In June 2000, we convened the Army Training and Leader Development Panel (ATLDP). The purpose of the ATLDP is to identify skill sets required of Objective Force Soldier and civilian leaders and to assess the ability of current training and leader development systems and policies to enhance these required skills. In May 2001, the ATLDP Phase I (Officer Study) validated the requirement to transform our Officer Education System (OES). The most significant product of the officer ATLDP is our OES Transformation. ATLDP Phase I (Officer Study) identified three high-payoff institutional training and education initiatives for lieutenants, captains, and majors: Basic Officer Leader Course (BOLC); Combined Arms Staff Course (CASC) for staff officers, and the Combined Arms Battle Command Course (CABCC) for company commanders; and, Intermediate Level Education (ILE). Beyond ILE, Army officers continue to attend Joint or Senior Service Colleges to develop leader skills appropriate to the operational and strategic levels of the profession.

The ATLDP Phase II (NCO Study) resulted in the recommendation to build new training and leader development tools for NCOs to replace current methods, as required. The ATLDP Phase III (Warrant Officer Study) culminated with the recommendation to clarifying the warrant officer's unique role in The Army and improving the Warrant Officer Education System (WOES) to ensure timely training and promotion. The Civilian Training and Leader Development Panel (Phase IV) study results are complete, and we are forming the Implementation Process Action Team (I-PAT) to identify actions The Army must take to increase the professional development of our civilian workforce. At the senior leader level, The Army initiated the Army Strategic Leadership Course (ASLC) aimed at teaching principles of strategic leadership. To date, we have completed twelve of the foundation courses and three alumni courses, training the majority of The Army's general officers.

Readiness

Homeland Defense (HLD)

HLD missions range from traditional warfighting competencies that defeat external threats to the non-combat tasks associated with supporting civil authorities in domestic contingencies. Operation NOBLE EAGLE mobilized over 16,000 Army National Guard Soldiers to protect critical infrastructure. These Soldiers assisted the Department of Transportation in securing our Nation's airports while also playing a vital role in securing our Nation's borders. The Army is moving forward to provide one Civil Support Team (CST) to each state, as required by the National Defense Authorization Act for FY 2003. Combat Support Teams support Incident Commanders and identify Chemical, Biological, Radiological, Nuclear, and Explosive (CBRNE) agents and substances, assess current and projected consequences, advise on response measures, and assist with appropriate requests for additional support. To date, OSD has certified 30 of 32 teams, and The Army is working to establish additional teams. Additionally, the Army National Guard has assumed the mission of Deputy Area Air Defense Commander (DAAOC) with the

Avenger and Sentinel Radar providing defense of critical assets. The Army remains committed to HLD, dedicating Active Component (AC) and Reserve Component (RC) staffs to focus on training, doctrine, planning, and execution of DoD missions in support of civil authorities.

Missile Defense

Robust Missile Defense is a vital warfighting requirement that protects both our homeland and our deployed forces. Missile Defense is inherently a joint capability to which The Army is a major contributor. The Army is deploying and employing Ground Based Mid-Course Defense assets to contribute our warfighting capability, accelerating the fielding of the PATRIOT Advanced Capability 3 (PAC3). The development of kinetic energy and directed energy weapons such as the Surface Launched Advanced Medium Range Air-to-Air Missile (SLAMRAAM) and Medium Tactical High Energy Laser (MTHEL) will bring new defense measures to the Nation. We are postured to assume control of the Medium Extended Air Defense System (MEADS) program in FY 2003 and intend to begin fielding by FY 2014. MEADS is a transformational program of Objective Force quality and a significant improvement on PATRIOT's capabilities. It will be more mobile, deployable (C130 capable), and sustainable than PATRIOT and cover a 360degree sector to the PATRIOT's sectored coverage. It will be effective against low radar cross section (RCS) cruise missile targets.

Chemical Demilitarization

In Section 1412 of Public Law 99-145, Congress directed the DoD to destroy the United States' chemical weapons stockpile. In turn, the Secretary of Defense delegated management of all chemical munitions disposal to the Department of the Army. On November 29, 2000, the Johnston Atoll Chemical Agent Disposal System, using incineration-based technology, completely destroyed the last stockpiles stored at the Atoll, and closure operations began in January 2001. The Tooele Chemical Agent Disposal Facility has incinerated 44% of the chemical agents and 81% of the munitions stored there. Disposal operations at these two sites destroyed 30% of the total U.S. chemical weapons stockpiles. Construction of incineration facilities at Anniston, Alabama; Umatilla, Oregon; and Pine Bluff, Arkansas, is complete. Systemization activities are on-going at Aberdeen, Anniston, Umatilla, and Pine Bluff. The plan to accelerate the disposal of bulk agents using a neutralization process at Aberdeen, Maryland, and Newport, Indiana, has been approved. Limited operations began on August 9, 2003, at Anniston. Aberdeen will commence operations when all approvals are in place. Newport is scheduled to begin in first quarter FY 2004. With continued funding and minimal schedule changes, we will safely destroy the U.S. stockpile of lethal chemical agents and munitions at eight existing CONUS sites.

Training the Force

In October 2002, The Army released Field Manual (FM) 7-0, Training the Force. Synchronized with other field manuals and publications being updated to respond to

changes in Army, joint, multinational, and interagency operations, FM 7-0 is the capstone doctrinal manual for Army training and leader development. It provides the developmental methodology for training and growing competent, confident Soldiers, and it addresses both current and future Objective Force training requirements.

We are transforming the way we fight future wars, and The Army is participating fully in a DoD-sponsored program to transform how forces train to fight. This effort involves four major initiatives: building upon existing service interoperability training; linking component and joint command staff planning and execution; enhancing existing joint training exercises to address joint interoperability; and studying the requirement for dedicated joint training environments for functional warfighting and complex joint tasks. The Army hosted the first joint National Training Center (NTC) event at Fort Irwin, CA, in May 2003. In June 2003, the U.S. Army Forces Command executed the 2nd joint NTC

event - JCS exercise ROVING SANDS.

During the late 1990s, funding for the recapitalization and modernization of The Army's Combat Training Centers (CTCs) was reduced, eroding their capability to support their critical missions. To address these problems, The Army will invest nearly $700M over the next six years to modernize these training centers.

Force Protection And Antiterrorism

Our efforts focus on improved force protection policy and doctrine; more rigorous training and exercises; improved threat reporting and coordination with national intelligence and law enforcement agencies; enhanced detection and deterrence capabilities for Chemical, Biological, Radiological, Nuclear, and Explosive (CBRNE) threats; increased capabilities and protection for access control; and expanded assessments of Major Commands (MACOM) and installation force protection programs. Both operational and installation environments rely upon secure, networked information infrastructure to execute daily enterprise-wide processes and decision-making, so the parameters of force protection include contemporary and evolving cyber threats.

The Army's Information Systems Security Program (ISSP) secures The Army's portion of the Global Information Grid (GIG), secures the digitized force, and supports information superiority and network security defense-in-depth initiatives. ISSP provides the capability to detect system intrusions and alterations and react to information warfare attacks in a measured and coordinated manner. To the greatest extent possible, it protects warfighters' secure communications - from the sustaining base to the foxhole. Soldiers, Active and Reserve, are heavily engaged in force protection and antiterrorism missions. Soldiers guard military installations, nuclear power plants, dams and power generation facilities; tunnels, bridges, and rail stations; and emergency operations centers. During the 2002 Winter Olympics in Salt Lake City, Utah, nearly 1,500 ARNG Soldiers provided security, and Soldiers guarded key infrastructure sites during Super Bowl XXXVII in January 2003. Over 12,500 Reserve Component Soldiers are currently mobilized for Operation NOBLE EAGLE to fulfill Force Protection requirements, and in

February 2003, over 8,000 Army National Guard Soldiers will support airport security requirements a requirement that could reach 9,500 Soldiers. Security of detention facilities and detainees at Guantanamo Bay Detention requires approximately 1,500 Army personnel, half of whom are Military Police. Army Reserve Internment and Resettlement battalions on 6-month rotations impact military police availability to CONUS Force Protection requirements.

Installations

Army installations are our Nation's power projection platforms, and they provide critical training support to The Army and other members of the joint team. The Army has traditionally accepted substantial risk in infrastructure to maintain its current warfighting readiness. However, a decade of chronic under funding has led to a condition in which over 50% of our facilities and infrastructure are in such poor condition that commanders rated them as “adversely affecting mission requirements." Our facilities maintenance must improve. Over the past two years, we began to rectify this situation with significant increases in funding and innovative business practices. These efforts have been dramatically successful as we continue to correct a problem that was 10 years in the making. In an effort to prevent further degradation we increased funding for facilities sustainment.

Sustainment

The Army is revolutionizing its logistics process. Through one initiative, the Single Stock Fund (SSF), we extend national visibility of stockage locations, capitalize inventories into the Army Working Capital Fund, and reduce customer wait time by an average of 18.5%. The SSF will continue to reduce inventory requirements and generate even more savings for The Army by creating greater flexibility for the management of inventories. Another initiative, the National Maintenance Program (NMP), enhances weapon system readiness, reliability, and availability rates by bringing Army Class IX repair parts to a single national standard. Increased reliability will reduce overall weapon system Operating and Support cost. NMP centralizes the management and control of Army maintenance activities for components and end items. NMP will produce appropriately sized Army maintenance capacity that still meets total maintenance requirements.

Strategic Readiness Reporting

Upon completion of its implementation, the Army's Strategic Readiness System (SRS) will be a precision readiness measurement tool that provides Army leadership with accurate, objective, predictive, and actionable readiness information to dramatically enhance resource management toward one end - strategic readiness to defend the United States. The Army Scorecard a product of SRS – will integrate readiness data from the business arena and the operating, generating, and sustaining forces of both the Active and Reserve Components. Army Scorecard methodology focuses on four critical areas: People - investing in Soldiers and their families; Readiness – maintaining the support

capability to the Combatant Commanders' operational requirements; Transformation transforming The Army into the Objective Force; and application of sound business practices.

SRS markedly improves how we measure readiness. It gathers timely information with precision and expands the scope of the data considered. We are further developing this system to leverage leading indicators and predict trends solving problems that affect readiness before they become problems, from Well-Being to weapons platforms. SRS will help enable The Army preserve readiness to support Combatant Commanders, invest in Soldiers and their families, identify and adopt sound business practices, and transform The Army to the Objective Force.

Transformation

Balancing Risk As We Manage Change

Balancing risk is integral to Army Transformation. To maintain current readiness while we transform, we are managing operational risk: risk in current readiness for near-term conflicts with future risk - the ability to develop new capabilities and operational concepts that will dissuade or defeat mid- to long-term military challenges. The Army has accepted risk in selective modernization and recapitalization, and we continue to assess these risks as we balance current readiness, the well-being of our people, Transformation, the war on terrorism, and new operational commitments. Between 1999 to 2002, The Army has terminated 29 programs and restructured 20 others for a total savings of $12.8B. These funds were reallocated to resource the Stryker Brigades and essential Objective Force research and development.

In Program Budget 2004 and its associated Five-Year Defense Plan (FYDP), The Army has generated an additional $22B of savings by terminating 24 additional systems and reducing or restructuring 24 other systems. The Army reinvested these savings in the development of transformational capabilities in these and other programs: Future Combat System - $13.5B, Precision Munitions - $3.2B, Sensors and Communications - $2.3B, Science and Technology - $1.1B, and Missile and Air Defense - $1.1B. The operational risk associated with the decreased funding for certain current programs is acceptable as long as we field Stryker Brigades on schedule and accelerate the fielding of the Objective Force for arrival, this decade. We will continue to reassess the risk associated with system reductions and related organizational changes against operational requirements and the strategic environment.

Transforming - Changing the Way We Fight

The Army is fundamentally changing the way we fight and creating a force more responsive to the strategic requirements of the Nation. We are building a joint precision maneuver capability that can enter a theater at the time and place of our choosing, maneuver at will to gain positional advantage, deliver precise joint fires and, if necessary, close with and destroy the enemy.