program may prove to be the largest DoD acquisition effort that fully embraces the concepts of evolutionary acquisition and spiral development - leveraging the potential of rapid advancement within individual technologies by allowing for changes within programs as technologies mature.

The FCS program is evolutionary in its design and incorporates periodic blocked improvements within its 19 systems - the Objective Force Soldier and 18 manned and unmanned systems. Within these 19 systems are 540 spirally developing technologies. The Army's use of a Lead System Integrator (LSI) enables a "best of the best" approach to selection from competing industry efforts. Our unprecedented partnership with DARPA ensures the FCS effort leverages that agency's DoD-wide perspective and resources to produce the best capability and value for the Joint Force.

The Army continues to revise its acquisition policies and applicable regulatory guidance. On October 3, 2001, The Army approved an acquisition reorganization that transferred control of all acquisition program management to the Army Acquisition Executive (AAE) and eliminated duplication of effort in two major Army commands. Effective October 2002, twelve Program Executive Officers (PEO) report to the Army Acquisition Executive, and their subordinate PEOs assumed management of all Army acquisition programs, regardless of Acquisition Category. The plan ensures that there is only one chain of authority for acquisition programs within The Army. In addition, the plan clearly holds Program Managers responsible and accountable for the life cycle management of their assigned programs.

We have also transformed the way we conduct business through the organization of the Army Contracting Agency (ACA) that realigns our previously decentralized installation and information technology contracting processes into one organization. Responsible for all contracts over $500,000 and tasked to eliminate redundant contracts, ACA leverages Army-wide requirements to achieve economies of scale. ACA supports Army Transformation efforts by aligning all base support contracting into a single organization that best supports

installation management transformation. All of these initiatives use information technology to leverage enterprise-wide buying capabilities. Additionally, ACA will act as the single coordinating element and form the base from which to deploy contingency-contracting, operational support to the warfighting commands. The Army Contracting Agency and other contracting activities will continue to support small business awards in the outstanding manner it did in FY02.

LOGISTICS TRANSFORMATION

We cannot transform The Army without a transformation in logistics. We must incorporate the logistician's view into the design of our systems even before we begin to build platforms. Collaboration between the acquisition and logistics communities will give the Objective Force the rapid deployability and sustainability we demand-by design - without compromising warfighting capability.

Designing the right logistics architecture - systems, business processes, enterprise, for example – is fundamental to success. The Army's Logistics Transformation will focus on creating an overarching corporate logistics enterprise that employs industries' best business practices. Within this enterprise, The Army established three principal goals for Logistics Transformation: enhance strategic mobility and deployability; optimize the logistics footprint; and reduce the cost of logistics support without reducing readiness or warfighting capability.

The Army's mobility and deployability goals for the Objective Force are to deploy a combat brigade within 96 hours after lift off, a division on the ground in 120 hours, and a five-division corps in theater in 30 days. To achieve this strategic responsiveness, the Army Strategic Mobility Program (ASMP) serves as a catalyst to bring about force projection changes both in The Army's and in our Sister Services' lift programs. Platforms like the Intra-Theater Support Vessel (TSV) and Inter-Theater Shallow Draft High Speed Sealift (SDHSS) provide

transformational capabilities for operational and strategic maneuver and sustainment of Army formations.

Because strategic air and sealift cannot meet deployment requirements, Army Prepositioned Stocks (APS) ashore and afloat continue to be a critical component of Army power projection. The Army is currently participating in a joint-led Worldwide Prepositioning Study to determine if location, mix, and capabilities in existing stocks of combat, combat support, and combat service support require adjustments to meet the Defense Strategy more effectively.

The Objective Force requires The Army to optimize its logistics footprint to produce a smaller, more agile, responsive, and flexible sustainment organization. To achieve this goal, we will leverage technology and innovative sustainment concepts. The Army is already developing and integrating key enablers to provide a transformed, corporate logistics enterprise. Some of these enablers include embedded diagnostics and prognostics, tactical logistics data digitization (TLDD), serial number tracking, and the Global Combat Service Support - Army (GCSS-A) system that utilizes a commercial Enterprise Resource Planning (ERP) solution. The ERP approach changes The Army's logistics automation systems strategy from one of custom code development for unique Army requirements to adoption of a commercial off-the-shelf (COTS) product.

The selective use of the Logistics Civil Augmentation Program (LOGCAP) to augment military logistics force structure provides commanders with the flexibility to reallocate manpower, resources, and materiel by adding contractors to the equation of logistics support. In addition to providing services and some supply support, these contractors can quickly deploy to establish base camps, receive and process Soldiers as they begin arriving in theater, and reverse the process when Soldiers go home.

Current initiatives that help reduce costs without reducing readiness or warfighting capability include the National Maintenance Program and the Single Stock Fund (SSF). As previously discussed, programs provide two basic building blocks for a revolutionary change in logistics business practices.

ADVANCED MEDICAL TECHNOLOGY

Congress designated The Army as the lead agent for DoD vaccine, drug, and development programs for medical countermeasures to battlefield threats. This includes vaccines against naturally occurring infectious diseases of military significance, combat casualty care, military operational medicine, and telemedicine research. The program also funds Food and Drug Administration requirements for technology transition to advanced development.

The medical force provides the requisite medical intervention and care for the Joint Force deployed around the globe. With its Medical Reengineering Initiative (MRI), The Army Medical Department has transformed 28 percent of its Corps, and echelon above Corps, force structure to an organizational structure that promotes scalability through easily tailored, capabilities-based packages. These packages result in improved tactical mobility, reduced footprint, and increased modularity for flexible task organization. MRI supports both the current forces and the Stryker Brigades, and is the bridge to the Objective Medical Force. We have implemented innovative strategies make the most efficient use of our budget. Medical modernization, which includes the acquisition of current medical equipment and technology, is partially funded within MRI units.

BUSINESS INITIATIVES COUNCIL

In June 2001, the Secretary of Defense established the Department of Defense Business Initiatives Council (DoD BIC). The DoD BIC's goal is to improve business operations and processes by identifying and implementing initiatives that expand capabilities, improve efficiency and effectiveness, and create resource savings in time, money, or manpower.

The Army has aggressively explored ways to improve its internal business practices, and has established The Army BIC, under the leadership of the Secretary and the G-8. Effective November 13, 2002, the Secretary of the Army

has approved a total of 35 initiatives under The Army BIC. Subsequently, The Army submitted a number of the initiatives through the formal DoD BIC process for implementation across the Services and other DoD activities. The BIC process has helped to create a culture of innovation and inter-service cooperation. The superb level of cooperation across the military departments, the Joint Staff and OSD has made this possible.

A COMMITMENT TO THE FUTURE

With the continued strong support of the Administration, the Congress, our Soldiers, and our Department of the Army civilians, and the greatest industrial base and science and technology communities in the world, The Army will field the Objective Force - this decade.

By 2010, we will have fielded the first operationally capable Objective Force unit equipped with the Future Combat Systems. Our Stryker Brigade Combat Teams will be providing to Combatant Commanders capabilities not currently available - enhanced strategic responsiveness and the ability to operate in a distributed, non-linear battlespace. Through selective recapitalization and modernization of systems that enable our Soldiers to preserve our legacy today, we will have sustained a decisive-win capability at a high state of readiness as an integral part of the Joint Force. And we will have significantly improved the well-being of our people and sustainment of Army infrastructure.

We remain committed to our legacy - preserving America's freedoms. In peace and in war, The Army's Soldiers serve the Nation with unmatched courage, indomitable will, pride, and plain grit - as they have for over 227 years. Soldiers will continue to fight and win the Nation's wars, decisively - it is our sacred duty and our non-negotiable contract with the American people.