Answer. Yes, this request supports our best estimate of the costs we see at this time.

Question. Does this supplemental request finance the requirement as identified by CENTCOM?

Answer. The initial Iraq operation cost estimate was prepared using the concept plan developed by the U.S. Central Command (CENTCOM). Subsequently, this initial estimate was refined based on CENTCOM's Operational Plan (OPLAN). No one can predict with certainty exactly how any major combat campaign will progress. However, based on current circumstances, the supplemental request is sufficient to finance CENTCOM's requirements.

Question. The fiscal year 2003 budget request did not include the additional costs of the global war on terrorism, nor did it include the additional cost of a war with Iraq. How much above the amount provided in the Department of Defense Appropriations Act, 2003 (Public Law 107-248), is needed to finance these efforts?

Answer. The incremental increase of $68.7 billion above the amount appropriated in the FY 2003 DoD Appropriations Act is required to finance military operations in Iraq and the ongoing global war on terrorism. The Congress appropriated $6.1 billion in the FY 2003 Consolidated Appropriations Resolution (P.L. 108-7) and the remaining $62.6 billion is included in the DoD's FY 2003 supplemental request.

COST OF IRAQ OPERATIONS

Question. What are your projections for total cost of the war through the end of hostilities?

Answer. The fiscal year 2003 supplemental request includes $55.4 billion for coercive diplomacy, major conflict, and transition and Iraq stability phases of the Iraq operations. This is the Department's best estimate of the cost of the war through the end of hostilities.

Question. What is the expected duration of hostilities?

Answer. The supplemental request includes the necessary resources to finance a short, extremely intense period of combat operations lasting approximately one month. This phase is then followed by a period of approximately three or more months of limited combat "mopping up" operations and lower intensity, sporadic fighting.

Question. Please describe your methodology for estimating these combat costs. What are the cost drivers, and the daily burn rate?

Answer. The Combatant Commanders first developed the concept plan, which was later refined as the Operational Plan (OPLAN). Thereafter, the Time Phased Force and Deployment Data (TPFDD) was prepared by the Services working closely with the Central Command Combatant Commander. Using this detailed data and other known factors, the Office of the Secretary of Defense (OSD) Cost Team generated cost estimates for military operations based on the type of mission/contingency, duration, operational tempo (OPTEMPO), number of personnel and equipment deployed, transportation needs, subsistence for personnel deployed, and the originating and destination site. Each primary cost category was further subdivided into multiple functional cost elements. These functional cost categories formed the basis of the cost breakdown structure used in the cost models to calculate the total cost of the operation. The daily burn rate estimate for the major conflict phase was approximately $400 million to $500 million (excluding coercive diplomacy).

Question. What is your current estimate for the rebuilding of Iraq?

Answer. It is too early to know the ultimate costs of Iraq's recovery. However, the $2.475 billion requested and appropriated was built on a sector specific relief and reconstruction plan. We are now evaluating how the assumptions and requirements identified in that budget plan reflect actual needs in Iraq.

The Iraq Relief and Reconstruction Fund was requested with flexible authorities because of these uncertain conditions and requirements. The structure of the Fund will allow those resources to be transferred for use for other urgent requirements. Moreover, Iraq's troubles began long before the war. Iraq has suffered from 30 years of mismanagement of the economy and deliberate policies of neglect targeted at real or imagined foes of the former regime. These policies have taken a significant toll on Iraq's infrastructure and institutions. The Coalition is committed to repairing damage done in the war and assisting the Iraqi people in their task of reconstructing infrastructure and institutions damaged or destroyed by years of misrule and systematic oppression.

It is worth noting that numerous countries around the world are contributing to restoration efforts in Iraq, and the prospects for full recovery look very good. Iraq enjoys significant human and natural resources that will make an important dif

ferences in recovery. The Iraqi people are talented, educated, and resourceful, and they have fertile soil, major rivers and significant oil reserves.

Question. Are your estimates for rebuilding and administering Iraq based on assumed participation by the United Nations or some collection of countries that are not now participating in the combat?

Answer. Yes, DoD estimates for rebuilding and administering Iraq are based on assumed participation by the United Nations (UN) and a collection of countries that did (and did not) participate in combat operations in Iraq.

Pursuant to the UN Security Council Resolution 1453 and upcoming technical meeting in New York at the United Nations the week of 23 June 2003, DoD fully expects continued and additional significant contributions from donor countries and parties around the world. This meeting will be co-hosted by the UN Development Program, the World Bank and Coalition countries. It will discuss needs assessments and the way ahead to a donor's conference this fall.

Question. Are there funds in this request for refugee operations?

Answer. The funds appropriated to the President for Other Bilateral Economic Assistance total $2.475 billion. These funds are designed to address the costs associated with supporting relief efforts related to refugees, internally displaced persons, and vulnerable individuals, including assistance for families of innocent Iraqi civilians who suffer losses as a result of military operations.

Question. How much have we spent in preparation for refugee operations in and around Iraq?

Answer. The Report to Congress pursuant to Section 1506 of the Emergency Wartime Supplemental Appropriations Act, 2003 (Public Law 108-11) demonstrates that the funds apportioned to the Department of State Bureau of Population, Refugee and Migration (PRM) total $39.1 million. Approximately $40.1 million has been allocated by PRM to date. An additional $111.6 million was apportioned to support relief efforts related to refugees, internally displaced people and vulnerable individuals.

The Department of State's Bureau for Population, Refugees, and Migration contributed assistance for the pre-positioning and emergency response activities of the U.N. High Commissioner for Refugees (UNHCR), the International Committee of the Red Cross (ICRC), the International Federation of Red Cross and Red Crescent Societies (IFRC), and the International Organization for Migration (IOM).

Also in the Emergency Wartime Supplemental Appropriations Act 2003, Congress appropriated $2.475 billion for the President's Iraq Relief and Reconstruction Fund, which is the primary source of U.S. government funding for Iraqi recovery activities. Congress also made $489 million available to the Department of Defense within the Iraqi Freedom Fund for use, if needed, to repair damage to Iraqi oil facilities and to preserve a petroleum distribution capability.

The $2.475 billion requested and appropriated reflects USG assumptions about expected costs and was built on a sector specific relief and reconstruction plan.

Question. If the requested supplemental funds are provided, will the services be able to replace all funds borrowed from normal operating accounts, such as for building repair?

Answer. Yes, the DoD's request of $30.3 billion for costs required for coercive diplomacy will replace all funds borrowed from normal operating accounts. For instance, this amount is necessary to reimburse the Components for estimated military personnel costs and transportation of personnel and equipment to the area of military operations. Also, the Services will need to be reimbursed for building repairs and facility enhancements (such as in Kuwait) in preparation for military operations in Iraq.

Question. If not, what activities that were provided for in the fiscal 2003 appropriations act, will not be accomplished?

Answer. If the DoD's total supplemental request is appropriated before May 2003, the Department will be able to replace all funds borrowed from normal operating

accounts.

AFGHANISTAN OPERATION ENDURING FREEDOM

Question. Besides the war in Iraq, military operations and humanitarian rebuilding efforts are continuing in Afghanistan. What are your estimates of the additional funds needed to continue the Afghanistan operation through the end of the year? What is your method for estimating costs?

Answer. The Department reviewed all the cost estimates for the cost of Afghanistan Operation Enduring Freedom (OEF) submitted by DoD Components. In addition, the Department also reviewed the cost of Operation Noble Eagle (ONE). Based on execution of approximately $1.1 billion per month in the first quarter of FY 2003

for ONE and OEF, the Department included $6.1 billion in the FY 2003 supplemental request. This is required in addition to the $6.1 billion appropriated in the FY 2003 Consolidated Appropriations Resolution.

Question. What work is being accomplished by other countries in Afghanistan? What is the estimated cost of humanitarian and rebuilding operations in Afghanistan to the end of the fiscal year? Are these costs fully funded?

Answer. The scope of the Humanitarian Assistance (HA)/reconstruction effort in Afghanistan is beyond the Defense Department's area of responsibility, although we work closely with State and USAID on these efforts. To date, over 37 countries have contributed to the rebuilding of Afghanistan.

The work being accomplished includes but is not limited to:

• Establishment of a refugee camp,

Providing food, medical and water supplies,

• Technical assistance to the banking sector,

· Building education facilities,

Demining equipment,

• Construction of a women's center, and

Providing various vehicles.

This list is not comprehensive and is a sample of accomplished work in Afghanistan to date.

Additionally, 20 coalition partner countries have contributed forces to the coalition military operation in Afghanistan, focused on creating the conditions for security, stability and reconstruction.

Question. What cash or in-kind contributions have been received or promised by other countries to assist with operations in Afghanistan?

Answer. Since the beginning of the war on terrorism, foreign nations have provided approximately $2.7 billion in logistical support to the United States.

Question. In the Omnibus Continuing Appropriations bill approved last month, Congress provided an additional $6.1 billion for the Department of Defense. How have these funds been used?

Answer. These funds were used to reimburse the Services for the costs incurred in support of Operation Noble Eagle and Operation Enduring Freedom.

Question. What is the current unobligated balance of the $6.1 billion appropriated. (Please provide this information by appropriation).

Answer. The current unobligated balance (as of March 27, 2003) is approximately $160 thousand.

PAYMENTS TO PAKISTAN AND JORDAN

Question. The supplemental request includes $1.4 billion for payments to Pakistan, Jordan, and other key cooperating nations, for logistical and military-related support provided, or to be provided, to the United States in connection with military action in Iraq and the global war on terrorism. How much has been provided in the past for such support? Of the request, how much represents payments that have already been made for which the Department is seeking reimbursement?

Answer. Pakistan, Jordan, and other key cooperating nations have been reimbursed a total of $1.2 billion for logistical and military-related support provided to the United States in connection with the global war on terrorism. Of this amount, $530 million was taken from the O&M accounts to make a payment under the Acquisition and Cross Servicing Agreement with Pakistan.

Question. What nations have received funding for such support, and what nations do you expect will receive assistance in the future?

Answer. As of September 30, 2003, the following nations have received reimbursement or have reimbursements pending from the FY 2002 Supplemental ($390 million) and the FY 2003 Supplemental ($1.4 billion).

*Note: Pakistan received $530.2M reimbursement via an Acquisition and Cross Servicing Agreement for the period July-Dec 2002. Question. How does the Department of Defense ascertain which costs should be reimbursed?

Answer. The following financial management guidelines have been established to ensure that the U.S. taxpayer interests are adequately protected. The following steps are adhered to in making payments to key cooperating countries for the cost of goods, services, or use of facilities provided in support of U.S. military forces in connection with the global war on terrorism:

1. A country providing support to U.S. military forces in connection with the global war on terrorism sends requests for U.S. reimbursement through the American Embassy in country. The country request for reimbursement should include a breakdown of costs by the types of cost (base support, food, medical, airlift) and justification on the level of support provided (number of troops, types of assets, number of hours flown, number and types of aircraft).

2. The country request for reimbursement is provided to the Department of Defense for evaluation and payment.

a. The information is reviewed by the appropriate combatant commander's staff for confirmation that the level and type of support claimed by the country was actually provided to U.S. military operations in connection with the global war on terrorism. Any significant changes in the level of support will be justified by the combatant commander's staff.

b. The Office of the Under Secretary of Defense (Comptroller) staff uses financial management tools to determine whether the claimed costs are reasonable. At a minimum an assessment is done to ensure that the cost avoidance to the U.S. is greater than the cost of the support being provided by cooperating countries.

3. The Secretary of Defense determines the appropriate payments to countries for justified claimed costs, in coordination with the Secretary of State, and in consultation with the Director of the Office of Management and Budget. Not earlier than 15 days following notification to the appropriate Congressional committees, DoD makes the reimbursement to the requesting country.

Question. What role does the Secretary of State play in this process, since the request includes language that provides that he must concur in such payments?

Answer. The Department of Defense forwards all recommended reimbursement packages to the Department of State prior to submitting the package to the Secretary of Defense for approval. Only after the Department of State concurs with the package is it sent forward to the Secretary of Defense for approval, and notification of the appropriate Congressional committees.

Question. The supplemental request includes language that provides that not to exceed $50 million may be used to "support the military operations or activities of foreign nations of furtherance of the global war on terrorism, including equipment, supplies, services, and funding with the concurrence of the Secretary of State". How does this authority differ from the $1.4 billion sought to reimburse nations for military support to the United States?

Answer. This provision would allow the U.S. to help nations enhance their counterterrorism capability so that they can contribute more effectively to the global war on terrorism in the future.

The $1.4 billion, conversely, is provided as reimbursement to key cooperating nations for support provided to U.S. military operations in support of the global war on terrorism.

Question. Elsewhere in the supplemental request, the Secretary of State is seeking over $2 billion in military assistance through the Foreign Operations Subcommittee; how does this $50 million differ from that request?

Answer. The State Department's security assistance programs are largely planned far in advance and cover a broad spectrum of needs. The special authority requested for the Department of Defense is intended to provide flexibility to respond quickly to emerging requirements for specialized training in counter-terrorism.

Well-trained local security forces not only reduce the demand for U.S. military forces, but because of their status, language skills and regional knowledge, they are capable of performing missions in ways U.S. forces cannot.

SUPPORT TO INDIGENOUS FORCES

Question. The supplemental request includes language that authorizes not to exceed $150 million to support indigenous forces assistance United States military operations or activities relating to the global war on terrorism, including equipment, supplies, services, and funding. Why is this request being made?

Answer. A number of foreign countries, including Afghanistan and the Afghan National Army, are providing the United States with operational military support in the Global War on Terrorism (GWOT).

In addition, indigenous forces that are not part of formal military structures may also be available to engage in activities in support of United States forces operating consistent with existing Congressional Resolutions or any subsequently enacted Congressional Resolution authorizing the use of force.

This provision provides resources, to include defense articles, services, education and training, and funds, over the near-term to both nations and indigenous forces that provide United States forces with operational support.

These forces would be critical to continue our efforts for GWOT or in the conduct of any new operations in other regions of the World.

Question. Would this authority be used in Iraq?

Answer. Yes. If enacted, this provision would further DoD's objectives in its mission to prosecute the Global War on Terrorism, and, if both authorized by Congressional Resolution and deemed necessary, to take military action against Iraq. This provision provides resources, to include defense articles, services, education and training, and funds, over the near-term to both nations and indigenous forces that provide United States forces with operational support.

These forces would be critical to continue our efforts for GWOT or in the conduct of any new operations in other regions of the world.

Question. Can you provide specific instances of how this authority would be used in the future?

Answer. Once a country no longer functions as a sovereign state all forces are indigenous. The Department of State has the responsibility for supporting sovereign states. But there is no general responsibility or authority for supporting indigenous forces of failed states such as the Northern Alliance in Afghanistan.

It is in DoD's interest to seek authority to support these forces as it did the Northern Alliance in Afghanistan.

These forces could be critical to continue our efforts for GWOT or in the conduct of any new operations in other regions of the world.

This provision requires no additional appropriations or budget authority above the President's Budget request.

The Secretary of Defense will determine the terms and conditions of the support to be provided, with the concurrence of the Secretary of State. The DoD would carefully monitor all requests for such support.

Question. What oversight would Congress have on this use of these funds? Answer. The Secretary of Defense will provide the congressional defense committees with a 15 day notification and a financial plan for the use of these funds.

GUARD AND RESERVE CALL-UP

Question. What is the total number of troops called up at this time?

Answer. As of 10 June there were 211,950 mobilized Reservists and Guardsmen on duty. Breakout by Service is as follows: Army-141,312; Navy-11,211; USAF— 34,074; USMC-21,087; and USCG-4,266.

More than 20,000 reservists have been demobilized since April, when levels peaked at more than 233,000. This reduction reflects our commitment to demobilizing reserve forces as soon as possible.