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intended to provide a corporate, senior level focus on installation management in support of the mission commanders. The new agency is designed to achieve efficiencies, ensure consistency and eliminate migration of funds from base operating accounts, such as facilities maintenance, environmental, and family programs.

Secretary White, please describe your progress in transitioning base operations to the Installation Management Agency?

Answer. The Installation Management Agency (IMA) has achieved initial operational capability and is performing its vital mission of managing the Army's installations. IMA is meeting the mobilization, deployment, redeployment, and other related support requirements in support of the global war on terrorism and operations in Iraq. IMA is partnered with Network Enterprise Technology Command and the Army Contracting Agency to improve efficiencies.

Fiscal year 2003 represents a transition year for management of manpower and dollars as documentation and appropriations realign to the agency. This transition, although not complete, has already proven beneficial to warfighting commanders and major commands who have been able to focus on operations and training, with IMA fully in charge of running the installations and caring for soldiers and families. In addition, the Army Reserve integrated its headquarters engineering functions into the IMA headquarters, with an additional policy office established at the Assistant Chief of Staff for Installation Management. The transfer of the remaining Army Reserve headquarters base operations functions will be accomplished in conjunction with the Army Reserve restructuring initiatives. IMA will achieve full operational capability by the end of fiscal year 2004.

Question. General Shinseki, why are the garrison and area support group commanders senior-rated by the local senior mission commander? How can the garrison commanders ensure Army-wide consistency in funding, and avoid migration of funds, if the local mission commander holds the keys to the garrison commander's career? Isn't this like having an auditor's future controlled by those he is auditing?

Answer. Making the senior mission commander on the installation the garrison commander's senior rater ensures that the garrison commander's performance is responsive to the priorities of the installation. We balance that by having the IMA region director rate the garrison commander. Designating the IMA region director as rater provides the corporate point of view on the garrison commander's ability to implement the efficiencies and uniformed level of service required for all Army installations within a given region. This designation of the senior rater is also consistent with Army officer evaluation policy and consistent with rating schemes of other officers on the installation. Senior raters are senior-level officials with broad experience and are able to evaluate performance across their installations. For the Army to successfully execute its mission, IMA, the major commands, and the senior mission commanders on installations must all work as one team in very close partnership.

Army Contracting Agency

Question. With the creation of the Army Contracting Agency, the Army has realigned previously decentralized contracting processes under one organization. The Army's goal was to eliminate redundant contracts, and to leverage the buying power of Army wide requirements.

Mr. Secretary, please describe the implementation of the Army Contracting Agency, and the efficiencies and savings you have achieved.

Answer. The Army Contracting Agency (ACA) was established as part of Army Transformation efforts. In accordance with our vision of the ACA, we have not yet achieved any identifiable savings in the seven months since the ACA stood up. The plan is to realize savings in the fiscal year 2004—2006 timeframe. The ACA has eight subordinate contracting organizations: a northern and southern regional headquarters aligned with the continental United States, Installation Management Activity regions; Information Technology, E-Commerce, and Commercial Contracting Center; and five contracting activities outside the continental United States.

Each Army installation will retain its local directorate of contracting (DOC), which will continue to perform full contract support for locally awarded contract actions and provide advice and assistance for centrally awarded actions. The DOC awards local base operations contracts under $500,000 and places delivery/task orders against established contract vehicles regardless of dollar value. In addition, the DOC performs contract administration for locally and centrally awarded contracts, manages local purchase card programs, and conducts emergency and safety buys above $500,000.

The ACA will generate savings through reduced cost of purchasing by eliminating duplicative overhead, obtaining efficiencies from regionalized and national contracts, and exploiting electronic commerce technologies. Again, the ACA expects to realize savings over a three-year period from fiscal year 2004-2006. The target personnel savings will be a net reduction of about 230 spaces. Program savings will be achieved on a case-by-case basis. Further savings will be obtained by economies of scale through negotiating single requirements, Army wide with industry providers.

Basic Officer Leadership Course

Question. The Army recently approved far-reaching changes to its Officer Education System that impact Basic and Advanced (Career) Officer courses as well as Command and General Staff College instruction. This course moves away from the traditional branch oriented officer basic in favor of a program called the Basic Officer Leadership Course. Under the new course, new officers would first spend about six weeks at a common location (Fort Benning) learning the basics of leadership, physical fitness, and individual weapons proficiency. Then the officers would move on to branch specific training at the branch school houses, for example tank training at Fort Knox.

General Shinseki, please explain the rationale behind the changes in the Officer Education System, the anticipated positive developments these changes should bring, and the risks associated with these changes.

Answer. As the Army transforms to the Objective Force to meet the challenges of the 21st Century security environment, so too must the Army transform its officer education system (OES) to train and educate the leaders who will command and control that force. Transformation of OES is based on a documented rationale for change, including findings and recommendations from the Army Training and Leader Development Panel (ATLDP) officer study published in February 2001.

The ATLDP identified the current OES as not meeting the leader development requirements of the contemporary operational environment. This complex, information-centric operational environment, characterized by uncertainty and ambiguity, rapid tempo, and compression of strategic and tactical focus, requires officers to be self-aware, adaptive, full-spectrum leaders. To meet Army needs and officer expectations, a transformed OES will provide the right education, in the right medium, to the right leader, at the right time and place.

The Army strategic objective is to develop more capable, confident leaders through continuous investment in personal growth and professional development throughout their careers. The Army intends to achieve this objective by improving and sustaining leader development through an experientially based education and training model enabled by increased leveraging of technology. This model will support the Army service culture and warrior ethos and produce leaders who can resolve dilemmas under stress, make decisions, and lead formations. Risks are associated with timely development of the advanced distance learning courseware and modules required to implement the model.

Question. What are the additional funding requirements associated with changing the Officer Education System?

Answer. The Army will execute three high-payoff OES initiatives: for lieutenants—the Basic Officer Leader Course (BOLC); for captains—the Combined Arms Staff Course (CASC) for staff officers and the Combined Arms Battle Command Course (CABCC) for company commanders; and for majors—Intermediate Level Education (ILE).

BOLC ensures a tough, standardized, small-unit leadership experience that progresses from pre-commissioning, to the initial entry field leadership experience, and branch technical/tactical training. BOLC provides a small unit leader training continuum and a common Army standard for small unit leadership. Additional funding requirements for BOLC fiscal year 2003 to fiscal year 2009 are $47.7 million.

Captains OES synchronizes training with assigned duty positions. This concept also reduces personnel and family turbulence. The CASC and the CABCC provide assignment-oriented training for staff officers and company commanders, respectively. Most importantly, CASC and CABCC will return approximately 1,500 captains to the field and give senior commanders more responsibility for junior officer professional development. The captains OES model will generate a net savings to the Army of $57.8 million during the period fiscal year 2003 to fiscal year 2009.

The third OES transformation initiative, ILE, will provide all majors with the same 12-week Military Education Level 4 producing/Joint Professional Military Education 1 common core of operational instruction, and additional tailored education opportunities tied to the requirements of the officer's specific career field, branch, or functional area. Additional ILE fiscal year 2003 to fiscal year 2009 funding requirements are $137.9 million.

Total additional funding requirements associated with transforming OES for the fiscal year 2003 to fiscal year 2009 timeframe are $243.4 million.

Question. Will changes to the officer career courses, which rely heavily on distance learning, produce officers capable of meeting the challenges of company command and battalion and brigade staff assignments?

Answer. Advanced Distributed Education (ADD is the delivery of training to soldiers and units through the application of multiple means and technology. ADL allows students, leaders, and units centralized access to essential information and training. It represents a powerful capability in which the proper balance of course content and delivery technologies are provided when and where they will have the greatest impact on force readiness.

The captains OES, the CASC and the CABCC, provide assignment-oriented training for staff officers and company commanders, respectively. ADL is key to the captains OES model and will produce officers capable of meeting the challenges of company command and battalion and brigade staff assignments. In addition to ADL, captains OES capitalizes on new high-impact, multi-echelon, combined arms resident training methods.

ADL will be used to facilitate learning in combined arms tactics, techniques, and procedures and training doctrine, history, and tradition. This will be followed by an immersion experience in a hands-on, performance-oriented resident component taught by small group instructors under the supervision of the assistant commandants at the branch schools. This phase will be tailored to the officers' assigned duty positions.

CABCC will also include an on-site experiential combat training center (CTC) component led by a branch-qualified mentor. This tactical exercise without troops overlaid on a unit in a CTC rotation is a hands-on practicum designed to reinforce the commander's personal responsibility to develop, execute, and evaluate training.

Question. What impact will this shift in policy have on local commanders in the field who are already managing soldiers working longer hours and deployed more often since September 11?

Answer. The requirement to do more with less and the demands of the contemporary operational environment necessitated the OES transformation. The BOLC model does not increase the amount of time an officer is in the training base. The Army benefits from the BOLC by gaining a corps of mature, confident, and competent officers who have a common bond with their combined arms peers and are ready to lead small units upon arrival at their first assignment.

The current Intermediate Staff College concept affords a resident education for only 50 percent of the majors in a year group. The Army leadership decided that education should not be a promotion discriminator and that a smaller Army with increased demands must educate 100 percent of its majors. Intermediate Level Education will provide all majors with the same common core of operational instruction and additional tailored education opportunities tied to the requirements of the officer's specific career field, branch, or functional area.

OES transformation will impact the field by timely producing an officer with a warrior ethos, grounded in warfighting doctrine, and who has the technical, tactical, and leadership competencies and skills to be successful in the officer's branch, assigned duties, career field, and functional area.

Question. The Committee applauds the Army's efforts to provide Intermediate Level Education to all its officers, but can the force absorb a doubling of the number of majors in training at a time of significant operational stress? How will this be managed?

Answer. The Army recognized that pulling an entire year group or cohort of majors will have an adverse impact on readiness and modified the concept. The ILE Intermediate Staff College concept will target approximately 1,950 officers from the Army competitive category each year. This target number is equivalent to a year group/cohort of majors. To alleviate the readiness impact on the field, 50 percent of the officers attending ILE will be in the grade of major and 50 percent will be drawn from the two senior year groups of branch-qualified captains. The Army Personnel Command will target officers for ILE attendance over a four-year period— the officer's last two years as a captain and first two years as a major.

Joint Logistics Warfighting Initiative

Question. The Army has been participating in a Department of Defense-wide demonstration of a logistics information management technology insertion program. The demonstration project, which is in its third year, is called the Joint Logistics Warfighting Initiative. What is your assessment of the Joint Logistics Warfighting Initiative?

Answer. The Joint Logistics Warfighting Initiative (JLWI) adds a capability to the legacy logistics systems at the operational level that the Army has not had in the past. This capability greatly widened the access to more timely supply and maintenance information through web-based tools. JLWI works well in base support and garrison operations and was used in Operation Enduring Freedom and in Iraq. However, without a more robust communication's architecture, JLWI and other webbased applications will have limited use during combat operations. The logistical functionality in JLWI is viewed as a capability that must be addressed when the Army transforms its logistics enterprise and converts to an enterprise resource planning based logistics solution.

Question. Does the Army plan to continue and expand use of the Joint Logistics Warfightinglnitiative?

Answer. The Army will continue to use JLWI until the introduction of the enterprise resource planning software. There is no plan for the Army to expand JLWI beyond those units already programmed.

Fiscal Year 2004 Program Terminations

Question. The fiscal year 2004 Army budget request proposes terminating 24 programs and restructuring an additional 24 to free up the financial resources needed to support the Future Combat System and transformation to the Objective Force. Many of the terminated and restructured programs are so-called Legacy Force programs such as the M1A2 SEP, Bradley Fighting Vehicle A3 upgrade, and related programs. The Army estimates that $2.3 billion becomes available in fiscal year 2004 because of these actions, and $2.6 billion becomes available in fiscal year 2005.

Please highlight the major system terminations proposed in the fiscal year 2004 budget request.

Answer. The Army terminated the 24 programs listed on the following table in the fiscal year 2004-2009 Future Years Defense Plan.

FISCAL YEAR 2004-2009 FUTURE YEARS DEFENSE PLAN PROGRAM TERMINATIONS
[In millions of dollars]

Projram termination Fiscal year 2004 ^j^ 2009

Crusader

Bradley A3

Abrams SEP

ATACMSBATP3I „

ATACMS Block II

MLRS270A1 Conversion

Tactical Exploitation System

Wide Area Munitions

Raptor

25mm M919 Round

07 Tractor

Stinger ._

Improved Target Acquisition System

Striker

Lightweight Video Recon System

120mm E4 Tank Round

Diagnostic Improvement System _

Joint Tactical Terminal _

Common Ground Station, P3I

Floodlight Sets

Guardrail

M16A4 Rifle

Non-lethal Capabilities Set

Mark-19 Grenade Launcher _

Total from Program Terminations -„ 1.622.5 13,874.3

Question. What are the associated savings estimated for fiscal year 2004? Over the Future Years Defense Plan (FYDP)?

Answer. The Army reallocated the $13.9 billion to its Transformation efforts over the FYDP period. For fiscal year 2004 $1.6 billion was garnered from these terminations for Transformation.

[table]

Question. The budget request proposes terminating the M1A2 SEP and Bradley A3 programs. In light of these proposed terminations, do you have concerns about maintaining the industrial base needed to produce the Future Combat System (FCS) beginning in fiscal year 2008?

Answer. Army Transformation required cancellation of certain programs to fund a variety of transformational initiatives to achieve greater war fighting capability over the long term. We assessed the risks to the industrial base from these program cancellations and, where we judged necessary, we have taken steps to mitigate adverse impacts. We saw two major risks to the industrial base as a result of the decision to not modernize the Counterattack Corps. Both of these risks involved maintaining viable armor system production capabilities at two production facilities: the Lima Army Tank Plant at Lima, Ohio, and the United Defense combat vehicle production facility at York, Pennsylvania.

The first risk involves the General Dynamics' combat vehicle fabrication capability at the Lima Army Tank Plant. We judged that risk as unacceptable since Lima initially had an insufficient workload to remain viable as a production facility for the fabrication of the Marine Corps' Advanced Amphibious Assault Vehicle and the Army's FCS ground vehicles. To mitigate this risk, the Army has restructured some programs and now has sufficient work to sustain Lima in active production until these new programs are brought into production.

The second risk involved maintaining the United Defense's combat vehicle production facility in Pennsylvania. We recognize that this facility would also be a likely candidate to manufacture FCS ground vehicles in the future. We expect that the production facilities in Pennsylvania will remain viable and open through calendar year 2004 because of a continuation of their current fiscal year 2003 Bradley upgrade work. With this expectation and acceptance of risk, we did not program fiscal year 2004 funding for Bradley upgrades to protect that portion of the industrial base.

While we cannot guarantee additional work from support for fielded systems, foreign sales, and reprocessing vehicles from operations in Iraq, the Army is looking hard at workload projections after calendar year 2004 and identifying fiscal year 2005 options which might be needed to protect any United Defense combat vehicle fabrication capability determined essential for future production. Those options will consider United Defense work on development of manned FCS non-line of sight gun system, unmanned ground systems, foreign sales, and other new non-traditional business. All of the other industrial base risks from not funding the Counterattack Corps are judged acceptable.

We expect fiscal year 2003 funding and other work to keep essential skills active through the end of calendar year 2004, given that final vehicle deliveries are scheduled for June 2005. The program funding for Bradley system sustainment and technical support will transition in fiscal year 2006 from procurement to the Operation and Maintenance, Army account. We believe United Defense's engineering staff and the Army's own in-house staff will be able to sustain the vehicles made by United Defense.

The shortage of Bradley upgrade funding is manageable, but there are two key issues we must address. The first issue is how we will fund the required technical support to the fielded fleet. For fiscal year 2003, the Army will have to fund the technical support from operation and maintenance accounts. That will present a problem for us because we will be addressing not only peacetime requirements but operational requirements associated with the global war on terrorism and operations in Iraq. Obviously, we will finance the highest priority operational requirements first and defer those which are lower priority. A second issue is whether key suppliers will abandon the supplier network as we reduce requirements. This is a continuing problem, and we will do more tradeoff analysis to support decisions, for example, to either stockpile components or find alternate suppliers.

Question. The budget request proposes terminating production of the M919 depleted uranium cartridge for the Bradley Fighting Vehicle. Are the stocks of this round sufficient to meet requirements from now through the retirement of the Bradley?

Answer. The Army has not funded the M919 program due to other higher-priority requirements. However, the program has received funds through Congressional plus-ups in fiscal year 1999 through fiscal year 2003. Procurement will end with the fiscal year 2003 appropriation unless the Congress directs additional funds into the program. The Army will have produced a quantity of approximately 2.14 million cartridges through the end of fiscal year 2004. The Army acquisition objective stands at 5.3 million cartridges. There is a $30 million critical unfunded requirement in the fiscal year 2004 budget. Stocks of the M919 cartridge, along with stocks of its less-capable predecessor cartridge, the M792, are sufficient to meet the needs of the

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