Page 1       TOP OF DOC
[H.A.S.C. No. 109–10]









 Page 2       PREV PAGE       TOP OF DOC


MARCH 16, 2005




CURT WELDON, Pennsylvania, Chairman
HOWARD P. ''BUCK'' McKEON, California
KEN CALVERT, California
JEB BRADLEY, New Hampshire
WALTER B. JONES, North Carolina
 Page 3       PREV PAGE       TOP OF DOC
JIM RYUN, Kansas
W. TODD AKIN, Missouri
JOE WILSON, South Carolina
BILL SHUSTER, Pennsylvania

JOHN SPRATT, South Carolina
LANE EVANS, Illinois
ADAM SMITH, Washington
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
JIM COOPER, Tennessee
G.K. BUTTERFIELD, North Carolina
DAN BOREN, Oklahoma

Douglas Roach, Professional Staff Member
John Sullivan, Professional Staff Member
Jesse Tolleson, Analyst
Curtis Flood, Staff Assistant
 Page 4       PREV PAGE       TOP OF DOC




    Wednesday, March 16, 2005, Fiscal Year 2006 National Defense Authorization Act—Future Combat Systems, Modularity, and Force Protection Initiatives


    Wednesday, March 16, 2005




    Abercrombie, Hon. Neil, a Representative from Hawaii, Ranking Member, Subcommittee on Tactical Air and Land Forces

 Page 5       PREV PAGE       TOP OF DOC
    Weldon, Hon. Curt, a Representative from Pennsylvania, Chairman, Subcommittee on Tactical Air and Land Forces


    Bolton, Hon. Claude M., Jr., Assistant Secretary of the Army for Acquisition, Logistics and Technology, Department of the Army

    Francis, Paul L., (Future Combat Systems), Director for Acquisition and Sourcing Management, Government Accountability Office

    Lovelace, Lt. Gen. James J., Deputy Chief of Staff, Army G3, (Operations and Requirements), United States Army

    Mattis, Lt. Gen. James N., Commanding General, Marine Corps Combat Development, United States Marine Corps

    Melcher, Lt. Gen. David F., Deputy Chief of Staff, Army G8 (Programming, Materiel Integration, and Management), United States Army

    Pickup, Sharon, (Modularity—Resources), Director for Defense Capabilities and Management, Government Accountability Office

    St. Laurent, Janet, (Modularity—Force Structure), Director for Defense Capabilities and Management, Government Accountability Office
 Page 6       PREV PAGE       TOP OF DOC


Bolton, Hon. Claude M., Jr., joint with Lt. Gen. James J. Lovelace, Jr., and Lt. Gen. David F. Melcher

Francis, Paul L.

Mattis, Lt. Gen. James N.

Pickup, Sharon, joint with Janet St. Laurent

[The Documents can be viewed in the hard copy.]

Army HMMWV Add-on Armor Production vs. Operational Requirements Chart [A color version of this chart is retained in the committee files.]

Army Investment Accounts Budget Chart [A color version of this chart is retained in the committee files.]

Army Organizational Structure Chart [A color version of this chart is retained in the committee files.]

 Page 7       PREV PAGE       TOP OF DOC
Our Army at War . . . Relevant and Ready, Today and Tomorrow submitted by: The Hon. Claude M. Bolton, Jr., Lt. Gen. James J. Lovelace, Jr., and Lt. Gen. David F. Melcher

Vehicle Force Protection Chart [A color version of this chart is retained in the committee files.]

[The Questions and Answers can be viewed in the hard copy.]

Mr. Abercrombie
Mr. Weldon


House of Representatives,
Committee on Armed Services,
Tactical Air and Land Forces Subcommittee,
Washington, DC, Wednesday, March 16, 2005.

    The subcommittee met, pursuant to call, at 3:17 p.m., in room 2118, Rayburn House Office Building, Hon. Curt Weldon (chairman of the subcommittee) presiding.

 Page 8       PREV PAGE       TOP OF DOC

    Mr. WELDON. The subcommittee will come to order. This afternoon, the Tactical Air and Land Forces Subcommittee meets to receive testimony on the land component and related programs in the fiscal year 2006 budget request.

    We have two panels of witnesses. For the first panel, representatives of the Government Accountability Office (GAO) will provide the subcommittee with their views on the Army's Future Combat Systems (FCS) and modularity programs.

    In the second panel, representatives of the Army and the Marine Corps will testify on Future Combat Systems and modularity programs, force projection and unfunded requirements associated with equipping our forces and sustainment of the current force in the future. I will comment on force protection issues when I introduce the second panel.

    The Future Combat Systems program is the Army's flagship of transformation. If realized, FCS would allow the Army to rapidly deploy and operate in all types of military operations, ranging from small-scale contingencies to major theater wars.

    The technological and organization advances that FCS promises would keep the Army well ahead of near-peer threats for decades. FCS is the largest and most complex program ever undertaken by the Army. It comprises software applications and 18 other major programs and projects, including a variety of new armored vehicles, missiles, sensors and unmanned ground and air vehicles.

    Most of the FCS projects, if taken separately, would classify as major defense acquisition programs on the level of an Abrams tank. As the GAO notes, the FCS concept seeks to replace mass with superior information; that is, to see and hit the enemy first, rather than tend to rely on heavy armor to withstand a hit.
 Page 9       PREV PAGE       TOP OF DOC

    If deployed as planned, in 2025, FCS brigade combat teams or units of action would represent 20 percent of the Army's force structure. Originally, the development costs for FCS was projected at $19 billion. Last year, it grew to $22 billion. Now, with spiral development included and schedule slips, the development program is projected at $30.3 billion.

    An updated procurement cost estimate is not currently available. But the last official estimate was approximately $80 billion, which would equip 15 of the 80 projected brigade combat teams in the Army by 2025.

    When FCS was conceived and initiated, it required the long-term commitment of a major fraction of the Army's Research and Development (R&D) budget. Now in response to the Global War on Terrorism, the Army is having to adapt and is reorganizing under a concept it calls modularity, restructuring to a brigade-size centric force, versus a division and corps structure.

    This restructuring is requiring an additional major commitment of Army resources. Where FCS is a long-term future transformational effort, modularity is the here and now transformation of the current force.

    In implementing modularity, the Army plans to increase the 33 active component brigades to 43 to 48 brigade combat teams (BCTs). The Army also plans to use the modular construct for the 34 Army Reserve and National Guard brigades, for a total number of at least 77 Army brigade combat teams, each composed of approximately 4,000 personnel.

    Modularity will provide a larger pool of rotational brigades to reduce stress on the current force. Modularity is also intended to increase the near-term capability of combat brigades to be more flexible, more rapidly deployable self-sufficient, more lethal and more expeditionary.
 Page 10       PREV PAGE       TOP OF DOC

    As already mentioned, FCS and modularity are costly programs. FCS will require $25 billion in R&D alone through 2011. The current plan for modularizing the Army will cost at least $69 billion between 2005 and 2011.

    However, of the $69 billion, only $48 billion has been programmed. And some estimate modularity costs will reach as high as $90 billion, including all potential costs of procurement, operations and maintenance, military construction and replenishment of pre-positioned stocks.

    Proceeding concurrently with modularity and FCS creates a challenging fiscal dilemma for the Army.

    Will the staff please put the chart up? It is over here. Do Members have that chart? So why don't we turn that chart so the public—this chart over here—so the public can see both charts?

    This chart shows the procurement and the Research, Development, Test and Evaluation (RDT&E) spending for the Army from fiscal year 2006 through fiscal year 2011. The budget top line indicating program funding is shown at the red arrow.

    Above the top line are the unfunded costs of modularity at $21 billion, assuming the Army's estimate of $69 billion is correct and a conservative estimate of the unfunded liability cost growth for FCS at $20 billion. Please remember, to get to the level shown by the top line, the F/A–22, DD(X), Virginia Class submarines, C–130J and Joint Common Missile are terminated or reduced.
 Page 11       PREV PAGE       TOP OF DOC

    One question for today is: where will the additional $41 billion in funding above the top line be found? There has been a lot of commotion on the other side of this Capitol about the FC program and a lot of the media has focused on those comments.

    I say to the Senate: Welcome. It is great you have finally joined the fray. This committee has been aggressive in pursuing the FCS program for the past two years, raising significant questions and concerns that we have tried to address in last year's conference and will continue to address this year.

    So our friends on the other side of the city and Capitol Hill, I say: Welcome. We are glad to have you join in the effort as it has been led by the House Armed Services Committee.

    Congressman Abercrombie is going to be here. He is a little bit late. Would you like to have someone read his statement?


    Mr. SMITH. Well, I think what I would like to do, with the Chair's permission, is read the opening paragraph.

    Mr. WELDON. Absolutely, whatever you would like.
 Page 12       PREV PAGE       TOP OF DOC

    Mr. SMITH. Take the rest for the record. The opening paragraph is, ''The Army and Marine Corps are the guys on the ground right now, bearing the brunt of the fight in Iraq. They deserve and will get the strongest support possible from the subcommittee on a bipartisan basis.''

    And I think I wholeheartedly agree with those sentiments. And I will submit the rest of the statement for the record. And perhaps if Mr. Abercrombie shows up, I am sure he will touch on the points in it.

    Mr. WELDON. I appreciate the gentleman's comments and appreciate his statement. And we will accept Mr. Abercrombie's statement for the record and any other statements Members would like to make.

    On our first panel, representing the Government Accountability Office, is Mr. Paul Francis, director of Acquisition and Sourcing Management, to address the FCS program. Also representing the GAO are Ms. Sharon Pickup and Ms. Janet St. Laurent, both directors for Defense Capabilities and Management, to testify about modularity.

    We thank all of our witnesses for joining us. We look forward to your testimony. And more importantly, we thank you for the outstanding effort you have provided to us as an independent team assessing where we are, where we hope to be and the path roads that are going to be required to get to the ultimate goal, which is to give our Army personnel the best equipment, the best technology that is available on the face of the earth.

 Page 13       PREV PAGE       TOP OF DOC
    I would like to proceed with the first panel. But before I do, I would add that your statements have been accepted in their entirety for the record. And you can make whatever verbal comments you like, realizing we have a second panel.

    And I would ask you to keep your comments as brief, but we are not trying to limit you. Whatever points you want to make, you make.

    With that, I will introduce my good friend and colleague, Mr. Abercrombie, for his opening statement.


    Mr. ABERCROMBIE. Thank you very much, Mr. Chairman.

    The Army and the Marine Corps, as you have indicated previously and all of the activity that we are involved with right now in the committee, in the subcommittee, the Army and the Marine Corps are the guys on the ground right now, bearing the brunt of the fight in Iraq. They deserve and will get the strongest possible support from this subcommittee on a bipartisan basis.

    However, Program Budget Decision (PBD), 753 has caused many problems for the Department of Defense (DOD), but one thing it got right was they need to make a major investment in equipment for the Army. We would still be better off if the 2006 part of the Army modularity had been included in the base budget instead of in some hoped-for supplemental next year.
 Page 14       PREV PAGE       TOP OF DOC

    And I think, Mr. Chairman, that that is something I am going to have to insist on, as we move forward here, is that I think we have to reexamine this budget, I am awfully sorry to say, because I do not think that has been addressed adequately.

    The purpose today is to ensure that the Army and the Marine Corps plans for modernization and recapitalization make the best use of the budget they have to get the best equipment to the guys out in the field. Congress has to sometimes play the spoiler on these matters when the DOD's plans are not workable.

    That does not in any way mean that we do not support the troops, which is the easy thing to say. I do not think that all wisdom resides over in that building across the river.

    The Army is not helped if it bases future plans on the success of programs we do not have enough money to pay for. Right now, the Army's plan to acquire thousands of pieces of equipment needed for modularity is running exactly concurrent with the plan to develop the Future Combat Systems.

    Between the two of them, modularity and the Future Combat Systems, I think we will eat up almost the entire Army investment ''budget,'' which means there is no fallback if these programs do not work or are substantially delayed.

    Mr. Chairman, since I have been in Congress, everything is substantially delayed. Everything seems to end up costing more.
 Page 15       PREV PAGE       TOP OF DOC

    Modularity has to be the job one for the Army because it brings the capability to soldiers currently engaged in fighting. Future Combat Systems has potential, but major problems in its budget, management and execution. Estimates of the Future Combat Systems range from $108 billion, according to the GAO, to $127 billion estimated by our staff, to $133 billion according to some in the press.

    It is not clear that the Army will ever have enough procurement funding to equip all its active and reserve brigades with the Future Combat Systems, especially if cost growth matches the historical pattern, which I have just alluded to. The GAO has reported that the Future Combat Systems has unstable requirements that are counting on the rapid maturation of technologies.

    Mr. Chairman, you and I have both sat here watching the so-called rapid maturation of technologies, which is more in theory than in reality. They are very complex; still in the early stages. Overall, the GAO presents a compelling case that the Future Combat Systems is not currently on a path to success.

    Mr. Chairman, I believe very, very sincerely that now is the time to fix the problem. Now is the time to fix the problem.

    I think we have to do it on a bipartisan basis. And I think we have to do it on the basis of what we consider to be in the best interests of the Nation and, by extension, of course the armed services.

 Page 16       PREV PAGE       TOP OF DOC
    The contracting mechanism for the Future Combat Systems, Other Transaction Authority (OTA), raises a number of questions and is probably—I am going to say probably misapplied for purposes of discussion, because I am willing to listen. But my thought is and I have indicated it already to at least one of the major contractors.

    I said, ''Do not come in here and ask for full Other Transaction Authority. This is not for you. This is not for the big guys. That is not what this is about. Do not do it.''

    We do not want to create a C–130J-type problem which I alluded to this morning in questioning I had at the full committee. Congress must be given the crossed information needed to properly oversee the program.

    I believe, Mr. Chairman, that that requirement should be non-negotiable. I think this raises the whole issue of capital budgeting. I raised it this morning and I raise it again right now.

    The Army must work with Congress to make sure that Other Transaction Authority is not used to end write the oversight process or used to overrun or obscure the idea that we do not have a funding system for capital assets that measures up to the necessities of modern combat.

    I believe the Army should recommend to Congress ways we can ensure our ability to provide oversight in this program without putting a straightjacket on the program. Without an acceptable plan for oversight, Congress will have few options to perform its oversight role and will be forced, in my judgment, to impose contracting requirements that may have to break with tradition.
 Page 17       PREV PAGE       TOP OF DOC

    Finally, the Stryker brigade has pioneered many of the concepts being applied to both modularity and the Future Combat Systems. I followed it very, very closely. As you well know, one of the Stryker brigades will be in Hawaii. And I have done my level best to try to work with the Army to see that that is going to be a big success in terms of training facilities.

    But the success of the Stryker Brigade Combat Teams in Iraq or elsewhere, I believe, strengthens the Army's case for modernization. But it does not strengthen the case for the funding of modernization if what we have before us is going to be the game plan.

    Thank you very much.

    Mr. WELDON. Thank you, Mr. Abercrombie. Thank you for your attention to this program and your support for the Army, which I know is unwavering.

    With that, we will turn to our witnesses. And again, I just want to point out, because I am very proud of this subcommittee and this full committee, that while the other body is now looking at FCS, this committee and this subcommittee has been involved with this program intensely for the past two years.

    In fact, last year, not only did we cut funding in line with the appropriators, but we actually fenced money until certain conditions and reports were made that the Army had to comply with. So I do not want this committee to be appearing as though it is taking a back seat to anyone, and certainly not the other body on this issue.

 Page 18       PREV PAGE       TOP OF DOC
    We appreciate their involvement. We welcome them to the fray. We look forward to working with them as we try to find the best answers to give the Army the best technology and the best equipment that our money can buy.

    With that, we will turn to our witnesses.

    Mr. Francis, we will ask you to go first, followed by Ms. St. Laurent and followed by Ms. Pickup.

    Thank you all for being here.


    Mr. FRANCIS. Thank you, Mr. Chairman, Mr. Abercrombie and Members of the subcommittee. I do want to extend my appreciation for the leadership that you have provided over these issues, particularly the FCS.

    I am going to cover three points on the Future Combat Systems and then I will turn the floor over to my colleagues, who will discuss modularity. The points I am going to cover on FCS are: the challenges the program faces, the prospects for delivering the program within projected resources and whether alternative approaches to FCS still warrant consideration.

    Let me turn to the first issue on challenges. FCS faces significant challenges in requirements, development, finance and management. The Army has set the bar for requirements very high. FCS vehicles are to weigh a fraction of current vehicles, yet are to be as lethal and as survivable.
 Page 19       PREV PAGE       TOP OF DOC

    Their lightweight and small size are critical to other Army goals; that is, more mobile forces that are easier to sustain in combat. I do not think it is an overstatement to say that the FCS, in combination with other investments, will mean fielding a new Army.

    The Army describes the development of FCS as an unprecedented technology and integration challenge. That challenge will include: a) creating a network to quickly deliver vast amounts of information; and b) developing individual systems that have been likened in complexity to fighter aircraft.

    The financial challenge is similarly daunting. The first increment of FCS, enough to equip about one-third of the force, will cost over $100 billion. At the same time, the Army faces the competing demands of sustaining current operations, recapitalizing the current force and modularizing.

    Finally, because of the management challenge FCS poses, the Army is using a Lead System Integrator (LSI) to manage the program and a contracting instrument known as Other Transaction Agreement, which gives the Army much more latitude to negotiate responsibilities with the integrator.

    My second issue relates to the prospects for executing FCS within estimated resources. During the past year, FCS was restructured, which added four years to reduce risk, increase demonstrations and harvest successes for the current force.

    Yet FCS is still at significant risk for delivering planned capability within estimated resources. This risk stems from the scope of the program's technical challenges and the low level of knowledge demonstrated in the program so far.
 Page 20       PREV PAGE       TOP OF DOC

    Our work over the years has shown that successful programs demonstrate high levels of knowledge early. The FCS is well behind demonstrating such knowledge. Since the program began in 2003, the focus has been on activities that should have been done before a program begins system development.

    Moreover, progress has been slower than anticipated. This low level of program knowledge, in my opinion, provides a very sandy base for making a good cost and schedule estimate. We have to keep in mind that this is an acquisition program that is going down a chute to design, build, test and buy equipment.

    But actually, what we are going to be facing in the next few years, I think, is a process of discovery. We are going to find out what is technically possible. We are going to find out what the solution will look like. And we are going to find out how much it is going to cost.

    So we could, I believe, in the next few years, as we get a preliminary design, deal with issues like: what if FCS costs twice as much? Would we still do it? What if we can get 80 percent solution? Would that be good enough?

    If we got an F–22-like outcome—that is, we got the capability we wanted, but at such high cost we can only buy a fraction of what we wanted—would that still be OK? I think we are going to see those types of discoveries in the program over the next year that we will have to decide upon before we get to the point that we know exactly what we are going to buy and for how much.
 Page 21       PREV PAGE       TOP OF DOC

    My last issue relates to alternatives, which is for any acquisition program, I think two questions can frame the business case: first, is it worth doing; and second, is it being done the right way?

    On the first question, I think the Army makes a compelling case that something like FCS should be done. The answer to the second question is more problematic.

    At this point, it is not yet known whether FCS is doable, much less doable within a predictable frame of time and money. Against this standard, the FCS is not yet a good fit as an acquisition program.

    That having been said, an important question that needs to be answered is: if the Army does need FCS-like capabilities, what is the best way to go about getting them? At this point, alternatives to the current strategy or business case still warrant consideration.

    One alternative could entail sending the first spiral of the program as the program of record for system development. Other capabilities in the program could be bundled into advanced technology demonstrations. That would be one alternative.

    I do not mean to suggest that that is the only one, but I think we have to keep our options open. As we go through this discovery period, we may have to find that we have to shift gears on the program.

    I would like to close by saying that Army leadership deserves a lot of credit for visualizing the Army of the future and lighting the way to get there. There will be debate about what is the best way to get there. But nothing would be happening without the vision and the commitment of the Army leadership.
 Page 22       PREV PAGE       TOP OF DOC

    Mr. Chairman, Mr. Abercrombie, that concludes my remarks. And I would like to turn the floor over to my colleague, Janet St. Laurent.

    [The prepared statement of Mr. Francis can be viewed in the hard copy.]


    Mrs. ST. LAURENT. Mr. Chairman and Members of the committee, I am pleased to be here to discuss GAO's observations on the Army's efforts to establish a modular force. The Army's modular force initiative is extremely significant because of its broad scope, potential impact on current and future operations and considerable costs.

    Mr. Chairman, as you noted, modularity is intended to enhance near-term force capability by using currently available technology and new concepts of operation. Also, the Army's new modular unit designs are intended to be compatible with the Army's designs for FCS-equipped units.

    My remarks today are based on GAO's ongoing work, which is focused primarily on the Army's active forces. I would like to quickly summarize our work in two areas: first, the Army's plans for modularity; and second, major challenges that may affect the Army's ability to fully achieve its goal.

 Page 23       PREV PAGE       TOP OF DOC
    Following my remarks, Ms. Pickup will be discussing the Army's cost estimates for modularity. As the graphic that you have shows and is on the board, the Army plans to establish at least 43 active modular brigades with about 3,000 to 4,000 people each by the end of fiscal year 2006. That is a very fast pace for doing so, but there are operational reasons that are guiding the Army.

    This will include restructuring 33 existing brigades and creating at least 10—and possibly 15—new brigades. The Army also plans to establish 34 National Guard modular brigades by 2010, although it is considering accelerating the schedule.

    In addition, the Army also plans, as the graphic shows, to restructure all of its combat support units in the higher echelon command and control organizations in both the active and the reserve component by 2010. When viewed in total, it is clear that the creation of a modular force will be a far-reaching and complex effort that will require many changes to personnel skills, equipment, training, facilities and doctrine.

    Although the Army is making progress in establishing modular units, it is likely to face several challenges in providing its new units with key personnel and equipment that are needed to achieve planned capabilities. This is because some required equipment that is critical to making the new brigades as capable as the Army's existing division-based brigades are currently in short supply and may remain so in the near future.

    Regarding personnel, the Army expects it will need more truck drivers, military police and other specialties like military intelligence specialists. For example, providing 9,000 more military intelligence specialists, particularly at the more senior level, may take several years because of the extensive training involved.
 Page 24       PREV PAGE       TOP OF DOC

    In addition, the Army's new modular designs have led to higher requirements for certain types of equipment, such as advanced communications, command and control, surveillance and reconnaissance assets, including unmanned aerial vehicles, and trucks. Although the Army has plans to procure some of this equipment, these higher requirements are occurring at a time when DOD is facing high demand for some of the same equipment to support operations in Iraq and Afghanistan.

    Because of existing shortages and funding considerations, the Army has therefore established a modified list of equipment and personnel to which the new modular brigades are being equipped and staffed. This is instead of fully equipping units to the design standard that was modeled and evaluated by the Army's Training and Doctrine Command, although equipping to the full level is still an Army goal.

    The two divisions we visited—the 3rd Infantry Division and the 101st Airborne Division—were both experiencing some challenges in obtaining key personnel and equipment to meet even these modified levels at the time of our visit. Also, the Army may make some key decisions in the future that could somewhat increase requirements for personnel and equipment beyond those that the Army has identified to date.

    First, the Army plans to decide by 2007 whether to recommend an increase in the number of active modular brigades from 43 to 48. In addition, the Army's Training and Doctrine Command is doing further evaluation of the Army's new designs such as assessing the cost and benefits of adding a third maneuver battalion to the Army's new modular brigade.

 Page 25       PREV PAGE       TOP OF DOC
    Finally, the Army has not yet finalized the design of higher echelon command headquarters and support units, although it is working toward that goal. Until all these designs are finalized and key decisions reached, the Army will not have a complete understanding of all the equipment and personnel that is needed to fully achieve its goals of achieving a more capable modular force.

    And I would like to turn this over to Ms. Pickup.

    [The joint prepared statement of Mrs. St. Laurent and Ms. Pickup can be viewed in the hard copy.]


    Ms. PICKUP. Mr. Chairman, Members of the subcommittee, I too am glad to be here to discuss Army modularity and would like to make a few comments about the Army's most recent cost estimates.

    First, clearly as you mentioned in your opening remarks, Mr. Chairman, the costs associated with modularity are substantial, requiring large investments to provide personnel, equipment, training and sustainment for the modular forces and command and support elements. As of March 2005, the Army estimated it will need about $48 billion in funding to fund modularity for the rest of fiscal year 2005 through fiscal year 2011.

 Page 26       PREV PAGE       TOP OF DOC
    I might add, this figure of $48 billion is the only information we have seen thus far formally presented by the Army on its funding needs.

    Under its current plan, the Army anticipates these funds to be available through both supplemental and regular appropriations; specifically, $5 billion in the fiscal year 2005 supplemental request now before Congress; another $5 billion in fiscal year 2006 supplemental funds; and the remaining $38 billion from DOD's annual appropriations from fiscal year 2006 through fiscal year 2011.

    Second, cost estimates are continuing to evolve. And we believe that they, along with funding needs, are likely to grow higher.

    The Army's current estimate of $48 billion represents a 71 percent increase compared to its early estimate of $28 billion in 2004. According to the Army, the $48 billion includes equipment and training costs for the creation of new brigades, as well as upgrades to existing brigades and for support and command elements. It also includes costs for temporary and permanent facilities.

    According to Army officials, an increase in end strength is needed to permit the Army to simultaneously support ongoing operations and reorganize into a modular force. However, they told us the current estimate does not include any personnel costs because it was difficult to differentiate between increases in end strength that were due to supporting operations and those needed for modularity.

    Based on our preliminary review, we believe there are certain factors that could affect the overall cost for modularity, including some that will likely make it grow higher than $48 billion. For example, the Army did not base the cost of equipping the modular forces on the tested design of the modular brigades; rather, its current estimates reflects costs for a lesser amount of equipment than called for in the tested design.
 Page 27       PREV PAGE       TOP OF DOC

    Army officials told us that they estimated equipment costs in this manner because some equipment is not currently available or in production in sufficient quantities to meet modularity requirements. Also, if the Army decides to add more brigades and/or maneuver battalions, costs for equipment, training, facilities, sustainment and other items could increase significantly.

    Furthermore, some costs are uncertain. For example, the current estimate includes costs for permanent facilities; however, plans for constructing facilities are uncertain because of pending decisions related to the base realignment and closure process and the planned restationing of forces from overseas.

    Also, designs for command and support elements are not final, which also could affect costs. As part of our ongoing work, we will continue to review the Army's cost estimates and funding plans for modularity.

    In sum, restructuring the entire Army, while continuing to support ongoing operations, poses significant challenges and will require substantial funds. The magnitude of achieving modularity, coupled with other ongoing major transformation initiatives raise long-term affordability issues for DOD.

    Until the Army provides a better understanding of the requirements and potential costs associated with modularity, DOD will not be well positioned to weigh competing priorities, affordability and make informed decisions, nor will Congress have all the information it needs to evaluate funding requests for modularity.
 Page 28       PREV PAGE       TOP OF DOC

    This concludes our prepared remarks. And we would be happy to answer any questions you might have.

    [The joint prepared statement of Ms. Pickup and Mrs. St. Laurent can be viewed in the hard copy.]

    Mr. WELDON. Thank you very much. I want to thank all of you, the three of you, for coming in and for your outstanding work.

    And I will try to be brief, although I have a ton of questions, but I want to get my colleagues a chance to ask their questions. So I will limit myself to just a couple of questions.

    Very simply: does the GAO believe that we can afford both programs as currently planned? If not, what are your recommendations for our plan to move forward? And what are our options in both areas?

    Mr. FRANCIS. Mr. Chairman, I think right now we would say, if everything went perfectly, just as planned, if modularity costs $48 billion and we could bring the FCS development in for $30 billion, I think the numbers work. If things do not go as planned, I think there is going to be a real challenge here.

    As I had said on Future Combat Systems, I do not think there is a good basis to make an estimate right now. I think we are going to find out over the next year what is possible.
 Page 29       PREV PAGE       TOP OF DOC

    I think the difficulty is these items are so big that if one of them has a ripple, it is going to send a ripple through the Army. So I think that is going to be a real challenge.

    I would also think too, we might want to be thinking beyond the Army here. The other services are vying for funds. And I think what we are seeing is bigger and bigger programs.

    If you look at things like missile defense and Joint Strike Fighter (JSF) and shipbuilding, we have so many big things going that any one sends a ripple, but the other ones are tying up enough of the budget that we have limited flexibility.

    So kind of a roundabout answer, but I think the prospects of the estimates for holding are not very good. And I think we are going to have to be looking at how to fund a bigger bill.

    Mr. WELDON. You are absolutely right about the ripples. And we are getting ripples from every major program we have, which we have to try to deal with.

    And as we have said for the last eight, ten years, even longer than that, we knew this day would come with a severe train wreck. We are in the midst of it now. And how do we provide the needs, based on increasing costs for all the major programs that the services want?

    Before I allow the other two witnesses to add any comments they would like to make, have you given us options, can you give us options in both areas, that we might consider, both in modularity and with FCS? Maybe not even discussing it today but for the record, is that something that you can provide to us?
 Page 30       PREV PAGE       TOP OF DOC

    Mr. FRANCIS. Yes, sir. We can.

    [The information referred to can be viewed in the hard copy.]

    Mr. WELDON. Would you ladies like to have any other comments?

    Mrs. ST. LAURENT. Just in terms of modularity, again what is driving modularity or part of it is also the ability to support ongoing operations. And I think at this point in the program, it is probably most important for Congress to continue to do some of the kinds of things it did last year and establish some reporting requirements for the Army to become more transparent in where it is in being able to fulfill the equipment and personnel needs, some of the challenges, what are the total requirements and having them provide data that shows how far they are going along and how capable they will be of meeting their goals.

    Because until we get visibility and to the extent of some of the equipment need problems, it is sort of difficult to determine whether or not there need to be any significant changes made.

    Ms. PICKUP. And I would echo those comments and just add that is true of the funding estimates. I think that you have the fiscal year 2005 supplemental before you and then you have the fiscal year 2006 budget and so on and so on. And I think that Congress needs good information on the cost implications of modularity as well.

    Mr. WELDON. Mr. Francis, using historical experience with other programs of similar complexity and technical risk, what has been DOD's experience with cost growth? And how does that compare with FCS?
 Page 31       PREV PAGE       TOP OF DOC

    Mr. FRANCIS. I think when we are looking at major programs, the numbers that come to mind to me are generally 20 to 40 percent more than what we expected, if you adjust for quantities and so forth. So fairly significant; the most complex, obviously the higher margin of error.

    What I would say, applying that experience to FCS, I do not think we can live with traditional margins of error on cost estimates for programs of this size. So 20 to 40 percent on a munitions program, you can probably make adjustments and cover, but if we have cost increases of that magnitude on a $100 billion program, I do not think that that is something that the system can tolerate.

    Mr. WELDON. One final question and I will move on. The FCS program manager has publicly stated that 19-ton manned ground vehicles—that is, tanks and infantry carriers, for example—are just not technically possible at this time. Yet the Army's Training and Doctrine Command has reiterated that the 19-ton requirement will not be changed because one of the cornerstones of FCS is airlift transportability.

    Currently, the FCS program is evaluating a 30-ton interim vehicle and a 24-ton vehicle or a 30-ton vehicle with chutes or spirals to get the weight down to 24 and then 19 tons. Both a 30-ton vehicle and a 24-ton vehicle would not be C–130 transportable.

    My questions are: if the vehicle is not C–130 transportable, then how is a 30-ton vehicle any different than a 35-ton Bradley or a 70-ton Abrams? Why do we need an interim vehicle? I thought Stryker was the interim vehicle.
 Page 32       PREV PAGE       TOP OF DOC

    If the technology is not present to produce this vehicle now, why is FCS spending half a billion dollars in fiscal year 2006 on manned ground vehicles instead of focusing on the technologies that can be spiraled into the current field in the current fleet of vehicles? It is apparent to me that FCS manned ground vehicles are a science and technology problem and simply do not qualify as a system development and demonstration program.

    Would you please comment?

    Mr. FRANCIS. Yes, sir. We have similar concerns about the nature of activities that are going on right now in system development and demonstration. We see a lot of those as being something that should have been done before the Milestone B decision.

    As far as the weight of the vehicles go, right now, the business case that the FCS proceeds on is the ability to deliver a force that is as lethal and survivable as the current heavy force, but to be light enough to be air transportable and have a small sustainment footprint when it gets over there. I think, as I said before, we are going to go through that process of discovery.

    If the Army does find that it cannot provide lethality and survivability, say, for under 30 tons, I think the business case changes. Then you do ask the question: if we cannot do C–130 air transportability but we do have a 30-ton vehicle, do we still have a viable program?

    The answer could be yes. If you gave up C–130 but you found your footprint in theater was still significantly less than the current heavy force, I think that is an argument that could be made. But it would have to be made.
 Page 33       PREV PAGE       TOP OF DOC

    And that is what I would say about alternatives. I think we have to provide in the program and in your oversight that latitude, as when we make those discoveries, we have to be able to say we might want to do something different and change gears.

    Mr. WELDON. We will let the Army respond to that as well.

    Mr. Abercrombie.

    Mr. ABERCROMBIE. I just voted against this supplemental budget. And everything that I heard this morning and everything that I am hearing now convinces me that I am on the right track.

    Parenthetically, I have swallowed my reservations for about three budgets now, waiting to see whether this was going to work. F–22, just in one year, last year, F–22, 380; this year, 179. Now suddenly, I am trying to think of this strategically. I am trying to think of this in terms of doctrine.

    I am trying to think of this, as a Member of this committee who did not serve in the armed services, trying to figure out what it is that we have to do to respond to the needs of the warfighter, the peacekeeper, the peacemaker. And it is not working.

    This is all a fantasy. I am honestly believing now that we are moving into wonderland. We are moving into Neverneverland. We cannot keep budgeting this way.

 Page 34       PREV PAGE       TOP OF DOC
    The last comments that were made here just in the last testimony, about reconsideration of methods, we are cash financing all of this. This is lunacy. They are cutting out the C–130J. There is no money. That is the Air Force.

    I do not believe this. I do not believe this is going to work. It is up billions and billions of dollars now over what was projected.

    This is not extra ammunition because there is a lot of shooting going on in Iraq and we con ourselves that somehow that is a supplemental request. There is not a penny in this budget for the conduct of this war in Afghanistan and Iraq, let alone the other dreamland operations that we are going to spread democracy like butter somewhere around the world.

    I am not lecturing you; I am ruminating in public here because I am paying serious attention to what you are presenting. And I have been one—and the Chairman knows—who has said over and over again, the way this budgeting is going, the Army gets the short end of the stick every time.

    And the reason I said they did is their stuff is not expensive enough. At last, they have found a way to be able to compete with the Air Force and the Navy. You know, a rifle is not a carrier, right? A Bradley Fighting Vehicle is not an F–22.

    So they always get the short end of the procurement stick because we do the cash financing. Have you folks considered the idea, whether it is the F–22 or the Joint Strike Fighter—right here, the Joint Strike Fighter, $244 billion, the most expensive weapons system, $244 billion. I do not believe it. I will eat this microphone if it stays at $244 billion. And I do not think I am going to lose on that bet.
 Page 35       PREV PAGE       TOP OF DOC

    Have you folks considered the idea of capital budgeting and separating the acquisition, capital asset acquisition budget from the operating budget in the Department of Defense? Has that ever come up?

    Mr. FRANCIS. The question has come up in discussion. We have not been asked to do any work on it. It is something that merits some consideration because I think if you had acquisitions in a capital budget, then you could, I think, focus more on what is the business case for the acquisition and what kind of buying power are we getting out of our investment dollar?

    Because I think the point you raise, as costs go up and quantities go down, buying power is reduced fairly significantly. And that is not helping the warfighter or the taxpayer.

    Mr. ABERCROMBIE. Excuse me, I do not mean to interrupt so much as comment on the thrust of what you are saying. That is my point. How the hell do you go from 380, being told and telling the taxpayer, telling our constituents that the Air Force has to have—I am citing this as a parallel example, so as to not be pejorative or picking on the Army here, because I am trying to make a point here.

    Last year, the strategic necessities that we funded and presented was 380 F–22s. Today, it is 179. What the hell happened in one year?

    Why wasn't it 179 last time? Now, you just got through giving a very clear explanation to the Chairman's detailed question about the difference in tonnage on vehicles. And I have been working very, very hard—and I think very, very well—on providing facilities for the Stryker brigade in Hawaii, the modified Stryker brigade.
 Page 36       PREV PAGE       TOP OF DOC

    I understand that things change. I understand that from the time of the first Stryker brigade—and I was here for that—from the time of concept right on through, that there are changes that take place. Modularity, modernity, maturation of systems that need changes and so on. I understand that.

    And I understand that facilities and the training capacities have to be there and there are going to be associated with that. But when we turn over other—what we call Other Transaction Authority agreement, which to my mind has always been associated with laser-like research and development projects to zero in on particular items that need not tweaking exactly, but laser focus, as opposed to the big, Brobdingnagian operations of the Boeings or the Lockheeds and all the rest of it or the two or three companies who we have left that do this.

    The socialized warfare that we have now, these are government corporations. You know, they are extensions of the government. Let them make the decisions instead of us and we kind of get on the receiving end of the information. Is that a fair observation?

    Mr. FRANCIS. I think, as we are going to larger programs and if we are going to Lead System Integrators, I think it is fair to say that those companies do have more say-so in what is going on.

    Mr. ABERCROMBIE. And isn't our oversight then, our oversight capacity, let alone our oversight obligation here in Congress, then become merely one of observation and reception and passive observation?

 Page 37       PREV PAGE       TOP OF DOC
    Mr. FRANCIS. I would hope not. I would hope the opposite.

    Mr. ABERCROMBIE. But isn't that a likely outcome of such a process, where a private company sits down with the Army or anybody else and they kind of make their minds up with these billions and billions of dollars, saying, ''Oh, we will head in this other direction?'' An interim vehicle idea, I do not remember an interim vehicle idea. Did we talk about that before here? Did we make that decision?

    I appreciate the Chairman giving me a little leeway here because this is kind of, I thought it was a dialogue, but you may think it is a lecture. I do not mean it to be that. But I do not have any other chance to do this, other than in our office or something and that is inside baseball and the public does not get to have an understanding of what is at stake here.

    My point is this: I think I am coming to the conclusion that I am against this whole thing and I am going to vote against all of it. And I do not care if I am the only one.

    We have to change the budgeting system here because I think we are engaged in a mutual self-deception society, building up very, very quickly, in which we go through a charade every year in here and these costs go all over the place. The Army cannot get anything done.

    The rest of the services cannot get anything done. And the costs are spiraling out of sight. And we have no system to bring it to ground, to get a hold of it.

 Page 38       PREV PAGE       TOP OF DOC
    And Congress is going to be reduced to raising its hand the way we did this afternoon. You cannot find five people on the floor of that body over there that believe in that supplemental budget that just passed, that does not think it is a fake.

    Everybody can say whatever they want on that. But I will tell you right now, the stuff that is in that supplemental budget should be in the regular budget process, particularly where the Army is concerned or the Marine Corps is concerned.

    It is disgraceful, what we are doing, equating needed equipment refurbishing or replacement in Iraq or Afghanistan with tsunami victims, for crying out loud, like it is a grab bag that you reach into. I know what the difference between a supplemental emergency is and ongoing, real costs. And I think we have to vote accordingly.

    So I am going to ask you now, I want to know what is your bottom line assessment with respect to this Future Combat Systems? Is your judgment that this is likely to continue to spiral out of hand or not?

    Mr. FRANCIS. My bottom line is the program is not well defined enough to say we know what it is going to cost.

    So where I would go with it is, and I think it relates to the comments you were just making, Mr. Abercrombie, if the department—in this case, the Army—decides that it has to take risks to develop a capability it needs, I think that should be debated. I think the burden falls on the Army executives and then with Congress on is that a good deal?

 Page 39       PREV PAGE       TOP OF DOC
    Mr. ABERCROMBIE. Does that take into account, excuse me, the time because the time is being extended now? It is out to like 2016.

    Mr. FRANCIS. Yes, I think what needs to be discussed is what are the risks? If we want a 100 percent solution, can we define that solution? What are the risks? How good an estimate? You cannot estimate very well what you do not now yet.

    So if you come to the decision that we need to go for that 100 percent solution, I would say let's find a way to push those technologies to get to the point where we say we can bring that solution in. We can bring that 18-ton vehicle in.

    I think that is the point you say, ''Okay, let's go forward.'' I think the really difficult thing is when you get a program that is five, six years into system development when the costs are very high, and then you say, ''Gee, I do not think we can bring it in for that.''

    I think the debate about risk and cost and those decisions has to occur early. We do have to take some risks. And we do have to have some venture capital. But we need to take that, do those things early and I would say before we can commit to system development and demonstration, because that is the point when I think it is a business case, it is a deal that the department says it can deliver this product for this amount of time and this amount of money.

    Mr. ABERCROMBIE. Okay, my bottom line—and the Chairman is very gracious to let me go on and I apologize to the other Members—but the bottom line for me is this: we have some things that work very well. And my problem right now is based on the idea that maybe something good or what you call the 100 percent solution is out there maybe in 2016, the things that do work now are being shortchanged.
 Page 40       PREV PAGE       TOP OF DOC

    The things that have proved themselves are being shortchanged. And the soldier in the field or the marine in the forefront right now has to live in the world right now, has to live in this hour and try to live in this hour and try to carry out a mission in this hour.

    And it seems to me we have to find a way to make sure that they have the equipment that is available now and the capacity that is available now and the training that we know we can give them now made available to them without question, as opposed to a situation in which I believe we find ourselves today, where we are actually trying to see how can we minimize giving them what they need to have right now because we are financing this Neverneverland stuff.

    Mr. FRANCIS. Very good points, Mr. Abercrombie. It is a tradeoff of what to do now versus what to do for the future. And I think it is a fair debate to say if we cannot reasonably predict what we can do in the future, we do need to be safeguarding what we can do in the interim.

    Mr. ABERCROMBIE. Well, one of the things that I have been reading over these years of a doctrine that seems to work pretty well is what is called retrenchment. Maybe we need to do a little retrenchment and step back and take a deep breath and do the things we do well and keep on doing them for awhile until we actually figure out what exactly can we do and where are we going?

    And not just can we afford it, but are we really going to get there? Or has this just become what amounts to a delusion and a fraud on the taxpayer?

 Page 41       PREV PAGE       TOP OF DOC
    I appreciate your candor.

    Thank you, Mr. Chairman. I appreciate your indulgence and the other Members'.

    Mr. WELDON. I thank the gentleman for his thoughtful comments and will now turn to the distinguished gentleman from Texas, Mr. Conaway, for any questions.

    Mr. CONAWAY. Thank you, Mr. Chairman. Coming down from 10,000 feet, you have a schematic on page five of the Future Combat Systems. Given that it includes manned systems, unmanned air vehicles, unattended munitions, unmanned ground vehicles, where are the choke points in terms of what is the most critical piece? It all hinges around a ''network.''

    You said it is immature, the overall information. What specific pieces of the Future Combat Systems is where the real risks of saying this would be great, like this 19-ton vehicle; five years from now, we are sitting here looking back and saying, ''Gee, I wish I would have known where those risks were.''

    What is the big piece of this, that if it does not work, then the rest of the stuff is just pie in the sky?

    Mr. FRANCIS. I will first offer the caveat that I am a layman versus an engineer. And maybe when Mr. Bolton comes up, he can give a more expert opinion.

    I believe the long pole in the tent first is the network. And I would say more specifically the Joint Tactical Radio System has—I am going to say this without being able to explain very well what it is, but it is a wide band networking wave form. I cannot myself visualize a wave form.
 Page 42       PREV PAGE       TOP OF DOC

    But basically what this is, this is the pipe through which information is going to come to the FCS component. If for some reason that information is not good enough or fast enough, that is going to reduce the advantage the vehicle have of standing away from the enemy.

    If they have to close, then the lighter vehicles are at greater risk. So to me, the first long pole would be that aspect of the network.

    I think a second thing you would think about is, if you assume the network is going to be there, can you bring together that other collection of the technologies that allows the manned ground vehicles to be light? If they get the quality information they need, can you bring—and it is quite a host of other technologies.

    Can you bring those together in a package that gives you the lightness you need? To me, again as a layman, if I solve those two pillars, say they are going to come in, I think you get encouraged that this can come together.

    Mr. CONAWAY. You can put your auditor hat back on and you can take your electrician hat off, I guess. Given the conflicting pulls and struggles with this system's costs, modularity's costs, just continuing the fight every day that we are doing, can you talk to us about what you perceive to be the Army's process for—I mean, we have bright people over there just like yourselves.

    But can you speak to us about the process the Army has in place for themselves, struggling with these questions? You know, how do we continue to afford this? How do we make the adjustments on the fly that all of us have to make every day? And is the system in place? And do you think it is working?
 Page 43       PREV PAGE       TOP OF DOC

    Mr. FRANCIS. Well, I will talk a little bit about Future Combat Systems and then I will turn to my colleagues who have been doing quite a bit of work with the——

    Mr. CONAWAY. Excuse me just a second. I know there is a good group looking at the Future Combat Systems and I know there is a really good group looking at modularity. But those guys have to be talking together.

    Somebody at the next level up above that has to have a system in place to try to referee all of that going on. Can you speak to it at that level and then drop down, if you have time left?

    Mr. FRANCIS. Yes, why don't I defer to my colleagues? Janet, do either you or Sharon want to talk about Quadrennial Defense Review (QDR) or the Future Years Defense Program (FYDP) process?

    Mrs. ST. LAURENT. I will just talk a little bit about the level of senior involvement. Certainly, if we want to look at modularity, we know there are several processes in place—periodic meetings, the Army campaign plan—which lays out a lot of the details for not only modularity but other initiatives that the Army is trying to put in place, such as rotational forces.

    And again, this effort has a lot of senior-level attention from the Chief, the Vice Chief, the Army Secretary, et cetera. So they are well on top of, I think, what some of the issues are as they begin to implement the process.
 Page 44       PREV PAGE       TOP OF DOC

    They are also involved in obviously the decision-making on FCS. So I do think there are some things in place to make sure the senior leadership is aware of the challenges on both efforts.

    Ms. PICKUP. Just a comment on the budget process. I do think that obviously the Army has to make tradeoffs within its own budget. And also, I think the Army has to take a broader look, both in the near term and the long term, at the affordability issues.

    One of the issues here is the way that you fund these things, the supplemental versus the regular appropriation, and the extent that the more the costs are in the regular appropriation, you can start to make some better tradeoffs. And I think the Army's funding strategy, at least right now, for modularity is to get more of the costs into the regular budget.

    And within that process, then they have the opportunity to look at some of the tradeoffs between some of these major initiatives.

    Mr. CONAWAY. Okay. One last thing, Mr. Francis, given the fact that we do not get to pick when the next guy does something stupid and we have to go after him, that is always—you know, in hockey, you try to change your lines on the fly. We seem to be in that position right now. What is your assessment of going to modularity, going to Future Combat Systems, the Army's ability to respond to some new threat that may be different than anything we are thinking about today, as it relates to all these other moving parts?

    Mr. FRANCIS. What would be next?
 Page 45       PREV PAGE       TOP OF DOC

    Mr. CONAWAY. Yes.

    Mr. FRANCIS. Boy, I could get paid a lot of money if I knew that.

    Mr. CONAWAY. Are you asking for a raise? [Laughter.]

    Mr. FRANCIS. I am not sure. The Army and the Department of Defense does go through a process routinely to kind of look at that—what is coming down the pike, what is changing. I think what gets harder now is we were pretty comfortable wit the Soviet threat; that was pretty predictable.

    Now it gets harder to see. I think if you listen to some of the pundits who discuss what is coming, it is going to be things more like what we are faced with in Iraq today, those types of things, versus very large force on force issues.

    I think the Army has taken that into consideration because that is part of, I think, their assessment. They have to be flexible. If they have a big heavy force that has kind of a single purpose, they are not going to be ready for some of these other things.

    So I think the unpredictability of what you are suggesting is what complicates the definition of requirements now because we have to aim for capabilities we think that will be good against the spectrum of threats versus something specific to counter a known threat.
 Page 46       PREV PAGE       TOP OF DOC

    Mr. CONAWAY. Thank you, Mr. Chairman.

    Mr. FRANCIS. If I might, just one more thing on the process issue? We ask ourselves this question quite a bit. I have a lot of respect for the people in the Army and the services and the Office of the Secretary of Defense (OSD) for what they do. I find them to be really top-notch people.

    So you ask yourself: how come top-notch people are not getting better outcomes? And I think it has to do with the pressures of the process. I do not think the process can be any better than the inputs that go into it.

    So if your estimates of cost, for example, are too low, the process will use those costs, but it cannot improve on those. And I think people, when they are trying to, for I think the right reasons, get programs funded because they really believe they are needed, you know the pressure is if you come in with a high estimate which you consider reasonable, you might get knocked out.

    So the pressure of the process does, I think, cause the inputs to be more optimistic.

    Mr. WELDON. I thank the gentleman for his excellent questions.

    The gentleman from Washington State is recognized.

 Page 47       PREV PAGE       TOP OF DOC
    Mr. SMITH. Thank you, Mr. Chairman.

    The first part of this, I just have more of a statement than a question, following up on some of the things that Mr. Abercrombie said. In fact, during the debate on the supplemental—and I did vote for it with some qualms along the lines of what Mr. Abercrombie talked about, but recognizing the immediate need of having troops in the field. But it was still a difficult balance, given what was going on in there.

    And during the course of the debate, one of the people said something without a hint of irony, that I think sort of sums up the problem, basically saying that the bill was necessary to fund ongoing emergencies. And I really liked that phrase. An ongoing emergency; love to know exactly what that means.

    Well, I know what it means from a budget standpoint. It is easier to fund something in that way, quickly in one shot without going through the normal process.

    But I think that is sort of an apt description of our entire budget process right now, is an ongoing emergency, an ongoing emergency that forces us to spend far, far more money than we take in, which we cannot really do for too much longer, would be my thinking. And I think we need to seriously look at that.

    And we are in the House Armed Services Committee, so that is what we focus on. I just want to make a couple of quick comments about this budget process because I think it is important to make sure that we get the most out of money because Mr. Abercrombie's right.

 Page 48       PREV PAGE       TOP OF DOC
    I mean, you hate to spend the kind of money that we have spent on the F–22 and not, at the end of the day, get a product out of it. And part of the reason for that is because we, I guess, imagine more money than exists. And then eventually, when you have to pay it, it does not exist and you have to deal with it.

    And how we deal with it is just an unbelievable waste of money in terms of a per-unit cost and in terms of these decisions. I am certainly not going to just pick on these two programs because there are many, many others that go outside of this committee.

    But I think the problem, as a starting point, is that we have a divide and conquer strategy in Congress. I have always been fascinated by the fact that what goes on in here or what goes on over in the Environment Committee or any of the other committees is somewhat separate. And we are all convinced of one thing and that is that our area of jurisdiction is being dramatically underfunded.

    So as near as I can tell, Congress is convinced of three things: number one, everything is dramatically underfunded; taxes are too high; and we have to do something about the deficit. And that would be funny, actually, you know, if it was not such a problem.

    That something as obviously idiotic—there is no other word—than to hold those three opinions can be so dominant, but it is absolutely dominant in this place. People hold those three opinions. And they do not just hold them, they hold them with a considerable amount of outrage at times.

    It does not work and it winds up costing us money. So I think everybody, regardless of what committee they are, needs to step back and say: how are we going to make this budget work? Instead of just sort of figuring out how to put a little more paint on the floor before we actually wind up in the corner, which is primarily what we do.
 Page 49       PREV PAGE       TOP OF DOC

    I will offer some modest suggestions, and that is the largest portions of our budget, I think, are obviously taxes and entitlements. We have had massive tax cuts that people wish to do even more, make them permanent.

    At the same time, we have had massive increases in entitlement spending. The Medicare Prescription Drug Bill is this bomb that is about to land on us here next year.

    And by the way, just a quick point on painting us into a corner, you know, all of the tax cuts and the prescription drug bill have been either phased in or phased out or both. That is a rather dry-sounding phrase until you realize the reason we do it is the same reason we do the back-loaded procurement stuff in the military—because it hides how much the thing actually is going to cost.

    You know, what are the 10-year numbers on the prescription drug bill? Well, the initial 10-year numbers look pretty good, in part of course because we lied about what they really were. But putting that aside for the moment, the other reason is because the thing did not start for three years.

    I mean, the first three years of the ten years of the prescription drug bill were unbelievably affordable because the program did not exist. And then, lo and behold, we get up to the point where it is going to start and it is like, ''My goodness, it went from $500 billion to $1 trillion. How did that happen?''

    Well, it happened because the bill is actually going to happen. And we have done this on issue after issue. We have simply put as much paint on the floor as possible to keep the corner away from us.
 Page 50       PREV PAGE       TOP OF DOC

    And every aspect of the budget pays a price for that. And the military folks, you are going to pay a price for that. We are going to waste money on programs that we started out that we could not fund. And we are just going to get to the point where we do not have any frigging money and we are not going to be able to do this stuff.

    So I would urge everybody, whether in the military or not, you have to care about the budget. I know it is a pain in the butt and you would much rather just care about whatever it is you are working on, but if we do not care about the broader budget, about what the revenue stream is.

    And I am sorry, cutting taxes does not increase revenue. I wish it did. It would be kind of like if eating nothing but dessert would make you lose weight, it would be a great way to look at the world, but it just does not work.

    And number two, entitlements are where the money is. And if we do not reduce the money we project to spend on that, we are not going to be able to deal with any of this stuff.

    Budget lecture aside—and I will admit it, that is a lecture—back down to the one question I do have, and that is just about the Stryker brigades, of particular interest because Fort Lewis sent over the 1st Stryker brigade. I got to talk to some of the troops, including the commanding officer.

    They were very pleased, obviously, with the way it performed. Just curious from your perspective, is the Stryker brigade working out the way we thought it would? Is it being useful in combat, cost-effective? Just sort of general analysis about how that program is progressing.
 Page 51       PREV PAGE       TOP OF DOC

    Ms. PICKUP. Yes, we have done a lot of work on the Stryker brigade in terms of the development and fielding. We have not—we are just about to start to some work possibly to look at the sustainment and operational effectiveness. So at this point in time, cannot answer your question, but we are about to start some work looking more at the operational effectiveness.

    Mr. SMITH. Don't have any thoughts at all? You have been over there for a while.

    Ms. PICKUP. Right. We are just about to start that work.

    Mr. SMITH. Okay.

    Thank you, Mr. Chairman.

    Mr. WELDON. I thank the gentleman for his questions.

    I have a couple of quick questions I would like to ask; hopefully, quick responses.

    Mr. Francis, what is your understanding of who will own the data rights for the operating system and the applications for FCS?

    Mr. FRANCIS. I do know that there is an intellectual property clause in the Other Transaction Authority that covers that. We have not gone in and analyzed that. I know it is not the Federal Acquisition Regulation (FAR) clause, so it is not the standard FAR arrangement.
 Page 52       PREV PAGE       TOP OF DOC

    My general understanding is the ownership is shared. But having said that, there are degrees of sharing. So if I could get back to you on that?

    [The information referred to can be viewed in the hard copy.]

    Mr. WELDON. Yes, and I would like to know if this is a standard operating practice for developing an operating system of this magnitude and then have the contractor own the data rights, if in fact that is the case.

    Mr. FRANCIS. Okay.

    Mr. WELDON. If you can answer that question for me. Your understanding is now that it is going to be maybe shared. Is that it?

    Mr. FRANCIS. Yes, my general understanding is on data rights that generally no party owns the rights outright, that they are shared. And I believe that is the case on FCS, but I would like to confirm that and get an answer back to you.

    [The information referred to can be viewed in the hard copy.]

    Mr. WELDON. Second question, since this whole program is based on basically the use of information and data, obviously the greatest vulnerability to this entire effort is the use of data and transmission of information. So if I am an adversary of the U.S. and I cannot match you on the battlefield, my plan would be to use directed energy or some other type of technology of that type to basically defeat your smart capability. Are any of these systems hardened?
 Page 53       PREV PAGE       TOP OF DOC

    Mr. FRANCIS. I do not know that right offhand, Mr. Chairman. I would like to get back to you on that. I do know that the design the Army has—and perhaps Mr. Bolton can shed more light on it—is to provide enough assets up there so there is persistence.

    So if a light goes out over here, the system can kind of make up for that. So I would think it would take quite a disruption to knock the whole network out.

    [The information referred to can be viewed in the hard copy.]

    Mr. WELDON. This committee has taken great efforts with the standing up of the Electromagnetic Pulse (EMP) Commission two years ago and they made a report last July, that an adversary would use perhaps that type of capability against us. So if a high-energy burst were laid down above the battlefield, the key question is does that negate the entire capability of what we have with FCS?

    Now we also understand from the EMP Commission that the cost to harden programs is extremely higher than what the program would normally cost. And what I need to have—and I will ask the military this question—is if in fact that has been taken into consideration and if in fact these systems are hardened.

    With that, I want to thank you.

    Also, the IDA did a study of FCS. Have you had a chance to review that—the Institute for Defense Analysis (IDA)?
 Page 54       PREV PAGE       TOP OF DOC

    Mr. FRANCIS. Yes, I have.

    Mr. WELDON. Any particular comments—not now, but in the record—about that study from any of you? Pros, cons, what they did not look at? We try to get an objective analysis from all sides. And we have had the GAO do a very thorough job. We will have the services next and the secretary.

    And IDA takes perhaps a less aggressive approach to FCS. And I just would wonder if you have any thoughts on that so that we can balance all those as we evaluate the program this year.

    Mr. FRANCIS. Sure. We can make some observations. This is the IDA study on the Other Transaction Authority for FCS?

    [The information referred to can be viewed in the hard copy.]

    Mr. WELDON. Yes.

    Mr. FRANCIS. Yes.

    Mr. WELDON. Mr. Abercrombie.

    Mr. ABERCROMBIE. Yes, thank you.

 Page 55       PREV PAGE       TOP OF DOC
    I want to follow up a little on that. There is an article out now, I mentioned in my opening remarks that the estimate for the total cost of the FCS is now $133 billion. Does that sound like a number you are used to? Or within the range?

    Mr. FRANCIS. Yes, the numbers we have are sort of half and half. We have an escalated number for R&D, which is $30 billion. We have a constant, I think, 2006 dollar estimate for procurement, which is about $80 billion.

    So mixed and matched, that is $110 billion. So escalated, $120 billion, $130 billion sounds in the ballpark.

    Mr. ABERCROMBIE. Okay, so $100-plus billion.

    Mr. FRANCIS. Right.

    Mr. ABERCROMBIE. All right. Now how many brigades would be equipped then if you spent $133 billion or $100-plus billion?

    Mr. FRANCIS. My understanding——

    Mr. ABERCROMBIE. The 43 brigades we are looking at overall, right?

    Mr. FRANCIS. Right.

 Page 56       PREV PAGE       TOP OF DOC
    Mr. ABERCROMBIE. How many are going to be equipped?

    Mr. FRANCIS. Fifteen is in this $100 billion.

    Mr. ABERCROMBIE. Great. Now are there systems that are not being built or systems not made available then to the other 33 as a result of concentrating on the 15 with the FCS?

    Mr. FRANCIS. I do not know that for sure, Mr. Abercrombie. I believe that the——

    Mr. ABERCROMBIE. But could one project such a thing?

    Mr. FRANCIS. Well, I think the Army is attempting to do that in their spiral approach to FCS. The idea is to spiral things from the FCS to these existing brigades.

    Mr. ABERCROMBIE. Okay, but what I am concerned about, I mentioned in my opening remarks is if we are not even funding what we need, what we have right now and what is likely to be there, what I am worried about is that they are going to get shortchanged. I think that is a legitimate concern on my part.

    Mrs. ST. LAURENT. If I could make a comment? I would just add that that is a key reason why we think it is very important for Congress to monitor and track the progress under modularity as well because some of the key equipment that is needed is there and designed and being put in place to enable new operating concepts.
 Page 57       PREV PAGE       TOP OF DOC

    You need more unmanned aerial vehicles, for example, to again enable more long-range surveillance. And without that again, this concept also relies on greater information superiority.

    Mr. ABERCROMBIE. I am going to move to that.

    Mrs. ST. LAURENT. So it is very key to understand the progress that is being made there and any compromises that may be being made in not purchasing all of the equipment and/or meeting all of the personnel needs for the new brigades. Another key component is the reserve force is also part of the modular effort. And there is some money in the budget to equip National Guard units and brigades that are moving to the modular structure as well.

    But given the extent to which we are relying on our reserve forces to support our operations in Iraq, they are also a key piece of this.

    Mr. ABERCROMBIE. And I can tell you, where the budget is concerned, they are off the chart. They are not getting it. The guard and reserve might as well be on the moon. This is not happening.

    Take the Stryker, which we just mentioned right here. That actually moved pretty quick and all that. But there have been changes in the Stryker. That has to be accommodated in the budget.

    I do not want to see the Stryker left out on the side because we are putting all this money into something that again is a wonderful experiment, maybe, with some kind of benefit down the line, somewhere, ten years from now. But in the meantime, we are not adequately funding the necessary changes in a maturing Stryker brigade.
 Page 58       PREV PAGE       TOP OF DOC

    Now if that is the case, let me follow up on something here that the Chairman already alluded to. You get the $100-plus billion, you get only 15 of the brigades. Then when you get those brigades, now, the FCS network is fundamental. I am going to call it the armor of the Future Combat Systems, right?

    It is fundamental to its being able to work, right?

    Mr. FRANCIS. Yes.

    Mr. ABERCROMBIE. Well, one of the odd things that happens in this luxurious life that we lead up here, the sybaritic life of a Member of Congress that we have, is that you can occasionally in this world of digital communications record a program on television that you do not see until later. So I did this marvel of modern communication the other day on something called ''24.'' It is a fictionalized account of terrorism and quite titillating to those of us who are, at the end of the day, denuded of our capacity for thrilldom.

    So I tuned in and why? Because I heard a rumor that there was going to be something about an electronicmagnetic pulse. And sure enough, it showed up.

    I will have to watch Donald Sutherland's son run around and pretend that he was Roscoe Bartlett. And I know it. And I told Roscoe, I said, ''You have been vindicated.''

    And yes it was fiction and all the rest. But the point was well taken.

 Page 59       PREV PAGE       TOP OF DOC
    And what bothered me here is that I am concerned that if the communications, the network, is crucial to the operation here in the battlefield, if that is interfered with, does that in fact disable the whole process, disable the capacity to fight back or even leave one vulnerable to being killed on the spot because you are operating at a distance here?

    Mr. FRANCIS. Mr. Abercrombie, I will defer to Mr. Bolton for the technical expertise on that. But I think in general, it is true. If the network is degraded, then the information that gets to the units of action will be degraded and there is going to be some consequence to that.

    Whether it means that they cannot see as far, which means they have to close closer to the enemy, there would be some kind of consequence there. Now I do not think it is binary. I do not think that a degradation in the network automatically means you are out of business unless you are talking to the extreme where the network——

    Mr. ABERCROMBIE. Presumably you have a Plan B.

    Mr. FRANCIS. Yes.

    Mr. ABERCROMBIE. Technical capacity to utilize a Plan B.

    Mr. FRANCIS. Right.

    Mr. ABERCROMBIE. Okay, I am willing to do that. In other words, we are getting into the Flash Gordon aspect of this because the whole question is to find the enemy at a distance, right? And what I am concerned about is if you are dealing with insurgency warfare, you are not necessarily dealing with that kind of fighting situation, right?
 Page 60       PREV PAGE       TOP OF DOC

    Mr. FRANCIS. Right.

    Mr. ABERCROMBIE. So I am concerned that we are going to get off into a very expensive, marginally useful technological capacity that does not necessarily relate to the on-the-ground, in-the-moment requirement of the warfighter that has to face the situation that they are most likely to face in an insurgency situation, which I believe is more likely than not to be the kind of thing, over the next decade or the decade, let's say, going up to 2016, that the warfighter, especially the Army soldier, is liable to be facing.

    Maybe that is past your capacity and we are off into some doctrinal side that you are not observing or that you have not analyzed. But do you see the thrust of my question?

    Are we over-technologizing a situation or the conditions under which we expect the warfighter to operate in the context of the situation they are likely to find themselves in over the next decade?

    Mr. FRANCIS. I understand the question. I would say it is past my league of expertise here.

    Mr. ABERCROMBIE. Maybe it should go to the next panel.

    Mr. FRANCIS. Yes.

 Page 61       PREV PAGE       TOP OF DOC
    Mr. ABERCROMBIE. Okay.

    Mr. Chairman, I appreciate your indulgence.

    And I very much appreciate the work that you and the GAO do. I want to say, for the record, that I have never read a report yet of the GAO that in any way, shape or form, does anything other than, as you presented it today, exhibits the respect they have for the people who are trying to do the job.

    And it seems to me you are rigidly objective in terms of whether or not that is actually being accomplished and at what cost, which is precisely what you are supposed to do and what is the most valuable to us as decisionmakers here, I assure you.

    Mr. FRANCIS. Thank the gentleman.

    Mr. WELDON. And I want to thank each of you for your outstanding work and your continued interaction with our staff on this program, which is extremely important to us. And the contribution you have made today and continue to make is extremely valuable.

    Thank you very much. And you are dismissed.

    And we would now call up our second panel.

    In the second panel will be the Army and Marine Corps witnesses. I would ask them to come forward.
 Page 62       PREV PAGE       TOP OF DOC

    Thank you all for appearing today. Before we take testimony, I would like to offer a few comments regarding force protection.

    We are obviously extremely proud of our military men and women serving with distinction in Iraq, Afghanistan and other critical areas in the Global War on Terrorism. Without a doubt, they are the best that the world has and the best that America has.

    First in our mind as we proceed with the examination of these programs is how best it serves the needs of our military men and women who are serving us overseas? That is our ultimate and number one priority—not the budgeteers, but that serves the needs of our military men and women.

    This committee has monitored the status of vehicle armoring and provides explosive device or Improvised Explosive Device (IED) electronic countermeasures, night vision equipment, as well as many other key items necessary to allow our forces to carry out their mission.

    The armor situation has improved to over 28,000 armored vehicles. And General Casey has standing orders that after February 15 of this year, no vehicle without armor protection is allowed to operate outside secured forward operating bases.

    However, Members of Congress continue to receive claims that entire units are operating without adequate vehicle armor. I hope the testimony received today can help us understand the absolute truth regarding vehicle armor.
 Page 63       PREV PAGE       TOP OF DOC

    Effective electronic jammers are an essential tool in defeating the IED threat. And yet at our full committee hearing last week, General Casey testified that only 25 percent of his requirement has been met.

    This committee has identified shortfalls in Army planning, provided substantial levels of increased funding and worked to help the Army industrial base respond to the need of our warfighters. In fact, it was this committee that first called for the $25 billion beginning of the debate on the plus-up at this time last year, when even the White House was not supportive of that effort.

    We have also conducted hearings that expose the inadequacies of the acquisition system. Along with your testimony on FCS and modularity, we would appreciate hearing your views on when satisfactory levels of force protection will be achieved.

    Our witnesses today are: the very Honorable Claude Bolton, Assistant Secretary of the Army for Acquisition, Logistics and Technology; Lieutenant General Dave Melcher, United States Army, Deputy Chief of Staff, G8; Lieutenant General James Lovelace, United States Army, Deputy Chief of Staff, Army G3; and Lieutenant General James N. Mattis, United States Marine Corps, Commanding General, Marine Corps Combat Development Command.

    We thank each of you for your appearance today, for your testimony, which will be accepted as a part of the record. And we most of all thank you for your leadership and commitment to our troops.

 Page 64       PREV PAGE       TOP OF DOC
    Under your guidance, our Army is the best. We have all seen them in action. We want to continue to give you that.

    And in the spirit of that effort, we invite you here. None of our questions are meant to try to embarrass anyone because in the end we have the same goal that you have. We want you to have the best. And we appreciate you being here.

    And we will now turn to Secretary Bolton and ask you to proceed and then, in turn, go to General Melcher, General Lovelace and General Mattis.


    Secretary BOLTON. Thank you, and good afternoon. And thank you, Chairman Weldon, and Congressman Abercrombie, and other distinguished Members of the Tactical Air, Land Forces Subcommittee for this opportunity to discuss the fiscal year 2006 budget, the budget request and the Future Year Defense Program as it relates to modularity, force protection and major acquisition programs, including the Future Combat Systems.

    As always, we appreciate your wisdom, the advice you have given us over the years, and your superb support. As you have highlighted, Mr. Chairman, with me today is Lieutenant General Jim Lovelace, the Army's G3, and Lieutenant General Dave Melcher, the Army's G8. I respectfully request that our joint written statement be made part of the record for today's hearing.
 Page 65       PREV PAGE       TOP OF DOC

    Thank you, sir.

    The United States Army, with more than 300,000 soldiers in 120 countries, is meeting the demands of the Global War on Terror, fulfilling our other worldwide commitments and transforming to meet the challenges of an uncertain future. It is our job to ensure that our men and women in uniform have what they need to fulfill their mission today as well as tomorrow.

    Speaking of tomorrow, let me turn briefly to the Army's Future Combat Systems, also known as the FCS, the Army's primary materiel program for our future force combat brigades. The FCS will provide our future force with an unprecedented military capability—rapid, deployability, lethality, survivability—well into the 21st century.

    The FCS will be a network system of systems—18 systems plus expanded network—all centered on the soldier. With such a complex undertaking, it is important for us to understand the requirements and the resources and integrated processes, which is why in order to succeed we need the right people from the government and the right people from industry tackling this tremendous task.

    We have a Lead Systems Integrator—or LSI—to assist the Army in managing the system of systems integration, all 18 separate systems and the network centered, as I said before, around the soldier. In order to meet the time and funding constraints, we have required not only an LSI, but also a team approach for this overall effort.

    When the Defense Advanced Research Projects Agency, or DARPA, served as lead to develop and define the FCS design concept, they used an Other Transaction Authority or OTA agreement to effectively accomplish the task, build the FCS team and protect the public interests. Currently in the system design and development phase, or SDD, this OTA affords us the opportunity to attract the best and brightest of our nation's industry and their subcontractors to this endeavor.
 Page 66       PREV PAGE       TOP OF DOC

    To measure the value and appropriateness of the LSI and OTA, which is done on a regular basis, we have used the earned value management system—or EVMS—which basically tells me that the FCS is tracking the program to cost, schedule and performance as we planned at the beginning of the OTA. After nearly 22 months, the FCS is on the schedule that we put on contract, on cost and on performance.

    We have also asked outside of the Army and the Department of Defense, on a regular basis, roughly every six months, to have others come in and look at the concept of the LSI and the OTA and other aspects of the program. Those outside independent reviews have further validated the appropriateness of the LSI and the OTA.

    The bottom line is that we need to acquire the best capabilities that we can afford within the constraints given to us by the warfighter and the public. I believe that the LSI and the OTA are both vitally important to our success.

    Now I will continue to challenge these management tools. And we will continuously look for better ways to get our warfighters what they need, where they need it, when they need it, better, faster and cheaper.

    Mr. Chairman, that concludes my comments. Again, I want to thank this committee for its continuing wisdom, guidance and support.

    Following brief remarks by Lieutenant General Lovelace and Melcher, I look forward to your questions.
 Page 67       PREV PAGE       TOP OF DOC

    [The joint prepared statement of Secretary Bolton, General Lovelace, and General Melcher can be viewed in the hard copy.]


    General MELCHER. Chairman Weldon, Ranking Member Abercrombie and distinguished Members of the committee, thank you for the opportunity to appear here today. As the Army's deputy chief of staff for programs, I am responsible for the resourcing of the Army and for finding and fielding solutions to Army requirements, both present and future.

    This includes everything from major weapons platforms to the soldiers' individual equipment. For example, the G8 has been heavily involved in bringing new protective gear to our soldiers in the current fight.

    At the same time, we work strategies to field new weapons systems and platforms into the force in the most efficient manner possible. On behalf of our outstanding soldiers, civilian employees and family members who are serving our country around the world, I thank you for the chance to tell their story and for all you have done to support them.

    Many of you have traveled to Iraq or Afghanistan and seen firsthand their sacrifice for this nation. Nothing we do is more urgent or pressing than ensuring our troops have the best protection we can provide.
 Page 68       PREV PAGE       TOP OF DOC

    Mr. Chairman, I look forward to answering your questions today as we work together to support our soldiers and marines on the ground. This concludes my statement, sir.

    [The joint prepared statement of General Melcher, Secretary Bolton, and General Lovelace can be viewed in the hard copy.]


    General LOVELACE. Mr. Chairman, Mr. Abercrombie and other distinguished Members of the committee, good afternoon and thank you for the opportunity to appear before you today. I especially want to say thank you for the support that we get for our soldiers, sailors, airmen, marines and coastguardsmen.

    As you know, we have been working hard together steadily to improve the Army's capabilities to train and equip our soldiers and DOD civilians for the Global War on Terrorism, at the same time, transforming our forces to make us a more flexible and adaptable force that fights across the full spectrum of conflict with our joint partners.

    Nothing we do is more urgent or pressing that ensuring our outstanding troops have the proper training on the best equipment that the Nation can provide. And I know you all agree.

 Page 69       PREV PAGE       TOP OF DOC
    It is a great day to be a soldier; although at war, we have the great support of the American people of course our elected officials, so well represented by yourselves today. Today, we face the full spectrum of conflict. And what does that mean? You hear that term.

    Everything from high-end threats in Korea, who posses intercontinental ballistic missiles and export their wares of warfare to rogue nations and organizations, to ongoing operations in Iraq and Afghanistan, which began with shock and awe and has since shifted to irregular warfare and stability and support operations as we reconstitute the country of Iraq.

    The bottom line is that we as an Army must design our organizations and equip our soldiers to dominate across the full spectrum of conflict and win decisively. Today, we have more than 650,000 soldiers on active duty. This is truly one Army—active, national guard and reserve—working together to meet the needs of the country.

    The Global War on Terrorism requirements has required a huge commitment from our reserve component (RC) formations and soldiers. And as expected, they have rallied to the cause and are performing magnificently.

    And as we build the modular force, we are using the Army's force generation model to manage our requirements and dwell time in order to provide the necessary land forces in support of our national military strategy, as well as the requirements of the combatant commanders.

    The force that we are providing the combatant commanders for our national military strategy is a campaign-quality Army with joint and expeditionary capabilities, an Army capable of dominating across the full spectrum of conflict. The Army has initiated its largest internal restructuring since World War II, the conversion of the Army modular force. This will add an additional 10 to 15 combat brigade teams to the Army by 2007, increasing the deployment pool and enhancing the full spectrum capabilities of our force.
 Page 70       PREV PAGE       TOP OF DOC

    The modular design is a basic building block approach which will reduce structural overhead by rightsizing the organization based upon capability by its large headquarter structures. The heavy, the infantry and the Stryker brigade units of action will be complemented with fire supports, maneuver enhancement, battlefield surveillance and aviation brigades.

    When compared to today's force, the Army modular force will be more flexible, survivable, have better joint intelligence, surveillance, reconnaissance capabilities and importantly, more deployable. The key improvement to our new modular force is the increased capability that comes with the enhanced battle command.

    We are forming these modular units with bigger brains by properly resourcing their headquarters and providing them with the technology and connectivity they need to gain and maintain a common operating picture of the battlefield, whether that be in the middle of the desert or downtown Baghdad.

    The shared, near real-time information will allow combatant formations to operate at much higher levels—much lower levels—to move, shoot and communicate in ways previously unheard of throughout the full spectrum of conflict. Leveraging joint capabilities truly enables us to be joint and interdependent.

    It will be like gifted athletes on a football field, moving from sideline to sideline, capable of taking on all opponents. We are already getting glimpses of that with the 1st Stryker brigade Combat Team that was deployed to Baghdad.

 Page 71       PREV PAGE       TOP OF DOC
    The one Stryker battalion disengaged from operations in Mosul, a northern city in Iraq, and in a 48-hour period of time, road marched 450 kilometers. Additionally, due to their enhanced battle command, they were able to engage the enemy in route and again at their final destination in An Najaf.

    The success of Stryker and its agility on the battlefield through enhanced battle command confirms that the Army's transformation plans are on target. Much as Stryker is informing us about the Army modular force, the Army modular force and the Future Combat Systems are interconnected across the doctrinal, organizational, training, materiel and leadership domains.

    Each depends on the other to enhance the capabilities and together are far stronger than individual programs. The operational experienced gained by the modular force brigade combat team unit of action will inform the Future Combat Systems unit of action deployment.

    For example, the lessons learned through regular threats will improve development of the Future Combat System's capabilities for stability operations. The FCS spiral acceleration will enhance the brigade combat team unit of action capabilities as well.

    For example, the improved FCS network-enabled battle command capabilities will improve short-term battle command solutions, enabling the brigade combat team to conduct network centric operations more effectively.

    In short, the modular force and the Future Combat Systems are essentially mutually supportive and interrelated Army programs. Of course, we are a nation at war. And the nature of war is transforming the Army. And the Army is transforming to make these changes.
 Page 72       PREV PAGE       TOP OF DOC

    Even as we speak, Iraq has enjoyed a positive election and freedom on the march in the parts of the world that years ago would have been unimaginable. No one can predict what the future holds, but it is certain that our nation must have the best trained, best led and best equipped soldiers on the ground, capable of deploying rapidly at precisely the right time, to the right place, with the right support structure, to influence the conditions and achieve victory as part of the joint team.

    Your continued support will ensure these soldiers remain the most valued and most respected in the world. I look forward to the session and answer whatever questions you might have.

    [The joint prepared statement of General Lovelace, Secretary Bolton, and General Melcher can be viewed in the hard copy.]


    General MATTIS. Chairman Weldon, Ranking Member Abercrombie and distinguished Members of the subcommittee, it is a pleasure to be here today to answer our questions. Returning home after spending most of the last three years overseas in Iraq and Afghanistan, I also pay my thanks to you for years of support.

    My opening remarks will be short so we can move rapidly to your questions. I request that my written statement be accepted for the record, Mr. Chairman.
 Page 73       PREV PAGE       TOP OF DOC

    I am accompanied by Brigadier General Catto here on my left, the Commanding General of our Systems Command and the Marine Corps' expert on acquisition and rapid fielding programs which we use to get equipment to marines in combat as fast as possible. I will use his in-depth knowledge to help answer your questions.

    From the nearly half billion dollars we have spent on vehicle armoring to the fielding of hundreds of IED jammers, the resources you have provided have given us the ability to drive down casualties while carrying out our mission in the fight. But as you know so well, it has not been without cost.

    The marines have suffered 359 killed and 3,694 wounded in the Iraq fighting. I believe we have just received word that we have lost one more of our lads killed and nine more wounded in the last 24 hours—not confirmed yet.

    Armor and jammers have been critical. But the best force protection lies in high-quality marines given the best possible training. And at that, we excel.

    The enemy is, however, adapting to our armor by increasing the size of the IEDs beyond the capacity of any armor to defeat it. The superb adaptability of our own troops to move from counterinsurgency combat to the toughest form of fighting—Fallujah, house to house—and then going back to counterinsurgency, shows that we have the right kind of troops in the right kind of war.

    The Marine Corps is a modular force. And it will remain a modular force.
 Page 74       PREV PAGE       TOP OF DOC

    The Marine Air/Ground Task Force is tailored for each mission from a couple hundred marines put together for one mission to over 90,000 that we can field on a corps-level operation. We have also adapted our force structure, reorganizing our combat forces to create needed units.

    Without an increase in end strength, we have added two infantry battalions, more light-armored vehicle companies. These are the companies that we have had for some 20 years that are similar to the Stryker, older vehicles. Reconnaissance companies and others have been added.

    We have also dual-missioned some of our organizations where it is low risk to do so. Your mandated 3,000 man end strength increase to the Marine Corps has also helped us greatly to better man our units, contributing directly to our combat readiness. And I thank you.

    We are closely tied to our comrades in the Army. On the battlefield, it is truly one team, one fight. Here in Washington and in dozens of integrated teams stateside, we share solutions and integrate staffs to ensure that we work as seamlessly here as we do in Iraq and Afghanistan.

    We are using our equipment at rates and under conditions that are extremely debilitating. Your continued focus on the materiel condition and readiness of our equipment is heartening.

    High mandatory costs for maintaining current readiness in the fight are a reality. But those costs can also eat deeply into our seed corn, our modernization funds, which have de facto become the billpayer in order to refurbish the equipment and maintain readiness that is needed now in the current fight.
 Page 75       PREV PAGE       TOP OF DOC

    We have offloaded much of our gear from our maritime prepositioned squadron that operates in the Indian Ocean, plus many of our aviation platforms are being used at three to eight times their program service life. And you know what that means. If we are to remain the nation's 911 force most ready when needed, we are going to have to pay those bills.

    I understand there is some question about the way in which we submit those bills, Mr. Chairman. We simply identify our requirements and we have to submit them according to certain business rules of the Department. Obviously, we defer to Congress as far as how you address those.

    That is all I have, sir. I look forward to answering your questions.

    [The prepared statement of General Mattis can be viewed in the hard copy.]

    Mr. WELDON. Thank you, General.

    Thank all of you for your testimony and for your service.

    Before I begin some questions, I want to pay tribute to the Army. The Army is always thought of as the troops on the ground. But we have a distinguished visitor in the room, Lieutenant Colonel Craig Collier, who took this committee on the first delegation in 39 years into Libya.

    Craig, it is good to see you again. It was a very difficult mission, not going to Libya, but accompanying six Members of Congress. [Laughter.]
 Page 76       PREV PAGE       TOP OF DOC

    But under impossible circumstances, for the first time in 39 years, we landed in Tripoli and had a chance to spend 2.5 hours with Colonel Gadhafi and convince him to continue to support the decisions he had made to our President, which are now underway. And then we went on into the theater of Iraq and Afghanistan to spend four days with the troops.

    Very emotional days. And it recalls the visit that we took and we flew by helicopter up to an area near the hole we found Saddam. And General Odierno, the 4th Infantry Division, met us and came over and told us about the great things the troops were doing.

    Then I asked him about casualties. And that is always the worst part of any involvement, as you all know, and take very personally, as we do. And he described this young, 24-year-old lieutenant who had just been a great role model and who was leading his unit on the road between Tikrit and Kirkuk. And he came under heavy fire and was attacked and valiantly went down and was killed.

    And when I heard the details of the description, I asked the general, I said, ''General, that young man's name would not be Bernstein, was it?'' And he looked at me and his eyes got real wide and he said, ''Well, yes, Congressman, it was Lieutenant Bernstein. How would you know?''

    I said, ''I nominated him to West Point. And I am carrying a three-page letter from his parents, a letter of pride in their son. And I brought the letter out of my back pocket and gave it to the general.''

 Page 77       PREV PAGE       TOP OF DOC
    And up until that time, I had never seen a three-star general or a two-star general weep. And there on the battlefield, we talked about the casualties and the bravery of that one lieutenant, but also the bravery of all of our personnel that are serving both our marines and Army personnel.

    So I just wanted to say that because it brings to reality for us our job, to give them the support they need and in a very real way. And I think the whole committee has been over there on several occasions. And we will be going back again this year. We deeply appreciate the work of our men and women.

    Craig, thank you for your great work in taking us over.

    With that, the first question is the obvious one. I mentioned it already.

    General Lovelace and General Melcher, would you please comment on the report that the 42nd Infantry Division does not have adequate armor and equipment, especially on the photographs that were circulated last week? They claim they were pictures from Tikrit and other areas within Iraq showing convoys without armor. We have to clarify this for the public, so would you please speak to those specifics?

    And we have the photos here if you would like to see them. You have probably already seen them.

    General LOVELACE. Sir, first comment is that those vehicles are uparmored. They are level three. And so those pictures are a little bit confusing as far as when people say they are not.
 Page 78       PREV PAGE       TOP OF DOC

    The only aspect of the vehicle that perhaps is a little bit nonstandard is the gun mount on the back. But they are uparmored.

    Sir, there are about four things that happen before a vehicle can go north. One is that the Multi-National Corps-Iraq (MNC–I) commander, in this case it is General Vines, he gives the priority of vehicles to be uparmored. And that is conveyed to those in the south who make sure that the vehicles are then prioritized in accordance with General Vines' wishes.

    Second thing is that clearly, the guidance is given to all commanders prior to leaving so that they know what has to be uparmored and what is not uparmored. And so that is the second hurdle that is en route to before you go north, going into Iraq.

    There is a board then that is done, this is a prioritization board that affects the guidance by General Vines. And it begins to align then the vehicles that are arriving and are en route north for prioritization. And that is again conveyed down through the chain of command.

    And last, what is done is we make sure that everybody understands what has to be uparmored and what does not have to be uparmored. So those are four things that are in line then to be before someone can go north.

    And some of your equipment, for example, of the past about eight or so brigades that I looked at, better than 95 percent of all the vehicles going north are uparmored. Now the five percent that are not are then put on the back of a vehicle and then are driven up and are not then where troops are exposed because some of those vehicles are going to find themselves inside of a forward operating base and do not have to be uparmored.
 Page 79       PREV PAGE       TOP OF DOC

    That is why then we are in compliance with what is the 15 February guidance, although by General Casey, was reiterated by the Secretary of Defense.

    General MELCHER. And sir, the only thing I would add is I am just looking at the latest status for the 42nd Division when they headed north. And true to what General Lovelace told you, about 96 percent of all their vehicles were uparmored.

    Now of that 96 percent in the division base, 12 percent were level one or the factory made production of, for example, uparmored Humvees. About 21 or two percent were level two, which are again factory built but installed in theater. And about 60 percent of the vehicles were level three protection, which is the add-on armor that has been applied to the vehicles.

    We are about at the point now in theater where we think we have sort of crossed the rubicon on meeting the uparmoring. And now our goal is to continue to replace level three with level two or one armor as quickly as we can do that, as we can ship over new factory-made Humvees or new kits in order to do that.

    It will be a continual improvement cycle with all these vehicles.

    Mr. WELDON. Thank you. And staff tells me that all the photographs show that the equipment was, in fact, level three. And there is also a great deal of ingenuity on the part of the Army to meet some very special needs that are very unique over there. And we appreciate that work done by our soldiers.

 Page 80       PREV PAGE       TOP OF DOC
    General LOVELACE. Sir, if I could provide one additional comment also? The Vice Chief of Staff has just been in theater. One of the reasons that he went into theater was to make sure that those vehicles that are not needed, that are perhaps now not armored, are got out, not driven out by individuals, but then trucked out again so that we do not have vehicles up north not uparmored that potentially can go on the road.

    Mr. WELDON. Great, thank you.

    General Melcher, I will ask the same question that I asked the GAO—you heard me ask it earlier and I will summarize it—regarding the manned ground vehicles. If the vehicles are not C–130 transportable, then how is a 30-ton vehicle any different than a 35-ton Bradley or a 70-ton Abrams? Why do we need an interim vehicle?

    I thought Stryker was the interim vehicle. If the technology is not present to produce this vehicle now, why is FCS spending half a billion dollars in fiscal year 2006 on manned ground vehicles instead of focusing perhaps on the technologies that can be spiraled into the current fleet of vehicles?

    General MELCHER. Sir, let me get a shot at this and Mr. Bolton may want to chime in. I think, you know, first of all, if you did not have the FCS variant of some sort of a future vehicle, you would have to create something in order to ultimately recapitalize or replace those kind of systems we have in the inventory today.

    Our tanks and our Bradleys were basically produced in the 1980's on up to today. And we have recapped any number of them, as you know, in order to keep those fleets viable.
 Page 81       PREV PAGE       TOP OF DOC

    At some point, I think they ultimately reach the end of their usable life and ought to be replaced with something new. In terms of the weight, I know that is one of the goals of FCS in order to get the weight as reduced as possible for the reason of logistical support and ease of deployability and transportability.

    But you are right, sir, a 30-ton vehicle is a 30-ton vehicle. And if it will not fit on a C–130, it would have to fit on some other conveyance.

    So I guess just to repeat a bit, you have to replace ultimately tanks and Bradleys with some future vehicle. This is an attempt to try and realize what that vehicle can be. Lighter is an admirable goal, as it is for the entire suite of vehicles, because of all the other benefits that accrue from that.

    Secretary BOLTON. Mr. Chairman, we will probably have this debate and we have had this debate in the Army for the last two years, and that is the transportability, which is the KPP, key performance parameter, for the FCS. We have not been fighting out of C–130's. No Strykers over in the area of responsibility (AOR) have come off 130's to be engaged in battle, as the G3 indicated in his opening remarks.

    We actually drove those vehicles down south. We intend to do that in the future.

    When we ran the timelines on how long would it take you to move all that by C–130, it does not work. Now having said that, we have decided that we want to use the box size of a 130 to size the Future Combat Systems. Why?
 Page 82       PREV PAGE       TOP OF DOC

    Well, if we can do that, we drive down the logistics tail. If you have to use a C–130 intra-theater for any reason, the commander has that flexibility, not saying that is going to be the concept of operations (CONOPS) because currently it is not.

    Now can we do that today? No. We do not have the technology today to do that. We are trying to mature that over the next 18 months to see if we can get there. How close will we get? I cannot answer that today.

    It will certainly be less than 70 tons. I believe it will be less than 50 tons, perhaps less than 30 tons. Will it be 20 tons or 19? I do not know the answer to that.

    Anything that we can get down, in my estimation, under 50 and certainly around 30, will drastically reduce the logistics tails. When I go to the G4 and I ask him, ''By tons, how much stuff are you—what percentage of stuff are you taking to the field?''

    He says, ''80 percent of the stuff I take to the field is water, fuel and ammunition. You take fuel and you drive down the size of this vehicle, which means I can also get efficiencies and the engine and so forth, that reduces the amount of fuel I have to put into that, which reduces the number of trucks I have to truck in with fuel, which reduces the number of drivers, which reduces the number of medics, which reduces the number of food trucks and so forth.''

    That drastically reduces that tail to some future G4 to worry about. So we are trying very hard to get this as small as possible.
 Page 83       PREV PAGE       TOP OF DOC

    And the challenge from the warfighter right now, put it into the 130 and prove to me you cannot. And so that is the debate that we have had going on.

    And we will come to resolution on that when we get to the preliminary design review. And that is about a year to 18 months away from us.

    Mr. WELDON. Yes, sir, I understand what you are saying. Our only concern is that what you just said is the technology is not there yet.

    And that is why our feeling is this should be a technology base. As opposed to putting money into manned ground vehicles now, we should be focusing on the technologies to allow you to accomplish the ultimate objective. That is the concern of Congress in this area.

    Secretary BOLTON. Yes, sir. And to address that, our Chief of Staff, General Schoomaker, when he came in, said, ''I do not want to wait around for all this technology that you all are talking about that is going to get here at the end of the decade or maybe the next decade. I have need for whatever technology is ready today to put into the force today.''

    And for the last three years, you have seen that with the rapid fielding and the rapid equipping initiatives and so forth, technology that is ready today. We have identified over the last several months three to four spirals out of the technology that is in the FCS that will start maturing in the 2008 to 2010 time frame.
 Page 84       PREV PAGE       TOP OF DOC

    We have identified unattended sensors, some of the network capabilities and a couple of others that we think will be ready at that time to be put into an evaluation brigade; let them take a look at that. If it is ready in 2010, it goes into the force.

    So you are absolutely right. The Chief does not want that either. What that does for us, we had a problem before. We have this FCS going along here. We have this current force going on here.

    But when you bring them together, aren't you building two different forces out there? Here we have an opportunity over time to drop in that technology from the FCS into the current force and grow it to this future force.

    Now granted, in doing that, we had to speed up some technologies, which costs money. We also took the opportunity to insert some things into the Future Combat Systems that we took out two years ago. And then we had to lengthen the FCS to do that.

    That also addressed the GAO's concern that we were doing too much, too fast with immature technologies.

    So I agree with you. The Chief agrees with you. And we are trying to balance all of that, to take technology when it is available, in the current tech base, in the FCS base, and put it into the current force.

    Mr. WELDON. I have one final question before I turn to my colleagues.
 Page 85       PREV PAGE       TOP OF DOC

    Mr. Secretary, FCS is the largest and most expensive program ever undertaken by the Army. So the question basically is why is FCS being contracted under an OTA instead of the standard Federal acquisition regulation part 15? And why have the contracting safeguards, such as the Truth in Negotiations Act, been waived?

    And then a follow-on to that, Mr. Secretary, is that FCS lead system integrator, or LSI, is charged with representing the Army's best interests in managing the FCS program and to assist in making tough programmatic decisions. After the selection of the LSI for FCS, the LSI, with the approval of the Army, made the decision to not compete the system of systems common operating environment software. Instead, the LSI will provide the software.

    This software is one of, I would think you would say, the most critical components of the FCS program. It ties everything to the network. Next, after a competition, the Army awarded the warfighter machine interface to the lead systems integrator.

    Here we have the LSI charged with managing the FCS program in the Army's best interests and, at the same time, operating as a subcontractor. We have been told about the firewalls and how this is a safeguard for the integrity of the program. However, these firewalls only stop the flow of proprietary information.

    What I find interesting is that we have seen this business model before. It mirrors Microsoft. Control the operating system hub and you control any competition within the entire system forever.

 Page 86       PREV PAGE       TOP OF DOC
    The path to participate on FCS will always go through the lead systems integrator. So I have several questions.

    Since systems common operating environment was not a preexisting, off-the-shelf product and the Army is paying for its development, who owns the software and the data rights?

    Secretary BOLTON. Yes, sir. First on the OTA and why, we actually took an agreement and then we put into the OTA the FAR clauses, DAR clauses and other lessons learned that we thought were appropriate for this program.

    The other way around is that you run the challenge of taking a FAR-base instrument and trying to take things out. My experience in the past, it has been tough to do, very tough to do—not impossible; you can tailor those. I have done it. But it is tough.

    And quite often, you wind up with things in there that you did not want, but the taxpayer still pays for. So this agreement has roughly 74, 75 clauses in it coming from the FAR, the DAR and other places.

    With regarding TINA, the Truth in Negotiations Act, it is not in there. It is not required by an OTA. But we did go ahead and put words in there that gets me a lot of the things that I would have under TINA.

    For example, it is a requirement to have a CAS, which is a cost accounting standard, an agreement with a disclosure statement for that company, which is the same piece of paper that they use when the auditors come in on an annual basis to make sure that everything you are seeing is correct.
 Page 87       PREV PAGE       TOP OF DOC

    I also have a FAR Part 31, which allows certain reports to go ahead and take place. I also invited in the Defense Contract Audit Agency to take a look at all the price and data before we actually said, ''Yes, that is the right cost for this particular contract.''

    I also invited in the Defense Contract Management Agency to take a look at that, as well as to make sure that the way I am measuring costs and schedule on a daily basis is accurate, that they have a system to do that.

    And finally, the United States comptroller general is allowed to go in and check all the books, all the data, for three years after the closeout of this contract. So I think we have what we need in there. But I am open for folks to take a look. But we have had our sets of lawyers take a look at it and so forth.

    With regard to data rights, I have what is called government purpose rights. I have a license for any software or data. I can use it any way I want for government purposes, with the exception of doing something commercially; not allowed to do that.

    By policy in the Department of Defense—not mine, not the Army's, not in OTA—whether I am in a FAR environment or an OTA, the department says buy only what you need. Do not own it. And that is what I have done.

    Now we can always talk about is that the correct policy for the Department of Defense? That also flows down to all the contractors. So they own it. I have a license to use it.
 Page 88       PREV PAGE       TOP OF DOC

    And that reduces some of the problems that we would normally have between a prime and a subcontractor. The OTA allows us to create—and we already have, I think—a very strong team.

    When it comes to who is controlling the team, you will find the government is sitting right there with this contractor. When we went through all the source selection for all the subs and so forth, I sat there.

    When Boeing decided to put in a proposal, I chaired that. I made the decision from three proposals that I got. And they were better. And that total value is roughly about one percent of the value of the contract at that time. And they were clearly the winners on that.

    The other way I judge this is that we went through all of that, plus all the lower tiers, and to date, I have had no protests from anybody. Any contractor could have said, ''I do not like what you are doing.'' And they have not done that. And that tells me that we are on the right direction.

    I mentioned earlier that we are on cost and schedule and so forth on the original contract. We just changed the baseline because we added things to it. And we will see how we do over the next quarter.

    But what I used is what I mentioned in my opening comments, the earned value management system. And basically what that says to the contractor is we are going to sit down and lay out for this year every task that you are going to do, how much time it is going to take, how much it is going to cost.
 Page 89       PREV PAGE       TOP OF DOC

    I have an estimate for that. And that is in my budget so I can pay for it.

    And then every day, every one of those: how much work did you do? How much did it cost?

    And after 22 months, perfect score is 100 percent. And they are right at 100 percent. Actually, they have done a little bit more in saving money and are probably about 36 hours behind on the actual schedule itself.

    But for a program this complex, that is unheard of. So we have a great team working this. I think we have all the right things in that OTA.

    It is not a blanket OTA. We tried to attract non-traditionals. We have four of those. Those are people who normally who do not do business with us because of all the red tape. We had 20 who were thinking about it, but as soon as they looked at what we were doing and saw all those clauses in it, they walked away.

    But every six months, we have someone else come in and take a look at it. The GAO has taken a look at it. We have had IDA take a look at it. I am about ready to let another study contract to have someone come specifically look at the comments that you have given us today, the basis concept of the OTA and the LSI.

    And that is where we are on that, sir.

 Page 90       PREV PAGE       TOP OF DOC
    Mr. WELDON. Secretary, I do not question the integrity of the LSI. I work very closely with Boeing and the rest of our contractor base. And that is not the intent of my questioning.

    Secretary BOLTON. Yes, sir.

    Mr. WELDON. I want to do a follow-on here. The systems common operating environment is intended to be the software that connects the various systems in FCS to the network. We have received reports that the lead systems integrator is attempting to require contractors to modify their software that is not a function of the network to incorporate the lead system integrator's developed software.

    For example, if I am in a vehicle and I want to press the brakes then have the vehicle computer send a command to actuate the brakes, why would the LSI require the subcontractor to use its software? Some suppliers believe that such action is an attempt by the LSI to expand their piece of FCS and to increase their span of control of FCS.

    Secretary, why is it in the best interests of the Army and the taxpayer to allow the LSI to control the key software as a subcontractor? Doesn't this limit competition? And how can the LSI act with the independence to make good decisions on behalf of the Army?

    Secretary BOLTON. Yes, sir. On the midware actually for our network, basically we establish interface control documents for everybody who is coming into that. It would be like taking an operating system like the Microsoft operating system, and now I am going to come up with another piece of software that is going to play on that backbone, that operating system.
 Page 91       PREV PAGE       TOP OF DOC

    I have to go to that software, see what I need to do to interface with it, or I am going to have a problem. We the government asked this contractor to take care of the midware.

    You are the one who is responsible for integrating all of this. And if we were not in a software environment, if we were out building a house or something like that, you would be the general contractor; you would be responsible for integrating all those trades to come in and build this thing.

    We said the same thing here. I own the license to that. So I if wanted to take that later on and go compete it someplace else, I can do that. But right now, for this contractor, he is responsible for making sure everyone fits into it.

    Now I will take your comment that somehow there is something going on here I do not understand and someone is being forced to do something they ought not to be doing beyond that interface control document, and I will take that back and take a look at it, sir.

    Mr. WELDON. Thank you, Secretary. That is all I can ask you now. And I would ask you to talk to several of the subcontractors who are talking to staff.

    Secretary BOLTON. Sure, I will.

    Mr. WELDON. And just follow up what I have asked you about today. Thank you very much.
 Page 92       PREV PAGE       TOP OF DOC

    Secretary BOLTON. Yes, sir.

    Mr. WELDON. Mr. Abercrombie.

    Mr. ABERCROMBIE. Thank you, Mr. Chairman.

    Mr. Bolton, when you say you are on track, on time and on budget, the indication that I have, the information I have is in fact you have added some systems. That is what you are talking about, right?

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. That the increase——

    Secretary BOLTON. The spirals.

    Mr. ABERCROMBIE. And I presume the answer you would give when I asked the GAO before that the number seems to have gone up, is that that number is reflective of the addition of these systems.

    Secretary BOLTON. Yes, sir. That is true.

    Mr. ABERCROMBIE. I am saying systems. Let me just make sure. The information here, as printed in this Bloomberg Communications story, I think it is from the 15th, I will read it to you so that you can see whether you think it refers to what you have just mentioned.
 Page 93       PREV PAGE       TOP OF DOC

    I am taking this from the story, so it is not me. I cannot verify it.

    It is taken from the story that an e-mail had come from your, if not your office, from the Army somewhere. This is the infamous e-mails. That is why I never do them. I do not know if you do. [Laughter.]

    Secretary BOLTON. Very little.

    Mr. ABERCROMBIE. My life is now reduced to post-ems.

    The increase is due to a number of reasons. Decisions that involved five previously deferred systems,—unnamed here—two classes of unmanned drones,—unnamed—an armed robotic ground vehicle,—unspecified—and a separate vehicle recovery and maintenance vehicle.

    Secretary BOLTON. Right.

    Mr. ABERCROMBIE. Is that a fair estimate?

    Secretary BOLTON. That is fair. We took those out before we wrote the agreement.

    And you will probably recall, Mr. Abercrombie, that we were trying to fit this into 2010?
 Page 94       PREV PAGE       TOP OF DOC


    Secretary BOLTON. When I came aboard three years ago, the idea was to have everything ready to go, a unit of action operational in 2010. And so in order to do that, we had to take things out. Those technologies that were not quite ready; we could not afford it. Could we put a fighting force together for this Future Combat Systems for 2010?

    When we took a look and said let's start spiraling this technology that is ready. And well, we are going to stretch the program, the technology will be available. So the items that are listed there, I think it is fairly correct, we just added back in.

    And so adding back, which means the requirement increased. It means you are going to pay more money for that. And then you want to accelerate some technologies and run all the prototypes to run through some tests or you can give it to the current force. And then you stretch the program. All that means more money.

    Mr. ABERCROMBIE. I understand that part.

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. It also indicated in here that you are going to go—again, this is all very generalized in here. ''A series of experiments that demonstrate technologies more thoroughly, which would add three years to the development contract.''

 Page 95       PREV PAGE       TOP OF DOC
    Secretary BOLTON. Actually, there are the spirals that we talked about, trying to get the technology that is ready into the current force. And we have a brigade, a combat brigade, that is an evaluation brigade, a unit of folks who we will give this technology to and say, ''How well is it working?''

    Mr. ABERCROMBIE. I am not arguing that. But is that an accurate statement?

    Secretary BOLTON. Yes, sir. It is accurate.

    Mr. ABERCROMBIE. Okay. Now the reason I am going through that—and I will take you at your word for it.

    Secretary BOLTON. Thank you.

    Mr. ABERCROMBIE. And the explanation you gave to Chairman Weldon at the same time. Although it does concern me that when these things get added in, if you recall some of the conversation I had previously with the GAO?

    Secretary BOLTON. Yes.

    Mr. ABERCROMBIE. It does tend to put Congress in the position of being some kind of passive observer. Not that I am trying to tell you how to do your job. I am really not, nor do I think I have the everyday—that you have to check with me in the morning or with Mr. Weldon in the morning to see what you want to do.
 Page 96       PREV PAGE       TOP OF DOC

    But you can certainly understand, when it comes to budgeting, when it comes to things like supplemental budgets—and I am going to get to Marine Corps on that score in a little bit—that it puts us in the position then of constantly acting like the surprised suitor or something like that. You mean, there has been something else added to the wedding plan? How are we going to handle that? Or where the hell did that come from?

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. And it is easy enough to explain. But in terms of us engaged with you in a rational and helpful way, particularly when we have to integrate this with an entire budget for all kinds of services, this can get problematic very, very quickly.

    Secretary BOLTON. Absolutely.

    Mr. ABERCROMBIE. Particularly right now, while we are having this hearing, there is a budget fight going on, on the floor, with all kinds of rhetorical flourishes out there, about who is the biggest spender and who is undermining the security of the United States, et cetera, et cetera. All kinds of high-flowing rhetoric over there about holding costs down and rigid spending plans and all the rest of it. And we simply cannot operate this way.

    So something has to be done. You heard my question before about the idea that capital budgeting, somewhere, somewhere along the line, I would put this in. You are testing technologies in the operating budget side.

 Page 97       PREV PAGE       TOP OF DOC
    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. You are not at the acquisition stage then, right?

    Secretary BOLTON. Right.

    Mr. ABERCROMBIE. This has to be separated from the acquisition. Supposing you had succeeded with all the things you are talking about with the Future Combat Systems and you are moving toward the next stage of that into actual acquisition? Maybe even one of these interim vehicles that you very smoothly described for us. I almost went for it for a minute. [Laughter.]

    Supposing that had actually happened? Would you agree, as General Jumper did this morning, that something—see, I have tied him in now—that something has to be done to enable the services to come before us for the acquisition of capital assets that does not then require them to decide which part of the baby they are going to hack in half or in three quarters or in several quarters?

    We have to have a separation of the acquisition of capital assets from the operational budgets that, by definition, are going to do this kind of thing. Research and development increases depending on the state of progress with that research and development, just to name a specific example.

    Secretary BOLTON. Well, sir, when you made that comment at the panel earlier, I did take note of that. It is the first I have heard of it. And it sparked something that had been troubling me for a while. And perhaps the two can work together.
 Page 98       PREV PAGE       TOP OF DOC

    When I look at the process that I am involved in, I get ridiculed, beaten about the head and shoulders quite often that the acquisition process is broken. You need to do better and so forth and so on. And people have been doing that to me for about 30 years. And you all have passed laws to make sure that my workforce is educated, trained and so forth.

    And I look at that workforce. And I can write a contract in two hours, a FAR-based contract in two hours. If I can do it in two hours, then I do not think the process is broken.

    Where I think we are missing the boat——

    Mr. ABERCROMBIE. It is not the process that is broken.

    Secretary BOLTON. I look at it——

    Mr. ABERCROMBIE. It is the tool you are given.

    Secretary BOLTON. Absolutely. Absolutely, sir.

    Mr. ABERCROMBIE. You get to cash finance this.

    Secretary BOLTON. What I would recommend that we take a look at is the entire—I call it the process. It starts with the GIs saying, ''I want,'' and ends when the GI says, ''I got.''
 Page 99       PREV PAGE       TOP OF DOC

    And that means I have to do a requirement. I have to do resourcing. I have to do the acquisition, tests, fielding, sustaining. We need to look at all of that. And part of it is the resourcing.

    Are the tools that we are using adequate for what we are trying to do today?

    Mr. ABERCROMBIE. What you do now is cash finance essentially, right?

    Secretary BOLTON. Yes, sir. Yes, sir.

    Mr. ABERCROMBIE. I do not see how you can do that. That is what this supplemental budget fight is about.

    Secretary BOLTON. But you know, sir——

    Mr. ABERCROMBIE. I will have to go home now and then some idiot is going to get up and say, ''You do not support the troops.'' That is right. I wake up in the morning and I am trying to figure out how I undermine the capacity of the troops to be able to fight.

    My argument is that we are undermining the capacity to fight.

 Page 100       PREV PAGE       TOP OF DOC
    Secretary BOLTON. Right.

    Mr. ABERCROMBIE. And I will bet you anything—and this is one of the questions I want to ask the Marine Corps—are we able to refill or are we able to resupply what we need to do in Iraq and Afghanistan right now adequately? We are robbing. I know for a fact.

    We see it every year here. We are robbing the second, third and fourth quarters' operational money, maintenance money, training money and all the rest of it to finance the operations of the wars that we are fighting or the deployments we are going into. That is not right.

    We have committed a fraud on ourselves because we cash finance it. We should separate that budget from capital acquisition.

    Why the hell should a marine or soldier on the ground, having to utilize one of these vehicles if they come out, have to compete with an aircraft carrier or an F–22 to be manufactured?

    Secretary BOLTON. Well, I am all in favor of taking a look at the tools that we have today because I do not think they are adequate. If you look at just the amount of gross domestic product (GDP) that we pay the military, not just the Army, over the last 100 years, it is interesting to note that when the war is off, it drops to very low levels. If we do not have a major war going on, it is typically two to three percent.

 Page 101       PREV PAGE       TOP OF DOC
    And then we try to figure out how to maintain a world-class military with an incredibly small amount of money. And then someone somewhere else in the world decides to kick sand in our face and then we do these unusual gyrations to ourselves and to the budget process trying to get folks up to speed to go fight the war.

    We have an opportunity to try to make it better than we have done over the last 100 years. Otherwise, as surely as I sit here, there will be another big war—and I mean a big war, consuming far more than the GDP that we are doing today—and we may not be as successful.

    Mr. ABERCROMBIE. I have been indulged by the committee Members on this in terms of time, so I will come back for my other questions. But I would appreciate it if you would look at this issue and perhaps get back to me in terms of whether or not you think capital budgeting at least is something that we ought to pursue, perhaps in some demonstration way.

    Secretary BOLTON. Okay, sir, I will. Thank you.

    [The information referred to can be viewed in the hard copy.]

    Mr. WELDON. I thank the gentleman for his questions.

    And I want to turn to our colleague, Mr. Conaway. And I want to thank him for staying for so long. That is a real tribute, that you take your job on the committee and subcommittee very seriously.
 Page 102       PREV PAGE       TOP OF DOC

    A lot of other Members are not here. You could be a thousand other places, but you are here. And so I just want to tell you that that does not go unnoticed and that we appreciate your commitment.

    Mr. ABERCROMBIE. May I express my gratitude too for your patience? And I know you can appreciate and from your questions before, this is the kind of dialogue that actually gives us some enlightenment on the committee. And I appreciate your courtesy and kindness to me.

    Mr. WELDON. My pleasure.

    Mr. Conaway.

    Mr. CONAWAY. Thank you, Mr. Chairman, Mr. Abercrombie, for those kind remarks. Part of it is I just liked being referred to as the other distinguished Members from the committee, over and over again. [Laughter.]

    I thank each of you gentlemen for your service to our country. If I ask an inarticulate question or a question that is insulting, it is not because I question your commitment to the tasks.

    I understand you wake up every morning and you go to that job, trying to bring every bit of intelligence and wisdom and knowledge to the task every single day. And I recognize that. And that is a given. So if I ask something that offends you, please excuse me for that.
 Page 103       PREV PAGE       TOP OF DOC

    Two questions: one that I asked the GAO guy. And maybe, Mr. Secretary, you are the referee.

    There is a limited amount of money. And we have FCS. We have modularity. We have the ongoing fight. We have rebuilding the equipment that we are using up, the inventory that we are using up too fast, the processes that you use and how that works within the system, because you have to have one, I suspect.

    And the other thing was the question I asked about the choke points on FCS. And the GAO fellow mentioned JTRS.

    Secretary BOLTON. JTRS.

    Mr. CONAWAY. And so I was trying to figure out what that was. And looking on page 19 of their program, found that it is the Joint Tactical Radio System and that the WIN-T, the Warfighter Information Network-Technology are central pillars of the network. And then there is the sense that they are separate programs from FCS and their costs are not included in that.

    You mentioned your earned value management system. Is there a parallel evaluation system of both of those?

    Secretary BOLTON. Yes, sir. And they are also Army programs, so they fall in my portfolio. And all of us take a look at that program. But they are in development, so they have earned value management systems attached to them.
 Page 104       PREV PAGE       TOP OF DOC

    The JTRS or the Joint Tactical Radio System, is extremely challenged to put software—to give you an idea of what we are trying to do, when you go to a normal radio, whether it is in your car or at home, you have an AM and an FM band on that. We now use software sometimes to control that so you do not have the—in the old days, we had a little rotating condenser in there, all mechanical. Now we can do that with software.

    We want to do that with wave forms so that I can take one radio and use it to do multiple types of broadcasts, using these wave forms. Tough to do, very tough to do, to try to put all those wave forms on one little processing chip without it getting too hot and messing and interfering with all the other signals.

    When I say ''too hot,'' I can cool that off, except now the box gets too big. That is okay for ground vehicles, but I want to put the same one in an aircraft and they are a little concerned about weight. So there is a challenge technically.

    There is a challenge also from requirements growth of what this thing was supposed to be several years ago when it started and what it is today. It has just mushroomed. It is everybody's nirvana.

    And finally, myself and colleagues in the other services said, ''Enough is enough. Let's just go back to what we wanted in the first place, baseline this thing and get on with it.''

    And so we are in the process of baselining the JTRS through an early operational assessment—I call it prototyping—this spring. And that will be it. But then that baseline will go to the joint or the FCS so that they can use it.
 Page 105       PREV PAGE       TOP OF DOC

    WIN-T is on a much better track and seems to be going along fairly well. Now those programs are in the Army.

    I also rely upon systems outside the Army for this Future Combat Systems, as we do today with our forces over in the AOR. They rely upon satellites; they rely upon Joint Stars (JSTARS), Airborne Warning and Control System (AWACS), to get situational awareness. Those all have to be in place. And there are new systems coming along that I have no control over because they are in other services.

    Now here the OSD, the Office of the Secretary of Defense, my colleagues there are trying to figure out how to prioritize those systems, put the right monies in places so that they are available when I come along. This is a terribly complex endeavor.

    And as we have gone through the FCS, we have knocked down more and more barriers, realizing—to get back to Mr. Abercrombie's comments earlier—the tools we are using were great in the Cold War. They were great maybe ten years ago. But they are not the tools we can use today and get into the future.

    And so whether you are talking about requirements, resourcing, the acquisition, basic acquisition, those all need to be changed. But that is where we are on the JTRS and the WIN-T, which are part of the things I am responsible for, outside the Future Combat Systems, but I monitor their progress the same way.

    And oh by the way, if the JTRS did not come along—and there are five different variants of JTRS right now and I am just talking about the cluster one that the Army is responsible for—then we have to look at ''in lieu ofs.'' What other radio are you going to use?
 Page 106       PREV PAGE       TOP OF DOC

    Actually, you are going to have to use more than one because JTRS is supposed to take the place of radios. And that would be problematic. So it is incumbent upon me to push the JTRS and the WIN-T as hard as I possibly can. And I hope that answers the question, sir.

    Mr. CONAWAY. Okay, that is fine.

    The overall process you use to control all those moving parts, you have one group within your command, I guess, that is sold out on FCS. You have another group that is totally responsible for modularity. How do you reconcile all those competing interests from a process standpoint?

    Secretary BOLTON. Let me just say, the systems, programs, the acquisition of those, that is my responsibility. Modularity is not. I am not the go-to person for that.

    That is actually being done by others because it goes across more than the materiel, the acquisition of things. It goes across how we organize those formations, how we equip them, which is my responsibility, how we train them, how we prepare them and then sustain them once they get into operation.

    So I will defer to the G8 and the G3 on that one.

    General MELCHER. Sir, I would just say that General Lovelace and I, on a weekly basis, get together to talk about the status of both modular force programs and, probably on about the same basis, FCS and issues related to FCS. And the Army has a campaign plan where the leadership of the Army is directly engaged, also on a weekly basis, to take a look at various issues leading up to how are we equipping and producing these modular formations near term?
 Page 107       PREV PAGE       TOP OF DOC

    And then ultimately, how does that relate to the spiraling of capabilities that we hope to do in multiple iterations between now and the time the first FCS, fully FCS-equipped unit of action or brigade combat team comes to the fore. So we address these kinds of issues routinely.

    From a resourcing standpoint, you asked about the costs and how do they all come together. One of the things that Mr. Francis said from GAO is about $48 billion for modularity in this program, 2005 all the way up through 2011, and about $30 billion or so for Future Combat Systems RDT&E.

    The actual figure is $48 billion for modularity and about $25 billion that the Army has in its program through 2011 for FCS. And I am fairly comfortable that those figures do represent the costs that are needed in order to equip and to do the military construction for these formations.

    I mean, we have looked at them fairly carefully now. And I think that I am very comfortable that $48 billion is the right figure.

    That does not include the cost of people, however. And as you know, sir, that is a separate issue. The Army has grown here temporarily under Presidential emergency authorities and is headed up to a level of about 512,000 for the active, which is 30,000 above what is our normal legislated previously level.

    And that whole issue of how we pay for that in the out years is one that we must continue to work with the Department. For the near term, it is a supplementally funded growth because it is related to the needs of building these formations, which are quite honestly, as soon as they are built, headed off to war.
 Page 108       PREV PAGE       TOP OF DOC

    Mr. CONAWAY. Thank you, Mr. Chairman. I appreciate your indulgence.

    Mr. WELDON. I appreciate the gentleman's questions. And I appreciate his staying with us. And I would call the gentleman a role model for Members of this committee. And you can quote me back in the district. We are very pleased to have you on the committee.

    I would ask staff to check with Mr. Abercrombie, wherever he is. He said he had another question. I do not want to adjourn the hearing without him having that question.

    But while we are waiting, the problem that we have is not that we do not believe anyone. It is not that we do not understand the projects. And I do not mean this in a derogatory sense, but in three or four years, you will each be off doing something else or whatever. We will still be here.

    I have been here 19 years. And I do not know how long I will be here, but the budget shortfall that we have, we just do not know where that money is going to come from. And that is our problem, that we just cannot decide for the next three years what we are going to do.

    And I know the Program Objective Memorandums (POMs) are designed to look at that. But the fact is, we get left with the result of planning that maybe in the end does not deal with those out years, that we have to face when the out years arrive.

 Page 109       PREV PAGE       TOP OF DOC
    I remember back in the 1990's when we said we were not spending enough on defense. And for six years straight, we increased funding over the chief's request and the secretary's request by $43 billion over six years.

    And we did that because, you know, we knew that the numbers were not going to jive down the road. And I remember asking Secretary Perry when he came in after he had become a private citizen.

    I said, Secretary, you know, I have the highest respect for you, but you publicly ridiculed us for putting more money that the warfighters did not need. Where would we be if we had listened to you?''

    And his comment was, ''You would be a lot worse off today if you had not taken the steps that you took.'' And to some extent, that is the way I feel. I mean, we keep wanting to give the services what they need, but we also know that the dollar amounts in the out years are woefully unrealistic.

    And we are going to have to one day deal with that problem, as we are dealing today with a train wreck that we said would occur six years ago. And in fact, last year, when the services came in, the Army was shortchanged in our mind by $6 billion of unfunded priorities.

    And we on this committee took the lead and said, ''Wait a minute,'' to Secretary Wolfowitz, ''you cannot do this. The Army cannot go through this next year with $6 billion of unfunded priorities.''
 Page 110       PREV PAGE       TOP OF DOC

    So that is when we started the effort to come up with a supplemental, which at that time the Pentagon leadership and the White House did not want to hear about. But thank goodness we did that. That was the first part of the eventual $25 billion supplemental that came about.

    And so the frustration we have is not with the work that you are all doing. But some of us—maybe not all of us—will be here ten years from now. And those people that will be here, whether it is Neil or myself or my good friend who just joined us from Texas, we have to deal with that.

    And so we just cannot look at what we are going to do for the next couple of years and say, ''Oh, we are not going to worry about that until two years from now.'' And that is the frustration we have.

    We know where we are going to be ten years from now because we knew we were going to be here six years ago. And we said to the services, ''You cannot have three tactical fighter programs.''

    ''You cannot have Joint Strike Fighter, the F–18 and the F–22 with the dollar projections that you are putting forth and still fund V–22 and still increase missile defense to almost $10 billion a year and take care of FCS and also deal with the quality of life issues for the troops. You cannot get to there from here.''

    Well, we are there. And now we are left with impossible decisions. And so you sense the frustration we have. And it is because of the situation that we are put in, which is an impossible one.
 Page 111       PREV PAGE       TOP OF DOC

    And it is going to require se accordingly.Congress to take some actions budget wise that we do not want to have to take, which are going to affect the programs. And one of those programs that might be adversely affected is FCS.

    And that is why we are asking critical questions, because as we develop the markup for this bill over the next several months, we have to balance all those equations together. And that gets at the heart of what Neil has been saying.

    So now with that, I will turn to Neil for any final questions he has.

    Mr. ABERCROMBIE. Yes, thank you.

    Mr. Secretary, following up on that, and I want to say that I can assure you that this is a bipartisan, nonpartisan operation. Mr. Weldon does not operate this subcommittee on that basis.

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. For which we are all grateful because everybody is going to be the beneficiary. Taking into account then everything that you said—and your presentation was excellent. No wasted words.

    And I understand the process that you have brought to bear and the philosophy that you have brought to bear with respect to this contract. I am not sure I still entirely agree, if only because of the many caveats you had to put in, in order to—you know, the safeguards. I should not say caveats, the safeguards that you said you put in.
 Page 112       PREV PAGE       TOP OF DOC

    But that said, going back to what the GAO did, the GAO said that there are approximately 50 critical technologies. You said you have added some technologies here to be tested. That is fine.

    There are some 50 critical technologies needed for the Future Combat Systems. Their belief is that approximately only one of the 50 technologies is at what was called the technology readiness level, the TRL level. Now maybe there is more, I do not know, but in any way, a small number.

    Maybe that is also on track. I do not know. Maybe that is also on time. Maybe the other technologies are somewhere down the line.

    At a readiness level appropriated for the system design and development level, which is the next thing—I am learning all these things—that phase. That is a nine-year process. This is the third year. So that is all well and good.

    My problem here is that I am concerned that we will run into what Chairman Weldon said, that all of a sudden, there will be an exponential rise in the costs of making those other 49 or 39 or whatever the number is of those technologies, reach that readiness level and get it to that system design level and, in fact, beyond that during these nine years.

    Can you state, I am not going to say with certainty, but can you state with any confidence that, given the recitation of the history of these other systems and some of these systems that we are dealing with right now, that somehow you are going to escape that? What gives you that kind of confidence?
 Page 113       PREV PAGE       TOP OF DOC

    Secretary BOLTON. What gives me the confidence? First of all, we only selected about 31 technologies.

    Mr. ABERCROMBIE. Okay.

    Secretary BOLTON. So I would have to talk to the GAO to figure out how they got the extras. We do have TRL levels, technology readiness levels. And we evaluated each one of those and picked those that we thought were either at the level, like a six—and there are nine levels to it—six or close to that.

    And some were low. Some were like fours. But we thought, ''No, we have the wherewithal to make that happen. And if it does not happen in that area, we have another technology that we will put in or we will eliminate it.''

    That is one. So I do have confidence there. The other really boils down to some discipline. And the discipline is can you get to the point where you finally decide that it is time to quit?

    I mentioned that I use the earned value management system. And I use that on all the programs. And I use it because it is the first indicator, the trend of that over time, that will tell me how well the program is doing. If I just look it day in and day out or month in and month out, if it is green, fine, but if it starts a trend one way or the other, it is hard to look at that.

 Page 114       PREV PAGE       TOP OF DOC
    I use that on a very short, one-page, three-column termination template. And it is the first thing I look at. And then I look closer.

    And basically, you have about three quarters to turn things around, so three quarters of a year.

    Mr. ABERCROMBIE. Okay, fine. Do you know whether or not that system was employed with regard to evaluating, the ongoing evaluation of the Comanche?

    Secretary BOLTON. With Comanche, I used that template. But Comanche, when I terminated Comanche, was a green program. We terminated Comanche not because of how the program was being run, but because Comanche no longer met our requirement.

    Mr. ABERCROMBIE. Is that because of how long it took?

    Secretary BOLTON. Well, no, sir.

    Mr. ABERCROMBIE. I mean, Mr. Weldon said he has been here 19 years; I am here 15. I went through all of this back from when I was a rookie on this committee. Going down, I watched it.

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. I went to all the things again. I am not a pilot. I am not an aeronautical engineer. I mean, I am not a fool.
 Page 115       PREV PAGE       TOP OF DOC

    Secretary BOLTON. Yes, sir. No, sir.

    Mr. ABERCROMBIE. And I understood what they were doing with the Comanche and all the rest of it. So right up until the time all of a sudden they said, ''Never mind,'' it was everything was on track, on time and on budget.

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. Well, not quite on budget, but there was explanations for it.

    Secretary BOLTON. The first week I was in this position, back in 2002, I reviewed the Comanche program management with the contractor. And that week, we restructured that program. Had we not done that, it would not have been a green program a year or so later.

    When I said discipline, it really gets back to the point that you just made. You go on for years and years and years. The question is, somewhere in there, someone should have said, ''That is it. We are out of here.''

    Mr. ABERCROMBIE. You do not think you have reached any of that with the Future Combat Systems?

    Secretary BOLTON. Not from the program management standpoint of it, nor from a requirements standpoint. You will need a light, survivable, lethal force in the future.
 Page 116       PREV PAGE       TOP OF DOC

    Mr. ABERCROMBIE. Okay, I will tell you what.

    Secretary BOLTON. Yes, sir.

    Mr. ABERCROMBIE. You made a good impression today. And I do not mean that in a superficial sense. I am going to think about what you have said.

    Secretary BOLTON. Okay.

    Mr. ABERCROMBIE. I will think hard on it.

    Secretary BOLTON. Okay, sir. I appreciate that.

    Mr. ABERCROMBIE. And I will back off on these OTA questions further on this for the moment.

    Secretary BOLTON. Any time you need answers to that, I am available.

    Mr. ABERCROMBIE. And I want to move to the Marines. Maybe going from the theoretical and so on, although there is nothing much theoretical about a budget decision. But you gave an excellent summary, General.

    But in your testimony, there is some excellent detail. Whoever put this together for you did a good job.
 Page 117       PREV PAGE       TOP OF DOC

    If you go to page two of your testimony, and I am going to refer to several things here. Your force protection program, your rapid equipping initiatives are very well stated.

    You read this testimony, I presume, are familiar with this testimony. Your rapid equipping initiatives, then your force protection paragraph—or I should not say paragraph, but your force protection section, right down up to and including the aviation survivability equipment, hardening and the counter IED initiatives.

    And you go over to page six, with your counter IED summary there. Very good summary. The initial threat from the remote control initiated IEDs came from low-frequency, low-power devices, such as cheaply made, mass produced garage door openers, key fobs, doorbells, donkeys with mortars, right? Could that be added in there?

    It is that kind of thing, right? That is what we are dealing with.

    And page eight—it is really well written, this testimony—your current ground sustainment programs. Again, very, very clearly stated as to what is involved. It is precisely the kind of thing that I was referring to in the more general level of questions I was asking.

    What I wanted to know on that, with all of the equipment that goes right to your marine fighter, your marine on the ground, having to deal with all the things in those areas that I just mentioned, I assume there has to be an attrition rate for that equipment that must be pretty heavy duty, particularly in Iraq. We do not hear as much about Afghanistan, but I have to imagine that in Afghanistan, that there is a considerable stress from the environmental conditions, you know, the geography, the actual context of the fighting that is taking place there, way above peacetime for sure.
 Page 118       PREV PAGE       TOP OF DOC

    Now does this budget, let alone this supplemental request that we have just had; that is to say this fiscal year 2006 budget and the supplemental request—and I want you to consider your answer now, please—does the Marine Corps ground equipment in those areas, the equipment on the ground, that is what I am referring to here, in these various areas I just mentioned, does it adequately replace those losses or not?

    And the reason I am asking the question is not so much to put you on the spot, to get you crossways with anybody, but to mention the supplemental I did vote for, which was what Chairman Weldon helped put together here and Chairman Hunter and Mr. Skelton, last year when we saw that there were things that were not going to be handled in the budget and should have been in the budget. The supplemental was not because it was something that occurred that we could not see happening.

    This was not a tsunami of equipment loss that had to be replaced. This was something that we knew damn well was going to have to be replaced. And that was the motivation for what the Chairman did and Members agreed.

    So that is my question. As we go into the budget for 2006, I do not want to be dealing with this crap on the floor where we pretend that we suddenly found something that nobody knew was there.

    I want to know, are you satisfied that you have the equipment replacement that you need in the context of the very excellent testimony that was given in those areas I mentioned?
 Page 119       PREV PAGE       TOP OF DOC

    General MATTIS. No, sir. We are not satisfied.

    Mr. ABERCROMBIE. Okay, I appreciate your candor.

    General MATTIS. I can go into more detail.

    Mr. ABERCROMBIE. You do not have to go into more detail right now.

    General MATTIS. Yes, sir. I understand.

    Mr. ABERCROMBIE. What I would appreciate, Mr. Chairman, is if perhaps staff and we could get together. And it is not because you are trying to run around anybody, you know, after all. If somebody comes and yells at you, you can say, ''Look, a Member of Congress asked.''

    And this is a democracy. And your job is to give us the best advice and the straightest answer you can. You do not make policy, thank God, right? You are in the Marine Corps.

    There are no politics in the Marine Corps. I notice you just nodded. You did not say, ''Yes, sir.'' [Laughter.]

    General MATTIS. Mr. Abercrombie, we will answer your questions. I give you my word.
 Page 120       PREV PAGE       TOP OF DOC

    [The information referred to can be viewed in the hard copy.]

    Mr. ABERCROMBIE. Okay. And Secretary Bolton, I have the same question for the Army. Because you folks are the ones that are really out there, in the sense of attrition of equipment and the areas that I mentioned, the four areas where the IEDs are concerned and all the rest of it.

    I ask you the same question. Do you think that this budget adequately—even with that supplemental that is over there, that passed—or do we need to consider in this budget recommendation something in that area?

    Secretary BOLTON. Referring to testimony——

    Mr. ABERCROMBIE. Should I go back over what I mentioned?

    Secretary BOLTON. No, sir. No, sir.

    We are looking at attritions. We believe that what we asked for was going to cover that.

    Mr. ABERCROMBIE. Would you take another look?

    Secretary BOLTON. Let me defer to the G8 because they are the ones who actually look at it.
 Page 121       PREV PAGE       TOP OF DOC

    Mr. ABERCROMBIE. Okay.

    Secretary BOLTON. I am the guy who buys it.

    Mr. ABERCROMBIE. I will ask you the same question. You are familiar with the areas that I mentioned.

    General MELCHER. Yes, sir. I am. And some of those areas, quite honestly, were funded out of Iraqi Freedom funds, for example.

    Mr. ABERCROMBIE. I understand.

    General MELCHER. Jammers and many of the things.

    Mr. ABERCROMBIE. I understand, yes, that is why I am asking.

    General MELCHER. But as you noted, that gives you really a one-time issue of that equipment. And some of it is going to get consumed or destroyed. And so there is always going to be a need to replace some of the equipment that is in theater and then to sustain it in the long haul; in other words, you know, once it is part of the inventory, you want to keep it functional and operable.

    Mr. ABERCROMBIE. My request is this, General: take a look.

 Page 122       PREV PAGE       TOP OF DOC
    General MELCHER. Yes, sir.

    Mr. ABERCROMBIE. And if it turns out, even with this supplemental budget over here, that your realistic assessment of what is needed, particularly in Afghanistan and Iraq, could use some readjustment, that you bring it to the Chairman's attention.

    General MELCHER. Okay, sir.

    Mr. ABERCROMBIE. That is not a criticism of the DOD. You understand, I am totally disinterested in getting in any kind of catfight over who found out what or anything like that. That is not our job. And that is not why I am asking you.

    General MELCHER. Sir, we are not shy about articulating what is needed.

    And I would just say, no matter what we submitted as of X date, you know that every day since then, there have been battle losses that have continued to occur.


    General MELCHER. We have continued to consume——

    Mr. ABERCROMBIE. And I will conclude with this. And the reason I am asking the question, as the Chairman well knows, is that we have had some testimony on a political level, at the Administration level, with some scenarios of optimism, let me put it that way, that I do not think adequately takes into account what the soldier or marine may literally have to deal with as a result of those policies.
 Page 123       PREV PAGE       TOP OF DOC

    Would that it all worked out and that the Iraqi army and the police force and all the rest of these numbers that come up on the board here every day were all up to the task assigned to them in a counterinsurgency. But I have an idea that the marines and the army are going to be called on for a hell of a lot more than what some of the more optimistic political forces in the country would like to see happen.

    It is not that we would not like to see it happen, but if it does not happen, I do not want the soldier on the ground or the marine in a combat situation have to make up for the inadequacies of the political preparation. So from a practical equipment point of view, if you will let us know what you think is the likely situation over this next budget year.

    I cannot speak for Chairman Weldon, but I know him well enough to know that that is the kind of information he would like to have. And he will act on it without fear or favor.

    General MATTIS. Mr. Abercrombie, if I could just make one note there?

    Mr. ABERCROMBIE. Certainly.

    General MATTIS. I assure you that no one in theater will go short. We will eat our seed corn. We will not modernize. We will do whatever we have to. And the Army I know is doing the same thing right now, whatever it takes.

 Page 124       PREV PAGE       TOP OF DOC
    The problem we face is we are not able to maintain our modernization or our refurbishment of the gear. Beyond there, we have troops at home who lack sufficient equipment to train with, for example.

    Mr. ABERCROMBIE. Right.

    General MATTIS. So we will answer the question in full.

    Mr. ABERCROMBIE. Do not forget, I come from a state that, per capita, has the most guard and reserve called up right now of anybody.

    General MATTIS. Yes, sir.

    Mr. ABERCROMBIE. And I understand completely what you are saying here.

    General MATTIS. Yes, sir.

    Mr. ABERCROMBIE. I am sure you are going to supply as needed. But I would much prefer to have somebody say, ''Yes, there is the warehouse over there immediately available to us with all the extras so we do not have to scramble. We know damn well that we have a reserve capacity, not only in terms of personnel, but a reserve capacity in terms of equipment, ammunition, operational ability and so on, that we do not have to look over our shoulder to see if it is there.''

 Page 125       PREV PAGE       TOP OF DOC
    General MATTIS. Thank you.

    Mr. ABERCROMBIE. Thank you.

    Thank you, Mr. Chairman. You are a good man, despite what anybody says.

    Mr. WELDON. Thank you, my good friend.

    I understand that they are about ready to activate Neil Abercrombie from Hawaii. [Laughter.]

    Just in closing, let me share with you my personal concerns here. This is my 19th year in Congress and 19th year on this committee.

    I remember back to my first term, then ranking Republican when the Democrats the House and this committee, invited me in—Bill Dickinson—for a meeting with the Army about a helicopter program called the Comanche. And I went in and met with him.

    And we sat down for two hours. And he talked to me about how important it was. And the Army came in and made the case.

    And for 16, 17 years, I was an aggressive supporter of the Comanche because of what the Army told me the need was. In fact, at that time, part of the plant that built half of the program was in my district in Pennsylvania. The other half was up in Connecticut.

 Page 126       PREV PAGE       TOP OF DOC
    And then 17 years later, I realized as I looked at the program, after we had spent billions of dollars, that I had to support the Pentagon's request to cancel the program. As tough as it was for me, because it meant jobs in my district and it meant a loss of a lot of face in my home county, I had to take that decision because, in the end, we could not afford the Comanche.

    The Army had decided to move on. Well, I do not want to have the same thing happen with FCS.

    I support the transformation. I supported when Shinseki was in. I support it today.

    Now Boeing very cleverly moved the top corporate executive into my district. Now there are not many jobs there; the bulk of the jobs are around the country.

    But they put the top guy in my district for obvious reasons. But I am going to keep asking the tough questions because I do not want to go through this again.

    If I am here six years from now, I do not want to have to go through and explain why I supported billions and billions of dollars for transformation for technology that perhaps was not ready, that we put money into, that ten years or six years from now is still not ready. And so I can tell you, with no prejudice toward anyone, the Army nor Boeing nor any other contractor, I am going to ask the tough questions.

    I do not want to be in that same position I was in with the Army on the Comanche, which was an embarrassment to the Army and an embarrassment to me. And unfortunately, I will not say wasted a lot of money, but $6 billion went into that program before the Army ultimately came to the conclusion on its own that it was time to move away, even though we could still continue to use some of those technologies from Comanche, which we are using today in our rotorcraft.
 Page 127       PREV PAGE       TOP OF DOC

    So with those thoughts in mind, I thank you for coming in. And thank you for your dedication to the men and women who serve our country and for your own commitment personally. We thank you.

    And this hearing now stands adjourned.

    [Whereupon, at 6 p.m., the subcommittee was adjourned.]