[Department of Defense Annual Report for Fiscal Year 1967, Including the Reports of the Secretary of Defense, Secretary of the Army, Secretary of the Navy, Secretary of the Air Force]
[From the U.S. Government Publishing Office, www.gpo.gov]

DEPARTMENT OF DEFENSE
ANNUAL REPORT
FOR FISCAL YEAR
1967
Including the Reports of the
PELLETIER LIBRARY, ALLEGHENY COLLEGE
SECRETARY OF DEFENSE
SECRETARY OF THE ARMY
SECRETARY OF THE NAVY
SECRETARY OF THE AIR FORCE
A
DEPARTMENT OF DEFENSE
ANNUAL REPORT
FOR FISCAL YEAR
1967
Including the Reports of the SECRETARY OF DEFENSE SECRETARY OF THE ARMY SECRETARY OF THE NAVY SECRETARY OF THE AIR FORCE
U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1969
For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 ■ Price $2.50
Letter of Transmittal
The Secretary of Defense
Washington
Dear Mr. President:
In compliance with Section 202(d) of the National Security Act of 1947, as amended, I submit the annual report of the Secretary of Defense for fiscal year 1967, together with the reports of the Secretaries of the Army, Navy, and Air Force for the same period.
Yours sincerely,
Melvin R. Laird
The President
The White House
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Contents
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Page
Chapter I. Operational Highlights of Fiscal Year 1967______ 3
II.	Operational Forces_________________________________ 12
III.	Defense Management_________________________________ 53
Annual Report of the Reserve	Forces Policy	Board___ 87
Annual Report of the Defense	Supply Agency________ 111
ANNUAL REPORT OF THE SECRETARY OF THE ARMY
Chapter I. Introduction____________________________________ 137
II.	Operational Forces: Deployment, Operations, and Readiness_____________________________________________ 140
III.	Force Development: Plans, Doctrine, Organization, and Systems____________________________________________ 152
IV.	Training, Intelligence, and Communications________ 163
V.	Personnel_________________________________________ 172
VI.	Reserve Forces____________________________________ 188
VII.	Management, Budget, and Funds_____________________ 193
VIII.	Logistics_________________________________________ 206
IX.	Research and Development__________________________ 231
X.	Public Works and Military Engineering_____________ 243
XI.	Special Functions_________________________________ 254
XII.	Military Assistance_______________________________ 259
XIII.	Summary___________________________________________ 264
Annual Report of the Office of Civil Defense_______ 265
ANNUAL REPORT OF THE SECRETARY OF THE NAVY
Chapter I. Introduction_____________________________________ 295
II.	The Mission of the Department of the	Navy_________ 297
III.	Programs and Expenditures_________________________ 299
IV.	Navy and Marine Corps Operations__________________ 301
V.	Naval Warfare Capabilities________________________ 314
VI.	Economy and Efficiency____________________________ 337
VII.	Civilian Economy Relations________________________ 348
VIII.	Conclusion________________________________________ 352
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CONTENTS
ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
Page
Chapter I. Introduction____________________________________ 359
II.	Strategic Forces_________________________________ 360
III.	General Purpose Forces___________________________ 365
IV.	Defense Forces____________________________________ 373
V.	Airlift Forces___________________________________ 377
VI.	Specialized Forces_______________________________ 386
VII.	The U.S. Air Force in Vietnam____________________ 392
VIII.	Manpower and Training___________________________ 400
IX.	Research and Development_________________________ 420
X.	Management_______________________________________ 433
Appendix___________________________________________________ 452
Annual Report of the
SECRETARY OF DEFENSE
July 1, 1966, to June 30, 1967
Contents
Page
Chapter I. Operational Highlights of Fiscal Year 1967_______________ 3
Opposing Forces in Vietnam____________________________ 3
Allied Combat Operations______________________________ 4
Supporting Activities_________________________________ 8
Political and Economic Developments__________________ 11
II. Operational Forces____________________________________
Strategic Forces_____________________________________ 12
General Purpose Forces_______________________________ 21
Airlift and Sealift Forces___________________________ 31
Reserve Forces_______________________________________ 33
Nuclear Test and Test Detection______________________ 37
Defense Space Programs_______________________________ 40
Collection Security__________________________________ 42
III. Defense Management_______________________________________ 53
Financial Management_________________________________ 54
Manpower_____________________________________________ 60
Research and Development_____________________________ 69
Logistics____________________________________________ 72
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I.	Operational Highlights of Fiscal Year 1967
The armed forces of the United States continued throughout fiscal year 1967 to carry out successfully their assigned mission of helping the Republic of Vietnam to defend itself against Communist aggression. As the enemy increased his efforts to achieve military victory, allied units disrupted his plans by effective counteroperations. By the end of the fiscal year it was clear that, particularly in light of the significant increases in the strength and capabilities of allied forces, the military road to victory had been closed to the aggressor.
Opposing Forces in Vietnam
Blocking the road to victory on June 30, 1967, were the 732,000 men in the forces of the Republic of Vietnam, 449,000 U.S. soldiers, sailors, marines, and airmen deployed to South Vietnam, and 54,000 men sent by other free world countries. (See tables 3, 4, and 5.) Supporting this total of 1,235,000, were 80,000 men aboard U.S. ships operating in the South China Sea and with U.S. units in Thailand.
All of these forces had been expanded during the year in accordance with schedules recommended by the theater commander, who took into account not only the tactical situation but also the limitations of the Vietnamese economy to absorb additional troops. Vietnamese forces increased by 32,000, U.S. forces in Vietnam by 181,000, and other free world forces by 24,000.
These manpower increases supported an impressive growth in combat strength. By the close of fiscal year 1967, the United States had deployed in Vietnam the equivalent of six and one-third Army divisions and two reinforced Marine Corps divisions, for a total of 85 ground combat maneuver battalions as compared to 51% at the beginning of the year. The number of combat support battalions rose during the same period from 38% to 64% and of engineer battalions from 20% to 53. Fighter-attack aircraft aboard offshore naval carriers and land-based in Southeast Asia increased from 841 to 948, and other fixed-wing planes from 838 to 1,128. Nearly 45 percent more helicopters were deployed in the theater at the end of the year than at the beginning, as their number rose from 1,687 to 2,419. All categories of naval forces operating in the area were also strengthened—the num
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
ber of river control craft from 64 to 202; coastal patrol ships from 91 to 132; and other offshore fleet units from 49 to 87. (See table 6.) Manning and supporting these forces in Vietnam were nearly 286,000 soldiers, 78,000 marines, 56,000 airmen, 28,000 sailors, and 500 men from the Coast Guard.
As for the forces of the Republic of Vietnam, more attention was devoted during the year to improving the capabilities of units-in-being than to increasing the number of men under arms. The regular forces, totaling nearly 327,000 men, were included in 154 infantrytype battalions at the end of the year, and the Regional and Popular Forces numbered about 141,000 each and the paramilitary security forces 123,000.
The increase in other free world forces made possible an expansion from 14 to 23 in the number of infantry-type battalions. The Republic of Korea, with nearly 46,000 men deployed, provided the major portion of this increase, while Australia and New Zealand also strengthened their combat contingents and the Republic of the Philippines dispatched a 2,000-man military civil action unit. Thailand sent an advance group to prepare for the arrival of a larger force at a later date.
As for the enemy, he continued to pay a heavy price for his aggression, suffering over 75,000 combat deaths during the year and losing nearly 18,000 defectors. Despite these losses, he was able to maintain his forces between 260,000 and 280,000 men. He maintained this level by infiltrating about 50,000 North Vietnamese troops and by intensive recruiting in the South. Still, enemy strength as estimated on June 30, 1967, was the lowest for the entire year.
Allied Combat Operations
Military actions in South Vietnam continued to be directed toward destroying enemy forces and providing increased security for the South Vietnamese in the countryside as well as the cities. These actions were supplemented by air strikes against North Vietnam, designed to increase the cost of aggression to the North Vietnamese Government.
Allied strategy in the south included three principal types of actions: (1) Search and destroy operations to find and eradicate Communist forces, base areas, and supplies; (2) clear and secure operations to eliminate guerrilla units in selected areas, followed by the introduction of pacification teams; and (3) the continuing defense of population centers and military installations against enemy attack. While considerable flexibility was exercised in assigning national contingents to these various missions, U.S. and allied ground combat forces, together with strike elements of the Vietnamese regular forces, concentrated on the large-scale search and destroy operations. Vietnamese regular,
OPERATIONAL HIGHLIGHTS OF FISCAL YEAR 1967
5
regional, and popular forces conducted the other types of operations, with some assistance as required from U.S. and other allied troops in clearing and securing areas and in reacting to Communist attacks on defended centers.
U.S. Marine Corps forces operated in the northern or I Corps sector, where they launched some 138 battalion-size or larger attacks during the year against enemy bases and troop concentrations. Smaller Marine units were utilized to eliminate local bands of guerrillas, and all formations assisted Vietnamese authorities in pacification operations that extended the area under government control. U.S. Army units operated primarily in the II and III Corps areas of central Vietnam, although some Army forces fought alongside the Marines in I Corps and others with South Vietnamese units in the IV Corps area south of Saigon in the Mekong Delta. Army troops conducted more than 150 battalion-size or larger operations, aimed particularly at destroying previously secure base camps and at striking concentrations of the enemy before preparations for offensive operations could be completed. Smaller attacks on scattered groups of enemy guerrillas and civic action programs to assist in securing the countryside were also undertaken by Army units.
Air Force, Navy, and Marine Corps fighter aircraft provided close air support for the ground forces in offensive and defensive roles and independently located and attacked enemy units not in contact with allied troops. Air Force B-52 bombers operating from Guam and, beginning in April 1967, from Thailand dropped about 170,000 tons of bombs on enemy bases and troop concentrations during the year in both preplanned and quick-reaction missions. The weight of this effort increased substantially during 1967 and reached a capability of 800 sorties per month as more aircraft with racks for 108 500- and 750-pound bombs were made available. The Air Force also provided some 268 cargo aircraft for in-country airlift, the volume of which steadily expanded.
Units of the 7th Fleet, in conjunction with Coast Guard cutters and the Vietnamese coastal forces, continued to conduct Operation MARKET TIME—the air and sea patrol of South Vietnamese waters to detect and intercept enemy ships and junks. U.S. surface ships also provided gunfire support to ground forces ashore. The Navy’s fleet of river patrol vessels, supported by minesweepers and naval helicopters, participated in Operation GAME WARDEN, designed to deny the use of inland waterways to the enemy and to interrupt his line of communications in the Mekong Delta.
The sharpest clashes between the opposing forces resulted from allied search and destroy operations. In the Saigon area, major attacks were launched against the enemy’s War Zone C, some 60 miles north
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
west of the capital, and the Iron Triangle, only 20 miles to the north. The thick jungles of War Zone C in Tay Ninh Province near the Cambodian border protected one of the largest logistics bases of the enemy, which was seriously damaged by Operation ATTLEBORO in November 1966 and again by Operation JUNCTION CITY during February-May 1967. Large quantities of supplies and equipment were captured, and enemy losses in the two operations were estimated at 1,100 and 2,700, respectively. Operation CEDAR FALLS against the Iron Triangle in January 1967 demonstrated the vulnerability of enemy sanctuaries to sudden massive attacks, as allied forces swept through the jungle area, cut roads, prepared helicopter landing zones for easier access, relocated the civilian population, and inflicted serious losses on enemy forces, including over 700 killed and 200 captured.
In the central highlands allied troops conducted constant surveillance and screening operations to keep the enemy off balance and to prevent infiltrating Viet Cong and North Vietnamese troops from launching a major attack. These objectives were achieved by a series of major allied offensives fought in the rugged terrain near the Cambodian border that gave the enemy tactical and logistic advantages.
Along the central coast, where Binh Dinh Province had been an enemy source of strength for many years, numerous successful search and destroy missions were undertaken to protect the allied base at Qui Nhonh and inflict heavy casualties on the enemy.
The northern provinces with their mountainous western regions and the narrow Demilitarized Zone (DMZ) became one of the most critical combat areas, as relatively short lines of supply provided the enemy with opportunities to concentrate his forces quickly for massive attacks. U.S. Marine Corps and Vietnamese units frustrated the enemy’s plans by constant patrolling and frequent spoiling operations. Operation HASTINGS in July 1966 disrupted the buildup of a North Vietnamese division, which lost nearly 900 men. During Operation PRAIRIE from August 1966 through January 1967 Marine battalions swept the area with frequent bloody contacts accounting for nearly 1,400 North Vietnamese killed. In the spring of 1967, enemy activities increased in intensity, including heavy shelling and ground attacks on allied artillery positions and counterinfiltration bases. The fighting became particularly intense around Khe Sanh in April and May as Marine units captured the dominating hills in bitter combat. In Operation UNION I and II infiltrating North Vietnamese units were badly hurt in the coastal flatlands south of Da Nang and continued allied sweeps of the southern DMZ destroyed North Vietnamese positions and supplies and inflicted heavy casualties on the enemy. Despite the allied successes, it appeared at the end of the fiscal year that the I
OPERATIONAL HIGHLIGHTS OF FISCAL YEAR 1967
7
Corps area, offering easy access and retreat across the DMZ, would remain a major enemy target for some time to come.
In support of allied operations in the south, the United States intensified during fiscal year 1967 the range and pace of air and sea attacks on lines of communications in North Vietnam and selected fixed targets contributing to the enemy’s war capability.
The air campaign was conducted by Air Force squadrons based in the Republic of Vietnam and Thailand and by carrier-based naval aircraft assisted by some land-based Marine air units. The area of operations in North Vietnam and the number and type of warsupporting targets authorized for strike or restrike steadily expanded during the year. About 90 percent of all missions were armed reconnaissance sorties along transportation routes and the remainder consisted of planned strikes directed against fixed targets, including bridges, railroad yards, troop barracks, petroleum storage, air defenses, thermal powerplants, and certain industrial facilities. These strikes greatly increased the cost to North Vietnam of infiltrating its men and supplies to the south. Thousands of vehicles, railroad cars, and water craft were destroyed. An estimated 300,000 full-time workers and an equal number of part-time workers had to be diverted to repair lines of communication or construct new ones, disperse petroleum storage locations, install diesel generators to produce electricity for essential services, and perform related tasks. Simultaneously, the North Vietnamese made a major effort to increase their air defenses, but new weapons and improved tactics enabled U.S. pilots to reduce the loss rate per thousand attack sorties from 4.5 aircraft in fiscal year 1965 to 1.7 in fiscal year 1967.
To supplement the air strikes, the 7th Fleet was authorized in October 1966 to intercept and destroy ships and junks along the coast of North Vietnam—Operation SEA DRAGON. In February 1967, the area of operation was extended from the 18th to the 20th parallel and military and logistic installations ashore were added to the target list. The capability of naval ships to disrupt lines of communications around the clock in any kind of weather made it more difficult for the enemy to use periods of darkness and bad weather for carrying out logistics movements or for making repairs. Daily sightings of enemy craft decreased from 50 in October 1966 to 10 in June 1967.
The increasing pace of combat during the year inevitably exacted a heavy price. Some 7,396 American soldiers, sailors, marines, and airmen lost their lives through actions by hostile forces and 1,334 more died from accidents, illness, and other causes. (See table 7.) Nearly 11,800 members of the Republic of Vietnam armed forces and 753 men from allied nations were also killed in battle. Enemy losses were nearly four times larger than those of the allies.
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Supporting Activities
The support of combat forces fighting in a tropical, largely undeveloped country 9,000 miles from our shores created many serious and frequently unprecedented problems for the personnel and logistics managers of the Department. That all essential requirements were met constituted one of the year’s most noteworthy accomplishments.
Manpower policies, designed to maintain high morale and reduce unusual hardships, remained in effect. The established tour of duty of no more than 12 months for military personnel stationed in Southeast Asia assured the regular rotation of servicemen. Aircraft crews returned home after flying 100 missions over North Vietnam, while naval personnel afloat or assigned to construction battalions rotated every 6 to 8 months and normally served two such tours in the area. Moreover, most personnel received one rest-and-recuperation leave of 5 to 7 days outside of Vietnam during a 12-month assignment. Existing policy prohibited the involuntary reassignment of individuals to the theater until all others in their grade and specialty had completed an initial tour. Military personnel could, however, volunteer to extend their assignment and under legislation enacted in November 1966 were granted a special 30-day leave with transportation at Government expense. About 700 officers and 25,000 enlisted men took advantage of this program during the year. The policy against the assignment of 17-year-olds to Vietnam was supplemented during the year by prohibiting the simultaneous involuntary service in the war zone of two members of the same family and by permitting the hardship discharge of a sole surviving son. In addition, military personnel serving in Southeast Asia were entitled to the special benefits made available by earlier legislation, including hostile-fire pay, income tax exemptions, duty-free gifts, and free mailing privileges.
The best possible medical care continued to be available as requirements rose sharply during the year with the increased pace of combat. While 22,000 of those wounded through hostile action could be treated without hospitalization, hospital care was required for 25,000. Of those hospitalized since 1965, about 70 percent had been restored to duty by June 30, 1967, and only 3 percent had died of their wounds. The percentage receiving medical discharges also remained quite low. Advances in evacuation techniques, in combat medicine, and in medical management all contributed to the outstanding performance of the medical services. Helicopters moved the wounded from the battlefield to fully equipped treatment facilities more quickly than ever before. Experienced specialists were available in the combat zone. Jet aircraft assured the timely delivery of an adequate supply of whole blood from the United States. As for noncombat hospital admission, malaria, diar
OPERATIONAL HIGHLIGHTS OF FISCAL YEAR 1967
9
rhea, and hepatitis remained the principal causes, but the incidence was declining. Development of the drug dapsone substantially assisted in controlling falciparum malaria, the strain resistant to the standard chloroquine-primaquine prophylaxis, and in reducing the time of treatment.
The capacity of hospitals in Vietnam increased from about 3,500 to over 6,000 beds during the year. Medical care was also provided by two Navy hospital ships operating offshore, the second of which began receiving patients in April 1967. The Army placed in service its newly developed mobile Medical Unit, Self-Contained, Transportable (MUST). Hospital facilities elsewhere in the Pacific and in the United States were expanded by about 5,000 additional beds. Aeromedical evacuation of patients, both intratheater and trans-Pacific, greatly increased. Army ambulance helicopters transported about 83,000 U.S., Vietnamese, and allied patients, while the Air Force provided medical airlift for about 90,000 within the Pacific Theater and for 23,000 from the Pacific to the United States, as compared to 49,000 and 13,000 respectively, during 1966.
The task confronting the logistical organizations of the Department continued to grow as both deployment and combat consumption increased substantially during the year. Production of the required materiel had to be carefully scheduled, as discussed later, in light of frequently changing needs of the combat forces. Traffic managers had to provide sea and air transportation for dry cargo shipments totaling 73 percent more than during the preceding year. Even more critical was the prompt establishment of adequate unloading, storage, and distribution facilities in a country whose peacetime requirements for such facilities had been merely a small fraction of the current ones. Despite these massive problems, the field commander, General Westmoreland, could state that “not once have the fighting troops been restricted in their operations against the enemy for want of essential supplies.”
Oversea shipments were the responsibility of the Military Sea Transportation Service (MSTS) and the Military Airlift Command (MAC). During fiscal year 1967, MSTS delivered 11.3 million tons of dry cargo to Vietnam and transported an additional 1.3 million tons in intratheater traffic. Despite the high volume of traffic, ship turn-around time decreased from a monthly average of 18.2 to 12.5 days. This achievement was largely attributable to improved port facilities in Vietnam and the increasing proportion of ships loaded for discharge at a single port. Air cargo shipments to Southeast Asia totaled 305,000 tons, an 82-percent increase over the preceding year. Red Ball Express shipments of high priority items, although a relatively small portion of the total, continued to make a significant con
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
tribution to the readiness of combat forces. By the close of the fiscal year, some 80,000 pieces of equipment and spare parts weighing 14,160 tons had been airlifted since December 1965 by this special priority service. As for passengers, MAC transported 722,000 to Southeast Asia in fiscal year 1967 and an additional 154,000 came to Vietnam by sea.
In Vietnam itself the key to effective combat support remained the progress made in the construction program for logistical and operational facilities. Approved plans called for six deep-draft ports, eight jet air bases, and 80 auxiliary air fields; cantonments for over 400,000 troops; 10.2 million square feet of covered storage space; 2.5 million cubic feet of refrigerated storage; 4 million square yards of open storage; petroleum tank farms for 3 million barrels; 6 million square feet of maintenance facilities; and various other supporting facilities. Over $1.5 billion had been programed for these projects since 1965. Work in place on June 30, 1967, was valued at $950 million or about 63 percent of the total program—an increase of $843 million during the year. With the completion of a substantial portion of these projects and the continuing buildup of military construction units in Vietnam, the work force of the civilian contractor combine was phased down from a peak strength of 51,000 in July 1966 to about 22,000 in June 1967.
In the field of supply management, emphasis shifted during the year from the rapid buildup of sufficient stocks to the maintenance of supply levels as actually required by combat experience. During the buildup phase, predetermined “supply packages” moved together with combat units from the United States, and monthly replenishments were shipped automatically to meet assumed consumption rates. As reserve supplies began to accumulate, normal requisitioning procedures were instituted and more intensive management applied to inventory levels. In March 1967, a special team of supply managers was sent to Vietnam to identify excess supplies and direct their reutilization. With the help of such reviews, U.S. Army, Vietnam, eliminated over 78,000 items from its stockage lists, canceled $100 million in outstanding requisitions, and earmarked supplies with a value of $117 million for redistribution.
Special attention continued to be devoted to Project PROVOST (Priority Research Objectives, Vietnam Operational Support), designed to meet urgent new requirements created by the special environmental and tactical conditions in Southeast Asia. Funds allocated to PROVOST rose from $370 million in fiscal year 1966 to $680 million in 1967. This effort has yielded substantial results. More powerful, long-burning flares and starlight scopes for crew-served weapons have increased the night fighting ability of allied forces. Improvements in the SHRIKE antiradiation, air-to-surface missile and in electronic
OPERATIONAL HIGHLIGHTS OF FISCAL YEAR 1967
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warfare equipment have contributed to lower aircraft losses. A new portable radar, the PPS-5, has proved capable of detecting personnel in motion as an aid in countering enemy infiltration. Studies in behavioral sciences have assisted U.S. advisers in evaluating the effectiveness of pacification efforts. In general, the PROVOST effort was focused on any new requirement that appeared subject to relatively quick solution.
Political and Economic Developments
Despite the increased pace of the war, the political and economic situation in the Republic of Vietnam improved during fiscal year 1967. In September 1966, over 80 percent of the eligible voters ignored Communist threats and participated in the election of a constituent assembly. Its 117 members drafted a new constitution that was promulgated on April 1, 1967, and by the close of the fiscal year preparations were going forward for the popular election of a new government in the early fall.
On the economic side, the danger of runaway inflation was gradually reduced during the year. Drastic actions were taken by the United States to limit its expenditures, and substantial economic assistance, particularly in the form of imports, increased the availability of consumer goods.
The rate of progress in pacifying the countryside, however, remained relatively slow and uneven, with gains in some areas and setbacks in others. In recognition of this situation, more units of the Army of the Republic of Vietnam were assigned to the pacification mission, Regional and Popular Forces were being retrained, and a further buildup of the National Police and the Revolutionary Development Cadres was initiated. In May 1967, the U.S. civilian and military support efforts of the pacification program were consolidated under the Commander, Military Assistance Command, Vietnam, and his civilian deputy for Civil Operations and Revolutionary Development Support ( CORDS). This organizational realignment was made to promote more effective utilization of U.S. resources and better coordination both within the U.S. support structure and between U.S. and Vietnamese personnel in the field.
In the final analysis, the ultimate success of the entire allied effort in South Vietnam will turn on the ability of the Republic of Vietnam to reestablish its authority over its territory so that peaceful reconstruction can be undertaken.
860-499 0—70-----2
II.	Operational Forces
While conducting major combat operations in Vietnam, the armed forces of the United States remained responsible for countering a wide range of other possible threats, from full-scale strategic nuclear attack to local subversion and insurrection. Discharge of these responsibilities required an increase in active duty military personnel strengths from 3,094,000 to 3,377,000 during the year; the introduction of new weapons, techniques, and tactics; and improvements in the combat readiness of the reserve components. These measures helped to meet the year’s challenges and provided a firm foundation for our security in the years to come.
Strategic Forces
Deterrence of nuclear attack on the United States or its allies is the most vital task assigned to the Department of Defense. Accomplishment of this mission depends upon the maintenance of instantly ready strategic offensive forces of sufficient size and strength to inflict unacceptable damage upon an attacker, even after they themselves have absorbed a surprise attack. These forces also need to be supplemented by strategic defenses designed to limit the damage to our society, should deterrence fail. U.S. capabilities for assured destruction and damage limitation have grown appreciably since 1961 when major programs were initiated to increase the survivability of weapons systems, to assure receipt of timely and reliable attack warnings, and to upgrade command and communications channels. With these objectives now achieved, current programs of the Department of Defense stress steady technological improvement in our forces so as to sustain our deterrent capabilities in future years.
Strategic Offensive Forces
Technological advances have greatly altered the composition of the strategic offensive forces during the past 6 years. In mid-1961 our retaliatory striking power consisted primarily of bombers—more than 1,000 medium-range B-47’s, over 600 long-range B-52’s, and about 40 supersonic medium-range B-58’s. Intercontinental ballistic missiles
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(ICBM) were just entering the weapons inventory with 28 considered operational. Five fleet ballistic missile (FBM) submarines had been commissioned. By June 30, 1967, the missile components of the strategic forces had grown to 1,054 ICBM’s in “hardened” silos and 41 FBM submarines, while the aircraft component included 635 B-52’s and B-58’s. This force structure provided a deterrent power that no aggressor could ignore.
Strategic Offensive Missiles
Our strategic missile forces added 120 MINUTEMAN ICBM’s and four FBM submarines to their strength during fiscal year 1967, thus completing the buildup to the programed level of 1,000 MINUTEMAN ICBM’s, 54 TITAN ICBM’s, and 41 nuclear submarines carrying 656 POLARIS FBM’s. Moreover, qualitative improvements further enhanced striking power, as MINUTEMAN II and POLARIS A-3 missiles replaced earlier MINUTEMAN I and POLARIS A-l models. Progress in the development of the MINUTEMAN III and of the POSEIDON FBM gave assurance of continued future growth.
The Air Force during the fiscal year completed the activation of three new MINUTEMAN II squadrons and the retrofitting of two MINUTEMAN I squadrons with MINUTEMAN II missiles, thereby modifying and increasing the force from 800 MINUTEMAN I’s and 80 MINUTEMAN Il’s to 700 MINUTEMAN I’s and 300 MINUTEMAN Il’s. The latter model has an improved second stage engine with greater thrust that provides increased range and payload; it also incorporates a more accurate reentry vehicle and penetration aids for protection against enemy defenses. During the coming year, additional MINUTEMAN I silo launchers will be reconfigured to fire the MINUTEMAN II. MINUTEMAN missiles continued to be supplemented by 54 TITAN II ICBM’s with storable liquid fuel deployed in hardened silos. The long range and heavy payload of this weapon give it a special capability against large, unhardened targets. Test firings and operational readiness inspections of TITAN II and MINUTEMAN missiles during the year confirmed the high reliability of both these weapon systems.
MINUTEMAN III was being developed for the further enhancement of our deterrent capabilities. This advanced missile is being designed to provide marked improvements in accuracy and penetration over its predecessors. Major milestones in this program during the year included the static test firing of the third stage motor and the award of the contract for a new reentry vehicle, the Mark 17, to be used with the MINUTEMAN II as well as the MINUTEMAN III. Other efforts
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
to improve the accuracy and survivability of warheads for use against defended targets were undertaken as part of the advanced ballistic reentry systems (ABBES) program, through which a variety of flight tests were conducted during the year. The Air Force continued its studies and research for the development of the components to be incorporated in an advanced ICBM.
With the commissioning of the U.S.S. TR7Z Rogers on April 1,1967, the Navy completed its program for the construction of a POLARIS fleet composed of 41 submarines and five tenders. In addition, the Navy continued to upgrade the capability of the force by converting the first five of the submarines equipped with the A-l, 1,200-mile version of the POLARIS FBM to the A-3 with a range of 2,500 miles. The first converted vessel rejoined the fleet last year, three more rejoined during 1967, and the last one is scheduled for completion early in fiscal year 1968. The 41-boat fleet will then include 28 submarines armed with the A-3 and 13 with the 1,500-mile A-2. The Navy also increased the number of submarines deployed on patrols during the year from 27—15 A-3’s and 12 A-2’s—to 32—25 and 7, respectively. The remaining nine submarines, including the two most recently commissioned, were either in shakedown or overhaul on June 30,1967.
The decision, announced in January 1967, to proceed with the production and deployment of the POSEIDON missile climaxed a development program for an advanced FBM that was initiated in 1965 and accelerated in 1966. Plans for this new weapon system call for a larger pay load of warheads and penetration aids, greater accuracy, and increased flexibility in targeting. Its subsequent deployment should insure the continued effectiveness of POLARIS submarines, 31 of which are to be retrofitted with POSEIDON during the 1970’s, while the remaining 10, not structurally adaptable to this large missile, would be armed with an improved version of the POLARIS A-3 that is also currently under development. Engineering development of the POSEIDON and its supporting equipment was proceeding on schedule under incentive-type contracts at the close of fiscal year 1967.
Strategic Aircraft
Retention of a mixed force of strategic missiles and manned bombers has been programed by the Department of Defense in order to complicate and make more expensive the defensive problems of potential enemies and to maintain flexibility in the retaliatory options available to us. To preserve these advantages, the development of a new bomber and standoff air-to-surface missile continued on schedule. At the same time, however, the achievement of programed goals for the buildup
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of strategic missiles permitted a further adjustment in the size of the manned bomber force to lower levels projected some years ago.
During fiscal year 1967 the Air Force deactivated three squadrons of older model B-52’s equipped with AGM-28A HOUND DOG missiles, thus reducing the number of operational strategic bombers by 45. Of the 635 remaining in service, 555 were B-52’s and 80 were B-58’s. The pre- and post-strike observation capabilities of these forces were enhanced during the year by deliveries of additional supersonic SR-71 long-range strategic reconnaissance aircraft—capable of surveying 60,000 square miles of territory in about an hour—and conversion of some C-135 transports to a reconnaissance configuration. As for the future composition of the bomber force, current plans provided for the gradual phaseout of the 80 B-58’s, of 300 C through F models of the B-52, and of all AGM-28A HOUND DOG missiles, and for the retention of 255 B-52G’s and H’s and of AGM-28B HOUND DOGs. The schedule for the deactivation of the older bombers is to be coordinated with the introduction of the new bomber currently under development, the FB-111, a modification of the F-111A tactical fighter.
Compared to the F-111A, the FB-111, as currently planned, will have longer wings, stronger landing gear, a more powerful engine, improved avionics for navigation and delivery of either nuclear or conventional weapons, and inflight refueling equipment. Its range on a typical nuclear strike mission should exceed not only that of the B-58 but also of the B-52C-F. The aircraft will also carry external fuel tanks and air-to-surface missiles. Development began during the preceding fiscal year, utilizing two F-lllA’s for testing and evaluation—one for avionics and one for modification as a prototype FB-111. Shortly after the close of fiscal year 1967, this prototype flew its first test flight. Funds to initiate procurement were included in the 1967 budget. For the longer range future, the Air Force continued development of components for incorporation in an advanced manned strategic aircraft (AMSA) to replace B-52G’s and H’s. Nonflight demonstrator engines were tested during the year and concept formulation for avionics systems progressed satisfactorily.
Scheduled to enter the operational inventory at the same time as the FB-111, the short-range attack missile (SRAM) will provide manned bombers with an advanced air-to-surface capability for attack of heavily defended targets or suppression of enemy defenses without having to fly over them. The overall design was approved in August 1966 and the Air Force awarded a “total package” contract in October for completion of development and initiation of production. Although designed originally for the FB-111, the missile could also be carried by some modified B-52’s.
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Responsibility for managing joint research projects utilizing the XB-70 supersonic aircraft was transferred to the National Aeronautics and Space Administration (NASA) by the Air Force in March 1967. Major objectives include the investigation of dynamic loads imposed on the airplane and the evaluation of stability and control characteristics and handling qualities of large supersonic aircraft—subjects of interest to both agencies. The Air Force will continue to provide pilots and mission support at Edwards AFB, Calif., for future research flights.
Strategic Defensive Forces
The systems constructed in the 1950’s to provide warning and defense against enemy bombing attacks were becoming increasingly vulnerable by 1961 because of the developing threat from enemy missiles. In addition, resources had been committed to meet a higher level of bomber threat than in fact materialized. Programs since 1961 have therefore had two objectives: (1) To improve the survivability and effectiveness of antiaircraft systems and adjust them to the actual threat, and (2) to develop the technology for effective antimissile systems as a supplement to our primary defense—the ability to assure the destruction of the aggressor. Both of these objectives were furthered by actions taken during fiscal year 1967.
Antibomber Defenses
U.S. defenses against manned aircraft include three interlocking subsystems: (1) A network of early warning radars to detect and track incoming hostile aircraft; (2) command and control equipment to vector weapon systems for the interception of these intruders; and (3) a mixed force of surface-to-air guided missiles and of manned interceptor aircraft armed with air-to-air missiles to destroy the attackers. This entire complex is under the overall direction of the North American Air Defense Command (NORAD), a combined United States-Canadian military organization. NORAD would direct an air battle from its automated Combat Operations Center within the Cheyenne Mountain in Colorado, a facility that became fully operational at the beginning of fiscal year 1967.
Adjustments since 1961 in the warning system have reduced duplication in coverage that was originally believed desirable to cope with the larger enemy bomber forces then anticipated. In keeping with this reassessment of the threat, some additional ground-based search radars were phased out during fiscal year 1967. Facilitating this reduction, some radar stations operated by the Federal Aviation Administration (FAA) of the Department of Transportation were interconnected
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with, the air warning and control systems of the Department of Defense by installing digitizers that make inputs from FAA sets compatible with military equipment. Seaward extension of radar coverage continued to be provided by EC-121 early warning aircraft flown by the Air Force. In addition, studies were initiated during 1967 of the feasibility of completely integrating FAA and Defense Department radars into a single national system for both air defense and air traffic control.
The program that was started in 1961 to provide backup interceptor control (BUIC) equipment as a supplement to the vulnerable semiautomatic ground environment (SAGE) system moved into its third phase during 1967 when construction began for fully automatic BUIC-III centers. Earlier, manual BUIC-I equipment had been installed to take over the functions of a SAGE center, should it be hit. This improvement was followed by the establishment of 14 semiautomatic BUIC-II facilities during fiscal year 1966. The defense program on which the 1968 budget was based called for emplacing BUIC-III equipment at five BUIC-I and 14 BUIC-II sites and for internetting these 19 centers with 12 SAGE sectors in such a way that any one BUIC-III or SAGE direction center could handle the air battle for an entire sector even if the other center or centers in a sector were destroyed.
The longer range plan for modernization of both the warning and the control systems envisions the development of equipment capable of detecting and tracking aircraft from above, over land areas, and controlling interceptors from the air rather than from the ground. This concept is being explored through a program for a new airborne warning and control system (AWACS). During fiscal year 1967, the Air Force was investigating three possible solutions to the problem of eliminating “ground clutter” from the radar returns of airborne sets and also was directing design efforts toward the airframe and avionics for the high performance aircraft that would provide the airborne platform for AWACS. This promising development program will continue to receive priority attention during the coming year.
In accordance with the program for reducing the number of manned interceptors to a level commensurate with the bomber threat, the Air Force continued to deactivate excess air defense units during fiscal year 1967, eliminating three squadrons from the force structure. All F-102’s formerly based in the continental United States have now been phased out, although this aircraft continued to provide effective air defense protection in Alaska and at oversea locations, including Vietnam. The air defense squadrons in the United States were equipped with F-101, F-104, and F-106 aircraft armed with FALCON, GENIE, and SIDEWINDER air-to-air missiles. Some F-106’s were modi
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
fied during the year to provide them with an air refueling capability that increases their range and responsiveness to an emergency in a threatened sector of the United States or overseas. Aircraft were more widely dispersed for greater survivability as the result of the completion in 1967 of the program for constructing additional operating bases. About one third of the force was normally maintained on 24-hour alert, backed up by Air National Guard units which gained 61 F-102’s from the regular forces and phased out 60 obsolescent F-89J’s by the close of the fiscal year.
Although the Air Force continued to test and evalute a prototype advanced interceptor, the YF-12A, and to develop an improved fire control/missile system, it appeared that successful development of AWACS was the key to a more effective future air defense. Therefore, the decision to procure the F-12A configured for control from a ground environment was deferred.
Surface-to-air missile defenses against bombers continued to be provided by NIKE-HERCULES batteries of the Army and Army National Guard, HAWK, missile units of the Army, and the BOMARC-B squadrons of the Air Force, which remained at virtually the same levels as during the preceding year. Near-term improvements that have been planned include the procurement of coordinated air defense system data converters for the HAWK and the NIKE-HERCULES. Longer range modifications of the force structure may result from the development program for an advanced weapon system for the field forces—the surface-to-air missile development (SAM-D) project of the Army—being designed to provide greater firepower and mobility than the two currently available Army missiles. Contract definition of the SAM-D was completed during the year and an advanced development contract awarded.
Antimissile Defenses
The supersonic speeds and operating environment of ICBM’s have posed difficult technological problems in the development of effective warning and tracking, command and control, and interception and destruction antiballistic missile (ABM) defense subsystems. The greatest progress has been made in constructing a warning network, in part because strategic considerations dictated early concentration on this project to increase the survivability of manned bomber forces. For some years operational warning stations have been interconnected with the control system for the strategic offensive forces, and improved detection equipment was being perfected during fiscal year 1967.
The Department of Defense has also committed substantial sums for a number of years to the development of an active antiballistic missile
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defense. These efforts have resulted in significant technological advances, but strategic questions remained concerning the desirability of proceeding with production and deployment. The available technology would not insure an impenetrable screen against a massive attack and the Soviet Union might counteract the defenses by increasing the size and weight of the attacking forces. In these circumstances, the better strategy for the United States during fiscal year 1967 appeared to be the continued enhancement of its own assured destruction capabilities. The developing ICBM threat from China, however, is adding a new complicating factor that was receiving careful study at the close of the year.
During fiscal year 1967 the three stations of the ballistic missile early warning system (BMEWS) in Alaska, Greenland, and the United Kingdom remained the principal means of alerting U.S. forces to a land-based missile attack. System capabilities were upgraded at the beginning of the year when a new tracking radar at the Alaskan station became fully operational. Current programs provide for complementing BMEWS by over-the-horizon (OTH) radars that were being converted from experimental to operational configuration by the Air Force. These stations bounce their signals between the earth’s surface and the ionosphere and thus achieve substantially longer range coverage than radars whose signals proceed in an unbroken path from the earth into outer space. While the initial OTH system involved separately located transmitters and receivers, a back-scatter OTH that would return an echo signal to the point of origin is also under development. To provide an interim alert system against submarine-launched missiles, the Air Force began modifying seven radars along the Atlantic, Gulf, and Pacific coasts and expected to have them operating in 1968.
The development of concepts and the design and testing of elements for an active ABM system progressed significantly during the fiscal year. As part of Project DEFENDER, the Advanced Research Projects Agency (ARPA) of the Department of Defense continued the investigation of missile reentry phenomenology, radars of advanced design, and defenses against highly sophisticated forms of attack. Through the NIKE-X program, the Department of the Army was developing a set of components for an area defense system that would be capable of intercepting and destroying incoming ICBM’s several hundred miles from their intended target. The Army’s concept included: (1) A perimeter acquisition radar (PAR) for very long-range search; (2) a multifunction array radar (MAR) for central control, search, target acquisition, discrimination between warheads and decoys, and direction of interceptor missiles; (3) a missile site radar (MSR) for local control of missiles; (4) control and data processing and display subsystems; (5) the SPARTAN three-stage missile
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
with a nuclear warhead for intercepting ICBM’s at long range outside the earth’s atmosphere; and (6) the SPRINT high acceleration missile for shorter range interception. Among the major actions in the NIKE-X program during fiscal year 1967 were the award of a contract in December 1966 for design and development of the PAR; fabrication, assembly, and testing of subsystems for the MAR and of a scaled-down tactical model, the TACMAR; the initiation of construction of a test model of the MSR at Kwaj alein Atoll; testing of the SPARTAN motor; and continued flight testing of SPRINT at the White Sands Missile Range, N. Mex. Progress during the year inspired confidence in the design specifications for these individual subsystems. Further development and testing of components at Kwaj alein is scheduled for the coming year, to be followed by thorough testing of the entire complicated weapon system to insure proper integration of all components.
Antisatellite Defenses
Detecting, tracking, identifying, and cataloging all man-made objects in space, of United States as well as foreign origin, remained the responsibility during the year of the space detection and tracking system (SPADATS), a component of NORAD. New computer programs were developed to facilitate the identification and cataloging of orbiting objects, which have continued to grow in numbers. Since October 1957 SPADATS has cataloged more than 2,600 satellites, other vehicles, and debris, of which more than 1,200 remained in orbit on June 30, 1967. The SPADATS center was moved from Ent AFB, Colo., to the NORAD Cheyenne Mountain complex during the year. Detecting and tracking functions continued to be performed by the Navy’s SPASUR radar fence, by BMEWS, and by the Air Force SPACETRACK network of radars and optical sensors. Further improvements and expansion have been programed to upgrade system capabilities, particularly in view of the increasing quantities of orbiting objects. The Department of Defense also continued to maintain a system for the interception and destruction of satellites within certain ranges.
Civil Defense
In addition to important training, public information, warning, coordination, and control functions, the civil defense program of the Department of Defense has concentrated on the establishment of a nationwide system of fallout shelters to protect the population from the radiological effects of a nuclear attack. Such a system can make a significant contribution to our overall damage limitation capabilities. Continued progress was made during fiscal year 1967 in finding fallout shelter space, although the Congress in recent years has funded the
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civil defense program at lower levels than recommended by the Department of Defense.
To date, the Office of Civil Defense (OCD) has located shelter spaces for about 160 million persons—an increase of 10.6 million or 7 percent during fiscal year 1967, licensed for public use some 100,468 structures with a capacity of 99 million people, and stocked 83,042 shelters with sufficient supplies to accommodate about 78 million individuals for 8 days or 47 million for 14 days. Relying, as in the past, on the cooperation of the States, local governments, industry, and private citizens, OCD expects to identify, license, and stock additional shelter spaces during the coming year. The detailed report of this agency’s operations during 1967 is appended to the Report of the Secretary of the Army.
General Purpose Forces
The mission of general purpose forces is to deter aggression—other than strategic nuclear attack—and to counter it should deterrence fail. The military resources allocated to this mission include most Army combat and combat support units, virtually all naval forces except POLARIS submarines, the Marine Corps, and the tactical elements of the Air Force. While these forces are raised, trained, and supported by the military Services, they are assigned for operations to the unified commands established by the Joint Chiefs of Staff—the Alaskan, Atlantic, European, Pacific, Southern, and Strike Commands.
Between 1961 and 1965 the general purpose forces were brought to high levels of readiness through personnel increases; unit reorganizations; expanded procurement of weapons, equipment, and supplies needed for sustained combat; and the development and introduction of modern materiel, tactics, and techniques. The success of these efforts was evidenced by the speed and effectiveness with which U.S. units deployed to Vietnam and began conducting combat operations in the summer and fall of 1965. Thereafter, and continuing in fiscal year 1967, the force structure and weapons inventories expanded to meet growing requirements in Southeast Asia while maintaining U.S. capabilities for fulfilling commitments elsewhere. Programs for the general purpose forces in the current fiscal year also made ample provision for sustained growth in combat readiness during future years.
Army
With the activation of two new infantry brigades—the 11th in July 1966 and the 198th in April 1967—and of the 6th Armored Cavalry Regiment in March 1967, the Army continued the temporary augmentation of its force structure to maintain its capability for other contingencies during the Vietnam war. During the preceding fiscal year,
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
a new infantry division and two separate brigades had been activated; thus, the equivalent of 2% divisions has been added to the troop list since 1965, for a total of 18% division-equivalents on June 30, 1967. During this same period the number of maneuver battalions grew from 174 to 201, artillery battalions from 115 to 147, and aviation units from 110 to 187. Active duty military personnel strength increased by 473,000—from 969,000 on June 30, 1965, to 1,442,000 2 years later.
Army deployment in Vietnam increased by nearly 126,000 during fiscal year 1967, for a total of about 286,000, with the arrival of such major units as the 4th and 9th Infantry Divisons, the 196th and 199th Light Infantry Brigades, and the 11th Armored Cavalry Regiment. With these additions, approximately one-third of the Army’s combat forces were committed to Vietnam, including five and one-third divisions and three separate brigades, or six and one-third divisionequivalents. Other deployments remained unchanged during the year, with five divisons and one brigade in Europe, two divisions in Korea, two brigades in Alaska, one brigade each in Panama and Hawaii, and five divisions in the active strategic reserve at home. During an emergency these units of the regular establishment would be reinforced by elements from the Army reserve components.
To support combat operations and to continue force modernization, weapons and equipment with a value of over $5.4 billion were delivered to the Army during fiscal year 1967, an increase of 84 percent over the preceding year. Ammunition, up 194 percent, accounted for a large part of this gain, but substantially larger numbers of new combat and support vehicles, aircraft, other weapons, communications and electronic items, and other support equipment were also received from production lines. For the most part, the funds for this material had been obligated during the preceding year, when $5.2 billion had been allocated to Army procurement programs. During the current year, nearly $5.9 billion was programed for weapons and equipment; major increases in objectives included one of 55 percent for miscellaneous support equipment such as road graders, tractors, generator sets, and similar nontactical materiel, and one of 47 percent for missiles, spare parts, and related ground support items. Amounts substantially higher than during the period prior to 1966 were also programed for the continued improvement of Army mobility, offensive firepower, and defensive capabilities.
Combat operations in Vietnam have been characterized by a steady expansion in the use of helicopters for deploying infantry units and light artillery batteries against dispersed enemy formations. This tactical innovation has been supported by the continued growth in the Army’s aviation resources. The inventory of active aircraft increased during fiscal year 1967 by nearly 1,300, or from 8,098 to 9,375. A net
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gain of about 1,400 helicopters was reduced by a net loss of about 100 fixed-wing aircraft. Most of the change in the latter category reflected the transfer from the Army to the Air Force of the responsibility and resources for intratheater fixed-wing airlift. The majority of the helicopters received during the year were UH-1 Iroquois, but initial deliveries of the new 0H-6A Cayuse light observation helicopter and continued production of the CH-54 Flying Crane and the CH-47 Chinook medium transports also swelled the inventory. Improved versions of the Iroquois and Chinook were under development. Major efforts to increase the suppressive fire capabilities of armed helicopters resulted in significant advances. Production was begun of an interim system, the AH-1G Hueycobra, that was expected to be ready for deployment to Vietnam early in fiscal year 1968, while the first prototype of the new AH-56A Cheyenne advanced aerial fire support system (AAFSS) was received for testing in May 1967. The Huey cobra, armed with a combination of 7.62-mm. six-barrel miniguns, 40-mm. grenade launchers, and 2.75-inch aerial rockets, will be superior in speed, maneuverability, and firepower to the present Iroquois gunships, while the Cheyenne is expected to be nearly twice as fast and is being designed to carry new tube-launched, optically tracked, wire-guided (TOW) antitank missiles as well as machineguns, rockets, and grenade launchers.
Lessons learned in combat and advances in technology were also reflected in changes in the tables of organization and equipment for Army artillery and surface-to-surface missile units. For example, the demonstrated effectiveness of 8-inch howitzers and 175-mm. guns in Vietnam led to a decision to increase the number of heavy artillery battalions in the force structure. As for medium artillery, with the development of an effective nuclear projectile for 155-mm. howitzers, the Army began phasing out its units equipped with the DAVY CROCKETT nuclear delivery system. Procurement of the self-propelled 155-mm. howitzer continued. A new light artillery weapon, the helicopter-transportable 105-mm. howitzer that had been deployed to Vietnam in 1966, continued to demonstrate its versatility and effectiveness. New ground support equipment was also being developed for the PERSHING missile system to permit it to take over, particularly in Europe, part of the quick reaction alert mission currently assigned to tactical aircraft and MACE missile squadrons of the Air Force.
Programs for the improvement of defensive systems against enemy armored vehicles continued to progress. The SHILLELAGH gun/ missile system was being procured to arm tanks and armored reconnaissance vehicles, while two new antitank weapons for infantrymen were being developed. The heavier of these, the TOW, will, when deployed, replace some 106-mm. recoilless rifles and the ENTAC wire-
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
guided missile system and be used on the Cheyenne helicopter. A lighter weapon, the DRAGON, formerly called the MAW, is being designed to replace some 90-mm. recoilless rifles. The TOW was successfully tested against moving targets during the year, while component and launch environment tests of DRAGON were initiated.
Systems for defending the ground forces against air attack also continued to receive heavy stress. Units in the field were issued the new REDEYE surface-to-air missile weapon that can be carried and used by one man, while the HAWK system was being improved through adaptation from a towed to a self-propelled configuration and by the development of new fire distribution controls that will give it and NIKE-HERCULES greater speed of reaction and increased flexibility. For defense against low-flying aircraft, a new mobile gun/mis-sile system, the Vulcan/CHAPPARAL, was under development and components were being procured. The Vulcan gun is a modification of the six-barrel, Gatling-type gun used on Air Force tactical fighters, while the CHAPPARAL is being adapted from the Navy-developed SIDEWINDER air-to-air missile. As for air defense in the 1970’s, the follow-on system being developed is the SAM-D, intended to replace both the HAWK and the NIKE-HERCULES.
The development and procurement of self-propelled artillery and air defense weapons as well as the production of tanks, armored personnel and cargo carriers, and other vehicles have contributed greatly to the significant growth in the Army’s capabilities for overland tactical mobility. Additional deliveries during fiscal year 1967 included General Sheridan armored reconnaissance/airborne assault vehicles and M-60 tanks, both of which will be armed with the 152-mm. SHILLELAGH gun/missile system. The joint program of the United States and the Federal Republic of Germany for development of a new main battle tank, MBT-70, continued to meet current design goals as the components were tested and accepted. A wooden and metal mock-up model of the MBT-70 was completed in January 1967 and work began on the prototype tank.
Navy and Marine Corps
Augmentation of the Navy to meet requirements in Southeast Asia increased the number of ships in commission during the year by 22 for a total of 931 on June 30, 1967. The active fleet was composed of 419 warships, including 41 POLARIS submarines, and 512 other combatant vessels and auxiliaries, as compared to 410 and 499, respectively, at the beginning of the fiscal year. To man these ships and perform other naval missions, personnel strength rose by about 6,400, from 745,200 on June 30, 1966, to 751,600 a year later.
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The number and worldwide deployment of attack carriers remained unchanged during the year while modernization of ships and weapons continued to improve air strike capabilities. The 15 attack carriers in commission included the nuclear-powered Enterprise, 7 modern For-restal-C&ss—two of which completed extensive overhauls during the year, two Midway-Cass, and five older Asseas-class ships. The Pacific Fleet operated nine of these carriers, and the Atlantic Fleet, six. The latter maintained two of its carriers in the Mediterranean Sea throughout the year, while five of the Pacific Fleet’s nine remained in the Far East—including the three stationed off the coast of Vietnam at all times. In addition, one antisubmarine warfare carrier, the Intrepid, continued its deployment to Southeast Asia where it functioned in a limited attack carrier role. New catapults and arresting gear, a larger flight deck, and the Naval Tactical Data System (NTDS) for command and control of operations were being added to a 16th carrier, the Midway, which was not part of the active fleet in 1967. This work, together with launching of the newest F orrestad-C&ss carrier, the John F. Kennedy, and award of a contract for construction of a second nuclear-powered carrier, the Chester W. Nimitz, during May 1967 brought the Navy closer to achieving its programed goal of four nuclear, eight Forrestal, and three modernized Midway attack carriers.
The combat capabilities of carrier air groups rose with the delivery of additional A-6A Intruder all-weather attack aircraft, F-4 Phantom II fighters, and reconnaissance versions of the F-4 and A-5 Vigilante, the latter through conversion rather than new production. Substantial inventories of A-1 Skyhawks, the Navy’s principal light attack aircraft, were maintained, while the older propeller-driven A-l’s were gradually being phased out. The service life of F-8 Crusader fighter aircraft, used on A&seir-class carriers, was being extended through wing modification and avionics improvements. Air striking power will be further increased during the coming year as new models, received from production lines in 1967, are deployed with the fleet. The Navy accepted its first A-7A Corsair II light attack bombers in October 1966, completed carrier trials, began flight squadron training, and expected to commit them to combat early in fiscal year 1968. Deliveries also commenced of the newest Phantom II model, the F-4J, that will deploy with the fleet in the spring of 1968. Testing continued during the year of the F-111B—of which five research and development models have been received-—and of its PHOENIX missile system. The Navy also initiated development studies for a multimission, all-weather fighterbomber, the VFAX, for possible deployment during the mid-197O’s.
The antiaircraft screen for protection of carrier and other task forces continued to grow in size and effectiveness during fiscal year 1967 with the commissioning of nine multipurpose guided missile
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ships and development of improved weapons. The Navy’s second nuclear-powered frigate, U.S.S. Truxtun, armed with TERRIER surface-to-air missiles, 5-inch and 3-inch guns, and ASROC antisubmarine rockets, was commissioned on May 27, 1967. The other newly commissioned ships included five conventionally powered frigates armed like the Truxtun; two guided missile escort ships armed with improved TARTAR surface-to-air missiles, one 5-inch gun, ASROC, and antisubmarine torpedoes; and the U.S.S. Decatur, the first of a class of destroyers being converted to guided missile ships. The Navy shipbuilding program for 1967 provided for construction of another nuclear-powered guided missile frigate, while the guided missile cruiser Albany, Leahy-class guided missile frigates, and the first nuclear-powered frigate, the Bainbridge, are to be modernized. As for missile systems, TALOS, TERRIER, and TARTAR demonstrated improved effectiveness and a prototype basic defense system for smaller ships using a modified SPARROW III air-to-air missile was installed for testing. In addition, a contract was awarded for the medium-range STANDARD missile to replace TARTAR and for an extended-range version to supersede TERRIER, while studies continued of the feasibility of adapting the Army’s SAM-D for naval use.
The Navy’s resources for antisubmarine warfare (ASW) included not only a sizable number of multipurpose ships such as those mentioned above but also ASW carriers and carrier air groups, land-based patrol aircraft, ASW destroyers and destroyer escorts, and attack submarines. Increases in the quantity and improvements in the quality of these assets during 1967 continued to enhance U.S. capabilities for protecting vital sea lanes and defending the fleet. Excluding the Intrepid on temporary assignment to Southeast Asia, the ASW carrier force remained at seven, of which four were deployed with the Pacific Fleet and three in the Atlantic. The air groups that were embarked on these carriers received additional late model S-2 Tracker aircraft and SH-3A Sea King long-range, all-weather helicopters for locating and destroying enemy submarines. Land-based squadrons obtained additional modern P-3 Orion patrol planes, for which an advanced avionics system, A-NEW, was in development. A new aircraft for ASW carriers, the VSX, was also being designed. New frigates and destroyer escorts entered the fleet equipped with the modern AN/SQS-26 sonar detection equipment, variable depth sonars (VDS), ASROC, and the new MK-46 torpedo, while the operational qualities of the AN/SQS-23 sonar installed on older ships were upgraded during periodic overhauls. Contracts for the construction of 10 destroyer escorts were awarded during 1967; an equal number had been laid down the preceding year and 10 more were included in the
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1968 budget. During subsequent years improvements in escort ships are expected from concept formulation studies that the Navy initiated during 1967 for a new class of destroyers and frigates, the DX/DXG. A development program to double the range of ASROC was also underway. As for attack submarines, six equipped with nuclear reactors and the SUBROC rocket-torpedo weapon were commissioned during the year, for a total of 28 nuclear and 77 conventionally powered submarines in service. Current plans called for a fleet eventually numbering 64 nuclear attack submarines, of which 58 have been authorized, including five for which contracts were awarded during fiscal year 1967.
A further temporary augmention of the Marine Corps during the fiscal year brought its personnel strength to 285,000 on June 30,1967, a gain of about 24,000 in 1967 and of 95,000 since July 1965. These additions permitted the organization of the 5th Marine Division— composed of nine infantry, one tank, one amphibian tractor, and the equivalent of five artillery battalions—and of four HAWK air defense batteries, two light and two medium helicopter squadrons, and certain special combat support and training units to reinforce the regular Marine Corps force structure of three divisions and three air wings. Readiness dates for the 5th Division and the other add-on units were met on schedule, and all these forces had been transferred to the operational control of the Commanding General, Fleet Marine Force, Pacific, by June 30, 1967. The 4th Marine Division/Air Wing is to be manned by reservists, who continued to maintain their readiness for mobilization and deployment.
The deployment of Marine Corps personnel to Vietnam increased from 53,700 to 78,400 during the year. Operational control remained vested in the III Marine Amphibious Force (MAF), composed of two reinforced divisions, the 1st and 3d, an augmented air wing, and supporting forces. In addition, two battalions composing the Special Landing Force were embarked in ships of the 7th Fleet to provide a floating reserve for commitment whenever needed. Two battalion landing teams remained at sea with the Atlantic Fleet—one in the Mediterranean and one in the Caribbean—while a reduced-strength battalion guarded the U.S. naval base at Guantanamo, Cuba.
The introduction of new weapons and support systems improved the effectiveness of Marine Corps forces. The Marine Tactical Data System, Tactical Air Operations Center, and Tactical Data Communications Center were deployed to Vietnam during the year to provide better command and control of air operations, while a new lightweight battlefield-surveillance radar, the AN/PPS-6, was tested, favorably evaluated, placed in production, and furnished to ground force units. Marine Corps air units continued to replace F-8’s with
360-499 0—70-----3
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F-4’s and UH-34’s with CH-46 medium transport helicopters, while A-4 squadrons were being modernized. The new CH-53 heavy assault cargo helicopter was placed in operational service in Vietnam during December 1966. Further improvements in Marine Corps amphibious warfare and helicopter vertical envelopment capabilities are expected from the development of a new, large, multipurpose amphibious assault ship, the LHA, for which the Navy began concept formulation during fiscal year 1967.
Air Force
Modernization and expansion of Air Force tactical elements since 1961 have substantially improved U.S. capabilities for counterinsurgency and limited warfare—the forms of aggression encouraged by enemies deterred from general war by the overwhelmingly destructive power of our strategic forces. Beginning in 1965, these limited warfare capabilities were called into play in Vietnam, where tactical air forces in support of ground troops and in independent air campaigns have carried out their mission effectively and courageously in accordance with our national objectives. Despite combat losses, the capabilities of the tactical air arm continued to rise during fiscal year 1967 as more modern planes were received from production lines, other new equipment was placed in service, extensive modifications were made in current models, and new tactics and techniques were introduced. Current plans provide for further improvement in these areas and for the maintenance of adequate strength to meet future challenges.
General purpose air elements include tactical fighter and reconnaissance wings, oversea air defense squadrons, B-57 tactical bombers deployed in Vietnam, MACE surface-to-surface guided missiles with nuclear warheads, and special air warfare (SAW) units. Fighter squadrons continued to be organized into 23 wings throughout the year, although the number of aircraft in the active inventory rose. During an emergency, the tactical units of the regular forces would be augmented by the Air National Guard which continued to maintain seven fighter and three reconnaissance wings and four air commando squadrons at a high degree of combat readiness.
Tactical air wings and squadrons of the regular establishment were assigned to four unified commands—Strike Command in the United States and the oversea European, Pacific, and Southern Commands. Deployment to the Pacific Command continued to increase; in Vietnam alone the number of U.S. Air Force personnel rose by about 19,000 during the year, from 36,400 to 55,700, while units in Thailand were also augmented. An additional fighter wing moved overseas from the United States, increasing to 16 the number based abroad. European
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deployments were affected by the request of the French Government for withdrawal of foreign troops previously stationed there, including six reconnaissance and two transport squadrons and their supporting elements manned by about 35,000 U.S. Air Force personnel. The transport squadrons and three of the reconnaissance units were moved to the United Kingdom; two withdrew to the United States but remained committed to return to the Federal Republic of Germany; and one was deactivated in accordance with previous plans. No changes were necessary in deployment of fighter squadrons in Europe, but MACE A guided missiles were eliminated from the force structure and plans made for assigning their quick reaction alert mission to the Army’s PERSHING missile and retiring the remaining MACE B squadron in Europe. Present plains envisage the retention of MACE B’s deployed to the Pacific Command, however.
Deliveries during the fiscal year of substantial numbers of the new F-4D Phantom II fighter with avionics equipment superior to that of the F-4C improved the air-to-air and air-to-ground combat capabilities of the tactical forces. These gains from new production together with lower than expected aircraft attrition in Vietnam resulted in a buildup of fighter strength. In addition to the F—4C/D, fighter aircraft in service included the F-100, F-104, and F-105—all of which continued to demonstrate their effectiveness in combat—and the F-102 interceptor deployed primarily for oversea air defense. Further improvements in force capabilities will result from the procurement of three new aircraft—the F-4E, A-7D, and F-111A—for which production contracts were awarded during the year. In October 1966 the Air Force began procuring the F^LE and A-7D. The F-4E has an internally mounted 20-mm. Gatling-type gun in the nose and a more powerful engine and a better air-to-air fire control system than previous models, while the A-7D is the Air Force version of the Navy’s A-7A Corsair II with a more powerful turbofan engine for land-based operations. Testing and evaluation of the F-111A continued during the year, and in May 1967 a fixed-price incentive contract for the production of 493 F-lll’s was signed, replacing an earlier letter contract. An improved avionics system to be installed on a later model, designated the F-111D, was under development. For the longer range future, the Air Force continued its design studies of two successor aircraft— the F-X advanced tactical fighter and the A-X low cost, ground combat support, attack aircraft.
Improved capabilities for the forward air control of fighter aircraft, particularly in close air support of ground troops, were provided during the year with the initiation of procurement of the 0-2, a two-engine observation aircraft that will serve as an interim replacement for the 0-1 one-engine aircraft currently used for directing air strikes.
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Initial deliveries of a modified version of a commercial aircraft, the 0-2, began in the early spring of 1967 and some had been deployed to Vietnam by the close of the year. Procurement also began during the year of an advanced, short-takeoff-and-landing (STOL) multipurpose aircraft, the O V-10, that is scheduled to replace both the 0-1 and 0-2.
Reconnaissance units received additional RF-4C’s, allowing the activation of two new RF-AC squadrons, and also continued to operate the RF-101, which will be retained in the force structure until the RF-4 inventory reaches planned goals. To provide an extension in range capabilities, development of a reconnaissance version of the F-lll was continued. One tactical reconnaissance squadron with EB-66 and EC-47 electronic countermeasure aircraft provided the nucleus for the newly established tactical electronic warfare force. Both of these aircraft were deployed in Southeast Asia, while advanced equipment was being developed.
Special air warfare (SAW) squadrons equipped with a variety of aircraft suitable for counterinsurgency, psychological warfare, and other unconventional operations continued to provide effective support to allied forces in Vietnam during the year. Elsewhere, SAW units assisted other allied nations in civic action projects and trained allied personnel in counterinsurgency techniques. In Vietnam, SAW squadrons employed A-l and F-5 aircraft in conventional attacks not unlike those assigned to tactical fighters and used AC-47 gunships to drop flares and furnish heavy suppressive fire in support of beseiged combat troops and outposts. The new 0-2B was placed in service for psychological warfare broadcasts, replacing the U-10, while UC-123’s sprayed jungle areas with defoliants to clear fields of fire and improve visibility. Looking toward the replacement of the A-l, the Air Force began modifying T-37 primary trainers in an attack configuration with a more powerful engine, the A—37A, for evaluation in Vietnam during the coming year.
To meet heavy consumption of air munitions after July 1965, production was increased nearly sixfold and by the beginning of fiscal year 1967 deliveries were exceeding usage rates for most items. Items of World War II and Korean war vintage were being replaced by munitions of advanced design. The Air Force increased its supply of dispenser-type bombs and of two new bombs, the WALLEYE television-guided glide bomb and the SNAKE YE with a retarding device for low-level delivery. Substantial quantities of conventional bombs, gun ammunition, and 2.75-inch rockets and of BULLPUP air-to-surface, SPARROW air-to-air, and SHRIKE antiradar guided missiles were also received. Development of the MAVERICK, a new air-to-surface missile for employment against armored vehicles and trucks, was initiated by the Air Force.
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Operation requirements in Vietnam have spurred the development of many items of new equipment for tactical air units, including, but not limited to, arresting gear for jet airfields, night vision aids, and a small ground-based radar. During fiscal year 1967 the Air Force began procuring the BAK-13 arresting systems with a 1,000-foot runout cable to permit the recovery of aircraft on the runways from either direction. Several new approaches to resolve the problem of detecting the enemy at night were pursued. In June 1967, airborne tests began for the LAU-67A automatic flare launcher which ejects 2.5-million-candlepower and new 5-million-candlepower flares at variable rates. Development also continued of a battlefield illumination airborne system (BIAS) that will employ 6-million-candlepower xenon lights rather than flares. The improvement of infrared reconnaissance and surveillance equipment was also underway. Evaluation also began for a small microwave radar set that can be backpacked into otherwise inaccessible areas.
Airlift and Sealift Forces
Our airlift and sealift forces perform both strategic and tactical missions. Strategically, they are responsible for the initial movement and continuing support of troops deployed overseas; tactically, they provide intratheater and assault airlift. These forces include the transport and aeromedical evacuation wings of the Military Airlift Command, the assault transport squadrons assigned to the Tactical Air Command and the unified commands, certain cargo and transport aircraft units in the Navy and Marine Corps, other specialized transportation elements such as aerial port squadrons, the transport and tactical airlift squadrons of the reserve components, and the troopships, cargo vessels, and tankers controlled by the Military Sea Transportation Service (MSTS).
Programs initiated in 1961 have corrected the serious deficiency in the load-carrying capacity of the strategic airlift component of these forces and provided a firm foundation for further projected expansion. As an interim measure, C-130 and C-135 cargo aircraft augmented the airlift fleet during the early 1960’s while first the much faster C-141 and then the much larger C-5A were being developed. Large-scale deliveries of the C-141 began during 1966 while the C-5A is scheduled to make its first flight in 1968 and to become operational in units by 1970. As discussed in last year’s report, the commitment of large U.S. forces to Vietnam required an immediate acceleration in the planned expansion program which was accomplished by stepping up the production rate for C-141’s and making more intensive use of the aircraft already available. The results of these actions were more fully realized during fiscal year 1967. The capacity of the airlift force to
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support operations in Southeast Asia, which had tripled between 1961 and 1966, jumped by another 50 percent during the year. Moreover, this gain in ton-mile capacity was achieved with a 12 percent reduction in the number of aircraft during the year as the inventory of C-141’s in the airlift fleet more than doubled, replacing greater numbers of C-124’s and shorter range C-130’s. This reduction was feasible because the greater speed of the C-141 allows it to deliver more cargo than four C-124’s during a given period of time.
Currently approved programs provide for the strategic airlift fleet to more than double again by the end of fiscal year 1972, for a tenfold gain since 1961. The buildup to 14 squadrons of C-141’s will be completed during the coming year, while six C-5A squadrons are scheduled to become operational during the early 1970’s. In addition, during fiscal year 1967 the Air Force initiated source selection for procurement of the C-9A (formerly the CX-2), a new medium-sized jet transport for aeromedical evacuation missions. These aircraft will begin to replace C-118’s and C-131’s in 1969. As in the past, the aircraft of the Military Airlift Command will continue to be supplemented by those owned by commercial airlines either through contractual arrangements or actual mobilization of the Civil Reserve Air Fleet (CRAF) during an emergency. The number of aircraft and crews assigned to CRAF was increased again during fiscal year 1967, reaching a total of 396 aircraft, a net gain of 25. The long-range international component of CRAF added 34 aircraft during the year for a total of 324, while the domestic component dropped by nine and totaled 72 at the close of the year.
The expanded capability of the strategic airlift fleet permitted changes to be made in other elements of the total airlift force. Most of the C-124’s that were displaced during the year by C-141’s were transferred from the active to the reserve forces for assignment to Air National Guard and Air Force Reserve strategic airlift and troop carrier squadrons formerly equipped with C-121’s and C-119’s. The C-130’s were retained in the active forces but transferred to tactical and intratheater airlift squadrons. In addition, the Air Force activated six squadrons equipped with C-7A Caribou transports. These aircraft were transferred from the Army on January 1, 1967, in accordance with the agreement of April 6, 1966, between the Chiefs of Staff of the two Services on the realignment of intratheater airlift support responsibilities. A new model aircraft, the C-123K, with two auxiliary jet engines to lessen runway requirements, was placed in service in Vietnam during the year.
As for sealift, the growing needs for support of Southeast Asian operations were met primarily by reactivating Government-owned ships in the National Defense Reserve Fleet (NDRF) and by char
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tering commercially owned merchant ships. The MSTS-controlled fleet was further augmented from both of these sources during fiscal year 1967, although the buildup was smaller than that of the preceding year. This fleet included 569 ships on June 30, 1967—121 more than a year ago and an increase of 368 since June 30, 1965. An additional 65 NDRF ships were in service at the close of fiscal year 1967 for a total of 166 as compared with two at the end of 1965, while 48 more commercial ships were added during fiscal year 1967, for a total of 229—& gain of 178 during the 2-year period. The Government-owned MSTS nucleus fleet added six LST’s, one roll-on/roll-off vessel, and one special project ship during the year, bringing its total to 174, for an increase of 25 since 1965, most of them LST’s and project ships.
The principal deficiency in the sealift forces at present is the lack of a sufficient quick-reaction cargo-delivery capability to match the growing capacity of strategic airlift to move a large body of troops to a threatened area promptly. To relieve this deficiency, the Department of Defense has favored the forward prepostioning of materiel, particularly the heavy and bulky items, that will be used by the airlifted troops. Extensive studies indicated that this requirement can best be met through the use of depot ships. This concept was tested and proved feasible prior to 1965 with three Victory ships of World War II vintage, and it was concluded that a fleet of fast deployment logistic (FDL) ships specifically designed as forward floating depots would provide the best solution to the problem. Contract definition for this new ship was completed by the Navy during fiscal year 1967 and a contractor selected to assume “total package” responsibility for operational systems development and production. In acting on the 1968 budget, however, the Congress not only denied the Department’s request for five FDL’s but also withdrew funds previously appropriated for the first two ships of this class. The Department intends to resubmit this program in the next budget.
Reserve Forces
Increasing the readiness and effectiveness of the reserve components has long been one of the principal goals of the Department of Defense. During fiscal year 1967 organized reserve units in all the military Services have consistently improved their readiness for mobilization and deployment in an emergency and have also contributed increasingly significant support to the active forces through realistic on-the-job training programs. In addition, the Army during the current year developed a new plan for the further reorganization of its reserve components to mesh reserve and regular force structures
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into “one Army.” Execution of this plan during the coming year will constitute another major step toward assuring that truly ready reserve forces will indeed be available when needed.
Increased mobilization readiness of some Army reserve forces was achieved after the commitment of regular troops to Vietnam with the establishment of the Selected Reserve Force (SRF) during the fall of 1965. Composed of 744: units with an authorized strength of about 119,000 from the Army National Guard and of 233 units with a strength of about 31,000 from the Army Reserve, the SRF was organized into three infantry divisions, six separate brigades, one armored cavalry regiment, and essential supporting forces. Units were manned at 100 percent of wartime levels and given highest priority for equipment. Throughout fiscal year 1967 these troops increased their proficiency by engaging in at least fifty-eight 4-hour drills and were counted as part of the strategic reserve force for deployment should the United States be called upon to respond to an emergency elsewhere before the termination of operations in Vietnam. Other Army National Guardsmen continued to provide a substantial portion of the Nation’s continental defenses by manning and keeping operational some 48 NIKE-HERCULES missile batteries on the mainland and six in Hawaii.
Despite the establishment of the SRF and the substantial progress in modernizing the force structure of the Army reserve components between 1962 and 1965, some deficiencies remained. The Department of Defense attempted to remedy them by proposing, as part of its budget submission to the Congress for fiscal years 1966 and 1967, a strengthening of the Army National Guard and the transfer of all organized units to that component. The Congress did not favor this proposal. Taking congressional views into account, the Army developed a new plan that was announced on June 2, 1967. It had five objectives: (1) To establish a force structure that satisfied military requirements; (2) to adjust the reserves to modifications in the active Army; (3) to provide to the states sufficient units for their own needs; (4) to locate forces so that in the event of mobilization the burdens will be equitably shared; and (5) to reduce involuntary assignments of reservists who have completed 2 or more years of active service. The plan called for the Army National Guard to provide eight combat divisions, 18 combat brigades, and combat and service support units manned at 90 percent or higher of wartime requirements with a paid-drill strength of 400,000. The Army Reserve would be responsible for 13 training divisions with the mission of preparing individuals for combat, two maneuver area commands, and certain service support units with a strength of 240,000 men in drill-pay status. About 1,000 unneeded units would be eliminated and approxi
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mately the same number of new units established. In general, the Congress was favorably disposed toward this force structure, but indicated a desire for the retention in the Army Reserve of some combat-capable units and of 20,000 more drill-pay spaces. At the close of the fiscal year, the Army was adjusting the plan in accordance with congressional intent and was scheduling implementation during fiscal year 1968.
In the Naval Reserve, the highly trained and responsive Selected Reserve with a drill-pay strength of about 126,000 is supplemented by about 219,000 other Ready Reservists, most of whom have recently served a 2-year tour of duty with the fleet, and some 48,000 Standby Reservists. No major changes in organization, equipment, or training programs were necessary during fiscal year 1967. The Naval Reserve Training (NRT) ship fleet continued to include 17 destroyers, 20 destroyer escorts, and 12 minecraft—all with Selected Reserve crews— plus 31 other ships, including submarines, used for training. The programed replacement of destroyer escorts by destroyers was temporarily suspended because of the higher priority requirements of the active forces. Naval Air Reserve units received 21 SH-3A helicopters to replace an equal number of older SH-34’s and maintained an aircraft inventory of about the same size as during the preceding year. Both surface and air reserve units continued joint training programs with elements of the active fleet. In support of the active forces, volunteer Naval Air Reserve crews have been flying airlift missions to Southeast Asia since May 1965. By June 30, 1967, they had moved 16,693,211 ton-miles of cargo westward and accumulated 65,349,447 passenger-miles on return flights to the United States.
The mission of the Marine Corps Reserve is to provide a fully structured Marine Expeditionary Force (reinforced di vision/wing team) and certain augmentation and active round-out units upon mobilization. This expeditionary force must be capable of insertion into sustained combat subsequent to M + 60 days. To complete the structuring of the combat and service support components of the 4th Division and to commence the formation of 4th Force Service Regiment some 70 units were redesignated to fill these slots. Unit readiness continued to improve through the redesignations, issuance of modern equipment, and participation with regular forces in large-scale air/ground exercises. Regular forces continued to request assistance from reserve maintenance and engineer companies during annual training duty periods. The Marine air wing redesignated and relocated 27 squadrons to complete the formation of the wing. This improved the readiness of the wing by increasing its flexibility.
While continuing to upgrade their equipment and improve their readiness for mobilization, the reserve components of the Air Force
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
rendered substantial support to the regular forces during the year. Crews from Air National Guard units that support the Air Defense Command, for example, remained on alert for 89,435 man-days, flew 17,234 missions lasting 128,603 hours, and completed some 40,100 interception sorties during the year. Aircraft and personnel from airlift squadrons of the Guard and the Air Force Reserve flew some 222,000 hours, moved over 63,000 tons of cargo, and carried 144,000 passengers in support of the Military Airlift Command and other airlift users. Their contribution represented nearly 7.5 percent of the cargo moved in military aircraft by MAC. Over one-half of the Guard flights and about one-fifth of those of the Air Reserve involved missions to Southeast Asia. To assist the Tactical Air Command, the Air National Guard in May 1967 undertook the new role of providing aerial refueling training for pilots in Europe. The Guard continued fighter and reconnaissance missions and the Reserve tactical airlift missions as part of joint Army-Air Force training programs. Air National Guard units participated in nine joint tactical exercises in Panama, Puerto Rico, and the United States, including Alaska and Hawaii, while Air Force Reserve units were involved in six. Together, they logged more than 4,600 flying hours in these exercises. Nonflying units also provided effective support to the active forces during realistic training periods.
As mentioned earlier, the air reserve components added to their inventories of C-124’s during the year. The Air National Guard obtained its first 24 of this aircraft for assignment to three airlift groups, while the Air Force Reserve received 55 for a total of 152 and phased out 35 C-119’s. These equipment changes wrere reflected in the Air Force Reserve troop structure; eight troop carrier groups were converted to military airlift groups and one troop carrier group was eliminated. As for Air National Guard air defense units, two fighterinterceptor groups converted from F-89 J to F-102A aircraft, although the implementation of the program for conversion to Century-series fighters was slowed by the continuing needs of the active forces. Among nonflying Air Force Reserve units, the major organizational change was the establishment on July 1, 1966, of six military airlift support squadrons, seven maintenance squadrons, and seven mobile supply support squadrons.
The combined strength of all reserve components, the number of reservists serving on extended active duty, and the number not on active duty but in paid status, all increased during the fiscal year. The Ready Reserve, not on active duty, declined in strength, however, by a net of 103,000, or 5 percent, as transfers of 310,000 men to the Standby or Retired Reserve and the discharge of 300,000 others who had completed their obligated duty exceeded new direct enlistments and acces
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sions from the regular forces. The net increase in paid status reservists during the year was the direct result of successful efforts to provide active duty training for the substantial backlog of untrained reserve personnel that had developed during the preceding year, particularly in the Army components. The capacity of training centers, even though enlarged, had been utilized in 1966 and the first half of 1967 primarily to meet the expanding needs of the active forces, but as goals were met and draft calls reduced, larger numbers of reservists could be accommodated during the second half. During the year as a whole, 205,000 reservists without prior service entered active duty for 4 or more months of training, 147,000 completed this duty and 95,000 were still at centers on June 30, 1967. As a result, the backlog of 133,000 Army reservists awaiting active duty basic training on June 30, 1966, was reduced to less than 11,000. Standards for enlistment in this program were also adjusted to give overriding priority to men between the ages of 17 and 18^. In addition, the Department of Defense announced its intention to order to active duty for up to 24 months those reservists who enlisted and then failed to observe their obligation to participate actively in a reserve component after completing active duty training, as provided by law.
Nuclear Test and Test Detection
The Department of Defense allocated nearly $225 million during fiscal year 1967 to joint activities with the Atomic Energy Commission (AEC) to maintain four specific safeguards against abrogation or violation of the Nuclear Test Ban Treaty of 1963. These safeguards include: (1) A comprehensive underground nuclear test program; (2) effective laboratory research in nuclear technology; (3) readiness to resume atmospheric testing; and (4) detection and monitoring of foreign nuclear detonations of all types.
An extensive program of underground testing was utilized by AEC primarily to verify design concepts for advanced weapons and by the Department of Defense to gain information on the vulnerability of weapons systems to nuclear detonations and to improve detection capabilities. Exclusive of three explosions that formed part of the Plowshare program for investigating the peaceful uses of nuclear devices, the Latchkey series of tests during fiscal year 1967 included 24 publicly announced events, of which 21 were sponsored by AEC and three by Defense. Three of the events took place at Pahute Mesa, a remote, high elevation section of the Nevada Test Site where deeper holes were drilled to accommodate detonations with a higher yield. About $40 million was budgeted by the Department of Defense during the year for its share of the underground test program.
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About $54 million was allocated by Defense to the second safeguard—the maintenance of modern nuclear laboratory facilities and of programs in theoretical and exploratory nuclear technology. This work continued to attract highly qualified scientists who made productive contributions to national security. The areas of investigation included research into the effects of nuclear detonations, development of laboratory simulation techniques and equipment with which to supplement data obtained through testing, and computational programs to extend the useful range of such data. Preliminary studies were completed for the design of a Defense facility to study the transient effects of radiation on electronics. Laboratory projects increased the effectiveness of underground testing by pointing out areas for investigation and provided information to prepare for the resumption of atmospheric testing, should it become necessary.
The maintenance of standby readiness to resume testing required the commitment of about $24 million during fiscal year 1967. These funds were used to support Joint Task Force 8, to maintain operational and scientific facilities at Johnston Atoll in the Pacific, to develop improved instrumentation techniques, and to procure prototype equipment. The Joint Task Force conducted two readiness exercises during the year, including one overseas, and demonstrated its ability to initiate operational systems testing with 2 to 3 months’ notice and to resume full-scale atmospheric weapons effects testing in 6 months.
The Department of Defense continued to improve and operate the atomic energy detection system (AEDS) and to upgrade detection capabilities through the VELA program of the Advanced Research Projects Agency. These two activities accounted for most of the $107 million allocated by the Department to monitor foreign events—the fourth safeguard—during fiscal year 1967.
The objective of the VELA program, in which the AEC participates, is to improve U.S. capabilities for detecting, locating, identifying, and verifying nuclear detonations on, beneath, and above the earth’s surface and to provide scientific data required for the development of U.S. policy concerning the nuclear test aspects of arms control and limitation measures. During fiscal year 1967, research and development efforts were directed toward satellite-borne systems, ground-based devices, underground and underwater detection, and on-site inspection techniques.
Two VELA satellites were placed in separated circular orbits at an altitude of about 60,000 nautical miles on April 28,1967, bringing to eight the number that have been successfully launched, of which six were still operational on June 20,1967. The two orbited this year have an improved stabilization system that keeps their optical sensors directed toward the earth at all times. Intended primarily for surveil
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lance of outer space and the upper reaches of the atmosphere, VELA satellites contain devices to detect neutrons, gamma rays, and x-rays should a nuclear detonation occur and also provide useful information on background radiation emissions, particularly those originating from the sun. Additional improved replacement models will be launched as necessary to preserve and upgrade system capabilities.
To improve the means for detecting detonations on or near the earth’s surface, the Department continued its development, testing, and evaluation of a variety of sensing systems, including acoustical and optical devices, and of instruments to measure electromagnetic energy, and continued the sampling of atmospheric debris. During fiscal year 1967, a family of air-launched, air-recovered, rocket-borne debris samplers were flight tested using an F-4C for launching and a new recovery system. In addition, a modified impactor blade sampler was launched on November 17,1966, to determine its efficiency in collecting particles during the maximum period of the Leonid shower. Improvements in ability to discriminate between lightning flashes and nuclear detonations were made in optical systems.
The underground portion of the VELA program included two major lines of research during the fiscal year: The development of improved seismic detection equipment and the investigation of means through which other nations might attempt to evade detection of their underground detonations. The seismic systems being tested and improved were the large aperture seismic array (LASA) that had been installed in Montana during the preceding fiscal year and the unmanned seismic observatory (USO), a prototype of which had been emplaced in a borehole at a depth of 90 feet near Fairbanks, Alaska, also during the preceding year. Experiments were carried out to determine the detection threshold of LASA and to develop techniques for locating and identifying seismic events as well as merely verifying their occurrence. Long period seismometers were added to the installation to supplement the short period arrays already in place. The USO incorporates both long period and short period seismometers and can operate unattended for up to 120 days. A second USO was placed at a depth of about 200 feet at the Uinta Basin Observatory near Vernal, Utah, in July 1966, and a third in a 169-foot hole near Sandia Base, Albuquerque, N. Mex., in September. The Department continued its investigation of the use of “decoupling” as a means to conceal nuclear detonations or disguise their true magnitude. Decoupling involves the use of an underground cavity as an explosion site to reduce the transfer of energy and hence the amount of shock and movement of the earth. Theoretical concepts about the extent of such a reduction through decoupling were confirmed by the detonation of a 350-ton yield nuclear device in a cavity with a diameter of 110 feet
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at a depth, of about 2,700 feet in the Tatum Salt Dome near Hattiesburg, Miss., on December 3,1966.
As for on-site inspection, detection and identification of radioactive gases appeared to offer a promising technique. Progress was made in developing low-level counters and equipment for gas sampling and separation.
Defense Space Programs
The Department of Defense expended nearly $1.7 billion during fiscal year 1967 for its space-related activities, including operational systems as well as projects still under development. The objective of these programs was to make maximum use of the space environment for national defense through projects that increase the effectiveness of our strategic and tactical weapons systems, exploit the potential for new information systems based on satellite-borne communications relays and sensors, and explore the usefulness of military manned space systems. These Defense programs accounted for about 23 percent of total U.S. expenditures of $7.2 billion for space systems and research and were fully integrated with the work of other Federal agencies to avoid both unnecessary duplication of effort and undesirable gaps in research. In addition to coordinating its activities with the national space effort, the Department provided extensive support to other agencies, and particularly to NASA. This cooperation with NASA involved the expenditure of more than $400 million during the year— about four-fifths on a reimbursable basis—and included such major activities as the operation of space ranges and launch facilities by the Air Force, construction by the Army, and the operation of tracking vessels and recovery ships by the Navy.
Space systems in full or interim operational use made an increasingly important contribution to defense capabilities during the year, including the areas of warning and detection, navigation, geodesy, and communications. Mention was made earlier of such operating networks as NORAD’s space surveillance and detection tracking system (SPADATS) and the VELA satellites for detection of nuclear explosions. An accurate, all-weather means for ships and aircraft to determine, their positions and check inertial navigational data was provided by the Navy Navigation Satellite System, which consisted of three orbiting satellites, a master ground station, four tracking stations, and receiving sets on board aircraft carriers and POLARIS submarines. Improved replacement satellites were interjected into the system during the year, while equipment to permit application by field forces in such tasks as locating field artillery positions was being developed. Geodetic programs of the three military Services and NASA utilizing a variety of complementary satellite transmitter and ground
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receiving devices provided more precise information about the earth’s size, shape, mass, and gravitational differences and thus facilitated the more exact determination of the relative positions of land areas separated by large bodies of water. These efforts will continue during the coming year.
Defense communications satellite programs include both long distance point-to-point and tactical systems, and substantial progress was made during fiscal year 1967 in each of these areas. The first long distance system was placed in operational service by the Department of Defense in July 1966; it used two SYNCOM satellites, developed and launched by NASA, to pass traffic between Southeast Asia, the Philippines, and Hawaii, supplementing cables and radio. A second long distance system, the Initial Defense Communications Satellite Project (IDCSP), began to demonstrate system feasibility on a worldwide basis and promised a limited operational capability. A single TITAN IIIC launch vehicle had placed seven IDCSP repeater satellites in orbit at the close of fiscal year 1966; launches on January 18 and July 1, 1967, brought the number to 17 operating in random dispersion around the equator at an altitude of about 18,000 nautical miles. Ground terminals were installed at 12 locations in the continental United States, Europe, and the Pacific, while a shipboard terminal operated on a Navy communications relay vessel. The experience gained with IDCSP during the year was being utilized in the design of the advanced, fully operational Defense Satellite Communications System (DSCS), for which planning and preparation continued during the year. In the area of tactical communications, a research satellite rode piggyback on the IDCSP launching of July 1, 1967, and it will be tested during the coming year with experimental terminals installed in aircraft, ships, and Army vehicles.
The Department’s major program for developing the equipment and technology with which to explore the role of man in space for defense purposes is the manned orbiting laboratory (MOL). This project entered its engineering development phase during the year with the award in May 1967 of fixed-price incentive contracts that totaled more than $850 million. The MOL system includes a seven-segment TITAN HIM launch vehicle, a GEMINI two-man spacecraft, the laboratory itself, and supporting equipment. The design concept calls for the MOL crew, arriving in orbit, to move from the GEMINI to the laboratory, conduct experiments for up to 30 days, transfer back to the spacecraft, and detach it for reentry and recovery. In November 1966, a highly successful unmanned test flight of a TITAN IIIC research and development booster with a GEMINI capsule confirmed that the heat shield modified for the laboratory hatch could withstand the high temperatures of reentry and also demonstrated the structural integrity
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and controls of the booster vehicle. Mockup and structural test assemblies of the laboratory were also completed before award of the engineering development contracts. Construction of the launch complex began at Vandenberg AFB, Calif., and 14 Air Force, Navy, and Marine Corps pilots commenced training for MOL missions.
The equipment and technology for a variety of space missions were being provided through continued progress in the development of a series of standardized TITAN III launch vehicles adapted from the TITAN IIICBM. After a successful test launching in July 1966, production of the TITAN IIIB, which consists of two liquid stages and an AGENA upper stage, was initiated. Although still under development at the close of the year, the TITAN IIIC, which incorporates a restartable upper stage and two 120-inch diameter five-segment strap-on motors, successfully placed GEMINI spacecraft, IDCSP, VELA, and numerous other satellites in orbit, thus confirming design specifications. Development was also initiated of the TITAN HID for placing heavy, unmanned payloads in polar orbits, while the first-stage motor with a new nozzle for the MOL’s TITAN HIM was successfully static-tested during the year.
Collective Security
For its own security, the United States has long sought the establishment of a peaceful world order in which all nations, large and small, aligned and unaligned, can maintain their independence free from threat of attack or political domination by more powerful neighbors. Not all states have accepted this goal, and some have attempted to effect political change by directing violence against others. Thus, the realities of the international situation for the past 20 years have dictated that the United States join with like-minded nations for mutual defense while continuing to seek peace and justice in the world. This system of alliances has substantially achieved its purpose of guaranteeing the security of the members and at the same time has permitted the allies to search for areas of political accommodation with the Communists. This search has been marked by signs of progress in recent years, as exemplified by the draft treaty on the peaceful uses of outer space that the President transmitted to the Senate for its advice and consent in February 1967.
Support of the collective security arrangements that have made possible this growing rapprochement has long been and remains a major responsibility of the Department of Defense. This mission during fiscal year 1967 involved combat in Vietnam, participation with allies in plans and preparations for regional defenses, and assistance to friendly nations in strengthening their forces. This assistance increasingly took
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the form of sales of material to countries that need and can afford it, with grant aid concentrated on helping only the most directly threatened, underdeveloped countries to defend themselves and make a more effective contribution to common security.
One of the most visible manifestations of U.S. commitment to the principle of collective security has been the assignment of large numbers of men to oversea commands and to afloat and mobile naval activities. Moreover, by continuing to expand airlift capacity, the Nation has provided further assurance to its allies that its troops could respond promptly to an emergency and receive timely reinforcements in the event of sustained combat. On June 30, 1967, over 1,578,000 military personnel were serving at sea or outside the continental United States—46.7 percent of total strength and an increase of 258,000 during the year, including 180,000 additional men deployed in Vietnam. Increased U.S. troop strength in Southeast Asia was partially offset by some reductions elsewhere; for example, the remaining units stationed in the Dominican Republic at the beginning of the fiscal year—about 5,000 men—returned home during the summer of 1966, while troop strength in Europe decreased when bases in France were closed. The Navy, with 442,000 men afloat and 61,000 ashore at oversea bases, had the largest percentage of its forces outside the United States—67.0, while the Army had the largest number—676,000, or 46.9 percent of its strength. For the Marine Corps, the percentage was 40.4, with nearly 8,000 men at sea with the Navy and 107,000 at oversea installations, while 283,000 Air Force personnel—31.6 percent—were assigned overseas. (See table 18.) Moreover, nearly 317,000 civilian employees, including both direct hire and contract hire personnel, worked at support bases located outside the continental United States and accounted for over 22 percent of the Department’s total civilian personnel strength.
As discussed earlier in this report, collective security measures in Southeast Asia remained a central concern of the United States during the fiscal year. That our allies, particularly those in the Pacific, shared this concern was demonstrated by increased military support given to the Republic of Vietnam by such nations as the Republic of Korea, Australia, New Zealand, the Philippines, and Thailand. In addition, economic aid and services were provided by more than 25 other free world countries. Despite the intensity of effort required to meet North Vietnamese aggression, the United States continued to participate fully with its allies in strengthening collective security arrangements elsewhere in the world.
Western Europe was of foremost importance, for Communist domination of the people and resources of this region would gravely threaten the vital interests of the United States. Here, collective secu-
360—499 0—70--4
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rity is provided through the North Atlantic Treaty Organization (NATO), for which fiscal year 1967 was a period of adjustment, change, and progress toward more effective cooperation. Of particular significance was the increasing direct role of politically responsible defense officials in the military planning activities of the alliance, including those related to nuclear strategy. Specifically, these officials participated in new procedures adopted during the year to improve the process through which member countries project their long-range plans for defense expenditures, jointly relate these plans to military contingencies, and design the most effective balanced forces that can be supported with the available resources. Another major activity of the alliance during the year was the adjustment of plans and deployments to take account of France’s decision, announced in March 1966, to withdraw her forces from integrated NATO commands and to terminate foreign base rights in France.
The adoption during the year of the new long-range planning procedures marked the culmination of efforts initiated in 1963 to correct long-standing disparities between force level goals as proposed by NATO military commanders and the lower troop strengths that most member countries were in fact prepared to provide. Meeting in July and December 1966 and May 1967, the defense ministers of the NATO countries inaugurated the development of 5-year force plans, initially with a 2-year planning cycle and an annual updating. The plans will integrate political objectives, military strategy, military forces, and country budgets in a realistic and consistent program. At the end of the first year of each planning cycle, 5-year goals are submitted for adoption and at the end of the second year country plans prepared in cosonance with these goals are reviewed. Approval of country plans would constitute a firm commitment to provide the forces called for in the first year of the program. The first planning cycle began in December 1966, and in May 1967 the ministers provided the military commanders with new, firm political guidelines on which the first program was to be based. Country plans for the period 1968—72 and projected goals for the period 1969-73 were being prepared for review by the ministers at their next meeting in December 1967. This planning concept should contribute to greater realism in assessing the threat across the whole spectrum of military capabilities and in formulating the appropriate strategy, plans, force structures, and budgets to deter Communist aggression in Europe.
Closely related to alliancewide force planning, new arrangements were concluded during the year to lessen the international balance of payments impact of oversea troop deployments. This subject was discussed at considerable length during the year, initially on a tripartite basis by the United States, the United Kingdom, and the Federal
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Republic of Germany between October 1966 and May 1967, and subsequently by these countries with the other NATO members. The German Republic, for its part, agreed to help offset the foreign exchange costs of stationing United States and British units in Germany by purchasing special U.S. Government securities while continuing the procurement of British and United States goods and services based on German military needs. The United States and the United Kingdom also proposed the redeployment of some of their units from Germany to home bases with the understanding that these forces would remain committed to NATO. Under this plan, about 34,000 U.S. Army and Air Force personnel—about 13 percent of U.S. strength in Germany— will be redeployed to the United States during fiscal year 1968. Principal units involved in this transfer will return annually to Germany for maneuvers and remain ready at all times to respond to an emergency in Europe. Savings of about $75 million per year in foreign exchange requirements are expected to result from this plan.
The establishment in December 1966 of a permanent forum where NATO defense ministers can discuss all nuclear matters of concern to the alliance improved allied cooperation in this vital area of policy and strategy. The new arrangements evolved from earlier U.S. efforts to expand the role of nonnuclear powers in nuclear planning. At the suggestion of the United States, an ad hoc Special Committee of Defense Ministers and three working groups had been formed during fiscal year 1966 to examine such areas as the exchange of intelligence, information, and other data; communications; and nuclear planning. The working group for the last subject, composed of five NATO defense ministers, chaired by the U.S. Secretary of Defense, met twice during fiscal year 1966 and twice during the first half of fiscal year 1967 to review and discuss the strategic and tactical nuclear resources of the alliance, potential circumstances and consequences of employing nuclear weapons, and ways to improve allied participation in nuclear affairs. At this group’s recommendation, the North Atlantic Council (NAC) agreed in December 1966 to constitute two ministerial-level agencies on a permanent basis—a Nuclear Defense Affairs Committee (NDAC), open to all member states, and a subordinate, seven-nation Nuclear Planning Group (NPG). ND AC, which all NATO allies except France, Iceland, and Luxembourg chose to join, recommends general policies on nuclear defense matters to NAC, while NPG conducts the detailed work on which to base such recommendations. Canada, Germany, Italy, the Netherlands, the United Kingdom, and the United States were elected to the initial 18-month terms for NPG, while Greece and Turkey will each serve half a term. At its first meeting in Washington during April 1967, the NPG ministers discussed the general strategic nuclear posture of the alliance, the problems of
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antiballistic missile defense, tactical nuclear matters, specific problems related to atomic demolition munitions, and the role of host countries in arrangements for the planning and use of nuclear weapons.
Adjustment of NATO and U.S. commands in Europe to the French request for withdrawal of foreign military personnel from France was accomplished by the target date of April 1, 1967. Supreme Headquarters, Allied Powers, Europe (SHAPE), lowered its flags at Rocquencourt, France, for the last time on March 30 and raised them the next day at new facilities in Casteau, Belgium. SHAPE’S subordinated Allied Forces Central Europe Command (AFCENT) was reorganized in November 1966 by consolidating the headquarters for the Allied Air Forces Central Europe (AIRCENT) and for Allied Land Forces Central Europe (LANDCENT) with those of AFCENT, and in March 1967 the combined headquarters moved from Fontainebleau, France, to Brunssum, the Netherlands. Relocation of U.S. commands and bases from France also permitted a streamlining of the force structure and an overall reduction in deployment of about 18,000 U.S. military personnel, the return home of 21,000 dependents, and a net decrease in civilian employment of about 11,000. It was estimated that these changes will save about $110 million annually in foreign exchange requirements and about $50 million in direct budgetary costs. As the initial step in this process, the headquarters of the U.S. 7th Army at Stuttgart, Germany, were combined with those of the U.S. Army, Europe, at Heidelberg. The facilities vacated at Stuttgart were then assigned to the headquarters of the unified U.S. European Command that had previously been located at Camp des Loges, France. The U.S. Air Force moved two troop carrier and three reconnaissance squadrons from France to England, deactivated one reconnaissance squadron as previously planned, and returned two other reconnaissance squadrons from France to the United States on a dual-basing concept that will permit their rapid redeployment to Germany if required. Closure of U.S. supply depots in France involved the relocation of hundreds of thousands of tons of material.
The military capabilities of the alliance for defending the Atlantic community were strengthened during the year by a number of other significant actions. In December 1966, contracts were signed with an international consortium for the installation of an improved air defense warning and control system, the NATO Air Defense Ground Environment (NADGE). Building on existing facilities, NADGE will upgrade radars, computers, and data transmission equipment in nine countries stretching from Norway to Turkey and further integrate them into a single complex for air defense of the Continent. Additional experimental communications channels between NATO military headquarters were also provided with the inauguration of a NATO
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satellite communications network at the close of the fiscal year. Space-borne elements were being provided by U.S. interim defense communications satellites, but will subsequently be replaced by NATO’s own satellites. As in previous years, allied military cooperation was both tested and improved through a series of troop exercises and maneuvers directed by SHAPE and by the Supreme Allied Command, Atlantic (SACLANT). U.S. elements participated actively in many of the operations. As for SACLANT, the success of allied naval coordination was attested by the decision of the defense ministers in May 1967 to proceed with the establishment of a permanent multinational naval force like those formed previously for annual MATCHMAKER exercises.
Training exercises to improve allied military cooperation in the field remained an important function of all the regional alliances of which the United States is a member, and U.S. units participated in a number of multinational and bilateral maneuvers during the year. In Europe, besides providing forces for various NATO-sponsored training operations, the United States helped conduct such bilateral exercises as ABSALON-66 with Denmark in October 1966 and PATHFINDER EXPRESS with Spain in May 1967. In the Middle East, U.S. fleet elements joined those of Iran and the United Kingdom in MIDLINK IX, sponsored by the Central Treaty Organization (CENTO), of which the United States is not a member but with which it cooperates. In the Pacific, despite the heavy demands of Vietnam, U. S. troops were involved in exercises with both the Australia-New Zealand-United States (ANZUS) alliance and the Southeast Asia Treaty Organization (SEATO)—PACIFIC CONCORD II in February 1967 for ANZUS and SIYASAT a month later for SEATO. In North America, the United States and Canadian navies conducted LANTFLEX-66 in November and December 1966, while the armies and air forces of the two allies cooperated in FRONTIER ASSAULT during February 1967 in Alaska. To the south, the Navy continued its annual series of UNITAS antisubmarine warfare training exercises, in which naval and air units of Colombia, Ecuador, Peru, Chile, Uruguay, Brazil, and Venezuela, in turn, participated during a 14-week period that began on September 1, 1966. In addition to these exercises, the United States, as in previous years, assisted in other alliance military planning, training, and logistic support activities that strengthened the collective security of the free world.
Military Assistance
The U.S. Military Assistance Program, administered by the Department of Defense and coordinated with the Department of State, remained a key instrument for building stronger mutual defenses
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despite reductions in magnitude during recent years. The President proposed that $917 million in new appropriations be made available for continuation of the program in fiscal year 1967. The Congress authorized $875 million of this amount, but actually appropriated $792 million. After financing adjustments, including transfers of $57 million to finance credit sales of military equipment and of $10 million to operate the U.S. Logistics Center in Japan, the total obligational authority for grant aid amounted to $744 million. The 1967 program did not include funds for the support of the forces of the Republic of Vietnam and for the direct and related costs of some other free world contingents engaged in combat in Vietnam. These costs had been transferred to the regular Defense budget during the preceding fiscal year.
Materiel and services with a value of $825.3 million chargeable to MAP funds were delivered to grant aid recipients during the fiscal year, or $229.1 million less than during the preceding year. (See table 48.) In addition, weapons and equipment excess to the needs of U.S. forces with an acquisition cost of $140.5 million were made available to allied nations without charge to MAP funds except for the costs of reconditioning and delivery. The number of countries receiving grant aid materiel assistance dropped to 36—a decline of 22 since 1962 and well below the ceiling of 40 imposed by the Foreign Assistance Act amendments of 1966. Of the countries that continued to receive materiel and services, seven along the periphery of Communist China and the Soviet Union accounted for about three-quarters of the total program. These threatened countries maintained about 2 million in their armed forces, but required materiel and other grant aid assistance in order to discharge their self-defense and collective security missions more effectively. Materiel assistance to the other 29 countries consisted of weapons and equipment to help developing countries meet their security needs, to support nations that have made strategically vital bases available to U.S. forces, and to fulfill commitments undertaken in earlier years.
Training programs for members of allied forces and orientation visits to the United States for foreign military officers remained an important element of MAP activities during the fiscal year, accounting for the expenditure of about $52.7 million. Nearly 19,000 individuals received such training during 1967, about 9,000 of them in the United States and nearly 10,000 in their home countries or at U.S. schools in Panama, Okinawa, and the Federal Republic of Germany. The courses, in addition to imparting information concerning the operation and maintenance of U.S. weapons and equipment, also acquaint allied personnel with U.S. institutions and goals.
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MAP materiel and training programs, although declining in scale, continued to make a significant contribution to the military capabilities of allied nations and thus to collective security and the achievement of U.S. foreign policy objectives. The Republic of Korea, for example, was placed in a better position to resist violation of its territory by deliveries of some F-5 Freedom Fighters to replace obsolescent aircraft, high speed patrol craft to strengthen its navy, and weapons and equipment to modernize its ground forces. Aid programs for other Southeast Asia and western Pacific countries also concentrated on items to assist in containment of insurgency and maintenance of regional security. The Republic of the Philippines, which dispatched a 2,000-man combat engineer unit to Vietnam for civic action operations during the year, was provided equipment for additional engineer battalions that will be deployed on similar missions at home. Elsewhere in the world, U.S. military assistance was utilized to an increasing extent to foster national self-sufficiency for defense. In Turkey, for example, U.S. cost-sharing agreements aided in the development of local capacity for the rehabilitation of used U.S. M-48 tanks and for the construction of new military vehicles for the army and of destroyer escorts for the navy.
International developments during the fiscal year brought about some adjustments in the program for 1967 as it had originally been presented to Congress. For example, the adoption by the new Government of Indonesia of a friendlier policy toward its neighbors was followed by a U.S. decision in September 1966 to resume a limited military assistance program for that country, previously term inn,ted in 1965. This aid was concentrated on items that support military civic action programs for the rehabilitation of the country. The military coup in Greece in April 1967 and the outbreak of combat between Israel and its Arab neighbors in June also resulted in program changes. The United States suspended the delivery of selected major equipment items programed for Greece to encourage a return to constitutional government and halted all arms shipments to countries involved in the Arab-Israeli war. While materiel programs for India and Pakistan remained in suspension throughout the year, both countries were authorized some training assistance and were allowed to purchase nonlethal equipment as well as spare parts, on a case-by-case basis, for equipment previously furnished by the United States.
The budget for fiscal year 1968, submitted to the Congress during the current year, envisioned new obligational authority of $596 million—as compared to the $792 million appropriated for fiscal year 1967. The budget submission proposed the transfer of funding responsibility for Laos and Thailand and for two multinational programs
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from MAP to the regular Defense budget. Action on the proposed transfers and funding levels was pending before the Congress at the close of fiscal year.
Military Export Sales
The steady decline during recent years in grant aid appropriations and deliveries has not diminished the role of the United States as the “arsenal of democracy.” As our free world allies became increasingly prosperous, they assumed an ever larger share of the financial burden of providing for their own defense. They have, however, continued to rely on the United States as an important source of supply for modern materiel. U.S. sales of equipment have, therefore, risen steadily during recent years while the sum total of deliveries from grant aid and from sales has remained fairly constant, averaging about $2.5 billion annually since 1962.
The military sales effort of the Department of Defense, which was intensified beginning in 1962, has been designed to support our foreign policy objectives. The program’s purpose is to strengthen the collective security of the free world, first, by modernizing the defensive posture of our allies at the lowest cost to them and, second, by promoting cooperative logistics arrangements and arms standardization that facilitate combined allied military operations. These sales provide another direct benefit to the United States by helping to offset the unfavorable balance of payments that has resulted in part from the necessary deployment of U.S. forces abroad.
Sales orders between fiscal years 1962 and 1967 totaled about $9.7 billion. Moreover, as of June 30, 1967, allied nations had committed themselves to place additional future orders with a value of about $1.4 billion and were expected to increase these commitments during the coming year. Of the $11.1 billion already received in orders and commitments, over 75 percent represent sales for cash, either directly from industry or through the Department of Defense; nearly 14 percent involve loans to foreign countries by the Export-Import Bank without U.S. repayment guarantees; and the remaining 11 percent are credit transactions financed or guaranteed by the Department through the military assistance revolving credit-sales fund. About 93 percent of the orders and commitments originated from industrialized countries—Western European states, Australia, Canada, New Zealand, and Japan—or from nations with substantial oil revenues—Iran, Libya, and Saudi Arabia.
Each proposed sale of military equipment was carefully reviewed for conformity with overall foreign policies established by the Department of State before negotiations commenced. Offers from less devel
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oped nations have received and will continue to receive particularly close scrutiny. It is the policy of the United States not to sell military equipment which a foreign country cannot afford, which its armed forces do not need for requisite defensive strength or cannot employ effectively, or which it can better purchase elsewhere. Likewise, the effects of arms sales on regional tensions and on programs for economic and social development are fully weighed. As a result, the United States has declined to sell equipment to Middle Eastern, African, and Latin American countries with a value several times that of the amount actually delivered to those areas.
Bilateral and multilateral agreements between the United States and its allies for the cooperative development of new weapons, coproduction of materiel, and mutual logistics support continued during fiscal year 1967, as in prior years, to account for a substantial portion of military sales transactions. The joint development of weapons systems not only promises lower costs but also permits the mutual sharing of scarce technological talent. Examples of such projects that were underway during the year included the United States-Federal Republic of Germany main battle tank; the U.S.-U.K. engine for a vertical takeoff and landing (VTOL) aircraft; United States-German studies of a V/STOL fighter; and multilateral Project MALLARD announced in April 1967 for the development of a tactical communications system to be used by the armies of Australia, Canada, and the United States.
Coproduction usually involves the purchase of U.S. manufacturing rights and processes, components, and tooling to be used at buyer’s plants overseas for fabrication and/or final assembly of U.S.-developed or mutually developed weapons. In some cases, foreign produced components are incorporated in items assembled in the United States. Either of these arrangements is likely to result in higher unit costs because of smaller volume, but the development of industrial skills and the maintenance of employment opportunities for its own nationals compensate the foreign purchaser for the price disadvantage. Coproduction programs initiated in recent years include NATO consortiums to manufacture HAWK and SIDEWINDER missiles, F-104G aircraft, and MK-44 torpedoes; bilateral agreements with Italy for the M-113 armored personnel carrier and F-104S aircraft, with the Federal Republic of Germany for the UH-1D helicopter, and with the United Kingdom for the F^ aircraft; and Canadian-Norwegian coproduction of the U.S. M-72 light assault weapon.
Under cooperative logistics support agreements, the purchasers of U.S. equipment are treated as a unit of the U.S. armed forces, provided that the purchaser invests appropriately in the U.S. supply
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pipeline. This form of military sale has been utilized particularly by the Federal Republic of Germany, which turns to U.S. training, procurement, supply, maintenance, and communications services for the support of the German armed forces, to the mutual benefit of both nations.
III.	Defense Management
Our military resources consist of men, materiel, and fixed facilities, all of which require the expenditure of public funds. The task of Defense management is to combine these four elements in proper proportions for present and future security and to exercise control over each of them so that neither scarcity nor waste develops. This managerial function is complicated not only by the tremendous number and variety of items required but also by shifts in international relationships and the swift pace of technological advances in the modem world. Moreover, miscalculation in this field may affect the security of the Nation for many years to come.
The effectiveness with which the Department of Defense discharges its responsibilities has been enhanced by managerial and organizational innovations during the past 6 years. The development of a single, integrated, rational procedure for assessing security needs and projecting the allocation of resources to meet them—the planning-programing-budgeting system (PPBS)—provided for effective concentration of effort on the most vital requirements by all organizational components of the Department. Restructuring of these components within the traditional framework of the military Services and the Department consolidated responsibility and authority for common support functions. The cost reduction program dramatized the search for more efficient and economical ways of conducting the Department’s—and the public’s—business with savings far in excess of original estimates. Although these new procedures and techniques were introduced during the early 1960’s before the commitment of combat troops to Vietnam, they proved invaluable during fiscal year 1967 when growing requirements for support of Vietnamese operations were superimposed on regular, on-going Defense missions. Yet the men, materiel, and facilities were provided at optimum rates to meet the requests of theater commanders in Southeast Asia without detriment to U.S. capabilities for fulfilling other commitments. Combat readiness is the ultimate test of support systems, and the performance of U.S. units in Vietnam clearly demonstrated that these systems were fully responsive to the needs of the armed forces.
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Financial Management
The tangible product of PPBS is a document called the Five-Year Defense Program, an 8-year projection of forces and a 5-year projection of costs and manpower that represent the officially approved set of assumptions concerning future needs. The system provides for continuous updating to adjust for changes in national security requirements and in technology and for an annual review and revalidation of the program after careful analysis of the costs and benefits associated with alternative commitments of resources. The approved program then serves as the basis for the annual budget that funds each year’s increment of the projected force structure.
The budget presented to the Congress in January 1967 reflected PPBS improvements of the preceding year. Specifically, the former program structure that grouped a number of disparate activities under the title “General Support” was rearranged to facilitate separate consideration and management of programs for communications, intelligence, and related services; central supply, maintenance, and transportation functions; training, medical, and other specialized personnel support activities; and administration. In addition, the components of the programs—program elements—were redefined to bring them into closer correspondence with the organizational entities that are responsible for program missions.
As thus developed and refined, PPBS has provided an effective mechanism for weighing alternative strategies and force structures, for reaching informed, objective decisions after all pertinent viewpoints have been considered, and for funding annual programs. A major remaining problem on which Defense financial managers have concentrated their attention in recent years is that of improving the execution and control of programs at the operating levels where the resources are employed and of relating more closely the mission-oriented data used in PPBS estimates to the costs actually incurred. Steps toward these objectives were incorporated in Project PRIME (Priority Management Effort) that was described in last year’s report.
As part of this project, more comprehensive accounting systems to provide data on the full costs of day-to-day operations were tested at one installation of each military Service during fiscal year 1967. These costs included military and civilian payrolls for an organization, spare parts and other consumable items, and services provided by other military units or contractors. Such expense items were formerly accounted for in terms of the appropriation from which the funds were drawn—i.e., Military Personnel, Operation and Maintenance, or Procurement. On the basis of the 1967 tests, plans were formulated for the Department-wide adoption of the new concepts and reporting
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procedures. On June 9, 1967, however, the Committee on Appropriations of the House of Representatives requested that full-scale introduction of PRIME be deferred for 1 year, pending additional testing at the command, rather than installation, level. These tests, which will serve as feasibility demonstrations and training exercises, will be conducted during fiscal year 1968 by the 6th Army, the Naval Air Training Command, the Marine Corps schools, and the Air Training Command. When fully implemented, this new resources management system will show for the first time just how expensive it is to operate each activity—for example, a Navy destroyer, a B-52 wing, or an Army division—and aid commanders in controlling the resources they utilize for the accomplishment of the missions assigned to them.
Concurrently with these efforts to acquire more accurate data about operating expenses, other financial management improvements were directed toward increasing the availability of more valid and timely information about the cost of developing and procuring weapons systems. The Department began during the year to require that certain contractors and subcontractors for major weapons and support systems furnish new cost information reports (CIR). Initially, CIR procedures are being applied to selected aircraft, missile, and space systems and their components; by June 30, 1967, 24 weapons or vehicles in these categories had been designated for coverage, while the addition of eight other systems of these types was being considered. The Department was also planning the extension of CIR to certain ships, electronics, and armor and ordnance systems in the near future.
Reporting procedures on the status of contracts—except for firm fixed-price awards and contracts of less than $100,000—were also revised during the year to provide additional information as the basis for forecasting and updating funding requirements and for developing future budget estimates. The new contract funds status report, which went into effect replacing two reports previously used, compares current funding with estimated requirements and aids in evaluating the relative firmness of the requirements on which estimates are based.
The Department made further progress during the year toward the installation of the joint uniform military pay system (JUMPS), a program designed to improve management, operating, accounting, and reporting procedures for disbursements financed through military personnel appropriations. Policies and principles for JUMPS were formally established in November 1966, and instructions issued for the development, test, and evaluation of the new system. In accordance with these guidelines, each military department will institute centralized and automated pay accounts for all active duty personnel, on as uniform a basis as practicable. Although personnel will continue to be paid at their home duty stations, the central accounting installa
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tion will reduce the workload at local finance offices; provide more accurate, comprehensive, and timely data about the status of funds; and cost less to operate in man-hours and dollars than the present decentralized systems. Members of the armed forces will benefit from the elimination of manual procedures that in the past have resulted in erroneous payments, while the military departments will gain more effective control over a portion of their financial operations that account for approximately a quarter of annual expenditures.
Budget
The Department of Defense had to develop its budget for fiscal year 1967 during the fall of 1965 after the deployment of major U.S. combat units to Vietnam had begun but long before the duration and scale of operations could be accurately known. Accordingly, Defense officials had to reach assumptions 18 months in advance concerning probable deployment schedules, operating rates, weapons attrition, and consumption of ammunition and supplies. Purely for budgetary purposes, the end of the fiscal year, June 30, 1967, was arbitrarily selected as the date for the termination of combat, with the caveat that consumption at higher than assumed levels and continuation of the war would require supplementary financing. This approach reduced the likelihood of acquiring weapons and supplies in excess of actual needs or of building up large cash balances as had occurred during the 1950’s in conjunction with the Korean war. At the same time, the opportunity to adjust procurement plans as dictated by experience remained open. The actual course of events during the fiscal year confirmed the prudence of this flexible arrangement.
The budget estimates based on these assumptions were transmitted by the President to the Congress in January 1966 and totaled $59,855 billion in new obligational authority, including $57,689 billion for basic military functions, $1,115 billion for military construction and family housing, $0,133 billion for civil defense, and $0,917 billion for military assistance. Funds for the logistical support of free world forces combating aggression in Vietnam, previously included in the military assistance appropriation, were incorporated in the Defense estimates. The total amount requested was $3.7 billion less than the new obligational authority provided by the Congress for fiscal year 1966 and $13.7 billion less than the sums proposed by the military Services and other components of the Department. The adjustments in Service estimates for the most part reflected changes in schedules and workloads, the elimination of duplicative projects, and the deferral of lower priority requirements.
Of the $57.7 billion requested for basic military functions, $16.9 billion required prior congressional authorization—the funds for pro-
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curement of aircraft, missiles, naval vessels, and tracked combat vehicles and for research and development. For these purposes the Congress authorized the appropriation of nearly $17.5 billion, or $0.6 billion more than requested. About half of the additional amount was designated for the NIKE-X antiballistic missile and for nuclear, rather than conventionally, powered guided missile frigates. Other increases were designed to maintain a production capability for the F-12 interceptor, to procure 0H-6A light observation helicopters and CX-2 aeromedical transports, and to step up development efforts for the manned orbital laboratory (MOL), the advanced manned strategic aircraft (AMSA), the CONDOR air-to-ground missile, and antisubmarine warfare techniques and devices.
These additional authorizations were also incorporated in the Department of Defense Appropriation Act of 1967, approved on October 15, 1966, that totaled $58,067 billion in new obligational authority, or about $0.4 billion more than requested by the President. This increase was subsequently offset in part by congressional actions on the three other appropriation bills for the Department considered during the fall of 1966. Military construction requests were reduced by $135 million, or 12 percent, military assistance funds by $125 million, or 14 percent, and civil defense by $32 million, or 25 percent. Approval of the four bills brought the total of new obligational authority provided during the 2d session of the 89th Congress to $59,940 billion, or nearly $0.1 billion more than the January 1966 budget estimates.
During the period that the Congress was acting upon these funding requests, U.S. forces continued their buildup in Vietnam, where combat operations steadily increased. The immediate needs for additional personnel and procurement of long leadtime weapons and equipment were met through internal reprograming actions undertaken in consultation with the Congress. At no time did financial considerations impinge upon the execution of approved plans. As the campaign in Southeast Asia continued, the Department received more accurate data for developing its estimates for the 1967 supplemental appropriation and for the 1968 budget. The Southeast Asia supplemental request, submitted to the Congress in January 1967, totaled $12.3 billion and was approved in April after a reduction of less than $0.1 billion. Additional appropriations were also needed to fund new legislation that increased military and civilian compensation schedules, provided additional medical benefits for retired military personnel and civilian dependents of active duty members of the armed forces, and afforded relief to military personnel and civilian employees of the Department who had to dispose of their homes at a loss as a consequence of the closure of military installations. While action on
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homeowners’ assistance was deferred until fiscal year 1968, the Congress made available in full the other amounts requested in this second supplemental estimate, totaling nearly $0.6 billion.
With approval of the supplemental appropriation acts, the total new obligational authority provided for fiscal year 1967 reached $72.7 billion, only $8 million less than the amounts requested by the President, although some internal program adjustments had been directed, as previously mentioned. (See table 10.) Excluding amounts added to revolving funds, new obligational availability for the year totaled $72.2 billion and total obligational availability $92.2 billion, including the carryover of unobligated funds appropriated in prior years, reimbursements, and other financial adjustments. Obligations of $78.2 billion were placed against these funds and expenditures for the year totaled $68.5 billion, as compared to $67.2 billion and $55.4 billion, respectively, during the preceding year. (See tables 12 and 13.)
The budget estimates for fiscal year 1968, as developed during the summer of 1966, were based on current combat experience that had shown some of the original assumptions concerning attrition and consumption rates to be too low and others too high. With more accurate information, the Department was in position to prepare longer range plans without increasing the danger of building up undesirable excess inventories. Accordingly, budget guidelines were changed. Instead of selecting an arbitrary date for the termination of hostilities, Defense officials instructed component agencies to request sufficient funds for fiscal year 1968 to protect production leadtimes on all items essential for combat through the time when fiscal year 1969 appropriations would become available. This meant in the case of aircraft with lead-times approximating 18 months that estimates were to cover deliveries sufficient to offset attrition until January 1, 1970. For ammunition, with an average leadtime of about 6 months, the fiscal year 1968 budget was to meet requirements through the first half of fiscal year 1969. Based on this guidance, the Department’s budget estimates for the new fiscal year, as transmitted by the President to the Congress in January 1967, totaled $75.3 billion, or $2.5 billion more than the amounts made available during fiscal year 1967. (See table 14.) This sum was expected to finance requirements for the entire year, barring-significant changes in the character or scope of Southeast Asia operations or unforeseen contingencies elsewhere in the world. Action on this request was pending in the Congress at the close of fiscal year 1967.
International Balance of Payments
Defense programs to reduce expenditures entering the international balance of payments and to increase receipts from sales of military
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equipment to other governments helped to offset partially the rising foreign exchange costs associated with operations in Southeast Asia during fiscal year 1967. Beginning in 1961, when the net adverse impact of Defense-associated expenditures had totaled nearly $2.8 billion, the efforts to reduce this deficit had cut it to less than $1.5 billion by the end of fiscal year 1965. In 1966, however, oversea expenditures began to rise largely as a result of the deployment of U.S. combat forces to Vietnam, and this trend continued during fiscal year 1967. Southeast Asian foreign exchange expenditures totaled about $1.3 billion, an increase of $800 million over the preceding year. The total net adverse balance, however, rose by only $200 million—from $2.2 billion to $2.4 billion—primarily as the result of unusually high receipts. (See table 15.) At the same time, the prices and wages for goods and services that must be procured abroad for the support of U.S. forces continued to rise, and increases in U.S. military and civilian pay scales added to the disposable income of personnel serving abroad. These factors spurred the continuing search for additional offsetting measures. In April 1967, the Secretary of Defense initiated a program including 20 further actions and studies. Still, substantial new savings will be difficult to achieve since the most effective administrative measures for reducing the adverse balance have already been carried out.
In evaluating new programs and carrying out existing ones to hold down the outflow of foreign exchange, the Department has been guided by two overriding considerations: The need to maintain essential combat capability and to avoid undue hardship for U.S. personnel and dependents in oversea areas. Subject to these guidelines, major efforts have concentrated on (1) reduction of military and civilian personnel in foreign assignments and consolidation of activities and bases as rapidly as circumstances permit; (2) substitution of U.S.-produced goods and services for foreign ones including use of a 50-percent premium in cost and sometimes even more, based on case-by-case reviews; and (3) stress on voluntary actions by individuals to return dollars to the United States. Actions were taken in all three of these major areas during fiscal year 1967. When U.S, forces and installations were relocated at the request of the French Government, civilian and military manpower neUls~were7reviewed, resulting in a reduction^ of some 18,000 positionsAii Europe. In Southeast Asia, the use of materials procured at home, of U.S. shipping, and of U.S. military construction battalions contributed to holding foreign exchange costs to about $250 million in support of a $1 billion total program. Establishment of the new uniformed services savings deposit program during the year, accompanied by an intensive publicity effort, was followed by a steady growth in the numbers and value of accounts. On June 30, 800-499 0—70-------5
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1967, some 149,000 military personnel were taking advantage of this program, which provides an interest rate of 10 percent for servicemen stationed outside the United States. Their deposits totaled $126.5 million, as compared to deposits of only $16.3 million in 4-percent accounts on September 1, 1966, when the new, higher interest rate became effective.
Manpower
With nearly 3.4 million men on active duty and 1.4 million civilian personnel, the Department of Defense employs more people than any other governmental or private organization in the United States. In addition, the Department has about 1.1 million reservists in paid status and pays 0.6 million retired military annuitants. These numbers suggest the dimensions of the manpower management task that confronts the Department.
The magnitude of the task has been considerably enlarged during the past 2 years as a result of the Vietnam war. This commitment required that military force levels and civilian employment be increased for the conduct and support of combat operations in Southeast Asia and for the maintenance of the capability to respond to contingencies elsewhere. Augmentation was also necessary in order to permit the regular rotation of troops to the combat zone, thus providing for more equitable sharing of the risks and burdens of the war. 'These requirements have had their impact on all elements of the Department—the operating forces, the training base, the support services, and the reserve components.
The manpower needs of all these activities were fully met during fiscal year 1967. The active forces continued their buildup, increasing their strength during 1967 by 283,000 for a total of 3,377,000—9 percent more than on June 30, 1966. Thousands and thousands of men completed duty tours in Southeast Asia and returned home as their replacements arrived on schedule. Civilian employment in the Department also rose and totaled 1,303,000—a gain of 164,000 or nearly 14 percent during the year—in part to support the larger active forces and in part to release servicemen for military duties. While meeting these immediate requirements, the Department actively pursued its longer range objective to enhance the attractiveness of career service. Moreover, it took actions to assist in the solution of pressing national problems on the homefront, where such measures were not inconsistent / with the primary objective of maintaining the Nation’s security.
The Active Forces
Although the net increase during fiscal year 1967 in the size of the active forces was one-third smaller than in 1966, the military Services
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required 888,000 personnel to meet the expansion goal and replace men leaving the armed forces. In contrast, an annual intake of 500,000 to 600,000 had proved sufficient during fiscal years 1964 and 1965 to maintain a force level of 2.7 million. Military manpower requirements for 1967 would have been even higher except for the successful completion of the first phase of the program initiated in September 1965 to substitute civilian employees for military personnel in support positions. By June 30, 1967, some 74,300 servicemen had been released for other assignments by the employment of 60,500 civilians. With execution of the second phase of this military-civilian conversion program during the coming year, 106,284 enlisted men and 7,931 officers are expected to be replaced by 94,979 civilian employees. The decrease of 19,236 in total positions represents the elimination of training and other support functions associated with the use of servicemen in jobs that can be filled by civilians. Expansion of the women’s components of the military Services (see table 23) also permitted the reassignment of male officers and enlisted men to field duties.
In meeting military manpower requirements, the armed forces continued to rely to the fullest possible extent on voluntary recruitment, supplemented as necessary by inductions through Selective Service. Two-thirds, or 590,000, of the officers and enlisted personnel who began active duty during the year entered the armed forces as volunteers. This response to the country’s needs, in combination with the lower expansion goal, permitted a reduction in draft calls. After reaching a peak of 49,200 in October 1966, the number of calls declined markedly, averaging about 38,000 per month for the first 5 months of the year and 14,000 for the last 7. For the whole year, 288,900 calls were issued, all for the Army, and 299,200 men were inducted, as compared with 334,500 and 339,700, respectively, during 1966, when the Navy and the Marine Corps had also drafted some personnel. Inductions, however, are expected to rise again during fiscal year 1968 when the Services will need to replace men drafted during fiscal year 1966.
The increasing availability of volunteers for positions of leadership and critical technical responsibility also allowed the Department to modify its policies governing the involuntary retention of personnel on active duty. The Navy and the Marine Corps, which had retained some enlisted men for up to 4 months after expiration of their obligated service, reverted to normal tour lengths during the first half of the fiscal year. Reserve officers in all the military Services who had been involuntarily extended were released on or before June 30, 1967. As for regular officers, the previous policy of generally deferring the acceptance of resignations or retirement applications was changed to require in each individual case a specific determination by the Secretary
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of the military department concerned that overriding military need justified retention.
Although voluntary recruitment efforts proved generally successful during the year, past surveys have indicated that many men enlist to avoid the more restrictive options of Selective Service. As the law authorizing involuntary induction was due to expire on July 1, 1967, searching reviews of draft policies were undertaken by both the executive branch and the Congress. Attention centered on the inequities and uncertainties that have arisen because annual intake requirements remain considerably below the number of available men. To reduce these inequities and uncertainties, the President, in proposing a 4-year extension of Selective Service, recommended that men be called at an earlier age, that college undergraduate deferment policies be tightened, that postgraduate deferments be limited to medical and dental students, and that a fair and impartial random system of selection be established. In June the Congress, on the basis of its own studies, extended induction authority for 4 years, authorized the induction of younger men first (including previously deferred students in this “prime age” group), and liberalized college but tightened postgraduate deferment policies. It did not, however, authorize a random selection system. Although these 1967 amendments were thus somewhat more limited than those recommended by the President, they assured the continued availability of the manpower required by the armed forces and more equitable selection criteria.
While this legislation was being considered, the Department continued to expand its established programs for encouraging enlistments and sponsored legislation to increase the attractiveness of career service.
Major attention was concentrated on military compensation. As in each of the past 3 years, the Department again recommended an increase in military pay scales with a view to preserving the balance that had been achieved in military and Federal civil service salaries. The Congress responded favorably. Concurrently with approval of the Federal Employees Salary Act of 1966, the base pay of all military personnel was raised by 3.2 percent, effective on July 1,1966. This action added about $351 million annually to military payrolls and brought the cumulative increase in base pay since 1963 to 33 percent. On December 1, 1966, the compensation of retired military personnel was adjusted upward by 3.7 percent as required by the Uniformed Services Pay Act of 1965 whenever the Consumer Price Index rises by 3 percent or more for 3 consecutive months since the last adjustment in retired pay. As this law further directs, the Department undertook its annual review of active duty pay scales, following which the President on April 5, 1967, proposed a 4.5 percent increase in military and civilian compensation. Congressional action on this recommendation
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was pending at the close of fiscal year 1967. Meanwhile, the Department continued its comprehensive study of the principles and concepts of military compensation, as required quadrennially by the 1965 pay law. The results of this study will subsequently be incorporated in legislative proposals to be submitted to the Congress.
Second only to the pay acts in improving the conditions of service life was the legislation enacted in September 1966 to greatly expand the health and medical benefits provided to military families at civilian facilities on a cost-sharing basis since 1956. This supplementary health program should make an important contribution to the morale of service personnel. The Military Medical Benefits Act of 1966 added three principal new types of care: (1) The range of medical treatment was increased so that it compares generally with that provided to Federal civilian employees through health insurance policies underwritten in part by the Government; specifically, outpatient care at civilian facilities and treatment of nervous and mental disorders and of chronic diseases were authorized; (2) coverage at civilian facilities was extended for the first time to retired personnel, including reservists drawing retired pay, their dependents, and the widows and other dependents of deceased active duty and retired personnel; and (3) a new program of financial assistance was authorized for active duty personnel with dependents suffering from mental retardation or serious physical handicaps. The first year’s cost to the Government of the revised program was estimated at $142 million.
Housing constituted the third component of the 1967 career motivation program. In the fall of 1966 a Department-wide task force completed its 2-year investigation of enlisted barracks and bachelor officer quarters (BOQ) and recommended new standards. Surveys by the task force indicated that substantial numbers of military personnel were leaving the service because of dissatisfaction with accommodations constructed under criteria established in 1955 for barracks and in 1959 for BOQ’s. To remedy this situation, the task force proposed: (1) That additional military personnel without dependents be authorized to draw quarters allowances and live off post, and (2) that on-base construction standards be revised to provide greater privacy and more living space. The Department’s fiscal year 1968 budget included funds with which to begin implementation of these recommendations. As for military personnel accompanied by dependents, action was taken to increase the availability of family housing at military installations. In January 1967 the Secretary of Defense authorized the military Services to proceed with the construction of some 8,500 sets of family quarters. Funds for these quarters had been appropriated in fiscal year 1966 but had been temporarily withheld to facilitate meeting high priority requirements, particularly those related to Southeast Asia.
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For the same reason the Department had excluded a request for family housing from the 1967 budget, proposing instead an increase from 7,000 to 13,075 in the number of units authorized for lease as public quarters. Only 7,500 were approved by the Congress, however. For fiscal year 1968, the Department requested a continuation of leasing authority for 7,500 units and funds for construction of 12,500 new family housing units—the number established as an annual target in 1963.
In addition to sponsoring these measures for the general enhancement of career attractiveness, the military Services sought within the framework of existing legislation to retain experienced enlisted personnel by improving opportunities for promotion, authorizing proficiency pay for more specialists, and emphasizing the new variable reenlistment bonus. Accelerated promotion was, in part, the result of the expansion in force levels; with more men under arms, more noncommissioned officers and technical specialists were required. During fiscal year 1967, personnel serving in the top six enlisted grades rose about 19 percent, or from 1,366,000 to 1,636,000. The number of men who qualified for proficiency pay of $30 to $100 per month increased from 191,200 to 209,500 during the year—7 percent of all enlisted personnel. At the close of the year, 48,800 men were receiving proficiency pay as a reward for sustained superior performance and 160,700 as a retention incentive in positions requiring expensive training. The possession of such skills also qualified some 30,000 first-term enlisted personnel for the variable-reenlistment bonus in amounts ranging from one to four times the normal bonus, depending upon the shortage of the particular skill involved. All the military Services reported that the new bonus, initiated in January 1966, had significantly contributed to reenlistments. Still, total reenlistment rates remained somewhat lower than before the Vietnam buildup, and additional remedies were being considered as part of the comprehensive study of military compensation mentioned earlier.
The policies followed and the problems encountered in the management of officer personnel generally paralleled those in the enlisted area. In recruitment the military Services relied on voluntary measures that proved fully satisfactory except in the specialized case of medical personnel; in fact, a rise in the number of applicants for commissions permitted the exercise of greater selectivity. About one-half of the new officers commissioned in 1967 were graduates of active duty officer candidate and flight training schools that had been expanded during the preceding year. The second largest source of new officers—and normally the primary one—was the Reserve Officers’ Training Corps, which maintained 477 senior units at 327 colleges and universities during the year. Enrollment at the beginning of the 1966-67 academic
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year increased by 10,000 over the preceding October. About 17,400 graduates entered active service, 1,400 more than during 1966, accounting for about 24 percent of new officers. Graduates of the Service academies, professional specialists who received direct commissions, and reservists who volunteered for active duty filled the remaining needs for commissioned personnel.
The buildup of the armed forces following July 1965 had increased requirements for medical officers substantially beyond the numbers available through the voluntary Berry Plan specialist and residency training deferment program. Consequently, in order to secure an adequate supply of doctors, the Department of Defense in February 1966 had placed a call with the Selective Service System to provide 2,496 physicians at the beginning of fiscal year 1967; as the balance between requirements and resources improved during the year, the call was reduced to 1,713 physicians and 75 optometrists. To meet fiscal year 1968 requirements, a call for 2,118 physicians and 111 osteopaths was placed in January 1967. In addition, the military Services planned to order to active duty about 100 doctors with reserve commissions who had not previously served 24 months in the armed forces.
The retention of pilots and of experienced middle grade officers, rather than the recruitment of new officers, provided the primary challenge during the year. The major programs for increasing the attractiveness of career service were, of course, designed in part to counter the increasing number of resignations by officers. Other actions were also taken. All the military Services were authorized during the year to expand further their flight training program, to provide the additional pilots needed to replace those resigning, and to fill new requirements. The Army trained more than twice as many aviators during fiscal year 1967 as during the preceding year and began preparations for a further 50 percent increase from 410 to 610 per month. The Navy, which had trained about 1,900 naval, Marine Corps, and Coast Guard pilots during fiscal year 1966, increased its output by about 100 and was building toward a goal of 2,573 annually by fiscal year 1969. As for the Air Force, its annual training program grew from 2,000 pilots per year in 1966 to 2,760 in 1967 on its way to an approved target of 3,247 by 1969. In addition, the Air Force Academy planned to introduce light aircraft flying training for cadets, both to motivate an even higher percentage of them to follow flying careers and to shorten the time of instruction after their commissioning. Yet the benefits of this buildup in training programs will not be fully realized by the military Services for some time because of the length of the instruction. Meanwhile, requirements for pilots were being met by reassigning rated personnel from nonflying to cockpit positions and by returning to flying status
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some relatively senior officers for whom proficiency flying requirements had been waived in accordance with law. The Air Force also increased the obligated service of newly promoted middle grade pilots and announced that future graduates of pilot and navigation schools who begin their training after January 1,1970, will incur a 5- instead of a 4-year service obligation.
Accelerated opportunities for promotion should also assist the military Services in retaining experienced officers, both rated and nonrated. The amendment in September 1966 of the Officer Grade Limitation Act of 1954 opened avenues of advancement for Air Force career officers comparable to those in the other military Services by increasing the authorized numbers of colonels, lieutenant colonels, and majors by 21, 51, and 32 percent, respectively. Authority was also provided for additional temporary promotions of 1,000 majors to lieutenant colonel and of 1,500 captains to major. The availability of more field grade positions also permitted the Air Force to reduce the commissioned service requirement for promotion to captain from 4^ to 3y2 years, effective in January 1967, and to promote approximately 11,300 first lieutenants to captain during the second half of the fiscal year. The Army also accelerated promotion opportunities for its first lieutenants and for warrant officers.
In addition to seeking improvements in retention rates, the military Services had to resort to temporary measures to fill their requirements for experienced officers. These included the selective deferral of resignations, the voluntary extension on active duty of reserve officers who had been twice passed over for promotion, reexamination of assignment criteria, and deferrals of educational assignments. To meet longer range needs for additional career officers, the Army and the Air Force continued to expand the Military and Air Force cadet corps and to award additional ROTC scholarships on schedules initiated in 1964 that will ultimately provide these two Services with career-motivated junior officers in approximately the same numbers available to the Department of the Navy from the Naval Academy and the Naval ROTC scholarship program.
Special Manpower Programs
For many years the manpower programs of the Department of Defense have yielded significant economic and social returns as an important byproduct of military readiness. For example, training courses, including off-duty education as well as on-the-job military instruction, supplemented by practical experience, have equipped many ex-servicemen with skills they subsequently applied in civilian pursuits. Armed forces information activities have promoted a greater awareness of the country’s history and policies and the respon
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sibilities of American citizenship. The dependents’ school system has provided educational opportunities for the children of servicemen, particularly those in oversea areas.
During the past fiscal year the Department sought to intensify its efforts that could make a contribution to social and economic progress. It initiated two major new programs during the year—Project 100, 000 and Project TRANSITION—and gave renewed emphasis to long-standing programs for the elimination of racial discrimination. In addition, as part of the President’s Youth Opportunity Campaign, the Department hired 35,000 young people as temporary summer employees during the summer of 1967 and the military Services were assisting local communities by providing recreational opportunities for thousands of others.
The objectives of Project 100,000, which was announced by the Secretary of Defense in August 1966, are 3-fold: (1) To open the opportunity to serve in the armed forces to a broader spectrum of the Nation’s youth by accepting men who failed to quality for military service under current standards; (2) to teach these men new skills and disciplines that will enable them not only to perform competently as servicemen but also to become more productive members of society; and (3) to highlight areas for improvement in military training. The need for this program was pointed up by the fact that nearly one-third—600,000—of the men reaching military service age each year failed to meet minimum educational or health standards for induction. To increase the use of these men, Project 100,000 was initiated in the fall of 1966 with the goal of accepting and training 40,000 formerly disqualified personnel the first year and 100,000 annually thereafter. By June 30, 1967, the military Services had enrolled 35,200 and expected to reach the 40,000 goal without difficulty. By far the largest portion was composed of men who had been rejected because of low scores on aptitude tests, but starting in February 1967 a small number was enlisted in a trial program for men with disqualifying medical conditions that appeared correctable within 6 weeks. Plans call for expanding this phase of the program to account for about 15,000 of the annual 100,000 intake. While induction standards were relaxed for Project 100,000, performance standards were not; however, extra assistance was made available to those requiring it during training. Early experience indicated that about 10 percent of the trainees required such additional help, as compared to 4 percent of all other men, and that 96 percent of the men were able to complete basic training satisfactorily, as compared to 98 percent of other enlistees and inductees. Thus, at the close of the year, it appeared that the objectives of Project 100,000 were fully attainable.
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Prvect TRANSITION was initiated in May 1967 in response to a request from the President that the Department of Defense make available, to the maximum possible extent, inservice training and education to enhance civilian employment opportunities for servicemen about to be discharged. Each of the military Services established pilot programs—the Army at Ft. Knox, Ky., the Navy at the San Francisco Naval Station, the Marine Corps at Camp LeJeune, N.C., and the Air Force at Randolph AFB, Tex. These programs included: (1) Counseling to inform men of requirements and to ascertain their desires; (2) supplementary education if needed to supply the equivalent of a high school diploma; (3) special training including civilian-related military courses, courses sponsored by other Federal agencies such as the Post Office Department, Manpower Development, and Training Act courses, and industrial training by private firms; and (4) placement assistance. Guided by the lessons learned in these initial efforts, the military Services expect to expand Project TRANSITION to all major military installations and to make it available during the last few months of enlistment tours. It is anticipated that about 20 percent of the 750,000 men who leave active duty annually will wish to avail themselves of these additional opportunities for counseling, training, and placement.
For many years the military Services have set high standards in extending full equality of treatment and opportunity to all personnel regardless of race, color, creed, or national origin. Yet while integration on military installations has been achieved, voluntary programs to lessen discrimination in communities near military bases have been less successful, particularly in regard to family housing. Reexamination of programs and policies during fiscal year 1967 indicated two principal reasons for the lack of sufficient progress: Inadequate direction to local activities and the lack of sanctions. Accordingly, in April 1967 a new approach was developed. The Secretary of Defense and each of the Secretaries of the three military departments designated an individual in his office to be the Coordinator for Equal Opportunity in Off-Base Housing, and the four coordinators, collectively, formed the Off-Base Equal Opportunity Board of the Department of Defense. A survey of the availability of housing near major military installations indicated that only 59 percent of the 1.1 million rental units in off-base housing projects was open to all military families. Action was taken to mobilize effective and continuing community support for nondiscriminatory rental policies. The Washington, D.C., area was selected for first attention, and an Off-Base Housing Services Coordinator appointed in the Office of the Secretary of Defense. He and other Defense officials appealed to local landlords in the area surrounding Andrews AFB, Md., and Ft. Meade, Md., for voluntary compliance,
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but met with only partial success. While negotiations continued, military personnel being transferred to these bases were forbidden to enter into new leases or rent apartments or trailer spaces except at facilities open for rental to all military personnel on an equal basis. Invoked at the close of the fiscal year, these enforcement measures give promise of correcting unsatisfactory conditions near these two bases, where approximately 60 percent of Negro families reported difficulty in finding suitable housing within a reasonable commuting distance. The Department is planning to extend the techniques of persuasion and sanctions during the coming year to other areas of the country where the effectiveness and morale of servicemen have been adversely affected by their inability to secure adequate housing for their families.
Research and Development
The steady progression of advanced weapons systems into the more expensive phases of their development, new requirements for specialized equipment generated by the conflict in Vietnam, and price increases all contributed to the rising trend in the cost of the Department’s research, development, test, and evaluation (RDT&E) activities during fiscal year 1967. Including the supplemental request for Southeast Asia, the budget submissions for the current year exceeded those of the preceding year by about $0.2 billion and totaled more than $7 billion; the Congress provided new obligational authority of $7.2 billion, as compared to $6.7 during 1966; the obligations incurred by the Department rose by nearly $1 billion for a total of $8.2 billion; and expenditures amounted to $7.2 billion for an increase of $0.9 billion. The sole purpose of these large investments is to sustain our combat capabilities and defense posture in an age of rapid technological change.
Achievement of this objective requires effective management and meticulous planning of research and development activities. Particular attention was focused during the year on improving the procedure for initiating and evaluating basic research and exploratory development projects, which are designed to stimulate the expansion of the scientific and technological base necessary for future weapons development programs. To reduce the great difficulties encountered in the precise scheduling and programing of scientific research, the Department established a three-stage planning process by the military Services and the Office of the Secretary of Defense. An assessment of the various long-range military threats to the country is followed by an evaluation of possible counterstrategies and finally, conceptual designs of systems that would provide the necessary defensive capabilities are formulated against these assumptions. In this way gaps in technology can be identified and resources can be allocated in a manner consistent
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with, anticipated military needs on the one hand and existing research opportunities on the other.
As a further aid to improving the management and productivity of defense research, the Department in 1964 began a historical analysis, Project HINDSIGHT, of the contributions to new weapons systems made by scientific endeavors. Subsystems and components of some 20 weapons were examined in an attempt to answer such questions as the following: What scientific advances were important in increasing performance or reducing the cost ? Where was the work done ? What motivated the creators? How was the research financed and managed? An interim report on the results of this study was completed during the fiscal year. The investigators found that a large number of discrete research discoveries over a considerable period of time were utilized in each advanced weapon and that the skillful selection and integration of these discoveries provided the key to successful engineering design of improved systems. Moreover, the study showed that the generation of required information was more efficient when the effort was clearly oriented toward satisfying a specific defense need and when the work was funded and managed by the Department or by contractors for Defense purposes. The study concluded that the Department’s investment in science and technology had a large payoff in improving the cost effectiveness of new weapons systems.
In recognition of the Defense laboratories’ outstanding technical competence, the Department sought during the year to involve them more fully in the planning process, particularly by assigning them analytical tasks that aid in determining what is technically feasible and operationally needed. Another recent innovation was the designation of certain facilities as the “lead” laboratory for a particular research area with responsibility for coordinating and applying available technical resources to the resolution of problems being encountered. This managerial procedure proved especially useful in the development of specialized equipment to meet the requirements arising from the war in Vietnam.
A program to stimulate new scientific findings while broadening the base of Defense-oriented research at universities throughout the country—Project THEMIS, which was initiated during fiscal year 1967 at the suggestion of the President—evoked a response far greater than anticipated. Institutions not already heavily engaged in Defense-sponsored research were asked to submit proposals for projects in eight areas of the physical, engineering, environmental, medical, and social sciences, and some 173 universities replied with offers to undertake 483 separate studies at a cost of about $400 million. With only about $20 million available for this work, the Department selected 49
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THEMIS research centers at 42 institutions in 31 States for the first year. Additional centers will be chosen during the coming year.
Information on Defense-sponsored research and development projects continued to be stored and made available to qualified users by the Defense Documentation Center of the Defense Supply Agency. The Center added over 50,000 technical reports to its collection during the year, covering the results of research by military activities, their contractors, subcontractors, and recipients of research grants. Usage of this collection has grown steadily; the Center received nearly 1,850,000 requests for documents during the year—an increase of 340,000 over the preceding year—and prepared more than 20,000 bibliographies on areas of interest requested by military organizations and contractors. These services not only assisted current research efforts but also helped to prevent duplication.
While research and exploratory development—representing one-fifth of the RDT&E budget—received particular attention from management, the full spectrum of research activities continued to be carefully scrutinized during fiscal year 1967. Improvement efforts were initiated to increase the effectiveness of test and evaluation programs, to maximize the reliability of newly developed equipment, and to devise better guidelines for incentive-type contracts.
In the field of test and evaluation, continuation of the operational testing program for low level air offensive and defensive systems and tactics by Joint Task Force 2 closed gaps in knowledge and design not covered in the service tests of the individual weapons. In addition, a new staff section was established in the Office of the Director, Defense Research and Engineering, to assure better coordination of effort and speedier action to correct any deficiencies that might be revealed either through test and evaluation or service use of new items.
Although the capabilities of advanced equipment, and particularly electronics items, have steadily improved, the price of these improvements has been an increase in complexity and a decline in overall system reliability. To overcome this disadvantage and to reduce maintenance costs, which have risen rapidly, the Department established during the fiscal year an advanced program to improve electronic reliability.
Reexamination of the application of incentive-type contracts to RDT&E work indicated that better criteria were needed for evaluating contractor performance and for assuring an equitable sharing of risks by the Government and by industry. In light of this conclusion, amendments to the Armed Services Procurement Regulation were being prepared as the fiscal year ended.
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Logistics
The primary task of the managers of the Defense logistics system is to provide the operating forces with the most suitable weapons, equipment, supplies, facilities, and support services in the proportions needed and on time. Their second duty is to perform this function as economically as possible. That these two responsibilities are not incompatible was again demonstrated during the past year. Troop deployment and combat operations in Vietnam proceeded as planned without being disrupted by logistic breakdowns. Other U.S. forces remained ready to respond to contingencies elsewhere in the world. At the same time, the Department continued to realize impressive savings through its cost reduction program, designed to assure that we buy only what we need, buy it at the lowest sound price, and reduce operating expenses.
The sheer immensity of the Department’s logistics activities, carried on by thousands of military and civilian personnel at hundreds of locations throughout the world, greatly complicates the task of managing resources and operations efficiently and economically. The resources of the Department of Defense were valued at more than $195.5 billion at the close of the fiscal year—$95.5 billion in weapons and equipment issued to military units; $41.4 billion in supply system inventories ; $40.1 billion in land and buildings, including construction in progress; and $18.5 billion in other types of personal property such as plant equipment, work in process, and items for disposal. Procurement operations during the year involved the award of some $44.6 billion in new contracts for weapons, supplies, construction, and services, requiring some 15.1 million separate transactions. Other high-volume logistics operations included the receipt, storage, and distribution of supplies; maintenance and repair of weapons and equipment; management of real property; transportation of people and freight; and the orderly disposal of items no longer needed for military purposes.
The challenges—and opportunities—presented during recent years to the managers of these tremendous resources and complex operations have been met in part by organizational and procedural innovations and in part by motivating and assisting all concerned to do a better job. While errors can still occur in this far-flung enterprise, the efforts to hold mistakes to a minimum are producing results. The troops are being supplied on time, and support systems are operating more economically than before.
Procurement and Production
The increasing tempo of operations in Vietnam during the year placed heavy demands on U.S. industry for items consumed in battle,
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particularly ground and air ammunition, and for weapons to replace those destroyed in combat and lost through attrition. In planning and carrying out the procurement of this materiel, logistics managers sought above all else to be fully responsive to the needs of field commanders. This objective required a high degree of flexibility in procurement programs so that schedules could be adjusted rapidly as differences between anticipated and actual loss and usage rates developed and as requirements for various types and sizes of ammunition changed. An equally important goal of the Department has been to avoid the accumulation of surpluses as occurred during the earlier wars of this century and to plan for easing the adverse economic impact on industry when defense needs decrease. At the same time, extra effort has been concentrated on preserving the advantages of competitive procurement even though combat demands necessarily restrict the use of peacetime procedures.
A means for achieving flexible responsiveness and preparing for an orderly transition from combat to peacetime production was found in the adoption of lower inventory objectives. Smaller reserve stocks are needed when assembly lines are running and can be rapidly accelerated than when, as during the 1961-65 period, inventory objectives are geared to the accumulation of supplies that support combat usage rates from the time hostilities commence until production catches up with demand. When hostilities cease, rebuilding of the lower inventories will assist in cushioning the impact of declining defense needs. To assure that inventories and production are carefully balanced with consumption, a new office responsible for material readiness was established in December 1966 by the Assistant Secretary of Defense (I&L). It was charged with the centralized supervision of some 284 high value key items, including aircraft, missiles, ammunition, and other major items. Timely inventory and production reporting systems were instituted to facilitate the monitoring of activities and the adjustment of programs.
Continuing combat demands pushed contract awards to new highs during fiscal year 1967, although inventory reviews together with the activation of fewer new combat units contributed to a smaller rise in procurement requirements than during the preceding year. Prime contracts with a total value of $44.6 billion were placed in 1967—an increase of 17 percent over the preceding year and a gain of 59 percent since 1965. In like fashion, the number of procurement actions rose to 15.1 million as compared to 14.4 million a year ago and 13.3 million in 1965. Major program categories that were higher in 1967 than 1966 included ships, up nearly 58 percent; aircraft, 27 percent; ammunition, 25 percent; communications and electronics, 15 percent; and missiles, 5 percent. (See table 33.)
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Higher procurement awards for fixed-wing and helicopter aircraft during the past 2 years increased deliveries by about 38 percent during 1967 and augmented inventories by about 8 percent since 1965, despite combat and operational losses and the phaseout of earlier models. The armed forces acquired more than 1,800 fixed-wing and 2,400 helicopter aircraft during the fiscal year, as compared to about 1,200 and 1,850, respectively, in 1966. Deliveries of about 7,300 fixed-wing aircraft and helicopters from new production during the 2-year period brought the total inventory from about 33,400 on June 30, 1965, to nearly 36,000 2 years later, even though the armed forces lost 1,200 in combat operations, 1,850 through accidents, and a net of 1,650 through retirements and transfers. Milestones during fiscal year 1967 included the initial deliveries of production models of the F-111A and the buildup, under accelerated schedules, of the A-7 and F-4 inventories. As for helicopters, the first AH-1 Hueycobra armed helicopters and OH-6 light observation helicopters were delivered to the Army from production, as were large numbers of UH-1 Iroquois tactical utility helicopters and of CH-46 and CH-47 medium transports used by the Marine Corps and the Army, respectively.
Production of key ground munitions rose from 16,000 tons in July 1966 to 96,000 tons in June 1967 while consumption doubled, reaching about 84,000 tons per month at the close of the fiscal year. Rates of production were closely watched and adjusted as necessary to keep pace with combat demands. A new type of antipersonnel munitions— the Beehive in 90-mm., 105-mm., and 106-mm. calibers—was introduced during the year. Initial deliveries of ground munitions produced for the first time since Korea included high explosive (HE) artillery rounds for 105-mm., 155-mm., and 8-inch howitzers and for 4.2-inch mortars. With the February 1967 decision to employ naval gunfire against shore targets north of the 17th parallel in Vietnam, consumption of 5- and 8-inch rounds increased rapidly. To keep pace, production rates were immediately accelerated and monthly output almost quadrupled during the year, from 1,174 tons to 4,407 tons.
The prompt responsiveness of industry and labor in meeting production schedules for air munitions increased inventories in this critical category by about 70 percent during fiscal year 1967 as the result of a 204 percent increase in production—even though there was a 240 percent increase in consumption. Output, which had amounted to about 36,000 tons in June 1966, peaked at 99,400 tons in May 1967, and totaled 990,000 tons for the year. An inventory of more than 600,000 tons of air munitions was available at the close of the year.
Expanded defense production for Southeast Asia and decisions to procure certain newly developed materiel during fiscal year 1967 required additional industrial facilities. While the Department of De
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fense relied primarily on its contractors to invest their own funds in new plants and equipment, it assisted and supplemented expansion programs through direct investment of Federal funds and redistribution and improved utilization of Government-owned industrial equipment. In addition, guaranteed loans under the Defense Production Act provided certain contractors with working capital to expedite production or services. Defense participation in this program during the year involved the authorization of loans totaling $97.1 million, of which $71.6 million was guaranteed, as compared to only $10.2 million and $7.4 million, respectively, during the preceding year.
Inventories of Defense-owned plant equipment increased by about $640 million, or 6 percent, during the year and were valued at over $11.3 billion on June 30, 1967. Machine tools and other production equipment with a value of $192.6 million were redistributed to contractors during the year, as compared to $156 million during 1966. In addition, some “package” plants and standby lines held in reserve for emergencies were reactivated during 1967, involving 9,314 machines valued at $101 million. Production was resumed on standby lines in about 4 months and at package plants in 3 to 8 months, as compared to a leadtime of 9 to 10 months for the acquisition of new equipment. As expanded aircraft requirements threatened to overload forging equipment and to delay deliveries, an intensive modernization program for Government-owned equipment and better scheduling helped to resolve the major problem.
Assistance in another form was provided to defense contractors through the National Priorities and Defense Materials System that forestalls or alleviates critical production problems arising from shortages of materials, components, and equipment. The Department of Defense Master Urgency List, the guide for the assignment of priority ratings to contracts and subcontracts, was updated during the year to include selected additional aircraft, missiles, bombs, sensors, ammunition, and electronic items for Southeast Asia. The number of cases that required special assistance during the year increased to 4,580 or a monthly average of 382. In July 1965, before the Vietnam buildup, only 61 cases were forwarded by the Department to the Business and Defense Services Administration of the Department of Commerce. The peak month of fiscal year 1967 was October 1966, when 508 cases were acted on, as compared to a peak month caseload of 415 during the Korean hostilities. In addition to these special assistance actions, the Department computed quarterly its anticipated requirements for controlled critical materials to support military contractors and suballocated the authorizations approved by the Office of Emergency Planning to claimant agencies. Particular attention was also required to ease potential production bottlenecks created by strikes.
860-499 0-70—6
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
With the outbreak of hostilities in the Middle East during June 1967, the Department of Defense immediately initiated contingency measures to guarantee continued deliveries of petroleum to the western Pacific, where U.S. forces rely on Persian Gulf suppliers for about 65 percent of their needs. The Department chartered 35 additional tankers and negotiated open-end contracts with U.S. and Caribbean producers for monthly requirements of some 6.5 milion barrels of petroleum. With the easing of tensions, delivery schedules from the Western Hemisphere were cut back to 5.4 million barrels for July and to 0.8 million barrels for August, pending full restoration of normal distribution patterns. The actions taken prevented any disruption in petroleum deliveries to Southeast Asia and reductions in inventories there.
Even with the increased volume and acclerated tempo of production contract awards during the year, the Department continued to emphasize competitive procurement procedures in keeping with the goals of its cost reduction program that had been initiated in 1961. During fiscal year 1967, $18.6 billion in awards—42.9 percent of all contracts with industry—had been preceded by competitive offers from two or more suppliers. Only 32.9 percent of the contracts awarded in 1961 had been competitive, and had this lower rate continued, the value of competitive contracts would have been $4.3 billion less during the current year. An additional $2 billion in awards involved design or technical competition. (See table 36.) Not only did competition increase, but prime contracts with small business firms also rose in value during the year, totaling $8.1 billion as compared to $7.3 billion for the preceding year. (See table 34.) Small business subcontracts increased from $5.1 billion to $6.7 billion during the year. Since March 1961, as a result of the cost reduction program, the proportion of cost-plus-fixed-fee contracts had been reduced from 38 percent to 10.4 percent, although the reactivation of federally owned standby ammunition plants, operated by contractors on a fee basis, resulted in a slight increase in CPFF awards during fiscal year 1967. (See table 35.)
Although departmental efforts to place contracts with firms in areas of substantial unemployment continued to receive high priority, the potential for such assistance declined during the year as the result of general improvement in economic conditions. By the close of the fiscal year, only nine major areas, three large cities, and 64 smaller localities were classified as labor surplus areas, as compared to 14, six, and 75, respectively, on June 30, 1966. Prime contract awards to firms in this smaller number of areas totaled $2.2 billion for the year, about $1 billion less than awards in the larger number of communities during the preceding year. Awards placed through set-aside or tie-bid prefer
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ence procedures declined also by about $40 million from the $98 million figure attained during fiscal year 1966.
While specialized contracts such as those for major weapon and space systems, construction, ships, and basic research are administered by the military departments, the execution of the preponderance of contracts is supervised by the centralized Defense Contract Administration Services (DCAS), organized in 1964 as a component of the Defense Supply Agency (DSA). The cost to DCAS of monitoring contract performance and insuring compliance, per unit of work, continued to be reduced during fiscal year 1967 despite the increased workload. When this office became fully operational in December 1965, it was responsible for prime contracts with a value of about $30 billion; by June 30, 1967, this amount had increased 63 percent to $48.9 billion. The larger work volume was accomplished with a growth in staff of only 32 percent during this 18-month period, representing significant savings achieved through the consolidation of offices and functions formerly performed separately by each of the military departments and other Defense contracting offices.
The final step in the procurement cycle is the determination that the materiel being delivered meets military requirements. Considerable progress was made during the year in improving quality and reliability assurance standards and procedures. The Armed Services Procurement Regulation was revised to assure that the inspections and tests required by contracts were faithfully performed as well as to determine that the finished products meet contract specifications. In addition, the Department continued to encourage industry to participate in Zero Defects programs aimed at motivating all employees to carry out work assignments meticulously and accurately. More than 3,000 private firms as well as the industrial enterprises operated directly by the Department of Defense have now established such programs.
Supply Management
The Department of Defense, concurrently with meeting Vietnamese requirements, continued during the year its long-term efforts to improve worldwide supply operations. Probably the most significant indication of success in these endeavors has been the declining ratio between supply system inventories and weapons systems in use. An investment of $44.3 in inventories was being retained in 1961 to support weapons with a value of $67.6 billion, or 65 cents’ worth of supplies for every dollar’s worth of weapons. By the close of fiscal year 1967, this ratio had been reduced to 46 cents per dollar, as inventories had decreased by $0.8 billion while weapons increased by $27.9 billion.
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
This large reduction had been accomplished through a wide variety of actions. Major ones included the pooling and centralized management of resources, elimination of unnecessary duplication of items and prevention of subsequent introduction of like items, faster supply operations to cut pipeline intransit stocks, and more rapid and complete reutilization or disposal of the surplus and excess materiel that is invariably generated as a result of technological change.
Integrated management of supply items used commonly by more than one military Service continued to play a major role during fiscal year 1967 in the reduction of inventory requirements and logistics costs. Prior to the establishment of DSA in 1961 only 41,000 of the some 4 million items in military supply systems were under the integrated management of a single agency. During fiscal year 1967 alone DSA added some 200,000 items to its central procurement and distribution assignment, bringing the total to 1,540,000, while an additional 160,000 DSA-managed items were authorized for local procurement. Moreover, about 80,000 supply items were under integrated management of the military Services or other Defense agencies, for a grand total of 1,780,000 items under integrated management—about 45 percent of the supply system. Some 975,000 additional items were being reviewed for possible centralized control through the item management coding program initiated in 1965. By June 30,1967, this program was 84 percent completed, and about 470,000 items had been selected for integrated management.
Further extension of integrated management can be achieved by assigning support responsibility to one military Service for commonly used weapons systems, a concept that has been applied since fiscal year 1964 to the F/RF-4 aircraft deployed in Navy, Marine Corps, and Air Force units. The number of common F-4 items under Air Force support management increased during fiscal year 1967 from 4,527 to 7,243, and further merging of resources and increased interservicing of assets are planned for the coming year. The experience gained in this program is being used to establish integrated support management assignments for other multi-Service aircraft such as the UH-1, F-lll, A-7, HH-53, and OV-10.
The economic benefits of integrated supply management are being realized increasingly on a Government-wide basis as the result of extensive cooperation between the Department of Defense, the General Services Administration (GSA), and other Federal agencies. Arrangements were completed during the fiscal year for the transfer to GSA of responsibility for managing on behalf of Defense agencies certain supplies used commonly throughout the Government such as paint, handtools, office equipment, furniture, and paper products. Although the Department has been procuring many of these items through GSA
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for some years, it had previously retained residual management authority over mobilization reserve stocks. At the same time, GSA and other civil agencies increased their reliance on the Department as supply manager for electronics, medical, subsistence, and fuel items. DSA is already meeting about 45 percent of the electronics requirements of NASA and FA A, furnishing subsistence and certain medical supplies to Veterans Administration and Public Health Service hospitals, and filling clothing and textile requisitions from the Office of Economic Opportunity. Preparations were completed during the year for extending Defense support in these supply classes and for providing fuel and petroleum products to civil agencies in future years. It has been estimated that the Government will be saving $3 million annually when these arrangements become fully effective.
Transportation
Defense transportation agencies continued to carry during the year the heavy additional workloads created by the Vietnam war—workloads that had to be superimposed on large requirements for the support of U.S. forces elsewhere. The Military Sea Transportation Service (MSTS) moved 26 percent more cargo during 1967 than during 1966; the Military Airlift Command (MAC) increased its worldwide deliveries of cargo by 77 percent and its passenger load by 31 percent; and the Military Traffic Management and Terminal Service (MTMTS) arranged commercial transportation for 25 percent more freight and 26 percent more passengers. Contrary to these increases, the number of passengers transported by ship declined by 21 percent during the year as the military Services relied more and more on expanded airlift capacity for transoceanic movements of personnel. (See table 46.) In summary, the three single manager transportation agencies met Vietnamese and worldwide requirements effectively, adjusted rapidly to changing usage patterns, and continued to achieve operating economies.
Although Southeast Asian operations accounted for most of the increased traffic during fiscal year 1967, the French Government’s demand that U.S. bases in that country be evacuated created heavy extra requirements for transportation. Nevertheless, through cooperative efforts the deadline of April 1,1967, was met on schedule. Some 637,000 tons of materiel were moved from France. The largest portion of the relocated materiel, 388,000 tons, went to bases in the Federal Republic of Germany, 147,000 tons to the United Kingdom, and 16,000 tons to other Western European countries, while 86,000 tons were removed from Europe for other worldwide requirements. To achieve this relocation., trucks from the Army’s 37th Transportation Group provided
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
more than 160 million ton-miles of overland transportation, while MSTS moved over 347,000 short tons of materiel, using cross-channel ferries, coasters, and tugs as well as deep-draft vessels. MTMTS accepted deliveries at ports in the United Kingdom and arranged for shipments of equipment to inland bases. Some Air Force materiel and supplies were airlifted by MAC.
MSTS was responsible during the year for moving 243,000 passengers and 41.7 million tons of cargo, including 14.3 million tons of dry cargo and 27.4 million tons of petroleum. Improved efficiency in sealift operations was particularly evident in the handling of cargoes destined for Southeast Asia, where port congestion was greatly reduced. On a worldwide basis, the greater use of container ships and containerized cargoes generated savings of about $20 million. Additional savings of about $4 million in shipping costs were realized through the use of competitive contracts for cargoes transported by regularly scheduled common carriers. Bid proposals had been solicited during June 1966 and the new contracts became effective during the current fiscal year.
In its worldwide operations, the enlarged MAC airfleet continued to be augmented substantially by commercial carriers that moved about 90 percent of the passengers and 34 percent of the cargo airlifted during the year. Contract procedures for the procurement of these services were thoroughly reviewed to obtain the most favorable terms for the Department and the use of the most efficient available aircraft. Approximately $24 million in savings was realized during the year through negotiated reductions in tariffs for turbolift aircraft. The MAC airfleet and its commercial augmentation carried 2,417,000 passengers and 599,000 tons of cargo during the year.
MTMTS 1967 operations involved arrangements for commercial transportation of 7,160,000 passengers and 30.5 million tons of cargo. Freight costs rose by 37 percent during the year while tonnage was 25 percent higher, but costs per ton-mile for all modes of transportation except air and pipelines were reduced. Cargoes proposed for air shipment were carefully checked to assure that they met eligibility requ i rem en ts, and the proportion of air shipments to total workload was cut from 2.4 to 1.8 percent. Pipeline deliveries declined from 17.5 to 13.1 percent of the total workload. The use of intermodal containerized cargo, shipped on a single bill of lading, was initiated to take advantage of the economies of this new transportation technique. While unit costs for passenger traffic rose slightly during the year, the aggregate cost per passenger-mile decreased in part as the result of greater use of the cheaper types of transportation. Air passenger traffic dropped from 78.9 to 75.9 of the total workload.
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Construction and Installations
The Department of Defense contracted for more military construction work during fiscal year 1967 than in any year since the end of the Korean war. Although Southeast Asian requirements accounted for a substantial part of the increase, the high volume also reflected the January 1967 decision to proceed with projects costing about $0.6 billion that had been temporarily deferred during 1966 in order to concentrate resources on the most pressing needs. Contracts for most of these deferred projects were awarded prior to June 30,1967. Consequently, total awards for the year amounted to $2.1 billion, of which $1.2 billion was for work in the United States and $0.9 billion for work at oversea locations. The new construction was designed to meet a wide variety of military requirements, including new operational and training facilities for land, sea, and air forces; additional production, maintenance, and supply support installations; research and development facilities; and troop housing projects.
Concurrently with its programs to meet expanding needs, the Department continued the systematic review of the existing base structure and the disposal of excess properties—a long-range project that has substantially reduced the cost of operating the Defense establishment since 1961. Some 48 decisions to close bases or reduce operations were reached during 1967, involving some 66,000 acres of real estate valued, with improvements, at $33 million. When these actions are completed, about 4,200 personnel spaces will be eliminated and annual savings of about $48 million will accrue. As in the past, the communities and individuals affected by these terminations will receive economic adjustment assistance from the Department. Such aid was extended to 32 localities in 24 States during fiscal year 1967. The number of displaced employees listed with the centralized referral system declined substantially from 6,744 to 2,791 as placements and other dispositions greatly exceeded new registrations.
Cost Reduction
Recent improvements in procurement, supply management, transportation, and real property utilization have been stimulated to a large extent by the Defense cost reduction program initiated in 1961 which enlisted personnel throughout the Department to seek means for providing logistical support to the armed forces. The resulting dollar impact of these efforts had reached a 5-year cumulative total of $14.3 billion in verified savings by the close of fiscal year 1966. During the current year the cost reduction program was placed on a permanent basis and reporting procedures changed to reflect the experience gained
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during the initial 5-year cumulative program. Under the revised criteria, the effects of each new improved or intensified management action will be included only in a single year’s report, and savings will be estimated only for the current and two succeeding years. This change not only simplifies reporting but also facilitates the relating of cost reduction actions to specific program plans and budget accounts.
Savings goals will continue to be established annually for the major operating components of the Department of Defense under four general categories: Buying only what we need, buying at the lowest sound price, reducing operating costs, and the military assistance program. The total goal for the 1967 program was $1.5 billion, of which $0.9 billion was to be realized the first year and the remainder during 1968 and 1969. Despite the impact of operations in Vietnam, the military Services and the Defense agencies again exceeded the ambitious objectives of the program. Actual savings for the year amounted to nearly $1.1 billion, while the full 3-year effect of the actions taken were estimated at nearly $2.1 billion—137 percent of the goal. (See table 41.)
Hundreds of actions, some large but many small ones, contributed to this impressive result. The effects of increased competition in procurement and termination of unnecessary installations have already been noted above. Another most productive effort has been the elimination of “goldplating” from military specifications through value engineering—the systematic analysis of materiel, facilities, and procedures to assure the adoption of designs that provide adequate and reliable performance at the lowest possible cost consistent with functional requirements. More than 500 major value engineering actions and several thousand smaller ones contributed some $339 million in savings for fiscal year 1967 alone. A whole series of measures to promote more efficient maintenance of equipment—including the establishment of economical repair limits, better planning during the development phase for new items, and joint training courses—have not only assisted in the better utilization of resources but also contributed to greater combat readiness.
Besides sponsoring its own inhouse cost reduction program, the Department of Defense has encouraged its major contractors to initiate similar efforts. Cost reduction workshops for industry were held during the year in eight cities around the country and were attended by more than 1,000 individuals. Some 85 companies with 211 plants reported to the Department that they had saved $967 million during the fiscal year on contracts totaling $12.4 billion. These savings benefit the taxpayer in three ways: (1) By reducing the amounts owed under cost-reimbursement-type contracts; (2) by enabling the Department
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to share in savings through incentive-type procurements; and (3) by providing reliable lower cost data for reference in pricing subsequent contracts. In addition, the techniques that have been developed have been applied by many other business firms not directly involved in defense work.
ANNEX
Contents
Page
Annex A.	Annual Report of the Reserve Forces Policy Board-------- 87
Annex B.	Annual Report of the Defense Supply Agency-------------- 111
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Annex A
ANNUAL REPORT
of the
RESERVE FORCES POLICY BOARD
July 1, 1966, to June 30, 1967
The Reserve Forces Policy Board (RFPB) operating in its statutory capacity as principal policy advisor to the Secretary of Defense on matters pertaining to the reserve components, maintained constant surveillance over their performance during fiscal year 1967 so that any needed action detected could be recommended promptly.
The past fiscal year saw several proposed changes to the reserve programs directed toward improving their overall efficiency, flexibility, and reliability, in turn pointing the way for continual improvement
This report on the status of the reserve programs of the armed forces is intended to reflect the reserve components’ mobilization potential and their value to our national security.
New members either designated by law or appointed to the Board by the Secretary of Defense during the reporting period are: Lt Gem Charles W. G. Rich, USA; Maj. Gen. John W. Kaine, USAR; Maj. Gen. Thomas G. Wells, Jr., ARNGUS; Maj. Gem Richard S. Abbey, USAF; Maj. Gen. Charles H. DuBois, ANGUS; Maj. Gen. Roy T. Sessums, AFRes; and Rear Adm. Russell R. Waesche, USCG.
The RFPB convened three times during fiscal year 1967. During these sessions the Board considered a number of major matters of policy affecting the reserve components of the armed Services. Principal among these matters were:
1.	Uniform code of military justice and its application to reserves;
2.	Reserve inservice information and public relations programs;
3.	Career patterns for reserve officers;
4.	Screening of the Ready Reserve;
5.	Project 100,000; and
6.	Selective Service study and recommendations.
All of these items were the subjects of repeated study, presentation, and discussion during the year. In addition, the Board addressed itself to other subjects and directed particular attention to various items of proposed legislation, both those originating within the Department of Defense and those referred to the Department for comment by a committee of the Congress. In cases involving legislation, where appropriate, the recommendations of the Board were forwarded
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
to the Secretary of Defense for consideration in the formation of a Department position.
The strength of each reserve component in fiscal year 1967 is shown in tables 27 and 28 of the appendix.
In fiscal year 1967, 96,292 nonprior-service personnel enlisted under the Reserve Enlistment Program of 1963 (REP 63). Under this program, the active duty for training for all nonprior-service enlistees varies from a minimum of 4 months to the maximum period required for MOS qualification. During this reporting period the average duration of active duty for training required for MOS qualification was approximately 6 months. The active duty for basic training program has, since its inception, produced well over a million basically trained enlisted men for the Ready Reserve.
Fiscal year 1967 witnessed the military Services, including the Coast Guard, continue screening their Ready Reserve as directed by section 271, title 10, U.S. Code, in order to insure its availability for active duty during a national emergency. The screening process covered a total of 2,461,989 reservists. The procedure removed a total of 617,514 from the Ready Reserve either by transfer to the Standby or Retired Reserve, or by discharge. Specifically, 311,210 officers and enlisted men were transferred to the Standby or Retired Reserve and 306,304 were discharged.
Compliance with the provisions of the Reserve Officers Personnel Act, as codified in titles 10 and 14, U.S. Code, has not yet created serious adverse effects on the mobilization potentialities of the reserve components. The critical test years (1968-71) for the attritive features of RO PA are about to begin. Many of the officers commissioned, during World War II will complete their service during this period and their removal from an active status will be mandatory. Procurement of officers to offset the anticipated losses will have to be about double the present rate and its is expected that the ROTO Vitalization Act will aid in achieving the increased officer production required.
Army Reserve Components
Approval of an Army plan for realigning the Army’s Reserve (USAR) and National Guard (ARNG) forces to improve significantly their early deployment capability and combat readiness was announced on June 2, 1967.
The realignment is designed to provide the Army reserve component forces recommended by the Joint Chiefs of Staff in order to bring the total force structure into balance with contingency plans and the supporting equipment program.
Because of its present imbalance, the current reserve component structure has serious deficiencies. More than a thousand units in the current structure are not needed. At the same time, the reserve components need almost a thousand units that they do not have.
There are four major objectives of the reorganization:
1.	Bring the force structure into balance with contingency plans and the supporting equipment programs.
2.	Update the reserve component structure.
3.	Provide adequate Army National Guard forces for the needs of each State.
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4.	Locate units and strengths geographically and in relation to population so that, in the event of mobilization, the burden is shared equitably.
Under the reorganization announced on June 2, 1967, the Army reserve components would consist of units with a total paid drill strength of 640,000. Units in the new structure would be manned at an average of more than 90 percent of full wartime strength. The new structure would be fully supported with equipment, technicians, repair parts, and all the other essentials necessary to achieve the required degree of readiness.
The structure of the Army reserve components under this new plan would consist of eight combat divisions, 18 brigades, 13 training divisions, and the necessary supporting units to enable the Army to respond promptly in the event of some unforeseen emergency.
The ARNG structure would contain eight divisions, 18 brigades, and certain supporting units, and have a total paid drill strength of 400,000. The US AR would have 13 training divisions, two maneuver area commands, other mobilization base units, and all other service support units for a total paid drill strength of 240,000.
When presented to the Congress, this plan met with disfavor in two areas. First, during the Senate Armed Services Committee hearing on this plan, the chairman stated that he thought some combat and combat support structure should be maintained in both the National Guard and the Army Reserve. Other members of Congress voiced the same thought. Secondly, the House of Representatives, in passing the Department of Defense appropriations bill for fiscal year 1968 and the Reserve Forces Vitalization Bill (H.R. 2), called for a minimum strength of 260,000 in the US AR rather than the 240,000 contemplated in the Department of the Army plan.
In the light of the foregoing, the Chief of Staff and the Secretary of the Army directed that the Army plan be subjected to further analysis.
Preliminary indications are that congressional objections can be satisfied by reconfiguration and tradeoffs within the original total force structure.
On January 19,1967, the decision was announced that the 14 U.S. Army Corps, the key headquarters for the command and administration of Army Reserve units in the continental United States, would be eliminated prior to December 31, 1968. The Department of the Army initiated plans to accomplish this action under the concept of transferring most of the functions of the Corps headquarters to the five continental U.S. armies and certain other functions to Army Reserve units commanded by general officers. Included in the concept was the formation of Army Reserve Commands (ARCOM, a Reserve Command and Control headquarters) to supplement the existing USAR General Officer Commands. At the year’s end, detailed plans for the execution of the Corps’ inactivation were being completed at the headquarters of the Continental Army Command (CONARC).
The Army reserve components troop basis as of June 30, 1967, consisted of 7,575 company and detachment-size units, six more than a year before.
The troop basis follows:
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Units	ARNG IR/RR l	USAR IR 1	Total
Combat divisions	 		8/15	o	23
Training divisions __ _	0	13	13
Command Headquarters, divisional		0/5	0	5
Combat brigades. __				7/0	4	11
Maneuver area commands			 _ _	0	2	2
Air Defense battalions	44/0	0	44
Field Army support command		_ _	0	0	0
Support brigades	 __ _	__	_ _	0	3	3
Adjutant General units. _ _	36/0	96	132
Civil affairs units	 __ 				0	77	77
COSTAR units._   	_ _	0	38	38
Finance units. 					 _	I/O	18	19
JAG units					0	196	196
Hospital units	 __	__	15/0	107	122
Military Police battalions	_ _	6/0	4	10
Public information units 					34/0	25	59
PSYOPS units. __			0	8	8
Garrison units _ _	__			0	18	18
Terminal units		0	19	19
Total companies and detachments		 _	2, 520/1. 480	3, 575	7, 575
Authorized paid drill strength		307, 900/110, 600	260, 000	678, 500
HR—Immediate Reserve: Maimed at 80 percent or higher of full wartime strength; necessary equipment being procured.
RR—Reinforcing Reserve: Manned at 50 percent of full wartime strength; no equipment being procured.
The Army reserve components paid drill strength totaled 680,031 (ARNG 418,074; USAR 261,957) on June 30, 1967. This strength included 68,840 officers (ARNG 33,880; USAR 34,960) and 611,191 enlisted men (ARNG 384,194; USAR 226,997).
The Ready Reserve yearend strength, excluding 2,419 in the inactive National Guard, was distributed as shown below:
	ARNG	USAR	Total
Air defense		 		 			7, 257 117, 420 180, 347 113, 050 0 0	0 30, 461 231, 496 0 423, 557 20, 647	7, 257 147, 881 411, 843 113, 050 423, 557 20, 647
Selected reserve force							
Other immediate reserve. _ __	__ 				
Reinforcing reserve.			____ 				
Ready reserve mobilization reinforcement pool _ _ _	__ _	_ 					
Control group delayed and mobilization designee. _	_	___ _ 		_			
Total Ready Reserve		_			
			1, 124, 235
			
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The Army National Guard started fiscal year 1967 with 1,847 aviators on flying status. In spite of vigorous recruiting efforts which resulted in the acquisition of 155 aviators, the year ended with 1,765, a net loss of 82. The USAR aviator strength as of June 30, 1967, was 542.
At the beginning of the fiscal year there were 26,967 technicians on duty with the reserve components (ARNG 22,939; USAR 4,028) including 4,970 in the air defense program and 216 in the program for military support of civil defense. As of June 20, 1967, actual technician strength was 28,332 (ARNG 23,758; USAR 4,574), including 5,043 in the air defense program and 220 in the program for military support of civil defense.
On June 30, 1966, there were 133,109 ( 79,106 ARNG; 54,003 USAR) nonprior-service enlistees (REP’s) awaiting initial active duty for training. This backlog of untrained personnel was due primarily to the continuing active Army buildup and to increasing active Army training requirements imposed on the existing training base.
Reduced draft calls beginning in January 1967, coupled with expansion of training facilities, permitted an increase in the number of training spaces allocated to the reserve components. The total input of REP’s to active duty for training (ACDUTRA) in fiscal year 1967 was 179,924 (109,990 ARNG; 69,934 USAR). The backlog was practically eliminated, and only 10,799 (5,605 ARNG; 5,194 USAR) individuals were awaiting ACDUTRA on June 30, 1967.
Most ARNG second lieutenants are produced through the State Officer Candidate School (OCS) Program. All States with the exception of Alaska have this program. The planned enrollment of new candidates in it during annual field training of 1967 is 6,200, which would be the highest total yet reached. Army Reserve interest in the ARNG State OCS program has increased and about 350 USAR personnel entered it during the summer of 1967. 594 ARNG personnel enrolled in the reserve component OCS courses, which are about 11 weeks long and conducted at active Army installations.
In order to reduce the Army Reserve’s long-standing shortage of junior officers in units, increased emphasis was placed on the participation of members of the U.S. Army Reserve in the active Army OCS program. Control of the USAR input was transferred to the Office, Chief, Army Reserve, and procedures for application, selection, and attendance of members of the U.S. Army Reserve were standardized with those of the active Army. To make the program more effective, all USAR graduates are now commissioned upon completion of OCS. Previously, a separate application for appointment was submitted by OCS graduates, often introducing delays in commissioning of up to 1 year. A continuing publicity program has been initiated to carry the OCS message down to unit level.
Upon recommendation of the Haines Board, CONARC established advanced and basic branch mobilization courses for reserve components personnel during the latter part of the year. Infantry and chaplain mobilization advanced courses were started in June 1967. Most of the other schools will start their programs during fiscal year 1968.
U.S. Army Reserve school system enrollment expanded during the year from 18,000 to 24,000, due in large part to the greater use of enlisted MOS training courses. These USAR schools were widely used and assisted commanders of Selected Reserve Force (SRF) units to achieve and maintain personnel proficiency objectives. The use of civilian and vocational schools as an extension of the MOS departments of the U.S. Army Reserve schools was authorized on a contract basis after a successful test in the XX Corps area.
To bring the functions of the 13 USAR training divisions into line with the active Army Training Centers, the divisions are taking part in active Army drill
360-499 0—70------7
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sergeant training courses, and are supplementing this training with drill sergeant schools at home stations. Over 500 drill sergeants are participating in or have completed this training.
The alignment of the training divisions to the brigade concept still awaits final disposition.
The annual Chief of Reserve/National Rifle Association Pistol Match was conducted during the winter months and was expanded to include entries from advanced course ROTO cadets in Senior Division ROTC schools. In all, about 700 from the US AR and ROTG participated in this off-duty, volunteer competition.
Attendance at the unit training assemblies in fiscal year 1967 remained high. The percentage of attendance was 98.8 for the ARNG and 88.3 for the USAR.
Multiple unit training assemblies (MUTA’s) have increased. During the second quarter the 4-hour training assembly became mandatory for most units. The only exceptions were a few specialized units designated by CONARC. This change from the old 2-hour drill has improved the training level and mobilization readiness of the Army reserve components units. In addition, all units are required to schedule a number of multiple drills consecutively within assembly periods. In these instances, the MUTA may consist of 8 to 24 hours of training over a period of 1 to 3 days.
Emphasis was placed on training assemblies at field training sites. The lengthened training and the encouragement to conduct maximum training in the field contributed significantly to the attainment of improved readiness levels. Achievements and shortfalls alike were in great measure the results of the buildup of forces in Southeast Asia. For example, where, in past years support tasks were normally performed by the active Army, the Army Reserve units and individuals provided the necessary support. The Southeast Asia buildup thus generally set the stage for reserve component training, effecting the program in a few instances. Generally, the challenges of self-support and the assistance given to the active Army in many of its missions were beneficial to the reserve components.
The units of the 150,000-man Selected Reserve Force (SRF), created to meet contingencies which might arise during the time when forces in the continental United States were drawn down by the demands of the Vietnam buildup, were given priority in manning and provision of equipment, and received intensive training at their home stations. By the end of the annual training cycle they had attained a higher overall state of readiness than has ever been reached before by reserve units not on active duty. To maintain this high state of readiness, the units of the SRF underwent training at 58 drills of at least 4 hours each, instead of the normal 48 drills per year.
The SRF has an authorized strength of 150,461 (118,903 ARNG ; 31,558 USAR) in 977 units (744 ARNG, 233 USAR). The assigned strength of the SRF on June 30, 1967, was 147,881 (117,420 ARNG; 30,461 USAR).
The Army National Guard air defense program is now in its 15th year of operation and has progressed from conventional weapons to the nuclear-capable NIKE-HERCULES missiles. The performance of the 54 fire units, distributed between continental United States and Hawaii, continued to improve. The 48 onsite NIKE-HERCULES batteries in the continental United States and the six fire units in Hawaii, manned by ARNG technicians, were operational around the clock during the past year. These batteries are sited to protect selected population centers against air attack.
Reduction in the numbers of Army advisors assigned to the Army reserve components continued in fiscal year 1967. On June 30, 1967, there were 758 officer advisors (ARNG 4,401; USAR 318) assigned, which represents a net
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decrease of 109 (ARNG 69; USAR 40) from fiscal year 1966. No significant improvement can be expected in the immediate future due to active Army requirements in Southeast Asia.
During fiscal year 1967, a number of milestones were passed in reserve component training. It was generally more meaningful, more mission-oriented, and more directed at the accomplishment of useful tasks than in previous years. However, there were fewer opportunities to participate in active Army exercises and air mobility training was curtailed. About 21,000 men of all Services, including the Puerto Rico National Guard, took part in Exercise CLOVE HITCH III. The largest U.S. fighting force to see “action” in the Caribbean since the crisis in the Dominican Republic defeated mythical invaders of Puerto Rico and the nearby islands of Vieques and Culebra. The organizational structure was similar to the one used during the Dominican crisis.
Army National Guard and Army Reserve units in the 5th Army area took part in a major command post exercise, CPX ROUND-UP I, during the period January-April 1967.
It was initially thought that the National Rifle and Pistol Matches, the national shooting competition, would be canceled because of manpower priorities in the active Army. However, the USAR provided sufficient additional personnel to support both the matches and the Small Arms Firing School at Camp Perry, Ohio.
Thousands of members of the USAR provided ACDUTRA site support, ROTC camp support, and support at CONUS Army and Corps headquarters for command and supervision of the U.S. Army Reserve.
During fiscal year 1967, issues of equipment to the reserve components were greatly in excess of withdrawals. Items received included several that are more modern and much new materiel, such as %-ton utility trucks and trailers. In addition, two large cargo ships and two smaller vessels as well as tugboats have been acquired for the training of port terminal service and other waterborne units of the U SAR.
Firepower, communications, and support capabilities have undergone little or no change this year, and shortages in these areas continue to create training problems. The greatest needs are for area communications equipment (field command level radios, radar sets, etc.), specialized quartermaster and engineer items, and heavy tactical vehicles. Training of the Selected Reserve Force has been hindered by some shortages of equipment, such as new radios, modern aircraft, and ground surveillance radar equipment.
Deferment of the military construction program for the reserve components announced in December 1964 is still generally in effect. Under present instructions, each project requires Office of the Secretary of Defense approval on a case-by-case basis. Each project must be justified as essential under both existing and planned future force structures, and for armory-type construction, it must be demonstrated that the risks of overbuilding for the planned force have been minimized.
During fiscal year 1967, projects estimated to cost $8,582,000 were approved for construction, utilizing carryover funds of the Army National Guard. With the exception of seven urgently needed new armories and one armory expansion, all approved projects were for training and administrative support facilities not affected by changes in troop structure or location of units. One project, for rehabiltation of a reserve center at a cost of $30,740, was approved for USAR.
The reserve components used 3,818 armory-type facilities (2,786 ARNG; 1,032 USAR) of which 1,251 were State-owned, 1,956 constructed with Federal funds, 479 leased, and 132 donated.
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Naval Reserve
The overall readiness of the Naval Reserve continues to be evaluated as good. In the Selected Reserve units, the carrier aviation squadron personnel would require carrier qualification before being fully combat ready, and the ASW ships’ crews would require brief refresher training. Minecraft, aircraft patrol, helicopter, and transport squadrons are ready now. The measure of readiness for the Naval Air Reserve squadrons parallels that for the active duty fleet squadrons.
The Naval Reserve traditionally depends on fallout from the fleet for ships, aircraft, and major items of equipment to replace that in the Naval Reserve which has become obsolete or uneconomical for repair. Replacement of Naval Reserve training ships by fallout from the active fleet was not realized during fiscal year 1967, and funds for ship maintenance have been extremely limited. These conditions have made it impossible to maintain the Naval Reserve training ships in an acceptable degree of readiness.
Since 1958, the Navy has maintained its Selected Reserve as the most highly trained and responsive part of the Ready Reserve. It provides a readiness and capability within the Naval Reserve both for immediate response and for rapid phased augmentation of the active Naval Force under a wide range of emergencies.
During fiscal year 1967, the Selected Reserve drill pay strength was maintained at an average of 126,000 as directed by the Secretary of Defense. It is organized into five parts: Antisubmarine warfare, mine warfare, fleet augmentation, fleet support activities, and shore establishment.
Highest priority is assigned to antisubmarine warfare and mine warfare and to the tactical air squadrons of the fleet augmentation component. In addition to these five parts, the Selected Reserve includes a number of program support personnel whose mission is to assist in the drilling programs with recruiting, training, administration, and special services such as medical and dental examinations and work by chaplains, civil engineers, and supply officers. The Naval Reserve Training (NRT) ships, the carrier, patrol, and helicopter air squadrons assigned to the ASW and mine warfare components, and certain attack and transport air squadrons of the fleet augmentation component are organically equipped and report as fully operational units when called to active duty. In addition, mobile construction battalions, naval air reserve maintenance units (NARMUS), and inshore undersea warfare (IUW) units are trained and report as units on recall. The remaining forces in the Selected Reserve do not report as organically equipped operational units on mobilization, but consist of personnel who will be assigned to active duty as individuals.
During fiscal year 1967 the Selected Reserve Forces continued to increase in petty officer strength while maintaining drill pay strength at the ceiling of 126,000.
All drill pay personnel are preordered for mobilization to permit immediate reporting for active duty. Orders are issued and kept current by the Naval Reserve Manpower Center, Bainbridge, Md.
There was an overall strength increase in the Ready Reserve, in both officer and enlisted personnel, during the fiscal year. Improvement in the Selected Reserve continued throughout the fiscal year, particularly in the areas of CADRE (Completed Active Duty Requirements Enlisted) strength, advancement of preactive duty enlisted reservists to E-3 grade prior to their planned active duty date, class A school utilization, and general administration. Improvement in
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these areas enhanced (1) the active duty forces by providing them with more highly trained personnel, and (2) the reserve forces by improving their mobilization readiness.
The number of Ready Reserve officers not on active duty increased from 53,282 to 54,147 during fiscal year 1967, an increase of 1.5 percent compared to a decrease of 3.5 percent in fiscal year 1966. As of June 30, 1967, 30,461 reserve officers were serving on active duty. Reserve officers in the Standby Reserve decreased by 9,667, to a total of 38,717, while those in the Retired Reserve increased by 7,049, to a total of 81,375.
The number of Ready Reserve enlisted men not on active duty increased by 6,578, to a total of 286,376. This increase was due primarily to the excellent recruiting climate throughout the year. The Standby Reserve enlisted strength continued to decline to a year end total of 9,392. Retired Reserve enlisted strength increased by 746, to 4,878.
The Naval Reserve Training Program is designed to maintain and increase nroficiency to insure the immediate readiness of trained units and individuals.
The Naval Reserve makes primary use of the so-called “2 x 6” enlistment program authorized by section 511(b) of title 10, U.S. Code, which required that 2 years of a 6-year enlistment be served on active duty. Personnel in this program undergo three phases of training : Preactive duty training of approximately 1 year to qualify them for advancement to E-3 upon entry on active duty; 2 years of active duty to advance them to petty officer grades; and the remainder of the enlistment in Naval Reserve training.
In 1963, the Navy greatly expanded the opportunity for enlistees to Navy class A schools for technical training before or during their active duty. Since July 1, 1963, all enlistees at class A schools must agree to drill in a Selected Reserve unit for at least 2 years after active duty. Class A school attendance was approximately 13,630 enlistees in fiscal year 1967. The percentage of personnel reporting to active duty in pay grade E-3 or higher increased from 75.17 percent in fiscal year 1966 to 84.9 percent in fiscal year 1967. This program has significantly increased the number of petty officers in the Selected Reserve.
Only the Naval Air Reserve has a short term active duty for training enlistment program similar to the Reserve Enlistment Program (REP) of the other Services. It is used to supplement the “2 x 6” Naval Air Reserve program in specific areas and is limited to approximately 2,000 enlistments annually.
In addition to the monthly weekend drills for each reserve crew, 296 reserve cruises of from 12 to 14 days’ duration in Naval Reserve Training (NRT) antisubmarine warfare ships were conducted. During fiscal year 1967, 46,688 reservists, Other than air, (5,524 officers and 40,164 enlisted) performed their 2 weeks’ active duty for training afloat in NRT and other fleet ships.
The Naval Air Selected Reserve squadrons deploy to fleet bases during their annual 2-week cruises and perform operation training with their fleet counterparts. This lets the reserve squadrons use fleet targets and facilities which provide realistic training, increasing readiness.
The Naval Air Reserve aircraft accident rate remained low during fiscal year 1967 as a result of emphasis on safety procedures, supplemental training, and readiness drills.
Participation by both NRT ships and aircraft squadrons in major and minor fleet exercises for operational training, on both 2-week annual cruises and on weekend drills, continued at a high rate, benefiting both the fleet and the reserve forces.
In May 1965, at the request of Commander in Chief, Pacific Fleet
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(CINCPACFLT), the Naval Air Reserve began airlifting high priority cargo to Southeast Asia. As of June 30,1967, 16,693,211 ton-miles of cargo had been carried westward and 65,349,447 passenger-miles had been accumulated on return flights. This airlift was flown with volunteer reserve crews.
Naval Reserve intelligence divisions continue to provide valuable support of the operating forces.
There were over 1,579 post-active-duty naval reservists voluntarily returned to active duty during fiscal year 1967. Excluding 1,133 Naval Reserve officer candidates, there were 30,461 officers and 77,112 enlisted men, for a total of 107,573 Naval Reserve personnel on active duty at the end of fiscal year 1967, representing approximately 14 percent of the Navy’s active duty strength. The Naval Reserve furnished the active force 35,645 “2 x 6” enlistees who entered active duty for 2 years during fiscal year 1967.
Commanding officers of the Naval Reserve training activities have been assigned responsibility for making casualty assistance calls on families of Navy personnel killed or wounded in South Vietnam. In addition, the Reserve Naval Air Station/naval air training units conduct aircraft investigations, aircraft salvage, and other operations not part of the Naval Reserve program. Naval Air reservists also recruit the large majority of aviation officer candidates.
The Naval Air Reserve received 21 SH-34 helicopters to replace a like number of older SH-34’s. The inventory of other aircraft assigned to the Naval Air Reserve remained approximately the same as in fiscal year 1966. The NRT ships inventory at the end of the fiscal year included 17 destroyers (DD), 20 destroyer escorts (DE), 12 mine sweepers (MSC/MSC(0)), and 31 other ships, including submarines assigned to assist in the training of Naval reservists. Replacement of DE’s by DD’s programed from fleet fallout was not accomplished during the year because of increased active force requirements. Much of the ordnance and electronic training equipment in the Naval Reserve inventory is of World War II vintage. The present rate of replacement of this outdated training equipment is insufficient to overcome obsolescence. Since the majority of Naval Reserve training equipment is this technical sort, procurement of more modern equipment is a very high priority problem.
Management control of technical equipment has been enhanced by development of an automatic data processing (ADP) listing for electronic (“E”) and nonelectronic (“S”) equipment under the cognizance of the Naval Ships Systems Command (NAVSHIPS). Such a listing provides in one document the allow* ance and inventory data for NAVSHIPS training equipment for 426 Naval Reserve training activities. A similar ADP listing for training aids is under development.
The Naval Reserve surface units currently occupy 426 facilities, three less than the preceding year. Of these, 122 are jointly utilized with the Marine Corps Reserve, 107 with the Coast Guard Reserve, 24 with the Air Force Reserve, 43 with the Army Reserve, and 12 with the Army National Guard.
During the fiscal year 1967, $5.9 million was obligated for construction of Naval and Marine Corps Reserve facilities, utilizing fiscal year 1967 appropriations as well as fiscal year 1965 and 1966 funds which had been deferred. Long-range requirements, including construction at naval air stations for the Naval Air Reserve and Marine Corps Reserve (Aviation), and the rehabilitation or replacement of existing training centers for nonaviation elements, are estimated to be in the magnitude of $97 million.
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Marine Corps Reserve
Significant improvement was made in strengthening the Marine Corps Ready Reserve during fiscal year 1967. Although all Organized Marine Corps Reserve (OMCR) units were considered combat-capable at the beginning of the year, some had not been training in skills proper for their mobilization mission with Marine Expeditionary Force (MEF). This situation was corrected during fiscal year 1967. For example, combat units in excess of the 4th Marine Division requirements were redesignated as combat/service support units required to round out the MEF structure.
The Marine Corps Reserve is structured to provide (1) a full combat-ready division/wing team (MEF) ; (2) augmentation forces to round out the in-being active combat/combat support forces; and (3) individuals for expansion of the supporting establishment.
The Directors of the seven Marine Corps Districts exercise control over all ground units within their geographical boundaries. The Commanding General, Marine Air Reserve Training Command, controls the air units through the 17 Marine Air Reserve Training Detachments. Command of the individual class III Ready Reservists is vested in the Commanding Officer, Marine Corps Automated Services Center, in Kansas City, Mo., who is responsible for the management and mobilization of all class III Ready Reservists.
As of June 30, 1967, the Marine Corps Ready Reserve strength was 103,541, of whom 47,588 were in class II and 55,983 were in class III.
The Organized Marine Corps Reserve (class II) is presently at approximately 80 percent of its manning level. In a mobilization, under section 673, title 10, U.S. Code, the IV Marine Expeditionary Force can be brought to full strength by utilizing trained reservists now in a class III status.
The training of Marine Corps Reserve units is accomplished in 48 drill periods per year, held during one full weekend per month. In addition, members of units annually serve on active duty with their unit for 14 days, primarily to accomplish essential training which is impractical during home area drills. Every effort is made to afford each unit experience operating in varying geographic locations with differing terrain and climate. This opportunity is limited only by transportation costs and unit mission.
Additional paid drills are provided for individuals who require technical training that cannot be accomplished during the 48 regularly scheduled drill periods.
Formal schooling is provided by other services in fields in which the Marine Corps cannot give the required school training, such as graves registration, meteorology, air delivery, material-handling equipment, military police activity, civil affairs, and reconnaissance. Other Services have also provided on-the-job training for Marine Reserves. For example, the Army and Air Force have instructed mess personnel who were assigned for weekend drill in Army or Air Force mess halls.
To further improve the Marine Corps Reserve mobilization readiness in 1967, Marine Corps and Navy formal school course attendance quotas were for Reserve officers and enlisted men in units to take refresher courses in their military occupational specialties. This training provided those reserves with the professional background they needed to serve as instructors when they returned to their units.
The 6-month training program of the Marine Corps provides the initial active
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duty training for individual reservists who are recruited to fill reserve unit billet vacancies. During this initial 6-month training period, the reservists receive the same training as, and are indistinguishable from, their regular counterparts who are being trained in the same military occupational specialties.
Each 6-month trainee must first complete recruit and individual combat training, and then receives the military occupational specialty (MOS) training recommended by his parent reserve unit for the remainder of his initial 6-month active duty. MOS training is accomplished either by assignment to basic specialist training courses or other schooling. On-the-job training is utilized when appropriate schools for the MOS are not available.
The technical training program is an adjunct allowing qualified trainees to complete schooling in hard skill occupational specialties. In some cases, selected trainees voluntarily extend the 6-month period to complete certain courses of technical training.
For the past 2 years joint regular/reserve air and ground exercises have been conducted with units of the 2d and 5th Marine Divisions. The units and squadrons of the 4th Marine Division and 4th Marine Aircraft Wing have particularly benefited from this joint training and close association with units of the regular establishment.
Throughout the year various multiple unit reserve exercises are conducted at Marine Corps and Army installations. These exercises are planned at Marine installations, but Army and National Guard facilities have been utilized to reduce travel and provide training in close proximity to participating Marine units.
Reserve and regular units participated in joint training exercises of multi-unit strength, including complex air-ground exercises.
When possible, reserve maintenance units traveled to regular facilities to conduct weekend training, in many cases, training in conjunction with regular forces, benefiting both the regular and reserve units.
Service units directly supported regular forces’ training programs, both with work, material, and equipment.
Engineer units engaged extensively in significant base improvement projects at the specific request of the host bases.
The Organized Marine Corps Reserve is ready for an orderly, phased mobilization, and with the use of class III reservists the IV Marine Expeditionary Force will be capable of deploying 60 days after being mobilized. The Marine Corps Automated Services Center continuously monitors unit vacancies and automatically assigns class III reservists. Upon mobilization, the necessary orders for class III reservists would be automatically printed and mailed within 48 hours.
Certain shortages exist in equipment for ground units, but substitute items are available and the equipment shortage would not prevent accomplishment of the 4th Division’s mission.
The 4th Marine Air Wing, utilizing class III Ready Reserves to fill certain billets, could mobilize and deploy with no significent personnel shortages. It does not possess electronic warfare and. inflight refueling (tanker) aircraft and is hampered by its lack of helicopters. In addition, 4th MAW aircraft presently on hand are fallout assets from the regular forces and lack certain capabilities of more modern equipment. However, the wing could accomplish its mission, even though at a reduced effectiveness level caused by these equipment deficiencies.
During the past year the aircraft situation improved through the addition of 31 UH-34 helicopters. The shortages of all-weather, electronic warfare, and refueler aircraft remain.
Unit and individual equipment in the hands of the Organized Marine Corps
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Reserve is adequate to support the training mission. Generally, major equipment is the same type as used by active Fleet Marine Forces except for certain communication items. The mobilization capability of the OMCR has improved during the past year through the identification and application of all assets of T/E equipment toward mobilization requirements. The next step being taken is the use of regular M-Series T/E’s as outfitting documents for OMCR units. This will place as much T/E equipment in the hands of each Reserve unit as it can profitably utilize, store, and maintain with existing facilities.
The Marine Corps Reserve achieves maximum joint utilization of facilities in accordance with the Department of Defense policy concerning use of real property. Exclusive-use training centers are built or maintained only when there is no alternative. At the end of fiscal year 1967, Marine Corps Reserve units occupied a total of 195 facilities, as follows :
128 centers used jointly with one or more other Services;
40 exclusively owned Marine Corps Reserve Training Centers;
8 exclusively leased Marine Corps Reserve Training Centers;
17 at Naval Air Stations;
1 at an Air National Guard Base;
1 at a regular Marine Corps Base.
Improvement of ground training centers during fiscal year 1967 included:
1 completion of a new training center ;
81 $300-$1,000 projects authorized for centers;
80 $l,001-$10,000 projects authorized for centers.
Air Reserve Forces
Enlargement of operational responsibilities and refinement in training programs and management systems contributed to Air National Guard (ANG) and Air Force Reserve [AFRes] achievement of new levels of effectiveness in support of Air Force missions during the fiscal year 1967.
Of the Air Reserve Forces total manpower of 495,564, the Ready Reserve strength was 287,778 on June 30,1967. There were 83,758 ANG and 42,190 members of AFRes flying and support units. Other Ready Reserve personnel were in AFRes squadrons and in AFRes mobilization augmentation, ready reinforcement, specialty training, and other assignments.
The yearend totals reflected increases in strength in both ANG and AFRes units, resulting in part from conversions of AFRes carrier (C-119) groups and ANG air transport (C-97/C-121) groups to military airlift (C-124) groups authorized 100 percent manning. Other units continued to face manning problems related to drill pay ceilings limiting manning to less than 100 percent. A related problem was the continued shortage of undergraduate training spaces for pilots for flying units, a problem expected to become increasingly critical as rated personnel retire. To counter this the Air National Guard’s Operation RED BARON was designed to bring pilots leaving the active Air Force into the ANG.
Air Reserve Forces airlift, tactical, and air defense units contributed significantly to the fulfillment of Air Force obligations in Southeast Asia. Air National Guard and Air Force crews continued to fly round trip airlift missions to Southeast Asia for the Military Airlift Command during fiscal year 1967. Other Air Reserve Forces airlift missions included flights to Europe, the Congo, Labrador, Greenland, Australia, and elsewhere. As part of our air defense, Air National Guard units flew more than 128,000 hours, of which 31,000 hours were on alert, in response to Air Defense Command requirements.
Important developments in planning and management included initiation of
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the Air Reserve Forces Personnel Data System (ARF-PDS) in August 1966 to improve compatibility between the reserve and active force personnel systems and the accessibility of reserve personnel information. Air Reserve Forces long-range planning studies were focused on improved use of manpower, on manpower and equipment requirements, and coordination with Air Force missions.
Air Reserve Forces activity was characterized in fiscal year 1967 by its versatility. Beyond their airlift, air defense, and other operational tasks, Air Guardsmen and Air Force Reservists assisted firefighting crews in Minnesota and Idaho, carried out missions of mercy, and reservists with professional and technical skills—doctors, lawyers, teachers, engineers, ministers, radio operators, and data processing technicians—performed various special services. Also, the Air Force Academy liaison officers, Air Force Reservists who serve in their communities as admissions counselors for the Academy, talked to more than 42,000 young men during 33,000 visits to 25,000 high schools and junior high schools, traveling more than 1,200,000 miles. Ninety percent of the Academy’s June 1967 entering class had been counseled by these Reserve liaison officers.
In July 1966, in response to presidential request, Air Reserve Forces units began transporting thousands of military personnel within CONUS when a union machinist work stoppage suspended commercial air travel. The ANG and AFRes covered five major coast-to-coast routes to move Service people to their destinations and, in addition, the AFRes covered feeder routes from more than 25 locations along the transcontinental lines. At the termination of this operation, 63 days later, 70,840 military passengers had been airlifted by the Air Reserve Forces.
Air National Guard
On June 30, 1967, the Air National Guard had 92 flying units and 144 nonflying units. The flying units, by type and mission, were: Fighter interceptor, 22; tactical fighter, 23; tactical reconnaissance, 12; air refueling, five; military airlift, 25 ; air commando, four; and air transport, one.
The ANG’s general purpose forces consisted of tactical fighter, tactical reconnaissance, and air refueling wings, plus the air commando groups and two nonflying tactical control groups. Its defense forces were five air defense wings with 21 fighter interceptor groups operating under control of the Air Defense Command and the North American Air Defense Command, and one fighter interceptor group operating under the Pacific Air Forces. Each of these units kept a portion of its aircrews and aircraft on active duty runway alert, flying intercept and identification missions. The defense forces also included two aircraft control and warning squadrons under Air Defense Command, two under the control of the Pacific Air Forces, and one under Tactical Air Command. These nonflying units also maintained 24-hour skeleton operations under regular Air Force control.
A number of organization and equipment changes affected the ANG force structure. Airlift groups at Marietta, Ga., Charlotte, N.C., and Jackson, Miss., were converted from C-97 and C-121 to C-124 aircraft. Fighter groups at Fargo, N. Dak., Great Falls, Mont., and Duluth, Minn., were converted from F-89J’s to F-102A’s. Because of MAP requirements for TF/F-102 aircraft, two ANG/ADC interceptor units, programed for conversion, could not be converted from F-89’s to F-102’s.
The Air Guard’s four air commando units again were given U-10 aircraft as replacements for U-6A’s that had been substituted for U-lO’s in fiscal year 1965.
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New weather flights were activated at McGuire AFB, N.J., Stout Field, Ind., Buckley ANG Base, Colo., and St. Paul, Minn. A weather flight at San Juan, P.R., was inactivated. Two communications maintenance squadrons in Georgia and Oklahoma were redesignated ground electronics engineering installation squadrons. A mobile communications squadron was activated at Hickam AFB, Hawaii. Aerial port flights were activated at Charlotte, N.C., and Dobbins AFB, Ga. An aeromedical evacuation flight was activated at Salt Lake City, Utah, and an aircraft control and warning squadron was inactivated at Hickam AFB, Hawaii.
The Air National Guard’s June 30, 1967, strength of 83,758 represented 100 percent of the spaces allocated as of that date by the Department of Defense. The 82,724 paid drill spaces authorized were 82 percent of the unit manning document strength of 100,732. The increase in drill spaces over the 80,901 authorized at the beginning of the year resulted from retention of three military airlift units that had been scheduled for inactivation in fiscal year 1967.
The limit on paid drill spaces prevented many units from improving their combat ready status in fiscal year 1967. Certain TAC units were authorized 75 percent, ADC units 78 percent, %nd MAC units 80 percent. “Beef Broth” units, authorized 100 percent manning, finished the year with 97 percent assigned. Units assigned to MAC, TAC, and ADC were authorized sufficient personnel to achieve C-l or C-2 combat readiness status in fiscal year 1968.
Retirements increased during the year, with 91 officers transferring to the retired list. In this period, 1,450 officers were granted Federal recognition and recognition was withdrawn from 1,082 for a net gain of 368 officers, 266 of them pilots.
The gain in pilots was attributable to Operation RED BARON, which produced an overall pilot strength of 3,950 on June 30. RED BARON, which raised from 12 to 42 the average net gain of pilots per month, is estimated to have saved more than $24 million in training funds through recruitment of experienced pilots leaving active Air Force service. In addition, since about half of the RED BARON pilots were Century series qualified, little or no transition training was required in ANG units.
The Air National Guard had 1,469 aircraft as of June 30, 1967. The inventory:
General	purpose	Air defense	
Type:	Number	Type:	Number
F-84F			 234	F-89J		40
RF-84F	 F-86H			 124 		75	F-102A		369
			
RB-57A		28	Total_ __ ___ _	409
F-100C	 U-6A_		 186 		25	Airlift	
HU-16B				15	C-97G		143
C-119 			 16	C-121C/G		46
KC-97L			 55	C-123J		6
F-105B				25	C-124C		24
F-101A/H___		 39	Total			 219
RF-101H			 19		
Total			 841	Grand total			1,469
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Air National Guard unit training continued to be synchronized with, and integrated into, the operations and programs of the commands having appropriate jurisdiction, General purpose units were under the supervision of Tactical Air Command for training and inspection. Air defense units that are on continuous alert are under supervision of Air Defense Command and Pacific Air Forces, which are responsible for their training, inspection, and operational control.
Airlift units participated in training related to mission support and joint exercises. Those in GUARD STRIKE received training in the transition from individual and unit training to systems training. ANG aircraft control and warning units continued their training by performing missions in support of the active Air Force. ANG weather flights received training in forecasting and observing Services in fixed and mobile environment while providing support for collocated flying units and weather service to Army National Guard units.
The Air Guard’s individual training is in five major categories: Flight, technical, professional, recruit, and on-the-job training (OJT). In fiscal year 1967, 14,727 individuals entered active duty for training. Flight training entrants included 185 in undergraduate pilot training and 68 in navigator training. Of the 3,819 who entered technical training, 1,412 officers and 1,433 airmen were in formal Air Training Command courses, and 142 officers and 832 airmen received training through mobile training detachments and factory courses. A total of 133 officers and airmen entered professional training at the Command and Staff and Air War Colleges, the Squadron Officer School, and the NCO academies. 8,991 nonprior-service individuals were enlisted and 10,066 began basic military training.
The on-the-job training program received continued emphasis in fiscal year 1967, with 36,432 airmen entering OJT. More than 28,400 were enrolled in career development courses, with nearly 16,000 being upgraded to next higher skill levels.
Two developments were of particular importance in OJT improvement. One was the establishment of the ANG Institute of Technology at Travis Field, Savannah, Ga., where 1,600 students were to be enrolled, beginning in July 1967, for intensified academic instruction. The other was the establishment of a 2-week technical instructor course, with an enrollment of about 1,000 students, to provide professional training for instructors and supervisors. Also, the R-5 refueler course, the EMU-10 generator course, the nondestructive inspection techniques course, and the aerospace photographic systems technician course were established to enhance the skilled manning, training, and operational capability of ANG units.
The Air National Guard supported Air Force general purpose forces in nine exercises under the Tactical Air Command and Joint Chiefs of Staff combined exercise program in fiscal year 1967. ANG tactical fighter, tactical reconnaissance, air commando, air refueling, and other units flew about 1,100 sorties of more than 2,500 hours in CONUS, Alaska, Hawaii, Panama, and Puerto Rico. Exercises were:
GOLD RUSH I, Alaska, July 20-30;
GOLD RUSH II, Alaska, October 21-31;
READY DEVIL II, Colorado, October;
GOLD RUSH III, Alaska, January 29-February 13;
TROPIC LIGHTNING III, Hawaii, February 12-April 12;
CASHEW TEE III, Panama, March 19-25;
CLOVE HITCH III, Puerto Rico and neighboring islands, April;
GOLD RUSH IV, Alaska, May 13-21; and
AFSC Fire Bomb Test, Alaska, March.
Air Guard units also conducted GUARD STRIKE I, a 30-day joint unilateral
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command and control or tactical control systems exercise in which tactical fighter, tactical reconnaissance, tanker, airlift, and other units flew 2,852 missions totaling 5,018 hours. Fourteen wings, 43 groups, and 30,000 troops (including 18,000 Army National Guardsmen), and members of Navy and Marine units contributed to the exercise, which represented a transition from unit and individual training to systems training.
To accommodate the assignment of C-124 aircraft at ANG bases, it was necessary to program, design, and construct facilities, including two new hangars and enlargement modification of one hangar at each of seven bases, at a cost of $2,863,000. Projects completed during the year included ground control approach and communications facilities and runway and taxiway rehabilitation and extensions, involving work at bases in 12 States at a cost of $3,391,000. Projects under construction included additions and improvements to buildings, runways, and power and control systems at ANG installations in 36 States and Puerto Rico, costing $24,462,000.
Air Force Reserve
On June 30, 1967, the Air Force Reserve had 45 flying units and 199 nonflying units. The flying units by type and mission were:
Wings Oroups Squadrons
Military airlift__________________________________________ 7	19__________
Troop carrier (tactical airlift)__________________________ 7	21__________
Aerospace Rescue and Recovery (ARRS)____________________________________ 5
Total____________________________________________ 14	40	5
Military airlift and ARRS forces, plus 12 air terminal squadrons (to be redesignated aerial port squadrons in July 1967), had wartime assignments to the Military Airlift Command. Troop carrier units were assigned to the Tactical Air Command.
Eight AFRes C-119 troop carrier groups were converted to the larger C-124 aircraft and became military airlift units. These units were located at Andrews, Hill, Hamilton, Kelly, Scott, and Stewart AFB’s, the Greater Pittsburgh International Airport, and L. G. Hanscom Field.
Other significant organization changes included the activation, on July 1, 1966, of six military airlift support squadrons (mobile-enroute) and seven maintenance squadrons (mobile) supported by seven supply squadrons, mobile (support).
The military airlift support squadrons increase the mobility of their gaining command, MAC, providing enroute and turn around maintenance, forward supply, airlift command post, and terminal services for MAC aircraft at stations on new emergency air routes. The squadrons, each authorized 16 officers and 149 airmen, are located and trained with MAC aerial port facilities at McChord, Travis, McGuire, and Charleston AFB’s.
The new mobile maintenance squadrons, for which the Air Force Logistics Command (AFLC) is the gaining command, support the particular weapon system for which the host Air Materiel Area (AMA) is the prime depot, and thus personnel assignments vary with the requirements of the system the unit supports. Personnel authorizations for the 14 units total 35 officers and 999 airmen. Units are located at Wright-Patterson, Hill, Tinker, McClellan, Robins, and Kelly AFB’s.
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Internal changes also included reorganization of the AFRes troop carrier groups to provide supply and consolidated maintenance squadrons in lieu of a materiel squadron in each group structure. The reorganization occurred in November for 13 groups not then scheduled for inactivation and in March for the remaining eight groups originally scheduled for inactivation but continued in being.
Air Force Reserve Aeromedical Evacuation (AME) units were reorganized on January 1,1967, and integrated with military airlift units. The reorganization resulted in an increase from 14 AME units (three groups, 11 squadrons) to 24 units (nine squadrons, 15 flights), each now assigned to a military airlift group. The new AME units, as separate and self-contained organizations, need not be mobilized with other AME or airlift units unless needed. Their location with airlift groups provides flying training support for AME units and aeromedical crew capability if they are required for aeromedical evacuation missions. Units are located at McClellan, Kelly, Dobbins, Richards-Gebaur, Homestead, McChord, Andrews, Barksdale, Carswell, Hamilton, Hill, March, Scott, Stewart, Tinker, and Westover AFB’s, Greater Pittsburgh Airport, and L. G. Hanscom Field.
One AFRes facility was closed in fiscal year 1967. Upon inactivation of the 929th Troop Carrier Group at Davis Field, Okla., the installation was turned over to the local municipality.
On June 30, 1967, the Air Force Ready Reserve personnel totaled 204,020, including 165,317 airmen, 38,684 officers, and 19 warrant officers.
The overall strength incorporated, in addition to 42,190 in flying and support units and 12,701 in AFRes squadrons, Ready Reservists assigned as follows: Mobilization augmentation, 8,588; ready reinforcement personnel section, 1,796; specialty training test program, 643; and obligated reserve section, 138,002.
Through the efforts of the recruiting and retention programs, AFRes category A units showed an increase in manning over fiscal year 1966. In the field of flying status actions, 275 applications were submitted for review in fiscal year 1967 and 148 pilots and 87 navigators (85 percent of the applicants) were placed on flying status.
Airlift and troop carrier aircraft of the Air Force Reserve totaled 484 on June 30, 1967. Thirty-two additional aircraft were assigned to aerospace rescue and recovery squadrons. The inventory:
Airlift
Type:	Number
C-119G____________________ 332
C-124_____________________ 152
ARRS
Type:	Number
HC-97_________________ 18
HU-16B________________ 14
Total__________________
484
Total__________________
32
Unit training was conducted by AFRes flying units and their support elements in connection with the operational requirements in military and troop carrier airlift and in aerospace rescue and recovery programs. Training included participation in TAG/JOS combined exercises.
The training and operational activities of the AFRes involved 18,578 missions, in 96,064.3 flying hours airlifting cargo and passengers and in actual search and rescue flights. The units carried 32,336.17 tons of cargo and 109,715 passengers, virtually all of them troops being carried to airdrop sites. AFRes flying hours for the year were 178,557.
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A total of 7,790 officers and airmen, representing an aggregate of 130,037 man-days of training effort, entered AFRes programs in fiscal year 1967. The numbers entering each program were, in summary:
Officers Airmen
Air qualification aircrew training________________________________ 4, 668	2, 480
Other aircrew training__________________________________________________ 16	18
Medical aircrew training________________________________________________ 68	5
Skill qualification training_____________________________________________ 11	5
Skill proficiency training_____________________________________________ 132	25
Medical general professional development_________________________________ 90	9
General professional development_________________________________________ 78	11
Officer Training School Program__________________________________________ 84	90
Total____________________________________________ 5, 147	2, 643
Grand total______________________________________________ 7, 790
Officer and airmen technical and professional training programs formed special elements of the overall training effort. Thirty-four officers and 23 airmen entered the 20 technical courses in fields such as special investigation, air police, aircraft maintenance, and data systems analysis. In the professional fields, where 37 courses for officers included subjects ranging from chaplain orientation to nuclear engineering, 277 officers entered training during the year. Eighteen airmen participated in professional training at that level.
Ninety-one Air Force Reservists served 45-day active duty tours. A total of 6,512 nonprior-service enlistees entered training, 6,202 completed training, and 1,729 remained in training status on June 30,1967.
Specialty training courses continued in test form for the training of Air Force Reservists in specific specialties for which the Air Force has mobilization requirements.
In individual training within units, 19,804 airmen entered OJT fiscal year 1967 and 12,782 were enrolled in career development courses. Airmen upgraded to next higher skill levels totaled 6,920, or 35 percent of those entering the program.
The Air Force Reserve also supported Air Force general purpose forces in six exercises in the Tactical Air Command and Joint Chiefs of Staff combined exercises program in fiscal year 1967. AFRes units participating in airlift and air mobility exercises used 73 aircraft—C-119’s and C-124’s—to fly more than 300 missions and more than 2,100 hours.
The exercises were:
GOLD RUSH I, Alaska, July 27-August 1
GOLD RUSH II, Alaska, October 20-24
DALL SHEEP, Alaska, November 1-5
CHUCKWAGON II, November-December, southeastern United States
TROPIC LIGHTNING, Hawaii, February and April
NORMANDY, Fort Bragg, N.C., May 15-19
AFRes crews carried more than 1,200 tons of cargo and about 3,500 passengers, airdropping 1,361 troops during NORMANDY, the field training exercise conducted by the Army’s 82d Airborne Division at Fort Bragg, N.C.
All major AFRes building programs for fiscal year 1967 were in support of C-124 aircraft, a reflection of the conversions from C-119’s effected before and during the period. Projects completed included a hangar at Hamilton AFB; hangar additions at Barksdale, Tinker, Hill, and McChord AFB’s: and other facilities at March, Dobbins, and Stewart AFB’s, at costs totaling $3,944,000.
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Projects under construction included hangar additions at Scott, Andrews, Stewart, and Kelly AFB’s and at L. G. Hanscom Field. Costs totaled $5,752,000. Various maintenance and operations facilities for March, Scott, Richards-Gebaur, and Tinker AFB’s and Greater Pittsburgh Airport were undergoing design, with completion of only three. Aggregate costs were estimated at $4,347,000.
In fiscal year 1967, the AFRs accomplished a test mobilization exercise involving several category A units which led to improvement in mobilization procedures. Establishment of Consolidated Base Personnel Offices in Reserve wings, and one Consolidated Reserve Personnel Office in support of the Air Reserve Forces Personnel Data System (ARFPDS), resulted in improved readiness for mobilization and deployment. Centralized control of personnel actions and input to the ARFPDS increased the validity of data input to the system and reduced the response time.
The Air Reserve Forces, somewhat stronger in manpower and equipment and benefiting from refinements in organization, training, and administrative control, continued to improve their overall effectiveness in fiscal year 1967.
U.S. Coast Guard Reserve
Planning over the past several years has been directed toward achieving a total Ready Reserve force of 45,200, which includes an early response force of about 33,000. To insure that plans were well conceived, reflecting current mobilization and training concepts, the port security program was subjected to a critical analysis in 1967 as the first step in a total review of the Reserve program. A significant result of the port security study was the termination of the coastal force training program thereby reducing manning requirements. Pending final validation of the other mobilization requirements recommended in the port security study and the results of a study of the remainder of the Reserve program being conducted in 1968, a policy was established to hold the early response force to a level of 18,100 during 1968-69 and to place greater emphasis on the quality of training.
Post-recruit training was strengthened through early identification of the type of training unit to which an enlistee will return upon completion of initial active duty for training. This permits selective assignment for post-recruit training to provide basic qualifications in a specialty related to the enlistee’s training unit and his mobilization assignment. Additionally, specific programs have been strengthened through standardization of training format plus increases in formal school time and requirements for individual correspondence course participation prior to release to inactive duty.
The Reserve training program is divided into the following four training elements—basic reserve training, port security training, vessel augmentation training, and other specialized training.
The objective of the basic reserve training element is to provide initial training to personnel prior to their assignment to Organized Reserve training units.
The objective of the remaining three elements is to provide specialized training in skills required for mobilization through the inactive duty training (drills) and annual active duty for training programs. Categories included under other Reserve training are aviation, merchant marine safety, staff, support, radio, and loran.
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As of June 30, 1967, the number of Organized Reserve training units providing inactive duty training was as follows:
Port security____________________________________________________________ 147
Vessel augmentation_______________________________________________________ 69
Other reserve training____________________________________________________ 45
Total ____________________________________________________________ 261
Additionally, 27 Coast Guard volunteer training units were providing training to volunteers in the new pay status in support of other reserve training, mainly in the field of merchant marine safety.
During fiscal year 1967, as a result of a review of the coastal surveillance mission, the coastal force training program was suspended with the concurrence of the Chief of Naval Operations.
The total strength of the Coast Guard Ready Reserve, not on active duty, decreased from 30,075 to 29,178 during the year. The number of personnel assigned in a drill-pay status increased from 16,041 to 15,580. Personnel assigned to fill early response requirements by program, are as follows :
Program:	strength
Port security training___________________________________________11,	589
Vessel augmentation training_____________________________________ 4,	375
Other reserve training___________________________________________ 1,	764
Total -----------------------------------------------------------17,728
Inactive duty unit training was provided in 121 operational port security training units for 889 officers and 8,248 enlisted personnel. Individual training is also conducted at these units to prepare personnel for advancement in port security specialties. Port security operational unit training was conducted during annual active duty for training periods, with 352 officers and 2,664 enlisted personnel participating. This training was given at selected parts throughout the country, utilizing the USGG Courier and Coast Guard shore facilities as bases of operations.
Inactive duty “rate” training was provided in 140 organized units with 1,008 officers and 6,435 enlisted personnel assigned. Attendance at drills, 96 percent for officers and 91 percent for enlisted personnel, was the highest since the inception of the Organized Reserve program. Individual active duty for training was given to 2,612 officers and 10,691 enlisted personnel. During fiscal year 1967, 2,805 enlisted personnel passed Service-wide examinations for advancement out of 3,705 that took the examinations, for 75.7 percent success record. Multiple-unit exercises were conducted periodically by districts for operational port security training units.
Coast Guard Reserve readiness is not satisfactory at this time in view of the task assignments versus the number of Ready Reservists available for these assignments upon mobilization. This is particularly true with respect to petty officers of second class and above. While the Reserve is in reasonably good condition to meet its personnel requirements at the officer and nonrated enlisted personnel level, the shortage of qualified petty officers is recognized as a significant problem. There is also a shortage of training aids, certain equipment, and other important materiel.
The Organized Reserve training unit program showed improvement during fiscal year 1967. Measures of this improvement include the following:
1.	Overall drill attendance of 91.6 percent was at a new high.
360-499 O—70----8
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ANNUAL REPORT OF THE SECRETARY OF DEFENSE
2.	The 75.5 percent of personnel who passed Service-wide examinations set another record, and comparison with the 1962 record of 40 percent shows a significant increase.
3.	While the number of personnel performing active duty for training remained at 1965-66 levels, a higher percentage than ever before attended specialized courses of instruction or participated in operational training.
4.	The active duty for training program has been strengthened by the addition of new specialized courses available on both coasts, and by full-year operation of the USCGC Courier.
A general shortage of training equipment for realistic operational and rate training continued. A schedule for the orderly acquisition of adequate training equipment has long been planned, and will be followed as funds become available.
Four additional port security boats were ordered during fiscal year 1967. When delivered, 12 modern small boats will be available for training. Plans provide for an ultimate total of 54 boats in this program.
In the event of mobilization, unit operating equipment will be obtained through normal supply channels. Unit training equipment and training vessels will also be available to the regular service or to activated Reserve units, as conditions indicate.
Organized Reserve training units continued to drill at training facilities of the Coast Guard and of other armed forces, primarily of the Navy. During fiscal year 1967, 5,422 reservists received training in 27 courses in specialized areas of instruction. As the first stage under a 10-year unit development plan, construction of a new engineer school classroom and laboratory building began this year.
On the west coast the facilities of the Coast Guard Training Center at Alameda, Calif., were utilized for conducting the Reserve summer training program. Twenty-eight specialized and rate training courses were offered, and 1,401 reservists participated.
Five training vessels were used full time in support of basic training, port security, and vessel augmentation programs. The USCGC Courier completed her first full year of operation and provided 35,722 man-days of training to 1,373 reservists training to fill port security mobilization requirements. Due to operational commitments in Southeast Asia, the Reserve training vessel Dexter was relieved of all Reserve training duties on April 1, 1967, and transferred to the regular Coast Guard fleet.
In support of the law enforcement mission, three Reserve training vessels were employed on patrol in the Florida Straits for short periods during the year.
In search and rescue emergencies, all Coast Guard vessels are subject to deployment, and during 1967 Reserve training vessels conducted 24 search and rescue missions. In addition, Reserve training vessels were employed as needed for inport search and rescue standby duties during 3,358 hours of standby time.
Reserve Officers’ Training Corps
The Advisory Panel on ROTO Affairs, operating under the Reserve Forces Policy Board, met during the year and considered such subjects as current versus anticipated production, minority group participation in ROTO, curricula, and initial active duty assignments of ROTO graduates.
It was observed that the international situation, coupled with strengthened program management, increased publicity, and the provisions of the ROTC Vitalization Act of 1964 allowed greater selectivity in accepting candidates for the ROTC program and should ultimately reflect better quality of the
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officers produced. The 2-year program authorized by the ROTC Vitalization Act and being conducted by the Army and the Air Force has proven successful. Subsistence allowances for advanced course students will be raised from $40 to $50 per month commencing July 1,1968.
The Army plans to take in the senior program 15 new institutions in fiscal year 1968 and 15 more in 1969 thereby widening the base from which to draw cadets in the post-Vietnam period when student interest in ROTC might be expected to decrease.
At the beginning of the 1967-68 school year, the Army had 3,031 ROTC scholarship students. During fiscal year 1968 it is expected that this total will be increased to 4,000.
The Naval ROTC program remains essentially unchanged. Navy’s scholarship program continues with approximately 5,500 each year.
The Air Force will award scholarships to 3,000 cadets in its 4-year ROTC program effective September 1967. Scholarships will be awarded to some 600 sophomores, 1,400 juniors, and 1,000 seniors. Each Air Force ROTC unit having a 4-year program will receive at least one scholarship for each class. The Air Force plans to have 5,000 scholarships in effect by 1970, the maximum number it may have at any one time.
The Advisory Panel on ROTC Affairs noted that the third anniversary of the Reserve Officers’ Training Corps Vitalization Act of 1964 will be October 13, 1967, and that some searching questions directed to the effectivenss of ROTC programs and units have been raised by various individuals and groups concerned with the ROTC. The panel concluded that these facts make it both important and timely to review the present operation and support of the ROTC programs with a view toward making improvements where indicated and developing better institutional and student relations and support.
John Slezak,
Chairman, Reserve Forces Policy Board.
Annex B
ANNUAL REPORT of the
DEFENSE SUPPLY AGENCY
July 1, 1966, to June 30, 1967
This is the sixth annual report of the Defense Supply Agency (DSA). In fiscal year 1967 the Agency made a successful adjustment to the accelerated rate of demands for support of Southeast Asia operations, ending the year with a noticeably improved supply posture. To a considerable extent, this improvement represented delayed benefits from DSA’s own efforts in fiscal year 1966. In that year DSA attempted to increase its procurements by 140 percent in competition with a booming civilian economy. Through a vigorous buying program and some use of rated orders, the Agency managed to obligate $4.25 billion in stock funds. Manufacturers actually delivered $2.91 billion in materiel during the year (see fig. 1). This was a DSA record and 67 percent more than delivered in the previous year, but still not enough to meet the sudden rise in military requirements. Gross sales exceeded deliveries in fiscal year 1966 by nearly $100 million.
To support an increasing oversea operation in a jungle terrain where the combat forces stressed unconventional warfare methods, DSA required either entirely new items or unprecedented quantities of articles in limited supply, including complicated spare parts subassemblies. Most of these were not military items procurable from the armament industry, but neither were they standard commercial designs. Most of the new contractors who accepted DSA contracts had to set up special production lines. As a result, industrial leadtime nearly doubled during fiscal year 1966, back orders increased 165 percent, and the Agency began fiscal year 1967 with $1.86 billion in undelivered materiel on order.
DSA STATISTICAL TRENDS
[In millions of dollars]
	End of fiscal year			
	1964	1965	1966	1967
Stock fund obligations	 Procurement deliveries	 Gross customer sales	 Net inventory change		1, 577. 8 1, 590. 0 1, 805. 2 -180. 3	1, 825. 8 1, 739. 1 1, 968. 0 -255. 0	4, 245. 7 2, 902. 9 3, 010. 2 + 17. 3	4, 309. 8 4, 822. 5 4, 090. 7 + 902. 2
Figure 1
111
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In light of this situation, fiscal 1967 can be characterized as the year in which DSA caught up with its delinquent programs. A more favorable trend was apparent by November 1966. The difficulties in clothing production described in last year’s report were laregly overcome, despite the fact that military Service requirements for clothing, as for all other DSA commodities, continued to expand. Sales increased 35 percent during fiscal year 1967, to $4.09 billion, but procurement deliveries increased 66 percent, to $4.82 billion, and exceeded sales in every DSA supply category. The Agency was therefore able to meet current requirements and at the same time to increase its inventories by over $900 million. This increase, which was a reversal of earlier DSA management trends, was designed to improve responsiveness to military Service demands for support of expanding oversea operations. It was recognized that increased depth of inventories was not a cure for all logistical support difficulties. However, progressive improvements in DSA’s supply effectiveness generally proportionate to the rise in supply levels tended to demonstrate that the Agency’s new inventories were wisely selected.
A similar increase in activity was experienced by DSA in its mission of providing centralized contract administration services for assigned DoD procurement contracts. DSA, through its Defense Contract Administration Service (DCAS) organization, was responsible for administering 272,000 prime and secondary contracts valued at $48.9 billion by the end of June 1967. This represented an increase during the year of 39.5 percent in contracts administered, and 24 percent in funds obligated on prime contracts.
The Director of DSA, Vice Adm. Joseph M. Lyle, SC, USN, retired on July 1, 1967. He was replaced by his Deputy, Lt. Gen. Earl C. Hedlund, USAF.
Changes in Agency Mission and Organization
On October 7, 1966, DSA responsibilities within the contracts compliance program were transferred to the Assistant Secretary of Defense (Manpower), and 11 DSA equal employment opportunity field offices, located throughout the United States, were disestablished. However, on March 21, 1967, the Deputy Secretary of Defense directed that operating functions of the DoD-wide contracts compliance program be assigned to DSA, effective July 1, 1967. The transfer involved 171 DoD civilian personnel.
Effective November 21, 1966, field service offices of the Defense Documentation Center (DDC) located at Boston, Mass.; Dayton, Ohio; New York, N.Y.; San Francisco, Calif.; and Alexandria, Va., were discontinued.
Effective December 30, 1966, the responsibilities of the OSD Directorate for Petroleum Logistics Policy, which had been merged with those of the Commander, Defense Fuel Supply Center, were transferred back to the OASD(I&L) and assigned to an Assistant for Petroleum Matters.
On January 15, 1967, DSA assumed responsibility for oversea support of decentralized and noncataloged items related to catalog classes assigned to DSA, for USAF activities in the Pacific area. Through this action, the final increment of the special purchases (SPUR) program was absorbed by the DSA supply centers. It involved the transfer of 237 personnel spaces from the Air Force to DSA.
On January 19, 1967, the Secretary of Defense announced that subsistence regional headquarters (SRH) located at Columbia, S.C., and Fort Worth, Tex., were to be discontinued, effective July 1,1967. This consolidation was expected to save 63 personnel spaces and annual operating expense of $532,000. By the end
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of the fiscal year the functions of both activities had been transferred on schedule to SRH New Orleans and Kansas City.
Changes in Item Management Responsibility
At the start of fiscal year 1967, the five operating inventory control points of DSA were managing 245 Federal supply classes (FSC’s) for all the military Services, and 45 classes for the Army only, encompassing a total of 1,335,800 centrally procured items. During fiscal year 1967, various adjustments resulted in a net loss to DSA of four classes. The most significant change was the transfer of three classes of automotive tires and tubes to the Army’s Tank Automotive Command
Early in fiscal year 1966, the Office of the Secretary of Defense directed the military Services to begin applying the item management coding criteria embodied in DoD Manual 4140.26-M. These criteria were to be applied retroactively to 825,000 items in DSA classes which had previously been managed by the Services, and also to 150,000 items in the 45 classes mentioned above. Coding began immediately and is expected to continue through December 1967. A total of 481,-204 coding actions had been completed as of June 30, 1967, with DSA being designated as manager of 324,263 items. Of these, 189,152 had been capitalized to DSA by the end of the fiscal year. On June 30, 1967, DSA was centrally procuring 1,538,500 items in 286 FSC’s for all the military Services. (See table 38 in the appendix. ) This represented a net increase of 202,700 items during the year, attributed largely to the retroactive item management coding program.
On July 1,1967, plans were on schedule for transfer of 52 FSC’s to the General Services Administration (GSA). The first increment of this transfer involved some 5,000 centrally managed items with assets of $21 million, and 12,000 localpurchase items. One additional FSC will be transferred during fiscal year 1968.
DSA Distribution System
No major changes were made during the year in the DSA distribution system, which continued to consist of seven principal depots, four specialized support depots, and 10 direct supply support points (DSSP’s) serving the Navy. However, shortage of storage space on the west coast due to the Southeast Asia supply situation has resulted in DSA positioning stocks in military Service depots and GSA depots in that area. A total of 12 distribution points outside the permanent DSA distribution system was involved, and in addition, leased covered space utilized as required. Meanwhile, DSA-owned materiel stored at attrition sites has continued to decrease; on June 30,1967, there were 20,500 tons remain-ing at 18 sites.
Depot Operations
Considerable progress has been made in the development of DSA-wide standard internal depot operating procedures, under a project designated mechanization of warehousing and shipment processing procedures (MOWASP). MO-WASP will provide paperwork support and computer services for the depot missions of shipping, receiving, shipment preplanning, inventory, and warehousing. In July 1966, the Defense General Supply Center (DGSC) became operational under MOWASP. An attempt was also made to implement the system at Defense Depot Mechanicsburg (DDMP) in August 1966. However, computer problems and system overloading caused breakdowns which jeopardized the supply mission and MOWASP was removed from DDMP in September 1966.
MOWASP operations at DGSC provided valuable experience with the system,
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and it became apparent that many revisions and improvements could be made. Accordingly, MOWASP has been redesigned and reprogramed and will be installed in the depot at the Defense Construction Supply Center (DCSC) in February 1968. By November 1968, all DSA distribution depots will be operating on the MOWASP system.
The impact of the Southeast Asia situation upon DSA storage operations which became evident in 1966 has continued. Occupied space in DSA depots increased from 16 million square feet on July 1, 1966, to 18 million square feet on June 30, 1967, while the percentage of space occupied rose from 78.5 percent to 87.3 percent during the same period. Utilization of available space increased at all depots except Dayton and Philadelphia, and there was a considerable degree of overcrowding at Tracy, Stockton, and Mechanicsburg. Supplies shipped and received at DSA depots during fiscal year 1967 amounted to 4.5 million short tons, an increase of 38.5 percent over the previous year.
Expanded depot operations required the procurement of 115 new units of materials-handling equipment (MHE). DSA also continued in a temporary hold status 286 over-age MHE units which had been withheld from disposal in the previous fiscal year. The intensified depot operations already described and an extremely high MHE utilization rate—as high as 90 percent compared to a normal 60 percent—caused a heavy attrition among older units, and it was necessary to replace 115 MHE units during the year.
Significant progress was made in the mechanization of warehouse bin-room operations. Installation of a pilot system at Defense Depot Ogden was completed late in the 1967 fiscal year, and anticipated cost reductions became apparent even though the system was in its initial shakedown period. Additional systems are now being procured for Columbus and Memphis, with start of operations expected in calendar year 1968. The system for Mechanicsburg will be procured in fiscal 1968. A metals-handling system is being installed at the Memphis depot. At Tracy and Mechanicsburg, metals-handling systems are in process of procurement.
Logistic Support of Civil Defense
During fiscal year 1967, survival supplies were issued to 8,375 shelter facilities, increasing the grand total of stocked facilities to about 86,000. The supplies issued during the year were enough for nearly 6 million persons, bringing the cumulative total to a level sufficient for approximately 50 million persons for 14 days. About 75 percent of the total shelter supplies procured (sufficient for 63 million persons for 14 days) had been issued by June 30, 1967. At that time, 17 DoD and 14 GSA warehouses served as distribution points to local governments—a reduction of 13 warehouses during the year. While reducing maintenance costs, these closures increased the number of civil defense organizations to which shelter supplies must be delivered at Federal expense.
Food inspectors of the U.S. Army Veterinary Corps and Air Force Veterinary Services are being utilized to inspect civil defense supplies stored in shelters. The objective is to obtain valid data on the serviceability of these supplies by inspecting fallout shelters on a scientific sampling basis. DSA has held a series of training seminars for the inspection personnel, and inspections at military installations have begun. Inspections in Federal buildings and then in civilian-owned facilities will follow.
DSA maintains an engineering equipment inventory for use in natural disasters and during civil defense postattack operations. Principal components of this inventory are 450 miles of 8-inch steel pipe with auxiliary equipment such as pumps, purifiers, chlorinators, and generators. Total value of this inventory was
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approximately $6.9 million at the end of fiscal year 1967. During the year, engineering equipment was loaned to 23 States for use in 78 communities to help alleviate the persistent water shortage in the northeastern United States and the spring floods along the Mississippi River.
Procurement and Production Program
During fiscal year 1967, DSA procurement activities awarded a total of 910,500 contracts aggregating $6.18 billion. Of the awards subject to competition, 91.5 percent were accomplished through competitive procurement. Awards to small business totaled $2.59 billion, or 45.8 percent of all awards to U.S. firms. This represents a record high dollar value awarded to small business during any fiscal year since the activation of the Agency. Awards of $10,000 and above in labor surplus areas totaled $587 million, or 12.3 percent of all DSA awards in the United States and possessions.
Contract review and approval levels were revised to take into consideration the increased procurement workload of the Agency during fiscal year 1967. Contract review procedures were also revised to provide for in depth review of actions. Notwithstanding the revised criteria, contracts subject to review and approval increased 25 percent, and dollars subject to review increased 20 percent in fiscal year 1967 over fiscal year 1966. Of the total annual procurement program, 13.8 percent was subject to Headquarters review and approval. Late in the year a new requirement, effective July 1, 1967, was imposed on DSA procuring activities for local contract review. This will be performed by an independent office as staff to the Director of Procurement and Production.
Headquarters and field industrial mobilization planning organizations continued to support procurement and production for Southeast Asia. Toward the end of the year, as this workload diminished, these personnel reverted back to their basic planning function. Accordingly, for most of the year, a minimum of industrial mobilization planning was conducted, with the major effort being expended on existing planned mobilization agreements with planned suppliers.
Progress continued toward implementation of the Standard Automated Materiel Management System (SAMMS). During the year procedures in the procurement subsystem of SAMMS were developed for computer generation of delivery orders, purchase orders, including calls against blanket purchase agreements, and unpriced purchase orders. This system, which encompasses both large and small purchases, is scheduled for initial implementation at the Defense Construction Supply Center in January 1969.
The Zero Defects program has been given new vitality by the creation of a high level council to stimulate both industry and in-house programs. A formal require-ment that all DSA field activities establish a Zero Defects unit within the Office of Planning and Management, effective July 1, 1967, has already received informal implementation in most instances. This new development has served to reemphasize all aspects of the DSA-wide integrated quality and reliability program. Salient features of that program during the year were closer liaison with Defense Contract Administration Services, rigorous followup on complaints, and promulgation of new updated policies implementing recently published changes to the Armed Services Procurement Regulations (ASPR). The program continues to stress contractor responsibility for quality as the keystone of the DSA quality assurance concept. The quality check program was expanded during the year to include Coast Guard stations and Job Corps centers in its scheduled round of
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customer visits. At depots, the quality audit program has given emphasis to monetary recovery through prompt procurement warranty actions. This has reinforced its basic function of preventive quality control, to assure that defective items do not enter the supply system.
DSA requests to the Department of Commerce for special assistance under the priorities and allocations program continued at a high rate. Approximately 350 cases involving expedited delivery of materials on existing contracts, mostly for use in Vietnam, were handled during the year.
During fiscal year 1967, industry was more responsive to DSA needs for procurement coverage on critical items than in the previous year, and use of the rated order procedure to impose mandatory acceptance orders was reduced about 40 percent. Approximately 300 of these orders were issued, all of them in the first half of the year.
A pilot program for contractor performance evaluation (CPE), conducted under DoD direction, has been under test at the Construction, Electronics, and General Supply Centers during the past year. Purpose was to determine whether CPE, which had already been implemented in the RDT&E area, could be extended to equipment and supply contracts. CPE is designed to provide the procuring activities with a record of contractor delivery and quality performance, for their use in documenting contract files and making determinations of responsibility. CPE data is stored in central data banks by the 11 Defense Contract Administration Regions (DCASR’s) and are made available on request. DSA forwarded the final reports to the pilot program to the Assistant Secretary of Defense (Installations and Logistics) recommending that, while the program is feasible, a costeffectiveness study should be made before DoD-wide implementation.
In an effort to decrease contract delinquency, special management emphasis was given to the establishment and use of more realistic production leadtimes and to improvement of contract status reporting. Special reporting procedures were utilized for monitoring production progress on critical items in support of Southeast Asia (e.g., landing mats, concertina barbed wire, tropical combat uniforms, and tropical boots). In addition, these reporting procedures provided output for required reports to authorities outside this Agency such as the Joint Materiel Priorities and Allocations Board and the JCS Ad Hoc Landing Mat Committee. In order to assure maximum efforts to expedite production of critical items, DSA Headquarters maintained close liaison with Defense Supply Centers and Defense Contract Administration Services field offices.
During fiscal year 1967, DSA purchased Service-managed items in DSA-assigned classes to the amount of $380.4 million, an increase of 47 percent over the previous year in this facet of the DoD coordinated procurement program. In past years, there was wide variance among the Services in their interpretation of the exception criteria which permitted a Service to buy its own requirements for these items, To secure more uniform application of the exception criteria, DSA developed and coordinated with the Services an interpretation guide. This was issued in February 1967 with the approval of the Office of the Assistant Secretary of Defense (I&L).
Defense-Wide Services
During fiscal year 1967, DSA continued to administer Defense-wide programs for cataloging, materiel utilization, surplus disposal, technical documentation services, and coordinated procurement. DSA was also standardization assignee for approximately 2.5 million items, or 62 percent of the 3.96 million DoD items in the Federal Catalog.
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Cataloging and Technical Data
There was a net increase of 110,150 items in the Federal Catalog during the fiscal year. This actually represented 396,431 additions and 286,321 deletions (see table 40 in the appendix). The net increase in catalog items could be attributed primarily to the introduction of repair parts for new major end items. However, inventory managers have also shown reluctance to initiate inventory disposal actions for maintenance parts which normally would become obsolescent since many of these parts support older equipments still in use in Southeast Asia. The validity of this policy is demonstrated by the fact that 32,247 of the “new” items added during the year were actually reactivations of inactive items.
DSA continued to give major attention to reductions in the number of items in assigned commodity classes. In fiscal year 1967, as a result of identification of duplicate or similar items and of standardization actions, decisions were made and concurred in by the military departments to eliminate 97,015 items. These decisions were based on a review of 290,703 items during the 12-month period.
Use of provisioning screening techniques has continued to increase. A total of 4,878,943 manufacturers’ parts were screened during 1967, an increase of 39 percent over the previous year. The ratio of provisioning items matched to existing Federal stock numbers (FSN’s) increased to approximately 39.7 percent All provisioning items identified with an FSN were also screened against the PLUS file of long supply and excess items. Assets were found to exist for 10.2 percent of the FSN’s matched, leading to normal reutilization procedures.
Items screened for purposes other than provisioning totaled 1,069,476 manufacturers’ numbers and 798,980 FSN’s. One example of such use was the part number screening of contractor stocks in Vietnam prior to turnover of the contractor inventory to the military Services for local reutilization. Approximately 65 percent of this inventory was identified. The emergency file screening service for support of high priority requisitions, initiated in the previous year in support of Southeast Asia operations, was discontinued in November 1966 because the normal processing schedule could provide daily service. By the end of the fiscal year, turnaround time for provisioning screening was 12 hours by wire and 7 days by mail.
As part of the SAMMS concept, a catalog subsystem revised requirement and a revised manual of operating procedures were completed and published in June 1967. DISC chaired the task group which coordinated these revised documents. The catalog subsystem of SAMMS is scheduled for implementation at the pilot supply center (DCSC) in January 1969.
During fiscal year 1967, the Federal Item Identification Guide (FUG) improvement program moved ahead in development of documents and preparation of item logistics data. Six FIIG’s were published and work was begun on re-description in the improved format of active items presently in the file. In all, work on 79 FIIG’s was underway or completed. A total of 263 FIIG’s had been scheduled, covering commodity areas previously included in 1,370 description patterns. The ultimate objective of the FUG improvement program is to provide the means for mechanized collection and retrieval of supply logistics data from a single record for multiple logistics purposes.
The DLSC integrated data system (DIDS) described in last year’s report has progressed to the stage of a formal system requirement. This document was completed in September 1966, coordinated with various DoD activities and the General Services Administration, and submitted to the Assistant Secretary of Defense (I&L) for approval on December 5, 1966. Subsequently, two additional
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areas were added: Communications, transmitted on May 1, 1967, and management statistics, which is currently being staffed with DoD and Federal civil agencies.
While the Assistant Secretary of Defense (I&L) has not given an unqualified approval to the DIDS requirement, he has approved the continuation of system design studies. A systems design specification based on the DIDS requirement is currently in preparation and will be part of a projected “requested for proposals” for a new machine configuration to be completed in fiscal year 1968.
Military Standard Data Systems
Jointly the military departments, DSA, and other Government agencies have created a large family of military standard data systems. Current objectives and developments of the DoD tend toward designing standardized information systems through the building-block approach—each block capitalizing on the uniformity of data established by the other. Standardization based on the creation of common languages, codes, and machine processable formats permits the integration of various information exchange systems whereby the data output of one system becomes the input to another to meet current and projected logistics requirements. Because of the large amount of supply support which crosses military Service lines, DSA has been designed as the systems administrator for system development and surveillance.
In December 1966 the procedures manual for military standard contract administration procedures (MILSCAP) was published and distributed to all DoD components as well as other Federal agencies and many interested commercial contractors. MILSCAP is aimed at standardizing a large amount of data in the functional areas of procurement, contract administration, inventory control, storage, and financial accounting. It will have its major impact in two areas— procurement and contract administration—hitherto relatively untouched by DoD data standardization or mechanization. The new system will replace a variety of nonstandard procedures now being used by Defense Contract Administration Services Regions (DCASR’s), the contract administration offices controlled by the military departments, and contract-awarding activities DoD-wide. Because of its impact on existing ways of doing business, the full system may require as many as 2 to 3 years for complete implementation.
In June 1967, the finalized DoD instruction and operating manual for the military supply and transportation evaluation procedures (MILSTEP) were forwarded to all DoD components. MILSTEP is a DoD standard data system for collection of data necessary to measure supply systems performance and transportation effectiveness. This measurement is applicable to activities throughout the Department of Defense and GSA insofar as they support the military Services. One of the management reports (the supply availability and analysis report) will be implemented with data accumulated from October 1, 1967. The pipeline performance and analysis report is scheduled to start on March 31, 1968.
Implementation of the DoD automatic addressing system (DAAS) has adhered to the schedule outlined in last year’s report. The backup facility at McClellan AFB was activated on August 13, 1966, and successfully assumed the entire workload of the system on a temporary basis. Expansion and reprograming of the original facility at Gentile Air Force Station was completed on October 17, 1966. This phase of DAAS will be complete after a limited number of additional subscribers nominated by the military Services are added early in fiscal year 1968. As an interim measure, workload on the system has been limited to the capacity of a single facility, or 175,000 average length messages in a 24-hour
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period. This was done to provide an alternate routing capability in the event of a technical failure at one facility.
However, the military Services have an immediate requirement for additional capacity to add subscribers during the intervening period before a long-range DoD-wide DAAS system can be implemented. An enhancement plan for augmenting the current system has been developed and approved by the Assistant Secretary of Defense (I&L). This provides for activation of three additional DAAS facilities in fiscal year 1968—two to be located at Gentile Air Force Station and one at McClellan AFB, augmenting the present facilities at these two locations.
Item Entry Control
The expanded Defense item entry control technical review program described in last year’s report has been implemented on schedule. Thirteen Defense Technical Review Activities (DTRA’s), four at DSA supply centers and nine at inventory control points of the military departments, have been activated. As of June 30, 1967, 67 Federal supply classes, accounting for approximately 75 percent of all new item growth in the Federal Catalog, had been assigned or brought under the program. In this connection the DoD 5-Year Standardization Program was recently revised, establishing accelerated targets for standardization actions within these same high-growth classes. These new goals provided for the initiation of new item reduction studies to achieve 100 percent standardization status coding coverage within these classes in a 5-year period. Military standards, to include providing preferred parts lists for use in new designs, are programed to give optimum coverage in Federal supply group 53 (hardware) and Federal supply group 59 (electronics) by the end of fiscal year 1970, and in all high growth classes 2 years later. The necessary item reduction studies are to be performed by the DTRA’s.
During fiscal year 1967, the four DSA DTRA’s reviewed 203,272 proposed new items of which 71,420 or 35 percent were determined to match, or be substitutable for, items already in the DoD supply system. An additional 15,252 items were returned to the originators for various errors in item identification.
Materiel Utilization
The salient development during the year in materiel utilization was a decrease of approximately 32 percent in the volume of assets available for redistribution. Specialists in the field ascribe this decline to the increased stock level authorizations of the military Services for support of Southeast Asia operations. Materiel utilized within DoD decreased about 17 percent during the year to $1,540 million, so that the proportion of available assets reutilized actually increased and exceeded goals in this functional area by 4 percent.
Efforts continued toward refinement of mechanized procedures designed to screen releasable assets of one military Service inventory control point (ICP) against the requirements of another. Reutilization resulting from this process, conducted centrally at DLSC and from direct interrogations between ICPs, totaled $434 million during the year ($348 million inter-Service reutilization and $86 million intra-Service reutilization). Utilization of military Service declared excess amounted to $1,106 million during fiscal year 1967 (see table 39 in the appendix).
Use of the brochure advertising technique for screening weapon system phaseout property, described in previous reports, has continued to expand. During the
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12-month period this technique accounted for $257.6 million of reutilization, an increase of about 102 percent over the previous fiscal year.
Reutilization of high value excess property (over $10,000 acquisition cost, regardless of type) which also utilized brochure techniques continued to be successful. Materiel in this category worth $55.1 million was reutilized in fiscal 1967, an increase of $6.3 million over the previous year. In this activity, utilization amounted to 83 percent of the value of all materiel advertised.
DSA has the responsibility for DoD-wide reutilization screening of automatic data processing equipment (ADPE). The assignment applies to both Government-owned and leased equipment of commercial type and was implemented on July 1, 1964, by establishing an ADPE Reutilization Screening Office within DSA Headquarters. During its third year of operation, this program resulted in redistribution of excess equipment worth $73.7 million—$64.1 million Government-owned and $9.6 million leased equipment—through centralized screening techniques. The total included $15.2 million utilized by civil agencies through an interchange of information with GSA. The inventory of Government-owned ADPE on hand on June 30, 1967, was $17.7 million.
Industrial Plant Equipment
The Defense Industrial Plant Equipment Center (DIPEC) at Memphis, Tenn., is charged with primary responsibility for development and maintenance of central records of the DoD inventory of industrial plant equipment (IPE) and the management of idle equipment. At the end of fiscal year 1967 DIPEC held records of 401,567 items with an acquisition cost of some $4 billion. The Center received 44,238 requests for equipment during the year and redistributed within DoD 13,841 units with an acquisition value of $165.5 million which had been declared idle by military and contractor activities of the Defense Department. An additional $27.1 million worth of IPE reporting was redistributed to the Military Assistance Program, the Atomic Energy Commission, National Aeronautics and Space Administration, Federal Aviation Administration, and others. Total redistributions for fiscal 1967 of 18,320 items amounting to $192.6 million in terms of original acquisition cost of the equipment. Another 5,283 items of equipment worth $22,208,053 was on loan to vocational schools under terms of Public Law 883.
DIPEC ended fiscal year 1967 with 22,986 items of idle equipment valued at $211.1 million in the General Reserve. The balance of the DoD industrial equipment reserve in package plants and stand-by lines which was in the custody of the military departments, consisted of 31,610 items valued at $416.3 million. This portion of the IPE reserve is earmarked for specific mobilization requirements and is normally not available for allocation.
Until very recently, IPE was not effectively identified. The first handbook of standards for describing IPE which Defense activities use in preparing property records for their own management uses and for reporting idle IPE to DIPEC was published in April 1965. By June 30, 1967, a total of 39 handbooks covering all of the types of IPE within the entire DIPEC scope had been published, and this project was in a maintenance status. However, use of these procedures has increased the number of identified items of IPE from 63,959 in June 1966 to 160,549 in June 1967. Preparations for reissue of all the older handbooks are now underway. Several are expected to be triple the original size in their revised versions. These handbooks have made a major contribution to improvement in the adequacy of controls over Government-owned property in the possession of contractors. Printed by the GPO, they are available commercially through the Superintendent of Documents.
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Concurrent with the development of the IPE handbooks, DIPEC identified and recorded interest at the Defense Logistics Services Center (DLSC) on more than 13,000 Federal supply numbers (FSN’s) which align to IPE criteria. As a result, FSN’s for IPE are screened twice weekly by DLSC against ICP requirements and assets, matches are forwarded to DIPEC, available industrial system assets are offered to fill supply system requirements, and supply systems assets are used by DIPEC to fill industrial system requirements.
On May 5, 1967, the Armed Services Procurement Regulation (ASPR) Committee approved a requirement that contractors’ official records of Defense-owned equipment costing $200 or more employ standard Federal Catalog nomenclature citing specific FSC numbers. The ASPR Committee also approved modifications of the ASPR creating contractual obligations for compliance with the established systems and procedures for reporting such equipment to DIPEC. A proposed DSA regulation has also been drafted on a DIPEC field visits program, to make better use of the new management tools which have been developed and which are prerequisites for overcoming the lack of information on Defense-owned IPE.
Materiel Disposal
DSA is responsible for the administration of the DoD disposal program worldwide, including utilization of DoD excess, donations, sales, demilitarization, and scrap preparation. Under authority of the annual DoD Appropriations Act, the costs incurred by all DoD elements engaged in the disposal of excess, surplus, and foreign excess personal property are reimbursed from the proceeds of sales, and the remaining proceeds are transferred to the U.S. Treasury.
Property declared excess, surplus, and foreign excess within DoD during fiscal year 1967 amounted to $4.8 billion, which was $.4 billion less than in the previous year, reflecting the continuation of the downward trends since 1964. The decrease in generations has been a result of increased mission assignments by the military Services and DSA, and withholding actions on declaring items as excess due to increased requirements resulting from Southeast Asia.
The dollar value of DoD property processed for disposal during fiscal year 1967 was $5,745 billion, of which $2,399 billion was reutilized within DoD, transferred to other Federal agencies and the Military Assistance Program, or donated to authorized recipients. Value of property sold, scrapped, abandoned, or destroyed during the year was $3,346 billion. Further details regarding these programs are given in table 39 of the appendix.
The DoD average rate of return for 1967 was 5.4 percent, a decrease of 1.1 percent from the previous year; this was a direct result of increasing utilization and because the character of usable property available for sale was changing. It was generally of a specialized military nature such as aeronautical equipment, which had limited commercial demand and marketability.
Proceeds from the sale of scrap have increased slightly, partially due to improved segregation of scrap materials increasing the price ped ton of nonferrous scrap. Proceeds totaled $101.4 million for fiscal year 1967, a $17 million decrease from 1966. The overall decrease in proceeds from the disposal program has been offset to a certain degree by a $6.6 million decline in operating expenses from the previous year. Total expenditures in 1967 amounted to $73.6 million.
Some reduction in program costs has been effected through consolidations. By the end of the fiscal year 1967, the consolidation of 79 surplus holding activities of all the military Services had been directed. Seventy activities had completed consolidation, five were in process of consolidation, and four consoli
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dations had been canceled because of base closures. Estimated annual savings which are currently accruing amount to $3.3 million and 376 personnel spaces.
Defense Documentation
The Defense Documentation Center (DDC) is the central facility for secondary distribution of technical reports of research and development activities sponsored by DoD. DDC provides classified and unclassified technical and management information services, without charge, to Government organizations and contractors engaged in Government research and development programs.
A new Directorate of Research and Engineering Management Information was established in DDC in April 1967, mainly to administer the DoD Research and Technology Work Unit Data Bank, initiated in the previous fiscal year. This activity, which reflects the status of on-going research projects, has attracted wide attention in the Federal scientific community. On June 30, 1967, it encompassed 30,220 rSsumds, an increase of 63 percent during the year. The National Aeronautics and Space Administration (NASA) contributed over 3,000 of the added resumes. Change notices to existing projects doubled during the year, and requests for work unit data tripled in volume. Meanwhile, DDC was assigned responsibilities for developing the following subsidiary data banks: (1) The DoD Technical Facilities Data Bank; (2) the Information Sciences Technology Data Bank; and (3) the Interagency Life Sciences Exchange Data Bank. DDC also designed and provided temporary computer support for the Computer Sciences Technology Data Base, which will ultimately be transferred to the National Bureau of Standards.
In December 1966, DDC was assigned responsibility for the maintenance and continuing development of the DoD Thesaurus of Engineering and Scientific Terms (TEST). As a related activity, the center was also made responsible for the review of terms in TEST for their applicability in the data elements standardization program, controlled by the Assistant Secretary of Defense (Comptroller).
DDC also completed the implementation of missions assigned in previous years, such as primary distribution of foreign technical reports, data bank services for contractor performance evaluation and contractor cost reduction reports, and mechanized central certification of users for access to DoD-spon-sored technical information. Expansion of both old and new programs necessitated an increase in authorized civilian strength from 511 to 602 employees. Nevertheless, overall costs of DDC operations were reduced by $1.1 million or about 11 percent below fiscal year 1966 costs. This was accomplished by various procedural and organizational changes, including the disestablishment of five DDC field service offices and the introduction of an entirely new automated system of document distribution.
DDC filled 1,846,240 requests for documents during the year, an increase over the previous year of 23 percent. Requests for bibliographies filled in fiscal 1967 totaled 20,365, and 52,972 new titles were announced in the technical abstract bulletins.
Relationships With Federal Civil Agencies
During fiscal year 1967, DSA and the GSA’s Federal Supply Services (FSS) completed their joint review of commodity management assignments, designating 53 Federal classes as “primary FSS classes” and 99 Federal classes as “primary DSA classes.” As noted earlier in this report, arrangements for transfer to the FSS of 17,000 items in 52 Federal classes had been completed
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by the end of the fiscal year. Action was also initiated to transfer one more FSS class, and all items designated for integrated management in all primary FSS classes, excluding a limited number of exception items to be retained under DSA management. In addition, remaining items in the classes associated with paint and handtools and all functions performed by DSA applicable to those classes will be transferred either to the FSS or to the military Services for management.
DSA has continued to study its capability to support civil agencies with DSA-managed commodities without impairing the Agency’s primary mission. Planning actions have already begun with respect to DSA assumption of support in bulk fuels and packaged petroleum products. This critical commodity support will be phased in to assure continuity of support to both Department of Defense and civil agency customers. Similar actions are scheduled for electronics support. For medical supplies and nonperishable subsistence, the Defense Personnel Support Center has been direct to undertake a technical review, to identify areas in which there exists a potential for increased commonality in DSA and civil agency items sufficient to warrant expansion of DSA mission support.
Additional formal agreements were made during fiscal year 1967 whereby DSA became responsible for supporting the Federal Aviation Administration with meals, combat, individual; the Post Office Department with selected electronic, general and industrial supplies; and the Agency for International Development with medical items (through the U.S. Medical Depot, Ryukyu). Negotiations are also in progress for supporting the Bureau of Indian Affairs with perishable subsistence.
DSA support to civil agencies during fiscal year 1967 is listed in figure 2 below.
SALES TO CIVIL AGENCIES UNDER FORMAL INTERAGENCY AGREEMENTS
FISCAL YEAR 1967
U.S. Coast Guard (all commodities)___________________________ $7,900,000
Public Health Service (medical)_________________________________ 763,000
General Services Administration (.electronics)____________________ 8,000
Veterans Administration (medical)_______________________________ 147,000
Atomic Energy Commission (subsistence)__________________________ 932,000
Federal Aviation Administration (electronics)_________________ 2,068,000
Federal Aviation Administration (subsistence)____________________ 60,000
National Aeronautics and Space Administration (all commodities) 3,620,000 Maritime Administration (clothing and textiles)______________ 5,000
Veterans Administration and Public Health Service
(perishable subsistence)___________________________________ 1,411,000
Office of Economic Opportunity (Job Corps)___________________ 10, 387, 000
Figure 2
Defense Contract Administration Services
The establishment and organization of Defense Contract Administration Services (DCAS) was described in the annual report for fiscal year 1965. Full implementation of this concept and complete activation of a nationwide DCAS field organization were reported in fiscal year 1966. At the end of fiscal year 1967,
360-499 0—70-----9
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DCAS was administering 272,000 prime and secondary contracts, an increase of 39.5 percent during the year. During the second half of the year, an average of 173,000 invoices were completed each month, an increase of 30 percent over the average workload in the corresponding period of the previous year. The dollar value of material inspected and released for shipment rose to $1.9 billion in June 1967, an increase of 27 percent over the June 1966 dollar value inspected and released.
This expansion was primarily due to stepped-up effort in support of Southeast Asia operations and additional NASA requirements. The additional workload was handled with a relatively small increase in work force. From June 1966 to June 1967, DCAS civilian manpower rose from 20,793 to 23,308, an increase of only 12 percent.
Some of the new DCAS programs and areas of major effort during fiscal year 1967 were:
The Corporate Administrative Contracting Officer (CACO) Program entails the assignment of an administrative contracting officer (ACO) to be cognizant of a contractor’s corporate-level organization. The CACO is responsible for the review and approval of policies and procedures having impact upon subordinate contractor organizations under the cognizance of different ACO’s. The program is presently applicable only to contractors entirely under the administrative cognizance of DCAS.
The Contractor Weighted Average Share in Cost Risk (CWAS) Program was implemented in accordance with Defense Procurement Circular No. 50, dated December 30, 1966. The program encompasses (1) a technique for determining the contractor’s assumption of cost risk for a given fiscal year through an analysis, by contract type, of costs incurred; and (2) the establishment of a threshold level for the relaxation of certain overhead cost reasonableness criteria as set forth in ASPR.
The CWAS program, which applies to both DoD and NASA contracts, was implemented by publishing an annex to DSA Manual 8105.1.
Management of Property.—Programs initiated in fiscal year 1966 to improve property management were continued. In addition, the following actions were taken to further improve the management of Government property in the possession of contractors:
(1)	Letters forwarded to major contractors emphasized the necessity for proper management of Government property in their possession, provided a summary of the standards used to evaluate their property control systems, and solicited their personal cooperation.
(2)	Each director of a DCAS region (DCASR) was advised of deficiencies reported by reviewing authorities during the previous fiscal year, so more positive action could be taken to eliminate them.
(3)	A new course on property administration is being developed for presentation at the Air Force Institute of Technology. This will provide both basic and advanced training.
(4)	A project was initiated for the assessment of all aspects of property administration, including policies, procedures, organization, personnel qualifications, and training.
Small Business and Economic Utilization.—Vigorous activity in these areas has continued. Subcontracting programs have been established in 1,488 prime contractor plants and are being reviewed quarterly by a DCAS field force of 51 small business and labor surplus area specialists. Subcontracting commitments of $4.1 billion were made to small business firms under cognizance of the DCAS Small Business Program during fiscal year 1967. This repre
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sents 49.3 percent of total subcontracting commitments to all subcontractors under the DCAS program.
Terminated Contracts.—Workload involving the administration of contracts terminated for the convenience of the Government increased 43.5 percent during fiscal year 1967. During this period a standby plan was developed to provide each DCASR with a readiness capability for responding to an expanded termination program which could result from a cessation of hostilities in Southeast Asia.
Systems Support.—'Systems Support, once a DCAS staff office concerned with engineering responsibility on selected major weapons contracts, has been integrated within the Production Directorate as a technical management division. Industrial specialists have been assigned to provide an expediting capability for high priority contracts. At the end of the year technical managers were coordinating over 1,200 contracts to assure complete and timely action by other functional elements. Approximately 700 of these were ammunition contracts in support of Southeast Asia.
Industrial Security.—DSA CAS had responsibility for security administration of all classified DoD contracts and for classified contracts awarded by nine other Federal departments and agencies. To improve the interface with user agencies, a security training presentation was developed for procuring contracting officers. By the end of the year, each DCASR had the capability of conducting security orientation seminars. Major revisions were also completed in three basic publications—the Defense Industrial Security Clearance Manual, the Industrial Security Operating Manual, and the Cryptographic Supplement to the Industrial Security Manual.
The Defense Industrial Security Clearance Office (DISCO) processing time for a Secret clearance averaged 25 days during 1967, whereas during the first year of DCAS operation average time was 60 days. Transfers of clearances between companies when employees change jobs, for which the Services took 30 days, were being processed in 5 days at the end of the year. On June 30, 1967, DISCO had 13,970 industrial facilities under cognizance. A major improvement during the year in streamlining the DISCO system was a reduction in the number of copies of the personnel security questionnaire required from five copies to one.
Contract Management Reviews.—During the year, four DCASR’s (New York, Philadelphia, Dallas, and Boston) were reviewed by a contract management review team from Headquarters, DSA CAS. These reviews were conducted in compliance with DoD Directive 5126.34, which requires that all phases of contract administration be reviewed periodically and that the results be reported to the Assistant Secretary of Defense (I&L). The objective was to provide management levels with current information as to the effectiveness of DCASR operations and management and to provide management consultant assistance to the regions. Contract management review is a relatively new program ( the first review was conducted in March 1966), and has been highly beneficial in identifying and resolving operational and managerial problems.
Customer Relations Visits.—This program was initiated in November 1966. The objective, to improve DCAS responsiveness to the buying activities through better communications, was implemented by three customer relations teams, each of which was composed of representatives from three Headquarters, DSA CAS Directorates (Contract Administration, Production, and Quality Assurance). The three teams have visited 62 Service, NASA, and DSA buying activities to discuss their problems, especially areas in
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which Headquarters, DSA CAS responsiveness and service could be improved. In addition, cooperation was solicited in those areas where certain actions by the buying activities would enable DCAS to provide better service.
Plant Assimilations.—During the year, Headquarters, DSA CAS assumed cognizance of contract administration responsibilities in two contractor plants (Martin-Marietta Corp., Orlando, Fla., and the Sperry-Utah Co., Salt Lake City, Utah) which had been reassigned to DSA from the Army by the Office of the Secretary of Defense (OSD). Transfer of the offices responsible for these plants required major realignments of organizational structures, communication channels, and established working procedures, but they are now operating effectively as members of the DCAS organization.
Quality Assurance Engineering Support Program.—OSD recently directed amplification of the normal engineering support functions expected of all DoD CAS components. This involved expansion of the one engineering function specified in the original DCAS national implementation plan (NIP) to the present 15 normal engineering support functions. Within DCAS, quality assurance engineering was assigned responsibility for those aspects of the engineering support functions pertaining to quality, reliability, and performance. Detailed guidance was provided to field quality assurance personnel in February 1967 for effective and timely management of these added engineering functions.
Specialized Safety and Flight Operations (SSdFO) Program.—The DOASRs became fully staffed for this program during fiscal year 1967 with 62 military and 53 civilian personnel. The staffs now were capable of handling the entire SS&FO mission without assistance from the three military Services. The SS&FO functions were enlarged on October 25,1966, to encompass surveillance of all flight safety and safety matters on hazardous and dangerous materials and processes as required by the contracts at those plants assigned DCAS cognizance.
Quality Assurance Management Data.—In early 1966 it was determined that data which would be more indicative of contractors’ performance was needed as well as improvements in data already being collected for managerial purposes. A committee was therefore established to develop a statistical approach to an index of contractors’ effectiveness in the quality assurance area, and to provide data which would be indicative of the technical activities of a quality assurance representative (QAR). This project resulted in the establishment of indices in three areas: (1) Quality of material inspected by the QAR; (2) effectiveness of the contractor’s quality assurance program; and (3) effectiveness of the QAR’s application of the procurement quality assurance program. The project was implemented on July 1, 1967.
Staff Personnel Utilization.—A project to investigate the effectiveness of utilization of staff personnel in the DOASR’s was initiated in 1966. The project was assigned to the Atlanta DCASR, and had the objectives of: (1) Identifying the activities of staff personnel; (2) providing data for judging effectiveness of utilization of staff personnel; (3) determining if resources were being fully utilized; and (4) relating these activities to the DSA cost accounting system. The Atlanta DCASR identified 22 areas of activity which were approved as specific functions to be reported, and each of these, in turn, was related to a specific identity in the cost accounting system. Atlanta prepared the program in detail, including program instructions for ADP handling of reported uuta, and a report format known as DSA Form 376a. The program was implemented for test purposes on July 1, 1967.
Inspection and Quality Control Career Management.—The activation of DCAS brought under one management quality control personnel who were
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specialists in a wide variety of commodities and industrial processes. A need became evident for revision of job classification standards in this area, and also for immediate guidance to assure equitable interpretation of the existing standards in various complex work situations. The Staff Director for Civilian Personnel and Headquarters, DSA CAS developed a guideline for the classification of nonsupervisory QAR positions, which was issued for trial application on July 1,1967.
Foreign Governments Procurement Support.—In response to a request from OASD (I&L), the Quality Assurance Directorate has developed procedures for direct assumption of an executive agency assignment for foreign government procurement support. In the past, DCAS has performed the bulk of the quality assurance support of these foreign purchases but has received the requests through the military departments. Direct communication between the foreign embassies and DCAS will shorten the time flow of correspondence. It is anticipated this agency assignment will rest in the New York DCASR.
Mechanization of GAS Data System.—The establishment of an automated management information system continues to progress according to plan. The MOCAS 1A system, which was designed to provide improved ADP output products for management, was implemented during the fiscal year at all DCASR’s.
MOCAS 1A utilizes the original ADP equipment, IBM 1401 and Honeywell 200 punched card processors. In order to overcome the large and difficult punched card processing workload, action was taken during 1967 to upgrade the H-200 equipment with tapes at the five large DCASR’s (New York, Los Angeles, Boston, Chicago, and Philadelphia). The upgraded equipment was installed between January and July 1967. During the year it also became apparent that the limitations of the original equipment coupled with the increased workload dictated that new and uniform ADPE be acquired for all DCASR’s. System specifications, identified as MOCAS IB, were developed with the primary objective of obtaining better ADPE for the MOCAS system on a competitive basis. The MOCAS IB standard equipment is scheduled for installation and implementation at all DCASR’s during fiscal year 1969. However, this is an interim system and will ultimately be replaced by MOCAS II, which will be the DSA implementation of MILSCAP, described earlier in this report.
Summary.—After 18 months of full operation, DCAS is performing its mission effectively and efficiently. Many management improvements have been successfully applied during this short period. More significant benefits and improved performance can be expected as DCAS gains additional experience and performance data in operations.
Budgeting and Funding
Generally, DSA uses appropriated Operation and Maintenance (O&M) and Research, Development, Test, and Evaluation (RDT&E) funds to pay operating costs and a Stock Fund to finance supply inventories. Other fund authorizations are also used for Military Construction; Procurement, Defense Agencies (PDA) ; and Family Housing.
DSA’s share of the O&M Defense Agencies’ obligations in fiscal year 1967 was $551 million. Additional funds of $38.7 million were received from the military departments and other Government agencies as reimbursement. Also, the military departments funded $17.1 million for military personnel assigned to DSA in fiscal year 1967. The total operating cost for the year 1967, including reimbursements and military pay, amounted to $606.7 million.
RDT&E funds are used for the operating and management costs of the Defense Documentation Center (DDC). In fiscal year 1967, DSA obligated $9 million in RDT&E funds for this purpose.
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DSA received military construction funds totaling $1.8 million during fiscal year 1967 to provide for administrative and logistical facilities, including minor construction and planning. Procurement, Defense Agencies funds in fiscal year 1967 in the amount of $14.3 million were received by DSA, principally for procurement of materials-handling equipment, mechanized materials-handling systems, and automatic data processing equipment. Under the appropriation Family Housing, Defense, $0.1 million was obligated by DSA during fiscal year 1967 to operate 96 family housing units.
Data reflecting final obligations and sales of the Defense Stock Fund for fiscal year 1967 are reflected in figure 1. A major buildup in DSA inventories during the fiscal year was authorized in successive increments, reflecting tight fiscal controls responsive to guidance from higher levels and based on progressive changes in the Southeast Asia situation. Obligations exceeded net sales by $333.5 million in fiscal year 1967, reflecting a continuation of fiscal year 1966 operations, when the net investment increase amounted to $1,322.5 million. A noteworthy feature of the situation on June 30, 1967, was the fact that on-hand inventories increased by $902.2 million during the year (including a mobilization reserve buildup of $209.5 million), while material on order decreased by $318.8 million during the year.
Personnel
During fiscal year 1967, DSA civilian strength increased from 55,851 to 64,448 (see fig. 3). This increase, to carry out Southeast Asia support, required Agency emphasis on recruiting needed skills. This effort was especially challenging because of the high turnover and tight labor market which complicated the filling of temporary positions. Approximately 10,000 of DSA’s June 30, 1967, strength were temporaries.
In addition to accelerated hiring, fiscal year 1967 was characterized by Agencywide strengthening of civilian personnel programs. For example, employee suggestions submitted and adopted increased by almost half over the previous year, and estimated dollar benefits almost trebled to over $8 million. Nearly 6,500 employees received functional or supervisory training during the year, and the use of Service school training courses for this purpose more than doubled. DSA hired 1,292 college employees during 1967 and employed over 3,000 summer workers under the various programs.
The DoD Centralized Referral Activity (CRA) located at Dayton, Ohio, was established in March 1965 and is operated by DSA at the Defense Electronics Supply Center. The original purpose of the CRA was to assist in the placement of DoD employees scheduled for involuntary separation due to base closures. By the end of fiscal year 1967, there had been 33,196 registrations in the system, 19,087 placements, 11,318 persons removed from the records due to retirement, resignation, death, etc., and 2,791 remained available for placement. In March 1967, the CRA system was expanded to include DoD employee returnees from overseas. In fiscal year 1967, there were 321 registrations and 52 placements in this category.
Military personnel positions in the Agency continue to be staffed on the basis of balanced military Service representation at all levels of operation. During the year, DSA participated in the DoD military-civilian substitutability program which resulted in the conversion of 72 military positions to civilian occupancy. Military strength on board by Service, as of June 30,1967, was Army, 34 percent; Air Force, 38 percent; Navy, 26 percent; and Marine Corps, 2 percent
With the cooperation of the military Services, DSA has established an active program for reserve mobilization designees to meet immediate officer requirements in the event of mobilization. A total of 582 officer spaces have been authorized to DSA by the Services as follows: Army, 232; Air Force, 210; and Navy, 140.
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STATUS OF DSA PERSONNEL
	June 30, 1966			June 30, 1967		
	Total1	Civilian	Military	Total1	Civilian	Military
Defense Supply Centers:	21, 941			23, 660		
						
Construction. 		5, 141 3, 782 189	5, 082 3, 738 171	59	5, 801 4, 048 186	5, 747 4, 005 169	54
Electronics 				44			43
Fuel				18			17
General 	 		3, 038 2, 783 7, 008	2, 976 2, 740 6, 813	62	3, 581 2, 779 7, 265	3, 528 2, 734	53
Industrial		 __			43			45
Personnel support				195		7, 096	169
(Clothing factory						
only) 		(2, 419)	(2,418)	0)	(2, 388)	(2, 387)	(i)
						
Defense depots:	9, 711			12, 629		
						
Mechanicsburg. _	1, 871 2, 082 3, 327 2, 431	1, 843 2, 059 3, 306 2, 416	28	1, 862	1, 836 2, 514 4, 998	26
Memphis						23	2, 535		21
Ogden _ _			21	5, 017 3, 215		19
Tracy _	_	_			15		3, 197	18
						
Defense Contract Administration Service Regions:	20, 974			24, 447		
						
Atlanta	1, 568 2, 790 2, 056 1, 636 966	1, 519	49	1, 848 3, 099 2, 352 1, 872 1, 146 1, 384 3, 358 3, 604 2, 767 1, 702 1, 315	1, 797 3, 055 2, 318 1, 842 1, 099 1, 364 3, 310 3, 546 2, 725 1, 670 1, 290	51
Boston	__ 				2, 748 2, 026 1, 610 925	42			44
Chicago _____			30			34 30 47
Cleveland _	_ _			26			
Dallas 			 __			41			
Detroit	 		 _	1, 200 2, 836 3, 057 2, 396 1, 454 1, 015	1, 181 2, 790 3, 004 2, 351 1, 427 994	19			20
Los Angeles _					46			48
New York				53			58
Philadelphia			45			42
St. Louis 						27			32
San Francisco			21			25
						
Service Centers:	2, 565			2, 754		
						
Documentation- _	481	477 1, 116	4	609	605 1, 187	4
Logistic services.	1, 125		9	1, 194		7
Industrial plant						
equipment. 			490	489	1	495	494	1
Administrative						
support. _ _			469	424	45	456	410	46
						
Field Extension Offices	 Headquarters _ 			612 1, 177	595 1, 031	17 146	814 1, 281	783 1, 129	31 152
						
Total	 _ _ _ _	56, 980	55, 851	1, 129	65, 585	64, 448	1, 137
						
Includes part-time and temporary civilian personnel.
Figure 3
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Cost Reduction Program
The cost reduction program began in 1962, and the establishment of DSA was in itself a cost reduction action, accounting for validated savings of $30.4 million annually. In 4 successive years greater economies were reported by DSA, culminating in a report of direct cost reductions totaling $163 million in fiscal year 1966.
For fiscal year 1967, the Secretary of Defense directed a substantial change in the program, discontinuing reports of carryover savings from prior years and abandonment of the 1961 base year. Hereafter, current year savings were limited to those which resulted from new, improved, or intensified management actions taken in the current year. Follow-on savings to be realized during the 2 succeeding years were to be projected, and validated, along with current year savings. More restrictive reporting criteria accompanied this directive, and under the new procedures DSA was assigned a current year goal of $31 million for fiscal year 1967, and a total of $51 million including follow-on savings for the 3-year period.
During fiscal year 1967, DSA accomplished validated cost reductions totaling $33.6 million, slightly exceeding its goal. Savings were reported in a total of eight areas. The largest savings were reported in the value engineering area, which accounted for $14 million. The second largest area was in operating expenses, and contributed $10.2 million. Follow-on savings to be realized in future years were approved at $14 million each in fiscal years 1968 and 1969, so the validated 3-year total was $61 million, or 119 percent of the 3-year goal.
Indirect contributions also resulted from DSA activity in administering Defense-wide programs and performing Defense-wjde .services, such as material interservicing and industrial plant equipment reutilization. These efforts were reflected in savings accruing to, and reported by, the military departments.
Supply Effectiveness
A uniform procedure for the measurement of supply effectiveness was one of DSA’s earliest management objectives, and was implemented in November 1962. As noted earlier in this report, the first steps have been taken toward the implementation of MILSTEP, which will provide a much more extensive measurement of supply performance by centers, depots, and transportation agencies. Current procedures are based upon two key effectiveness indicators.
The first management indicator, stock availability, measures the performance of the centers as inventory managers by the percentage of requisitioned items supplied from available .stocks. The net number of requisitions processed by DSA supply centers rose from 19.3 million in fiscal year 1966 to 19.7 million in fiscal 1967 and is expected to decrease to 18.8 million during 1968. Average availability of the system during fiscal 1967 was 86.5 percent, a decrease of 1.3 percentage points from the rate achieved in the previous year, and is expected to increase to an average of 90.5 percent in fiscal year 1968. The anticipated 1968 rate of stock availability is considered to provide a satisfactory level of supply support to the Services.
The second indicator, on-time fill, measures supply system effectiveness by the percentage of stock items processed for shipment within the time frames specified in the DoD uniform material movement and issue priority system. During fiscal year 1967, DSA filled 75.3 percent of its shipments on time, or a
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drop of 4.9 percentage points below the previous year’s rate. The rate of on-time fill has increased steadily since December 1966, and is expected to average 79.5 percent in fiscal year 1968. Intensive management effort at all supply centers is expected to result in additional improvements in on-time fill.
Back orders on hand rose from 412,100 in June 1966 to 593,400 in October 1966, but had been reduced to 355,800 by June 1967 and are expected to drop to 340,000 by June 30,1968.
Customer Supply Assistance Program
Customer supply assistance was formalized as a DSA Headquarters program by DSAR 4000.1, which disestablished the customer supply assistance offices (CSAOs) as mission elements of Defense Depot Ogden and the Defense Personnel Support Center, and established the Eastern OSAO and Western CSAO as field extension offices of the Headquarters, DSA Directorate of Supply Operations. All Defense supply centers were directed to utilize these regional offices as primary supply assistance contacts in direct communications between DSA activities and DSA customers.
During fiscal year 1967, the team of 12 supply maangement representatives of the Western CSAO provided their services to over 275 installations (Army, Navy, Air Force, Marine Corps, and non-DoD), making almost 600 liaison visits. The 12-man team of the Eastern CSAO visited over 325 bases of military and nonmilitary customers for a total of nearly 650 visits during the year.
When CINCUSARPAC requested DSA to assign a liaison officer to USARV, Headquarters DSA responded by placing an officer on temporary duty for a period of 90 days. Early in fiscal year 1967, the DSA staff officer detailed to this assignment recommended (with the concurrence of all the Service components in Vietnam) that quarterly DSA visits to Southeast Asia be made in lieu of a permanent assignment to that area. Since that time, routine quarterly liaison to Southeast Asia has begun. There are many benefits, both to DSA and to the customer, to be gained from such routine liaison visits to oversea areas. Some of the more important ones are:
1.	Many problems are solved for the customer at the working level before they become inflated into “headquarters-to-headquarters” formal type actions.
2.	Headquarters DSA problems can be brought to the customer’s operating level where immediate actions are taken to alleviate the situation.
3.	A rapport develops between the DSA customer assistance representative and customer personnel.
4.	The use of an established customer assistance individual in Headquarters DSA with the mission of servicing a given set of customers frees the rest of the DSA staff from performing routine liaison as an ancillary function.
5.	Repetitive visits by DSA CSAO field personnel let the military customer know that DSA is doing something about supply problems.
6.	Use of one knowledgeable individual as a Headquarters DSA customer representative increases program efficiency.
Summary
During its 6 years of existence, DSA has demonstrated the soundness of the concept of integrated management of common supplies and related logistic services in DoD and that it can be made to work in time of peace or war. The
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Defense Supply Agency has proven itself to be a respected and accepted part of the military logistic team by its performance in support of our military forces, especially those engaged in the fighting in Southeast Asia.
J. M. Lyle,
Vice Admiral, SO, USN, Director, Defense Supply Agency.
Annual Report
of the
SECRETARY OF THE ARMY
July 1, 1966, to June 30, 1967
Contents
Page
Chapter I. Introduction____________________________________________ 137
II.	Operational Forces: Deployment, Operations, and Readiness_________________________________________________________ 140
The Pacific and the Far East__________________________ 140
Europe, the Middle East, and Africa___________________ 142
Alaska and Latin America______________________________ 143
Continental United States_____________________________ 144
Army Readiness________________________________________ 145
Strategic Mobility____________________________________ 146
Special Forces________________________________________ 147
Civil Affairs and Psychological Operations____________ 148
Civil Defense_________________________________________ 149
III.	Force Development: Plans, Doctrine, Organization, and
Systems________________________________________________ 152
Plans and Programs____________________________________ 152
Authorization and Productivity________________________ 153
Systems Development___________________________________ 155
Army Aviation_________________________________________ 160
Chemical-Biological-Radiological Matters______________ 161
IV.	Training, Intelligence, and Communications_______________ 163
Training and Schooling________________________________ 163
Intelligence__________________________________________ 166
Communications and Electronics________________________ 168
V.	Personnel________________________________________________ 172
The Impact of Vietnam_________________________________ 172
Military Personnel____________________________________ 173
Pay, Housing, and Awards______________________________ 178
Religious and Morale Activities_______________________ 180
Medical Care__________________________________________ 181
Civilian Personnel____________________________________ 184
VI.	Reserve Forces___________________________________________ 188
Reorganization of the Reserve Components______________ 188
Selected Reserve Force_______________________________  189
Elimination of the 14 U.S. Army Corps_________________ 189
Readiness_____________________________________________ 189
Air Defense___________________________________________ 191
Budget________________________________________________ 191
VII.	Management, Budget, and Funds____________________________ 193
Organization__________________________________________ 193
Management Programs, Systems, and Techniques_________	196
Army Cost Reduction Program___________________________ 200
Army Study Program____________________________________ 201
Budget and Funds______________________________________ 201
Accounting and Auditing_______________________________ 203
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CONTENTS
135
Page
VIII.	Logistics___________________________________________________ 206
Inquiry into the Army Logistics System_________________ 206
Facilities and Materiel Readiness______________________ 207
Technical Data and Standardization_____________________ 208
Procurement____________________________________________ 209
Materiel Maintenance___________________________________ 212
Army Aircraft________________________________________ 214
Support of Operations in Southeast Asia________________ 214
Support of Operations in Europe______________________ 220
Support of Operations in the Dominican Republic______	221
Logistics Systems______________________________________ 222
Transportation_______________________________________ 223
Supply and Depot Management____________________________ 225
Installations__________________________________________ 226
Support Services_______________________________________ 228
IX.	Research and Development___________________________________ 231
Combat Support_________________________________________ 231
Firepower______________________________________________ 232
Mobility_______________________________________________ 234
Communications-Electronics_____________________________ 234
Other Significant Research Programs____________________ 237
National Ranges________________________________________ 240
International Cooperative Research and Development___	240
X.	Public Works and Military Engineering_____________________ 243
Public Works___________________________________________ 243
Pollution Abatement____________________________________ 248
Forests, Fish, Wildlife, Recreation, and Natural Beauty— 249
Emergency Operations___________________________________ 250
Mapping and Geodesy____________________________________ 251
Nuclear Power Applications_____________________________ 252
XI.	Special Functions_________________________________________ 254
Administration of the Ryuku Islands____________________ 354
Administration of the Panama Canal_____________________ 256
Promotion of Rifle Practice____________________________ 257
XII.	Military Assistance_______________________________________ 259
Civic Action___________________________________________ 259
Foreign Military Training____________________________   260
International Logistics________________________________ 261
XIII.	Summary_____________________________________________________ 264
Annual Report of the Office of Civil Defense___________ 265
I. Introduction
The war in Vietnam is unique among crises in this decade. Unlike the contingencies that involved U.S. interests in Berlin and Cuba in 1961 and 1962, respectively, the present conflict in Southeast Asia has been prosecuted without calling upon the reserves. While Berlin and Cuba represented threats without hostilities and the Dominican Republic emergency in 1965 involved only minor operations, Vietnam has produced substantial, distant, and extended combat operations on a scale requiring a major expansion of the active Army.
During fiscal year 1967 Army strength increased by almost 243,000 from 1,199,784 to 1,442,498. In the same period, strength in Vietnam rose from 167,000 to 308,000. Five of the Army’s 17 divisions, along with four brigades and an armored cavalry regiment, have now been committed there. By the close of the fiscal year, deployments to Vietnam exceeded the number that served in the War with Spain in 1898 and exceeded by about 32,000 men the U.S. Army strength in Korea at the end of that war in 1953.
The year was one of general adjustment in manpower and skills. The active Army expanded by about 50 percent between the summer of 1965 and the summer of 1967, while the Army force in Vietnam rose dramatically over the 2-year period from about 35,000 personnel and one major unit to 308,000 and many major units. The key to both the overall expansion and the expansion in Vietnam was the training base. During the early phases of the buildup, skilled officer and enlisted personnel had to be drawn from both the 7th Army in Europe and the 8th Army in Korea to build the training base to a level that would enable the Army to deploy and maintain fully manned units in Vietnam and still support the 1-year rotation policy. Veterans of the fighting in Southeast Asia and increased output from the training and school systems gradually brought supply into line with demand so that by the end of the fiscal year the 7th and 8th Armies were again at roughly their authorized strength levels.
The difficulty of maintaining personnel equilibrium is illustrated by the fact that over 120,000 veterans returned to the United States from Vietnam in calendar year 1966; this figure will more than double in calendar year 1967, very nearly reaching the proportions of a complete turnover in personnel in the war zone.
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ANNUAL REPORT OF THE SECRETARY OF THE ARMY
Operations in Vietnam have been on three general levels: Those against regular organized military formations; those against small but organized guerrilla forces; and those to counter individual or small groups of terrorists. At the higher end of the scale, operations were directed at locating and destroying enemy base areas. There were more than 150 battalion-size or larger operations, and the enemy suffered both troop and logistic losses as a result of penetrations into many of his previously secure sanctuaries. The helicopter continued to play a central role, transporting troops and supplies, airlifting artillery, providing suppressive fires, and evacuating the wounded. There was also an increasing use of armored vehicles during the year.
The increased strength in Vietnam in combination with intensified operations inevitably increased the level of casualties. The Army lost 4,305 killed and 26,531 wounded as the result of hostile action during the fiscal year. The high month of the period was May 1967, when Army casualties totaled 4,372. From January 1961 through June 1967 the Army’s casualties were 6,980 killed and 41,614 wounded.
The American soldier in Vietnam has participated both officially and personally in noncombat activities, through the Revolutionary Development Program, for example, and in numerous voluntary works. Official civic action efforts included medical treatment, food distribution, and construction of public facilities, while private contributions included both funds and services to further the economic and social welfare of the Vietnamese in such ways as repairing schools, roads, and bridges, rehabilitating public facilities, supplying potable water, providing medical and dental care, and distributing food and clothing.
The capacity of the logistics system in Vietnam was more than doubled during the year. Shortages, though existing in some areas, were at a minimum and did not affect combat operations; the scale of procurement, transportation, and port capacity insure adequate levels of all classes of supply. The procurement program for the year took account of combat consumption, other worldwide requirements, and war reserve needs. At the department level, a major study of the Army logistics system was completed that will have far-reaching effects when approved findings are acted upon.
Although the Vietnam war was a dominant factor during fiscal year 1967, the Army’s worldwide responsibilities continued, and a major operation was completed in Europe. This was the removal from France of U.S. headquarters, units, and installations, and the establishment of a new American line of communications in Europe based in Germany, the Benelux countries, and England. Involving hundreds of installations, thousands of personnel, and three-quarters of a million
INTRODUCTION
139
tons of material and supplies, the operation was completed on schedule by April 1,1967.
Briefly and broadly stated, the Army in fiscal year 1967 fought a distant war while building its strength and carrying out other manifold responsibilities at home and around the world. How it did so is outlined in the following pages.
II.	Operational Forces: Development, Operations, and Readiness
In fiscal year 1967 the Army readied and deployed a substantial number of additional forces to Southeast Asia, conducted wide-ranging operations in Vietnam, and maintained forces in various other areas of the world.
The Pacific and the Far East
The U.S. Army, Pacific, which extends from Hawaii to Japan, Korea, and Southeast Asia, has been enlarged in scope and size as a result of the Vietnam conflict. Operational forces in the area have increased during the year to a level of seven combat divisions, five combat units of brigade size, four corps or equivalent headquarters, and a multitude of support elements that range from a missile command and air defense brigades in Korea to an engineer command and an aviation brigade in Vietnam.
During fiscal year 1967, U.S. Army strength in Vietnam increased from 167,000 to 308,000 (includes transients and patients, excludes temporary duty personnel). Major combat units sent to the area during the period included the 4th and 9th Infantry Divisions, the 196th and 199th Light Infantry Brigades, and the 11th Armored Cavalry Regiment. A proportionate number of combat support and combat service support units were also deployed. It was necessary to refine Army organizational structure to command, control, and support the continuous buildup of all types of units. The U.S. Army, Vietnam, provided an Army headquarters to carry out combat support and combat service support functions in South Vietnam. This support was provided to Army, Navy, Marine, and Air Force units and to the military forces of the Republic of Vietnam and other participating free world nations.
U.S. Army forces operated in all four corps tactical zones in the Republic of Vietnam and in two primary roles—offensive operations against enemy main forces and their base areas, and operations supporting revolutionary development activities. Although offensive operations constituted the central role, the extension of security around bases brought protection to an increasing number of people while
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engineer operations and heavy military use opened many roads to the civilian population. In operations against enemy main force and base areas, Army units participated in approximately 13,273 battalion days of combat, conducting over 150 battalion-size or larger operations.
Friendly forces, by capitalizing on their relatively greater firepower and tactical mobility, have been able to take the initiative against the enemy’s main forces. The spoiling operations that successfully blunted the enemy’s offensive capabilities during the summer of 1966 were followed by allied penetrations into previously immune enemy base areas—sanctuaries that had reduced his vulnerability and enabled him to pace the war to his own advantage. A continuing enemy buildup in forces and activity, especially in the region of the Demilitarized Zone (DMZ), has maintained pressure on friendly units and required some readjustment of forces. Clearing and securing additional areas of the Republic of Vietnam is a slow and tedious task requiring close and continuous coordination between civil and military agencies. The Viet Cong underground government and infrastructure, carefully nurtured for years, is slowly being rooted out.
Thailand holds a strategic position in Southeast Asia. While insurgency increased within Thai borders during the year, particularly in the remote northeastern and southern sections, operations by Thai forces against insurgents were more effective. The United States continued to help Thailand improve its economic and military situation. An important development was the establishment of Headquarters, U.S. Army Support, Thailand, the command and control agency for Army units in the country. The Army has been constructing and maintaining strategic roads, communications networks, port facilities, and military supply depots while helping the Royal Thai Army improve its combat readiness.
The U.S. commitment in Korea continued with the U.S. 8th Army posted along the DMZ together with Republic of Korea forces. Major forces were I Corps (Group) with U.S. forces consisting of the 2d and 7th Infantry Divisions, the 4th Missile Command, and the 38th Artillery Brigade (Air Defense). The I Corps (Group) mission was to defend the western avenues of approach into South Korea; the 2d Infantry Division was deployed along the DMZ with the 7th Infantry Division in reserve. Units regularly conducted simulated combat training and held frequent exercises to maintain combat readiness, while the U.S. Military Advisory Group helped the Republic of Korea Army develop and maintain its forces. Beginning late in the fall of 1966 North Korean provocations were more numerous, principally in the area along the DMZ and were apparently related to presidential and assembly elections. Despite an increase in the number of firing
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incidents, the North Korean activity consisted mainly of probes, reconnaissance, and minor harassment.
On Okinawa, in addition to Headquarters, U.S. Army, Ryukyu Islands, and Headquarters, IX Corps, the principal Army forces were the 2d Logistical Command, the 30th Artillery Brigade (Air Defense) , the 7th Psychological Operations Group, the 1st Special Forces Group, Asia, and the 97th Civil Affairs Group. In a realignment of logistical missions, the 2d Logistical Command assumed certain support functions for Army forces in South Vietnam.
The U.S. Army, Japan, headquartered at Camp Zama, continued to carry out its primary mission of providing logistical support to Army and allied forces in the Far East, concentrating on military assistance, depot operations, procurement, and hospital facilities. The command operated 2,510 hospital beds for battle casualties from South Vietnam.
Europe, the Middle East, and Africa
The Army’s heavy responsibilities in Southeast Asia did not relieve it from its obligations in Europe. The U.S. Army, Europe (USAREUR), continued as the Army component of the unified U.S. European Command and an important element of North Atlantic Treaty Organization forces. It represented about one-sixth of the Army’s strength worldwide. Its major element, 7th Army, was deployed along a 300-mile front of the so-called Iron Curtain with three mechanized infantry and two armored divisions. Two armored cavalry regiments formed a screen for these divisions and another provided rear area security and a reserve for the 7th Army. Powerful nuclear artillery units, some equipped with PERSHING missiles, backed up the maneuver forces.
The French demand that all U.S. forces be withdrawn from that country by April 1,1967, caused major reorganizations and relocations in the theater command structure and the USAREUR logistical structure. 7th Army’s headquarters was consolidated with USAREUR’s in Heidelberg, Germany, on December 1, 1966; the new headquarters maintained a capability of dividing into separate headquarters to meet wartime requirements. Headquarters, U.S. Army Communications Zone, Europe, moved to Worms, Germany, and the Supply and Maintenance Agency moved to Zweibruecken, Germany.
In withdrawing its forces from France, U.S. Army, Europe, faced two major tasks—relocating its facilities and maintaining its capability to provide its forces with initial combat support. By the end of March 1967, USAREUR had either relocated within Europe, returned to the United States, or disposed of almost three-quarters of a
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million tons of supplies, equipment, and materiel. Over 30,000 personnel were relocated, and USAREUR turned over 350 installations to the French Government or the Military Liquidation Section of the American Embassy in Paris. The command revised its communications systems and set up inactive supply depots in England and active depots in the Federal Republic of Germany. It also provided for the support of the U.S. elements of the new NATO headquarters in the Benelux area. The overall reorganization resulted in a saving of 4,932 military and 260 civilian spaces in Europe.
The Berlin situation remained relatively stable during the year. The garrison’s operational readiness was kept at a high level through active training within the city and at training areas in West Germany.
The U.S. Army Southern European Task Force (SETAF) continued to provide NATO forces in northern Italy with ground-delivered nuclear support. During the Italian flood disaster in November 1966, SETAF took part in relief operations by evacuating Italian citizens and distributing supplies.
In the Middle East and Africa, as elsewhere in the world, Army personnel continued to serve in embassies and military assistance advisory groups and missions. During the Arab-Israeli crisis of May and June 1967, Army peronnel helped evacuate U.S. citizens from the area.
During the year Army specialists assisted the Government of Pakistan in surveying, removing, and disposing of U.S. munitions buried in that country at the end of World War II.
Alaska and Latin America
In the Western Hemisphere the Army retained its strategic responsibilities in both Alaska and Latin America. As the Army component of the unified Alaskan Command, U.S. Army, Alaska, contained two mechanized infantry brigades, two air defense artillery battailions, a support command headquarters, the Yukon Command, the Northern Warfare Training Center, and the Alaska Military District. The bulk of the troops were stationed at Fort Richardson, Fort Wainwright, and Fort Greely. The major units of the mechanized infantry brigades were an infantry battalion, a mechanized infantry battalion, an artillery battalion, an engineer company, and a tank company. Two new infantry battalions were activated in Alaska to replace two deployed to Vietnam in January 1966.
Ground transportation networks in Alaska are limited and many areas are accessible only by air. U.S. and Canadian Army and Air Force units participated in strategic mobility exercises as training for
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operations on a nuclear battlefield and in a primitive northern area. These exercises provided a means of evaluating the readiness of forces to respond to contingencies anywhere in Alaska.
On the southern approaches to the United States, U.S. Army Forces, Southern Command, is the Army component of the unified defense command. Located at various posts in the Panama Canal Zone, the command had an infantry brigade, an air defense battalion, and a special action force. The major units of the brigade were a mechanized infantry battalion, an infantry battalion, and an airborne battalion. The command also operated the School of the Americas and provided mobile training teams to assist Latin American countries.
In Puerto Rico, the subordinate element of U.S. Army Forces, Southern Command, was phased down to a small headquarters on January 1, 1967, and Fort Brooke and Fort Buchanan were declared excess to needs. In conjunction with this action, the Commonwealth of Puerto Rico agreed to take over from the Army the English language training of Puerto Ricans preparing for military service. The Army will continue to operate the U.S. Army Rodriguez Hospital at Fort Brooke until July 1969.
In the Dominican Republic, withdrawal of the Inter-American Peace Force began on June 28, 1966, with the departure of the 1st Battalion, 320th Artillery, U.S. Army. Return of this unit to the United States signaled implementation of a resolution adopted on June 24 by the Foreign Ministers of the Organization of American States, directing that the withdrawal of the Peace Force from the Republic begin before July 1 and be completed within 90 days.
The departure on September 21, 1966, of the last unit of the InterAmerican Peace Force concluded an operation begun on April 28, 1965. Over 23,000 U.S. personnel—14,889 of them Army—and some 1,800 troops from Brazil, Costa Rica, El Salvador, Honduras, Nicaragua, and Paraguay comprised the peacekeeping force in the island republic during an unsettled period.
Continental United States
The U.S. Continental Army Command, as a major field command under the Army Chief of Staff, embraced five numbered armies and .the Military District of Washington and included the five active Army divisions and numerous other units of various sizes and types that comprise the home base and the active Army’s continental segment of the strategic reserve. A principal mission, especially import-tant in the context of Vietnam, continued to be the organization, training, and equipping of assigned units.
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Army Readiness
To maintain Army readiness in the continental United States despite the heavy commitment of men and units to Vietnam during fiscal year 1967, the Army expanded its training base and, as in 1966, met its obligations without calling up the reserves or extending terms of service.
Of the more than 100,000 men sent to Southeast Asia during the year, major units averaged 9 to 12 months from activation to arrival on station; smaller units were activated and deployed in 6 months or less.
To accelerate the readiness of units scheduled for deployment to Southeast Asia, personnel and equipment were often transferred from units of lesser priority—a practice known as “drawing down” a unit. Virtually all Army commands were levied upon in varying degrees during fiscal year 1967; the units involved were generally able to continue to perform their missions.
The readiness condition of Army units improved gradually over the year as personnel and equipment became available and training programs were completed. Personnel readiness showed a marked improvement in the early months. Unit strengths improved and shortages of specialists decreased considerably in the fourth quarter. Units in all major commands except Vietnam continued to be short of officers— especially captains and majors—and aviators up to year’s end. Training readiness dropped in the first half of the fiscal year because of high personnel turnover, but later improved as unit training programs were completed. Logistics readiness, too, was adversely affected by the heavy demand for equipment and parts in Southeast Asia, while equipment serviceability was strained by heavy training requirements and retention in service of older equipment.
Command supervision continued to play an important role with periodic departmental reviews of readiness posture in major commands and activities. The Army readiness reporting system was revised to incorporate changes recommended by Army major commanders and the departmental staff, and a new regulation was published. Experience has demonstrated the value of the unit readiness system as a management tool.
Unit requirements for Southeast Asia were met either with newly activated units or with units assigned to the Strategic Army Force (STRAF). (The STRAF is that part of the Army, normally located in the continental United States and Hawaii, that is trained, equipped, and maintained for employment as necessary.) As units were withdrawn and deployed, action was taken to reconstitute the STRAF.
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Reconstitution is necessary not only to maintain a strategic reserve to meet current plans and possible contingencies, but to provide a structure for individual progression in grade and occupational skills between periods of service in short-tour areas.
The Army Operations Center system was expanded during the year by doubling computer memory and mass storage capacities and by improving the printer and card punch capabilities. The number of data files was tripled and several were expanded, and the Army deployment status file, through which units programed for Southeast Asia are monitored to arrival, was refined. Flexibility, utilization, and response were improved and as the year closed an analysis of the entire system was under way. The remodeling and expansion of the center and installation of new equipment was completed in August 1966.
Strategic Mobility
Strategic mobility has always been an essential element of military preparedness. Its principal requirements today include a combat ready force; a mixture of adequate airlift and sealift; and the prepositioning of materiel, in unit sets, on land and afloat in those areas of the world most likely to become active arenas.
During the past year the Army has studied the entire subject of strategic mobility to measure requirements and capabilities and determine what balance between airlift, sealift, and prepositioned materiel will best meet national strategy requirements. The Army supports programed levels of active and reserve strategic airlift forces as an interim solution to strategic mobility requirements, and strongly supports the currently constituted Civil Reserve Air Fleet (CRAF) program as an augmentation resource.
An immediately responsive airlift force is the primary means of meeting the early deployment requirements of our worldwide contingency plans. Airlift is presently available to deploy unit personnel to areas where prepositioned materiel is located, or to deploy selected Army units with their equipment and supplies. The introduction of the C-5A aircraft in 1970 will provide, in conjunction with the C-141, a capability for airlifting entire army divisions with their equipment. The C-5A is designed to deliver combat units, both troops and accompanying equipment, and their subsequent support requirements into support area airfields; allow rapid loading and discharge of supplies and equipment; and be capable of sustained speeds of 440 knots and ranges in excess of 3,000 nautical miles with a 100-ton pay load.
The Army supports a modernization program for the Military Sea Transportation Service (MSTS), along with the development of fast and efficient cargo ships under U.S. registry. It also supports a sealift
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program, similar to the CRAF program, through which the U.S. merchant fleet would be more responsive to Department of Defense requirements during national emergencies.
The fast deployment logistic (FDL) ship represents the most recent effort to provide a balanced rapid deployment sealift capability for land combat forces during the 1970’s. These ships will be used primarily to deploy, and/or preposition afloat, materiel for selected forces whose personnel can then be airlifted at a considerable reduction in total deployment time. The FDL ship’s unique design concept combines a speed of at least 24 knots, controlled humidity storage areas, a rapid roll-on/roll-off capability, a rapid lift-on/lift-off capability, stern ramp discharge for amphibious and beach lighter operations, and the capability to transfer men and materiel from ship to shore by helicopter. These ships will be capable of carrying their own lighters and helicopters. The introduction of the FDL ship has been delayed for lack of funds.
The Army has prepositioned in Germany the equipment for two divisions and a number of support units. Land prepositioning has certain limitations. It requires host country approval, the equipment must be used in conjunction with airlift, and rapid response is possible only when the materiel is to be used reasonably near the prepositioning location. Forward floating depots overcome some of these limitations and provide more flexibility in the field of rapid deployment to meet all kinds of contingencies.
Special Forces
During fiscal year 1967, Special Forces units continued their assignments in Germany, Panama, Okinawa, Vietnam, and at Fort Bragg, N.C. The 46th Special Forces Company was deployed to Thailand, and the 7th Special Forces Task Force returned from the Dominican Republic and rejoined its parent unit at Fort Bragg. Since all units except those in Vietnam were understrength, an intensified recruitment and training program was begun to bring them up to authorized strength.
In Vietnam, the 5th Special Forces Group continued its work in remote areas, carrying out its broad mission of developing, organizing, equipping, training, and directing the Civilian Irregular Defense Group to conduct stability and unconventional warfare operations. The Group has also been responsible for a wide range of stability missions of its own, including rural construction, tactical training, military civic action, and psychological operations. This assistance has contributed to interdiction of infiltration routes across international borders.
The 8th Special Forces Group of the Latin America Special Action
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Force in Panama, advising and assisting Latin American military and paramilitary forces in internal defense and development activities, has trained over 45,000 military personnel in 17 countries.
Civil Affairs and Psychological Operations
Traditionally and historically the Army’s principal role in civil affairs has been military government. The scope of Army activity has been limited to the performance by experts of highly specialized functions in the fields of finance, government, public safety, public works and utilities, and health and sanitation—functions essential to a viable society. In terms of authority, the Army was supreme; measured in professional skill, the Army was limited to the expertness of the men available within the civil affairs unit. Additional military support was conditioned by combat requirements.
The traditional concept is changing. The most significant civil affairs development in Vietnam, for example, is the increasingly active role being played by other than civil affairs units. As a result of experience in Vietnam and in the Dominican Republic, the Army is now reexamining its civil affairs capability. Our experience over the past several years in brush-fire wars has made it clear that we must improve the ability to operate in the field of civil affairs in order to support the Army’s third principal mission—stability operations. The philosophy is that civil affairs is a job for everyone, be he infantryman or quartermaster, artilleryman or engineer. The subject of civil affairs was stressed in several publications issued in April 1967 and actions are being taken to increase the quantity and quality of instruction in the subject in Army schools and to bring it into tests and exercises.
The new concept will not significantly alter the role of civil affairs in the Reserves. The active Army’s civil affairs role is to maintain, restore, or establish a climate of order within which a government can function effectively, while the Reserve’s is to provide civil affairs support in the communications zone and field army areas and to reinforce stability operations.
Army psychological operations forces were especially active in the Pacific during this fiscal year. The group in that region, with headquarters on Okinawa, had detachments in Japan, Korea, Taiwan, Thailand, and Vietnam, and provided strategic support to military activities in all of those areas, but especially in Vietnam. In Vietnam the Army contributed substantially to the staffing of the U.S. Joint Public Affairs Office. A tactical psychological operations battalion directly supported Military Assistance Command, Vietnam, operations in-country, U.S. Army psychological operations in Vietnam supported both tactical operations and revolutionary development
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activities, by conducting ground and air loudspeaker missions; printing and distributing safe conduct passes, leaflets, posters, news sheets, and song sheets; distributing radios; producing radio and television material; training Vietnamese units; supporting traveling entertainment teams; providing advisors to the Republic of Vietnam down to sector level; and supporting civil affairs and civic action programs.
Psychological operations units also were assigned in Germany and Panama, those assigned to Panama providing mobile training teams for Latin American nations. A group at Fort Bragg, site of the U.S. Army Special Warfare School, where the primary psychological operations courses are taught, served as the strategic augmentation and training and rotational base for psychological operations units.
Civil Defense
The civil defense program, an integral part of the Nation’s defense posture, is designed to save lives, limit damage, and speed recovery in the event of nuclear attack against the United States. The primary focus of the program since 1961 has been to develop a nationwide fallout shelter system through the dual-purpose use of existing public and private structures to provide protection from radioactive fallout for everyone in the United States. This primary effort and allied emergency systems are managed and administered by the Office of Civil Defense (OCD) through the legally constituted authorities of State and local governments.
Civil defense operates on a day-to-day basis with all 50 State governments and with the governments of thousands of local jurisdictions, and it receives support from many organizations, community leaders, and individuals.
The National Fallout Shelter Survey, conducted by the U.S. Army Corps of Engineers and the U.S. Navy Facilities Engineering Command at the close of fiscal year 1967, listed 175,496 facilities with fallout-protected space for more than 160.2 million persons. About 98.7 million of these spaces were licensed, 92.7 million marked with shelter signs, and 78.4 million stocked with Federal supplies sufficient to sustain occupants for 8 days, if shelter areas were filled to their rated capacities, or 47.1 million for a full 14-day period.
All 50 States have active civil defense programs, and 4,232 local jurisdictions, representing more than 85 percent of the Nation’s population, are involved directly with the OCD in the nationwide civil defense program.
Progress was made during the fiscal year in the second major phase of the shelter program, the Community Shelter Planning Program (CSP). It is designed to develop procedures in each community
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for making efficient use of available protection against radioactive fallout, to get this information to each citizen, and to prepare each department of local government to support the plan and meet its responsibilities in time of major disaster. CSP projects in process by July 30, 1967, covered 400 counties containing a total population of 44 million people.
Approximately 162.8 million fallout-protected spaces, with a protection factor (PF) of 40 or better, had been located through various surveys by the end of the fiscal year. In addition to the national survey figure noted above, this includes approximately 2.3 million spaces developed through the Small Structures Survey, a continuing survey of structures that have space for at least 10, but not more than 50 persons.
The home fallout protection survey has been completed in five States and was under way in five more at yearend. This survey is being conducted by interview and mailed questionnaires, and 91 percent of the homeowners contacted in the first five States responded. After the householder provides certain structural information, he is sent a confidential report on the amount of fallout protection provided by the best location in his basement, together with suggestions on how to improve his protection.
Over 13,500 architects and engineers have been trained and certified in fallout shelter analysis and “slanting” techniques which, if applied at the design stage of new buildings, will provide or increase fallout shelter at little or no increase in cost on construction. The packaged ventilation kit, an air exhaust fan system, was developed by OCD for use in shelter areas that need added ventilation in order to take care of more people.
Complementary civil defense systems, necessary to effectively use fallout shelters and conduct recovery operations, were improved and expanded during the year. These nationwide supporting systems include warning, communications, monitoring and reporting radiological contamination, and damage assessment.
Emergency Operating Centers (EOC’s) are primary components of the complementary defense systems. These are fallout-protected centers equipped with necessary communication links and are for the use of key Federal, State, and local officials in directing civil defense actions during major emergencies.
Actions are bpiing taken to tie the EOC’s to the Emergency Broadcasting System (EBS), a system managed by the Federal Communications Commission in cooperation with the broadcasting industry, to reach the public with official information at the time of an attack emergency.
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All States and over 4,200 of the local governments participating in the civil defense program submitted annual program papers, required for eligibility in receiving Federal assistance. The assistance includes Federal support in technical guidance, training and education, and financial assistance.
Other civil defense supporting activities included research to develop program direction and guidance; the national civil defense training and education programs; preparation of emergency public information to inform the public of actions to take in a major emergency ; community service activities to gain the participation of industry, national organizations, associations, institutions, and agencies; and liaison with civil defense authorities of friendly countries. A summary account of the civil defense program is included as an annex to this report.
The Army recognizes the important role of a strong civil defense program in the total national defense posture and has continued to strengthen its ability to provide military support for this program.
The military Services represent a significant source of assistance to civil defense because of their organization, specialized equipment, disciplined manpower, and long experience in dealing with emergencies.
The State adjutants general and their staffs at State military headquarters exercise operational employment of military personnel and units made available for military support of civil defense at the State level. The Commanding General, U.S. Continental Army Command (USCONARC), and the CONUS Army commanders guide and control the State military headquarters in the performance of civil defense missions in the 48 contiguous States. In Alaska, Hawaii, and Puerto Rico similar headquarters are controlled by the commanders of appropriate unified commands.
Manpower authorized to plan and conduct the military support mission totaled 263 at the end of fiscal year 1967—15 military and 18 civilian personnel at USCONARC and CONUS Army Headquarters; two military personnel and one civilian personnel at the National Guard Bureau; and 227 civilian National Guard technicians at State headquarters.
The Army also continued to provide trained Reserve officers to assist the States in the planning phase of civil defense as well as in military support of civil defense. This is being accomplished by forming Reinforcement Training Units from members of the Ready Reserve Mobilization Reinforcement Pool to participate directly on a voluntary basis in civil defense planning and training activities.
III.	Force Development: Plans, Doctrine, Organization, and Systems
The Army, like the other Services, annually develops detailed requirements fbr balanced and ready forces projected some years into the future. Army force development plans are geared to overall patterns established by the Secretary of Defense and include joint requirements and allocations to unified commands. The availability of manpower and other resources affects force development, and readiness and effectiveness are maintained only through constant review and refinement of Army plans, doctrine, organization, and systems.
Plans and Programs
The Army Force Development Plan, published annually, serves as the principal instrument for planning changes to the Army portion of the Five-Year Defense Program, which in turn is the central vehicle for force planning for the whole Department of Defense. Recommendations in the Army Force Development Plan are developed within the context of the strategy, objectives, and forces set forth in the Basic Army Strategic Estimate and the Army Strategic Plan. The Army Force Development Plan provides a framework within which problem areas are identified, alternatives evaluated, and requirements forecast. The goal of the whole planning process is to provide for the creation of balanced and ready Army forces within the limits of reasonably attainable resources.
An Army Force Development Plan will be published early in the 1968 fiscal year, covering the 20-year period 1968-87 but oriented primarily toward influencing Army budget estimates during the course of the 1969-73 Five-Year Defense Program. Force levels are based on Department of Defense guidance. The plan compares each force with the fiscal year 1968 program, assesses the capabilities of each force in major functional areas, analyzes force alternatives for personnel and individual training requirements, provides logistic planning guidance and a forecast of requirements and costs, discusses the relationship of research and development to modernization, and outlines a modernization program for selected major items.
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To provide an automatic data information file pertinent to both, the current and projected Army force structure, a force accounting system was established during 1967. It combines information and data previously provided by nine different files and includes complete information on the units in the force structures of the active Army and the reserve components, as well as those of the Army of the United States, which are maintained in an unmanned status. It also includes a record of transactions that cause changes in the Army force structure. This system will be expanded to include mobilization planning data and force planning information needed to meet changes required by the Five-Year Defense Program.
Over 100 urgent requirements for nonstandard equipment for Vietnam have been processed during fiscal year 1967 under the Army’s ENSURE Program (Procedures for Expediting Non-Standard Urgent Requirements for Equipment). Although worldwide in application, this program is currently geared to the war in Vietnam. Its purpose is to expedite development and procurement of items for which field commanders have stated urgent need. This includes equipment not in the Army inventory, commercial items, and items being developed but not yet standardized. To be eligible for the ENSURE Program, proposed items must provide a new or improved capability for a unit engaged in combat operations.
Authorization and Productivity
The New Army Authorization Document System (NAADS) initiated on October 1, 1965, and outlined in some detail in last year’s report, has been accelerated so that all Army units were to have been converted by December 1967. The system is linked to the unit readiness system and Army organizational policies. The readiness system measures the operational readiness of units and force structures. When unit personnel and equipment authorizations are recorded on automated data tape, the Army will have the means to program, procure, and distribute manpower and equipment in terms of overall requirements and priorities.
Departmental staffing guides were updated during the year in line with functional and policy changes related to Army field activities. Completed or impending changes to the Staffing Guide for U.S. Army garrisons reflect consolidation of supply, maintenance, and service functions—formerly performed by the technical services—into single organizational elements, and organizational and staffing adjustments required by the modified military pay voucher system. The Staffing Guide for Headquarters, CONUS Armies, was revised to emphasize functional consolidations in former technical service areas, and the
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Staffing Guide for U.S. Army Corps was changed to provide guidance for utilization of school-employed retired officer and noncommissioned officer instructors in ROTC programs at military junior colleges, military institutes, and high schools in lieu of the Army personnel previously authorized in these institutions. Other activities stressed normal revision and updating processes to keep staffing guidance aligned with current military operations, organization, and manpower policies.
In connection with manpower utilization, over 415 surveys were made worldwide during the year, covering 252,875 spaces and resulting in redistribution of 15,717 to higher priority requirements.
In accordance with the policy established by President Johnson last year that military personnel must be “assigned to duties for which there is a direct military requirement,” the Army’s civilianization program was initiated. Under the first phase of this program, from January 1966 through June 1967, a total of 27,879 military positions were converted to civilian occupancy. The second phase of the program calls for the conversion of 13,295 more military positions to civilian occupancy during the first three quarters of fiscal year 1968. The labor market is expected to be adequate for approximately 7,000 of these positions and marginal for the remainder.
TOE service and support activities absorb about two-thirds of the total manpower required for the Army in the field, and about half of that in turn is considered to be measurable in terms of work output. TOE manpower authorization criteria are being developed to cover service and support functions in order to insure optimum allocation. Criteria have been established for about 15 percent of the measurable service and support activities, or about 25,000 spaces. By 1970, based on current force structure planning, some 200,000 spaces will be covered.
Productivity measurement studies were extended in fiscal year 1966 to laundry and warehousing activities to determine whether manpower was being effectively utilized in those areas. Using fiscal year 1964 as the base year, an index for productivity for labor in laundry activities showed increases for fiscal years 1965 and 1966 of 9.7 and 2.5 percent, respectively. Warehousing activities productivity increased by 7.4 percent in 1965 and dropped below 1964 by 1.5 percent in 1966.
The studies showed that the buildup in Southeast Asia affected these activities and that considerable effort was required to maintain a balanced workload and personnel. Deployments and drawdowns decreased workload, but since man-hours did not decrease as rapidly as the workload, only a minimum productivity increase was achieved in laundry activities. The volume of orders, reduced delivery time requirements, a sharp increase in priority shipments, and changed
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preservation, packaging, and packing specifications all contributed to a reduced productivity in depot issue activities. In many cases the output capacity of aging depot facilities is not equal to the volume and time demands of the present situation. The Depot Modernization Program and Project DIMES, both discussed later in this report, are aimed at establishing design capacity equipment layouts that, in conjunction with modem industrial engineering methods, will allow productivity compatible with plans and comparable with modem industry’s methods.
Systems Development
The Army made substantial progress during fiscal year 1967 on the automatic data systems within the Army in the field (ADSAF) program, reported upon at some length in last year’s report. The system is designed to provide a field commander with more accurate and timely information in making tactical decisions. A fixed site service bureau was established at U.S. Army, Europe, headquarters; development of the tactical operations system element of the program has been proceeding in a 7th Army environment and definition of the contributory system will lean heavily on this field evaluation. Meanwhile, action on the combat service support system element advanced toward installation of a prototype at Fort Hood, Tex., while the tactical fire direction system element proceeded in the contract definition phase.
To improve Army materiel readiness, a model was developed in this report year for the disciplined management of materiel throughout its life cycle. The model is based on analyses and recommendations of the Department of the Army Board of Inquiry on the Army logistics system (see ch. VIII) and a special committee study. It was approved by the Chief of Staff as a basis for revising regulations that govern materiel management, and when this is done a set of detailed and integrated manuals will be prepared which will govern the acquisition, use, support, and disposition of Army materiel.
The model, which has been reduced to a graphic flow chart for ready reference, modifies the current materiel acquisition system but does not involve revolutionary changes. It is divided into four phases— concept formulation, contract definition, development and production, and operations and disposal. It begins with concepts for the entire Army of the future, progressively refining them to specific materiel systems during the latter part of the concept formulation phase. The model then identifies the interrelationship and ordered sequence of significant actions to be taken during the remaining three phases.
The model format is designed to show the relationships between the user, developer, trainer, and higher headquarters. For example,
860—499 O—70 *—ill
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user needs—stated as operational capabilities objectives and qualitative materiel development objectives—guide research and exploratory development. The results of the developmental effort, fed back to the user, enable the user to refine broad objectives and state requirements more precisely. Interaction between the user and the developer proceeds through development of technical approaches, tradeoffs, and cost effectiveness studies. These procedures are designed to insure that responsibilities for the six Department of Defense prerequisites to contract definition are delineated and completed systematically by the time the request to develop is submitted to the Office of the Secretary of Defense. The model then depicts the process by which the specific system is developed, produced, distributed, operated, and finally phased out of the inventory. Throughout the process, specific steps are identified to insure that related doctrine, organization, personnel, force structure, testing and evaluation, training, and logistical actions are accomplished concurrently with hardware development.
A significant feature of the model is the provision for evaluation and decision points throughout the materiel, life cycle. During the critical development and production phase, formal system status evaluations have been introduced into the management process to provide disciplined challenges of the requirement and development effort to determine subsequent actions—including the very basic decision as to whether development should continue.
Not all systems will follow each step of the model from concept to disposal. A breakthrough in technology, for example, may permit omission of certain exploratory or advanced development efforts. And of course the acquisition of a pair of boots need not undergo all of the processes required for a tank.
The materiel life cycle model will be a basic tool of the Department of the Army Systems Staff Officer (DASSO). The DASSO system was initiated in 1962 to monitor selected materiel items or systems requiring special management. DASSO monitorship usually begins with approval of materiel requirements and ends after distribution has been made and no extraordinary management problems exist. There were developments in many of these systems during the year. For example, several changes affecting the combat arms systems occurred during the year. The small arms weapons systems (SAWS) study to evaluate potential weapons that might replenish or replace current small arms was completed and led to decisions to adopt the M-16A1 (5.56-mm.) as a standard Army rifle in addition to the M-14 (7.62-mm. NATO); limit procurement for the foreseeable future to the M-16A1 rifle and the XM-177E1 submachinegun (a short M-16E1 rifle); continue research and development on a special purpose individual weapon (SP1W); retain the M-60 (7.62-mm. NATO) machine
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gun as the standard one for the Army; and initiate a comprehensive long-range Army small arms program that would include expanded research and development efforts for more effective weapons. Combat evaluations of the XM-177E1 submachinegun and the XM-148 40-mm. grenade launcher attachment were being conducted in Vietnam.
In artillery systems the new lightweight 105-mm. howitzer M-102, originally designed for use in airborne and airmobile units, was introduced into Vietnam in 1966. With its capability to be moved by helicopter and its 360° traverse, it has been highly successful there in providing timely and effective fire support to the combat arms. The development of a nuclear projectile for the 155-mm. howitzer has enabled the Army to eliminate the DAVY CROCKETT from units equipped with that howitzer, i.e., all divisions except airborne and airmobile. The nuclear projectile has greater range and a larger yield, and is less vulnerable than the DAVY CROCKETT.
In the field of surface-to-surface missiles, the LANCE system is being developed to replace the HONEST JOHN and LITTLE JOHN free rockets. It is now in the late stages of tactical prototype development and has been undergoing extensive testing at White Sands Missile Range in New Mexico. On April 7, 1967, development of an extended-range LANCE was announced following successful tests indicating that extended range could be achieved with minimum modification.
Two smaller missiles used in the antitank and assault roles were continued in development during this period. The TOW (Tube launched, Optically tracked, Wire guided) entered engineering-service tests and engaged fast-moving targets at more than a mile with pinpoint accuracy. It will replace the 106-mm. recoilless rifle and the French developed ENTAC missile. The TOW has been successfully fired from the helicopter and will replace the SS-11 there. The medium antitank weapon (MAW), recently renamed the DRAGON, a smaller, man-portable antitank missile, is being developed to replace the 90-mm. recoilless rifle. Initial testing was begun at Cape Kennedy, Fla.
The Army also took the first step toward reducing the number and types of system test equipment by procuring a number of land combat support systems (LOSS) to support the SHILLELAGH missile system. This automatic testing, fault isolation, and repair system will support the TOW, LANCE, and DRAGON systems as they are fielded and may be applied to the CHAPARRAL and REDEYE in the future.
Engineering models of the new PERSHING missile system ground support equipment were demonstrated in April 1967. This system will substitute wheeled for tracked carriers and the principal items of equipment will be of improved design. Meanwhile, PERSHING forces
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deployed in Europe improved their capabilities with present equipment. The PERSHING’s excellent flight record was sustained in the year’s firings by U.S. and West German units. In late June 1967, JCS operational test program firings were initiated to establish performance characteristics for the system.
There were several developments in the air defense field during the 1967 fiscal year. An improvement program was continued on the NIKE-HERCULES, the second generation missile of the NIKE family, in use since 1958. This missile was made more effective, beginning in 1961, by adding a field applied kit. A further major improvement study was begun in 1966 and completed this year with recommendations that will maintain and project system capabilities in terms of present and anticipated threats. Not a completely new system, the HERCULES modification will simplify training, maintenance, operations, and logistics, and will make use of an existing Government-industry team in an orderly engineering and production program.
Selected units equipped with the HAWK air defense missile system are to be improved by adding a self-propelled capability using a modified M-548 cargo carrier. This will increase the mobility and flexibility and reduce the vulnerability of the units that provide air defense for the forward elements of the field army.
Both the HERCULES and the HAWK will benefit from the introduction of the AN/TSQ-73 fire distribution system, a high-speed and largely automatic coordination system planned for development. Versatile data processing and display equipment will receive target data from multiple sources and process and pass it to the missile batteries. The AN/TSQ-73 will incorporate the latest electronic techniques and will give the Army a highly mobile, dependable, fast-reacting, and flexible air defense control and coordination capability.
Looking further into the future, the Secretary of Defense in May 1967 approved initiation of a project for the development of a new surface-to-air missile system, the SAM-D. This will be an air defense system to defend the field army against both aircraft and tactical missiles and it will be adaptable to use in the continental United States. The system will be mobile and capable of engaging several targets simultaneously. The SAM-D would replace the current HAWK and HERCULES systems except possibly the self-propelled version of the HAWK described above. It will complement an advanced forward area air defense system in the field Army and the NIKE-X in the continental United States.
After several years of intensive research and development, the REDEYE air defense system entered the Army inventory in this fiscal year. The small missile and its launcher can be transported and
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employed by one man. It provides the frontline soldier with a capability for defending his unit from attack by all types of aircraft.
The Army has been developing two weapons, one a gun, the other a missile, for defense against aircraft attacking at altitudes of less than 10,000 feet. The Vulcan is a surface-to-air version of the six-barrel Gatling gun used in Air Force planes for several years. The Army version will fire at 3,000 or 1,000 rounds per minute and the gunner can select bursts of 10,30,60, or unlimited to engage attacking aircraft. The fire control system includes an on-board radar that provides range and speed information for tracking. The missile in this surface-to-air team is the CHAPARRAL. It uses an infrared seeker that locks onto the engine heat of an attacking aircraft while the missile homes on the target. Composite battalions of 32 Vulcans and 32 CHAPARRALs will be organic to Army divisions and will be organized for theater and field army use as well as to defend vital rear areas and installations.
The Army has deployed one of its older weapons systems to Vietnam to assist in ground support and air defense operations. The reliable twin 40-mm. M-42 Duster has been serving Army and Marine units since November 1966. Each gun is capable of firing 120 rounds of high explosive, incendiary, or armor-piercing ammunition per minute. The maximum effective range of the gun in the ground role is 1,650 meters. The Duster weapons were reconditioned before deployment and have confirmed their versatility.
Joint United States-German development of a main battle tank (MBT-70) has progressed during the fiscal year. In January 1967 a wood and metal mockup was completed and reviewed by representatives of both countries. The feasibility of such key components as the engine, suspension system, and gun loader has been demonstrated by actual performance. Most design goals are being met and the pilot model will soon be completed.
It is becoming more apparent that the MBT-70 will represent a major advancement over present tanks. The crew will be reduced to three. Compared with the present M-60A1, the MBT-70 will have far greater firepower, considerably more protection (including nuclear protection), and greatly improved mobility through its advanced suspension system. It will be the first U.S. tank designed to live and fight on the nuclear battlefield.
On June 30, 1966, the Army contracted with the Federal Republic of Germany for production of the HS-820 weapon system. A 20-mm. rapid-firing gun, the HS-820 will be mounted on the M-114 command and reconnaissance vehicle. Initial production tests on ammunition have been satisfactory. Production weapons were to be tested beginning in July 1967.
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Army Aviation
In September 1966 a study was initiated to develop updated aviation requirements for the combat structure of the Army for fiscal years 1968-72. The evaluation was made in the light of combat experience in Southeast Asia and other developments that followed a similar study made in 1965.
Within the combat structure of the Army, each type of functional task that could be accomplished by aircraft was identified. The primary tasks were established as command, control and communications, intelligence, maneuver, firepower, and logistics. The numbers of aircraft required for each task were determined from a consideration of frequency and duration of missions. Alternatives were identified and compared on a cost effectiveness basis through analysis of war games, historical data (particularly Vietnam), and other studies. The best alternative was selected and the required aviation resources were fitted into units in the combat structure. The final report was submitted on March 31,1967, and was being staffed at the close of the fiscal year. It will be useful in budgetary and manpower decisions connected with Army aviation.
There were noteworthy developments in several aircraft programs during the year. By the end of the period a total of 1,071 0H-6A (Cayuse) helicopters had been placed under procurement and the first 66 received from actions extending back to the 1965 fiscal year. The first AH-1G (Huey Cobra) helicopter, an improved interim armed craft for Vietnam, was received in March 1967, and procurement was approved for OV-1D (Mohawk) aircraft, an improved version of the present model that will provide better imagery, faster service, and greater flexibility in use. An improvement plan was initiated for the CH-47 (Chinook) to restore speed and lift capabilities degraded by combat weight and density altitude considerations in Vietnam; this will include a new rotor blade, an uprated engine and drive system, and increased integral fuel capacity. In addition, the first prototype of the AH-56A (Cheyenne) helicopter was completed ahead of schedule in May 1967 while study of the total requirement continued preliminary to procurement action. Finally, the UH-1D (Iroquois), the primary tactical utility transport in Vietnam, was improved with the development of an engine that will be more suitable to the high temperature and altitude conditions in Vietnam. By the close of the year UH-1D production included the improved powerplant and a new Iroquois designation for the model—1H.
Operations in Vietnam have continued to create increased requirements for Army aviators. During the fiscal year 3,790 aviators were trained, over 90 percent of them rotary-wing pilots. An active Army
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training output rate of 410 pilots per month, was achieved; a goal of 610 per month is programed for the first quarter of 1968.
Requirements for aviation units led to an increase of 17 percent over the 1966 structure. The big factor was expanded helicopter operations in Vietnam, where the principal demand was for the UH-1 (Iroquois) troop carrier. The helicopter has been actively used in counterinsurgency operations.
The magnitude of the Army aviation buildup in Vietnam is evident from a comparison of 1-month periods a year apart. In June 1966 there were 2,000 Army aircraft in Vietnam; they flew 111,000 combat sorties, carried 33,000 tons of cargo, and transported 361,000 troops. During the same month in 1967 the number of aircraft had increased to nearly 2,600; they flew 243,000 combat sorties and moved 54,000 tons of cargo and 573,000 troops. Aviation improved overall Army capabilities in combat. The chief benefits lay in the improved mobility of infantry and light artillery units and the improved capability to sustain them in combat operations at increased distances.
Chemical-Biological-Radiological Matters
Chemical and biological weapons that produce lethal or incapacitating effects comprise a small but highly important part of the total Army weapons inventory. They contribute to national security by providing a deterrent against the use of similar weapons by an enemy and by providing a retaliatory capability.
The Army Chief of Staff on April 7,1967, approved a new chemical and biological weapons surety (CBS) program, to be effective on July 1, 1967, covering safety, security, and reliability and emphasizing such matters as personnel and physical security, general safety, and storage and packaging. The CBS program will be managed by the U.S. Army Nuclear Weapons Surety Group at Fort Belvoir, Va.
In Vietnam, the riot control agent, OS, has been used from time to time. It was tried first for tunnel clearing operations and subsequently proved helpful in situations where the enemy is intermingled with the civilian population. CS has also proved useful in such tactical operations as clearance of fortified positions, reconnaissance for concealed forces, fire suppression in villages containing Viet Cong and civilians, and defense of fixed positions. It has been effective when delivered by helicopter in a suspected enemy area, in forcing the Viet Cong to expose their positions.
A family of riot control delivery systems is now being developed to exploit the agent’s capabilities, including air-droppable CS clusters and an expendable portable launcher to be used as a counter-ambush and perimeter defense weapon. In this connection a lightweight pro
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tective mask has been developed and is being evaluated in Vietnam. It is about half the weight and a third the bulk of the standard M-17 mask and is expected to provide adequate protection against riot control agents while decreasing the soldier’s load.
IV.	Training, Intelligence, and Communications
Training and Schooling
The Army’s training load grew during fiscal year 1967 in company with the buildup and the expanding commitment in Vietnam. New training centers were established at Fort Lewis, Wash., Fort Bragg, N.C., and Fort Campbell, Ky., each with a capability to start a training cycle a week for five basic combat training companies of 220 trainees each. The addition of this weekly capacity of 3,300 trainees completed the expansion of this portion of the training center system and provided a total entrance capacity of 63 basic combat training companies (13,860 men) each week. However, training requirements were reduced in February 1967, leading to an adjustment of the base to 59 companies.
The expansion in basic combat training (BCT) automatically created increased loads in advanced individual training (AIT) and combat support training (CST) 2 months later as graduates emerged from the basic training program. In fiscal year 1966, this was accommodated simply by increasing class sizes and course frequency, but early in fiscal year 1967 training companies and brigades had to be added to the training center system. A chronology of this expansion is shown below.
Time Period {Fiscal year 1967)
Installation
Expansion
September 1966___Fort
September 1966___Fort
September 1966___Fort
September 1966___Fort
September 1966___Fort
October 1966_____Fort
February 1967____Fort
February 1967____Fort
March 1967_______Fort
March 1967______Fort
April 1967_______Fort
Dix, N.J__________________
McClellan, Ala____________
Lewis, Wash_______________
Huachuca, Ariz____________
Jackson, S.C______________
Polk, La__________________
Lewis, Wash_______________
Knox, Ky__________________
Ord, Calif________________
Lewis, Wash_______________
Dix, N.J__________________
CST Brigade.
AIT Brigade.
AIT Brigade.
CST Brigade.
Inf AIT converted to RVN oriented.
One RVN Inf AIT Co added.
One AIT Co added.
1 Co Armor AIT added every other week.
1 Co Inf AIT added.
1 Co Inf AIT added.
1 Co Inf AIT added..
When active Army training requirements were reduced in February, attention was centered on reducing the training backlog in the reserve
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enlistment program (REP). Although total active Army and REP requirements for the last half of the fiscal year could be accommodated, as indicated above, within 59 rather than 63 BCT companies, AIT requirements for the period rose as a result of the peak active Army input to training during the first half of the year and the changes in military occupational specialty (MOS) requirements of the active Army and the reserve. Thus some of the resources of the BCT company adjustment were applied to the AIT base.
As in the previous fiscal year, the Army in 1967 emphasized training for service in Vietnam. The special Vietnam-oriented program for infantrymen that began in December 1965 with a weekly capability of 454 trainees was expanded to handle 1,135 each week. The policy that all Vietnam-bound personnel, regardless of branch, receive special training was continued, and included appropriate orientation and additional emphasis on such subjects as perimeter defense, jungle survival, security, and ambush drill. Individual training programs were revised on a continuing basis in line with findings developed in the operational reports-lessons learned program established last year.
Even with this expansion in the training center system in fiscal year 1967 it was still necessary to give basic combat and advanced individual training to 24,300 new men in active military units during the first half of the fiscal year. More than 55,000 had been trained in this manner in the previous year.
A comparison of training center operations for fiscal years 1966 and 1967 shows an increase of 46,000 in the annua] average training load and an increase of 166,000 in total training input in 1967.
The Army school system was also expanded to meet requirements for trained personnel to support operations in Southeast Asia. As a result, 105 courses at 11 service schools operated on a double shift and 27 courses at five of these schools on a triple shift. Entering Army service schools in the 1967 fiscal year were 402,000 students as compared with 306,000 in 1966 and 195,000 in 1965.
The schools responded in every possible way to specific training requirements, creating new courses and revising established ones to fit new needs. Supply and maintenance courses, for example, were revised along functional lines to fit methods of operation in Vietnam.
The continuing demand for military assistance advisors in Vietnam was reflected in an active schedule of courses at the Special Warfare School, Fort Bragg, N.C. Four courses of 5 weeks’ duration were conducted to train officers in psychological operations and for advisory duty at all levels from sector to corps, and to train enlisted men as advisors in counterinsurgency operations.
To meet increasing demands for officers, the officer candidate school
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program was expanded in July 1966. Three new schools were opened: for ordnance officers at Aberdeen Proving Ground, Md.; for quartermaster officers at Fort Lee, Va.; and for transportation officers at Fort Eustis, Va. At the same time the branch immaterial program at Fort Knox. Ky., was converted to an armor course only. Officer candidate courses also were continued for infantry, artillery, engineer, signal, and Women’s Army Corps officers. The output from the OCS program was 19,326 officers in fiscal year 1967.
The Army’s civil schooling program provides individuals with graduate degrees for high staff and technical and school positions where degree requirements are certified by the Army Educational Requirements Board. During the year there were 1,900 students enrolled in the graduate program and 564 received degrees. Under the civil schools program another 5,700 were provided training in short specialized courses at civilian institutions. Training in management techniques, operations research and systems analysis, and computer support techniques was enlarged during the year.
Management education and training received considerable attention during the fiscal year. The 1966 Haines Board made a number of recommendations in this regard in its study of the Army school system and officer education, and further emphasis stemmed from actions at Defense level concerning resource management systems, methods, and techniques. To meet visible and emerging requirements, steps were taken to improve the coverage of instruction in resource management systems and general management in the core curricula of officer career courses in branch schools, the Command and General Staff College, and the Army War College.
There are 241 colleges and universities conducting the senior Reserve Officers’ Training Corps (ROTC) program on 256 campuses. Total student participation this year was 177,422 and 10,727 officers were commissioned. The international situation, strengthened management, increased publicity, and the ROTC Vitalization Act of 1964 have allowed the Army to apply greater selectivity in accepting cadets for the advanced program and this will enhance the quality of new ROTC officers. In fiscal years 1968 and 1969 an output of approximately 18,000 officers per year is forecast.
At the beginning of the 1967-68 school year, 800 4-year and 856 2-year scholarships were awarded, so that a total of 1,564 4-year and 1,467 2-year scholarships were in force. During the 1968-69 school year, another 800 4-year and 845 2-year scholarships will be awarded, bringing the total to 4,000. Scholarship recipients continue to be outstanding in terms of athletic ability and extracurricular achievement as well as in academic excellence.
To plan for the post-Vietnam period, when student interest in the
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ROTC may be expected to decrease, up to 15 new institutions will be taken into the senior program in 1968 and up to 15 more in 1969.
A new curriculum has been developed that is more in consonance with academic requirements of certain institutions. It has been offered for development at selected institutions with the intent that it will become optional for adoption by all senior ROTC institutions in fiscal year 1971. Meanwhile, the 2-year program authorized by the Vitaliza-tion Act has proven highly successful. This year, 1,874 applicants attended the basic camp at Fort Benning, Ga. Six advanced camps, supporting the traditional 4-year program, were conducted with 18,395 participants. Commencing July 1, 1967, the subsistence allowance for advanced course cadets was raised from $40 to $50 a month.
There were 416 high schools in the junior ROTC program during the fiscal year. Student enrollment was 87,338. Expansion will continue, reaching about 500 schools in fiscal year 1968 and up to 650 in 1971. Retired Army personnel hired by school officials are replacing the active duty instructors in this program, as provided for in the ROTC Vitalization Act.
There were 39 high schools in the National Defense Cadet Corps (NDOC) during fiscal year 1967 with a cadet enrollment of 12,257. Participation in this program will decrease as more units convert to the junior ROTC program.
The Deputy Chief of Staff for Personnel assumed staff responsibility for the ROTC/NDCC programs on July 1,1966. During the past year the management structure for these programs has been strengthened at the departmental, field army, and continental army levels.
Intelligence
There were a number of developments of some significance in the intelligence field in fiscal year 1967. The comprehensive tactical reconnaissance and surveillance (TARS-75) study was completed. Covering the period 1967-75, it addressed the essential elements of information required by U.S. Army battlefield commanders at all echelons, the optimum operational and organizational concepts to collect and process this information, and the impact of these needs and concepts on the research and development program. The study recommendations will now be used to evaulate new or improved concepts, establish joint reconnaissance and surveillance procedures within the framework of the study, and modify research and development objectives and requirements.
Also during the year, preparations were made to transfer responsibility for scientific and technical intelligence production on helicopters and ground effects machines from the Air Force to the Army.
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Effective July 1, 1967, the responsibility was to be handled by the U.S. Army Foreign Science and Technology Center.
The U.S. Army Intelligence Threats and Forecasts Group, estab’ lished in January 1966 to provide intelligence support for the Army study program, completed six of an 11-volume series entitled Forecast of Conflict Environment. The group uses operations research techniques to assess probable enemy forces and weapons systems, and maintains a “red-planner team” to apply potential enemy forces in war games against U.S. forces.
The progress of the Army Intelligence and Security Branch since its creation in 1962 was assessed by a special committee during the year, while branch officer advanced courses formerly conducted at the U.S. Army Security Agency and the U.S. Army Intelligence School were combined, in line with Haines Board recommendations, into a single course to be taught at Fort Holabird, Md., beginning with the 1968 academic year.
The personnel security program was also improved, to the benefit of the security posture of the entire Defense establishment. Control of Army counterintelligence investigative activities and resources has been progressively centralized under the Commanding General of the U.S. Army Intelligence Command. Investigations and request procedures were standardized to permit more timely response to investigation requests.
Major changes occurred when the Army was designated to establish and operate the Defense National Agency Check Center (DNACC) and the Defense Central Index of Investigations (DCII). Both are located at Fort Holabird under the Commanding General of the Intelligence Command. The DNACC conducts national agency checks for the entire Defense Department (average processing time is now about 15 days), while DCII receives and maintains tracings to the counterintelligence and criminal investigative files created by the Army, Navy, and Air Force, responding to requests for index readings in 24 to 48 hours. The average Army background investigation now takes only about 35 days.
Although clearance authorities are authorized to accept final security clearance certificates issued by previous commanders, such validation of top secret clearances was modified during the past year by requiring verification of the data shown on the current clearance certificate. This consists of a file check at the U.S. Army Investigations Records Repository to verify the information on the certificate, and it must be done within 60 days of an individual’s assignment to a new agency.
Until July 1966, personnel security investigations were not conducted on Army personnel until they required access to classified information, since many individuals entered, served, and left the
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Army needing no access. Recent advances in equipment and methods have changed the situation, and on July 1,1966, a policy of conducting an Entrance National Agency Check on all inductees and first-term enlistees was established. These are completed during basic combat training so that security clearance eligibility is established before graduation and gaining commanders can fully utilize their new personnel.
Another element of personnel security is the Ultra Sensitive Position Program, established in August 1966 at the direction of the Secretary of Defense. These are positions in which the incumbent influences or makes major decisons concerning far-reaching military policy or operations or has access to information whose disclosure could significantly affect national defense. Authority to designate such positions has been limited to the civilian and military officials at the top of the departmental and field structure, and the occupants of the positions are subjected to special background investigations above normal procedures and a 5-year updating investigation. This is supplemented by a day-to-day evaluation by supervisors or commanders. The Assistant Chief of Staff for Intelligence maintains a central record of all positions and incumbents in the program.
The Office of the Assistant Chief of Staff for Intelligence also administers the program under which certain foreign dignitaries visit the United States as guests of top Army or Defense officials or in connection with military assistance program activities. Nine VIP tours were conducted during the year, while some 1,750 Allied officers participated in orientation tours and 42,930 other foreign nationals visited military installations or commercial facilities that are under Army security cognizance.
Communications and Electronics
There were major Army communications developments in fiscal year 1967, involving the war in Vietnam, the relocation of American installations from France, and the move of the Strategic Communications Command from Washington, D.C., to Fort Huachuca, Ariz.
In Southeast Asia the Integrated Wideband Communications System was improved and extended. In South Vietnam and Thailand some 36 microwave and tropospheric scatter links were activated to extend that portion of the Defense Communications System to major U.S. bases. Plans and engineering were completed on an automatic telephone long-distance service for U.S. and allied forces throughout Southeast Asia, a system that will provide access to the Automatic Voice Network (AUTOVON) when it becomes operational.
The communications buildup for Vietnam reached a peak in the fiscal year as the majority of earmarked signal units were deployed.
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The general increase in Army maneuver forces and their support elements required a proportionate increase in both tactical and strategic communications in the war zone. At the same time, some of the Army’s latest tactical communications equipment, described below, was issued to units in combat.
In Korea a 15-station microwave system for the Republic of Korea Army, being built under the military assistance program and linking strategic locations between Pusan and Seoul, moved toward its scheduled completion in July 1967.
In Europe there was steady progress toward completion of the Army portion of the European Tropospheric Scatter System. A contract let in the latter part of the fiscal year should provide the Commander in Chief, European Command, with automatic service to 44 of the 66 sites in the system. Tributary site acquisition is the major deterrent to automation of the whole system.
The configuration of Army communications in Europe was significantly altered as a result of the requirement to remove U.S. and NATO activities from France. Of 38 major relocation projects, the Army, which operated major portions of strategic and command and control communications systems throughout France, completed 31 between January 1 and March 31, 1967. The remainder will be completed in the next fiscal year. The relocations were made without major disruption of operational traffic in Europe.
The Latin American communications system was expanded during the year with the activation of a U.S.-owned and contractor-operated station in El Salvador and a leased voice circuit from Panama to U.S. agencies in Uruguay. The system now consists of circuits from Panama to U.S.-owned and contractor-operated stations in seven Latin American countries, and leased circuits from Panama to U.S. agencies in five countries.
Progress and problems marked the automatic switching field during the year. Although access lines to the Automatic Voice Network (AUTOVON) were increased in the continental United States, there was some slippage in the overseas program. Meanwhile, the new Automatic Ditital Network (AUTODIN) system has performed well for data subscribers. While seven switches were added in CONUS during the year, there will continue to be problems until more government terminals become available. The overseas AUTODIN program also fell behind schedule, although site construction progressed rapidly and testing was under way on the Philippines switch—the first scheduled for 1967 operation. Finally, progress was made in the automatic secure voice communications program with installation progressing on 11 switches around the world.
The communications center of the Department of the Army in the
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Pentagon and the U.S. Military Assistance Command, Vietnam, in Saigon are being automated, and the changeover from manual to automatic operation moved well along toward expected completion early in fiscal year 1968.
In the satellite communications program, the research and development phase of the synchronous-altitude satellite communication (SYNCOM) program ended as the fiscal year opened. U.S. Army Strategic Communications Command personnel operated and maintained four of the five original ground terminals. That at Asmara, Eritrea, was inactivated in February 1967 and is being returned to the U.S. Army Satellite Communications Agency. The SYNCOM program will remain operational during the useful life of the SYNCOM II and III satellites, estimated at from 2 to 3 years. In the Initial Defense Communications Satellite Project there are currently nine terminals in operation. Thirteen more are to be delivered in July 1967, when the Pacific portion of the system will go into operation. The system will provide communications for national command and control and for command and control of tactical and strategic forces.
Several steps were taken during fiscal year 1967 to improve the management of Army communications, especially related to the Army’s responsibilities in the Defense Communications System. In March 1967 the Army Communications System Agency was established at Fort Monmouth, N.J., to provide centralized management of Defense Communications Agency projects and tasks, while in May a Defense Communications Systems Support Office was organized in the Office of the Chief of Communications and Electronics.
In fiscal year 1967 the standardization of command arrangements in the communications-electronics field in all Army component commands overseas was completed under an arrangement whereby the communications-electronics officer on the general staff of a component commander serves also as the commander of the area Strategic Communications Command element. This dual-hat arrangement, which places communications responsibilities in the hands of one man, was concluded last year in Europe and in the Signal Brigade in Southeast Asia. In November 1966 it was extended to the Army commands in the Pacific and the Canal Zone, while in April 1967 the circuit was completed in Alaska where a new Strategic Communications Command element was established.
In December 1966 the Headquarters of the U.S. Army Strategic Communications Command began to move from Washington, D.C., to Fort Huachuca, Ariz., a decision brought about by the rapid increase in the command’s strength, its dispersal in the national capital area, and its location in a prime target area. The move will continue through the 1968 fiscal year until only a liaison office remains.
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During the first half of the fiscal year the first AN/GRC-106 radio sets from initial procurement were issued to units in Vietnam. This is the basic radio in a new group of single sideband transistorized radio teletypewriter sets that will provide a new dimension in combat communications. The first quantities were shipped to Southeast Asia in April 1967.
A second generation of radio relay assemblages is planned to replace those currently used in the army area system. It consists of low, medium, and high channel capacity equipment: The AN/GRC-103, a low channel capacity radio for the division area; the AN/GRC-50, a medium channel set for corps and army command systems; and the AN/GRC-144, a high channel capacity radio for the corps and army areas. These sets may be used in various combinations and quantities to meet the needs of all field army organizations.
Another new set is the AN/GRC-163, designed to provide lightweight, multichannel communications between brigade and battalion headquarters. It will be used to replace wire lines normally installed between these headquarters, and initial issue to Southeast Asia will begin in September 1967.
These and other radio sets and their related equipment will comprise the Army’s communications up through field army level in the period 1967-70.
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V.	Personnel
The Impact of Vietnam
The general expansion of the Army and the increasing tempo of operations in Vietnam over the past 2 years have affected personnel management worldwide. It has been necessary to call upon Army elements from Alaska to Panama, from Germany to Japan, to sustain the training base and supply original and replacement needs in Southeast Asia, and this has led to a great deal of personnel turbulence. Since tours in Vietnam are normally limited to 1 year, a considerable problem has also developed in managing the rotation.
During calendar year 1965 all deployments to Vietnam were made at the expense of the Continental Army Command and particularly of the Strategic Army Force and the training base. To rebuild that base and provide cadre for deploying units required that personnel be withdrawn from commands with lesser priority—including those in oversea areas. During the past fiscal year there was considerable progress in restoring programed strength in the losing commands as skilled and trained personnel became available. Returnees from Vietnam were assigned either to posts in the United States or to oversea long tour areas after a visit home enroute.
A sharp rise in Army strength in Vietnam during the summer of 1965—brought about primarily by deployment of the 1st Cavalry Division—raised the prospect of a rotational peak 12 months later as tours expired. To bring the monthly rotation into line with personnel and transportation capabilities in 1966 and later, the August 1966 replacement requirement was partially spread over a 5-month period from June to October, while in Vietnam 30-day curtailments and 15-day extensions leveled the returnee load. The August replacement peak was thereby reduced by about a third.
Also during the year a Women’s Army Corps detachment was established in Vietnam, and about 120 WAC officers, warrant officers, and enlisted personnel were assigned to the Military Assistance Command and U.S. Army headquarters there.
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Military Personnel
Following the trend of the last several years, Army strength increased in fiscal year 1967 from 1,199,784 to 1,442,498—127,393 officers, 16,124 warrant officers, 1,296,603 enlisted personnel, and 2,378 cadets. The ratio of officer to enlisted personnel was 1: 9.0 as compared with 1: 9.2 on June 30,1966. Officer procurement totaled 44,086 during 1967.
OFFICER PROCUREMENT BY SOURCE IN FISCAL YEAR 1967
Source
Number
Service Academies________________________________________________
Reserve Officers’ Training Corps_________________________________
Officer Candidate School_________________________________________
Voluntary active duty____________________________________________
Professional (JAGC, WAC, MSC, CHAP)______________________________
Medical Corps, Dental Corps, Veterinary Corps____________________
Regular Army appointments (from civil life)______________________
Miscellaneous 1 2________________________________________________
Nurses and medical specialists___________________________________
Warrant Officers_________________________________________________
561
10, 689
19, 240
1, 595
1, 780
2, 380
36
103
1, 498
6, 264
Total___________________________________________________
2 44, 086
1 Includes administrative gains, such as recall from retired list, inter-Service transfers, etc.
2 Excludes reimbursable personnel.
The number of warrant officers increased from 11,318 to 16,124 by the end of the fiscal year, and the actual strength of the Army Nurse Corps was expanded from 3,735 to 4,545 despite a national shortage of nurses. A WAC Student Officer Program on a 1-year experimental basis was approved, under which selected women who have successfully completed the college junior course are enlisted in the Army Reserve in pay grade E-A during the senior year in college and are obligated to apply for commissions as second lieutenants in the WAC upon graduation.
Increasing requirements in Southeast Asia for aviators, for which increases in the training base had been approved during the previous 2 fiscal years, produced an aviator strength at end fiscal year 1967 of 12,908, an increase of 34 percent over the previous year. Most of this was reflected in warrant officer ranks, which accounted for 90 percent of the increase. Aviator strength will grow at an increased rate during fiscal year 1968 as a result of the new authorized aviator output level of 610 monthly for the active Army, approved in December 1966. By June 1967 some 500 aviators had been assigned to the training base as instructors to facilitate attainment of the higher rate. The expanded aviator procurement program was 'highly successful in this fiscal year,
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with, more than enough applicants to support increased school production. The year also saw improvements in the aviation personnel management program and in a career program for warrant officer aviators involving promotion and schooling opportunities to increase career appeal.
During the fiscal year the Army gained 190,320 soldiers by first enlistment, an increase of 20,207 or 11.9 percent over last year. Several new enlistment/reenlistment options were established. One guarantees a year of duty at a chosen station for Vietnam returnees provided a requirement exists. Another permits certain former servicemen who are not currently members of a reserve component to enlist in the Army Reserve for 15 months specifically for the purpose of serving a 1-year tour in Vietnam; it also authorizes qualified Reserve personnel a similar opportunity. These two programs became operative in November and December 1966, respectively, while in April 1967 a WAC recruiting duty reenlistment option was announced.
In the 1967 fiscal year 299,069 men were inducted into Army service—18,440 less than the previous year—and 21,926 inductees enlisted in the regular Army. Of the 489,389 entering the Army during the year without prior service, 38.9 percent were enlistees and 61.1 percent inductees.
There were also various other manpower acquisition programs in operation during the year. One—invitational recall of retired personnel in grades E-5 and E-6 on a voluntary basis—was discontinued when it produced less than a thousand acceptances. There is great potential in another program launched in the period—Project 100,000. In this Defense project, the Services will seek to qualify 100,000 men annually by lowering mental standards and waiving minor medical conditions that can be corrected within 6 weeks. Under the program men will acquire skills and aptitudes that would make them satisfactory soldiers and more productive members of society. The Army was well on the way to acquiring its quota of 30,400 by the first phase terminal date of September 30,1967, as the 1967 fiscal year closed.
In the area of promotion during the year, there were a number of developments generally designed to speed the advancement of the best qualified to meet a shortage of captains. On November 1, 1966, the active duty service requirement for promotion to first lieutenant was lowered from 18 to 12 months; at the same time, field commanders holding authority to promote to first lieutenant were also given authority to promote to the grade of captain. The point at which officers were eligible for a captaincy was set at 30 months of active Federal commissioned service. At the next grade level, the “fully qualified—not recommended” category was eliminated from the consideration for promotion to temporary major, leaving a clear-cut choice of “recom
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mended” or “not recommended” as a means of assuring promotion of the best qualified officer and attrition of the less qualified. The promotion eligibility zone for warrant officers was also broadened to afford the outstanding warrant officer the same opportunity to advance ahead of his contemporaries that is afforded the commissioned officer.
The standardized enlisted promotion criteria that became effective in February 1966 have extended mandatory selection boards from E-8 and E-9 to E-5, E-6, and E-7, required publication of recommended lists, and insured that an enlisted man retains his promotion eligibility when he is transferred. Special exceptions to promotion policies, it may be noted, have been authorized in Vietnam in recognition of the special requirements and sacrifices of the personnel there. For example, all enlisted personnel, immediately upon arrival in the country, are eligible for promotion to E-3 without regard to time in service or in grade.
For fiscal year 1967 the Army programed $52.1 million for proficiency pay in three enlisted specialty categories and one of superior performance. The variable reenlistment bonus program was $27.1 million for 36,846 awards.
The retention on active duty of trained and experienced officers continued to be one of the Army’s major personnel problems. The rising need for junior officers in Vietnam has compounded the basic problem by further aggravating such factors as family separation and frequent reassignment, which contribute to dissatisfaction with a military career. In line with the authority granted him in 1966 to appoint second lieutenants in the U.S. Army Reserve with a concurrent call to active duty in infantry, armor, artillery, engineer, signal, or transportation branch, the Commanding General, U.S. Army, Vietnam, had appointed some 132 candidates by the close of the 1967 fiscal year.
To offset a lower retention among obligated volunteer Reserve officers (21.5 percent this year as opposed to 25.5 in 1966), selective involuntary retention was continued until January 1967 when the Army was directed to release, upon application, any Reserve officer having no obligation. Subsequent releases have aggravated the high loss rate of junior officers, causing a shortage of captains whose tiiitti-bers, but not experience, have been partially replaced by accelerated promotions. Some relief has been obtained by permitting officers who have completed their minimum period of obligated service to extend for from 1 to 24 months without making a career declaration. In the case of senior Reserve officers eligible for retirement, 60 percent of those who have been offered additional tenure have accepted.
The heavy Army commitment in Southeast Asia created serious imbalances in certain skills between short tour areas and the sustaining base (the continental United States and all oversea areas to which individuals are authorized to take dependents). To insure the Army’s
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capability to provide skilled replacements for the short tour area, to maintain the 1-year tour in the short tour area, and to assure career soldiers a minimum of 25 months in the sustaining base between short tours, the sustaining base was augmented by a so-called CONUS sustaining increment. Spaces were allocated to commands in the continental United States, Alaska, Hawaii, and Panama to augment existing Army units and provide skill and career progression for soldiers preparing for and returning from assignments in short tour areas.
Numerous personnel management and job classification actions were taken during the year. Progress was made on the development of a Military Occupational Specialty (MOS) Data Bank covering all jobs performed by Army personnel. Data will be stored in computers and will be used in such personnel management functions as selection, classification, assignment, career management, occupational training, and proficiency testing. Officer and enlisted job classification structures were updated in line with changes in doctrine and organization, the fielding of new equipment, and job analysis and engineering studies. Five new officer special career programs were established covering automatic data processing, comptroller, intelligence, procurement, and operations research/systems analysis. Steps were also taken to develop job classifications and anticipate manpower and training requirements for new equipment before such equipment enters the operational inventory.
Job evaluation also was under study in the fiscal year and experiments were conducted using 10 evaluation factors for enlisted and five for officer jobs; refinement will continue during the coming year in an effort to develop a more scientific and defensible system than the present one under which positions are graded in accordance with their relation to well defined jobs with agreed upon grades. Along with job evaluation, selection testing and classification procedures were improved during the year. Included were new tests to improve the quality of aviation officers and warrant officers selected as well as officers acquired through OCS and ROTC sources. In this connection the Army has been assigned primary responsibility for developing new selection and classification tests for counseling high school students about their potential in the armed forces.
For a number of years departmental personnel management teams have been visiting major commands in the continental United States to help them in field personnel administration. In the past this mission normally involved instruction in current procedures, interpretation of regulations, and assembling information for special programs. In 1967 emphasis was on personnel accounting problems that arose in connection with levies for replacements for Vietnam. Direct liaison was
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set up between the department and the field to correct orders and reports on the spot. Improvement in Vietnam shipments resulted.
The Army’s personnel research/study program covers many subject areas ranging from recruitment to retirement. Some studies are conducted in-house, others by contract, and all are designed to promote a more effective use of manpower. The Army 75 Personnel Concept Study, for example, is intended to develop a unified concept for the 1971-75 period of personnel goals, objectives, and policies. Special contract studies in progress in fiscal year 1967 covered such areas as analysis of accident experience data to enhance safety training, evaluation of junior officer duties in connection with career motivation, and behaviorial and physiological changes under chronic stress. Certain projects begun in the previous 2 fiscal years produced benefits in 1967. An automated procedure to forecast personnel capabilities to meet future force structure requirements became available at the Research Analysis Corporation, where refinement will continue. A model for projecting officer losses and promotions was being readied for operational use as the year closed.
The increased size of the Army in fiscal year 1967 led to an increase in trials by general and special courts-martial. The rate per thousand strength, including the reserve enlistment program (REP), however, remained fairly constant. The number and rate of summary courts-martial during the year were reduced, probably as a result of increased use of non judicial punishment. There were 49,943 persons tried by courts-martial during fiscal year 1967 (34.92 per 1,000 based on average month-end strength including REP) as compared with 38,613 in fiscal year 1966 (35.19 per 1,000). By types of courts-martial, the fiscal year statistics show that 1,902 were tried by general court-martial (1.33 per 1,000) compared with 1,476 in fiscal year 1966 (1.34 per 1,000); 34,735 were tried by special court-martial (24.29 per 1,000) compared with 23,121 in fiscal year 1966 (21.07 per 1,000); and 13,306 received summary courts-martial (9.30 per 1,000) compared with 14,016 in 1966 (12.77 per 1,000). In addition, approximately 226,562 persons were punished under the provisions of Article 15 of the Uniform Code of Military Justice (158.5 per 1,000) compared with 171,365 in fiscal year 1966 (156.35 per 1,000).
There were 23,103 cases during the year ending November 30,1966, in which Army military personnel overseas were charged with offenses subject to the jurisdiction of foreign courts. In 14,619 of these cases the host country had the primary right to exercise jurisdiction. This right was waived by the host country in 13,961 or 96 percent of the cases. Of 4,789 Army military personnel tried by foreign courts, 46 received sentences to confinement which were not suspended.
During the year the U.S. Army Claims Service obligated 93,751
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claims in the amount of $17,988,086.59 and recovered $659,013.68 for 30,219 claims in favor of the United States. Recoveries under the Medical Care Recovery Act totaled $1,260,255.90 for the year, while $352,208.96 were collected in claims for the loss, damage, or destruction of Army property.
The enlisted absent without leave (AWOL) rates per 1,000 strength increased considerably in fiscal year 1967. The overall 1967 rate of 78.0 per 1,000, based on annual average strength, compares favorably with the rate of 181 per 1,000 for fiscal year 1952, when the peak strength of the Korean war period was reached, but unfavorably with the rate of 45 in fiscal year 1960, a period of peace and relatively low Army strength.
As might be expected in a period of active operations and expanded strength, the worldwide military prisoner population increased significantly during 1967. The number of confinement facilities was unchanged; the Army was operating 44 stockades and one disciplinary barracks as the year closed. The transient stockade in the Dominican Republic was closed and a new one was established at Fort Wainwright, Alaska. At the end of the year the total prisoner population in Army facilities was 7,579, an increase of 2,088 over 1966. The majority of prisoners, about 80 percent, were confined for AWOL and desertion.
The high prisoner population and the continuing expansion of the Army heightened the need for additional disciplinary facilities and for affirmative actions to hold down confinement levels. A new correctional training concept was developed and directions were issued to field commands emphasizing that pretrial confinement should be limited.
The Uniform Code of Military Justice places the various military departments on the same statutory basis in the administration of military justice. Similarly, a high degree of uniformity among the Services is considered desirable in the administration of correctional facilities and the treatment of persons convicted under the uniform code. Legislation to this end was proposed during the year and Congressional consideration was pending as the period closed.
Pay, Housing, and Awards
The passage of Public Law 89-501, effective July 1,1966, gave military personnel of all ranks a 3.2 percent increase in pay, comparable to the civil service salary increase of the same period. In addition, the gradual rise in the Consumer Price Index prompted a cost-of-living increase of 3.7 percent in December 1966 for retired personnel.
During fiscal year 1967 the Army participated in the first quadrennial Department of Defense military compensation and retirement study, an effort to examine the adequacy and appropriateness of mili
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tary pay and other forms of compensation in the varied aspects. The conclusions of this study are far-reaching and are expected to be submitted to Congress early in 1968. Pending completion of the compensation study, an interim pay proposal was sent to Congress and was introduced by the Chairman of the House Armed Services Committee. (If passed, it will provide a 5.6 percent across-the-board increase in basic pay on, or retroactive to, October 1,1967.)
No family housing construction was included in the Department of Defense fiscal year 1967 budget but construction of 1,680 units deferred from the 1966 program was approved and contract awards will begin in July 1967. All construction from earlier yearly programs has been completed except a 94-unit project at Fort Richardson, Alaska.
The Army was allocated 3,777 leases (2,700 in CONUS and 1,077 overseas) in fiscal year 1967. The Army requirement for family housing, based on long-range strength and deployment for permanent installations, amounts to 357,828 units; assets consisting of military controlled units and off-post housing total 248,531 units. The gross deficit is thus 109,297 units, but Department of Defense program limitations reduce this to 33,786 units. The approved 5-Year Defense Program includes 9,610 new units to be constructed worldwide from appropriated funds, plus 300 more rental guarantee units from nonappropriated funds in addition to 1,450 units already included in assets.
Several significant housing studies were made during the year. One addressed the quantity and quality of family housing and the policies that govern the field, while another considered all facets of architectural design and procedures.
For troop housing, the 1967 construction appropriation totaled $32.4 million for barracks construction and $500,000 for bachelor officer quarters. The 8,476 permanent barracks spaces will be applied against the currently estimated long-range requirement for 394,518 spaces at permanent installations, which will leave a deficit of 126,838 new spaces. Funds will be programed to reduce this deficit at an annual rate of about 23,000 after 1968.
The long-range requirements for bachelor officer quarters at permanent installations are 22,614 spaces. There is presently a deficit of 10,830 spaces, which will be reduced by about 2,000 annually under present plans. Beginning in 1968 bachelor housing will be improved under a new program that will authorize certain individuals to live off-post, increase statutory limitations on bachelor housing construction, and standardize designs under revised criteria.
Awards and decorations are a commander’s primary means of recognizing outstanding heroism or meritorious service. To make the
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program immediately responsive to field commanders, the Department of the Army delegated award authority for the Distinguished Service Cross and all lesser awards to the Commanding General, U.S. Army, Vietnam. Unit commanders in the rank of major general and brigadier generals occupying a two-star command position were authorized to award the Silver Star, Distinguished Flying Cross, and all lesser awards, while brigade commanders were authorized to award the Bronze Star Medal and all lesser awards. During the fiscal year, four Medals of Honor were awarded to Army personnel.
Religious and Morale Activities
During fiscal year 1967, 263 chaplains were engaged in religious activities in Vietnam. Four died as a result of hostile action and 11 were wounded. In addition to their ministrative roles the chaplains emphasized development of chapels and suitable worship facilities at unit base camps and contributed broadly to the pacification program.
In fiscal year 1967 the authorized strength of the Chaplains Branch was increased from 1,442 to 1,850. Denominational quotas were assigned to the three major faith groups: 1,180 to the Protestant, 613 to the Catholic, and 57 to the Jewish. Actual branch strength at the year’s end was 1,811.
Attendance at religious services conducted by Army chaplains exceeded 19.8 million. Because of deferments in various construction projects only three permanent-type chapels were started in the continental United States during the year. Attention was centered on improving existing facilities.
Since its establishment in July 1965 the Army Community Service has provided a variety of meaningful social and welfare services to members of the Army community. In its first 2 years of operation over 430,(XX) individuals visited some 130 ACS centers for assistance. Basic personnel support for the Army Community Service is the volunteer, who is usually a military dependent. Volunteers perform a wide range of services such as operating household loan closets, surveying communities for resources to aid the handicapped, providing emergency child care, and serving in various administrative support positions.
Under the provisions of an August 1966 Department of Defense directive, the responsibility for the operation and administration of all dependents’ schools in the European area has been assigned to the Army. The Air Force and the Navy have been assigned similar responsibilities for dependents’ schools located in the Pacific and Atlantic geographic areas, respectively. Under the geographic manager concept, each military department will program, budget, and fund for all
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dependents’ schools in its area of responsibility. Local commanders, regardless of Service affiliation, will provide logistical support to schools located on their base or installation.
Medical Care
The expansion of combat operations in a tropical theater has brought an inevitable rise in the Army noneffective rate due to medical causes. The noneffective rate is the average daily number of Army active duty personnel, per 1,000 average strength, in an excused-from-duty status due to medical causes. The noneffective rate rose from 11.6 per 1,000 in 1966 to 14.3 per 1,000 in 1967. Noneffectiveness due to injuries resulting from hostile action in Southeast Asia reached 2.3 per 1,000 average strength, up from 1.0 in 1966.
The rate of admission to hospital and quarters was 345 per 1,000 average strength, per year—about 5 percent higher than in the previous year. The fatality rate in patients admitted to medical facilities because of wounds or injuries resulting from hostile action was 2.3 percent, less than the rate in the Korean war, which was in turn lower than such rates in earlier wars. This low mortality rate in Vietnam is due to a combination of factors: Helicopter evacuation; ready availability of whole blood; well established forward hospitals; advancement in surgical techniques; and improved medical management. The use of the helicopter not only results in the early definitive treatment of the wounded but also brings into the hospital system mortally wounded patients whom no skill can save. In earlier conflicts this type of casualty would have died on the battlefield. Therefore, the 2.3 percent rate becomes even more impressive.
Malaria occurring in the United States among Vietnam returnees increased during fiscal 1967 from 0.17 per 100 returnees per month to 0.67. Meningococcal disease, including meningitis, decreased 50 percent over 1966, while acute respiratory disease among trainees in the period November 1966—May 1967 was down 45 percent over the corresponding period in the prvious year as a result of the live adenovirus vaccine, type 4, given the receptees at the Army Training Centers.
During the year the joint Army-Public Health Service program for eradicating the aedes aegypti—mosquito vector of urban yellow fever and dengue fever—from Army posts in the United States and its territories continued. It was the first year of full-scale operations in all Army areas where this agent is present. The Army effort is part of a national eradication program being conducted in cooperation with the governments of 10 southeastern States, Hawaii, Puerto Rico, and the Virgin Islands.
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The incidence of neuropsychiatric illness in U.S. Army troops in Vietnam is lower than that recorded in any previous conflict in which U.S. armed forces were involved. The present rate of 12 cases per 1,000 average strength per year is approximately the same rate that is experienced among all Army troops in the continental United States.
A mobile, flexible, and responsive helicopter evacuation system has been developed in air ambulance units. At the beginning of the fiscal year there were 61 Army helicopters with medical crews in Vietnam providing aeromedical evacuation for U.S. forces and supporting South Vietnamese and other Allied forces when required.
A new item of equipment, the personal rescue hoist, is being used to retrieve wounded from inaccessible areas. It uses a 256-foot cable with a 600-pound load capacity. In fiscal year 1966 air ambulance units evacuated more than 83,000 patients while flying approximately 38,000 combat hours. About 25 percent of the patients were Vietnamese and 5 percent were of other Allied countries.
A draft call for 2,496 physicians—1,446 for the Army— issued for the first quarter of the fiscal year, was reduced to 1,713—758 for the Army—when anticipated casualty levels in the fighting in Vietnam did not materialize. Another call procured 75 optometrists for the Medical Service Corps, the first draft of these specialists in Selective Service history, and stimulated sufficient additional volunteers to meet all requirements for the year. As the year closed, another call was out for 2,118 physicians and 111 osteopaths (1,461 and 76, respectively, for the Army) for the first quarter of the 1968 fiscal year. The number of flight surgeons and aviation medical officers on active duty increased during the year from around 242 to about 325.
The Army blood program for the first time was put on a self-sustaining basis in 1967, the result of improved laboratories, trained personnel, and advanced techniques. Laboratory staffs were augmented at certain hospitals and installations with large donor populations, and a blood transfusion center was established at the Medical Research Laboratory at Fort Knox, Ky.
The Army Nurse Corps (ANC) increased in strength during fiscal year 1967 from 3,735 to 4,545. Some 1,400 officers were brought to active duty in the ANC, against a loss of 590. There was a decline in volunteers for direct appointment for active duty, coming at a time when salaries for nurses in the civilian area have substantially increased. The greatest source of potential officers for the Nurse Corps continues to be the educational subsidy programs offered to selected students in nursing education.
A high caliber of applicant continued to be attracted to the Walter Reed Army Institute Nursing Program. Of 601 applications received
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in the year, 135 were selected to participate in this subsidy program. The results in terms of ANC officers will be realized in the summer of 1968 and annually thereafter.
There are 630 Army Nurse Corps officers in 53 medical units in 20 geographical locations in South Vietnam, assigned to field, evacuation, and mobile surgical hospitals and to specialized treatment teams. In addition to their primary duties they are voluntarily assisting in the Medical Civilian Aid Program (MEDCAP).
Public Law 89—614 expanded the Dependents’ Medical Care Program to include civilian outpatient services for dependents of active duty members of the uniformed Services; set up another new program of civilian inpatient and outpatient medical care for retired members, their dependents, and the dependents of deceased personnel; and established a new program of institutional care, rehabilitation, and special education in civilian facilities for the physically handicapped and mentally retarded dependents of active duty members. The Army, as executive agent, has administered the civilian portion of the program in the United States and Puerto Rico for dependents of all uniformed Services members since 1956 when the basic program was established, and with the passage of the new law was delegated authority to administer the civilian health benefits for dependents and retirees in the United States, Puerto Rico, Canada, and Mexico. In addition, effective July 1,1967, the Army will administer the civilian portion of the program for beneficiaries of members of all uniformed Services in countries located within the United States European Command.
The increasing emphasis on military and civilian medical needs in Southeast Asia placed a heavier responsibility on the Army medical supply system. A reorganization of medical supply in that area was completed early in the fiscal year with the United States Army Medical Depot, Ryukyus, as the hub of the system. This depot became the supply source for Agency for International Development public health activities in Vietnam, Laos, and Thailand. The Army also assumed responsibility for resupply to the Medical Civilian Aid Program being conducted by military physicians and surgeons in South Vietnamese villages when military medical functions permit. The Ryukyus depot was also assigned responsibility for the medical resupply for ARVN forces.
Army safety is a day-to-day, hour-to-hour concern, and numerous actions were taken during fiscal year 1967 to prevent accidents of all kinds. Nevertheless, the accident rate climbed with rising Army strength; the Army aircraft accident rate, civilian injury rate, and military personnel fatality and injury rates increased during the first three quarters of the year over the corresponding period in 1966. The “other personnel” injury rate declined 16 percent in the same 9-month
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period and there was no change in the Army motor vehicle accident rate—significant factors when viewed in light of increased Army strength. The Army’s 1966 record was recognized in 1967 by the National Safety Council in the presentation of its highest award, the 20th time in 23 years that the Army has been so honored.
Civilian Personnel
The supporting role of the Army’s civilian work force increased significantly during fiscal year 1967. With the buildup in Southeast Asia and the conversion of military positions to civilian tenure, civilian employment reached 565,100, an increase of 74,147 or 15.1 percent over June 30,1966. Of the total work force, 175,900, including 154,622 local nationals, were employed outside the continental United States. The greatest concentrations of the latter were in Germany, Vietnam, and Korea.
In spite of a tight labor market, the Army was able to fill most of its civilian positions during fiscal year 1967 including the converted military positions. Although some problems were encountered in recruiting for managerial, professional, technical, and skilled blue collar employees, there was no general shortage. The Bureau of the Budget’s decision to reinstate ceiling controls on total civilian strength had an adverse effect on employment in the last quarter and may continue to hamper recruiting.
The long-range program for closing excess Army bases and reorganizing or realigning functions to promote economy and efficiency was continued. Since 1963 these changes have affected 37,577 civilian employees. All were assured that they would not be separated without first being offered another job within the Department of Defense, and the Army has succeeded in fulfilling this commitment. Of the 5,464 remaining to be placed, many are employed at activities which are not scheduled to close for a year or more.
The Army continued to rely heavily on its local national work force, which constituted about half of the total number of military and civilian personnel needed to support oversea activities. Nearly 87 percent of the civilian white collar and nearly all of the blue collar jobs in foreign areas were filled by local nationals. While wage trends in foreign areas continued upward, salaries for local nationals were significantly lower than they would have been for U.S. civilian or military personnel.
The use of local nationals to support military operations in Vietnam about doubled during the year, reaching a total of 34,395. While there was a shortage of skilled civilian manpower, it was partly offset by an intensive training program. Students were enrolled in courses at a
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central training institute. Over 1,400 Vietnamese drivers were trained in the year.
The Army in fiscal year 1967 completed the transfer of activities in France to neighboring countries, requiring the relocation of U.S. civilian employees, the separation of French employees, and the recruitment of qualified personnel at the relocation sites. On March 31,1966, before the relocation, Army civilian employees in France totaled about 14,000. Most of the U.S. citizens in this group were reassigned to activities in Germany; some to positions in England, the Benelux countries, and Italy; and a small number to the United States. With the exception of a few French employees who accompanied the Army to relocation sites, the local national work force was phased out in accordance with provisions of the labor agreement with the French Government.
Advances were made in civilian career management in the period of this report. A pilot test was run in the comptroller career field on revised career management concepts and procedures derived from a special study of career programs originated in 1964. Results substantiated new concepts and procedures and these will be extended to other fields. Two new career programs were placed in operation, one for librarians covering some 800 positions and an information and editorial program covering about 2,000 positions. With these additions, plus the revision and publication of the automatic data processing program, the Army’s career management system now covers 14 separate programs.
The Army also supported the Department of Defense in the development of a Defense-wide procurement career program which became operational on March 1, 1967, and an interagency task group engaged in developing a qualifications inventory program to support the Civil Service Commission’s new executive assignment system. This central talent inventory at the Commission will contain experience, education, training, and other biographical data on all Federal civilian employees in grades GS-15 and above, and in Public Law 80-313 positions. It will provide a source of well-qualified candidates for grade GS-16, 17, and 18 positions throughout the Federal Government.
The program for Army-wide surveillance of civilian positions at grades GS-14 and above and average grade levels continued. Its success in meeting Budget Bureau and Defense Department objectives is evident from the decline in the Army’s average GS grade level from 7.31 on June 30,1965 to 7.00 on June 30,1966 and 6.90 on June 30,1967. In the third quarter of the year the Bureau of the Budget and Department of Defense removed the numerical limitations which had been imposed on high grade positions, although the continuing need for effective management of position structures was emphasized. To assure
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continued surveillance of high grade positions in the Army, program revisions were made which provide for the gradual elimination of numerical limitations beginning in fiscal year 1968.
Army representatives participated with Civil Service Commission officials in formulating a draft policy on the operation of a single Federal-wide wage system and in developing trial standards for the classification of blue collar positions.
The Secretary of Defense approved an Army plan to establish a Career Executive Development Institute in the Washington, D.C., metropolitan area. The Army was designated executive agent to operate the Institute, which will provide executive-level training in administration for about 200 Department of Defense personnel each year. Approximately 18 weeks long, the course is unique in that this is the first time the full spectrum of the Defense management function has been put together in one curriculum for executive personnel. The curriculum was approved in May 1967 and the first course was scheduled to open in January 1968. Because of congressional actions on the Defense appropriations bill, however, the opening will be delayed at least until January 1969.
To keep civilian employees abreast of scientific, technical and managerial advancements, both within and outside government, the Army maintains a long-term training and education program with a central pool of spaces and funds to support training requirements that are above command resources. In 1967, over 200 employees were assisted through the central pool as compared with 119 in 1966.
The cooperative education program took on added significance during the year. More than 400 students were participating by year’s end and with increasing manpower requirements in engineering, physical science, accounting, mathematics, and other demanding occupations, further expansion is anticipated. Meanwhile, the apprentice training program was used to help meet manpower requirements in the trades and crafts area. The Army at year’s end had about 500 apprentices receiving on-the-job training primarily in electrical, electronics, and machinist trades. With the demand for skilled manpower rapidly increasing there should also be substantial growth in this program over the next 5 years.
Relationships with employee unions continued to be good during the year. The Army had 499 bargaining units, an increase of 30 percent over 1966. Of this number, 283 units had obtained exclusive recognition, while the remaining 216 had formal recognition. This continued the trend toward exclusive recognition, which provides not only for Army consultation with the union on new or revised personnel policies, but also gives the union the right to negotiate a written contract on these matters. The number of employees covered by exclusive
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recognition increased from about 58,000 at the beginning of the fiscal year to over 112,000 at the end. The number of written agreements approved by the Army increased to 141. A significant increase in this number is expected during the months ahead, since only half of the bargaining units with exclusive recognition have exercised their right to negotiate a written contract with management. In anticipation of this intensified union activity, the Army sponsored a series of advanced labor relations seminars for Army personnel concerned with labor relations.
The Army suggestion program enters its 25th year of operation with a record of achievement. During the period June 1943 through June 1967, net first-year dollar benefits realized from adopted suggestions have amounted to $479,240,804. Adopted suggestions submitted by military personnel during fiscal year 1967, the first full year of operation under Public Law 89-198, accounted for $4,215,102 of the above amount.
Retired military personnel continued to be a fruitful source of candidates for the Army’s civilian jobs during fiscal year 1967. Many of the new positions established to support the buildup in Southeast Asia and many of the vacancies created by the civilianization program were filled by retired military personnel. The Dual Compensation Act of 1964 requires prior authorization by the Secretary of the Army or his designee and approval by the Civil Service Commission when a retired member is proposed for employment within 180 days following retirement. Authorization was received during the year, however, which allows major commands and regional offices of the Civil Service Commission to give final approval on retired enlisted personnel being considered for lower grade positions. This new procedure has expedited processing of requests without compromising the intent of the requirement for prior approval.
Efforts in the Equal Employment Opportunity Program during fiscal year 1967 were concentrated on improving the operation of the Army’s local plan of action approach, established in 1962 and adopted by the Civil Service Commission for Government-wide application. It is based on the assumptions that the Equal Employment Opportunity Program is an integral part of the total civilian personnel management program, and that differing local problems and needs require locally developed solutions. A civilian personnel regulation published on September 30,1966, incorporated a requirement for an activity plan of action.
360—499 0—70—13
VI.	Reserve Forces
Although, met entirely out of active Army resources, the heavy U.S. commitment in Vietnam and the accompanying worldwide personnel drawdown has placed a premium on reserve readiness. During fiscal year 1967, the reserve components further improved their ability to perform their mission.
Reorganization of the Reserve Components
The Secretary of Defense on June 2,1967, announced his approval of an Army plan to improve the early deployment capability and combat readiness of the Army’s reserve components by realigning Army Reserve and National Guard forces. The plan’s purpose is to provide the Army reserve component forces that the Joint Chiefs of Staff have recommended to bring the total force structure into balance with contingency plans and the supporting equipment program. The current reserve component structure has serious deficiencies. The structure contains more than a thousand units that are not needed, while at the same time it needs almost a thousand units of types it presently lacks.
In addition to bringing the reserve components structure up to date and into balance with contingency plans and equipment programs, the new reorganization will provide the States with adequate Army National Guard forces, locate units and strengths geographically and in relation to populations so as to distribute the burden in the event of mobilization, and reduce the need to assign involuntarily to reserve units individuals who have completed 2 years of active duty.
This plan replaces earlier proposals for realignment, advanced in 1965 and 1966, that would have placed all paid drill units in the Army National Guard. Congress did not look favorably on these plans, and the new one provides for organized units in the Army Reserve as well as in the National Guard.
Under the proposed reorganization, the Army reserve components will consist of units having a paid drill strength of 640,000, of whom 400,000 will be in the Army National Guard and 240,000 in the U.S. Army Reserve. These units will be manned at an average of more than 90 percent of full wartime strength and will be fully supported with equipment, technicians, repair parts, and all other essentials.
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Under the Army plan, the Army National Guard will have eight divisions, 18 brigades, and certain supporting units; the Army Reserve will have 13 training divisions, two maneuver area commands, and mobilization base and service support units. The structure will provide a reserve force that can respond promptly and effectively in an emergency.
At the end of the fiscal year, the plan was still under consideration in Congress in connection with authorizations of reserve strength for the coming fiscal year. In February, the House passed a bill specifying an aggregate Army reserve component strength of 640,000.
Selected Reserve Force
The Selected Reserve Force (SRF) was created to meet contingencies during the period when the Strategic Army Force was meeting Vietnam buildup requirements. In fiscal year 1967 SRF units were given priority in personnel and equipment and intensive training at their home stations. By the end of the annual training cycle, they had attained a higher overall readiness than has ever before been reached by Reserve units not on active duty. To maintain this readiness, SRF units conducted an annual training program which averaged 58 four-hour drills instead of the standard 48 per year.
The authorized strength of the Selected Reserve Force is 150,461 (118,903, ARNG; 31,558, USAR) in 977 units (744, ARNG; 233, USAR). The assigned strength at the beginning of fiscal year 1967 was 144,030 (115,251, ARNG; 28,779, USAR); as the year closed it was 147,881 (117,420, ARNG; 30,461, USAR). The proposed realignment of the reserve components will leave the SRF substantially untouched.
Elimination of the 14 U.S. Army Corps
The Secretary of Defense announced in January 1967 that 14 U.S. Army Corps, the headquarters for command and administration of Army Reserve units in the continental United States, would be eliminated before the end of calendar year 1968. The Army initiated plans to transfer most of the functions of the crops headquarters to the five continental U.S. armies and some to Reserve units commanded by general officers. At the end of the year detailed plans for inactivation of the corps were being completed at Continental Army Command headquarters.
Readiness
As fiscal year 1967 opened, total paid drill strength of the reserve components was 671,898 (420,924, ARNG; 250,974, USAR). There were 135,878 enlisted accessions, during the year (58,979, ARNG;
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76,899, USAR) including 73,513 with no prior service (45,113, ARNG; 28,400, USAR). Paid drill strength was 680,031 (418,074, ARNG; 261,957, USAR) on June 30,1967.
On June 30, 1966, there were 133,109 (79,106, ARNG; 54,003, USAR) enlistees with no prior service awaiting initial active duty for training. This backlog developed primarily because of the continuing buildup of the active Army and its increasing training requirements. Reduced draft calls beginning in January 1967 coupled with expansion of training facilities permitted an increase in the number of training spaces allocated to the reserve components. Total reserve input in fiscal year 1967 was 179,924 (109,990, ARNG; 69,934, USAR). Most of the backlog was eliminated by the close of the year.
At the beginning of the year there were 26,967 technicians on duty with the reserve components (22,939, ARNG; 4,028, USAR), including 4,970 in the air defense program and 216 in military support of civil defense. On June 30, 1967, actual technician strength was 28,332 (23,758, ARNG; 4,574, USAR), including 5,043 in the air defense program and 220 in the civil defense activities.
The rate of withdrawal of materiel from the reserve components in 1965 and 1966 abated during 1967 and some types of items (though not necessarily the same items previously withdrawn) were being received at an increased rate. Some of the materiel received, such as 14-ton utility trucks and trailers, was new, while some was excess active Army equipment. Two large cargo ships and some smaller vessels were acquired from the Government-owned inactive fleet. These were reactivated and their cargo-handling equipment was restored to operating condition for training purposes.
Attendance was high at unit training assemblies, totaling 95.9 percent for the ARNG and 88.3 for the USAR. While there were fewer opportunities to participate in active Service exercises and air mobility training was curtailed, the influence of the Vietnam war gave more significance to all training and efforts were extended to make it meaningful, mission-oriented, and useful. About 21,000 men of all Services, including the Puerto Rican National Guard, took part in Exercise CLOVE HITCH III. The largest U.S. fighting force to operate in the Caribbean since the Dominican crisis defended Puerto Rico and the islands of Vieques and Culebra against mythical invaders. The organizational structure was similar to that used during the Dominican crisis.
Command post and mobilization exercises were stressed in all commands. Army National Guard and U.S. Army Reserve units participated in major exercises in the Third Army (ROLL CALL), Fourth Army (TALON SHIELD), and Fifth Army (ROUNDUP I).
Multiple-unit training assemblies increased, and during the second
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quarter of the report period the 4-hour training assembly became mandatory for most units; the exceptions were a few specialized units. This has improved the training level and mobilization readiness of reserve component units. In addition, all units are required to schedule a number of multiple drill periods by combining training assembly periods. In these cases the assembly must be of 4 hours’ duration. The multiple unit assembly may consist of 8 to 24 hours of training over a period of 1 to 3 days.
Assemblies at field training sites were emphasized. Readiness was improved through the lengthened assembly and the encouragement for unit commanders to conduct a maximum of training in the field. While the Southeast Asia buildup denied the reserve components much of the training support normally supplied by the active Army, there were offsetting benefits from the experience in providing self-support.
The reserve components required and occupied 3,818 armory-type facilities (2,786, ARNG; 1,032, USAR) of which 1,251 were State-owned and licensed, 1,956 constructed or reconstructed with Federal funds, 479 leased, and 132 donated or permitted.
The manpower priorities of the active Army raised serious doubts as to the possibility of conducting the national rifle and pistol matches. This was resolved when the U.S. Army Reserve was able to provide additional personnel to support the matches and the Small Arms Firing School at Camp Perry, Ohio.
The Chief of the U.S. Army Reserve, with the concurrence of the Chief of Military History, established April 23, 1908, as the official birthday of the Army Reserve. It was on that date that the Congress passed the act establishing the Medical Reserve Corps, legal predecessor to today’s Army Reserve.
Air Defense
The Army National Guard air defense program is now in its 15th year of operation. It has progressed from conventional weapons to the nuclear-capable NIKE-HERCULES missile, continued with 48 on-site batteries in the continental United States and six fire units in Hawaii, all manned by ARNG technicians and operational around the clock. Unit performance improved during the year.
Budget
In fiscal year 1967 the Army National Guard personnel appropriation totaled $370.3 million, including suppiementals of $15.3 million for the Selected Reserve Force and $8.5 million for the military pay raise. Appropriations for operation and maintenance totaled $231 million. The appropriation was for logistical and technician support for
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approximately 4,000 units. No military construction obligation authority was obtained during 1967. Total obligations were $579.7 million.
As approved by Congress, $309.3 million was provided in the Reserve Personnel, Army (RPA) appropriation to support the USAR and ROTC in fiscal year 1967. Included was $14.9 million in supplemental funds for Selected Reserve Force readiness and $6.2 million for the military pay raise. The Congress also approved $123.2 million for operations and maintenance (BP—2600). There was no new military construction (MCAR) obligation authority; $17 million of the RPA appropriation was reprogramed to “emergency fund, Defense.” Total obligations during the year were $394.2 million.
VII.	Management, Budget, and Funds
An expanding Army and a heavier commitment in Southeast Asia have combined with rising expenditures and advancing technology to challenge Army resource management at every level. During fiscal year 1967 the simultaneous processes of review, streamlining, refining, and updating proceeded along normal evolutionary lines. This section of the annual report discusses developments in management programs and systems, methods and techniques, and reviews Army budget and funding activities in the period.
Organization
Efficient organization is a prerequisite to effective management, and there were several important changes in the departmental staff during the fiscal year. Preeminent among them was the establishment in February of the Office of the Assistant Vice Chief of Staff within the Office of the Chief of Staff in order to bring related management structures and efforts under central direction and control.
Three systems are basic to all Army planning, programing, budgeting, and management: Management information systems measure and analyze requirements and resource availability in relation to plans and programs; weapon systems analysis measures alternative solutions to the mix of personnel, forces, logistical support, and funds; and force planning analysis compares alternative forces and costs against missions to be performed. Organizational elements had been gradually developed over the course of several years to operate in these fields, even as a broad study effort delineated the work to be performed. But while the systems were related to each other and to the Army’s study program, it became apparent that they would not evolve fully and effectively unless they were accorded priority attention and “placed in a keystone position under the umbrella of the total analysis effort.” The establishment of the position and office of the Assistant Vice Chief of Staff provided both the level and the focus to insure the priority attention and central control that would insure effective and economical utilization of resources.
The Office of the Assistant Vice Chief of Staff was organized to include four principal directorates—Director of Studies, Director of
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Management Information Systems, Director of Weapons System Analysis, and Director of Force Planning Analysis. Essentially the personnel and other assets for establishing the four directorates came from special offices already existing in the Office, Chief of Staff, that had grown up over the years. Some assets, however, were drawn from the Army Comptroller for the weapons system and force planning analysis offices and all four of the new directorates acquired contract assets.
The U.S. Army Management Systems Support Agency was estab-lised as a class II activity under the jurisdiction of the Assistant Vice Chief of Staff, while the U.S. Army Information and Data Systems Command, formerly operating under the jurisdiction of the Special Assistant for Army Information and Data Systems, was transferred to that of the Comptroller of the Army. Also, in April 1967, the Office of the Director of Automatic Data Processing was established under the Comptroller of the Army. This office, independent of any of the elements of the Army that actually use computers, is responsible for professional evaluation and selection of computers for the using elements ; its director is the sole Army point of contact with the computer industry on these matters. All Federal agencies were directed in 1966 by the President to explore every means of use for the electronic computer in order to achieve a more effective job at the lowest possible cost. Central control over computer selection is a step in that direction.
The need to provide for better central planning and control of mushrooming systems development also led to organizational changes among the major departmental staff agencies. In the Office of the Deputy Chief of Staff for Logistics (DCSLOG), the position of Assistant Deputy for Plans, Doctrine, and Systems, was established in August 1966 to coordinate all departmental matters concerning logistics plans, doctrine, systems, and transportation policy and procedures. At the same time a Logistics Doctrine and Systems Office was activated to direct, control, and coordinate doctrine, systems, and personnel matters pertaining to logistics organization and activities worldwide. In January 1967, a Logistics Doctrine and Systems Agency was established as a class II field extension of the Office of the DCSLOG to analyze and design systems and procedures for performing logistical operations at all levels of the Army. In more specific contexts, an Office, Special Assistant for Munitions, was established in December 1966 to provide intensive management over certain categories of ammunition—generally those of immediate operational significance, high cost, or possible criticality; and a need to have one agency responsible for the overall knowledge, monitorship, and coordination of aviation logistics was answered with the establishment in January 1967 of the
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Office of the Special Assistant for Logistical Support of Army Aircraft.
In the operational staff area, the Office of the Deputy Chief of Staff for Military Operations was reorganized in March 1967 to decrease the deputy’s span of control and consolidate similar functions in three directorates: A Directorate of Operations, where functions of current operations were joined; a Directorate of Plans, where planning functions were combined; and a Directorate of International and Civil Affairs, where staff work on international political-military matters was consolidated. The Directorates of Special Operations and Civil Affairs were abolished and their functions transferred to that of International and Civil Affairs; the position of Assistant Deputy Chief of Staff for Special Operations was also abolished. In another move, a Strategic Forces Division was created within the Plans Directorate in recognition of the growing scope and importance of nuclear considerations in plans, weapons, deployments, targets, forces, and defense.
The increased emphasis in the Army on electronic warfare operations led in December 1966 to the formation of an Army Electronics Warfare Board, to be chaired by the Deputy Chief of Staff for Military Operations and with a membership drawn from major staff agencies and the major continental field commands. The board will coordinate and assess Army activity in this field, establish requirements, expedite projects, and provide guidance.
In the personnel area, also in December 1966, a Personnel Systems Directorate was established in the Office of the Deputy Chief of Staff for Personnel to provide central direction and control over the development of concepts, doctrine, and plans concerning automated manpower and personnel management systems Army-wide. This directorate also assumed operational control of the U.S. Army Data Support Command, which provides systems and computer support in the personnel area for the Department of the Army staff.
During fiscal year 1967, the departmental structure was appraised against the objectives of the 1962 reorganization and in the light of its present form. In the study, seven primary areas were surveyed: Staff, logistics, personnel, individual training, unit training, combat developments, and research and development. An outgrowth of the assessment was the merger of the Office of the Chief of Finance with the Office of the Comptroller of the Army. Since the functions of finance and accounting in the Office of the Secretary of Defense and in Army field organizations are combined, there was no reason why they should be separated in the Department of the Army staff. The study also high
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lighted the fact that existing procedures and controls must be revised and new procedures and controls established so that new organizational structures will function as planned.
Management Programs, Systems, and Techniques
The Headquarters, Department of the Army Management Information System, was reoriented during fiscal year 1967 in conjunction with the reorganization of the Office of the Chief of Staff, and additional resources were applied to its development and operation. The purpose of the system is to supply information required by the Secretary of the Army and the Chief of Staff in making decisions concerning management planning and control of resources. Staff agency data banks comprise the overall system’s data bank. Thus the responsiveness of staff agency functional systems is being improved, and deficiencies are being isolated and corrected. The Office of Management Information Systems in the Office of the Assistant Vice Chief of Staff began monitoring and assisting in the development of the new Army authorization document system (see ch. Ill), the integration of the force accounting and force planning systems, the development of plans to improve military supply and personnel systems, and improvement in the process for conducting capabilities analysis. Work was also begun on improving output measurement techniques and top management asset and requirement displays. The Army Management Systems Support Agency provides data support.
In fiscal year 1967, the Army had approximately 500 management information systems in operation. The widening use of these systems required that they themselves be managed, and an effort was begun to establish central coordination, guidance, and control over existing and developing systems.
Progress during the year which promoted improved control of information systems included the use of PERT (Program Evaluation and Review Technique) to discipline and monitor systems development; the initial development of a matrix-chaining technique for interrelating resources, functions, and systems to detect gaps, duplication, and overlap; and publication of a 5-Year Planning Base for Army Management Systems published in January 1967. It is the first long-range plan for DA-developed systems, and will be updated annually. An Army data elements and codes program was put into operation to standardize data elements.
There was progress during the year in the development and installation of standard automated systems in various functional areas and major commands. Efforts in the financial management improvement program, for example, have been geared to Department of Defense
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resource management systems requirements and to changing the Army management structure in order to improve Army responsiveness to Department of Defense, Bureau of the Budget, and congressional needs. Army staff agency representatives joined a management consultant firm in installation studies at Fort Carson, Colo., and the Lexington Blue Grass Army Depot, Lexington, Ky., which led to recommendations to improve methods of planning, programing, budgeting, reporting, review, and analysis so that management information would better serve installation commanders in decision making and Department of Defense requirements. The proposals will be tested in fiscal year 1968.
The Army’s centralized automated military pay system (CAMPS), established in 1964 to test the feasibility of centralized computation of military pay on a large-scale computer, continued successfully when the 44th Finance Section in Europe completed conversion to the test structure and achieved a test complex of about 70,000 accounts in widely divergent environments, including a major tactical unit in Vietnam.
Previously scheduled for full-scale test and evaluation in the last half of calendar year 1966 and Army-wide installation in calendar 1968, the CAMPS will be modified to fit a new joint uniform military pay system (JUMPS) directed in November 1966 by the Department of Defense and to be effective by July 1, 1969. The CAMPS conforms generally to the JUMPS specifications and the Army system will be amended to introduce the joint system’s twice-a-month pay cycle.
Fiscal year 1967 marked the fourth year of Army participation in the Defense integrated management engineering system (Project DIMES), which has as its objective the substantial adoption within a 5-year period of accepted industrial management techniques at all suitable Defense activities. It is divided into three phases: Phase I involves work measurement and methods improvement; phase II consists of integration of standards into work planning and control systems; and phase III covers development of standard cost accounting systems. Of 12 pilot installations participating in the program, two arsenals and three depots moved into phase III in the fiscal year while one arsenal, two proving grounds, two national inventory control points, a repair and utilities (post engineer) activity, and an ocean terminal were in phase II. Evaluation of achievements in the pilot installations has led to extension of the concept to seven arsenals and 20 depots, for a total of 32 installations and activities in the program. Savings up to March 1967 exceeded $18 million.
The program to centralize supply management operations (COSMOS), reported upon over the last several years, moved ahead in prototype testing in the 6th U.S. Army. Scheduled to be onera-
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tional in calendar year 1967, it will provide an automated stock control system and the development effort will be used in the broader Army program of stock control for the Combat Service Support System.
To improve supply effectiveness in direct support and general support units, tests were undertaken and a plan developed to convert manual stock accounting procedures in such units to a computer system. In the first phase, personnel and equipment were deployed to mechanize selected direct and general repair parts support units in Southeast Asia. Initial results showed a high degree of improvement in stock record accounting at direct support unit level. In the second phase of this program, Army-wide mechanization requirements of direct support and general support units will be determined.
The national ADP program for AMC logistics management (NAPALM) is the Army Materiel Command’s plan for developing a standard automated system for materiel management at inventory control points and other affected activities. In the first phase, the automatic data processing equipment to support the mission was selected; the pilot equipment was to be installed in August 1967. Later phases of the program will cover standardization of the systems.
The systemwide project for electronic equipment at depots—extended (SPEEDEX) is designed to determine what is required in the way of projects and documentation to replace existing computers at 10 major distribution depots and to extend a new system to the New Cumberland Army Depot in Pennsylvania and the Army Aeronautical Depot Maintenance Center at Corpus Christi, Tex. The program was begun in 1966 because of the greatly increased workload on existing computers and the need to develop additional capacity for planned applications. The Red River Army Depot in Texas coordinated an effort in which individual depots developed specific applications. From the resulting data automation requirement, systems specifications were drafted, reviewed by the departmental staff, and in May 1967 released to manufacturers for proposals.
There was progress in the development and use of automatic data processing systems to support the Army’s personnel management program. New computer-aided systems were installed at DA headquarters to support enlisted personnel assignment programs. As the year closed, more than 15 major ADP projects were being developed to improve the efficiency and responsiveness of Army personnel operations.
An automated system for class I installations (COCOAS) has been under development as a standard system for major posts, camps, and stations within the Continental Army Command. The prototype installation was established at Fort Sill, Okla., where test and evaluation continued through the year. Initial applications included supply management, stock control, financial accounting, military and civilian
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pay, and personnel accounting. Extension of this system to worldwide systems with similar applications is now in the planning stage. Also moving along through the year was the ADSAF project, involving three related but semi-independent tactical automatic data systems (see ch. III).
In a business as large as the Army, management techniques are numerous and varied; indeed, management implications and programs run through this entire report. It is useful to mention certain others of them here to point up their variety and their degree and level of application as well as to outline the form of the total management program at this period in the Army’s history and the progress made in the fiscal year under consideration.
Work measurement, for example, is a program through which personnel are brought under performance standards. As the fiscal year opened, more than 130,000 individuals were working against qualitative standards, in posts, camps, and stations as well as in industrial and commercial activities in warehouses and equipment maintenance shops. Measurement data developed in this program is being woven into management systems that are used for scheduling, controlling, budgeting, and staffing the work of the Army, and commanders and managers are thus better able to control their operations. The techniques are similar to those used in private industry.
Management depends upon the accumulation and processing of masses of data, which in turn require an adequate reporting system. Yet, care must be exercised to hold the administrative burden on operating units to a minimum. The successful effort in Vietnam last year, through which tactical units were relieved from preparing 46 of 73 reports previously required, was extended this year to all major oversea commands, to the benefit of their tactical units and subordinate commands. In U.S. Army, Europe, alone an estimated 127,000 manhours of report preparation were saved. A companion effort at the Army staff level also reduced the reporting workload.
At the very top level, an Army status report is used to inform the Secretary of the Army regularly and briefly on the overall situation of major programs, and this was expanded during the year to reflect progress in command activities. At the same time another management tool, the quarterly review of Army programs for the Army Policy Council and the General Staff Council, was continued, although presentations were directed to individual major programs like research and development, construction in Vietnam, and officer candidate schools rather than to broad coverage of many programs.
Heavy demands for statistical data both from within and outside the Army led during the year to the establishment of a network of statistical clearance liaison officers for each staff agency—to insure a
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high, standard of statistical uniformity, consistency, accuracy, and timeliness—and the initiation of a research project to overcome deficiencies and insure quality control over statistical reporting.
Quality control in a larger sense is the purpose behind the Zero Defects program. Now in its second year of operation as an Army-wide program, it is intended to promote defect-free performance and reduce the cost of rework. Through the year it has sharpened Army effectiveness by improving the quality of goods and services procured or produced.
Attention to courses of management instruction was matched with moves to develop civilian and officer management career programs. In the civilian area a prototype program was brought well along that would strengthen the leadership role of the Comptroller of the Army in the comptrollership area, provide for more active participation by commanders in civilian career management, identify a career executive group of employees of high potential, make training an integral part of career progression, and simplify the system used to screen career employees for selection and assignment. At the year’s close, midway in the program, there were improvements in recruiting, records, appraisals, training, and general interest.
Automatic data processing career programs were published for both military and civilian personnel during the year. The civilian program covers 5,000 employees. The military program is designed to develop commissioned officers for assignment to ADP positions at both Army and Defense levels.
Army Cost Reduction Program
The Army cost reduction program was revised during fiscal year 1967 in line with policy and procedural changes in the overall Department of Defense program. Under the new terms only new, improved, or intensified actions of the current year are reportable; savings claimed include those realized in the current year and estimates of those expected to be achieved in the two succeeding fiscal years; savings are based on individual actions and not on formula computations or comparisons with a base year; and two goals are established for each cost reduction area as well as the whole program, one for the current fiscal year and a second for total effect—including current year savings and estimated savings for the two succeeding years.
The Army’s progress in cost reduction during fiscal year 1967 totaled $247.3 with $482.8 million total effect for fiscal years 1967-69, representing 110 percent and 129 percent, respectively, against Army goals of $224 and $374 million.
Several examples will illustrate field participation in the program.
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Two civilian employees at Frankford Arsenal, Pa., discovered that a lower cost and simplified safety machanism for the XM592 fuze could be used in the XM563F2 fuze. The new design reduced the number of parts and machining operations and produced a net saving of $1,164,780. At the Tooele Army Depot in Utah, an employee suggested that plastic instead of steel ventilators be used on wood containers for engines, axles, and transmissions; plastic ventilators cost 10 cents as opposed to $1 for steel, proved to be more suitable for withstanding weather conditions over a longer period of time, and produced a saving of $11,556. And finally, two employees at the New Cumberland Army Depot in Pennsylvania designed a holding and sizing fixture for the manufacture of fiberglass cones for the Chinook helicopter antenna assembly that reduced the number of operations from 3 to 1, saving both labor and materiel and leading to a monetary saving of $9,569.
Army Study Program
Until 1963, studies were prepared independently by various Army staff agencies and without the degree of coordination and correlation that would make them more widely useful. To correct this situation and based upon recommendations of the Director of Special Studies, an Army Study Advisory Committee was established, a documentation and information retrieval system was set up, common standards for study preparation were developed, and a master study program, to be updated annually, was published. The 1967 listing was actively used within the Army staff in planning, programing, and budgeting, and by the other Services and the Office of the Secretary of Defense as well. During the year, the office of the Director of Special Studies was augmented by the addition of a Special Studies Group with the mission of conducting priority studies for the Chief of Staff or the Vice Chief of Staff, and a Study Processing Group, organized to monitor the Army study effort and develop the Army master study program. Upon the organization of the office of the Assistant Vice Chief of Staff, these functions were assigned to the studies directorate.
Budget and Funds
The original Army budget estimate for regular appropriations for military functions only for fiscal year 1967 totaled $21.0729 billion in new obligational authority (NOA). Following OSD and Budget Bureau review, the President’s Budget requested $17.1164 billion in NOA for the Army. Congress appropriated $17.2790 billion in regular appropriations, and supplemental appropriations raised the NOA to $22.8735, well above the levels of recent years. The chronological devel-oment of the fiscal year 1967 budget is traced in the table below.
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ANNUAL REPORT OF THE SECRETARY OF THE ARMY
DEPARTMENT OF THE ARMY
CHRONOLOGICAL SUMMARY OF THE BUDGET ESTIMATE, FISCAL YEAR 1967 1 ________ [In millions of dollars]
New obligational authority	Total appropriated	6, 893. 4	CO CO »Q ci ci od O b-CO CO H		O	1Q	co	b- r-4	*	00	00 CO	Ci	co Q LQ	1-H			22, 120. 0 402. 5	22, 522. 5 351. 0		22, 873. 5
	Second Supplemental (PL 90-21)	78. 5	 hours after departure. By the end of the year, 13 regularly scheduled flights were operating weekly from Vietnam to the United States.
The following comparative data reflect the increase during fiscal year 1967 in commercial and military activities of MAC cargo, mail, and passenger services over the previous year:
AIRLIFT FORCES
381
TON MILES FLOWN (CHANNEL TRAFFIC)
[In millions]
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USMC______________________________________________ 100
MAP _______________________________________________ 89
ANG_______________________________________________ 145
Total________________________________________
3,581
MANPOWER AND TRAINING
415
Because of the authorized increases ATC opened a new pilot training center at Randolph AFB, Tex., in March 1967, bringing to nine the number of jet pilot training bases. In February 1967, the last of more than 36,000 AF pilots to be trained in the subsonic T-33 graduated at Craig AFB, Ala. The replacement for the T-33 is the supersonic T-38 Talon, which will be used at all ATC jet pilot training bases.
The Air Training Command increased the use of mission simulators in aircrew training. By ground simulation of normal and emergency procedures and use of new weapons, aircrews received more effective training and spent fewer flying hours covering basic techniques. The Air Force planned to procure mission simulators for all of its new weapon systems.
During the year, ATC began developing a special training program for pilots assigned to right seats in the new F-lll aircraft. This program would stress essential radar, navigation, and bombing skills.
The first class of German Air Force students entered undergraduate pilot training at Sheppard AFB, Tex., in August 1966. The Federal Republic of Germany purchased the required aircraft and agreed to reimburse the U.S. Air Force for training costs. The program, conducted largely by USAF personnel, will continue for 5 years.
During the period, 895 men received undergraduate navigator training: 782 for the Air Force, 63 for ANG, and 50 for MAP. Navigator-bombardier training was completed by 282 personnel.
The regular 25-week electronic warfare course graduated 151 students. Another 72 completed a specialized 10-day course for electronic warfare officers assigned to EB-66 units in Southeast Asia. This course offered instruction on radar equipment to be encountered, electronic order of battle, and EB-66 tactics and procedures. Electronic warfare simulators were used extensively. The Air Force planned to give the regular course to 220 officers and the specialized one to 120 in fiscal year 1966. Fifteen Marines also were to receive the first 16 weeks of the regular course.
In January 1967, the Air Force counterinsurgency course was transferred to TAC’s Special Air Warfare Center, Eglin AFB, Fla., from Air University. The course was mandatory for aircrews and other operations specialists assigned to certain special air warfare units.
Survival training for aircrews bound for Southeast Asia was reduced from 19 to 11 days by deleting a field exercise which overlapped training received at the PACAF Jungle Survival School. During the year, survival training was completed by 7,522 personnel. The Air Force was studying the feasibility of consolidating all AF survival training under a single manager and incorporating at one base the training now given at the TAG Sea Survival School, the U.S. Air Force Survival School, and the PACAF Jungle Survival School.
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ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
Technical Training
The impact of the conflict in Southeast Asia also continued to be felt in basic military and technical training. Overcrowding at Lackland and Amarillo AFB’s, Tex., resulting from the large influx of active AF, ANG, and AFRes recruits, pointed up the need for additional housing. In October 1966, the Secretary of Defense approved additional facilities at Lackland, and construction began before the end of June 1967. Nevertheless, since Amarillo was scheduled to close in June 1968, a future housing shortage was anticipated.
To meet the continuing demand for technical skills, 82.6 percent of the 116,800 USAF recruits (the largest percentage in recent years) who completed basic military training were assigned to technical schools. Training facilities were adjusted to handle the greater number. By July 1966, with the major training bottleneck broken, the Air Force had dropped the accelerated 4-week, 24-day basic military training course and restored the regular 6-week, 30-day training period. Similarly, in November the 6-day week for basic technical courses was eliminated and the normal 5-day week reinstated.
Several technical courses were established to meet specific needs in Southeast Asia. Increased use of conventional munitions necessitated a course on explosive ordnance disposal. The Air Force trained 1,798 munition specialists during fiscal year 1967 and planned to train 2,423 men the following year. The air police combat preparedness course provided additional training in weapons used by security police in Southeast Asia.
Because of the 1-year tour of duty in Southeast Asia, some experienced men returning from the theater had to be replaced with newly trained personnel who had reached only the three-skill level rather than the desired five- and seven-skill levels. On-the-job training in the United States of three-skill airmen was accelerated to enable them to reach the five-skill level in critical specialties. Deficiencies in on-the-job training in the United States, often caused by inadequate administration, were investigated and largely corrected by the end of the year. In several specialties, formal training replaced on-the-job training because the great demand for replacements in Southeast Asia created a shortage of experienced personnel to conduct on-the-job training.
In June 1967, the Air Force commenced support of the President’s Project TRANSITION which would make available in-service training and education to ease the shift of noncareer military personnel to civilian life. ATC established an experimental project at Randolph AFB, Tex., and similar programs were to be established at all major installations where appreciable numbers of servicemen would leave the Air Force.
MANPOWER AND TRAINING
417
ATC revised 26 of its technical courses to accommodate personnel recruited under the lower standards of the Secretary of Defense’s Project 100,000. At the end of the fiscal year ATC was evaluating the effectiveness of the revised courses and comparing their graduates with airmen of the same qualifications who had received on-the-job training.
Professional Education
AFROTC training was offered at 177 colleges and universities during the academic year of 1966-67. At 24 of these institutions it was mandatory. Seven colleges conducted only the 4-year program, 35 only the 2-year program, and 135 both the 2- and 4-year programs. Two institutions discontinued AFROTC on June 30, 1967. AFROTC enrollment as of February 1967 was:
Freshmen_____________________________________________30,397
Sophomores__________________________________________ 20,386
Juniors______________________________________________ 5,751
Seniors _____________________________________________ 5,643
Total---------------------------------------------62,177
The Air Force commissioned 5,896 AFROTC graduates, 1,106 more than last year. During the summer of 1966, 4,796 cadets attended 4 weeks of field training, and 796 completed the 6 weeks prerequisite to enrolling in the 2-year program.
In May 1967, the Air Force awarded or reconfirmed 3,031 financial assistance grants for AFROTC cadets entering the program in fiscal year 1968. They went to seniors, juniors, and for the first time to 600 sophomores. Each grant, to be effective with the beginning of the fall term, provides for tuition, laboratory expenses, incidental fees, and the cost of textbooks. Cadets also receive $50 per month.
Twenty high schools participated in Air Force Junior ROTC during the year, and an additional 45 were to begin programs in the fall of 1967. The Air Force provided text material, individual equipment and uniforms, with the instructors—retired officers and noncommis-sioned officers—being hired by the schools.
Officer Training School commissioned 7,383 graduates in fiscal year 1967, as compared to 2,736 in fiscal year 1966. To accommodate the increased attendance, the training week was lengthened from 5 to 5^ days, the course reduced from 12 to 10 weeks, and 10 rather than eight classes scheduled. The selection board was able to be highly selective because high draft calls motivated many college graduates to apply for officer training.
In 1967, the Air Force Academy graduated 524 cadets and commissioned all but 10. In addition, the Air Force commissioned 13 West Point and 10 Naval Academy graduates. It planned to assign 265
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ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
Academy graduates to pilot training and 41 to navigator training. The remainder continued academic work or technical training.
Academy liaison officers talked to more than 42,000 young men in 25,000 high schools and junior high schools during the fiscal year to interest them in the Academy. The Air Force estimated that 90 percent of the men who entered the Academy had been visited by liaison officers.
More than 1,250 graduates of the Air Force Academy had served in Southeast Asia by the end of the year. Approximately 400 were in the theater on June 30, 1967, with 200 in South Vietnam. Twenty-four graduates had died in the war zone, 19 in combat. Eight had downed enemy MiG’s one having two confirmed kills and another two unconfirmed but probable kills.
Light aircraft flying training for cadets at the Academy was approved during the year. Physically qualified volunteers were scheduled to receive approximately 36 hours of flight instruction plus the associated classroom training in their senior year. This training was planned to begin in January 1968 and was expected to motivate more graduates to select flying careers as well as accelerate their future pilot training. The program would also identify those cadets who lack flying aptitude, enabling them to redirect their interests to other career fields.
Attendance at Air University schools was reduced about 70 percent by demands of the war in Vietnam. Although most commands sent as many students as they could spare, the January 1967 class at the Squadron Officer School had 372 students instead of the usual 788. The full quota of students was selected for the Air War College and the Air Command and Staff College, but Headquarters USAF directed only 30 percent of them to attend. Personnel records would show that they had been chosen and explain why they did not attend. Six noncommissioned officer academies and 11 leadership schools were in operation, but SAC’s academies remained closed because of war demands, and TAC’s were scheduled to close also. The NCO Academy at Headquarters Command graduated its first WAF class.
The Air Force Institute of Technology (AFIT) selected 1,583 men to fill a quota of 1,744 for continuing academic work toward college degrees in the fields of management, engineering, and science. Of the total, 150 were to train with industry. Fellowships or scholarships were given to 67 students and 964 degrees awarded during fiscal year 1967. The major problem in selecting students was the shortage of academically qualified officers who could be spared from operational assignments. AFIT’s School of Systems and Logistics filled 90 percent of its 3,674 spaces, but it was not able to train enough students to meet requirements. AFIT’s Civil Engineering Center graduated 900 stu
MANPOWER AND TRAINING
419
dents, 200 of whom were second lieutenants entering the civil engineering career field on their first tour of duty.
The University of Oklahoma, which in 1964 began offering seminars in government on some USAF bases, arranged for a new series at Offutt AFB, Nebr. Sponsored by SAC, the courses would be open to qualified officers of other commands. The seminars were offered to individuals stationed at locations where more conventional graduate study was not available.
The Minuteman Education Program, established in 1962 to provide college courses for launch-control officers at the isolated missile sites, enabled 240 students to obtain college degrees by June 30, 1967. On that date, 554 students were enrolled at six bases.
Language training for USAF personnel stationed in Southeast Asia was delayed pending completion of a Defense Language Institute survey to determine the proper size of the program. During the year 28 other language programs were conducted in the continental United States and at selected oversea bases. Ten more were scheduled to begin in September 1967.
IX.	Research and Development
During fiscal year 1967 the Air Force pursued an extensive research and development program aimed at acquiring new and improved weapon and supporting systems for the future. At the same time, high priority was given current projects that met the requirements of Air Force combat forces in Southeast Asia. The Air Force expedited numerous developments which improved equipment or otherwise enhanced unit capabilities to carry out assigned missions.
Southeast Asia Requirements
The Air Force continued to respond rapidly to the requirements of the tactical forces in Southeast Asia. During fiscal year 1967, 42 tasks were funded under Project 1559 at a cost of more than $4 million, 19 of them in direct support of Southeast Asia operational requirements (SEAOR’s). Since inception of this project, 58 tasks related to the war effort were completed or closed out, 45 were canceled or disapproved, and 70 remained active. In addition to Project 1559, other “quick reaction” funds were made available for counterinsurgency aircraft modifications and reconnaissance and electronic warfare projects.
An example of quick response was the SEAOR received in January 1967 for a C-130 cargo buffer stop. Air Force development engineers designed and fabricated a stop by positioning material-handling equipment on the rails forward of the load. This allowed adequate cargo restraint during takeoff, eliminated the need to tie and secure bundles separately and then regroup them in flight, and increased the load capacity from 12 to 16 bundles. The development, completed within several months, cost $20,000.
Another SEAOR forwarded by 7th Air Force requested an arresting system on all jet fighter base runways in the combat theater to permit recoveries from either direction. In early 1967, the Air Force ordered 14 BAK-13 systems, the first of which was received on June 27. The BAK-13, which has a 1,000-foot cable runout, can handle any fighter in the USAF inventory. The Air Force also obtained four arresting machines (with a 650-foot runout) from the Marine Corps and shipped them to Vietnam in March.
420
RESEARCH AND DEVELOPMENT
421
As part of Project SHED LIGHT, the Air Force pursued a number of developments to help illuminate the terrain for attack by either ground or air units. In June 1967, flight tests began on a LAU-62A automatic flare launcher, designed to dispense MK-24 and MLU-A4 flares at a variable rate. MLU-A4 produces 5 million candlepower, twice the light output of the MK-24. Work also continued on a battlefield illumination airborne subsystem (BIAS) built around a series of xenon lights that produce 6 million candlepower.
Another approach under investigation to improve night vision involved a photomultiplier tube with an extended infrared response S-20 photocathode and a high speed multiplier. It was expected to facilitate infrared reconnaissance and surveillance and direct night viewing.
Many crewmen flying UC-12 spray aircraft had been wounded by enemy ground fire. They were issued new armor vests, designed by the Aerospace Medical Division working with Army specialists, which protected the neck as well as the torso.
In November 1966, development of a microwave “manpack” radar set with an integrated circuit design was completed. The 233-pound radar can be conveniently packaged in small units and carried by seven men into locations otherwise inaccessible for use as radar sites. The manpack radar was undergoing field testing and evaluation at yearend.
In Vietnam, F-100 radar antennas were found to fail after about four combat missions because of acoustical vibrations created by cannon fire. AF engineers fabricated a viscoelastic damper which increased the service life of the antenna fivefold in tests. Several units were ship* ped to Southeast Asia for further evaluation.
Experience acquired in preparing sites for vertical takeoff aircraft helped the Air Force understand soil stabilization problems in the theater. A recently developed fiberglass reinforced resin was used to stabilize sand ammunition revetments, prepare cargo storage areas, and spray sandbags to prevent the burlap from rotting.
The Air Force continued to introduce modern and more effective munitions into the war zone, including dispensers, bomblets, a retarded bomb, fuzes, and rocket warheads. The loading of bombs and ammunition on fighter aircraft was substantially improved. Newly acquired heavy equipment transported loaded racks to the flight line and attached them to the aircraft. The new MAU-33M bomb lift trailer permitted prepacking of bombloads for modified B-52’s, greatly facilitating munition handling.
The CBU-24, a weapon delivered by a diving aircraft and released above the zone of intensive ground fire, was developed to suppress enemy flak. It has about the same weight as a 750-pound bomb a,nd
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ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
contains about TOO BLU-26 bomblets. During the year it was undergoing operational evaluation in Southeast Asia.
On November 15, 1966, the Air Force selected two contractors to verify the preliminary design and provide data on the AGM-64A MAVERICK air-to-surface missile. Their proposals were received in April 1967 and were under study at the close of the year. The MAVERICK would be used by the F-111A, F-4, and A-7D against such point targets as heavily armored vehicles and trucks. A small rocket booster would enable it to hit targets over a wider area than glide weapons.
Space
Manned Orbiting Laboratory
The objectives of the manned orbiting laboratory (MOL) program, approved by President Johnson on August 25, 1965, are to determine the military capabilities of man in space and to develop equipment and technology that will contribute to manned and unmanned space flight. The MOL system consists of a TITAN HIM booster, a GEMINI B spacecraft, a laboratory vehicle, and supporting equipment. Once in orbit, a two-man crew will move from the spacecraft to the laboratory, conduct experiments in a “shirt-sleeve” environment during a flight of up to 30 days, and return to the spacecraft for reentry and landing.
During fiscal year 1967, the Air Force established the basic configuration and initiated procurement of long leadtime items. It also designed and began construction on a $24.3 million launch complex at Vandenberg AFB, Calif., and completed a mockup of the laboratory. On May 19, 1967, the Air Force awarded a fixed-price incentive fee contract to cover engineering development of the laboratory and a second contract for work on the GEMINI B.
On November 3, 1966, in an important flight test, a TITAN IIIC boosted a GEMINI spacecraft into space to evaluate a heat shield containing an MOL access hatch. The suborbital flight demonstrated that the modified heat shield could withstand the high temperatures of reentry.
Spacecraft Technology
In its spacecraft technology and advanced reentry test (START) program, the Air Force continued work on a spacecraft that would enable an astronaut returning from orbit to maneuver and select his landing site. During the year the SV-5D precision recovery including maneuverable entry (PRIME) vehicle was launched from Vandenberg AFB by ATLAS boosters on three occasions and demonstrated that it could reenter the atmosphere, undergo ablation without losing
RESEARCH AND DEVELOPMENT
423
control, and maneuver off its ballistic path, before returning to a target area. After this 7-foot long, 860-pound wingless spacecraft met all mission objectives on its third flight on April 19,1967, a scheduled fourth launching was canceled at a savings of at least $1 million.
As the next phase of the START program, the Air Force planned to test the X-24 (formerly the SV-5P), a manned vehicle several times the size of the SV-5D, which initially would be dropped from an aircraft at Edwards AFB, Calif. These piloted low speed tests (PILOT) were to investigate landing techniques and the maneuvering ability of lifting bodies in flights at low speeds and altitudes. At least 20 flights with the X-24 were planned, beginning in late calendar year 1967.
Communication Satellites
In January 1967, the Air Force completed the second successful launching in the initial defense communications satellite program (IDCSP), adding eight satellites to the seven orbited in June 1966 and raising the number of operating satellites in space to 15. Three additional satellites were scheduled for launch in July 1967, making a sufficient number available to constitute an operational system. A replenishment launch in the spring of 1968 was expected to complete the first phase of the Defense Satellite Communications System.
During the year, the United States and Great Britain concluded a memorandum of understanding whereby two synchronous satellites would be orbited to augment the IDCSP to provide operational communications for use in the defense of the United Kingdom. The first launch in this program, which is entirely financed by Great Britain, will take place in 1968.
The Air Force awarded a contract in January 1967 to acquire an experimental tactical communication satellite for joint Service use. Other contracts for purchase of a limited number of associated communication terminals were awarded in the spring of 1967. When installed in Army vehicles, Navy ships and submarines, and Air Force aircraft, the terminals would be used in tests to obtain the information and experience needed to develop an operational DoD tactical communication satellite system within the next few years.
Detection Satellites
Two 500-pound VELA satellites—launched to detect any violations of the limited nuclear test ban treaty and to gather environmental data on radiation from natural occurrences in space—completed their third year in orbit in mid-October 1966. They were the oldest U.S. spacecraft continuing to provide useful data.
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ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
On April 28, 1967, the Air Force successfully launched two new 760-pound VELA satellites into a 60,000-nautical-mile orbit. Stabilized and downward-looking, they had an improved capability for detecting nuclear explosions.
Project GEMINI
During the first half of the period, the Air Force worked closely with NASA on the final three GEMINI flights. An important “first” was achieved during the 3-day flight of GEMINI 10, which began on July 18,1966, when Maj. Michael Collins, USAF, demonstrated that a man could do useful work in space. He maneuvered from the spacecraft to the ATLAS-AGENA target vehicle and retrieved a micro-meteorological detection instrument. During the flight of the GEMINI 12, beginning November 11, Maj. Edwin Aldrin, USAF, set a record for extravehicular activity by remaining outside his spacecraft for 5 hours, 36 minutes.
Both the GEMINI 10 and 12 spacecraft carried a unique attitude control system developed by scientists of the Office of Aerospace Research (OAR). The system, which detects pitch and yaw, senses the alignment of the spacecraft with a stream of charged particles through which the vehicle passes.
The space program was marked by tragedy during the year. On January 27,1967, three astronauts—Lt. Col. Virgil I. Grissom, USAF, Lt. Col. Edward H. White II, USAF, the first American to walk in space, and Lt. Cmdr. Roger B. Chaffee, USN—were killed in a flash fire inside their APOLLO spacecraft on the launch pad at Cape Kennedy, Fla. On January 31, two AF technicians, Airman 2/C William F. Bartley, Jr., and Airman 3/C Richard G. Harmon, were killed in a similar fire in a space cabin simulator at Brooks AFB, Tex.
Other Space Launchings
During the year the Air Force launched a number of scientific satellites, some riding piggyback aboard boosters carrying out other missions. On July 13, 1966, two OAR satellites were launched from Vandenberg AFB, Calif., aboard an ATLAS missile. One successfully entered orbit as a passive communication device relaying signal reflections to several ground stations.
On August 4, a SCOUT rocket launched another OAR satellite into orbit from Vandenberg; it carried seven experiments designed to map and monitor particle radiations in space. On August 19, an ATLAS-AGENA boosted into orbit from Vandenberg two piggyback satellites—a sequential collation of range (SECOR) Army vehicle and an Air Force environmental research satellite. A second SECOR satellite was launched on October 5, also aboard an ATLAS-AGENA.
RESEARCH AND DEVELOPMENT
425
On October 28, five OAR experiments, designed to study electron and ion density structure in the Van Allen radiation belts, were orbited from Vandenberg by a SCOUT rocket. The most spectacular scientific satellite launch of the year occurred on November 3, 1966, and demonstrated the remarkable versatility of the AF TITAN IIIC booster. Its primary mission was the suborbital test of the GEMINI B heat shield for the MOL. After it drove the spacecraft back into the atmosphere for the reentry test, the TITAN IIIC transtage pitched up and boosted three satellites containing nine engineering and scientific experiments into orbit.
On December 11, an ATLAS booster placed two additional OAR scientific satellites into orbit from Vandenberg. They carried 11 experiments for studying space radiation hazards to man. One satellite contained a gravity gradient stabilization system which was successfully operated.
On April 28,1967, the TITAN IIIC booster that orbited two VELA nuclear detection satellites also carried aloft three OAR scientific spacecraft. They contained experiments to investigate the effects of vacuum on the characteristics of 16 metals and to monitor radiations in the Van Allen belts and from the sun.
At the close of the year, OAR scientists launched a 65-pound payload 187 miles into space from Wallops Island, Va., in a suborbital test. Carried aloft by a TRAILBLAZER II four-stage, solid-propellant rocket, the payload was part of a continuing investigation of the reentry communication blackout phenomena caused by ionized flow fields that form around spacecraft returning to earth.
Engineering Development
The Air Force and NASA continued to use the XB-70 aircraft to investigate dynamic loads and evaluate the stability, control, and handling of large supersonic aircraft. In January, after numerous flights, the XB-70 completed a series of sonic boom tests. On March 25, 1967, the Air Force transferred management and operational control of the big aircraft to NASA. The Air Force would continue to provide two XB-70 pilots, chase aircraft, and equipment. NASA planned to put additional instrumentation into the aircraft and use it in support of the national supersonic transport program.
The advanced ballistic reentry systems (ABRES) project continued to provide important technological data to the Air Force, Navy, and other strategic system agencies for use in improving reentry vehicles and materials. Using the relatively inexpensive ATHENA booster, the Air Force conducted 34 experimental subscale flights from Green River, Utah, to the White Sands Missile Range, N. Mex., for a number of reentry test sponsors. After examining the results for the most
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ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
premising techniques, the Air Force further evaluated them for potential strategic missile applications and numerous secondary test payloads in full-scale launchings from Vandenberg. Nine experimental reentry vehicles were sent down the Western Test Range from the west coast base, using surplus ATLAS missiles.
Tn support of the Army’s NIKE-X program, the Air Force continued development and design of specially shaped target vehicles, some of which were launched during the year from Vandenberg.
Missile and Aircraft Technology
Advanced ICBM
The Air Force continued investigations of an advanced ICBM to supplement or replace part of the MINUTEMAN force and the entire TTTAN II missile force sometime during the 1970’s. Between December 1966 and May 1967, three studies of the new system were conducted. The system was visualized as similar to MINUTEMAN, with three solid-propellant stages, but more accurate and carrying a larger and more effective payload featuring new penetration aids and advanced reentry vehicles. In addition, the advanced ICBM was to be more survivable both in the ground and in flight.
Advanced Manned Strategic Aircraft
The Air Force continued development of components for the advanced manned strategic aircraft (AMSA), proposed as a replacement for the B-52 G and H aircraft. Although basically designed to operate against strategic targets, the bomber would also be able to carry out limited war assignments. AMSA would have variable sweep wings and four medium bypass-ratio engines able to sustain the aircraft at both subsonic and supersonic speed at high and low altitudes. The aircraft’s weapons would include the short-range attack missile. Concept formulation was essentially completed during the year. Two contractors continued work on the AMSA propulsion systems, and nonflight demonstrator engines were tested. Eight contractors worked on the aircraft’s avionics, defining the characteristics of navigation, target acquisition, weapon delivery, and other equipment.
Air Defense Aircraft
An improved manned interceptor, coupled with an airborne warning and control system (AWACS) and over-the-horizon radar, would provide a more, modern air defense force. Studies indicated that such a combination would also permit major reductions in the present ground environment equipment and sites. The reduced operating costs
RESEARCH AND DEVELOPMENT
427
of a modernized force over a period of time could largely offset the initial investment in the new aircraft.
The Air Force considered an interceptor on the order of the YF-12A the 'best approach. Tests of this prototype aircraft demonstrated that it would meet performance requirements and that it would be an even better aircraft if the SR-71 airframe were adopted. Test flights also showed that YF-12A radar could detect and track targets at long ranges and that air-to-air missile performance was impressive.
The Air Force proposed to install AWACS in a high-performance aircraft to give the Air Defense Command a system that could survive an enemy attack, track suspected or hostile aircraft, and control interceptors. Suitable for tactical control as well as air defense, the AWACS aircraft could be used to direct fighters against ground targets as well as to conduct air surveillance and direct intercepts.
Tactical Aircraft
Air Force investigations of an F-X as both an air superiority and ground attack aircraft for the post-1975 period continued throughout the year. After three contractors completed design studies of the F-X in May 1966, the Air Force awarded additional study contracts to help resolve two major issues: Whether the F-X should carry one or two crew members and whether a variable sweep wing or a doubledelta fixed wing would be more suitable. Results of these studies were expected to be available in the early fall of 1967.
Four study contracts were awarded for preliminary design of an A-X attack aircraft, specifically intended for close support of Army units. This aircraft would be relatively inexpensive, rugged, and highly survivable. The Air Force expected to complete concept formulation for the A-X by the fall of 1967 and, assuming early development approval, attain an initial operational capability by December 1970.
Possible acquisition of a more moden aircraft to replace the AC-47 used in close support of ground forces in Vietnam was also studied. Attention centered on providing improved equipment and fire support for hamlets and installations under attack at night and in bad weather.
Recovery Aircraft
In March, OSD asked the Air Force and Navy to examine the possibility of producing an interim recovery aircraft. On April 30, the Services solicited proposals from industry for an aircraft that might be operationally available within 3 years. Nine contractors responded with 13 proposals, ranging from improved helicopters to vertical takeoff and landing (VTOL) designs. Meanwhile, in January, the Air Force initiated a study of a combat aircrew recovery aircraft (CARA) for use during the 1970’s.
860-499 0—70—28
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Aeromedical Evacuation Aircraft
On December 31,1966, the Secretary of Defense approved funds for the off-the-shelf purchase of eight CX-2 aircraft, a modified commercial jet, to replace some of the C-118’s and C-131’s used for aeromedical evacuation. On May 15, 1967, the Air Force requested bids on the eight aircraft with an option to buy an additional 42. The desired performance and characteristics of the CX-2 included a minimum range of 2,000 miles, takeoff and landing over a 50-foot obstacle within 5,000 feet, and capacity to carry 30 litter or 40 ambulatory patients, plus the medical crew. On June 14,1967, the Air Force received contractor proposals and began evaluation.
Experimental Aircraft
On November 18,1966, the X-15 research aircraft, jointly developed and flown by the Air Force, Navy, and NASA, set an unofficial speed record of 4,250 miles per hour or Mach 6.33. The plane has also climbed to an altitude of 67 miles. This performance makes the X-15 an economical flight test bed in the hypersonic ranges.
In vertical/short takeoff and landing (V/STOL) area, development of the tri-Service XC-142A continued. This tilt-wing turboprop transport had been flown more than 410 hours by contractor and military personnel at Edwards AFB, Calif. Despite accidents on December 28,1966, and May 10,1967, the XC-142A demonstrated good performance and required no unusual pilot skills.
In October 1966, the XC-142A flew nonstop from Edwards AFB to Dallas, Tex., a distance of 1,080 miles, in 3 hours 43 minutes, setting a V/STOL record for distance and endurance without inflight refueling. During a test at Dallas, Tex., it proved its air rescue capabilities by picking up a man from a life raft. The plane also operated satisfactorily from the deck of the aircraft carrier U.S.S. Yorktown.
Under the cooperative V/STOL tactical fighter research and development program, the United States and Germany successfully completed the design study phase in November 1966. By the spring of 1967, each country had selected a contractor for the system definition phase, and the two contractors were studying two aircraft—one that would employ both lift and vectored cruise engines and the other only vectored cruise engines. After evaluation of these studies, scheduled for completion in November 1967, the two countries would decide whether to proceed into the third phase of the program—the development, fabrication, and evaluation of 12 prototypes.
With the Vietnam experience highlighting the need for an improved tactical transport for limited war operations, the Air Force studied the possibility of developing a light intratheater transport (LIT) as a V/STOL replacement for the C-7A and C-123 during the 1970’s.
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The aircraft would operate from runways of less than 1,500 feet or, if necessary, without runways. In December 1966, contracts were awarded to six companies for studies of various concepts, including tilt wing, folded and stowed rotors, fans, and jets.
In September 1966, the Air Force initiated evaluation studies of an air deflection and modulation (ADAM II) concept for possible use in an aircraft with engines inside the wings. The Air Force believed the ADAM concept might be applicable in a subsonic V/STOL tactical or transport aircraft.
Propulsion
In support of the United States-German V/STOL fighter development project, the Air Force, during fiscal year 1967, operated several demonstrator engines with vectored thrust for both lift at takeoff and landing and for forward propulsion. In a related project, the joint United States-British direct-lift engine development, the unit demonstrated a greater than 20-to-l thrust/weight ratio.
The Air Force planned to begin development in the summer of 1967 of an advanced cryogenic rocket engine which would use liquid oxygen and liquid hydrogen as propellants. In this program, to be conducted jointly with NASA, the Air Force established a requirement for an engine with 250,000 pounds of thrust for use singly or in clusters for spacecraft propulsion or the upper stages of boosters. The Air Force Rocket Propulsion Laboratory, Edwards AFB, Calif., tested a full-scale thrust chamber of the rocket engine.
Construction of a toxic altitude propulsion research (TAPR) facility at the Air Force Rocket Propulsion Laboratory, Edwards AFB, Calif., begun in July 1965, was completed by the contractor and accepted by the Air Force on April 26,1967. Valued at $6 million, the facility provides the Air Force with a capability for simulated high altitude (120,000 feet) testing of both solid and liquid engines, including those with toxic propellants, up to thrusts of 50,000 pounds. In checking out the facility, an XAGM-48A solid motor was successfully fired on June 30,1967, in a 42-second duration test at a simulated altitude of 84,000 feet.
In November 1966, the TF-39 turbofan engine for the C-5A had its first full power test. By the end of the period, as the total number of test hours on the fan engine approached 400, indications were that it would meet all established objectives.
Avionics
During the year, the Air Force decided that the Mark II avionic system, originally conceived for the F-111A, would be installed in the F-111D models. Selected components of the Mark II would also be
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incorporated in the FB-111, and advances in avionic technology resulting from the Mark II development would be applied to future fire control systems for such new aircraft as the F-X.
Two C-123K’s were equipped with radar, several other nighttime sensers, and a weapon delivery system to improve night attack capability. By June 21, 1967, five airworthiness test flights on one aircraft had been completed. TAC planned to evaluate the system for possible deployment to Southeast Asia.
The Air Force continued advanced development of LORAN D—a successor to the LORAN C radio navigation system. Constructed of lightweight materials, LORAN D could be airlifted into combat areas and erected within 10 hours. It would then radiate signals which would allow equipment aboard the aircraft to compute its latitude and longitude. Experimental models of the transistorized transmitters were scheduled for delivery to the Air Force in November 1967.
Materials
The Air Force investigated and tested the uses of advanced filaments and composite materials in aircraft structures. A lower wing surface airflow deflector door, consisting of boron epoxy skins and full depth aluminum honeycomb core, was given a flight evaluation on an F-lll test aircraft. On January 3,1967, the aircraft flew 1 hour and 15 minutes at speeds up to Mach 1.6 and an altitude of 25,000 feet with the door attached. The design provides a 16 percent weight savings for this component compared to its aluminum counterpart. Future plans called for fabricating a wing panel and horizontal stabilizers out of this material for the F-lll, and undertaking additional tests.
A 30-month program was initiated to fabricate and test helicopter rotor blades made of boron filaments. A 10-hour flight test of the CH-47 advanced geometry boron composite blades was planned to follow ground testing.
Two compounds were developed that provide better elastomer seals for use in aircraft hydraulic systems. One of the seals was expected to increase service life by almost twice that of current compounds when immersed in hydraulic fuels. At the end of the period it was being evaluated for use on the F-lll and other new aircraft.
Research
On July 18, 1966, the Air Force launched an 815-foot long, 26-million-cubic-foot balloon, twice as large as any of its predecessors, from Holloman AFB, N. Mex. The NASA-financed flight was designed to test the balloon system prior to the start of a series of experi
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ments necessary to a soft landing of an unmanned VOYAGER capsule on Mars in the early 1970’s. The first in this series was successfully conducted on August 30 from Walker AFB, N. Mex. and OAR planned to launch four more of these giant balloons during the summer of 1967.
Air Force scientists achieved record low temperatures in their investigations of cryogenic thermoelectric cooling. They attained a temperature of 129° Kelvin or minus 228° Fahrenheit from a heat sink by using a two-stage magneto-peltier cooler mounted on a six-stage peltier cooler. Future plans called for construction of an improved cooler using thermoelectric and thermomagnetic effects to cool an operating infrared detector. The temperature goal for this device would be 80° Kelvin or minus 316° Fahrenheit.
Several fuel cells which exceeded the 30-day life requirement were developed by the Air Force to increase the capacity of the AGENA electrical power supply. Each cell produces 28 volts and up to 250 watts. The first test was stopped at the end of 30 days. The second test had accumulated 70 days as of June 30, 1967.
As part of its air defense mission, the Air Force in Project BLUE BOOK has been investigating reports of unidentified flying objects since 1948. After reviewing the project, the Air Force Scientific Advisory Board recommended that the program be expanded to include studies by independent scientists of selected sightings. In October 1966, the Air Force contracted with the University of Colorado to analyze phenomena associated with these sightings and to submit recommendations on Air Force methods of investigation and evaluation. A special panel of the National Academy of Sciences agreed to review the report of the University of Colorado scientists after completion in 1968.
On June 30, 1967, the Air Force discontinued the Arctic Aeromedical Laboratory, Fort Wainwright, Alaska, and transferred its research and development work to the School of Aerospace Medicine, Brooks AFB, Tex.
Ranges and Equipment
In September 1966, the first eight EC-135N APOLLO/range instrumentation aircraft, purchased by the Air Force to support NASA’s lunar landing program, made its initial flight. In December, it was tested during the flight of GEMINI 12. The modified 0135 set up two-way voice communications, recorded telemetry data during several orbits of the spacecraft, and transmitted the information to an Eastern Test Range ground station. Five of the EO135N’s were on hand by
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June 30, 1967, and the remaining three were scheduled for delivery in December.
The AF Western Test Range on March 17,1967, assumed operational control of the APOLLO/range instrumentation ship Vanguard, the first of five such vessels that would support the lunar landing program.
At Eniwetok Atoll, the Western Test Range improved terminal scoring of ICBM launchings from Vandenberg by placing an acoustical scoring system in the bottom of the lagoon. On March 30, 1967, the range acquired a two-man submarine which the Air Force would use to recover reentry vehicles impacting in the lagoon.
In October 1966, the first flight test of the space ground link subsystem (SGLS), conceived as the standard telemetry, tracking, and command system for satellites for the period up to 1975, proved highly successful. The equipment was scheduled to be installed at all stations of the Air Force Satellite Control Facility during the next 2 years.
X.	Management
The Air Force continued to stress good management in the use of its resources. It pursued a vigorous cost reduction program, increasingly turned to computer systems to help manage its resources, and adopted a number of new administrative changes which improved operational efficiency.
1967 Budget
The proposed Air Force budget for fiscal year 1967, as approved by the President, called for $20,942 million in new obligating authority, or $1,112 million less than the amount approved the previous year. The new total included $256 million for military construction and $2,220 million to purchase 599 aircraft, including F-lllA’s, FB-lll’s, F-4C’s, RF-AC’s, C-141’s, and C-5A’s. The defense appropriation bill passed by Congress in October 1966 gave the Air Force $20,806 million in new obligating authority. A separate bill passed in November 1966 added $218.5 million for military construction.
Congress subsequently passed two supplemental appropriation acts— the first provided $3,029 million to support the buildup in Southeast Asia; the second, $151.7 million to finance military and civilian pay raises and other requirements. With new transfers of an additional $17.6 million, the Air Force had a total of $24,223 million in new obligating authority, or $1,568 million more than appropriations adjusted for transfers for the previous year.
Including transfer and supplemental funds, the major cost categories for fiscal year 1967 were: Military personnel (including AFRes and ANG), $5,574 million; operations and maintenance (including ANG), $5,853 million; aircraft procurement, $5,316 million; missile procurement, $1,234 million; other procurement, $2,659 million; research, development, test, and evaluation (RDT&E), $3,172 million; and military construction (including AFRes and ANG but excluding military housing), $414 million.
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ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
The following table summarizes the total funds available for obligation in fiscal year 1967:
AMOUNTS AVAILABLE FOR OBLIGATION BY THE AIR FORCE DURING
FISCAL YEAR 1967—AS OF JUNE 30, 1967
[In millions of dollars] 1
Department of Defense Appropriation Act, 1967---------------------- 20, 805. 9
Military Construction Appropriation Act, 1967---------------------- 218. 5
Supplemental Defense Appropriation Act, 1967----------------------- 3, 029. 0
Second Supplemental Appropriation Act, 1967------------------------ 151. 7
Total new obligation authority enacted---------------------- 24,205.1
Unobligated balance of prior year programs----------------------- 4, 420. 7
Other new authorizations------------------------------------------ +71. 3
Transfer from Emergency Fund, Defense to:
Operation and Maintenance, AF_________________________________ +63. 0
Research, Development, Test, and Evaluation, AF--------------- +42.2
Transfer to Emergency Fund, Defense from:
Military Personnel, AF---------------------------------------- 81. 6
Aircraft Procurement, AF______________________________________ -4. 0
Transfer from Operation and Maintenance, AF to:
Operation and Maintenance, Army------------------------------- •
Operation Expense, PBS, GSA___________________________________ • 3
Operation and Maintenance, Defense Agencies------------------- —• 7
Reimbursements---------------------------------------------------- b 446. 8
Total available for obligation fiscal year 1967------------- 30,161. 4
1 Represents nearest rounded figure.
Actual obligations and expenditures for fiscal year 1967 are summarized in the table below. The total of $26,531 million for obligations compares with $23,009 million for 1966 and $20,036 million for 1965. The total of $22,945 million for expenditures compares with $20,131 million for 1966 and $18,216 million for 1965.
USAF ACTUAL OBLIGATIONS AND NET EXPENDITURES FOR FISCAL YEAR 1967—AS OF JUNE 30, 1967
[In millions of dollars]1	...
Obligations Net expenditures
Military Personnel, AF_______________________ 5, 437. 3	5, 275. 0
Reserve Personnel______________________________________ 64.	3	64.	4
National Guard Personnel------------------------------- 84.	2	84.	6
Operation and Maintenance, AF---------------- 6, 067. 7	5, 469. 6
Operation and Maintenance, ANG------------------------ 271.	7	242.	8
Discontinued Procurement Appropriations--------------------- 2. 1
Aircraft Procurement_______________________________ 6,	277.	5	4,	842. 4
Missile Procurement_________________________________ b	375.	4	1,	278. 1
Other Procurement__________________________________ 2,	551.	0	1,	975. 9
Research, Development, Test, and Evaluation. _	3, 820.	2	3,	229. 2
Military Construction, AF____________________ 567. 4	536. 9
Military Construction, AFR------------------- 4. 5	5. 3
Military Construction, AN G__________________ 10-1	& 2
Miscellaneous_______________________________________________ —69. 0
Total_____________________________________________ 26, 531. 2	22, 945. 2
1	Represents nearest rounded figures. Amounts will not necessarily add to total.
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HOW THE AIR FORCE DOLLAR WAS SPENT
Percent
Aircraft, missiles, and related equipment____________________________________ 35
Aircraft______________________________________________________________ (21)
Missiles_______________________________________________________________ (6)
Other__________________________________________________________________ (8)
Military personnel 1_________________________________________________________ 24
Civilian personnel2__________________________________________________________ 10
Military construction 1_______________________________________________________ 2
Operation and maintenance 1__________________________________________________ 15
Research, development, test, and	evaluation_________________________________ 14
i Includes Reserve and Air National Guard costs.
2	Includes direct hire and contract personnel.
1968 Budget
For fiscal year 1968, the President requested $24,891 million in new obligating authority for the Air Force, including $631.4 million for military construction and $44 million for the Air Force industrial fund. This was $685.7 million more than the amount of new obligating authority that Congress provided for fiscal year 1967.
The $3,127 million presidential budget request for aircraft procurement covered more than 1,262 new aircraft including planes for the air forces of Vietnam, Thailand, and Laos.
At the end of June 1967, the House of Representatives had passed the appropriation bill with a $187.7 million decrease for the Air Force, excluding military construction which had not been acted upon. Most of the decreases were made in RDT&E, operation and maintenance, the industrial fund, and “other” procurement. Action by the Senate was pending at the close of the fiscal year.
Cost Reduction
Extensive changes were made in Air Force procedures for computing cost reduction, in accordance with new OSD requirements. The preceding year, instead of 1961, was used as the standard for measuring savings, reportable savings limited to those realized in the current year, and cost avoidance and budgeted cost reduction items eliminated.
Based on the new criteria, OSD set Air Force goals at $332 million (1.3 percent of the total budget) for fiscal year 1967, plus $583 million to be realized through fiscal year 1969 from actions taken during the current year. The fiscal year 1966 goal had been $2.4 billion.
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The change in criteria, announced in the fall of 1966, temporarily disrupted the reporting of savings from AF activities. By midyear, the Air Force had achieved validated savings amounting to only 7 percent of its goal and by the end of the third quarter less than 50 percent. However, by June 30, 1967, the Air Force had more than realized its objective. Savings were reported equaling 143 percent of the fiscal year 1967 goal.
The cardinal rule guiding Air Force cost reduction activities remained that no savings would be sought in areas which would degrade mission capability. The Air Force stressed buying only what was needed, buying at the lowest sound price, and reducing operating costs by improved management and use of existing resources. For example, an important cost reduction was achieved when the Air Force transferred repair of C-141 gear from Hill AFB, Utah, to Robins AFB, Gra., where the aircraft was maintained. The action reduced both the number of spares required to fill the pipeline and packing costs, saving $247,000 during fiscal year 1967 and an estimated $2.4 million for fiscal years 1967-69.
Military and civilian incentive awards are closely allied to cost reduction. First-year tangible benefits flowing from suggestions submitted by AF personnel totaled $120.2 million for fiscal year 1967— some $9.2 million more than for the previous year. Of 289,004 suggestions submitted, 46,174 were adopted. Cash awards to military and civilian personnel totaled $1.6 million. For each dollar awarded, the Air Force realized $74.92 in measurable savings.
In its Zero Defects program, aimed at raising standards of individual performance, the Air Force presented more than 50,000 awards to individuals and organizations during the 2^ years since it was begun. During fiscal year 1967, the Air Force Chief of Staff presented awards to 15 major commands, while defense industries also won 112 Air Force Participation Awards, 33 Air Force Achievement Awards, and nine Air Force Craftsmanship Awards.
Financial Management
In line with the general objectives set out in the President’s memorandum of May 24, 1966, the Air Force continued to improve its financial management techniques. The financial information for resource management (FIRM) system for wings and bases was tested at Laughlin AFB, Tex., beginning on July 1, 1966, to determine the feasibility of relying primarily on expense data for financial planning and control. Local commanders and managers were provided a monthly
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statement reflecting the cost of all resources used in performing assigned missions. As a result of a preliminary evaluation, the Air Force decided to continue the FIRM test, with some modification, during fiscal year 1968.
The Air Force also designed an interim financial management system for its worldwide operations. It included some of the features of Project FIRM and provided for operation of depot maintenance activities under an industrial fund and the use of additional divisions of the stock fund to hold materiel items in “suspense” between the time of receipt and consumption. Setting July 1, 1967, as the date for installing the interim system, the Air Force issued instructions to all field activities and began training personnel. However, implementation of this project was suspended as a result of congressional decision on the fiscal year 1968 appropriation bill. Congress did permit a test of the proposed system and the Air Force made plans to conduct one beginning in July 1967.
Data Automation
Air Force automatic data processing equipment has progressed from the relatively primitive punchcard accounting systems used during World War II to some 976 highly sophisticated computers installed around the world.
Modernization and standardization of automated base supply accounting continued during the year. Of the 147 bases scheduled to receive UNIVAC 1050-11 computers, 134 had received them by June 30, 1967.
Nine of the 17 UNIVAC 1050-II’s scheduled for Southeast Asia were in place by the end of June. Also, 13 Burroughs B-263 systems were installed in the theater with two more programed. An additional four computers were to be emplaced, completing a projected buildup to 36 in Southeast Asia by the end of March 1968.
As part of the modernization program, the Air Force installed a new computerized system in place of a manual system which had main-tained some 93,000 individual flight records. An automated center was established in Europe to control the redistribution of excess materiel. Originally conceived to improve management of AF resources only, the center also aided in the redistribution of DoD materiel resulting from the relocation of U.S. forces from France. The three Services subsequently prepared a joint plan for using the center in screening all DoD releasable assets in the theater.
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In October 1966, MAC established a computerized passenger reservation center at Rhein Main AB, Germany, to handle passenger reservations for all DoD agencies in Europe. Intermediate MAC reservation points in England, France, and Spain were tied into the main center in Germany, where travel requests were matched with scheduled flights.
In June 1967, OSD approved Air Force acquisition of more advanced electronic computers for the Air Force Global Weather Center at Offutt AFB, Nebr. The new equipment would permit processing of weather satellite data and development of new techniques for weather forecasting.
During the year, the Air Force and the Department of Commerce agreed to establish a computer facility at Asheville, N.C., for joint use in processing climatological data. The facility would replace separate installations presently in use, reduce administrative overhead, develop guidance for common-use computer programs, and save $94,000 annually.
Procurement and Production Management
Industrial Planning
The demands of the Southeast Asia conflict strained the capacity of many production facilities. To assure timely support of combat operations, the Air Force analyzed various segments of the industrial base to identify shortages in skilled manpower, production facilities, machine tools, equipment, and other deficiencies contributing to long leadtime. This information furnished a basis for Air Force recommendations to increase productivity in critical areas.
On December 1, 1966, the Air Force initiated an intensive analysis to reduce its purchasing and alleviate the strain on the industrial complex. It resulted in the cancellation of 123,258 items proposed for procurement valued at $75.9 million and 42,227 procurement orders valued at $20.4 million. At the same time, the Air Force canceled more than 1,500,000 requisitions for centrally procured items valued at $383.9 millinn and eliminated 354,817 slow-moving articles worth $38 million. Finally, 72,557 items valued at $272.2 million were reused.
The monthly expenditure of munitions in Southeast Asia increased to well over twice the amount used during the peak of the Korean war. Since 1965, Air Force munition procurement had increased sixfold, requiring the reopening and retooling of a number of production facilities. During fiscal year 1967, the Air Force was able to replenish its stockpiles as it received more munitions than it consumed. Additionally, because the Air Force inventory of World War II and Korean
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war type ordnance was largely expended during the year, stockpiles were refilled with newer and more versatile munitions.
The Air Force manufacturing methods program placed particular emphasis on solving special production problems associated with Southeast Asia requirements, such as fabrication of improved aircraft armor plate, high-power electronic countermeasure tubes, munitions, and erosion-resistant coatings for jet engine blades.
Industrial Resources
Funds for industrial equipment modernization totaled $21.4 million in fiscal year 1967—$10.8 million less than for the previous year. The Air Force used the money to replace obsolete machinery with modern, efficient tooling, particularly for forging, extrusion, and machining work. The new equipment produced superior work at lower cost. For example, in one project, three new machines costing $885,000 replaced seven older ones and were expected to pay for themselves within 2 years. The Air Force also encouraged private industry to invest its own funds in modern equipment. Besides providing a superior product at less cost, modem industrial equipment cut manufacturing time and reduced the need for an extensive spares inventory.
The Air Force reduced its industrial plants and support facilities from 52 to 50. Twelve of these facilities were in the process of disposal on June 30, 1967, and another four were programed to leave the inventory within the next 12 months.
Procurement
The Air Force obligated $7.8 billion in new production orders, an increase of $1.2 billion in 1 year. Aircraft and spares obligations in fiscal year 1967 rose to $3.1 billion as compared to $2.8 billion the previous year. Procurement of missiles and spares dropped from $560.6 million in fiscal year 1966 to $460 million. The amount contracted for modification, facility, component, and other support activities decreased from $4.97 billion to $4 billion. Obligations for communication and electronic equipment totaled $199 million.
In fiscal year 1967, as in the past few years, the Air Force increased the dollar value of procurement contracts awarded through competitive bidding. This was accomplished despite the fact that emergency noncompetitive procurement to satisfy logistical requirements in Southeast Asia had been allowed since July 1965. Between 1962 and 1967, the percentage of price competitive contracts rose from 17.3 to 31.2 percent. The Air Force estimated savings of $16.8 million had resulted during the fiscal year by switching from noncompetitive to competitive procurements.
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The Air Force reduced the use of cost-plus-fixed-fee contracts from 46.4 percent in fiscal year 1961 to 5.1 percent in 1967. At the same time the need for shifting from cost-plus-incentive-fee (CPIF) contracts to fixed-price-incentive (FPI) and fixed-price (FP) contracts whenever feasible was emphasized. During fiscal year 1967, the Air Force cut its obligation ratio for CPIF contracts to 12.4 percent, a reduction of 3.4 percent over the previous year. FPI and FP contracts made up 79.5 percent of the Air Force fiscal year 1967 obligations, up 4.7 percent from fiscal year 1966.
“Total package” procurement, introduced in 1965 with the award of FPI contracts for C-5A airframes and engines, was extended to the purchase of the AGM-69A short-range attack missile (SRAM) and several lesser programs. Under this method the Air Force pays a single price for the design, development, production, and lifetime support, including provision of spare parts and ground support equipment, of the weapon system.
Multiyear procurement contracts resulted in better standardization, more effective price competition, and reduction of administrative costs. Legislative restrictions, however, denied use of these contracts for projects funded by single-year appropriations. Consequently, the Air Force urged the adoption of legislation expanding the use of multiyear contracts for such varied activities as flight training instruction, maintenance of remote operational sites, base services, food services, and grounds maintenance.
Small business procurement increased in dollar value although there was a slight decrease in percentage. Small concerns received $1.3 billion in prime contracts, as compared to $1.2 billion for the previous year, or 11.9 percent of the $11 billion awarded to business concerns in the United States. Small concerns also received approximately $1.2 billion, or 34.6 percent, of all subcontracts let by Air Force prime contractors.
Military Assistance Program
The Air Force has participated in the military assistance program (MAP) for 18 years, enabling friendly nations to modernize their air forces through U.S. grant aid and allied purchases. As of June 30, 1967, nearly 270 foreign air force squadrons—both jet and conventional—had either been equipped or were being supported under this program. Practically all of these squadrons were operationally ready, and in most instances the unit not meeting the necessary criteria could not do so because it was converting to newly acquired aircraft. Air Force MAP expenditures reached a cumulative total of $10.6 billion, of which aircraft accounted for $6 billion. By the end of the
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fiscal year the Air Force had delivered 16,050 planes, including 11,000 jets.
In fiscal year 1967, Air Force grant aid for supplies and services amounted to $281 million, distributed among 25 MAP countries. Deliveries included 113 F-5’s, 24 F-86’s, 35 cargo planes, 84 trainers, and 100 utility aircraft and helicopters. In addition, the military assistance Service-funded program for Vietnam and Korea furnished support totaling $292 million. Deliveries included 21 F-5’s, 19 cargo planes, and 41 utility planes and helicopters, as well as ammunition and other support materiel.
Delivery of grant aid materiel and the sales program to Greece were partially suspended during the period, and totally suspended in the case of 15 Mideast countries. The previously suspended MAP grant aid programs in India and Pakistan were canceled and the funds recouped.
Military assistance sales, which not only bolster the military strength of allied nations but also ease the U.S. balance of payments problem, totaled more than $600 million for the second consecutive year. Sales included 78 new aircraft—C-130’s, F-5’s, and F-lll’s—and four aircraft control and warning sites. Congress limited combined grant aid and sales in Latin American countries to $85 million to encourage them to devote their resources to other than military equipment. The Air Force gave undergraduate pilot training in T-37 and T-38 aircraft and advanced training in the F-104G to 87 German Air Force (GAF) pilots. Another 51 students received F-104G transition training and 38 students completed an F-104G refresher course. Training of GAF pilots provided approximately $29 million in “gold flow” pamings
During the past 18 years, 69,989 foreign nationals have received training in Air Force schools under grant aid while 6,907 have completed training under foreign military sales. In fiscal year 1967, 4,804 foreign nationals received training under grant aid and military sales.
Logistics Management
AF logistics managers support an organization with more than $76 billion worth of resources, an annual budget approaching $25 billion, and a military and civilian complement of 1,250,000. Logistical support—supply, maintenance, transportation, and base operations— received $2.2 billion during fiscal year 1967. A major management job in peactime, the task became even more complicated with the AF buildup in Southeast Asia. However, despite miscellaneous problems in the distribution of supplies, occasional bottlenecks in transportation, and a number of unforeseen and urgent requirements, the AF logistical
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system permitted it to carry out the planned expansion of combat operations.
The phaseout of four of the nine Air Force Logistics Command air materiel areas (AMA) continued. Rome AMA at Griffiss AFB, N.Y., was deactivated on April 30, 1967. Norton AFB, Calif., which remained open after the closure of San Bemadino AMA on June 30, 1966, was transferred to the Military Airlift Command the following day. In March 1967, at the request of local, State, and industry officials, the Air Force decided to close Middletown AMA at Olmsted AFB, Pa., on June 30, 1968, 1 year ahead of schedule. The relocation of management, maintenance, and supply functions from the Mobile AMA at Brookley AFB, Ala., which would close on June 30, 1969, progressed on schedule.
The Air Force assisted employees who were affected by the AMA closures and helped local communities make the best possible use of the facilities. All employees were offered other jobs elsewhere within the Government. In September 1966 the Pennsylvania State University began classes at Olmsted AFB while the airfield proper was turned over to the State of Pennsylvania in June 1967. Portions of Marietta Air Force Station, associated with the Middletown AMA, were sold to an industrial development company and the remainder was taken over by the General Services Administration to stockpile strategic materials. The phased withdrawal from the Mobile AMA was accompanied by a gradual civilian takeover of the facilities. The city of Mobile planned to lease the production facilities of the base as they became excess to Air Force needs and in turn to sublease them to private industry. Negotiations were begun to make a portion of the base available to the University of South Alabama. The harbor airport facilities were being transferred to the U.S. Coast Guard.
Supply
Meeting the supply requirements of the Vietnam conflict required aggressive measures. The Air Force sought to buy as few new high-cost items as possible by expediting the repair and return of used articles. It was able to keep the aircraft and engine spares inventory at about the same size (approximately $7 billion), despite the larger number of aircraft, by improving management techniques and using computers which predicted requirements with great accuracy.
The low, not operationally ready supply (NORS) rate demonstrated the adequacy of the spares inventory and Air Force ability to put parts where they were needed. In March 1967 the NORS rate for aircraft in Vietnam was 3.99 percent—the lowest figure since intensification of
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443
AF operations there. This low rate was attained by applying such advanced management techniques as resupply by air, direct requisitioning to the responsible depot, daily surveillance of aircraft and missile status, and prewarehousing of materiel for newly activated units in Southeast Asia.
The value of AF war reserve materiel and unit mobility kits was demonstrated in Southeast Asia. “Grey Eagle” packages, designed to support 4,400 people deployed to new and unequipped bases, proved useful in getting the deployments started but were not designed for long-term support. These packages were updated both in quantities and in types of items in order to furnish better initial support and equipment suitable for extended use. Lightweight prefabricated buildings were substituted for tents, which deteriorated quickly in the theater. With regard to war reserve materiel, the Air Force decided to include some airfield runway matting to permit rapid construction of runways, taxiways, and parking aprons.
In February 1967, the Air Force inaugurated a program to improve management of the pallets and nets used in the 463L air cargo system. Although they were in short supply, the Air Force eliminated cargo backlogs resulting from the shortages.
During fiscal year 1967, the aircraft replenishment spares program totaled $919.6 million, $25 million more than the previous year and nearly double that of earlier years. The demands of the Southeast Asia war required the retention of items which normally would have been discarded, while the number of new items procured far exceeded the number discontinued. During the year, 230,732 cataloged line items were added to the Air Force inventory while only 165,499 were eliminated—a net gain of 65,233. As of June 30, 1967, the number of line items totaled 1,711,529.
Maintenance
AFLC’s rapid area maintenance (BAM) teams , introduced during fiscal year 1966, continued to supplement the efforts of maintenance personnel in operational units. By performing on-site heavy maintenance on crash- and battle-damaged aircraft, RAM teams permitted operational units to keep a maximum number of personnel in direct support of the combat mission. In 19 months, the teams repaired 191 aircraft and prepared 45 planes for one-time flight and an additional 36 for transportation to rear echelon maintenance facilities.
The depot maintenance program provided repair and overhaul of all AF equipment beyond the capability of field maintenance units. The cost of this maintenance totaled almost $900 million, an increase of
360-499 0—70-----29
444
ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
about $157 million over the previous year. Of the amount spent, approximately $446 million was for contract maintenance. Some $36 million went for maintenance and modification of intercontinental ballistic missiles, approximately 60 percent of it through contracts.
In view of airlift improvements and the desirability of limiting maintenance facilities in Southeast Asia, the Air Force tested the relative advantages of field versus depot repair for selected units in a combat environment. Two F-4C squadrons at Cam Ranh Bay relied primarily on maintenance support from a depot in the United States for 120 days while two other F-4C squadrons followed normal procedures for local base repair. The test results, which might lead to important changes in AF field maintenance, were expected in fiscal year 1968.
Combat operations in Southeast Asia indicated the need to modify aircraft by incorporating highly sophisticated electronic aids and countermeasures. Approximately $358 million was programed for this purpose during fiscal year 1967.
By the close of the fiscal year, 87 USAF bases were authorized a full range of nondestructive inspection (NDI) equipment. Within a relatively short span of time, Air Force use of X-ray, eddy current, ultrasonic magnetic particles, and penetrant methods in the maintenance of aircraft and missiles progressed from a laboratory experiment to an everyday work practice tool. For example, 0-130 fuel tanks were inspected with ultrasonic techniques at the rate of four man-hours per aircraft. Conventional inspection methods had required 400 hours. In addition to saving time and dollars, the technique enhanced safety by providing a more thorough internal structure inspection.
In January 1967, at Hill AFB, Utah, inspection began on the first of 400 Army NIKE-HERCULES sustainer motors. The motors were scrutinized by two AF 24-million-electron-volt linear accelerators, the largest industrial X-ray machines in the West.
An AFLC engineering team developed an automatic system which uses an electronic computer “snooper eye” for testing jet engines. Simultaneously operating the engine and collecting performance data this new technique can evaluate eight engines at the same time.
Spectromatic oil analysis continued to be an outstanding example of preventive maintenance. Metallic elements in used aircraft engine oil are identified by analysis of light emitted from a burning sample, thus detecting excessive engine wear. All PACAF, TAC, and USAFE bases were equipped with analyzers, eliminating the need to send oil samples to distant laboratories. During fiscal year 1967, 636,773 samples were tested and 465 defective engines discovered.
MANAGEMENT
445
Transportation
The AF materiel transportation, budget rose in fiscal year 1967 to approximately $450 million—more than $100 million above the previous year’s budget. A major portion of the increase resulted directly from the need to move great quantities of materiel to Southeast Asia. By June 30, 1967, base expansion was virtually completed and programed stock levels reached, and the Air Force expected to cut costs in the coming year. Action underway to reduce cost rates for channel traffic by 4.3 percent and for special assignment airlift by 3.7 percent would also be an important factor.
On January 1, 1967, 19 ships which had carried air munitions to Southeast Asia on a per diem basis were returned to the Military Sea Transportation Service (MSTS). The cost of each ship had averaged $5,000 a day with the Air Force paying these costs even if the ships returned empty to the United States. Their return to MSTS enabled the Air Force to utilize the entire MSTS fleet capability on a point-to-point basis, paying a set price per ton and no longer being responsible for the ships after cargo discharge.
The buildup of munition stocks for Southeast Asia allowed the Air Force to relax the mandatory delivery deadlines. The Air Force then determined that money could be saved by shipping some items from east coast ports that previously had been moved exclusively from the west coast, although transit time would increase from 8 to 10 days. Consequently, in January 1967 the SAC ammunition resupply section was moved to the Munitions Outloading Terminal, Sunny Point, N.C. As of June 30, 1967, 22 ships had left that port for Guam, saving approximately $400,000 per ship in transportation costs.
Two more Air Force bases were connected to commercial aviation pipelines during the year. Since five bases were closed, the total number of Air Force installations receiving this service totaled 47. Proposals for pipeline connections to three more bases were approved, with completion of all facilities programed for fiscal year 1968. By using commercial pipelines, the Air Force was able to boost annual savings to approximately $6.8 million and raise total estimated savings since 1954 to $57 million. The pipeline companies also provided 3.7 million barrels of fuel storage capacity for these bases at no cost to the Air Force.
In December 1966, the first units of an improved air-transportable fueling system went into use overseas. Lighter and smaller but with greater capacity than the existing system, the new equipment speeds up fueling of tactical aircraft dispersed at advanced bases. Transportable by C-130 or larger aircraft, the system can be set up and ready for
446
ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
use within an hour after being off-loaded. It weighs 11,000 pounds— one-third the weight of earlier transportable systems—and consists of two 50,000-gallon tanks of polyurethane-coated nylon fabric. Each folds into a bundle 13 feet long, 50 inches wide, and 24 inches high. Unfolded and ready for filling, each tank is 66 feet long and 24 feet wide. Fuel delivery to the storage tanks is done with two 3,000-gallon units made of the same nylon fabric. They rest on standard cargo pallets which are loaded into an aircraft and then filled by two 300-gallon-per-minute pumps driven by two standard engines. At the forward base, the fuel can be discharged into the storage tanks in 7 minutes.
In the first 21 instances of its use, this system saved the Air Force an estimated $27,000 in reduced drum costs and substantial savings in man-hours through elimination of repetitious handling of the 55-gallon drums hitherto used. The delivery of fuel to the Mekong Delta in South Vietnam, where C-130 or C-141 aircraft could not land, necessitated the modification of the fabric tank to use 2,000-gallon bladders that would fit into a 0-123. At the end of the period the modified sy stem was in use in the delta.
The Air Force received delivery of more than 400 aircraft refueling trucks that could be airlifted in C-130 and C-141 transports without disassembly. Retaining the 5,000-gallon capacity of earlier trucks, the new vehicles are longer and lower, have an aluminum tank which does not require coating to prevent contamination, and contain a bottom loading system that reduces the hazard of static electricity. The trucks service any type of aircraft at a flow rate of 600 gallons a minute.
Base Maintenance
In cooperation with the National Space and Aeronautics Admin-istration, the Air Force instrumented four different types of aircraft to measure runway roughness. These planes tested runways at several installations which had been programed for maintenance and repair. On the basis of the data gathered, three projects were modified and one was eliminated, reducing the cost more than $1 million.
During fiscal year 1967,1,443 fires on AF bases were reported, the lowest number in the history of the Air Force and a reduction of 879 from the previous year. Losses in building and contents totaled $4.19 million, down slightly fr^^i $4.26 million in fiscal year 1966, but well below the past lO-^Sar average of approximately $9.9 million. Fire suppression was required in 193 aircraft accidents, 22 more than in fiscal year 1966, but damage resulting from the fires totaled $10.2
MANAGEMENT
447
million as compared to $26.6 million. The total fire loss for fiscal year 1967 was $14.4 million, less than half of the $31 million loss incurred a year earlier. Forty-four persons lost their lives, 36 in fires associated with aircraft accidents.
As in the past, the Air Force supported the Department of Defense program to improve management and conservation of natural resources at military bases, including abatement of air, soil, and water pollution, and improvement of outdoor recreational facilities.
After the President of France, Charles deGaulle, requested that U.S. military forces leave France by April 1, 1967, the Air Force established procedures for disposing of its excess real and related personal property. All but 3 of the 67 USAF installations in France were returned to the owners by the deadline. Leases on the Orly Admin-istration Office and the Paris Air Postal Office were extended to June 30, 1967, to accommodate U.S. participation in the Paris Air Show. The disposition of the Suippes bombing and gunnery range— used jointly by U.S. and French units—remained unsettled at the close of the fiscal year, pending negotiations for its continued use.
Air Force actions resulting from the DoD program for consolidation of activities, joint use of facilities, and base closures continued. During the year the Air Force issued disposal directives for eight major installations, including James Connally AFB, Tex.; Brookley AFB, Ala.; Turner AFB, Ga.; Walker AFB, N. Mex.; Truax Field, Wis.; Orlando AFB, Fla.; Hunter AFB, Ga.; and the airfield complex portion of Amarillo AFB, Tex. As of June 30, 1967, Air Force installations were classified as follows:
	United States		Overseas		Total	
	1966	1967	1966	1967	1966	1967
Operational		73	70	46	43	119	113
Operational support:						
Flying		6	6	5	4	11	10
Nonflying		12	12	4	4	16	16
Training__________________	32	31			32	31
Research and test_____________	9	9			9	9
Logistic________________ _	10	9			10	9
Southeast Asia bases (non-U.S.						
property) _____________			17	18	17	18
						
Total		142	137	72	69	214	206
						
448
ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
Inspections
The Inspector General reviewed the effectiveness, efficiency, and economy of Air Force planning, programing, and management. The 53 inspections conducted during this period included five general inspections of major commands. Inspectors stressed readiness, security, safety, and support effectiveness. In Southeast Asia inspectors focused on flight and munition safety and support for USAF combat forces.
The Aerospace Systems and Technology Division of the Inspector General’s Office was established to inspect aerospace system design, development, and acquisition procedures and actions, as well as conventional munitions. It also monitored inspections of AF units responsible for chemical-biological munitions. Ten inspections of industrial management of resources were conducted.
Safely
Despite the Air Force buildup in Southeast Asia, the aircraft accident rate declined during the year. From July to December 1966 the rate dropped by 0.2—from 5.0 major aircraft accidents per 100,000 flying hours to 4.8. By the end of June 1967 the rate had dropped another 0.2 to 4.6 accidents. In addition, both the number and rate of aircraft losses from noncombat accidents in Southeast Asia declined.
The Inspector General sponsored the Central Treaty Organization (CENTO) professional military development program seminar on aviation flight safety in May 1967. The objective was to exchange ideas, experience, and professional knowledge which would lead to greater flight safety within CENTO. During May the Inspector General also was host to the Joint Services Safety Conference which dealt with safety problems common to the Army, Navy, Coast Guard, and Air Force.
In dealing with missile-space safety, the Inspector General stressed care during modification of missile systems. Before modifications were begun, inspectors presented extensive briefings, based on the TITAN II silo disaster near Little Rock AFB in August 1965, to military and contractor personnel. There were no accidents involving missiles undergoing major modification, and the number of general missile mishaps decreased. Inspection teams were particularly concerned with the safety and reliability of tactical missiles employed in Southeast Asia. New operational and maintenance procedures were implemented by technical modifications, especially to air-to-air missiles.
Personnel from the Inspector General’s Office participated in the i n vesti gati on of the APOLLO spacecraft accident at Cape Kennedy on January 27, 1967, which killed three astronauts, and assisted in
MANAGEMENT
449
presenting findings and recommendations to Congress. They also monitored the investigation of an accident in an experimental pressure chamber at Brooks AFB, Tex., 4 days later when two airmen were fatally burned under circumstances similar to the APOLLO disaster. Following these accidents inspectors reviewed the safety measures used in 100 percent oxygen environments and inspected fire-extinguishing systems, flame-resistant clothing, emergency rescue equipment, and egress procedures.
The Air Force nuclear safety program continued to be effective. There were no nuclear yield mishaps or nuclear weapon accidents. Of the approximately 2,000 reports of nuclear safety problems analyzed, about half involved negligible safety hazards while the remainder were continually checked to assure effective correction. Radiological safety surveys at 10 AF bases revealed that all were following adequate safety procedures. Annual nuclear safety surveys were made at three reactor facilities and no major safety discrepancies found. In all, the Air Force conducted 28 nuclear safety surveys during the fiscal year.
The ground accident rate for fiscal year 1967, as measured by the number of accidents per million man-days of exposure, was lowered to 26.0, with a total of 10,507 accidents reported. This compared with a 29.2 rate and 11,088 accidents for the preceeding year. The private motor vehicle continued to be the worst killer, and the Air Force vigorously supported auto safety programs. Its basic standard traffic safety course was taught at 136 AF bases.
The military buildup in Southeast Asia was accompanied by a corresponding increase in use of nonnuclear munitions. Accidents involving these explosives increased in fiscal year 1967 but not out of proportion with expanded operations. Research continued on safety policies for the storage and use of explosives.
Security
The Inspector General completed 410,880 investigations in fiscal year 1967—353,388 personnel, 24,900 criminal and procurement fraud, and 32,952 counterintelligence. The property recovered as a result of criminal investigations was valued at nearly $270,000.
The Air Force emphasized security activities in Southeast Asia during this period. The security police combat preparedness course, which prepared men for security duty in Southeast Asia, graduated 3,214 men by the end of the year. Operation SAFE SIDE provided specially trained security police to guard USAF bases in Vietnam.
The Air Force continued to review its advance development programs to determine if they had adequate security protection and to insure correct security classification. The classification of certain com
450	ANNUAL REPORT OF THE SECRETARY OF THE AIR FORCE
pounds in the area of advanced propellant ingredients was studied. AF personnel participated in a review of contractor documents concerning supersonic transport propulsion to determine what information could be released to foreign governments and yet protect the interests of the United States. Contractor and AF personnel studied security policy and public release procedures covering subjects of national interest, such as weapon systems, communication satellites, and other space programs.
APPENDIX
Appendix
STATISTICAL INFORMATION
Page
Table 1. Major Forces by Department_________________________ 454
2.	Major Forces by Mission___________________________ 455
Vietnam
3.	U.S. Military Personnel in South Vietnam__________ 456
4.	Republic of Vietnam Forces________________________ 456
5.	Other Free World Forces in Vietnam________________ 457
6.	U.S. Forces Deployed in Southeast Asia____________ 458
7.	U.S. Military Personnel Casualties in Vietnam Conflict. 459
8.	U.S. Aircraft Losses in Southeast Asia____________ 460
Budget and Finance
9.	Financial Summary_________________________________ 461
10.	Chronology of Fiscal Year 1967 Budget Estimates___	462
11.	New Obligational Availability for Military Functions and Military Assistance, Fiscal Year 1967____________ 463
12.	Obligations for Military Functions and Military Assistance, Fiscal Years 1966-67_____________________ 464
13.	Expenditures for Military Functions and Military Assistance, Fiscal Years 1966-67_____________________ 466
14.	Defense Budget, Fiscal Years 1967-68______________ 468
15.	U.S. Defense Expenditures and Receipts Entering the International Balance of Payments____________________ 469
Research and Development
16.	Research, Development, Test, and Evaluation Programs, Direct Obligations___________________________________ 470
Personnel
17.	Active Duty Military Personnel____________________ 471
18.	Deployment of Military Personnel__________________ 472
19.	Military Personnel by Grade_______________________ 473
20.	Enlisted Personnel Procurement____________________ 474
21.	Dependents of Military Personnel__________________ 475
22.	Reenlistment Rates________________________________ 476
23.	Women Military Personnel__________________________ 478
24.	Civilian Personnel________________________________ 479
25.	OSD-JCS Personnel_________________________________ 480
26.	Other Defense Activities Personnel________________ 481
27.	Reserve Personnel_________________________________ 482
28.	Reserve Personnel Not on Active Duty______________ 483
29.	Reserve Personnel in Paid Status__________________ 484
30.	Reserve Active Duty Basic Training Programs_______	485
31.	Medical Care in Defense Facilities________________ 486
32.	Civilian Health and Medical Program of the Uniformed Services_____________________________________________ 487
452
APPENDIX
453
Logistics	paw
33.	Contract Awards by Program__________________________ 488
34.	Contract Awards by Type of Contractor_______________ 489
35.	Contract Awards by Pricing Provisions_______________ 490
36.	Contract Awards by Competitive Status_______________ 491
37.	Contract Awards by Region and State_________________ 492
38.	Defense-Wide Supply_________________________________ 494
39.	Excess Materiel_____________________________________ 495
40.	Federal Catalog System______________________________ 496
41.	Cost Reduction Program______________________________ 497
42.	Major Storage Facilities____________________________ 498
43.	Property Holdings___________________________________ 499
44.	Real Property Holdings______________________________ 500
45.	Family Housing______________________________________ 501
46.	Defense-Wide Transportation Services________________ 502
Military Assistance
47.	Military Assistance, 1950-67________________________ 503
48.	Military Assistance Deliveries______________________ 504
49.	Military Assistance Obligations and Expenditures___	506
Note.—Subtotals In these tables may not add to totals due to rounding.
454
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 1
MAJOR FORCES BY DEPARTMENT
	June 30,1961	June 30,1965	June 30,1966	June 30,1967
Department of Defense Active duty personnel	 Active aircraft inventory		2,483,771 31, 262	2,665,389 29, 864	3,094,058 30, 554	3,376,880 32, 809
Department of the Army Divisions	 Regiments/RCTs	 Armored combat commands	 			14 6 1 2 8 3 4 41% 76% 857, 622 5, 564	16 4	17 4	17 5
Brigades	 Battle groups		_ ___		7	9	11
Special Forces groups	 Army missile commands	 Surface-to-surface missile battalions	 Air defense missile battalions	 Active duty personnel	 Active aircraft inventory			7 2 38 56% 969, 066 6, 933	7 1 36 51% 1,199,784 8, 098	7 1 33 50% 1,442,498 9, 375
Department of the Navy Commissioned ships in fleet. Warships	 Other	 Carrier air groups	 Carrier antisub air groups... Patrol and warning squadrons	 Marine divisions	 Marine air wings	 Active duty personnel	 Navy	 Marine Corps	 Active aircraft inventory.		819 (375) (444) 17 11 38 3 3 803, 998 (627, 089) (176, 909) 8, 793	880 (407) (473) 17 11 35 3 3 861, 661 (671, 448) (190, 213) 8, 056	909 (410) (499) 17 10 32 4 3 1,006,921 (745, 205) (261, 716) 8, 260	931 (419) (512) 17 10 32 4 3 1,036,888 (751, 619) (285, 269) 8,417
Department of the Air Force USAF combat wings	 Strategic wings	 Air defense wings	 Tactical wings (including airlift)	 USAF combat support flying squadrons	 Active duty personnel	 Active aircraft inventory.		88 (37) (19) (32) 121 821, 151 16, 905	78 (28) (13) (37) 120 824, 662 13, 875	74 (23) (ID (40) 126 887, 353 14, 196	74 (23) (9) (42) 127 897, 494 15, 017
APPENDIX
455
MAJOR FORCES BY MISSION
Table 2
	June 30, 1961	June 30, 1965	June 30, 1966	June 30, 1967
Strategic Retaliatory Forces				
Intercontinental ballistic missiles:				
MINUTEMAN squadrons					16	17	20 6
TITAN squadrons	 			6	6	
ATLAS squadrons			5			
POLARIS submarines		_________	5	29	37	41
Strategic bombers:				
B-52 wings		__ 	 		13	14	13	12
B-58 wings________ _ _ _ ___ __	1	2	2	2
B-47 wings				20	5		
				
Continental Air and Missile				
Defenses				
Manned fighter interceptor squadrons	 Interceptor missile (BOMARC) squad-	42	39	33	28
rons_______ „ _ _ _ _ _	_	7	6	6	6
Army air defense missile battalions		49%	23%	18	18
				
General Purpose Forces				
Army divisions _ _ _	_______ _ ___ _	14	16	17	17
Army maneuver battalions				124	174	191	201
Army aviation units			67	110	160	187
Army Special Forces groups			 __	3	7	7	7
Warships:				
Attack carriers_______ _	_ _	15	16	15	15
Antisubmarine warfare carriers		9	9	8	8
Nuclear attack submarines		13	21	22	28
Other		_ _ __		 		328	331	328	327
Amphibious assault ships	 _	110	135	159	161
Carrier air groups (attack and antisub-				
marine warfare) ___________	28	28	27	27
Marine Corps divisions/air wings.			3/3	3/3	4/3 130	4/3 126
USAF tactical forces aircraft squadrons..	93	117		
Airlift and Sealift Forces				
Airlift aircraft squadrons:				
C-130 through C-141		16	38	42	44
C-118 through C-124__________	35	19	16	16
Troop and cargo ships and tankers		101	109	121	130
				
456
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 3
U.S. MILITARY PERSONNEL IN SOUTH VIETNAM1 [In thousands]
	Army	Navy3	Marine Corps	Air Force	Total
June 30, 1964		9. 9	1. 0	. 6	5. 0	16. 5
Fiscal Year 1965					
Sept. 30, 1964		11. 9	1. 1	. 7	5. 8	19. 5
Dec. 31, 1964		14. 7	1. 1	. 9	6. 6	23. 3
Mar. 31, 1965		15. 6	1. 3	4. 7	7. 5	29. 1
June 30, 1965		27. 3	3. 8	18. 1	10. 7	59. 9
Fiscal Year 1966					
Sept. 30, 1965		76. 2	6. 1	36.4	13. 6	132. 3
Dec. 31, 1965		116. 8	8. 7	38. 2	20. 6	184. 3
Mar. 31, 1966		137.4	12. 8	48. 7	32. 3	231. 2
June 30, 1966		160. 0	17.4	53. 7	36.4	267. 5
Fiscal Year 1967					
July 31, 1966		163. 3	19. 7	55. 2	38. 8	277. 0
Aug. 31, 1966		176. 9	21. 4	55. 3	43. 2	296. 8
Sept. 30, 1966		189. 2	21. 9	56. 5	45. 5	313. 1
Oct. 31, 1966		212. 8	22.7	59. 0	47. 9	342.4
Nov. 30, 1966		219. 7	24. 0	61. 6	50.4	355. 7
Dec. 31, 1966		239.4	23. 8	69. 2	52. 9	385. 3
Jan. 31, 1967		252. 4	24. 3	73. 7	53. 0	403.4
Feb. 28, 1967		259.4	24. 5	74. 2	55.4	413. 5
Mar. 31, 1967		264. 6	25. 1	75. 4	55. 8	420.9
Apr. 30, 1967		279. 9	25. 6	73. 9	56. 2	435. 6
May 31, 1967		280. 7	27. 9	79. 5	55.4	443. 5
June 30, 1967		285. 7	29. 0	78.4	55. 7	448. 8
1 As reported by MACV.
3 Beginning in July 1965, includes 400 to 500 Coast Guard personnel.
Table 4 REPUBLIC OF VIETNAM FORCES [In thousands]
End of fiscal year
	1964	1965	1966	1967
Regular Forces__ ___			218. 5	265. 7	313. 6	326. 7
Regional Forces_____________	87. 3	107.7	141. 4	141. 3
Popular Forces_______________	99. 6	149. 0	137.7	141. 3
Other 1		120. 2	103.4	107. 8	122. 9
TOTAL		525. 6	625. 8	700. 5	732. 2
1 IncludTS Civilian Irregular Defense Group (CIDG), Armed Combat Youth, and National Police.
APPENDIX
457
Table 5
OTHER FREE WORLD FORCES IN VIETNAM
[In thousands]
Country	Fiscal year 1965— June 30, 1965	Fiscal year 1966		Fiscal year 1967	
		Dec. 31, 1965	June 30, 1966	Dec. 31, 1966	June 30, 1967
Australia 			 ___ _	1. 1	1. 5	4. 4	4. 4	5. 9
Korea _ 			 _ _ ____	2. 1	20. 7	25. 2	45. 6	45. 6
New Zealand_________	C)	. 1	. 2	. 2	. 4
Philippines		. 1	. 1	. 1	2. 1	2. 1
Thailand			C)	(*)	(i)	. 2	. 2
Other		(*)	C)	0	m	C)
TOTAL		3. 3	22. 4	29.9	52. 6	54. 2
1 Less than 50.
458
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 6
U.S. FORCES DEPLOYED IN SOUTHEAST ASIA
	End of fiscal year		
	1965	1966	1967
GROUND FORCES: Maneuver battalions		9	51%	85
Combat support battalions		4	38%	64%
Engineer battalions 1		W	30%	53
AIR FORCES: Fighter-attack aircraft		593	841	948
Non attack capable aircraft		405	838	1, 128
Helicopters2		505	1,687	2,419
NAVAL FORCES:8 River control ships		64	202
Coastal patrol ships 4		35	91	132
Offshore ships		60	49	87
1 Includes construction battalions.
3 Excludes Navy carrier-based helicopters.
* Navy and Coast Guard ships and vessels normally engaged in South China Sea-Gulf of Thailand area^west of 115° east.
< Includes DEB’s, MSO’s, MSC’s, WHEC’s, and PG’s.
APPENDIX
459
Table 7
U.S. MILITARY PERSONNEL CASUALTIES IN VIETNAM CONFLICT
	Fiscal years 1961-63	Fiscal year 1964	Fiscal year 1965	Fiscal year 1966	Fiscal year 1967
From Actions by Hostile Forces
DEATHS From aircraft accidents/ incidents	 From ground action		50 20	80 29	109 195	319 3,345	413 6,983
DEATHS Killed		39	84	191	3,099	6, 134
Died of wounds		4	5	13	341	749
Died while missing or captured		27	20	100	224	513
TOTAL DEATHS		70	109	304	3,664	7,396
WOUNDS (nonfatal) Hospital care required		112	391	806	11, 009	24, 999
Hospital care not required		104	356	774	9, 126	21, 974
Not the Result of Actions by Hostile Forces
DEATHS From aircraft accidents/ incidents	 Other than air	 DEATHS Died of illness	 Died while missing	 Died from other causes		12 26	15 28	62 95	193 450	424 910
	9 2 27	13 5 25	24 39 94	94 131 418	210 240 884
TOTAL DEATHS		38	43	157	643	1,334
360-490 0—70-----80
460
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 8
U.S. AIRCRAFT LOSSES IN SOUTHEAST ASIA
Aircraft type	Fiscal year 1965		Fiscal year 1966		Fiscal year 1967	
	Hostile	Operational	Hostile	Operational	Hostile	Operational
Fighter and attack		 		85	49 1 3 2 7 1 18	302 4 30	85	393 2 32	87 4 5
Interceptor											
Reconnaissance	 			8			5		
Bombers __ _	_ _ _ _								
Transports 				 __	1		14	14	5	18
Trainers __	___ _	__ _	_ -						
Other fixed-wing_ 			11		58	42	46	66
Total fixed-wing_		 _ _ _						
	105 29	81 58	408 124	146 130	478 190	180 290
Helicopters _	__ _	_								
						
TOTAL AIRCRAFT LOSSES		134	139	532	276	668	470
APPENDIX
461
Table 9 FINANCIAL SUMMARY
[In billions of dollars]
Total obligational authority (TOA)	Fiscal year 1966	Fiscal year 1967	Fiscal year 19681
TOA BY PROGRAM:			
Strategic forces		6. 8	7. 1	8. 1
General purpose forces		29. 5	34. 3	34. 4
Specialized activities		4. 7	4. 9	5. 3
Airlift and sealift forces		1. 7	1. 5	1. 6
Reserve and Guard forces		2. 3	2. 6	2. 8
Research and development		5. 3	5. 4	5. 8
Logistics		5. 3	6. 3	6. 0
Personnel support		7. 2	8. 2	8. 9
Administration		2. 6	3. 0	3. 1
Military assistance		1. 2	. 9	. 6
GROSS TOA		66. 6	74. 2	76. 6
Less unfunded retirement pay		-. 1	3	-. 2
NET TOA		66. 5	74. 0	76. 4
Working capital			__ _		. 5	2
Other financing adjustments		-2. 9	-1. 7	-1. 4
NEW OBLIGATIONAL AUTHORITY		63. 5	72. 8	75. 3
TOTAL EXPENDITURES		55.4	68. 0	73. 1
TOA BY DEPARTMENT AND AGENCY:			
Army		 __ ______	__ _	19. 1 . 1	23. 6 . 1	24. 7 . 1
Civil Defense				
Navy	 __ 		 			20. 0	22. 0 25. 5	22.4 26. 0
Air Force		24. 3		
Defense agencies		1. 3	1. 5	2. 0
Defense family housing		. 7	. 5	. 8
Military assistance		1. 2	. 9	. 6
GROSS TOA2		66. 6	74. 2	76. 6
i As estimated in the President’s budget, Jan. 24,1967.
2 Excludes cost of nuclear warheads.
462
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 10 CHRONOLOGY OF FISCAL YEAR 1967 BUDGET ESTIMATES
[In billions of dollars]
Item	Printed budget estimates Jan. 24, 1966	SEA supplemental Jan. 24, 1967	Supplemental requests Mar. 1&-23, 1967	Total
NEW OBLIGATIONAL AUTHORITY				
(NOA) REQUESTED		59. 9	12. 3	. 6	72. 7
ANALYSIS BY FUNCTIONAL TITLE:				
Military personnel		18. 7	1. 4	. 3	20. 4
Operation and maintenance		15. 7	3. 3	. 3	19. 3
Procurement		16. 4	6. 3	—	22. 7
RDT&E		6. 9	. 1		7. 0
Military construction		. 6	. 6		1. 2
Family housing		. 5	—	0)	. 5
Civil defense		. 1			. 1
Revolving and management funds			. 5	—	. 5
Total, military functions		58. 9	12. 3	. 6	71. 8
Military assistance		. 9			. 9
TOTAL NOA REQUESTED		59. 9	12. 3	. 6	72. 7
CONGRESSIONAL ACTION		+. 1	-. 1	0)	0)
TOTAL NOA ENACTED		59. 9	12. 2	. 6	72. 7
1 Less than $50 million.
APPENDIX
463
Table 11
NEW OBLIGATIONAL AVAILABILITY FOR MILITARY FUNCTIONS AND MILITARY ASSISTANCE, FISCAL YEAR 1967
[In millions of dollars]
	Army	Navy	Air Force	Defensewide activities i	Department of Defense
MILITARY PERSONNEL:					
Active forces		6, 821	5, 186	5, 419		17, 426
Reserve forces		646	151	155		951
Retired pay	 Total		7, 467	5, 337	5, 574	1, 839 1, 839	1, 839 20, 216
OPERATION AND MAIN-					
TENANCE		7, 523	5, 094	5, 853	965	19, 434
PROCUREMENT:					
Aircraft		1, 195	3, 068	5, 316		9, 579
Missiles		536	436	1, 234		2, 207
Ships			1, 757			1, 757
Tracked combat vehicles		509	8			517
Ordnance, etc		1, 958	1, 554	1, 789	1	5, 302
Electronics and communi-					
cations		575	459	347	4	1, 385
Other procurement	 Total		826 5, 598	730 8, 012	523 9, 209	46 51	2, 125 22, 871
RDT&E:					
Military sciences		166	192	159	107	624
Aircraft		103	337	706	12	1, 158
Missiles		733	708	888	114	2, 443
Astronautics		13	13	913	4	942
Ships		1	298			299
Ordnance, etc		193	183			375
Other equipment		311	99	288	238	936
Programwide management. Total		78 1, 597	89 1,919	218 3, 172	11 484	396 7, 172
CONSTRUCTION:					
Active forces		403	267	401	9	1, 080
Reserve forces	 Total		403		5_ 272	13 414	9		18 1, 098
FAMILY HOUSING					507	507
CIVIL DEFENSE					101	101
REVOLVING AND MAN-					
AGEMENT FUNDS		351	77		107	535
OTHER					7	7
MILITARY ASSISTANCE—				782	782
TOTAL		22, 939	20, 710	24, 223	4,853	72, 724
1 Includes the Office of the Secretary of Defense, Joint Chiefs of Staff, Defense agencies, Office of Civil Defense, Military Assistance, etc.
464
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 12 OBLIGATIONS FOR MILITARY FUNCTIONS AND MILITARY ASSISTANCE, FISCAL YEARS 1966-671
[In millions of dollars]
	Unobligated balance brought forward	New obligational availability	Reimbursements, etc.	Total obligational availability	Obligations	Unobligated balance carried forward2
DEPARTMENT OF DEFENSE: 1966 3		11, 049	63, 533	6, 555	81, 136	67, 220	13, 865
1967		li 865	72* 136	6, 169	9 2' 169	78, 208	13' 737
						
BY FUNCTIONAL TITLE						
Military Personnel: 1966			17, 073	179	17, 252	17, 226 20, 329	
1967			2o" 216 15, 339	262	20, 478 17, 429		
Operation and Maintenance: 1966		75		2, 015		17, 337	71
1967		71	19, 434	2, 091	21, 596	21, 463	61
Procurement: 1966		8, 805	20, 013	3, 324	32, 141	21, 796	10, 345
1967		10, 345	22, 871	2, 665	35, 881	24, 705 7,240	11, 176
RDT&E: 1966		1, 224	6, 746	685	8, 655		1, 414
1967		1, 414	7, 172	583	9, 170	8, 167	1, 003
Construction: 1966		791	2, 566	483	3, 840	2, 073	1, 768
1967		1, 768	1, 098	559	3,425	2, 144	1, 281
Family Housing: 1966		111	666	6	783	564	217
1967.		217	507	5	729	550	178
Civil Defense: 1966		23	107	(*)	130	90	39
1967		39	101	1	141	118	22
Other: 1966						
1967				7		7	2	5
Military Assistance: 1966 3		20	1, 023	-137	906	895	11
1967		11	728	2	741	729	12
See footnotes at end of table.
APPENDIX
465
Table 12—Continued
OBLIGATIONS FOR MILITARY FUNCTIONS AND MILITARY ASSISTANCE, FISCAL YEARS 1966-67 —Continued
	Unobligated balance brought forward	New obligational availability	Reimbursements, etc.	Total obligational availa -bllity	Obligations	Unobligated balance carried forward2
BY AGENCY Army:						
1966		2, 388	17, 493	3, 293	23, 174	21, 000	2, 156
1967		2, 156	22, 588	3, 285	28, 028	24, 947	2, 965
Navy:						
1966		5, 127	18, 486	1, 768	25, 381	18, 714	6, 666
1967		6, 666	20, 633	1, 484	28, 783	21, 961	6, 762
Air Force:						
1966		3, 214	22, 655	1, 564	27, 432	23, 009	4, 421
1967		4, 421	24, 223	1, 518	30, 161	26, 531	3, 614
OSD and Defense Agencies:						
1966		277	3, 770	67	4, 114	3, 513	573
1967		573	3, 863	-121	4, 315	3, 922	362
Office of Civil Defense:						
1966		23	107	(4)	130	90	39
1967		39	101	1	141	118	22
Military Assistance:						
1966 3		20	1, 023	-137	906	895	11
1967		11	728	2	741	729	12
1 This table excludes revolving and management funds of the Department of Defense and the Foreign Military Sales Fund.
2 Consists of preclosing balance minus expired funds .
3 Fiscal year 1966 data have been adjusted to be comparable with fiscal year 1967 by treating militar y assistance reservations as obligations incurred.
* Less than $500,000.
466
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 13
EXPENDITURES FOR MILITARY FUNCTIONS AND MILITARY ASSISTANCE, FISCAL YEARS 1966-67
[In millions of dollars]
	Unexpended balance brought forward	New expenditure availability, etc.	Total available for expenditure	Expenditures	Unexpended balance carried forward 1
DEPARTMENT OF DEFENSE: 1966		34, 892 43, 041	63, 647 72, 732	98, 539	55, 377 68, 537	43, 041
1967				115, 773		46, 970
					
BY FUNCTIONAL TITLE Military Personnel: 1966		366	17, 136 20, 179 15, 480 19, 479 20, 053 22, 871 6, 746 7, 172 2, 610	17, 502 20, 896 17, 069	16, 753 19, 787 14, 710	717
1967-_ 		717				935
Operation and Maintenance: 1966		1, 589				2, 300
1967		2, 300		21, 779 42, 033	19, 000	2,700
Procurement: 1966		21, 980			14, 339	27, 678
1967		27, 678 4,259 4, 746 1, 359		50, 549	19, 012	31, 536
RDT&E: 1966				11, 005	6, 259	4, 746
1967				11, 918	7, 160	4,759
Construction: 1966				3, 969	1, 334	2, 636
1967 		2, 636 334	1, 098	3, 734	1, 536	2, 199
Family Housing: 1966			666	1, 000	647	346
1967			346	507	853	558	291
Civil Defense: 1966 		103	107	209	86	117
1967			117	102	219	100	114
Other: 1066					
1967				7	7	(8)	7
Revolving and Management Funds: 1966			2, 953	(2)	2, 953	281	2,670
1967			2, 670	534	3,204	512	2, 689
Military Assistance: 1966 __	1, 949	850	2,799	968	1, 831 1,740
1967		1,831	782	2,613	873	
See footnotes at end of table.
APPENDIX
467
Table 13—Continued
EXPENDITURES FOR MILITARY FUNCTIONS AND MILITARY ASSISTANCE, FISCAL YEARS 1966-67—Continued
	Unexpended balance brought forward	New expenditure availability, etc.	Total available for expenditure	Expenditures	Unexpended balance carried forward i
BY AGENCY Army: 1966		6, 147	17, 646	23, 793	14, 832	8, 941
1967		8, 941	23, 026	31, 968	21, 010	10, 824
Navy: 1966		15, 615	18, 521	34, 136	16, 026	18, 074
1967		18, 074	20, 792	38, 866	19, 291	19, 505
Air Force: 1966		9, 712	22, 753	32, 465	20, 131	12, 316
1967		12, 316	24, 255	36, 571	22, 945	13, 607
OSD and Defense Agencies: 1966		1, 364	3, 770	5, 134	3, 335	1, 760
1967		1, 760	3, 776	5, 536	4, 317	1, 180
Office of Civil Defense: 1966		104	107	211	86	119
1967		119	101	220	100	115
Military Assistance: 1966		1, 949	850	2,799	968	1, 831
1967		1, 831	782	2, 613	873	1,740
1 Net balance after withdrawals and restorations of unexpended balances as provided in Public Law 798.
2 Less than $500,000.
468
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 14 DEFENSE BUDGET, FISCAL YEARS 1967-68
[New obligational authority in millions of dollars]
	Fiscal year 1967			Fiscal year 1968
	Amounts requested	Amounts appropriated	Actual new obligational authority	Amounts requested 1
BY FUNCTIONAL TITLE:				
Military personnel		20, 380	20, 435	20, 216	22, 025
Operation and maintenance		19, 262	19, 226	19, 434	19, 154
Procurement		22, 714	22, 933	22, 871	22, 917
RDT&E		7, 040	7, 093	7, 172	7, 273
Military construction		1, 218	1, 097	1, 098	2, 123
Family housing		533	507	507	814
Civil defense		133	101	101	111
Other __ __ __	__ 				7	7	16
Revolving and management funds		535	535	535	241
Total		71, 815	71, 935	71, 943	74, 674
Military assistance		917	792	782	596
TOTAL		72, 732	72, 727	72, 724	75, 270
BY AGENCY:				
Army		22, 761	22, 874	22, 939	23, 629
Navy		20, 674	20, 672	20, 710	21, 134
Air Force		24, 139	24, 205	24, 223	24, 891
OSD-Def ense agencies		4, 108	4, 083	3, 970	4, 867
Civil defense		133	101	101	111
Military assistance		917	792	782	596
1 Amounts included in budget estimates of Jan. 24,1967.
APPENDIX
469
Table 15
U.S. DEFENSE EXPENDITURES AND RECEIPTS ENTERING THE INTERNATIONAL BALANCE OF PAYMENTS
[In millions of dollars]
	Fiscal year 1961	Fiscal year 1965	Fiscal year 1966	Fiscal year 1967
DEPARTMENT OF DEFENSE				
EXPENDITURES:				
Support of U.S. Forces		2, 471. 2	2, 553. 2	3,170. 1	3, 973. 3
Expenditures by military				
and civilian personnel x_	807. 9	972. 7	1,154. 6	1, 291. 9
Hire of foreign nationals._	366. 6	408. 0	438. 1	529. 8
Procurement:				
Major equipment		61. 6	78. 4	86. 8	143. 9
Construction		157. 5	104. 8	256. 1	393. 4
Petroleum products 2_	257. 2	269. 9	326. 2	378. 9
Other materials and				
supplies 8_ _ 			304. 5	145. 2	204. 0	262. 3
Operation and				
maintenance				
(other) 4_________	515. 9	399. 9	490. 8	697. 8
Other payments 4_ _ _		174. 3	213. 5	275. 3
Military Assistance		311. 9	168. 2	156. 8	123. 6
Offshore procurement		155. 1	75. 5	52. 6	29. 4
NATO infrastructure		105. 2	34. 0	50. 5	49. 0
Other_______   __ __	51. 6	58. 7	53. 7	45. 2
Net Change in Foreign Currency				
Holdings		-2. 0	. 9	12. 0	25. 8
OTHER AGENCIES’ EXPEN-				
DITURES s		343. 3	95. 1	50. 5	28. 1
TOTAL EXPENDITURES		3, 124. 4	2, 817. 4	3, 389. 4	4, 150. 8
RECEIPTS:				
Cash 8________	—318. 9	— 1, 252. 3	— 1, 045. 4	— 1, 548. 0
Barter			— 68. 9	-139. 5	-203. 7
TOTAL RECEIPTS		—318. 9	-1, 321. 2	-1,184. 9	-1, 751. 7
NET ADVERSE BALANCE		2, 805. 5	1, 496. 2	2, 204. 5	2, 399. 1
* Includes expenditures for goods and services by nonappropriated fund activities.
8 Except for fiscal year 1961, Includes expenditures for petroleum procured through Operation and Maintenance accounts as well as through Stock Fund accounts.
8 Except for fiscal year 1961, includes primarily expenditures through Operation and Maintenance and Stock Erma accounts.
4 Since fiscal year 1964, data previously reported as contractual services have been divided into two cate-8°rjes. i.e., “Operation and Maintenance (Other)” which Includes all O&M payments not included elsewhere, and “Other Payments,” which includes expenditures for retired pay, claims, research and development, industrial fund activities, etc.
6 Expenditures entering balance of international payments by the Atomic Energy Commission and other agencies included in the NATO definition of defense expenditures.
6 Includes only: (a) Sales of military items through Department of Defense; (b) reimbursement to United States for logistical support of U.N. forces and defense forces of other nations; (c) sales of services and excess personal property. Excludes estimates of receipts for military equipment procured through U.S. private sources, except when covered by govemment-to-government agreements and data are available.
470
ANNUAL RS*ORT OF THE SECRETARY OF DEFENSE
Table 16 RESEARCH, DEVELOPMENT, TEST, AND EVALUATION PROGRAMS, DIRECT OBLIGATIONS1
[In millions of dollars]
		Fiscal year 1966, actual	Fiscal year 1967, estimated	Fiscal year 1968, estimated
RESEARCH, DEVELOPMENT, AND EVALUATION: Military sciences	TEST,	602. 0	614. 9	611. 0
Aircraft and related equipment	 Missiles and related equipment			1, 096. 7 1, 964. 8	1, 291. 2 2, 432. 4	1, 098. 0 2, 446. 0
Military astronautics and related equipment		975. 5	1, 022. 0	1, 061. 1
Ships, small craft, and related ment	equip-	293. 1	287. 0	290. 9
Ordnance, combat vehicles, and related equipment__ _ _		 _ _ _ _		400. 7	388. 0	311. 0
Other equipment. _	_ _ _ _		838. 9	966. 8	977. 3
Management and support			_ __		402. 9	395. 8	411. 7
Emergency fund 2			18. 2	125. 0
				
Total		6, 574. 6	7, 416. 2	7, 332. 0
				
SUPPORTING ACTIVITIES: Military personnel______	_ _ _		288. 3	292. 3	277. 5
Procurement______________		107. 9	81. 9	64. 8
Operational and maintenance			37. 6	41. 0	55. 9
Civil defense____________ _ _ _		10. 0	10. 0	10. 0
Military construction			75.4	100. 8	95. 0
Other			. 7	8.8
				
Total		519. 2	526. 7	512. 0
				
TOTAL			7, 093. 8	7, 942. 9	7,844.0
				
1 As presented in the President’s budget, Jan. 24.1967.
2 The emergency funds used during fiscal years 1966 and 1967 have been added to the appropriate sub-categories to which they were transferred.
APPENDIX
471
Table 17 ACTIVE DUTY MILITARY PERSONNEL
	Department of Defense	Army	Navy	Marine Corps	Air Force
OFFICERS: June 30, 1966		348, 827	117, 786	79, 805	20, 512	130, 724
June 30, 1967		384, 496	143, 517	81, 902	23, 592	135, 485
Regulars: June 30, 1966		172, 430	43, 456	51, 074	14, 077	63, 823
June 30, 1967		174, 640	44, 529	51, 441	15, 794	62, 876
Reserves:1 June 30, 1966		176, 397	74,330	28, 731	6, 435	66, 901
June 30, 1967		209, 856	98, 988	30, 461	7,798	72, 609
ENLISTED: June 30, 1966		2, 732, 705	1, 079, 682	658, 635	240, 911	753, 477
June 30, 1967		2, 980, 666	1, 296, 603	663, 831	261, 584	758, 648
OFFICER CANDI- DATES: June 30, 1966		12, 526	2,316	6, 765	293	3, 152
June 30, 1967_		11, 718	2, 378	5, 886	93	3, 361
TOTAL: June 30, 1966		3, 094, 058	1, 199, 784	745, 205	261, 716	887, 353
June 30, 1967_		3, 376, 880	1, 442, 498	751, 619	285, 269	897, 494
i Members of reserve components, including National Guard, plus a small number of officers without component in the Army of the United States or Air Force of the United States.
472
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 18 DEPLOYMENT OF MILITARY PERSONNEL
[Percentages listed in parentheses]
	Department of Defense	Army	Navy	Marine Corps	Air Force
SHORE ACTIVI-					
TIES:					
June 30, 1966_		2, 662, 373	1, 199, 784	319, 736	255, 500	887, 353
	(86. 0)	(100. 0)	(42. 9)	(97. 6)	(100.0)
June 30, 1967-		2, 926, 840	1, 442, 498	309, 443	277, 405	897, 494
	(86. 7)	(100. 0)	(41. 2)	(97. 2)	(100. 0)
Continental U.S.:					
June 30, 1966		1, 774, 136	696, 263	266, 809	173, 962	637, 102
	(57. 3)	(58. 0)	(35. 8)	(66. 4)	(71. 8)
June 30, 1967_		1, 798, 711	766, 414	248, 061	170, 144	614, 092
	(53. 3)	(53. 1)	(33. 0)	(59. 6)	(68. 4)
Outside Continental					
U.S.:					
June 30, 1966_		888, 237	503, 521	52, 927	81, 538	250, 251
	(28. 7)	(42. 0)	(7.1)	(31. 2)	(28. 2)
June 30, 1967-		1, 128, 129	676, 084	61, 382	107, 261	283, 402
	(33. 4)	(46. 9)	(8.2)	(37. 6)	(31. 6)
AFLOAT AND					
MOBILE ACTIV-					
ITIES:					
June 30, 1966	431, 685		425, 469	6, 216	
	(14. 0)		(57. 1)	(2. 4)	
June 30, 1967		450, 040		442,176	7, 864	
	(13. 3)		(58. 8)	(2.8)	
					
TOTAL:					
June 30,1966		3, 094, 058	1, 199, 784	745, 205	261, 716	887, 353
	(100.0)	(100. 0)	(100. 0)	(100. 0)	(100. 0)
June 30,1967		3, 376, 880	1, 442, 498	751, 619	285, 269	897, 494
	(100.0)	(100.0)	(100.0)	(100. 0)	(100.0)
APPENDIX
473
Table 19 MILITARY PERSONNEL BY GRADE
JUNE 30, 1967
[Percentages listed in parentheses]
	Department of Defense	Army	Navy	Marine Corps	Air Force
OFFICERS...			384,496 (1L4)	143,517 (9.9)	81,902 (10.9)	23,592 (8.3)	135,485 (15.1)
Percent of total.						
Gen. of the Army—Fleet Admiral..							
	2 37 125 1,170 17,301 40,723 69,547 107,145 54,501 71,274 3,930 3,871 4,493 10,376 1	2 14 42 f	202 I	257 5,743 14,841 20,470 34,156 18, 685 32,981 1,723 3,014 4,019 7,368			
General	—Admiral..				10 39 |	261 4,310 8,433 14,784 22,722 15,291 12,724 596 499 335 1,898	1 7 f	29 I	39 738 1,538 3,589 5,946 2,953 7,223 107 175 137 1,110	12 37 165 217 6,510 15,911 30,704 44,321 17, 572 18,346 1,504 183 2
Lt. General	—Vice Admiral						
Maj. General 1	_	. . , , , }■	—Rear Admiral					
Bng. General] Colonel	—Captain.								
Lt. Colonel	—Commander						
Major	—Lt. Commander						
Captain	—Lieutenant						
1st Lieutenant —Lieutenant (JG)						
2d Lieutenant	—Ensign.									
Chief Warrant Officer W-4								
Chief Warrant Officer W-3		  ..					
Chief Warrant Officer W-2									
Warrant Officer W-l										
Unknown Grade						1
					
ENLISTED i...				2,980, 666 (88.3)	1,296,603 (89.9)	663,831 (88.3)	261,584 (9L7)	758,648 (84.5)
Percent of total								
Pay Grade E-9							
	16,183 42,430 143,424 273, 765 457, 323 702,678 728,106 405, 579 211,178	5,356 17, 357 53,720 102,162 177,169 339, 699 299,982 161,209 139,949	3,271 8,287 38,098 75,876 100,219 130, 541 204,244 80,126 23,169	1,103 3,769 9,466 14,818 32,559 58,983 63,741 44,353 32,792	6,453 13,017 42,140 80,909 147,376 173,455 160,139 119,891 15,268
Pay Grade E-8						
Pay Grade E-7.	  —					
Pay Grade E-6									
Pay Grade E-5						
Pay Grade E-4									
Pay Grade E-3						
Pay Grade E-2						
Pay Grade E-l.									
					
OFFICER CANDIDATES	—	11, 718 (0.3)	2,378 (a 2)	5,886 (0.8)	93 (!)	3,361 (a 4)
Percent of total 						
					
TOTAL	 				3,376,880	1,442,498	751, 619	285,269	897,494
					
1	Enlisted are shown by pay grade due to wide diversity of titles. “Proficiency Pay” was being received by 209,468—pay grade E-9, 3,754; pay grade E-8,11,427; pay grade E-7, 36,923; pay grade E-6, 67,615; pay grade E-5, 68,481; pay grade E-4, 20,274; and pay grade E-3, 994.
2	Less than 0.05 percent.
474
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 20
ENLISTED PERSONNEL PROCUREMENT
	Department of Defense	Army	Navy	Marine Corps	Air Force
Inductions: Fiscal Year 1966	 Fiscal Year 1967-—	339, 734 299, 200	317, 509 299, 069	2, 585	19, 636 131	4
First enlistments: Fiscal Year 1966	 Fiscal Year 1967-		548, 235 483, 473	170, 113 190, 320	143, 144 101, 083	68, 856 71, 289	166, 122 120, 781
Immediate reenlistments: Fiscal Year 1966_	 Fiscal Year 1967		207, 376 187, 930	77, 000 78, 613	37, 442 38, 856	10, 273 8, 012	82, 661 62, 449
Other reenlistments: Fiscal Year 1966	 Fiscal Year 1967-		15, 899 14, 479	6, 598 5, 817	4, 491 5, 053	922 677	3, 888 2,932
Reserves to active duty: 1 Fiscal Year 1966	 Fiscal Year 1967		50, 733 49, 873	1, 838 2, 202	34, 894 42, 977	13, 672 4,442	329 252
TOTAL: Fiscal Year 1966.— Fiscal Year 1967		1, 161, 977 1, 034, 955	573, 058 576, 021	222, 556 187, 969	113, 359 84, 551	253,004 186, 414
1 Includes National Guard.
APPENDIX
475
DEPENDENTS OF MILITARY PERSONNEL MARCH 31, 1967
Table 21
	Department of Defense	Army	Navy	Marine Corps	Air Force
TYPE OF DEPENDENT Wives_ _ __ _ _	1, 413, 859 2, 427, 033 J 236, 957	567, 711 851, 421 112, 860 40, 932	300, 268 500, 313 3, 856 2, 706	70, 462 120, 498 925	475, 418 954, 801 |	75,678
Children. _ _ _ _					
Parents 								
Other 1_ _ _ __					
					
LOCATION OF DEPENDENT Continental United States	 Alaska__	3, 562, 966 33, 650 57, 253 45, 741 378, 239	1, 384, 972 10, 974 15, 194 18, 522 143, 262	736, 557 2, 623 16, 528 9, 355 42, 080	182, 085 70 6, 561 482 2, 687	1, 259, 352 19, 983 18, 970 17, 382 190, 210
Hawaii________					
U.S. territories	 Foreign countries						
					
TOTAL		4, 077, 849 1. 21	1, 572, 924 1. 10	807, 143 1. 08	191, 885 . 69	1, 505, 897 1. 67
Number per military person						
1 Consists of all other persons related to the military member and who reside in his household and are dependent in fact on him for over half of their support.
360-499 0—70-----81
476
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 22
REENLISTMENT RATES
[Percentage of eligibles]
	Department of Defense	Army	Navy	Marine Corps	Air Force
REGULARS: Fiscal Year 1966__ __ 				49. 6	49. 5	44. 0	33. 9	55. 6
Fiscal Year 1967__ _			42. 2	44. 1	37. 9	22. 0	50. 1
					
First term: Fiscal Year 1966_ _ _ __________	23. 2	28. 0	23. 7	16. 3	18. 9
Fiscal Year 1967_____________	18. 8	23. 7	18. 9	10. 6	16. 8
Career: Fiscal Year 1966__________ _	87. 7	83. 4	89. 6	88. 6	89. 7
Fiscal Year 1967______________	81. 1	74. 2	80. 9	77. 9	88. 0
					
INDUCTEES (Army): Fiscal Year 1966 _________		10. 2			
Fiscal Year 1967	__ _ _ __ __		20. 8			
					
FIRST TERM REGULARS, BY OCCUPATIONAL GROUP: Infantry, Gun Crews, and Allied Specialists: Fiscal Year 1966____________	30. 0	35. 1	26. 0	15. 6	72. 1
Fiscal Year 1967____________	23. 3	33. 3	19. 1	9. 2	43. 2
Electronics Equipment Repairmen: Fiscal Year 1966 		22. 5	21. 7	28. 1	18. 5	19. 2
Fiscal Year 1967		21. 3	19. 5	26. 4	11. 2	19. 9
Communications and Intelligence Specialists: Fiscal Year 1966		19. 3	18. 9	22. 7	14. 6	16. 2
Fiscal Year 1967_____________	18. 1	23. 6	18. 6	7.4	17.5
Medical and Dental Specialists: Fiscal Year 1966		24. 8	31. 1	19. 8		21. 3
	18. 3	22. 4	12. 6		20. 7
Other Technical and Allied Specialists: Fiscal Year 1966			19. 0	17. 0	23. 4	18. 6	17. 6
Fiscal Year 1967	________	14. 8	13. 3	15. 6	11. 3	16. 5
Administrative Specialists and Clerks: Fiscal Year 1966		23. 6	23. 7	29. 2	19. 6	22. 1
Fiscal Year 1967			18. 4	19. 8	19. 9	13. 1	17. 7
Electrical)Mechanical Equipment Repairmen: Fiscal Year 1966			22. 1	25. 8	23. 2	15. 2	19. 1
Fiscal Year 1967	_____	19. 3	21. 1	20. 0	11. 7	18. 6
Craftsmen: Fiscal Year 1966			19. 3	17. 2	23. 2	13. 3	17. 6
Fiscal Year 1967		15. 5	17. 3	16. 9	10. 8	13. 8
APPENDIX
477
Table 22—Continued
REENLISTMENT RATES—Continued
[Percentage of eligibles]
	Department of Defense	Army	Navy	Marine Corps	Air Force
Service and Supply Handlers:					
Fiscal Year 1966		26. 0	34. 4	40. 4	15. 6	18. 3
Fiscal Year 1967	 Miscellaneous:	19. 6	28. 2	31. 3	12. 6	12. 1
Fiscal Year 1966		22. 4	53. 3	15. 3	100. 0	5. 9
Fiscal Year 1967		9. 8	15. 8	8. 3	50. 0	12. 1
478
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 23
WOMEN MILITARY PERSONNEL
	Department of Defense	Army	Navy	Marine Corps	Air Force
OFFICERS: June 30, 1966		11, 293 12, 619	4, 143 4, 742	2, 808 3, 018	153 189	4, 189 4, 670
June 30, 1967______	_ _					
Regulars: June 30, 1966 ____________					
	3, 316 3, 219 7, 977 9, 400	1, 123 1, 080 3, 020 3, 662	1, 145 1, 100 1, 663 1,918	106 119 47 70	942 920 3, 247 3, 750
June 30, 1967___________					
Reserves: June 30, 1966_ _	__					
June 30, 1967 _ _ _ __ _					
					
ENLISTED: June 30, 1966___________	21, 048 22, 300	9, 179 9, 741	5, 140 5, 249	1, 679 2, 122	5, 050 5, 188
June 30, 1967_______					
					
OFFICER CANDIDATES: June 30, 1966___________	248 254		248 254		
June 30, 1967_	__ _ _					
					
TOTAL: June 30, 1966		32, 589 35, 173	13, 322 14, 483	8, 196 8,521	1, 832 2,311	9,239 9,858
June 30, 1967						
					
APPENDIX
479
CIVILIAN PERSONNEL
Table 24
	Department of Defense	Defensewide activities	Army	Navy	Air Force
DIRECT HIRE: June 30, 1966		1, 138, 130	68, 927	405, 544	356, 744	306, 915
June 30, 1967		1, 302, 605	79, 134	484, 818	409, 942	328, 711
Salaried: June 30, 1966		594, 181	55, 299	231, 211	151, 158	156, 513
June 30, 1967		654, 278	63, 092	254, 878	175, 242	161, 066
Wage Board: June 30, 1966		543, 949	13, 628	174, 333	205, 586	150, 402
June 30, 1967		648, 327	16, 042	229, 940	234, 700	167, 645
INDIRECT HIRE: June 30, 1966		128, 549	13	85, 409	13, 638	29, 489
June 30, 1967		120, 340	14	80, 282	13, 625	26, 419
TOTAL: June 30, 1966		1, 266, 679	68, 940	490, 953	370, 382	336, 404
June 30, 1967		1, 422, 945	79, 148	565, 100	423, 567	355, 130
480
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 25
OSD-JCS PERSONNEL
	June 30,1966			June 30 ,1967		
	Total	Civilian	Military	Total	Civilian	Military
OFFICE OF SECRETARY OF DEFENSE Secretary and Deputy Secretary	 Defense Research and En- gineering	 Administration	 Comptroller	 Installations and Logistics International Security Affairs. Systems Analysis	 Manpower	 Public Affairs	 General Counsel	 Special staff assistants		14 558 420 314 286 289 153 172 189 53 151	9 381 252 306 264 210 119 112 90 52 91	5 177 168 8 22 79 34 60 99 1 60	13 558 402 337 369 290 190 338 198 53 148	9 390 246 326 314 211 133 257 97 52 92	4 168 156 11 55 79 57 81 101 1 56
Total		2, 599	1, 886	713	2, 896	2, 127	769
JOINT CHIEFS OF STAFF ORGANIZATION Office of the Chairman	 Joint Staff	 Other JCS activities		34 615 1, 042	15 203 235	19 412 807	36 666 1, 106	15 221 234	21 445 872
Total		1, 691	453	1, 238	1, 808	470	1, 338
TOTAL FULL-TIME PERSONNEL		4, 290	2,339	1, 951	4,704	2,597	2, 107
Intermittent consultants	 Summer employees		67 115	67 115	—	77 116	77 116	—
TQTKL			4,472	2, 521	1, 951	4,897	2,790	2,107
APPENDIX
481
Table 26
OTHER DEFENSE ACTIVITIES PERSONNEL
	June 30, 1966			June 30, 1967		
	Total	Civilian	Military	Total	Civilian	Military
Defense Atomic Support Agency	 Defense Communications Agency	 Defense Contract Audit Agency	 Defense Intelligence Agency	 Defense Supply Agency	 U.S. Court of Military Appeals	 Armed Forces Information and Education	 International military activities		6, 621 2, 541 3,672 6, 009 56, 980 37 477 138	2, 074 1,077 3,666 3,219 55,851 37 417 65	4,547 1,464 6 2, 790 1,129 60 73	6, 923 3, 208 4,108 6,086 65,573 36 481 135	2,386 1,519 4,108 3, 357 64, 448 36 430 60	4, 537 1, 689 2, 729 1,125 51 75
TOTAL		76, 475	66, 406	10, 069	86, 550	76, 344	10, 206
482
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 27
RESERVE PERSONNEL, JUNE 30, 1967
	Officers	Enlisted 1	Total
DEPARTMENT OF DEFENSE		865, 026	2, 196, 029	3, 061, 055
Department of the Army	 Army National Guard	 Army Reserve		388, 539 36, 280 352, 259	1, 351, 649 385, 809 965, 840	1, 740,188 422, 089 1, 318, 099
Department of the Navy	 Navy Reserve	 Marine Corps Reserve		233, 040 204, 700 28, 340	519, 511 383, 473 136, 038	752, 551 588, 173 164, 378
Department of the Air Force	 Air National Guard	 Air Force Reserve		243, 447 10, 717 232, 730	324, 869 73,195 251, 674	568, 316 83, 912 484, 404
ON ACTIVE DUTY 2		209, 215	94, 226	303, 441
Department of the Army	 Army National Guard	 Army Reserve		98, 508 1, 491 97, 017	3,131 33 3, 098	101, 639 1, 524 100, 115
Department of the Navy	 Naval Reserve	 Marine Corps Reserve		38, 259 30, 461 7,798	90, 791 78, 499 12, 292	129, 050 108, 960 20, 090
Department of the Air Force	 Air National Guard	 Air Force Reserve		72, 448 151 72, 297	304 3 301	72, 752 154 72, 598
NOT ON ACTIVE DUTY		655, 811	2, 101, 803	2, 757, 614
Department of the Army	 Army National Guard	 Army Reserve		290, 031 34, 789 255, 242	1, 348, 518 385, 776 962, 742	1, 638, 549 420, 565 1, 217, 984
Department of the Navy	 Naval Reserve	 Marine Corps Reserve		194, 781 174, 239 20, 542	428, 720 304, 974 123, 746	623, 501 479, 213 144, 288
Department of the Air Force	 Air National Guard	 Air Force Reserve		170, 999 10, 566 160, 433	324, 565 73,192 251, 373	495, 564 83, 758 411, 806
COAST GUARD RESERVE: On active duty	 Not on active duty		1, 085 5,784	270 26, 522	1, 355 32, 306
1 Includes officer candidates.
1 On continuous or extended active duty, and included in count of military personnel on active duty; Excludes reserves undergoing 2-week annual, 4-month minimum basic, etc., reserve training.
APPENDIX
483
Table 28
RESERVE PERSONNEL NOT ON ACTIVE DUTY
	Ready Reserve	Standby Reserve	Retired Reserve	Total
DEPARTMENT OF DEFENSE: June 30, 1966__ 				1, 965, 626 1, 862, 896	467, 650 535, 491	335, 352 359, 227	2, 768, 628 2, 757, 614
June 30, 1967_ 						
				
DEPARTMENT OF THE ARMY: June 30, 1966					1, 224, 077 1, 126, 726	233, 683 312, 503	190, 663 199, 320	1, 648, 423 1, 638, 549
June 30, 1967__ __ __				
Army National Guard: June 30, 1966 		 -				
	426, 258 420, 565 797, 819 706, 161			426, 258 420, 565 1, 222, 165 1, 217, 984
June 30, 1967 __ _	_				
Army Reserve: June 30, 1966_ _ __		233, 683 312, 503	190, 663 199, 320	
June 30, 1967 __ ___ __				
				
DEPARTMENT OF THE NAVY: June 30, 1966		 __	452, 204 448, 392	88, 527 78, 981	88, 076 96, 128	628, 807 623, 501
June 30, 1967_ __ ___ __				
Naval Reserve: June 30, 1966________				
	337, 153 344, 851 115, 051 103, 541	64, 219 48, 109 24, 308 30, 872	78, 458 86, 253 9, 618 9, 875	479, 830 479, 213 148, 977 144, 288
June 30, 1967_________				
Marine Corps Reserve: June 30, 1966_						
June 30, 1967______				
				
DEPARTMENT OF THE AIR FORCE: June 30, 1966________	289, 345 287, 778	145, 440 144, 007	56, 613 63, 779	491, 398 495, 564
June 30, 1967________				
Air National Guard: June 30, 1966	_ __ __				
	79, 883 83, 758 209, 462 204, 020			79, 883 83, 758 411, 515 411, 806
June 30, 1967______				
Air Force Reserve: June 30, 1966.			145, 440 144, 007	56, 613 63, 779	
June 30, 1967							
				
COAST GUARD RESERVE: June 30, 1966 _______	30, 075 29,178	2,428 2,293	801 835	33, 304 32, 306
June 30, 1967_ _______				
				
484
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 29 RESERVE PERSONNEL IN PAID STATUS
	Paid drill training			Paid active duty training only	Total in paid status
	DriU pay status	Active duty basic training	Total		
DEPARTMENT OF DEFENSE: June 30, 1966__	_	929, 204 887, 877	39, 984 94, 793	969, 188 982, 670	84, 907 82, 894	1, 054, 095 1, 065, 564
June 30, 1967 						
					
DEPARTMENT OF THE ARMY: June 30, 1966		 _	643, 346 595, 653	28, 552 84, 378	671, 898 680, 031	70, 545 69, 642	742, 443 749, 673
June 30, 1967 						
Army National Guard: June 30, 1966							
	399, 094 364, 888 244, 252 230, 765	21, 830 53, 186 6, 722 31, 192	420, 924 418, 074 250, 974 261, 957		420, 924 418, 074 321, 519 331, 599
June 30, 1967						
Army Reserve: June 30, 1966_ 					70, 545 69, 642	
June 30, 1967_______					
					
DEPARTMENT OF THE NAVY: June 30, 1966			167, 168 168, 129	5, 228 4, 487	172, 396 172, 616	10, 697 9, 859	183, 093 182, 475
June 30, 1967 						
Naval Reserve: June 30, 1966						
	122, 754 123, 756 44,414 44, 373	1, 049 1, 302 4, 179 3, 185	123, 803 125, 058 48, 593 47, 558	8, 034 7, 629 2, 663 2, 230	131, 837 132, 687 51, 256 49, 788
June 30, 1967_ ___ _					
Marine Corps Reserve: June 30, 1966						
June 30, 1967						
					
DEPARTMENT OF THE AIR FORCE: June 30, 1966		118, 690 124, 095	6, 204 5, 928	124, 894 130, 023	3, 665 3, 393	128, 559 133, 416
June 30, 1967_						
Air National Guard: June 30, 1966_					
	75, 098 80, 052 43, 592 44, 043	4, 785 3, 706 1, 419 2, 222	79, 883 83, 758 45, 011 46, 265		79, 883 83, 758 48, 676 49, 658
June 30, 1967						
Air Force Reserve: June 30, 1966					3, 665 3, 393	
June 30, 1967_ ____					
					
COAST GUARD RESERVE: June 30, 1966______	16, 041 16, 580	1, 755 1, 528	17, 796 18, 108	1, 645 1, 054	19, 441 19, 162
June 30, 1967_______					
					
APPENDIX
485
Table 30
RESERVE ACTIVE DUTY BASIC TRAINING PROGRAMS1
	Enlistments	Entered active duty	Completed active duty
DEPARTMENT OF DEFENSE: Fiscal Year 1966		204, 673	94, 088	92, 537
Fiscal Year 1967		96, 292	204, 858	146, 809
DEPARTMENT OF THE ARMY: Fiscal Year 1966		171, 976	61, 647	64, 085
Fiscal Year 1967		73, 513	179, 924	121, 503
Army National Guard: Fiscal Year 1966		109, 939	45, 878	47, 635
Fiscal Year 1967		45, 113	109, 990	77, 058
Army Reserve: Fiscal Year 1966		62, 037	15, 769	16, 450
Fiscal Year 1967		28, 400	69, 934	44,445
DEPARTMENT OF THE NAVY: Fiscal Year 1966		15, 961	15, 263	12, 945
Fiscal Year 1967		9, 254	10, 519	10, 892
Naval Reserve: Fiscal Year 1966		1, 524	1, 387	1, 332
Fiscal Year 1967		1, 825	1, 756	1, 495
Marine Corps Reserve: Fiscal Year 1966		14, 437	13, 876	11, 613
Fiscal Year 1967		7,429	8, 763	9, 397
DEPARTMENT OF THE AIR FORCE: Fiscal Year 1966		16, 736	17, 178	15, 507
Fiscal Year 1967		13, 525	14, 415	14, 414
Air National Guard: Fiscal Year 1966		11, 634	12, 063	10, 119
Fiscal Year 1967		8, 991	10, 066	10, 885
Air Force Reserve: Fiscal Year 1966		5, 102	5, 115	5, 388
Fiscal Year 1967		4,534	4, 349	3, 529
COAST GUARD RESERVE: Fiscal Year 1966		2, 865	2, 953	2, 878
Fiscal Year 1967		2, 950	3,436	3, 486
14 or more months active duty reserve training under provisions of Section 511(d), Title 10, U.S. Code. Table includes enlisted personnel only; in addition, 2 Army Reserve officers completed active duty training during fiscal year 1966, while 4 Army Reserve officers entered active duty training and 2 completed training during fiscal year 1967.
486
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 31 MEDICAL CARE IN DEFENSE FACILITIES
	Department of Defense	Army	Navy	Air Force
HOSPITAL AD- MISSIONS: Active Duty Personnel: Fiscal Year 1966		586, 479	270, 276	180, 874	135, 329
Fiscal Year 1967__	621, 212	282, 512	196, 404	142, 296
Dependents and Others: Fiscal Year 1966		617, 629	241, 831	140, 689	235, 109
Fiscal Year 1966		650, 725	266, 023	148, 804	235, 898
TOTAL: Fiscal Year 1966		1, 204, 108	512, 107	321, 563	370, 438
Fiscal Year 1967		1, 271, 937	548, 535	345, 208	378, 194
OUTPATIENT VISITS: Active Duty Personnel: Fiscal Year 1966		22, 012, 893	8, 293, 579	7, 400, 294	6, 319, 020
Fiscal Year 1967		23, 913, 016	9, 181, 614	7, 933, 813	6, 797, 589
Dependents and Others: Fiscal Year 1966		26, 611, 393	9, 890, 288	6, 196, 650	10, 524, 455
Fiscal Year 1967__	28, 367, 923	10, 671, 617	6, 957, 926	10, 738, 380
TOTAL: Fiscal Year 1966		48, 624, 286	18, 183, 867	13, 596, 944	16, 843, 475
Fiscal Year 1967		52, 280, 939	19, 853, 231	14, 891, 739	17, 535, 969
APPENDIX
487
Table 32
CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES
EXPENDITURES BY THE GOVERNMENT FOR HEALTH CARE FROM CIVILIAN SOURCES
[In dollars]
	Department of Defense	Army	Navy	Air Force
HEALTH CARE BENEFICIARIES: Dependents of Active Duty Members:1 Fiscal Year 1966__	71, 078, 549	20, 689, 127	30, 099, 464	20, 289, 958
Fiscal Year 1967		82, 899, 889	28, 718, 874	33, 866, 961	20, 314, 054
Retired Members and Their Dependents and Survivors of Deceased Members Fiscal Year 1966__	(2)	(2)	(2)	(2)
Fiscal Year 1967__	5, 281, 153	2, 038, 947	1, 787, 343	1, 454, 863
Handicapped or Retarded Dependents of Active Duty Members Fiscal Year 1966. _	(2)	(2)	(2)	(2)
Fiscal Year 1967__	204, 980	63, 130	38, 909	102, 941
ADMINISTRATIVE AND OTHER COSTS: Fiscal Year 1966		1, 479, 340	417, 776	607, 652	453, 912
Fiscal Year 1967		1, 710, 517	285, 776	972, 294	452, 447
	—■	■	-	—1	—	■	1	—
TOTAL COSTS: Fiscal Year 1966. -	72, 557, 889	21, 106, 903	30, 707,116 36, 665, 507	20, 743, 870
Fiscal Year 1967—	90, 096, 539	31,106, 727		22, 324, 305
i Excluding expenditures under the Handicapped and Retarded Program.
2 Not authorized fiscal year 1966.
488
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 33 CONTRACT AWARDS BY PROGRAM
[Net in millions of dollars]
	Fiscal year 1966		Fiscal year 1967	
	Amount	Percent	Amount	Percent
MAJOR HARD GOODS: Aircraft			8, 002	20. 9	10, 199	22. 8
Missile and space systems		4, 395	11. 5	4, 631	10. 4
Ships		1, 433	3. 7	2, 259	5. 1
Tank-aut emotive		1, 590	4. 2	1, 476	3. 3
Weapons		521	1. 4	624	1. 4
Ammunition		2, 913	7. 6	3,632	8. 1
Electronics-communications equipment		3, 994	10. 4	4, 578	10. 3
Total		22, 848	59. 7	27, 399	61. 4
SERVICES		3, 041	8. 0	3, 893	8. 7
ALL OTHER: Subsistence		1, 102	2. 9	1, 182	2. 6
Textiles and clothing		1, 286	3. 3	1, 184	2. 7
Fuels and lubricants		1, 342	3. 5	1, 540	3. 5
Miscellaneous hard goods		2, 768	7. 2	2, 815	6. 3
Construction		1, 856	4. 9	2, 131	4. 7
Actions of less than $10,000		4, 000	10. 5	4,489	10. 1
Total		12, 354	32. 3	13, 341	29. 9
TOTAL		38, 243	100. 0	44, 633	100. 0
APPENDIX
489
Table 34
CONTRACT AWARDS BY TYPE OF CONTRACTOR
[Net in millions of dollars]
	Department of Defense	Army	Navy	Air Force	Defense Supply Agency
INTERGOVERNMENTAL: Fiscal Year 1966		1, 015	159	449	364	43
Fiscal Year 1967		1, 253	228	668	316	41
WORK OUTSIDE U.S.: Fiscal Year 1966		2, 530	973	753	386	418
Fiscal Year 1967		2, 815	1, 019	905	411	480
EDUCATIONAL AND NON- PROFIT INSTITUTIONS: Fiscal Year 1966		672	172	187	309	4
Fiscal Year 1967		756	190	215	350	1
BUSINESS FIRMS FOR WORK IN U.S.:1 Fiscal Year 1966		34, 026	9, 994	9, 075	9, 682	5, 275
Fiscal Year 1967		39, 809	10, 954	12, 210	10, 989	5, 656
Small Business Firms: Fiscal Year 1966		7, 269	1, 867	1, 753	1, 205	2,444
Fiscal Year 1967		8, 073	2, 072	2, 096	1, 312	2, 593
Small Business Percentage: Fiscal Year 1966		21.4	18.7	19.3	12,4	46.3
Fiscal Year 1967		20.3	18.9	17.2	11.9	45.8
TOTAL: Fiscal Year 1966		38, 243	11, 298	10, 464	10, 741	5,740
Fiscal Year 1967		44, 633	12, 391	13, 998	12, 066	6, 178
1 For military functions only. Data for military and civil functions combined is as follows:
Fiscal	Fiscal
Year	Year
1966	1967
Awards to business firms for work in U.S___________________________________ $34,878 $40,609
Small business firms_______________________________________________________ 7,611	8,361
Small business percentage__________________________________________________ 21.8%	20.6%
490
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 35 CONTRACT AWARDS BY PRICING PROVISIONS
[Net in millions of dollars]
		Fiscal year 1966		Fiscal year 1967	
		Amount	Percent	Amount	Percent
FIXED PRICE: Firm	 Redeterminable	 Incentive	 Escalation	 Total	 COST REIMBURSEMENT: No fee	 Fixed fee	 Incentive fee	 Time and materials	 Total	 TOTAL ACTIONS OF $10,000 OR MORE	 Actions less than $10,000 1	 Intragovemmental orders 2			19, 277 766 5, 327 1,181	57. 5 2. 3 15. 9 3. 5	22, 092 688 7, 001 1, 193	56. 3 1. 8 17. 8 3. 0
		26, 551	79. 2	30, 974	78. 9
		734 3, 328 2, 763 139	2. 2 9. 9 8. 3 0. 4	752 4, 068 3, 277 178	1. 9 10. 4 8.3 0. 5
		6, 964	20. 8	8,276	21. 1
		33, 515 3, 713 1, 015	100. 0	39, 249 4, 132 1, 252	100. 0
					
					
TOTAL		38, 243		44, 633	
					
1 Data on pricing provisions are not obtained for actions of less than $10,000.
1 Pricing provisions not applicable.
APPENDIX
491
Table 36 CONTRACT AWARDS BY COMPETITIVE STATUS
[Net in millions of dollars]
	Fiscal year 1966		Fiscal year 1967	
	A Tn mi nt	Percent	Amount	Percent
COMPETITIVE: Formally advertised________ _ _	5, 283 1, 751 1, 705 7, 800 2, 062	14. 2 4. 7 4. 6 20. 9 5. 6	5, 792 1, 936 1, 841 9, 047 1, 998	13. 4 4. 5 4. 2 20. 8 4. 6
Restricted to small business and labor surplus areas						
Open market purchases of $2,500 or less within the United States1	 Other price competition 2	 Design or technical competition	 Total __		 	 					
	18, 601	50. 0	20, 614	47. 5
NONCOMPETITIVE: Follow-on contracts after price or design competition___________				
	7,449 11, 178	20. 0 30. 0	7, 844 14, 923	18. 1 34. 4
Other one-source solicitation					
Total- 					
	18, 627	50. 0	22, 767	52. 5
TOTAL EXCEPT INTRAGOVERN- MENTAL ORDERS 					
	37, 228	100. 0	43, 381	100. 0
				
	1, 015		1, 252	
				
TOTAL _			38, 243		44, 633	
				
1 Price competition required on actions of $250 or more and assumed for actions below $250.
2 Contracts awarded through negotiation after requesting proposals from 2 or more suppliers.
8 Competitive status not applicable.
860-499 0—70-----82
492
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 37 CONTRACT AWARDS BY REGION AND STATE1
	Fiscal year 1966		Fiscal year 1967	
	Millions of dollars	Percent of United States	Millions of dollars	Percent of United States
NEW ENGLAND:				
Maine		50	. 2	57	. 2
New Hampshire		110	. 3	162	. 4
Vermont		81	. 3	100	. 3
Massachusetts		1, 336	4. 2	1, 422	3. 8
Rhode Island		132	. 4	198	. 5
Connecticut		2, 051	6. 5	1, 936	5. 2
TOTAL		3, 761	11. 9	3, 875	10. 4
MIDDLE ATLANTIC:				
New York		2, 819	8. 9	3, 262	8. 7
New Jersey		1, 090	3. 4	1, 235	3. 3
Pennsylvania		1, 665	5. 3	1, 649	4. 4
TOTAL		5, 574	17. 6	6, 146	16. 4
SOUTH ATLANTIC:				
Delaware		38	. 1	52	. 1
Maryland		843	2. 7	868	2. 3
District of Columbia		328	1. 0	358	1. 0
Virginia		426	1. 3	665	1. 8
West Virginia		149	. 5	142	. 4
North Carolina		449	1. 4	448	1. 2
South Carolina		176	. 6	181	. 5
Georgia		799	2. 5	1, 148	3. 1
Florida		767	2. 4	799	2. 1
TOTAL		3, 975	12. 5	4,661	12. 5
SOUTH CENTRAL:				
Kentucky		70	. 2	124	. 3
Tennessee		502	1. 6	538	1. 5
Alabama		282	. 9	297	. 8
Mississippi		162	. 5	115	. 3
Arkansas		96	. 3	127	. 3
Louisiana		303	1. 0	656	1. 8
Oklahoma		158	. 5	158	.4
Texas		2, 292	7. 2	3, 547	9. 5
TOTAL		3, 865	12. 2	5, 562	14. 9
See footnotes at end of table.
APPENDIX
493
Table 37—Continued
CONTRACT AWARDS BY REGION AND STATE 1—Continued
	Fiscal year 1966		Fiscal year 1967	
	Millions of dollars	Percent of United States	Millions of dollars	Percent of United States
EAST NORTH CENTRAL:				
Ohio		1, 589	5. 0	1, 602	4. 3
Indiana		1, 068	3. 4	898	2. 4
Illinois		920	2. 9	1, 064	2. 8
Michigan		918	2. 9	1, 034	2. 8
Wisconsin		365	1. 1	384	1. 0
TOTAL		4, 860	15. 3	4, 982	13.3
WEST NORTH CENTRAL:				
Minnesota		498	1. 6	650	1.7
Iowa			248	. 8	279	.8
Missouri		1, 113	3. 5	2,278	6. 1
North Dakota		83	.3	17	(2)
South Dakota		23	. 1	9	(2)
Nebraska		80	. 3	104	. 3
Kansas		313	1. 0	399	1. 1
TOTAL		2, 358	7. 6	3,736	10. 0
MOUNTAIN:				
Montana		14	(2)	78	. 2
Idaho		20	(2)	15	(2)
Wyoming		11	(2)	33	. 1
Colorado		256	. 8	210	.6
New Mexico		170	. 5	81	. 2
Arizona		32	. 1	250	.7
Utah		86	.3	179	. 5
Nevada		248	. 8	29	(2)
TOTAL		837	2.5	875	2.3
PACIFIC:				
Washington		444	1.4	606	1.6
Oregon		90	.3	99	. 3
California		5, 813	18. 3	6, 689	17. 9
TOTAL		6,347	20.0	7, 394	19. 8
ALASKA AND HAWAII:				
Alaska		72	.2	86	. 2
Hawaii		64	.2	65	. 2
TOTAL		136	.4	151	.4
1 Includes supply, RDT&E, services, construction, and facility prime contract awards of $10,000 or more within the United States, totaling $31,713 million during fiscal year 1966 and $37,382 million during fiscal year 1967.
2 Lees than 0.05 percent;
494
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 38
DEFENSE-WIDE SUPPLY
	Line items centrally managed	Net inventory investment ($ millinns)	Annual sales ($ millinns)	Annual obligation ($ millinns)
Clothing and Textiles:				
June 30, 1966		22, 200	630. 6	647. 7	1, 182. 4
June 30, 1967		23, 400	978. 2	961. 2	1, 108. 9
Construction Supplies:				
June 30, 1966		321, 600	217. 9	244. 7	590. 1
June 30, 1967		384, 600	405. 5	518. 2	506.7
Electronic Supplies:				
June 30, 1966		524, 000	403. 9	209. 2	218. 0
June 30, 1967		605, 500	486. 2	239. 2	260. 0
General Supplies:				
June 30, 1966		99, 400	181. 3	328.4	476. 5
June 30, 1967		104, 000	268. 6	522. 2	618. 1
Industrial Supplies:				
June 30, 1966		354, 400	220. 3	186. 1	276. 9
June 30, 1967		409, 400	312. 7	255. 2	294. 6
Medical Supplies:				
June 30, 1966		11, 400	179. 4	164. 1	249. 3
June 30, 1967		10, 800	226. 2	213. 8	222. 8
Subsistence:				
June 30, 1966		800	160. 8	1, 141. 8	1, 252. 5
June 30, 1967		800	218. 9	1, 266. 5	1, 298. 7
DSA SUPPLY CENTERS TOTAL:				
June 30, 1966		1, 335, 800	1, 994. 1	2, 923. 2	4, 245. 7
June 30, 1967		1, 538. 550	2, 896. 3	3, 976. 3	4, 309. 8
APPENDIX
495
Table 39
EXCESS MATERIEL
[In millions of dollars]
	Fiscal year 1966	Fiscal year 1967
UTILIZATION WITHIN DEPARTMENT OF DEFENSE: Wholesale inter-Service supply support		403	434
Intra-Service 1		1, 068 388	726
Inter-Service			380
		
Total		1, 859	1, 540
		
OTHER UTILIZATION AND DISPOSAL: Military assistance program _ _ _ _ _ _ _______	227	319
Utilization by other Federal agencies		377	309
Donations		285	321
Sold as usable property 2			804	917
Designated for sale as scrap		2, 614	2,146 244 39
Other dispositions	 Destroyed or abandoned			158 115	
		
Total		4,580	4,205
		
TOTAL GROSS UTILIZATION AND DISPOSAL		6,439	5,745
CASH PROCEEDS REALIZED		119	101
		
i Excludes intra-Service transfers of property by property officers. ’ Includes sales of missile property.
496
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 40 FEDERAL CATALOG SYSTEM
	Fiscal year 1966		Fiscal year 1967	
FEDERAL CATALOG Number of Items at Beginning of Year.. _ Number of items added	 Number of items deleted	 Net change	 Number of Items at End of Year	 Department of Defense items	 Other agency items		4, 203, 208		4, 182, 916	
	385, 103 405, 395 -20, 292		396, 471 286, 321 + 110, 150	
	4, 182, 916		4, 293, 066	
	3, 846, 086 336, 830		3, 963, 692 329, 374	
INTER-SERVICE USE Army: Items in use 		June 30,1966		June 30,1967	
	Number	Percent	Number	Percent
	1, 160, 086 399, 167		1, 173, 404 415, 437	
Items also used by other Services— Navy: Items in use 			34.4		35.4
	1, 450, 494 370, 879		1, 520, 680 407, 414	
Items also used by other Services— Marine Corps: Items in use		 ________		25. 6		26. 8
	265, 567 181, 935		278, 270 189, 123	
Items also used by other Services—_ Air Force: Items in use	_ 			68. 5		68. 0
	1, 646, 296 408, 225		1, 711, 529 449, 032	
Items also used by other Services—		24. 8		26. 2
APPENDIX
497
Table 41
COST REDUCTION PROGRAM
[In millions of dollars]
Savings
	Fiscal year 1967, actual	Fiscal years 1967-69, estimated
BUYING ONLY WHAT WE NEED Refining Requirements for:		
Major items		136	196
Initial provisioning		31	61
Secondary items		110	123
Technical manuals		2	3
Technical data and reports		10	15
Production base facilities		4	4
Increased Use of Excess:		
Equipment and supplies		49	62
Idle production equipment_________				
Contractor inventory		1	1
Eliminating “Goldplating” (Value Engineering)		339	609
Inventory Item Reduction		3	2
Total, Buying Only What We Need		685	1, 077
BUYING AT LOWEST SOUND PRICE Shift to Competitive Procurement:		
Percent competitive		(42. 9)	
Amount of savings		30	79
Direct Purchase Breakout		11	19
Multiyear Procurement		29	63
Total, Buying at Lowest Sound Price		70	161
REDUCING OPERATING COSTS		
Terminating Unnecessary Operations		J7	64
Reducing Operating Expenses:		
Departmental_____________________________	135	360
Increasing Efficiency of Operations:		
Telecommunications management		11	40
Transportation and traffic management		53	140
Equipment maintenance management		32	93
Noncombat vehicle management		2	8
Reduced use of contract technicians		4	7
Military housing management		5	10
Real property management		14	31
Packaging, preserving, and packing		18	37
Total, Reducing Operating Costs		281	790
MILITARY ASSISTANCE PROGRAM		16	31
TOTAL PROGRAM		1, 052	2, 059
1 Saving sreallzed as result of base closing decisions made during fiscal year 1967.
498
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 42 MAJOR STORAGE FACILITIES
[In millions of square feet]
	Fiscal year 1966	Fiscal year 1967
COVERED SPACE:1 Beginning of fiscal year_______________	318. 3 -21. 7 296. 6	296. 6 -22. 8 273. 8
Net reduction _____________________		
End of fiscal year.. _________________		
		
OCCUPIED OPEN SPACE:2 Beginning of fiscal year_____________ _ _ _	86. 6 -2. 8 83. 8	83. 8 + 24. 0 107. 8
Net reduction ________________		
End of fiscal year__ _ 				
		
CROSS-SERVICING OF COVERED SPACE:1		23. 6	24. 6
Among Defense agencies. 		 _________		
	17.7 5. 1 . 8	19. 7 4.2 . 7
National stockpile		___________ __		
Other Government agencies_______	_ __		
		
CROSS-SERVICING OF OCCUPIED OPEN SPACE:2		19. 1	20. 1
Among Defense agencies___________________		
	4. 3 14. 3 . 5	6. 0 13. 8 . 3
National stockpile			
Other Government agencies___________________		
		
1 Includes the gross interior area o fbuildings used for storage or in support of storage activities.
2 Includes the open area actually utilized for storage, exclusive of roadways, storage support activities, etc.
APPENDIX
499
Table 43
PROPERTY HOLDINGS
[Acquisition cost in billions of dollars ]
	Department of Defense	Army	Navy	Air Force	Defense agencies
PERSONAL PROPERTY: Materiel in Use: .Tune 30, 1966			87. 6	9. 6	42. 9	35. 1	
June 30, 1967		95. 5	11. 1	45. 2	39. 2	
In Supply System: June 30, 1966		37. 7	11.9	12. 7	11. 0	2. 1
June 30, 1967	 Plant Equipment: June 30, 1966		41.4 10. 7	13. 2 4. 3	13. 5 3.4	11. 7 2. 3	3. 0 . 6
June 30, 1967		11. 3	4. 6	3. 6	2.4	.6
Government-Provided Material: June 30, 1966			4.7	. 6	2. 6	1. 4	C)
June 30, 1967		4. 7	1. 0	2. 5	1. 2	(»)
Industrial Funds: June 30, 1966			.3	C)	. 3	C)	C)
June 30, 1967			.4	C)	. 3	C)	W
Excess and Surplus: June 30, 1966			2.7	. 3	1. 0	1. 3	. 1
.Tune 30, 1967			2. 2	.3	. 7	1.1	. 1
					
Total: June 30, 1966			143.7	26. 9	62. 9	51. 1	2. 8
June 30, 1967		____	155.4	30. 2	65. 9	55. 7	3.7
					
REAL PROPERTY:	38. 4	11. 0	10.4	17.0	
Tune 30 1967	38.5	11.2	10. 8	16. 5	
					
CONSTRUCTION IN PROGRESS: Tune 30 1966	1. 5	.4	. 6	.5	
Tune 30 1967	1. 6	. 4	. 8	.5	
					——	■———'<
TOTAL PROPERTY HOLDINGS—ALL TYPES: June 30, 1966			183. 6	38. 2	73.9	68.6	2.8
June 30, 1967 		195.6	41.8	77. 5	72. 5	3.7
					
1 Less than $50 million.
500
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 44
REAL PROPERTY HOLDINGS
	Department of Defense	Army	Navy	Air Force
Acquisition Cost (In Millions of Dollars) United States: June 30, 1966		32, 566	9, 720	8,831	14, 015
June 30, 1967		32, 671	9, 823	9,045	13, 803
U.S. Possessions: June 30, 1966		1, 314	286	672	356
June 30, 1967		1, 364	277	699	388
Foreign Countries: June 30, 1966		4, 510	985	914	2,611
June 30, 1967		4,460	1,142	1, 014	2,304
TOTAL: June 30, 1966		38, 390	10, 991	10, 417	16, 982
June 30, 1967		38, 495	11, 242	10, 758	16, 495
Acreage (In Millions of Acres) By location: United States: June 30, 1966		27. 6	14.1	4. 1	9.4
June 30, 1967		26.8	13.0	4.2	9. 6
U.S. Possessions: June 30, 1966		.2	. 1	. 1	0)
June 30, 1967		.3	. 1	. 1	. 1
Foreign Countries: June 30, 1966		3.2	1.0	. 2	2.0
June 30, 1967	_		2.4	. 9	. 3	1. 2
TOTAL: June 30, 1966		31. 0	15.2	4.5	11.4
June 30, 1967		29. 5	14. 0	4.6	10.9
By Type of Control: Owned Outright: June 30, 1966		7.3	4.2	1.4	1.7
June 30, 1967		7.1	4.1	1.4	1.7
Public Domain and Public Lands: June 30, 1966		16. 6	7.3	2.3	7.0
June 30, 1967		16. 6	7.3	2. 3	7.0
Leased, Easements, etc.: June 30, 1966		4.0	2. 7	.5	.8
June 30, 1967		3.4	1.7	.6	1.1
Foreign Rights: June 30, 1966		3.1	1.0	. 2	1.9
June 30, 1967		2.3	.9	.3	1. 1
1 Air Force controlled only 39,894 acres in U.S. possessions on June 30,1966.
APPENDIX
501
FAMILY HOUSING
Table 45
	June 30, 1966	June 30, 1967
TOTAL UNITS—MILITARY OWNED AND CON- TROLLED _			374, 703	377, 612
Adequate				
	342, 067	344, 448
Capehart-		 			
	112, 530 69, 792 7, 048 7, 003 139, 527 3,917 1, 255 995	111, 352 70, 682 8,706 4, 776 143, 815 3, 917
Wherry (acquired)	 ______________		
Leased		 ______ ______		
Surplus commodity _ _ 				
Other public quarters 		 ___________		
Wherry (privately owned)				
Rental guaranty				
810 housing 				1, 200
Inadequate 	 -				
	32, 636	33, 164
		
UNITS UNDER CONSTRUCTION		6, 363	2, 642
Appropriated funds _	,, ..		
	6,363	2,642
		
502
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 46 DEFENSE-WIDE TRANSPORTATION SERVICES
	Department of Defense	Military Airlift Command	Military Sea Transportation Service	Military Traffic Management and Terminal Service1
PASSENGERS MOVED: Fiscal Year 1966__	7, 846, 000	1, 848, 000	309, 000	5, 689, 000
Fiscal Year 1967. _	9, 820, 000	2, 417, 000	243, 000	7, 160, 000
CARGO MOVED (in short tons): Dry Cargo Tonnage: Fiscal Year 1966__	21, 777, 000	338, 000	10, 987, 000	2 10, 452, 000
Fiscal Year 1967__	30, 902, 000	599, 000	14, 277, 000	2 16, 026, 000
Petroleum Tonnage: Fiscal Year 1966__	36, 123, 000		22, 176, 000	13, 947, 000
Fiscal Year 1967__	41, 848, 000	—	27, 399, 000	14, 449, 000
TOTAL: Fiscal Year 1966__	57, 900, 000	338, 000	33, 163, 000	24, 399, 000
Fiscal Year 1967__	72, 750, 000	599, 000	41, 676, 000	30, 475, 000
COSTS (in millions of dollars): Payments for Com- mercial Services: Fiscal Year 1966__	1, 935	394	690	2 851
Fiscal Year 1967__	2, 804	685	981	2 1, 138
Other Costs: Fiscal Year 1966__	476	233	146	97
Fiscal Year 1967__	608	318	170	120
TOTAL: Fiscal Year 1966__	2,411	627	836	948
Fiscal Year 1967__	3, 412	1, 003	1, 151	1, 258
1 Operations of this agency are limited to the continental United States, except for the through-billed movement of household goods.
8 Excludes tonnage and costs for through-billed household goods moved between the United States and oversea locations—169,000 tons and $103 million for fiscal year 1966 and 189,000 tons and $116 million for fiscal year 1967.
APPENDIX
503
Table 47
MILITARY ASSISTANCE, 1950-67
[In millions of dollars]
Fiscal year	Appropriations	Transfers, reimbursements, and rescissions	Available for obligation	Obligations and reservations	Expenditures
1950		1, 314. 0	. 1	1, 314. 1	1,101. 0	51. 7
1951		5, 222. 5	. 9	5, 223. 4	4, 676. 9	934. 2
1952		5, 744. 0	-476. 4	5, 267. 6	5, 591. 2	2, 385. 9
1953		4, 219. 8	-237. 9	3, 981. 9	2, 512. 1	3, 953. 1
1954		3, 230. 0	-329. 6	2, 900. 4	2, 383. 7	3, 629. 5
1955		1, 252. 7	-478. 1	774. 6	3, 163. 2	2, 297. 3
1956		1, 022. 2	-11. 9	1, 010. 3	848. 7	2, 620. 1
1957		2, 017. 5	-9. 7	2, 007. 8	1, 664. 5	2, 356. 3
1958		1, 340. 0	-29. 0	1, 311. 0	1, 828. 4	2, 189. 8
1959		1, 515. 0	27. 8	1, 542. 8	1, 512. 2	2, 368. 1
1960		1, 300. 0	57. 2	1, 357. 2	1, 358. 4	1, 635. 4
1961		1, 800. 0	-6. 0	1, 794. 0	1, 786. 9	1, 466. 2
1962		1, 600. 0	-8. 4	1, 591. 5	1, 585. 4	1, 404. 6
1963		1, 325. 0	79. 2	1, 404. 2	1, 442. 7	1, 767. 2
1964		1, 000. 0	167. 3	1, 167. 3	1, 188. 6	1, 533. 4
1965		1 1, 130. 0	62. 5	1, 192. 5	1,174. 7	1, 272. 6
1966		1 1, 470. 0	2 -498. 8	971. 2	977. 3	1, 114. 3
1967		792. 0	569. 2	1, 361. 2	1, 351. 3	1, 055. 1
					
TOTAL »		37, 294. 8	-1, 121. 6	36,173. 1	36,147. 1	34, 034. 8
1 Includes $75 million section 510 “Special Authority” in fiscal year 1965 and $300 million in fiscal year 1966.
’ Reflects transfer of financing responsibility for support of military assistance to free world countries in Vietnam from the Military Assistance Program to the military departments.
8 Includes “Common Use Item” appropriation administered by the Agency for International Development.
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
504
Table 48
MILITARY ASSISTANCE DELIVERIES [In millions of dollars]
	Fiscal year	Fiscal year	Fiscal years
	1966	1967	1950-67
EUROPE:			
Belgium				1. 6	. 1	1, 235. 7
Denmark		20. 1	7. 6	617. 9
France		-1. 6		4, 153. 0
Germany		-. 1		900. 8
Italy		3.2	4. 6	2, 289. 4
Luxembourg				8. 2
Netherlands		. 1	3. 3	1, 217. 5
Norway		42. 8	32. 6	852. 9
Portugal		-. 5	2. 2	310. 6
Spain		35. 5	8. 0	540. 6
United Kingdom		-. 1	—	1, 034. 5
Yugoslavia				693. 9
Europe Area		1. 2	1. 0	207. 7
TOTAL		102. 2	59. 4	14, 062. 8
NEAR EAST:			
Afghanistan		. 2	. 1	3. 2
Greece		78. 7	44. 0	1, 354. 8
Iran		41. 1	41. 2	715. 5
Iraq		. 2	. 1	46. 7
Jordan		2. 8	11.9	48. 0
Lebanon		. 1	. 1	8. 8
Saudi Arabia		1.5	. 8	33. 0
Syria		0)	118. 5	0)
Turkey		100. 4		2, 433. 1
Yemen		e)		0)
Near East Area			. 2	19. 2
TOTAL		225. 1	216.7	4, 662. 3
AFRICA:			
Cameroon				. 2
Congo		3. 6	5. 1	16. 1
Dahomey				• 1
Ethiopia		10. 7	9. 0	100. 6 0)
Ghana				
Guinea		.7	. 3	1. 0
Ivory Coast				• 1
Liberia		. 6	1. 1	4. 9
Libya		1. 7	2. 6	12. 4 2. 8 26. 7 1
Mali		. 5	. 7	
Morocco		3. 1	5. 2	
Niger				
Nigeria		. 3	. 2	1.0 2. 6
Senegal		. 1	. 2	
Sudan		. 3	. 3	• I i& 3
Tunisia		. 5	. 7	
See footnotes at end of table.
505
Table 48—Continued
APPENDIX
MILITARY ASSISTANCE DELIVERIES—Continued			
	Fiscal year 1966	Fiscal year 1967	Fiscal years 1950-67
AFRICA—Continued Upper Volta. 				C)		. 1
Africa Area					
			
TOTAL		22. 2	25. 2	185.5
			
EAST ASIA: Cambodia.			87. 1
China, Republic of		76. 5	70. 3	2, 320. 0
Indo China.	__ _					709. 6
Indonesia _____________	______	— 4. 8	6. 1	63.9
Japan		1. 2	29. 2	850. 7
Korea	 ________________	153. 1	152. 6	2, 309. 5
Malaysia, Federation of____________	. 2	. 2	.4
Philippines	 _ 		26. 1	20. 9	344.3
Thailand		40. 7	46. 9	591. 7
Vietnam	170. 8		1, 477. 2
East Asia Area________	______	13. 7	2. 3	246. 1
			
TOTAL		477. 5	328. 5	9, 000. 5
			
LATIN AMERICA: Argentina. _______________________	6.4	6. 8	23. 5
Bolivia____________________	2.4	2. 9	15. 8
Brazil_ __ _	_____________	9. 5	13.5	194. 1
Chile________________ _________	8.4	4. 7	79. 2
Colombia	_	_	_ ______	8. 3	7.9	67. 5
Costa Rica_______________________	. 1	. 1	1.7
			10. 6
Dominican Republic		1. 7	3.4	16. 0
Ecuador			_ _	______ __	3. 9	3. 1	34.1
El Salvador		.7	. 6	4.7
Guatemala		1.2	1. 4	10.8
			3.2
Honduras		. 7	1. 0	5.4
Jamaica,		. 2	.8
Mexico _	_	________________	. 2	. 2	1.5
Nicaragua	 ___________	1.0	1.0	8.9
Panama_	_	_	__________	.4	.5	2.3
Paraguay__	_ ____________	1. 0	1.1	5.1
Peru		7. 3	6. 6	73. 2
Uruguay. _ _ ______________	2. 5	1. 6	35. 8
Venezuela 			 _ _	_______	1. 0	1. 0	6.4
Latin America Area________________	1. 6	1. 5	13.5
			
TOTAL		58. 5	59. 3	614. 3
			
WORLDWIDE AND REGIONAL PRO- GRAMS 2		169. 0	136. 2	4, 024. 5
TOTAL, DELIVERIES UNDER GRANT AID.	1, 054. 4	825. 3	32, 549. 8
1 Less than $50,000.
2 Includes totals for countries which must remain classified because of intergovernmental agreements or because of their sensitive nature.
506
ANNUAL REPORT OF THE SECRETARY OF DEFENSE
Table 49 MILITARY ASSISTANCE OBLIGATIONS AND EXPENDITURES
[In millions of dollars]
Budget activity	Obligations/Reservations 1		Expenditures	
	Fiscal year 1967	Fiscal years 1950-67	Fiscal year 1967	Fiscal years 1950-67
GRANT AID PROGRAM: Equipment and Supplies: Aircraft		81. 3	6, 769. 9	200. 1	6, 570. 3
Ships		-121. 9	1,808.2	-109. 9	1, 696. 6
Vehicles and weapons		98. 9	7, 547. 8	149. 0	7, 311. 4
Ammunition		64. 3	4, 311. 6	63. 3	4, 212. 6
Missiles		-11. 0	1, 338. 0	-2. 5	1, 315. 8
Communications equipment...	22. 2	2, 040. 3	65. 0	1, 916. 0
Other equipment and supplies.	29. 9	2, 607. 9	103. 0	2, 454. 9
Services: Construction		-4. 8	493. 6	11. 7	485. 2
Repair and rehabilitation		169. 8	682. 6	178. 1	653. 2
Supply operations		79. 3	2, 233. 3	77. 6	2, 221. 4
Training		49. 4	1, 164. 8	46. 8	1, 138. 5
Other services: Administrative expenses..	22. 8	399. 5	22. 0	392. 6
Infrastructure		-74. 3	992. 8	52. 6	992. 8
International military headquarters		44. 8	173. 7	24. 1	143. 1
Mutual weapons develop- ment program		-. 3	271. 9	. 8	271. 5
Other special projects and services		21. 2	754. 0	14. 1	728. 3
Total grant aid program.	471. 4	33, 589. 8	895. 9	32, 504. 3
SALES PROGRAM		619. 0	1, 386. 0	157. 1	621.4
ECONOMIC PROGRAM		2	910. 3	2. 1	909. 1
Obligations/reservations transferred		+ 261. 0	+ 261. 0	NA	NA
TOTAL 2		1, 351. 3	36, 147. 1	1, 055. 1	34, 034.8
BY AGENCY: Army		540. 3	17, 483. 1	506. 2	16, 761. 6
Navy		206. 6	4, 385. 5	140. 9	3, 962. 4
Air Force		232. 9	11, 094. 4	346. 1	10, 687. 5
OSD		366. 6	2, 005. 9	59. 1	1, 447. 3
Other agencies		4. 8	1,178. 3	2. 7	1, 175. 9
TOTAL		1, 351. 3	36, 147. 1	1, 055. 1	34, 034. 8
NA—Not applicable.
1 Budget activity distribution reflects reduction of $261 million for transfers of infrastructure and Laos-Thailand from MAP to military functions funding as of June 30, 1967.
3 Includes “Common Use items” appropriation administered by the Agency for International Development.
Note.—Negative amounts resul tfrom adjustments among budget activity categories.
US. GOVERNMENT PRINTING OFFICE: 1970 O—360-499