader global war on 
terrorism have made it imperative that the Department of 
Defense and the Congress respond by providing the necessary 
resources to support our deployed forces. These demands are far 
from trivial--the situation in Iraq coupled with these other 
operations have led to the largest mobilization in decades.
    It is clear that these deployments, especially Operation 
Iraqi Freedom, will remain the focus of our armed forces for 
some time. It is also becoming clearer with each passing day 
that these operations are generating great strains on the 
current force, in terms of both manning and equipment. The 
Committee is deeply concerned that these stresses are creating 
many near- and mid-term challenges which have yet to be fully 
factored into Department of Defense plans and budgets.
    While looking to address these immediate and mid-term 
concerns in this legislation, the Committee also is mindful of 
the need to provide for the longer-term investments required to 
ensure the viability of the U.S. military in the future.

                    FISCAL YEAR 2005 BUDGET REQUEST

    The President's fiscal year 2005 defense budget submitted 
in February 2004 was largely a ``peacetime budget'', as the 
Administration initially announced it intended to request funds 
for war-related costs through the supplemental appropriations 
process.
    Accordingly, this budget reflected the Administration's 
emphasis on strongly supporting improved pay and benefits for 
service members, and increases in peacetime training and 
readiness accounts. In the acquisition arena, the budget 
request gave continued priority to developing new generations 
of ground combat vehicles, ships and aircraft, many of which 
embrace so-called ``defense transformation''--be it in 
technology, acquisition scheme, or operational employment. The 
budget also reflected the need to address emerging threats by 
proposing increased funding for intelligence, the development 
of missile defenses and counters to chemical and biological 
attacks, and a series of other transformational technologies 
including new satellites and unmanned aircraft.

        BUDGET AMENDMENT FOR OPERATIONS IN IRAQ AND AFGHANISTAN

    As originally submitted, the fiscal year 2005 request did 
not include funds to support the ongoing costs resulting from 
operations in Iraq and Afghanistan. Funds for these operations 
were to be requested at the beginning of 2005 in a supplemental 
appropriations request. The situation in theater has evolved, 
however, and as a result, on May 12, 2004, the President 
submitted a budget amendment for the Department of Defense, 
requesting $25,000,000,000 for incremental operational costs 
associated with Iraq and Afghanistan operations. These 
appropriations are intended to serve as a funding bridge until 
early next year when a fiscal year 2005 supplemental request 
will be submitted to cover the remaining costs of the Iraq and 
Afghanistan operations, as well as the global war on terrorism.

                            UNFUNDED DEMANDS

    Largely due to timing, the Committee notes that the 
President's budget does not include funding to address two 
major emerging requirements, both centered on the nation's 
ground forces.
    First, at roughly the same time the budget was submitted 
the Army announced the most ambitious restructuring of its 
combat formations in decades. This reorganization, known as 
``modularity'', will transform the structure of Army divisions 
to create additional combat relevant units, centered on 
brigades. This plan will not just lead to a more flexible, 
deployable Army, but by creating additional combat formations, 
it should contribute to the reduction of stress on our troops 
resulting from the high operational tempo of recent years. The 
Army is moving rapidly to institute this new structure, but no 
funds for this initiative were requested in the fiscal year 
2005 budget.
    Second, the fiscal year 2005 budget, prepared last year, 
does not address the new set of recapitalization challenges 
confronting all the services--but particularly the Army and 
Marine Corps--as a result of Operations Iraqi Freedom and 
Enduring Freedom. As stated in recent congressional testimony 
by the Chairman of the Joint Chiefs of Staff,

          ``The equipment that we leave is being used very 
        hard, more than we've ever used in peacetime. So as we 
        look at future budgets . . . we have to program in . . 
        . the ability to fix this equipment if it can be fixed 
        through depot, or replaced, if it has to be replaced.''
    The Committee concurs.

                            COMMITTEE VIEWS

    Thus, the biggest challenge the Committee faced this year 
was to seek a balance between these competing imperatives. The 
Committee's priorities are to sustain current operations, 
readiness, and force well-being; ensure our forces' ability to 
respond to other potential conflicts in the not-too-distant 
future; and use our limited resources to proceed surely, but 
effectively, with military transformation.
    To meet these objectives, the Committee finds itself 
largely in agreement with many aspects of the overall direction 
of the Administration as reflected in the fiscal year 2005 
budget. Amending the budget to provide for early fiscal year 
2005 operational costs of Iraq and Afghanistan is both prudent 
and necessary. Also, the Committee has long stressed the need 
for adequate funding for military pay, quality of life, and 
readiness programs, and supports these priorities as requested 
in the President's budget.
    As for the Department's acquisition programs, in general 
the Committee believes that many of the ``transformational'' 
programs under development are worthy objectives, both playing 
to American advantages and future threat environments. These 
programs stress the use of modern information technology and 
manufacturing techniques to produce more agile, flexible, and 
lethal combat platforms and systems. After thorough 
examination, however, the Committee has concluded that a 
consistent theme runs through many of these programs, as 
proposed in the fiscal year 2005 budget--namely, the 
development programs are currently too aggressive and 
optimistic in terms of research, testing, and production 
profiles. The Committee believes that a more measured 
``transition to transformation'' is in order, especially in the 
areas of Naval surface combatants and Army combat vehicles.
    Finally, the Committee believes it imperative to begin now 
a meaningful program that addresses what will surely be the 
long-term need to refurbish and rebuild our ground forces. 
There is no question that the combination of combat losses and 
extraordinary rates of operational tempo make this necessary, 
as is the need to deal with strain on certain elements of the 
domestic industrial base, for items such as ammunition.
    For its future budgets, the Committee believes the 
Department must confront the reality that its ongoing 
contingency operations must lead to some serious rethinking of 
its needs, and the budgets and programs to meet them. The 
Department would be wise to step back and take a broad look at 
the changed circumstances now confronting the military--as the 
Committee has done--to develop a balanced, effective fiscal 
plan and program for the coming years.

              Major Recommendations in the Committee Bill

    To meet near-term needs, the Committee provides funds to:
           Support continued operations in Iraq and 
        Afghanistan;
           Fight the Global War on Terrorism;
           Maintain readiness; and
           Fully fund military pay, benefits, and 
        medical programs.
    For the mid-term the Committee bill:
           Initiates a program to recapitalize our 
        ground forces;
           Supports continued production of major 
        platforms such as the Virginia class submarine, the C-
        17, C-130, and V-22 transports, and the F/A-18 and F/A-
        22 fighters;
           Supports the initial deployment of national 
        missile defenses and continued investment in theater 
        missile defenses; and
           Makes recommendations on certain programs 
        that will allow the Department to ``transition to 
        transformation''.
    For the long-term, the Committee supports the Department's 
efforts to transform, but makes appropriate adjustments to 
programs that have ``come too far, too fast''.
    A more detailed summary of major programs follows:
    Fiscal Year 2005 Operational Costs.--The Committee bill 
proposes $25,000,000,000 in title IX to defray operational 
costs in Iraq and Afghanistan. Within this amount, the 
Committee provides funding for added manpower requirements 
stemming from these operations and the increases in end 
strength approved by the House in its consideration of the 
National Defense Authorization Act for Fiscal Year 2005. This 
amount also includes over $14 billion for operation and 
maintenance; addresses critical force protection requirements 
such as Up-armored HMMWVs and individual body armor; and 
provides funding in support of the Army brigade restructuring 
initiative, as it applies to units which will be rotating into 
theater.
    Ground Forces Recapitalization.--The Committee bill 
provides increases over the budget request totaling $2.2 
billion for the Army and Marine Corps. Of this amount, some 
$330 million is directed to the Guard and Reserve component. 
This recapitalization package includes--
           $1.3 billion for combat vehicles--including 
        procurement of equipment for an additional Stryker 
        brigade combat team ($950 million) above that 
        programmed in the budget;
           $503 million for helicopters;
           $390 million for trucks and other support 
        vehicles; and
           $52 million for the ammunition production 
        base.
    These recommendations begin the process of restocking our 
ground forces' fleets, recognizes the `transformational' 
character of the Army's restructuring/modularity process, and 
provides a more robust transitional force for the Army on the 
path to transformation.
    Military Personnel and Medical Programs.--The Committee 
bill fully funds the military pay raises proposed in the 
President's budget, and also supports the request for Basic 
Allowance for Housing, eliminating service members' average 
out-of-pocket housing expenses from 3.5 percent to zero in 
fiscal year 2005. Nearly $18 billion is recommended for the 
Defense Health Program, an increase of $2.2 billion over fiscal 
year 2004, and funding for military-related medical research 
and related initiatives is increased by nearly over $900 
million over requested levels.
    Readiness Accounts.--The Committee bill provides the 
requested levels of funding for land forces training, tank 
training miles, helicopter flying hours, ship steaming days, 
Air Force and Navy flying hour programs.
    Missile Defense Program.--The Committee bill recommends 
$9.7 billion for missile defense programs, an increase of over 
$632 million from fiscal year 2004 levels and a net decrease of 
$458 million from the budget request. This amount includes $4.4 
billion for ground-based midcourse missile defense, in support 
of fielding a national missile defense initial operational 
capability in the autumn of 2004 as proposed by the President. 
For theater missile defense, the Committee has provided $938 
million for production, modification and continued development 
of Patriot PAC-3 missiles and the next generation MEADS 
systems.
    Chemical and Biological Defense Initiatives.--The Committee 
bill provides nearly $1.7 billion for procurement and 
development of chemical and biological defenses under the 
Defense-Wide appropriations, with additional funding for mobile 
chemical agent detection, air contaminant monitoring systems, 
early warning and detection programs, and miniature chemical 
and biological detectors.
    Future Combat System.--The Committee bill provides $2.9 
billion, an increase over fiscal year 2004 of $1.2 billion and 
a decrease of $324 million to the budget request. The Committee 
bill fully funds the requested amount for the Non Line of Sight 
Cannon (NLOS-C) and directs its fielding by not later than 
2010.
    Shipbuilding Programs.--The Committee bill provides a total 
of $10.2 billion for shipbuilding procurement and has fully 
funded amounts requested for fiscal year 2005 production ships, 
including one Virginia-class submarine, one Trident SSGN 
conversion, and three DDG-51 destroyers. An additional $225 
million is allocated towards a DDG-51 modernization program and 
for procurement of an additional DDG-51 in the future.
    As for future ship development, the Committee recommends 
$953 million for the next-generation CVN-21 carrier; $409 
million for the Littoral Combat Ship, an addition of $57 
million over the request; and a total of $1.2 billion for the 
DD(X) program, a reduction of $248 million from the request 
owing to a decision to defer construction of the first DD(X) 
ship.
    Major Aviation Programs.--The Committee makes the following 
recommendations:
    Army: The Committee approves termination of the RAH-66 
Comanche program and redistributes funding to other Army 
aviation programs, as proposed by the Army, and adds $463 
million over the request for additional Blackhawk and Chinook 
helicopters.
    Navy/Marine Corps: Funding is provided for 42 F/A-18 
fighters, 8 Marine Corps V-22's and 2 E-2C surveillance 
aircraft as requested in the budget.
    Air Force: The Committee recommends $3.6 billion for 24 F/
A-22 fighters, and adds $158 million to the C-17 program to 
procure 15 aircraft, one over the request. The Committee 
proposes $100 million for a ``Tanker Replacement Transfer 
Fund'', to be used for the eventual acquisition of KC-767 
tankers. $100 million is added for continued development of the 
B-2 and a next-generation bomber program.
    Joint Strike Fighter.--The Committee bill recommends $4.4 
billion, an increase of $116 million from fiscal year 2004 
levels, for the Joint Strike Fighter development program. This 
amount represents a net decrease of $204 million from the 
request reflecting schedule slips. Funds are added for design 
work on the STOVL variant of this aircraft.
    Space Programs.--The Committee bill provides $560 million 
for the Space Based Infrared System (SBIRS-High), an increase 
of $91 million over the request; and provides $520 million for 
Enhanced Expendable Launch Vehicle (EELV) procurement. 
Development funding for the Advanced Wideband System and Mobile 
User Objective System programs is reduced, owing to concerns 
regarding technical maturation, risk reduction, and likely 
expenditure rates. Funding for the Space Based Radar program is 
reduced to $75 million, with direction to return this effort 
back to the technology development phase.

              Committee Recommendations by Major Category


                           MILITARY PERSONNEL

    In title I, the Committee recommends a total of 
$104,191,558,000 for active, Reserve and Guard military 
personnel costs, a reduction of $620,000,000 from the fiscal 
year 2005 budget request and $5,737,877,000 over the amount 
appropriated in fiscal year 2004.
    The Committee supports the budget request proposal of a 3.5 
percent pay raise for military personnel effective January 1, 
2005, as well as the proposal to eliminate the remaining 3.5 
percent out-of-pocket housing costs.
    The Committee has funded the end strength levels as 
requested in the President's budget request for active duty and 
Selected Reserve personnel. Funds in title IX of the bill 
provide additional funds for the increased end strength 
resulting from ongoing contingency operations, and those levels 
approved by the House in its version of the National Defense 
Authorization Act for Fiscal Year 2005.

                       OPERATION AND MAINTENANCE

    In title II of the bill, the Committee recommends a total 
of $120,568,274,000 for Operation and Maintenance support to 
the Service elements and other Department of Defense entities, 
a reduction of $1,306,315,000 from the fiscal year 2005 budget 
request and $4,653,397,000 over the amount appropriated in 
fiscal year 2004.
    The Committee's recommendation fully funds the President's 
request for readiness training in flying hours, ship steaming 
and ground forces operational tempo training. Requests for unit 
and depot level maintenance program funding have been fully 
supported. Transformational initiatives, including the Army's 
Flight School XXI and the Navy's Fleet Response Plan have been 
fully supported.
    In addition, the Committee's recommendation includes an 
increase of $500,000,000 in additional operating account 
funding to address many of the Department's funding shortfalls. 
Increased funding has been included for individual soldier and 
Marine field equipment, small all terrain vehicles, general 
purpose tents and mobility shelters, training and support 
facilities, joint training capabilities, training on urbanized 
terrain, military and civilian workforce safety, education 
programs, and distance learning.

                              PROCUREMENT

    In title III of the bill, the Committee recommends a total 
of $77,354,791,000 for procurement of equipment, an increase of 
$2,692,474,000 over the fiscal year 2005 budget request and 
$2,698,744,000 over the amount appropriated in fiscal year 
2004.
    Major program initiatives include:

$2,441,900,000 for Guard and Reserve equipment
$406,937,000 for 39 UH-60 Blackhawk helicopters
$1,039,450,000 for CH-47 helicopter modifications
$654,460,000 for Apache Longbow modifications
$489,253,000 for 108 Patriot missiles
$245,378,000 for Bradley Fighting Vehicle sustainment
$1,855,074,000 for Stryker Brigades
$457,692,000 for High Mobility Multi-Purpose Wheeled Vehicles 
        (HMMWV)
$610,664,000 for Family of Medium Tactical Vehicles (FMTV)
$212,538,000 for Family of Heavy Tactical Vehicles (FHTV)
$2,907,456,000 for 42 F/A-18 E/F Fighter aircraft
$846,571,000 for 8 Navy V-22 aircraft and $305,581,000 for 3 
        Air Force V-22 aircraft
$241,792,000 for 9 UH-1Y/AH-1Z helicopters
$295,595,000 for 15 MH-60S helicopters
$134,555,000 for 4 airlift aircraft
$329,558,000 for 14 trainer aircraft
$58,835,000 for H-53 modifications
$160,970,000 for P-3 modifications
$967,613,000 for spares and repair parts for Navy and Marine 
        Corps aircraft
$256,196,000 for 293 Tactical Tomahawk missiles
$1,994,754,000 for Navy weapons
$1,581,143,000 for 1 Virginia Class submarine
$469,226,000 for the last SSGN conversion
$3,444,950,000 for 3 DDG-51 Guided Missile Destroyers
$966,559,000 for 1 LPD-17 Class ship
$132,696,000 for AAV7A1 Product Improvement Program
$235,545,000 for 155MM Lightweight Towed Howitzer
$3,603,769,000 for 24 F-22 Raptor aircraft
$23,023,000 for modifications to F-117 stealth fighter-bombers 
        to maintain a fleet of 51 aircraft
$2,671,079,000 for 15 C-17 tactical airlift aircraft
$202,178,000 for 3 Global Hawk High Altitude UAVs
$186,609,000 for 13 Predator Medium Altitude UAVs
$100,000,000 for tanker replacement and the establishment of a 
        Tanker Replacement Transfer Fund
$769,171,000 for 11 C-130J airlift aircraft
$234,103,000 for Air Force aircraft spares and repair parts
$519,997,000 for 3 Evolved Expendable Launch Vehicles
$3,840,199,000 for procurement of ammunition for all Services

               RESEARCH, DEVELOPMENT, TEST AND EVALUATION

    In title IV of the bill, the Committee recommends a total 
of $68,946,512,000 for Research, Development, Test and 
Evaluation programs, an increase of $1,174,224,000 over the 
fiscal year 2005 budget request and $3,728,628,000 over the 
amount appropriated in fiscal year 2004.
    Major program initiatives include:

$2,873,653,000 for the Future Combat System including 
        $497,643,000 for the Non Line of Sight Cannon (NLOS-C)
$141,600,000 for the Theater Support Vessel (TSV)
$4,367,927,000 for the Joint Strike Fighter (JSF) F-35 program
$710,401,000 for the Joint Unmanned Combat Aerial System 
        (JUCAS) program
$1,182,785,000 for the DD(X) next generation Guided Missile 
        Destroyer
$409,080,000 for the Littoral Combat Ship (LCS)
$237,969,000 for the Expeditionary Fighting Vehicle (EFV)
$132,389,000 for the UH-1Y/AH-1Z development
$253,164,000 for V-22 Osprey development and test flights
$557,398,000 for the VXX Executive helicopter replacement 
        program
$50,000,000 for future bomber development
$458,860,000 for development of E-10A and MP-RTIP radar
$50,000,000 for improvements to the B-2 bomber
$344,538,000 for continued development of F/A-22 capability
$674,836,000 for the Advanced Wideband System (AWS) Satellite
$612,049,000 for the Advanced EHF Satellite
$599,488,000 for the Space Based Infrared System (SBIRS) High 
        Satellite
$307,668,000 for the National Polar-Orbiting Operational 
        Environmental Satellite

               OTHER ITEMS OF INTEREST FUNDED IN THE BILL

$1,694,338,000 for the Chemical Biological Defense Program
$8,688,772,000 for the programs of the Ballistic Missile 
        Defense Agency

     REPROGRAMMING, WITHHOLDING, AND ``TAXING'' APPROPRIATED FUNDS

    In recent years, the Committee has become increasingly 
troubled with practices of the Department of Defense (DoD) 
which involve the withholding and redirection of appropriated 
funds from activities provided for by the Congress. Recent 
developments with respect to the research, development, test 
and evaluation appropriations are of special concern. The 
following discussion addresses how DoD executes the movement of 
a significant level of appropriated funds among programs 
through mechanisms such as reprogramming funds, withholding 
funds, and charging ``taxes'' on funds that pass through the 
control of various departmental organizations.
    Reprogrammings.--This is the process by which DoD formally 
transfers funds from one program or activity--as approved in an 
appropriations act and delineated in a committee report--to 
another program or activity. The Congress understands there are 
instances in which DoD should be allowed to make such funding 
shifts, and this has manifested itself in the provision of 
transfer authority in appropriations acts and the establishment 
of reprogramming guidelines by the congressional defense 
committees. These guidelines include setting both dollar 
thresholds and ``item of special interest'' designations, under 
which DoD is obliged to seek the prior approval of the 
congressional defense committees before executing the movement 
of funds. An above-threshold reprogramming (ATR) requires 
approval of the congressional defense committees. A below-
threshold reprogramming (BTR) does not, except in limited 
instances, include any requirement for congressional 
notification or approval.
    In both fiscal years 2003 and 2004, the Committees on 
Appropriations temporarily raised the threshold for a BTR 
movement of funds. The new BTR guidance was raised to 
$20,000,000 for procurement (P-1 items) and $10,000,000 for 
Research, Development, Test and Evaluation (R-1 items), with 
current direction stating that the threshold shall be the 
specific dollar limitation ($20,000,000 for procurement and 
$10,000,000 for RDT&E) or 20 percent of the line, whichever is 
less.
    The Committee believes these reprogramming guidelines 
provide sufficient management flexibility for DoD, but is 
concerned that the guidelines are not applied consistently 
within the Department. Indeed, the Committee has observed 
increased use of BTRs by both the Office of the Secretary of 
Defense (OSD) and the military services in a manner which is 
often inconsistent and in clear violation of congressional 
intent. Especially troubling is evidence suggesting below 
threshold reprogrammings have been used to initiate new start 
development programs without congressional notification.
    Program Funding Withholds.--Withheld funds are those funds 
appropriated to, but not released to, programs for some portion 
of their availability period. Withholds are executed at the OSD 
and Service level, and are often justified when a program is 
experiencing programmatic issues or when congressional 
adjustments require additional information. These amounts 
should be released for expenditure to the programs for which 
the funds were appropriated when either OSD or the service 
involved is confident the program can proceed.
    ``Taxes''.--The term ``taxes'' refers euphemistically to 
amounts directed by either Departmental or Service entities to 
be set aside from amounts appropriated to programs, in order to 
be used for another purpose. Examples of taxes include 
reductions and redirection of funds resulting from statutory 
requirements, including those mandated to meet Small Business 
Innovative Research (SBIR) requirements, or ``across-the-
board'' reductions applied in response to explicit direction in 
appropriations acts. However, according to a General Accounting 
Office (GAO) review, program managers do not apply statutory 
taxes in an equitable manner. Further, these items are not 
separately identified in budget documentation in support of 
each Research, Development, Text and Evaluation (RDT&E) 
appropriation request. It is therefore impossible to determine 
if the Department is properly executing the requirements of the 
law.
    The Committee has also learned that other, so-called ``non-
statutory taxes'', are being increasingly applied to programs 
by OSD or the Services, in order to generate funds to 
accommodate shortfalls in other programs or fund new 
requirements. GAO has informed the Committee that in both 2003 
and 2004 program managers anticipated they would be required to 
set aside two to three percent of a program's appropriation to 
pay for taxes. Some of the amounts set aside as taxes are used 
to initiate new programs or new research that has not been 
presented to Congress, and for which an appropriation has not 
been approved.
    The routine use of BTRs, withholds, and taxes is increasing 
and becoming more widespread, affecting nearly every program. 
Of particular concern is that the scope and the impact of their 
use are not readily visible to the Committee, and in some 
cases, not visible to OSD or Service headquarters. Moreover, 
according to GAO the use of these mechanisms can have a 
substantial impact on the funding levels for specific programs, 
and in some cases lead to a major redirection of a program 
after the appropriation has been enacted. There have been 
instances in which cumulatively, more than 10 percent of 
funding for a particular program has been shifted to other 
purposes.
    The Department of Defense claims these mechanisms are 
necessary tools to effectively manage its acquisition-related 
appropriations. The Committee recognizes the need for the 
Department to have some flexibility to meet emergencies, react 
to unexpected opportunities, and make the most efficient use of 
funds. However, too much flexibility can encourage unrealistic 
budgeting and inefficient management practices, blur 
accountability, and weaken oversight. For example many program 
managers seek funding in excess of program requirements, to 
mitigate the financial impact of these mechanisms against their 
programs. The Committee concludes that while these actions may 
indeed provide flexibility, they constitute a terrible business 
practice and encourage poor management habits within the 
Department.
    In addition, the lack of visibility into changes in 
appropriated funding levels for programs is of great concern. 
Current requirements for financial reports to the Committee 
provide information that is often late, inaccurate, and non-
specific. Moreover, in many instances the Department does not 
have adequate internal systems for management tracking and 
analysis of this information. It is telling that while the DoD 
continually presses the Congress generally and the Committee 
specifically for more flexibility in the management of 
appropriated funds, it cannot provide itself or the Committee 
adequate and timely information on the current use or impact of 
such fiscal management mechanisms.
    Most importantly, the Committee is concerned that the 
extensive use of these practices, coupled with a failure to 
provide adequate visibility into their use and impact, 
substantially increases the risk that the Department of Defense 
may be circumventing the intent of the Congress.

Committee Recommendation

    Regarding so-called ``non-statutory'' taxes, the Committee 
believes that the two-to-three percent level noted by GAO in 
recent years has been assumed in the amounts requested in the 
fiscal year 2005 budget. Budgeting for amounts in anticipation 
that they will be redirected to other programs is not 
acceptable. Therefore, the Committee bill includes section 
8020, which reduces the fiscal year 2005 budget request for the 
Research, Development, Test and Evaluation appropriations 
(Title IV of the committee bill) by $685,000,000. This 
reduction shall be applied to each budgeted program element, 
project and activity. Appropriations made to programs in direct 
support of the National Foreign Intelligence Program (NFIP) are 
exempt from the application of section 8020.
    Further, the Committee directs the Department of Defense to 
end the practice of setting aside funds--taxing appropriations 
made for particular programs--without a statutory requirement 
to do so. The amounts appropriated in 2005 for each program 
designated in the appropriate tables in this report shall not 
be altered by any departmental entity through the application 
of non-statutory taxes or set asides.
    Finally, in order to determine the application of statutory 
taxes, the Committee directs that future budget requests 
include a separate identification of the amount of an RDT&E 
appropriation request that will be set aside as a tax to 
fulfill each statutory requirement.

Reporting Requirements

    By February 1, 2005, the Secretary of Defense is directed 
to provide the Committee--
          (a) Timely and complete data, by RDT&E program 
        element, on the use of the Department's current 
        flexibility mechanisms, including withholds, 
        reprogrammings (i.e., actual BTRs as well as ATRs) and 
        taxes during fiscal year 2004, as of September 30, 
        2004, and
          (b) A proposal for reporting fiscal year 2005 data to 
        the Committee on the BTRs and ATRs executed to funds 
        appropriated for procurement and RDT&E programs, by 
        program element, as part of the Accounting Report 1002 
        process, or some other method that provides regular and 
        timely information.
    Also, the Committee believes that not later than 90 days 
after enactment of the Department of Defense Appropriation Act, 
2005, the Undersecretary of Defense (Comptroller) should 
establish a working group of members of the Senior Executive 
Service with extensive experience in financial management and 
budgetary execution. This group should work to develop 
alternative and improved methods for providing visibility, 
flexibility, accountability, and oversight (both internal to 
the Department and to the Congress) in the management of 
research and development appropriations. This group should 
provide, through the Office of the Secretary of Defense, an 
interim and final report on the alternatives and methods 
explored, including the advantages and disadvantages of each, 
and provide recommendations for the establishment of new 
guidelines for the Department of Defense.

    SECURITY AND FINANCIAL REVIEWS REGARDING IRAQI NATIONAL CONGRESS

    The Committee is gravely concerned about recent allegations 
of security compromises associated with members of the Iraqi 
National Congress (INC), who may have provided highly sensitive 
U.S. intelligence information to a foreign government. 
Additional allegations of financial improprieties have been 
brought to light from recent Iraqi justice system proceedings. 
In the portion of this report dealing with funds provided for 
title IX, the Committee directs that the Office of Management 
and Budget provide a comprehensive report addressing all 
sources of funding and other support provided to the INC 
between 1998 and the current fiscal year. Further direction to 
the Intelligence Community regarding these matters is included 
in the classified annex accompanying this report.

                         Forces to be Supported


                         DEPARTMENT OF THE ARMY

    The fiscal year 2005 budget request is designed to support 
active Army forces of 10 divisions, 2 armored cavalry 
regiments, 2 separate brigades, and reserve forces of 8 
divisions, 3 separate brigades, and 15 enhanced National Guard 
brigades (6 enhanced brigades will be aligned under 2 AC/ARNG 
integrated division headquarters). These forces provide the 
minimum force necessary to meet enduring defense needs and 
execute the National Military Strategy. The Army is in the 
process of converting to a modular brigade based force. At end 
state, the active Army force will contain 43-48 maneuver Units 
of Action. The Army National Guard will transition to 33 Units 
of Action and 1 Stryker Brigade Combat Team (SBCT).
    A summary of the major forces follows:

------------------------------------------------------------------------
                                                   Fiscal year
                                        --------------------------------
                                            2003       2004       2005
------------------------------------------------------------------------
Divisions:
    Airborne...........................          1          1          1
    Air Assault........................          1          1          1
    Light..............................          2          2          2
    Infantry...........................          0          0          0
    Mechanized.........................          4          4          4
    Armored............................          2          2          2
                                        --------------------------------
      Total............................         10         10         10
                                        ================================
Non division Combat units:
    Armored Cavalry Regiments..........          3          3          2
    Separate Brigades..................          1          1          2
                                        --------------------------------
      Total............................          4          4          4
                                        ================================
.Active duty military personnel, end         480.0      480.0      482.4
 strength (thousands)..................
------------------------------------------------------------------------

                         DEPARTMENT OF THE NAVY

    The fiscal year 2005 budget request supports battle forces 
totaling 292 ships at the end of fiscal year 2004, including 18 
strategic submarines, 12 aircraft carriers, 226 other battle 
force ships, 1,614 Navy/Marine Corps tactical/ASW aircraft, 729 
Undergraduate Training aircraft, 479 Fleet Air Training 
aircraft, 296 Fleet Air Support aircraft, 378 Reserve aircraft 
and 443 in the pipeline.
    A summary of the major forces follows:

------------------------------------------------------------------------
                                                   Fiscal year
                  Type                  --------------------------------
                                            2003       2004       2005
------------------------------------------------------------------------
Strategic Forces:                               18         18         18
    Submarines.........................         18         18         18
General Purpose:                               245        241        238
    Aircraft Carriers..................         12         12         12
    Surface Combatants.................         98         94         91
    Submarines (Attack)................         54         55         55
    Amphibious Warfare Ships...........         36         35         36
    Combat Logistics Ships.............         34         34         33
    Mine Warfare.......................         11         11         11
Support Forces:                                 21         21         21
    Mobile Logistics Ships.............          2          2          2
    Support Ships......................         19         19         19
    Mobilization Cat. A (Reserve)......         14         15         15
    Surface Combatants.................          8          9          9
    Amphibious Warfare Ships...........          0          0          0
    Mine Warfare.......................          6          6          6
                                        --------------------------------
      Total Ships, Battleforce.........        298        295        292
                                        ================================
Auxiliaries/Sea Lift Forces:                   159        160        157
    Coastal Defense....................         13         13          8
    Maritime Preposition...............         17         17         17
    Fast Sealift/Other.................         12         12         12
    Ready Reserve Force/LMS RORO.......         79         79         79
    Naval Fleet Aux Force..............         38         39         41
Naval Aircraft:
    Primary Authorized (plus Pipe).....      4,062      4,175      4,100
    Authorized Pipeline................        437        460        443
    Tactical/ASW Aircraft..............      1,680      1,623      1,614
    Fleet Air Training.................        470        484        479
    Fleet Air Support..................        329        332        296
    Training (Undergraduate)...........        745        727        729
    Reserve............................        409        385        378
Naval Personnel:
    Active:
        Navy...........................    382,235    373,800    365,900
        Marine Corps...................    177,779    175,000    175,000
    Reserve:
        Navy...........................     88,156     85,900     83,400
            SELRES/Drilling Reserve....     73,578     71,516     69,248
            Full Time Support..........     14,578     14,384     14,152
        Marine Corps...................     41,046     39,600     39,600
            SELRES.....................     38,785     37,339     37,339
            Full Time Support..........      2,261      2,261      2,261
------------------------------------------------------------------------

                      DEPARTMENT OF THE AIR FORCE

    The fiscal year 2005 Air Force budget request is designed 
to support active, guard, and reserve forces, including 87 
combat coded fighter and attack squadrons and 8 combat coded 
strategic bomber squadrons. The ICBM force maintains 605 launch 
facilities with 500 Minuteman missiles, with the Peacekeeper 
missile force completing deactivation. The budget also supports 
our critical airlift mission, including 22 active duty airlift 
squadrons. To accomplish the Air Force mission, the 2005 budget 
supports a Total Force end strength of 542,600.
    A summary of the major forces follows:

------------------------------------------------------------------------
                                                   Fiscal year
                                        --------------------------------
                                            2003       2004       2005
------------------------------------------------------------------------
Summary of Major Forces:
    USAF Fighter and Attack Squadrons           86         88         87
     (Active, ANG, AFRC)...............
        Active.........................         45         45         46
        ANG............................         36         37         36
        AFRC...........................          5          6          5
    Strategic Bomber Squadrons (Active)          8          8          7
    Strategic Bomber Squadrons (AFRC)..          1          1          1
    Flight Test Units (DT and OT units          11         12         12
     with assigned aircraft)...........
        Fighter........................          8          9          9
        Bomber.........................          3          3          3
    ICBM Operational Launch Facilities/        605        605        605
     Control Centers...................
    ICBM Missile Inventory.............        533        516        500
    USAF Airlift Squadrons (Active):
        Strategic Airlift Squadrons....         12         14         13
        Tactical Airlift Squadrons.....         10         10          9
Total Active Airlift Squadrons.........         22         24         22
Total Air Force Aircraft Inventory.....      5,851      5,854      5,776
------------------------------------------------------------------------
Note: Numbers of squadrons above reflect combat coded units only; i.e.
  no training or test units.


----------------------------------------------------------------------------------------------------------------
                           Endstrength                              FY 2003 PB      FY 2004 PB      FY 2005 PB
----------------------------------------------------------------------------------------------------------------
Active Duty.....................................................         375,062         359,300         359,700
Reserve Component...............................................         182,891         182,830         182,900
Air National Guard..............................................         108,137         107,030         106,800
Air Force Reserve...............................................          74,754          75,800          76,100
----------------------------------------------------------------------------------------------------------------

                                TITLE I

                           MILITARY PERSONNEL

  Programs and Activities Funded by Military Personnel Appropriations

    The President's fiscal year 2005 budget request continues 
to increase funding for military pay, housing allowances, 
recruiting and retention programs, and overall quality of life 
programs for active duty and Guard and Reserve personnel.
    The budget request proposed an increase in basic pay for 
all personnel by 3.5 percent, effective January 1, 2005, and 
proposed eliminating the remaining 3.5 percent out-of-pocket 
housing costs for military members. The Committee supports the 
enhancements to recruiting, retention, military pay and 
increased housing benefits for fiscal year 2005.

   SUMMARY OF MILITARY PERSONNEL RECOMMENDATIONS FOR FISCAL YEAR 2005




Fiscal year 2004......................................   $98,453,681,000
Fiscal year 2005 budget request.......................   104,811,558,000
Fiscal year 2005 recommendation.......................   104,191,558,000
Change from budget request............................      -620,000,000


    The Committee recommends an appropriation of 
$104,191,558,000 for the Military Personnel accounts. The 
recommendation is an increase of $5,737,877,000 above the 
$98,453,681,000 appropriated in fiscal year 2004. These 
military personnel budget total comparisons include 
appropriations for the active, reserve, and National Guard 
accounts. The following tables include a summary of the 
recommendations by appropriation account. Explanations of 
changes from the budget request appear later in this section.


    The fiscal year 2005 budget request includes a net decrease 
of 7,500 end strength for the active forces and a decrease of 
approximately 2,400 end strength for the Selected Reserve over 
fiscal year 2004 authorized levels.
    The Committee recommends the following levels highlighted 
in the tables below.

                      OVERALL ACTIVE END STRENGTH




Fiscal year 2004 estimate.............................         1,390,500
Fiscal year 2005 budget request.......................         1,383,000
Fiscal year 2005 recommendation.......................         1,383,000
    Compared with Fiscal year 2004....................            -7,500
    Compared with Fiscal year 2005 budget request.....  ................


                 OVERALL SELECTED RESERVE END STRENGTH




Fiscal year 2004 estimate.............................           863,330
Fiscal year 2005 budget request.......................           860,900
Fiscal year 2005 recommendation.......................           860,900
    Compared with Fiscal year 2004....................            -2,430
    Compared with Fiscal year 2005 budget request.....  ................



----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year 2005
                                                           -----------------------------------------------------
                                          FY 2004 estimate                                         Change from
                                                             Budget request    Recommendation        request
----------------------------------------------------------------------------------------------------------------
Active Forces (end strength):
    Army................................           482,400           482,400           482,400  ................
    Navy................................           373,800           365,900           365,900  ................
    Marine Corps........................           175,000           175,000           175,000  ................
    Air Force...........................           359,300           359,700           359,700  ................
                                         -----------------------------------------------------------------------
      Total, Active Force...............         1,390,500         1,383,000         1,383,000  ................
Guard and Reserve (end strength):
    Army Reserve........................           205,000           205,000           205,000  ................
    Navy Reserve........................            85,900            83,400            83,400  ................
    Marine Corps Reserve................            39,600            39,600            39,600  ................
    Air Force Reserve...................            75,800            76,100            76,100  ................
    Army National Guard.................           350,000           350,000           350,000  ................
    Air National Guard..................           107,030           106,800           106,800  ................
                                         -----------------------------------------------------------------------
      Total, Guard and Reserve..........           863,330           860,900           860,900  ................
----------------------------------------------------------------------------------------------------------------

               Adjustments to Military Personnel Account


                                OVERVIEW

                        END STRENGTH ADJUSTMENTS

    The Committee recommends the requested end strength levels 
as proposed in the budget. The Committee is aware that 
unprecedented retention levels and stop loss policies 
associated with the Global War on Terrorism have had an 
influence on the Services' end strength, causing them to exceed 
their mandated active duty end strength levels. Thus, the 
Services anticipate ending fiscal year 2004 significantly above 
their authorized end strength levels. The Committee has 
provided additional funds for the active duty military 
personnel accounts in title IX of the bill to address these 
additional manpower expenses.

                        ACCURACY OF OBLIGATIONS

    The Committee recommends a reduction of $499,700,000 to the 
budget request, based on a General Accounting Office (GAO) 
analysis of prior year unexpended military personnel account 
balances. Even though some Services and components have 
improved the annual certification of the accuracy of present 
and prior year obligation balances, not all of the funds 
obligated are expended, and those unexpended balances are not 
always identified in the annual review certification process. 
Because the Services' and components' accounting data continue 
to show a pattern of under spending their appropriated funds, 
the Committee believes that the fiscal year 2005 military 
personnel budget request is overstated and can be reduced.
    The Committee continues to believe the Services can improve 
their appropriations balance review below the budget activity 
level to ensure that funds are properly obligated and expended 
for the purposes appropriated. The Committee again directs the 
Secretary of Defense to ensure that all the Services and Guard 
and Reserve components strengthen the annual review and 
certification process by including a review of the accuracy of 
prior year obligations below the budget activity level.

                          PERSONNEL STRENGTHS

    Because military personnel strengths are the foundation 
upon which the military personnel budget is built, it is vital 
that budget justification documents accurately reflect expected 
monthly strengths by rank. Without monthly strength information 
to use for the overview of work years, the Committee will not 
be able to assess the accuracy of the Services' personnel 
budget requests, as the General Accounting Office has found 
over the last several years. The Committee, therefore, again 
directs the Services to provide an annual budget justification 
exhibit, which displays the expected monthly personnel 
strengths by pay grades. The Committee further directs the 
Services to provide the requested exhibit in support of the 
fiscal year 2005 budget request for use in budget 
deliberations. This exhibit should also include the projected 
monthly strength of Guard and Reserve personnel mobilized in 
support of the Global War on Terrorism, broken out by officer 
and enlisted.

                GUARD AND RESERVE WORKYEAR REQUIREMENTS

    The Committee recommends a reduction of $55,000,000 to the 
budget request for Guard and Reserve workyear requirements. For 
a number of years, the General Accounting Office (GAO) has 
found that the Guard and Reserve components overstate, in many 
cases, the average strength of military personnel budgeted. 
This occurs when the budgeted positions are not manned, and 
when the Guard and Reserve components overstate inactive duty 
training (IDT) and annual training (AT) participation rates 
they use to estimate their budgets. In the past, the Committee 
has directed the Secretary of Defense to ensure that the Guard 
and Reserve components determine their participation rates 
based on the actual number of personnel participating in 
training, determined by the number of personnel paid.
    Last year, the Committee directed the Department to report 
on the determination of Reserve components participation rates. 
The Assistant Secretary of Defense for Reserve Affairs provided 
a report in early March 2004, which provided a summary of how 
the Guard and Reserve components determine participation rates 
for selected training activities, and notes some progress by 
some components in developing more accurate participation 
rates. However, the report does not indicate how the Office of 
the Secretary of Defense plans to ensure that participation 
rates accurately reflect the percentage of personnel actually 
being paid for training. GAO has found that this determination 
can be made using pay data to confirm the number of personnel 
being trained. Additionally, because of the many ways in which 
personnel are supporting the Global War on Terrorism and the 
relationships, direct and indirect, to individual and unit 
training requirements, it is important that accurate 
participation rates be used to assure that funding is provided 
where it is needed. Therefore, the Committee directs the 
Secretary of Defense to ensure that all Guard and Reserve 
components use participation rates in the budget based on the 
number of personnel paid for training.

                  MILITARY TECHNICIANS COST AVOIDANCE

    The Committee recommends a reduction of $221,400,000 to the 
budget request based on a General Accounting Office (GAO) 
analysis of actual mobilization data for approximately 8,300 
Army and Air Force Guard and Reserve military (civilian) 
technicians mobilized in support of the Global War on 
Terrorism. To the extent that mobilization continues in fiscal 
year 2005, funds required in the Operation and Maintenance 
accounts for military technicians' compensation and related 
benefits can be reduced since these full-time support personnel 
are being covered by the Military Personnel appropriations 
accounts.

         BUDGET JUSTIFICATION DOCUMENTS FOR MILITARY PERSONNEL

    The Committee directs the Secretary of Defense to include 
in congressional justification materials for the services 
military personnel budget requests an exhibit of the Summary of 
Price and Program Changes (PB-31D), similar to that provided in 
the Operation and Maintenance budget exhibits. The Committee 
directs the Department to standardize the format of the PB-31D 
for all military personnel accounts to provide subactivity 
group, line item level of detail beginning with the budget 
justification materials for fiscal year 2006, and thereafter.

                   REIMBURSEMENT OF CITIZENSHIP FEES

    The Committee directs the Secretary of Defense to identify 
each member or former member of the Armed Forces who, during 
the period beginning July 3, 2002, and ending October 1, 2004, 
applied for naturalization under the authority of section 328 
or 329 of the Immigration and Nationality Act (8 U.S.C. 1439, 
1440), and to use funds made available under Title I of this 
Act to reimburse the member for any fees paid by the member for 
filing the application for naturalization or for the issuance 
of a certificate of naturalization upon being granted 
citizenship, other than the portion of any such fee required to 
be paid to a State rather than the United States.

                      FULL-TIME SUPPORT STRENGTHS

    There are four categories of full-time support in the Guard 
and Reserve components: civilian technicians, active Guard and 
Reserve (AGR), non-technician civilians, and active component 
personnel.
    Full-time support personnel organize, recruit, train, 
maintain and administer the Reserve components. Civilian 
(Military) technicians directly support units, and are very 
important to help units maintain readiness and meet the wartime 
mission of the Army and Air Force.
    Full-time support end strength in all categories totaled 
154,956 in fiscal year 2004. The fiscal year 2005 budget 
request is 156,674 end strength. The following table summarizes 
Guard and Reserve full-time support end strengths:

                                    GUARD AND RESERVE FULL-TIME END STRENGTHS
----------------------------------------------------------------------------------------------------------------
                                                  FY 2004                                          Change from
                                                  estimate      Budget request   Recommendation      request
----------------------------------------------------------------------------------------------------------------
Army Reserve:
    AGR.....................................           14,374           14,970           14,970  ...............
    Technicians.............................            7,844            8,094            8,094  ...............
Navy Reserve:
    TAR.....................................           14,384           14,152           14,152  ...............
Marine Corps Reserve:
    AR......................................            2,261            2,261            2,261  ...............
Air Force Reserve:
    AGR.....................................            1,660            1,900            1,900  ...............
    Technicians.............................            9,991            9,954            9,954  ...............
Army National Guard:
    AGR.....................................           25,599           26,476           26,476  ...............
    Technicians.............................           26,189           26,676           26,676  ...............
Air National Guard:
    AGR.....................................           12,191           12,225           12,225  ...............
    Technicians.............................           23,240           23,306           23,306  ...............
Total:
    AGR/TAR.................................           70,469           71,984           71,984  ...............
    Technicians.............................           67,264           68,030           68,030  ...............
----------------------------------------------------------------------------------------------------------------

                        MILITARY PERSONNEL, ARMY





Fiscal year 2004 appropriation........................   $28,247,667,000
Fiscal year 2005 budget request.......................    29,723,472,000
Committee recommendation..............................    29,507,672,000
Change from budget request............................      -215,800,000


    The Committee recommends an appropriation of 
$29,507,672,000 for Military Personnel, Army. The 
recommendation is an increase of $1,260,005,000 above the 
$28,247,667,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Military 
Personnel, Army are shown below:

                        [In thousands of dollars]

Budget Activity 2: Pay and Allowances of Enlisted 
    Personnel:
    1050  Special Pays/Selective Reenlistment Bonuses...          -6,300
Undistributed:
    3200  Unobligated Balances..........................        -209,500

                        MILITARY PERSONNEL, NAVY





Fiscal year 2004 appropriation........................   $23,217,298,000
Fiscal year 2005 budget request.......................    24,459,957,000
Committee recommendation..............................    24,416,157,000
Change from budget request............................       -43,800,000


    The Committee recommends an appropriation of 
$24,416,157,000 for Military Personnel, Navy. The 
recommendation is an increase of $1,198,859,000 above the 
$23,217,298,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Military 
Personnel, Navy are shown below:

                        [In thousands of dollars]

Budget Activity 2: Pay and Allowances of Enlisted 
    Personnel:
    7350  Special Pays/Selective Reenlistment Bonuses...          -9,800
Undistributed:
    9550  Unobligated Balances..........................         -34,000

                    MILITARY PERSONNEL, MARINE CORPS





Fiscal year 2004 appropriation........................    $8,971,897,000
Fiscal year 2005 budget request.......................     9,595,902,000
Committee recommendation..............................     9,591,102,000
 Change from budget request...........................        -4,800,000


    The Committee recommends an appropriation of $9,591,102,000 
for Military Personnel, Marine Corps. The recommendation is an 
increase of $619,205,000 above the $8,971,897,000 appropriated 
for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustment to the budget activities for Military 
Personnel, Marine Corps is shown below:

                        [In thousands of dollars]

Budget Activity 2: Pay and Allowances of Enlisted 
    Personnel:
    12400  Special Pays/Selective Reenlistment Bonuses..          -4,800

                     MILITARY PERSONNEL, AIR FORCE





Fiscal year 2004 appropriation........................   $22,910,868,000
Fiscal year 2005 budget request.......................    24,510,811,000
Committee recommendation..............................    24,291,411,000
Change from budget request............................      -219,400,000


    The Committee recommends an appropriation of 
$24,291,411,000 for Military Personnel, Air Force. The 
recommendation is an increase of $1,380,543,000 above the 
$22,910,868,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Military 
Personnel, Air Force are shown below:

                        [In thousands of dollars]

Budget Activity 2: Pay and Allowances of Enlisted 
    Personnel:
    17300  Special Pays/Selective Reenlistment Bonuses..         -48,000
Undistributed:
    19620 Unobligated Balances..........................        -171,400

                        RESERVE PERSONNEL, ARMY





Fiscal year 2004 appropriation........................    $3,568,725,000
Fiscal year 2005 budget request.......................     3,733,590,000
Committee recommendation..............................     3,719,990,000
Change from budget request............................       -13,600,000


    The Committee recommends an appropriation of $3,719,990,000 
for Reserve Personnel, Army. The recommendation is an increase 
of $151,265,000 above the $3,568,725,000 appropriated for 
fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Reserve 
Personnel, Army are shown below:

                        [In thousands of dollars]

Undistributed:
    23900  Unobligated Balances.........................         -11,500
    23950  Reserves Cost Avoidance......................          -2,100

                        RESERVE PERSONNEL, NAVY





Fiscal year 2004 appropriation........................    $2,002,727,000
Fiscal year 2005 budget request.......................     2,171,632,000
Committee recommendation..............................     2,108,232,000
Change from budget request............................       -63,400,000


    The Committee recommends an appropriation of $2,108,232,000 
for Reserve Personnel, Navy. The recommendation is an increase 
of $105,505,000 above the $2,002,727,000 appropriated for 
fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Reserve 
Personnel, Navy are shown below:

                        [In thousands of dollars]

Undistributed:
    25300  Unobligated Balances.........................         -48,400
    25370  Reserves Cost Avoidance......................         -15,000

                    RESERVE PERSONNEL, MARINE CORPS





Fiscal year 2004 appropriation........................      $571,444,000
Fiscal year 2005 budget request.......................       654,973,000
Committee recommendation..............................       653,073,000
Change from budget request............................        -1,900,000


    The Committee recommends an appropriation of $653,073,000 
for Reserve Personnel, Marine Corps. The recommendation is an 
increase of $81,629,000 above the $571,444,000 appropriated for 
fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustment to the budget activities for Reserve 
Personnel, Marine Corps is shown below:

                        [In thousands of dollars]

Undistributed:
    26600  Unobligated Balances.........................          -1,900

                      RESERVE PERSONNEL, AIR FORCE





Fiscal year 2004 appropriation........................    $1,288,088,000
Fiscal year 2005 budget request.......................     1,464,050,000
Committee recommendation..............................     1,451,950,000
Change from budget request............................       -12,100,000


    The Committee recommends an appropriation of $1,451,950,000 
for Reserve Personnel, Air Force. The recommendation is an 
increase of $163,862,000 above the $1,288,088,000 appropriated 
for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Reserve 
Personnel, Air Force are shown below:

                        [In thousands of dollars]

Undistributed:
    27900  Unobligated Balances.........................         -10,300
    27910  Reserves Cost Avoidance......................          -5,400
    27930  932nd Airlift Wing Personnel.................           3,600

                     NATIONAL GUARD PERSONNEL, ARMY





Fiscal year 2004 appropriation........................    $5,500,369,000
Fiscal year 2005 budget request.......................     5,950,729,000
Committee recommendation..............................     5,915,229,000
Change from budget request............................       -35,500,000


    The Committee recommends an appropriation of $5,915,229,000 
for National Guard Personnel, Army. The recommendation is an 
increase of $414,860,000 above the $5,500,369,000 appropriated 
for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for National Guard 
Personnel, Army are shown below:

                        [In thousands of dollars]

Undistributed:
    29350  Unobligated Balances.........................         -10,500
    29410  Reserves Cost Avoidance......................         -25,000

                  NATIONAL GUARD PERSONNEL, AIR FORCE





Fiscal year 2004 appropriation........................    $2,174,598,000
Fiscal year 2005 budget request.......................     2,546,442,000
Committee recommendation..............................     2,536,742,000
Change from budget request............................        -9,700,000


    The Committee recommends an appropriation of $2,536,742,000 
for National Guard Personnel, Air Force. The recommendation is 
an increase of $362,144,000 above the $2,174,598,000 
appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for National Guard 
Personnel, Air Force are shown below:

                        [In thousands of dollars]

Undistributed:
    30550  Unobligated Balances.........................          -2,200
    30600  Reserves Cost Avoidance......................          -7,500
                                TITLE II

                       OPERATION AND MAINTENANCE

    The fiscal year 2005 budget request for programs funded in 
Title II of the Committee bill, Operation and Maintenance, is 
$121,874,589,000 in new budget authority, which is an increase 
of $5,959,712,000 above the amount appropriated for fiscal year 
2004.
    The accompanying bill recommends $120,568,274,000 for 
fiscal year 2005, which is an increase of $4,653,397,000 above 
the amount appropriated for fiscal year 2004. These 
appropriations finance the costs of operating and maintaining 
the Armed Forces, including the Reserve components and related 
support activities of the Department of Defense (DoD), except 
military personnel costs. Included are pay for civilians, 
services for maintenance of equipment and facilities, fuel, 
supplies, and spare parts for weapons and equipment. Financial 
requirements are influenced by many factors, including force 
levels such as the number of aircraft squadrons, Army and 
Marine Corps divisions, installations, military personnel 
strength and deployments, rates of operational activity, and 
the quantity and complexity of equipment such as aircraft, 
ships, missiles and tanks in operation.
    The table below summarizes the Committee's recommendations.
    
    
                   OPERATION AND MAINTENANCE OVERVIEW

    The President's fiscal year 2005 budget request represents 
a $5,959,712,000 increase above fiscal year 2004 in Title II, 
Operation and Maintenance, exclusive of supplemental funding 
provided for continuation of military operations in Afghanistan 
and Iraq. The Administration's initial request did not include 
funding for the continuation of the war on terrorism in 
Afghanistan, Iraq, and elsewhere. An amendment to the fiscal 
year 2005 budget request was provided to the Committee on May 
12, 2004, which asked for $25,000,000,000 in additional funds 
to support ongoing operations in Iraq, Afghanistan, and the war 
on terrorism for the first few months of fiscal year 2005. 
Funding for these purposes is addressed in Title IX of the 
Committee bill. In that title, the Committee has provided 
$14,335,400,000 to ensure that funds are available to support 
the operating costs of the services, including purchase of all 
necessary soldier protection equipment. The funds provided in 
Title IX will support continuation of operations well into 
fiscal year 2005, and will ensure that critical base operating, 
and maintenance accounts need not be diverted to support the 
war effort.
    The budget request for normal peacetime funding in Title 
II, Operation and Maintenance would sustain flying hours, ship 
steaming and ground operating tempo at approximately fiscal 
year 2004 levels. Navy Operation and Maintenance supports 292 
ships, 12 Carrier Strike Groups and 12 Expeditionary Strike 
Groups. The Navy's Fleet Response Plan, begun in fiscal year 
2004, expands in 2005, with the goal of increasing availability 
of Naval assets for duty worldwide. Requested funding for ship 
operations and maintenance increases by $600,000,000 in fiscal 
year 2005. The Air Force flying hour program provides the 
funding necessary to maintain basic flying skill and pilot 
development and production, and to provide trained aircrews to 
joint forces combatant commanders through ten aerospace 
expeditionary forces. The budget request fully supports the 
Army's ground and aviation training programs including a 
gradual increase in the number of battalion rotations at ground 
combat training centers. Army Flight School XXI implementation 
continues, and increased base operations funding reduces the 
risk of funds being diverted from critical training accounts to 
base support activities during the year of execution.
    The budget request supports increasing facilities 
sustainment from 94 percent in fiscal year 2004 to 95 percent 
in fiscal year 2005. Funding is included to support a pay 
increase of one and one half percent for civilian employees. 
And the budget request included $572,000,000 to convert 10,070 
positions from performance by military personnel to performance 
by civilian personnel.
    In Title II of the bill, the Committee has supported 
programs for readiness training in flying hours, ship steaming 
and ground forces optempo training. Maintenance programs have 
been fully funded as requested. Army depot maintenance annual 
funding increases by $35,000,000 and is on track to achieve 
optimal funding by fiscal year 2007. Ship depot maintenance is 
increased by $412,000,000 with budgeted inductions increasing 
from 72 to 90. Funding for Air Force depot maintenance 
increases by $296,000,000. Robust support for anti-terrorism 
and force protection funding has been continued. The Committee 
has fully supported the Army's Flight School XXI program and 
the Navy's Fleet Response Plan.

                 RECOMMENDATIONS TO ADDRESS SHORTFALLS

    Despite the continuation of robust funding in operation and 
maintenance accounts requested for fiscal year 2005, testimony 
by the Services' leadership and briefings by key staff members 
indicate that a certain degree of risk has been taken in some 
areas. The Army flying hour program is based on historical 
execution levels of 13.1 hours, per crew, per month, however, 
the Army maintains the goal of achieving 14.1 hours, per crew, 
per month. The Air Force assumes a lower fiscal year 2004 
flying hour cost, based on fiscal year 2002 execution.
    The Committee has provided over $500,000,000 in additional 
operating account funding to assist in addressing many of the 
Department's shortfalls. Increased funding has been included 
for individual soldier and Marine field equipment, small all 
terrain vehicles, general purpose tents and mobility shelters, 
training and support facilities, joint training capabilities, 
foreign language training, training on urbanized terrain, 
military and civilian safety, education programs, and distance 
learning.
    As has been the practice, the Committee has identified 
spending that does not directly support readiness and has moved 
those funds to programs that more directly support readiness 
goals.
    Funding for repair and restocking of much of the equipment 
used in Afghanistan and Iraq in fiscal year 2004 is not 
included in the administration's budget request. Much of the 
Army equipment that was drawn from pre-positioned sets for the 
war against Iraq will not be returned to pre-positioned stocks 
in fiscal year 2005 and will continue in service in Iraq. Much 
of the Marine Corps' pre-positioned equipment used in Operation 
Iraqi Freedom I, and which was being repaired and returned to 
pre-positioned sets, has been issued for service in Operation 
Iraqi Freedom II. Title IX of the accompanying bill includes 
funds for depot level and unit level maintenance of pre-
positioned equipment sets and for repair of equipment in those 
units that have rotated from duty in Iraq back to home 
stations.
    Technical and tactical solutions to soldier safety and 
personal security battlefield challenges continue to evolve. 
The Committee has provided additional funding to address 
shortfalls in this area in Title IX of the accompanying bill. 
Increased and improved body armor for individual soldiers and 
Marines is fully funded, including for those soldiers in the 
new combat units being formed by the Army.

               OPERATION AND MAINTENANCE BUDGET EXHIBITS

    The Summary of Price and Program Changes (PB-31D) exhibits 
as submitted by the Army and Air Force for fiscal year 2005 
provide the level of detail necessary to assist the Committee 
in reviewing the budget request. The various summaries of price 
and program changes provided for other operation and 
maintenance appropriations accounts are presented in less 
detail and specificity, and have proven to be much less helpful 
in understanding the justification material provided. The 
Committee directs the Department of Defense to standardize the 
format of the PB-31D for all operation and maintenance accounts 
to provide subactivity group, line item level of detail, as the 
Army and Air Force provided for fiscal year 2005, beginning 
with the budget justification materials for fiscal year 2006, 
and thereafter.

            OPERATION AND MAINTENANCE BUDGET EXECUTION DATA

    The Committee directs the Department of Defense to continue 
to provide the congressional defense committees with quarterly 
budget execution data. Such data should be provided not later 
than forty-five days past the close of each quarter for the 
fiscal year, and should be provided for each O-1 budget 
activity, activity group, and subactivity group for each of the 
active, defense-wide, reserve and National Guard components. 
For each O-1 budget activity, activity group, and subactivity 
group, these reports should include the budget request and 
actual obligations; the DoD distribution of unallocated 
congressional adjustments to the budget request; all 
adjustments made by DoD during the process of rebaselining the 
operation and maintenance accounts; all adjustments resulting 
from below threshold reprogrammings; and all adjustments 
resulting from prior approval reprogramming requests.
    In addition, the Committee requires that the Department of 
Defense provide semiannual written notifications to the 
congressional defense committees, which summarize Operation and 
Maintenance budget execution, to include the effect of 
rebaselining procedures, other below threshold reprogrammings, 
and prior approval reprogrammings. The Committee further 
directs that the Department of Defense provide the House of 
Representatives and Senate Committees on Appropriations written 
notification 30 days prior to executing procedures to 
rebaseline Operation and Maintenance accounts.

                OPERATION AND MAINTENANCE REPROGRAMMINGS

    The Committee directs that proposed transfers of funds 
between O-1 budget activities in excess of $15,000,000 be 
subject to normal prior approval reprogramming procedures. 
Items for which funds have been specifically provided in any 
appropriation in the report using the phrases ``only for'' and 
``only to'' are Congressional interest items for the purpose of 
the Base for Reprogramming (DD form 1414). Each of these items 
must be carried on the DD 1414 at the stated amount, or revised 
amount if changed during conference or if otherwise 
specifically addressed in the conference report. In addition, 
due to continuing concerns about force readiness and the 
diversion of Operation and Maintenance funds, the Committee 
directs the Department of Defense to provide written 
notification to the congressional defense committees for the 
cumulative value of any and all transfers in excess of 
$15,000,000 from the following budget activities and 
subactivity group categories:

Operation and maintenance, Army

    Operating Forces: Divisions, Corps combat forces, Corps 
support forces, Echelon above Corps support forces, Land forces 
operations support, Land forces systems readiness, and Land 
forces depot maintenance.

Operation and maintenance, Navy

    Operating Forces: Mission and other flight operations, 
Fleet air training, Aircraft depot maintenance, Mission and 
other ship operations, Ship operational support and training, 
Ship maintenance.

Operation and maintenance, Marine Corps

    Operating Forces: Operational forces, Depot maintenance.

Operation and maintenance, Air Force

    Operating Forces: Primary combat forces, Primary combat 
weapons, Air operations training, Depot maintenance; 
Mobilization: Airlift operations, Depot maintenance, Payments 
to the transportation business area; Basic Skill and Advanced 
Training: Depot maintenance; Logistics Operations: Depot 
maintenance.
    Further, the Department should follow prior approval 
reprogramming procedures for transfers in excess of $15,000,000 
out of the following budget subactivities:

Operation and maintenance, Army

    Depot maintenance.

Operation and maintenance, Navy

    Aircraft depot maintenance,
    Ship maintenance.

Operation and maintenance, Marine Corps

    Depot maintenance.

Operation and maintenance, Air Force

    Air Operations, Depot maintenance,
    Mobility Operations, Depot maintenance,
    Basic Skills and Advanced Training, Depot maintenance; and
    Logistics Operations, Depot maintenance.

                         AVAILABILITY OF FUNDS

    The budget request proposed that all operation and 
maintenance funding be made available for obligation for two 
years as opposed to one year. The proposed change was intended 
to provide increased flexibility in managing operational funds. 
The Committee bill maintains one-year availability for all 
operation and maintenance funds. The Committee believes that 
funds provided for current operational expenses and readiness 
of the armed forces should be promptly obligated for the 
purposes and programs for which appropriated.

                              CIVILIAN PAY

    The Committee has fully funded the budget request for a 1.5 
percent pay increase for civilian employees of the Department 
of Defense. The Committee understands that the Department of 
Defense may implement an increase in pay that is greater than 
1.5 percent, and directs that any increase above 1.5 percent 
will be paid from within funds available to the DoD.

                          UNOBLIGATED BALANCES

    The Committee has adjusted amounts available in service 
operation and maintenance accounts for fiscal year 2005 to 
account for amounts left unobligated in operation and 
maintenance accounts at the end of prior fiscal years and the 
effect of such under-obligations on estimated future 
requirements. The Committee has reduced funding for unobligated 
balances as follows.

                        [In thousands of dollars]

Army....................................................         $80,000
Navy....................................................          86,000
Marine Corps............................................           8,000
Air Force...............................................          71,000
Defense-Wide............................................          55,100
Army Reserve............................................           8,800
Navy Reserve............................................           7,000
Marine Corps Reserve....................................           1,500
Air Force Reserve.......................................           7,900
Army National Guard.....................................          21,900
Air National Guard......................................          17,900
Defense Health Program..................................          50,000

         REDUCTION TO ADMINISTRATION AND SERVICEWIDE ACTIVITIES

    The Committee has adjusted amounts available in service 
operation and maintenance accounts for fiscal year 2005 to 
reflect improved efficiency in providing for administrative and 
servicewide activities in the military departments. The 
Committee has reduced funding for operation and maintenance as 
follows.

                        [In thousands of dollars]

Army....................................................         $88,000
Navy....................................................          91,600
Marine Corps............................................          17,200
Air Force...............................................         138,400

                        BASE OPERATIONS SUPPORT

    Spending for Base Operations Support increased 
substantially above the cost of inflation. The Committee has 
reduced by $86,000,000 the amount provided for operation and 
maintenance for unjustified growth in base operations as 
follows.

                        [In thousands of dollars]

Army....................................................         $28,000
Navy....................................................          15,000
Air Force...............................................          43,000

                       CIVILIAN PAY OVERSTATEMENT

    The Committee has reduced the total amount available in 
Title II by $91,900,000 to correct for overstatement of 
requirements for civilian pay. The Committee has reduced 
funding for overstated operation and maintenance civilian pay 
requirements as follows.

                        [In thousands of dollars]

Army....................................................         $66,100
Navy....................................................          13,300
Air Force...............................................          12,500

                    MILITARY TO CIVILIAN CONVERSIONS

    The Committee has reduced the total amount available in 
Title II by $176,900,000 to more accurately reflect the actual 
rate of conversion of selected military billets to performance 
by civilian personnel, including both federal employees and 
contractor employees. The Committee has reduced overstated 
amounts for operation and maintenance for civilian pay and 
contract support as follows.

                        [In thousands of dollars]

Army....................................................         $80,000
Navy....................................................          19,300
Marine Corps............................................          29,100
Air Force...............................................          48,500

                       WORKING CAPITAL FUND CASH

    The Committee bill accompanying this report includes a 
general provision, Section 8098, that reduces the total amount 
available in Title II by $316,000,000 to reflect cash balance 
and rate stabilization adjustments in the Department of Defense 
Working Capital Funds. The reduction designated for Navy 
includes $59,000,000 proposed for the purchase of aircraft 
engines by the Navy Working Capital Fund based on a proposed 
revision to Section 8040. The proposed change to Section 8040 
was not adopted and the funding for Navy aircraft engines was 
restored in ``Aircraft Procurement, Navy''. The Committee has 
reduced funding for the services' operation and maintenance 
accounts as follows.

                        [In thousands of dollars]

Navy....................................................        $150,000
Air Force...............................................         166,000

                  TRANSPORTATION WORKING CAPITAL FUND

    The Committee bill accompanying this report includes a 
general provision, Section 8110, that reduces the total amount 
available in Title II by $967,200,000 to correct for excess 
cash balances that have accumulated in the Transportation 
Working Capital Fund due to increased business within United 
States Transportation Command in support of military operations 
in Afghanistan and Iraq, as follows.

                        [In thousands of dollars]

Air Force...............................................        $967,200

                            OTHER CONTRACTS

    The Committee bill accompanying this report includes a 
general provision, Section 8089, that reduces the total amount 
available in Title II by $300,000,000 to correct for 
overstatement of requirements for miscellaneous and other 
contracts. The Committee has reduced funding for overstated 
operation and maintenance as follows.

                        [In thousands of dollars]

Army....................................................         $66,700
Navy....................................................          77,900
Marine Corps............................................           6,100
Air Force...............................................         149,300

                            CONTRACT OFFSETS

    The Committee bill accompanying this report includes a 
general provision, Section 8119, that reduces the total amount 
available in Title II by $100,000,000 to correct for amounts 
available to the Department of Defense as the Department and 
the Internal Revenue Service cooperate in levying offsets for 
DoD contractors' federal tax debt. The Committee has reduced 
funding for operation and maintenance as follows.

                        [In thousands of dollars]

Army....................................................         $22,000
Navy....................................................          26,000
Marine Corps............................................           2,000
Air Force...............................................          50,000

                     CIVILIAN SEPARATION INCENTIVE

    The Committee has reduced the total amount available in 
Title II by $55,100,000 to correct for amounts requested in 
excess of requirements for incentives for early retirements in 
the civilian workforce. The Committee has reduced funding for 
operation and maintenance as follows.

                        [In thousands of dollars]

Navy....................................................         $14,400
Air Force...............................................          40,700

                            FORT TICONDEROGA

    The Committee bill accompanying this report includes a 
general provision, Section 8101, which provides an additional 
$2,000,000 to be available only for the purpose of making a 
grant to the Fort Ticonderoga Association for the renovation of 
the King's Warehouse at Fort Ticonderoga, New York. The 
renovation will provide a winterized facility for year round 
use that will include classrooms, workshops, a hands-on 
teaching gallery and auditorium, an expanded educational 
program, and accessibility for handicapped persons.

                       PRESIDIO OF SAN FRANCISCO

    The Committee bill accompanying this report includes a 
general provision, Section 8101, that provides an additional 
$2,500,000 to be available only for the purpose of making a 
grant to The Presidio of San Francisco Trust to provide for the 
research, planning, and design of the restoration of the parade 
ground at the Main Post, the Presidio of San Francisco, 
California to support the development of the Presidio as a site 
for public education about the impact of the military on 
American life.

                           CORROSION CONTROL

    In July of 2003, the General Accounting Office (GAO) 
reported on efforts within the Department of Defense to reduce 
corrosion and control costs. Although the Department of Defense 
has been attacking the corrosion problem for many years, and 
the Congress has added funding for corrosion prevention and 
control, the finding of the study was that the Department and 
the military services do not have an effective approach to 
prevent and mitigate corrosion.
    Corrosion attacks military equipment and infrastructure. It 
increases costs, shortens the potential service life of 
equipment, and increases safety risks. The GAO report cited 
studies, which estimated the annual cost of corrosion for 
military systems at between $10 billion and $20 billion. 
Aircraft losses have been attributed to corroded electrical 
contacts and corrosion related cracks in landing gear. 
Uncontrolled corrosion forces the premature replacement of 
equipment such as heating and air-conditioning units, aircraft 
hangars, pre-positioned equipment sets, and fuel storage 
facilities.
    The Department and the military services have achieved some 
successes in prevention and mitigation of corrosion, but 
communication within and between the services has been poor. 
The Department lacks an effective system for sharing anti-
corrosion success stories. An overall approach to corrosion 
control has been absent. Central oversight of anti-corrosion 
information, technology, and program management, including 
budget review, requires renewed energy and focus by the 
leadership within the Department of Defense. The GAO study 
notes that corrosion control projects frequently are assigned 
low funding priorities compared to current operations and 
training, or maintenance and repair projects that offer more 
immediate results. Additionally, guidance on corrosion 
prevention and mitigation generally does not extend to non-
major weapons systems and infrastructure programs.
    The Committee directs the Secretary of Defense to provide a 
report to the congressional defense committees, not later than 
April 1, 2005, describing the Department's current status and 
planned improvements in (1) the collection and analysis of data 
on corrosion costs, readiness implications and safety data; (2) 
the development and promulgation of clearly defined, outcome-
oriented objectives and performance measures; (3) the level of 
resources required and budgeted to accomplish the objectives; 
and (4) the oversight mechanism that coordinates and oversees 
corrosion prevention and mitigation efforts among the defense 
agencies and military services.

            JOINT PROFESSIONAL MILITARY EDUCATION LEVEL ONE

    In the report accompanying the Committee's Defense 
Appropriations bill for fiscal year 2004 (House Report 108-
187), the Committee expressed concern over the confusion and 
lack of standardization regarding service member access to 
senior service college level educational opportunities. The 
Committee continues to support rigorous Joint Professional 
Military Education for all components of the Armed Forces, and 
believes that a clearly defined requirement for achieving level 
one credit is essential. Sadly, the Department of Defense has 
been unresponsive in addressing issues of standardization and 
equal access for members of the various components. The 
Committee directed the Secretary of Defense to provide a report 
to the congressional defense committees not later than March 1, 
2004, on the requirement for Joint Professional Military 
Education Level One, and the various alternatives for attaining 
that level of military education. The report, now more than two 
months past due, is still in review by the Department of 
Defense. The Committee is frustrated with the Department's 
apparent lack of enthusiasm for addressing the issue of equal 
access for the components of the Armed Forces to Joint 
Professional Military Education opportunities. The Committee 
provides substantial funding each year to support military 
professional development and education, and will continue to 
exercise careful oversight of the use of funds appropriated for 
this purpose. The Department of Defense is urged to complete 
the required report and to submit it to the congressional 
defense committees.

                    OPERATION AND MAINTENANCE, ARMY





Fiscal year 2004 appropriation........................   $25,029,346,000
Fiscal year 2005 budget request.......................    26,133,411,000
Committee recommendation..............................    25,820,311,000
Change from budget request............................      -313,100,000


    The Committee recommends an appropriation of 
$25,820,311,000 for Operation and Maintenance, Army. The 
recommendation is an increase of $790,965,000 above the amount 
appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Army are shown below:

                        [In thousands of dollars]

Budget Activity 1: Operating Forces:
    250  Advanced Combat Helmet.........................           1,000
    250  Ultra Lightweight Camouflage Net System 
      (ULCANS)..........................................           5,000
    250  Modular General Purpose Tent System (MGPTS)....           4,000
    250  Tactical Operations Centers (ELAMS/MECCS) for 
      USASOC and 4th Infantry Division..................           6,000
    400  Modernized Equipment Support Cost Unjustified 
      Growth............................................         -10,000
    400  Leak Proof Transmission Drip Pans..............           3,000
    450  Rotational Training Unjustified Cost Growth....         -10,000
    600  Tactical Exploitation System...................          -4,000
    600  Vehicle Integrated Primary Electrical Resource.           3,500
    750  Base Operating Support Unjustified Growth......         -28,000
    750  Renewal of Sunshine Road Ammunition 
      Transportation Route, Fort Benning................           4,000
    750  Upgrade Telecommunications Infrastructure, Fort 
      Monmouth..........................................           2,000
    800  Rock Island Arsenal Wash Bay...................             100
    800  Rock Island Arsenal Laser Cutting Machine......             600
    800  Rock Island Arsenal Titanium Welding Cell......             300
Budget Activity 3: Training and Recruiting:
    1650  ROTC Cadre and Support Costs Unjustified 
      Growth............................................          -9,000
    1850  Satellite Communications for Learning (SCOLA), 
      DLI Foreign Language Center.......................           3,000
    1850  Virtual Reality Spray Paint Simulator System 
      and Training Program..............................           3,000
    1850  Video Interactive Training and Assessment 
      System............................................           2,000
    1850  Military Police MCTFT Joint Training..........           1,000
    1900  Air Battle Captain ROTC Helicopter Flight 
      Training..........................................           2,000
    1950  Leadership for Leaders at CGSC/CAL and KSU....           1,000
    2000  Training Support and Doctrine Development 
      Unjustified Growth................................         -20,000
    2000  Training Instrumentation for Air and Missile 
      Defense Units, Fort Bliss.........................           7,000
    2000  DLIFLC Global Language On-line Support System 
      (GLOSS) Project...................................           2,800
    2000  DLIFLC Persian-Farsi Curriculum Development--
      Semester 2........................................           2,300
    2350  Online Technology Training Program, Fort Lewis           2,000
    2400  Philadelphia Military Academies...............           1,000
Budget Activity 4: Administration and Servicewide 
    Activities:
    2650  Security Programs Classified..................           4,000
    2800  NATO 9T AGM Batteries.........................           2,500
    2800  Pulse Technology--Army Battery Management 
      Program...........................................           4,000
    2800  Integrated Digital Environments Pilot Program 
      for Army Aviation Fleet Logistics Management......           2,000
    2850  Integrated Digital Environments (IDE) PEO 
      Ground Combat Systems.............................           1,000
    2850  Sense and Respond Logistics...................           4,000
    2850  Controlled Humidity Preservation Program, Soft 
      Portable Tunnels..................................           1,000
    3000  OASA (Civil Works) Headquarters Funding 
      transfer to Energy and Water Subcommittee.........          -2,500
    3050  Army Knowledge Online (AKO)...................           4,000
    3200  One Soul: Holocaust Education Exhibit.........           1,000
    3200  Memorial Day..................................             900
    3650  Center for Disaster Management and 
      Humanitarian Assistance...........................           1,000
Undistributed:
    3730  Repairs at Fort Baker.........................           2,500
    3790  Unobligated Balances..........................         -80,000
    4100  Administration and Servicewide Activities.....         -88,000
    4110  Civilian Pay Overstatement....................         -66,100
    4130  Military to Civilian Conversions..............         -80,000

                   ONLINE TECHNOLOGY TRAINING PROGRAM

    The Committee recommends an additional $2,000,000 in 
Operation and Maintenance, Army only to continue the Fort Lewis 
Online Technology Training Pilot Program.

                    PHILADELPHIA MILITARY ACADEMIES

    The Committee recommends an additional $1,000,000 in 
Operation and Maintenance, Army only to support the School 
District of Philadelphia for the establishment of the 
Philadelphia Military Academies Junior ROTC Program.

             VEHICLE INTEGRATED PRIMARY ELECTRICAL RESOURCE

    The Committee recommends an additional $3,500,000 in 
Operation and Maintenance, Army only for operational testing of 
an under-hood power system.

   VIRTUAL REALITY SPRAY PAINT SIMULATOR SYSTEM AND TRAINING PROGRAM

    The Committee recommends an additional $3,000,000 in 
Operation and Maintenance, Army only for a collaborative effort 
for the Army and Pine Technical College Virtual Reality 
Simulator System and Training Program.

            FORT MONMOUTH TELECOMMUNICATIONS INFRASTRUCTURE

    The Committee recommends an additional $2,000,000 in 
Operation and Maintenance, Army only to engineer and install 
upgraded communications infrastructure at Fort Monmouth, New 
Jersey, including replacing obsolescent cable plant by 
extending underground service via copper and fiber optic media 
to all Fort Monmouth buildings from the new fiber ring.

                      CONTROLLED HUMIDITY PROGRAM

    The Committee recommends an additional $1,000,000 in 
Operation and Maintenance, Army only to augment the use of 
Controlled Humidity Program Soft Portable Tunnels as currently 
used in Italy to include low water vapor transmission rate 
(WVTR) material as described in MIL-P-58102, Type II, and MIL-
C-58104 by the Department of the Army, to enhance cost 
avoidance and support rapid storage space requirements and 
relocation capabilities for fielded equipment.

                 ONE SOUL: HOLOCAUST EDUCATION EXHIBIT

    The Committee recommends an additional $1,000,000 in 
Operation and Maintenance, Army only to complete the 
development of a Holocaust education exhibit and place the 
exhibit in the certified Army Museums at Army installations 
across the country. The United States Army played a prominent 
role in liberating Nazi concentration camps at the end of World 
War II. The Afikim Foundation's ``One Soul: Holocaust Education 
Exhibit'' presents the history and lessons of the Holocaust in 
a thought-provoking and intimate manner.

                      SENSE AND RESPOND LOGISTICS

    The Committee recommends an additional $4,000,000 in 
Operation and Maintenance, Army only to support Army Sense and 
Respond Logistics for transition to a net-centric logistics 
command and control decision support capability.

           INTEGRATED DIGITAL ENVIRONMENTS INFORMATION PORTAL

    The Committee recommends an additional $1,000,000 in 
Operation and Maintenance, Army only for the Program Executive 
Officer (PEO) Ground Combat Systems (GCS) at TACOM to expand 
the current PEO GCS eBusiness Portal technologies for the 
benefit of all ground combat system program managers and in 
support of the Army Transformation strategy.

                         ARMY KNOWLEDGE ONLINE

    The Committee recommends an additional $4,000,000 in 
Operation and Maintenance, Army only for a disaster recovery 
capability, including data storage management services, to 
support Army Knowledge Online.

                    OPERATION AND MAINTENANCE, NAVY





Fiscal year 2004 appropriation........................   $28,146,658,000
Fiscal year 2005 budget request.......................    29,789,190,000
Committee recommendation..............................    29,570,090,000
Change from budget request............................      -219,100,000


    The Committee recommends an appropriation of 
$29,570,090,000 for Operation and Maintenance, Navy. The 
recommendation is an increase of $1,423,432,000 above the 
amount appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Navy are shown below:

                        [In thousands of dollars]

Budget Activity 1: Operating Forces:
    4560  Publications Costs and Maintenance Trends 
      Analysis Unjustified Growth.......................         -20,000
    4560  Navy Air Logistics Data Analysis..............         -10,000
    4560  Knowledge Management and Decision Support 
      System............................................           6,000
    4650  Naval Aviation Depot (NADEP) Support of the 
      FRP...............................................           2,000
    4650  Simulation Modeling Analytical Support System 
      (SMASS) Program...................................           1,000
    4650  CAT & RADCOM Test Program Sets Life Extension 
      Program...........................................           6,000
    4650  Navy Converged ERP Program Reduction..........          -7,500
    4850  Pier-side and Organizational Maintenance 
      U.S.S. Eisenhower.................................          15,000
    5050  Single Torpedo Maintenance Facility...........           1,500
    5050  Engineering Technician, Apprentice, Co-op 
      Program, NUWC Keyport.............................           1,500
    5050  Improved Engineering Design Process...........           1,500
    5500  Excessive Growth for JFCOM and PACOM..........         -25,000
    5550  Manual Reverse Osmosis Desalinator (MROD) 
      Testing, Repair and Replacement...................           1,000
    5950  Unsupported Requirements Global Hawk UAV......         -10,000
    6210  Toledo Shipyard Improvement Plan..............           2,500
    6220  Base Operating Support Unjustified Growth.....         -15,000
    6220  Naval Integrated Security System, Naval 
      Station San Diego.................................           4,000
    6220  Navy Region Northwest--Navy Shore 
      Infrastructure Transformation (NSIT)..............           6,500
    6220  Navy Region Southeast--Integrated Safety 
      Management System (ISMS) Completion...............           4,500
    6220  Combating Terrorism Database System (CDTS) 
      Remote Data Repository (RDR) Project..............           2,000
Budget Activity 2: Mobilization:
    6500  Ship Disposal Program.........................           1,000
Budget Activity 3: Training and Recruiting:
    7200  Near Pier-Side Tactical and Simulation 
      Training..........................................           2,000
    7200  Blended Learning Initiative...................           1,000
    7300  Navy Advanced Education Demonstration Project.           1,000
    7300  Center of Excellence for Learning Technology 
      (CELT)............................................           1,000
    7300  Center for Defense Technology and Education 
      for the Military Services (CDTEMS)................           5,000
    7600  Continuing Education Distance Learning........           1,000
    7700  Naval Sea Cadet Corps.........................           1,000
    7700  Naval Junior ROTC Marine Science Research 
      Program...........................................           2,000
Budget Activity 4: Administration and Servicewide 
    Activities:
    8550  Stainless Steel Sanitary Spaces...............           4,000
    8600  Active Data-Rich RFID AIT for Navy In-Transit 
      Visibility Infrastructure.........................           3,000
    9000  Local Situational Assessment Segment, NAS 
      Lemoore...........................................           6,000
    9000  Navy Integrated Security System (NISS)........           4,000
    9000  Security Programs Classified..................           6,000
Undistributed:
    9440  Unobligated Balances..........................         -86,000
    9550  Administration and Servicewide Activities.....         -91,600
    9570  Civilian Pay Overstatement....................         -13,300
    9580  Military to Civilian Conversion...............         -19,300
    9590  Civilian Separation Incentive.................         -14,400

            KNOWLEDGE MANAGEMENT AND DECISION SUPPORT SYSTEM

    The Committee recommends an additional $6,000,000 in 
Operation and Maintenance, Navy only to implement and sustain a 
spiral development transformation through well-defined 
processes for capitalizing on best practices and integrating 
lessons learned across the Naval Aviation Enterprise. The 
funding will support design, development, and sustainment of a 
knowledge management and decision support architecture that 
facilitates a culture of self-sustaining, knowledge-sharing, 
collaborative communities.

               LOCAL SITUATIONAL ASSESSMENT, NAS LEMOORE

    The Committee recommends an additional $6,000,000 in 
Operation and Maintenance, Navy only to fund the Local 
Situational Assessment Segment operating system at the Naval 
Air Station (NAS) Lemoore to support anti-terrorist force 
protection at the base by providing an integrated open 
architecture backbone LSAS, Smart Fence and Smart Gate 
capability system.

                                 CDTEMS

    The Committee recommends an additional $5,000,000 in 
Operation and Maintenance, Navy only for the Center for Defense 
Technology and Education for the Military Services (CDTEMS). 
CDTEMS leverages Naval Postgraduate School (NPS) expertise to 
assist deployed US forces to win the Global War on Terrorism. 
Based on insights gained by NPS students while deployed in 
Iraq, Afghanistan and other operational theaters, and by the 
Special Operations Command and other program sponsors, CDTEMS 
conducts research and education programs that directly increase 
the effectiveness of US Joint and Combined operations. CDTEMS 
supported programs include the Center for Post-Conflict 
Reconstruction, the Field Experimentation Program, the Maritime 
Domain Protection Project, and the Regional Security Education 
Program. The additional funding will support these programs and 
will provide for research aimed at applying other emerging 
technologies to war fighting and counter-terrorism needs.

                  SINGLE TORPEDO MAINTENANCE FACILITY

    The Committee recommends an additional $1,500,000 in 
Operation and Maintenance, Navy only to virtually connect and 
coordinate torpedo maintenance activities in the same fashion 
as the Navy's Single Shipyard Concept. Torpedo maintenance 
activities are currently spread across several facilities. This 
effort would link these activities together to maximize their 
efficiency.

       NAVY REGION SOUTHEAST INTEGRATED SAFETY MANAGEMENT SYSTEM

    The Committee recommends an additional $4,500,000 in 
Operation and Maintenance, Navy only to complete the Integrated 
Safety Management System (ISMS) project in the Navy's Southeast 
Region (8 sites) and expand it into the remaining six sites in 
the Southeast Region (total of 14 sites).

                            NAS NORTH ISLAND

    The Committee directs that of the funds made available in 
Operation and Maintenance, Navy, $5,000,000 is only to complete 
the renovation of buildings 10 and 11 at NAS North Island.

                   GLOBAL HAWK MARITIME DEMONSTRATION

    The budget includes $10,000,000 to support operational 
costs of exercise participation for the Global Hawk High 
Altitude (HAE) Unmanned Aerial Vehicle (UAV). The Committee has 
eliminated this request based on the view that the Navy's cost 
of operating and maintaining its single Global Hawk asset would 
be far greater than the benefit gained from exercise 
participation.
    The Air Force has a program that supports the acquisition, 
fielding, and operation of a large number of Global Hawk UAVs 
and the Committee believes that a more cost effective solution 
would be to add the Navy's Global Hawk UAV to the Air Force 
inventory. Therefore, the Committee directs the Navy to 
transfer its Global Hawk UAV asset to the Air Force within 60 
days of enactment of this Act.

                       DOD-NOAA FACILITY CLEAN-UP

    The Committee urges the Department of Defense to consult 
with the National Oceanic and Atmospheric Administration (NOAA) 
and to enter into such memoranda of understanding as are 
necessary to make use of NOAA's expertise and experience in 
fulfilling its responsibilities for clean-up on Vieques Island.

                OPERATION AND MAINTENANCE, MARINE CORPS





Fiscal year 2004 appropriation........................    $3,440,323,000
Fiscal year 2005 budget request.......................     3,632,115,000
Committee recommendation..............................     3,605,815,000
Change from budget request............................       -26,300,000


    The Committee recommends an appropriation of $3,605,815,000 
for Operation and Maintenance, Marine Corps. The recommendation 
is an increase of $165,492,000 above the amount appropriated 
for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Marine Corps are shown below:

                        [In thousands of dollars]

Budget Activity 1: Operating Forces:
    10050  All Purpose Environmental Clothing System 
      (APECS)...........................................          10,000
    10050  Marine Corps Mountain/Cold Weather Clothing 
      and Equipment.....................................           1,000
    10050  Modular General Purpose Tent System (MGPTS)..           3,000
    10050  EMI Hardened Fluorescent Stringable Tent 
      Lighting System...................................           4,000
    10050  Range Enhancements for JNTC MOUT Facility at 
      Twentynine Palms..................................          15,000
    10100  Life Cycle Sustainment Software Maintenance 
      Unjustified Growth................................          -3,000
    10100  Transportation CLS Replacement and Ammunition 
      Rework Unjustified Growth.........................          -2,000
    10100  NATO 9T AGM Batteries........................           2,500
    10100  Pulse Technology--USMC Battery Management 
      Program...........................................           1,000
    10200  Base Operating Support Unjustified Growth....          -5,000
    10200  Defense Motor Vehicle Safety Demonstration 
      Program...........................................           1,000
    10350  Contract Maintenance and Training Exercise 
      Unjustified Growth................................          -1,000
Budget Activity 4: Administration and Servicewide 
    Activities:
    11850  MCLB Albany Sewer Line Replacement...........           1,500
Undistributed:
    12010  Unobligated Balances.........................          -8,000
    12050  Administration and Servicewide Activities....         -17,200
    12055  Military to Civilian Conversions.............         -29,100

       MARINE CORPS MOUNTAIN/COLD WEATHER CLOTHING AND EQUIPMENT

    The Committee recommends an additional $1,000,000 in 
Operation and Maintenance, Marine Corps, only for the purchase 
of Marine Corps Mountain/Cold Weather clothing and equipment 
for Marine Corps operational forces, including exhale/custom 
fit technology gloves, as well as All Purpose Environmental 
Clothing System (APECS), sunglasses, canteens, sleeping bags, 
gaiters, and cold weather assault climbers kits.

                  OPERATION AND MAINTENANCE, AIR FORCE





Fiscal year 2004 appropriation........................   $26,904,731,000
Fiscal year 2005 budget request.......................    28,471,260,000
Committee recommendation..............................    27,994,110,000
Change from budget request............................      -477,150,000


    The Committee recommends an appropriation of 
$27,994,110,000 for Operation and Maintenance, Air Force. The 
recommendation is an increase of $1,089,379,000 above the 
amount appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Air Force are shown below:

                        [In thousands of dollars]

Budget Activity 1: Operating Forces:
    12600  Maintain 52 F-117 Aircraft...................           7,900
    12600  Forward Osmosis Water Filtration Devices.....           1,000
    12600  F-15E Oxygen Concentrator Reliability 
      Improvement Program...............................           1,000
    12600  Combat Air Systems Activities, 480th Intel 
      Squadron..........................................          -9,000
    12750  JNTC Distributed Mission Operations 
      Unjustified Growth................................         -15,000
    12775  Transfer to O&M, Air National Guard..........         -39,300
    12800  Air Operations Centers Unjustified Growth....         -10,000
    12850  Fairchild AFB Force Protection Rail 
      Relocation........................................             500
    13000  C3I Operations and Sustainment Unjustified 
      Growth............................................         -27,000
    13100  Engineering, Installation Support, and 
      Expanded Space Operations School Unjustified 
      Growth............................................         -30,000
    13100  Contaminant Air Processing System (CAPS).....           2,000
    13200  Management Support for Air Force Battle Labs.           5,000
    13400  Maintenance and Upkeep of Rocket Engine Test 
      Stands at Edwards AFB.............................           3,500
    13690  Repair Jump Tower at Kirtland AFB............             600
Budget Activity 2: Mobilization:
    13850  Joint Combined Aircrew System Tester (JCAST).           4,000
    13975  Transfer to O&M Air National Guard...........         -39,500
Budget Activity 3: Training and Recruiting:
    14600  Pavement Equipment Operator Course 
      Consolidation, Whiteman Air Force Base............           2,500
    14650  AWACS Communications Training................           1,000
    14750  Geospatial Distant Learning and Higher 
      Education Development.............................           1,000
    15100  Online Technology Training Program McChord 
      AFB...............................................           1,000
    15100  Online Technology Training Program Nellis AFB           1,000
    15100  Online Technology Training Program MacDill 
      AFB...............................................           2,000
Budget Activity 4: Administration and Servicewide 
    Activities:
    15400  Engine Health Management Data Repository 
      Center............................................           2,000
    15550  Wright-Patterson AFB Civil Engineering 
      Critical Infrastructure Data Set Development......           1,000
    15950  Joint Personnel Recovery Agency..............           2,000
    16000  Demonstration Project for Contractors 
      Employing Persons with Disabilities...............           1,000
    16100  William Lehman Aviation Center...............             750
    16100  Defense Installation Spatial Data 
      Infrastructure (DISDI)............................           6,000
Undistributed:
    16630  Unobligated Balances.........................         -71,000
    16710  Administration and Servicewide Activities....        -138,400
    16720  Base Operations Support......................         -43,000
    16730  Civilian Pay Overstatement...................         -12,500
    16780  Military to Civilian Conversions.............         -48,500
    16790  Civilian Separation Incentive................         -40,700

       F-15E OXYGEN CONCENTRATOR RELIABILITY IMPROVEMENT PROGRAM

    The Committee recommends an additional $1,000,000 in 
Operation and Maintenance, Air Force, only to procure and 
install MSOGS upgrade kits for the F-15E fleet. The Committee 
understands that the depot developed and qualified upgrade kit 
will increase oxygen system reliability to near the life of the 
aircraft.

        DEFENSE INSTALLATION SPATIAL DATA INFRASTRUCTURE (DISDI)

    The Committee recommends an additional $6,000,000 in 
Operation and Maintenance, Air Force, only to expand the 
successful USAF Geobase program to improve military 
installation management throughout DoD.

                             AIR SHOW STUDY

    The Committee directs that of the funds made available in 
Operation and Maintenance, Air Force, $1,000,000 be used only 
for the purposes described in Section 1072 of the House-passed 
National Defense Authorization Bill for fiscal year 2005.

                  THREAT REPRESENTATION AND VALIDATION

    The independent validation of threat models and simulators 
is critical to ensuring war-fighter preparedness and 
survivability. The Committee has assisted the Air Force in 
accomplishing the threat modeling and simulation validation 
being conducted by the National Air and Space Intelligence 
Center (NAIC) for several years. The Committee understands that 
although the NAIC Threat Representation and Validation program 
was to be divested in fiscal year 2004, that it has been 
reinstated. Further, the Committee understands that this will 
consist of reinstating six government positions in fiscal year 
2004 and funding for fiscal year 2005 to support the positions 
until the program can be inserted into the fiscal year 2006 to 
2011 Program Objective Memorandum (POM) cycle. The Committee 
considers this a critical program and believes it in the best 
interest of the Air Force to maintain this important 
capability, and to ensure that it is included in the fiscal 
year 2006 to 2011 POM.

                    HEAVY OUTSIZED AIRLIFT CAPACITY

    The Committee is aware of the on-going Mobility 
Capabilities Study and the probability that the current 54.5 
MTM/day requirement will increase. The Committee, like the Air 
Force, recognizes the value of filling whatever heavy, outsized 
lift requirement is validated with the most cost effective 
fleet structure to include better use of the Civilian Reserve 
Air Fleet. The Committee directs the Secretary of the Air Force 
to provide the congressional defense committees no later than 
March 31, 2005, an assessment of options to introduce a U.S. 
owned, heavy, outsized airlift capability into the CRAF based 
on potential commercial uses of commercialized versions of U.S. 
heavy outsized cargo aircraft without the need for government 
investment or substantial involvement.

                       B-1 AIRCRAFT REGENERATION

    The fiscal year 2004 Defense Appropriations Act provided 
$17,100,000 in procurement aircraft modification funding to 
regenerate additional B-1 aircraft previously planned for 
retirement. The Air Force has indicated this funding is 
sufficient to modify and increase the force structure by 7 
aircraft, to a fleet total of 67. For fiscal year 2005, the Air 
Force has advised the Committee it will operate the total B-1 
fleet of 67 aircraft from within funds available to the Air 
Force.

                OPERATION AND MAINTENANCE, DEFENSE-WIDE





Fiscal year 2004 appropriation........................   $16,226,841,000
Fiscal year 2005 budget request.......................    17,494,076,000
Committee recommendation..............................    17,346,411,000
Change from budget request............................      -147,665,000


    The Committee recommends an appropriation of 
$17,346,411,000 for Operation and Maintenance, Defense-Wide. 
The recommendation is an increase of $1,119,570,000 above the 
amount appropriated in fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Defense-Wide are shown below:

                        [In thousands of dollars]

Budget Activity 1: Operating Forces:
    17050  TJS--CJCS Exercise Program...................         -50,000
    17100  SOCOM--Completion of Knowledge Superiority 
      for Transitional Warfighter.......................           2,000
    17100  SOCOM--Decreased Airlift requirements........         -10,000
Budget Activity 3: Training and Recruiting:
    17480  DHRA--DLAMP Program Growth...................          -5,000
    17480  DHRA--Joint Advertising Market Research and 
      Studies Program...................................          10,000
    17610  NDU--Continuing Education....................           2,000
    17610  NDU--NDU Integrated Strategic Education......           1,000
    17610  NDU--Joint Staff Infrastructure..............           1,600
    17610  NDU--Commissioned Officer Education 
      Assistance........................................           1,000
Budget Activity 4: Administration and Servicewide 
    Activities:
    17750  CMP--Outdoor Odyssey.........................             500
    17875  DHRA--Defense Business Fellows...............          -4,400
    17875  DHRA--Business Systems.......................          -2,000
    17900  DISA--Program Growth.........................         -50,000
    17900  DISA--Transaction Monitoring Improvement 
      Project...........................................           1,000
    17925  DLA--Passive RFID Prototype Project..........           2,000
    17925  DLA--Commercial Technologies for Maintenance 
      Activities........................................          15,000
    17975  DODEA--Lewis Center for Educational Research.           3,000
    17975  DODEA--Family Advocacy Program...............          20,000
    17975  DODEA--Program for Citizen-Soldier Support...           3,000
    17975  DODEA--Office of the Victim Advocate.........           3,000
    17975  DODEA--Professional Development Project--
      Instruction for Dyslexic Students.................           1,900
    17975  DODEA--Internet Safety and Education.........           1,000
    18050  DSS--Unjustified Program.....................         -50,000
    18075  DTRA--Export Control Database................           1,300
    18100  OEA--David's Island--Fort Slocum Remediation.           4,000
    18100  OEA--McClellan AFB--Sewer Remediation........           4,000
    18100  OEA--George AFB..............................           2,000
    18100  OEA--Norton AFB..............................           5,000
    18100  OEA--Bayonne Military Ocean Terminal.........           6,000
    18100  OEA--Cecil Field.............................           2,000
    18100  OEA--March Joint Powers Authority--Arnold 
      Heights Reuse Project.............................           3,000
    18100  OEA--Hunters Point Naval Shipyard............           3,000
    18125  OSD--Public Affairs..........................         -11,500
    18125  OSD--BMMP....................................          -7,000
    18125  OSD--Net Assessment..........................          -4,000
    18125  OSD--BMMP Domains............................         -15,000
    18125  OSD--Logistics System Modernization..........          -4,000
    18125  OSD--DOD CIO.................................          -5,000
    18125  OSD--Readiness and Range Initiative..........         -10,000
    18125  OSD--Training Transformation.................          -5,000
    18125  OSD--OSD Contract and Support................          -5,000
    18125  OSD--OSD Study Program.......................          -4,000
    18125  OSD--Comptroller Initiatives.................          -6,500
    18125  OSD--Defense Procurement and Acquisition 
      Policy............................................          -7,500
    18125  OSD--Middle East Regional Security Program...           2,500
    18125  OSD--Study on Internet and Wireless 
      Technology........................................           1,000
    18125  OSD--Center for Foreign Language Study.......           1,000
    18125  OSD--Command Information Superiority 
      Architectures.....................................           1,000
    18125  OSD--National Strategic Seaport Model........           3,000
    18125  OSD--Military Leadership and Rule of Law 
      Program...........................................           1,000
    18125  OSD--National Dedicated Fiber Optic Network 
      Program...........................................           2,000
    18125  OSD--Norm Mineta Internship Immersion Program           3,000
    18125  OSD--Clinic for Legal Assistance to Service 
      Member............................................             750
    18125  OSD--Information Technology Organizational 
      Composition Project...............................           2,000
Undistributed:
    19010  Impact Aid...................................          35,000
    19020  Other Programs...............................          12,785
    19042  Unobligated Balances.........................         -55,100

                     PASSIVE RFID PROTOTYPE PROJECT

    The Committee recognizes the critical importance of 
ensuring that needed material is provided to operating field 
units, particularly in the combat theater, in the most 
efficient manner possible. The Committee provides $2,000,000 
for continued expansion of a passive RFID implementation in 
which Defense officials, working with defense suppliers and 
providers of RFID and bar code technology to combine efforts to 
accelerate integration of this needed technology into the 
supply chain management process.

                NORM MINETA INTERNSHIP IMMERSION PROGRAM

    The Committee has included a new proviso under this heading 
to establish an academically-oriented internship and immersion 
program to allow undergraduate students at colleges and 
universities with high concentrations of Asian-American Pacific 
Islander economically disadvantaged students to participate in 
Washington-based internships at the Department of Defense and 
other defense-related agencies. The Secretary shall coordinate 
the administration of this program with the non-profit 
Washington Center for Internships and Academic Seminars and 
shall designate this program hereafter as the ``Norm Mineta 
Internship Immersion Program,'' in honor of the former Member 
of the U.S. House of Representatives from California.

       COMMERCIAL TECHNOLOGIES FOR MAINTENANCE ACTIVITIES (CTMA)

    The Committee recommends $15,000,000 for Commercial 
Technologies for Maintenance Activities (CTMA) only to continue 
the existing program including not less than $3,000,000 for 
operating costs of the National Center for Manufacturing 
Sciences.

                               GEORGE AFB

    The Committee recommends an additional $2,000,000 in 
Operation and Maintenance, Defense-Wide only for ongoing water 
distribution and other infrastructure improvements at the 
former George AFB.

                               NORTON AFB

    The Committee recommends an additional $5,000,000 in 
Operation and Maintenance, Defense-Wide only for ongoing hangar 
repair, electrical supply delivery, tower improvements and 
contaminated water supply treatment at the former Norton AFB.

                 LEWIS CENTER FOR EDUCATIONAL RESEARCH

    The Committee has included an additional $3,000,000 in 
Operation and Maintenance, Defense-Wide for the Lewis Center 
for Educational Research for staffing, curriculum development, 
research, coordination and logistical support to enhance 
Department of Defense teacher training.

            ENVIRONMENTAL REMEDIATION OF UNEXPLODED ORDNANCE

    The costs and duration of cleanup and remediation of 
unexploded ordnance at current and former facilities remains a 
significant problem confronting the Department of Defense. The 
Committee notes that a 2003 report of the Defense Science Board 
(DSB) and a 2003 audit by the General Accounting Office (GAO) 
both express concerns with the lack of a comprehensive plan by 
the Department of Defense regarding this issue. Accordingly, 
the Committee directs the Department of Defense to provide to 
the congressional defense committees by April 1, 2005, a 
comprehensive plan and cost estimates associated with 
remediation of unexploded ordnance and environmental 
restoration; a program restructuring to improve efficiency, 
management and organization of the munitions response program; 
and a projected schedule for identifying, prioritizing and 
remediation of all known munitions response sites as 
recommended by the DSB and the GAO.

                          BUILDING PROTECTION

    The Committee is aware of actions taken by federal and 
municipal agencies and schools to install perforated steel 
window barriers to protect building occupants from security 
threats and natural disasters, including intruders, potential 
explosives use, and hurricanes. Many of these facilities are 
located in areas subject to high winds and severe weather. The 
Committee requests that the Deputy Under Secretary for Defense 
(Installations and Environment) provide the Committee, no later 
than January 31, 2004, a listing of domestic and overseas 
installations that would benefit from window barrier 
protection, including the number of school and housing-related 
buildings on each installation.

                            VICTIM ADVOCATES

    The Committee recommends an increase of $3,000,000 above 
the budget request to enhance the Department of Defense's 
victim advocate programs. Given the potential for domestic 
violence arising from the heightened stress our military 
members and families face in connection with the ongoing 
Afghanistan and Iraq conflicts, the Committee believes a 
military-wide set of standard protocols for responding to 
sexual misconduct and domestic violence cases must be 
developed. As such, these additional funds are to be used by 
the Office of the Secretary of Defense to initiate a program to 
standardize response protocols among the military services that 
ensure access to treatment services, reduce bureaucratic 
hurdles for victims and survivors, and remove barriers to 
reporting these types of violence cases. The Committee intends 
to work with the Department as it develops a program for 
implementing this initiative.

                OPERATION AND MAINTENANCE, ARMY RESERVE





Fiscal year 2004 appropriation........................    $1,998,609,000
Fiscal year 2005 budget request.......................     2,008,128,000
Committee recommendation..............................     1,976,128,000
Change from budget request............................       -32,000,000


    The Committee recommends an appropriation of $1,976,128,000 
for Operation and Maintenance, Army Reserve. The recommendation 
is a decrease of $22,481,000 below the $1,998,609,000 
appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Army Reserve are shown below:

                        [In thousands of dollars]

Undistributed:
    20180  All Terrain Military Utility Vehicles........           5,500
    20190  Military Technicians Cost Avoidance..........         -34,200
    20200  Controlled Humidity Protection...............           4,000
    20220  Unobligated Balances.........................          -8,800
    20230  Army Reserve IT Consolidation................           1,500

                US ARMY RESERVE COMMAND IT CONSOLIDATION

    The Committee recommends an increase of $1,500,000 above 
the budget request only for the Army Reserve to achieve a 
continuity of operations capability for its mission critical 
information technology systems by replicating mission critical 
data between Peachtree City, Georgia and San Antonio, Texas.

                     CONTROLLED HUMIDITY PROTECTION

    The Committee recommends an increase of $4,000,000 above 
the budget request for implementation of the Controlled 
Humidity Protection program for critical equipment storage for 
the U.S. Army Reserve 99th Regional Readiness Command. These 
funds are made available to enhance the deployment and mobility 
of Army Reserve forces and supplies.

                OPERATION AND MAINTENANCE, NAVY RESERVE





Fiscal year 2004 appropriation........................    $1,172,921,000
Fiscal year 2005 budget request.......................     1,240,038,000
Committee recommendation..............................     1,233,038,000
Change from budget request............................        -7,000,000


    The Committee recommends an appropriation of $1,233,038,000 
for Operation and Maintenance, Navy Reserve. The recommendation 
is an increase of $60,117,000 above the $1,172,921,000 
appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustment to the budget activities for Operation and 
Maintenance, Navy Reserve is shown below:

                        [In thousands of dollars]

Undistributed:
    22680  Unobligated Balances.........................          -7,000

            OPERATION AND MAINTENANCE, MARINE CORPS RESERVE





Fiscal year 2004 appropriation........................      $173,952,000
Fiscal year 2005 budget request.......................       188,696,000
Committee recommendation..............................       187,196,000
Change from budget request............................        -1,500,000


    The Committee recommends an appropriation of $187,196,000 
for Operation and Maintenance, Marine Corps Reserve. The 
recommendation is an increase of $13,244,000 above the 
$173,952,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustment to the budget activities for Operation and 
Maintenance, Marine Corps Reserve is shown below:

                        [In thousands of dollars]

Undistributed:
    24150  Unobligated Balances.........................          -1,500

              OPERATION AND MAINTENANCE, AIR FORCE RESERVE





Fiscal year 2004 appropriation........................    $2,179,388,000
Fiscal year 2005 budget request.......................     2,239,790,000
Committee recommendation..............................     2,227,190,000
Change from budget request............................       -12,600,000


    The Committee recommends an appropriation of $2,227,190,000 
for Operation and Maintenance, Air Force Reserve. The 
recommendation is an increase of $47,802,000 above the 
$2,179,388,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Air Force Reserve are shown below:

                        [In thousands of dollars]

Undistributed:
    25660  Military Technicians Cost Avoidance..........         -35,400
    25665  932nd Airlift Wing Operations and Training...           8,300
    25680  Unobligated Balances.........................          -7,900
    25682  932nd Airlift Wing Site Activation...........          16,600
    25692  932nd Airlift Wing Technicians...............           5,800

                           932ND AIRLIFT WING

    The Committee has included additional funding under this 
heading, as well as ``Reserve Personnel, Air Force'' and 
``Aircraft Procurement, Air Force'', to support mission 
operations, training, mission transition, and sustainment at 
the 932nd Airlift Wing at Scott Air Force Base, Illinois.

             OPERATION AND MAINTENANCE, ARMY NATIONAL GUARD





Fiscal year 2004 appropriation........................    $4,340,581,000
Fiscal year 2005 budget request.......................     4,440,686,000
Committee recommendation..............................     4,376,886,000
Change from budget request............................       -63,800,000


    The Committee recommends an appropriation of $4,376,886,000 
for Operation and Maintenance, Army National Guard. The 
recommendation is an increase of $36,305,000 above the 
$4,340,581,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Army National Guard are shown below:

                        [In thousands of dollars]

Undistributed:
    26830  National Emergency and Disaster Information 
      System............................................           3,500
    26890  Joint Training and Experimentation Program...           5,000
    26940  Rural Access to Broadband Technology.........           4,000
    26970  National Guard Global Education Project......             500
    27090  National Response Center WMD Facility........           1,000
    27100  Adv Emergency Medical Response Training 
      Program...........................................           2,500
    27110  Homeland Operational Planning System.........           8,000
    27140  Advanced Information Technology Services 
      (C4ISR)...........................................           1,000
    27310  Military Technician Cost Avoidance...........         -94,600
    27341  National Guard Motor Pool Parts Tracking 
      System............................................           2,000
    27345  Unobligated Balances.........................         -21,900
    27350  ERP for Army Guard Installations.............           1,000
    27360  Omega 36 Battle Effects Simulator............           3,000
    27365  Regional Geospatial Service Center...........           1,000
    27370  AVCRAD Replacement Equipment.................           3,000
    27381  Community Emergency Response/Info Analysis 
      Center............................................           2,500
    27382  Tactical Operations Center (ELAMS/MECCS).....           1,500
    27383  Strategic Biodefense Initiative..............          10,000
    27384  Advanced Starting Systems....................             500
    27385  Infantry Helmet Liner Retrofit (BLISS Kit)...           2,500
    27386  District of Columbia NG Tuition Assistance...             200

                  HOMELAND OPERATIONAL PLANNING SYSTEM

    The Committee recommends an increase of $8,000,000 above 
the budget request only for execution by the Homeland 
Operational Planning System (HOPS) at Lawrence Livermore 
National Laboratory in support of the California National 
Guard.

                      AVCRAD REPLACEMENT EQUIPMENT

    The Committee recommends an increase of $3,000,000 above 
the budget request to replace equipment and property deployed 
with the Connecticut Army National Guard's 1109th Aviation 
Classification Repair Activity Depot (AVCRAD).

                       ADVANCED STARTING SYSTEMS

    The Committee recommends an increase of $500,000 above the 
budget request only for the California National Guard to test, 
evaluate, and procure reverse polarity protected Jump Starters 
with coil-cord control systems.

                     INFANTRY HELMET LINER RETROFIT

    The Committee recommends an increase of $2,500,000 above 
the budget request only for Oregon and California National 
Guard use for Retrofit of Kevlar Helmet Suspension System.

             OPERATION AND MAINTENANCE, AIR NATIONAL GUARD





Fiscal year 2004 appropriation........................    $4,431,216,000
Fiscal year 2005 budget request.......................     4,422,838,000
Committee recommendation..............................     4,438,738,000
Change from budget request............................       +15,900,000


    The Committee recommends an appropriation of $4,438,738,000 
for Operation and Maintenance, Air National Guard. The 
recommendation is an increase of $7,522,000 above the 
$4,431,216,000 appropriated for fiscal year 2004.

                          Program Recommended

    The total amount recommended in the bill will provide the 
following program in fiscal year 2005:


    The adjustments to the budget activities for Operation and 
Maintenance, Air National Guard are shown below:

                        [In thousands of dollars]

Budget Activity 1: Operating Forces:
    27700  Mission Support Operations/Surveying Systems.           1,000
    27850  Depot Maintenance/Transfer from active duty..          78,800
Undistributed:
    28160  National Guard State Partnership Program.....           1,000
    28290  Military Technicians Cost Avoidance..........         -57,200
    28310  IT Consolidation.............................           3,000
    28320  Unobligated Balances.........................         -17,900
    28330  Extended Cold Weather Clothing System........           1,000
    28340  LRC 21 Laptop Mission Trainers...............           1,500
    28350  AATTC Mobility Equipment and Training........             500
    28360  Senior Scout Mission.........................           2,000
    28375  Automatic Flight Following System............           2,000
    28380  District of Columbia NG Tuition Assistance...             200

            OVERSEAS CONTINGENCY OPERATIONS TRANSFER ACCOUNT





Fiscal year 2004 appropriation........................        $5,000,000
Fiscal year 2005 budget request.......................        30,000,000
Committee recommendation..............................         5,000,000
Change from budget request............................       -25,000,000


    The Committee has fully funded the budget request for 
support of ongoing DoD operations in Bosnia and Kosovo. These 
operations are no longer contingency events, and such 
continuing operations have been funded in the regular 
appropriations accounts lines as requested by the 
Administration. As these operations are now accounted for in 
the budget development process, contingency funds are not 
needed and the Committee has reallocated $25,000,000 from the 
Overseas Contingency Operations Transfer Account to more urgent 
priorities.

          UNITED STATES COURT OF APPEALS FOR THE ARMED FORCES





Fiscal year 2004 appropriation........................       $10,333,000
Fiscal year 2005 budget request.......................        10,825,000
Committee recommendation..............................        10,825,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $10,825,000 
for the United States Court of Appeals for the Armed Forces. 
The recommendation is an increase of $492,000 above the amount 
appropriated in fiscal year 2004.

                    ENVIRONMENTAL RESTORATION, ARMY





Fiscal year 2004 appropriation........................      $396,018,000
Fiscal year 2005 budget request.......................       400,948,000
Committee recommendation..............................       400,948,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $400,948,000 
for Environmental Restoration, Army. The recommendation is an 
increase of $4,930,000 above the amount appropriated in fiscal 
year 2004.

                    ENVIRONMENTAL RESTORATION, NAVY





Fiscal year 2004 appropriation........................      $256,153,000
Fiscal year 2005 budget request.......................       266,820,000
Committee recommendation..............................       266,820,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $266,820,000 
for Environmental Restoration, Navy. The recommendation is an 
increase of $10,667,000 above the amount appropriated in fiscal 
year 2004.

                  ENVIRONMENTAL RESTORATION, AIR FORCE





Fiscal year 2004 appropriation........................      $384,307,000
Fiscal year 2005 budget request.......................       397,368,000
Committee recommendation..............................       397,368,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $397,368,000 
for Environmental Restoration, Air Force. The recommendation is 
an increase of $13,061,000 above the amount appropriated in 
fiscal year 2004.

                ENVIRONMENTAL RESTORATION, DEFENSE-WIDE





Fiscal year 2004 appropriation........................       $24,081,000
Fiscal year 2005 budget request.......................        23,684,000
Committee recommendation..............................        26,684,000
Change from budget request............................        +3,000,000


    The Committee recommends an appropriation of $26,684,000 
for Environmental Restoration, Defense-Wide. The recommendation 
is an increase of $2,603,000 above the amount appropriated in 
fiscal year 2004.
    The adjustment to the budget for Environmental Restoration, 
Defense-Wide is shown below:

                        [In thousands of dollars]

Perchlorate Destruction by UV Catalyzed Iron Reaction...           3,000

         ENVIRONMENTAL RESTORATION, FORMERLY USED DEFENSE SITES





Fiscal year 2004 appropriation........................      $284,619,000
Fiscal year 2005 budget request.......................       216,516,000
Committee recommendation..............................       216,516,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $216,516,000 
for Environmental Restoration, Formerly Used Defense Sites. The 
recommendation is a decrease of $68,103,000 below the amount 
appropriated in fiscal year 2004.

                             DEWITT CENTER

    The Committee is aware of the important environmental 
cleanup activities at the DeWitt Center, a formerly used 
defense site in California. The Committee expects the Army to 
provide adequate funding to complete cleanup requirements at 
this site in a timely manner.

             OVERSEAS HUMANITARIAN, DISASTER, AND CIVIC AID





Fiscal year 2004 appropriation........................       $59,000,000
Fiscal year 2005 budget request.......................        59,000,000
Committee recommendation..............................        59,000,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $59,000,000 
for Overseas Humanitarian, Disaster, and Civic Aid.

              FORMER SOVIET UNION THREAT REDUCTION ACCOUNT





Fiscal year 2004 appropriation........................      $450,800,000
Fiscal year 2005 budget request.......................       409,200,000
Committee recommendation..............................       409,200,000
Change from budget request............................                 0


    The Committee recommends an appropriation of $409,200,000 
for Former Soviet Union Threat Reduction Account. The 
recommendation is a decrease of $41,600,000 below the amount 
appropriated in fiscal year 2004.
                               TITLE III

                              PROCUREMENT

                  ESTIMATES AND APPROPRIATIONS SUMMARY

    The fiscal year 2005 Department of Defense procurement 
budget request totals $74,662,317,000. The accompanying bill 
recommends $77,354,791,000. The total amount recommended is an 
increase of $2,692,474,000 above the fiscal year 2005 budget 
estimate and is $2,698,744,000 above the total provided in 
fiscal year 2004. The table below summarizes the budget 
estimates and the Committee's recommendations.


                         SPECIAL INTEREST ITEMS

    Items for which additional funds have been provided as 
shown in the project level tables or in paragraphs using the 
phrase ``only for'' or ``only to'' in this report are 
congressional interest items for the purpose of the Base for 
Reprogramming (DD 1414). Each of these items must be carried on 
the DD Form 1414 at the stated amount, or a revised amount if 
changed during conference or if otherwise specifically 
addressed in the conference report. These items remain special 
interest items whether or not they are repeated in a subsequent 
conference report.

            REPROGRAMMING GUIDANCE FOR ACQUISITION ACCOUNTS

    The statement of the managers accompanying conference 
report on the Continuing Appropriations Act for fiscal year 
2003 (H.R. 108-10) temporarily raised the reprogramming 
thresholds for procurement, and research and development funds 
appropriated to the Department of Defense to $20,000,000 and 
$10,000,000, respectively. The statement of the managers 
accompanying conference report on the Department of Defense 
Appropriations Act for fiscal year 2004 (H.R. 108-283) 
clarified this guidance indicating that approved below 
threshold reprogramming limitations are the specific dollar 
threshold allowed for fiscal year 2003, or 20 percent, 
whichever is less.
    The Committee believes that these guidelines provide 
sufficient management flexibility for the Department of 
Defense. However, the Committee has some concerns that these 
guidelines are not being consistently applied within DoD. 
Therefore, the Committee directs that these guidelines be 
extended for fiscal year 2005 with the following 
clarifications. The dollar thresholds, $20,000,000 for 
procurement funds, and $10,000,000 for research, development, 
test and evaluation are cumulative. Therefore, if the combined 
values of transfers into or out of a procurement (P-1) or 
research and development (R-1) line exceed the identified 
threshold, the Department of Defense must submit a prior 
approval reprogramming. The Department shall continue to follow 
the limitation that prior approval reprogramming are set at 
either the specific dollar threshold or 20 percent of the 
procurement or research and development line, whichever is 
less. In addition, guidelines on the application of prior 
approval reprogramming procedures for congressional special 
interest items are established elsewhere in this report.

                            CLASSIFIED ANNEX

    Adjustments to the classified programs are addressed in a 
classified annex accompanying this report.

                    MULTIYEAR PROCUREMENT CONTRACTS

    In the Aircraft Procurement, Air Force section of this 
report the Committee discusses how the Air Force ignored the 
law and the express intent of Congress by using the current 
multiyear contract for the C-17 aircraft as a vehicle to 
support an incremental funding strategy. In so doing, it also 
has inappropriately committed the government to potential Anti-
Deficiency Act violations and unfunded liability costs running 
in the hundreds of millions of dollars in the event a follow-on 
contract for this program is not entered into by a date 
certain, or if certain production levels are not agreed to.
    Regrettably, the Committee has learned the Air Force has 
also entered into a similar multiyear contract for the C-130J 
aircraft. The current production profile includes three 
aircraft whose manufacture has been approved in the absence of 
a fully funded appropriation for this purpose. In addition, in 
this contract the contractor has received a commitment on 
behalf of the government by the Air Force that the annual 
production rate will be sustained at 16 aircraft from 2007 
through 2009, between Air Force, Navy, and Marine Corps 
purchases and potential foreign sales. Failure to achieve this 
rate will significantly increase the cost per plane to the Air 
Force, representing a contingent liability the government is 
obliged to pay. At present, current projections suggest this 
rate will not be met, with shortfalls of 4 aircraft each in 
2007 and 2008 and 6 aircraft in 2009. If these projections 
hold, the Air Force and the taxpayer will foot the bill. In 
effect, the Air Force has permitted itself to become a de facto 
sales agent for this program, putting it in a position to 
insist that other elements of the Department of Defense and the 
Congress help it find a way to fund this production profile or 
pay significant penalties.
    The Committee realizes that properly administered multiyear 
procurements can result in significant savings. However, the 
multiple abuses of sound contracting principles and fiscal 
responsibility by the Air Force in these instances cannot and 
will not become a model for future multiyear acquisitions. 
Accordingly, the Committee has recommended several 
modifications to section 8008 of this bill, and the Committee 
directs these requirements be met before future multiyear 
production contracts can be entered into:
    (1) Multiyear contracts must follow full funding policies 
and not be used as vehicles for incrementally funding 
procurement;
    (2) Contract cancellation ceilings may not include 
recurring manufacturing costs of unfunded units;
    (3) Contract payments may not be made in advance of 
projected manufacturing costs (to include purchase of 
materials) for funded units;
    (4) Advance procurement funds may not be used to pay the 
costs of normal fabrication and assembly of unit components. 
The use of these funds should be restricted to long-lead items, 
economic-order-quantity buys, and the one-time non-recurring 
costs of improving manufacturing capabilities;
    (5) Advance procurement funds are limited to no more than 
10 percent of total procurement costs; and
    (6) Regular procurement funds for units should be requested 
for the appropriate fiscal year to be obligated to pay for 
normal fabrication and assembly of funded units and components.
    The Committee also takes exception to the Air Force's use 
of a unique provision in the current C-17 multiyear contract 
that allows the contractor to add charges to the fixed price 
contract if a follow-on contract is not awarded. The amended 
general provision further directs that no new multiyear 
contracts provide for such a price adjustment.
    The Committee directs that not later than 90 days after 
enactment of this legislation, the Secretary of Defense submit 
a report to the congressional defense committees explaining how 
applicable Departmental regulations and policy guidance have 
been amended to comply with this guidance.

                     GROUND FORCES RECAPITALIZATION

    The Committee has repeatedly heard Department of Defense 
officials describe how the intensity of operations and the 
hostile environment in Iraq are taking a toll on U.S. military 
equipment. The Committee understands that one to two months' 
worth of operations in Iraq is equivalent to roughly one year's 
worth of peacetime activity. Our military also has suffered the 
loss of substantial amounts of equipment in combat operations. 
Moreover, the demands of Operation Iraqi Freedom have strained 
certain elements of the domestic industrial base. For example, 
DoD would face serious difficulty if asked to surge beyond 
current rates of ammunition production. Yet, the Committee 
notes that the fiscal year 2005 DoD budget request neither 
provides for the replacement of equipment lost in combat nor 
allocates funds to enhance our strained industrial base.
    The Committee believes that a bold initiative at this time 
is necessary to ensure our military ground forces remain 
capable now and for the immediate future. Accordingly, the 
Committee recommends a total of $2,233,200,000 above the budget 
request in order to replace or overhaul Army and Marine Corps 
combat and tactical vehicles, acquire Stryker combat vehicles 
necessary to support the accelerated fielding of Stryker 
Brigade Combat Teams, replace helicopters lost in combat, and 
make improvements to the ammunition industrial base.
    The Committee believes this is an essential first step. The 
Department of Defense, however, must continue this effort and 
respond--through clear planning and sustained financial 
commitments--to the need to recapitalize our ground forces. 
Thus, the Committee directs the Secretary of Defense to provide 
to the congressional defense committees, not later than 
February 15, 2005, a report detailing near term and long-term 
ground forces' equipment refurbishment, replacement, and 
recapitalization requirements. This report should include 
estimates of the cost, production requirements, and timelines 
needed to meet these requirements, and also, detail the extent 
to which the fiscal year 2006 budget submission and the Future 
Years Defense Plan provides for meeting these needs.
    The table below outlines the Committee's recommendations.
                                                           ($ thousands)
Aircraft Procurement, Army:
    UH-60L--12 Aircraft Guard...........................         127,200
    CH-47--8 Aircraft Active............................         336,000
      Total--Aircraft Procurement, Army.................         463,200
Weapons and Tracked Combat Vehicles, Army:
    Bradley ODS+........................................         134,000
    Bradley Integrated Modernization Program............          40,000
    Stryker--Additional Brigade.........................         900,000
    Stryker--Fieldling Costs............................          50,000
      Total--Weapons and Tracked Combat.................
      Vehicles, Army....................................       1,124,000
Procurement of Ammunition, Army:
    Radford AAP.........................................          16,000
    Holston AAP.........................................           3,500
    Lake City AAP.......................................          22,400
    Kansas and Lone Star AAP............................          10,000
      Total--Procurement of Ammunition, Army............          51,900
Other Procurement, Army:
    HMMWV M1113--Active.................................          50,000
    HMMWV M1113--Guard & Reserve........................          65,000
    HMMWV Recapitalization A0 to A2.....................          39,000
    FMTV--Active........................................          45,000
    FMTV--Reserve.......................................          60,000
    HEMTTs all variants--Active.........................          45,000
    HEMTTs all variants--Guard & Reserve................          50,000
    Palletized Load System--Active......................          10,000
    Palletized Load System--Reserve.....................          10,000
    M915 Tractor--Guard.................................          15,000
      Total--Other Procurement, Army....................         389,000
Aircraft Procurement, Navy:
    CH-53--T64 Engine Government Reliability Improvement          40,000
      Total--Aircraft Procurement, Navy.................          40,000
Procurement, Marine Corps:
    AAV RAM/RS Upgrades.................................          74,100
    LAV (Components)....................................          25,300
    HIMARS..............................................           5,600
    Lightweight 155mm Howitzer..........................          60,100
      Total--Procurement, Marine Corps..................         165,100
                    --------------------------------------------------------
                    ____________________________________________________
      Grand Total--Ground Forces Recapitalization.......       2,233,200
                    ========================================================
                    ____________________________________________________

                       AIRCRAFT PROCUREMENT, ARMY




Fiscal year 2004 appropriation........................    $2,154,035,000
Fiscal year 2005 budget request.......................     2,658,241,000
Committee recommendation..............................     3,107,941,000
Change from budget request............................      +449,700,000


    This appropriation finances acquisition of tactical and 
utility airplanes and helicopters, including associated 
electronics, electronic warfare equipment for in-service 
aircraft, ground support equipment, components and parts such 
as spare engines, transmission gear boxes, and sensor 
equipment. It also funds related training devices such as 
combat flight simulators and production base support.

                        Committee Recommendation

    The Committee recommends an appropriation of $3,107,941,000 
for Aircraft Procurement, Army. The following report and 
project level tables provide a summary of the Committee's 
recommendations.


               COMANCHE TERMINATION AND BUDGET AMENDMENT

    The Committee supports the Department of Defense decision 
to terminate the RAH-66 Comanche helicopter program. This 
decision will free up the resources needed to make sweeping 
improvements in a number of the Army's aviation programs. For 
example, the Army indicates funding required for the 
development and construction of 122 Comanche aircraft through 
fiscal year 2011 is sufficient to provide for roughly 800 other 
aircraft. The Committee notes that this decision should help 
meet both the immediate needs of the Army associated with the 
Global War on Terrorism as well as needs associated with the 
Army's brigade restructure (modularity) initiative.
    Accordingly, the Committee's recommendations incorporate 
the vast majority of the recommendations in the fiscal year 
2005 Comanche budget amendment. However, there are two 
instances within Aircraft Procurement, Army where the Committee 
has reservations. The budget amendment proposed establishing 
two new aircraft programs including a replacement for the Kiowa 
Warrior armed reconnaissance helicopter, and a new light 
utility helicopter. While the Committee realizes the potential 
utility of these aircraft, the Committee notes that there is no 
program of record to support the proposed level of funding in 
either case. Similarly, the Committee notes that the Army has 
not initiated new start notifications to date in fiscal year 
2004. As a result, the Committee recommends reducing funding 
for the Kiowa Warrior replacement by $12,000,000 below the 
amended budget request, and reducing funding for the new light 
utility helicopter by $22,000,000.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


                       MISSILE PROCUREMENT, ARMY





Fiscal year 2004 appropriation........................    $1,505,462,000
Fiscal year 2005 budget request.......................     1,398,321,000
Committee recommendation..............................     1,327,000,000
Change from budget request............................       -71,321,000


    This appropriation finances the acquisition of surface-to-
air, surface-to-surface, and anti-tank/assault missile systems. 
Also included are major components, modifications, targets, 
test equipment and production base support.

                        Committee Recommendation

    The Committee recommends an appropriation of $1,327,000,000 
for Missile Procurement, Army. The following report and project 
level tables provide a summary of the Committee's 
recommendations.


                    LINE OF SIGHT ANTI-TANK (LOSAT)

    The budget requested $86,321,000 for the LOSAT program, an 
increase of $43,089,000 over the fiscal year 2004 
appropriation. The Committee recommends $15,000,000, a 
reduction of $71,321,000. The Committee recommends that the 
Army terminate this program, and that the remaining balance of 
$15,000,000 be used to meet termination costs. In the 
Committee's view, the Army has not made a long-term commitment 
to fielding LOSAT as evident in the fact that the Army plans to 
acquire only 435 missiles, and ends the program at the 
conclusion of the current Low Rate Initial Production run. 
Recognizing that several other anti-armor systems are already 
fielded and available to light forces, the Committee believes 
the Army should focus its resources on acquiring robust 
inventories of these systems as well as meeting prospective 
recapitalization needs.

                                HELLFIRE

    The Committee understands that the Army intends to procure 
Hellfire II missiles with different warhead configurations 
based on experience in Operation Iraqi Freedom. Accordingly, 
the Committee recommends that fiscal year 2005 funding 
available for the Hellfire missile may be used to procure any 
mix of warhead variants in order to best meet the Army's 
operational needs.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


        PROCUREMENT OF WEAPONS AND TRACKED COMBAT VEHICLES, ARMY





Fiscal year 2004 appropriation........................    $1,857,054,000
Fiscal year 2005 budget request.......................     1,639,695,000
Committee recommendation..............................     2,773,695,000
Change from budget request............................    +1,134,000,000


    This appropriation finances the acquisition of tanks; 
personnel and cargo carriers; fighting vehicles; tracked 
recovery vehicles; self-propelled and towed howitzers; machine 
guns; mortars; modification of in-service equipment, initial 
spares; and production base support.

                        Committee Recommendation

    The Committee recommends an appropriation of $2,773,695,000 
for Procurement of Weapons and Tracked Combat Vehicles, Army. 
The following report and project level tables provide a summary 
of the Committee's recommendations.


                                STRYKER

    The budget requested $905,074,000 for the Stryker program, 
an increase of $84,953,000 over the fiscal year 2004 
appropriation. The Committee recommends $1,855,074,000, an 
increase of $950,000,000. The Committee notes that the Army has 
enjoyed considerable success both in the development and 
fielding of the Stryker Brigade Combat Teams (SBCTs), and in 
the deployment of a Stryker Brigade in support of Operation 
Iraqi Freedom. The Committee also understands that additional 
SBCTs, above the six currently programmed, may play an 
important role in Department of Defense plans to revise the 
overseas basing of U.S. forces.
    In order to accelerate the fielding of the SBCTs, and 
support future basing decisions, the Committee recommends an 
increase of $950,000,000 above the budget request. This amount 
should provide for both the additional Strykers necessary to 
outfit one brigade above that requested in the fiscal year 2005 
budget, and for some of the ancillary costs associated with 
standing up an additional SBCT and basing the associated 
vehicles. To give the Committee better insight into the Army's 
long range plans for the Stryker Brigades, the Committee 
directs the Secretary of the Army to provide a report to the 
congressional defense committees, concurrent with submission of 
the fiscal year 2006 budget request, on plans to program and 
budget for additional SBCTs above the six currently planned. 
The report should address plans for the types of brigades under 
consideration (whether infantry, cavalry or other), plans for 
basing such units, required support equipment needed to round 
out these units, and the adjustments made or needed to the 
Army's budget to support these plans.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


                    PROCUREMENT OF AMMUNITION, ARMY





 Fiscal year 2004 appropriation.......................    $1,387,759,000
 Fiscal year 2005 budget request......................     1,556,902,000
 Committee recommendation.............................     1,608,302,000
 Change from budget request...........................       +51,400,000


    This appropriation finances the acquisition of ammunition, 
modification of in-service stock, and related production base 
support including the maintenance, expansion, and modernization 
of industrial facilities and equipment.

                        Committee Recommendation

    The Committee recommends an appropriation of $1,608,302,000 
for Procurement of Ammunition, Army. The following report and 
project level tables provide a summary of the Committee's 
recommendations.


                       AMMUNITION INDUSTRIAL BASE

    The budget requested $40,746,000 for the Provision of 
Industrial Facilities program, a decrease of $18,324,000 below 
the fiscal year 2004 appropriation. The Committee recommends 
$103,646,000, an increase of $62,900,000 above the request. The 
list of unfunded requirements for fiscal year 2005 prepared by 
the Chief of Staff of the Army indicates that the Army is 
experiencing shortages of certain small caliber ammunition. 
These shortages are driven both by operations in Iraq and 
Afghanistan, and the Army's brigade restructuring (modularity) 
initiative. The Committee has provided additional funding for 
these requirements, as described elsewhere in this report, but 
also notes that Army ammunition plants will be hard pressed to 
fill these shortfalls given the current state of production 
facilities. Accordingly, $51,900,000 of the increase provided 
in this program is for the purpose of improving the condition, 
efficiency and output of selected Army ammunition plants. This 
initiative is part of the Committee's effort to recapitalize 
ground forces, as described elsewhere in this report.
    Of this amount, $16,000,000 is for the Radford Army 
Ammunition Plant (AAP) to begin replacing acid and associated 
propellant production lines. $22,400,000 is available to 
modernize the small caliber ammunition production facilities at 
the Lake City AAP. $3,500,000 is available to increase 
production of the explosive compounds RDX and HDX at the 
Holston AAP. Finally, $10,000,000 is available to improve the 
high volume load, assemble, and pack (LAP) facilities at the 
Lone Star and Kansas AAPs. The funding provided for this 
purpose should be divided equally between the two facilities.

                    M169 CARTRIDGE CASING PRODUCTION

    The Committee believes that it is in the best interest of 
the Department to fund a modernization upgrade for the U.S.-
based manufacturing equipment for the 40mm high velocity M169 
cartridge case to mitigate risk. The Department of Defense is 
strongly encouraged to allocate the necessary funds to upgrade 
the 40mm manufacturing capability to support future 
requirements.

                              HYDRA ROCKET

    The amended budget requested $164,689,000 for the Hydra 
Rocket program, an increase of $122,708,000 over the fiscal 
year 2004 appropriation. The Committee recommends $121,689,000, 
a reduction of $43,000,000. The Army's original budget request 
for fiscal year 2005 provided only $14,300,000 for the Hydra 
Rocket program. Thus, compared to the February budget submit, 
the Committee recommendation provides for an increase of 
$107,389,000 in fiscal year 2005. The Committee notes with some 
concern that the Future Years Defense Program (FYDP) 
accompanying the original budget submit reflected no funding 
for the Hydra Rocket program beyond fiscal year 2006. 
Accordingly, the Committee encourages the Army to take measures 
in future budget submissions to stabilize the level of funding 
for this program.

                           Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


                        OTHER PROCUREMENT, ARMY





 Fiscal year 2004 appropriation.......................    $4,774,452,000
 Fiscal year 2005 budget request......................     4,240,896,000
 Committee recommendation.............................     4,868,371,000
 Change from budget request...........................      +627,475,000


    This appropriation finances the acquisition of: (a) 
tactical and commercial vehicles, including trucks, semi-
trailers, and trailers of all types to provide mobility and 
utility support to field forces and the worldwide logistical 
systems; (b) communications and electronics equipment of all 
types to provide fixed, semi-fixed, and mobile strategic and 
tactical communication equipment; (c) other support equipment, 
generators and power units, material handling equipment, 
medical support equipment, special equipment for user testing, 
and non-system training devices. In each of these activities, 
funds are also included for the modification of in-service 
equipment, investment spares and repair parts, and production 
base support.

                        Committee Recommendation

    The Committee recommends an appropriation of $4,868,371,000 
for Other Procurement, Army. The following report and project 
level tables provide a summary of the Committee's 
recommendations.


                TACTICAL UNMANNED AERIAL VEHICLE (TUAV)

    The budget requested $100,456,000 for the TUAV program, an 
increase of $26,692,000 over the fiscal year 2004 
appropriation. The Committee recommends $109,231,000, an 
increase of $8,775,000 for the procurement of additional Shadow 
200 TUAVs. The Committee directs that the Army use these funds 
to acquire additional TUAVs for transfer to the Marine Corps. 
Additional discussion on this subject is provided in the 
``Weapons Procurement, Navy'' section of this report.

                       RAPID EQUIPPING FORCE (REF)

    The Committee recognizes that the Rapid Equipping Force 
initiative requires a degree of flexibility to rapidly respond 
to emerging needs identified in Operation Enduring Freedom and 
Operation Iraqi Freedom. To facilitate this objective, the 
Committee recommends that funding appropriated in Other 
Procurement, Army--Other Support Equipment (OPA3) for REF may 
be used to fulfill requirements in both the OPA3 and Other 
Procurement, Army--Communications and Electronics (OPA2) budget 
activities. In addition, the Committee directs the Secretary of 
the Army to report to the congressional defense committees not 
later than March 1 and October 1 each year on REF funding 
execution.

  INTEGRATED COMMUNICATIONS NAVIGATION IDENTIFICATION AVIONICS (ICNIA)

    Of the funds requested in the amended budget request for 
fiscal year 2005, the Committee directs that funds originally 
requested for ICNIA shall be used only to continue this 
program, and for no other purpose. The Committee expects that 
the Department of Defense will continue to program and budget 
for planned ICNIA development in fiscal year 2006 and future 
budget requests.

                           Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


                       AIRCRAFT PROCUREMENT, NAVY





 Fiscal year 2004 appropriation.......................    $9,110,848,000
 Fiscal year 2005 budget request......................     8,767,867,000
 Committee recommendation.............................     8,841,824,000
 Change from budget request...........................       +73,957,000


    This appropriation provides funds for the procurement of 
aircraft and related support equipment and programs, flight 
simulators, equipment to modify in-service aircraft to extend 
their service life, eliminate safety hazards and improve 
aircraft operational effectiveness, and spare parts and ground 
support equipment for all end items procured by this 
appropriation.

                        Committee Recommendation

    The Committee recommends an appropriation of $8,841,824,000 
for Aircraft Procurement, Navy. The following report and 
project level tables provide a summary of the Committee 
recommendation.


                         ONGOING PROGRAM REVIEW

    The Committee is aware that the Navy's senior leadership 
has initiated a series of discussions focused on how best to 
transition from today's force to the ``transformational'' force 
of the future. In general, these discussions have focused on 
the most efficient and effective methods of addressing combat 
losses as well as bridging potential gaps in operational 
capability until new systems are available for use.
    The Committee recognizes that current operations have 
caused the Navy to re-evaluate the timeframe in which it can 
maintain its warfighting capability with existing technology. 
The plan of just two short years ago was to maintian aircraft 
and certain ship classes at existing levels, while anticipating 
the delivery of transformational systems such as the Joint 
Strike Fighter and Littoral Combat Ship. Ongoing operations as 
well as schedule slips for some major weapons systems require 
the Navy to consider a period of transition. This period of 
transition may include replacement of combat losses with the 
next generation of equipment, such as the V-22, unplanned 
upgrades to the F/A-18 series aircraft, and adjusting 
production levels to achieve the most productive ratios.
    The Committee does not believe the Navy nor the Department 
of Defense as a whole can abandon the drive to transformation. 
However, it is apparent that ongoing operational tempo requires 
an adjustment to original plans and that a ``transition to 
transformation'' may be the best way to maintain and improve 
capability. The Committee is encouraged that the Navy has 
initiated such planning and believes that future budget 
requests should support this effort.

                       EA-18G ADVANCE PROCUREMENT

    The Committee recommends eliminating the request for EA-18G 
Advance Procurement. The recommendation is based on the 
Committee's view that the Navy should conduct additional 
testing prior to acquisition and therefore the fiscal year 2005 
advance procurement request is premature.
    The Committee is concerned with the Navy's decision to 
press an Initial Operating Capability (IOC) for the EA-18G with 
funds generated by a truncated pre-System Development and 
Demonstration (SDD) and the decommissioning of two EA-6B 
squadrons. The Committee believes that pursuing such an 
aggressive schedule places additional risk on the EA-18G 
development effort. The Committee believes that to reduce 
program risk additional pre-SDD tests should be conducted to 
allow for necessary modifications to systems transitioning from 
the EA-6B to the FA-18G prior to entering SDD.

                                 MH-60R

    The Committee recommends a reduction of $54,400,000 from 
the request for acquisition of MH-60R aircraft, a reduction of 
$9,400,000 from the request for advance procurement for future 
MH-60R aircraft, and a reduction of $18,200,000 for MH-60R 
initial spares.
    The Committee notes that in fiscal year 2004, Congress 
provided $339,518,000 for the acquisition of six MH-60R 
helicopters. The Navy submitted, and the Committee approved, 
two reprogrammings that transferred fiscal year 2004 funds from 
acquisition and initial sparing of two helicopters to other 
Navy requirements. This reduced the fiscal year 2004 
acquisition from six to four helicopters.
    The fiscal year 2005 budget includes a request of 
$338,491,000 for the acquisition of eight MH-60R helicopters. 
The Committee believes that it will be too great a challenge to 
double the production level from four to eight helicopters in a 
single year. Therefore, the Committee recommends a more modest 
production rate of six aircraft and has reduced the acquisition 
request by $54,400,000 and the initial spares request by 
$18,200,000 to accommodate this reduced production rate.
    In addition, the Congress provided $46,217,000 in advance 
procurement for eight helicopters in fiscal year 2004. Based on 
the Committee's recommendation to reduce this production rate 
to six helicopters, the funds provided in fiscal year 2004 can 
be used for advance procurement requirements for the fiscal 
year 2006 planned acquisition and $9,400,000 of the fiscal year 
2005 advance procurement requirements is therefore in excess of 
need.

                              EA-6B SERIES

                IMPROVED CAPABILITIES (ICAP III) PROGRAM

    The Committee recommends eliminating the request for the 
EA-6B Improved Capabilities--ICAP III--system modification 
program.
    The Committee notes that the Navy has reprogrammed and 
placed on hold all funds appropriated for ICAP III in fiscal 
year 2004 based on developmental delays in the program. The 
Committee recommendation takes into account anticipated 
additional delays in the program in 2005 due to an estimated 
slip in the Milestone III decision from fiscal year 2004 to 
fiscal year 2005 based on limited availability of aircraft for 
testing, as well as continued software development issues.
    If the Navy determines that the ICAP III program has 
stabilized and the fiscal year 2005 schedule will be executed 
as planned, the Committee would consider a reprogramming 
request to restore all or a portion of this recommended 
reduction.

         F/A-18 ADVANCED TACTICAL RECONNAISSANCE SYSTEM (ATARS)

    The Committee recommends an additional $5,000,000 for the 
continued conversion of the ATARS recorders to solid-state 
device technology.
    The Committee notes that during discussions of requirements 
for the fiscal year 2004 Emergency Supplemental, the Marine 
Corps indicated its intent to fully budget for this requirement 
in the fiscal year 2005 budget request. The Committee is 
disappointed that despite its stated intention to include funds 
for this requirement in the 2005 budget, the Marine Corps 
failed to do so.
    The Committee directs the Marine Corps to fully fund the 
remaining requirement for the ATARS recorder upgrades in the 
fiscal year 2006 budget request. The Committee notes that 
despite the fact that the Marine Corps has known of this 
requirement for many years and that Congress has provided funds 
above the budget request for this upgrade in each of the last 
three years, the Marine Corps has never budgeted funds to 
accommodate the upgrade. The Committee believes the Marine 
Corps should re-prioritize its budget request to ensure full 
funding of this program.

       F/A-18 LITENING POD DOWNLINK DEVELOPMENT PROGRAM FOR AV-8B

    The Committee recommends a total of $3,000,000 for the AV-
8B LITENING Pod Downlink Development Program (LPDD) for an 
advanced video downlink to improve the detection, 
identification, and targeting capability of the LITENING Pod 
ISR targeting system. Of this amount, $2,000,000 is provided in 
Aircraft Procurement, Navy and $1,000,000 is provided in 
Research, Development, Test and Evaluation, Navy, AV-8B 
Engineering Development.

              F/A-18 LITENING POD ADVANCED TARGETING (AT)

    The Committee recommends an additional $5,000,000 to 
initiate the procurement of LITENING Pod AT for the Marine 
Corps aviation asset, the F/A-18D. The Committee notes this is 
not the targeting pod program of record for this aircraft, but 
the Marine Corps sought to add money above the President's 
request in order to field an advanced targeting pod in a more 
timely manner than the program of record, the Advanced 
Targeting Forward Looking Infrared (ATFLIR) pod.
    The Committee directs the Marine Corps to fully fund the 
acquisition, integration, and installation for the remainder of 
the LITENING Pod AT requirement, stated to be a total 60 pods 
for 72 F/A-18D's, in the fiscal year 2006 and future budgets. 
The Committee believes the Marine Corps should re-prioritize 
its budget request to ensure full funding of this program.

      NAVAL AIR SYSTEMS COMMAND METROLOGY AND CALIBRATION PROGRAM

    The Committee recommends an increase of $1,000,000 for the 
Naval Air Systems Command Metrology and Calibration Program. 
The increasing complexity of weapons platforms, weapons 
systems, and operational systems, especially in terms of the 
electronic subsystems and components, has given added 
importance to the Navy's test, monitoring and diagnostic 
capability and the need for improved measurement assurance.
    The Navy's Metrology and Calibration (METCAL) Program was 
established over 40 years ago to provide needed assurance by 
standardizing calibration procedures and processes, ensuring 
traceability of measurements from the prime weapon system to 
the National Institute of Standards and Technology, and 
reducing the occurrence of wrong test decisions. The METCAL 
program provides the facilities, equipment, personnel, and 
procedures to ensure the proper calibration of the Navy's test 
equipment.

            OPERATIONAL FLIGHT TRAINER SIMULATION INITIATIVE

    The Committee recommends an additional $25,000,000 to 
establish an Operational Flight Trainer Simulation Initiative. 
Within this amount, the Navy should pursue the upgrade or 
purchase of at least one Level ``D'' P-3 Operational Flight 
Trainer (OFT).
    The Committee believes the Navy should aggressively pursue 
the introduction of advanced simulation into flight training 
curriculum. The addition of advanced Level ``D'' simulation or 
Federal Aviation Administration (FAA) approved simulators, 
would greatly enhance the existing flight training programs of 
the F/A-18 as well as the P-3. The Committee believes that the 
use of these training devices would support the life extension 
programs of various aircraft, especially the P-3, by using 
simulation to reduce flight hours on operational aircraft.

                          Program Recommended

    The total program recommended in this bill will provide the 
following in fiscal year 2005:


                       WEAPONS PROCUREMENT, NAVY





Fiscal year 2004 appropriation........................    $2,095,784,000
Fiscal year 2005 budget request.......................     2,101,529,000
Committee recommendation..............................     1,993,754,000
Change from budget request............................      -107,775,000


    This appropriation provides funds for the procurement of 
strategic and tactical missiles, target drones, torpedoes, 
guns, associated support equipment, and modification of in-
service missiles, torpedoes, and guns.

                        Committee Recommendation

    The Committee recommends an appropriation of $1,993,754,000 
for Weapons Procurement, Navy. The following report and project 
level tables provide a summary of the Committee recommendation.


                        NORTHWEST UNDERSEA RANGE

    The Committee recommends an additional $3,500,000 for 
support of the Pacific Northwest Undersea Range. These funds 
will provide essential refurbishments and upgrades to systems 
for undersea range tracking, underwater targets, underwater 
recovery, communication, navigation safety, and shore-based 
computing. Additionally, these funds support range craft 
modernization and upgrades, as well as improvements to range 
infrastructure.

PIONEER UNMANNED AERIAL VEHICLE (UAV) PRODUCT IMPROVEMENT PROGRAM (PIP)

    The Committee recommends eliminating the request for the 
Pioneer UAV PIP program, a reduction of $8,775,000. The 
Committee has increased funding for the acquisition of the 
Army's Shadow 200 UAV and directs the Army to increase the 
production rate of this UAV and transfer the assets to the 
Marine Corps (see discussion under ``Other Procurement, Army'' 
portion of this report).
    The Committee believes that while it may not meet all of 
the Marine Corps UAV requirements, the Shadow 200 can meet a 
majority of these requirements and that, at least in the short 
term, would provide significant improvement in situational 
awareness for the Marine Corps. The Committee notes that the 
Marine Corps Pioneer (UAV) ground station is compatible with 
the Shadow 200, so additional investment in ground station 
requirements is not required.

                          Program Recommended

    The total program recommended in this bill will provide the 
following in fiscal year 2005:


            PROCUREMENT OF AMMUNITION, NAVY AND MARINE CORPS





Fiscal year 2004 appropriation........................      $934,905,000
Fiscal year 2005 budget request.......................       858,640,000
Committee recommendation..............................       885,340,000
Change from budget request............................       +26,700,000


    This appropriation finances the acquisition of ammunition, 
ammunition modernization and ammunition related material for 
the Navy and Marine Corps.

                        Committee Recommendation

    The Committee recommends an appropriation of $885,340,000 
for Procurement of Ammunition, Navy and Marine Corps. The 
following report and project level tables provide a summary of 
the Committee recommendation.


                          Program Recommended

    The total program recommended in this bill will provide the 
following in fiscal year 2005:


                   SHIPBUILDING AND CONVERSION, NAVY





Fiscal year 2004 appropriation........................   $11,467,623,000
Fiscal year 2005 budget request.......................     9,962,027,000
Committee recommendation..............................    10,189,327,000
Change from budget request............................      +227,300,000


    This appropriation provides funds for the construction of 
new ships and the purchase and conversion of existing ships, 
including hull, mechanical and electrical equipment, 
electronics, guns, torpedo and missile launching systems, and 
communication systems.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$10,189,327,000 for Shipbuilding and Conversion, Navy. The 
following report and project level tables provide a summary of 
the Committee recommendation.


                          SHIPBUILDING ISSUES

    The Committee remains deeply troubled by the lack of 
stability in the Navy's shipbuilding program. Often both the 
current year and outyear ship construction profile is 
dramatically altered with the submission of the next budget 
request. Programs justified to Congress in terms of mission 
requirements in one year's budget are removed from the next. 
This continued shifting of the shipbuilding program promotes 
confusion and frustration throughout both the public and 
private sectors. Moreover, the Committee is concerned that this 
continual shifting of priorities within the Navy's shipbuilding 
account indicates uncertainty with respect to the validity of 
requirements and budget requests in support of shipbuilding 
proposals.
    This state of affairs reached a new level during 
consideration of this year's request when officials in the Navy 
actively pursued changing the President's budget request to 
accommodate an alternative option for the LHA Replacement 
program. That the LHA(R) was subject to re-structure is not 
surprising. Indeed, the Committee had proposed elimination of 
this program in fiscal year 2004 based on the inability of the 
Navy to adequately justify the program. However, this out of 
cycle proposal for a new ship class (tantalizingly presented to 
the press before Congress was provided with information) simply 
highlights the overall instability of the shipbuilding program.
    The Committee further notes that documentation submitted 
with budgetary proposals is often lacking in specifics 
regarding total program requirement (number of ships to be 
constructed), total program cost, and detailed expenditure 
plans. This lack of information makes it difficult for Congress 
to weigh options for funding programs throughout the Department 
of Defense. Furthermore, it obscures the impact of current 
decisions on future budgetary requirements. The Committee 
requests that future budget documentation include sufficient 
information to allow for informed decisions.
    Perhaps most troubling, the Committee believes the Navy's 
shipbuilding strategy is focused on replacing a current class 
of ship with a more technologically advanced version of the 
same class--without adequate review of the underlying 
requirement, fiscal realities, nor consideration of all 
alternatives for meeting operational needs. The inventory of 
Navy ships displays an astounding level of complexity. Within a 
class of ships there are a variety of models with various 
levels of technology aboard. Managing technological and war-
fighting capability baselines for each class of ship, let alone 
the entire Fleet, requires a significant investment of funds to 
maintain the various upgrades, spare parts and training 
requirements. The Committee believes the Navy should consider a 
thorough review of its entire shipbuilding profile, to 
establish a consistent underlying requirement for new 
construction coupled with a focus on a streamlined approach to 
upgrades and modernization efforts.

          DDG-51 GUIDED MISSILE DESTROYER--ADVANCE PROCUREMENT

    The Committee recommends an increase of $125,000,000 to 
initiate advance procurement of materiel necessary for the 
construction of an additional DDG-51 Guided Missile Destroyer 
in the 2006 or 2007 budget.
    This recommendation is based on the Committee's view that 
the additional system development and testing required for the 
DD(X), the next generation destroyer, will lead to a delay in 
the Initial Operating Capability of the DD(X). With this delay, 
the Committee believes operational requirements of the Navy 
necessitate the construction of at least one more DDG-51.
    The Committee expects the Navy to fully fund the 
construction of this DDG-51 in a future budget request.

         DDG-51 GUIDED MISSILE DESTROYER--MODERNIZATION PROGRAM

    The Committee recommends an increase of $100,000,000 to 
initiate a DDG-51 Modernization program. These funds shall be 
used by the Navy to accelerate modernization of in-service DDG-
51 Guided Missile Destroyers that emphasizes increased 
warfighting capability, reduced total ownership cost, and 
expanded use of open architecture.
    The Committee notes that in its recent report to Congress, 
``DDG-51 Class Guided Missile Destroyer Modernization Plan,'' 
the Navy indicates that modernization would be initiated with 
the oldest DDGs. The Committee understands the desire of the 
Navy to maintain a highly capable DDG fleet until 2047, but 
believes further analysis should be conducted to determine the 
most cost-efficient manner of increasing mission capability of 
the Navy. The Committee directs the Navy to re-evaluate this 
plan for modernization, taking into account a cost-benefit 
analysis of executing a modernization effort on the oldest of 
the DDG-51 Class.
    The Committee requests the Navy submit by March 1, 2005, a 
detailed plan to execute a multi-year DDG-51 modernization 
effort, initiated with the Committee's recommended increase. 
The plan should address each element of the modernization plan, 
the cost-benefit of the element, and the implementation of the 
plan by hull number.

                          Program Recommended

    The total program recommended in this bill will provide the 
following in fiscal year 2005:


                        OTHER PROCUREMENT, NAVY





Fiscal year 2004 appropriation........................    $4,941,098,000
Fiscal year 2005 budget request.......................     4,834,278,000
Committee recommendation..............................     4,980,325,000
Change from budget request............................      +146,047,000


    This appropriation provides funds for the procurement of 
major equipment and weapons other than ships, aircraft, 
missiles and torpedoes. Such equipment ranges from the latest 
electronic sensors for updates naval forces, to trucks, 
training equipment, and spare parts.

                        Committee Recommendation

    The Committee recommends an appropriation of $4,980,325,000 
for Other Procurement, Navy. The following report and project 
level tables provide a summary of the Committee recommendation.


                   CVN PROPELLER REPLACEMENT PROGRAM

    The Committee recommends an additional $2,000,000 only for 
the procurement and installation of CVN propeller replacements.
    The Committee understands that the Navy has designed a new 
propeller for new and in-service aircraft carriers to meet 
operational, endurance, and readiness requirements of today's 
fleet. The CVN propeller replacement program is to outfit the 
in-service aircraft carriers with the new design rather than 
replace eroded propellers with refurbished ones of the old 
design. These additional funds will allow the Navy to pursue 
this propeller replacement program in a more timely manner. The 
Committee urges the Navy to fund this requirement in future 
budget requests.

                         TRIDENT MODIFICATIONS

    The Committee recommends an increase of $8,200,000 for a 
portion of the TRIDENT modification program. The Committee also 
recommends appropriations language under ``Other Procurement, 
Navy'' to provide authority to use procurement funds for 
modifications associated with force protection and security 
enhancements.
    The Committee directs that the fiscal year 2006 budget be 
submitted in accordance with this funding mechanism and that 
the appropriate budget documentation provide a separate line 
detailing the current and future financial requirements for the 
modifications.

                UNMANNED UNDERSEA VEHICLE (UUV) PROGRAM

    The Committee recommends eliminating the request for 
procurement of the Long-term Mine Reconnaissance System (LMRS) 
Unmanned Undersea Vehicle (UUV), a reduction of $61,235,000. 
The Committee understands that the Navy is pursuing a complete 
restructure of this program and the funding requested for the 
procurement of two ship sets of LMRS will not be executed in 
fiscal year 2005, and is, therefore, in excess of need.
    The Committee strongly supports the need for a robust UUV 
program. The Committee believes many missions currently 
performed by expensive manned systems, especially those 
associated with intelligence, surveillance and reconnaissance 
(ISR) preparation of the battlespace, could be more effectively 
performed by UUVs. The Committee encourages the Navy to 
aggressively pursue a UUV program that increases capability and 
expands the mission flexibility of the platforms.
    The Committee also directs the Navy to review the program 
management of the UUV program. The Committee believes that 
institutional reluctance has contributed to delays in the 
transition of UUVs to operational status in support of fleet 
requirements. While technological challenges are not 
insignificant in this program, it appears these challenges are 
not quickly resolved, exacerbating other program delays and 
increasing costs.

         PERFORMANCE-CENTRIC MISSION ESSENTIAL CONTENT DELIVERY

    The Committee recommends an additional $1,000,000 for 
performance-centric mission essential content delivery to 
provide the Shipboard Non-Tactical Application Delivery 
Interface System (SNADIS) with a specific capability to provide 
performance-centered content delivery to the evolving shipboard 
mobile computing environment. The Committee believes this will 
improve overall capability and readiness of the warfighter by 
providing a direct link to critical resources on demand.

                     SERIAL NUMBER TRACKING SYSTEM

    The Committee recommends an additional $4,000,000 to 
continue the implementation of the Serial Number Tracking 
System (SNTS) in the areas of Shipboard Automated Configuration 
Management and Calibrated Equipment Management. An initiative 
using modern commercial off-the-shelf automatic identification 
and data collection (AIDC) technologies to address critical 
supply and maintenance needs in the Navy, the SNTS program is 
yielding significant improvements in productivity and 
effectiveness.

                      PHYSICAL SECURITY EQUIPMENT

    The Committee recommends fully funding the request of 
$194,214,000 for Physical Security Equipment. The Committee 
notes that a majority of this request is associated with 
equipment to meet anti-terrorism and force protection 
requirements.
    The Committee believes that without a centralized authority 
for establishing overall requirements for anti-terrorism and 
force protection, equipment purchases may be duplicative and 
ineffective. The Committee believes the Navy should centralize 
decision-making authority for all anti-terrorism and force 
protection requirements to ensure the Fleet-wide application of 
standards of protection levels, standardization of equipment, 
approval of technological improvements, and standardization of 
training.

                          Program Recommended

    The total program recommended in this bill will provide the 
following in fiscal year 2005:


                       PROCUREMENT, MARINE CORPS





Fiscal year 2004 appropriation........................    $1,165,727,000
Fiscal year 2005 budget request.......................     1,190,103,000
Committee recommendation..............................     1,462,703,000
Change from budget request............................      +272,600,000


    This appropriation funds the procurement, delivery, and 
modification of missiles, armaments, communication equipment, 
tracked and wheeled vehicles, and various support equipment.

                        Committee Recommendation

    The Committee recommends an appropriation of $1,462,703,000 
for Procurement, Marine Corps. The following report and project 
level tables provide a summary of the Committee's 
recommendations.


                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005:


                    AIRCRAFT PROCUREMENT, AIR FORCE





Fiscal year 2004 appropriation........................   $12,086,201,000
Fiscal year 2005 budget request.......................    13,163,174,000
Committee recommendation..............................    13,289,984,000
Change from budget request............................      +126,810,000


    This appropriation provides for the procurement of 
aircraft, and for modification of in-service aircraft to 
improve safety and enhance operational effectiveness. It also 
provides for initial spares and other support equipment to 
include aerospace ground equipment and industrial facilities. 
In addition, funds are provided for the procurement of flight 
training simulators to increase combat readiness and to provide 
for more economical training.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$13,289,984,000 for Aircraft Procurement, Air Force. The 
following report and project level tables provide a summary of 
the Committee's recommendations.


                             F/A-22 RAPTOR

    The budget requested $4,156,956,000 for procurement of 24 
F/A-22 aircraft, an increase of $11,578,000 and 2 aircraft over 
the fiscal year 2004 appropriation. The Committee recommends 
purchase of 24 aircraft, as requested, and provides 
$4,126,956,000 for that purpose. The amount provided is a 
reduction of $30,000,000 from the request. The Committee 
strongly supports and, therefore, expects that ongoing efforts 
to implement lean-manufacturing techniques and production 
improvements will continue to lead to cost reductions in the 
program.

                    F/A-22 INDEPENDENT COST ESTIMATE

    The Committee notes that several significant decision 
points regarding continued production of the F/A-22 lay in the 
not-so-distant future. The program recently entered into 
Initial Operational Test and Evaluation (IOT&E), which is 
scheduled to conclude in the fall. Following completion of 
IOT&E, the Department will consider whether to grant authority 
for the program to enter full rate production, whether and when 
to request multiyear procurement authority, and as a subtext to 
all of this, whether there is a need to increase the production 
cost cap established under authorization law.
    The Committee believes this is the appropriate point in the 
program to recalibrate F/A-22 cost models using the latest 
information on current and projected costs. Accordingly, the 
Committee directs the Under Secretary of Defense for 
Acquisition Technology and Logistics to sponsor a new 
comprehensive F/A-22 independent cost estimate (ICE), to be 
conducted by a federally financed research and development 
center (FFRDC) with demonstrated competence in this area in 
coordination with the Defense Contract Audit Agency (DCAA). 
This analysis should: (1) determine appropriate estimates of 
unit costs and validate unit cost models and related 
assumptions based on the latest projections of production 
efficiencies; (2) identify optimal yearly production profiles 
that can be financed under the budgetary framework contained in 
the 2005 Future Years Defense Plan; and (3) determine 
appropriate estimates of remaining non-recurring development, 
test, and acquisition program oversight costs. The Committee 
expects that the FFRDC will be allowed to both contract the 
services of a private sector audit entity experienced in 
industry costing techniques, and coordinate the execution and 
review of this ICE with the DCAA. The Committee expects the F/
A-22 prime contractor to provide full access and cooperation 
with this analytical effort to the FFRDC, DCAA, and any private 
sector agency involved under rules and procedures that 
adequately protect the confidentiality of proprietary financial 
data and manufacturing techniques. This ICE is to be 
transmitted to the congressional defense committees not later 
than March 1, 2005.

                             C-17 AIRCRAFT

    The budget requested $2,512,479,000 for the procurement of 
14 C-17 aircraft, an increase of $369,907,000 and 3 aircraft 
over the fiscal year 2004 appropriation. The Committee 
recommends $2,671,079,000, an increase of $158,600,000 and one 
additional aircraft above the request.
    The Committee is extremely displeased by the Air Force's 
continued use of a flawed and irresponsible financial strategy 
for the C-17 multiyear procurement contract. In fiscal year 
2003, the Air Force proposed a budget request it referred to as 
``transformational''. The Committee, however, saw it for what 
it was--an incremental financing scheme that abused the 
political support for this program and flaunted acquisition 
regulations and standard practices. In that year, the Congress 
provided full funding for all 15 aircraft, and directed the Air 
Force to fully fund the same number in fiscal year 2004.
    Unfortunately, for fiscal year 2004 and now with the fiscal 
year 2005 Defense budget request, the Air Force has continued 
its financial sleight-of-hand on the C-17 program. Based on a 
recently concluded investigation by the Committee's Surveys and 
Investigations staff, the Committee learned the Air Force is 
using a combination of advance procurement funding and 
exorbitant cancellation ceilings to keep the contractor to a 
production schedule which has as many as 5 aircraft at any 
given time in the production line for which funds have not been 
appropriated. Not once in the past has the Committee indicated 
its approval for using advance procurement funding to proceed 
with production of aircraft for which full appropriations have 
not been approved. Nor is the Committee aware of any change in 
Department of Defense (DoD) fiscal policy or regulations that 
would permit this. As both DoD and Office of Management and 
Budget financial officials put it to Committee investigators, 
the Air Force had ``pushed the envelope''. And, in the 
Committee's view, the `envelope' has been pushed too far.
    Moreover, the Air Force also included a provision in the 
second C-17 multiyear procurement contract that assumes 
additional funding for aircraft will be approved following the 
end of the contract. Otherwise, the Department will be liable 
to pay the contractor significant termination costs. This 
contingent liability places a burden not just on the current 
Congress, but on the next Congress as well, and could be 
interpreted as a violation of the Anti-Deficiency Act.
    In order to prevent such future financial chicanery on the 
part of the Air Force or any other military service, the 
Committee includes a new general provision that significantly 
amends authority carried in past Defense Appropriations acts 
regarding multiyear procurement contracts. This provision is 
discussed elsewhere in this report. With regard to the current 
funding shortfall in fiscal year 2005, the Committee has added 
an additional $158,600,000 and one aircraft. Bill language is 
also included in the Aircraft Procurement paragraph directing 
that funds provided are for the procurement of 15 aircraft in 
fiscal year 2005, that advance procurement funds are provided 
for the procurement of 15 aircraft in fiscal year 2006, and 
that the Secretary of the Air Force shall fully fund the 
procurement of 15 aircraft in fiscal year 2006. In placing this 
requirement upon the Air Force,the Committee would note the 
commitment of the Secretary of the Air Force, during a public 
hearing on this matter, to work with the Committee to ``set it 
right''. The Committee anticipates that the Secretary will do 
just that.

                    C-17 INTERIM CONTRACTOR SUPPORT

    The budget requested $945,560,000 for C-17 Interim 
Contractor Support (ICS), an increase of $17,933,000 over the 
fiscal year 2004 appropriation. The Committee recommends 
$786,960,000, a reduction of $158,600,000.
    In the preceding part of this report, the Committee 
expresses its displeasure with the funding strategy the Air 
Force has employed to execute the C-17 program. That strategy 
has resulted in an incremental funding scheme for the C-17 that 
the Committee finds unacceptable. In order to fully fund 15 
aircraft in fiscal year 2005, the budget request must be 
amended to provide for one additional aircraft and 
$158,600,000. Therefore, the Committee provides increased 
funding for one additional C-17 in fiscal year 2005, and 
reduced funding in this account by a like amount.
    The Committee finds it puzzling that the Air Force refuses 
to fully fund aircraft in production, yet the fiscal year 2005 
request for C-17 ICS includes funding of $176,000,000 in new 
capability block upgrades and improvements to the existing 
fleet. In budget justification materials, the Air Force 
identifies $114,000,000 of this amount as needed to address 
unfunded requirements. The Committee wishes to send a very 
clear message--it considers full funding of the aircraft in 
production to be this program's number one unfunded 
requirement. Once the Air Force understands this message and 
provides the resources needed to bring this program in line 
with a traditional, fully funded procurement program, the 
Committee will entertain any funding requests for new 
capability to the existing fleet.

                    TANKER REPLACEMENT TRANSFER FUND

    In section 8121 of the Committee bill, the Committee 
provides $100,000,000 to establish the `Tanker Replacement 
Transfer Fund'. The establishment of this fund reflects the 
Committee's intent that the Air Force proceed apace with 
replacing its fleet of aging aerial refueling aircraft with KC-
767 tankers. As such, the funds provided under section 8121 may 
be used to implement the current tanker replacement program-of-
record, as approved in the National Defense Authorization Act 
for Fiscal Year 2004 and amended by the House-passed version of 
the National Defense Authorization bill for Fiscal Year 2005.
    The Committee notes, however, that the fluid nature of the 
situation surrounding this program prohibits a definitive 
allocation of funds for specific activities. Thus, the 
Committee provides the Secretary of the Air Force with the 
authority to allocate these funds to Air Force operation and 
maintenance, procurement, or research and development accounts, 
allowing the Air Force to quickly implement acquisition or 
modification plans once the situation is clarified. The 
provision requires the Secretary of the Air Force to notify the 
congressional defense committees of the service's intent to 
transfer funds under this heading 15 days prior to any 
transfer.

                              GLOBAL HAWK

    The budget request included $287,768,000 for the 
procurement of four RQ-4B Global Hawk High Endurance Unmanned 
Aerial Vehicles, an increase of $89,865,000 above the fiscal 
year 2004 appropriation. In response to the Committee's 
direction for the Navy to transfer to the Air Force one Global 
Hawk currently in production for the Navy, the Committee has 
provided $202,178,000, a reduction of $85,590,000 and one 
aircraft below the request.
    The Committee is concerned with the Air Force strategy to 
accelerate the Global Hawk program. The compressed schedule 
results in a highly concurrent development, test and production 
cycle for the B model. Compared to its predecessor, the RQ-4A, 
which has extensive testing and operational experience, the RQ-
4B model is heavier; incorporates a new wing, fuselage, and 
vertical tail; requires essentially all new manufacturing 
drawings, new tooling and changed production processes; and has 
a 50 percent greater payload capacity to carry advanced sensors 
still in development. The Air Force strategy is to start 
producing the RQ-4B in 2004 without prototyping, and eventually 
procure 13 air vehicles and long lead items on 7 more before 
the design is tested and full-rate production approved.
    The Committee believes that the resulting production 
schedule is overly ambitious and that development of the B 
model is over cost and behind schedule. Accordingly, the 
Committee has reduced advance procurement funding by 
$21,300,000 for 2 fiscal year 2006 aircraft. The funding 
provided is sufficient to maintain the fiscal year 2006 
production of the RQ-4B at the fiscal year 2005 level of 4 
aircraft.

                         C-130 GUNSHIP LINK 16

    The budget request includes $11,700,000 in the C-130 
aircraft modification line to develop, procure, and install 
combined Link 
16, beyond Line-of-Sight Tactical Data Information Link Joint 
(TADIL-J) and gateway growth potential for Air Force Special 
Operations Command (AFSOC) AC-130 aircraft. The Committee 
believes that requesting funds to initiate a new development 
program in the Aircraft Procurement account is misunderstanding 
the general distinctions between procurement funds and 
development funds. The Committee is supportive of the entire 
AFSOC community and the outstanding job they have done in 
battles in Afghanistan and Iraq, as well as the larger Global 
War on Terrorism. In support of the AFSOC mission, the 
Committee directs the Secretary of the Air Force to establish 
the necessary development program for this new capability and 
to include a request for this program in the fiscal year 2006 
budget submission.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005:


                     MISSILE PROCUREMENT, AIR FORCE





Fiscal year 2004 appropriation........................    $4,165,633,000
Fiscal year 2005 budget request.......................     4,718,313,000
Committee recommendation..............................     4,425,013,000
Change from budget request............................      -293,300,000


    This appropriation provides for procurement, installation, 
and checkout of strategic ballistic and other missiles, 
modification of in-service missiles, and initial spares for 
missile systems. It also provides for operational space 
systems, boosters, payloads, drones, associated ground 
equipment, non-recurring maintenance of industrial facilities, 
machine tool modernization, and special program support.

                        Committee Recommendation

    The Committee recommends an appropriation of $4,425,013,000 
for Missile Procurement, Air Force. The following report and 
project level tables provide a summary of the Committee's 
recommendations.


                 JOINT AIR-TO-SURFACE STANDOFF MISSILE

    The budget requested $148,161,000 for the procurement of 
360 Joint Air-To-Surface Standoff Missiles (JASSMs), an 
increase of $63,161,000 over the fiscal year 2004 
appropriation. The Committee recommends $139,861,000, a 
reduction of $8,300,000 and 57 missiles below the request.
    The Committee previously expressed concern about the 
results of an Initial Operational Test and Evaluation (IOT&E) 
conducted between April 2002-February 2004. A final report from 
the Director of Operational Testing and Evaulation on the 
results of the IOT&E found that JASSM is operationally 
effective but not operationally suitable. The basis for this 
finding was that JASSM could hit its target set, but required 
more missiles than expected due to poor missile reliability. 
The report included additional issues of concern about the 
missile including cumbersome mission planning, supportability 
problems, fuel leak detector needs and contractor warranty 
requirements.
    The Committee is aware there are appealing aspects to the 
existing JASSM production contract, including attractive 
pricing at higher rates of production, but believes these are 
of little value when the end product continues to be 
malfunctioning missiles en route to targets. The Committee 
wants to see the JASSM program succeed, but it will closely 
monitor efforts to address the issues identified in the IOT&E 
report. The Air Force and the contractor must take immediate 
action to improve JASSM reliability, such as conducting a 
robust fuze improvement program, and fixing the mission 
planning software and interface/throughput problems. These 
corrections then must be verified through additional 
operational testing. Failure to do so will cause the Committee 
to reconsider its support for this program through its fiscal 
year 2005 and future budget deliberations.

                   EVOLVED EXPENDABLE LAUNCH VEHICLE

    The Air Force requested $610,997,000 for the Evolved 
Expendable Launch Vehicle (EELV) program, an increase of 
$1,687,000 over the fiscal year 2004 appropriation. The 
Committee recommends $519,997,000, a decrease of $91,000,000 
from the request. The Air Force has requested this adjustment 
to help offset new cost growth in the Space Based Infrared 
System (SBIRS) High program.
    The Committee is concerned the current acquisition approach 
of maintaining two EELV contractors may be ill advised in the 
new space launch environment facing the United States. The two 
contractor acquisition strategy is based largely on the desire 
to maintain ``assured access to space'' as well as the desire 
to retain a measure of competition. The strategy was adopted in 
the late 1990s when numerous commercial launches were projected 
for the future. These failed to materialize, however, leaving 
the government as the primary launch customer. Now, both 
contractors routinely complain about losing money on the EELV 
program. At the same time, launch costs for United States 
Government payloads have soared.
    The Committee agrees the United States must maintain 
assured access to space. Ironically, the current two contractor 
approach may actually jeopardize this objective. The Air Force 
argument for two contractors largely involves the problem of a 
particular launch vehicle being grounded pending investigation 
of a launch failure. With two contractors, the Air Force argues 
launches could in theory be shifted to the second vendor. The 
Committee recognizes the possible value of such a back-up 
capability, but wonders whether this approach is practical 
given the two year lead-time required to buy launch vehicles 
from the second vendor.
    There are other factors to be considered. For example, 
given the extraordinarily high cost and importance of satellite 
payloads, the Committee believes it is wiser to invest in 
launch reliability than launch back-up. The Committee is 
concerned that by maintaining two ``standing armies'' without 
adequate funding, the government could inadvertently be 
motivating the contractors to cut corners in a way that could 
hurt launch reliability. Also, with few available launches 
divided between two contractors, contractor personnel are not 
able to maintain as high a level of proficiency, again 
potentially adversely affecting reliability. Put simply, the 
Committee believes fully funding one contractor may be a wiser 
approach to assured access than the current approach of 
underfunding two contractors.
    The Committee understands the Undersecretary of Defense for 
Acquisition and Technology has directed that an update to the 
Space Launch Modernization Plan of 1994 be completed by 
November 2004. The Committee directs that this update include a 
thorough analysis of the issue of two versus one EELV 
contractors relative to launch reliability, and that this 
report be submitted to the congressional defense committees 
upon completion. The Committee believes upcoming lot buys of 
EELV should be minimized pending recommendations made in the 
report.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005:


                  PROCUREMENT OF AMMUNITION, AIR FORCE





Fiscal year 2004 appropriation........................    $1,262,725,000
Fiscal year 2005 budget request.......................     1,396,457,000
Committee recommendation..............................     1,346,557,000
Change from budget request............................       -49,900,000


    This appropriation finances the acquisition of ammunition, 
modifications, spares, weapons, and other ammunition-related 
items for the Air Force.

                        Committee Recommendation

    The Committee recommends an appropriation of $1,346,557,000 
for Procurement of Ammunition, Air Force. The following report 
and project level tables provide a summary of the Committee's 
recommendations.


                         GENERAL PURPOSE BOMBS

    The budget request included $266,500,000 for procurement of 
General Purpose Bombs, an increase of $98,655,000 over the 
fiscal year 2004 appropriation. The Committee recommends 
$236,589,000, a decrease of $29,900,000 below the request. 
Justification materials included and justified an amount of 
only $261,608,000. Accordingly, the Committee has reduced 
funding by $4,900,000. Funding has been further reduced by an 
additional $35,000,000, noting that this program received 
$54,700,000 in supplemental funding to reconstitute following 
operations in Afghanistan and Iraq. An increase over the fiscal 
year 2004 request of $65,000,000 is provided to meet current 
requirements. The Committee has also included an additional 
$10,000,000 above the request for the GBU-27A/B, Enhanced 
Paveway III.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005:


                      OTHER PROCUREMENT, AIR FORCE





Fiscal year 2004 appropriation........................   $11,558,799,000
Fiscal year 2005 budget request.......................    13,283,557,000
Committee recommendation..............................    13,199,607,000
Change from budget request............................       -83,950,000


    This appropriation provides for the procurement of weapon 
systems and equipment other than aircraft and missiles. 
Included are vehicles, electronic and telecommunications 
systems for command and control of operational forces, and 
ground support equipment for weapon systems and supporting 
structure.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$13,199,607,000 for Other Procurement, Air Force. The following 
report and project level tables provide a summary of the 
Committee's recommendations.


                 THEATER AIR CONTROL SYSTEM IMPROVEMENT

    The Committee has reduced funding for the Theater Air 
Control System Improvement by $15,800,000 for the Battle 
Control System Mobile (BCS-M) Block 20 production development 
upgrades. The Committee fully supports this effort. However, 
the schedule for this program indicates that the upgrades will 
undergo development and testing throughout fiscal year 2005, 
and that production is not scheduled to begin until fiscal year 
2006.
    In addition, the fiscal year 2004 contract was actually 
awarded six months later than indicated by the 2005 budget 
justification. The request has been reduced accordingly to 
allow completion of the development and test efforts.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005:


                       PROCUREMENT, DEFENSE-WIDE





Fiscal year 2004 appropriation........................    $3,709,926,000
Fiscal year 2005 budget request.......................     2,883,302,000
Committee recommendation..............................     3,028,033,000
Change from budget request............................      +144,731,000


    This appropriation provides funds for the procurement, 
production, and modification of equipment, supplies, materials, 
and spare parts.

                        Committee Recommendation

    The Committee recommends an appropriation of $3,028,033,000 
for Procurement, Defense-Wide. The following report and project 
level tables provide a summary of the Committee's 
recommendations.


                        SOF ROTARY WING UPGRADES

    The Committee recommends $454,272,000, an increase of 
$7,000,000, only for Infrared Engine Suppression kits for MH-47 
helicopters. The Committee is aware of the substantial 
enhancement these kits provide for engine infrared signature 
and encourages the Army to equip its CH-47 helicopters with 
Infrared Suppression Kits.

                  ADVANCED SEAL DELIVERY SYSTEM (ASDS)

    The budget request for the Advanced Seal Delivery System 
(ASDS) included $5,864,000 for procurement and $34,921,000 for 
advance procurement for the second ASDS, an increase of 
$8,861,000 over the fiscal year 2004 appropriation. The 
Committee recommends $13,264,000 for ASDS procurement and no 
funding for ASDS advanced procurement. The ASDS is a manned 
combatant mini-submarine used for the clandestine delivery of 
Special Operations Forces personnel and weapons and will 
provide an important improvement over the current SEAL delivery 
system. The United States Special Operations Command has 
recently, and in the Committee's view, prudently decided to 
delay procurement of the second system until a new battery is 
developed and tested and improvements are made to the 
Environmental Control Unit. The Committee has a long history of 
concerns about this program and has provided substantial 
funding for a new battery as well as other improvements to the 
system. The Committee compliments USSOCOM for its recognition 
that important improvements must be made prior to procuring the 
next system. The Committee recommendation is consistent with 
the new Capability Assurance Plan developed by USSOCOM to 
assure future systems meet the requirements and expectations of 
the Special Operations forces who will use the ASDS.

                        MISCELLANEOUS EQUIPMENT

    The Committee recommends $19,830,000, including an increase 
of $1,500,000, only for AN/PVS-21 Low Profile Night Vision 
Goggles. The Committee recommends that the Special Operations 
Command complete the procurement of ruggedized, heads-up 
display capable, see-through binocular vision, commercial-off-
the-shelf, low profile night vision goggle systems for the 
Naval Special Warfare Boat Operators and their associated 
crewmembers.

                   VULNERABILITY MANAGEMENT STRATEGY

    The Committee is aware that new technology providing a 
vulnerability management solution is nearing completion of the 
evaluation process by the National Institute of Standards and 
Technology so as to receive Common Criteria evaluation at EAL3. 
This appliance-based technology runs a hardened operating 
system and communicates through encryption using digital 
certificates for authentication and by performing the 
Continuous Monitoring requirement specified by NIST SP 800-37, 
Section 2.7. In an effort to better prove its effectiveness in 
meeting vulnerability standards of the Department of Defense, 
the Committee has provided $5,000,000 to the Department to 
demonstrate this technology.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005:


                  NATIONAL GUARD AND RESERVE EQUIPMENT





Fiscal year 2004 appropriation........................      $400,000,000
Fiscal year 2005 budget request.......................                 0
Committee recommendation..............................                 0
Change from the budget request........................                 0


    This appropriation provides funds for procurement of 
equipment for the National Guard and Reserve.
    The budget request includes $1,963,500,000 to equip 
National Guard and Reserve units in Procurement accounts for 
each of the Services. The Committee is aware of the 
indispensable contributions members of the Guard and Reserve 
make to our national security and has added $477,900,000 in 
additional funding above the request within the regular 
appropriation accounts, and an additional $100,000,000 for 
National Guard and Reserve Equipment within a separate 
appropriation (Title IX) to support continuing operations in 
Iraq and Afghanistan.

                    DEFENSE PRODUCTION ACT PURCHASES





Fiscal year 2004 appropriation........................       $78,016,000
Fiscal year 2005 budget request.......................         9,015,000
Committee recommendation..............................        27,015,000
Change from budget request............................       +18,000,000


                        Committee Recommendation

    The Committee recommends an appropriation of $27,015,000 
for the Defense Production Act Purchases appropriation.
    The Committee directs that within funds appropriated: (1) 
$2,000,000 be used only for a radar systems project to develop 
affordable production processes and a domestic supplier of 
transmit/receive modules for phased arrays; (2) $2,000,000 be 
used only for the Facility for Military Lens System Fabrication 
and Assembly; (3) $2,000,000 be used only for a flexible 
aerogel material supplier initiative to develop affordable 
production methods and a domestic supplier for aerogels; (4) 
$4,000,000 be used only to perform a preliminary plant design, 
review permitting issues, and develop a five-year plan to build 
a modern plant for domestic supply of beryllium; (5) $4,000,000 
be used only for the development of a domestic supplier of the 
Read Out Integrated Circuit (ROIC) infrared sensors; (6) 
$2,000,000 be used only for development of a domestic supplier 
of semiconductor ``mask'' capability; and (7) $2,000,000 be 
used only for the development of a thermal battery industrial 
base infrastructure.

                         INFORMATION TECHNOLOGY

    The Department requested $28,717,579,000 for Information 
Technology, an increase of $475,769,000 over the fiscal year 
2004 budget. The Committee recommends $28,221,131,000, a 
decrease of $496,448,000 as explained below:

                        [In thousands of dollars]

Operation and Maintenance, Army:
    Army Knowledge Online...............................          $4,000
    Virtual Reality Spray Paint Simulator and Training 
      Program...........................................           3,000
    Integrated Digital Environments Pilot Program for 
      Army Aviation Fleet Logistic......................           2,000
    Online Technology Training Program at Ft. Lewis.....           2,000
Operation and Maintenance, Navy: Navy Converged ERP.....          -7,500
Operation and Maintenance, Air Force:
    Geospatial Distant Learning.........................           1,000
    Online Technology Training Program at McChord AFB...           1,000
Operation and Maintenance, Defense-Wide:
    BMMP................................................          -7,000
    BMMP Domains........................................         -15,000
    Command Information Superiority Architectures 
      Program...........................................           1,000
    DISA Program Growth.................................         -50,000
    DoD CIO.............................................          -5,000
    Export Control Database.............................           1,300
    Information Technology Organizational Composition 
      Project...........................................           2,000
    Study on the Impact of Internet and Wireless 
      Technology on Military Life.......................           1,000
    Transaction Monitoring Improvement Project..........           1,000
Operation and Maintenance, Army Reserve: U.S. Army 
    Reserve Command IT Consolidation....................           1,500
Operation and Maintenance, Army National Guard:
    C4ISR Integration...................................           1,000
    ERP for Army Guard Installation.....................           1,000
    National Guard Global Education.....................             500
Operation and Maintenance, Air National Guard: Air 
    National Guard IT Consolidation.....................           3,000
Other Procurement, Army:
    Advanced Information Technology Services (AITS).....           5,500
    Satellite Multi-Modal Collaborative Crisis & 
      Training Network for MN Army Guard................           1,000
Other Procurement, Navy:
    Digital Stores Management System (DSMS).............           5,000
    Technological Data Knowledge Management in an 
      Integrated Data Environment (TDKM-IDE)............           5,000
Procurement, Marine Corps: USMC COOP....................           4,000
Other Procurement, Air Force: CITS......................         -60,000
Procurement, Defense-Wide:
    AHPCRC--Supercomputer Procurement...................           7,000
    BMMP Domain Systems Procurement.....................         -30,248
Research, Development, Test and Evaluation, Army:
    Distributed Scalable C2 Communication System........           1,000
    FREEDOM Software Environment........................           1,000
    Global Anti-Terrorist Activity Analysis Capability 
      at the INSCOM Information Dominance Center........           3,000
    MVMNT Program for Simulation Based Operation........           2,000
    Online Contract Document Management.................           1,000
    Section 8096--IT Reduction..........................         -60,000
Research, Development, Test and Evaluation, Navy:
    Navy Converged ERP..................................         -27,500
    Smart Integrated Data Environment (SIDE)............           1,000
    USMC LAV Integrated Digital & Collaboration 
      Environment Service Net...........................           2,000
    Web-based Technology Insertion for Expeditionary 
      Warfare Testbed...................................           1,000
    Section 8096--IT Reduction..........................         -29,000
Research, Development, Test and Evaluation, Air Force:
    Advanced Course in Engineering Cyber Security.......           2,000
    Center for Information Assurance Security...........           2,000
    Command & Control Service Level Management..........           5,000
    ESC NORTHCOM Deployment Planning....................           1,000
    Information Assurance for Reengineering and Enabling 
      Technologies......................................           3,000
    Net-Centric Information Visualization Services......           3,000
    Worldwide Infrastructure Security Environment (WISE)           4,000
    Section 8096--IT Reduction..........................         -72,000
Research, Development, Test and Evaluation, Defense-
    Wide:
    Advanced Processing and Prototyping Center--Sematech           5,000
    Army High Performance Computing Research Center.....          15,000
    BMMP................................................         -45,000
    Center for Secure Telecommunications................           2,000
    Data Intensive High Performance Computing...........           3,000
    High Performance Computer Prototype--Naval Research 
      Lab...............................................           5,000
    Internet Protocol Version 6.........................           1,500
    JITC Information Assurance Trend/Metric Analysis 
      Support...........................................           2,500
    NASEC Through Wall Radar Imaging....................           3,000
    Net Centric Warrior Training (NetCWT)...............           3,000
    Net Centricity Program Growth.......................         -70,000
    Rapid Acquisition Incentive Program Growth..........         -10,000
    Section 8096--IT Reduction..........................        -109,000
Defense Health Program: Financial Information Systems 
    Excessive Program Growth--All Other Office 
    Automation (TMA)....................................         -25,000

  INFORMATION TECHNOLOGY AND BUSINESS MANAGEMENT MODERNIZATION PROGRAM

    The budget requested $28,717,579,000 for the Information 
Technology programs, an increase of $475,769,000 over the 
fiscal year 2004 appropriation. The Committee recommends 
$28,221,131,000, a decrease of $496,448,000.
    The Committee commends the Department of Defense for its 
ongoing effort to modernize its business information systems. 
While acknowledging the accomplishments of the Department, the 
Committee is greatly concerned about how the Business 
Management Modernization Program (BMMP) is being administered. 
BMMP was initiated in July 2001 with a goal of developing a 
Department-wide business enterprise architecture as a part of 
the Secretary of Defense's transformation goals. Since 
implementation, Congress has appropriated over $300,000,000 for 
BMMP, yet the General Accounting Office (GAO) reports no 
significant changes in the Department of Defense's business 
architecture or its investment in existing and new systems.
    In the May 2004 review of the BMMP, GAO found that the 
Department had only fully implemented two of the over twenty-
four recommendations from earlier reviews. The recommendations 
that have yet to be accomplished include BMMP instituting key 
architecture management best practices, such as assigning 
accountability and responsibility for directing, overseeing and 
approving the architecture. Additionally, GAO found that BMMP 
continues to lack effective control over investments in 
information technology programs resulting in billions of 
dollars being spent on the development and modernization of 
programs that may be duplicative or interoperable with other 
Department of Defense systems.
    Included within the requested $28,717,579,000 for 
Information Technology is $235,700,000,000 for BMMP, Domain 
Owners and Domain Systems procurement. Additionally, 
$2,716,737,000 is requested for the development and 
modernization of new or existing information technology 
systems. Based on previously discussed concerns, the Committee 
has adjusted amounts available for BMMP and for information 
technology development and modernization in the research, 
development, test and evaluation accounts for fiscal year 2005 
to be applied as follows:

                        [In thousands of dollars]

Operation and Maintenance, Defense-wide, BMMP...........         -$7,000
Operation and Maintenance, Defense-wide, BMMP Domains...         -15,000
Procurement, Defense-wide, BMMP Domains Procurement 
    Systems.............................................         -30,248
Research, Development, Test and Evaluation, Army, IT....         -60,000
Research, Development, Test and Evaluation, Navy, IT....         -29,000
Research, Development, Test and Evaluation, Air Force, 
    IT..................................................         -72,000
Research, Development, Test and Evaluation, Defense-
    Wide, BMMP..........................................         -45,000
Research, Development, Test and Evaluation, Defense-
    Wide, IT............................................        -109,000

              NAVY CONVERGED ENTERPRISE RESOURCE PLANNING

    The budget requested $100,000,000 for Navy Converged 
Enterprise Resource Planning (ERP), an increase of $100,000,000 
over the fiscal year 2004 appropriation. The Committee 
recommends $65,000,000, a decrease of $35,000,000.
    The Navy Converged Enterprise Resource Planning program is 
a proposed new start planning to reinvent and standardize Navy 
business processes for acquisition, financial and logistics 
operations by converging four existing ERP pilots saving nearly 
$795,000,000 across the Future Years Defense Plan. While the 
Committee commends the Navy for this effort, the Committee is 
concerned with the planned schedule for the program. In 1999, 
the Navy implemented four separate ERP pilots focused on the 
management of programs, Warfare Center, maintenance activities 
and finance obligating over $1,000,000,000 from within the Navy 
Working Capital Fund and Operation and Maintenance, Navy. The 
new program proposes to combine the four existing pilots into 
one program using lessons learned during the last five years 
with a Milestone C decision planned during the second quarter 
of fiscal year 2006. This schedule for convergence seems overly 
aggressive and potentially unobtainable. Accordingly, the 
Committee has reduced the program as follows:

                        [In thousands of dollars]

Operation and Maintenance, Navy, 1A6A...................         -$7,500
Research, Development, Test and Evaluation, Navy........         -27,500

               U.S. ARMY RESERVE COMMAND IT CONSOLIDATION

    The Committee recommends an increase of $1,500,000 only for 
the Army Reserve to achieve a continuity of operations 
capability for its mission critical information technology 
systems by replicating mission critical data between Peachtree 
City, Georgia and San Antonio, Texas.
                                TITLE IV

               RESEARCH, DEVELOPMENT, TEST AND EVALUATION

                  ESTIMATES AND APPROPRIATION SUMMARY

    The fiscal year 2005 Department of Defense research, 
development, test and evaluation budget request totals 
$67,772,288,000. The accompanying bill recommends 
$68,946,512,000. The total amount recommended is an increase of 
$1,174,224,000 above the fiscal year 2005 budget estimate and 
is $3,728,628,000 above the total provided in fiscal year 2004. 
The table below summarizes the budget estimate and the 
Committee's recommendations.


            REPROGRAMMING GUIDANCE FOR ACQUISITION ACCOUNTS

    As described elsewhere in this report, the Committee has 
continuing concerns about DoD practices on the reprogramming of 
funds. Accordingly, the Committee directs that the following 
guidelines be applied for the reprogramming of funds provided 
in this bill. For transfers greater than $20,000,000 for 
procurement funds, and $10,000,000 for research, development, 
test and evaluation funds, DoD must follow normal, prior 
approval reprogramming procedures. The Committee further 
directs that these thresholds are cumulative. Therefore, if the 
combined value of transfers into or out of a procurement (P-1) 
or research and development (R-1) line exceed the identified 
threshold, the Department of Defense must submit a prior 
approval reprogramming following normal prior approval 
procedures. The Department shall also observe the limitation 
that prior approval reprogrammings are set at either the 
specific dollar threshold or 20 percent of the procurement or 
research and development line, whichever is less. In addition, 
guidelines on the application of prior approval reprogramming 
procedures for congressional special interest items are 
established elsewhere in this report.

                      JOINT STRIKE FIGHTER (F-35)

    The budget included a total request of $4,571,927,000 for 
the Joint Strike Fighter (JSF) F-35 program, an increase of 
$320,183,000 over the 2004 appropriated level. The Committee 
recommends a total appropriation of $4,367,927,000 for the F-
35, a reduction of $204,000,000 from the fiscal year 2005 
request and an increase of $116,183,000 over the fiscal year 
2004 appropriated level.
    The F-35 Joint Strike Fighter as currently conceived offers 
significant benefits in war-fighting capability, logistics 
support, and affordability for the Navy, Marine Corps, Air 
Force, and the program's international partners. For example, 
the development program is focused on maintaining commonality 
of the variants, offering a major opportunity for the 
Department to reduce the life-cycle costs of its future air 
forces. In addition, the current estimated cost of the F-35 
production unit is substantially less than other aircraft, of 
critical importance as the Department of Defense must replace 
large numbers of older aircraft and achieve a much needed 
recapitalization of its air forces. The Committee believes the 
stated goal of this program--the development and construction 
of an affordable next-generation fighter aircraft--is what the 
Department must deliver.
    Concerns about the excessive weight of the aircraft during 
the initial part of the Systems Development and Design (SDD) 
phase have been heightened by internal discussions, studies, 
and congressional inquiries. For example, results presented at 
the Preliminary Design Review (PDR) indicated an excess of 
approximately 2,400 pounds greater than the stated weight 
requirement. This has led to a decision to postpone the 
Critical Design Review (CDR) for the airframe, with the stated 
plan to first identify opportunities to reduce weight through 
trade offs, including a review of performance requirements and 
the option of re-designing the airframe. The Committee supports 
these steps, as well as the appointment of an Independent 
Review Team (IRT) to conduct a thorough review of the F-35 
program.
    The Committee understands that while a formal report of the 
IRT findings has not been released, initial findings indicate 
that the weight of this aircraft, particularly the Short Take 
Off Vertical-Landing (STOVL) variant, may be greater than 
previously recognized. Initial findings also suggest that 
current funding levels for the JSF are insufficient to execute 
the program as currently configured.
    The Committee is concerned about the impact, if any, these 
new findings may have on program cost, schedule, and ultimately 
the successful transition to production of all three F-35 
variants. Moreover, the Committee notes the timeframe to 
address potential program changes based on the IRT findings may 
occur after Congress has finalized consideration of the fiscal 
year 2005 budget. This is of concern to the Committee because 
of the potential that the funds appropriated for JSF in fiscal 
year 2005 may be executed in a manner inconsistent with detail 
provided in support of the 2005 request.
    The Committee believes that should the Department of 
Defense determine that alterations in stated performance 
requirements or aircraft design are essential for continuation 
of this program, it must present such changes and associated 
alterations in budgetary and schedule requirements to Congress. 
Therefore, of the total funding provided for the F-35, the 
Committee directs that $1,357,927,000 may not be obligated or 
expended until the Department of Defense submits to the 
congressional defense committees a detailed report on its plan 
to implement findings of the Independent Review Team (IRT) and 
the impact this plan will have on the JSF program, schedule, 
and cost. The Committee directs that the Department provide the 
Committee a summary of the IRT findings by not later than July 
1, 2004, and that the Department provide, by January 15, 2005, 
a detailed report highlighting all JSF budgetary and 
programmatic changes from the budget request that will be 
implemented during fiscal year 2005.
    Other adjustments to the budget request are as follows:
     An increase of $52,000,000 to the $404,000,000 
request for airframe Engineering Activity. This recommendation 
is based on the Committee's understanding that ongoing and 
future airframe weight analysis studies and options are not 
fully accommodated within the current budget request and 
therefore additional funds are required.
     A reduction of $98,000,000 to the $820,000,000 
request for the F-135 engine development program. This 
recommendation is based on the Committee's view that the F-135 
engine development program should be re-aligned so that it 
coincides with the revised aircraft development program based 
on the budget proposal to add one year to the System Design and 
Development (SDD) program. The Committee understands that fewer 
flight test engines than originally planned are required for 
the flight test program at this point in time.
     A reduction of $120,000,000 to the $1,099,000,000 
request for airframe Manufacturing, Tooling, and Materials, 
deferring that funding related to developing a manufacturing 
process, tooling process, and the purchase of materiel for 
production-configuration aircraft. This recommendation is based 
on the Committee's understanding that ongoing and future 
studies may yield a production-configuration aircraft that is 
different from the preliminary-design aircraft. Therefore, 
funding for these activities is requested in advance of need. 
This recommendation fully funds requirements for the A-1 
(Conventional Take Off and Landing) and B-1 (Short Take Off and 
Vertical Landing) first flight aircraft.
     A reduction of $50,000,000 to the overall funding 
request based on a history of Navy and Air Force reprogramming 
actions that have continually reduced previously appropriated 
funds for the JSF program.
     Finally, the Committee recommends a $12,000,000 
increase to the F-35 program for an initiative, described in 
the next section of this report, to pursue emerging 
technologies that will help preserve future growth potential 
for the F-35 by providing additional weight savings.

                PRESERVING GROWTH POTENTIAL FOR THE F-35

    Anticipating that the F-35 will remain in the inventory 
until well into this century, and that its missions will expand 
over time, the Committee believes the Department must redouble 
its efforts to examine both short- and long-term alternatives 
for reducing the weight of the aircraft. An excessive fixation 
on more traditional options, such as re-design of the airframe 
and engine, may unnecessarily add significant time and cost to 
the F-35's development program, as well as the ability to 
successfully seek product improvements to the aircraft over 
time.
    The Committee believes the Department should pursue 
alternative technologies which have proven successful in 
reducing aircraft component weight, particularly in avionics 
and weapons systems, and integrate these technologies into 
future upgrades of the F-35. The Committee understands there 
are several emerging technologies now available for this 
purpose, which just a few years ago were promising but not 
sufficiently mature to warrant consideration. These 
technologies offer significant reductions in weight, power 
consumption, volume, thermal related issues, and cost while 
increasing performance and Mean Time Between Failure (MTBF). 
Several defense programs have adopted these technologies and a 
few have received the DoD Value Engineering Award or have been 
selected for exploitation in the newly created DoD CHALLENGE 
Program.
    The Committee believes it necessary to establish, separate 
from the existing F-35 development contract, an initiative to 
pursue such alternative technologies. This initiative should 
focus on developing emerging technologies that produce 
lightweight, extremely efficient avionics and weapons systems, 
and then transitioning these technologies into the F-35 program 
at the appropriate time, potentially as a part of a future 
block upgrade.
    The Committee has provided an additional $12,000,000 to 
implement this initiative. These funds shall be used by the F-
35 program manager to take a ``clean sheet'' look at these 
emerging technologies to determine the best opportunity to 
eliminate weight from the F-35 avionics and weapons system, 
including mission systems, and demonstrate these technologies 
through a Systems Integration Laboratory and flight test 
environment. Furthermore, the program manager shall evaluate 
the risk and cost of completing the technology effort and 
determine the appropriate point at which to ``cut in'' the 
technology with the F-35 architecture.
    The Department shall report back to the Committee no later 
than January 15, 2005, on its plan to implement this 
initiative. This plan shall address the specific goals of 
weight reduction, the initial set of technologies that the 
Department will pursue, the criteria used to select and then 
test these technologies, and an initial plan for transitioning 
such technologies into the F-35 architecture.

                        F-35 PROGRAM MANAGEMENT

    The Committee is concerned that the current structure of 
transitioning the Joint Strike Fighter (F-35) program 
acquisition responsibility contributes to program instability 
and excessive overhead costs.
    The management of the Joint Program Office (JPO) 
transitions among the Services with each Service having Program 
Management responsibility at established intervals. Acquisition 
Executive responsibilities also transition at established 
intervals between the Navy and the Air Force. The Committee 
believes these shifts in management and responsibilities, while 
well-intended, contribute to program delays, instability, 
duplicative management staff, and increased overhead costs. In 
addition, this circumstance makes it difficult for both senior 
DoD officials and Congress to exercise optimal oversight of the 
F-35 program.
    Therefore, the Committee directs the Secretary of Defense 
to review and revise the management oversight of the Joint 
Strike Fighter (F-35) program by November 15, 2004. The 
Committee believes DoD should retain the practice of 
transitioning the JPO management team between Service 
personnel, but the management responsibilities should not be 
transitioned between acquisition executives of each Service. 
The Committee believes management of program acquisition should 
remain with one Service, and that the U.S. Navy, due to its 
significant investment in two variants of the F-35, should be 
assigned all of the acquisition executive oversight 
responsibilities for the Joint Strike Fighter (F-35) program.

              JOINT UNMANNED COMBAT AERIAL SYSTEM (JUCAS)

    The budget included a total request of $710,401,000 for the 
Joint Unmanned Combat Aerial System (JUCAS) program, an 
increase of $381,652,000 over the 2004 appropriated level. The 
Committee recommends a total appropriation of $710,401,000, the 
amount requested, for the JUCAS program. However, the proposed 
allocation of these funds has been adjusted to emphasize the 
near-term development and demonstration of unmanned combat 
aerial vehicles (UCAVs) for the Air Force and the Navy.
    The Committee recommends $449,617,000, an increase of 
$165,000,000 over the budget request, for the JUCAS Advanced 
Technology Development and Risk Reduction program (program 
element 0603400D8Z). These funds are for completion and 
demonstration of the X-45A technology demonstrator and to 
continue development and demonstration of the X-45C and the 
Navy's X-47B demonstrator systems. The Committee believes the 
Department should aggressively pursue and fully fund the 
development and demonstration of these technologies to meet the 
stated requirements of the Air Force and the Navy.
    The Committee recommends $260,784,000, a reduction of 
$162,089,000 from the budget request, for the JUCAS Advanced 
Component and Prototype Development program (program element 
0604400D8Z). These funds support the effort of achieving a 
joint operational assessment in the 2007-2009 timeframe, and 
the development of a JUCAS common operating system. The 
Committee supports the Department's efforts in these areas, but 
believes a more pressing requirement for the JUCAS program is 
the development of an affordable weapons system which provides 
versatile combat capability to augment manned forces.
    The Committee recommends no appropriation, a reduction of 
$2,911,000 from the budget request, for the Air Force support 
to the Joint Program Office (program element 0207256F).
    The Committee directs the Defense Advanced Research 
Projects Agency (DARPA) to submit a report to the Committee, 
within 90 days of enactment of the fiscal year 2005 Defense 
Appropriations Act, detailing the fiscal year 2005 program and 
budgetary changes implemented as a result of the Committee's 
recommendation. The Committee also directs the Department to 
submit, by July 1, 2004, a copy of the April 2004 memo from 
Acting Undersecretary of the Department of Defense for 
Acqusition, Technology and Logistics (AT&L) to the Director of 
the Defense Advanced Research Projects Agency (DARPA), which 
addresses issues associated with the JUCAS program.
    The Committee supports the recommendations made by the 
Senate Armed Services Committee, in Senate Report 108-260, to 
establish an Executive Committee to provide guidance and 
recommendations to the JUCAS Program Office. The Committee 
believes this will encourage support for the JUCAS program 
throughout the Department of Defense.
    To ensure the Department has considered all options 
available with respect to unmanned aerial vehicle (UAV) 
technologies for this mission, the Committee directs DARPA to 
conduct an analysis of currently available UAVs that could 
potentially meet the JUCAS requirement. The Committee believes 
current systems and technology may prove effective in 
accomplishing aspects of prospective JUCAS missions. Early 
identification of these programs will present DARPA and the 
Services with a more robust array of options for pursuing 
future operations with unmanned aerial systems, while helping 
DARPA focus its development efforts towards addressing those 
mission areas which remain unique challenges.

                         SPECIAL INTEREST ITEMS

    Items for which additional funds have been provided as 
shown in the project level tables or in paragraphs using the 
phrase ``only for'' or ``only to'' in this report are 
congressional interest items for the purpose of the Base for 
Reprogramming (DD 1414). Each of these items must be carried on 
the DD Form 1414 at the stated amount, or a revised amount if 
changed during conference or if otherwise specifically 
addressed in the conference report. These items remain special 
interest items whether or not they are repeated in a subsequent 
conference report.

                            CLASSIFIED ANNEX

    Adjustments of the classified programs are addressed in a 
classified annex accompanying this report.

            RESEARCH, DEVELOPMENT, TEST AND EVALUATION, ARMY





Fiscal year 2004 appropriation........................   $10,363,941,000
Fiscal year 2005 budget request.......................     9,266,258,000
Committee recommendation..............................    10,220,123,000
Change from budget request............................      +953,865,000


    This appropriation finances the research, development, test 
and evaluation activities of the Department of the Army.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$10,220,123,000 for Research, Development, Test and Evaluation, 
Army. The following report and project level tables provide a 
summary of the Committee's recommendation.


                          FUTURE COMBAT SYSTEM

    The fiscal year 2005 budget request for the Future Combat 
System (FCS) totals $3,198,098,000, including $2,700,455,000 in 
program element 0604645A, Armored Systems Modernization, and 
$497,643,000 in 0604647A, Non Line of Sight Cannon (NLOS-C). In 
addition, the Army budget requests funding for nearly 150 
complementary systems necessary for the successful development 
and fielding of FCS. In total, the funding for this program 
represents well over one-third of the total Army research and 
development budget request.
    The Committee recommends a total of $2,873,653,000 for 
fiscal year 2005, a reduction of $324,445,000 from the 
requested amount. $248,000,000 of this reduction is from 
program overhead. The Committee notes that the budget request 
includes both multiple layers of management reserve, as well as 
over $100,000,000 for the purpose of program withholds and 
other ``taxes'' contrary to normal budget practices. The 
remaining $76,445,000 of the reduction is from termination of 
the Non Line of Sight Launch System (NLOS-LS). The Committee is 
aware that NLOS-LS is comprised of three elements including the 
Loiter Attack Munition (LAM), the Precision Attack Munition 
(PAM) and a Command Launch Unit (CLU). The Committee directs 
the Army to cease development of all aspects of this system. 
With respect to LAM, the Committee is aware that it is 
essentially an unmanned aerial vehicle (UAV) with a 30-minute 
dwell time. Testing thus far has proven unsuccessful, and the 
Committee notes that other UAV platforms are being developed 
elsewhere in the FCS program. Concerning PAM, the Committee 
notes that this system has the same mission profile as the 
already fielded Guided Multiple Launch Rocket System (GMLRS). 
The Committee also notes that GMLRS has significantly greater 
range and payload than PAM as well as comparable accuracy. The 
Committee has provided additional resources to accelerate 
development and fielding of the GMLRS-Unitary as described 
elsewhere in this report.
    In the statement of the managers accompanying conference 
report on the fiscal year 2004 Defense Appropriations Act, the 
Congress recommended that the Army organize the budget request 
for both the FCS common elements and platforms to better 
justify the program. In execution of fiscal year 2004 funding, 
the Army developed an entirely different funding distribution--
one which provided management flexibility, but failed to 
provide relevant information about financial requirements for 
FCS along the lines of the program's basic structure. In 
addition, the Committee recently learned that the Army and the 
FCS Lead System Integrator (LSI) had planned to make major 
revisions to funding levels within the Army-proposed structure 
prior to congressional action on the fiscal year 2005 budget 
request. In some cases, these changes were on the order of 
hundreds of millions of dollars, thus calling into question the 
validity of the materials submitted in support of the fiscal 
year 2005 budget request.
    As expressed in fiscal year 2004, the Committee remains 
concerned that this program lacks adequate justification to 
warrant the requested funding. Accordingly, the Committee 
directs that the Army adhere to the following funding structure 
in execution of appropriations provided for fiscal year 2005, 
and in preparation of the fiscal year 2006 budget request.

0604645A: Armored Systems Modernization.................  $2,376,010,000
    --System of Systems (SoS) Program Management, 
      Engineering, Software, Test and Evaluation........   1,572,610,000
    --Sustainment.......................................      53,600,000
    --UAV Reconnaissance & Sensors......................     154,200,000
    --Unmanned Ground Vehicles..........................     137,100,000
    --Non Line of Sight Launch System (NLOS-LS).........               0
    --Manned Ground Vehicles............................     429,000,000
    --Unattended Ground Sensors.........................      29,500,000
0604647A: Non Line of Sight Cannon (NLOS-C).............     497,643,000
      Total:............................................   2,873,653,000

    The projects identified within program element 0604645A, 
Armored Systems Modernization, are congressional special 
interest items for the purpose of prior approval reprogrammings 
as discussed elsewhere in this report. In addition, the 
Committee reminds the Army that the cumulative value of 
transfers into or out of these program elements are subject to 
the same reprogramming guidelines applicable to all other 
Research, Development, Test and Evaluation funded programs.

                   NON LINE OF SIGHT CANNON (NLOS-C)

    The Committee recognizes that NLOS-C is an integral part of 
the Future Combat System (FCS) and is being managed on the same 
development timelines as FCS. While this timeline is 
potentially subject to change at either the Milestone B update 
scheduled for November 2004, or the Preliminary Design Review 
scheduled for April 2005, the Committee is aware that the 
current plan for FSC fielding, to include NLOS-C, is fiscal 
year 2010. Therefore, as explained in section 8100 of the 
Committee bill, the Committee expects that the Army will 
program and budget to field NLOS-C in fiscal year 2010. To this 
end, the Committee directs that the Army field NLOS-C in 
compliance with the definition of weapon system fielding as 
expressed in Army Regulation 700-142.
    As noted elsewhere in the report, the budget request 
includes $497,643,000 for NLOS-C. The Committee recognizes that 
$93,686,000 of the funding requested in program element 
0604647A is requested explicitly for the purpose of developing 
unique mission equipment. Accordingly, the Committee directs 
that this amount is a congressional special interest item for 
the purpose of prior approval reprogrammings.

                         THEATER SUPPORT VESSEL

    The budget requested $89,151,000 for the Logistics and 
Engineering Equipment program, an increase of $763,000 over the 
fiscal year 2004 appropriation. The Committee recommends 
$165,051,000, an increase of $75,900,000 above the request. Of 
the amount requested within this program element, the Army 
includes $65,380,000 for the Theater Support Vessel (TSV) 
program. Fiscal year 2005 is the first year in which funding 
has been requested to construct such a vessel. The Committee 
notes that the total cost of this vessel is approximately 
$141,600,000, and the Army had planned to incrementally fund 
its construction over the course of fiscal years 2005 through 
2007. The Committee firmly believes that the Department should 
fully fund major investment items and accordingly has added 
sufficient funding in the fiscal year 2005 bill to complete 
this vessel.
    In addition to concerns about incremental funding, the 
Committee is also concerned about the extent to which the 
Army's TSV concept has been rationalized with Navy Sealift and 
Afloat Basing programs, as well as Marine Corps sealift 
requirements. Given the Navy and Marine Corps plans in this 
regard, the Committee believes that the Army must ensure that 
the design and construction of the TSV is compatible with Navy 
plans and programs. Accordingly, the Committee directs that 
none of the funds provided for the TSV program may be obligated 
or expended until the Secretaries of the Army and Navy jointly 
provide a report to the congressional defense committees 
addressing the following issues:
          --The Army requirements for the Theater Support 
        Vessel (TSV) including number of vessels to be 
        constructed;
          --The relationship between the Navy Afloat Basing 
        concept and TSV requirements including measures to 
        ensure that these programs are compatible;
          --The relationship between Army and Marine Corps 
        requirements for intra-theater sealift; and,
          --The plans for funding the TSV program including 
        amounts included in the Future Years Defense Program, 
        and a summary of DoD deliberations on whether to fund 
        this program through the National Defense Sealift Fund 
        (NDSF) or by other means in future budget submissions.

                   JOINT TACTICAL RADIO SYSTEM (JTRS)

    The Committee recognizes that the Future Combat System 
(FCS) is on a very aggressive development timeline, and that 
this timeline is dependent upon successful development of 
nearly 150 complementary systems. Among the most critical of 
these complementary systems is the Joint Tactical Radio System 
(JTRS) which will provide a foundation for the C4ISR network 
required to link soldiers, platforms, and sensors. The 
Committee has concerns about the maturity of JTRS, especially 
about JTRS Cluster 5 which is necessary for manportable 
applications, and applications requiring small form/fit radios. 
Accordingly, the Committee directs the Secretary of Army to 
provide a report to the congressional defense committees, not 
later than February 1, 2005, listing specific FCS elements that 
require JTRS Cluster 5 including, but not limited to, 
manportable systems, and systems requiring small form/fit 
radios such as unmanned aerial vehicles, unmanned ground 
vehicles and unattended sensors. The report shall provide a 
detailed description of the JTRS Cluster 5 development timeline 
and explain how this timeline fits into the FCS development 
timeline. The report shall also explain the DoD mitigation 
strategy in the event that JTRS Cluster 5 development fails to 
keep pace with the FSC program schedule.

        PATRIOT PAC-3/MEDIUM EXTENDED AIR DEFENSE SYSTEM (MEADS)

    In April 2003, the Department of Defense Acquisition 
Executive signed an Acquisition Decision Memorandum (ADM) 
directing the merger of the Patriot PAC-3 and MEADS programs, 
and assigned management, programming and budgeting 
responsibilities to the Army. In the statement of managers 
accompanying the conference report on the fiscal year 2004 
Defense Appropriations Act, the Congress expressed its support 
for this course of action and directed the Army to submit a 
plan for combining these programs. In the fiscal year 2005 
budget request, the programs remain separate entities. While 
management may reside within a single Army major command, the 
budget request is presented as though nothing about the 
programs had changed. Further, it is not clear whether the 
amounts requested for the PAC-3/MEADS program have been 
rationalized to improve either funding or programmatic 
efficiencies. While the Committee still supports the merged 
PAC-3/MEADS program under Army cognizance, the Committee 
believes there have been unnecessary delays in realigning 
program funding. Accordingly, the Committee directs the 
Secretary of the Army to develop a plan to merge these programs 
as directed by the April 2003 ADM, and provide a report to the 
congressional defense committees on this plan not later than 
February 15, 2005.

                 LAND WARRIOR AND FUTURE FORCE WARRIOR

    In the report accompanying the House version of the fiscal 
year 2004 Defense Appropriations bill, the Committee expressed 
concern about the Land Warrior program with respect to both its 
failure in developmental testing, and the instability in its 
design. In the statement of managers accompanying the 
conference report on the fiscal year 2004 Defense 
Appropriations Act, the conferees expressed a similar view 
reducing overall funding for this program and providing funding 
in research and development rather than in procurement. In 
fiscal year 2005, the Committee notes that the Army proposes 
funding for two conceptually similar programs including Land 
Warrior and Future Force Warrior. The budget request includes a 
total of $183,127,000. The Committee believes the Army should 
combine the resources of these programs to better focus program 
requirements and development efforts. Accordingly, the 
Committee recommends reducing overall funding by $20,000,000 
below the budget request, and directs the Army to merge the 
funding and management of the Land Warrior and Future Force 
Warrior programs.

         GUIDED MULTIPLE LAUNCH ROCKET SYSTEM (GMLRS)--UNITARY

    The budget requested $97,422,000 for the Multiple Launch 
Rocket System (MLRS) Product Improvement program, an increase 
of $12,853,000 over the fiscal year 2004 appropriation. The 
Committee recommends $112,422,000, an increase of $15,000,000. 
The Committee has provided an additional $15,000,000 to 
accelerate development and fielding of the GMLRS-Unitary 
munition to U.S. forces in high-risk locations by fiscal year 
2006. The Committee directs that this amount is a congressional 
special interest item for the purpose of prior approval 
reprogrammings. Based on the present demonstrated capability, 
the Committee believes the Army should field out of the 
existing GMLRS-DPICM production line a limited quantity of not 
less than 450 GMLRS-Unitary munitions (consisting of a 200 lb. 
warhead and multi-mode fuze). This limited capability would, if 
fielded as described above, place in the hands of both Army and 
Marine Corps commanders, nearly two years earlier than planned, 
a precision, lethal, all-weather munition that reduces 
collateral damage and unexploded ordnance, and is capable of 
engaging targets of opportunity in both urban and open terrain 
in a timely manner.

                           NUCLEAR MONITORING

    In the fiscal year 2005 budget request, the Army includes 
funding for the Nuclear Arms Control Technology--Sensor Network 
Monitoring project in the same program element as the Joint 
Tactical Radio System (JTRS). In the Committee's view, this 
project represents a distinct entity for which the budget 
request should be presented separately; not buried in a larger, 
unrelated program. Accordingly, the Committee directs the 
Secretary of Defense to establish an appropriate account to 
program and budget for this program beginning with the fiscal 
year 2006 budget request, and report to the congressional 
defense committees not later than March 1, 2005 on these plans.

                       DEFENSE LANGUAGE INSTITUTE

    In the statement of managers accompanying the conference 
report on the fiscal year 2004 Defense Appropriations Act, the 
conferees recommended the Department of Defense establish a 
separate program element code within Research, Development, 
Test and Evaluation, Army, and begin funding research and 
development activities related to the Defense Language 
Institute. The Committee notes that neither of these actions 
are reflected in the Army budget request for fiscal year 2005. 
To initiate this work, the Committee recommends an increase of 
$2,500,000 above the budget request, and directs that the Army 
establish a separate program element to program and budget for 
this activity.

                      ARIZONA TELEMEDICINE PROGRAM

    The Committee is encouraged by the accomplishments of the 
Arizona Telemedicine Program and its multidisciplinary clinical 
program in conjunction with the Army, the Departments of 
Agriculture, Commerce, and Health and Human Services. DoD is 
strongly encouraged to continue its work with this program.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


            RESEARCH, DEVELOPMENT, TEST AND EVALUATION, NAVY





Fiscal year 2004 appropriation........................   $15,146,383,000
Fiscal year 2005 budget request.......................    16,346,391,000
Committee recommendation..............................    16,532,361,000
Change from budget request............................      +185,970,000


    The appropriation provides funds for the research 
development, test and evaluation activities of the Department 
of the Navy, which includes the Marine Corps.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$16,532,361,000 for Research, Development, Test and Evaluation, 
Navy. The following report and project level tables provide a 
summary of the Committee recommendation.


                          BONE MARROW REGISTRY

    The Committee provides $34,000,000 to be administered by 
the C. W. Bill Young Marrow Donor Recruitment and Research 
Program, also known, and referred to, within the Naval Medical 
Research Center, as the Bone Marrow Registry. This DoD donor 
center has recruited more than 330,000 DoD volunteers, and 
provides more marrow donors per week than any other donor 
center in the Nation. Over 1,500 service members and other DoD 
volunteers from this donor center have provided marrow to save 
the lives of patients. The Committee is aware of the continuing 
success of this national and international life saving program 
for military contingencies and civilian patients, which now 
includes over 5,300,000 potential volunteer donors, and 
encourages agencies involved in contingency planning to 
continue to include the C. W. Bill Young Marrow Donor 
Recruitment and Research Program in the development and testing 
of their contingency plans. DD Form 1414 shall show this as a 
special congressional interest item, and the Committee directs 
that all of the funds appropriated for this purpose be released 
to the C. W. Bill Young Marrow Donor Recruitment and Research 
Program within 60 days of enactment of the fiscal year 2005 
Defense Appropriations Act.

 NAVAL HOSPITAL GREAT LAKES AND NORTH CHICAGO VETERANS AFFAIRS MEDICAL 
                                 CENTER

    The Committee is pleased with the progress made in 
developing a comprehensive resource sharing initiative between 
Naval Hospital Great Lakes and the North Chicago Veterans 
Affairs Medical Center. The Committee continues to expect a 
proposal for design planning and construction of a new joint 
ambulatory care center in fiscal year 2006. The Committee also 
expects the design proposal to include a physical connection 
between the new joint ambulatory care center and the existing 
VA Medical Center.

                                 DD(X)

    The budget included a request of $1,431,585,000 for the 
next generation guided missile destroyer, the DD(X) program, an 
increase of $367,198,000 over the 2004 appropriated level. The 
Committee recommends an appropriation of $1,182,785,000 for the 
DD(X), a reduction of $248,800,000 from the fiscal year 2005 
request and an increase of $118,398,000 over the fiscal year 
2004 appropriated level.
    The Committee believes the DD(X) development schedule does 
not provide sufficient time for the proper maturation and 
testing of transformational technologies prior to initiating 
construction of the first ship, presenting a potential ``rush 
to failure.'' According to the Navy's schedule, detailed design 
drawings necessary for the construction of the ship will not be 
completed prior to the award of this initial construction 
contract. It is the Committee's view that it is not prudent to 
proceed with the construction of a ship without first 
completing detailed design drawings and concluding basic 
testing of the technologies that will be integrated into the 
ship. According to the General Accounting Office, none of the 
twelve critical technologies for DD(X) will reach maturity 
prior to entering product development. Further, based on the 
Navy's schedule, land-based testing of two critical 
technologies will not be complete prior to the conclusion of 
the Critical Design Review (CDR).
    Accordingly, the Committee recommends eliminating the 
$221,000,000 requested for the first increment for construction 
of the first DD(X) ship. This recommendation is based on the 
Committee's judgment that the highly concurrent, extremely 
aggressive DD(X) development program does not support a fully 
informed acquisition decision in fiscal year 2005, making a 
request for construction funding premature. The Committee 
believes that additional time for development prior to the 
construction contract award will provide time for the program 
to stabilize and for the maturation and testing of critical 
technologies.
    The Committee also recommends a reduction of $43,800,000 
from the $191,400,000 requested for Critical Design Review 
(CDR), scheduled for the last quarter of fiscal year 2005. This 
recommendation reflects the Committee's conclusion that the CDR 
schedule must slip in order to complete land-based testing of 
critical components of the leading technologies prior to 
completion of CDR. The Committee directs the Navy to extend the 
time frame for the CDR to ensure that land-based testing has 
been completed on all twelve DD(X) critical technologies prior 
to the completion of CDR.
    Finally, the Committee recommends an increase of 
$13,000,000 only for the completion of the DD(X) alternative 
engine construction and its delivery to the Navy for testing, 
an increase of $1,000,000 for Floating Area Networks, and an 
increase of $2,000,000 for smart ships that anticipate and 
manage.

                       LITTORAL COMBAT SHIP (LCS)

    The budget included a request of $352,089,000 for the 
Littoral Combat Ship (LCS) program, an increase of $187,018,000 
over the 2004 appropriated level. The Committee recommends an 
appropriation of $409,089,000 for the LCS, an increase of 
$57,000,000 over the fiscal year 2005 request and an increase 
of $241,018,000 over the fiscal year 2004 appropriated level.
    The Committee remains impressed with the Navy's initiative 
in pursuing the LCS program, which promises to address 
significant operational gaps in Navy capability while presaging 
new ways of developing and fielding technology to the Fleet. 
The Committee has agreed to the Navy's request to fund 
construction of LCS in the research, development, test and 
evaluation appropriation, recognizing the Navy's desire to more 
readily accommodate potential changes to the program. The 
Committee approves this request because it views the Flight 0 
ship as a prototype of a completely new class of ship. Once the 
Navy has completed and tested the prototype, it should proceed 
with the preliminary design and construction of the first 
Flight 1 ship.
    The Committee recommendation includes increasing the budget 
request for the construction of the first Flight 0 LCS by 
$107,000,000, fully funding this construction effort at 
$214,000,000. The fiscal year 2005 request included only 
$107,000,000 for the first increment of the LCS construction. 
Budget documentation indicates the Navy plans to request an 
additional $107,000,000 for the second and final increment for 
the first ship in fiscal year 2006. The Committee strongly 
opposes incremental funding of ship construction and therefore 
has provided a total of $214,000,000 in 2005 for construction 
of the first LCS, fully funding the construction requirement in 
one year.
    The Committee recommendation reduces the LCS request by 
$50,000,000 for Phase I pre-design/concept studies for the 
development of a request for proposal for the preliminary 
design of the Flight 1 ship. This recommendation is based on 
the Committee's judgment that the preliminary design of the 
first Flight 1 ship should commence after test and evaluation 
of the Flight 0 prototype to avoid potential costly re-design 
efforts.

                AMPHIBIOUS ASSAULT SHIP--LHA REPLACEMENT

    The budget includes a request of $44,180,000 for the 
amphibious assault ship (LHA) replacement, the LHA(R) program. 
The Committee recommends no appropriation for the LHA(R), a 
reduction of $44,180,000 from the fiscal year 2005 request 
based on the uncertainty of proceeding with the LHA(R) program 
of record.
    In its fiscal year 2004 recommendations, the Committee 
eliminated funding for LHA(R), only to be persuaded by the Navy 
that the program of record was achievable. However, after 
submission of the fiscal year 2005 budget, the Navy determined 
that the LHA(R) program required a major restructure. Owing to 
the overall cost of the LHA(R) program, coupled with relatively 
little gain in capability, the Navy now apparently advocates an 
alternative option based on modifications to the LHD-8 
configuration. Funding and justification for this option has 
not been included in the President's request, nor has a budget 
amendment been submitted which formally changes the program of 
record and the amounts requested for fiscal year 2005. 
Moreover, the Navy's new plan presumes designing a ship that 
would alter the amphibious nature of the LHA, and then, 
proposing an incrementally funded construction program. It is 
unclear at this time whether this option would be the design 
and construction of the first in a new class of ships, or a 
single ship for this mission.
    While the Committee supports Marine Corps requirements for 
a new amphibious assault ship, the Committee strongly believes 
that more time is required to fully assess the appropriate way 
ahead, including a thorough review of requirements and the 
likely availability of funding. This review should emphasize 
fielding operational capability--not just the development and 
construction of a new ship--consistent with projected 
warfighting requirements and the availability of budget 
resources.
    Should the Navy and Marine Corps determine that the re-
structure of the LHA(R) program is the way ahead for the 
future, a fully funded program for design and construction of a 
ship to meet this requirement should be included in a future 
budget request. The Committee will not support a proposal which 
suggests that construction be incrementally funded.
    The Committee notes that Congress provided $64,100,000 in 
fiscal year 2004 for the LHA(R) program of record, that will 
potentially be replaced by the alternative option of a modified 
LHD-8. Since these funds remain available through fiscal year 
2005, the Navy may use the funds appropriated in fiscal year 
2004 for the LHA(R) for costs associated with the development 
and design of an alternative option.

                 ADVANCED HYBRID STORED ENERGY DEVICES

    The Committee recommends an additional $3,000,000 for the 
development and demonstration of advanced rechargeable hybrid 
stored energy devices using the MDA SBIR/STTR developed nano-
composite carbide, nitride and metal alloy materials 
technologies. These materials are considerably lighter, more 
capable, safer, and more affordable than current state-of-the-
art thermal batteries used on most naval munitions. Application 
of these technologies could significantly increase the 
operational capability and reduce the life cycle costs of all 
current and future naval air weaponry.

        BLAST RESISTANT ANECHOIC SPRAYABLE ELASTOMERIC COATINGS

    The Committee recommends an additional $2,000,000 to 
develop new blast resistant materials for coating ship hulls. 
The Committee supports the Navy's recommendation to improve 
platform protection for naval vessels by improving the 
capability to suppress explosions and control damage through 
the development of a liquid spray applied unique material with 
blast mitigation properties.

                 CUTTING TOOLS FOR AEROSPACE MATERIALS

    The Committee recommends an additional $5,000,000 for a 
multi-phased program to develop, produce, and test several new 
monolithic and composite ceramic materials for aerospace 
fabrication. The Committee believes this will help the 
Department address the manufacturing difficulties and machining 
problems of composite materials for aerospace platforms.

           LOW-POWER MEGA PERFORMANCE UAV PROCESSING ENGINES

    The Committee recommends an additional $4,000,000 for an 
advanced processor suitable for the mission requirements of 
unmanned aerial vehicles. Specifically, the Committee believes 
that mission requirements require the need to address the 
overwhelming data throughput requirements of UAV and the need 
to enhance on-board sensor processing capabilities. Recent 
technology advances in sensor processing platforms include 
advances in multi-threaded, massively parallel processing 
systems on chips, enabling low-power, affordable commercial-
off-the-shelf engines to provide a computing platform for 
advanced processing requirements.

             CENTER FOR CRITICAL INFRASTRUCTURE PROTECTION

    The Committee recommends an additional $8,000,000 for the 
Center for Critical Infrastructure Protection (CCIP) to develop 
for the Unified Combatant Commands, particularly the U.S. 
Northern Command (NORTHCOM) and the Joint Forces Command 
(JFCOM), innovative technology solutions and methodologies for 
protecting critical infrastructure including the sustained 
operation of our nation's ports, protection of our merchant 
shipping systems, and assured access to the national industrial 
base.
    The CCIP will investigate mission critical elements of 
protection from risk assessment, surveillance and 
communications techniques, and security technologies addressing 
the unique threats associated with critical infrastructure 
protection. The technologies developed by CCIP will create 
innovative security solutions such as sensors, intelligent 
cargo containers, visualization, and other situational 
awareness mechanisms for securing the nation's critical 
infrastructure that supports uninterrupted joint force 
protection.

        HIGH PERFORMANCE SANDWICH PANEL CONSTRUCTION TECHNIQUES

    The Committee recommends an additional $5,000,000 to 
promote the development and qualification of advanced steel 
sandwich panels for the construction of U.S. Navy ships. The 
Committee supports the Navy's effort to design, develop, and 
implement high-performance steel sandwich panel construction 
techniques in order to improve quality and performance and to 
lower procurement costs for U.S. Navy ships.

                               PROJECT M

    The Committee recommends an additional $2,500,000 for 
Project M, a shock and vibration mitigation technology program. 
The Committee believes that this shock and vibration mitigation 
technique could transition to shock mitigating systems aboard 
high-speed ships and crafts, including those employed by Navy 
Special Warfare forces. The additional funds will enable the 
Navy to complete the producibility engineering of the new shock 
mitigation system, address interface requirements and 
investigate technology applications to naval aviation and other 
platforms.

            INTELLIGENT SYSTEMS CONSORTIUM (ISC) INITIATIVE

    The Committee recommends an additional $3,000,000 only to 
accelerate the Intelligent Systems Consortium (ISC) Initiative. 
The Committee understands that the Navy has identified a 
requirement to focus on the development of intelligent 
shipboard electro-mechanical devices in support of the all-
electric ship concept, reduced manning requirements, and future 
sea-basing requirements. The ISC Initiative is a consortium of 
Navy, academic, Federal laboratory, and industry partners 
formed to pursue development of product concepts and design to 
meet these naval requirements.

      CASCADING VEHICLES CONCEPT FOR ADVANCED LITTORAL OPERATIONS

    The Committee recommends an additional $5,000,000 to 
initiate the Cascading Vehicles Concept for Advanced Littoral 
Operations from the SEALION medium-range maritime platform. The 
Committee believes that this initiative is not an alternative 
to the Littoral Combat Ship (LCS) envisioned by the Navy to 
conduct littoral operations, but rather a supporting technology 
demonstration initiative.

                   REVIEW OF MULTIPLE MISSILE SYSTEMS

    The Committee believes that the Navy should conduct a 
review of its requirement for maintaining multiple attack 
missile systems. For example, it is unclear to the Committee 
why the Navy is developing and acquiring both the Tactical 
Tomahawk and the Joint Air-to-Surface Standoff Missile (JASSM), 
both of which have essentially the same stated mission and 
capability for nearly identical cost.
    Furthermore, the Committee is concerned that the Navy has 
multiple ``improvement'' plans underway for its varied 
inventory of attack missile systems. It appears that a program 
barely completes testing and evaluation before an improvement 
is already in development. The Committee is concerned that 
there is a potential for too much time and money to be spent on 
developing new technologies, delaying the introduction of the 
missile to the inventory in sufficient numbers.
    This situation has led to an inventory of smaller numbers 
of one kind of missile per mission rather than a large 
inventory of missiles for multiple missions. The Navy should 
consider a ``neck down'' strategy to reduce the number of 
different missiles and concentrate resources on increasing the 
overall number of missiles in the inventory.

            DISRUPTIVE TECHNOLOGY OPPORTUNITIES FUND (DTOF)

    The Committee recommends $6,000,000 to establish a 
Disruptive Technology Opportunities Fund (DTOF). This Fund, 
managed by the N6/N7 organization, will support a Navy 
partnership with the Defense Advanced Research Projects Agency 
(DARPA) on a portfolio of high-risk, high-payoff projects to 
address pressing naval challenges.
    The Committee is supportive of this concept because the 
projects identified for advancement through the DTOF are those 
designed to transition quickly to meet Fleet requirements. The 
Committee notes there are a significant number of ongoing 
science and laboratory projects that support several 
institutional organizations, but do not support requirements 
identified by the Fleet and rarely, if ever, transition to 
operational use. The Committee believes that research and 
development projects must be able to support current or future 
operational requirements of the Navy and must transition to 
operational use.
    The Committee directs the Navy to submit by January 15, 
2005, a report on the projects to be considered under the DTOF 
and the fiscal year 2006 and future budgetary requirements of 
this initiative. Future reports of projects should be submitted 
with the budget request, and should identify those projects 
that have transitioned to operational use in the Fleet or have 
been abandoned if not able to transition.

       SUPPLY CHAIN PRACTICES FOR AFFORDABLE NAVY SYSTEMS (SPANS)

    The Committee recommends an additional $2,000,000 for the 
development and adoption of industrial and logistical best 
business and management practices among government and industry 
in support of Department of Defense systems. The Committee is 
aware of the significantly higher costs for supply chain 
management in the Defense sector than that for commercial 
electronics companies, and recognizes the significant savings 
that the SPANS program has already demonstrated by gains in 
efficiency and cycle time reduction. The Committee encourages 
the Office of Naval Research to fully fund this program in 
future budget requests.

                CENTER FOR COASTLINE SECURITY TECHNOLOGY

    The Committee recommends an additional $5,000,000 to 
continue research on tactical unmanned aerial vehicles at the 
Center for Coastline Security Technology. These funds will be 
used by the Center to continue research, simulation, and 
evaluation of coastal defense and marine domain awareness 
equipment, sensors, and components.

                   JOINT OPERATIONAL TEST BED (JOTBS)

    The Committee recommends an additional $7,000,000 only for 
the Joint Operational Test Bed (JOTBS). Of these funds, 
$1,500,000 is to ensure Predator ground control viability, 
$2,000,000 is to enhance the JOTBS Joint Mission Support 
Module, and $3,500,000 is to lease (annually) or procure UAV 
suites for experimentation. JOTBS is a Congressional interest 
item. Funds may not be moved into or out of this program 
without prior Congressional approval.

               NANO-IMPRINT AT MANUFACTURING SCALE (NIMS)

    The Committee recommends an additional $4,000,000 for the 
development of a Nano-Imprint at Manufacturing Scale (NIMS) 
tool.
    The Committee is concerned that this nation faces shrinking 
advantages across all technology areas due to the rapid decline 
of the U.S. based semiconductor industry and the movement of 
intellectual property and industrial capability to foreign 
nations. In addition, the United States is losing the 
capability to conduct research and development for next 
generation lithography machines to produce integrated circuits 
used in Defense applications.
    Nano-lithography is one of the key technologies with the 
potential to revitalize the domestic semiconductor industry. 
The additional funds provided by the Committee will advance the 
development of Nano-Lithography technology to enable the 
Department of Defense to build ultra-high speed circuits 
critical to the development of smart weapon systems.

             COMPOSITE CERAMIC UNMANNED UNDERWATER VEHICLE

    The Committee supports the initiative to develop high-
performance, low cost, modular UUVs using advanced composite 
technology, ceramic component technology, and water-soluble 
tooling. The Committee believes the Navy should pursue this 
technology and include funding in future requests for applied 
research on composite ceramic UUVs.

                          AH-1Y/UH-1Z TAILBOOM

    The budget requested $90,389,000 for the H-1 Upgrade 
program, an increase of $1,600,000 over the fiscal year 2004 
appropriation. The Committee recommends $132,389,000, an 
increase of $42,000,000 over the fiscal year 2005 request. The 
Committee understands that the Marine Corps has identified a 
technical issue in the current design of these aircraft which 
involves the venting of engine exhaust onto the tailboom. The 
Committee further understands that an additional $12,000,000 is 
required for the engineering and tooling necessary to resolve 
this problem, and an additional $30,000,000 is required for 
testing. Accordingly, the Committee recommends an increase of 
$42,000,000 for this program.

                              CV-22 OSPREY

    The budget requested $304,164,000 for the V-22 Osprey 
flight test program, a reduction of $102,978,000 below the 
fiscal year 2004 appropriation. The Committee recommends 
$253,164,000, a reduction of $51,000,000 from the fiscal year 
2005 request. The Committee is aware that the test flight 
schedule for the CV-22 variant of the Osprey has experienced a 
delay of approximately six months. This delay is technical in 
nature having to do with the intensity of inspections and 
maintenance that accompany V-22 flight testing, and a lack of 
suitable environmental conditions for test flights, among other 
things. As a result of this delay, the Committee recommends a 
reduction of $51,000,000 from the budget request for the V-22 
test flight program. The Committee also recognizes the delayed 
test events will have to be rescheduled, and associated costs 
must be supported in future budget requests. Accordingly, the 
Committee directs the Secretary of the Navy to provide a report 
to the congressional defense committees not later than February 
1, 2005, indicating revisions to the test flight schedule to 
compensate for this delay, and indicating how this delay will 
be funded over the Future Years Defense Program.

                         VXX HELICOPTER PROGRAM

    The budget requested $777,398,000 for the VXX Executive 
Helicopter Development program, an increase of $579,967,000 
over the fiscal year 2004 appropriation. The Committee 
recommends $557,398,000, a reduction of $220,000,000 from the 
fiscal year 2005 request. The Committee understands that the 
Department of Defense has deferred selection of the contractor 
team that will produce this aircraft because of the immaturity 
of the mission equipment to be incorporated into the aircraft.

              NAVY CONVERGED ENTERPRISE RESOURCE PLANNING

    The budget requested $100,000,000 for Navy Converged 
Enterprise Resource Planning (ERP), an increase of $100,000,000 
over the fiscal year 2004 appropriation. The Committee 
recommends $65,000,000, a reduction of $35,000,000 from the 
fiscal year 2005 request. Based on concerns discussed in the 
Information Technology section of this report, the Committee 
has adjusted amounts available for ERP to be applied as 
follows:

                        [In thousands of dollars]

Operation and Maintenance, Navy, 1A6A...................         -$7,500
Research, Development, Test and Evaluation, Navy........         -27,500

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005. 


         RESEARCH, DEVELOPMENT, TEST AND EVALUATION, AIR FORCE





Fiscal year 2004 appropriation........................   $20,500,984,000
Fiscal year 2005 budget request.......................    21,114,667,000
Committee recommendation..............................    21,033,622,000
Change from budget request............................       -81,045,000


    This appropriation finances the research, development, test 
and evaluation activities of the Department of the Air Force.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$21,033,622,000 for Research, Development, Test and Evaluation, 
Air Force. The following report and project level tables 
provide a summary of the Committee's recommendation. 


                SPACE BASED INFRARED SYSTEM (SBIRS) HIGH

    The Air Force requested $508,448,000 for the Space Based 
Infrared System (SBIRS) High Program, a decrease of 
$108,781,000 below the fiscal year 2004 appropriation. The 
Committee recommends $599,448,000, an increase of $91,000,000 
above the budget request. The Committee notes this adjustment 
was requested by the Air Force to address new cost growth to 
the SBIRS High program.
    The Committee is deeply disappointed with the development 
of the SBIRS High program. This program has been restructured 
numerous times, most recently 2 years ago following a Nunn-
McCurdy cost breach. The Committee understands new cost 
estimates are triggering another round of Nunn-McCurdy 
notifications. The Committee is dismayed with the inability of 
the Air Force and contractor team to execute this program 
effectively. The Committee understands that the Office of 
Secretary of Defense is actively analyzing program 
alternatives. The Committee encourages this analysis and 
directs submission of the results to the congressional defense 
committees upon completion.

                           SPACE BASED RADAR

    The Air Force requested $327,732,000 for the Space Based 
Radar program. The Committee recommends $75,000,000, a 
reduction of $252,732,000, and directs that the Air Force 
fundamentally restructure the program to meet the concerns 
addressed below.
    The Space Based Radar (SBR) program is intended to provide 
near continuous, global radar imagery and surface moving target 
indication (SMTI) as well as high resolution terrain 
information. Advocates describe the program as a key 
contributor to achieving ``global persistent surveillance''. 
Though the pursuit of persistent surveillance is a noble goal, 
the Committee believes the Space Based Radar program as 
currently structured:
          --Is neither affordable nor likely to produce the 
        results claimed by its advocates, within any reasonable 
        definition of cost, technical challenge, or risk.
          --Would consume a disproportionate share of resources 
        from within an already highly stressed DoD space and 
        surveillance budget;
          --And finally, is simply a less-pressing priority 
        than many other near-and mid-term needs confronting the 
        Department of Defense.
    SBR Cost.--Regarding cost, recent independent cost 
estimates by the OSD Cost Analysis Improvement Group (CAIG) 
state that the acquisition and 12-year operations cost of the 
current SBR program of record--a 9 satellite constellation--
would cost $34 billion in constant fiscal year 2004 dollars. 
This amount is roughly equal to the life cycle cost of 
virtually all other Air Force satellite programs combined, 
including Advanced EHF, Wideband Gapfiller, GPS, NPOESS, and 
SBIRS High. Moreover, there are many reasons to believe this 
estimate significantly understates prospective SBR costs.
    First, this is a ``50 percentile'' estimate, conducted 
prior to the concept definition phase. Historically, actual 
program costs increase from this point, sometimes dramatically, 
as requirements and technical issues become clearer with time. 
As a point of comparison, cost estimates for the Space Based 
Infrared System High (SBIRS High) program have increased some 
450 percent from a similar stage in its development.
    The Committee further notes the Air Force considers 9 
satellites in low earth orbit to be less than half the number 
required to provide near continuous global moving target 
indication. The CAIG was not asked to estimate the cost of an 
objective SBR constellation of 21-24 satellites, but the cost 
of such a constellation could exceed $60 billion based on the 
current understanding of program requirements and technology.
    Alternative SBR configurations offer little prospect of 
mitigating such costs. For example, in the hope that fewer 
satellites will translate to lower costs, some concepts suggest 
putting fewer (though significantly larger) satellites in 
Medium Earth Orbit (MEO). While this approach may have some 
operational advantages, it apparently does not reduce costs, as 
the recently completed Air Force Analysis of Alternatives (AoA) 
estimates that a full MEO constellation would cost about 40 
percent more than a 24 satellite LEO constellation.
    The Committee is also concerned about the cost and 
operational magnitude of the infrastructure needed to support 
the SBR program. For example, just three to four SBR 
satellites, working at peak load, would consume bandwidth equal 
to the entire capacity of the yet-to-be-developed 
Transformational Communications Satellite system. Likewise, SBR 
poses daunting challenges for any supporting ground 
infrastructure--always a significant cost driver for space 
programs. For example, it is widely accepted that SBR will 
generate far too much data for traditional human exploitation. 
Instead, the success of the program depends on significant 
advances in artificial intelligence, a field with a spotty 
track record at best.
    SBR Operational Capability.--Regarding system capability, 
the Committee harbors additional concerns about the performance 
of an SBR constellation, particularly with regard to tracking 
moving targets. The Committee has consistently maintained that 
the baseline 9 satellite constellation, as well as more robust 
alternatives, would be unable to track vehicles effectively 
because of significant coverage gaps.
    The Committee's position has been largely validated by the 
Air Force's SBR Analysis of Alternatives (AoA). Though AoA 
briefing charts attributed some limited tracking to a 9 
satellite system, the Air Force later admitted this tracking 
was provided completely by airborne assets. More disturbing, 
even a full 21 satellite constellation loses track on most high 
value targets in just minutes. Further, the Air Force analysis 
did not take into account adversary use of even simple denial 
and deception techniques.
    Another DoD analysis suggests that even the meager 
performance identified in the AoA is overly optimistic. This 
independent analysis indicates a 24 satellite system would 
provide only 55 percent coverage when terrain and relative 
vehicle speeds are considered--and that between 96 and 150 
satellites would be required in low earth orbit to provide 
continuous coverage.
    Further, the Committee is concerned about the effectiveness 
of SBR in targeting many environments. For example, SBR is not 
well suited for moving indication in urban areas, nor can it 
image under sheds, in caves, in underground facilities, or 
under heavy foliage. The system will have limitations in 
mountainous terrain, due to obstructed views from various 
satellite look angles. In short, SBR provides limited 
capability in the very environments that adversaries are using 
today, and will likely continue to use, to hide activities from 
U.S. surveillance.
    Committee Views and Recommendations.--In summary, in and of 
itself the SBR development program is fraught with enough 
uncertainties to call into question its viability. Indeed, even 
under the Administration's own plans the SBR program of record 
is underfunded in the current Future Year Defense Program by $2 
billion, a shortfall resulting from the Department's 
unwillingness to fully fund this program. The Committee sees 
little prospect of this changing in light of the other fiscal 
challenges confronting the Department. These include the well-
documented ``procurement bow-wave''; this Administration's 
emphasis on missile defense and other transformational 
programs; and now, and most importantly, the as-yet-unbudgeted 
future manpower, operational, and equipment recapitalization 
requirements stemming from operations in Iraq and the Global 
War on Terrorism. The Committee concludes that against these 
demands, SBR simply cannot be afforded budget priority.
    Without a new approach, the Committee sees little future 
for the Space Based Radar program. Accordingly, the Committee 
recommends $75,000,000, a reduction to the request of 
$252,732,000. These funds are provided to redirect the Air 
Force's development efforts towards technologies and concepts 
that would lead to program costs far lower than currently 
conceived. The focus should be on seeking breakthroughs that 
fundamentally change the cost-benefit equation for a space 
based radar system.

            E-10A MULTI-MISSION COMMAND AND CONTROL AIRCRAFT

    The budget requested $538,860,000 for the E-10A Multi-
sensor Command and Control Aircraft program, an increase of 
$178,000,000 over the fiscal year 2004 appropriation. The 
Committee recommends $458,860,000, a reduction of $80,000,000 
below the request.
    The Committee is concerned about the proposed level of 
funding growth in the E-10A program in light of recent 
developments that call into question any relationship between 
the amounts in the request and the program as it currently 
stands. At the Defense Acquisition Board meeting for this 
program in December 2003, a decision was made to delay 
Milestone B by one year, from July 2004 to July 2005. The 
Milestone B decision is the point at which the Air Force is to 
confirm that the MR-RTIP radar can be integrated with the 767 
aircraft, so that the program may proceed with that platform. 
The reasoning for this delay was to allow the completion of 
ongoing studies into the cruise missile threat and several 
Ground Moving Target Indicator air and space tradeoff studies. 
Due to the Milestone B delay, the Air Force has had to delay 
delivery of the test bed aircraft for modifications by six 
months.
    These actions have forced a restructuring of the program 
after the budget was submitted in February. Since then, the Air 
Force has directed the start of pre-System Design and 
Development (SDD) program re-planning activities, issued new 
objectives for an engineering change proposal (ECP), and stated 
the need for this ECP to comply with the new ``program 
adjustments to execute a new technical baseline.''
    Despite these changes, the Air Force's guidance directs the 
contractor to now assume a ``robust Initial Design Review'' 
schedule to avoid delaying the Final Design Review in 2006 or 
the initial operational capability date of 2013. This change in 
the program results in a greatly condensed time between initial 
and final design review, significantly increasing risk to the 
program. Experience shows that it is extremely difficult to 
recover schedule in a development program. The Committee sees 
no basis for such optimistic assumptions, especially since 
efforts to host the radar on the 767 aircraft involves 
incorporating open systems architecture and interfaces which 
have yet to be designed.
    The Committee believes the Air Force must be more realistic 
and less optimistic in its restructuring of this program. The 
one-year delay in Milestone B and the delay of the test bed 
aircraft delivery should be appropriately accounted for in the 
schedule, not ignored. For these reasons, the Committee has 
reduced the request by $80,000,000 to realign the program with 
a more responsible schedule.

                           BOMBER DEVELOPMENT

    The request included no funding for a future bomber 
development program. The Committee recommends $50,000,000 for 
this purpose.
    Earlier this year, the Air Force established a program 
office and an integrated planning team to begin reviewing 
technologies available to improve Air Force global strike (GS) 
and global persistent attack capabilities (GPA). Further, in an 
industry-wide ``Request For Information'' (RFI), the Air Force 
solicited input from industry regarding the need for updated 
GS/GPA capabilities and methods for meeting new capability 
requirements. The Air Force RFI notes that, in meeting any new 
requirements, ``proposed capabilities may be comprised of 
currently available/emerging products, modified current 
products, Non-developmental Items and Government Furnished 
Equipment. A new or modernized bomber aircraft may satisfy the 
proposed capability.''
    The Committee is encouraged that the Air Force is 
considering a variety of options, including the development of 
a new weapon system or upgrading existing legacy platforms, 
such as the B-2 bomber, with increased capabilities. Thus, the 
Committee strongly urges the Secretary of the Air Force to give 
full and fair consideration to all options mentioned above. 
Also, the Committee directs that the Secretary of the Air Force 
provide notification to the congressional defense committees at 
least 30 days prior to the obligation of any funds provided 
under this heading.
    Given that the timeline for a bomber development decision 
will not occur until late in fiscal year 2005, and that 
significant amounts of funding provided in the fiscal year 2004 
Defense Appropriations Act have not yet been obligated, the 
Committee is restrained from providing funds in an amount 
greater than the additional $50,000,000 appropriated for this 
effort. Nonetheless, the Committee fully expects the Department 
of Defense to provide robust funding for the future bomber 
development program in its fiscal year 2006 budget request and 
beyond.

                       AIRBORNE ELECTRONIC ATTACK

    The budget requested $138,393,000 for Electronic Warfare 
Development, an increase of $41,389,000 over the fiscal year 
2004 appropriation. The Committee recommends $110,893,000, a 
reduction of $27,500,000 below the request.
    Of the funds requested in fiscal year 2005, $57,500,000 was 
planned for development of a new stand-off jamming pod 
capability for the B-52. The Committee notes that on March 19, 
2003, during the Air Force posture hearing before the 
Committee, the Secretary of the Air Force, in explaining the 
program he envisioned, stated ``[w]e would use the same 
equipment the Navy would, so we would not be developing 
anything new''. Based on his statement, the Committee was 
surprised by the fiscal year 2005 budget justifications showing 
a new start development program totaling over $733,000,000 in 5 
years.
    The Committee would note there are several tested and 
fielded technologies that could fulfill this requirement much 
more affordably and quicker than the Air Force program of 
record. Accordingly, the Committee has provided $30,000,000 of 
the request for engineering and architecture development 
efforts, receiver and jammer technology studies, and for 
development and refinement of requirements and CONOPS. The 
Committee denies funding for receiver and jammer technology 
development. The Committee holds the Secretary to his word, and 
believes the Air Force should take a hard look at available 
technologies for integration into the B-52 before proceeding 
with development of a costly new system.

                       BOMBER TACTICAL DATA LINKS

    The budget requested $120,256,000 for Bomber Tactical Data 
Link development, an increase of $107,297,000 over the fiscal 
year 2004 appropriation. The Committee recommends $81,256,000, 
a reduction of $39,000,000 below the request.
    Of the funds requested, $68,200,000 is for continuing 
development of B-1B Link 16 integration, a program begun in 
fiscal year 2004 with $12,800,000 in appropriations. The 
remaining $52,000,000 of the request would begin development of 
a similar capability in the B-52. While supportive of providing 
this capability for B-52 aircraft, the Committee believes that 
given the historical level of funding needed to begin 
development for the B-1B, the request is excessive. The 
Committee has provided sufficient resources within this 
appropriation for the Air Force to begin development of the B-
52 capability, and continue the ongoing B-1B program.

                NATIONAL AEROSPACE LEADERSHIP INITIATIVE

    The Committee recommends $25,000,000 in Aerospace 
Technology Development and Demonstration to establish a 
national aerospace leadership program. Given the evolving 
security and economic threats to our Nation, the Committee 
believes it is imperative that the United States maintain its 
world leadership in advanced propulsion and power systems, as 
well as preserve an innovative and highly competitive domestic 
aerospace manufacturing supplier base to meet the Department of 
Defense's current and future needs. This initiative should be 
used to support U.S. leadership in aerospace research and 
development, fortify the U.S.-based manufacturing supply chain, 
and buttress our aerospace original equipment manufacturers' 
technology and production market share. As such, the Secretary 
of the Air Force is directed to implement a multi-regional 
aerospace leadership program, enlisting the support of and 
recommendations for such a program from industry, university, 
and U.S. Government executive and congressional leaders. 
Moreover, the Secretary is directed to develop plans and 
provide funding for continuing this program in fiscal year 2006 
and beyond. The Committee intends to work with the Department 
of the Air Force as it develops a comprehensive, detailed 
implementation plan for this intitiative.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


        RESEARCH, DEVELOPMENT, TEST AND EVALUATION, DEFENSE-WIDE





Fiscal year 2004 appropriation........................   $18,900,715,000
Fiscal year 2005 budget request.......................    20,739,837,000
Committee recommendation..............................    20,851,271,000
Change from budget request............................      +111,434,000


    The appropriation provides funds for the research, 
development, test and evaluation activities of the Department 
of Defense for Defense-Wide activities.

                        Committee Recommendation

    The Committee recommends an appropriation of 
$20,851,271,000 for Research, Development, Test and Evaluation, 
Defense-Wide. The following report and project level tables 
provide a summary of the Committee's recommendation.


            COMPARATIVE GENOMICS FOR NATIONAL SECURITY GOALS

    The Committee recommendation includes an additional 
$3,000,000 in DARPA's Defense Research Sciences line-item only 
to research novel computational approaches to biological 
processes with application to other problems of extreme 
computational complexity. These funds are also available only 
to enhance understanding of the evolution and transmission of 
pathogenicity, contributing to better identification and 
inactivation of pathogens and the development of effective 
countermeasures. The Committee encourages the Department of 
Defense to examine these innovative research methods and 
incorporate funding in the fiscal year 2006 and subsequent 
budget requests to continue this research.

                   OPERATIONALLY RESPONSIVE SATELLITE

    The Committee has provided an additional $25,000,000 to the 
Force Transformation Directorate only for the Operationally 
Responsive Satellite program. The Committee notes that the 
program has been authorized in both the House and Senate. The 
Committee fully supports the program objectives as discussed in 
both the House and Senate authorization reports. The Committee 
sees great promise that this approach could provide 
transformational space-based capabilities to warfighters in a 
timely and cost-effective manner.

                CHEMICAL AND BIOLOGICAL DEFENSE PROGRAM

    The Committee commends the Department on the execution of 
the Chem-Bio Defense Initiatives Fund and recommends continuing 
the program within the Department's Chemical and Biological 
Defense Program. The Committee's recommendation provides an 
increase of $25,000,000 for this fund. The Secretary of Defense 
is directed to allocate these funds among the programs that 
yield the greatest gain in our chem-bio defensive posture.

           CALIFORNIA MANUFACTURING TECHNOLOGY CENTER (CMTC)

    The Committee recommends continuing the California 
Manufacturing Technology Center (CMTC). The Committee's 
recommendation provides an increase of $8,000,000 only to 
continue development of efficient processes, techniques and 
tools to enable small manufacturers to respond to Diminished 
Manufacturing Sources (DMS) and to reduce costs with automatic 
and computer-based systems technology.

                 DEFENSE ACQUISITION CHALLENGE PROGRAM

    The budget requests $21,463,000 for the Defense Acquisition 
Challenge Program in the Quick Reaction Special Projects 
Advanced Technology Development program element. The Committee 
believes the focus of this program should be less on new 
technology development and more on identifying and inserting 
innovative technologies quickly into the Department of 
Defense's weapon systems. Accordingly, the Committee has 
eliminated $21,463,000 from the budget request, and has instead 
provided $26,463,000 as a new program element line in Research, 
Development and Evaluation, Defense-Wide Budget Activity 5 
(Engineering and Manufacturing Development), an increase of 
$5,000,000 above the request.

               BUSINESS MANAGEMENT MODERNIZATION PROGRAM

    The budget requested $235,700,000 for the Business 
Management Modernization Program (BMMP), an increase of 
$108,200,000 over the fiscal year 2004 appropriation. The 
Committee recommends $138,452,000, a decrease of $97,248,000.
    Based on concerns discussed in the Information Technology 
section of this report, the Committee has adjusted amounts 
available for BMMP for fiscal year 2005 to be applied as 
follows:

                        [In thousands of dollars]

Operation and Maintenance, Defense-Wide, BMMP...........          -7,000
Operation and Maintenance, Defense-Wide, BMMP Domains...         -15,000
Procurement, Defense-Wide, BMMP Domain Procurement 
    Systems.............................................         -30,248
Research, Development, Test and Evaluation, Defense-
    Wide, BMMP..........................................         -45,000

            BALLISTIC MISSILE DEFENSE SYSTEM (BMDS) SUMMARY

    The budget request includes $10,170,677,000 for missile 
defense programs, an increase of $1,090,311,000 over the fiscal 
year 2004 appropriation. The Committee recommends 
$9,712,777,000, a reduction of $457,900,000.
    Within the total requested for fiscal year 2005, 
$9,146,672,000 is for the programs managed directly by the 
Missile Defense Agency (MDA). With respect to the MDA request, 
the Committee recommends $8,688,772,000, a reduction of 
$457,900,000. While the funding recommended is a reduction from 
the budget request, the Committee notes that, with respect to 
all missile defense programs, the recommended amount is 
$632,411,000 above that enacted in fiscal year 2004, with MDA 
programs funded at $977,088,000 above fiscal year 2004.
    The Committee strongly supports the efforts of the 
Administration to field a system to provide an initial defense 
capability beginning in September 2004. To this end, the 
Committee fully funds that portion of the MDA budget request 
that provides for Ground Based Midcourse (GMD) programs related 
to initial defensive operations (IDO), including the provision 
of launch sites, interceptors, Aegis-class warships, and early 
warning radars (including continuing development of the Sea-
Based X Band radar). The Committee also fully funds plans for 
forward-based radars and Theater Missile Defense programs such 
as Patriot, as described elsewhere in this report.
    The Committee is concerned about a number of the proposals 
contained in the fiscal year 2005 budget request. For example, 
the Department of Defense appears to be rushing toward 
development of next-generation technologies without fully 
testing or developing the systems that comprise the current 
generation. Accordingly, the Committee recommends reductions of 
$25,000,000 each to both the BMDS--Technology program and the 
Advanced Concepts, Evaluations and Systems program. The 
Committee recommends a reduction of $61,500,000 to the Terminal 
Defense Segment program including $31,500,000 for excessive 
program management costs, and $30,000,000 because of program 
schedule delays related to rocket motor production. The 
Committee recommends a reduction of $35,000,000 for long lead 
materials related to BMDS interceptors number 31 through 40 
because MDA has failed to identify a suitable launch site. 
Finally, the Committee believes the level of funding requested 
for the national team efforts remains excessive. The Committee 
recognizes the work of the national team is essential to 
successful deployment of the integrated, layered missile 
defense system envisioned by DoD. However, the justification 
materials accompanying the budget request fail to provide an 
adequate basis for the requested level of funding. Accordingly, 
the Committee recommends reductions totaling $205,000,000 to 
the program elements containing national team funding.
    The Committee also recommends rescinding funds provided in 
previous years. The Committee notes that MDA terminated the 
RAMOS program in execution of its fiscal year 2004 program, and 
substantially restructured the Airborne Laser (ABL) program. 
The Committee recommends a rescission of $31,500,000 due to the 
termination of the RAMOS program. The Committee is aware that 
MDA is presently developing plans to complete termination of 
this program. Accordingly, the Committee would consider a prior 
approval reprogramming of funds if this proves necessary for 
the orderly conclusion of this program. The Committee also 
recommends a rescission of $74,700,000 due to MDA's 
restructuring of the Airborne Laser program which resulted in 
termination of plans for the Iron Bird test facility and a 
second aircraft.
    The table below provides a summary of the Committee's 
recommended funding for fiscal year 2005.

                        [In thousands of dollars]

Missile Defense Agency Programs:
    Ballistic Missile Defense--Technology...............         196,320
    Advanced Concepts, Evaluations and Systems..........         231,159
    Ballistic Missile Defense--Terminal Defense Segment 
      (THAAD & Arrow)...................................         876,248
    BMD Midcourse Defense...............................       4,369,775
    BMD Boost Defense--Airborne Laser (ABL).............         495,614
    Ballistic Missile Defense--Sensors..................         594,957
    Ballistic Missile Defense Interceptors..............         398,262
    Ballistic Missile Defense--Test & Targets...........         713,658
    Ballistic Missile Defense--Products (C2BMC).........         388,608
    Ballistic Missile Defense--Core (SE&I)..............         310,264
    Pentagon Reservation................................          13,884
    Management Headquarters.............................         100,023
                    --------------------------------------------------------
                    ____________________________________________________
      Total MDA Programs................................       8,688,772
                    ========================================================
                    ____________________________________________________
    JTAMDO..............................................          86,409
                    --------------------------------------------------------
                    ____________________________________________________
Theater Missile Defense Programs:
    Patriot PAC-3 System Summary........................         489,253
    Patriot Modifications...............................          87,948
    Patriot Improvements................................          31,690
    MEADS...............................................         264,527
    Patriot PAC-3 Research & Development................          64,178
                    --------------------------------------------------------
                    ____________________________________________________
      Total--Theater Missile Defense Programs...........         937,596
                    ========================================================
                    ____________________________________________________
      Grand Total.......................................       9,712,777

                     AEGIS MISSILE DEFENSE PROGRAM

    The fiscal year 2005 budget request includes $1,072,374,000 
for the Aegis element of the Ballistic Missile Defense System 
(BMDS), and the budget materials reflect a program total of 
$4,681,115,000 from fiscal year 2003 through 2009. In addition 
to this robust level of funding, the Missile Defense Agency 
indicates that the Navy will commit as many as 18 Aegis-class 
ships to support this program. The Committee supports the 
continuing development of the Aegis program and has fully 
funded the Department's request in fiscal year 2005. However, 
the Committee has concerns about the required level of funding 
in the outyears to modify ships, provide a stock of SM-3 
missiles, and provide for operation and maintenance costs of 
this element of the BMDS. Accordingly, the Committee directs 
the Secretary of Defense to submit a report to the 
congressional defense committees not later than January 31, 
2005, that explains the Department's long range plans for the 
Aegis element of BMDS including the number of vessels that DoD 
will commit to support Aegis; plans to fund conversion of these 
vessels for missile defense purposes in future budget 
submissions; plans to resolve conflicts between Navy support 
for missile defense missions and other surface combatant 
missions; and plans to provide for operation and maintenance 
funding requirements.

                     BMDS OPERATION AND MAINTENANCE

    The Committee notes that the Missile Defense Agency budget 
in support of the Ground-Based Midcourse (GMD) program contains 
over $300,000,000 for operation and maintenance related 
activities of the Ballistic Missile Defense System (BMDS). This 
includes about $200,000,000 for physical security and force 
protection, and $104,750,000 for contractor logistical support 
(CLS) needed to support missile sites upon activation. The 
budget provides neither an indication of the long-term 
operation and maintenance costs for the BMDS, nor an expression 
of DoD's plans to begin budgeting for these costs in the 
military services' operation and maintenance accounts. 
Accordingly, the Committee directs the Secretary of Defense to 
submit a report to the congressional defense committees not 
later than November 15, 2004, that outlines that Department's 
plans to program and budget for operation and maintenance costs 
necessary to keep the BMDS on alert status including manning 
and operating missile defense sites, maintenance of equipment, 
and providing for physical security of BMDS assets.

                  INTEGRATED FLIGHT TEST-13C (IFT-13C)

    The Missile Defense Agency is presently finalizing 
preparations for Integrated Test Flight-13C scheduled for July 
2004. The Committee understands this is a critically important 
test flight not only for the Ground Based Midcourse (GMD) 
booster and kill vehicle, but also as a test of the Command, 
Control, Battle Management and Communications (C2BMC) hardware 
and software. The Committee also notes the importance of this 
test given its timing with respect to initial defensive 
operations scheduled for September 2004. Accordingly, the 
Committee directs that the Director of the Missile Defense 
Agency provide a report to the congressional defense committees 
not later than August 15, 2004, in both classified and 
unclassified form, including a detailed assessment of the 
results of IFT-13C and any impact these results may have on 
initial defensive operations.

               ADVANCED MULTIPURPOSE MICRODISPLAY SYSTEM

    The Committee recommends an increase of $3,000,000 only for 
development of an eyewear system that incorporates a high 
resolution display, based on a folded optics engine, that is 
low profile, first surface and is capable of high optical 
efficiency with low optical distortion.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


                OPERATIONAL TEST AND EVALUATION, DEFENSE





Fiscal year 2004 appropriation........................      $305,861,000
Fiscal year 2005 budget request.......................       305,135,000
Committee recommendation..............................       309,135,000
Change from budget request............................        +4,000,000


    This appropriation funds the Operational Test and 
Evaluation activities of the Department of Defense.

                        Committee Recommendation

    The Committee recommends an appropriation of $309,135,000 
for Operational Test and Evaluation, Defense. The following 
report and project level tables provide a summary of the 
Committee's recommendation.


                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


                                TITLE V

                     REVOLVING AND MANAGEMENT FUNDS

                     DEFENSE WORKING CAPITAL FUNDS




Fiscal year 2004 appropriation........................    $1,641,507,000
Fiscal year 2005 budget request.......................     1,685,886,000
Committee recommendation..............................     1,174,210,000
Change from budget request............................      -511,676,000


    The Committee recommends an appropriation of $1,174,210,000 
for the Defense Working Capital Funds. The recommendation is a 
decrease of $467,297,000 below the amount appropriated for 
fiscal year 2004.

                DEFENSE WORKING CAPITAL FUNDS REDUCTION

    The Committee recommends a reduction of $511,676,000 to the 
budget estimate, as a result of fiscal constraints, to be 
distributed only as follows:




Working Capital Fund, Army............................     -$184,056,000
Working Capital Fund, Navy............................       -65,385,000
Working Capital Fund, Air Force.......................       -81,089,000
Working Capital Fund, Defense-Wide....................      -181,146,000


                     NATIONAL DEFENSE SEALIFT FUND




Fiscal year 2004 appropriation........................    $1,066,462,000
Fiscal year 2005 budget request.......................     1,269,252,000
Committee recommendation..............................     1,186,626,000
Change from budget request............................       -82,626,000


    This appropriation provides funds for the lease, operation 
and supply of pre-positioning ships, operation of the Ready 
Reserve Force, and acquisition of ships for the Military 
Sealift Command, the Ready Reserve Force, and the Marine Corps.

                        Committee Recommendation

    The Committee recommends an appropriation of $1,186,626,000 
for the National Defense Sealift Fund (NDSF).

                MARITIME PRE-POSITIONING FORCE (FUTURE)

    The fiscal year 2005 budget includes a $117,000,000 request 
for Research, Development, Test and Evaluation for Strategic 
Sealift, an increase of $103,500,000 over the fiscal year 2004 
level. Of the amount requested, $92,626,000 is for concept 
development and lead hull research and development efforts for 
the Maritime Pre-positioning Force (Future), MPF(F).
    The Committee has provided a total of $34,326,000 for 
Research, Development, Test and Evaluation for Strategic 
Sealift, a reduction of $82,626,000 from the request. This 
reduction is applied to the request for MPF(F) for which the 
Committee provides a total of $10,000,000 for concept 
development. None of the funds provided for MPF(F) concept 
development may be obligated or expended until the Navy submits 
a detailed MPF(F) proposal and expenditure plan to the 
Committee on Appropriations.
    Budget documentation provided to Congress in support of the 
fiscal year 2005 budget request provided no information 
detailing how the MPF(F) funds were to be spent. The only 
information provided states that lead hull construction costs 
are to be incrementally funded beginning in fiscal year 2007. 
Requests for additional information yielded no detail of the 
planned expenditures due to a not-yet completed study by the 
Center for Naval Analysis. The Committee notes that while 
detail was not provided to Congress, the trade press was 
provided some information and printed articles quoting senior 
Navy officials on plans for the possible construction of a 
fleet of MPF(F) ships.
    The Committee believes the Navy must provide sufficient 
justification of its requests for appropriated funds. While the 
Committee appreciates that the timing inherent in the budget 
process does not always favor rapid transition to new ideas, it 
is not reasonable to request Congress provide funds for a 
program with no justification except that which is printed in 
the trade press. Furthermore, the Navy is well aware of the 
Committee's views with respect to incremental funding of 
programs. The Committee finds little humor in being asked to 
fund an unjustified request of nearly $100 million, for what is 
intended upon its maturation to become an incrementally funded 
program.
                                TITLE VI

                  OTHER DEPARTMENT OF DEFENSE PROGRAMS

                         DEFENSE HEALTH PROGRAM




Fiscal year 2004 appropriation........................   $15,730,013,000
Fiscal year 2005 budget request.......................    17,640,411,000
Committee recommendation..............................    17,959,186,000
Change from the budget request........................      +318,775,000


    This appropriation funds the Defense Health Program of the 
Department of Defense.

                        Committee Recommendation

    The budget requested $17,640,411,000 for the Defense Health 
Program, an increase of $1,910,398,000 over the fiscal year 
2004 appropriation. The Committee recommends $17,959,186,000, 
an increase of $318,775,000 over the budget request.


                 DEFENSE HEALTH PROGRAM--REPROGRAMMING

    The Committee remains concerned as the Department of 
Defense embarks upon the transition to new TRICARE contracts 
and institutes new business practices to improve beneficiary 
satisfaction, access to care and efficiency of Military 
Treatment Facilities. As the Committee has observed in the 
past, the Department's typical pattern of budget execution for 
the Defense Health Program has been to divert funding from 
Direct (or In-House) Care to pay for the increasing cost of 
contractor-provided medical care, while continuing to insist at 
the time its budgets are submitted that such diversions will 
not be needed. To limit such transfers and improve oversight of 
this account, the Committee designates funding for the Direct 
Care System as a special interest item, as defined elsewhere in 
this report, and that the Department of Defense shall follow 
prior approval reprogramming procedures for any transfers out 
of the Direct Care System.
    In addition, the Committee directs that the Department of 
Defense shall provide budget execution data for all of the 
Defense Health Program accounts. Such budget execution data 
shall be provided quarterly to the congressional defense 
committees through the DD-COMP(M) 1002.

     WALTER REED ARMY MEDICAL CENTER--AMPUTEE PATIENT CARE PROGRAM

    Ongoing combat operations have produced a surge in complex 
combat injuries involving amputations of major limbs. Military 
amputees demand highly specialized care that requires an 
experienced team of surgeons, physical and occupational 
therapists, phychologists, phychiatrists, nurses, social 
workers, nutritionists and others that specialize in treating 
this population. The Military Amputee Patient Care Program 
(headquartered at Walter Reed Army Medical Center) provides a 
center of expertise for state-of-the-art treatment, the 
rehabilitation of military amputee patients to the highest 
level of physical function, and a return to active duty if 
possible. The Committee commends the Army and those associated 
with this vital effort.
    The Committee recommends an additional $18,000,000 over the 
budget request for this program. This includes $8,000,000 for 
operating costs associated with the center, including but not 
limited to personnel, equipment, patient travel, and prosthetic 
device costs. An additional $10,000,000 is provided for 
increased clinical and applied collaborative research in 
prosthetic care. Of this amount, not less than $1,500,000 shall 
be for clinical evaluation of vacuum assisted suspension 
systems, including investigation of the improved functionality 
resulting from volumetric control, as well as the circulatory 
and improved wound healing benefits of such technology in 
supporting our service members returning to pre-injury physical 
activity levels.

                     LANDSTUHL ARMY MEDICAL CENTER

    The Committee acknowledges and commends Landstuhl Army 
Medical Center and its staff for the significant role they have 
played in the treatment of wounded service men and women during 
the ongoing Operations Iraqi Freedom and Enduring Freedom. The 
Committee recommends $10,000,000 over the request, only for 
Landstuhl Army Medical Center to make upgrades to the facility 
in order to continue providing quality patient care.

                           ARMY FISHER HOUSES

    Since 1990 Fisher Houses have been meeting the needs of 
military family members when confronted with the illness or 
hospitalization of an eligible military beneficiary. The 
Committee is aware that the Non-Appropriated Fund 
Instrumentalities established by law to help defray the 
operating costs of Fisher Houses have decreased in value due to 
poor financial market performance. Further, the costs to manage 
many Fisher Houses are much higher than planned due to an 
influx of patients at Military Treatment Facilities as a result 
of casualties suffered during Operations Iraqi Freedom and 
Enduring Freedom. Accordingly, the Committee has allocated 
$11,000,000 to the Defense Health Program to help mitigate any 
deficit in the Fisher House's operating costs. The Committee 
directs the Secretary of Defense to analyze the financial 
condition of the Fisher House operating accounts and submit a 
report to the congressional defense committees by March 1, 
2005.

                        THIRD-PARTY COLLECTIONS

    According to the General Accounting Office (GAO) DoD's 
Third-Party Collections Program generates on average about $122 
million annually. However, total collections for fiscal year 
2003 were down $30 million from the previous year, and the GAO 
has further documented that DoD fails to collect $44 million a 
year from third-party insurers (an amount that represents only 
35 of the 132 Military Treatment Facilities under DoD's 
auspices). It is clear that DoD's failure to effectively bill 
and collect from third-party insurers pursuant to law is 
resulting in an increased burden on the taxpayer. The Committee 
also has concerns that DoD reduced its Information Technology 
budget for third-party outpatient collection systems from 
fiscal year 2004 to fiscal year 2005.
    The Committee directs the DoD to report to the 
congressional defense committees by April 1, 2005, regarding 
the status of the transition to outpatient itemized billing and 
how third-party collections have progressed since the 
implementation of this system in fiscal year 2003. The 
Committee also directs the DoD to submit quarterly reports to 
the congressional defense committees on the status of 
collections during the current fiscal year.

                         MENTAL HEALTH SERVICES

    The Committee believes that hardships resulting from U.S. 
troop deployments to Iraq and Afghanistan make it imperative 
for the Department of Defense to offer adequate mental health 
services for active duty and reserve members deployed to combat 
theaters. The Committee also is concerned that sufficient 
mental health services be made readily available to dependents 
of active duty and reserve members. As such, the Committee 
directs the Secretary of Defense to conduct a comprehensive 
review of mental health services available to our military 
members deployed in combat theaters, as well as a review of 
services that may be available to their dependents during and 
after a military member's deployment. The report should be 
submitted to the congressional defense committees no later than 
180 days after enactment of this legislation. The review should 
include, but not be limited to, the following subjects:
          --Data on the average number of service days lost due 
        to mental health reasons;
          --The types of measures taken by the military 
        services to reduce the stigma often associated with 
        mental health counseling;
          --An analysis of mental health services available--
        and barriers to access--to active duty and reserve 
        members and their dependents (including dependents of 
        activated members of the National Guard and Reserve 
        Components); and,
          --An analysis of the extent to which the U.S. Army 
        has implemented the recommendations of the Army's 
        Mental Health Advisory Team.

     LIMITED ACCESS TO MILITARY TREATMENT FACILITIES IN RURAL AREAS

    The Committee is encouraged by the Department of Defense's 
recent efforts to address the lack of access to care in rural 
and remote communities. However, the Committee remains 
concerned that despite these efforts, under-served communities 
still have difficulty accessing health care services, 
especially Reservist and retiree beneficiaries. Therefore, the 
Committee encourages the Assistant Secretary of Defense for 
Health Affairs to work in consultation with a private non-
profit to develop a ``community-based'' model pilot program in 
Washington State to expand health care services in these areas.

            CHEMICAL AGENTS AND MUNITIONS DESTRUCTION, ARMY





Fiscal year 2004 appropriation........................    $1,500,261,000
Fiscal year 2005 budget request.......................     1,371,990,000
Committee recommendation..............................     1,371,990,000
Change from budget request............................                 0


    This appropriation funds the Chemical Agents and Munitions 
Destruction activities of the Department of the Army.

                        Committee Recommendation

    The budget requested $1,371,990,000 for the Chemical Agents 
and Munitions Destruction, Army program, a decrease of 
$128,271,000 over the fiscal year 2004 appropriation. The 
Committee recommends the budget request of $1,371,990,000.

                          Program Recommended

    The total program recommended in the bill will provide the 
following in fiscal year 2005.


         DRUG INTERDICTION AND COUNTER-DRUG ACTIVITIES, DEFENSE





Fiscal year 2004 appropriation........................      $835,616,000
Fiscal year 2005 budget request.......................       852,697,000
Committee recommendation..............................       876,697,000
Change from the budget................................       +24,000,000


    This appropriation provides funds for Military Personnel; 
Operation and Maintenance; Procurement; and Research, 
Development, Test and Evaluation for drug interdiction and 
counter-drug activities of the Department of Defense to include 
activities related to narcoterrorism.

                       Committee Recommendations

    The Department of Defense requested $852,616,000 for Drug 
Interdiction and Counter-Drug Activities. The Committee 
recommends $876,697,000, an increase of $24,000,000.

                  EXPLANATION OF PROJECT LEVEL CHANGES

                        [In thousands of dollars]

Criminal Information Sharing Alliance Network (CISA)....          +5,000
Florida National Guard Counter-Drug Activities..........          +3,000
Indiana National Guard Counter-Drug Activities..........          +1,000
Joint Task Force-6......................................          +2,000
Multi-Jurisdictional Counter-Drug Task Force Training...          +3,500
Nevada National Guard Counter-Drug Activities...........          +3,000
Project Athena Beta Site................................          +2,500
Southwest Border Fence..................................          +7,000
Tennessee National Guard Counter-Drug Activities........          +2,000
Volume Test Site for Point Sensors at NSWC..............          +3,000
Young Marines...........................................          +3,000
Tethered Aerostat.......................................          -5,000
Hemispheric Radar System................................          -5,000
ISR and Tanker Support..................................          -1,000

                   VOLUME TEST SITE FOR POINT SENSORS

    The Committee recommends an additional $3,000,000 only for 
the Volume Test Site for Point Sensors program at the Naval 
Surface Warfare Center, Dahlgren, VA. The Committee also 
directs that these funds be transferred to the Office of Naval 
Research for execution.

                       TETHERED AEROSTAT PROGRAM

    The budget request includes $32,291,000 for the Tethered 
Aerostat Program. The Committee recommends $27,291,000, a 
reduction of $5,000,000 for the same reasons enunciated in 
House Report 108-187. The funds provided by the Committee are 
intended to continue the operation of all existing Aerostat 
systems.

                        HEMISPHERIC RADAR SYSTEM

    The budget request includes $25,466,000 for the Hemispheric 
Radar System. The Committee recommends $20,466,000, a reduction 
of $5,000,000. The reduction is recommended based on 
operational assessments that determined that four radar sites 
would close in Peru, Colombia, and Venezuela.

                    OFFICE OF THE INSPECTOR GENERAL





Fiscal year 2004 appropriation........................      $162,449,000
Fiscal year 2005 Budget request.......................       244,562,000
Committee recommendation..............................       193,562,000
Change from budget request............................       -51,000,000


    The Committee recommends an appropriation of $193,562,000 
for the Office of the Inspector General. Of this amount, 
$191,362,000 shall be for operation and maintenance, $2,100,000 
shall be for procurement, and $100,000 shall be for research, 
development, test and evaluation. The recommendation is an 
increase of $31,113,000 above the amount appropriated for 
fiscal year 2004.
    The Committee supports the goal of achieving improved 
financial management within the Department of Defense, 
including clean financial audits. The Committee has provided 
additional funding to support an increase in audit capacity and 
mission support for the Offices of the Deputy Inspector General 
for Auditing, Intelligence, Investigations, and Inspections and 
Policy.
                               TITLE VII

                            RELATED AGENCIES

                 NATIONAL FOREIGN INTELLIGENCE PROGRAM

    The National Foreign Intelligence Program (NFIP) consists 
of those intelligence activities of the government that provide 
the President, other officers of the Executive Branch, and the 
Congress with national foreign intelligence on broad strategic 
concerns bearing on U.S. national security. These concerns are 
stated by the National Security Council in the form of long-
range and short-range requirements for the principal users of 
intelligence.
    The NFIP budget funded in the Department of Defense 
Appropriations Act consists primarily of resources for the 
Central Intelligence Agency (CIA), the Defense Intelligence 
Agency, the National Reconnaissance Office, the National 
Security Agency, the National Geospatial-Intelligence Agency, 
the intelligence services of the Departments of the Army, Navy, 
and Air Force, the Intelligence Community Management Staff, and 
the CIA Retirement and Disability Fund.

                            CLASSIFIED ANNEX

    The Committee's budget reviews are published in a separate, 
detailed and comprehensive classified annex. The intelligence 
community, Department of Defense and other organizations are 
expected to fully comply with the recommendations and 
directions in the classified annex accompanying the fiscal year 
2005 Defense Appropriations Act.

   CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM FUND




Fiscal year 2004 appropriation........................      $226,400,000
Fiscal year 2005 budget request.......................       239,400,000
Committee recommendation..............................       239,400,000
Change from budget request............................                 0


    This appropriation provides payments of benefits to 
qualified beneficiaries in accordance with the Central 
Intelligence Agency Retirement Act of 1964 for Certain 
Employees (P.L. 88-643), as amended by Public Law 94-522. This 
statute authorized the establishment of a CIA Retirement and 
Disability System (CIARDS) for certain CIA employees and 
authorized the establishment and maintenance of a fund from 
which benefits would be paid to those beneficiaries.

                        Committee Recommendation

    The budget requested $239,400,000 for the Central 
Intelligence Agency Retirement and Disability System Fund, an 
increase of $13,000,000 over the fiscal year 2004 
appropriation. The Committee recommends $239,400,000 as 
requested for this mandatory account.

               INTELLIGENCE COMMUNITY MANAGEMENT ACCOUNT





Fiscal year 2004 appropriation........................      $175,113,000
Fiscal year 2005 budget request.......................       304,355,000
Committee recommendation..............................       309,644,000
Change from budget request............................        +5,289,000


    This appropriation provides funds for the activities that 
support the Director of Central Intelligence and the 
intelligence community.

                        Committee Recommendation

    The budget requested $304,355,000 for the Intelligence 
Community Management Account, an increase of $134,531,000 over 
the fiscal year 2004 appropriation. The Committee recommends 
$309,644,000, an increase of $5,289,000. Of the amount 
appropriated under this heading, $46,100,000 is for transfer to 
the Department of Justice for operations at the National Drug 
Intelligence Center.

PAYMENT TO KAHO'OLAWE ISLAND CONVEYANCE, REMEDIATION, AND ENVIRONMETAL 
                            RESTORATION FUND





Fiscal Year 2004 appropriation........................       $18,430,000
Fiscal year 2005 budget request.......................                 0
Committee recommendation..............................                 0
Change from budget request............................                 0


    The Committee recommends an appropriation of $0 for the 
Payment to Kaho'olawe Island Conveyance, Remediation, and 
Environmental Restoration Fund, the amount proposed in the 
budget. The recommendation is $18,430,000 below the amount 
appropriated for fiscal year 2004.

                 NATIONAL SECURITY EDUCATION TRUST FUND





Fiscal year 2004 appropriation........................        $8,000,000
Fiscal year 2005 budget request.......................         8,000,000
Committee recommendation..............................         8,000,000
Change from budget request............................                 0


    The National Security Education Trust Fund was established 
to provide scholarships and fellowships to U.S. students to 
pursue higher education studies abroad and to provide grants to 
U.S. institutions for programs of study in foreign areas and 
languages.

                        Committee Recommendation

    The budget requested $8,000,000 for the National Security 
Education Trust Fund, the same amount provided in the fiscal 
year 2004 appropriation.
    The Committee recommends $8,000,000 for the purposes of 
title VIII of Public Law 102-183, to be derived from the 
National Security Education Trust Fund, as requested.
                               TITLE VIII

                           GENERAL PROVISIONS

    The accompanying bill includes 122 general provisions. Most 
of these provisions were included in the Department of Defense 
Appropriations Act for fiscal year 2004 and many have been 
included in the Defense Appropriations Act for a number of 
years.
    Actions taken by the Committee to amend last year's 
provisions or new provisions recommended by the Committee are 
discussed below or in the applicable section of the report.

              Definition of Program, Project, and Activity

    For purposes of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (Public Law 99-177) as amended by the 
Balanced Budget and Emergency Deficit Control Reaffirmation Act 
of 1987 (Public Law 100-119) and by the Budget Enforcement Act 
of 1990 (Public Law 101-508), the following information 
provides the definition of the term ``program, project, and 
activity'' for appropriations contained in the Department of 
Defense Appropriations Act. The term ``program, project, and 
activity'' shall include the most specific level of budget 
items, identified in the Department of Defense Appropriations 
Act, 2005, the accompanying House and Senate Committee reports, 
the conference report and the accompanying joint explanatory 
statement of the managers of the Committee in Conference, the 
related classified reports, and the P-1 and R-1 budget 
justification documents as subsequently modified by 
Congressional action.
    In carrying out any Presidential sequestration, the 
Department of Defense and agencies shall conform to the 
definition for ``program, project, and activity'' set forth 
above with the following exceptions:
    For Military Personnel and Operation and Maintenance 
accounts the term ``program, project, and activity'' is defined 
as the appropriations accounts contained in the Department of 
Defense Appropriations Act.
    The Department and agencies should carry forth the 
Presidential sequestration order in a manner that would not 
adversely affect or alter Congressional policies and priorities 
established for the Department of Defense and the related 
agencies and no program, project, and activity should be 
eliminated or be reduced to a level of funding which would 
adversely affect the Department's ability to effectively 
continue any program, project, and activity.
                               CHAPTER 1

                                TITLE IX

                       ADDITIONAL APPROPRIATIONS

                    Department of Defense--Military

                     Submission of Budget Amendment

    On May 12, 2004, the President submitted a budget amendment 
for the Department of Defense, requesting $25,000,000,000 for 
the Iraq Freedom Fund. These funds were requested as a 
contingent emergency reserve, dependent on Presidential 
designation for release. As proposed, these funds could be 
transferred to any appropriations account after five days prior 
notice to the Congress.
    The Committee commends the Administration for submitting 
this request. The President's fiscal year 2005 budget, 
submitted in February 2004, contained no additional funding to 
support fiscal year 2005 operations in Iraq or Afghanistan. 
Funds for these operations were to be requested at the 
beginning of 2005 in a supplemental appropriations request, as 
has been the norm over the past decade with similar operations. 
However, events over recent months--the decision to sustain a 
higher force level in Iraq than had been previously forecast, 
the required troop movements to support those levels, and 
increased force protection requirements--make it abundantly 
clear that some level of funding to support these operations is 
required early in the fiscal year, so as to preclude the 
services from having to divert funds from other worldwide 
operational and training requirements.
    The Committee believes the cost of continuing involvement 
of a substantial number of Army and Marine Corps combat 
divisions and support units will be more than the services can 
absorb within their peace time budgets, without unacceptable 
damage to home station training, maintenance, and support 
operations. Therefore, the funds requested in the budget 
amendment are intended to serve as a funding bridge until early 
next year when the Department of Defense will have better 
information on required resources, providing the basis for a 
supplemental request for the remaining fiscal year 2005 costs 
of the Iraq and Afghanistan operations.
    Following receipt of the President's request, the Committee 
obtained background information on fiscal year 2005 war-related 
requirements from the Office of the Secretary of Defense, the 
military services and defense agencies, and the intelligence 
community. Additionally, the Committee reviewed available 
budget execution data for fiscal year 2004. These efforts 
provided a good understanding of anticipated funding needs for 
the first several months of fiscal year 2005, and formed the 
basis for the Committee's recommendations, cited below.

                       Committee Recommendations

    In this chapter, the Committee recommends total new 
appropriations of $25,000,000,000, provided within 22 
appropriations accounts. Funding by category is as follows:

Military Personnel......................................  $3,932,000,000
Operation and Maintenance...............................  14,335,400,000
Iraq Freedom Fund.......................................   2,978,000,000
Procurement.............................................   2,199,600,000
Defense Working Capital Funds...........................   1,250,000,000
Defense Health Program..................................     305,000,000

    Funds are provided for specific appropriations accounts, 
and would be available upon enactment of the bill. Quarterly 
reports are required on the obligation of funds.
    To provide some measure of flexibility to the Department of 
Defense, as was done in the November 2004 War Supplemental 
(Public Law 108-106), the Committee recommends providing 
appropriations for the Iraq Freedom Fund, which would be 
available for obligation five days after written notification 
is provided to the Congress. Also, the Committee bill provides 
transfer authority for funds in this title, permitting up to 
$2,000,000,000 to be reprogrammed among activities following 
approval by the congressional defense committees through 
regular order prior-approval notification and reprogramming 
procedures.
    The Committee bill also includes certain authorities 
providing for war-related support to allied forces, and 
training and equipping Iraqi and Afghan military and security 
forces, consistent with similar authorities provided in Public 
Law 108-106.
    For purposes of Section 402(a)(2) of S. Con. Res. 95 (108th 
Congress), as made applicable to the House of Representatives 
by H. Res. 649 (108th Congress), all funds provided in this 
chapter, and those made available by transfer or pursuant to 
authority in section 9003 of the Committee bill, are directly 
in support of national security and U.S. forces in the field, 
are sudden, meet an urgent and compelling need, are 
unpredictable, and are not permanent in nature.
    The following table summarizes, by appropriations account 
or general provision, the Committee's recommendations compared 
to the President's request.

                        [In thousands of dollars]
------------------------------------------------------------------------
               Account                     Request       Recommendation
------------------------------------------------------------------------
Iraq Freedom Fund...................       $25,000,000        $2,978,000
Military Personnel:
    Military Personnel, Army........  ................         2,552,200
    Military Personnel, Navy........  ................           232,200
    Military Personnel, Marine Corps  ................           273,200
    Military Personnel, Air Force...  ................           874,400
                                     -----------------------------------
      Total Military Personnel......  ................         3,932,000
                                     ===================================
Operation and Maintenance:
    O&M, Army.......................  ................        11,698,400
    O&M, Navy.......................  ................           303,000
    O&M, Marine Corps...............  ................         1,295,000
    O&M, Air Force..................  ................           744,000
    O&M, Defense-Wide...............  ................           295,000
                                     -----------------------------------
      Total Operation and             ................        14,335,400
       Maintenance..................
                                     ===================================
Procurement:
    Missile Procurement, Army.......  ................            42,800
    Procurement of WTCV, Army.......  ................           201,900
    Procurement of Ammunition, Army.  ................           330,000
    Other Procurement, Army.........  ................         1,151,400
    Aircraft Procurement, Navy......  ................            34,000
    Procurement of Ammunition, Navy   ................           112,800
     and Marine Corps...............
    Procurement, Marine Corps.......  ................           111,400
    Other Procurement, Air Force....  ................            35,300
    Procurement, Defense-Wide.......  ................            80,000
    National Guard and Reserve        ................           100,000
     Equipment......................
                                     -----------------------------------
      Total Procurement.............  ................         2,199,600
                                     ===================================
Revolving and Management Funds:
    Defense Working Capital Funds...  ................         1,250,000
                                     -----------------------------------
      Total Revolving and Management  ................         1,250,000
       Funds........................
                                     ===================================
Other Department of Defense
 Programs:
    Defense Health Program..........  ................           305,000
                                     -----------------------------------
      Total Other DoD Programs......  ................           305,000
                                     ===================================
Transfer Authority:
    Total Transfers.................      [25,000,000]       [2,000,000]
    Grand Total Chapter 1, Title IX.        25,000,000       25,000,000
------------------------------------------------------------------------
Numbers in brackets do not add; represent transfer authority.

                         Reporting Requirements

    The Committee directs the Secretary of Defense to provide a 
report to the congressional defense committees within 60 days 
of enactment of this legislation on the allocation of the funds 
within the accounts listed in this chapter. The Secretary shall 
submit updated quarterly reports thereafter.
    The Committee also directs the Secretary of Defense to 
submit to the congressional defense committees, no later than 
January 31, April 30, and July 31, 2005, a comprehensive 
financial analysis and update for fiscal year 2005. This series 
of reports will detail both actual and projected obligation of 
appropriations provided in this Act for the continuation of the 
war in Iraq and Afghanistan.
    In certain limited areas, the Committee has provided funds 
in this chapter at a line item level of detail more general 
than in the other titles of the bill. Examples include funds 
for the Army's Rapid Fielding Initiative, funded in both 
operation and maintenance and procurement accounts, and various 
``miscellaneous equipment'' lines for the Marine Corps, Special 
Operations Forces, and the Guard and Reserve. This approach is 
intended to provide the military services with some degree of 
flexibility to respond to the needs of commanders in the field, 
provide support for service members, and to reconstitute units 
that return to their home stations. The Secretary of Defense is 
directed to provide a report to the congressional defense 
committees within 60 days of enactment of this legislation on 
the allocation of the funds within those line items, and submit 
updated quarterly reports thereafter. Additional discussion on 
this subject is provided elsewhere in this report.
    Finally, the Committee expects that in order to meet 
unanticipated requirements, the Department of Defense may need 
to transfer funds within those appropriations accounts for 
purposes other than those specified in this report. The 
Committee directs the Department of Defense to follow normal 
prior-approval reprogramming procedures should it be necessary 
to transfer funding between different appropriations accounts 
in this chapter.

                           Abuse of Prisoners

    The Committee is deeply troubled by the breakdown in 
training, supervision and discipline that resulted in the 
deplorable mistreatment of prisoners at the Abu Ghraib prison 
in Baghdad, Iraq. While investigations and the legal process 
continue, it is clear that the basic values inherent in 
American military conduct were ignored.
    Military unit structure and training must be specific to 
the tasks or missions to which the units will be assigned. 
Military unit design must be reinforced by close supervision, 
discipline, and rigorous training, including training on values 
and ethics. Readiness must be assessed by inspections. A 
reporting system that provides confidentiality and protection 
for personnel to report misdeeds must be available, and 
military personnel must be aware of the system.
    The Committee directs the Secretary of Defense to provide a 
report to the congressional defense committees not later than 
February 1, 2005, regarding military structure and job 
specialties for handling prisoners and managing prisons; the 
proper roles and separation of duties of military police, 
intelligence gathering officials, and civilian contractors; the 
training standards for those who handle prisoners; the 
responsibilities and interactions of supervisors between 
military and civilian personnel; the utility of internal 
controls; and the availability of a mechanism for junior 
personnel to report perceived abuses up the chain of 
supervision or command. The report shall address shortcomings 
discovered by Department of Defense investigations of this 
matter, and any corrective actions that will be implemented 
including changes in resource allocation.

                          INC FINANCIAL REVIEW

    The Committee directs that the Office of Management and 
Budget (OMB), with the cooperation of the Secretaries of State 
and Defense, and the Director of Central Intelligence, submit a 
comprehensive report (in both unclassified and classified 
forms, as appropriate) to the Committee on Appropriations, 
within 15 days of enactment of this legislation. This report 
shall describe in detail all United States government sources 
of funding, and the purposes of this funding, provided directly 
to or in support of the Iraqi National Congress (INC) since the 
enactment of the Iraqi Liberation Act in 1998 through fiscal 
year 2004. This report shall include delineation of funds by 
fiscal year and agency, including financial and other support 
provided by the Coalition Provisional Authority during its 
existence, and the intended purpose of such funding. This 
report should describe any anticipated U.S. government 
financial or other support for the INC for fiscal year 2005 and 
beyond. The report also should address military and security-
related training efforts in which INC-sponsored personnel were 
or are currently involved in, as well as funds used to support 
their activities or movements. The Committee further requests 
that OMB furnish to the Committee copies of any agency 
Inspector General audits, inspections, or other internal 
reports completed regarding these programs. The Committee 
requests that OMB consult with the Committee prior to beginning 
this effort.

                           Military Personnel

    The Committee recommends a total of $3,932,000,000 for the 
active duty military personnel accounts. Of the amount 
provided, the Committee provides $3,118,500,000 for first 
quarter incremental wartime costs of pays and allowances for 
active duty and Reserve personnel deployed in support of 
Operation Iraqi Freedom and Operation Enduring Freedom. Also 
included is $683,000,000 for costs of the services exceeding 
their mandated active duty end strength levels due to 
unprecedented retention levels and stop loss policies, and to 
support increased Army and Marine Corps end strength as 
provided for in the House-passed National Defense Authorization 
Act for Fiscal Year 2005. Finally, $130,500,000 is provided for 
Family Separation Allowance and Imminent Danger Pay.
    The following table provides details of the recommendations 
for the military personnel accounts:

                        [In thousands of dollars]

                                                          Recommendation
Military Personnel, Army:
    First quarter of incremental wartime costs..........      $2,200,000
    Army active duty overstrength.......................         162,000
    Increased active duty end strength..................         150,000
    Extension of Imminent Danger Pay....................           4,900
    Extension of Family Separation Pay..................          35,300
                    --------------------------------------------------------
                    ____________________________________________________
      Total Military Personnel, Army....................       2,552,200
                    ========================================================
                    ____________________________________________________
Military Personnel, Navy:
    First quarter of incremental wartime costs..........         204,000
    Extension of Imminent Danger Pay....................             700
    Extension of Family Separation Pay..................          27,500
                    --------------------------------------------------------
                    ____________________________________________________
      Total Military Personnel, Navy....................         232,200
                    ========================================================
                    ____________________________________________________
Military Personnel, Marine Corps:
    First quarter of incremental wartime costs..........         207,500
    Marine Corps overstrength and increased active duty 
      end strength......................................          50,000
    Extension of Imminent Danger Pay....................           2,400
    Extension of Family Separation Pay..................          13,300
                    --------------------------------------------------------
                    ____________________________________________________
      Total Military Personnel, Marine Corps............         273,200
                    ========================================================
                    ____________________________________________________
Military Personnel, Air Force:
    First quarter of incremental wartime costs..........         507,000
    Air Force active duty overstrength..................         321,000
    Extension of Imminent Danger Pay....................          16,500
    Extension of Family Separation Pay..................          29,900
                    --------------------------------------------------------
                    ____________________________________________________
      Total Military Personnel, Air Force...............         874,400
                    ========================================================
                    ____________________________________________________
      Total Military Personnel..........................       3,932,000

                       Operation and Maintenance

    The Committee recommends $14,335,400,000 for operation and 
maintenance accounts. Of this amount, $13,188,000,000 is 
provided for incremental operations and support costs of the 
war, critical field and depot maintenance, training, and base 
operations support, in accordance with requirements and 
priorities provided the Committee by the services.
    $1,148,000,000 is provided for individual soldier 
equipment, including force protection items--such as 
$538,000,000 for body armor. Funding is provided for the Rapid 
Fielding Initiative in the Army, and for Initial Issue 
Equipment in the Marine Corps to address critical requirements 
for basic soldier and Marine equipment such as hydration on the 
move gear, advanced combat helmets, desert boots, cold weather 
clothing, and ultra-lightweight camouflage net systems. Funds 
necessary to support Army Brigade Restructuring (also referred 
to as ``modularity'') transformation in the early months of 
fiscal year 2005 have also been included.
    The following table provides details of the recommendations 
for the operation and maintenance accounts:

                        [In thousands of dollars]

                                                          Recommendation
Operation and Maintenance, Army:
    Incremental Wartime Operating Costs.................      $9,789,750
    Depot Maintenance...................................         220,000
    Rapid Fielding Initiative...........................         610,000
    Interceptor Body Armor with Deltoid Auxiliary 
      Protection........................................         334,600
    Brigade Restructuring (Modularity) HMMWV Recap......          56,050
    Reset (Delayed Desert Damage 10/20).................         688,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Operation and Maintenance, Army.............      11,698,400
                    ========================================================
                    ____________________________________________________
Operation and Maintenance, Navy:
    Incremental Wartime Operating Costs.................         161,000
    Ship Depot Maintenance..............................          76,000
    Aircraft Depot Maintenance..........................          66,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Operation and Maintenance, Navy.............         303,000
                    ========================================================
                    ____________________________________________________
Operation and Maintenance, Marine Corps:
    Incremental Wartime Operating Costs.................       1,212,000
    Depot Maintenance...................................          43,000
    Initial Issue Including Body Armor..................          40,000
                    --------------------------------------------------------
                    ____________________________________________________
    Total Operation and Maintenance, Marine Corps.......       1,295,000
                    ========================================================
                    ____________________________________________________
Operation and Maintenance, Air Force:
    Incremental Wartime Operating Costs.................         600,000
    Interceptor Body Armor..............................         144,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Operation and Maintenance, Air Force........         744,000
                    ========================================================
                    ____________________________________________________
Operation and Maintenance, Defense-Wide:
    Incremental Wartime Operating Costs.................         226,000
    SOCOM Body Armor....................................          19,000
    DISA................................................          50,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Operation and Maintenance, Defense-Wide.....         295,000
                    ========================================================
                    ____________________________________________________
      Total Operation and Maintenance...................      14,335,400

                           Iraq Freedom Fund

    The Committee recommends $2,978,000,000 for the Iraq 
Freedom Fund, instead of $25,000,000,000 as proposed by the 
President. Of this amount, not less than $1,978,000,000 is 
available only for classified programs, which are described in 
a classified annex to this report.
    The Committee proposal provides substantial funding in the 
Iraq Freedom Fund to provide the Department of Defense with the 
capability to address emergent requirements. In particular, 
under this appropriation funds may be transferred to research, 
development test and evaluation accounts to support quick 
reaction development and fielding activities, especially those 
relating to force protection, such as countermeasures against 
improvised explosive devices.
    Consistent with direction in prior appropriations acts, 
funds in the Iraq Freedom Fund may not be transferred for 
obligation unless the Secretary of Defense notifies the 
congressional defense committees in writing of the details of 
any transfer from this account five days prior to transfer. The 
Secretary is also directed to submit a report not later than 30 
days after the end of each fiscal quarter to the congressional 
defense committees summarizing the details of the transfer of 
funds from this appropriation.

                              Procurement

    The Committee recommends a total of $2,199,600,000 for 
various procurement appropriations. Of this amount, over $1.2 
billion is provided for force protection and related equipment, 
including:
          $674,300,000 for Up-armored HMMWVs;
          $198,400,000 for Bolt-on Armor kits;
          $297,400,000 for Rapid Fielding Initiative equipment; 
        and
          $59,000,000 for aircraft survivability equipment.
    In addition, $417,800,000 is for ammunition, and over 
$300,000,000 is for additional equipment to equip the 
restructured Army brigades being stood up in 2004-2005. 
National Guard and Reserve forces will receive $100,000,000 for 
combat gear and support equipment, and Special Operations 
Forces $80,000,000.
    The Committee believes that the Army and Marine Corps 
should make every effort to ensure that this funding is 
provided in support of deployed units, or those scheduled for 
rotation to the theater, without regard as to whether they are 
in the active or reserve component.
    The following table provides details of the recommendations 
for the procurement accounts:

                        [In thousands of dollars]

                                                          Recommendation
Missile Procurement, Army:
    Javelin, Brigade Restructuring (Modularity).........         $42,800
                    --------------------------------------------------------
                    ____________________________________________________
      Total Missile Procurement, Army...................          42,800
                    ========================================================
                    ____________________________________________________
Procurement of Weapons and Tracked Combat Vehicles, 
    Army:
    XM-8 Assault Weapon, Brigade Restructuring 
      (Modularity)......................................          25,900
    Rapid Fielding Initiative...........................         166,600
    WTCV Procurement, Brigade Restructuring (Modularity)           9,400
                    --------------------------------------------------------
                    ____________________________________________________
      Total Procurement of WTCV, Army...................         201,900
                    ========================================================
                    ____________________________________________________
Procurement of Ammunition, Army:
    Small Arms Ammunition, Brigade Restructuring 
      (Modularity)......................................         315,000
    Flares, Aircraft Survivability......................          15,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Procurement of Ammunition, Army.............         330,000
                    ========================================================
                    ____________________________________________________
Other Procurement, Army:
    M1114 Up-Armor HMMWV, Force Protection..............         639,000
    Vehicle Bolt-on Armor and Emerging Requirements.....         132,400
    Rapid Fielding Initiative...........................         130,800
    Other Procurement, Brigade Restructuring 
      (Modularity)......................................         249,200
                    --------------------------------------------------------
                    ____________________________________________________
      Total Other Procurement, Army.....................       1,151,400
                    ========================================================
                    ____________________________________________________
Aircraft Procurement, Navy:
    Aircraft Survivability Equipment....................          34,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Aircraft Procurement, Navy..................          34,000
                    ========================================================
                    ____________________________________________________
Procurement of Ammunition, Navy and Marine Corps:
    Miscellaneous Ammunition............................         102,800
    Flares, Aircraft Survivability......................          10,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Procurement of Ammunition, Navy and Marine 
      Corps.............................................         112,800
                    ========================================================
                    ____________________________________________________
Procurement, Marine Corps:
    Miscellaneous Equipment.............................          45,400
    Bolt-on Armor Kits..................................          66,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Procurement, Marine Corps...................         111,400
                    ========================================================
                    ____________________________________________________
Other Procurement, Air Force:
    Up-Armored HMMWV....................................          35,300
                    --------------------------------------------------------
                    ____________________________________________________
      Total Other Procurement, Air Force................          35,300
                    ========================================================
                    ____________________________________________________
Procurement, Defense-Wide:
    SOCOM Miscellaneous Equipment.......................          80,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Procurement, Defense-Wide...................          80,000
                    ========================================================
                    ____________________________________________________
National Guard and Reserve Equipment:
    Miscellaneous Equipment for Deployment to OIF/OEF...         100,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total National Guard and Reserve Equipment........         100,000
                    ========================================================
                    ____________________________________________________
      Total Procurement.................................       2,199,600

                       Miscellaneous Procurement

    As discussed earlier in this report, in certain limited 
areas the Committee has provided for some degree of flexibility 
for the Army's Rapid Fielding Initiative, funded in both 
operation and maintenance and procurement accounts, and various 
``miscellaneous equipment'' lines for the Marine Corps, Special 
Operations Forces, and the Guard and Reserve.
    The Committee has provided $249,200,000 for Other 
Procurement, Army requirements related to the Army's Brigade 
Restructuring (Modularity) initiative. Among the items 
identified by the Army for possible procurement include 
communications equipment such as SINCGARS radios, other 
tactical radios, Joint Network Nodes, satellite communications 
hubs, and related equipment; equipment required for actionable 
intelligence including various DCGS-A items; and other 
equipment such as weapons sights and night vision equipment.
    The Committee has provided $45,400,000 for Procurement, 
Marine Corps for similar equipment required to conduct ongoing 
operations. Items identified by the Marine Corps include: 
targeting devices, tactical radios, jammers, night vision 
devices, and intelligence gathering and analysis equipment.
    The Committee has provided $80,000,000 in Procurement, 
Defense-Wide for equipment required for operations by Special 
Operations Forces. Examples of equipment identified by U.S. 
SOCOM include Critical Combat Mission Needs for Small Arms and 
Weapons, Communication Equipment and Electronics, Miscellaneous 
Equipment, SOF Operational Enhancements, Rotary Wing Upgrades 
and Sustainment, C-130 Modifications, Ammunition, and Equipment 
Reconstitution.
    The Committee has provided $100,000,000 for National Guard 
and Reserve equipment required for operations of deployed units 
of the Army National Guard and the Army and Marine Corps 
Reserve, and to reconstitute equipment lost or left behind by 
returning units. Examples of equipment identified by the Guard 
and Reserve include Night Vision devices, Decontamination Kits, 
M4 Carbines, M240B Machine Guns, other Small Arms, High 
Frequency Radios, Multi-band Super High Frequency Terminals, 
Movement and Tracking Systems, All Terrain Lifting Army 
Systems, Truck Rough Terrain Container Handlers, Global 
Positioning Systems, and Handheld Standoff Mine Detection 
Systems. The Committee intends that these funds shall be in 
addition to the amounts provided elsewhere in this chapter 
providing for equipment to deploying Guard and Reserve units.

                        Vehicle Force Protection

    Over the past year, the Committee observed the dramatic 
rise in the requirement for additional armored tactical and 
support vehicles, including armor kits for existing vehicles, 
as the threat to our troops in Iraq and Afghanistan from rocket 
propelled grenades and improvised explosive devices continued 
unabated. The Committee has long propounded the need for these 
vehicles and has provided increased funding for them in past 
appropriations acts. Once again, the Committee has acted to 
address the need for armored vehicles by recommending an 
increase of $674,300,000 to purchase additional up-armored 
HMMWVs and $198,400,000 for additional bolt-on armor kits 
within appropriations accounts under this title.
    The Committee remains concerned that the heretofore 
haphazard approach to procuring armored vehicles resulted in 
increased risk to our troops in the field. To help quantify 
that risk and spur development of a clear policy for procuring 
armored vehicles, the Committee directs the Secretary of 
Defense to provide a report to the congressional defense 
committees that answers the following questions:
    1. What is the Department's policy for purchasing armored 
vehicles, and how does the Department determine what percentage 
of the total vehicle fleet must be armored?
    2. What factors have been used to set that policy, and when 
was it last updated?
    3. What long-range plans does the Department have for 
purchasing armored vehicles and what funding has been allocated 
for that purpose?
    4. What studies have been conducted by the Department or 
outside parties that characterize and/or quantify the 
protection provided by armored vehicles (versus non-armored 
vehicles) in the face of threats from rocket propelled 
grenades, improvised explosive devices, small arms fire and 
similar types of weapons?
    5. How many U.S. casualties have been caused by these types 
of weapons; how many of these casualties were experienced by 
troops in non-armored vehicles; and how many of these 
casualties could have been avoided or minimized had the troops 
been using armored vehicles?
    This report should be submitted (in unclassified and 
classified form, as appropriate) to Congress not later than 
November 15, 2004. The Committee intends to continue to work 
with the Department on this matter.

                     Defense Working Capital Funds

    The Committee recommends an additional $1,250,000,000 for 
the Defense Working Capital Funds. This increase is recommended 
due to more recent, accurate estimates of fuel price increases 
as well as requirements in such programs as war reserves, spare 
parts, unused plant capacity, and fuel facilities studies.
    The continued need to supplement funds due to repeated 
under-pricing of fuel is of grave concern to the Committee. 
Admittedly, recent fuel price increases have exceeded 
forecasts, but the Committee believes part of this problem is 
due to the Department, under Office of Management and Budget 
guidance, failing to accurately estimate and budget for fuel 
price fluctuations. This must be corrected. Accordingly, the 
Committee directs the Secretary of Defense to provide a report 
by November 15, 2004, to the congressional defense committees 
on corrective actions being taken to improve fuel price 
estimates.

                         Defense Health Program

    The Committee recommends $305,000,000 for the Defense 
Health Program. These funds will cover additional costs 
incurred by the military medical system, including costs 
associated with improving medical readiness for Ready Reserve 
members, and TRICARE eligibility for mobilized members of the 
Reserve Component and their families during pre-mobilization 
and the transition back to Reserve Component status.
    The Committee is determined to provide the best possible 
health care for the Reserve Component. Unfortunately the 
Department has failed to fully implement the provisions that 
were established in Public Law 108-136. Funds provided by the 
Committee are to meet these requirements, as well as related 
initiatives included in the House-passed version of the 
National Defense Authorization Act for Fiscal Year 2005.

               Outsourcing Oversight of Defense Contracts

    The Committee is deeply concerned about the outsourcing of 
oversight responsibilities with respect to Iraq reconstruction 
contracts. The Coalition Provisional Authority (CPA) has 
awarded ten contracts worth $5.1 billion for the reconstruction 
of various sectors in Iraq. These contracts are cost-plus, 
single-award, indefinite-delivery/indefinite-quantity 
contracts. These types of contracts are typically awarded to 
multiple contractors to ensure competition, yet each of the 
Iraq reconstruction contracts was awarded to a single 
contractor.
    With billions of dollars at stake and the unique nature of 
the reconstruction contracts, effective oversight is critically 
important to prevent waste, fraud, and abuse. The Committee has 
been advised that the CPA awarded seven program management 
contracts that assign oversight responsibilities for U.S. 
reconstruction contracts to private companies. Delegating 
oversight responsibilities to private contractors is 
potentially troublesome and should only be done if: (1) 
appropriate Federal personnel are not available to perform the 
oversight functions; (2) appropriate Federal personnel 
supervise the contract and perform all inherently governmental 
functions and; (3) the contractor does not have an 
organizational conflict of interest or the appearance of such a 
conflict of interest in the performance of the contract.
    The Committee, however, is concerned that several of the 
private contractors awarded oversight contracts may have 
substantial ongoing commercial relationships with the companies 
they are charged with overseeing. The Committee strongly 
believes the Department should comply with the above conditions 
before entering into any such oversight contracts. Further, the 
Committee intends to pursue this matter to ensure proper 
oversight is given to contracting activities in Iraq and 
elsewhere.

                               CHAPTER 2


                          DEPARTMENT OF STATE


                   Administration of Foreign Affairs


                    DIPLOMATIC AND CONSULAR PROGRAMS

    The Committee recommendation includes $665,300,000 for 
necessary expenses for the operations of the United States 
Mission in Iraq, including $240,000,000 for logistical support, 
$18,800,000 for the costs of worldwide OpenNet and classified 
connectivity infrastructure, $70,000,000 for the State 
Department operations in Iraq, and $336,500,000 for the 
security-related costs, including equipment, armored vehicles, 
protective detail and contract support. Language is included 
designating funding for emergency and overseas contingency 
operations. For purposes of Section 402(a)(2) of S. Con. Res. 
95 (108th Congress), as made applicable to the House of 
Representatives by H. Res 649 (108th Congress), funds provided 
under this heading are provided in response to a situation 
which poses a direct threat to U.S. personnel and property, is 
sudden, is an urgent and compelling need, is unpredictable, and 
is not permanent in nature.

            EMBASSY SECURITY, CONSTRUCTION, AND MAINTENANCE

    The Committee recommendation includes $20,000,000 for 
necessary expenses of securing interim United States Mission 
facilities in Iraq. Language is included designating funding 
for emergency and overseas contingency operations. For purposes 
of Section 492(a)(2) of S. Con. Res. 95 (108th Congress), as 
made applicable to the House of Representatives by H. Res. 649 
(108th Congress), funds provided under this heading are 
provided in response to a situation which poses a direct threat 
to U.S. personnel and property, is sudden, is an urgent and 
compelling need, is unpredictable, and is not permanent in 
nature.

                               CHAPTER 3


                     BILATERAL ECONOMIC ASSISTANCE


                  FUNDS APPROPRIATED TO THE PRESIDENT


           United States Agency for International Development


              INTERNATIONAL DISASTER AND FAMINE ASSISTANCE

    The Committee recommendation includes $70,000,000 for 
necessary expenses to respond to the humanitarian crisis in the 
Darfur region of Sudan and in Chad. Language is included 
designating funding for emergency and overseas contingency 
operations.
    For purposes of Section 402(a)(2) of S. Con. Res. 95 (108th 
Congress), as made applicable to the House of Representatives 
by H. Res. 649 (108th Congress), funds provided under this 
heading are provided in response to a situation which poses a 
direct threat to life and property, is sudden, is an urgent and 
compelling need, is unpredictable, and is not permanent in 
nature.

                          Department of State


                    MIGRATION AND REFUGEE ASSISTANCE

    The Committee recommendation includes $25,000,000 for 
necessary expenses to respond to the humanitarian crisis in the 
Darfur region of Sudan and in Chad. Language is included 
designating funding for emergency and overseas contingency 
operations.
    For purposes of Section 402(a)(2) of S. Con. Res. 95 (108th 
Congress), as made applicable to the House of Representatives 
by H. Res. 649 (108th Congress), funds provided under this 
heading are provided in response to a situation which poses a 
direct threat to life and property, is sudden, is an urgent and 
compelling need, is unpredictable, and is not permanent in 
nature.

                     GENERAL PROVISIONS--THIS TITLE

    Title IX of the Committee bill contains fifteen general 
provisions. Several of these extend or modify war-related 
authorities included in Public Law 108-106, enacted in November 
2004. These include extending until September 30, 2005 higher 
levels of Family Separation Allowance and Imminent Danger Pay, 
travel reimbursement for the families of hospitalized service 
members, and clothing allowances. The Committee bill also 
includes certain authorities providing for war-related support 
to allied forces, and training and equipping Iraqi and Afghan 
military and security forces.
    In April 2004, the Administration requested that the 
congressional defense committees provide legislative authority 
for a new program called the Global Peace Operations 
Initiative. The House Armed Services Committee has addressed 
this matter, in both the House-passed version of the National 
Defense Authorization Act for Fiscal Year 2005 (H.R. 4200) and 
its accompanying report (House Report 108-491). Section 1213 of 
that bill directs the Administration provide additional 
information to the Congress. The requested legislative 
authority for this program was denied.
    The Committee strongly agrees with the concerns expressed 
by the House Armed Services Committee and does not recommend 
providing the requested legislative authority. The Committee 
directs that those reports required by section 1213 of the 
authorization bill also be provided to the Subcommittees on 
Defense and Foreign Operations of the Committee on 
Appropriations. The Committee also suggests that, should this 
program be requested in any future budget, the funds required 
for implementation be included in the budget request.
    A description of the recommended general provisions 
follows.
    Section 9001 establishes the period of availability for 
obligation for appropriations and provides that funds in title 
IX are available for obligation upon enactment of this Act.
    Section 9002 has been included which provides that funds 
made available in title IX are in addition to amounts provided 
elsewhere in this Act.
    Section 9003 provides for transfer between appropriations 
of up to $2,000,000,000 of the funds in title IX, for the 
Department of Defense establishes notification requirements, 
and provides that transfer authority in this section is in 
addition to any other transfer authority available to the 
Department of Defense, and is subject to the same terms and 
conditions as provided in section 8005 of this Act. This 
section also amends section 8005 of the Department of Defense 
Appropriations Act, 2004, to increase transfer authority to 
$3,000,000,000, excludes transfers among military personnel 
appropriations from counting against this limitation, and 
repeals section 168(a) of division H of Public Law 108-199.
    Section 9004 deems funds appropriated or made available by 
transfer in title IX for intelligence activities to be 
authorized by the Congress.
    Section 9005 provides that none of the funds in title IX 
may be used to finance programs or activities denied by 
Congress, or to initiate a new start without prior 
congressional notification.
    Section 9006 provides that Sections 1318 and 1319 of the 
Emergency Wartime Supplemental Appropriations Act, 2003, shall 
remain in effect for fiscal year 2005.
    Section 9007 establishes certain military pay rates from 
October 1, 2004 through September 30, 2005.
    Section 9008 provides that not to exceed $500,000,000 of 
operation and maintenance funds made available in title IX may 
be used to train and equip military or security forces in Iraq 
and Afghanistan to include the provision of supplies and 
equipment, that such authority is in addition to other 
authority to provide assistance, and provides for congressional 
notification.
    Section 9009 makes available $300,000,000 of operation and 
maintenance funds provided by title IX to fund the Commander's 
Emergency Response Fund, and provides for quarterly reports to 
the congressional defense committees.
    Section 9010 amends Section 202(b) of the Afghanistan 
Freedom Support Act by increasing the amount to $650,000,000.
    Section 9011 provides that operation and maintenance funds 
in title IX may be used to provide supplies, services, and 
transportation to coalition forces supporting military 
operations in Iraq and Afghanistan, and provides for quarterly 
reports.
    Section 9012 provides that the Secretary of Defense shall 
submit semi-annual reports on the military operations of the 
Armed Forces and reconstruction activities of the Department of 
Defense in Iraq and Afghanistan.
    Section 9013 has been included regarding certain transfer, 
reprogramming, and other authorities applicable to amounts 
provided in this title for the Department of State.
    Section 9014 has been included in which the Congress 
reaffirms that torture of prisoners of war and detainees is 
illegal and does not reflect the policies of the United States 
Government or the values of the people of the United States.
    Section 9015 has been included which requires the President 
to provide to the Congress, no later than October 1, 2004, a 
report detailing the estimated costs from fiscal year 2006 to 
2011 of Operation Iraqi Freedom and Operation Enduring Freedom, 
including reconstruction, security and support costs.
            HOUSE OF REPRESENTATIVES REPORTING REQUIREMENTS

    The following items are included in accordance with various 
requirements of the Rules of the House of Representatives:

               Changes in the Application of Existing Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following statements are 
submitted describing the effect of provisions in the 
accompanying bill which directly or indirectly change the 
application of existing law.
    Language is included in various parts of the bill to 
continue on-going activities which require annual authorization 
or additional legislation, which to date has not been enacted.
    The bill includes a number of provisions which place 
limitations on the use of funds in the bill or change existing 
limitations and which might, under some circumstances, be 
construed as changing the application of existing law.
    The bill includes a number of provisions, which have been 
virtually unchanged for many years, that are technically 
considered legislation.
    The bill provides that appropriations shall remain 
available for more than one year for some programs for which 
the basic authorizing legislation does not presently authorize 
each extended availability.
    In various places in the bill, the Committee has earmarked 
funds within appropriation accounts in order to fund specific 
programs, and has adjusted some existing earmarking.
    Those additional changes in the fiscal year 2005 bill, 
which might be interpreted as changing existing law, are as 
follows:

                        APPROPRIATIONS LANGUAGE

    Language has been amended in ``Operation and Maintenance, 
Army'' which changes the amount provided for emergency and 
extraordinary expenses.
    Language has been amended in ``Operation and Maintenance, 
Navy'' which changes the amount provided for emergency and 
extraordinary expenses.
    Language has been amended in ``Operation and Maintenance, 
Air Force'' which changes the amount provided for emergency and 
extraordinary expenses.
    Language has been amended in ``Operation and Maintenance, 
Defense-Wide'' which changes the name of the ``CINC Initiative 
Fund'' to ``Combatant Commander Initiative Fund''; amends the 
earmark for funds available to the Combatant Commander 
Initiative Fund; changes the amount provided for emergency and 
extraordinary expenses; includes language which earmarks funds 
for an internship program for university students to 
participate in Defense educational programs; and amends the 
amount available for expenses relating to certain classified 
activities.
    Language has been amended in ``Operation and Maintenance, 
Air National Guard'' with changes designed to make this 
appropriations paragraph consistent with the ``Operation and 
Maintenance, Army National Guard'' appropriations paragraph.
    Language has been amended in ``United States Court of 
Appeals for the Armed Forces'' which changes the amount that 
may be provided for official representation purposes.
    Language has been amended in ``Overseas Humanitarian, 
Disaster, and Civic Aid'' which changes a title 10 citation in 
this paragraph.
    The appropriations paragraph ``Former Soviet Union Threat 
Reduction'' was amended to include the word ``Account'' in the 
title; and language has been deleted which earmarks funds for 
dismantling and disposal of nuclear submarines.
    Language has been included in the Army's procurement 
accounts which earmarks funds for the Army Reserve and Army 
National Guard.
    Language has been deleted in ``Procurement of Weapons and 
Tracked Combat Vehicles, Army'' which earmarks funds for the 
Stryker Brigade Combat Teams.
    Language has been deleted in ``Other Procurement, Army'' 
concerning the purchase of vehicles required for physical 
security of personnel.
    Language has been included in the Navy and Marine Corps' 
procurement accounts which earmarks funds for the Navy Reserve 
and Marine Corps Reserve.
    Language has been deleted in ``Other Procurement, Navy'' 
concerning the purchase of vehicles required for physical 
security of personnel; and includes language which allows funds 
to be available for TRIDENT modifications associated with force 
protection and security requirements.
    Language has been included in the Air Force's procurement 
accounts which earmarks funds for the Air Force Reserve and Air 
National Guard.
    Language has been included in ``Aircraft Procurement, Air 
Force'' with regard to the procurement of C-17 aircraft.
    Language has been deleted in ``Other Procurement, Air 
Force'' concerning the purchase of vehicles required for 
physical security of personnel.
    Language has been deleted in ``Procurement, Defense-Wide'' 
concerning the purchase of vehicles for the Defense Security 
Service and vehicles required for physical security of 
personnel.
    The appropriations account ``National Guard and Reserve 
Equipment'' has been deleted.
    Language has been amended in ``Research, Development, Test 
and Evaluation, Army'' which earmarks $10,000,000 for Molecular 
Genetics and Musculoskeletal Research.
    Language has been deleted in ``National Defense Sealift 
Fund'' which earmarks funds for the cost of constructing 
additional sealift capacity.
    Language has been deleted in ``Defense Health Program'' 
which earmarks funds for contracts entered into under the 
TRICARE program; includes language which earmarks $11,000,000 
for Army Fisher Houses; earmarks $10,000,000 for HIV prevention 
programs; and includes language concerning funds for HIV 
prevention programs in the Department of Defense Appropriations 
Act, 2004.
    Language has been deleted in ``Chemical Agents and 
Munitions Destruction, Army'' which earmarks funds only for 
Chemical Stockpile Emergency Preparedness Program evacuation 
route improvements.
    Language has been amended in ``Intelligence Community 
Management Account'' which earmarks $26,953,000 for the 
Advanced Research and Development Committee; and which 
transfers $46,100,000 to the Department of Justice.
    The appropriations account ``Payment to Kaho'olawe Island 
Conveyance, Remediation, and Environmental Restoration Fund'' 
has been deleted.
    Language has been included in Title IX which provides 
$25,000,000,000 to certain appropriations accounts for 
additional war related expenses for ongoing military operations 
in Iraq and Afghanistan.
    Language has been included in Title IX in the ``Iraq 
Freedom Fund'' that provides for the transfer of funds into and 
out of this account; provides that no less than $1,978,000,000 
be for classified programs; requires the Secretary of Defense 
to notify the congressional defense committees prior to making 
transfers from this appropriation; and requires the Secretary 
of Defense to report quarterly on the transfer of funds from 
this appropriation.

                           GENERAL PROVISIONS

    Section 8005 has been amended which increases the level of 
general transfer authority for the Department of Defense, and 
provides that transfers between military personnel 
appropriations shall not be taken into account for purposes of 
the limitation of funds which may be transferred under this 
section.
    Section 8008 has been amended to include language which 
provides multiyear authority for Lightweight 155mm Howitzer; 
and includes language which prohibits funds to be used for a 
multiyear contract unless certain conditions are met.
    Section 8014 has been amended to prohibit an offeror from 
gaining a competitive advantage by not including a health care 
plan, or contributing less for employee health care than the 
amount paid by the Department of Defense for health care for 
employees.
    Section 8015 has been amended which changes a title 10 
citation in this provision.
    Section 8018 has been amended to include language to make 
permanent the provision concerning residual value amounts.
    Section 8024 has been amended to include language to make 
permanent the provision which allows the Secretary of Defense 
to adjust wage rates for civilian employees hired for health 
care occupations.
    Section 8027 has been amended which earmarks $24,822,000 
for the Civil Air Patrol Corporation; and deletes language 
which earmarks funds for administrative expenses incurred by 
the Air Force.
    Section 8028 has been amended to change the number of staff 
years of technical effort that may be funded for defense 
Federally Funded Research and Development Centers (FFRDCs); 
includes language which provides a waiver for the staff years 
funded in the National Foreign Intelligence Program; deletes 
language on the number of staff years that may be funded for 
defense studies and analysis by FFRDCs; and amends the amount 
for reduction for FFRDCs.
    Section 8033 has been amended to include language to make 
permanent the provision that allows funds available at the end 
of a fiscal year due to energy cost savings to remain available 
for the next fiscal year.
    Section 8034 has been amended to include language to make 
permanent the provision concerning non-excess property leases.
    Section 8036 has been amended to include language to make 
permanent the provision that allows funds available in ``Drug 
Interdiction and Counter-Drug Activities, Defense'' to be 
available for the ``Young Marines program''.
    Section 8048 has been amended to include language which 
rescinds $399,750,000 from the following programs:

2003 Appropriations:
    Former Soviet Union Threat Reduction: Unobligated 
      balances..........................................     $50,000,000
2004 Appropriations:
    Aircraft Procurement, Navy: Modification of Aircraft 
      (T-38)............................................       2,900,000
    Shipbuilding and Conversion, Navy: SNN ERO (SNN 716)      10,300,000
    Other Procurement, Navy: Minesweeping Replacement...       5,200,000
    Other Procurement, Air Force: Classified Programs...     100,000,000
    Procurement, Defense-Wide: ASDS Advanced Procurement      23,400,000
    Research, Development, Test and Evaluation, Army:
        MEADS...........................................      41,650,000
        Biomedical Engineering Technology and Advanced 
          Material......................................       1,000,000
    Research, Development, Test and Evaluation, Navy: 
      Unmanned Combat Aerial Vehicle....................      20,000,000
    Research, Development, Test and Evaluation, Air 
      Force:
        Unmanned Combat Aerial Vehicle..................      15,000,000
        Classified Programs.............................       9,000,000
        ADV Polar.......................................      13,000,000
    Research, Development, Test and Evaluation, Defense-
      Wide:
        Center for Information Assurance................       2,100,000
        Airborne Laser..................................      74,700,000
        RAMOS...........................................      31,500,000

    Section 8051 has been amended to include language to make 
permanent the provision that allows funds appropriated for the 
Department of Defense to be available to compensate National 
Guard personnel for State counter-drug activities.
    Section 8056 has been amended to include language to make 
permanent the provision that allows for the transfer of funds 
to other Department of Defense appropriations for projects 
related to increasing energy and water efficiency in Federal 
buildings.
    Section 8063 has been amended to include language to make 
permanent the provision that allows the Secretary of Defense to 
issue loan guarantees in support of United States defense 
exports.
    Section 8067 has been amended to include language to make 
permanent the provision permitting the obligation at the time a 
reimbursable order is accepted for funds appropriated in title 
II of this Act and for the Defense Health Program in title VI 
for supervision and administration costs for facilities 
maintenance or similar support functions.
    Section 8079 has been amended to include language to make 
permanent the provision that refunds attributable to the use of 
Government travel cards and purchase cards may be credited to 
the Operation and maintenance and Research, development, test 
and evaluation accounts.
    Section 8086 has been amended to change the dollar amount 
available for transfer, and deletes subsection (b) providing 
for additional transfers.
    Section 8088 has been amended which provides funds for a 
grant to the Fisher House Foundation; and deletes language 
which provided funds to the Services for support and upkeep of 
existing Fisher Houses.
    Section 8089 has been amended which reduces funds available 
in Operation and Maintenance accounts by $300,000,000 to 
reflect savings attributable to efficiencies and management 
improvements in the funding of the Services' miscellaneous or 
other contracts.
    Section 8090 has been amended which changes the amount 
available under ``Research, Development, Test and Evaluation, 
Defense-Wide'' for the Arrow missile defense program; and 
amends the amount available for producing Arrow missile 
components in the United States and Arrow missile components 
and missiles in Israel to meet Israel's defense requirements.
    Section 8091 has been included which provides that the 
Secretary of the Navy shall make certain grants related to 
ongoing research in support of the Office of Naval Research.
    Section 8092 has been amended which reduces the amount 
available for transfer to fund increases in the cost of prior 
year shipbuilding programs.
    Section 8094 has been amended to include language to make 
permanent the provision that allows appointments of healthcare 
professionals only after the individual has a recognized degree 
from an accredited institution and successfully completed a 
clinical education program affiliated with the Department.
    Section 8096 has been amended which reduces funds available 
in title IV of this Act by $270,000,000 to reduce cost growth 
in information technology development and modernization.
    Section 8098 has been amended which reduces funds available 
in Operation and Maintenance accounts by $316,000,000 to 
reflect cash balance and rate stabilization adjustments in 
Defense Working Capital Funds.
    Section 8099 has been amended which provides $6,000,000 in 
``Operation and Maintenance, Army National Guard'' only for a 
grant to the Center for Military Recruitment, Assessment and 
Veterans Employment.
    Section 8100 has been amended which requires the Army to 
program and budget for fielding the Non-Line of Sight Cannon 
element of the Future Combat System by fiscal year 2010, and 
requires the Army to program and budget for no fewer than seven 
Stryker Brigade Combat Teams.
    Section 8101 has been amended which provides grants to the 
Intrepid Sea-Air-Space Foundation, the Presidio Trust and the 
Fort Ticonderoga Association.
    Section 8108 has been amended which provides for certain 
land conveyances at the former Norton Air Force Base.
    Section 8109 has been amended which reduces funds available 
in titles III and IV of this Act by $345,000,000 to reflect 
savings from revised economic assumptions; and deletes language 
which exempts military personnel pay and benefits from 
reductions under this provision.
    Section 8110 has been amended which reduces funds available 
in ``Operation and Maintenance, Air Force'' by $967,200,000 to 
reflect cash balance and rate stabilization adjustments in 
Defense Transportation Working Capital Fund.
    Section 8111 has been amended to include new restrictions 
on the use of intelligence funding.
    Section 8112 has been amended providing that subsection 
8149(b) of the Department of Defense Appropriations Act, 2003, 
which requires a credit worthiness evaluation of an individual 
prior to the issuance of a government charge card, shall remain 
in effect for fiscal year 2005.
    Section 8113 has been included which provides for the 
purchase of heavy and light armored vehicles for force 
protection purposes, and requires notification to Congress.
    Section 8114 has been included which earmarks funds in 
``Operation and Maintenance, Marine Corps'' for the Secretary 
of the Navy to enter into a contract for road improvements at 
the Twentynine Palms, California installation.
    Section 8115 has been included which appropriates 
$3,000,000 to ``Operation and Maintenance, Marine Corps'', for 
a health demonstration project at the Marine Corps Air and 
Ground Combat Center.
    Section 8116 has been included concerning the conveyance of 
a former Army Reserve Training Center to the city of Wooster, 
Ohio.
    Section 8117 has been included which requires members of 
Reserve components to be notified in writing of the expected 
period for which the military member will be mobilized.
    Section 8118 has been included which provides for the 
transfer of funds from any available Navy appropriation to any 
available ship construction program, and repeals Section 126 of 
Public Law 108-136.
    Section 8119 has been included which reduces funds 
available in title II of this Act by $100,000,000 to reflect 
savings attributable to the offsetting of payments to 
contractors for the collection of unpaid taxes.
    Section 8120 has been included which reduces funds 
available in title IV of this Act by $685,000,000 for non-
statutory funding set asides.
    Section 8121 has been included which establishes a Tanker 
Replacement Transfer Fund, and appropriates $100,000,000 to 
said Fund.
    Section 8122 has been included which prohibits using funds 
in this Act to amend or cancel the Department of Defense 
Directive on personal commercial solicitation on military 
installations, until one year after the General Accounting 
Office provides a report on the regulations governing the sale 
of life insurance policies to military personnel, and policies 
and procedures for processing financial allotments.
    An explanation for each of the general provisions included 
in Title IX of the bill are provided in that Title.

                  Appropriations Not Authorized by Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following table lists the 
appropriations in the accompanying bill which are not 
authorized by law:

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                 Appropriations
               Agency/program                   Last year of    Authorization   in last year of   Appropriations
                                               authorization        level        authorization     in this bill
----------------------------------------------------------------------------------------------------------------
Military Personnel, Army....................             2004            (\1\)       28,247,667       29,507,672
Military Personnel, Navy....................             2004            (\1\)       23,217,298       24,416,157
Military Personnel, Marine Corps............             2004            (\1\)        8,971,897        9,591,102
Military Personnel, Air Force...............             2004            (\1\)       22,910,868       24,291,411
Reserve Personnel, Army.....................             2004            (\1\)        3,568,725        3,719,990
Reserve Personnel, Navy.....................             2004            (\1\)        2,002,727        2,108,232
Reserve Personnel, Marine Corps.............             2004            (\1\)          571,444          653,073
Reserve Personnel, Air Force................             2004            (\1\)        1,288,088        1,451,950
National Guard Personnel, Army..............             2004            (\1\)        5,500,369        5,915,229
National Guard Personnel, Air Force.........             2004            (\1\)        2,174,598        2,536,742
Operation and Maintenance, Army.............             2004       24,627,037       25,029,346       25,820,311
Operation and Maintenance, Navy.............             2004       27,975,559       28,146,658       29,570,090
Operation and Maintenance, Marine Corps.....             2004        3,426,056        3,440,323        3,605,815
Operation and Maintenance, Air Force........             2004       26,089,670       26,904,731       27,994,110
Operation and Maintenance, Defense-Wide.....             2004       16,243,157       16,226,841       17,346,411
Operation and Maintenance, Army Reserve.....             2004        1,966,009        1,998,609        1,976,128
Operation and Maintenance, Navy Reserve.....             2004        1,171,921        1,172,921        1,233,038
Operation and Maintenance, Marine Corps                  2004          173,952          173,952          187,196
 Reserve....................................
Operation and Maintenance, Air Force Reserve             2004        2,179,188        2,179,388        2,227,190
Operation and Maintenance, Army National                 2004        4,256,331        4,340,581        4,376,886
 Guard......................................
Operation and Maintenance, Air National                  2004        4,406,146        4,431,216        4,438,738
 Guard......................................
Overseas Contingency Operations Transfer                 2004            5,000            5,000            5,000
 Account....................................
United States Court of Appeals for the Armed             2004           10,333           10,333           10,825
 Forces.....................................
Environmental Restoration, Army.............             2004          396,018          396,018          400,948
Environmental Restoration, Navy.............             2004          256,153          256,153          266,820
Environmental Restoration, Air Force........             2004          384,307          384,307          397,368
Environmental Restoration, Defense-Wide.....             2004           24,081           24,081           26,684
Environmental Restoration, Formerly Used                 2004          252,619          284,619          216,516
 Defense Sites..............................
Overseas Humanitarian, Disaster, and Civic               2004           59,000           59,000           59,000
 Aid........................................
Former Soviet Union Threat Reduction Account             2004          450,800          450,800          409,200
Aircraft Procurement, Army..................             2004        2,098,985        2,154,035        3,107,941
Missile Procurement, Army...................             2004        1,549,462        1,505,462        1,327,000
Procurement of Weapons & Tracked Combat                  2004        1,997,304        1,857,054        2,773,695
 Vehicles, Army.............................
Procurement of Ammunition, Army.............             2004        1,413,305        1,387,759        1,608,302
Other Procurement, Army.....................             2004        4,365,246        4,774,452        4,868,371
Aircraft Procurement, Navy..................             2004        9,009,948        9,110,848        8,841,824
Weapons Procurement, Navy...................             2004        2,233,534        2,095,784        1,993,754
Procurement of Ammunition, Navy and Marine               2004          924,355          934,905          885,340
 Corps......................................
Shipbuilding and Conversion, Navy...........             2004       11,729,984       11,467,623       10,189,327
Other Procurement, Navy.....................             2004        4,739,143        4,941,098        4,980,325
Procurement, Marine Corps...................             2004        1,123,499        1,165,727        1,462,703
Aircraft Procurement, Air Force.............             2004       12,035,151       12,086,201       13,289,984
Missile Procurement, Air Force..............             2004        4,298,505        4,165,633        4,425,013
Procurement of Ammunition, Air Force........             2004        1,284,725        1,262,725        1,346,557
Other Procurement, Air Force................             2004       11,631,859       11,558,799       13,199,607
Procurement, Defense-Wide...................             2004        3,768,506        3,709,926        3,028,033
National Guard and Reserve Equipment........             2004                0          400,000                0
Defense Production Act Purchases............             2004                0           78,016           27,015
Research, Development, Test and Evaluation,              2004        9,544,833       10,363,941       10,220,123
 Army.......................................
Research, Development, Test and Evaluation,              2004       14,845,503       15,146,383       16,532,361
 Navy.......................................
Research, Development, Test and Evaluation,              2004       20,555,667       20,500,984       21,033,622
 Air Force..................................
Research, Development, Test and Evaluation,              2004       18,438,718       18,900,715       20,851,271
 Defense-Wide...............................
Operational Test and Evaluation, Defense....             2004          286,661          305,861          309,135
Defense Working Capital Funds...............             2004          632,261        1,641,507        1,174,210
National Defense Sealift Fund...............             2004        1,062,762        1,066,462        1,186,626
Defense Health Program......................             2004       15,401,509       15,730,013       17,959,186
Chemical Agents & Munitions Destruction,
 Army:
    Operation and maintenance...............             2004        1,199,168        1,169,168        1,138,801
    Procurement.............................             2004           79,212           79,212           78,980
    Research, development, test and                      2004          251,881          251,881          154,209
     evaluation.............................
Drug Interdiction and Counter-Drug                       2004          817,371          835,616          876,697
 Activities, Defense........................
Office of Inspector General.................             2004          162,449          162,449          193,562
CIA Retirement & Disability System Fund.....             2004          226,400          226,400          239,400
Intelligence Community Management Account...             2004  ...............          175,113          309,664
    Transfer to Dept of Justice.............             2004                0         (44,300)         (46,100)
National Security Education Trust Fund......             2004            8,000            8,000            8,000
Sec. 8005...................................             2004  ...............      (2,100,000)      (3,000,000)
Sec. 8021...................................             2004  ...............            8,000            8,000
Sec. 8028...................................             2004  ...............          -74,200          -40,000
Sec. 8034...................................             2004  ...............           31,000           25,000
Sec. 8037...................................             2004  ...............            1,331            1,000
Sec. 8048...................................             2004  ...............         -325,560         -399,750
Sec. 8079...................................             2004  ...............           44,000           44,000
Sec. 8101...................................             2004  ...............           34,950            6,600
Sec. 8088...................................             2004  ...............            3,800            2,000
Sec. 8089...................................             2004  ...............         -504,500         -300,000
Sec. 8096...................................             2004  ...............         -200,000         -270,000
Sec. 8098...................................             2004  ...............         -372,000         -316,000
Sec. 8099...................................             2004  ...............            5,500            6,000
Sec. 8110...................................             2004  ...............         -451,000         -967,200
Sec. 8109...................................             2004  ...............       -1,662,000         -345,000
Sec. 8115...................................             2004  ...............                0            3,000
Sec. 8119...................................             2004  ...............                0         -100,000
Sec. 8120...................................             2004  ...............                0         -685,000
Sec. 8121...................................             2004  ...............                0          100,000
Title IX, Department of Defense.............             2004  ...............                0       25,000,000
Title IX, Department of State,                           2003        5,133,390        5,098,804          685,300
 Administration of Foreign Affairs..........
Title IX, International Disaster and Famine              1987           25,000           70,000           70,000
 Assistance.................................
Title IX, Migration and Refugee Assistance..             2001          750,000          700,000           25,000
----------------------------------------------------------------------------------------------------------------
\1\ The FY 2004 National Defense Authorization Act authorizes $98,908,400 for military personnel.

                           Transfer of Funds

    Pursuant to clause 3(f)(2) of rule XIII of the Rules of the 
House of Representatives, the following is submitted describing 
the transfer of funds provided in the accompanying bill.

                               TRANSFERS

    Language has been included in ``Operation and Maintenance, 
Army'' which provides for the transfer of funds to Fort Baker.
    Language has been included in ``Operation and Maintenance, 
Defense-Wide'' which provides for the transfer of funds 
relating to classified activities.
    Language has been included in ``Overseas Contingency 
Operations Transfer Account'' which provides for the transfer 
of funds out of and into this account.
    Language has been included in ``Environmental Restoration, 
Army'' which provides for the transfer of funds out of and into 
this account.
    Language has been included in ``Environmental Restoration, 
Navy'' which provides for the transfer of funds out of and into 
this account.
    Language has been included in ``Environmental Restoration, 
Air Force'' which provides for the transfer of funds out of and 
into this account.
    Language has been included in ``Environmental Restoration, 
Defense-Wide'' which provides for the transfer of funds out of 
and into this account.
    Language has been included in ``Environmental Restoration, 
Formerly Used Defense Sites'' which provides for the transfer 
of funds out of and into this account.
    Language has been included in ``Drug Interdiction and 
Counter-Drug Activities, Defense'' which transfers funds to 
other appropriations accounts of the Department of Defense.
    Language has been included in ``Intelligence Community 
Management Account'' which provides for the transfer of funds 
to the Department of Justice for the National Drug Intelligence 
Center.
    Fourteen provisions (Sections 8005, 8006, 8015, 8027, 8034, 
8037, 8056, 8065, 8086, 8090, 8092, 8110, 8118, 8121) contain 
language which allows transfers of funds between accounts.
    Language has been included in Title IX, Chapter 1, ``Iraq 
Freedom Fund'' which transfers funds to other appropriations 
accounts of the Department of Defense.
    Language has been included in Title IX, Chapter 1, section 
9003, which provides transfer authority for funds in Chapter 1, 
and amends fiscal year 2004 transfer authority.

                              Rescissions

    Pursuant to clause 3(f)(2) of rule XIII of the Rules of the 
House of Representatives, the following table is submitted 
describing the rescissions recommended in the accompanying 
bill:

Former Soviet Union Threat Reduction, 2003/2005.........     $50,000,000
Aircraft Procurement, Navy, 2004/2006...................       2,900,000
Shipbuilding and Conversion, Navy, 2004/2008............      10,300,000
Other Procurement, Navy, 2004/2006......................       5,200,000
Other Procurement, Air Force, 2004/2006.................     100,000,000
Procurement, Defense-Wide, 2004/2006....................      23,400,000
Research, Development, Test and Evaluation, Army, 2004/
    2005................................................      42,650,000
Research, Development, Test and Evaluation, Navy, 2004/
    2005................................................      20,000,000
Research, Development, Test and Evaluation, Air Force, 
    2004/2005...........................................      37,000,000
Research, Development, Test and Evaluation, Defense-
    Wide, 2004/2005.....................................     108,300,000

          Compliance With Rule XIII, Cl. 3(e) (Ramseyer Rule)

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2004

           *       *       *       *       *       *       *


                                TITLE VI

                  OTHER DEPARTMENT OF DEFENSE PROGRAMS

                         Defense Health Program

  For expenses, not otherwise provided for, for medical and 
health care programs of the Department of Defense, as 
authorized by law, $15,730,013,000, of which $14,914,816,000 
shall be for Operation and maintenance, of which not to exceed 
2 percent shall remain available until September 30, 2005, and 
of which $7,420,972,000 shall be available for contracts 
entered into under the TRICARE program; of which $328,826,000, 
to remain available for obligation until September 30, 2006, 
shall be for Procurement; and of which $486,371,000, to remain 
available for obligation until September 30, 2005, shall be for 
Research, development, test and evaluation, of which not less 
than $4,250,000 shall be available for HIV prevention 
educational activities undertaken in connection with U.S. 
military training, exercises, and humanitarian assistance 
activities conducted primarily in African nations.

           *       *       *       *       *       *       *


                               TITLE VIII

GENERAL PROVISIONS

           *       *       *       *       *       *       *


                          (TRANSFER OF FUNDS)

  Sec. 8005. Upon determination by the Secretary of Defense 
that such action is necessary in the national interest, he may, 
with the approval of the Office of Management and Budget, 
transfer not to exceed [$2,100,000,000] $3,000,000,000 of 
working capital funds of the Department of Defense or funds 
made available in this Act to the Department of Defense for 
military functions (except military construction) between such 
appropriations or funds or any subdivision thereof, to be 
merged with and to be available for the same purposes, and for 
the same time period, as the appropriation or fund to which 
transferred: Provided, That such authority to transfer may not 
be used unless for higher priority items, based on unforeseen 
military requirements, than those for which originally 
appropriated and in no case where the item for which funds are 
requested has been denied by the Congress: Provided further, 
That the Secretary of Defense shall notify the Congress 
promptly of all transfers made pursuant to this authority or 
any other authority in this Act: Provided further, That no part 
of the funds in this Act shall be available to prepare or 
present a request to the Committees on Appropriations for 
reprogramming of funds, unless for higher priority items, based 
on unforeseen military requirements, than those for which 
originally appropriated and in no case where the item for which 
reprogramming is requested has been denied by the Congress[: 
Provided further, That a request for multiple reprogrammings of 
funds using authority provided in this section must be made 
prior to June 30, 2004.]: Provided further, That transfers 
among military personnel appropriations shall not be taken into 
account for purposes of the limitation on the amount of funds 
that may be transferred under this section.
                              ----------                              


 SECTION 126 OF THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 
                                  2004

[SEC. 126. PILOT PROGRAM FOR FLEXIBLE FUNDING OF CRUISER CONVERSIONS 
                    AND OVERHAULS.

  [(a) Establishment.--The Secretary of the Navy may carry out 
a pilot program of flexible funding of conversions and 
overhauls of cruisers of the Navy in accordance with this 
section.
  [(b) Authority.--Under the pilot program, the Secretary may, 
subject to subsection (d), transfer amounts described in 
subsection (c) to the appropriation for the Navy for 
procurement for shipbuilding and conversion for any fiscal year 
to continue to provide funds for any conversion or overhaul of 
a cruiser of the Navy for which funds were initially provided 
from the appropriation to which transferred.
  [(c) Funds Available for Transfer.--The amounts available for 
transfer under this section are amounts appropriated to the 
Navy for any fiscal year after fiscal year 2003 and before 
fiscal year 2013 for the following purposes:
          [(1) For procurement, as follows:
                  [(A) For shipbuilding and conversion.
                  [(B) For weapons procurement.
                  [(C) For other procurement.
          [(2) For operation and maintenance.
  [(d) Limitations.--(1) A transfer may be made with respect to 
a cruiser under this section only to meet either (or both) of 
the following requirements:
          [(A) An increase in the size of the workload for 
        conversion or overhaul to meet existing requirements 
        for the cruiser.
          [(B) A new conversion or overhaul requirement 
        resulting from a revision of the original baseline 
        conversion or overhaul program for the cruiser.
  [(2) A transfer may not be made under this section before the 
date that is 30 days after the date on which the Secretary of 
the Navy transmits to the congressional defense committees a 
written notification of the intended transfer. The notification 
shall include the following matters:
          [(A) The purpose of the transfer.
          [(B) The amounts to be transferred.
          [(C) Each account from which the funds are to be 
        transferred.
          [(D) Each program, project, or activity from which 
        the funds are to be transferred.
          [(E) Each account to which the funds are to be 
        transferred.
          [(F) A discussion of the implications of the transfer 
        for the total cost of the cruiser conversion or 
        overhaul program for which the transfer is to be made.
  [(e) Merger of Funds.--Amounts transferred to an 
appropriation with respect to the conversion or overhaul of a 
cruiser under this section shall be credited to and merged with 
other funds in the appropriation to which transferred and shall 
be available for the conversion or overhaul of such cruiser for 
the same period as the appropriation to which transferred.
  [(f) Relationship to Other Transfer Authority.--The authority 
to transfer funds under this section is in addition to any 
other authority provided by law to transfer appropriated funds 
and is not subject to any restriction, limitation, or procedure 
that is applicable to the exercise of any such other authority.
  [(g) Final Report.--Not later than October 1, 2011, the 
Secretary of the Navy shall submit to the congressional defense 
committees a report containing the Secretary's evaluation of 
the efficacy of the authority provided under this section.
  [(h) Termination of Program.--No transfer may be made under 
this section after September 30, 2012.]
                              ----------                              


        SECTION 168 OF THE CONSOLIDATED APPROPRIATIONS ACT, 2004

                   (Division H of Public Law 108-199)

  Sec. 168 [(a) Rescissions.--From unobligated balances of 
amounts made available in Public Law 107-38, and in Public Law 
107-117, and in appropriations Acts for the Department of 
Defense, $1,800,000,000 is hereby rescinded: Provided, That the 
Director of the Office of Management and Budget, after 
consultation with the Committees on Appropriations of the House 
and Senate and the Secretary of Defense, shall determine the 
amounts to be rescinded from each account that is to be so 
reduced: Provided further, That the rescissions shall take 
effect no later than September 30, 2004: Provided further, That 
the Director of the Office of Management and Budget shall 
notify the Committees on Appropriations of the House and Senate 
30 days prior to rescinding such amounts: Provided further, 
That such notification shall include the accounts, programs, 
projects and activities from which the funds will be rescinded: 
Provided further, That this section shall not apply to any 
amounts appropriated or otherwise made available by the seventh 
proviso under the heading ``Emergency Response Fund'' in Public 
Law 107-38.]

           *       *       *       *       *       *       *

                              ----------                              


       SECTION 202 OF THE AFGHANISTAN FREEDOM SUPPORT ACT OF 2002

SEC. 202. AUTHORIZATION OF ASSISTANCE.

  (a) * * *
  (b) Amount of Assistance.--The aggregate value (as defined in 
section 644(m) of the Foreign Assistance Act of 1961) of 
assistance provided under subsection (a) may not exceed 
[$450,000,000] $650,000,000, except that such limitation shall 
be increased by any amounts appropriated pursuant to the 
authorization of appropriations in section 204(b)(1) and shall 
not count toward any limitation contained in section 506 of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2318).

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the following is a statement of 
general performance goals and objectives for which this measure 
authorizes funding:
    The Committee on Appropriations considers program 
performance, including a program's success in developing and 
attaining outcome-related goals and objectives, in developing 
funding recommendations.

                        Constitutional Authority

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives states that:

          Each report of a committee on a bill or joint 
        resolution of a public character, shall include a 
        statement citing the specific powers granted to the 
        Congress in the Constitution to enact the law proposed 
        by the bill or joint resolution.

    The Committee on Appropriations bases its authority to 
report this legislation from Clause 7 of Section 9 of Article I 
of the Constitution of the United States of America which 
states:

          No money shall be drawn from the Treasury but in 
        consequence of Appropriations made by law * * *

    Appropriations contained in this Act are made pursuant to 
this specific power granted by the Constitution.

                 Comparison With the Budget Resolution

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires an explanation of compliance with 
section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344), as 
amended, which requires that the report accompanying a bill 
providing new budget authority contain a statement detailing 
how that authority compares with the reports submitted under 
section 302 of the Act for the most recently agreed to 
concurrent resolution on the budget for the fiscal year from 
the Committee's section 302(a) allocation. This information 
follows:

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                      302(b) allocation                     This bill
                                             -------------------------------------------------------------------
                                                   Budget                            Budget
                                                 authority         Outlays         authority         Outlays
----------------------------------------------------------------------------------------------------------------
Discretionary:..............................          390,931          415,987          390,931          415,594
Mandatory...................................              239              239              239              239
----------------------------------------------------------------------------------------------------------------

                      Five-Year Outlay Projections

    In compliance with section 308(a)(1)(B) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the following table contains 
five-year projections associated with the budget authority 
provided in the accompanying bill.

                                                              (Millions)
Budget Authority........................................         391,170
Outlays:                                                                
    2004................................................             128
    2005................................................         286,638
    2006................................................          90,587
    2007................................................          24,555
    2008 and beyond.....................................          13,970

          Financial Assistance to State and Local Governments

    In accordance with section 308(a)(1)(C) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, no new budget or outlays are 
provided by the accompanying bill for financial assistance to 
State and local governments.



                  ADDITIONAL VIEWS OF HON. DAVID OBEY

    The Administration's steadfast refusal to appropriately 
plan for military operations in Iraq and Afghanistan and 
address critical shortfalls in our military was evident in its 
FY 2005 budget request for the Department of Defense. The 
President's budget included no funding for Iraq and Afghanistan 
operations, nor were funds requested to address known Army 
needs for additional manpower, protective gear, up-armored 
Humvees, and repair or replacement of weapons systems damaged 
in the war. Only recently did the Administration grudgingly 
admit the need for additional funds by submitting a $25 billion 
``emergency'' supplemental.
    The Administration's failure to budget for these ongoing 
efforts is irresponsible and reckless. It shows an 
unwillingness to make the difficult budgetary choices forced 
upon our nation by the President's Iraq policy, as well as a 
lack of respect for the American people who deserve to know the 
facts up front rather than on the installment plan.
    The Committee did the right thing by including these funds, 
but based on analysis of the best available data from the 
Pentagon, operations in Iraq and Afghanistan will cost over $76 
billion over the next year. If the White House and the Majority 
Party had been willing to deal with real numbers, I had 
intended to offer an amendment during Full Committee 
consideration of this bill that would have increased funding 
for Iraq and Afghanistan by $51.7 billion to fully fund the 
real expected cost of military operations and personnel costs 
in Iraq and Afghanistan for the entire year. I am inserting in 
the record the text of the amendment to show these real costs.
    My amendment would have ensured that our forces in Iraq and 
Afghanistan had the supplies and support they require for their 
mission, and I am disappointed that the full cost of the war 
effort is not included as part of this bill. We have an 
obligation to our troops. We know that this obligation will 
cost more than $25 billion. Congress will need to provide these 
additional funds soon, whether or not the President chooses to 
support the troops by requesting the funds himself.
    The Committee accepted my amendment requiring the President 
to provide details on estimated costs for FY 2006-11 for 
operations in Iraq and Afghanistan. This report will be due to 
the Congress on October 1, 2004, unless the President certifies 
that the costs cannot be divulged due to national security 
issues. I offered this amendment because the Administration 
owes the American people a full accounting of the cost of its 
policies in Iraq and Afghanistan over the next five years.
    Since the beginning of military operations in Iraq, this 
Administration has said, ``Trust us. We know better.'' The 
Committee did trust the Administration. We provided the 
Administration and its political appointees in the Pentagon 
with every dollar requested for Iraq. We provided them with 
unprecedented flexibility in spending those funds. There were 
no questions asked and no strings attached.
    The Administration and the Pentagon have abused the trust 
that the Congress and the American people placed in them.
    They marched to war based upon flawed intelligence and 
knowingly used that false intelligence to persuade Members of 
Congress and the public to support military action.
    The Administration exaggerated foreign military and 
financial support to downplay the full cost of the war.
    They ignored the advice of career military officials, like 
Army Chief of Staff General Eric Shinseki, who suggested that 
an Iraqi occupation force should number ``several hundred 
thousand.''
    The Defense Department pushed aside the State Department, 
which was more experienced and better prepared to help shape a 
post-war Iraq.
    Most appallingly, the Administration and the Pentagon 
rushed our military into battle with inadequate supplies and 
support. Some 40,000 troops in the Iraqi theatre lacked 
protective plates for body armor vests. Portable electronic 
jammers for defeating roadside bombs were in woefully short 
supply. Only about 25 percent of the armored vehicles needed 
had been provided.
    Today, U.S. forces are still short about 1,300 of the 4,000 
armored Humvees needed in Iraq. Newsweek recently noted that: 
``[a]ccording to an unofficial study by a defense consultant 
that is now circulating through the Army, there have been 142 
casualties by land mines or improvised explosive devices, while 
48 others died in rocket propelled grenade attacks. Almost all 
of those soldiers were killed while in unprotected vehicles, 
which means that perhaps one in four of those killed in combat 
in Iraq might be alive if they had the stronger armor around 
them, the study suggested.''
    Today, the United States Army is stretched to the breaking 
point. Many Army units have had their deployments extended well 
beyond the 12-month rotation called for by Defense Department 
policy. Some units are being called back to Iraq earlier than 
planned. The Army recently went into ``stop-loss,'' which 
prevents officers or enlisted persons in certain specialties 
from departing the service even after they are eligible to 
leave. In effect, the Administration has instituted a `stealth 
draft' what will prevent Americans who have served their 
country honorably from returning to civilian life.
    These facts demand that the Congress exercise its 
Constitutional oversight responsibility more aggressively. 
Conducting that oversight requires receiving the Pentagon's 
best estimate of the cost of our engagement in Iraq for the 
next five years. These numbers are available and they should be 
provided to the Committee and the Congress, as this bill now 
requires.
    To date, Congress has appropriated about $150 billion in 
military and reconstruction funding for the Iraq conflict. It 
is undeniable that the additional $25 billion provided in this 
bill for Iraq will not be the last dollars that the Iraq 
mission will require or that the Congress will provide. The 
total figure will likely swell to roughly a quarter of a 
trillion dollars for operations in Iraq and Afghanistan, with 
the vast majority of that funding devoted to Iraq. To put this 
in perspective, a quarter of a trillion dollars would:
         Pay for last year's Veterans Affairs and 
        Housing and Urban Development Departments bill, the 
        Commerce, Justice and Senate Departments bill, and the 
        Agriculture Department bill combined.
         More than double the total amount the states 
        spend on education.
         Repair nearly every school in America that 
        needs to be modernized.
    The American people deserve a full accounting of the cost 
of the war in Iraq, and not on the installment plan. Since day 
one of the Iraq operation, the Administration's actions have 
been characterized by deception. I hope the Administration will 
take the opportunity they have been provided to have an honest 
conversation about the true cost of the Iraq mission. We owe 
the American people nothing less.
                                                         Dave Obey.

                  Amendment To Be Offered by Mr. Obey

    Strike Title IX and insert in lieu of

   TITLE IX--ADDITIONAL APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE

        ADDITIONAL APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE

                    CHAPTER I--DEPARTMENT OF DEFENSE

                           MILITARY PERSONNEL

                        Military Personnel, Army

    For an additional amount for ``Military Personnel, Army'', 
$10,088,200,000.

                        Military Personnel, Navy

    For an additional amount for ``Military Personnel, Navy'', 
$844,200,000.

                    Military Personnel, Marine Corps

    For an additional amount for ``Military Personnel, Marine 
Corps'', $1,045,700,000.

                     Military Personnel, Air Force

    For an additional amount for ``Military Personnel, Air 
Force'', $3,358,400,000.

                       OPERATION AND MAINTENANCE

                    Operation and Maintenance, Army

    For an additional amount for ``Operation and Maintenance, 
Army'', $41,539,150,000.

                    Operation and Maintenance, Navy

    For an additional amount for ``Operation and Maintenance, 
Navy'', $806,000,000.

                Operation and Maintenance, Marine Corps

    For an additional amount for ``Operation and Maintenance, 
Marine Corps'', $4,979,000,000.

                  Operation and Maintenance, Air Force

    For an additional amount for ``Operation and Maintenance, 
Air Force'', $2,787,000,000.

                Operation and Maintenance, Defense-Wide

    For an additional amount for ``Operation and Maintenance, 
Defense-Wide'', $1,123,000,000.

                           IRAQ FREEDOM FUND

                     (INCLUDING TRANSFER OF FUNDS)

    For an additional amount for ``Iraq Freedom Fund'', 
$6,000,000,000, to remain available for transfer until 
September 30, 2006, for the purposes authorized under this 
heading in Public Law 108-11: Provided, That the Secretary of 
Defense may transfer the funds provided herein to 
appropriations for military personnel; operation and 
maintenance; Overseas Humanitarian, Disaster, and Civic Aid; 
procurement; research, development, test and evaluation; the 
Defense Health Program; and working capital funds: Provided 
further, That of the amounts provided under this heading, not 
less than $5,000,000,000 shall be for classified programs, 
which shall be in addition to amounts provided for elsewhere in 
this title, and under this heading: Provided further, That 
funds transferred shall be merged with and be available for the 
same purposes and for the same time period as the appropriation 
or fund to which transferred: Provided further, That this 
transfer authority is in addition to any other transfer 
authority available to the Department of Defense: Provided 
further, That upon a determination that all or part of the 
funds transferred from this appropriation are not necessary for 
the purposes provided herein, such amounts may be transferred 
back to this appropriation: Provided further, That the 
Secretary of Defense shall, not fewer than 15 days prior to 
making transfers from this appropriation, notify the 
congressional defense committees in writing of the details of 
any such transfer: Provided further, That the Secretary shall 
submit a report no later than 30 days after the end of each 
fiscal quarter to the congressional defense committees 
summarizing the details of the transfer of funds from this 
appropriation.

                              PROCUREMENT


                       Missile Procurement, Army

    For an additional amount for ``Missile Procurement, Army'', 
$42,800,000, to remain available until September 30, 2007.

        Procurement of Weapons and Tracked Combat Vehicles, Army

    For an additional amount for ``Procurement of Weapons and 
Tracked Combat Vehicles, Army'', $201,900,000, to remain 
available until September 30, 2007.

                    Procurement of Ammunition, Army

    For an additional amount for ``Procurement of Ammunition, 
Army'', $330,000,000, to remain available until September 30, 
2007.

                        Other Procurement, Army

    For an additional amount for ``Other Procurement, Army'', 
$1,265,600,000, to remain available until September 30, 2007.

                       Aircraft Procurement, Navy

    For an additional amount for ``Aircraft Procurement, 
Navy'', $34,000,000, to remain available until September 30, 
2007.

            Procurement of Ammunition, Navy and Marine Corps

    For an additional amount for ``Procurement of Ammunition, 
Navy and Marine Corps'', $112,800,000, to remain available 
until September 30, 2007.

                       Procurement, Marine Corps

    For an additional amount for ``Procurement, Marine Corps'', 
$111,400,000, to remain available until September 30, 2007.

                      Other Procurement, Air Force

    For an additional amount for ``Other Procurement, Air 
Force'', $35,300,000, to remain available until September 30, 
2007.

                       Procurement, Defense-Wide

    For an additional amount for ``Procurement, Defense-Wide'', 
$320,000,000, to remain available until September 30, 2007.

                  National Guard and Reserve Equipment

    For an additional amount for ``National Guard and Reserve 
Equipment'', $100,000,000, to remain available until September 
30, 2007.

                     REVOLVING AND MANAGEMENT FUNDS


                     Defense Working Capital Funds

    For an additional amount for ``Defense Working Capital 
Funds'', $1,250,000,000.

                  OTHER DEPARTMENT OF DEFENSE PROGRAMS


                         Defense Health Program

    For an additional amount for ``Defense Health Program'', 
$305,000,000 for Operation and Maintenance.

                     CHAPTER II--GENERAL PROVISIONS

    Sec. 9001. The amounts provided in this title, or made 
available by the transfer of funds in or pursuant to this 
title, are designated by the Congress to be contingency 
operations pursuant to section 403 of S. Con. Res. 95 (108th 
Congress), and an emergency requirement pursuant to section 502 
of H. Con. Res. 95 (108th Congress).
    Sec. 9002. Appropriations provided in this title are 
available for obligation until September 30, 2005, unless 
otherwise so provided in this title: Provided, That 
notwithstanding any other provision of law or of this Act, 
funds in this title are available for obligation, and 
authorities in this title shall apply, upon enactment of this 
Act.
    Sec. 9003. Notwithstanding any other provision of law or of 
this Act, funds made available in this title are in addition to 
amounts provided elsewhere in this Act.

                          (TRANSFER OF FUNDS)

    Sec. 9004. Upon his determination that such action is 
necessary in the national interest, the Secretary of Defense 
may transfer between appropriations up to $600,000,000 of the 
funds made available to the Department of Defense in this 
title: Provided, That the Secretary shall notify the Congress 
promptly of each transfer made pursuant to this authority: 
Provided further, That the transfer authority provided in this 
section is in addition to any other transfer authority 
available to the Department of Defense: Provided further, That 
the authority in this section is subject to the same terms and 
conditions as the authority provided in section 8005 of this 
Act.
    Sec. 9005. Funds appropriated in this title, or made 
available by the transfer of funds in or pursuant to this 
title, for intelligence activities are deemed to be 
specifically authorized by the Congress for purposes of section 
504 of the National Security Act of 1947 (50 U.S.C. 414).
    Sec. 9006. None of the funds provided in this title may be 
used to finance programs or activities denied by Congress in 
fiscal year 2005 appropriations to the Department of Defense or 
to initiate a procurement or research, development, test and 
evaluation new start program without prior notification to the 
congressional defense committees.
    Sec. 9007. Sections 1318 and 1319 of the Emergency Wartime 
Supplemental Appropriations Act, 2003 (Public Law 108-11; 117 
Stat. 571), shall remain in effect during fiscal year 2005.
    Sec. 9008. From October 1, 2004, through September 30, 
2005, (a) the rates of pay authorized by section 310(a) of 
title 37, United States Code, shall be $225; and (b) the rates 
of pay authorized by section 427(a)(1) of title 37, United 
States Code, shall be $250.
    Sec. 9009. Notwithstanding any other provision of law, from 
funds made available in this title to the Department of Defense 
for operation and maintenance, not to exceed $500,000,000 may 
be used by the Secretary of Defense, with the concurrence of 
the Secretary of State, to train, equip, and provide related 
assistance to military or security forces in Iraq and 
Afghanistan, to enhance their capability to combat terrorism 
and to support U.S. military operations in Iraq and 
Afghanistan: Provided, That such assistance may include the 
provision of equipment, supplies, services, training and 
funding: Provided further, That the authority to provide 
assistance under this section is in addition to any other 
authority to provide assistance to foreign nations: Provided 
further, That the Secretary of Defense shall notify the 
congressional defense committees not less than 15 days before 
providing assistance under the authority of this section.
    Sec. 9010. From Funds made available to this title to the 
Department of Defense for operation and maintenance, not to 
exceed $300,000,000 may be used, notwithstanding any other 
provision of law, to fund the Commander's Emergency Response 
Program, for he purpose of enabling military commanders in Iraq 
to respond to urgent humanitarian relief and reconstruction 
requirements within their areas of responsibility by carrying 
out programs that will immediately assist the Iraqi people, and 
to fund a similar program to assist the people of Afghanistan: 
Provided, That the Secretary of Defense shall provide quarterly 
reports to the congressional defense committees regarding the 
source of funds and the allocation and use of funds made 
available pursuant to the authority provided in this section.
    Sec. 9011. Section 202(b) of the Afghanistan Freedom 
Support Act of 2002 (Public Law 107-327, as amended by section 
2206 of Public Law 108-106) is amended by striking 
``$450,000,000'' and inserting in lieu thereof 
``$650,000,000''.
    Sec. 9012. Funds available to the Department of Defense for 
operation and maintenance in this title may be used, 
notwithstanding any other provision of law, to provide 
supplies, services, transportation, including airlift and 
sealift, and other logistical support to coalition forces 
supporting military and stability operations in Iraq and 
Afghanistan: Provided, That the Secretary of Defense shall 
provide quarterly reports to the congressional defense 
committees regarding support provided under this section.
    Sec. 9013. (a) Not later than April 30 and October 31 of 
each year, the Secretary of Defense shall submit to Congress a 
report on the military operations of the Armed Forces and the 
reconstruction activities of the Department of Defense in Iraq 
and Afghanistan.
    (b) Each report shall include the following information:
          (1) For each of Iraq and Afghanistan for the half-
        fiscal year ending during the month preceding the due 
        date of the report, the amount expended for military 
        operations of the armed Forces and the amount expended 
        for reconstruction activities, together with the 
        cumulative total amounts expended for such operations 
        and activities.
          (2) An assessment of the progress made toward 
        preventing attacks on United States personnel.
          (3) An assessment of the effects of the operations 
        and activities in Iraq and Afghanistan on the readiness 
        of the Armed Forces.
          (4) An assessment of the effects of the operations 
        and activities in Iraq and Afghanistan on the 
        recruitment and retention of personnel for the Armed 
        Forces.
          (5) For the half-fiscal year ending during the month 
        preceding the due date of the report, the costs 
        incurred for repair of Department of Defense equipment 
        used in the operations and activities in Iraq and 
        Afghanistan.
          (6) The foreign countries, international 
        organizations, and nongovernmental organizations that 
        are contributing support for the ongoing military 
        operations and reconstruction activities, together with 
        a discussion of the amount and types of support 
        contributed by each during the half-fiscal year ending 
        during the month preceding the due date of the report.
          (7) The extent to which, and the schedule on which, 
        the Selected Reserve of the Ready Reserve of the Armed 
        Forces is being involuntarily ordered to active duty 
        under section 12304 of title 10, United States Code.
          (8) For each unit of the National Guard of the United 
        States and the other reserve components of the Armed 
        Forces on active duty pursuant to an order to active 
        duty under section 12304 of title 10, United States 
        Code, the following information:
                  (A) The unit.
                  (B) The projected date of return of the unit 
                to its home station.
                  (C) The extent (by percentage) to which the 
                forces deployed within the United States and 
                outside the United States in support of a 
                contingency operation are composed of reserve 
                component forces.
    Sec. 9014. Of the amounts provided in this title, 
$5,000,000,000 may not be obligated or expended until such time 
as: (1) the President provides to the Congress a report 
detailing the estimated costs over the period from fiscal year 
2006 to 2011 of Operation Iraqi Freedom and Operation Enduring 
Freedom, or any related military operations in and around Iraq 
and Afghanistan, and the estimated costs of reconstruction, 
internal security, and related economic support to Iraq and 
Afghanistan; or (2) the President certifies in writing to the 
Congress that estimates of these future military and economic 
support costs cannot be provided for purposes of national 
security; Provided, That the report referenced in subsection 
(1) shall be submitted no later than January 1, 2005.



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