SPARE PARTS SHORTFALLS

Question. The Committee often hears from military units at their home bases, or when they are deployed, that the Army suffers shortages of key spare parts. In the budget request for fiscal year 2004, the Army has realigned substantial funding, over $650 million, to increase the spare parts inventory.

Please discuss the spare parts issue, and the trade offs the Army has made in order to free up the additional funds for spare parts.

Answer. The Army has had a long-standing problem with spares. In the mid 1990's, the Army systematically reduced our strategic inventories supporting all major weapon systems. This decision was made in response to DoD's attempt to right size inventories and implement stock funding of depot level reparables while adjusting the force structure after the end of the Cold War. For several years, high weapon system readiness rates and high supply stock-availability rates were maintained by redistribution of excess inventories and local repair of components. However, in recent years, the combination of increased OPTEMPO, aging weapon systems, and reduced national level stocks negatively impacted weapon system readiness and supply availability.

In early 2000, the Army logistics and financial communities started working to develop, validate, and fund the increased requirement for spares. The Army continued to work the issue internally, but this requirement was competing with a multitude of other force structure and operational requirements. As the global war on terrorism started to unfold, the requirement continued to grow until the fiscal year 2003 unfinanced requirement reached $1.563 billion in August 2002. Based on a critical readiness need to replenish depleted peacetime inventories of repair parts and support the global war on terrorism, the Army decided to take the necessary level of risk in the base operations support accounts in the active and Reserve Component operations and maintenance appropriations for both fiscal year 2003 and fiscal year 2004. By initiating this action, the Army is able to order long lead-time parts for inventory in anticipation of unit demands in fiscal year 2004. Because readiness of the force is especially paramount during the global war on terrorism and the uncertainty of a war with Iraq, the Army took this measured risk with the base operations support accounts.

RECAPITALIZATION PROGRAMS

Question. The Army's recapitalization program is shown to be fully funded for fiscal year 2004, with program growth of about $200 million.

What is your assessment of the progress being made in the Army Recapitalization Program?

Answer. The Army's Recapitalization Program continues to achieve success. During fiscal year 2002, the Army exceeded expectations achieving 102 percent of the projected systems for induction to be recapitalized. Through the second quarter of fiscal year 2003, we have already achieved 60 percent of the total fiscal year 2003 goal. Čertain systems scheduled for recapitalization in the third and fourth quarters of fiscal year 2003 are ahead of the original projected quarterly goals and are already inducted for recapitalization. We again expect to achieve the goal of 100 percent of the projected systems for induction to be recapitalized in fiscal year 2003. Question. Have you added or deleted items for fiscal year 2004?

Answer. There, have been no recapitalization system additions or deletions for fiscal year 2004. The 17 Army recapitalization programs are the AH-64D Apache; UH-60 Black Hawk; CH-47 Chinook; M1 Abrams; M2/M3 Bradley; M270A1 Multiple Launch Rocket System; Patriot Ground Support Equipment; Field Artillery Ammunition Supply Vehicle; M113 Family of Vehicles; Heavy Expanded Mobility Tactical Truck; M88 Recovery Vehicle; Electronic Shops Shelter; High-Mobility Multipurpose Wheeled Vehicle; TPQ-36 Firefinder Radar; M9 Armored Combat Earthmover; Small Emplacement Excavator; and the Armored Vehicle Launched Bridge. The following variants within the 17 will receive no recapitalization funding starting in fiscal year 2004: M1A2 Abrams SEP retrofit; M2A3/M3A3 Bradley; M88A2 Recovery Vehicle; and the Armored Vehicle Launched Bridge.

AIRCREW TRAINING HOURS

Question. Please discuss Flight School XXI. Does Flight School XXI change the Army's flying hour requirement of 14.5 hours per crew per month?

Answer. Implementation of Flight School XXI will enhance unit capabilities by providing better-trained aviators. Flight School XXI will achieve this result by assuring more aviator time in the cockpit of their primary rated aircraft, with less time in training-specific aircraft. Therefore, Flight School XXI will positively impact

the quality of aviator training, even as it complements ongoing Army efforts with parts, maintenance, and deployment readiness issues to help assure the consistent execution of the established quantitative standard of 14.5 hours per crew per month. All of Flight School XXI is funded within the aviation training base and does not change the Army's requirement of 14.5 hours per crew per month. Additionally, with a five-week average shorter course length, Flight School XXI will assist in decreasing pilot shortages in units.

Question. Is the 14.5 hours per crew per month requirement fully funded in the fiscal year 2004 budget request?

Answer. First, let me assure you that the Army intends to meet its fiscal year 2004 flying hour goal of 14.5 hours per active duty crew per month. We continue to train to maintain readiness and remain committed to achieving goals established that assure readiness, like that of 14.5 flying hours per month.

It is true that achievement of this aviation flight-training goal is sometimes impacted by factors beyond the control of the unit commander. Those external factors include aircraft downtime due to Safety of Flight maintenance issues and, to some extent, transformation and deployments. Our recent history with these factors has led the Army to budget for the fiscal year 2001 through 2002 historical average of 13.1 hours per crew per month, with plans to internally finance up to 14.5 hours as the impact of these factors for fiscal year 2004 emerge. Having said that, it is true that the Army is taking some small risk in the flying hour program for fiscal year 2004. However, this risk is prudent because it allows the Army to invest more heavily in depot maintenance and spare parts to reduce aircraft downtime. The better we do at arresting potential aviation parts and maintenance issues, the better we will do at consistent execution of our flight hour training standard. We will closely monitor execution of the flying hour program in fiscal year 2004 and make necessary adjustments to ensure that funding is not the reason for not executing the full 14.5 hour per month aviation training standard.

Question. Since student pilots spend a shorter overall time in flight school, is there a cost savings?

Answer. Although pilots spend less time in Flight School XXI and fly fewer hours there, they spend more time in simulation training and fly more hours in modernized "go to war" aircraft instead of legacy aircraft. Although the total number of hours in Flight School XXI decreases, the hours saved are offset as a result of the increased operating cost associated with flying modernized aircraft.

FACILITIES SUSTAINMENT, RESTORATION, AND MODERNIZATION

Question. In the fiscal year 2004 budget request, Sustainment, Restoration and Modernization (SRM) of facilities is funded at 84 percent overall, with the sustainment piece funded at 93 percent as mandated by OSD.

What is the status of the Army's Barracks Upgrade Program?

Answer. Congressional establishment of major command baselines for SRM funding which eliminated our centrally managed OMA-funded barracks upgrade program renovations in fiscal year 2002 and 2003, in addition to internal Department priorities in fiscal year 2004, have caused us to delay completion of our barracks modernization beyond 2009. The Army does not meet DoD's goal of eliminating inadequate permanent party barracks by 2007.

Question. Please describe the Army's progress toward achieving the DoD goal of a 67-year recapitalization rate by 2007.

Answer. The Army-wide recapitalization rate for fiscal year 2004 is 144 years. Our goal is to increase recapitalization investment and meet the 67-year rate by 2007.

Question. What is the impact on mission accomplishment of the current state of facilities?

Answer. The overall condition rating of Army facilities is C-3, which impairs mission performance.

Question. In what geographic areas are the more severe facilities maintenance problems?

Answer. The geographic areas with the most severe facilities maintenance problems are those with extreme climatic conditions such as areas affected by very cold temperatures, corrosive salt, sand, and high humidity. Some of the worst geographic locations include facilities in Korea and Germany.

ARMY INSTALLATION MANAGEMENT AGENCY

Question. The Army has taken aggressive action to transform the management of installations. Integral to that effort has been the creation of the Installation Management Agency. The new Army field agency, activated on October 1st of 2002, is

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 (ADL) 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 periodthe 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?