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105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-132
_______________________________________________________________________


 
        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998


                               ----------                              

                              R E P O R T

                                 OF THE

                     COMMITTEE ON NATIONAL SECURITY
                        HOUSE OF REPRESENTATIVES

                                   ON

                               H.R. 1119

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

      [Including cost estimate of the Congressional Budget Office]

                                     
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

                                     

 June 16, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed



         NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-132
_______________________________________________________________________


        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998

                               __________

                              R E P O R T

                                 OF THE

                     COMMITTEE ON NATIONAL SECURITY

                        HOUSE OF REPRESENTATIVES

                                   ON

                               H.R. 1119

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

      [Including cost estimate of the Congressional Budget Office]


<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


 June 16, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed



                  HOUSE COMMITTEE ON NATIONAL SECURITY
                       One Hundred Fifth Congress

               FLOYD D. SPENCE, South Carolina, Chairman
BOB STUMP, Arizona                   RONALD V. DELLUMS, California
DUNCAN HUNTER, California            IKE SKELTON, Missouri
JOHN R. KASICH, Ohio                 NORMAN SISISKY, Virginia
HERBERT H. BATEMAN, Virginia         JOHN M. SPRATT, Jr., South 
JAMES V. HANSEN, Utah                    Carolina
CURT WELDON, Pennsylvania            SOLOMON P. ORTIZ, Texas
JOEL HEFLEY, Colorado                OWEN PICKETT, Virginia
JIM SAXTON, New Jersey               LANE EVANS, Illinois
STEVE BUYER, Indiana                 GENE TAYLOR, Mississippi
TILLIE K. FOWLER, Florida            NEIL ABERCROMBIE, Hawaii
JOHN M. McHUGH, New York             MARTIN T. MEEHAN, Massachusetts
JAMES TALENT, Missouri               ROBERT A. UNDERWOOD, Guam
TERRY EVERETT, Alabama               JANE HARMAN, California
ROSCOE G. BARTLETT, Maryland         PAUL McHALE, Pennsylvania
HOWARD ``BUCK'' McKEON, California   PATRICK J. KENNEDY, Rhode Island
RON LEWIS, Kentucky                  ROD R. BLAGOJEVICH, Illinois
J.C. WATTS, Jr., Oklahoma            SILVESTRE REYES, Texas
MAC THORNBERRY, Texas                TOM ALLEN, Maine
JOHN N. HOSTETTLER, Indiana          VIC SNYDER, Arkansas
SAXBY CHAMBLISS, Georgia             JIM TURNER, Texas
VAN HILLEARY, Tennessee              F. ALLEN BOYD, Jr., Florida
JOE SCARBOROUGH, Florida             ADAM SMITH, Washington
WALTER B. JONES, Jr., North          LORETTA SANCHEZ, California
    Carolina                         JAMES H. MALONEY, Connecticut
LINDSEY GRAHAM, South Carolina       MIKE McINTYRE, North Carolina
SONNY BONO, California               CIRO D. RODRIGUEZ, Texas
JIM RYUN, Kansas
MICHAEL PAPPAS, New Jersey
BOB RILEY, Alabama
JIM GIBBONS, Nevada
                    Andrew K. Ellis, Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page

Explanation of the Committee Amendment...........................     1
Purpose..........................................................     1
Relationship of Authorization to Appropriations..................     2
Summary of Authorization in the Bill.............................     2
  Summary Table of Authorizations................................     2
Rationale for the Committee Bill.................................    10
  Readiness......................................................    13
  Quality of Life................................................    14
  Modernization and Innovation...................................    15
  Defense Reform.................................................    16
  Conclusion.....................................................    17
Hearings.........................................................    18

DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION..................    19
TITLE I--PROCUREMENT.............................................    19

  OVERVIEW.......................................................    19
    Aircraft Procurement, Army...................................    22
      Overview...................................................    22
      Items of Special Interest..................................    25
    Missile Procurement, Army....................................    27
      Overview...................................................    27
      Items of Special Interest..................................    30
    Weapons and Tracked Combat Vehicles, Army....................    31
      Overview...................................................    31
      Items of Special Interest..................................    34
    Ammunition Procurement, Army.................................    36
      Overview...................................................    36
      Items of Special Interest..................................    40
    Other Procurement, Army......................................    41
      Overview...................................................    41
      Items of Special Interest..................................    50
    Aircraft Procurement, Navy...................................    57
      Overview...................................................    57
      Items of Special Interest..................................    61
    Weapons Procurement, Navy....................................    66
      Overview...................................................    66
      Items of Special Interest..................................    70
    Ammunition Procurement, Navy/Marine Corps....................    71
      Overview...................................................    71
      Items of Special Interest..................................    74
    Shipbuilding and Conversion, Navy............................    74
      Overview...................................................    74
      Items of Special Interest..................................    77
    Other Procurement, Navy......................................    81
      Overview...................................................    81
      Items of Special Interest..................................    91
    Procurement, Marine Corps....................................    95
      Overview...................................................    95
      Items of Special Interest..................................   100
    Aircraft Procurement, Air Force..............................   101
      Overview...................................................   101
      Items of Special Interest..................................   106
    Ammunition Procurement, Air Force............................   110
      Overview...................................................   110
    Missile Procurement, Air Force...............................   113
      Overview...................................................   113
      Items of Special Interest..................................   116
    Other Procurement, Air Force.................................   117
      Overview...................................................   117
      Items of Special Interest..................................   123
    Procurement, Defense-Wide....................................   124
      Overview...................................................   124
      Items of Special Interest..................................   129
    National Guard and Reserve Equipment.........................   130
      Overview...................................................   130
      Items of Special Interest..................................   134
    Chemical Agents and Munitions Destruction, Defense...........   134
      Overview...................................................   134
      Items of Special Interest..................................   136
    Defense Export Loan Guarantees...............................   137
      Overview...................................................   137
  LEGISLATIVE PROVISIONS.........................................   139
    Subtitle A--Authorization of Appropriations..................   139
      Sections 101-108--Authorization of Appropriations..........   139
      Section 121--Limitation on Obligation of Funds for the 
        Seawolf Submarine Program................................   139
      Section 122--Report on Annual Budget Submission Regarding 
        the Reserve Components...................................   139

TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION............   140

  OVERVIEW.......................................................   140
    Army RDT&E-..................................................   142
      Overview...................................................   142
      Items Of Special Interest..................................   151
    Navy RDT&E...................................................   164
      Overview...................................................   164
      Items Of Special Interest..................................   174
    Air Force RDT&E..............................................   202
      Overview...................................................   202
      Items Of Special Interest..................................   211
    Defense Agencies RDT&E.......................................   216
      Overview...................................................   216
      Items Of Special Interest..................................   225
  LEGISLATIVE PROVISIONS.........................................   255
    Subtitle A--Authorization of Appropriations..................   255
      Section 201--Authorization Of Appropriations...............   255
      Section 202--Amount For Basic And Applied Research.........   255
      Section 203--Dual Use Technology Programs..................   255
    Subtitle B--Program Requirements, Restrictions, and 
      Limitations................................................   255
      Section 211--Manufacturing Technology Program..............   255
      Section 212--Strategic Environmental Research and 
        Development Program......................................   256
      Section 213--Tactical Unmanned Aerial Vehicles.............   256
      Section 214--Revisions to Membership of and Appointment 
        Authority for National Ocean Research Leadership Council.   257
      Section 215--Maintenance and Repair of Real Property at Air 
        Force Installations......................................   257
      Section 216--Expansion of Eligibility for the Defense 
        Experimental Program to Stimulate Competitive Research...   257
      Section 217--Limitation on the Use of Funds for Adaptation 
        of Integrated Defensive Electronic Countermeasures 
        (IDECM) Program to F/A-18E/F Aircraft and AV-8B Aircraft.   257
      Section 218--Bioassay Testing of Veterans..................   257
    Subtitle C--Ballistic Missile Defense Programs...............   258
      Section 231--Budgetary Treatment of Amount Requested for 
        Procurement for Ballistic Missile Defense Programs.......   258
      Section 232--Cooperative Ballistic Missile Defense Programs   258
      Section 233--Deployment Dates for Core Theater Missile 
        Defense Programs.........................................   258
      Section 234--Annual Report on Threat Posed to the United 
        States by Weapons of Mass Destruction, Ballistic 
        Missiles, and Cruise Missiles............................   260
      Section 235--Director of Ballistic Missile Defense 
        Organization (BMDO)......................................   260
      Section 236--Tactical High Energy Laser Program (THEL).....   261

TITLE III--OPERATION AND MAINTENANCE.............................   262

  OVERVIEW.......................................................   262
    Funding Priorities...........................................   262
    Readiness....................................................   263
    Reform.......................................................   264
    Funding Overview.............................................   264
  ITEMS OF SPECIAL INTEREST......................................   292
    Budget Request Reductions....................................   292
      Administration and Support Accounts........................   292
      Bulk Fuel..................................................   292
      Advisory and Assistance Services...........................   293
    Defense Support Services Reform..............................   293
      Overview...................................................   293
      Contracting Out Firefighter and Security Activities at 
        Military Installations...................................   294
      Criminal Investigations and Board on Audits................   294
      Defense Reutilization and Marketing Service Improvements...   295
      Defense Supply and Logistics Management....................   295
      Definition of Mission Essential Support Services...........   296
      Extensively Studied Functions..............................   297
      Multi-Service Contracting of Base Operations Functions.....   297
      Oversight of Outsourced Functions..........................   298
      Procurement and Electronic Commerce Technical Assistance 
        Program..................................................   298
      United States Transportation Command.......................   299
    Environmental Issues.........................................   300
      Air Force Plant #3, Tulsa, Oklahoma........................   300
      Compliance Funding.........................................   300
      Environmental Cleanup at the Washington Navy Yard..........   301
      Exploring Options to Reduce Environmental Cleanup Costs....   302
      Performance Based Contracting..............................   302
    Intelligence Matters.........................................   303
      Budget Justification Materials.............................   303
      Command and Control, Communications, Computers and 
        Intelligence Integrated Architecture Plan................   304
      Defense Space Reconnaissance Program (DSRP)................   304
      Foreign Instrumentation Intelligence.......................   305
      Imagery and Geospatial System Production...................   305
      Intelligence System Interoperability.......................   306
      Interferometric Synthetic Aperture Radar...................   307
      Joint Planning and Program Review..........................   307
      National Imagery and Mapping Agency Civilian Personnel.....   307
      National Imagery and Mapping Agency Mission Support........   308
      Tactical Unmanned Aerial Vehicle (UAV).....................   309
      Tactical Information Program...............................   309
      Tactical Support...........................................   309
    Morale, Welfare, and Recreation Issues.......................   310
      Deferred Payment Programs of Military Exchanges............   310
      MWR Reimbursement from Closure of Foreign Military 
        Installations............................................   310
      Pentagon Concessions Committee Activities..................   311
      Report on Black Marketing of Beer in Korea.................   312
      Report on Tobacco Sales at Commissaries....................   312
      Uniform Health Benefit Program for Nonappropriated Fund 
        Employees................................................   313
      Defense Commissary Agency Produce Purchasing...............   313
    Other Issues.................................................   314
      Army After Next............................................   314
      Army Aviation Training.....................................   315
      Army Civilian Personnel Management.........................   315
      Army Depot Maintenance Funding.............................   316
      Automatic Document Conversion Technology...................   316
      Budget Justification Materials.............................   316
      Computer Crimes and Information Technology Security........   317
      Contractor Operated Civil Engineering Supply Stores........   317
      Department of Defense Next Generation Weather Radar-Doppler   318
      Emergency Communications Services for Members of the Armed 
        Forces and Their Families................................   318
      Flying Hour Shortfalls.....................................   319
      Impending Change in Air Force Supply Management Activity 
        Group....................................................   320
      Logistics Augmentation Programs............................   320
      Military Affiliate Radio System............................   321
      Mobility Infrastructure Enhancement........................   322
      Non-BRAC Caretaker Costs...................................   322
      Repair and Maintenance Projects............................   322
      Renovation of Building for Defense Accounting Service 
        Center...................................................   323
      Shatter Resistant Window Film..............................   323
      Travel Reengineering.......................................   323
  LEGISLATIVE PROVISIONS.........................................   324
    Subtitle A--Authorization Of Appropriations..................   324
      Section 301--Operation and Maintenance Funding.............   324
      Section 302--Working Capital Funds.........................   324
      Section 303--Armed Forces Retirement Home..................   324
      Section 304--Transfer From National Defense Stockpile 
        Transaction Fund.........................................   325
      Section 305--Refurbishment and Installation of Air Search 
        Radar....................................................   325
      Section 306--Refurbishment of M1A1 Tanks...................   325
      Section 307--Procurement and Electronic Commerce Technical 
        Assistance Program.......................................   325
      Section 308--Availability of Funds for Separation Pay for 
        Defense Acquisition Personnel............................   325
    Subtitle B--Military Readiness Issues........................   325
      Overview...................................................   325
      Section 311--Expansion of Scope of Quarterly Readiness 
        Reports..................................................   328
      Section 312--Limitation on Reallocation of Funds Within 
        Operation and Maintenance Appropriations.................   329
      Section 313--Operation of Prepositioned Fleet, National 
        Training Center, Fort Irwin, California..................   329
      Section 314--Prohibition of Implementation of Tiered 
        Readiness System.........................................   329
      Section 315--Reports on Transfers From High Priority 
        Readiness Appropriations.................................   330
      Section 316--Report on Chairman, Joint Chiefs of Staff 
        Exercise Program and Partnership for Peace Program.......   331
      Section 317--Quarterly Reports on Execution of Operation 
        and Maintenance Appropriations...........................   331
    Subtitle C--Civilian Personnel...............................   331
      Section 321--Pay Practices When Overseas Teachers Transfer 
        To General Schedule Positions............................   331
      Section 322--Use of Approved Fire-Safe Accommodations by 
        Government Employees on Official Business................   332
    Subtitle D--Depot-Level Activities...........................   332
      Section 331--Extension of Authority for Aviation Depots and 
        Naval Shipyards to Engage in Defense Related Production 
        and Services.............................................   332
      Section 332--Exclusion of Certain Large Maintenance and 
        Repair Projects from Percentage Limitation on Contracting 
        for Depot-Level Maintenance..............................   332
      Section 333--Restrictions on Contracts for Performance of 
        Depot-Level Maintenance and Repair at Certain Facilities.   332
      Section 334--Core Logistics Functions of Department of 
        Defense..................................................   333
      Section 335--Centers of Industrial and Technical Excellence   333
      Section 336--Personnel Reductions, Army Depots 
        Participating in Army Workload and Performance System....   334
    Subtitle E--Environmental Provisions.........................   334
      Section 341--Revision of Membership Terms for Strategic 
        Environmental Research and Development Program Scientific 
        Advisory Board...........................................   334
      Section 342--Amendments to Authority to Enter into 
        Agreements with Other Agencies in Support of 
        Environmental Technology Certification...................   334
      Section 343--Authorization to Pay Negotiated Settlement for 
        Environmental Cleanup at Former Department of Defense 
        Sites in Canada..........................................   334
      Section 344--Modifications of Authority to Store and 
        Dispose of Nondefense Toxic and Hazardous Materials......   335
      Section 345--Revision of Report Requirement for Navy 
        Program to Monitor Ecological Effects of Organotin.......   335
      Section 346--Partnerships for Investment in Innovative 
        Environmental Technologies...............................   335
      Section 347--Pilot Program to Test Alternative Technology 
        for Eliminating Solid and Liquid Waste Emissions During 
        Ship Operations..........................................   336
    Subtitle F--Commissaries And Nonappropriated Fund 
      Instrumentalities..........................................   336
      Section 361--Reorganization of Laws Regarding Commissaries, 
        Exchanges, and other Morale, Welfare, and Recreation 
        Activities...............................................   336
      Section 362--Merchandise and Pricing Requirements for 
        Commissary Stores........................................   336
      Section 363--Limitation on Noncompetitive Procurement of 
        Brand-Name Commercial Items for Resale in Commissary 
        Stores...................................................   337
      Section 364--Transfer of Jurisdiction over Exchange, 
        Commissary, and Morale, Welfare and Recreation Activities 
        to Under Secretary of Defense (Comptroller)..............   337
      Section 365--Public and Private Partnerships to Benefit 
        Morale, Welfare and Recreation Activities................   337
      Section 366--Treatment of Certain Amounts Received by 
        Defense Commissary Agency................................   338
      Section 367--Authorized Use of Appropriated Funds for 
        Relocation of Navy Exchange Service Command..............   338
    Subtitle G--Other Matters....................................   338
      Section 371--Assistance to Local Educational Agencies That 
        Benefit Dependents of Members of the Armed Forces and 
        Department of Defense Civilian Employees.................   338
      Section 372--Continuation of Operation Mongoose............   339
      Section 373--Inclusion of Air Force Depot Maintenance as 
        Operation and Maintenance Budget Activity Group..........   339
      Section 374--Programs to Commemorate 50th Anniversary of 
        Marshall Plan and Korean Conflict........................   339
      Section 375--Prohibition on Use of Special Operations 
        Command Budget for Base Operation Support................   340
      Section 376--Continuation and Extension of Demonstration 
        Program to Identify Overpayments Made to Vendors.........   340
      Section 377--Applicability of Federal Printing Requirements 
        to Defense Automated Printing Service....................   340
      Section 378--Base Operations Support for Military 
        Installations on Guam....................................   341

MILITARY PERSONNEL OVERVIEW......................................   341
TITLE IV--MILTARY PERSONNEL AUTHORIZATIONS.......................   346

  LEGISLATIVE PROVISIONS.........................................   346
    Subtitle A--Active Forces....................................   346
      Section 401--End Strengths for Active Forces...............   346
    Subtitle B--Reserve Forces...................................   347
      Section 411--End Strengths for Selected Reserve............   347
      Section 412--End Strengths for Reserves on Active Duty in 
        Support of the Reserves..................................   348
      Section 413--End Strengths for Military Technicians (Dual 
        Status)..................................................   348
      Section 414--Increase in Number of Members in Certain 
        Grades Authorized to Serve on Active Duty in Support of 
        the Reserves.............................................   349
    Subtitle C--Authorization of Appropriations..................   349
      Section 421--Authorization of Appropriations for Military 
        Personnel................................................   349

TITLE V--MILITARY PERSONNEL POLICY...............................   350

  ITEMS OF SPECIAL INTEREST......................................   350
      Family Life Assistance Programs............................   350
      Increased Support for Military Recruiting..................   350
      Investigation of the Deaths of Military Personnel by Self-
        inflicted Causes.........................................   350
      Joint Recruiting Information Support System................   351
      Military Identification Cards..............................   352
      Military Occupational Specialties (MOS) Consolidations.....   352
      Retention of Military Leave for Federal Civilian Employees 
        Who Perform Reserve Duty.................................   352
      Sexual Misconduct in the Armed Services....................   353
  LEGISLATIVE PROVISIONS.........................................   354
    Subtitle A--Officer Personnel Policy.........................   354
      Section 501--Limitation on Number of General and Flag 
        Officers Who May Serve in Positions Outside Their Own 
        Service..................................................   354
      Section 502--Exclusion of Certain Retired Officers from 
        Limitation on Period of Recall to Active Duty............   355
      Section 503--Clarification of Officers Eligible for 
        Consideration by Selection Boards........................   355
      Section 504--Authority to Defer Mandatory Retirement for 
        Age of Officers Serving As Chaplains.....................   355
    Subtitle B--Reserve Component Matters........................   355
      Section 511--Individual Ready Reserve Activation Authority.   355
      Section 512--Termination of Mobilization Income Insurance 
        Program..................................................   356
      Section 513--Correction of Inequities in Medical and Dental 
        Care and Death and Disability Benefits for Reserve 
        Members Who Incur or Aggravate an Illness in the Line of 
        Duty.....................................................   357
      Section 514--Time-in-Grade Requirements for Reserve 
        Commissioned Officers Retired During the Drawdown Period.   357
      Section 515--Authority to Permit Non-Unit Assigned Officers 
        to be Considered by Vacancy Promotion Board to General 
        Officer Grades...........................................   357
      Section 516--Grade Requirement for Officers Eligible to 
        Serve on Involuntary Separation Boards...................   357
      Section 517--Limitation on Use of Air Force Reserve AGR 
        Personnel for Air Force Base Security Functions..........   357
    Subtitle C--Military Technicians.............................   358
      Section 521--Authority to Retain on the Reserve Active-
        Status List Until Age 60 Military Technicians in the 
        Grade of Brigadier General...............................   358
      Section 522--Military Technicians (Dual Status)............   358
      Section 523--Non-Dual Status Military Technicians..........   359
    Subtitle D--Measures to Improve Recruit Quality and Reduce...   359
    Recruit Attrition............................................   359
      Section 531--Reform of Military Recruiting Systems.........   359
      Section 532--Improvements in Medical Prescreening of 
        Applicants for Military Service..........................   360
      Section 533--Improvements in Physical Fitness of Recruits..   360
    Subtitle E--Military Education and Training..................   360
      Section 541--Independent Panel to Review Military Basic 
        Training.................................................   360
      Section 542--Reform of Army Drill Sergeant Selection and 
        Training Process.........................................   361
      Section 543--Requirement for Candidates for Admission to 
        United States Naval Academy to Take Oath of Allegiance...   362
      Section 544--Reimbursement of Expenses Incurred for 
        Instruction at Service Academies of Persons from Foreign 
        Countries................................................   362
      Section 545--United States Naval Postgraduate School.......   363
      Section 546--Air Force Academy Cadet Foreign Exchange 
        Program..................................................   363
      Section 547--Training in Human Relations Matters for Army 
        Drill Sergeant Trainees..................................   364
      Section 548--Study of Feasibility of Gender-Segregated 
        Basic Training...........................................   364
    Subtitle F--Military Decorations and Awards..................   364
      Section 551--Study of New Decorations for Injury or Death 
        in Line of Duty..........................................   364
      Section 552--Purple Heart to be Awarded Only to Members of 
        the Armed Forces.........................................   365
      Section 553--Eligibility for Armed Forces Expeditionary 
        Medal for Participation in Operation Joint Endeavor or 
        Operation Joint Guard....................................   365
      Section 554--Waiver of Time Limitations for Award of 
        Certain Decorations to Specified Persons.................   365
    Subtitle G--Other Matters....................................   365
      Section 561--Suspension of Temporary Early Retirement 
        Authority................................................   365
      Section 562--Treatment of Educational Accomplishments of 
        National Guard ChalleNGe Program Participants............   365
      Section 563--Authority for Personnel to Participate in 
        Management of Certain Non-Federal Entities...............   366
      Section 564--Crew Requirements of WC-130J Aircraft.........   366
      Section 565 and Section 566--Civil-Military Programs.......   366
      Section 567--Continuation of Support to Senior Military 
        Colleges.................................................   367
      Section 568--Restoration of Missing Persons Authorities 
        Applicable to Department of Defense as in Effect Before 
        Enactment of National Defense Authorization Act For 
        Fiscal Year 1997.........................................   367
      Section 569--Establishment of Sentence of Confinement for 
        Life Without Eligibility for Parole......................   368
      Section 570--Limitation on Appeal of Denial of Parole for 
        Offenders Serving Life Sentence..........................   368
      Section 571--Establishment of Public Affairs Branch in the 
        Army.....................................................   368

TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS..............   369

  ITEMS OF SPECIAL INTEREST......................................   369
      Armed Forces Health Professions Scholarship Program 
        (AFHPSP).................................................   369
      Communication of Retirement Benefits to New Accessions.....   369
      Study of Certain Compensation Issues.......................   370
      Tax Deferred Savings Plan..................................   370
  LEGISLATIVE PROVISIONS.........................................   371
    Subtitle A--Pay and Allowances...............................   371
      Section 601--Increase in Basic Pay for Fiscal Year 1998....   371
      Section 602--Annual Adjustment of Basic Pay and Protection 
        of Member's Total Compensation While Performing Certain 
        Duty.....................................................   371
      Section 603--Use of Food Cost Information to Determine 
        Basic Allowance for Subsistence..........................   372
      Section 604--Consolidation of Basic Allowance for Quarters, 
        Variable Housing Allowance, and Overseas Housing 
        Allowances...............................................   372
    Subtitle B--Bonuses and Special and Incentive Pays...........   373
      Section 611--One-Year Extension of Certain Bonuses and 
        Special Pay Authorities for Reserve Forces...............   373
      Section 612--One-Year Extension of Certain Bonuses and 
        Special Pay Authorities for Nurse Officer Candidates, 
        Registered Nurses, and Nurse Anesthetists................   373
      Section 613--One-Year Extension of Authorities Relating to 
        Payment of Other Bonuses and Special Pays................   373
      Section 614--Increase in Minimum Monthly Rate of Hazardous 
        Duty Incentive Pay for Certain Members...................   374
      Section 615--Availability of Multiyear Retention Bonus for 
        Dental Officers..........................................   374
      Section 616--Increase in Variable and Additional Special 
        Pays for Certain Dental Officers.........................   374
      Section 617--Special Pay for Duty at Designated Hardship 
        Duty Locations...........................................   374
      Section 618--Selected Reserve Reenlistment Bonus...........   375
      Section 619--Selected Reserve Enlistment Bonus for Former 
        Enlisted Members.........................................   375
      Section 620--Special Pay or Bonuses for Enlisted Members 
        Extending Tours of Duty Overseas.........................   375
      Section 621--Increase in Amount of Family Separation 
        Allowance................................................   375
      Section 622--Change in Requirements for Ready Reserve 
        Muster Duty Allowance....................................   375
    Subtitle C--Travel and Transportation Allowances.............   375
      Section 631--Travel and Transportation Allowances for 
        Dependents of Member Sentenced by Court-Martial..........   375
      Section 632--Dislocation Allowance.........................   376
    Subtitle D--Retired Pay, Survivor Benefits, and Related 
      Matters....................................................   376
      Section 641--Time in Which Certain Changes in Beneficiary 
        Under Survivor Benefit Plan May Be Made..................   376
    Subtitle E--Other Matters....................................   376
      Section 651--Definition of Sea Duty for Purposes of Career 
        Sea Pay..................................................   376
      Section 652--Loan Repayment Program for Commissioned 
        Officers in Certain Health Professions...................   376
      Section 653--Conformance of NOAA Commissioned Officers 
        Separation Pay to Separation Pay for Members of Other 
        Uniformed Services.......................................   376
      Section 654--Reimbursement of Public Health Service 
        Officers for Adoption Expenses...........................   376
      Section 655--Payment of Back Quarters and Subsistence 
        Allowances to World War II Veterans Who Served as 
        Guerrilla Fighters in the Philippines....................   377
      Section 656--Space Available Travel for Members of Selected 
        Reserve..................................................   377
      Section 657--Study on Military Personnel At, Near, or Below 
        the Poverty Line.........................................   377
      Section 658--Implementation of Department of Defense 
        Supplemental Food Program for Military Personnel Outside 
        the United States........................................   377

TITLE VII--HEALTH CARE PROVISIONS................................   378

    OVERVIEW.....................................................   378
    ITEMS OF SPECIAL INTEREST....................................   379
        CHAMPUS as a Second-Payer to Other Health Insurance......   379
        Pacific Medical Network..................................   379
        TRICARE Program..........................................   379
        Vietnam Repatriated Prisoner of War Program..............   380
    LEGISLATIVE PROVISIONS.......................................   381
      Subtitle A--Health Care Services...........................   381
        Section 701--Expansion of Retiree Dental Insurance Plan 
          to Include Surviving Spouse and Child Dependents of 
          Certain Deceased Members...............................   381
        Section 702--Provision of Prosthetic Devices to Covered 
          Beneficiaries..........................................   381
      Subtitle B--TRICARE Program................................   381
        Section 711--Addition of Definition of TRICARE Program to 
          Title 10...............................................   381
        Section 712--Plan for Expansion of Managed Care Option of 
          TRICARE Program........................................   381
      Subtitle C--Uniformed Services Treatment Facilities........   382
        Section 721--Implementation of Designated Provider 
          Agreements for Uniformed Services Treatment Facilities.   382
        Section 722--Limitation on Total Payments................   382
        Section 723--Continued Acquisition of Reduced-Cost Drugs.   382
      Subtitle D--Other Changes to Existing Laws Regarding Health 
        Care Management..........................................   382
        Section 731--Waiver or Reduction of Copayments Under 
          Overseas Dental Program................................   382
        Section 732--Premium Collection Requirements for Medical 
          and Dental Insurance Programs..........................   382
        Section 733--Consistency Between CHAMPUS and Medicare in 
          Payment Rates for Service..............................   383
        Section 734--Use of Personal Services Contracts for 
          Provision of Health Care Services and Legal Protection 
          for Providers..........................................   383
        Section 735--Portability of State Licenses for Department 
          of Defense Health Care Professionals...................   384
        Section 736--Standard Form and Requirements Regarding 
          Claims for Payment for Services........................   384
        Section 737--Medical Personnel Conscience Clause.........   384
      Subtitle E--Other Matters..................................   384
        Section 741--Continued Admission of Civilians as Students 
          in Physician Assistant Training Program of Army Medical 
          Department.............................................   384
        Section 742--Emergency Health Care in Connection with 
          Overseas Activities of On-Site Inspection Agency of the 
          Department of Defense..................................   385
        Section 743--Comptroller General Study of Adequacy and 
          Effect of Maximum Allowable Charges for Physicians 
          under CHAMPUS..........................................   385
        Section 744--Comptroller General Study of Department of 
          Defense Pharmacy Programs..............................   385
        Section 745--Comptroller General Study of Navy Graduate 
          Medical Education Program..............................   385
        Section 746--Study of Expansion of Pharmaceuticals by 
          Mail Program to Include Additional Medicare-Eligible 
          Covered Beneficiaries..................................   386

TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND 
  RELATED MATTERS-...............................................   387

  ITEMS OF SPECIAL INTEREST......................................   387
      Cost Accounting Standards Board............................   387
      Management Responsibility for Acquisition Policy...........   387
      Training and Education of the Acquisition Workforce........   388
  LEGISLATIVE PROVISIONS.........................................   389
    Subtitle A--Acquisition Policy...............................   389
      Section 801--Case-by-Case Waivers of Domestic Source 
        Limitations..............................................   389
      Section 802--Expansion of Authority to Enter Into Contracts 
        Crossing Fiscal Years to All Severable Services Contracts 
        Not Exceeding a Year.....................................   390
      Section 803--Clarification of Vestiture of Title Under 
        Contracts................................................   390
      Section 804--Exclusion of Disaster Relief, Humanitarian, 
        and Peacekeeping Operations from Restrictions on Use of 
        Undefinitized Contract Actions...........................   390
      Section 805--Limitation and Report on Payment of 
        Restructuring Costs under Defense Contracts..............   390
      Section 806--Authority Relating to Purchase of Certain 
        Vehicles.................................................   390
      Section 807--Multiyear Procurement Contracts...............   390
      Section 808--Domestic Source Limitation Amendments.........   391
      Section 809--Repeal of Expiration of Domestic Source 
        Limitation for Certain Naval Vessel Propellers...........   391
    Subtitle B--Other Matters....................................   391
      Section 821--Repeal of Certain Acquisition Reports and 
        Requirements.............................................   391
      Section 822--Extension of Authority for use of Test and 
        Evaluation Installations by Commercial Entities..........   391
      Section 823--Requirement to Develop and Maintain List of 
        Firms Not Eligible for Defense Contracts.................   391

TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT......   392

    ITEMS OF SPECIAL INTEREST....................................   392
      Armed Services Patent Advisory Board.......................   392
      Defense Acquisition Workforce..............................   392
      Defense Boards and Commissions.............................   393
      Defense Reorganization.....................................   394
      Management Headquarters and Headquarters Support Personnel.   394
    LEGISLATIVE PROVISIONS.......................................   395
      Section 901--Limitation on Operation and Support Funds for 
        the Office of the Secretary of Defense...................   395
      Section 902--Components of National Defense University.....   396
      Section 903--Authorization for the Marine Corps University 
        to Employ Civilian Professors............................   396
      Section 904--Center for the Study of Chinese Military 
        Affairs..................................................   396
      Section 905--White House Communications Agency.............   397
      Section 906--Revision to Required Frequency for Provision 
        of Policy Guidance for Contingency Plans.................   397
      Section 907--Termination of the Defense Airborne 
        Reconnaissance Office....................................   397

TITLE X--GENERAL PROVISIONS......................................   399

    Counterdrug Activities.......................................   399
      Overview...................................................   399
      Items of Special Interest..................................   399
        C-26 aircraft photo reconnaissance upgrade...............   399
        Gulf states counterdrug initiative.......................   399
        Mapping, charting and geodesy............................   400
        Mexican, Caribbean and South American initiative.........   400
        Non-Intrusive Inspection Systems.........................   402
        Optionally piloted air vehicle...........................   403
        Southwest border fence project...........................   403
        Tracker aircraft.........................................   403
    Other Matters................................................   404
      Implementation of Whistleblower Protections................   404
      Intelligence Shortcomings During Persian Gulf War..........   404
      Resolution of Commercial Disputes in Saudi Arabia..........   405
  LEGISLATIVE PROVISIONS.........................................   405
    Subtitle A--Financial Matters................................   405
      Section 1001--Transfer Authority...........................   405
      Section 1002--Incorporation of Classified Annex............   405
      Section 1003--Authority for Obligation of Unauthorized 
        Fiscal Year 1997 Defense Appropriations..................   406
      Section 1004--Authorization of Supplemental Appropriations 
        for Fiscal Year 1997.....................................   406
      Section 1005--Increase in Fiscal Year 1996 Transfer 
        Authority................................................   406
      Section 1006--Fisher House Trust Fund......................   406
      Section 1007--Flexibility in Financing Closure of Certain 
        Outstanding Contracts for Which a Small Final Payment is 
        Due......................................................   406
    Subtitle B--Naval Vessels and Shipyards......................   406
      Section 1021--Relationship of Certain Laws to Disposal of 
        Vessels for Export from the Naval Vessel Register and the 
        National Defense Reserve Fleet...........................   406
      Section 1022--Authority to Enter into a Long-Term Charter 
        for a Vessel in Support of the Surveillance Towed Array 
        Sensor (SURTASS) Program.................................   407
      Section 1023--Transfer of Two Specified Obsolete Tugboats 
        of the Army..............................................   407
      Section 1024--Naming of a DDG-51 Class Destroyer the U.S.S. 
        Thomas F. Connolly.......................................   407
      Section 1025--Congressional Review Period with Respect to 
        Transfer of the Ex-U.S.S. Midway (CV-41).................   407
    Subtitle C--Counter-Drug Activities..........................   408
      Section 1031--Prohibition on Use of National Guard for 
        Civil-Military Activities Under State Drug Interdiction 
        and Counterdrug Activities Plan..........................   408
    Subtitle D--Miscellaneous Report Requirements and Repeals....   409
      Section 1041--Repeal of Miscellaneous Obsolete Reports 
        Required by Prior Defense Authorization Acts.............   409
      Section 1042--Repeal of Annual Report Requirement Relating 
        to Training of Special Operations Forces with Friendly 
        Foreign Forces...........................................   409
    Subtitle E--Other Matters....................................   409
      Section 1051--Authority for Special Agents of the Defense 
        Criminal Investigative Service to Execute Warrants and 
        Make Arrests.............................................   409
      Section 1052--Study of Investigative Practices of Military 
        Criminal Investigative Organizations Relating to Sex 
        Crimes...................................................   409
      Section 1053--Technical and Clerical Amendments............   410
      Section 1054--Display of POW/MIA Flag......................   410
      Section 1055--Certification Required Before Observance of 
        Moratorium on Use by Armed Forces of Antipersonnel 
        Landmines................................................   410
      Section 1056--Protection of Safety-Related Information 
        Voluntarily Provided by Air Carriers.....................   410
      Section 1057--National Guard ChalleNGe Program to Create 
        Opportunities for Civilian Youth.........................   411
      Section 1058--Lease of Non-Excess Personal Property of the 
        Military Departments.....................................   412
      Section 1059--Commendation of Members of the Armed Forces 
        and Government Civilian Personnel who Served During the 
        Cold War.................................................   412

TITLE XI--COOPERATIVE THREAT REDUCTION WITH STATES OF FORMER 
  SOVIET UNION...................................................   413

  OVERVIEW.......................................................   413
  ITEMS OF SPECIAL INTEREST......................................   413
      Arms Elimination Projects in Russia........................   413
      Arms Elimination Projects in Ukraine.......................   414
      Auditing of CTR Assistance.................................   414
      Chemical Weapons Destruction...............................   415
      Fissile Material Storage Facility..........................   417
      Nuclear Reactor Core Conversion............................   418
      Nuclear Weapons Storage Security In Russia.................   419
      Other Support Programs.....................................   419
      Program Overhead...........................................   420
      Prohibition of Specified Activities........................   420
  LEGISLATIVE PROVISIONS.........................................   420
      Section 1101--Specification of Cooperative Threat Reduction 
        Programs.................................................   420
      Section 1102--Fiscal Year 1998 Funding Allocations.........   420
      Section 1103--Prohibition on Use of Funds for Specified 
        Purposes.................................................   420
      Section 1104--Prohibition on Use of Funds Until Specified 
        Reports are Submitted....................................   420
      Section 1105--Limitation on Use of Funds Until Submission 
        of Certification.........................................   420
      Section 1106--Use of Funds for Chemical Weapons Destruction 
        Facility.................................................   421
      Section 1107--Limitation on Use of Funds for Storage 
        Facility for Russian Fissile Material....................   421
      Section 1108--Limitation on Use of Funds for Weapons 
        Storage Security.........................................   421
      Section 1109--Report to Congress on Issues Regarding 
        Payment of Taxes or Duties on Assistance Provided to 
        Russia Under Cooperative Threat Reduction Programs.......   421
      Section 1110--Limitation on Obligation of Funds for a 
        Specified Period.........................................   421
      Section 1111--Availability of Funds........................   421

TITLE XII--MATTERS RELATING TO OTHER NATIONS.....................   422

  OVERVIEW.......................................................   422
      African Center for Security Studies........................   422
      Arms Control Implementation................................   422
      Defense Logistics Cooperation with the People's Republic of 
        China....................................................   424
      The Khobar Towers Bombing and Force Protection in Southwest 
        Asia.....................................................   424
      Strategic Force Reductions.................................   426
  LEGISLATIVE PROVISIONS.........................................   427
      Section 1201--Reports to Congress relating to United States 
        forces in Bosnia.........................................   427
      Section 1202--One-year Extension of Counterproliferation 
        Authorities..............................................   429
      Section 1203--Report on Future Military Capabilities and 
        Strategy of the People's Republic of China...............   429
      Section 1204--Temporary Use of General Purpose Vehicles and 
        Nonlethal Military Equipment under Acquisition and Cross 
        Servicing Agreements.....................................   429

DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS.................   431

  PURPOSE........................................................   431
  MILITARY CONSTRUCTION OVERVIEW.................................   431

TITLE XXI--ARMY..................................................   452

  SUMMARY........................................................   452
  ITEMS OF SPECIAL INTEREST......................................   452
      Improvements of Military Family Housing....................   452
      Planning and Design........................................   452
  LEGISLATIVE PROVISIONS.........................................   452
      Section 2101--Authorized Army Construction and Land 
        Acquisition Projects.....................................   452
      Section 2102--Family Housing...............................   452
      Section 2103--Improvements to Military Family Housing Units   453
      Section 2104--Authorization of Appropriations, Army........   453
      Section 2105--Correction In Authorized Uses of Funds, Fort 
        Irwin, California........................................   453

TITLE XXII--NAVY.................................................   454

  SUMMARY........................................................   454
  ITEMS OF SPECIAL INTEREST......................................   454
      Co-Composting Facility, Naval Education & Training Center, 
        Newport, Rhode Island....................................   454
      Improvements to Military Family Housing....................   454
      Prepositioned Equipment Maintenance Facilities, Blount 
        Island, Jacksonville, Florida............................   454
  LEGISLATIVE PROVISIONS.........................................   455
      Section 2201--Authorized Navy Construction and Land 
        Acquisition Projects.....................................   455
      Section 2202--Family Housing...............................   455
      Section 2203--Improvements to Military Family Housing Units   455
      Section 2204--Authorization of Appropriations, Navy........   455
      Section 2205--Authorization of Military Construction 
        Project at Naval Air Station, Pascagoula, Mississippi, 
        for which Funds have been Appropriated...................   455

TITLE XXIII--AIR FORCE...........................................   456

  SUMMARY........................................................   456
  ITEMS OF SPECIAL INTEREST......................................   456
      Disposal of Real Property, Hancock Field, Syracuse, New 
        York.....................................................   456
      Improvements to Military Family Housing....................   456
      Inter-Departmental Land Transfer, Bellows Air Force 
        Station, Hawaii..........................................   456
  LEGISLATIVE PROVISIONS.........................................   457
      Section 2301--Authorized Air Force Construction and Land 
        Acquisition Projects.....................................   457
      Section 2302--Family Housing...............................   457
      Section 2303--Improvements to Military Family Housing Units   457
      Section 2304--Authorization of Appropriations, Air Force...   457
      Section 2305--Authorization of Military Construction 
        Project at McConnell Air Force Base, Kansas, for which 
        Funds Have Been Appropriated.............................   457

TITLE XXIV--DEFENSE AGENCIES.....................................   458

  SUMMARY........................................................   458
  LEGISLATIVE PROVISIONS.........................................   458
      Section 2401--Authorized Defense Agencies Construction and 
        Land Acquisition Projects................................   458
      Section 2402--Military Housing Planning and Design.........   458
      Section 2403--Improvements to Military Family Housing Units   458
      Section 2404--Energy Conservation Projects.................   458
      Section 2405--Authorization Of Appropriations, Defense 
        Agencies.................................................   458
      Section 2406--Correction in Authorized Use of Funds, 
        McClellan Air Force Base, California.....................   458
      Section 2407--Modification of Authority to carry out Fiscal 
        Year 1995 Projects.......................................   459

TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION INFRASTRUCTURE.....   460

  SUMMARY........................................................   460
  LEGISLATIVE PROVISIONS.........................................   460
      Section 2501--Authorized NATO Construction and Land 
        Acquisition Projects.....................................   460
      Section 2502--Authorization of Appropriations, NATO........   460

TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES..................   461

  SUMMARY........................................................   461
  ITEMS OF SPECIAL INTERESTS.....................................   461
      Budget Process to Support the Validation of Military 
        Construction Requirements for the Army National Guard....   461
  LEGISLATIVE PROVISIONS.........................................   462
      Section 2601--Authorized Guard and Reserve Construction and 
        Land Acquisition Projects................................   462
      Section 2602--Authorization of Military Construction 
        Projects for Which Funds Have Been Appropriated..........   462
      Section 2603--Army Reserve Construction Project, Salt Lake 
        City, Utah...............................................   462

TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS..........   463

  LEGISLATIVE PROVISIONS.........................................   463
      Section 2701--Expiration of Authorizations and Amounts 
        Required to be Specified by Law..........................   463
      Section 2702--Extensions of Authorizations of Certain 
        Fiscal Year 1995 Projects................................   463
      Section 2703--Extension of Authorizations of Certain Fiscal 
        Year 1994 Projects.......................................   463
      Section 2704--Extension of Authorizations of Certain Fiscal 
        Year 1993 Projects.......................................   463
      Section 2705--Extension of Authorizations of Certain Fiscal 
        Year 1992 Projects.......................................   463
      Section 2706--Extension of Availability of Funds for 
        Construction of Over-the-Horizon Radar in Puerto Rico....   464
      Section 2707--Effective Date...............................   464

TITLE XXVIII--GENERAL PROVISIONS.................................   465

  ITEMS OF SPECIAL INTEREST......................................   465
      Force Protection for Overseas Facilities from Chemical and 
        Biological Weapons.......................................   465
      Military Construction in the Republic of Korea and 
        Burdensharing Support for United States Forces Korea.....   465
      Withdrawals of Public Lands for Military Purposes..........   466
  LEGISLATIVE PROVISIONS.........................................   466
    Subtitle A--Military Construction Program and Military Family 
      Housing Changes............................................   466
      Section 2801--Use of Mobility Enhancement Funds for 
        Unspecified Minor Construction...........................   466
      Section 2802--Limitation on the Use of Operation and 
        Maintenance Funds for Facility...........................   466
      Section 2803--Leasing of Military Family Housing, United 
        States Southern Command, Miami, Florida..................   467
      Section 2804--Use of Financial Incentives Provided as Part 
        of Energy Savings and Water Conservation Activities......   467
      Section 2805--Congressional Notification Requirements 
        Regarding Use of Department of Defense Housing Funds for 
        Investments in Nongovernmental Entities..................   467
    Subtitle B--Real Property and Facilities Administration......   467
      Section 2811--Increase in Ceiling for Minor Land 
        Acquisition Projects.....................................   467
      Section 2812--Administrative Expenses for Certain Real 
        Property Transactions....................................   467
      Section 2813--Disposition of the Proceeds from the Sale of 
        Air Force Plant 78, Brigham City, Utah...................   467
    Subtitle C--Defense Base Closure and Realignment.............   468
      Section 2821--Consideration of Military Installations as 
        Sites for New Federal Facilities.........................   468
      Section 2822--Prohibition against Conveyance of Property at 
        Military Installations to State-Owned Shipping Companies.   468
    Subtitle D--Land Conveyances Generally.......................   468
      Part I--Army Conveyances...................................   468
      Section 2831--Land Conveyance, James T. Roker Army Reserve 
        Center, Durant, Oklahoma.................................   468
      Section 2832--Land Conveyance, Fort A.P. Hill, Virginia....   468
      Section 2833--Expansion of Land Conveyance, Indiana Army 
        Ammunition Plant, Charlestown, Indiana...................   468
      Section 2834--Modification of Land Conveyance, Lompoc, 
        California...............................................   469
      Section 2835--Modification of Land Conveyance, Rocky 
        Mountain Arsenal, Colorado...............................   469
      Section 2836--Correction of Land Conveyance Authority, Army 
        Reserve Center, Anderson, South Carolina.................   469
      Section 2837--Land Conveyance, Fort Bragg, North Carolina..   469
      Section 2838--Land Conveyance, Gibson Army Reserve Center, 
        Chicago, Illinois........................................   469
      Section 2839--Land Conveyance, Fort Dix, New Jersey........   469
      Part II--Navy Conveyances..................................   470
      Section 2851--Correction of Lease Authority, Naval Air 
        Station, Meridian, Mississippi...........................   470
      Part III--Air Force Conveyances............................   470
      Section 2861--Land Transfer, Eglin Air Force Base, Florida.   470
      Section 2862--Study of Land Exchange Options, Shaw Air 
        Force Base, South Carolina...............................   470
      Section 2863--Land Conveyance, March Air Force Base, 
        California...............................................   470
    Subtitle E--Other Matters....................................   470
      Section 2881--Repeal of Requirement to Operate Naval 
        Academy Dairy Farm.......................................   470
      Section 2882--Long-Term Lease of Property, Naples, Italy...   471
      Section 2883--Designation of Military Family Housing at 
        Lackland Air Force Base, Texas, in Honor of Frank Tejeda, 
        a Former Member of the House of Representatives..........   471

TITLE XXIX--SIKES ACT IMPROVEMENT AMENDMENTS.....................   472

  LEGISLATIVE PROVISIONS.........................................   472
      Section 2902--Definition of Sikes Act for Purposes of 
        Amendments...............................................   472
      Section 2903--Codification of Short Title of Act...........   472
      Section 2904--Integrated Natural Resource Management Plans.   472
      Section 2905--Review for Preparation of Integrated Natural 
        Resource Management Plans................................   472
      Section 2906--Annual Reviews and Reports...................   472
      Section 2907--Transfer of Wildlife Conservation Fees from 
        Closed Military Installations............................   472
      Section 2908--Federal Enforcement of Integrated Natural 
        Resource Management Plans and Enforcement of Other Laws..   473
      Section 2909--Natural Resource Management Services.........   473
      Section 2910--Definitions..................................   473
      Section 2911--Cooperative Agreements.......................   473
      Section 2912--Repeal of Superseded Provision...............   473
      Section 2913--Clerical Amendments..........................   473
      Section 2914--Authorizations of Appropriations.............   473

DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS 
  AND OTHER AUTHORIZATIONS.......................................   475

TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS......   475

  PURPOSE........................................................   475
  OVERVIEW.......................................................   475
  ITEMS OF SPECIAL INTEREST......................................   488
      Accelerated Strategic Computing Initiative and Control of 
        Supercomputer Technology.................................   488
      Chemistry and Metallurgy Research Facility at the Los 
        Alamos National Laboratory...............................   488
      Defense Asset Acquisition..................................   489
      Defense Environmental Restoration and Waste Management.....   489
      Enhanced Surveillance Program at the Production Plants.....   491
      Inertial Confinement Fusion................................   491
      Infrastructure and Manufacturing Improvements at Weapons 
        Production Sites.........................................   492
      Initiatives For Proliferation Prevention...................   492
      Laboratory Review of Missile Defenses......................   493
      Management and Organization of DOE's Nuclear Weapons 
        Program..................................................   493
      Materials Protection, Control, and Accounting Program......   494
      Naval Reactors.............................................   494
      Nuclear Energy.............................................   495
      Operation of F and H canyons...............................   495
      Privatization..............................................   495
      Program Direction for Defense Programs.....................   498
      Recurring General Provision Relating to Availability of 
        Funds....................................................   498
      Stockpile Life Extension Program at Y-12 Plant.............   499
      Technology Transfer........................................   499
      Transfer of Funds Associated with Security at Rocky Flats 
        Site and the Fernald Site................................   499
      Tritium Production.........................................   499
      Worker and Community Transition............................   500
  LEGISLATIVE PROVISIONS.........................................   501
    Subtitle A--National Security Program Authorization..........   501
      Section 3101--Weapons Activities...........................   501
      Section 3102--Environmental Restoration and Waste 
        Management...............................................   501
      Section 3103--Other Defense Activities.....................   501
      Section 3104--Defense Nuclear Waste Disposal...............   501
    Subtitle B--Recurring General Provisions.....................   501
      Section 3121--Reprogramming................................   501
      Section 3122--Limits on General Plant Projects.............   502
      Section 3123--Limits on Construction Projects..............   502
      Section 3124--Fund Transfer Authority......................   502
      Section 3125--Authority for Conceptual and Construction 
        Design...................................................   502
      Section 3126--Authority for Emergency Planning, Design and 
        Construction Activities..................................   502
      Section 3127--Funds Available for all National Security 
        Programs of the Department of Energy.....................   503
      Section 3128--Authority Relating to Transfer of Defense 
        Environmental Management Funds...........................   503
    Subtitle C--Program Authorizations, Restrictions, and 
      Limitations................................................   503
      Section 3131--Ballistic Missile Defense National Laboratory 
        Program..................................................   503
    Subtitle D--Other Matters....................................   503
      Section 3141--Plan for Stewardship, Management, and 
        Certification of Warheads in the Nuclear Weapons 
        Stockpile................................................   503
      Section 3142--Repeal of Obsolete Reporting Requirement.....   503
      Section 3143--Revisions to Defense Nuclear Facilities 
        Workforce Restructuring Plan Requirements................   503
      Section 3144--Extension of Authority for Appointment of 
        Certain Scientific, Engineering, and Technical Personnel.   504
      Section 3145--Report on Proposed Contract for Hanford Tank 
        Waste Vitrification Project..............................   504
      Section 3146--Limitation on Conduct of Subcritical Nuclear 
        Weapons Tests............................................   504
      Section 3147--Limitation on Use of Certain Funds Until 
        Future Use Plans are Submitted...........................   505
      Section 3148--Plan for External Oversight of National 
        Laboratories.............................................   505
      Section 3149--University-Based Research Center.............   505
      Section 3150--Stockpile Stewardship Program................   505
      Section 3151--Reports on Advanced Supercomputer Sales to 
        Certain Foreign Nations..................................   505

TITLE XXXII--DEFENSE NUCLEAR FACILITIES SAFETY BOARD 
  AUTHORIZATION..................................................   507

  LEGISLATIVE PROVISIONS.........................................   507
      Section 3201--Authorization................................   507
      Section 3202--Plan for Transfer of Functions of Defense 
        Nuclear Facilities Safety Board to Nuclear Regulatory 
        Commission...............................................   507

TITLE XXXIII--NATIONAL DEFENSE STOCKPILE.........................   508

  LEGISLATIVE PROVISIONS.........................................   508
      Section 3301--Authorized Uses of Stockpile Funds...........   508
      Section 3302--Disposal of Beryllium Copper Master Alloy 
        From National Defense Stockpile..........................   508
      Section 3303--Disposal of Titanium Sponge in National 
        Defense Stockpile........................................   508
      Section 3304--Conditions on Transfer of Stockpiled Platinum 
        Reserves for Treasury Use................................   508
      Section 3305--Restrictions on Disposal of Certain Manganese 
        Ferro....................................................   508
      Section 3306--Required Procedures for Disposal of Strategic 
        and Critical Materials...................................   509

TITLE XXXIV--NAVAL PETROLEUM RESERVES............................   510

  LEGISLATIVE PROVISIONS.........................................   510
      Section 3401--Authorization of Appropriations..............   510
      Section 3402--Price Requirement on Sale of Certain 
        Petroleum During Fiscal Year 1998........................   510
      Section 3403--Termination of Assignment of Navy Officers to 
        Office of Naval Petroleum and Oil Shale Reserves.........   510

TITLE XXXV--PANAMA CANAL COMMISSION..............................   511

  LEGISLATIVE PROVISIONS.........................................   511
    Subtitle A--Authorization Of Expenditures From Revolving Fund   511
    Subtitle B--Facilitation Of Panama Canal Transition..........   511
      Section 3511--Short Title; References......................   511
      Section 3512--Definitions Relating to Canal Transition.....   511
      Part I--Transition Matters Relating to Commission Officers 
        and Employees............................................   511
      Section 3521--Authority for the Administrator of the 
        Commission to Accept Appointment as Administrator of the 
        New Panama Canal Authority...............................   511
      Section 3522--Post-Canal Transfer Personnel Authorities....   512
      Section 3523--Enhanced Authority of Commission to Establish 
        Compensation of Commission Officers and Employees........   512
      Section 3524--Travel, Transportation and Subsistence 
        Expenses for Commission Personnel No Longer Subject to 
        Federal Travel Regulations...............................   513
      Section 3525--Enhanced Recruitment and Retention 
        Authorities..............................................   513
      Section 3526--Transition Separation Incentive Payments.....   513
      Section 3527--Labor-Management Relations...................   513
      Section 3528--Availability of Panama Canal Revolving Fund 
        for Severance Pay for Certain Employees Separated by the 
        Panama Canal Authority after Canal Transfer Date.........   514
      Part II--Transition Matters Relating to Operation and 
        Administration of Canal..................................   514
      Section 3541--Establishment of Procurement System and Board 
        of Contract Appeals......................................   514
      Section 3542--Transactions with the Panama Canal Authority.   515
      Section 3543--Time Limitations for Filing of Claims for 
        Damages..................................................   515
      Section 3544--Tolls for Small Vessels......................   515
      Section 3545--Date of Actuarial Evaluation of FECA 
        Liability................................................   515
      Section 3546--Notaries public..............................   516
      Section 3547--Commercial Services..........................   516
      Section 3548--Transfer from President to Commission of 
        Certain Regulatory Functions Relating to Employment 
        Classification Appeals...................................   516
      Section 3548--Enhanced Printing Authority..................   516
      Section 3549--Technical and Conforming Amendments..........   516

TITLE XXXVI--MARITIME ADMINISTRATION.............................   516

  LEGISLATIVE PROVISIONS.........................................   516
      Section 3601--Authorization of Appropriations for Fiscal 
        Year 1998................................................   516
      Section 3602--Repeal of Obsolete Annual Report Requirement 
        Concerning Relative Cost of Shipbuilding in the Various 
        Coastal Districts of the United States...................   517
      Section 3603--Provisions Relating to Maritime Security 
        Fleet Program............................................   517
      Section 3604--Authority to Utilize Replacement Vessels and 
        Capacity.................................................   517
      Section 3605--Authority to Convey National Defense Reserve 
        Vessel...................................................   518
Departmental Data................................................   519
  Department of Defense Authorization Request....................   519
  Military Construction Authorization Request....................   519
Committee Position...............................................   520
Communications From Other Committees.............................   520
Fiscal Data......................................................   528
  Congressional Budget Office Estimate...........................   528
  Congressional Budget Office Cost Estimate......................   528
    Authorization of Appropriations..............................   529
  Committee Cost Estimate........................................   537
  Inflation-Impact Statement.....................................   537
Oversight Findings...............................................   537
Constitutional Authority Statement...............................   538
Statement of Federal Mandates....................................   538
Roll Call Votes..................................................   538
Changes in Existing Law Made by the Bill, as Reported............   546
Additional and dissenting Views..................................   768
  Dissenting views of Ronald V. Dellums..........................   768
  Additional views of John Spratt................................   770
  Additional views of James Hansen, Tillie Fowler and Solomon 
    Ortiz........................................................   773
  Additional views of James M. Talent............................   777
  Additional views of Patrick J. Kennedy.........................   779
  Additional Views of Van Hilleary, Stephen Buyer, Tillie Fowler, 
    Roscoe Bartlett, Buck McKeon, Joe Scarborough, Lindsey 
    Graham, and Jim Ryun.........................................   781



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-132
_______________________________________________________________________


        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998

                                _______
                                

 June 16, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Spence, from the Committee on National Security, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1119]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on National Security, to whom was referred 
the bill (H.R. 1119) to authorize appropriations for fiscal 
years 1988 and 1999 for military activities of the Department 
of Defense, to prescribe military personnel strengths for 
fiscal years 1998 and 1999, and for other purposes, having 
considered the same, report favorably thereon with amendments 
and recommend that the bill as amended do pass.
    The amendments are as follows:
    The amendment strikes out all after the enacting clause of 
the bill and inserts a new test which appears in italic type in 
the reported bill.
    The title of the bill is amended to reflect the amendment 
to the text of the bill.

                 EXPLANATION OF THE COMMITTEE AMENDMENT

    The committee adopted an amendment in the nature of a 
substitute during the consideration of H.R. 1119. The remainder 
of the report discusses the bill, as amended.

                                PURPOSE

    The bill would--(1) Authorize appropriations for fiscal 
year 1998 for procurement and for research, development, test 
and evaluation (RDT&E); (2) Authorize appropriations for fiscal 
year 1998 for operation and maintenance (O&M) and for working 
capital funds; (3) Authorize for fiscal year 1998: (a) the 
personnel strength for each active duty component of the 
military departments; (b) the personnel strength for the 
Selected Reserve for each reserve component of the armed 
forces; (c) the military training student loads for each of the 
active and reserve components of the military departments; (4) 
Modify various elements of compensation for military personnel 
and impose certain requirements and limitations on personnel 
actions in the defense establishment; (5) Authorize 
appropriations for fiscal year 1998 for military construction 
and family housing; (6) Authorize appropriations for fiscal 
year 1998 for the Department of Energy National Security 
Programs; (7) Modify provisions related to the National Defense 
Stockpile; (8) Authorize appropriations for fiscal year 1998 
for the operation of the Panama Canal Commission; and (9) 
Authorize appropriations for fiscal year 1998 for the Maritime 
Administration.

            RELATIONSHIP OF AUTHORIZATION AND APPROPRIATIONS

    Importantly, the bill does not generally provide budget 
authority. The bill authorizes appropriations. Subsequent 
appropriation acts provide budget authority. The bill addresses 
the following categories in the Department of Defense budget: 
procurement; research, development, test and evaluation; 
operation and maintenance; working capital funds, military 
personnel; and military construction and family housing. The 
bill also addresses Department of Energy National Security 
Programs and the Maritime Administration.
    Active duty and reserve personnel strengths authorized in 
this bill and legislation affecting compensation for military 
personnel determine the remaining appropriation requirements of 
the Department of Defense. However, this bill does not provide 
authorization of specific dollar amounts for personnel.

                  SUMMARY OF AUTHORIZATION IN THE BILL

    The President requested budget authority of $265.6 billion 
for the national defense budget function for fiscal year 1998. 
Of this amount, the President requested $251.0 billion for the 
Department of Defense (including $8.4 billion for military 
construction and family housing) and $13.6 billion for 
Department of Energy national security programs and the Defense 
Nuclear Facilities Safety Board.
    The committee recommends an overall level of $268.2 billion 
in budget authority. This amount is an increase of 
approximately $2.6 billion from the amount requested for the 
national defense budget function by the President. The 
committee's recommendation is consistent with the amounts 
established in the budget resolution for fiscal year 1998 for 
the national security budget function.

                    SUMMARY TABLE OF AUTHORIZATIONS

    The following table provides a summary of the amounts 
requested and that would be authorized for appropriation in the 
bill (in the column labeled ``Budget Authority Implication of 
Committee Recommendation'') and the committee's estimate of how 
the committee's recommendations relate to the budget totals for 
the national defense function. For purposes of estimating the 
budget authority implications of committee action, the table 
reflects the numbers contained in the President's budget for 
proposals not in the committee's legislative jurisdiction.
    Offset Folios 24 to 29 Insert here

<SKIP PAGES = 006>

                    RATIONALE FOR THE COMMITTEE BILL

    H.R. 1119, the National Defense Authorization Act for 
Fiscal Year 1998, reflects the committee's continued efforts to 
manage the risks that continued force downsizing and budget 
reductions pose for U.S. national security interests in an 
uncertain world. The committee and the Congress have helped 
bring a measure of stability to the U.S. defense program over 
the past two years, moving to restore some balance between the 
need to maintain sufficiently large and capable forces today 
and the need to modernize and introduce innovative new 
technologies and concepts that will provide a basis for 
continued American military superiority in future.
    The committee believes that the fundamental dilemma facing 
the Department of Defense remains constant: how to maintain a 
viable all-volunteer force in an environment where the number, 
scope and duration of military missions, especially 
peacekeeping and humanitarian missions, continue to grow while 
military forces and defense budgets continue to decline. 
Although the Department's recent Quadrennial Defense Review 
(QDR) recognized these realities, the long-standing gap between 
strategy and resources will persist and, in fact, is likely to 
widen. The National Defense Panel (NDP), an independent body 
selected by the Administration and Congress to assess the QDR, 
summarized the problem when it concluded that the QDR exposed a 
``risk in defense resources.'' In particular, the NDP concluded 
that the QDR's plan to improve modernization funding was based 
upon ``tenuous'' assumptions which ``collec tively . . . 
represent a budget risk which could potentially undermine the 
entire Defense Strategy.''
    The QDR acknowledges that a sound national military 
strategy is based upon protecting the ability of U.S. military 
forces to respond to today's challenges while also preparing 
for the challenges of an uncertain future. This strategy 
requires three principle tasks of the Department of Defense. 
First, U.S. military forces must help to maintain the security 
and stability among powerful nations that is by and large the 
result of the American-led victory in the Cold War. Second, 
U.S. forces must protect today's security and stability from 
lesser threats, be they smaller nations, ethnic conflicts, 
terrorism or myriad other sources. Finally, U.S. forces must 
begin to prepare now for the possibility of future great-power 
conflicts that may be fought with military forces quite 
different from today's.
    This first task of maintaining current security and 
stability has been articulated in a clear set of standards that 
account for the size and structure of today's U.S. military 
forces. These standards include the need to maintain 
approximately 100,000 troops both in Europe and in East Asia, 
and sufficient forces available to deploy, fight and rapidly 
win two nearly simultaneous major wars. The committee continues 
to support these standards. The troop levels in Europe and Asia 
represent an enduring commitment by the United States to these 
vital regions, while the capability to fight two wars 
simultaneously ensures that the United States will be able to 
respond to crises without compromising the ability to maintain 
stability elsewhere. With the continued imminent threats in 
Korea and the Persian Gulf, this two-war capability must remain 
a basic building block of U.S. military forces.
    At the same time, the dominance of U.S. conventional 
military forces and the continued strength of our nuclear 
deterrent is compelling adversaries to be more innovative and 
aggressive. Countering more diffuse and less traditional 
threats accounts for the second principle task of U.S. armed 
forces. Terrorism, proliferation of weapons of mass 
destruction, tribal and ethnicconflicts, the potential for 
``information warfare'' and other asymmetric threats are placing new 
burdens upon the U.S. military. In the past year, the terrorist bombing 
of the Khobar Towers complex in Dhahran, Saudi Arabia has highlighted 
the need for improved force protection measures for U.S. units deployed 
abroad. The proliferation of ballistic missile technology and weapons 
of mass destruction also has accelerated in the past year, and the 
committee continues to believe that efforts to develop and deploy 
effective defenses against such threats must remain a national 
priority.
    The QDR also has acknowledged, under the rubric of 
``smaller-scale contingencies,'' that U.S. military forces will 
be engaged in a growing number of peacekeeping and humanitarian 
missions. Because the Administration regularly has deployed the 
U.S. military on such missions, the QDR concluded that these 
lesser contingencies will represent a significant element of 
U.S. military operations over the next decade. The QDR also 
recognized the strains that multiple peacekeeping and 
humanitarian deployments place on U.S. troops, their families, 
military equipment and training for combat. However, based upon 
its continued attention to the growing readiness problems that 
U.S. forces confront, the committee is skeptical that the 
Department can maintain the current level of operational and 
personnel tempo without sacrificing critical military 
capabilities. Units and troops absorbed in repeated 
peacekeeping operations are unable to train effectively, for 
the high-intensity combat missions necessary to execute the 
national military strategy.
    The committee has long been concerned that the third 
principle task of the U.S. armed forces--preparing today for 
the eventuality of future great-power conflicts--has been 
undervalued by the administration. By contrast, the committee 
considers the maintenance of peace and stability among the 
world's most powerful nations to be America's unique 
contribution to global security, and of critical importance to 
the nation's ability to protect its interests around the world. 
However, today's security is the historical exception rather 
than the rule. As historian Donald Kagan testified before the 
committee, ``War has been a persistent part of human experience 
since before the birth of civilization. In 1968, Will and Ariel 
Durant calculated that there had been only 268 years free of 
war in the previous 3,421.'' There is every reason to believe 
that the current epoch should be viewed not as a ``post-war'' 
period, but instead as an interwar period. With history as a 
teacher, it is only prudent to assume that a large power or 
coalition of powers eventually will contest a vital U.S. 
national security interest.
    While the committee cannot predict with certainty who this 
challenger will be or exactly when the challenge will arise, it 
is possible to identify what our enduring national interests 
are, for they have remained constant. Even in the post-Cold War 
era and absent a global competitor like the Soviet Union, the 
United States retains its traditional interests in protecting 
the American homeland and its people; preventing a hostile 
power or coalition of hostile powers from dominating Europe, 
East Asia and the energy-producing regions of the world; and 
protecting the international order of nation-states. These 
abiding interests preceded, and have survived, the Cold War.
    The most serious and sustained threats to these enduring 
interests can only come from other powers capable of fielding 
substantial conventional military forces or nuclear weapons. 
While the QDR represents an improvement over the 
Administration's 1993 Bottom-Up Review, the QDR presents an 
overly optimistic view of the possibility of future challenges 
to America's core security interests. The committee believes 
that a sound national military strategy must account not only 
for the likelihood of threats but also for the gravity of any 
threat to these core security interests.
    In the past year, the committee has focused on the 
challenges posed by China--an emerging power--and Russia--a 
once and perhaps future power--to United States global 
interests. While neither nation is currently an enemy of the 
United States, they do represent the nations most likely and 
able to accumulate military power sufficient to challenge U.S. 
vital national security interests. The QDR's projection that 
neither China nor Russia is likely to emerge as a regional 
great power until beyond 2015 is questionable.
    The committee remains supportive of efforts to bolster the 
democratic process in Russia. The collapse of the Soviet Union 
has created an opportunity to more closely tie Russia to the 
world's democracies. However, the committee believes that 
Russia's future will be shaped less by U.S. policies than by 
whether Russia decides to remain an independent power pursuing 
its own strategic goals, driven by its own history and 
character, or decides to form working partnerships with the 
United States and its allies. The current Russian experiment in 
quasi-democracy is struggling against a centuries-long 
tradition of autocracy, and the United States must remain 
guarded in assessing prospects for the experiment's success. 
Moreover, history has demonstrated that the transition to 
democracy often proves a tumultuous and violent process. A vast 
but collapsed empire, governed by a weak central authority and 
armed with an arsenal of nuclear weaponry under questionable 
control, Russia must provide cause for great caution. Even if 
Russia succeeds in becoming more fully democratic, it still may 
establish security goals that conflict with those of the United 
States.
    China is an emerging power and poses an inverse problem. 
The Administration believes that the nature of Chinese power is 
not yet determined, and that China's external relations can be 
shaped through engagement to allow it to make a positive 
contribution to regional stability and to act as a responsible 
member of the international community. The committee takes a 
guarded view, more consistent with the Department of Defense 
report prepared pursuant to the National Defense Authorization 
Act for Fiscal Year 1997. The report concluded that China's 
goal is to become one of the world's great powers, that China 
will be securely established as the leading political power in 
East Asia early in the coming century and that China will 
``build its military power to the point where it can engage and 
defeat any potential enemy within the region with its 
conventional forces and can deter any global threat to China's 
national security.'' Whether or not an emerging China becomes 
an enemy of the United States and its allies remains to be 
seen, but China's stated strategic goals would appear to 
challenge America's current position as a powerful presence for 
peace and stability in East Asia.
    The committee believes that the process of managing 
strategic risk must be shaped first and foremost by the risks 
of renewed great-power rivalries. The surest way to optimize 
the chances of an American strategic partnership with either 
Russia or China is for the United States to continue to be the 
world's most powerful force for peace and stability. However, 
the committee also recognizes that the assumption that either 
Russia or China will acquiesce in American global leadership is 
a dangerous premise upon which to base U.S. security strategy 
for the coming century.
    The making of strategy has always been a process of 
managing risk. In a post-Cold War environment of shrinking 
military forces and constrained defense budgets, the imperative 
to maintain strategic priorities grows while the margin for 
error gets smaller. The QDR strategy is consistent with the 
committee's view of the role America should play in the post-
Cold Warworld, and the committee is hopeful that the review 
might provide a more stable foundation for maintaining the armed forces 
necessary for the nation to meet these future challenges. However, the 
continued decline in defense spending means that the committee's two-
year-old effort to begin revitalizing U.S. military forces will take 
longer and will involve higher risk to the nation.
    The projected real decline in future defense budgets, 
assumed in the QDR and ratified in the recent budget agreement, 
adds to strategic risk. Neither the Administration's fiscal 
year 1998 defense budget request nor the defense plan 
established in the QDR adequately address budgetary shortfalls 
that exacerbate the strategic risks inherent in a dangerous 
world. The QDR has not allayed the committee's skepticism 
regarding the Administration's commitment to establishing a 
defense program that balances the pillars of a sound defense 
program: the maintenance of sufficient combat forces in a state 
of readiness necessary to execute the national military 
strategy, the guarantee of a decent quality of military life 
and an adequate program of equipment modernization to ensure 
for the future the advantages U.S. military force enjoy today. 
If the defense program is to be truly brought into balance, and 
the harmony between current readiness, quality of life, and 
modernization restored, more dramatic actions are demanded.

                               READINESS

    The committee reaffirms its commitment to maintaining a 
high state of military readiness. In past years, the committee 
has added significant funds to restore pay raises, increase the 
level of combat training, improve the level of equipment 
maintenance and undertake many other initiatives to compel the 
Administration to address readiness problems. However, the 
readiness of U.S. armed forces, particularly for the high-
intensity combat missions central to the nation's military 
strategy, has continued to erode. It is apparent that the high 
pace of military operations, due in large part to the burdens 
of repeated deployments for peacekeeping and humanitarian 
missions, and declining budgets are taking a heavy toll on U.S. 
military forces. Four trends are salient. First, soldiers, 
sailors, airmen and Marines are working harder and longer to 
execute their peacetime missions due to an inherent tension 
between personnel and resources shortages and the increased 
pace of operations. Military personnel and their families are 
paying an increasingly higher human price from being repeatedly 
asked to ``do more with less.'' Second, the quantity and 
quality of combat training is being compromised, especially for 
the most demanding mission--to fight and win tomorrow's high-
intensity wars. Third, the quality of military life continues 
to erode to the point where a growing number of talented and 
dedicated military personnel and their families are questioning 
the desirability of a life in uniform. And fourth, military 
equipment is aging prematurely due to extended use and reduced 
maintenance. Budget cuts and the increased operational tempo 
have started to affect the reliability and availability of 
existing fleets of equipment. In sum, these trends depict a 
significant, systemic readiness problem that will continue to 
undermine the preparedness of U.S. military forces.
    The committee bill represents an effort to manage the risk 
associated with a deepening readiness problem by protecting 
funding for high-intensity combat training and maintenance of 
equipment and infrastructure. In addition, the committee 
believes that the Administration's personnel budget request 
will not be able to provide the forces needed to execute the 
national military strategy and to support current operational 
tempo while providing a decent quality of military life. Nor 
does the committee accept the QDR's end-strength 
recommendations, which are likely to exacerbate the personnel 
readiness problems outlined above. To more prudently manage the 
risk associated with the problems inherent in the 
Administration's budget request, the committee has maintained 
the end-strength floors established in 1996 and continues to 
protect what it believes to be prudent active-duty force 
levels. The committee also has continued its commitment to 
readiness by adding funds for depot maintenance, real property 
maintenance and mobility enhancements needed to maintain a 
power-projection force capable of rapid reaction to world 
crises.

                            QUALITY OF LIFE

    In past, the committee has considered the quality of 
military life to be an essential component of a balanced 
defense program, and has strengthened military housing 
programs, programs to reduce out-of-pocket costs for military 
personnel and their families, and has funded full pay raises, 
whether requested by the Administration or not. Nonetheless, 
many troops and their families have grown increasingly 
dissatisfied with the quality of military life. Much of this 
dissatisfaction stems from the stress of extended time away 
from home resulting from almost continuous peacekeeping and 
other humanitarian missions.
    Quality of life is inherently difficult to quantify. It is 
a complex construct, reflected in a delicate mix of variables 
such as balancing family life and military service, decent 
housing, adequate pay and benefits, reliable and affordable 
health care and many other factors. Providing a decent quality 
of military life is essential to recruit, retain and maintain 
the professional, all-volunteer force upon which U.S. military 
strategy relies. Since the 1970s, when the draft was 
terminated, the compact between the nation and the men and 
women who serve it in uniform has rested upon the proposition 
that soldiers, sailors, airmen and Marines and their families 
will be provided with a standard of living that approximates 
that of middle-class America.
    However, there is a widespread belief among service 
personnel and their families that the quality of their lives is 
eroding. As a consequence, many in the military are beginning 
to question whether the rewards of military life are worth the 
mounting hardships. Perhaps the leading cause of 
dissatisfaction is increased family separations. Given that 65 
percent of the force, officer and enlisted, is married, the 
choice between professional requirements and personal needs is 
becoming more complicated. One Navy spouse summarized the 
problem when she told the committee, ``In such a high 
[operations tempo] environment, the best marriages, the ones 
that survive, are those in which people learn to live apart.''
    The services' attempts to balance quality of life with 
other factors reveal just how difficult a management problem 
this is. For example, the commander of the Army's III Corps at 
Fort Hood, Texas, has demanded that important training time and 
resources be diverted to create opportunities for soldiers to 
attend to basic and essential activities of family life, such 
as parent-teacher conferences. This is a poignant and 
disturbing example of the dilemmas facing military families. 
Since the committee began reporting on the growing readiness 
problem, the Department of Defense has begun to recognize the 
problem, and has introduced a number of measures to better 
manage the strains of high operational and personnel tempos. 
The committee notes these small belated steps with 
satisfaction, but believes that more aggressive actions will be 
necessary.

                      MODERNIZATION AND INNOVATION

    A third critical component of a balanced defense program is 
ensuring that U.S. military personnel are equipped with modern 
technology. There is widespread general consensus that the 
``procurement holiday'' of the past five years must come to an 
end. The Joint Chiefs of Staff have identified a goal of $60 
billion per year in procurement spending as the approximate 
funding level needed to recapitalize the U.S. armed forces--a 
figure reconfirmed by the QDR. The committee continues to 
support this objective, but continues to doubt the 
Administration's commitment.
    In the context of trying to manage risk in an environment 
of constrained resources, the committee believes it is 
necessary to set modernization priorities that reflect 
strategic priorities. Systems that promise only marginal 
improvement over those currently in the field should, and 
eventually will, give way to those systems that demonstrate 
more cost-effective and strategically relevant capabilities. 
There is no better example than tactical aircraft programs, 
where plans far exceed projected budgets and the half-measures 
recommended in the QDR do not address the problem.
    The committee was pleased to see, in several instances, 
that the QDR did make important strides toward aligning 
modernization priorities with strategic need. For example, the 
QDR's recognition that the Administration's own ``three-plus-
three'' national missile defense program was substantially 
underfunded confirms the committee's approach to this important 
program over the past several years. The committee stands by 
its belief that continued global proliferation of ballistic 
missile technology makes the deployment of an effective 
national missile defense system of the highest priority. 
However, the committee continues to question the 
Administration's commitment to either national or theater 
missile defenses. Despite claims advanced in the fiscal year 
1998 defense budget request that theater defense programs were 
being accelerated, funding for these programs was cut by more 
than $400 million from current spending levels.

                             DEFENSE REFORM

    Serious readiness, quality of life and modernization 
problems and shortfalls add increased urgency to the 
committee's continuing efforts to reform the Department of 
Defense establishment to create a smaller, smarter and 
streamlined bureaucracy. In an environment where combat forces 
continue to be reduced while they are deploy more often, the 
committee believes that it is untenable to continue devoting 60 
percent of the defense budget to support and infrastructure. If 
the goal to reestablish a defense program balanced among the 
need to maintain ready forces and to ensure a decent quality of 
military life today while modernizing U.S. military forces for 
tomorrow is to become a reality, the Administration must become 
a more active partner in pursuing meaningful defense reform.
    Defense reform is no longer just about being more 
efficient. Rather, it is about survival in an environment where 
failure to achieve real defense reform will result in degraded 
combat capability for lack of adequate resources. The committee 
initiated a number of reforms during the 104th Congress in the 
areas of acquisition policy, infrastructure and support 
services, and defense structure and organization. All were 
intended to increase overall efficiency within the Department 
while, at the same time, encouraging the shift of resources 
from the Department's support ``tail'' to the services' combat 
``tooth'' in an effort to preserve the military's warfighting 
effectiveness.
    The committee acknowledges Secretary Cohen's promise to 
pursue defense reform through the establishment of the Task 
Force on Defense Reform, but the committee notes that the 
results of that new review will not be known until late in the 
year. While additional reviews may be warranted, it is the 
committee's view that in the aftermath of the 1995 Commission 
on Roles and Mission, the 1996 Defense Science Board Task Force 
on Outsourcing and Privatization, and the 1997 QDR, the time 
for aggressive action is now.
    To accelerate the process of reform, the committee reported 
H.R. 1778, the Defense Reform Act of 1997, to the House of 
Representatives. This bill pursues meaningful reform in three 
basic areas: streamlining the defense bureaucracy, improving 
defense business practices and adding a measure of common sense 
to the environmental regulations governing the Department's 
operations. Chief among the bureaucratic reforms are 
initiatives to reduce headquarters staffs by 25 percent and the 
defense acquisition workforce by more than 40 percent. 
According to the Congressional Budget Office, these reforms 
will save $15 billion over the next five years and an 
additional $5 billion each year thereafter without taking into 
account the additional potential savings resulting from the 
mandated increases in competition of defense support services. 
Finally, the environmental reforms will not merely help to 
control the rapidly escalating cost--now $12 billion per year--
of defense environmental clean-up efforts, they will ensure 
that these funds actually are spent on restoration work itself, 
rather than to satisfy excessive and redundant regulatory 
requirements. The committee recognizes the need for 
environmental restoration of former military and defense 
installations, but believes that taxpayer dollars should be 
devoted to the needed cleanup work, not on paperwork.

                               CONCLUSION

    Secretary of Defense Cohen has admitted that the defense 
posture outlined in the Quadrennial Defense Review will allow 
U.S. forces to execute the national military strategy, but at 
increased risk. He also quantified the budgetary risk--the 
amount of defense spending required to close the strategy-
resource gap--at approximately $15 billion per year. While the 
committee believes that the annual shortfall is greater than 
$15 billion, what was most striking about the Secretary's 
estimate was the relatively small size of the budget shortfall 
in comparison to the tremendous strategic risk associated with 
not addressing it. At $15 billion, the estimate represents 
approximately one-tenth of 1 percent of the federal budget. Yet 
the military, strategic and political risks associated with not 
fixing this shortfall are monumental. For the military, the 
budget shortfall translates into declining readiness, 
diminished quality of military life and postponed modernization 
problems described above. The continued erosion of military 
capability will threaten the nation's capabilities to protect 
and promote its interests around the world and will inevitably 
lead to the loss of American international influence. In the 
committee's view, the risks of inaction or failure far outweigh 
the cost of addressing shortfalls in the defense budget--
whether $15 billion per year, or more.
    Although the QDR was completed too late to shape the 
Administration's fiscal year 1998 defense budget request or to 
factor significantly in the committee's deliberations, H.R. 
1119 reflects the committee's mounting sense of urgency to 
restore a proper balance among readiness, quality of military 
life and modernization and to push the Department of Defense in 
the directionof meaningful reform. The nation cannot afford 
status quo defense budgets. The way forward is uncertain and involves 
great risks. The committee would prefer to be raising and maintaining 
military forces capable of an unquestioned response to challenges 
anywhere in the world, rather than managing budgetary, military and 
strategic risk with no margin for error. In this context, H.R. 1119 
reflects the committee's effort to address serious shortfalls while 
managing risk in a resource-constrained environment.

                                HEARINGS

    Committee consideration of the National Defense 
Authorization Act for Fiscal Year 1998 results from extensive 
hearings that began on February 12, 1997 and that were 
completed on May 22, 1997. The full committee conducted 11 
sessions. In addition, a total of 54 sessions were conducted by 
five different subcommittees and two panels of the committee on 
various titles of the bill.
            DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION

                          TITLE I--PROCUREMENT

                                OVERVIEW

    The last few years have seen a vigorous debate concerning 
the adequacy of the Clinton Administration budgets for defense 
modernization. Administration officials argue that a 
``holiday'' in weapons procurement was justified due to the 
many new weapons purchased in the 1980s and to not having to 
replace older weapons retired as a result of the drawdown in 
the size of the force. The 104th Congress reasoned otherwise: 
namely, that the disproportionate cuts in the equipment 
modernization accounts jeopardized the technological edge that 
was so brilliantly demonstrated in the Persian Gulf War. 
Consequently, Congress added $11 billion to these accounts in 
the fiscal year 1996 and fiscal year 1997 National Defense 
Authorization Acts (Public Laws 104-106 and 104-201)--a 15 
percent increase over the budget request for each of those two 
years--despite the Administration's opposition to doing so. In 
taking these actions, the 104th Congress sought the expert 
advice of the military service chiefs on how best to apply the 
additional funds to the most urgent unfunded modernization 
priorities. Regrettably, no sooner had these acts had been 
signed into law than the Administration proposed to use the 
added modernization funds to pay for the operations and 
readiness shortages contained in their budgets.
    This same pattern continues with the fiscal year 1998 
budget request. Attainment of even modest modernization 
increases has again been deferred until ``next year.'' Despite 
obvious and compelling evidence of procurement shortfalls and 
despite the fact that the Chairman of the Joint Chiefs of Staff 
concluded that, beginning with fiscal year 1998, the Department 
required $60 billion annually to keep the force modernized, the 
fiscal year 1998 budget request of $42.6 billion represents a 
cut of $1.5 billion from the budget enacted for fiscal year 
1997 and is $2.9 billion below the spending levels forecast in 
the President's budget for fiscal year 1998 just last year. 
Furthermore, the budget request marks the fourth consecutive 
year that the Administration has reduced the fiscal year 1998 
procurement figure--by a cumulative total of $14.5 billion--
relative to its earlier projections.
    The committee notes that the recently-released Quadrennial 
Defense Review (QDR) acknowledges that the planned ``rebound'' 
in procurement ``has been repeatedly postponed in recent 
budgets as increases previously projected for the procurement 
accounts have been eroded by unexpected demands for additional 
funding in operational activities.'' The committee is dismayed 
by the fact that the 
Department believes this shift in resources from modernization 
to operations will continue and that procurement funding, 
instead of growing to $60 billion per year, could be expected 
to stall in the range of $45-$50 billion. The committee further 
notes that this belief is reinforced by the independent 
National Defense Panel's critique of the QDR, which found the 
QDR modernization plan risky due to tenuous assumptions of 
further base closures and savings from acquisition and other 
infrastructure reforms.
    Notwithstanding the Administration's lack of resolve to 
deal proactively with the continuing modernization problem, the 
committee--for the third year in a row--has added funds 
significantly in excess of the procurement budget request. 
Moreover, in formulating its proposed addition of $3.8 billion, 
the committee has also once again been responsive to meeting 
the unfunded priorities submitted by the various military 
service chiefs of staff. However, because the committee 
believes that the QDR has not made the correct decisions 
regarding tactical aircraft and the B-2, it has taken different 
positions on these two issues. Furthermore, the committee 
disagrees with the Department's assessment of the Arsenal Ship 
demonstrator's utility and its proposed teaming arrangement for 
construction of the New Attack Submarine. These topics are 
discussed at length in the report.
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                       Aircraft Procurement, Army

                                Overview

    The budget request contained $1,162.5 million for Aircraft 
Procurement, Army in fiscal year 1998. The committee recommends 
authorization of $1,535.3 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Aircraft survivability equipment (ASE)

    The budget request contained $900,000 for project 
management support and fielding of ASE systems, however, no 
funding was included for upgrades to the Aircraft Survivability 
Equipment Trainer IV (ASET IV).
    The ASET IV is a ground-based, mobile aviation threat 
emitter simulation and training system, which teaches aircrews 
to recognize surface-to-air-missile (SAM) and anti-aircraft 
artillery threats in order to employ the correct aircraft 
threat avoidance tactics. ASET IV systems are currently fielded 
at major training centers throughout the United States and 
Germany and require that an aircraft have a fully operational 
ASE suite of sensors on board for training. The committee 
understands that in its present configuration, however, the 
ASET IV cannot locate, identify, or track aircraft at night nor 
can it simulate the most current infrared (IR) SAM threats, 
thereby limiting aircrews to daylight training against older IR 
SAM threats, which is not representative of the Army's ``train 
as you fight concept.''
    The committee is aware of upgrades to the ASET IV system 
that would enable nighttime training through the incorporation 
of a night vision camera and provide an up-to-date IR SAM 
threat emitter simulation capability. Based on the Army's 
requirement for forces to train in realistic threat 
environments, the committee recommends an increase of $14.8 
million for upgrading eight ASET IV systems with IR SAM threat 
simulators and night vision cameras.

Aircraft survivability equipment (ASE) modifications

    The budget request contained $4.6 million for ASE 
modifications, of which $2.2 million was to complete the 
installation of AN/AVR-2A Laser Detecting Sets (LDS) on the AH-
64 Apache. However, no funding was requested for procurement of 
additional LDSs for other types of aircraft despite the fact 
that only 413 of the required 2,063 systems have been fielded 
by the Army.
    The LDS detects, identifies, and characterizes threats from 
laser-targeted weapons 360-degrees-around and plus-or-minus 45 
degrees above-and-below an aircraft. It is the only device 
procured by the Army that provides warning to helicopter crews 
when they have been illuminated by a laser-targeted weapon. As 
a result of the increasing proliferation of laser technology, 
the committee believes the Army should fulfill its requirement 
for these unique detection systems as soon as possible and, 
therefore, recommends an increase of $15.0 million for 
continued procurement of LDS for installation on UH-60 
Blackhawks, MH-60K Blackhawks, and MH-47E Chinooks.

C-12 cargo aircraft modifications

    The budget request contained $600,000 for avionics and 
cockpit upgrades to C-12 cargo aircraft.
    The C-12 is based throughout the world and is one of the 
Army's primary passenger-carrying aircraft. The C-12 is 
expected to remain active in service for at least the next 20 
years and will be one of four types of aircraft that will 
remain in the Army's fixed wing utility aircraft fleet after a 
major consolidation of the inventory is completed.
    Based on the need for passenger-carrying military aircraft 
to have the latest technology for safe flight operations and 
noting that the majority of the Army's C-12 aircraft were 
purchased in the 1970s and 1980s with avionics and navigation 
equipment that was state-of-the-art at that time but obsolete 
today, the committee believes these upgrades should be 
accelerated. Therefore, the committee recommends an increase of 
$6.0 million for avionics and cockpit upgrades for 34 C-12 
cargo aircraft.

Longbow training devices

    The budget request contained $474.8 million for the Longbow 
modification program, of which $81.6 million was for Longbow 
training devices. The requested funding will procure two types 
of pilot trainers, the Longbow Crew Trainer and the Longbow 
Collective Training System, and several types of maintenance 
trainers.
    The Army has deemed these devices critical for training, 
since the Apache Longbow will be a primary weapon system in 
almost all Army operations and deployments. The committee 
recommended an increase of $53.0 million in fiscal year 1997 to 
accelerate procurement of these devices to support pilot and 
maintenance training when the Army's first Apache Longbow 
battalions are fielded. Since $28.5 million of this amount was 
not appropriated in fiscal year 1997, the committee recommends 
an increase of $28.5 million in fiscal year 1998 for this 
purpose.

OH-58D kiowa warrior modifications

    The budget request contained $38.8 million for Kiowa 
Warrior modifications.
    The committee notes that the current inventory of Kiowa 
Warriors is still below the requirement of 507, yet, the Army 
has not requested funds for the procurement of additional 
aircraft. While there are sufficient aircraft to meet the 
active Army division, regiment, and battalion component 
requirements, an insufficient amount exists for active 
component target acquisition and reconnaissance platoons, as 
well as for Force XXI needs and Army National Guard units. 
Therefore, the committee recommends $175.0 million to fund an 
additional 21 aircraft.

Training devices

    The budget request did not contain funding for training 
devices.
    Currently, the Korean-based Eight Army (EUSA) UH-60 
Blackhawk, CH-47 Chinook, and AH-64 Apache flight simulators 
visually depict generic terrain that does not duplicate any 
real-world location. The committee is concerned that EUSA 
helicopter pilots do not have the correct visual databases, 
state-of-the-art image generators and associated computers to 
simulate the Korean terrain. Further, the committee believes 
that having the capability to practice flying over Korean-
simulated terrain in a simulator would greatly reduce the 
possibility of inadvertent flights over politically sensitive 
and potentially hostile areas. The committee is aware of an 
EUSA requirement for improved flight simulators, including 
geographic-specific databases and state-of-the-art image 
generators, and recommends an increase of $18.6 million for 
these hardware and software upgrades.

UH-60 blackhawk

    The budget request contained $183.2 million for 18 UH-60L 
Blackhawks but did not contain funding to modify Blackhawks to 
the UH-60Q enhanced medical evacuation variant.
    Noting that the total Blackhawk requirement for the Army 
National Guard's (ARNG) aging utility helicopter fleet is in 
excess of 400 aircraft, the committee recommends an increase of 
$90.0 million to procure an additional 12 Blackhawks for the 
ARNG. The committee further recommends an increase of $6.0 
million for modification kits to configure three of these 
aircraft as UH-60Q enhanced medical evacuation models in 
acknowledgment of the fact that this modification is also a 
priority modernization requirement of the ARNG.

                       Missile Procurement, Army

                                Overview

    The budget request contained $1,178.2 million for Missile 
Procurement, Army in fiscal year 1998. The committee recommends 
authorization of $1,176.5 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Army tactical missile system (ATACMS)

    The budget request contained $97.8 million for the 
procurement of 153 Block IA ATACMS missiles to be acquired 
using a multiyear procurement contract. The committee notes, 
however, that the Army has changed its plans for initiating a 
multiyear procurement contract as a result of deficiencies in 
operational testing performed on the missile prior to its 
entering into full-rate production.
    As a result of the multiyear procurement cancellation, the 
committee understands that only 100 missiles will be procured 
in fiscal year 1998. Therefore, the committee recommends a 
corresponding reduction of $10.8 million.

Avenger modifications

    The budget request did not contain funding for 
modifications to Avenger fire units, which constitute the rear 
component of the Army's Forward Area Air Defense System (FAADS) 
and are the first element of FAADS that has been fielded.
    The committee notes that the Avenger's current 
configuration limits its capability to rapidly lock on and 
track newly emerging threats to ground forces, such as cruise 
missiles and unmanned aerial vehicles, both of which are under 
development by many countries around the world. The slew-to-cue 
upgrade gives the Avenger an automatic and much more rapid 
target identification, tracking and processing capability in 
response to these types of targets and provides an over 50 
percent increase in kill capability as a result of the greater 
speed of operation.
    Since the committee believes it is vitally important to 
enhance the capability of the Army's only FAADS fielded assets, 
it recommends an increase of $13.3 million for 125 slew-to-cue 
upgrade kits.

Improved target acquisition system/tube-launched, optically-tracked, 
        wire-guided (ITAS/TOW) missile modifications

    The budget request contained $62.8 million for ITAS/TOW 
modifications, of which no funding was included for the Missile 
Ordnance Inhibit Circuit (MOIC) modification.
    The MOIC modification provides for installation of a 
circuit on TOW training missiles to prevent flyback in the 
event of a missile malfunction. This critical safety 
enhancement is fundamental for troops to be able to train with 
live-fire missiles. Therefore, the committee recommends an 
increase of $7.0 million for the procurement and installation 
of the MOIC on both the basic and improved versions of the TOW 
missile.

Stinger modifications

    The budget request contained $12.4 million for modification 
upgrades to 751 Stinger Block I missiles.
    This electronics, software and guidance upgrade extends the 
service life of Block I missiles and increases the 
effectiveness of the Stinger against low-flying fixed and 
rotary wing targets. Consequently, consistent with actions 
taken by the committee in fiscal years 1996 and 1997, the 
committee recommends an increase of $9.3 million for an 
additional 549 Block I upgrades to continue to maintain an 
economic production rate of this missile.

               Weapons and Tracked Combat Vehicles, Army

                                Overview

    The budget request contained $1,065.7 million for 
procurement of Army weapons and tracked combat vehicles for 
fiscal year 1998. The committee recommends authorization of 
$1,519.5 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Bradley fighting vehicle system series modifications

    The budget request contained $61.2 million for 
modifications to the Bradley fighting vehicle, of which $34.6 
million is for upgrading Bradley ``A2'' version vehicles to the 
Operation Desert Storm (ODS) variant.
    The Bradley ODS variant incorporates changes that improve 
the vehicle's lethality, survivability, and mobility, as well 
as the situational awareness of its crew. Modifications include 
installation of a laser range finder, Global Positioning System 
navigation capability, a combat identification system, a 
driver's thermal viewer and a missile countermeasure device.
    When the Army completes all of its planned modifications to 
the Bradley, the active fleet will include a mix of the most 
advanced ``A3'' variant, along with ``A2'' and ODS versions. 
The Army National Guard (ARNG), however, will be left with 
unmodified, first-generation ``A0'' vehicles, which, because of 
major survivability deficiencies, were not used in ODS and will 
not be taken into future combat.
    Because the ARNG comprises an increasing percentage of the 
total force warfighting assets as a result of active component 
force reductions, the committee recommends an increase of 
$120.0 million for modifying 120 Bradley ``A0'' vehicles to the 
ODS variant for the ARNG.

M109A6 paladin/M992A2 field artillery ammunition support vehicle 
        (FAASV)

    The budget request did not contain funding to procure 
M109A6 Paladin self-propelled howitzers or M992A2 FAASVs for 
the Army National Guard (ARNG).
    Although ARNG units comprise the majority of the Army's 
field artillery force, the committee notes that the ARNG does 
not have a full complement of the most recently upgraded 
versions of either the M109A6 Paladin or the M992A2 FAASV. 
Since ARNG artillery battalions will have a greatly enhanced 
role in the future, yet only 16 of the 48 ARNG battalions are 
scheduled to receive the fully-digitized Paladin system, the 
committee recommends an increase of $111.0 million for 72 
Paladins and a corresponding $81.1 million increase for 72 
FAASVs to upgrade four additional ARNG artillery battalions.

M113 carrier modifications

    The budget request contained $20.2 million for modifying 66 
M113 carriers to the ``A3'' configuration. The M113A3 upgrade 
program, forecast to add an additional 20 years of service life 
to the vehicle, includes depot overhaul and rebuild of the 
vehicle along with the installation of a new engine, 
transmission, external fuel tanks, driver controls, and spall 
liners. The committee recommends an increase of $53.0 million 
for M113 modifications, as discussed below.
    The committee notes that the budget request falls far short 
of the required amount, as it has in previous years, for the 
planned upgrade of 250 vehicles per year andrecommends an 
increase of $24.6 million, which, when combined with the budget 
request, will provide for approximately this number. Also, the 
committee is concerned that the M113 may not provide sufficient armor 
protection for its crew and that the majority of the M113 fleet cannot 
operate at night. Therefore, the committee recommends an increase of 
$20.0 million for reactive armor tiles to enhance the vehicle's 
survivability and an increase of $8.4 million to accelerate equipping 
the M113A3 with night vision driver viewers.

M240B medium machine gun

    The budget request did not contain funding for the M240B 
medium machine gun. The M240B is intended to replace the M60 
series machine gun in light infantry, mechanized infantry, and 
combat engineer units. Although the Army has a total 
procurement objective of over 11,000 M240B machine guns, the 
service has only procured 1,200 of these weapons to date.
    The committee notes that the Army has failed to fund this 
requirement for a second straight year and that funding to 
fulfill the Army's objective falls far short of the 11,000 
weapons objective through the future years defense program. 
Moreover, the Army has not entered into a multiyear procurement 
as the committee strongly encouraged in the committee report on 
H.R. 3230 (H Rept. 104-563)
    To ensure that the requirements for small arms are 
fulfilled, the committee recommends an increase of $20.0 
million for 2,100 M240B medium machine guns and strongly urges 
the Secretary of the Army to include funding in the fiscal year 
1999 budget request for this weapon.

M88A2 improved recovery vehicle

    The budget request contained $28.6 million for modifying 12 
existing ``A1'' variant vehicles to the more capable ``A2'' 
version.
    The A2 upgrade enables the vehicle to safely perform 
battlefield recovery of the 70-ton M1 Abrams tank and other 
vehicles weighing 60 tons or more. It consists of structural 
improvements to the vehicle chassis, an increased-horsepower 
engine, additional armor, an improved winch, and the addition 
of a hydraulic-assisted braking system. Although 24 vehicles 
per year is the minimum sustaining production rate, the budget 
request is sufficient to fund only 12 vehicles.
    The committee believes that this upgrade program is vital 
to the Army's future mobility and, consistent with its actions 
for the past two fiscal years, recommends an increase of $27.8 
million for 12 additional vehicles.

M9 armored combat earthmover (ACE)

    The budget request did not contain funding for the M9 ACE.
    The M9 ACE provides infantry, tank and artillery units with 
survivable fighting positions and creates anti-tank ditches as 
obstacles against enemy maneuver units. The committee believes 
the vehicle's high speed and heavy digging capabilities are 
essential to the success of any ground combat unit's maneuver 
effectiveness.
    Consistent with its recommendation for fiscal year 1997 to 
fund an additional 54 M9 ACE vehicles, the committee recommends 
an increase of $52.4 million to fund the remaining 54 M9 ACEs 
necessary to complete the active Army's requirement for 108 
vehicles.

                      Ammunition Procurement, Army

                                Overview

    The budget request contained $890.9 million for Ammunition 
Procurement, Army in fiscal year 1998. The committee recommends 
authorization of $1,093.8 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Ammunition

    The budget request contained $694.2 million for procurement 
of ammunition. The committee recommends $915.1 million, an 
increase of $212.9 million for the following types of 
ammunition:

                        [In millions of dollars]

Small/Medium Cal Ammunition:
    CTG 5.56mm Blank M200 Linked..................................   2.4
    CTG 7.62mm ball M80 linked....................................   6.0
    CTG 50 caliber ball M33 w/M9 linked...........................   0.1
    CTG 50 caliber 4 ball/1 Tracer................................   0.1
Mortar Ammunition:
    CTG Mortar 120mm HE M934 w/mo Fuze............................   9.0
    CTG Mortar 120mm Illum M930...................................   3.0
Tank Ammunition:
    CTG Tank 120mm TPCSDS-T M865..................................  12.8
    CTG Tank 120mm TP-T M831/M831A................................   9.8
Artillery Ammunition:
    CTG Arty 105mm DPICM M915.....................................  10.0
    CTG Arty 105mm HERA M927......................................  20.0
    PROJ Arty 155mm HE M795.......................................  50.0
Artillery Fuzes:
    M767A1 Electronic Artillery Fuze..............................  20.0
Mines:
    M87 Volcano...................................................  12.0
Rockets:
    Bunker Defeating Munition.....................................  10.0
    Rocket, Hydra-70 MPSM Practice................................  37.2
Demolition Munitions, All Types:
    SLAM..........................................................  10.0
Other Ammunition:
    Antitank Simulator M27........................................   0.5

Armament retooling and manufacturing support (ARMS) initiative

    The budget request contained $5.0 million for the ARMS 
initiative.
    The committee is aware that several refinements could be 
made to the ARMS Act of 1992 (Public Law 102-484), which 
provides for the reutilization of excess capacity of 
government-owned, contractor-operated ammunition facilities of 
the Department of the Army for commercial purposes. While the 
committee is supportive of innovative ways to reduce the impact 
of defense downsizing on communities, it believes that a 
thoroughreview of the benefits of these proposed refinements is 
required before considering permanent changes to existing authorities.
    Therefore, the committee directs the Secretary of the Army 
to provide a report to the congressional defense committees by 
March 31, 1998, that evaluates the following issues: (1) 
establishment of a special account for the accumulation of 
revenues generated from ARMS activities and the benefits of 
allowing the Secretary of the Army to retain those revenues for 
ARMS industrial base projects; (2) authorization for the 
Secretary to offer an ARMS participant who had made 
nonseverable property improvements to a facility to have the 
first right of refusal in acquiring title to the improved 
property at a fair market or negotiated value in the event that 
the Army decided to dispose of the property or facility as 
surplus; (3) authorization for the Secretary to enter into 
sole-source contracts with a facility-use contractor for long-
term periods; (4) authorization for the Secretary to be able to 
accept a combination of funds, property, services or other 
consideration in lieu of rental payments for the use of 
property accountable under an ARMS facility-use contract; and 
(5) authorization for the Army Industrial Operations Command to 
make an ammunition facility available for ARMS initiatives, 
even in cases where the facility was considered ``excess,'' 
thus providing an alternative to the current requirement to 
transfer an ``excess'' facility to the Army Corps of Engineers 
for environmental remediation and property management 
determinations.

Conventional ammunition demilitarization

    The budget request contained $106.1 million for 
conventional ammunition demilitarization.
    The committee strongly supports demilitarization of older 
ammunition but notes that the request represents a 10 percent 
increase over the amount requested in prior years and that is 
forecast for fiscal year 1999 in the future years defense 
program. The committee recommends $96.1 million, a $10.0 
million reduction, which the committee believes would create 
neither a near-term safety hazard nor prevent the execution of 
a balanced and safe ammunition demilitarization program.

                        Other Procurement, Army

                                Overview

    The budget request contained $2,455.0 million for Other 
Procurement, Army in fiscal year 1998. The committee recommends 
authorization of $2,640.3 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless other 
specified, adjustments are without prejudice and based on 
affordability considerations.
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                       Items of Special Interest

Area common user system (ACUS) modifications

    The budget request contained $82.4 million for 
implementation and engineering support of the ACUS modification 
program to update current legacy information systems and 
transition them to the Warfighter Information Network (WIN), 
which will support the Army's Force XXI digitization efforts. 
However, no funding was included for procurement of Tactical 
Personal Communications Services (PCS).
    As part of the Army's future wireless command post, 
Tactical PCS will replace wire-based communications with 
cellular communications. The committee is supportive of the 
Army's WIN communications upgrades and is aware of demonstrated 
cellular technologies that could meet preliminary Army Tactical 
PCS requirements. Based on the Army's plan to field a fully 
digitized division by fiscal year 2001 and its related mobile 
communications requirements, the committee recommends an 
increase of $10.0 million for the procurement of currently 
available Tactical PCS technologies for evaluation by Force XXI 
experimental forces.

Army data distribution system (ADDS)

    The budget request contained $57.2 million for the ADDS, of 
which $37.0 was for procurement of 304 Enhanced Position 
Location Reporting System (EPLRS) radios.
    As the digital ``backbone'' of the Army's Force XXI 
battlefield digitization efforts, EPLRS provides field 
commanders position information on their forces, in addition to 
supporting the majority of their data communication 
requirements. The Army's procurement objective for EPLRS is 
5,015 units, however, it has only procured 1,776 units to date. 
The committee understands the unique position location 
information that this system contributes to a combat unit's 
situational awareness, and, therefore, recommends an increase 
of $37.4 million for the procurement of 1,092 additional EPLRS 
radios.

All source analysis system (ASAS)

    The budget request contained $7.8 million for procurement 
of six ASAS-Extended unit sets to replace selected ASAS Common 
Hardware Software (CHS)-I workstations with CHS-II workstations 
and enhanced software.
    The ASAS is a ground-based, mobile, intelligence 
information processing and fusion system designed to provide 
automated intelligence support to combat commanders. The system 
interfaces with selected national, joint, and theater-level 
intelligence assets to provide commanders at echelons above 
corps down through battalion level a common, comprehensive 
picture of an opposing force's capabilities and potential 
actions.
    The committee anticipates that the Army will become 
increasingly reliant upon timely and accurate all source 
intelligence data provided by ASAS for the rapid targeting and 
employment of precision weapons and, therefore, recommends an 
increase of $9.0 million for the procurement of additional 
ASAS-Extended unit sets and enhanced software.

Automated data processing equipment

    The budget request contained $125.1 million for the Army's 
sustaining base automation systems, of which no funding was 
included for Sustaining Base Information Services (SBIS).
    As the Army modernizes its warfighting forces for the 
twenty-first century, it must also leverage state-of-the-art 
automation technology to plan, organize, train, equip, deploy, 
sustain, and redeploy these forces. The committee notes that 
continental United States (CONUS)-based combat service support 
for forces forward-deployed throughout the world will likely 
expand in the future to include logistics, personnel, finance, 
transportation, medical, and other sustaining base functions. 
However, the committee understands that the overall base 
automation infrastructure is currently overburdened, is 
reaching technological obsolescence, and may not be able to 
provide the level of combat service support expected of it by 
Army leaders. Consequently, the committee recommends an 
increase of $13.0 million to procure additional SBIS hardware 
for application fielding to additional CONUS bases and urges 
the Secretary of the Army to fully fund SBIS requirements in 
future budget requests.

Close combat tactical trainer (CCTT)

    The budget request contained $93.0 million for continued 
low rate initial production of the CCTT system, to include 122 
modules for fixed sites and seven mobile modules.
    The CCTT is a networked system of manned simulators for the 
Abrams tank, Bradley fighting vehicle, High Mobility 
Multipurpose Wheeled Vehicle, and M113A3 carrier and will train 
both active and reserve component crews of armored and 
mechanized infantry combat units. The committee is aware of the 
cost savings that can be achieved through simulation training 
and is encouraged with the progress made to date. However, the 
committee notes that a delay in the Initial Operational Test 
and Evaluation of the CCTT from April 1997 to the second 
quarter of fiscal year 1998 has occurred due to software 
reliability difficulties. Accordingly, the committee recommends 
a reduction of $11.5 million.

Common hardware software (CHS)

    The budget request did not contain funding for the 
procurement of CHS, which provides the standardized hardware 
and software for the information systems that will support the 
Army's first fully digitized division.
    The committee understands that the Army's contract for CHS-
I will expire prior to the end of fiscal year 1997. The 
committee believes it would be imprudent to terminate the 
existing CHS-I contract until a thorough analysis of the 
results of the recently concluded Advanced Warfighting 
Experiment, which evaluated its ``digital battlefield'' 
modernization efforts, has been completed. Allowing the CHS-I 
contract to expire prior to the complete evaluation of CHS-I, 
CHS-II and other battlefield digitization hardware could 
potentially delay fielding of critically-needed command, 
control and communications capabilities. Therefore, the 
committee directs the Army to extend the expiring CHS-I 
contract for one year, a period commensurate with minimizing 
fielding interruptions and with attaining the final 
certification of CHS-II.

Communications satellite radios

    The budget request did not contain funding for procurement 
of satellite communications radios for counterintelligence (CI) 
units in Korea.
    The committee is aware that communications shortfalls exist 
to fully support CI units deployed throughout the Korean 
peninsula and that a recent study identified a requirement to 
provide satellite communications connectivity for these units. 
Therefore, the committee recommends an increase of $2.8 million 
for this purpose.

Depot maintenance of other end items

    The budget request contained $24.8 million for depot 
maintenance of other end items.
    The committee is puzzled by the first-time request for 
these funds, as many of the projects included in the budget 
justification material appear to be associated with research, 
development, test and evaluation of existing systems rather 
than related to depot maintenance activities. Therefore, the 
committee recommends a reduction of $24.8 million.

Family of heavy tactical vehicles (FHTV)

    The budget request contained $9.1 million for procurement 
of Palletized Load System (PLS) cargo beds and handling 
devices.
    The FHTV includes the PLS along with companion trailers and 
flatracks, three variants of Heavy Expanded Mobility Tactical 
Trucks, and the Heavy Equipment Transporter System (HETS). The 
committee has recommended increases in funding for this class 
of vehicles in previous fiscal years because it recognized the 
increased role that they play in the Army's expanding mission 
areas and the multiple requirements they have fulfilled during 
operations in Bosnia. However, the committee notes that the 
Army National Guard still has a shortfall of approximately 500 
HETS. Therefore, the committee recommends an increase of $45.0 
million for 96 of these vehicles in order to equip an Army 
National Guard HETS company.

Family of medium tactical vehicles (FMTV)

    The budget request contained $209.4 million for 1,506 FMTV 
vehicles. The FMTV program provides for replacement for 
approximately 50 percent of the two-and-halfton and 100 percent 
of the five-ton trucks in the Army's inventory, all of which are 
reaching the end of their useful service lives.
    While the committee strongly supports the Army's 
requirement for medium trucks, it notes that there is a large 
increase in the funds requested for engineering change orders. 
Therefore, the committee recommends a decrease of $10.0 million 
and believes the funds remaining for engineering change orders 
are adequate for a program at this level of maturity.

Handheld computer terminal units

    The budget request contained $13.1 million for three 
Forward Area Air Defense Command and Control (FAAD C2) computer 
and software systems and $2.4 million for 20 Forward Entry 
Devices (FED). No funding was included for the XM-30 Mortar 
Ballistic Computer (MBC). The committee recommends a total 
increase of $33.2 million for these programs, as discussed 
below.
    The automated, deployable FAAD C2 system provides accurate 
and timely targeting information for the employment of FAAD 
weapon systems. The committee notes that although full-rate 
production of the FAAD C2 system was approved by the Joint 
Requirements Oversight Council in June 1995, funding requests 
for this critical air defense system have continued to decrease 
since fiscal year 1996. The committee, therefore, recommends an 
increase of $10.0 million for accelerated fielding of the FAAD 
C2 system to five divisions.
    The FED, a ruggedized, lightweight, high resolution, 
handheld computer, is an integral part of the Advanced Field 
Artillery Tactical Data System (AFATDS) and is used by Forward 
Observers (FO), Fire Support Teams (FIST) and Field Artillery 
Battery Commanders to control and synchronize fire support 
assets within the AFATDS. The committee understands that 
currently-fielded systems require upgrading in order to provide 
artillery forces with a much faster computer processing 
capability. The committee is concerned that FOs, FISTs, and 
Battery Commanders have the processing capability to rapidly 
coordinate artillery fire and counterfire support missions, 
and, also notes that these devices are high on the Army Chief 
of Staff's fiscal year 1998 unfunded priority list. Therefore, 
the committee recommends an increase of $16.3 million to 
procure upgraded FEDs for these purposes.
    The XM-30 MBC will replace the obsolete M23 MBC and provide 
accurate, rapid ballistic trajectory calculations for all 
cartridge and fuze combinations of 60mm, 81mm, 107mm and 120mm 
mortars as well as automated digital communications with other 
fire support devices via the AFATDS. The M23 MBC is 
incompatible with FEDs and is no longer supportable in the 
field due to the lack of unique repair parts and components. 
Based upon the enhanced response times, improved accuracy and 
commonality with AFATDS and FEDs, the committee recommends an 
increase of $6.9 million for the XM-30 MBC.

High mobility multi-purpose wheeled vehicle (HMMWV)

    The budget request contained $66.2 million to procure 774 
HMMWVs, of which $28.8 million was for 250 Up-Armored HMMWVs.
    In response to increased peacekeeping mission requirements, 
the Army developed the Up-Armored HMMWV variant to provide 
increased ballistic and blast protection primarily for the 
military police. This variant has proven to be a valuable asset 
and is responsible for saving the lives of soldiers whose 
vehicles were struck by mine blasts in Bosnia. Since the 
committee anticipates that the Up-Armored HMMWV will play a 
continuing role in more frequent deployments to areas of unrest 
around the world, it recommends an increase of $38.7 million 
for an additional 360 of these HMMWV variants.

Logtech

    The budget request contained $3.4 million for automatic 
identification technology (AIT), which consists of various 
radio frequency (RF), bar code scanning and data carrier 
devices. AIT devices, as components of automated logistics 
systems, contribute to expedited receiving, storage, 
distribution, and inventory management of new and reparable 
items.
    The committee is aware of an AIT that employs an RF tagging 
device to identify items and track their location for supply 
and logistics purposes. The committee understands that the 
device is currently used to track supplies being shipped from 
several inventory control points in the continental United 
States to Guantanamo Bay, Cuba, as well as to forces deployed 
in Bosnia. The committee further understands that the device is 
used to automate manufacturing process controls for jet engine 
repairs and inventory tracking of ground support equipment at 
various military depots. The committee is impressed with the 
promising results achieved to date with the RF tagging device 
and believes that substantial savings can be achieved from 
further implementation of the device into automated inventory 
and repair processes. Therefore, the committee recommends an 
increase of $11.7 million for this purpose.

M915/M916 line haul tractor trailer truck

    The budget request contained $36.1 million to initiate the 
procurement of 293 commercially available vehicles.
    While the committee is well aware of the requirements for 
this cargo handling vehicle and commends the Army for procuring 
a commercial truck, it believes there should be a more moderate 
initial rate of procurement. For this reason, the committee 
recommends a reduction of $18.0 million.

Modifications to in-service equipment

    The budget request contained $1.2 million for modifications 
to Firefinder radars, including the AN/TPQ-36 Mortar Locating 
Radar.
    This radar is the primary target acquisition and 
counterfire system for Army field artillery forces. It is 
capable of rapidly locating multiple indirect fire weapons, 
such asmortars and rocket launchers, simultaneously and 
transmitting target data in near-real-time. However, the committee 
understands that currently-fielded radars generate false target 
location errors and believes there is a critical need to eliminate 
these errors. Therefore, the committee recommends an increase of $6.5 
million for modification kits to correct the AN/TPQ-36 Mortar Locating 
Radar false target location errors. The committee also recommends an 
increase of $1.5 million for spares and logistics support.

Night vision devices

    The budget request contained $85.3 million for procurement 
of night vision devices, of which $24.3 million was for the 
procurement of AN/PVS-7 night vision goggles. However, no 
funding was included for the procurement of 25mm generation 
three image intensifier tubes for upgrading the Aviator's Night 
Vision Imaging System (ANVIS). The committee recommends a total 
increase of $30.8 million for night vision devices as discussed 
below and elsewhere in this report.
    The AN/PVS-7 night vision goggle is a head- or helmet-
mounted, third-generation, image intensifying, device used by 
soldiers for nighttime operations. The Army procurement 
objective for this device is 281,000 however, at the end of 
fiscal year 1997, only 166,180 units will have been procured.
    The committee is aware of the enhanced operational 
capability that night vision devices provide combat forces and 
believes that these devices will play an increasingly important 
role in future Army deployments. Accordingly, the Army Chief of 
Staff has designated these devices as one of the Army's highest 
unfunded priorities for fiscal year 1998. The committee 
understands that an increase in funding would allow for 
procurement of an additional 6,239 devices, enabling the Army 
to fulfill force requirements earlier than planned. Therefore, 
the committee recommends an increase of $17.0 million to 
procure AN/PVS-7 night vision goggles for this purpose.
    The ANVIS upgrade, also included in the Army Chief of 
Staff's top unfunded fiscal year 1998 priorities, will provide 
aviators with a significantly enhanced night flying capability 
and contribute immeasurably to their safety of flight. The 
ANVIS collects critical flight information, such as, altitude 
and course heading from aircraft sensors and converts this 
information onto a visual imaging heads-up display. The upgrade 
will provide new image intensifier tubes that generate higher 
resolution images at lower light levels, which the committee 
understands will increase pilot reaction time to avoid 
obstacles by 40 percent. Because of the critical safety 
improvements that will result from this upgrade, the committee 
recommends an increase of $5.4 million for ANVIS 25mm 
generation three image intensifier tubes.

Nonsystem training devices

    The budget request contained $49.7 million for nonsystem 
training devices, of which no funding was included for 
firefighter trainers. This training device is a computer-
controlled, natural-gas-fueled system, which is currently 
providing safe, realistic, and environmentally-friendly 
training for firefighters at airports and training academies 
throughout the country.
    The committee understands that Army firefighter training 
sites have been or will be closed in the future because most 
are not in compliance with environmental regulations. Because 
of the site closures, the Army has established a program to 
provide regional firefighter training and has awarded a 
contract to procure 28 firefighter trainers over a five-year 
period for this purpose. However, it has procured only four of 
these trainers to date. The committee believes these trainers 
provide a safe, unique and fundamental fire prevention and 
teaching capability for Army firefighters and, therefore, 
recommends an increase of $4.0 million to procure four 
additional firefighter trainers.

Reserve component automation system (RCAS)

    The budget request contained $114.3 million for continued 
procurement and fielding of the RCAS. The RCAS provides the 
Army the capability to more effectively administer, manage, and 
deploy the Army National Guard and Reserve forces.
    While the committee is a strong supporter of the National 
Guard and Reserve forces, it is concerned with the significant 
increase in funding requested for this program, an increase of 
50 percent over the combined amounts contained in the budget 
requests for the previous two years. The committee believes 
that such a large increase is not warranted and, therefore, 
recommends a reduction of $24.0 million.

Sentinel

    The budget request contained $41.0 million for 12 Sentinel 
systems.
    The Sentinel system consists of a trailer-mounted radar and 
an identification-friend-or-foe device, along with Forward Area 
Air Defense stCommand, Control and Intelligence interfaces. The 
system plays an integral role in the digital battlefield by 
automatically detecting, identifying, and reporting cruise 
missiles, unmanned aerial vehicles (UAV), and rotary and fixed 
wing aircraft targets and rapidly transmitting data on these 
targets to air defense units.
    The committee believes that the Sentinel system will play 
increasingly critical air defense and force protection roles, 
especially with the proliferation of UAVs and cruise missiles 
throughout the world. These small targets require early 
detection in order to provide maximum reaction times for 
engagement at ranges well beyond the forward line of troops. 
Therefore, the committee recommends an increase of $20.3 
million for 14 additional Sentinel systems.

Shortstop

    The budget request did not contain funding for procurement 
of the Shortstop Electronic Protection System (SEPS).
    The SEPS is a commercial electronics radio frequency 
countermeasure system that protects personnel and high value 
assets from artillery and mortar rounds and rockets by 
detonating their proximity fuzes well before they impact in the 
target area. The committee understands that initial Army 
testing of 5000 artillery rounds fired at the SEPSresulted in a 
100 percent pre-detonation success rate, while follow-on tests with 
both artillery and rockets were also highly successful.
    The initial SEPS units were developed as a quick reaction 
capability system and deployed during Operation Desert Storm. 
More recently the SEPS has been deployed to Bosnia. The 
committee is aware of an urgent need statement for 62 systems 
for the Eighth Army in Korea. Funding for procurement of 20 
units for Korea was appropriated in fiscal year 1997; however, 
the Army failed to request funding for SEPS in the fiscal year 
1998 budget request. Therefore, the committee recommends an 
increase of $9.0 million for the procurement of 42 additional 
SEPS to ensure that deployed forces have adequate protection 
from artillery, mortar and rocket attacks.

Single channel anti-jam manportable (SCAMP) terminals

    The budget request contained $4.3 million for fielding of 
SCAMP terminals. No funds were requested to procure new 
terminals even though the Army has procured less than half of 
its requirement for 660 terminals.
    These satellite communications terminals provide extended-
range, anti-jam voice and data command and control (C2) 
communications capability worldwide as part of the extremely 
high frequency Milstar satellite communications program.
    Based on the critical requirement for joint C2 
communications and to ensure that the Army can be fully 
integrated into the joint C2 network provided by the Milstar 
communications network, the committee recommends an increase of 
$12.3 million for SCAMP terminals and encourages the Secretary 
of Army to exercise the existing firm fixed price contract 
option for these terminals in fiscal year 1998.

                       Aircraft Procurement, Navy

                                Overview

    The budget request contained $6,086.0 million for Aircraft 
Procurement, Navy in fiscal year 1998. The committee recommends 
authorization of $6,173.0 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Aircraft spares and repair parts

    The budget request contained $740.2 million for aircraft 
spares and repair parts.
    The committee recommends an additional $62.0 million to 
procure 11 improved F402-408A engines for the TAV-8B Harrier 
trainer aircraft. The committee notes that the Commandant of 
the Marine Corps identified a requirement for 22 of these 
engines among his highest unfunded aviation procurement 
priorities. In making this recommendation, the committee 
understands that these engines will enhance the safety margin 
of flight training operations and increase AV-8B pilot training 
production by twenty percent. The committee encourages the Navy 
to include the remaining 11 F402-408A engines in its fiscal 
year 1999 budget request in order to re-engine all 22 TAV-8B 
trainer aircraft.

AN/ALR-67E(V)2 radar warning receiver upgrade

    The budget request contained $32.9 million for common 
electronic countermeasures modifications but did not include 
any funding to upgrade the AN/ALR-67E(V)2 radar warning 
receiver (RWR).
    The AN/ALR-67E(V)2 RWR is the common RWR installed on all 
Navy and Marine Corps front-line strike and fighter aircraft. 
The committee understands that low cost upgrades to the AN/ALR-
67E(V)2 RWR are now available that would provide significantly 
greater survivability through better signal analysis, longer 
detection ranges, and improved situation awareness. The 
committee further understands that these upgrades would 
significantly lower the RWR's life cycle costs through 
maintainability improvements to the operating system software. 
Accordingly, the committee recommends an increase of $15.0 
million to provide these upgrades to the AN/ALR-67E(V)2.

AN/ALQ-165 airborne self-protection jammer (ASPJ)

    The budget request contained $32.9 million for common 
electronic countermeasures equipment, but did not include 
funding to procure the AN/ALQ-165 ASPJ for the F-14D or the F/
A-18C/D aircraft.
    The self-protection system installed on the F/A-18C/D, 
except those configured with the ASPJ for contingency 
operations, has no capability against pulse doppler or 
continuous wave radars that currently are the most widely 
deployed air-to-air and air-to-surface radar threats to 
tactical aircraft. The committee is aware that the Navy can 
only equip approximately 72 aircraft with the ASPJ, although it 
has a requirement for employment of this system on over 500 F-
14Ds and F/A-18C/Ds. The committee understands that in order to 
meet its current deployment requirements in the Bosnia and 
Persian Gulf theaters, the Navy must remove the ASPJs from 
aircraft returning from these areas and install them on 
aircraft beginning deployment. Furthermore, as a result of this 
shortfall, ASPJs are not available to support training or other 
potential combatrequirements. Accordingly, the committee 
recommends an increase of $75.0 million for production of 50 AN/ALQ-165 
ASPJs.

AN/AWW-13 guided weapon control monitor set

    The budget request did not contain funding to procure AN/
AWW-13 guided weapon control monitor sets.
    The AN/AWW-13 provides the data link capability for the F/
A-18 series aircraft to employ the precision-guided Walleye and 
Stand-off Land Attack Missiles (SLAM). The committee 
understands that the Navy requires 218 AN/AWW-13s, but only 
plans to procure 200 of these systems through calendar year 
1997, when production of the AN/AWW-13 is scheduled for 
termination. To meet the Navy's requirement and retain AN/AWW-
13 production capability for future F/A-18s or other aircraft 
that employ Walleye or SLAM, the committee recommends an 
increase of $9.0 million to procure the remaining 18 systems.

AV-8B

    The budget request contained $277.6 million to procure 11 
remanufactured AV-8B aircraft, and $19.4 million for advance 
procurement of 12 remanufactured aircraft in fiscal year 1999.
    The committee continues to support the upgraded AV-8B's 
enhanced mission-capability and safety-related improvements and 
notes that, for fiscal year 1997, it authorized the procurement 
of two more additional aircraft than were appropriated. Since 
the Commandant of the Marine Corps identified an additional AV-
8B as his highest unfunded aviation procurement priority for 
fiscal year 1998, the committee recommends an additional $33.0 
million to procure this aircraft.

Contract aerial refueling services

    The budget request did not contain funding for contract 
aerial refueling services.
    The committee understands that commercial aerial refueling 
may be less expensive than the cost-per-flight-hour of the 
current Air Force tankers and believes this concept warrants 
further evaluation. Accordingly, the committee recommends an 
increase of $6.0 million to modify three aircraft for this 
purpose.

E-2C

    The budget request contained $236.5 million to procure 
three E-2C aircraft, and $23.6 million for advance procurement 
of four aircraft in fiscal year 1999.
    Fleet aviation continues to require modern, robust, 
carrier-based airborne early warning (AEW) command and control 
aircraft. Except for fiscal year 1998, the Department plans to 
procure four new AEW aircraft per year throughout the future 
years defense program. The Chief of Naval Operations (CNO), in 
order to maintain a steady production rate of four aircraft per 
year, identified an additional E-2C as one of his top two 
unfunded procurement priorities in fiscal year 1998.
    The committee supports the CNO's request and recommends an 
additional $68.0 million to procure one additional E-2C 
aircraft. This increase will result in a more efficient 
production flow, provide aircraft to the fleet sooner, and save 
$13.2 million.

EA-6B modifications

    The budget request contained $86.8 million for EA-6B 
modifications but did not include funding to replace wing 
center sections (WCS) or for the turbine engine blade 
containment system (TEBS).
    The first 65 EA-6B aircraft were manufactured with an 
aluminum alloy WCS that is susceptible to stress corrosion 
cracking. Thirty nine of these aircraft are still in service, 
20 of which Congress provided WCS replacement funding in fiscal 
years 1995 and 1997. Consistent with its prior actions, the 
committee recommends an increase of $50.0 million to replace 
the WCSs of 10 additional EA-6Bs. The committee urges the 
Secretary of the Navy to provide funds to complete the WCS 
modifications in his fiscal year 1999 budget request.
    Based on historical data analysis of the EA-6B's engine, 
the Navy determined that the EA-6B will experience between 
three and five aircraft losses due to catastrophic failure of 
turbine engine blades before the EA-6B reaches its retirement. 
In fiscal year 1997, the Congress provided $5.0 million to 
address this problem, but the committee has since learned that 
the cost to outfit the entire fleet has risen to $60.0 million. 
Since the EA-6B is no longer in production and the total cost 
to modify all EA-6Bs with the TEBS is less than the value of 
one aircraft, the committee recommends an increase of $18.0 
million to continue this modification.

F/A-18

    The budget request contained $2,101.1 million for 
procurement of 20 F/A-18E/F aircraft, four fewer than the 
number for which advance procurement funds were requested in 
fiscal year 1997, and $90.5 million for advanced procurement of 
30 aircraft in fiscal year 1999.
    Based on the recently-released recommendations of the 
Quadrennial Defense Review (QDR), the Navy's current 
procurement objective for the F/A-18E/F is 548 to 785 aircraft, 
at a maximum production rate of 48 aircraft per year, which has 
been decreased from the fiscal year 1998 budget request 
procurement plan of 1,000 aircraft at a maximum production rate 
of 60 aircraft per year. The committee understands that the 
Navy plans to determine its actual procurement objective based 
on the initial operational capability date of the Joint Strike 
Fighter (JSF).
    The committee is sensitive to the Navy's requirement to 
modernize its tactical aircraft fleet. Unfortunately, the Navy 
failed in its attempts to replace the A-6 and F-14 fleets first 
with the A-12 and then with the A/F-X, both of which were 
terminated. Consequently, the F/A-18E/F program emerged--more 
by default than by design--as the Navy's choice to replace the 
A-6 in the all-weather attack mission, replace the F-14 in 
thefleet air defense and tactical reconnaissance missions, and to 
supplement existing F/A-18C/Ds. The F/A-18E/F improves range and 
payload capabilities compared to the F/A-18C/D, but it will not be 
nearly as survivable as either the A-12 or the A/F-X would have been. 
Accordingly, the committee strongly supports the Navy's participation 
in the JSF program to meet its longer-term force structure and 
modernization requirements and believes that the JSF will be more cost 
and operationally effective than any previous Naval aircraft when it 
enters service with the fleet. Therefore, the committee recommends an 
increase of $20.0 million in PE63800N to accelerate development of the 
Naval variant of the JSF, as explained elsewhere in this report.
    The committee notes that the budget request proposal to 
reduce the quantity of F/A-18E/Fs procured in fiscal years 1998 
and 1999 by 10 from the 60 proposed in the fiscal year 1997 
acquisition plan, together with the QDR recommendation to 
reduce both the total procurement objective and the maximum 
production rate of this aircraft, suggests that future 
aircraft, shipbuilding, and other weapons procurement demands 
on the Navy's budget are necessitating consideration of 
alternative F/A-18E/F production rates. Accordingly, the 
committee recommends $1,348.9 million for continued F/A-18E/F 
production, a reduction of $752.2 million. The committee 
believes that until the review of the QDR by the independent 
National Defense Panel is completed in December 1997 and 
assessed by the Congress, the F/A-18E/F program should proceed 
at a slower pace.

H-1 series modifications

    The budget request contained $18.5 million for 
modifications to the H-1 series helicopter, of which $18.3 
million was planned for communications and navigation block 
upgrades. The budget request also contained $80.7 million in 
research and development funding for future H-1 upgrades.
    Subsequent to the Department's submission of the budget 
request, the Navy determined a need to restructure its 
communications and navigation block upgrades and research and 
development plans for the H-1 series helicopters. The 
restructured program, which requires transferring funds from 
the aircraft procurement account to the research and 
development account, would improve commonality between the UH-
1N and AH-1W helicopters through a new plan to design common 
cockpit architecture and to procure common parts and software. 
The committee supports this initiative and recommends $12.7 
million for H-1 communications and navigation block upgrades, a 
reduction of $5.6 million, and a corresponding increase in PE 
0604245N for research and development of H-1 series upgrades.

Lightweight environmentally sealed parachute assembly (LESPA)

    The budget request did not contain funding for LESPA.
    The committee continues to support this initiative, begun 
in fiscal year 1997, to replace old parachutes in the P-3 and 
EP-3 aircraft with the LESPA. Due to its longer repack cycle 
and extended service life, the committee understands that the 
Navy will realize substantial life cycle cost savings by 
procuring LESPA compared to continued use of existing 
parachutes. Accordingly, the committee recommends an additional 
$11.0 million to procure LESPA for P-3 and EP-3 aircraft fleets 
as follows: $10.8 million for the P-3 and $200 thousand for the 
EP-3.

Oil debris detection system (ODDS)

    The budget request contained $164.9 million for the 
modification of P-3 aircraft, $49.1 million for the 
modification of E-2 aircraft, and $19.2 million for the 
modification of C-2 aircraft. The budget request did not 
contain funding for the procurement and installation of ODDS in 
the T-56 engine, which is common to the P-3, E-2 and C-2 
fleets.
    The ODDS is an on-board detection system that alerts 
aircrews to the presence of metal chips in engines and 
propeller gear boxes, allowing flights to be terminated prior 
to catastrophic failure of critical components. It also permits 
the clearing of smaller particles that routinely accumulate in 
engine oil and cause false impending engine failure alarms, 
resulting in unnecessary termination of aircraft missions and 
costly engine diagnostics. Since the ODDS, which has been 
successfully integrated into many other Department of Defense 
aircraft, both reduces aircraft maintenance costs and enhances 
aircrew safety, the committee recommends an increase of $1.6 
million to incorporate this system on the P-3, E-2 and C-2 
fleets as follows: $1.4 million for the P-3 and $100 thousand 
each for the E-2 and C-2 fleets.

P-3 series modifications

    The budget request contained $164.9 million for P-3 series 
modifications, $74.7 million of which is for four anti-surface 
warfare improvement program (AIP) kits, and $41.3 million of 
which is for 11 sustained readiness program (SRP) kits.
    The AIP improves the P-3's capabilities in communications, 
survivability and over-the-horizon targeting through the 
installation of commercial-off-the-shelf components. The 
committee understands that the Commanders-in-Chief (CINCs) of 
the Atlantic and Pacific theaters require 68 AIP-configured P-3 
aircraft by fiscal year 2001, but the future years defense 
program only provides for 44 aircraft by this time. In the last 
year alone, these aircraft have played major roles in joint 
naval operations in Bosnia, Liberia, Central Africa, the 
Formosa Strait and the Strait of Hormuz by providing littoral 
and overland surveillance. Consequently, in order to meet CINC 
requirements and achieve a more efficient production rate, the 
committee recommends an increase of $56.6 million for an 
additional eight AIP kits.
    The SRP extends the service life of the P-3C by replacing 
and refurbishing airframe components. The committee understands 
that material conditions of the fleet aircraft are 
deteriorating faster than originally forecast, requiring 
frequent major airframe repairs in advance of the nominal 30-
year expected operational service life. If left unchecked, 
aircraft could be rendered unserviceable due to corrosion or 
cracking of major structural components. Accordingly, the 
committee recommends an increase of $35.1 million to procure 17 
additional shipsets of SRP kits.

T-45 training system

    The budget request contained $244.0 million to procure 12 
T-45C aircraft and associated ground-based training equipment, 
and $6.2 million for advance procurement of 12 T-45C aircraft 
in fiscal year 1999.
    The committee is aware that the T-45A Goshawks delivered 
thus far are performing extremely well and have exceeded 
expectations in almost every performance measure. The last T-
45A is planned for delivery in February 1998 and a 
significantly upgraded T-45C, with a digital cockpit, will 
begin deliveries in October 1997. Student training in the 
digitally instrumented T-45C will begin in mid-summer 1998.
    The committee is concerned that the aging TA-4J and T-2C 
aircraft, now scheduled for retirement in fiscal years 1998 and 
2003 respectively, are increasingly expensive to operate due to 
an increased instructor requirement, more frequent parts 
replacement cycle, and more aircraft flight time required to 
train students to the desired standard. Lead time for spares is 
excessive and results in an increased period of time that the 
aircraft are unavailable for training. Moreover, the T-2 fleet 
has been grounded on numerous occasions due to flight control 
problems and other maintenance issues related to an aging 
aircraft. Taken together, these factors could cause the fiscal 
year 1998 pilot training rate to fall short of the Navy's 
yearly quota by approximately 100 naval aviators.
    Therefore, the committee recommends an increase of $100.0 
million to procure six additional T-45C aircraft. The committee 
understands that by continuing to procure the T-45C at the rate 
of 18 aircraft per year, the Navy would complete its T-45 
aircraft procurement program three years earlier and save 
$210.0 million in aircraft procurement costs compared to the 
future years defense program, as well as $262.2 million in T-2 
flight hour cost avoidance.

V-22

    The budget request contained $472.0 million to procure five 
V-22 aircraft and $69.7 million for advance procurement of 
seven aircraft in fiscal year 1999.
    The committee has been a strong supporter of accelerated V-
22 procurement and endorses the recently-released Quadrennial 
Defense Review's (QDR) recommendation to achieve a long-term 
production rate of 30 aircraft per year by 2004. However, the 
committee notes that despite the fact that in fiscal year 1997 
Congress appropriated advance procurement funding for 12 
aircraft in fiscal year 1998, the Department has requested only 
five. Therefore, consistent with its prior actions, the 
recommendations of the QDR, and the Commandant of the Marine 
Corps' unfunded priorities for fiscal year 1998, the committee 
recommends an increase of $189.3 million to procure two 
additional aircraft.

                       Weapons Procurement, Navy

                                Overview

    The budget request contained $1,136.3 million for Weapons 
Procurement, Navy in fiscal year 1998. The committee recommends 
authorization of $1,214.7 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Close-in weapon system (CIWS) surface mode upgrade

    The budget request contained $10.0 million for CIWS but did 
not include funding to procure surface mode upgrade kits for 
this system.
    The CIWS is a fully autonomous, radar-directed gun system 
designed for anti-ship missile defense. While the existing 
system is effective against its designed threat, the Navy's new 
focus on littoral operations requires an ability to defend 
against small, fast surface craft for which most Navy ships 
have a limited defense. To address this deficiency, the 
committee recommends an increase of $20.0 million to procure 
CIWS upgrade kits for both surface combatants and other ships 
equipped with this system.

                          Hellfire II missiles

    The budget request did not contain funding for the Hellfire 
II missile.
    The Hellfire II missile is an anti-armor and anti-ship 
weapon used by the Marine Corps on the AH-1W and by the Navy on 
the SH-60B. Neither the Navy nor the Marine Corps have procured 
Hellfire II missiles since fiscal year 1994. The committee has 
been informed that because of this situation, the Navy's and 
the Marine Corps' inventories of Hellfire II missiles is 25 
percent below requirements. To address this shortfall, the 
committee recommends $37.5 million to procure 700 Hellfire 
missiles.

Joint stand off weapon (JSOW)

    The budget request contained $58.7 million for 113 JSOW 
missiles for the Navy. No funds were requested to procure JSOW 
missiles for the Air Force until fiscal year 1999.
    The committee continues to support accelerated procurement 
of precision guided munitions and integration of these weapons 
into aircraft and mission planning subsystems. Also, the 
committee notes that the Chief of Naval Operations included 
additional JSOW procurement in the top one-third of his fiscal 
year 1998 unfunded priorities.
    The committee added funding in fiscal year 1997 to 
accelerate the integration of precision guided weapons on the 
B-2 bomber and understands that some of this funding will be 
used to complete JSOW integration in late 1998. The committee 
urges the Air Force to accelerate updating the B-2's mission 
support system in order to employ JSOW at the earliest possible 
date.
    The committee recommends an increase of $10.0 million for 
the Navy to procure 37 additional missiles and an increase of 
$29.0 million for the Air Force to initiate procurement of 100 
missiles. The committee understands that these increases will 
reduce the fiscal year 1998 JSOW unit cost by 24 percent. The 
committee expects the Air Force to accelerate JSOW capability 
on the B-2 with these weapons.

Standard Missile (SM)-2 Block IIIB medium range (MR) modification kits

    The budget request contained $35.6 million for 80 SM-2 
Block IIIB MR modification kits.
    The SM is the Navy's primary surface-to-air weapon against 
hostile aircraft and anti-ship cruise missiles. The latest MR 
version to enter production, SM-2 Block IIIB, retains the full 
performance of earlier models and adds improvements against 
electronic countermeasures. However, the current SM inventory 
is dominated by older versions that are less capable against 
modern anti-ship weapons and ineffective against some newer 
threat missiles.
    Even though the Navy plans to supplement its new missile 
production by upgrading older missiles to the Block IIIB 
configuration, its projected Block IIIB inventories at the turn 
of the century will still fall significantly short of the 
quantity required to meet deployment inventories. Accordingly, 
the committee recommends an increase of $33.0 million to 
procure an additional 80 SM-2 Block IIIB MR modification kits. 
This action will allow the Navy to field more of the latest-
version missiles and reduce the need to ``cross deck'' the 
missiles between deploying and returning ships.

               Ammunition Procurement, Navy/Marine Corps

                                Overview

    The budget request contained $336.8 million for Ammunition 
Procurement, Navy/Marine Corps in fiscal year 1998. The 
committee recommends authorization of $470.4 million for fiscal 
year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Marine corps ammunition

    The budget request contained $99.0 million for procurement 
of ammunition. The committee recommends $227.0 million, an 
increase of $128.0 million for the following types of 
ammunition:

                        [In millions of dollars]

CTG 5.56mm training rounds........................................   3.0
CTG 7.62mm training rounds........................................   6.0
Rocket Motor, 5 inch..............................................   1.5
Charge, demolition linear HE......................................  10.0
CTG 40mm practice grenade linked M918.............................  10.6
CTG Tank 120mm M830A1 (HEAT)......................................  33.4
CTG Tank 120mm TPCSDS-T M865......................................   5.2
Fuze, ET, XM762...................................................   7.0
CTG 25mm TPDS-T, linked...........................................   1.1
Signal Smoke, illumination........................................   3.4
Charge, demolition assembly M183..................................  43.3
Fuze, ET, M767....................................................   3.5

                   Shipbuilding and Conversion, Navy

                                Overview

    The budget request contained $7,438.2 million for 
Shipbuilding and Conversion, Navy in fiscal year 1998. The 
committee recommends authorization of $7,655.0 million for 
fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Fast patrol craft

    The budget request did not contain funding for a fast 
patrol craft.
    The Navy and Marine Corps emphasis on the employment of 
expeditionary forces, coupled with the enormous investment 
required for construction of major combatant ships, combine to 
make the procurement of an inexpensive, multi-mission fast 
patrol craft a highly desirable objective. The committee 
direction for such a craft, contained in its report on H.R. 
1530 (H. Rept. 104-131), was clear--a high-speed vessel capable 
of carrying multiple anti-surface ship missiles, as well as 
command, control, and intelligence assets. The committee 
continues to believe that a fleet of such small multi-mission 
craft would be a national asset and, consequently, recommends 
an increase of $20.0 million, to be combined with the $9.5 
million authorized and appropriated in fiscal year 1996, to 
construct this platform. The committee directs the Secretary of 
the Navy to release these funds to the Office of Naval Research 
only for the purpose of contracting for the fast patrol craft.

Landing craft air cushion (LCAC) service life extension program (SLEP)

    The budget request did not contain funding for LCAC SLEP.
    Congress provided $3.0 million in fiscal year 1997 for 
advance procurement of components needed to initiate an LCAC 
SLEP, based on its understanding that the Navy was prepared to 
fully fund this program in fiscal year 1998. The committee 
understands that these funds will not be released until fiscal 
year 1999 because the Navy now intends to begin the LCAC SLEP 
in fiscal year 2000. However, the committee also understands 
that the Navy's strategy to begin this SLEP in fiscal year 2000 
is currently under review in order to address the realities of 
more extensive corrosion and greater obsolescence of electronic 
equipment in the LCAC fleet than earlier realized.
    The LCAC is the only surface platform that can provide 
high-speed, heavy lift from over-the-horizon. Without a SLEP, 
the first LCACs will begin retiring in 2004; with a SLEP, ten 
years of useful life will be added to the LCAC fleet. Since no 
funding is programmed for a replacement craft, allowing the 
LCACs to deteriorate without a SLEP would result in a severe 
degradation in the Navy's ability to perform amphibious warfare 
and operational maneuver from the sea. Accordingly, the 
committee recommends $17.3 million to begin the LCAC SLEP in 
fiscal year 1998.

LPD-18

    The budget request did not contain funding for the LPD-18.
     LPD-18 is the second ship of 12 in the LPD-17 class of new 
amphibious ships with which the Navy plans to replace 41 
obsolete amphibious vessels. The LPD-17 class will not only 
provide the Navy and Marine Corps with advanced-technology 
command systems and extensively improved ship self-defense 
capabilities but also reduce by 60 percent the crew 
requirements of the four existing classes of ships it will 
replace. Thecommittee notes that the Chief of Naval Operations 
considers the procurement of the LPD-18 to be among his top unfunded 
procurement priorities for fiscal year 1998 and recommends $185.0 
million for the advance procurement of this ship.

New attack submarine (NAS)

    The budget request contained $2,314.9 million for 
procurement of the first NAS and $284.9 million for advance 
procurement of the second and third NASs in fiscal years 1999 
and 2001 respectively.
    In presenting its budget request for fiscal year 1996 two 
years ago, the Navy was poised to proceed with its plan to 
begin producing a 30-ship class of NASs at a single shipyard, 
the Electric Boat Division of General Dynamics. Congress 
rejected the Navy's plan, directing that the NAS would not be a 
serially-produced new class of nuclear attack submarines and 
further directing that Newport News Shipbuilding would 
participate in the future construction of such submarines. 
Congress was concerned over having the NAS design serially 
produced at a single shipyard since it could have led to 
production of a scaled-down, less capable, version of the NAS 
predecessor, the Seawolf, while precluding the consideration of 
technological innovation available through the other nuclear-
capable shipyard. Moreover, because Congress was concerned with 
the prospects of an unaffordable nuclear attack submarine, it 
reasoned that competition between Electric Boat and Newport 
News was viewed as important to controlling costs.
    The results of Congress' efforts were enacted into law in 
the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106). Section 131 of that Act replaced the 
Navy's plan with one that set forth a series of four 
submarines, beginning construction in each of fiscal years 1998 
through 2001, which use the NAS as a baseline design and 
successively incorporate new technologies. The first and third 
of these submarines were to be built at Electric Boat; the 
second and fourth were to be built at Newport News. The 
Congressional plan stated that the best designs from each 
shipyard would form the basis for serial production of the 
first of a new class of next-generation submarines beginning in 
2003 (amended to 2002 by the National Defense Authorization Act 
for Fiscal Year 1997 (Public Law 104-201)). Although the Navy's 
original plan also projected commencing construction of four 
NASs between fiscal year 1998 and fiscal year 2003, the Navy, 
nevertheless, maintained that the Congressional plan was 
unaffordable.
    Notwithstanding the previously signed Memorandum of 
Agreement (MOA) with Electric Boat and Newport News to 
facilitate the competition requirements of Section 131, the 
Navy's budget request for fiscal year 1998 is premised upon 
having the two shipyards team to produce not only the first 
four NASs, beginning construction in fiscal years 1998, 1999, 
2001 and 2002 respectively, but all NASs thereafter. This 
teaming arrangement, in conjunction with authorization to 
initiate a proposed multiyear procurement contract for the 
first four submarines, would, according to the Navy, save 
$600.0 million ``over the current plan.''
    The committee notes several inconsistencies between 
provisions contained in the formal Team Agreement and 
representations made to the committee in other documents: (1) 
The Team Agreement states that, ``The Government, acting 
through the Department of the Navy (``Government'') planned to 
construct four NAS submarines, the first and third of which 
were to be built by Electric Boat, and the second and fourth of 
which were to be built by Newport News, in accordance with the 
National Defense Authorization Act for Fiscal Year 1997.'' The 
Assistant Secretary of the Navy (Research, Development, and 
Acquisition), in a formal witness statement submitted to the 
committee earlier this year stated, ``The plan the Secretary of 
Defense submitted to the Congress in March of last year, for 
fiscal year 1997, included funding for two of the four 
submarines and concluded that it would be very difficult to 
accelerate funding for the program in the context of other 
modernization priorities.'' (2) The Team Agreement states that, 
``Both Electric Boat and Newport News have been encouraged by 
the Government to enter into a team arrangement for NAS 
submarines, and the parties anticipate alterations to existing 
law to accommodate the team arrangement contemplated by this 
Agreement.'' In the same formal statement noted above, the 
Assistant Secretary of the Navy stated that, ``In December 
1996, Electric Boat and Newport News proposed to construct New 
Attack Submarines as a team, rather than as competitors.'' The 
committee is puzzled by such apparent contradictions and 
believes they call into question the forthrightness with which 
the Navy is dealing with the Congress.
    Additionally, the committee notes that the Navy has 
proposed legislation that would waive section 2306b (a) of 
Title 10, United States Code, which enumerates those 
determinations that an agency head must make as being in the 
best interests of the government in order to enter into a 
multiyear procurement contract, and would repeal the provisions 
of the National Defense Authorization Acts for Fiscal Years 
1996 and 1997, which codified the Congressional plan for next-
generation nuclear attack submarines. Based on the Navy's 
request for a waiver of section 2306b (a), the committee can 
only infer that authorizing a multiyear procurement in the case 
of the NAS may not be in the best interests of the government. 
Accordingly, the committee does not recommend approval of this 
waiver. Moreover, the committee believes that the current NAS 
design is the best the Navy is willing to do rather than the 
best the Navy is capable of doing and, therefore, declines to 
repeal the Congressional plan for production of the next-
generation submarine, as enacted into law.
    The committee is pleased that the Navy has followed the 
committee's direction to increase funding for advanced 
submarine technologies and notes that the fiscal year 1998 
request adds approximately $60.0 million to the amount 
requested in fiscal year 1997 for this purpose. However, the 
committee is not convinced that the Navy is committed to 
maturing these advanced technologies and inserting them into 
the NAS, especially into any of the first four submarines. 
Although the Navy asserts there are many technology insertion 
``opportunities'' on these four submarines, the committee does 
not yet see evidence of a funding commitment to incorporate 
more than a very few of them as they mature. Because of this 
apparent shortcoming, the committee recommends a provision 
(sec. 121) that would prohibit the obligation of more than 50 
percent of the funds authorized and appropriated for fiscal 
year 1998 for the Seawolf (SSN-23) until the Secretary of 
Defense certifies that he will fully fund in the future years 
defense program accompanying the fiscal year 1999 budget 
request 50 percent of the procurement resources estimated to be 
required for incorporation into each of the first four NASs 
thetechnology ``opportunities'' available for those vessels, as briefed 
to the committee by the Assistant Secretary of the Navy (Research, 
Development, and Acquisition).
    The committee is aware that the initial sea trials of the 
Seawolf produced some very unexpected and positive results. 
Those results testify to the potential of contemporary 
hydrodynamic design to both improve the performance and enhance 
the affordability of the NAS. Unfortunately, the Seawolf's 
hydrodynamic design is not reflected in the NAS, and the 
committee believes that the results of these sea trials 
demonstrate that the Congressional plan not to freeze the NAS 
design has merit.
    Based on the Seawolf initial sea trials, the committee 
believes that the current NAS power plant might be capable of 
providing performance levels beyond those demonstrated by the 
Seawolf, if alternative hydrodynamic technologies are 
exploited. If such is the case, then: (1) an even smaller power 
plant might be used on an NAS-displacement platform to produce 
planned-for NAS performance levels while simultaneously 
yielding more space for additional weapons storage; or (2) a 
smaller power plant might be used to provide Seawolf 
performance levels on a less-than-NAS-displacement platform. In 
recognition of the fact that hydrodynamic shaping and advanced 
control surfaces cannot be ``inserted'' once a submarine is 
built, the committee further believes the Navy should pursue a 
parallel, large-scale demonstrator that is not limited by form 
(hull and appendages) or by a single hull design to evaluate 
the potential to achieve higher levels of performance with 
either the NAS or smaller power plants. The committee is aware 
of the encouraging hydrodynamic and acoustic potential 
identified by a recent Electric Boat evaluation of 
incorporating a double hull around a contemporary submarine and 
believes this potential reinforces the benefits of constructing 
such a demonstrator.
    For this purpose, the committee recommends an additional 
$103.0 million in research and development funds and directs 
the Secretary of the Navy to issue a competitive solicitation 
for the demonstrator to the shipyards not currently involved in 
the design or future construction of the NAS. Furthermore, the 
committee directs the Secretary to transfer funds in the future 
years defense program accompanying the fiscal year 1998 budget 
for the Arsenal Ship demonstrator, which the committee 
recommends terminating in Title II of this report, to the 
submarine large-scale demonstrator.

Nuclear aircraft carrier refueling overhauls

    The budget request contained $1,615.0 million for the 
refueling overhaul of the Nimitz nuclear aircraft carrier and 
$92.9 million in advance procurement for overhaul of a second 
carrier in fiscal year 2001.
    The committee understands that the Navy will not install 
the close-in weapons system on the Nimitz, as previously 
planned and budgeted. Therefore, the committee recommends 
$1,608.4 million, a corresponding reduction of $6.6 million.

                        Other Procurement, Navy

                                Overview

    The budget request contained $2,825.5 million for Other 
Procurement, Navy in fiscal year 1998. The committee recommends 
authorization of $3,073.4 million for fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Airborne mine countermeasures

    The budget request contained $20.2 million for airborne 
mine countermeasures, but did not include funding for Magic 
Lantern.
    The committee is aware of the successful Naval Reserve 
operational assessment of the Magic Lantern airborne mine 
detection system. The committee understands the system 
demonstrated the ability to automatically detect and classify 
contact mines from the surface to below the keel depth of any 
U.S. warship with an unprecedented probability of detection.
    The committee supports the Navy's decision to designate the 
Naval Reserve as the existing operational command for the laser 
airborne mine warfare mission. The committee is concerned, 
however, that if the capability exists only in the one East 
Coast Light Airborne Multi-Purpose System (LAMPS) squadron, as 
is presently the case, the Navy will not be optimizing the use 
of these very limited assets. The committee believes that, with 
minor modifications, existing Magic Lantern assets could be 
used to establish a capability in the West Coast LAMPS squadron 
comparable to that in its East Coast counterpart. A Magic 
Lantern capability in the West Coast squadron would provide for 
more flexible training and, more importantly, enhance the 
ability of the Reserves to draw qualified and trained personnel 
from both squadrons to support contingencies for extended 
periods.
    Therefore, the committee recommends an increase of $7.5 
million for: (1) equipping the West Coast squadron with two 
Magic Lantern systems; (2) procuring spares and support 
equipment for the West Coast Magic Lantern systems; (3) 
provisioning eight Reserve LAMPS aircraft with Magic Lantern 
engineering change proposals, including miniaturized airborne 
Global Positioning System receivers; and (4) converting the 
Magic Lantern adaptation system to the Magic Lantern deployment 
contingency configuration.

AN/BPS-16 submarine navigation radar

    The budget request did not contain funding for the AN/BPS-
16 submarine navigation radar.
    Consistent with its initiative over the last two years to 
upgrade the navigation radar on the Los Angeles-class submarine 
fleet, the committee recommends $9.0 million to initiate the 
backfit of the AN/BPS-16 radar on the TRIDENT submarine fleet. 
The AN/BPS-16 navigation radar redresses a severe safety and 
readiness problem associated with the high failure rate of the 
older BPS-15 radar. The routine failure of the older system 
forces the fleet to rely on a small, pleasure boat style 
commercial radar that does not meet standards for larger 
vessels. Installation of the AN/BPS-16 will provide TRIDENT 
submarines with significantly improved capability for safe 
operations while navigating into and out of ports and 
performing tactical surface operations at sea in adverse 
weather conditions.

AN/SPS-73(V) surface search radar

    The budget request contained $1.7 million to procure 10 AN/
SPS-73(V) surface search radars.
    The AN/SPS-73(V) surface search radar is the radar 
navigation system selected to replace the less-reliable AN/SPS-
55, AN/SPS-64(V), AN/SPS-67(V)1 and LN-66 radars, many of which 
are over 30 years old. The AN/SPS-73(V) will replace these 
different radars with one system, reducing logistics management 
costs and saving approximately $42,000 per ship per year in 
maintenance costs. Although the Navy's procurement objective is 
550 systems, it has budgeted for only 44 systems in the future 
years defense program. To accelerate the introduction of this 
cost-effective system and enhance the navigation safety of the 
Navy's surface ships, the committee recommends an increase of 
$13.0 million for production and installation of approximately 
55 more systems.

Computer aided submode training (CAST) lesson authoring system (CLASS)

    The budget request contained $26.8 million for AEGIS 
support equipment, but did not include any funding for CLASS to 
be expanded to ships or systems other than AN/UYQ-70-equipped 
AEGIS destroyers.
    CLASS is a commercial-off-the-shelf training system that 
operates with the Navy's existing CAST system, but adds multi-
media capabilities such as video, audio, three-dimensional 
graphics, animation and interactive simulations. The committee 
understands that the CLASS is fully funded beginning in fiscal 
year 1999 for installation on AN/UYQ-70-equipped AEGIS 
destroyers, but the Navy does not plan to backfit this system 
on other AEGIS-equipped platforms or to expand it to other 
systems. Accordingly, the committee recommends an increase of 
$8.0 million for the purpose of backfitting CLASS on AEGIS 
cruisers and destroyers and to expand this technology to other 
systems such as cooperative engagement capability, joint 
maritime command information system, and global command and 
control system.

Cooperative engagement capability (CEC)

    The budget request did not contain funding for CEC.
    The CEC significantly improves anti-air warfare (AAW) 
capability by integrating all battle group component AAW sensor 
information into a single, real-time depiction that allows one 
platform to target and engage a hostile air threat with 
information from another. CEC distributes sensor data from any 
ship or aircraft in the battle group to all others through a 
real-time, line-of-sight, high-data-rate distribution network. 
The committee notes that the Chief of Naval Operations has 
identified CEC as one of the top three fiscal year 1998 
unfunded procurement priorities. Therefore, the committee 
recommends $114.8 million to restore the Navy's CEC fielding 
plan by procuring and installing CEC shipsets for two aircraft 
carrier battle groups.

DD-963 combat control upgrade

    The budget request contained $14.3 million for Navy 
tactical data systems, but did not include funding to upgrade 
DD-963 combat control systems with AN/UYQ-70 workstations and 
associated peripherals.
    The Spruance-class surface combatants operate with combat 
control and display systems, designed thirty years ago, that 
are obsolete, unreliable and expensive to maintain. Due to the 
obsolescence of these computer and display systems, the Navy 
must often ``cannibalize'' ships in non-deployed and overhaul 
status for spare parts. Moreover, the lack of modern 
technology, combined with the low reliability and frequent 
maintenance of these systems, require increased shipboard 
manning to keep these systems combat-ready. Accordingly, the 
committee recommends $10.0 million to upgrade the computers, 
consoles and associated equipment of two Spruance-class surface 
ships with AN/UYQ-70 workstations and associated peripherals.

Integrated navigation, information, and ship control system

    The budget request did not contain funding for the 
integrated navigation, information, and ship control system.
    Congress authorized and appropriated $24.0 million in 
fiscal year 1997 for the procurement and installation of 
commercial-off-the-shelf (COTS) integrated navigation, 
information, and ship control systems for backfit on CG-47 
class cruisers. However, the committee understands that the 
Navy currently intends to use these funds to conduct a 
competition for the development of a machinery control system, 
notwithstanding the fact that the $24.0 million was provided 
for the procurement and installation of a suite of non-
developmental ``smart ship'' systems like those installed on 
the U.S.S. Yorktown. The committee strongly opposes the Navy's 
intentions and directs the Secretary of the Navy to procure 
COTS systems--not develop new ones--for installation on CG-47 
class cruisers.

Mobile remote emitter simulator (MRES)

    The budget request contained $4.9 million for weapons range 
support, but did not include funding to procure MRES systems.
    The MRES is a ground-based threat simulator system that 
provides in-flight electronic threat training to aircrews. The 
Navy currently operates outdated electronic combat simulator 
systems at two fixed sites on the east coast of the United 
States. The MRES system would provide both updated threat 
simulation and allow this training to be conducted at other 
locations. Therefore, to improve the quality and availability 
of electronic combat training, the committee recommends an 
increase of $9.5 million to procure two MRES systems for the 
Atlantic test range component of the Naval Air Warfare Center.

Self-contained breathing apparatus (SCBA)

    The budget request contained $14.1 million for fire 
fighting equipment, but did not include funding to procure 
oxygen breathing apparatus used for shipboard firefighting.
    The committee notes that the Navy is attempting to replace 
antiquated oxygen-breathing apparatus used for shipboard 
firefighting with a more user-friendly and efficient system. 
The committee understands that in fiscal year 1996, the Navy 
successfully completed testing of a non-developmental, 
commercial off-the-shelf SCBA in the fleet and, as a result, 
recently directed that SCBAs be procured and installed on all 
Navy ships. Given the improved performance of these systems and 
their contribution to shipboard survivability, the committee 
recommends an additional $23.0 million to begin outfitting the 
fleet with SCBAs.

Sonobuoys

    The budget request contained $54.8 million for the 
procurement of AN/SSQ-36, AN/SSQ-53E, AN/SSQ-62E and Signal 
Underwater Sound (SUS) sonobuoys. The budget request did not 
contain any funding for the AN/SSQ-57 or the AN/SSQ-110 
sonobuoys.
    The Navy formerly maintained the equivalent of a five-year 
stockpile of sonobuoys based on peacetime consumption rates. 
However, today's inventory has been reduced to only one and 
one-half to two times the annual peacetime consumption rate and 
the committee understands that the level of funding contained 
in the budget request will not allow the Navy to meet inventory 
requirements for the execution of even one major regional 
conflict. Furthermore, the committee notes that the Chief of 
Naval Operations identified additional sonobuoy procurement 
among the top ten unfunded procurement priorities for fiscal 
year 1998. To address this inventory shortage, the committee 
recommends an increase of $45.8 million. The committee expects 
this increase to be distributed as follows: $1.5 million to 
restore and stabilize the inventory of AN/SSQ-36s at required 
levels; $23.7 million to meet AN/SSQ-53 inventory shortfalls; 
$4.5 million to retrofit the current inventory of AN/SSQ-57 
sonobuoys to meet changing threat acoustic signatures; $8.6 
million to restore and stabilize the inventory of SSQ-62s; $5.0 
million to continue to upgrade the existing inventories of the 
AN/SSQ-110 with shallow-water capabilities and safety 
enhancements; and $2.5 million to restore and stabilize the 
inventory of the SUS sonobuoy.

Surface ship sonar windows and domes

    The budget request did not contain funding for surface ship 
sonar windows and domes.
    In fiscal year 1996, Congress authorized and appropriated 
funds to ensure that essential support services and ongoing 
product improvement initiatives would continue for surface ship 
sonar windows and domes. However, the committee understands 
that the Department of the Navy has reprogrammed these funds 
for other purposes and has jeopardized the completion of a 
Navy-initiated product improvement. This product improvement 
employs a structural acoustic glass-reinforced plastic-and-
rubber sandwich material system which, in tests thus far, 
demonstrates superior performance, lower life-cycle costs, and 
reduced manufacturing and procurement costs over the current 
rubber-only system. Accordingly, the committee recommends $6.0 
million to complete the ongoing product improvement initiative 
for the structural acoustic sandwich material system for 
surface ship sonar domes.

Surface ship torpedo defense (SSTD)

    The budget request contained $344 thousand for SSTD but did 
not include funding for the procurement of countermeasure 
systems or acoustic devices.
    The SSTD system, which consists of the AN/SLQ-25A towed 
torpedo countermeasure, the AN/SLQ-25B torpedo countermeasure 
set, and the launched expendable acoustic device, enhances ship 
survivability against both advanced acoustic and non-acoustic 
homing torpedoes. The committee understands that the current 
program funds equipment for only 53 surface combatants, leaving 
over 200, including aircraft carriers, unprotected. Since the 
worldwide torpedo threat continues to proliferate, the 
committee recommends an increase of $12.6 million to add this 
capability to additional surface combatants and urges the 
Secretary of the Navy to adequately fund this program in future 
budget requests.

TB-23 towed array

    The budget request contained $78.0 million for submarine 
acoustics, of which approximately $8.0 million is for the 
refurbishment and upgrade of 20 TB-23 towed arrays.
    The TB-23 is one of four towed arrays employed by 
submarines to passively detect other ships, thereby enhancing 
their ability to determine ship activity in an area of 
operations. The committee understands that the TB-29, the 
newest towed array of the four, is currently undergoing a 
program restructure due to the high cost of the first 10 
systems and, as a result, approximately 55 TB-23s will require 
refurbishment to fully outfit the Navy's attack and ballistic 
missile submarine fleets. Fifteen of these 55 systems will be 
refurbished with funds provided in fiscal year 1997, in 
addition to the 20 in the fiscal year 1998 budget request. 
Accordingly, the committee recommends an increase of $8.0 
million to refurbish and upgrade the remaining 20 TB-23s in 
order to restore the towed array inventory to needed readiness 
levels.

WSN-7 ring laser gyro (RLG)

    The budget request contained $31.6 million for navigation 
equipment, including $12.3 million for the procurement of nine 
WSN-7 RLGs. The WSN-7 has been selected as the common RLG for 
all surface and submarine fleets.
    The committee recommends an increase of $18.0 million for 
procurement and installation of 18 additional WSN-7 RLGs. This 
increase would allow the Navy to significantly accelerate the 
replacement of high-maintenance-cost WSN-1, WSN-2, WSN-3, and 
WSN-5 ship navigation systems in the surface and submarine 
fleets with theWSN-7 RLG ship navigator. According to fleet 
commanders, this accelerated procurement would maximize cost savings 
and improve fleet performance.

                       Procurement, Marine Corps

                                Overview

    The budget request contained $374.3 million for 
Procurement, Marine Corps in fiscal year 1998. The committee 
recommends authorization of $442.8 million for fiscal year 
1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
    Offset Folios 118 to 121 Insert here

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                       Items of Special Interest

Communications and electronics infrastructure support

    The budget request contained $41.8 million for 
Communications and Electronics Infrastructure Support, of which 
$17.5 million was included for upgrades to base 
telecommunications infrastructure.
    The Commandant of the Marine Corps has designated 
communications upgrades for Marine bases as the number one 
unfunded priority for fiscal year 1998. These upgrades will 
vastly improve the telecommunications infrastructure at Marine 
Corps Air Stations (MCAS) Beaufort and Cherry Point, at Marine 
Corps Base (MCB) Quantico and Marine Corps Air Ground Combat 
Center (MCAGCC) Twenty Nine Palms with state-of-the-art fiber 
optic voice and data technology and ensure they are fully 
compatible with the digital Defense Messaging System. 
Additionally, the leased telephone system at MCAS Beaufort, 
which is presently at saturation level, will be replaced with a 
government-owned Integrated Services Digital Network-capable 
system. To support the Marine Corps' growing demands for 
modeling and simulation, telemedicine, optical disk imagery 
transmission and video teleconferencing, the committee 
recommends an increase of $42.6 million to be allocated as 
follows:

                        [In millions of dollars]

MCAS Beaufort.....................................................   5.4
MCAS Cherry Point.................................................  19.4
MCB Quantico......................................................   8.8
MCAGCC Twenty Nine Palms..........................................   9.0

Javelin

    The budget request contained $42.1 million for procurement 
of 194 Javelin antitank missiles and 140 command launch units.
    The Javelin, which is jointly procured with the Army, is a 
man-portable, fire-and-forget, antitank weapon capable of 
defeating all known and projected armor threats. The committee 
believes that this improved warfighting capability is necessary 
for early entry Marine forces to achieve dominance on the 
battlefield and, therefore, recommends an increase of $17.0 
million for procurement of 186 additional missiles.

Marine enhancement program

    The budget request did not contain funding for a Marine 
enhancement program.
    The committee recommends $10.0 million to be expended at 
the discretion of the Commandant of the Marine Corps for 
purposes of procuring emerging advanced technology equipment 
that would increase the warfighting effectiveness of the force 
or equipment that would eliminate identified deficiencies of 
currently-fielded items. Thecommittee directs the Commandant to 
provide a report to the congressional defense committees not later than 
March 31, 1998, that details the expenditure of these funds

                    Aircraft Procurement, Air Force

                                Overview

    The budget request contained $5,817.8 million for Aircraft 
Procurement, Air Force in fiscal year 1998. The committee 
recommends authorization of $6,770.9 million for fiscal year 
1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

B-1 modifications

    The budget request contained $114.2 million for B-1 
modifications, but did not include funding to procure a digital 
data link for this aircraft.
    The committee notes that the Air Force Chief of Staff's 
fiscal year 1998 unfunded priority list included as the fifth 
highest priority a request for funding to provide a limited 
capability and to develop tactics and concepts for employment 
of a digital data link on the B-1 fleet. Such a data link 
allows the fighter and bomber fleets--the ``shooters''--to 
receive real-time, secure, and jam-resistant targeting 
information from aircraft such as the Airborne Warning and 
Control System or the Joint Surveillance and Target Attack 
Radar System--the ``sensors.'' This linked information improves 
an aircrew's situational awareness, operational coordination 
among shooter aircraft, and in-flight re-targeting of emerging 
higher priority targets. It also contributes to the positive 
identification of both airborne and ground forces, thereby 
contributing to the elimination of friendly fire. The committee 
endorses the requirement to include the B-1 on the Department's 
primary data link and recommends $24.0 million to install a 
stand-alone Joint Tactical Information Distribution System 
terminal and display on up to six B-1 aircraft for this 
purpose.

B-2

    The budget request contained $174.1 million for the B-2 
bomber. These funds are requested for costs associated with 
additional software investment, technical orders, interim 
contractor support, aircrew training devices, peculiar support 
equipment, program management administration, and non-recurring 
costs for curtailment of the B-2 production line.
    Having held two hearings on the B-2 since the committee 
concluded its fiscal year 1997 authorization deliberations, the 
committee is convinced of the need to continue production of 
this bomber. No less than seven former secretaries of defense 
have recommended doing so, as have numerous other former senior 
leaders of the Air Force and the Congress. Likewise, current 
Air Force leaders privately acknowledge that they would welcome 
more B-2s in the bomber inventory, except that they are 
``unaffordable.'' The committee rejects this ``unaffordable'' 
assertion and strongly believes the United States can afford 
additional B-2s.
    Twenty-one B-2s does not constitute an adequate force level 
to deal with the many likely contingencies and crises over the 
next 30-40 years, and no other military systems in existence or 
on the drawing boards can adequately substitute for the 
capabilities the B-2 offers. As noted in testimony presented to 
the committee by the former air component commander in the 
Persian Gulf war, the B-2 is the only weapon system in the U.S. 
inventory free of range, survivability, and lethality 
limitations, and, as such, could well be the nation's only 
practical option for quickly projecting truly decisive power in 
future regional crises.
    On April 1, 1997, the B-2 reached its initial operational 
capability milestone. According to a statement issued by the 
commander of the Air Force's Air Combat Command, ``This is a 
significant milestone in ensuring the future of national 
defense. The combination of low observability, large payload 
capacity, bombing accuracy, and long range gives America a 
unique, unprecedented military capability. This combination 
allows the B-2 to penetrate sophisticated defenses and threaten 
an enemy's war-making capability. It gives the United States 
the capability to project power to any part of the globe within 
a matter of hours and deliver combat power with precision in 
support of warfighting commands.'' The committee agrees that 
the B-2's combination of range, payload, precision weapons 
delivery, and stealth make it uniquely capable of independently 
responding quickly and decisively from secure U.S. bases to 
future contingencies anywhere in the world--and thus justify 
its continued production. Accordingly, the committee recommends 
an additional $331.2 million for the B-2. This amount 
represents an increase of $353.0 million to initiate the 
eventual procurement of an additional nine B-2s coupled with a 
decrease of $21.8 million, which was requested for production 
curtailment costs. Of the $353.0 million added, $281.0 million 
is for reestablishment of those elements of the production line 
that have been previously laid away and $52.0 million is for 
advance procurement.

C-130J

    The budget request contained $49.9 million for one C-130J 
aircraft. No funds were requested for advance procurement of C-
130Js and no funds were requested for the Marine Corps tankers.
    The committee recommends an increase of $522.6 million for 
nine additional aircraft. Three of these are to be configured 
as tankers for the Marine Corps and six are for Air National 
Guard units, including one EC-130J variant.

F-16 digital terrain system (DTS)

    The budget request did not contain funding for the F-16 
DTS. The DTS provides ground collision avoidance information to 
pilots, thereby contributing to safer aircraft operations at 
night and in low visibility.
    The committee understands that the DTS, which is currently 
in production to upgrade the F-16s owned by Norway, Denmark, 
the Netherlands, Belgium, and Taiwan has completed flight 
certification and been declared fully certified for use on Air 
Force F-16s. The committee further understands that the Air 
Force plans to purchase DTSs to equip its active, Guard, and 
Reserve F-16 fleets beginning in fiscal year 1999 and is in the 
process of modifying the F-16's operational flight program to 
accommodate the DTS integration. In order to initiate 
procurement of the F-16 DTS in fiscal year 1998, the committee 
recommends an additional $20.0 million.

Global air traffic management (GATM)

     The budget request contained $20.6 million for the GATM 
upgrades.
     The committee is aware that the world is experiencing a 
tremendous growth in air traffic that has necessitated a 
significant change in the manner by which both commercial and 
military aircraft will be controlled and managed in the future. 
To handle this expected increase, a new management system, 
approved by the International Civil Aviation Organization 
(ICAO), is being designed to reduce the distance required 
between transiting aircraft and to allow pilots more freedom in 
selecting their routes and altitudes.
    Implementation of this new system, however, requires new or 
upgraded equipment for communications, global navigation, 
flight management, and collision avoidance. The committee 
understands the Air Force has already undertaken steps to 
ensure that future aircraft will include this equipment. 
However, the problem lies with upgrading aircraft currently in 
the fleet, especially airlift and tanker aircraft. Since the 
specific ICAO requirements have only recently been published, 
the Air Force was unable to include funding in the fiscal year 
1998 budget request for much of the equipment it needs to begin 
modifying existing aircraft to meet these requirements. In 
fact, the Air Force Chief of Staff has advised the committee 
that GATM equipment is the second highest priority for 
additional funding. Accordingly, the committee recommends an 
additional $67.7 million to procure GATM equipment.

H-1 modifications

    The budget request contained $2.8 million for UH-1 
modifications, but none of these funds were for inclusion of an 
oil debris detection system (ODDS) as part of an upgrade to the 
aircraft's engine diagnostic system.
    As noted elsewhere in this report, the ODDS modification, 
which has been incorporated on all Army UH-1s, alerts aircrews 
of debris in engine and propeller gear boxes, thereby allowing 
flights to be terminated prior to a catastrophic engine 
failure. It also clears particles that routinely accumulate in 
engine oil and cause false impending engine failure alarms, 
resulting in unnecessary termination of aircraft missions as 
well as unnecessary and costly engine diagnostics. 
Consequently, the ODDS not only enhances aircrew safety and but 
also reduces operating and support costs. The committee is 
impressed by the results of the ODDS installation on Army UH-1s 
and recommends an increase of $800,000 for the installation of 
this system on the Air Force UH-1 fleet.

Joint primary aircraft training system (JPATS)

     The budget request contained $65.4 million for JPATS, 
including 18 T-6A aircraft and associated ground-based training 
equipment.
    The JPATS, consisting of both the T-6A aircraft and a 
ground-based training system, will be used by both the Air 
Force and the Navy for primary pilot training. The T-6A will 
replace both the Air Force's T-37B and the Navy's T-34C fleets, 
providing safer, more economical and more effective training 
for future student pilots.
    The Air Force began procurement of the T-6A in fiscal year 
1995, and the Navy plans to begin procurement in fiscal year 
2000. The committee notes that the Air Force Chief of Staff 
included the acquisition of additional T-6As in his list of 
unfunded priorities for fiscal year 1998. Accordingly, the 
committee recommends an increase of$12.2 million for four 
additional aircraft. The committee understands that this action will 
reduce the fiscal year 1998 unit cost by $100,000 per aircraft and 
contribute to the accelerated reduction of Air Force primary pilot 
training direct operating costs, since the T-6A is approximately 30 
percent less expensive to operate than the T-37B.

Predator unmanned aerial vehicle (UAV)

    The budget request contained $116.5 million for 15 Predator 
UAVs.
    The Predator was acquired as an advanced concept technology 
demonstration (ACTD) program in response to an urgent 
requirement identified by the Joint Chiefs of Staff (JCS) in 
1993 and is the first ACTD to make the transition to a 
production program. The committee is aware of the success of 
the Predator in a number of continental United States 
exercises, as well as two operational deployments to Bosnia, 
and supports the full number of systems validated by the JCS. 
However, the committee notes that the request does not include 
funds needed for attrition aircraft or for spares and, 
therefore, recommends $30.0 million for these purposes.

RC-135

    The budget request did not contain funding for re-engining 
RC-135 reconnaissance aircraft.
    The committee notes that $145.0 million was authorized to 
re-engine six RC-135 aircraft in the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-106). 
The committee remains convinced the RC-135 will continue to be 
the workhorse of the manned special reconnaissance fleet well 
into the 21st century and is disappointed that, despite 
previous assurances to the contrary, continuation of this 
effort remains unfunded in the fiscal year 1998 budget. 
Nevertheless, the committee is persuaded by the General 
Accounting Office's analysis of the re-engining program, which 
concluded that the Department can expect to realize savings of 
over $1.5 billion with new engines compared to operating and 
maintaining the current TF-33 engines on these aircraft. 
Accordingly, the committee recommends an additional $52.0 
million to re-engine two RC-135 aircraft.

Senior Year Electro-Optical System (SYERS)

    The budget request contained $141.5 million for continued 
procurement of spares and repair parts for the U-2 aircraft and 
sensors. Because the U-2 SYERS imagery satisfies a large 
percentage of theater commanders' imagery requirements, the 
committee is committed to ensuring the availability of this 
aircraft and the viability of its sensors. The committee 
understands that the request does not adequately fund either 
upgrades to existing components of or required additional spare 
parts for SYERS. Accordingly, the committee recommends an 
increase of $5.0 million for these purposes.
    Congress initiated and sustained for several years an 
upgrade to the SYERS imaging sensor which among other things 
would allow it to be carried in the ``Q-bay'' of the U-2, such 
that a radar sensor and the SYERS electro-optical sensor could 
be flown simultaneously. This initiative appeared to Congress 
to be well worth the small investment in SYERS, since in 
wartime this dual capability could free another U-2 aircraft to 
fly other missions.
    The committee has now learned that the aircraft fuselage 
may have to be modified in order to carry SYERS in the Q-bay. 
Specifically, a ``canoe'' would have to be added to allow the 
camera to image beyond 45 degrees. In view of this fact, the 
committee directs the Secretary of the Air Force to provide a 
report to the congressional defense and intelligence committees 
by March 15, 1998, on the need and the costs to design and 
procure the number of ``canoes'' necessary to allow SYERS and a 
radar sensor to flown simultaneously.

Theater Airborne Warning System (TAWS)

    The budget request contained $67.1 million for defense 
airborne reconnaissance program modifications, but did not 
contain funding for TAWS, a medium-wave infrared (MWIR) sensor 
system capable of detecting and calculating the launch points 
of tactical ballistic missiles. TAWS is currently deployed on 
the Cobra Ball RC-135 reconnaissance aircraft.
    In the statement of the managers accompanying the 
conference report on H.R. 3230 (H. Rept. 104-724), the 
conferees urged the Air Force to proceed with a program to 
install TAWS on the Rivet Joint RC-135 aircraft, which is 
available in greater numbers than the Cobra Ball. Such a 
program would provide an option for early deployment of TAWS in 
support of improved theater ballistic missile defenses. 
However, the Department has opted instead to install this 
capability on the Airborne Laser (ABL).
    The committee understands that the ABL is not scheduled to 
reach initial operational capability until 2003. The long 
intervening period during which TAWS would remain only on the 
very few Cobra Ball aircraft would not meet the near-term need 
for a theater ballistic missile analysis and warning 
capability. Furthermore, the Air Force plans to acquire no more 
than seven ABL aircraft, a force structure too small to assure 
that TAWS would be available when and where needed.
    The committee believes this important mission is best 
satisfied by a reconnaissance aircraft. Therefore, the 
committee recommends an increase of $20.0 million to migrate 
the MWIR TAWS technology from the Cobra Ball RC-135 to the 
Rivet Joint RC-135 to enhance near-term deployment flexibility.

                   Ammunition Procurement, Air Force

                                Overview

    The budget request contained $404.0 million for Ammunition 
Procurement, Air Force in fiscal year 1998. The committee 
recommends authorization of $437.0 million for fiscal year 
1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                     Missile Procurement, Air Force

                                Overview

    The budget request contained $2,557.7 million for Missile 
Procurement, Air Force in fiscal Year 1998. The committee 
recommends authorization of $2,389.2 million for fiscal year 
1998.
    The Committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

AGM-65 maverick modifications

    The budget request did not contain funding for AGM-65 
modifications.
    The committee understands that 12,000 early-generation 
models of this anti-tank weapon are approaching 20 years 
service life and require upgrading to further extend their 
longevity, particularly since the Maverick has been identified 
as a weapon to be employed by the Joint Strike Fighter. To 
alleviate this problem, the Air Force has completed the 
development of a reliability and maintainability upgrade to 
these missiles, but the committee further understands that 
funds to begin production of the upgrade are not anticipated 
until fiscal year 1999 or later. The committee is aware that 
the gap between the completion of testing and the beginning of 
production could significantly increase the cost of the 
upgrade, as well as unacceptably delay its fielding. Therefore, 
the committee recommends an increase of $11.0 million to 
eliminate any such gap with low-rate production and to ensure a 
smooth transition to full-rate production, which the committee 
assumes will occur in fiscal year 1999.

AGM-130

    The budget request contained $1.5 million for AGM-130 
management administration and contractor support, but did not 
include funding to procure additional AGM-130 missiles.
    The AGM-130 is a precision-guided air-to-surface missile 
employed on the F-15E aircraft to strike targets from outside 
point defense ranges and is the F-15E's only 2,000-pound class 
weapon with this capability. The committee is aware that both 
the Department's Heavy Bomber Force Study and a separate study 
conducted by the Defense Science Board recommended that the Air 
Force retain 1,000 AGM-130 missiles in its inventory. In view 
of this fact, and to address the unfunded requirement 
identified by the Air Force Chief of Staff, the committee 
recommended an increase of $95.0 million in fiscal year 1997 
for an additional 250 missiles. Recognizing that the 
requirement for the AGM-130 still exceeds the number of 
missiles funded in prior years by over 200, the committee 
recommends an increase of $41.0 million for an additional 100 
missiles.

Medium launch vehicle (MLV)

    The budget request contained $165.8 million for the MLV 
program.
    The Air Force has identified $14.8 million in excess prior 
year funds in this program resulting from lower-than-expected 
cost growth and launch failure recovery activities that are no 
longer required. Of this total, $5.0 million was recommended 
for rescission in H.R. 1469, the Fiscal Year 1997 Supplemental 
Appropriations Act. The committee notes that the remaining 
balance of these excess funds are available to meet fiscal year 
1998 MLV requirements and, consequently, recommends $156.0 
million, a $9.8 million reduction.

Titan space boosters

    The budget request contained $555.3 million for Titan IV 
boosters and related equipment and launch support activities.
    The Air Force has identified $204.0 million in excess prior 
year funds in the Titan program. Of this total, $122.0 million 
was recommended for rescission in H.R. 1469, the Fiscal Year 
1997 Emergency Supplemental Appropriations Act. The committee 
notes that the remaining balance of these excess funds are 
available to meet fiscal year 1998 Titan IV requirements. 
Consequently, the committee recommends $473.3 million, a 
decrease of $82.0 million.

                      Other Procurement, Air Force

                                Overview

    The budget request contained $6,561.3 million for Other 
Procurement, Air Force in fiscal year 1998. The committee 
recommends authorization of $6,574.1 million for fiscal year 
1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Air Force satellite control network (AFSCN)

    The budget request contained $32.2 million for the AFSCN.
    The committee understands that $9.0 million was authorized 
and appropriated in fiscal year 1997 for an AFSCN hardware 
purchase to support a classified program. The committee has 
been informed, however, that the Air Force canceled this 
hardware purchase because of a delay in the classified program 
and a resulting shift in plans to support it. The committee 
notes that the funds for this purchase are now available to 
meet fiscal year 1998 AFSCN requirements and recommends $23.2 
million, a reduction of $9.0 million.

Automated surface observation system (ASOS)

    The budget request contained $18.0 million for weather 
observation/forecast equipment but did not include funding for 
ASOS. ASOS is the only federally-sanctioned automated weather 
observation system and is being procured by the Federal 
Aviation Administration, the National Weather Service, and all 
of the military services.
    The committee understands that the Navy and Marine Corps 
have funded their planned systems but that there are unfunded 
requirements for a stand-alone ASOS at both Air Force and Army 
air combat training ranges. The committee believes that 
accurate and timely weather information is a matter of pilot 
safety and recommends an increase of $4.0 million to purchase 
20 ASOSs for these ranges. The committee further recommends 
that the Air Force, as executive agent for this system, 
identify the total remaining requirements for both services and 
fund these requirements in the future years defense program.

Joint situational awareness system (JSAS)

    The budget request did not contain funding for the JSAS.
    The committee is aware of the significant progress made by 
the Air Force in providing theater-wide situational awareness 
to joint task force commanders through the JSAS. The JSAS has 
proven to be a highly-effective, low-cost, real-time, user-
friendly intelligence fusion system and represents a building 
block for greatly expanded capabilities. The committee believes 
the Air Force should pursue integrating the JSAS into the 
Global Command and Control System and recommends an additional 
$6.3 million for this purpose.

Radio equipment

    The budget request contained $12.8 million to procure new 
and upgrade existing Air Force radio equipment, including $12.2 
million to replace and upgrade high frequency (HF) radio 
communications systems with commercial-off-the-shelf equipment 
at 14 locations worldwide, a program known as Scope Command.
    The committee is pleased with the progress of the Scope 
Command program and notes that there is an opportunity to 
capitalize on this investment with the forthcoming 
implementation of the Global Air Traffic Management (GATM) 
system, discussed elsewhere in this report. The committee 
understands that GATM implementation will place renewed 
emphasis on HF communications to satisfy requirements for 
maintaining beyond-line-of-sight contact with aircraft, and, 
therefore, recommends an increase of $6.5 million to cost-
effectively augment the ongoing Scope Command equipment upgrade 
to meet these requirements.

Tactical signals intelligence support

    The budget request contained $4.1 million for tactical 
signals intelligence support.
    The committee fully supports the Department of Defense's 
efforts to coordinate intelligence data broadcasts to the 
warfighters and recommends an increase of $5.0 million to 
accelerate the procurement of hardware and software to fully 
implement the Integrated Broadcast Service technical/
operational architecture.

                       Procurement, Defense-Wide

                                Overview

    The budget request contained $1,695.1 million for 
Procurement, Defense-Wide in fiscal year 1998. The committee 
recommends authorization of $1,837.0 million for fiscal year 
1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

All-torso body armor

    The committee notes that the extraordinary effectiveness of 
modern all-torso body armor was demonstrated during Operation 
Provide Hope in Somalia when a group of 98 all-torso body 
armor-equipped Army Rangers surrounded by a much larger number 
of Somali militiamen took extremely heavy fire for many hours, 
involving direct hits on 78 to 80 percent of its personnel, and 
yet withdrew as a thoroughly combat-capable unit. The committee 
understands that some Rangers took as many as three hits on 
their all-torso body armor yet remained combat-effective, 
although essentially all of these hits were subsequently judged 
to likely have been fatal or disabling had the armor not been 
worn. It is unlikely that few, if any, Rangers in this 
firefight would have survived, if a large fraction of them had 
not remained combat-capable due to the effectiveness of their 
body armor.
    Subsequent Army studies and analyses indicate that more 
than 50 percent of all life-threatening wounds sustained in 
combat such as this firefight would be prevented by the use of 
such armor. Not unimportantly, these analyses indicate that the 
costs of procuring and employing such modern high-technology 
body armor are a small fraction of combat-related medical costs 
which would be avoided by use of this armor. Moreover, morale 
gains by infantrymen due to the combat effectiveness of body 
armor may also be expected to be a significant force-
multiplier.
    For the above reasons, the committee recommends an increase 
of $30.0 million to procure state-of-the-art all-torso body 
armor of the quality to stop most shrapnel and small arms fire 
for Army, Marine Corps, and special forces infantrymen.

Automated document conversion system (ADCS)

    The budget request did not contain funding for the ADCS.
    The committee notes that for the past five years the 
Department has conducted extensive testing of an ADCS and 
concluded that significant cost savings can be achieved by, for 
example, converting hard copy complex engineering drawings to 
an electronic format. These tests have also proven the 
flexibility of this system for converting electrical system 
schematics and contour maps as well. The committee understands 
that the latest document conversion test disclosed that the 
average savings of ADCS compared to computer-aided redrawing is 
50 percent and compared to hand-drawn work is 70 percent. 
Consequently, as it has for each of the past two fiscal years, 
the committee strongly supports the ADCS program and recommends 
$30.0 million for continued purchase of ADCS software.

Information systems security

    The budget request contained $19.6 million for information 
systems security.
    As a result of its hearing on information warfare, where 
for the first time all of the Department of Defense's corporate 
information officers were present in one forum, thecommittee 
was pleased to learn that the global threat of information warfare is 
an issue which the Department has taken extremely seriously. However, 
the committee is concerned that the number of attempted intrusions into 
the Department's unclassified networks has been occurring with 
increasing frequency. While the Department is meeting the challenge 
with a well-organized system to protect against would-be intruders, 
detect those who attempt to intrude, and react to those that do 
intrude, the committee is convinced that much more needs to be done, 
especially at the worldwide locations of the theater Commanders-in-
Chief (CINCs). Although the committee recognizes that there are plans 
to fully secure the CINCs' information links, it believes that these 
plans require expediting. Consequently, the committee recommends an 
increase of $50.0 million to implement network intrusion devices, 
firewalls, multi-level security assurance guards and other equipment in 
order to ensure the secure operation of these links as soon as it is 
possible to do so.

                  National Guard and Reserve Equipment

                                Overview

    The budget request did not contain funding for National 
Guard and Reserve Equipment for fiscal year 1998. The committee 
recommends authorization of $700.4 million for fiscal year 
1998.
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                       Items of Special Interest

AC-130 gunship

    The committee has reviewed the Department of Defense's AC-
130 gunship requirements study and believes the operational 
shortfalls identified are valid. The committee requests the 
Department provide a report to the congressional defense 
committees by March 31, 1998 on the potential cost 
effectiveness of using the Air National Guard to meet this 
shortfall.

Army force wide digitization

    The committee notes that the recently-concluded Quadrennial 
Defense Review (QDR) findings included unqualified support for 
the Army's Force XXI digitization efforts and that the digital 
attack or armed scout helicopters will perform an important 
``quarterback'' function in that battlefield scenario. The 
committee concurs with this analysis. Indeed, the committee 
recommends a total of $715.3 million for both AH-64 Longbow 
Apache digital attack and OH-58D Kiowa Warrior armed scout 
helicopters elsewhere in this report.
    Nevertheless, the committee is concerned that plans to 
replace AH-1 Cobras in the Army National Guard (ARNG) may not 
be adequately synchronized with Army-wide digitization plans. 
This may be due to the fact that the Army Aviation Plan has not 
been updated since the completion of the QDR.
    Accordingly, the committee expects the Secretary of the 
Army and the Director of ARNG Bureau to review and align AH-1 
Cobra replacement plans for the ARNG consistent with the QDR 
findings as they apply to the Army's digitized battlefield. The 
committee also expects the fiscal year 1999 budget request to 
reflect the results of this review as appropriate.

           Chemical Agents and Munitions Destruction, Defense

                                Overview

    The budget request contained $620.7 million for Chemical 
Agents and Munitions Destruction, Defense for fiscal year 1998. 
The committee recommends authorization of $610.7 million for 
fiscal year 1998.
    The committee recommends approval of the request except for 
those programs adjusted in the following table. Unless 
otherwise specified, adjustments are without prejudice and 
based on affordability considerations.
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                       Items of Special Interest

Chemical agents and munitions destruction

    The budget request contained $620.7 million for the defense 
chemical agents and munitions destruction program, including 
$472.2 million for operations and maintenance, $66.3 million 
for research and development, and $82.2 million for 
procurement.
    Section 152 of the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106), directed the Secretary 
of Defense to conduct an assessment of the chemical stockpile 
disposal program and to consider measures that could be taken 
to reduce program costs, while continuing to ensure maximum 
protection of the public and the environment. The results of 
the assessment were to be reported to the Congress with the 
submission of the fiscal year 1998 budget request. Section 142 
of the National Defense Authorization Act for Fiscal Year 1997 
(Public Law 104-201) further required that the Secretary of 
Defense conduct an assessment of alternative demilitarization 
technologies (other than incineration) that could be used for 
destruction of the chemical stockpile and report the results of 
this assessment to the Congress by December 31, 1997. Section 
8065 of the Omnibus Consolidated Appropriations Act for Fiscal 
Year 1997 (Public Law 104-208) directed that the Under 
Secretary of Defense (Acquisition and Technology) conduct a 
pilot program to identify and demonstrate not less than two 
alternatives to the baseline incineration process and appoint a 
program manager for these activities who would report directly 
to him.
    Based upon the results of a hearing which addressed all of 
the aforementioned concerns, the committee affirms its 
previously-held views that the risks of continued storage of 
the chemical weapons stockpile exceed those associated with 
demilitarization operations. Therefore, the committee believes 
that the demilitarization program should proceed expeditiously 
with the current baseline incineration program until such time 
as the evaluation of alternative technologies for destruction 
of the stockpile is concluded. The committee also notes that 
continued delays in the program will lead to further cost 
increases.
    However, the committee also agrees with the Department's 
decision to further develop chemical neutralization 
technologies for destruction of agents at the bulk-only 
chemical storage sites and with its plan for assessing the 
feasibility of alternative technologies for potential use at 
other chemical stockpile storage sites. The committee directs 
the Secretary of Defense to report to the Congress by December 
31, 1997, the status of that assessment and its potential 
impact on the costs and schedule for completion of destruction 
operations at the Pueblo and Lexington-Blue Grass storage 
sites.
    Of the $63.3 million requested for research and development 
activities, $40.8 million is for the non-stockpile chemical 
materiel project. The committee notes that the project is to be 
completed in the third quarter of fiscal year 2002, and 
believes that this represents too aggressive a schedule in view 
of the overall uncertainties surrounding the project. The 
committee expects that more time will be needed for the Army to 
prove that the proposed disposal systems will safely and 
effectively destroy all non-stockpile materiel and will be 
accepted by the affected states and communities. Accordingly, 
thecommittee recommends a reduction of $10.0 million for non-
stockpile chemical materiel research and development.

                     Defense Export Loan Guarantees

                                Overview

    The budget request contained $1.2 million for Defense 
Export Loan Guarantees, Defense for fiscal year 1998. The 
committee recommends authorization of $1.2 million for fiscal 
year 1998.
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                         LEGISLATIVE PROVISIONS

              Subtitle A--Authorization of Appropriations

           Sections 101-108--Authorization of Appropriations

    These sections would authorize the recommended fiscal year 
1998 funding levels for all procurement accounts.

    Section 121--Limitation on Obligation of Funds for the Seawolf 
                           Submarine Program

    This section would prohibit the obligation of more than 50 
percent of the funds authorized and appropriated for the 
Seawolf Submarine until the Secretary of the Navy certifies 
that he would fully fund in the future years defense program 
accompanying the fiscal year 1999 budget request 50 percent of 
the resources estimated to be required for incorporation into 
each of the first four New Attack Submarines of the technology 
``opportunities'' available for those vessels, such 
``opportunities'' being those presented to the committee in 
testimony by the Assistant Secretary of the Navy (Research, 
Development, and Acquisition).

 Section 122--Report on Annual Budget Submission Regarding the Reserve 
                               Components

    This section would require the Secretary of Defense to 
submit an annual report to Congress that describes the measures 
taken within the Department to ensure that the reserve 
components are appropriately funded and lists the major weapons 
and items of equipment provided for these components. The 
section would also require the Secretary of Defense to display 
in all future years defense program updates the amounts 
programmed for the procurement of equipment for the reserve 
components.
         TITLE II--RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

                                OVERVIEW

    The budget request contained $35,934.5 million for 
research, development, test, and evaluation (RDT&E), 
representing a $658.9 million decrease from the amount 
authorized for fiscal year 1997.
    The committee recommends authorization of $37,273.7 
million, an increase of $1,339.2 million from the fiscal year 
1998 request.
    The committee recommendations for the fiscal year 1998 
RDT&E program are identified in the table below. Major issues 
are discussed following the table.
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                               Army RDT&E

                                Overview

    The budget request for fiscal year 1998 contained $4,510.8 
million for Army RDT&E. The committee recommends authorization 
of $4,752.9 million, a increase of $242.1 million.
    The committee recommendations for the fiscal year 1998 Army 
RDT&E program are identified in the table below. Major changes 
to the Army request are discussed following the table.
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                       Items of Special Interest

Advanced field artillery tactical data system

    The budget request contained $39.0 million for the advanced 
field artillery tactical data system (AFATDS). The committee 
supports this vital fire control automation to digitally 
integrate command and control of artillery fire support and 
understands that additional funding is needed to complete 
software development and prevent delay in fielding this system. 
The committee recommends an increase of $12.0 million in PE 
23726A.

All source analysis system

    The budget request contained $24.0 million for engineering 
development of the all source analysis system (ASAS). The 
committee notes that the ASAS is a critical Army tactical 
intelligence fusion effort essential to the success of the 
Army's Force XXI digitization initiative, and recommends an 
additional $3.5 million in PE 64321A to support the software 
upgrade program for ASAS.

Armament enhancement initiative

    The budget request contained $40.3 million in PE 63639A for 
the armament enhancement initiative (AEI). The committee 
understands that the tank extended range munition-kinetic 
energy (TERM-KE) offers the potential of significantly improved 
offensive capability for the M-1 tank main armament system. The 
committee recommends $60.3 million for AEI, an increase of 
$20.0 million, to accelerate development of the TERM-KE.

Army tactical missile system

    The budget request contained $1.3 million in PE 23802A for 
other missile product improvement programs. While the Army 
tactical missile system (ATACMS) is identified as a high 
priority modernization program for precision strike capability, 
no funds were included in the request for missile improvements. 
However, due to recent program restructuring, additional 
funding is required to complete the ATACMS block upgrade 
program. The committee supports the ATACMS program and 
recommends $3.2 million for ATACMS product improvement.

Aviation advanced technology

    The budget request contained $7.1 million in PE 63801A for 
aviation advanced technology. The committee understands that 
the Army is exploring retinal display technology, a new 
development which revolutionizes the manner in which aircraft 
cockpit displays can be presented to military aircraft crews. 
Specifically, retinal display technology uses the human retina 
as the focal plane for images beamed into the eye, creating a 
high fidelity, full color image directly on the human visual 
system. Utilization of this technology would enable major 
improvements in aircraft cockpit design. The committee 
recommends $12.1 million, an increaseof $5.0 million for 
further development and integration of retinal display technology into 
the Army's aircrew integrated common helmet.

Aviation advanced technology development

    The budget request contained $6.6 million for aircraft 
demonstration engines in PE 63003A. The committee is informed 
of the potential benefits of scramjet technology for future 
advanced missiles and recommends an increase of $8.0 million to 
develop this capability.

Ballistics technology

    The budget request contained $33.3 million for ballistics 
technology in PE 62618A. The committee understands that liquid 
propellant technology offers a significant increase in 
capability for future artillery systems, and that additional 
funding is needed to support completion of the liquid 
propellant armament technology maturation program. The 
committee is also aware that the Army has placed a high 
priority on development of electric armament technology for the 
future tank and supports efforts to resolve fundamental issues 
including power generation and switching.
    The committee recommends $38.3 million for PE 62618A, an 
increase of $5.0 million for liquid propellant armament 
technology.

Battlefield Combat Identification System (BCIS)

    The budget request contained $14.8 million for combat 
identification development. The committee continues to support 
the development of a battlefield combat identification system 
as a means of preventing friendly fire casualties. Recent 
advanced warfighting experiments have demonstrated the benefits 
of and requirement for better battlefield situation awareness.
    The committee supports the budget request of $14.8 million 
and urges the Secretary of the Army to maintain the high 
priority placed on development and procurement of a battlefield 
combat identification system and to ensure requested BCIS 
funding is used only to support that initiative.

CH-47 improved cargo helicopter

    The budget request contained $2.6 million for aircraft 
modifications/product improvement programs in PE 23744A. The 
Chinook CH-47 helicopter is the Army's only heavy lift cargo 
helicopter. The committee notes that there is no program in the 
Army modernization plan for a new replacement helicopter and, 
therefore, strongly recommends that the Army continue the 
improved cargo helicopter (ICH) program which will provide 
essential upgrades and extend the Chinook service life by 
twenty years. The proposed modifications are projected to 
reduce Chinook operating and sustainment costs by more than 22 
percent. The committee recommends an increase of $20.0 million 
for the CH-47 ICH program.

Comanche

    The budget request contained $282.0 million in PE 64223A 
for continued development of the Comanche helicopter.
    The committee notes that Comanche development began in 1982 
with the first planned initial operational capability (IOC) 
scheduled for 1994. The Department's most recent selected 
acquisition report (SAR) indicates that the planned date to 
begin engineering manufacturing development has been delayed to 
the end of fiscal year 2001, with the soonest possible IOC 
being December, 2007. While Comanche is reported to be one of 
the Army's highest priority programs, it is currently 
identified by the Army Chief of Staff as under-funded, calling 
into question the actual importance of Comanche to Army 
modernization.
    Results of recent warfighting experiments at the national 
training center strongly support the requirement for a modern 
armed reconnaissance helicopter in the digital battlefield. The 
committee supports the planned testing and engine development 
including production of a second Comanche prototype which will 
allow a robust demonstration and validation program and 
therefore recommends $322.0 million, an increase of $40.0 
million to accelerate the second prototype Comanche.

Combat vehicle and automotive advanced technology

    The budget request contained $32.7 million for combat 
vehicle and automotive advanced technology. The committee is 
impressed by the advances reflected in the composite armored 
vehicle advanced technology demonstration and recommends an 
increase of $3.0 million in PE 63005A, including $2.0 million 
for the composite experience base program to strengthen 
materials initiatives, and $1.0 million to support the electric 
drive for survivability initiative.

Combat vehicle and automotive technology

    The budget request contained $33.1 million in PE 62601A for 
combat vehicle and automotive technology. The committee 
understands that a number of combat vehicles are now carrying 
additional equipment weight which requires engines of greater 
horsepower density to maintain or improve combat performance. 
The high output diesel engine (HODE) would offer the potential 
of significant increases in horsepower for combat vehicles. The 
committee recommends an additional $1.0 million to support HODE 
testing by the Army's National Automotive Center (NAC).
    The budget request also contained $12.4 million for 
advanced automotive technology within PE 62601A. The committee 
notes that the program funding for fiscal year 1998 was 
projected last year to be $8.4 million, but was increased by 
$4.0 million to fund the advanced automotive technology 
necessary to support the National Automotive Center's 
Technology Demonstration III. The committee also recommends an 
additional $3.0 million to continue testing of commercial 
technologies critical to new vehicle development and vehicle 
upgrades, in the NAC's Technology Demonstration III program.
    The committee understands that new alternatives to common 
vehicle propulsion technology are being developed by the public 
and private sector that offer significant benefits to the 
military, such as reduced pollution, lower operating cost, and 
noise reduction. The committee supports a unified effort to be 
administered by the NAC to assess and develop promising 
alternative vehicle propulsion technologies such as natural 
gas, fuel cell power plant,electric drive, and other propulsion 
innovations and improvements, and recommends an increase of $7.0 
million for a joint effort using academic, industry and government 
resources to develop alternative propulsion.
    The committee recommends $44.1 million for combat vehicle 
and automotive technology in PE 62601A, an increase of $11.0 
million.

Combat vehicle improvement programs

    The budget request contained $136.5 million for ground 
combat vehicles horizontal technology integration within PE 
23735A. Field emission flat panel display technology is of 
increasing importance as the Army incorporates digitization 
technology into its fleet of vehicles. The committee strongly 
supports development of this important technology and 
recommends an additional $2.0 million to integrate these 
displays into the Abrams tank. The committee also recommends an 
increase of $8.0 million to continue development of the AN/VVR-
1 Laser Warning Receiver.
    The committee is aware of the successful development of 
Linebacker slew-to-cue technology and recommends an additional 
$10.1 million to complete development and integration of this 
capability into the Bradley vehicle. The committee recommends 
$156.6 million for combat vehicle improvement programs, an 
increase of $20.1 million.

Countermine technology development and demonstration program

    The budget request contained $8.7 million in PE 62712A, 
$10.6 million in PE 63606A, and $15.1 million in PE 63619A for 
countermine technology.
    The committee is pleased with the increased emphasis that 
the Department has placed on the countermine program and with 
the Department's response to direction from the committee 
contained in the committee report on H.R. 3230 (H. Rept. 104-
563). The committee notes the Department's March 1997 report 
``Unexploded Ordnance Clearance: A Coordinated Approach to 
Requirements and Technology Development,'' and the Department's 
progress in establishing a requirements-driven research and 
development program for unexploded ordnance (UXO) clearance 
technology that is designed to coordinate and leverage 
technology advances in the areas of countermine, explosive 
ordnance disposal, humanitarian demining, active range 
clearance, and UXO environmental remediation. The Department's 
report addresses a total of $174.6 million contained with in 
the budget request for technology development to support UXO 
clearance, including $141.7 million for development of 
countermine technology, $7.5 million for explosive ordnance 
disposal, $17.7 million for humanitarian demining, $1.0 million 
for active range clearance, and $4.3 million for environmental 
UXO remediation. This represents an increase of $44.1 million 
above that provided for the countermine program in fiscal year 
1997.
    The committee is encouraged by measures the Department is 
taking to ensure focused oversight of operational requirements 
and coordination of the development of countermine and other 
UXO clearance technology and also notes the creation of the UXO 
Center of Excellence, a joint service activity which will 
coordinate technology activities in the five UXO clearance 
mission areas and provide a clearing house for UXO technology 
and information with industry, academia, other government 
agencies, and U.S. international partners.
    The committee recognizes that there are many areas of 
commonality, but also significant differences among the UXO 
clearance mission areas. The committee also recognizes that no 
single ``Silver Bullet'' technology exists that is likely to 
solve the UXO clearance problem and that a UXO clearance 
``system of systems'' which makes use of a range of 
technologies will be required. The committee strongly urges the 
Department to continue a robust countermine and other UXO 
clearance research and development program which investigates, 
demonstrates, and evaluates emerging technologies and continues 
the development and fielding of those that show promise for 
improving countermine and other UXO clearance capabilities. 
Accordingly, the committee recommends an increase of a total of 
$11.0 million for the development of countermine technology, 
including $3.0 million in PE 62712A, $5.0 million in PE 63606A, 
and $3.0 million in PE 63619A. The committee directs that the 
Secretary of Defense provide to the Congressional defense 
committees an updated report on the development and fielding of 
UXO clearance technology with the submission of the Fiscal Year 
2000 budget request.

Electromechanics and hypervelocity physics

    The budget request contained $45.6 million in PE 61104A for 
Army university and industry research centers. The committee 
recommends an increase of $1.9 million in the program for basic 
research in electromechanics and hypervelocity physics.

Electronics and electronics devices

    The budget request contained $20.2 million for electronics 
and electronic devices, of which $2.2 million was for battery/
individual power technologies within PE 62705A. Battery 
technology is increasingly important as the armed forces shift 
to digital technology. Continued innovation is necessary to 
provide more affordable power sources which will also be more 
portable, reusable and more efficient in order to meet the 
increasing power demands of new weapons systems and equipment. 
The committee strongly supports development of technologies 
such as advanced high-energy battery systems, low cost reusable 
and no-lead added alkaline cells and recommends that the 
Secretary of the Army continue these efforts.
    Up to 50 percent of the backpack weight carried by forward-
deployed Army and special forces troops is comprised of 
electrical batteries to power the increasing number of 
electronic weapons and communication systems. No lightweight 
field battery recharging capability presently exists to enable 
the reuse of power sources to minimize the amount of batteries 
that must be carried to the field. The resultant additional 
weight in batteries thereby limits other essentials for field 
operations, such as food, weapons, ammunition and supplies.
    The committee is aware of research efforts sponsored by the 
Defense Advanced Research Projects Agency for the development 
of the PEP-100, a standard-combustion fuel-driven, man-portable 
thermophotovoltaic generator (TPV). TPV technology has 
demonstrated that it can provide up to 110 watts of power, and, 
if proven feasible, may supply a 12-man, 12-day patrol with a 
portable, quiet, low thermal signature electrical power 
generator.
    The committee recommends an increase of $5.0 million for 
further development and testing of a TPV generator to provide 
soldiers and special forces with a much-needed field battery 
recharging capability. The committee also recommends an 
additional $3.0 million for development of improved 
manufacturing technology.
    The committee recommends $28.2 million, an increase of $8.0 
million.

Environmental quality technology

    The budget request contained $17.5 million for 
environmental quality technology within PE 62720A. The 
committee notes that no funding is specifically identified to 
continue the development of computer models to remediate 
training areas, or to continue support of the Radford 
Environmental Development and Management Program (REDMAP). The 
committee strongly supports these initiatives to enhance 
environmental quality and directs the Secretary of the Army to 
ensure that these efforts are adequately supported within the 
funding authorized for environmental quality technology 
research.
    The committee also supports continuation of the joint 
effort of the U.S. Army Environmental Center and the U.S. 
Department of Agriculture to demonstrate the efficacy and cost 
effectiveness of agriculturally based bioremediation to restore 
contaminated military and civilian sites in geographically 
isolated Pacific island ecosystems. In particular, the 
committee supports demonstration of phytoremediation, 
composting, wetlands, and other agriculturally based 
technologies to restore lands and related resources and 
recommends that an increase of $4.0 million to continue the 
existing Bioremediation Education Science and Technology 
program.
    Additionally, the committee recommends an increase of $4.9 
million for the continued development of a computer-based land 
management model to reduce time and costs for training area 
recovery.

Family of heavy tactical vehicles

    The budget request contained no funding for engineering and 
manufacturing development for the family of heavy tactical 
vehicles (HTV). The committee understands that safety systems 
are being developed to protect HTV crew members from accidents 
involving impacts and rollovers. The committee recommends $1.3 
million to develop enhanced safety products for HTVs.

Force XXI architecture

    The budget request contained $11.1 million for command, 
control, and communications systems engineering development in 
PE 64805A. The committee is aware of the Army emphasis on 
digitization for Force XXI and the high priority of its 
architecture development. The committee supports acceleration 
of the Army's highest priority unfunded requirement, and 
recommends an increase of $5.0 million.

Healthcare information protection demonstration

    The budget request contained $9.6 million in PE 33140A for 
the Army's information systems security program.
    The committee understands that the use of advanced 
information and communication technology, which provides the 
ability to transfer patient information and medical histories 
among military and civilian health care providers, raises 
significant issues relative to the need to maintain the 
security and privacy of healthcare data for military personnel 
who may receive treatment in civilian and military healthcare 
facilities. The committee believes there is a need to establish 
an integrated and focused program for the development and 
demonstration of healthcare information security systems which 
would address these issues. The committee recommends an 
increase of $2.5 million in PE 33140A to initiate a 
demonstration program for military healthcare information 
protection that would be consistent with national healthcare 
and information protection initiatives. The committee directs 
the Secretary of the Army to report to the Congressional 
defense committees the program development plan, plan for 
evaluation of the demonstration, and funding requirements for 
the program with the submission of the fiscal year 1999 Defense 
budget request.

Human factors engineering technology

    The budget request contained $14.3 million for human 
factors engineering technology. The committee understands that 
the Army is exploring the potential of emergency medical team 
coordination (MedTeams) to provide enhanced battlefield medical 
support and recommends an increase of $5.1 million in PE 62716A 
for development of the MedTeams capability.

Information systems technology, information superiority, and 
        information security

    The budget request contained approximately $10.3 billion 
for Department of Defense information systems and information 
technology, including $544.4 million for information systems 
and information technology research, development, test, and 
evaluation. Of that amount, $306.0 million was for information 
security research, development, test, and evaluation.
    The committee views with great interest the development of 
information systems technology and the increasing use of, and 
dependence on information systems in the Department of Defense 
and in the nation as a whole. Rapidly advancing information-
based technologies and an increasingly competitive global 
environment have thrust information into center stage in 
society, government, and warfare. Increasingly, complex 
information systems are being integrated into traditional 
military operational disciplines such as mobility, logistics, 
command, control, communications, and intelligence, and 
increased emphasis is being placed on the use of the commercial 
information infrastructure.
    The committee believes that the application of information 
and information technology in our military forces, combined 
with the supporting infrastructure in the Department of 
Defense, and our national life will offer greatly increased 
capabilities, but also will require that the Administration 
begin to treat information technology as a strategic resource 
vital to our national security. Inherent in these new 
capabilities, information technology also creates potentially 
serious vulnerabilities that could be exploited by an 
adversary, as the military and other elements of national power 
become increasingly dependent upon information systems and 
information capabilities. The vulnerability of information 
infrastructures to attack and the linkage between information 
systems and the traditional critical infrastructures (such as 
the electrical power system) have increased the scope and 
potential of the information warfare threat.
    The promise of information technology as a key ``enabler'' 
to achieve superiority on future battlefields, the 
vulnerabilities that information technology brings, and how 
theDepartment of Defense plans to protect against these vulnerabilities 
provided the focus for a committee hearing in March 1997. The committee 
also heard testimony on the findings and recommendations of the 1996 
Defense Science Board Task Force on Information Warfare-Defense. The 
task force report cited a robust information infrastructure as critical 
to the future effectiveness of U.S. military forces and the need for 
extraordinary action to deal with the present and emerging challenges 
of defending against possible information warfare attacks on the United 
States.
    The committee commends the efforts taken to develop and 
institutionalize the use of common information architectures 
within the Department of Defense, to improve policies and 
management practices, and to create a Department-wide 
environment that promotes interoperability and integration 
among the military services and defense agencies. The committee 
notes the efforts that are underway to protect and assure the 
integrity of the Defense and national information 
infrastructures. The committee also notes that the budget 
request for the information systems security program in PE 
33140G includes an increase of $56.6 million above the fiscal 
year 1997 funding level.
    The committee supports the maintenance of a robust 
information systems security research and development program. 
Accordingly, the committee recommends the following increases 
to the budget request:
          (1) $2.0 million in PE 63006A for tactical internet 
        command and control protection;
          (2) $6.7 million in PE 65604A for information 
        operations/warfare survivability analysis of command, 
        control, communications, and computers/information 
        electronic warfare systems;
          (3) $1.6 million in PE 33150A for development and 
        application of information protection measures for the 
        Army's component of the global command and control 
        systems for the U.S. European Command; and
          (4) $2.7 million in PE 33140F for the Air Force 
        information protection program.
    The committee directs the Secretary of Defense to report to 
the Congressional defense committees with the submission of the 
fiscal year 1999 budget, an assessment of the progress in the 
Department's information systems security program that 
addresses the current status of the program, specific actions 
being taken on the recommendations of the 1996 Defense Science 
Board Task Force on Information Warfare-Defense, and additional 
actions that should be taken to assure the increased security 
and integrity of the Defense information infrastructure. The 
report shall also address measures necessary to assure the 
integrity of those elements of the national information 
infrastructure and critical national infrastructure on which 
the Defense information infrastructure depends, and 
identification of any additional resources and legislative 
authority which may be required.

Integrated family of test equipment

    The budget request contained $2.6 million in PE 64746A for 
automatic test equipment. The committee understands that 
additional funding is required to continue development and 
upgrading of the integrated family of test equipment (IFTE), 
including completion of the electro-optics test facility and 
software upgrades for the portable on-system repair tool. The 
committee recommends an increase of $2.3 million to continue 
the IFTE program.

Joint service small arms program

    The budget request contained $4.8 million for the joint 
service small arms program within PE 63607A. The objective of 
this program is to demonstrate key technologies leading to more 
effective small arms weapons and munitions for all services, 
including such technology as the objective individual combat 
weapon (OICW). The committee supports this initiative and 
recommends an increase of $5.5 million to expedite development 
of the OICW. The committee notes the relevance of the Advanced 
Lightweight Anti-armor Weapon System (ALAWS) warhead technology 
to the Objective Crew Served Weapons System. The Defense 
Science Board 1996 Summer Study Task Force on Tactics and 
Technology for the 21st Century stated that there is a need for 
man-portable weapons to be capable of engaging a range of 
targets, from adversary soldiers to adversary armor. 
Accordingly, the committee recommends an additional $1.5 
million for continued warhead development.
    The committee recommends $11.8 million for the joint 
service small arms program, an increase of $7.0 million.

Life support for trauma and transport

    The budget request contained $18.4 million in PE 62712E for 
military medical and trauma care technologies, $8.8 million in 
PE 62787A for combat casualty care technology, and $6.8 million 
in PE 63807A for medical systems advanced development.
    The Army's budget justification included $3.3 million for 
continued evaluation and refinement of sensors, surgical and 
evacuation technology, including the life support for trauma 
and transport (LSTAT) Pod and the advanced surgical suite for 
trauma casualties (ASTEC). Developed under a Defense Advanced 
Research Projects Agency project, the LSTAT pod is a single-
patient, intensive care and life support capability that would 
be used to maintain life support and stabilization of 
battlefield casualties during their evacuation from the front 
line for higher echelon medical treatment. Four of these units 
are expected to complete air-worthiness testing and achieve 
Food and Drug Administration approval during fiscal year 1997. 
The Army is leading the joint service test program. The 
committee believes that the LSTAT pod represents a major 
advance in battlefield medical care and strongly supports an 
expedited development and evaluation process which would lead 
to early achievement of an initial operating capability and 
accelerated fielding of the system for battlefield use by all 
the services. Accordingly, the committee recommends an increase 
of $1.0 million in PE 62787A and $5.0 million in PE 63807A to 
accelerate the development program and the joint developmental 
and operational test of the LSTAT. The committee directs the 
Secretary of the Army to report to the Congressional defense 
committees the plan for completing the joint service test 
program and plans for fielding the LSTAT and other advanced 
battlefield life support and evacuation systems with the 
submission of the fiscal year 1999 Defense budget request.

Logistics advanced technology

    The budget request contained $35.5 million for logistics 
advanced technology. The committee is aware of the increasing 
importance of suppression of infrared (IR) signature on 
thebattlefield. The committee recommends an increase of $2.0 million in 
PE 63001A for further development of IR suppression fabrics for combat 
uniforms.

Missile/air defense product improvement

     The budget request contained $17.4 million for missile/air 
defense product improvement within PE 23801A. The Patriot 
system, which provided vital air defense during Operation 
Desert Storm, is being upgraded through enhanced communications 
and other system improvements to respond to the evolving air 
and cruise missile threat. The committee is also aware of 
efforts to develop block II modifications to the Stinger 
Missile to provide enhanced performance. The committee supports 
continuation of these initiatives and recommends $34.1 million, 
an increase of $10.0 million for Patriot PAC-3 missile upgrades 
and an increase of $6.7 million for Stinger block II 
modifications. The Secretary of the Army may use existing PAC-3 
missiles from inventory to support development of a cruise 
missile defense capability.

Missile and rocket advanced technology

    The budget request contained $117.1 million for missile and 
rocket advanced technology in PE 63313A.
    The missile and rocket technology program included $1.0 
million for future missile technology. The committee is aware 
of potential cost and performance benefits for future missiles 
from the use of composite materials and structures and 
recommends an increase of $6.0 million for this program.
    The budget request included $57.7 million for the enhanced 
fiber optic guided missile (EFOG-M) program. Development of 
this technology has been plagued since its inception by 
technical problems and changing priorities. To date, only 
aircraft mounted captive carry testing of the sensor has been 
performed, and only surrogate missiles are planned during the 
remainder of the Advanced Concept Technology Demonstrator 
(ACTD) before committing to procure 300 user operational 
evaluation missiles. The Army has continued to develop EFOG-M, 
which requires operator control from launch until impact, even 
though it now states requirements for smart, fire and forget 
weapons based on modern technology. The committee recommends no 
funds for EFOG-M and directs the Secretary of the Army to 
restructure the ACTD program to require flight testing of 
prototype weapons before any missile production is approved.
    The committee recommends authorization of $65.4 million in 
PE 63313A, a decrease of $51.7 million.

Missile defense battle integration center

    The budget request contained $5.0 million for the battle 
integration center (BIC). The Army is building a flexible 
distributed interactive simulation-based architecture which can 
operate in regimes of training, exercises and military 
operations, as well as providing support to advanced concept 
development. The committee understands that this effort has 
been identified as an Army priority, yet it is insufficiently 
funded. The committee recommends an increase of $14.0 million 
in PE 63308A to continue development of the BIC as an 
integrated battlelab with the capability to provide high 
fidelity representation of the modern battlefield.

Munitions manufacturing technology

    The budget request contained $44.3 million in PE 78045A for 
the Army's manufacturing technology program. The current 
munitions research, development, and production base, which 
emphasizes the use of high volume, single purpose production 
lines and was built to fight the Cold War and needs to be 
reshaped to meet the requirements of the 21st Century. 
Achieving superiority on the 21st century battlefield within 
today's austere defense budget will require the development of 
munitions that are smart, light-weight, affordable, and capable 
of being produced in a reasonable time frame, at a reasonable 
cost, and in short production runs.
    The committee recommends an increase of $15.0 million for 
munitions manufacturing technology. This increase should be 
used to accelerate key munitions manufacturing technologies in 
composites, electronics, energetics, power supplies and metal 
parts that would reduce the cost of future munitions and permit 
both government and commercially owned munitions production 
facilities to produce research and development and production 
quantities of munitions concurrently, adapt design changes and 
product improvements quickly, and make short production runs 
feasible and cheaper. The committee encourages the Secretary of 
the Army to maintain the increased funding level for munitions 
manufacturing technology in the fiscal year 1999 budget 
request.

Passive millimeter wave camera

    The budget request contained $3.5 million for ground combat 
identification technology in PE 62120A. The committee is aware 
that the passive millimeter wave camera technology is reaching 
maturity, and recommends an increase of $5.0 million.

Persian Gulf illness clinical trials program

    The budget request included $74.7 million in PE 62787A for 
medical technology.
     The committee has been deeply concerned about the health 
problems experienced by veterans of the Persian Gulf War. The 
committee understands that although there are many ongoing 
studies investigating risk factors which may be associated with 
these health problems, there have been no studies which examine 
health outcomes and the effectiveness of the treatment received 
by the veterans. Testimony presented in hearings on Persian 
Gulf War illness and the medical literature indicate there are 
therapies, such as cognitive behavioral therapy, which have 
been effective in treating patients with symptoms similar to 
those seen in many Persian Gulf veterans. The committee 
recommends an increase of $4.5 million for the establishment of 
a program of multi-site cooperative clinical trials by the 
Department of Defense and the Department of Veterans Affairs to 
assess the effectiveness of protocols for treating veterans of 
the Persian Gulf War who suffer from ill-defined or undiagnosed 
conditions. Such protocols should include, but not be limited 
to, a multi-disciplinary treatment model, of which cognitive 
behavioral therapy is a component.

Plasma energy pyrolysis system

    The budget request contained no funds for the plasma energy 
pyrolysis system (PEPS). The committee is aware that PEPS 
offers the potential to render hazardous waste, including 
medical and chemical, into an inert glass slag by-product. The 
committee recommends an increase of $8.7 million in PE 62720A 
to complete development and construction of a mobile PEPS unit 
to deal with environmental hazards.

Projectile detection and cueing (PDCue)

    The committee continues to support the projectile detection 
and cueing (PDCue) program for Army evaluation in PE 62120A. 
The committee is aware that the Army Research Laboratory (ARL) 
will receive prototypes this fiscal year and plans to 
incorporate mobile HMMWV capability and deliver the system for 
evaluation under the Military Operations in Urban Terrain 
(MOUT) Advanced Concept Technology Demonstration program. To 
accelerate the program the committee recommends an increase of 
$2.5 million for PDCue within PE 62120A.

Short-range unmanned aerial vehicle

    The budget request contained no funding for short-range 
unmanned aerial vehicles (UAV). The Department, based on lack 
of progress in the tactical unmanned aerial vehicle program, 
which is under close scrutiny for possible cancellation, has 
directed the Services to assess other solutions for UAV 
requirements. The Army has an unfulfilled, validated 
operational requirement for a short-range UAV. The committee 
directs the Secretary of Defense to initiate an Army 
acquisition program for the Department, to develop and procure 
a short-range UAV to fulfill the existing requirement. 
Performance specifications for a short-range UAV are to be as 
defined by the validated operational requirement. The UAV is to 
be equipped with the objective digital data link that is 
compatible with the Army's digital architecture for the future. 
The committee notes that historically, requirements changes and 
upgrading have been, in great part, the cause of many failed 
UAV programs. Therefore, the Department is directed to acquire 
a short-range UAV with minimum development to meet the existing 
validated operational requirement. Subsequent to IOC, as 
appropriate, block changes may be used to implement a pre-
planned product improvement program.
    The committee notes that technology improvement since 
validation of the operational requirement may allow increased 
range beyond 100 kilometers. The committee directs that the 
range threshold be 100 kilometers with specified endurance, 
while the objective range shall be 200 kilometers.
    The committee recommends $5.0 million in PE 63003A to begin 
development of a short-range UAV for all services having the 
defined requirement. Such development should as much as 
practicable, use mature, existing air vehicle technology and 
include digitization of systems to be compatible with emerging 
digital force architecture.

Telemedicine

    The budget request contained $10.7 million for advanced 
medical technology within PE 63002A.
    The committee endorses the Army's efforts to improve 
medical response and treatment of soldiers on the battlefield 
but notes, however, that no funds in the budget request were 
specifically identified under a separate project for 
telemedicine. The committee also recognizes the potential value 
of virtual reality emergency medical telemedicine (VREMT) 
efforts designed to improve diagnostics and treatment by combat 
medics. In addition to improving primary care on the 
battlefield, VREMT will also provide an exportable training 
capability. The committee recommends $16.5 million in PE 
63002A, an increase of $2.3 million for telemedicine technology 
and $3.5 million for VREMT.

Weapons and munitions advanced technology

    The budget request contained $18.3 million for weapons and 
munitions advanced technology in PE 63004A. The committee 
supports this initiative which includes demonstration of a 
precision guided mortar munition that will be evaluated along 
with other new tactics and technologies to provide early entry 
forces the capability to defeat armored forces. The committee 
is aware of the potential benefits of electro-rheological 
fluids recoil for future artillery systems and recommends an 
increase of $5.0 million for associated research.
     The committee is also aware that plastic cased ammunition 
for military use as a service round has been preliminarily 
developed for 5.56mm ammunition. The committee is aware that 
plastic cased ammunition offers potential cost and weight 
savings compared to existing munitions and, therefore, 
recommends an increase of $3.0 million for development and 
certification of this innovative munitions technology.
    The committee recommends $26.3 million for weapons and 
munitions advanced technology, an increase of $8.0 million.

                               Navy RDT&E

                                Overview

    The budget request contained $7,611.0 million for Navy 
RDT&E. The committee recommends authorization of $7,947.0 
million, an increase of $336.0 million.
    The committee recommendations for the fiscal year 1998 Navy 
RDT&E program are identified in the table below. Major changes 
to the Navy request are discussed following the table.
    Offset Folios 188 to 196 Insert here

<SKIP PAGES = 009>

                       Items of Special Interest

Advanced anti-radiation guided missile

    The budget request contained no funds to continue the 
advanced anti-radiation guided missile (AARGM) demonstration 
program.
    AARGM is a Phase III Small Business Innovative Research 
(SBIR) program designed to develop and demonstrate an advanced 
dual-mode seeker on an existing high-speed anti-radiation 
missile (HARM) airframe. The committee has placed a high 
priority on the AARGM program, and believes that the technology 
demonstrated to date shows great promise for providing a 
significantly increased anti-radiation missile capability. The 
committee is concerned, however, that the high level of 
concurrency in the schedule for the AARGM development and 
demonstration results in increased risk to the program and that 
a more sequential development program may be warranted. 
Accordingly, the committee recommends an increase of $35.0 
million in PE 25601N to continue the AARGM program. The 
committee directs the Secretary of the Navy to conduct an 
independent assessment of the program plan, development and 
demonstration schedule, program execution, technical 
performance, and program risk, and report the results of the 
assessment to the Congressional defense committees by March 31, 
1998. The report should also include the Secretary's 
recommendations on revisions to the program schedule and the 
funding required to complete the program.

Advanced deployable system

    The budget request contained $33.0 million in PE 64784N for 
continued development of the Advanced Deployable System (ADS), 
an element of the Integrated Undersea Surveillance System 
program. The request includes funds for the concept evaluation, 
program definition, and risk reduction phase of an ADS 
prototype and engineering and manufacturing development for 
production of the ADS.
    To meet the requirement for providing reliable detection of 
quieter threat submarines operating in the noisy and shallow 
waters of the world's littoral regions, a significantly 
improved information processing and data fusion capability is 
needed for support of ADS operations. The committee finds the 
budget request to be insufficient for development of these 
capabilities and inadequate to support the conduct of at-sea 
testing to validate performance in challenging littoral 
environments. Accordingly, the committee recommends an increase 
of $10.4 million for continued development and integration of 
automated detection and data fusion algorithms, rapid 
prototyping of information processing capabilities, and at-sea 
testing to validate the expected improvements in ADS 
performance.

Advanced ranging source

    The budget request contained $16.9 million in PE 64261N for 
engineering and manufacturing development of acoustic search 
sensors.
    The committee recommends an increase of $4.0 million to 
accelerate the development of alternative shallow water-capable 
sound sources in the advanced extended echo ranging (AEER) 
program and ensure that unique acoustic technology is available 
for the advanced ranging source (ARS) and air deployed low 
frequency project (ADLFP) comparative program testing.

Advanced submarine tactical electronic combat system

    The budget request contained $311.1 million in PE 64558N to 
continue engineering and manufacturing development for the New 
Attack Submarine (NSSN), including $95.8 million for NSSN 
combat system development.
    An integral part of the NSSN combat system is the advanced 
submarine tactical electronic combat system (ASTECS) and the 
integrated electronic support measures mast (IEM). The IEM 
combines communication, radar intercept, and precision 
direction finding capabilities in a single, low observable 
mast. As the precision sensor for the ASTECS, the IEM allows 
the combined system to address the full spectrum of advanced, 
complex radar, communication, and navigation systems that may 
be deployed by adversaries. Both ASTECS and IEM are planned for 
the NSSN, and the IEM for back-fit on SSN-688 and SSN-21 class 
submarines. The committee understands that budgetary 
constraints have resulted in the deferral of several critical 
elements of the IEM and ASTECS program: full implementation of 
IEM precision radar band direction finding; specific emitter 
identification, interception of frequency-agile and cellular 
communications, and international maritime satellite (INMARSAT) 
emissions; development of systems software for automatic data 
correlation, onboard training, and situational awareness; and 
back-fit of IEW. The committee believes these capabilities are 
essential and should be reinstated in the NSSN program. 
Accordingly, the committee recommends an increase of $17.0 
million in PE 64558N to restore the deferred elements of the 
ASTECS/IEM program, including repackaging the non-development 
initiative precision radar direction finding receiver and 
reducing the production cost of the IEM antenna group.

Anti-submarine warfare systems development

    The budget request contained $22.9 million in PE 63254N for 
development of anti-submarine warfare systems.
    The committee recommends an increase of $3.8 million to 
complete demonstration/validation of sonobuoy geo-positioning 
system integration and transducer enhancements for improving 
the shallow water anti-submarine warfare effectiveness of the 
air deployed low frequency projector.

AN/WLY-1 submarine acoustic intercept receiver

    The budget request contained $6.1 million in PE 11226N for 
operational systems development of improvements in the 
effectiveness and survivability of all classes of U.S. 
submarines, including continued development and testing of the 
AN/WLY-1 submarine countermeasure detection and control set.
    The AN/WLY-1 is the next generation of submarine acoustic 
intercept receivers and will significantly enhance a 
submarine's ability to respond to threat active sonar and 
acoustic homing torpedoes. Scheduled for initial fleet 
introduction in 2001, the AN/WLY-1 will be deployed on all new 
submarine classes (SSN-21 and NSSN) and will replace the 
current AN/WLR-9 acousticintercept receiver on existing SSN-
688I submarines. The committee recommends an increase of $8.0 million 
to accelerate the introduction of the AN/WLY-1 in the fleet and back-
fit on the SSN-688I submarine.

Arctic oceanographic observation program

    The budget request contained $48.2 million in PE 62435N for 
applied research in oceanographic and atmospheric technologies.
    The committee understands that additional funding is 
required to support the second year of a four-year, cooperative 
science and technology program for the utilization of 
underwater acoustic techniques to determine ocean climate and 
acoustic characteristics in a large ocean basin. The committee 
recommends an increase of $3.0 million and encourages the 
Secretary of the Navy to include funds for completion of the 
program in the fiscal year 1999 Defense budget request.

Arsenal ship and surface combatant-21 (SC-21)

    The budget request contained $103.0 million in PE 64310N 
and $47.2 million in PE 63763E for the Arsenal Ship program. 
The budget request also included $55.0 million in PE 64567N for 
the Navy's next generation surface combatant, SC-21.
    The Arsenal Ship is a joint Navy-Defense Advanced Research 
Projects Agency (DARPA) program to develop and demonstrate a 
``proof-of-principle prototype strike warfare ship'' and a new 
paradigm for development and construction of Navy ships. The 
Arsenal Ship is envisioned as a stealthy, highly survivable, 
reduced manpower fire support ship, loaded with as many as 500 
vertical launch cells. Up to five additional Arsenal Ships 
could be procured beginning in fiscal year 2004 should the 
evaluation of the Arsenal Ship demonstrator prove successful. 
The cost of the Arsenal Ship demonstration program is 
approximately $520 million, and the Congressional Budget 
Office's estimate of the cost of a six Arsenal Ship program 
totals $3 billion, plus an additional $2 billion for the 
weapons load for the six ships. The committee understands that 
the Navy envisions the Arsenal Ship as a bridge to the SC-21 
and intends to use the Arsenal Ship demonstrator to evaluate 
various technologies that might be incorporated in SC-21.
    According to recent Navy briefings, the first variant of 
SC-21 will be a land attack destroyer, DD-21, a multi-mission 
ship with 128 vertical launch cells that places an overwhelming 
emphasis on fire support, small crew, reduced signature, and 
significantly reduced life cycle cost. Based on the results of 
the Navy's SC-21 cost and operational effectiveness analysis, 
DD-21 would represent the ``best balance'' of capability 
compared to other options considered. The cost for the SC-21 is 
estimated to be approximately $750.0 million through fiscal 
year 2003, and the Navy indicates that the first potential DD-
21 construction contract award could be in fiscal year 2004. 
According to the Navy, development of SC-21 is to capitalize on 
the investments made in Arsenal Ship and in the Navy's Smart 
Ship programs.
    Both the House report (H. Rept. 104-563) and the statement 
of managers accompanying the conference report on H.R. 3230 (H. 
Rept. 104-724) agree that Arsenal Ship would be a major defense 
acquisition program and would have to satisfy the major 
acquisition program management issues, such as operational 
requirements validation and cost and operational effectiveness 
analysis. Committee hearings on the Navy's budget request for 
naval ship construction and research and development raised 
issues regarding the Arsenal Ship concept, the development 
schedules for the Arsenal Ship and the SC-21 program, and the 
ability for the lessons learned in the Arsenal Ship 
demonstration to feed into the SC-21 program. These issues have 
not been resolved, despite recent announcements that Arsenal 
Ship is to be merged into the SC-21 program, and the committee 
understands that there has been no change in the Arsenal Ship 
program.
    The committee believes that differences in ship size and 
mission capability between the Arsenal Ship and DD-21, as 
conceived, yield two separate development programs. The 
committee also believes that the overlapping schedules for the 
Arsenal Ship and the SC-21 program do not provide sufficient 
opportunity for the experience gained from the Arsenal Ship 
demonstrator to provide maximum benefit to design and 
construction of the DD-21. The committee further believes that 
the Navy's program, as outlined in the fiscal year 1998 budget 
request, would lead to two parallel, overlapping, and nearly 
simultaneous development programs for future surface 
combatants, each of which meets the criteria for a major 
defense acquisition program. The committee believes that two 
such programs are unaffordable, and that requirements for both 
programs have not yet been validated by the Department of 
Defense.
    The committee therefore recommends no funding for the 
Arsenal Ship in PE 64310N and PE 63763E in fiscal year 1998. 
The committee directs the Under Secretary of Defense 
(Acquisition and Technology) and the Secretary of the Navy to 
review the acquisition strategy for the SC-21 program and to 
determine whether or not a prototyping strategy is appropriate 
for the new surface combatant. The results of the review and 
plans to incorporate such a strategy in the development of SC-
21 shall be reported to the Congressional defense committees 
with the submission of the fiscal year 1999 budget request.

Automatic target recognition/optical correlation

    The budget request contained $34.2 million in PE 63609N for 
Navy conventional munitions development, $26.2 million in PE 
63601F for Air Force conventional weapons technology, and $4.8 
million in PE 63232D for automatic target recognition. The 
committee is aware progress is being made in the Director, 
Defense Research and Engineering (DDR&E) automatic target 
recognition (ATR) program and the development of ATR 
technologies for missiles, precision-guided weapons, and target 
cueing for surveillance systems. The DDR&E's January 1997 
report to the Congressional defense committees on optical 
correlation technology describes the progress that has been 
made in the potential weaponization of optical correlation 
technology for these purposes. The committee also understands 
that the Air Force is investigating the use of optical 
correlators for missile applications in its Optical Processor 
Enhanced Ladar program.
    The committee recommends an increase of $8.0 million in PE 
63609N for the development and demonstration of a miniature 
optical correlator for automatic target recognition and 
improved aimpoint selection for the Standard Missile, and an 
increase of $3.5 million in PE 63601F for the development and 
demonstration of a miniature optical correlator for automatic 
target recognition and aimpoint selection for the AGM-130. The 
committee expects the Air Force and the Navy to capitalize on 
current programs for the development of ATR technologyand the 
application of optical correlator technology and to coordinate their 
activities with the DDR&E's ATR program.

Autonomous underwater vehicle and sonar development

    The budget request contained $48.2 million in PE 62435N for 
oceanographic and atmospheric technologies, including $17.5 
million for applied research in environmental influences on 
mine countermeasures systems and littoral oceanography.
    The committee recommends an increase of $10.0 million to 
continue applied research and exploratory development in 
technologies for advanced sensors and unmanned underwater 
vehicles applicable to mine countermeasures and other littoral 
operations.

Battle force tactical trainer

    The budget request contained $59.0 million in PE 24571N for 
consolidated training systems development, including $2.9 
million for continued development of the battle force tactical 
training (BFTT) system.
    The committee understands that the BFTT system provides 
opportunities for fleet personnel to achieve and maintain 
combat readiness through coordinated, realistic, stressful, 
combat system team training, and permits the ship's combat 
system team to train on their own equipment while located at 
pier-side. The committee also recognizes that electronic 
surveillance systems aboard naval combatants are integral parts 
of ship and battle force combat systems and the information 
architecture required to conduct naval combat operations 
successfully. To take full advantage of the training capability 
represented by the BFTT system and permit fleet personnel to 
train using all aspects of their operational systems (including 
those that generate classified data), the committee believes 
that these electronic surveillance systems should interface 
with the BFTT system. Accordingly, the committee recommends an 
increase of $5.0 million for the integration of ship and battle 
force electronic surveillance systems into the BFTT system.

Beach and surf zone obstacle clearance

    The budget request contained $41.6 million in PE 63782N for 
advanced development and demonstration of technology for 
shallow water mine counter-measures.
    The committee is aware of initial testing by the Air Force 
and the Navy that demonstrates the ability of GPU-5 gunpod, 
mounted on an air-cushion landing craft, to breach beach and 
surf zone obstacles safely, quickly, and decisively. The 
committee believes that the system, when proven by further 
testing, offers potential for a relatively low cost, highly 
effective obstacle clearance capability that could be fielded 
quickly to improve the capability of U.S naval and amphibious 
forces operating in the littoral. Accordingly, the committee 
recommends an increase of $750,000 to complete the additional 
testing required to prove the capability.

Carbonate fuel cells

    The budget request contained $19.2 million in PE 63513N for 
development of shipboard systems non-propulsion machinery 
systems, components, and improvements for current and future 
surface fleet hull, mechanical, and electrical systems.
    The request included funding to continue the program that 
was initiated in fiscal year 1997 for design of a full scale 
ships service molten carbonate fuel cell power plant and 
demonstration of a 500 kilowatt molten carbonate fuel cell. The 
molten carbonate fuel cell demonstration program supports the 
development of high efficiency, dispersed, and environmentally 
friendly power plants for the next generation of surface 
combatants (SC-21) and fleet support vessels. To accelerate 
system and key component development and demonstration and the 
scale-up of the 500 kilowatt demonstrator to a full scale ships 
service electric power plant that could be considered for use 
on the SC-21 future surface combatant, the committee recommends 
an increase of $3.5 million. The committee encourages the 
Secretary of the Navy to include the additional funding 
required to maintain the accelerated schedule for development 
and demonstration of the full scale system in the Navy's budget 
request for fiscal year 1999.

Commandant's warfighting laboratory

    The budget request contained $34.2 million in PE 63640M for 
the Commandant's warfighting laboratory (CWL) advanced 
technology demonstration.
    The Commandant and the Chairman, Joint Chiefs of Staff 
identified the CWL as a priority un-funded requirement to 
expand experimentation to meet future technologically advanced 
warfighting threats. These experiments and demonstrations focus 
on developing operational and warfighting concepts to enhance 
warfighting capabilities in the next century. Recent advanced 
warfighting experiments have, in particular, demonstrated the 
importance of information provided from relatively low cost 
unmanned aerial vehicles. The committee notes the early results 
from the CWL initiative, and recommends an increase of $24.8 
million for the CWL, including $5.0 million specifically to 
investigate the utility of low-cost close range unmanned aerial 
vehicles as defined by the current operational requirement.

Composite engineered materials

    The budget request contained $1.7 million in PE 63725N for 
advanced development of materials, electronics and computer 
technologies.
    The committee continues to support the Navy's development 
and use of new and improved materials to address the growing 
backlog and cost of naval shore facility maintenance and 
repair. The committee therefore recommends an increase of $3.0 
million to complete the shore facilities materials program in 
cost-shared research on carbon fiber-reinforced, recycled 
thermoplastic engineered lumber.

Cooperative engagement capability

    The budget request contained $139.2 million in PE 63658N 
for the cooperative engagement capability (CEC).
    As reflected in the House report (H. Rept. 104-563) on H.R. 
3230 and the statement of managers accompanying the conference 
report on H.R. 3230 (H. Rept. 104-724), the Congresshas 
recognized the CEC program as among the highest priority programs in 
the Navy and the Department of Defense. In testimony during the defense 
posture hearing on the fiscal year 1997 budget request, the Secretary 
of Defense singled out the CEC as a program of high priority that he 
had chosen to accelerate because of its great potential for linking 
units from more than one service together and greatly increasing their 
warfighting capability. The Congressional defense committees agreed 
with the priority established by the Secretary and recommended 
significant increases to the CEC program to accelerate the fielding of 
the capability to the fleet and to accelerate and expand joint service 
integration efforts.
    The committee notes that the Navy's fiscal year 1998 budget 
request for the CEC program is significantly less than 
projected in the fiscal year 1997 Future Years Defense Plan and 
budget justification, and results in a slip of over one year in 
the fielding of the capability to fleet units. The committee 
does not understand the Navy's failure to provide the funding 
required to maintain the accelerated fielding schedule for a 
program that has received such a high priority from the 
Secretary of Defense and from the Congress. The committee 
believes that the Navy has overemphasized programs for new 
naval ``platforms'', at the expense of the warfighting weapons 
systems that would make existing platforms more effective.
    The committee recommends a total increase of $50.0 million 
in PE 63658N for the CEC program: $15.0 million to continue the 
accelerated development of the low cost common equipment set, 
$5.0 million to support transfer of the CEC design and 
development agent to industry, $20.0 million to accelerate 
integration of the CEC into Navy E-2C and P-3 aircraft, $5.0 
million to initiate development of an integrated capability 
between CEC and the ship self defense program, and $5.0 million 
to accelerate joint service integration and demonstration of 
CEC with the Army's Patriot and the Marine Corps' Hawk air 
defense missile systems.

Cryogenic electronics technology

    The budget request contained $76.7 million in PE 62234N for 
advanced development of materials, electronics and computer 
technologies, including $9.5 million for advanced 
multifunctional radio frequency system support technology, and 
$9.2 million in PE 62712E for development of cryogenic 
technologies.
    The committee understands that cryogenic electronics and 
high temperature superconductivity technology may offer the 
potential for achieving significant improvements in the ability 
of future radar systems to detect and track low-flying targets 
in clutter. The committee is aware that the Defense Advanced 
Research Projects Agency and the Office of Naval Research are 
demonstrating notable performance gains through the use of 
cryogenic electronics and high temperature superconductivity 
technology in analog and digital electronic components. The 
committee is also informed that the application of these 
technologies may permit the development of advanced RF 
receiver/exciter subsystems that could be common to a wide 
range of radar applications and could result in significant 
reductions in the cost of future radar systems. Accordingly, 
the committee recommends an increase of $3.0 million in PE 
62234N to continue the development of superconducting waveform 
generator and analog-to-digital converter technology.

CVN-77 research and development

    The budget request contained $17.9 million in PE 64567N for 
aircraft carrier contract design for the CVN-77.
    The Navy has stated that CVN-77 will provide a transition 
from the Nimitz-class nuclear aircraft carrier to the next-
generation CV(X). As such, CVN-77 is a candidate for 
development, evaluation, and incorporation of a range of 
advanced technologies and acquisition reform initiatives which, 
not only could result in lower life cycle costs, but could also 
set the standard by which further improvements in the 
application of advanced technologies and acquisition 
initiatives to the design and construction of the CV(X) will be 
measured. Accordingly, the committee recommends an increase of 
$17.0 million to accelerate the evaluation of maturing advanced 
technologies for potential incorporation in the design of CVN-
77.

CV(X) carrier systems development

    The budget request contained $90.2 million in PE63512N for 
future aircraft carrier research and development.
    The committee notes that this request represents an 
increase of $84.5 million above the amount appropriated for 
fiscal year 1997 and $88.4 million above that projected for 
fiscal year 1998 in the fiscal year 1997 Future Years Defense 
Plan. The increase is planned for advanced development of a 
range of advanced technologies for potential incorporation in 
the design and construction of the next-generation CV(X) 
aircraft carrier.
    The committee notes that the Joint Requirements Oversight 
Council approved a mission needs statement (MNS) for a New 
Tactical Aviation Sea-Based Platform for the 21st Century, the 
CV(X), in March 1996. The committee understands that among the 
potential alternatives that may compete with CV(X) in meeting 
the operational requirements of the MNS are the Mobile Offshore 
Base (MOB) and the Arsenal Ship, as well as land-based 
aircraft. The committee further understands that MOB studies in 
support of the CV(X) cost and operational effectiveness 
analysis have just been initiated. The committee also notes 
that the budget request includes funding for an Arsenal Ship 
demonstration that could lead to procurement of up to five 
Arsenal Ships. The committee is concerned that the issues 
raised in the committee report on H.R. 3230 (H. Rept. 104-563) 
and the statement of managers accompanying the conference 
report on H.R. 3230 (H. Rept. 104-724) relative to the need for 
validation of the Arsenal Ship operational requirement and 
performance analysis have not yet been addressed by the Navy.
    In view of the above, the committee believes that it is 
neither fiscally nor technically prudent to increase advanced 
carrier systems research and development for the CV(X) to the 
degree sought by the Navy. The committee believes that 
increased emphasis should be placed on the research and 
development program for the CNV-77, and elsewhere in this 
report, has recommended an increase to the research and 
development program for the CVN-77 aircraft carrier to provide 
a transition to the CV(X). The committee recommends that 
funding for carrier systems research and development for the 
CV(X) be held to the level originally projected for fiscal year 
1998 and recommends a decrease of $88.4 million

E-2 eight-blade composite propeller system

    The budget request contained $64.9 million in PE 24152N for 
operational systems development of preplanned product 
improvements in E-2C aircraft and weapon system capabilities, 
including $39.4 million for E-2C mission system improvements.
    The committee is aware that the Navy is seeking solutions 
to operational limitations encountered with the propeller 
system used on E-2C and C-2A aircraft. The current propeller 
system incorporates technology developed in the 1950's and the 
1960's, is difficult and expensive to maintain, is no longer in 
production, and is a frequent cause of E-2C aircraft not being 
operationally ready. The committee is also aware of proposals 
to develop an eight-blade composite propeller for E-2C and C-2A 
aircraft that might also be retrofitted to Navy P-3 and C-130 
aircraft. The committee understands that the cost of developing 
and producing the new propeller system could be recovered in 
four to five years as a result of reduced operation and support 
costs for the aircraft. Accordingly, the committee recommends 
an increase of $10.0 million to initiate a 24 month program for 
development and demonstration of an eight-blade composite 
propeller system for the E-2C. The committee encourages the 
Secretary of the Navy to include the funds for completion of 
the development program in the fiscal year 1999 defense budget 
request.

Extended range guided munition

    The budget request contained $37.8 million in PE 63795N for 
land attack systems technology.
    The committee strongly supports a naval surface fire 
support (NSFS) program which focuses on near term and far term 
improvements to naval fire support systems: development and 
demonstration of an extended range guided projectile (ERGM) 
which would incorporate advanced, low cost, global positioning 
system/inertial navigation system (GPS/INS) guidance 
technology; improvements in the existing Mk 45 5-inch naval 
gun; demonstration of the Army's tactical missile system 
(ATACMS) and other missile systems for NSFS applications; and 
development and demonstration of technologies to satisfy the 
Navy's long term requirements for advanced gun systems. The 
committee believes that the Navy must continue to place a high 
priority on the program and accelerate the fielding of near 
term capabilities to correct the existing shortfall in naval 
surface fire support capabilities. Accordingly, the committee 
recommends an increase of $15.1 million in PE 63795N to 
complete the development and commence integration of a fire 
control system to support the achievement of initial 
operational capability of the advanced 5''/62 caliber gun and 
the ERGM in DDG 81, planning and land-based testing of the 5''/
62 gun, and risk reduction and testing of the ERGM projectile 
and propellant. Elsewhere in this report, the committee 
recommends increases to the NSFS program for a naval ATACMS, 
and advanced, miniaturized GPS/INS guidance and control.

F/A-18E/F super hornet

    The budget request contained $317.0 million in PE 24136N 
for the F/A-18 fleet. The committee understands that $267.5 
million of this amount is for the F/A-18E/F Super Hornet and 
that funding for this program has increased $114.2 million over 
the amount forecast in the 1997 Future Years Defense Plan 
(FYDP).
    The committee has expressed great concern, described in 
detail elsewhere in this report, over the unaffordable pace of 
tactical aviation (TACAIR) modernization being pursued by the 
Department. Of the three most costly TACAIR programs in the 
Department's request--the Air Force F-22 Raptor, the Navy F/A-
18E/F Super Hornet, and the Joint Strike Fighter--the Super 
Hornet was recently approved by the Department to enter 
production, even prior to final recommendations by the 
Quadrennial Defense Review and National Defense Panel.
    The committee is unaware of any justification to support 
such a large increase in this year's research and development 
request for the Super Hornet over the recently forecast funding 
level identified in the 1997 FYDP. Therefore, the committee 
recommends $202.8 million for the F/A-18 fleet, a decrease of 
$114.2 million for the F/A-18E/F.

F/A-18F Tactical Reconnaissance

    The budget request contained no funding for developing the 
F-14 Tactical Air Reconnaissance Pod System (TARPS) Completely 
Digital (CD) capability.
    The committee understands that the Navy plans to replace 
the F-14 Tactical Air Reconnaissance Pod System (TARPS) with an 
electro-optical podded system for the F/A-18F Super Hornet. The 
committee has closely monitored the technical issues and 
difficulties experienced by the Marine Corps with the 
internally mounted Advanced Tactical Reconnaissance System 
(ATARS) for the F/A-18D. These issues, combined with the 
expected costs and extent of modifications to the F/A-18F if an 
internally mounted sensor were chosen, point to a podded 
reconnaissance capability as a more cost-effective and flexible 
approach for Navy fighter aircraft.
    Therefore, the committee supports the Navy's decision to 
develop a non-dedicated podded reconnaissance capability for 
the Super Hornet. The committee expects that the Navy will 
adhere to this decision and stresses that it will not favor any 
future request for development of an internally mounted F/A-18 
reconnaissance capability. The committee believes that the Navy 
should, to the extent possible, ensure that the TARPS 
development be transferable to the F/A-18F pod. To ensure that 
the latest technologies are provided to the user, the committee 
directs that the development and procurement of the F/A-18F 
podded system be awarded competitively.
     The committee has followed the TARPS digital imagery (DI) 
electro-optical (EO) improvements and is pleased with the 
results of this interim, but limited, capability. However, the 
committee believes there is a need to move to a production EO 
capability with a larger format backplane that provides both 
better resolution and a larger target area field-of-view, and 
understands that the TARPS CD development would provide such a 
capability at significantly less cost than a Navy purchase of 
the Advanced Tactical Airborne Reconnaissance System (ATARS).
    Based on the successful results from the interim DI 
efforts, the committee is convinced that CD will provide a cost 
effective EO tactical manned reconnaissance capability to 
replace the current film-based F-14 pods. Therefore, the 
committee recommends $5.0 million in PE 24136N for TARPS CD 
non-recurring engineering. The committee directs the Navy to 
move to TARPS CD production as expeditiously as possible.

Free electron laser

    The budget request contained $32.3 million in PE 62111N for 
technologies applicable to surface and aerospace surveillance 
and weapons.
    The committee has supported the Navy's technology program 
for design, fabrication, and activation of a one kilowatt 
average power free electron laser that operates in the infrared 
spectrum, and the evaluation of the technology for potential 
ship self-defense applications. The committee recommends an 
increase of $9.0 million to continue the Navy's free electron 
laser program. The increase will support the next phase in the 
development of superconducting accelerator free electron laser 
technology to achieve higher power levels and to evaluate the 
utility of a high energy laser weapon for naval applications.

Freeze-dried blood

    The budget request contained $18.3 million in PE 63706N for 
advanced development and demonstration of medical technology 
for care and treatment of Navy and Marine Corps personnel in 
operational theaters, including $3.6 million for advanced 
technology development related to blood and blood substitutes.
    The committee supports the Navy's program for the 
development of technologies for freezing red blood cells, the 
development of freeze-dried red blood cell units having 
extended shelf-life, and the development and clinical trial of 
improved frozen and freeze-dried blood platelet products that 
have enhanced storage capabilities, and recommends an increase 
of $2.5 million to accelerate these efforts.

Ground proximity warning system (GPWS)

    The budget request contained $36.3 million in PE 64215N for 
standards development, but did not include funding to continue 
the integration of GPWS technology into Navy-Marine Corps 
helicopter fleets.
    Congress provided an increase of $2.0 million for fiscal 
year 1997 to continue development of the GPWS in anticipation 
of its fielding on Navy and Marine heavy lift helicopters. The 
committee notes that the Navy plans to use these funds to 
achieve production approval of the GPWS for the H-53 and H-46 
series helicopters. To continue this development effort, the 
committee recommends an increase of $4.0 million for 
integration of GPWS technology into the remaining Navy-Marine 
Corps helicopter fleet and urges the Navy to program the 
modification funding needed to complete the fleet-wide 
installation of this system.

H-1 series modifications

    The budget request contained $18.5 million in Navy 
procurement for modifications to the H-1 series helicopter of 
which $18.3 million was planned for communications and 
navigation block upgrades. The budget request also contained 
$80.7 million in PE 64245N for development of future H-1 
upgrades.
     Subsequent to the submission of the budget request, the 
Navy determined a need to restructure its communications and 
navigation block upgrades and research and development plans 
for the H-1 series helicopters. The restructured program, which 
requires transferring funds from the aircraft procurement 
account to the research and development account, would improve 
commonality between the UH-1N and AH-1W helicopters through a 
new plan to design a common cockpit architecture and to procure 
common parts and software. The committee supports this 
initiative and recommends a reduction of $5.6 million in 
procurement for H-1 communications and navigation block 
upgrades and an increase of $5.6 million in PE 64245N for 
design of a common cockpit architecture.

High frequency surface wave radar

    The budget request contained $87.3 million in PE 63792N in 
the Navy's advanced technology demonstration (ATD) program.
    The ATD program demonstrates high-risk/high-payoff 
technologies that could significantly improve the warfighting 
capabilities of the fleet and joint forces and provides the 
opportunity to identify and move emerging technologies quickly 
and efficiently from the laboratory to the fleet. The committee 
understands that the high frequency surface wave radar (HFSWR) 
has the potential for significantly improving over-the-horizon 
detection of cruise missiles and is also applicable to other 
over-the-horizon surveillance missions. Fiscal year 1997 
funding reductions forced the Navy to place the HFSWR ATD on 
hold after conducting two years of a three-year ATD, and no 
funds are included in the fiscal year 1998 budget request for 
completion of the demonstration. Because of the positive 
results achieved in the HFSWR ATD before it was halted and the 
potential increase in over-the-horizon surveillance capability 
that the technology would bring to the fleet, the committee 
recommends an increase of $4.0 million to complete the HFSWR 
ATD.

Hull, mechanical, and electrical systems virtual laboratory initiative

    The Navy is considering revolutionary changes to its 21st 
century naval vessel fleet, such as SC-21 and CVX, that 
includes stealth, automation, power electronics building blocks 
and electric drive. While these synergistically linked 
technologies are ideal candidates for cross-discipline system 
evaluation in a synthetic environment, the Navy has no formal 
plan or funding for such a capability. The committee recognizes 
the success achieved by the other services and industry in the 
employment of simulation-based design of innovative 
technologies and believes that this capability would contribute 
significantly to cost-effectiveness and innovation in the 
development of hull, mechanical and electrical ship systems. 
The committee believes that a virtual laboratory concept that 
includes integrated product and process development capability, 
electronically linking government, academic and industrial 
partners, is a way to incorporate timely innovation, optimized 
system design and control acquisition and total ownership 
costs. This concept would provide a virtual test bed for 
performance evaluation and interface development as well as 
virtual prototyping of systems, components and subassemblies 
under simulated conditions. The committee directs the Secretary 
of the Navy to provide an assessment to the Congressional 
defense committees of such a virtual laboratory for hull, 
mechanical and electrical systems and if warranted, an 
implementation plan for this concept by June 1, 1998. The 
committee encourages the Navy to seek technical input from 
industry and other services laboratory programs as part of the 
assessment process.

Integrated combat weapon system

    The budget request contained $18.3 million in PE 63502N for 
surface and shallow water mine countermeasures, including $5.2 
million for the Integrated Combat Weapon System (ICWS).
    The ICWS is a series of major incremental block upgrades to 
current mine countermeasures combat systems to provide MCM- and 
MHC-class ships an affordable and fully integrated combat 
weapons system. The committee recommends an increase of $10.3 
million to accelerate the transition of ICWS to a commercial-
off-the-shelf, open systems architecture with increased 
commonality among operator stations, development and 
demonstration of improvements in system navigation and command 
and control, and early deployment of the ICWS full 
implementation system to the fleet.

Integrated ship self defense test site

    The budget request contained $132.3 million in PE 64755N 
for the ship self defense program and $33.2 million in PE 
64759N, Major Test & Evaluation Investment. No funds were 
requested in either program element for the ship self defense 
set and support equipment required to activate the Navy's 
Integrated Ship Self Defense Engineering Center (ISDEC).
    In 1991, the Navy received approval to construct a land-
based test facility at Wallops Island to integrate and test the 
ship self defense system (SSDS) and its related equipment. The 
decision was made after a comprehensive review of available 
test sites and their ability to support the engineering 
development, in-service engineering, training, testing, and 
other initiatives associated with the SSDS. Construction of the 
facility was completed in 1995. A December 1996 letter from the 
Office of the Chief of Naval Operations advised that ``program 
reductions have resulted in delays of two or more years for the 
procurement and installation of systems intended for ships and 
insufficient funding to operate and maintain the Wallops Island 
facility.''
    In view of the priority assigned to the cooperative 
engagement capability (CEC) and ship self defense programs, the 
committee does not understand the inability of the Department 
of the Navy to fund the installation of the required SSDS 
equipment set and related equipment required to activate the 
integrated SSDS test site. Such funding should have been an 
integral part of the program plan when approval for 
construction of the site was sought and given in 1991. The 
Navy's inability to provide the required funding is even more 
incomprehensible in view of the fact that the ship self defense 
and CEC programs that will use the site have been among the 
Navy's highest priority programs. These programs have been 
funded at an average funding level of approximately $400.0 
million annually since 1990, and have received significant 
annual funding increases from Congress. By failing to budget 
for the activation and operation of the ISDEC, the Navy has 
severely restricted its ability to perform testing and lifetime 
engineering support, in-service engineering, and engineering 
initiatives related to the CEC and SSDS systems.
    Accordingly the committee recommends an increase of $8.6 
million in PE 64759N to purchase the SSDS and related equipment 
required to activate the integrated land based test site at 
Wallops Island. The Secretary of the Navy is also directed to 
provide from available funds the $6.0 million that is required 
to refurbish and install an AN/SPS-48E air search radar at the 
site.

Inter-cooled recuperated engine

    The budget request contained $49.7 million in PE 63573N for 
the Navy's advanced surface machinery program (ASMP), including 
$32.3 million for the inter-cooled recuperated (ICR) gas 
turbine engine. The ICR engine program is a cooperative 
development program between the United States, the United 
Kingdom, and France to develop and demonstrate an advanced fuel 
efficient gas turbine engine that would be the prime power 
plant for future ship applications.
    In the statement of managers accompanying the conference 
report on H.R. 3230 (H. Rept. 104-724), the conferees directed 
the Secretary of the Navy to review the results of 
developmental testing of the ICR engine and to provide a report 
of the progress made in resolving the problems previously 
encountered during early stages of the ICR engine development 
testing. The committee also notes that significant progress has 
been made and that the development program is proceeding in 
accordance with a two-phased recovery plan. The committee also 
understands that testing of the engine has demonstrated the 
ability to operate from 1 percent to 110 percent of the design 
power range and the ability to achieve a 21 percent annual fuel 
savings based on a DDG-51 Class operating profile.
    The committee is encouraged by the progress being made and 
by the indication that the ICR engine will be an advanced 
maritime power plant capable of the significant annual fuel 
savings and reduced operating costs that are the objective of 
the program, but notes that considerable development and 
testing must still be done to realize this goal. The committee 
also notes that the United States has borne the majority of the 
cost of the ICR engine program. The committee is aware of 
ongoing discussions between the Department of the Navy and its 
counterparts in the development program partnership regarding 
the conduct of land-based engine qualification testing, 
proposals for at-sea testing, and the funding required to 
support completion of the program. The committee believes that 
agreement on these issues will be key to ensuring the 
completion of the development program and the provision of an 
advanced, fuel-efficient power plant for future U.S. ships.
    The committee directs the Secretary of the Navy to conduct 
an assessment of the progress in the ICR engine program, future 
plans for engine testing and qualification, and the status of 
agreements with the United Kingdom, France, and other countries 
that are participating in the development program. The results 
of the assessment shall be reported to the Congress with the 
submission of the fiscal year 1999 defense budget request.

Joint air to surface standoff missile/standoff land attack missile 
        expanded response

    The budget request contained $9.6 million in PE 64312N and 
$203.3 million in PE 27325F for the Air Force/Navy Joint Air to 
Surface Standoff Missile (JASSM) program and $28.9 million in 
PE 64603N for the Navy's Standoff Land Attack Missile Expanded 
Response (SLAM ER) program.
    The JASSM program was established in the fiscal year 1996 
budget, following cancellation of the Tri-Service Stand-off 
Attack Missile (TSSAM), to develop a replacement for that 
system at the earliest possible date. In the statement of 
managers which accompanied the conference report on S. 1124 (H. 
Rept. 104-450), the conferees stressed the urgent need for the 
operational capability that would have been provided by the 
TSSAM and the expectation that theSecretary of Defense would 
establish a joint program in the Air Force and the Navy for development 
of a TSSAM replacement that would meet the requirements of both 
services.
    The committee notes recent proposals by the Navy to replace 
the joint program for JASSM with the Navy's SLAM-ER, prior to 
completion of the current program definition and risk reduction 
phase for JASSM. The committee considers such a proposal to be 
premature and not in the best interests of the joint program. 
The proposal is, however, one of the program alternatives that 
could be considered at the Milestone II review for entry of the 
JASSM program into engineering and manufacturing development in 
July 1998, if properly based on the technical progress in the 
program and risk reduction phase, cost and operational 
effectiveness analysis, and other factors that must be taken 
into account in that review.
    The committee has reviewed the Navy's SLAM-ER program and 
considers the development and procurement schedule excessively 
concurrent. The committee understands that on the basis of a 
single controlled flight test, the Navy has made a low rate 
initial production decision that will result in the procurement 
of approximately 19 percent of the total planned buy of SLAM-ER 
before the completion of development and operational testing. 
The committee further notes that flight test of a SLAM-ER with 
operational seeker will not be conducted until Development Test 
II. The committee believes that this decision is neither 
technically nor fiscally prudent. The committee directs the 
Secretary of the Navy to review the development and acquisition 
program for SLAM-ER and provide to the Congressional defense 
committees by December 31, 1997, and provide an assessment 
which addresses the concerns expressed by the committee.

Joint standoff weapon system

    The budget request contained $71.5 million in PE 64727N for 
the joint standoff weapon system (JSOW). JSOW is a modular 
design that is being developed in three variants: a submunition 
dispenser, an anti-armor submunition dispenser, and a unitary 
warhead variant which will incorporate an imaging infrared 
seeker, data link and 500 pound blast fragmentation warhead. 
The committee understands that the submunition variant has 
completed development and initial operational testing with a 
success rate of over 96 percent and has been approved for low 
rate initial production with initial deliveries to the Navy for 
use in the F/A-18 in 1998. Initial procurement of the anti-
armor submunition variant is scheduled for fiscal year 1999, 
however, current program funding levels would delay fielding of 
the unitary warhead variant until 2002. The committee 
recommends an increase of $9.0 million to accelerate the 
development and fielding of the unitary warhead variant.

Joint strike fighter

    The budget request contained $448.9 million in PE 63800N 
for Navy portion of the Joint Strike Fighter (JSF) program.
    The committee is concerned that, although this request 
represents an increase of almost 100 percent in funding for 
Navy JSF participation over fiscal year 1997 levels, it is 
based on schedule, cost, and quantity objectives that no longer 
reflect the Department's plans for Navy tactical aircraft as 
outlined in the recently released Quadrennial Defense Review 
(QDR). The committee understands that the QDR proposes a major 
increase in Navy JSF aircraft quantities from the level 
anticipated in the 1997 Future Years Defense Plan (FYDP) and 
supports efforts to accelerate the Navy portion of JSF. The 
committee recommends an increase of $20.0 million and directs 
the Secretary of Defense to use the increase in funding to 
ensure that JSF meets all Navy requirements and to enable this 
program to support a significantly increased quantity of Navy 
JSF aircraft.
    The committee is also concerned that the 1997 FYDP does not 
reflect adequate funding within the JSF program to continue 
development of the alternative fighter engine (AFE) beyond the 
current demonstration/validation phase. The committee continues 
to believe that a fully developed and flight tested AFE is 
essential to reduce risk to the JSF program and to provide 
credible competition necessary for controlling program cost. 
Therefore, the committee directs the Secretary of Defense to 
provide a report to the Congressional defense committees no 
later than February 15, 1998, detailing the level of funding 
within the JSF program that is identified to fund full 
development and flight test of the AFE.

Joint surveillance and target radar system integration

    The budget request contained $5.1 million in PE 64231N for 
the Joint Maritime Communications Information System (JMCIS)--
Afloat. No funds were requested to include a capability within 
JMCIS to exploit the Joint Surveillance and Target Radar System 
(JSTARS) moving target indicator (MTI) data.
    The committee believes that there are compelling reasons 
for the Navy to acquire the ability to use the JSTARS radar 
surveillance system. The Navy currently has no means to detect 
and track, and locate moving targets, on a large scale, to 
contribute meaningfully to operations ashore. The Navy and 
Marine Corps aviation forces, future variants of the Tomahawk 
missile, shore fire-support systems, and amphibious forces will 
all require highly capable moving target indicator (MTI) radar 
support for situation assessment and targeting.
    Therefore, the committee recommends an increase of $10.0 
million to perform the tasks necessary to integrate JSTARS data 
into Navy and Marine ship and air platforms.

Joint tactical combat training system

    The budget request contained $59.0 million in PE 24571N for 
consolidated training systems development, including $33.6 
million for continued development of the joint tactical combat 
training system (JTCTS). The JTCTS is a Navy-led, joint Air 
Force/Navy program for the development of fixed, transportable, 
and mobile range instrumentation for shore-based tactical air 
crew training and for deployable, at-sea naval expeditionary 
force training.
    The committee notes that the estimated cost of the program 
through fiscal year 1999 has grown over 70 percent in the last 
year, and that the budget request for fiscal year 1998 is $27.5 
million greater than proposed in the fiscal year 1997 Future 
Years Defense Plan. The committee understands that the increase 
results from inadequate estimates of development costs and 
program complexity, failure to clearly define the requirements 
of the development contract, and reductions in Air Force 
funding below that anticipated by the Navy. These factors have 
forced major contract restructure, economic inefficiencies in 
hardware and software development, and a significant extension 
in the development schedule. The committee believes that the 
JTCTSrequirement and program must be reassessed and a new 
system and program baseline established to bring the program under 
control.
    The committee directs the Secretary of the Navy, in 
coordination with the Secretary of the Air Force, to conduct an 
assessment of the JTCTS requirement and development program 
execution and to report the results of the assessment, 
revisions to the program baseline, and funding requirements and 
schedule for completion of the program to the Congressional 
defense committees by December 31, 1997. The committee believes 
that until the assessment is completed, no increase to the 
program is warranted, and therefore recommends a decrease of 
$27.5 million in PE 24571N.

Light airborne multi-purpose system helicopter program

    The budget request contained $73.4 million in PE 64212N for 
other helicopter development.
    The Navy has embarked on a program to convert its existing 
fleet of LAMPS helicopters from the SH-60B configuration to the 
SH-60R configuration. The block II upgrade will enhance the 
anti-submarine warfare and anti-surface warfare capabilities of 
the LAMPS MK III in support of the naval battle group in 
littoral operations and in regional conflicts. The committee 
recommends an increase of $15.0 million to maintain the 
schedule for the block II upgrade and support the insertion of 
ruggedized, scaleable, commercial-off-the-shelf (COTS) avionics 
technology into SH-60R avionics. The committee understands that 
use of COTS avionics technology will yield significant savings 
in production costs during the conversion program and reduce 
overall system life-cycle costs.

Light strike vehicle

    The budget request contained no funds for the light strike 
vehicle (LSV). The committee understands that there is an 
approved operational requirements document (ORD) for 
lightweight, high performance all-terrain vehicles for a number 
of critical missions, such as special operations and forward 
reconnaissance in conventional operations.
    The ORD requires an initial operational capability by 
fiscal year 2001. The committee is concerned that while the 
Commandant has emphasized the high priority of the V-22 Osprey 
to Marine combat capability, the Marine Corps currently has no 
viable ground vehicle that can be carried inside the Osprey. 
Current vehicles for these missions are reaching the end of 
their service life, are easily detected, and have limited 
mobility or are not internally transportable in the Osprey.
    Accordingly, the committee recommends $5.0 million in PE 
26624M to begin the development of the LSV for both the Marine 
Corps and Special Operations Forces, and directs the Secretary 
of the Navy to report to the Congressional defense committees 
by November 30, 1997 the plan to field this critical 
warfighting asset.

Lightweight wide aperture array

     The budget request contained $61.1 million in PE 63504N 
for advanced submarine combat systems, including $10.5 million 
to continue the development of advanced flank array technology.
    The committee recommends an increase of $4.0 million to 
accelerate the development and application of fiber optic 
technology to low cost, lightweight hull array systems for 
current and next generation submarines.

Littoral anti-submarine warfare technology demonstration

    The budget request contained $54.8 million in PE 63747N for 
undersea warfare advanced technology, including $30.9 million 
for shallow water surveillance advanced technology.
    The committee has expressed concerns about the potential 
threat of advanced diesel submarines operating in the shallower 
waters of the world's littoral regions and the challenge posed 
to U.S. surveillance and detection capabilities. In fiscal year 
1996, Congress provided additional funds for the development 
and demonstration of advanced technologies for shallow water 
anti-submarine warfare (ASW). These funds were subsequently 
used for the development, testing, and calibration of 
components of a mobile, high power broadband acoustic 
surveillance source that is based upon the adaptation of 
commercial-off-the-shelf (COTS) air-gun technology. The 
committee understands that this effort has been successfully 
completed and shows promise for filling a significant niche in 
the U.S. ASW shallow water surveillance capability. The 
committee, therefore, recommends an increase of $5.0 million 
for continued development, demonstration, and evaluation of the 
technology which, the committee understands, will permit 
decisions on proceeding further with the development of COTS 
air gun technology as an acoustic surveillance source.

Marine Corps assault vehicles

    The budget request contained $60.1 million for the advanced 
amphibious assault vehicle (AAAV) in PE 63611M.
    The Marine Corps is developing the AAAV to be a high water 
speed, amphibious armored personnel carrier replacement for its 
current fleet of aging amphibious vehicles. The committee 
understands that additional funding is required for fabrication 
and testing of a second prototype which is needed to preserve 
the current schedule if any significant equipment failures 
occur. The committee strongly supports development of the AAAV 
and recommends an increase of $10.0 million for a second AAAV 
prototype.

Marine Corps communications systems

    The budget request contained $38.3 million in PE 26313M for 
Marine Corps communications systems.
    The committee notes that the Commandant of the Marine Corps 
has identified critical unfunded requirements for development 
of a tactical hand held radio, a tactical remote sensor system, 
a Marine common hardware suite, and the tactical electronic 
reconnaissance processing and evaluation system. The committee 
recommends an additional $5.2 million for these programs.

Marine Corps ground combat/supporting arms system

    The budget request contained $12.6 million in PE 26623M for 
Marine Corps ground combat/supporting system development.
    The committee recommends an increase of $4.3 million to 
integrate and test the AN/VVR-1 Laser Warning Receiver into the 
M1A1 Abrams tank. The committee also recommends an increase of 
$0.7 million as requested by the Commandant for the Marine 
enhancement program to support development of better clothing 
and other items for the individual Marine.

Marine Corps ground combat/support system

    The budget request contained $36.5 million for PE 63635M, 
including funding for continued development of the joint Army/
Marine Corps lightweight 155mm howitzer.
    The program has completed competitive selection of the 
prime contractor, and has entered the engineering and 
manufacturing development phase. The committee fully supports 
this program effort to field a much needed replacement for the 
aging and operationally deficient M198 howitzer and recommends 
an increase of $3.6 million.

Marine mammal research program

    The budget request contained $366.3 million in PE 61153N 
for Navy Defense Research Sciences, including $137.1 million to 
support basic research in ocean sciences.
    The committee recommends an increase of $500,000 to 
continue the Navy's cooperative marine mammal research program. 
The committee directs the Secretary of the Navy to submit to 
the Congressional defense committees by March 1, 1998, a report 
on the research being conducted in the marine mammal research 
program and the technological implications of this research to 
Navy sonar requirements.

Medical mobile monitor

    The budget request contained $18.3 million in PE 63706N for 
advanced development and demonstration of medical technology 
for care and treatment of Navy and Marine Corps personnel in 
operational theaters. No funds were requested to continue the 
program for advanced technology development and evaluation of 
the medical mobile monitor.
    The committee continues to believe that the Department must 
place high priority on the fielding of state-of-the-art, cost 
effective, medical care for U.S. forces. The development and 
demonstration of miniaturized, lightweight, rugged emergency 
medicine and medical information technology tools for use in 
forward units should lead to advances in critical medical care 
for the military services that could also be adopted by other 
Federal and civilian medical organizations that are required to 
provide medical care in remote and austere environments. The 
committee recommends an increase of $4.0 million to complete 
the program for development and demonstration of mobile medical 
monitor prototypes and to demonstrate the ability of the 
monitor to interface with existing military communications 
systems and medical information systems.

Micro-electromechanical systems guidance and control

    The budget request contained $37.8 million in PE 63795N for 
land attack systems technology for naval ship-to-shore fire 
support.
    The committee has strongly supported a naval surface fire 
support (NSFS) program which focuses on near and long term 
improvements to naval fire support systems. The committee 
believes that advanced global positioning system/inertial 
navigation system (GPS/INS) guidance and control technology is 
essential to the NSFS program and to other precision guided 
munitions programs. The success of this program and the 
affordability and cost-effectiveness of advanced precision 
guided munitions can be significantly enhanced by micro-
electromechanical systems (MEMS) technology used in the 
guidance and control unit. MEMS technology has the potential to 
significantly reduce the cost of the GPS/INS guidance and 
control for the Navy's extended range guided projectile (ERGM), 
the Army's low cost competent munition (LCCM), and other 
Department programs. The committee is informed of a recent 
successful demonstration of a MEMS-based advanced guidance and 
control unit for the ERGM in gun-fired tests at Yuma Proving 
Ground that demonstrated the promise of MEMS-based GPS/INS 
technology. Accordingly, the committee recommends an increase 
of $5.0 million in PE 63795N to continue the Navy's guidance 
and control risk reduction program, accelerate development and 
qualification of MEMS-based GPS/INS guidance and control, and 
ensure the early availability of the technology for ERGM 
program, LCCM, and other guided munitions, rocket and missile 
programs. The committee recommends that the Secretary of the 
Navy and the Secretary of the Army ensure that the development 
of MEMS-based GPS/INS guidance and control is coordinated 
closely between the two services.

Mine countermeasures autonomous system technology

    The budget request contained $42.7 million in PE 62315N for 
mine countermeasures, mining, and special warfare technology.
    The committee understands that recent research, operational 
simulations, and evaluation of prototype hardware indicates 
that application of autonomous robotics surveillance and 
tactical oceanography system technologies could yield 
significant improvements in shallow water mine countermeasures. 
The committee believes that a partnership between academia, the 
Navy materiel development community, and the Navy operational 
community would be useful in evaluating the utility of such 
systems, developing tactics for their use, and then evaluating 
the operational results in at-sea tests of the systems and 
tactics. To support such a program, the committee recommends an 
increase of $3.0 million for research and development in 
autonomous system technologies for shallow water mine 
countermeasures.

Molecular design material science

    The budget request contained $366.3 million in PE 61153N 
for Navy defense research sciences. The committee holds 
continuing interest in research in the synthesis and creation 
ofnew molecular structures at the atomic level and the 
potential that this research holds for developing new products for use 
in electronics, biomedical science, and many other military 
applications. The committee recommends an increase of $10.0 million to 
continue the program of basic research in molecular design materials 
science that was initiated in fiscal year 1994. The committee directs 
the Secretary of the Navy to conduct an assessment of the goals, 
objectives, and progress of the program, and future directions and 
funding requirements for the program, and to report the results of the 
assessment to the Congressional defense committees by March 15, 1998.

National oceanographic partnerships program

    The budget request contained $48.2 million in PE 62435N for 
applied research in oceanographic and atmospheric technologies, 
including $5.0 million to continue the National Oceanographic 
Partnership Program.
    In the belief that a strong national oceanography program 
is essential to the long-term national security of the United 
States, and to other areas of U.S. national interest, the 
Congress established in section 282 of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201) the 
National Oceanographic Partnerships Program. The objective of 
the program is to coordinate and leverage all U.S. 
oceanographic efforts in the Navy, industry, and academia, and 
to encourage the sharing of resources, intellectual talent, and 
facilities in ocean science and education in order to ensure 
the superiority of the U.S. oceanography program. To maintain 
the momentum of the program and provide a bridge until 
additional funds for support of the program can be included in 
the budget requests of other participating agencies and 
departments, the committee recommends an increase of $16.0 
million in PE 62435N and $7.5 million in Navy operations and 
maintenance, as reflected in Title III of this report, to 
continue to support the development of federal, academic and 
industry oceanographic research partnerships under the program.
    The committee commends the Secretary of the Navy for his 
leadership of the National Ocean Research Leadership Council. 
The committee directs the Secretary of Defense to coordinate 
with the secretaries of Commerce, Energy, and Interior, the 
Director of the National Science Foundation, the Administrators 
of the National Aeronautics and Space Administration and the 
Environmental Protection Agency on funding levels required in 
future budget requests for continuation of the NOPP, and to 
provide a report to the Congressional defense committees by 
February 28, 1998 on the funding for the program in the fiscal 
year 1998 budget requests of these agencies and of the 
Department of Defense.

National test and training range center initiative

    The committee understands that the Department of Defense 
has supported development of a capability in the Hampton Roads 
region for integration and transcontinental connectivity of 
military test and training ranges, which would result in a 
national test network architecture to support widely 
distributed combat systems integration and testing. The test 
center, under development by the Navy, would leverage resources 
from several existing government-sponsored high performance 
computing and high speed network programs, such as simulation-
based design, synthetic theater of war, the National Science 
Foundation's partnership for advanced computing infrastructure, 
the high performance computing modernization program, and 
Defense Advanced Research Projects Agency distributed object 
computation test bed. The committee recognizes the potential of 
this technology in reducing the high cost of system 
acquisition, test, and training, while enhancing quality and 
stimulating advances in information technology and electronic 
commerce. The committee encourages enhanced support for the 
Navy's initiative.

Naval biodynamics laboratory data bank

    The budget request contained no funding for the Naval 
Biodynamics Laboratory (NBDL).
    For nearly thirty years, the NBDL focused on the intensive 
test, study, and analysis of the human body's response to the 
trauma of crashes, and developed a national data bank of 
collective human crash response information based on 
approximately 3,500 crash tests using live human subjects. In 
1996, the NBDL ceased operations as a result of previous 
decisions to close the laboratory, but was not able to 
consolidate and safely store its research information in a 
consistent, useful data bank format. The committee believes 
that the effort spent in amassing the unique human response 
data by the NBDL should not be lost. Accordingly, the committee 
directs the Secretary of the Navy to develop a plan for 
establishing a national crash survival data bank that will 
safeguard the integrity of the data gathered by the NBDL and to 
submit a report on the plan and the funding required to 
establish the data bank with the fiscal year 1999 Defense 
budget request.

Navy tactical missile system (NTACMS)

    The budget request contained $37.8 million in PE 63795N for 
development, demonstration, and validation of land attack 
systems technology for naval ship-to-shore fire support.
    The committee is aware of preliminary Navy studies 
indicating that the U.S. Army tactical missile system (ATACMS), 
when suitably marinized for employment by surface ships and 
submarines, would enhance the Navy's capability against many 
potential surface targets. The committee is further aware that 
a Navy version of ATACMS, called NTACMS, meets the requirement 
of the Naval Surface Fire Support Mission Need Statement (MNS) 
for a responsive and lethal fire support missile system. The 
committee is also aware of the successful demonstration in 
November 1996 at White Sands Missile Range of the firing of an 
ATACMS from a Navy Mark 41 Vertical Launch System launcher. The 
proposed NTACMS would adapt the ATACMS Block IA missile with 
the M74 submunition for naval use. In addition, the potential 
exists in the future to adapt other ATACMS warhead variants 
into NATACMS, including the Brilliant Anti-Tank (BAT) anti-
armor submunition and hard target penetrator weapons. The 
committee recommends an increase of $20.0 million in PE 63795N 
for program definition and risk reduction activities to permit 
NTACMS to begin accelerated engineering and manufacturing 
development in fiscal year 1999.
    The committee considers it appropriate that demonstration, 
validation, and risk reduction for NTACM and the Land Attack 
Standard Missile (LASM) continue through fiscal year 1998. The 
committee is aware of competing claims regarding cost and 
effectiveness of the two systems that have been made by system 
proponents. The committee strongly believes, cautions, and 
expects that a through, objective, and independent cost and 
operational effectiveness analysis ofcompeting system 
alternatives will be required before the Navy proceeds with any 
development milestone decision for a land attack missile.

P-3 maritime patrol aircraft modernization program

    The budget request contained $3.2 million in PE 64221N to 
continue upgrades to the P-3C aircraft system to enhance 
surface and surface tracking, classification, and attack 
capabilities.
    The committee notes the continuing disparity between the 
operational requirements of the regional commanders-in-chief 
and the Navy's plans for modernization of the P-3C fleet, and 
believes that the Navy must increase the priority given to the 
P-3C modernization program.
    The committee recommends an increase of $12.0 million to 
continue acceleration of the integration of anti-surface 
warfare improvement program (AIP) sensors to reduce operator 
workload, modernize the operator-machine interface, provide 
additional sensor integration/enhancements, improve/automate 
tactical planning aids, and provide for multi-sensor data 
correlation and fusion.

Power electronic building blocks and power node control centers

    The budget request contained $46.9 million in PE 62121N for 
applied research in surface ship and submarine hull, 
mechanical, and electrical technology, logistics technology, 
and environmental protection for all Navy platforms and shore 
facilities. The request included $6.0 million to continue the 
development of power electronic building block for the rapid 
switching and control of shipboard high power electrical 
systems.
    The committee believes that this technology should be 
accelerated to provide the electric power system options for 
future shipboard designs that include electric drive and for 
meeting reduced manning goals through automation of ship 
systems. The committee also believes that the use of virtual 
prototyping for simulation and evaluation of advanced concept 
electrical systems should contribute to this effort. The 
committee recommends an increase of $6.0 million to accelerate 
the development and demonstration of power electronic building 
blocks, and an increase of $1.5 million to continue the 
development of power node control centers for advanced 
integrated electrical distribution system fault detection, 
switching, reconfiguration, and control of shipboard electrical 
systems.

Precision targeting and location system

    The budget request contained no funds for global 
positioning system (GPS) interference precision targeting and 
location.
    The committee is aware of the potential vulnerability of 
GPS signals to collateral interference and intentional jamming. 
In fiscal year 1997, Congress authorized and appropriated $3.5 
million in PE 64270N for demonstration of a flyable prototype 
of a currently available technology capable of rapid, precision 
location of sources of GPS interference in order to assess the 
technical feasibility and utility of such a targeting system 
incorporated on operational aircraft and unmanned aerial 
vehicles. The committee recommends an increase of $2.8 million 
in PE 64270N to complete the demonstration.

Project ``M''

    The budget request contained $39.7 million in PE 63508N for 
technologies for submarine and surface ship handling, 
machinery, and engineering systems.
    The committee recommends an increase of $5.0 million to 
continue the Navy's program for transition, development and 
demonstration of advanced quieting technology developed under 
the Defense Advanced Research Project Agency Project ``M.''

Proton exchange membrane fuel cells

    The budget request contained $18.2 million in PE 63712N for 
environmental quality and logistics advanced technology.
    The committee understands that proton exchange membrane 
(PEM) fuel cell technology is rapidly maturing and has been 
successfully demonstrated in automotive and portable power 
applications. High power conversion efficiency, modularity, 
rugged operational characteristics and low environmental impact 
should make the PEM fuel cell well-suited for portable and on-
site power generation. The committee believes that 
opportunities exist for the development and demonstration of 
PEM fuel cell technology for both military and civilian 
applications in a cost-shared, cooperative program involving 
government and industry that makes use of existing cooperative 
research and development agreements. The demonstration would 
permit the Department of the Navy and the civilian sector to 
gain experience with, and evaluate the power generation 
capability of a facility-level power plant that uses PEM fuel 
cell technology. Accordingly, the committee recommends an 
increase of $1.8 million to establish a cooperative, cost-
shared demonstration of PEM fuel cell technology.

Remote minehunting system

    The budget request contained $18.3 million in PE 63502N for 
surface and shallow water mine countermeasures, including $6.9 
million for the Remote Minehunting System (RMS) (V)3.
    RMS is a remotely operated system for detection and 
classification of sea mines that operates from surface 
combatant ships and provides the fleet with an organic means of 
finding and avoiding mined waters. The RMS prototype was 
successfully demonstrated in Exercise Kernel Blitz in March 
1995 and subsequently deployed in an overseas exercise in which 
the system again demonstrated great success in providing the 
force the ability to quickly assess and monitor the extent of 
the sea mine threat. The success of the demonstration has 
resulted in an accelerated program to deploy RMS to the fleet 
and the endorsement by the Chief of Naval Operations and the 
Chairman of the Joint Chiefs of Staff. The committee 
understands that an increase in funding would enable completion 
of a second engineering development model (EDM) of the RMS, 
including the over-the-horizon communication subsystem, and to 
support integration of the RMS in DDG-51 Flight IIA new ship 
construction and the AN/SQQ-89 undersea combat system. 
Development of the second EDM would permit the Navy to meet an 
aggressive program schedule and reduce program risk by allowing 
concurrent environmental and development testing. The committee 
recommends an increase of $7.9 million to accelerate the 
integration of the RMS capability on other ships of the fleet.

Safety and survivability enhancements

    The budget request contained $263.9 million in PE 65864N, 
including $131.8 million for test and evaluation support at the 
Naval Air Warfare Center Weapons Division and $85.7 million for 
test and evaluation support at the Naval Air Warfare Center 
Aircraft Division.
    The committee believes that there is a high potential for 
the adaptation of commercial off-the-shelf non-developmental 
items (COTS NDI) that could improve operational safety and 
combat survivability in the Navy's operational commands. To 
that end, the committee has previously supported funding for 
the procurement, test, and evaluation by the Navy of COTS NDI 
that have high potential for contributing to safety of flight, 
fire fighting, damage control, emergency preparedness ashore, 
survival at sea, and chemical/biological warfare defense. The 
committee recommends an increase of $2.0 million to continue 
ongoing evaluations and expand the program to assess COTS NDI 
that are new to the industrial marketplace. The committee 
recommends that the Secretary of the Navy consider establishing 
a separate program line item for this activity in future budget 
requests.

Second source qualification program for carbon fibers

    The budget request contained $76.7 million in PE 62234N for 
materials, electronics and computer technologies.
    The committee continues to monitor the Navy's efforts in 
materials applied research and development in support of 
aviation platform affordability, supportability, and mission 
performance. The committee recommends an increase of $2.0 
million to continue the program established in fiscal year 1997 
to address new materials processes such as resin transfer 
molding and to establish second source qualification procedures 
for carbon fibers for advanced composites used in several naval 
aircraft and for prepreg systems.

Shipboard condition-based maintenance and damage assessment

    The budget request contained $46.9 million in PE 62121N, 
including $8.6 million for logistics and environmental quality 
technology.
    An objective of the Navy's logistics technology program is 
the development of diagnostic technologies that will enable the 
implementation of condition-based maintenance, rather than the 
traditional philosophy of time-based maintenance. The committee 
believes that advanced micro-electromechanical systems (MEMS) 
employed in damage-tolerant sensor networks show promise for 
meeting the Navy's goals for shipboard condition-based 
maintenance and damage assessment. Accordingly, the committee 
recommends an increase of $5.0 million in PE 62121N for the 
development of enabling MEMS and damage-tolerant sensor network 
technologies in preparation for the initiation of an advanced 
technology demonstration in fiscal year 1999.

Ship self defense program

    The budget request contained $132.3 million in PE 64755N 
for the Navy's ship self defense program, including $14.1 
million for development of an infrared mode upgrade to the 
Rolling Airframe Missile (RAM) and improvements in RAM's 
capability against low-elevation targets. No funds were 
requested to continue development of the Phalanx close-in 
weapon system (CIWS).
    As a result of experience gained during tanker escort 
operations in the Persian Gulf that was confirmed during 
Operation Desert Storm, the Navy established an operational 
requirement for an advanced minor caliber gun system to provide 
close-in defense for surface ships against small surface craft, 
small low-flying aircraft, and helicopters. In May 1993, 
following extensive Congressional defense committee reviews, 
the Navy determined that adding a surface mode capability to 
CIWS would provide the most cost and operationally effective 
solution to address the operational requirement. In July 1993, 
the Navy announced that the RAM would replace Phalanx on major 
surface combatants, although development of the CIWS surface 
mode capability (Phalanx Block IB) would continue for use on 
other surface combatants and ships equipped with the CIWS. 
Currently, 369 CIWS systems are fielded on 222 U.S. Navy ships 
and 233 systems are fielded on foreign ships.
    The committee understands that the Navy intends to end the 
Phalanx Block IB upgrade following the completion of testing 
and will not procure the upgrade for the fleet, but does intend 
to field a low altitude or surface mode upgrade for the RAM 
systems that will be deployed on major surface combatants. Navy 
officials cited the need to reallocate fiscal year 1998 funding 
to higher priority programs as the reason for the Phalanx Block 
IB decision. The committee believes that the Navy's action 
would leave the majority of the Navy's ships without the close-
in defense capability that the Navy previously convinced the 
Defense authorizing committees was required and that this 
decision reflects the Navy's continuing disregard of the 
requirements to provide adequate self defense for U.S. fleet 
ships, other than major combatants, that have been the focus of 
the ship self defense program.
    The committee directs the Secretary of the Navy to reassess 
the requirement for close-in defense of Navy surface ships and 
how the Navy will satisfy the requirements not only for major 
surface combatants, but also for other surface ships in the 
fleet. A report of the results of the assessment and the Navy's 
plan for meeting the requirement shall be submitted to the 
Congressional defense committees by February 28, 1998. No 
fiscal year 1998 funds may be obligated for the RAM upgrade 
program until thirty days after the Secretary's report is 
received by the committees.

Submarine anti-submarine warfare defensive weapons

    The budget request contained $54.8 million in PE 63747N for 
advanced technology.
    The committee recommends an increase of $4.0 million to 
mature the development of hydrodynamics and propulsion 
technologies for the 6.25" torpedo vehicle and expand guidance 
and control technologies. The additional funds would accelerate 
the development and demonstration of technologies applicable to 
quick reaction anti-submarine weapons for close-range 
engagements and to defensive systems for protecting surface 
ships and submarines against torpedo attack.

Submarine combat system multi-purpose processor (MPP)

    The budget request contained $42.3 million in PE 64503N for 
SSN-688 and TRIDENT modernization, including $33.5 million for 
submarine sonar improvement. However, the budget request did 
not contain funding for the MPP.
     To facilitate rapid improvements in submarine acoustic 
data processing, the Navy selected the MPP as the cornerstone 
of sonar upgrades for the existing SSN-688, 688I and TRIDENT 
submarines. At one-half the cost of legacy systems, the MPP 
provides the Navy with vastly improved processing power and the 
ability to integrate advanced software to existing hardware 
using an open operating system architecture. For fiscal year 
1997, the committee recommended an additional $11.0 million and 
Congress appropriated $7.0 million for advanced development and 
rapid introduction of the MPP into the U.S. submarine fleet. To 
continue this cost-effective initiative, the committee 
recommends an increase of $15.0 million.

Surface ship torpedo defense system

     The budget request contained no funds to continue the 
Navy's surface ship torpedo defense (SSTD) program.
    In 1995, the Navy informed Congress that the SSTD program 
was being restructured to mitigate the risk and cost in 
development of an improved torpedo defense capability for Navy 
surface ships. The committee is encouraged by the recent 
successes in development of the launched expendable acoustic 
device (LEAD) and the multi-sensor torpedo recognition and 
alertment processor (MSTRAP) and the improvements in SSTD 
capability that these systems will provide when deployed to the 
fleet. However, the absence of funding for continuation of the 
SSTD program in fiscal year 1998 will halt further progress and 
will inhibit the ability of the Navy to capitalize on the 
results of the joint United States/United Kingdom 
demonstration/validation program. Accordingly, the committee 
recommends an increase of $9.8 million in PE 63506N to continue 
the SSTD development program and further enhance detection, 
classification, and localization of threat torpedoes and 
integrated improved soft kill capabilities that are being 
tested in the joint United States/United Kingdom programs.

Surveillance towed array sensor system/low frequency active program

     The budget request contained $9.9 million in PE 24311N for 
the integrated surveillance system, including research and 
development support of the Surveillance Towed Array Sensor 
System (SURTASS) and for the integrated undersea surveillance 
system (IUSS).
    The committee understands that the SURTASS is a proven 
mobile, long-range underwater passive acoustic sensor systems 
and that the addition of the low frequency active (LFA) 
capability provides a significant increase in the capability of 
the system to detect quiet submarines operating in both deep 
ocean and shallow coastal littoral waters. In the statement of 
managers accompanying the conference report on H.R. 3230 (H. 
Rept. 104-724), the conferees agreed to increased funding for 
the SURTASS program which would:
          (1) continue development and integration of SURTASS 
        twin line arrays, reduce the size of transmit arrays, 
        continue fiber optic array development, expand 
        frequency processing capabilities, and conduct at-sea 
        testing of resulting developments;
          (2) sustain the low frequency active program and 
        development of more reliable low frequency active 
        transmitters; and
          (3) adapt SURTASS software algorithms for submarine 
        sonar systems.
    The committee recommends an increase of $4.0 million in PE 
24311N to continue the development of fiber optic sensors for 
the SURTASS/LFA program.

Visualization architecture technology for aviation test and evaluation

     The budget request contained $33.2 million in PE 64759N 
for the Navy's Major Test & Evaluation Investment program.
    The committee understands that increased funding is 
required for the visualization architecture and technology 
project to develop and improve data display technologies, 
provide enhanced situation awareness, and improve the ability 
of developmental and operational test personnel to assess 
complex, dynamic air combat testing and operations. The 
committee recommends an increase of $3.0 million, and expects 
the project to focus initially on improving aviation 
development and test capabilities at the Navy's Air Combat 
Environment Test and Evaluation Facility.

                            Air Force RDT&E

                                Overview

    The budget request contained $14,451.4 million for Air 
Force RDT&E. The committee recommends authorization of 
$14,659.7 million, an increase of $208.4 million.
    The committee recommendations for the fiscal year 1998 Air 
Force RDT&E program are identified in the table below. Major 
changes to the Air Force request are discussed following the 
table and in the classified annex to this report.
    Offset Folios 226 to 233 Insert here

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                       Items of Special Interest

ALR-69 radar warning receiver

    The budget request contained $25.6 million in PE 63270F for 
electronic combat technology. Included in this program are 
modernization efforts to improve the survivability of current 
technology combat aircraft in high radar threat environments.
    The committee notes that while efforts to date have 
successfully improved radar warning equipment for aircraft 
employed by active forces, the Air Force Reserve, Air National 
Guard, and Special Operations Forces aircraft have not received 
adequate development support to integrate these same 
survivability improvements. The committee recommends an 
increase of $14.0 million to accelerate these additional 
survivability improvement efforts.

Autonomous free-flight dispenser system

    The budget request contained $41.2 million in PE 63605F for 
advanced weapons technology.
    The committee notes that the Department of Defense's 
increased emphasis in developing precision guided munitions 
(PGMs) with stand-off capability to enhance strike aircraft 
performance and survivability. Although the services are 
pursuing several PGM development programs to address specific 
requirements, the committee is aware of a previously tested 
glide-bomb PGM which, when modified with turbojet powered 
capability, could address a significant number of current 
precision weapon system requirements. The autonomous free 
flight dispenser-turbo (AFDS-T) has been successfully tested on 
U.S. strike aircraft in an unpowered configuration and a glide 
version is currently in production in Europe for allied 
aircraft. The committee believes that the AFDS-T offers both 
cost effective PGM capability as well as interoperability with 
allied forces and recommends an increase of $15.0 million to 
conduct sufficient verification testing to evaluate the 
capability of this weapon system and its suitability for U.S. 
forces.

Bomber testing

    The budget request contained $389.3 million in PE 65807F 
for test and evaluation support of Air Force test ranges and 
facilities.
    The committee is aware of ongoing efforts to improve B-2 
bomber testing capability at the Bark Flight Test Facility and 
supports the expansion of this facility's capability to conduct 
testing of other Air Force bomber aircraft. The committee 
recommends an increase of $8.0 million to add test capability 
to this existing facility for B-1B, B-52, and other bomber or 
strike aircraft.

Conventional ballistic missile

    The budget request contained $32.8 million in PE 63851F for 
intercontinental ballistic missile (ICBM) demonstration and 
validation activities.
    The committee notes that a number of ``rogue'' nations have 
constructed hardened, deeply buried facilities. Some of these 
facilities represent command and control structures and sites 
at which weapons of mass destruction are developed and stored 
and are therefore of great military significance. The 
destruction of these sites requires a weapon that can penetrate 
hardened structures or rock, while maintaining sufficient 
structural integrity to detonate. The committee further notes 
that the ability of the U.S. military to strike at these 
targets effectively without recourse to nuclear weapons is 
extremely limited.
    The committee believes that a conventionally armed ICBM has 
the potential to hold these targets at risk, in the near term, 
and at modest cost. This proposed capability is based on a 
combination of very high ICBM warhead terminal velocities, 
technologies that allow precision delivery, long range, 
relative invulnerability to enemy defenses, and the maturity of 
current ICBM technology.
    Therefore, the committee recommends $49.3 million for ICBM 
demonstration and validation activities, an increase of $16.5 
million. The additional funding is for the purpose of 
establishing a conventional ballistic missile advanced concept 
technology demonstration program. The funding is to be used to 
modify an existing reentry vehicle, complete flight test plans, 
and procure long lead items to support a flight test.

Ejection seats

    The budget request contained $7.9 million in PE 63216N for 
aviation survivability and $17.2 million in PE 63231F for crew 
systems and personnel protection technology.
    The committee understands that improvements are needed in 
tactical aircraft ejection seat systems to provide adequate 
safety for air crews. The committee fully supports enhanced 
crew safety, and recommends an increase of $1.5 million in PE 
63216N and an increase of $2.0 million in PE 63231F for 
continued development of improvements in aircrew ejection seats 
and evaluation of alternative technologies leading to an 
injury-free ejection seat design.

High speed anti-radiation missile

    The budget request contained $13.6 million for manned 
destructive suppression in PE 27136F.
    The committee believes that the high speed anti-radiation 
(HARM) missile provides a significant capability for 
suppression of enemy air defenses. The committee supports the 
HARM development and recommends an increase of $3.0 million to 
accelerate development of HARM F-16 interfaces and operational 
flight software.

Joint strike fighter

    The budget request contained $458.1 million in PE 63800F 
for the Air Force portion of the Joint Strike Fighter (JSF). As 
mentioned elsewhere in this report, the committee is extremely 
concerned that the current pace of the Department's tactical 
aviation programs is both unaffordable and not coordinated with 
the emerging Quadrennial Defense Review (QDR). The committee 
notes that this request represents an increase of $27.0 million 
over the projected funding for JSF identified in the 1997 
Future Years Defense Plan and recommends $431.1 million, a 
decrease of $27.0 million.

Minuteman safety enhanced reentry vehicle

    The budget request contained $137.9 million in PE 64851F 
for efforts to upgrade the Minuteman III intercontinental 
ballistic missile (ICBM) guidance and propulsion systems.
    The Minuteman guidance replacement program (GRP) is 
replacing 1960's vintage electronics with modern supportable 
technology. The program is proceeding through engineering and 
manufacturing development and the first of the upgraded 
guidance systems is expected to be delivered in 1999. The GRP 
also preserves the option to incorporate the Mk-21 safety 
enhanced reentry vehicle on the Minuteman III ICBM if 
Peackeeper ICBMs, which are now equipped with the Mk-21, are 
retired.
    The committee notes that the Mk-21 is the most modern, 
safest, and logistically supportable reentry vehicle in the Air 
Force inventory. It further notes that the Air Force is 
planning to replace the older Mk-12A reentry vehicle with the 
Mk-21 on 150 Minuteman III ICBMs. However, the actual design 
and development efforts for the hardware and software needed 
for the incorporation of the Mk-21 remain to be accomplished. 
Initial engineering tests will be accomplished with additional 
funding authorized and appropriated for fiscal year 1997. The 
committee believes that a continuation of this effort will 
reduce the risk of a potentially costly redesign and refit of 
the new guidance systems. To promote the timely completion of 
Mk-21 integration efforts, the committee recommends $152.9 
million for PE 64851F, an increase of $15.0 million.

Pollution prevention

    The budget request contained $5.9 million for pollution 
prevention in PE 65854F.
    The committee is aware of an automated monitoring network 
demonstration for in-ground, real-time monitoring of aquifers 
that allows the user to accurately determine if the 
contaminated area is stable or requires costly remediation. 
This smart monitoring system is designed to completely replace 
expensive, time consuming and potentially dangerous collection 
and transporting of soil and groundwater samples for analysis. 
The Air Force requires additional funding to further evaluate 
the system by continuing to monitor current wells and to expand 
the demonstration to monitor for contaminants in the aquifer 
throughout the base. The committee supports improvements in 
environmental monitoring on military installations and 
recommends an increase of $5.0 million for this program.

Protein-based ultra-high density memory

    The budget request contained $86.1 million in PE 62702F for 
command, control, and communications research.
    The committee understands that Air Force exploratory 
development in bioelectronics research has produced promising 
results that offer an alternative approach to data storage. 
Work to date has demonstrated that protein memory technology is 
feasible and potentially capable ofenabling significant 
increases in memory storage capacity. The committee recommends an 
increase of $3.0 million to continue protein-based memory research.

Range improvement program

    The budget request contained $47.3 million for major test 
and evaluation investment in PE 64759F.
    The committee understands that the test range at Eglin Air 
Force Base is a national asset that provides important test and 
evaluation capabilities for the Department of Defense. It is 
also aware that the range needs improved instrumentation and 
other modernization to meet 21st century requirements. The 
committee supports improved test and evaluation and recommends 
an increase of $14.8 million for range modernization.

Rocket propulsion research

    The budget request contained $48.1 million for rocket 
propulsion technology in the integrated high payoff rocket 
propulsion technology (IHPRPT) initiative programs.
    The IHPRPT represents the Department of Defense's principal 
technology effort to dramatically improve the performance of 
rocket systems and is leveraged through coordination and 
cooperation with industry and the National Aeronautics and 
Space Administration. The committee believes that the 
Department's strong leadership and commitment to this effort is 
essential to achieving this leverage, and is concerned that the 
requested level of funding may be insufficient to sustain 
critical research in materials and propellants. Therefore, the 
committee recommends an increase of $6.0 million to PE 62601F, 
$1.5 million be added to PE 63302F, and an increase of $1.0 
million to each for PE 62111N and PE 63217N for IHPRPT 
programs.

Rocket system launch program

    The budget request contained $8.0 million in PE 65860F for 
the rocket system launch program (RSLP). The RSLP provides 
research, development, test, and evaluation support to the 
Department of Defense and other government agencies using 
excess ballistic missile assets.
    The committee continues to support the atmospheric 
interceptor technology (AIT) program, a primary technology base 
program within the Ballistic Missile Defense Office for 
advanced hit-to-kill interceptor technologies. Flight tests are 
needed in fiscal year 1998 for the AIT program to move ahead, 
but funding for these tests was not included in the AIT or RSLP 
budget requests. The committee understands that these flight 
tests may use experimental Advanced Solid Axial Stages 
boosters, the testing of which will help the RSLP program 
better meet future requirements. The committee recommends $33.0 
million for RSLP, an increase of $25.0 million, to support AIT 
flight tests in fiscal year 1998.

Solar thermionics orbital transfer vehicle

    The budget request contained $40.8 million for advanced 
spacecraft technology in PE 63401F.
    The committee is aware that space power and thermal 
management technology is important to the goal of making future 
space-based systems more affordable. The committee also 
understands that the Air Force has initiated an orbital 
transfer vehicle program that will use thermionics technology 
to provide both electrical power and propulsion. The committee 
supports use of technological innovation to reduce the cost of 
space systems and recommends an increase of $20.0 million to 
support the orbital transfer vehicle program.

Space and Missile Rocket Propulsion

    The budget request contained $16.2 million within PE 63302F 
for Space and Missile Rocket Propulsion.
    The committee remains concerned that the nation's space 
launch system is too unreliable and expensive and believes that 
exploration of potentially revolutionary launch technologies is 
fully justified. Improving the efficiency and responsiveness of 
U.S. launch capabilities is important to a wide range of 
military activities and to reducing infrastructure costs.
    The Scorpius space launch technology demonstration program 
embodies one promising approach to robust, inexpensive, 
scalable launch capabilities. It has been funded through seven 
small business innovative research awards by BMDO and Phillips 
Laboratory. The committee recommends an increase of $15.0 
million for continuation of the Scorpius program and that the 
funding for the Scorpius program be transferred from BMDO (PE 
63173C) to the Air Force (PE 63302F).
    The committee believes that military single-stage-to-orbit 
(SSTO) vehicles could also be important to future defense 
missions and could provide assured and very flexible access to 
space. The committee notes that the budget request contained no 
funding for the military spaceplane, however, the Air Force has 
expressed support for this program and indicates that it will 
be funded in fiscal year 1999. The committee recommends an 
increase of $15.0 million in PE 63302F to continue this 
program.

Titan space launch vehicles

    The budget request contained $82.4 million in PE 35144F for 
research and development on Titan IVB boosters and related 
equipment.
    The Titan IVB uses upgraded strap-on solid rocket motors 
(SRMUs) to enable the Titan booster to meet increasing 
performance requirements. The Air Force determined that the 
SRMU needed to be requalified for use on the Titan IVB, if the 
program were to continue beyond 37 launches. The process of 
making this determination resulted in a significant lag in the 
obligation and expenditure of funding that was authorized in 
fiscal year 1996. Therefore, the committee recommends $67.4 
million, a reduction of $15.0 million to reflect this delay.

Trusted rubix

    The budget request contained $5.3 million for the 
information systems security program in PE 33140F.
    The committee is aware that the advent of the information 
age has caused a greater reliance on computer-based systems 
and, accordingly supports the Department's efforts to improve 
computer security and to protect the defense information 
infrastructure from attack. The committee recommends an 
increase of $2.3 million for continued development of the 
Trusted Rubix multi-level security program.

                         Defense Agencies RDT&E

                                Overview

    The budget request contained $9,361.2 million for Defense 
Agencies RDT&E. The committee recommends authorization of 
$9,914.1 million, an increase of $552.8 million.
    The committee recommendations for the fiscal year 1998 
Defense Agencies RDT&E program are identified in the table 
below. Major changes to the Defense Agencies request are 
discussed following the table.
    Offset Folios 241 to 248 Insert here

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                       Items of Special Interest

Active structural control

    The budget request contained $82.6 million in PE 63764E for 
land warfare technology, including $29.0 million for technology 
for early entry forces.
    The committee understands that the helicopter active noise 
and vibration control (HANVC) program is demonstrating in a 
helicopter rotor control system the active structural control 
technology that was developed in the Defense Advanced Research 
Projects Agency advanced submarine technology program. The 
technology has the potential for significantly reducing the 
radiated noise and vibration produced by helicopters. The 
reduction in radiated noise and vibration could increase the 
survivability of helicopters on the battlefield and could also 
significantly reduce maintenance costs as well as crew and 
passenger discomfort. The committee recommends an increase of 
$6.6 million in PE 63764E for the HANVC program.

Advanced concept technology demonstrations

    The budget request contained $121.1 million in PE 63750D 
for Advanced Concept Technology Demonstrations (ACTD). The 
committee is concerned that this represents more than a hundred 
percent increase for the fiscal year 1997 appropriation of 
$58.5 million. Although the Department has stated that ACTDs 
are used to apply mature technologies to meet urgent military 
requirements, the committee has found that ACTDs often use 
technology that is not mature and fail to address a validated 
urgent military requirement. Therefore, the committee questions 
the requirement for the requested funding increase and 
recommends $91.1 million, a decrease of $30.0 million in PE 
63750D.

Advanced lithography program

    The budget request contained $32.0 million in PE 63739E for 
the Defense Advanced Research Projects Agency (DARPA) advanced 
lithography program.
    The committee notes the critical role played by lithography 
in the development of advanced microchip technology and the 
role of the microchip as the engine of the information 
technology revolution that is the foundation of modern 
warfighting. The DARPA advanced lithography program was 
established in response to Section 216 of the National Defense 
Authorization Act for Fiscal Year 1995 (Public Law 103-337) as 
a goal-oriented program to ensure the development of 
lithographic processes that would lead to superior performance 
electronics systems for the Department of Defense. The goal of 
the DARPA program to provide early research in high risk, high 
payoff technologies for the pattern transfer of highly complex 
patterns at sub 0.1 micron resolution, and focuses on the areas 
of maskless writing, new imaging materials, metrology, and 
exploitation of recent developments such as proximal probes and 
quantum structures. DARPA investments are used to demonstrate 
proofs of concept, with planned early transition to the 
services and industry for development of the prototype stage; 
and the DARPA strategy puts responsibility for research and 
development investments within five or six years of production 
in the hands of industry. The committee understands that DARPA 
is working with industry and the Navy to transition the DARPA 
program in x-ray lithography. To facilitate this transfer and 
ensure a smooth transition of the technology development 
program to industry and the Navy, the committee recommends an 
increase of $15.0 million. The committee also recommends an 
increase of $6.0 million for the support of ongoing long term 
nanofabrication and extreme ultraviolet lithography research 
aimed at the fabrication of nanoelectric structures.

Advanced submarine technology program

    The budget request contained $69.1 million in PE 63763E for 
the Defense Advanced Research Projects Agency marine technology 
program. No funds were included for joint U.S./Russian 
submarine research and development.
    The committee recommends an increase of $3.0 million to 
enable the Director of DARPA to establish a U.S.-Russian 
cooperative program for research and development relevant to 
nuclear submarines. This initiative will capitalize on the 
trust and confidence created under DARPA-sponsored initiatives 
with the Russian submarine design bureaus and institutes of the 
Russian Academies of Science. The cooperative program should 
apply to technology in the areas of nuclear submarine 
architecture, ship automation and damage control, submarine 
hydrodynamics and hydroacoustics. The technical direction and 
scope of these initiatives will be coordinated with the 
Department of the Navy.

Airborne information transmission

    The budget request contained $10.8 million in PE 35206D to 
continue testing and evaluation of the airborne information 
transmission (ABIT) system.
    The committee believes that all major airborne 
reconnaissance systems should have the ability to communicate 
and cooperatively operate sensor systems using wide-bandwidth, 
high data rate communications. Such a capability would allow 
real-time database sharing, cooperative target location, a long 
haul ``reach back'' capability to national processing 
facilities, and use/control of collection systems from platform 
to platform. The committee supports the Department's Common 
Data Link (CDL) and ABIT efforts to pursue these capabilities. 
Accordingly, the committee directs the Secretary of Defense to 
conduct a study on the costs, requirements, and benefits of 
adding wide-bandwidth data links on all major airborne 
reconnaissance/surveillance aircraft. The study should also 
provide costs for developing and installing this capability on 
the various aircraft. The results of this study shall be 
provided to the Congressional defense and intelligence 
committees by October 1, 1998.
    The committee notes the ongoing Air Force efforts to 
integrate ABIT capabilities on the RC-135 reconnaissance 
aircraft, and believes this effort should be the basis for all 
future manned reconnaissance interoperability efforts, 
including an ABIT capability on the joint surveillance target 
attack radar system aircraft. The committee recommends an 
increase of $3.0 million for the Air Force to lead this effort.

Airborne overhead integrated task force (AOITF)

    The Department of Defense and the Intelligence Community 
have formed an integrated task force to investigate the costs 
and benefits of correlating airborne and overhead 
signalsintelligence data for improved target location capabilities. The 
task force has concluded the first phase of its work, unquestionably 
showing results that would provide high payoff for tactical forces at 
modest costs. Due to the timing of the task force's study, the 
administration could not address its findings and funding 
recommendations in the budget request.
    Based on the potential importance of this initiative for 
dominant battlefield awareness in several primary mission 
areas, the committee recommends an increase of $7.2 million in 
the PE 35206D, within Defense Airborne Reconnaissance Program 
for continuing AOITF investigations and developments. 
Additionally, the committee recommends an additional $2.3 
million in PE 31359A, within the General Defense Intelligence 
Program for required software improvements to the Joint 
Collection Management Tool program. Other actions are detailed 
in the classified annex to this report.
    The committee applauds the work of the task force and the 
decision to sustain it and ultimately transform it into a joint 
office to oversee implementation. The committee also fully 
endorses the task force's plan to examine the costs and 
benefits of cooperative processing in other, closely related 
areas.

Airborne reconnaissance advanced development

    The budget request contained $4.5 million in PE 35206D for 
continued refinement of the joint airborne reconnaissance 
architecture standards. Included in this amount was funding for 
verifying compliance and interoperability of new upgrades and 
developments. The committee recommends $1.5 million for this 
effort, a decrease of $3.0 million.
    The budget request for PE 35206D also contained $3.0 
million for initiating development of the heavy fuel engine 
(HFE) for the tactical UAV. Department of Defense documentation 
duplicates justification for requesting an HFE within PE 
35204D. Additionally, the committee is aware that previous 
authorizations and appropriations for this effort have not been 
fully obligated or expended. Therefore, the committee 
recommends a decrease of $3.0 million in this program element.

Airborne reconnaissance advanced development

    The budget request contained $9.6 million in PE 35206D for 
studies and advanced designs leading to possible future 
integration of the joint signals intelligence (SIGINT) avionics 
family (JSAF) collection systems on the Global Hawk unmanned 
aerial vehicle (UAV). It also contained $6.6 million for 
beginning development of systems to incorporate the JSAF prime 
mission equipment. The committee understands that this funding 
will not build systems, but only provide the necessary studies 
and initial design efforts to do so.
    The committee understands the Global Hawk is an advanced 
concept technology demonstration (ACTD) designed to validate 
the military utility of a high altitude, long endurance, wide 
area coverage UAV. There is no stated goal for a SIGINT 
demonstration in the ACTD, and as stated by Department 
witnesses, there is no Joint Requirements Oversight Council 
approval for such requirement. Additionally, since the military 
utility demonstration phase of this ACTD is scheduled to be 
completed in fiscal year 2000, there has been no determination 
that this air vehicle will be continued beyond the ACTD.
    Although the committee does not believe this vehicle will 
ever totally replace existing SIGINT systems, it does believe 
there may be a future utility for a focused Global Hawk SIGINT 
mission. However, the committee is not willing to authorize the 
expenditure of such large sums for studying such a future 
mission when the air vehicle has not yet flown, or proven its 
military utility and suitability for its primary imagery role. 
The committee is particularly sensitive to this issue when the 
Department is apparently willing to deny funding to upgrade 
critical operational SIGINT collection systems in order to fund 
demonstration systems. Accordingly, the Congress for fiscal 
year 1997 denied $10.0 million funding request in the Global 
Hawk program element for SIGINT development. The committee, 
however, has recently learned that the Department has an 
additional $4.0 million in fiscal year 1997 funds in the 
Defense Airborne Reconnaissance Program's advanced technology 
funding line for this same purpose.
    Therefore, the committee recommends a decrease of $16.2 
million in this program element for the purpose of advanced 
design for a SIGINT capability on Global Hawk. The committee 
will be willing to address this issue as a product improvement 
to an imagery-capable and militarily suitable air vehicle that 
has been demonstrated, proven, and approved for acquisition. 
The committee believes the fiscal year 1997 funds are 
sufficient to study not implement development of a future 
SIGINT application and agrees the funds should be expended for 
that purpose.

Ballistic missile defense

    The budget request contained $2,589.1 million for research, 
development, test, and evaluation (RDT&E), procurement, and 
military construction of ballistic missile defense (BMD) 
systems within the Ballistic Missile Defense Organization 
(BMDO). The committee recommends changes to the request as 
summarized below:

                        [In millions of dollars]

Support technologies(PE63173C)................................    $25.0 
Navy Theater Wide (PE63868C)..................................    150.0 
Navy Area Theater (PE64867C)..................................     22.0 
THAAD (PE64861C)..............................................     45.0 
National Missile Defense (PE63871C)...........................    474.0 
Cooperative Programs (PE63XXXC)...............................    123.1 
Joint Theater Missile Defense (PE63872C)......................    (18.7)
UAV BPI (PE63870C)............................................    (12.9)
Theater Missile Defense procurement...........................     384.6

    A detailed explanation of the recommended changes are 
provided below.
            Cooperative programs
    The budget request did not contain a separate program 
element (PE) for cooperative ballistic missile defense (BMD) 
programs. The committee continues to support cooperative 
ballistic missile defense programs with U.S. allies.
    The budget request for cooperative BMD programs with Israel 
contained $38.7 million for the Arrow Continuation Experiments/
Arrow Deployability project (ACES/ADP) in PE 63872C, and $12.9 
million for the Unmanned Aerial Vehicle Boost Phase Intercept 
(UAV BPI) program in PE 63870C. The Israeli commitment to 
cooperative BMD development remains strong. The committee notes 
the accomplishments achieved to date by the U.S.-Israeli ACES/
ADP project and recommends $48.7 million for the program, an 
increase of $10.0 million. The committee believes that 
additional funding will support efforts to deploy an Israeli 
ballistic missile defense capability while also providing 
valuable technological benefits to on-going U.S. TMD programs.
    The budget request contained $16.5 million within PE 63308A 
for the Tactical High Energy Laser (THEL) program. The 
committee is aware that the threat from tactical rockets and 
missiles is growing, as such systems proliferate world-wide. 
The U.S. and Israel are cooperating in an effort to respond to 
this threat by developing a high energy laser that can destroy 
tactical missiles in flight.
    The committee recommends a legislative provision (sec. 236) 
that would transfer the THEL program from the Secretary of the 
Army to the director of BMDO, and would authorize a total of 
$38.2 million for the THEL program. The committee directs the 
transfer of $16.5 million from PE 63308A to PE 63XXXC, a new 
program element that would consolidate cooperative ballistic 
missile defense programs under BMDO management. The committee 
also recommends an increase of $15.0 million to ensure 
completion of the first phase of the program to design, build, 
integrate and test the THEL advanced concept technology 
demonstrator and to begin developmental testing to validate 
THEL capabilities. The committee further directs the director 
of BMDO to provide the remaining $6.7 million required for the 
THEL program from BMDO administrative accounts.
    The budget request did not contain funding for two 
cooperative projects with Russia, the Russian-American 
Observation Satellite (RAMOS) and the Active Plasma Experiment 
(APEX). The committee recommends $30.0 million for the RAMOS 
and APEX projects. Recent events indicate some Russian interest 
in exploring the possibility of greater cooperation in this 
area. For example, at the recent Helsinki summit, Presidents 
Clinton and Yeltsin declared that they are prepared to explore 
integrated cooperative defense efforts in the area of early 
warning support for TMD activities, technology cooperation in 
areas related to TMD, and expansion of the ongoing program of 
cooperation in TMD exercises.
    The committee notes that expanded cooperation with Russia 
in the area of ballistic missile defense must be carefully 
considered and implemented only in a manner that does not 
jeopardize U.S. technological advantages or the development and 
deployment of U.S. BMD systems. The committee directs the 
Secretary of Defense to develop a plan for U.S.-Russian 
cooperative projects--identifying the costs and benefits 
associated with each project--and to submit this plan to the 
Congressional defense committees no later than February 1, 
1998.
    The committee believes that the effective management of 
cooperative BMD programs requires their consolidation in a 
separate program element. Therefore, the committee recommends a 
legislative provision (Sec. 232) that would establish the 
``Cooperative Ballistic Missile Program'' as a separate program 
element within BMDO to support technical and analytical 
cooperative missile defense efforts between the U.S. and other 
nations.
    The committee recommends $123.1 million to support the 
cooperative programs in the new PE63XXXC. This amount includes 
the transfers of $38.7 million from PE 63872C, $12.9 million 
from PE 63870C, $16.5 million from PE 63308A, and an increase 
of $55.0 million over the amounts requested.
            Joint theater missile defense
    The budget request contained $542.6 million for the Joint 
Theater Missile Defense (JTMD) in PE 63872C.
    The Pacific Missile Range Facility (PMRF) provides an 
essential test range capability for Navy and other TMD 
programs. PMRF enhancements are needed to ensure that the range 
can support the full scope of TMD testing required in the 
future. The committee recommends an increase of $20.0 million 
for the purpose of upgrading the PMRF.
     The committee also directs the transfer of $38.7 million 
from PE 63872C to the new cooperative BMD PE 63XXXC to support 
the Israeli-U.S. effort to develop the Arrow ballistic missile 
defense system (project 2259). The details of this transfer are 
discussed elsewhere in this report.
    The committee recommends $523.9 million for the JTMD 
program.
            Medium extended air defense system (MEADS)
    The budget request contained $47.9 million in PE 63869C for 
the Medium Extended Air Defense System (MEADS).
    The Administration has identified the MEADS as a high 
priority Theater Missile Defense (TMD) initiative and as an 
important international cooperative development effort. While 
the committee supports MEADS, it does so with some reluctance 
since the Administration currently has no funding in fiscal 
year 1998 or the Future Years Defense Plan (FYDP) to continue 
MEADS development beyond the current project definition-
validation phase. The Administration's apparent lack of long-
term commitment to MEADS threatens both program stability and 
perceptions of U.S. reliability as a partner in current and 
future international cooperative programs. The committee's 
support for MEADS is dependent on the Administration's 
willingness to fund its continued development and the Secretary 
of Defense is urged to provide adequate funding for this 
development in the FYDP and to designate strongly MEADS as a 
core TMD program.
            Multilateralization of the Anti-Ballistic Missile Treaty
    The committee notes the Administration's decision to seek 
to expand beyond Russia the number of states party to the 1972 
U.S.-Soviet Anti-Ballistic Missile (ABM) Treaty to include 
three former republics of the Soviet Union.
    The committee is concerned with the Administration's 
contention that multilateralizing the ABM Treaty is not a 
substantive change to the treaty's terms and, therefore, 
Congressional approval is not required. In a report to Congress 
in November 1996, the Administration asserted that ``the 
resolution of succession questions has long been regarded as a 
function of the Executive Branch'' and that the notion of 
Congressional approval of any succession agreement ``would cast 
doubt on well-established principles of treaty succession.''
    The committee believes that the issue of whether or not 
multilateralization involves substantive changes to ABM Treaty 
has less to do with the question of which states are 
appropriate successors than with the rights accorded those 
states under the agreement reached. For example, the treaty 
allows the parties to deploy up to 100 ABM interceptors. 
However, the administration has stated that Russia will be 
granted exclusive rights to deploy the full complement of 100 
interceptors on its side. In other words, although the former 
Soviet states of Ukraine, Belarus, and Kazakhstan might become 
parties to the treaty, they would not be allowed to deploy ABM 
interceptors on their national territory. In the committee's 
view, this represents a modification to the rights of the 
states party to the ABM Treaty, and, therefore a substantive 
change to the treaty.
    Furthermore, the committee believes that the addition of 
multiple coequal parties to the ABM Treaty would substantively 
change the process by which treaty revisions to might be 
negotiated. Four parties, each of equal legal standing but with 
varying rights accorded under the treaty, would presumably have 
to agree unanimously to amend the treaty if the U.S. pursues 
such amendments. Such a process is substantively different than 
negotiating with one equal party.
    Deployment of an effective national missile defense capable 
of defending all fifty states, even against a limited ballistic 
missile threat, will likely require amendment of the treaty. 
With five parties where there were once only two, the treaty 
amendment process would be rendered much more difficult, and 
perhaps impossible. Thus, even while the Administration 
purports to be committed to an NMD deployment option, it 
simultaneously supports a change to the ABM Treaty that could 
render any such deployment option, short of abrogating the 
treaty, implausible.
    The committee believes that multilateralization represents 
a substantive change to the ABM Treaty, and, as such, that the 
Administration is required to submit any such proposal to 
Congress for appropriate review and approval.
            National missile defense
    The budget request contained $504.1 million for National 
Missile Defense (NMD) in PE 63871C, $324.7 million less than 
appropriated for fiscal year 1997. The Secretary of Defense 
recently informed the committee that NMD funding in the Future 
Years Defense Plan (FYDP) is inadequate to support the program 
and identified a fiscal year 1998 shortfall of $474.0 million, 
part of a total shortfall of at least $2.3 billion over the 
FYDP.
    The committee has consistently believed that proposed NMD 
budgets were inadequate to support the Administration's ``three 
plus three'' deployment readiness program. As early as 1994, 
the committee was informed by the BMDO that annual NMD funding 
of $600 million was required for a viable technology readiness 
program. BMDO reported then that annual funding in the range of 
only $450 million ``could seriously damage our NMD readiness 
strategy and would likely permit projected third world threats 
to the homeland to materialize prior to any viable NMD 
deployment capability.'' In 1995, BMDO informed the committee 
that a ``three plus three'' deployment readiness program would 
require annual development funding of $800 million to $850 
million. However, the Administration's annual funding requests 
have consistently fallen hundreds of millions of dollars short 
of the levels needed for a viable program. Even after the 
Administration provides additional outyear funding for NMD, the 
program schedule will be challenging and the committee is 
concerned that several factors may undermine the viability of 
even the Administration's option to deploy an NMD by 2003.
    First, the previous Under Secretary for Acquisition and 
Technology testified to the committee that no long lead 
procurement funding for NMD had been budgeted anywhere in the 
FYDP because no deployment decision had been made. The 
committee remains concerned that unless appropriate funds for 
long lead procurement, military construction, and deployment 
planning are programmed in fiscal year 1999, the option to 
deploy an NMD by 2003 will be unavailable. Accordingly, the 
committee directs the Director of BMDO to provide a report to 
the Congressional defense committees by February 1, 1998, 
detailing long lead procurement, military construction, and 
deployment planning, and any other acquisition activity that 
must be funded prior to a decision to deploy an NMD in order to 
ensure that deployment by 2003 could be achieved; the cost of 
these activities; and how BMDO intends to preserve a 2003 
deployment option if these activities are not funded in the 
fiscal year 1999 budget request.
    Second, the committee is concerned with persistent NMD 
program organizational difficulties, particularly the delays in 
establishing the NMD joint program office and awarding the lead 
system integrator contracts. The committee urges the Secretary 
to ensure that all management and contract difficulties are 
identified and addressed in an expedited manner in an effort to 
provide some long overdue stability to the program.
    Third, the committee notes that inadequate investments in 
test assets has increased technical and schedule risk for BMD 
programs, including NMD. A recent test failure, due to human 
error in the launch sequence of a NMD test vehicle, resulted in 
delays to the program because another booster and additional 
test targets were not available. The committee finds this kind 
of delay unacceptable for such a high priority program. 
Accordingly, the committee directs the Director of BMDO to 
report to the Congressional defense committees by February 1, 
1998, on the specific steps that are being taken, and those 
that should be taken but are not, to mitigate schedule risks 
and the potential for single point failures resulting from 
inadequate test assets.
    Finally, the committee notes that NMD battle management/
command, control, and communications (BM/C3) funding has 
declined dramatically in each of the last two fiscal years. 
Effective BM/C3 is of central importance to the success of all 
ballistic missile defense efforts. While the committee is 
encouraged that reuse of theater missile defense BM/C3 software 
is being emphasized by BMDO as a means of speeding development 
and reducing risk and cost, NMD software development remains a 
significant challenge. The committee believes that BM/C3 
development and risk reduction efforts deserve priority 
attention and urges DOD to establish reuse of TMD BM/C3 as a 
significant evaluation criterion in future NMD system contract 
awards, consistent with system requirements.
    The committee believes that deployment of a national 
missile defense remains a national priority and recommends 
$978.1 million, an increase of $474.0 million.
            Navy area theater ballistic missile defense
    The budget request contained $267.8 million in PE 64867C 
for Navy Area Theater Ballistic Missile Defense (TBMD). The 
committee notes the program's recent missile intercept testing 
successes and supports Department efforts to accelerate this 
program. As with all current TMD programs, the committee 
believes that the Navy Area TBMD test program could be more 
effectively accelerated if sufficient threat representative 
missile targets and test component spares were available. 
Accordingly, the committee recommends $289.8 million, an 
increase of $22.0 million to provide additional test support.
            Navy theater-wide missile defense
    The budget request contained $194.9 million in PE 63868C 
for the Navy theater-wide missile defense system. The unfunded 
requirements list from the Chief of Naval Operations and 
communications from other offices in the Navy indicate that the 
theater-wide program is inadequately funded to support an 
accelerated development test plan. Moreover, there is a growing 
concern that the Department still has not thoroughly assessed 
the feasibility of accelerating the currently planned Navy 
theater-wide missile defense deployment date of fiscal year 
2008. Noting numerous Administration statements attaching high 
priority to TMD programs, the committee directs the Secretary 
of Defense to report to the Congressional defense committees no 
later than February 15, 1998, on the cost and technical 
feasibility of options for a more robust Navy theater-wide 
flight test program, the earliest technically feasible 
deployment date, and costs associated with such a deployment 
date. The committee recommends an increase of $344.9 million, 
an increase of $150.0 million, to support a more robust program 
schedule.
            Support technologies
    The budget request contained a total of $147.6 million in 
PE 63173C for BMD support technologies.
    The Atmoshperic Interceptor Technology (AIT) program is an 
ongoing effort that addresses technological challenges common 
to several BMD programs, including THAAD, the Navy theater-wide 
program, and the national missile defense effort by examining 
advanced hit-to-kill warhead technologies. The budget request 
included only $4.9 million for AIT, a reduction from $43.0 
million appropriated for fiscal year 1997. The committee 
supports AIT and recommends an increase of $25.0 million to 
continue more robust AIT development.
    The committee is concerned by a funding reduction of over 
$100.0 million for BMD support technologies from the fiscal 
year 1997 level. Reductions of this magnitude slow the 
development of critical and innovative technologies and are 
inconsistent with the Administration's assertion that the 
budget request supports an acceleration of theater missile 
defense programs. They also undermine the comprehensive 
technology effort needed to stay ahead of the evolving 
ballistic missile threat.
    The committee urges the Secretary of Defense to provide 
adequate funding for BMD support technologies and recommends 
$172.6 million, an increase of $25.0 million.
            Theater high altitude air defense
    The budget request contained $556.1 million for 
demonstration/validation and engineering and manufacturing 
development for the Theater High Altitude Air Defense (THAAD) 
system.
    The committee supports the THAAD program, believes it will 
provide U.S. military forces with critically needed protection 
against ballistic missile attack, and restates its support of 
THAAD as a core TMD system. Although the THAAD program has met 
numerous test objectives to date, the committee is concerned by 
recent test failures and supports the Department's prompt and 
comprehensive program reviews. However, the committee is 
disturbed by indications that the Department nonetheless plans 
to reduce prior year and fiscal year 1998 THAAD funding in 
order to use the funds for other purposes. Although 
identification of the causes of test failures is necessary 
before further testing, the committee believes that both the 
Administration's currently planned fielding date of 2006 may be 
indicative of a program constrained by funding and insufficient 
test opportunities.
    Independent reviews of THAAD have reaffirmed the program's 
planned design, operational requirement, and the successful 
completion of 28 of the 30 THAAD program objectives to date. In 
addition to the on-going review of THAAD, the committee 
believes that the test program will benefit from additional 
funding to provide reserve interceptor, missile, and target 
assets, as well as other back-up resources. A more robust test 
program will help to lower the risk of delays and lost 
opportunities resulting for unexpected anomalies and single-
point failures.
    The committee recommends $601.1 million, an increase of 
$45.0 million in PE 64861C, to provide funds necessary for 
additional THAAD testing and to further mitigate risk in the 
flight test program. The committee strongly urges the 
Department not to reduce funding for THAAD in order to address 
shortfalls elsewhere in the FYDP and to use any prior or fiscal 
year 1998 THAAD funds deemed unavailable for obligation for 
their original purpose for further risk reduction in the test 
program.
            Theater missile defense demarcation
    The committee notes that the presidents of the United 
States and Russia, at the recent Helsinki summit, signed a 
joint statement concerning the 1972 Anti-Ballistic Missile 
(ABM) Treaty and the relationship of TMD systems to that 
treaty. The joint statement outlined the agreement reached last 
year between both sides at the Standing Consultative Commission 
(SCC) regarding lower-velocity TMD systems, which Russia 
refused to sign, and established parameters to be used as the 
basis for further negotiations on higher-velocity TMD systems.
    The committee is concerned with several elements of the 
joint Helsinki statement. First, it establishes limitations on 
TMD systems in the context of the ABM Treaty. The ABM Treaty, 
which prohibits a defense of U.S. national territory against 
strategic ballistic missiles, was never intended to apply to 
theater missile defense systems.
    Second, the Administration asserts that it has sought to 
negotiate an agreement with Russia that would ``clarify'' the 
distinction between permitted and prohibited missile defense 
capabilities. The agreement fails to achieve this 
clarification.
    The committee continues to accept the ``demonstrated 
standard'' identified in section 325 of the National Defense 
Authorization Act for Fiscal Year 1996 (Public Law 104-106), 
which makes no reference to interceptor speeds. Specifically, 
this provision established the principle that TMD interceptors 
could not be tested against a ballistic missile traveling 
farther than 3,500 kilometers or with a velocity greater than 
five kilometers per second. Interceptors tested against 
ballistic targets exceeding these parameters would be 
considered ABM-capable. This ``demonstrated standard'' was the 
only criterion supported by Congress for judging whether TMD 
interceptors were captured by the ABM Treaty.
    The U.S.-Russian Helsinki agreement would establish the 
``demonstrated standard'' as the sole measure of treaty 
compliance for lower-velocity TMD systems, those with speeds of 
three kilometers a second or less. However, no agreement was 
reached on higher-velocity TMDsystems. While the Administration 
has issued public assurances that no U.S. TMD systems now under 
development will be restricted by the Helsinki agreement, it has also 
committed to negotiate with Russia on the higher-velocity systems. The 
Russian perspective on these impending negotiations is that limits on 
interceptor speed must be introduced, the U.S. cannot unilaterally 
declare its higher-velocity TMD programs to be in compliance with the 
ABM Treaty, and that compliance can only be established through 
negotiation
    Far from clarifying the distinction between permitted and 
prohibited systems, the Administration has apparently accepted 
an artificial distinction between lower- and higher-velocity 
TMD and has agreed to negotiations that may limit the 
performance of U.S. TMD systems. The committee opposes 
restrictions on higher velocity U.S. TMD systems, as well as 
negotiations that would compel any degradation of the 
capabilities embodied in U.S. TMD systems, present or future.
    Third, the agreement reached in Helsinki went beyond even 
the Administration's stated objective of clarifying ambiguities 
in the ABM Treaty. For instance, the joint statement notes that 
TMD deployments should be limited in ``number and geographic 
scope.'' Such a restriction could impose for the first time 
unacceptable restraints on where and how TMD systems might be 
deployed.
    Fourth, the joint statement notes U.S.-Russian agreement 
that no TMD deployment will be directed against the other 
party. This prohibition could deny new NATO members an 
important defensive benefit under Article V of the North 
Atlantic Treaty. Under such a restriction, Russia may object to 
U.S. TMD systems deployed in Western Europe or Asia intended to 
protect U.S. forces and allies. Such a restriction is likely to 
make it more difficult to build an allied consensus on the need 
for TMD.
    Finally, the language of the joint statement committing the 
sides to ``exchange detailed information annually on TMD plans 
and programs'' has the potential to provide Russia with 
sensitive information regarding U.S. TMD programs, as well as 
an opportunity to challenge U.S. TMD programs early in their 
development. Such exchanges must be carefully thought through 
and implemented only to the extent that they do not undermine 
U.S. national security objectives.
    The committee notes the Administration has stated that the 
Helsinki agreement on theater missile defense demarcation 
represents a substantive change to the ABM Treaty and its 
intention to submit the agreement to the Senate for its advice 
and consent. The committee believes that a full and thorough 
debate over the implications of the TMD demarcation agreement 
for U.S. security is long overdue.
            Theater missile defense of U.S. territories
    The committee supports highly effective theater missile 
defenses for the territories of the United States and urges the 
Secretary of Defense to take all appropriate steps to ensure 
that U.S. ballistic missile defense planning continues to be 
responsive to evolving threats to these territories.

Chemical-biological defense program

    The budget request included a total of $530.9 million for 
the chemical-biological defense (CBD) program of the Department 
of Defense, including $320.8 million in research, development, 
test, and evaluation and $210.0 million in procurement.
    The committee has been advised of problems in manufacture 
and qualification of new production M-40 protective masks and 
is concerned about the impacts of these problems on the ability 
to meet acquisition objectives for the mask. The committee 
directs the Secretary of the Army to review the M-40 mask 
procurement program and provide a report to the Congressional 
defense committees by October 30, 1997, which addresses the 
results of that review and the actions to be taken to correct 
any problems discovered.
    The committee notes that the Counter Proliferation Review 
Committee's May 1997 Report states the Defense Advance Research 
Projects Agency (DARPA) biological warfare defense program will 
no longer be incorporated into the CBD program management and 
oversight structure. The Committee directs the Secretary of 
Defense to ensure that the DARPA biological warfare defense 
program is coordinated and integrated under the program 
management and oversight of the Department's CBD program.
    The committee understands that the Department's policies on 
anthrax vaccination of U.S. forces and support for Other than 
U.S. Forces are awaiting final approval, and that these 
decisions will impact total funding, vaccine production, and 
storage requirements. The committee also notes the impending 
award of a prime systems contract to develop new biological 
defense vaccines, pursue vaccine licensing, and produce 
stockpile vaccines to meet the Department's requirements.
    To address funding shortfalls in the budget request for the 
CBD program, the committee recommends an increase of $1.6 
million in PE 63384BP for vaccine advanced development, an 
increase of $858,000 in PE 64384BP for vaccine development and 
an increase of $5.0 million in PE63884 to support on-going 
development efforts in detectors, decontamination equipment, 
and protective equipment for the Chemical-Biological Quick 
Reaction Force and its components.
    The committee directs the Secretary of Defense to address 
the above issues as specific areas of interest in the next 
annual report to Congress on the NBC defense program.

Central test and evaluation investment plan

    The budget request contained $131.4 million for the central 
test and evaluation investment plan (CTEIP) in PE 64940D.
    The committee notes the reduction in funding for CTEIP and 
supports Department initiatives to streamline and consolidate 
development test operations. However, the committee understands 
that additional funds are required to begin the preliminary 
design phase for the heavy vehicle test facility. An increase 
of $10.0 million will accelerate the development, by a full 
year, of this capability offering significant cost and schedule 
benefits for future heavy vehicle development programs.
    The committee is also concerned that anechoic research 
efforts of both the Air Force and Navy are insufficiently 
funded in the budget request. The committee recommends $142.9 
million, an increase of $1.5 million for CTEIP for the heavy 
vehicle test facility and an increase of $10.0 million to 
adequately support both service anechoic research programs.

Commercial technology insertion programs

    The budget request contained $47.9 million in PE 63752D for 
insertion of commercial technology in military systems.
    The committee supports programs designed to reduce life 
cycle costs as well as enhance system reliability, 
maintainability and capability. However, the committee views 
this type of activity as integral to specific systems 
acquisition programs and not as a separate activity. The 
committee recommends no funds for PE 63752D and directs the 
Secretary of Defense to ensure that these initiatives are 
incorporated within the Department's dual use applications 
program.

Conventional munitions demilitarization technology

    The budget request contained $12.3 million in PE 63104D to 
continue the program for development and demonstration of 
environmentally compliant technologies for the disposal and 
demilitarization of conventional munitions, explosives, and 
rockets.
    The committee is pleased that the Department of Defense has 
developed a joint explosives demilitarization program in 
accordance with the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106) and the direction 
contained in the National Defense Authorization Act for Fiscal 
Year 1997 (Public Law 104-201), using an integrated management 
structure that follows the model of the large rocket motor 
demilitarization program. The committee notes that the Joint 
Demilitarization Program Report to the Congress, dated February 
1997, reflects a six-year investment plan that is based on 
requirements from the Joint Ordnance Commander's Group and 
includes a range of competitively selected resource recovery 
and demilitarization technologies. The committee understands 
that the joint explosives demilitarization program would 
balance technology maturation with disposal needs that address 
the highest priority demilitarization requirements. The 
committee believes that the program should lead to the fielding 
of safe, efficient, and environmentally acceptable technologies 
for disposal and demilitarization of the nation's stockpile of 
obsolete munitions, explosives, and rockets. To maintain the 
program at the funding level established in the enabling 
legislation, the committee recommends an increase of $3.0 
million, which should permit the acceleration of promising 
technologies and the evaluation of additional alternative 
technologies.

Counter-proliferation analysis and planning system

    The budget request contained $58.3 million in PE 63160D for 
advanced development of counter-proliferation support 
technologies.
    The committee has been made aware of the counter-
proliferation analysis and planning system (CAPS) and is 
supportive of its demonstrated performance as a counter-
proliferation analysis and planning tool for the intelligence 
community and regional commanders-in-chief. The committee 
recommends an increase of $3.0 million in PE 63160D to 
accelerate the development of CAPS mission planning tools and 
develop the system architecture for mission-specific data bases 
and mission support.

DarkStar

    The investigation of last year's crash of the first 
DarkStar unmanned aerial vehicle (UAV) and the experience of 
trying to field the Predator after its successful demonstration 
have revealed that reliability is an important issue for these 
advanced concept technology demonstrations (ACTDs). In 
principle, an ACTD is to demonstrate technology and should not 
expend much resources ensuring that the demonstrated system is 
ready for serial production. However, in practice, the 
Department of Defense has demonstrated a proclivity to move 
directly into production with ACTD configurations immediately 
after successful demonstrations. Taking production issues into 
account in designing systems for ACTDs, therefore, would appear 
to be prudent, especially in cases (such as the endurance UAVs) 
where a unit price cap is a determining factor in the success 
of the program. The DarkStar program office is currently 
examining high-payoff reliability improvement measures for the 
system. The committee directs Department to provide the results 
of this review and any actions taken by February 15, 1998.
    The committee also requests the Department to sponsor a 
study of the operational benefits of adding a moving target 
indicator (MTI) radar capability to the DarkStar, and the costs 
of doing so. This study should be coordinated with the program 
office of the Joint Mobile Target Engagement ACTD, assuming it 
gets underway in fiscal year 1998. The study should be 
submitted to the Congressional defense and intelligence 
committees by April 1, 1998.

Defense airborne reconnaissance office

    The budget request included $21.5 million in PE 35209D for 
operation of the defense airborne reconnaissance office (DARO).
    The National Defense Authorization Act for Fiscal Year 1994 
(Public Law 103-160) directed the creation of an organization 
to oversee and coordinate the activities of the military 
services with respect to the development of airborne 
reconnaissance systems. While the committee continues to 
support oversight of service developmental efforts to ensure 
system interoperability and preclude unnecessary duplication of 
efforts, it believes defense reconnaissance system oversight 
and guidance would be more effectively accomplished by the 
Director of Military Intelligence (DMI) than it has been thus 
far by the DARO. The committee further believes that 
development and acquisition of reconnaissance systems would be 
more properly controlled by the military services rather than 
centrally directed by the Office of the Secretary of Defense.
    Therefore, the committee recommends a provision (sec. 907) 
that directs abolishment of the DARO, and transfer of required 
defense airborne reconnaissance program functions to the 
Director, Defense Intelligence Agency (DIA) under his 
authorities as Director of Military Intelligence (DMI) and 
Joint Military Intelligence Program (JMIP) Coordinator. The 
committee directs the Director, DIA to provide a transition 
plan, with a draft DMI DARP charter, to the Congressional 
defense and intelligence committees no later than the 
submission of the fiscal year 1999 President's budget.
    The committee recommends no funding for the DARO, and $7.5 
million for continued DARP management, a decrease of $14.0 
million.

Digital terrain elevation data

    The budget request contained no funds in PE 35206D for 
developing a digital terrain elevation data (DTED) collection 
capability for aircraft.
    The stated requirements for DTED are very stringent and may 
cost the Department of Defense more than it can afford using 
current and planning collection methods. There are also 
indications that the Joint Warfare Capabilities Assessment for 
intelligence and reconnaissance casts doubt on the need for 
worldwide DTED at the currently required levels (3, 4, and 5). 
Instead, the committee believes it may be sufficient to have 
the surge capability to collect such data only when needed with 
an airborne system. However, no such DTED collection capability 
currently exists.
    Therefore, the committee, recommends $2.0 million in this 
PE for the Department to conduct an analysis to determine 
design trades from which to choose an airborne platform to 
perform fine DTED data collection. This analysis should 
determine whether an embedded system or a ``remove and 
replace'' configuration that could be installed as necessary on 
an airframe of opportunity makes the most sense. The committee 
requests that the results of this analysis be provided to the 
defense and intelligence committees no later than April 1, 
1998.

DP-2 thrust vectoring system

    The budget request contained $82.6 million in PE 63764E for 
land warfare technology. The committee recommends an increase 
of $14.0 million to continue the DP-2 thrust vectoring system 
development and demonstration program.

Endurance unmanned aerial vehicles

    The budget request contained $216.7 million in PE 35205D 
for endurance unmanned aerial vehicles (EUAV). The request for 
high altitude EUAVs contained $96.0 million for Global Hawk and 
$54.6 million for DarkStar, while $15.0 million was requested 
for the medium altitude UAV Predator.
    The committee notes that the Department initiated Advanced 
Concept Technology Demonstrations (ACTD) to develop and 
demonstrate the two high altitude EUAVs in 1995 in order to 
permit the rapid and affordable evaluation of advanced 
capabilities. The EUAV ACTD also included the specific 
requirement that the two EUAV candidates must prove the ability 
to be procured at a unit cost of $10.0 million or less before 
being selected to perform the EUAV mission. The committee 
understands that the Global Hawk is to provide continuous, all-
weather, day/night, wide-area reconnaissance and surveillance 
in direct support of the joint forces commander. The DarkStar 
is intended to provide essentially the same capabilities, but 
is designed to employ stealth technology to operate in high 
threat environments.
    While the committee supports the need for determining the 
military utility of long-dwell UAVs for broad area coverage, it 
remains concerned about the two high altitude EUAVs. The 
concern is heightened by the recent DOD Inspector General 
report that states a lack of clear military worth of the 
current high altitude EUAV efforts. Further, the committee is 
concerned that current efforts are pushing the technologies 
involved and not specifically demonstrating proven/existing 
technologies (a major issue raised in the DOD IG report). The 
committee is also aware of system reliability and 
maintainability concerns and is concerned that it appears as 
though there is an apparent rush to this unproved UAV solution. 
In fact, the Department's own documentation shows that roughly 
39 percent of the airborne reconnaissance budget is going into 
proving UAVs--an extremely high percentage to demonstrate 
unproved capabilities that have marginally stated requirements.
    The EUAV ACTD management plan states that the number of 
Global Hawk and DarkStar EUAVs produced may be changed based on 
program status or user input. The committee understands that an 
adequate test program can be conducted with four Global Hawk 
air vehicles, four DarkStar air vehicles and two ground control 
stations, and strongly recommends that the Department complete 
the ACTDs, and user evaluations of the EUAV's military worth, 
before authorizing a high altitude EUAV acquisition program.
    The committee understands that the Department currently 
plans to suspend Global Hawk and DarkStar production after 
delivery of a total of five prototypes each in fiscal year 1997 
until both UAVs have been proven airworthy. The committee 
endorses this decision and recommends that all Global Hawk and 
DarkStar UAV assets remaining after completion of ACTD testing 
be transferred to the Air Force Air Combat Command for 
continued evaluation and user operational testing.
    The medium altitude EUAV, the Predator, was established as 
an ACTD in response to an urgent requirement identified by the 
Joint Chiefs of Staff (JCS) in 1993. The committee notes that 
while there have been some problems with this system, Predator 
is the first ACTD to complete transition to a production 
program. The success of the Predator in a number of continental 
United States exercises and two operational deployments to 
Bosnia has prompted the JCS to seek additional funding for 
Predator, including a number of pre-planned product improvement 
(P3I) upgrades to be included with production systems. Of the 
funds requested for fiscal year 1998, $4.4 million are 
designated for beginning development and integration of P3I 
upgrades. The committee recommends elsewhere in this report 
that additional procurement funding be provided to accelerate 
these upgrades.

Facial recognition technology

    The budget request contained $29.1 million for the DOD 
counter-terror technical support (CTTS) program in PE 63122D.
    The CTTS is an interagency program for development and 
demonstration of surveillance, physical security, and 
infrastructure protection technology. The committee fully 
supports use of advanced technology to control access to 
critical facilities, and recommends an increase of $5.0 million 
for the development and demonstration of biometric access 
control technology, including the use of authentication 
software and the principal component method of facial 
recognition.

Flat panel display initiative

    The budget request contained $37.0 million in PE 62708E for 
the development of the technology and manufacturing capability 
for high definition displays.
    In 1994, the President and the Department of Defense 
announced a five year Flat Panel Display Initiative and 
affirmed the commitment to establishing a viable domestic flat 
panel display industry. The objective of the program is to 
establish a domestic technical capability for development of 
advanced displays using multiple technological approaches, 
demonstrate themanufacturing capabilities required for high 
resolution military information display systems, and ensure the 
availability of advanced technology displays for use by defense 
agencies and the military services. The committee notes the success of 
the initiative in the development and demonstration of advanced 
technologies for high definition displays, in the increased level of 
participation in the program and funding provided by industry, and in 
the establishment of domestic capabilities for the manufacture of high 
definition displays. The ultimate success of the program will be a 
viable domestic flat panel display industry and proliferation of the 
application of flat panel display technology in the commercial sector 
and in the military services. The committee also notes, however, that 
the government's share of the program contained in the fiscal year 1998 
budget request for the Defense Advanced Research Project Agency is 
significantly below that originally projected when the initiative was 
announced to Congress in 1994. The committee believes that a stable 
funding level should be sustained until the completion of the original 
five year program. Such stability in funding is necessary in order to 
capitalize on previous investments in the development of high 
definition display technology and domestic manufacturing capabilities 
and to meet the government's stated commitment to support the 
establishment of domestic capabilities for manufacturing of flat panel/
high definition displays and display substrates. Accordingly, the 
committee recommends an increase of $23.0 million to sustain the 
program at the fiscal year 1997 funding level. The committee also 
recommends that the program place increased emphasis on the 
demonstration of flat panel displays for various applications by the 
military services in order to facilitate the transition of the flat 
panel display program to the military services and their use of the 
technology for service applications.

High altitude endurance unmanned aerial vehicle common ground segment

    The budget request contained $51.1 million in PE 35205D for 
the high altitude endurance (HAE) unmanned aerial vehicle (UAV) 
common ground segment (CGS), $9.0 million of which was for 
testing.
    The committee understands that $10.0 million of fiscal year 
1997 funds were authorized and appropriated for this same 
testing. The committee also understands that such testing was 
not completed due to the delays in both HAE advanced concept 
technology demonstrations. Therefore, the committee recommends 
$42.1 million, a decrease of $9.0 million.

Joint robotics program

    The budget request contained $23.2 million in PE 63709D for 
the joint robotics program.
    The committee notes that vehicle teleoperation capability 
(VTC) technology is becoming mature and recommends an increase 
of $10.0 million to evaluate VTC technology.

Joint wargaming simulation management office

    The budget request contained $71.3 million in PE 63832D for 
the Defense Modeling and Simulation Office activities to 
coordinate simulation policy within the Department of Defense, 
establish interoperability standards and protocols, promote the 
use of simulation within the military departments, and 
establish guidelines and objectives for coordination of 
simulation, wargaming, and training.
    The committee recommends $60.0 million, a reduction of 
$11.3 million. The committee believes that aggressive, 
innovative use of advanced modeling and simulation will be 
necessary if the Department of Defense is to modernize and 
perform its mission in the most cost-effective and timely 
manner, and will require that simulations be interoperable and 
reusable to the maximum extent possible. The committee 
understands that this is a key goal of the Department's 
Modeling and Simulation Master Plan. The committee also 
understands that the Department has successfully developed and 
demonstrated a high level architecture (HLA) for advanced 
modeling and simulation, which provides a necessary technical 
foundation for interoperability and reuse, and that the 
Department has a policy which requires HLA-compliance for all 
its simulations. The committee agrees with this initiative and 
intends to support only those investments in simulations which 
are HLA-compliant.

Joint strike fighter

    The budget request contained $23.9 million in PE 63800E for 
continued development of the Joint Strike Fighter. The 
committee understands that defense-wide funding for this 
program has been transferred to the Navy and Air Force research 
and development accounts, and, therefore, recommends no funds 
be authorized in defense-wide research and development accounts 
for this program.

Maritime technology program

    The budget request contained $37.4 million in PE 63746E to 
continue the maritime technology (MARITECH) program.
    This program is a five-year Defense Advanced Research 
Projects Agency (DARPA) initiative to preserve the U.S. 
shipbuilding industrial base by improvements in the industry's 
commercial competitiveness through the application of advanced 
technology. The committee notes the success of the MARITECH 
program to date. The program's two-phased acquisition strategy, 
which focuses in the near term on the development of 
internationally competitive commercial ship designs and 
construction strategies and in the long term on the development 
of advanced product and process technologies, has resulted in a 
significant increase in the level of activity and 
competitiveness of the U.S. shipbuilding industry. The 
committee recommends an increase of $4.0 million to support 
transition of the technologies developed under the program to 
the military services and to expand the opportunities for 
participation in the MARITECH program by the smaller, 
technologically innovative companies, that have participated in 
the DARPA program for development of advanced information 
technologies (such as simulation based design, virtual 
prototyping, and ship systems automation).

Multi-function self-aligned gate array

    The budget request contained $122.0 million in PE 35204D 
for tactical unmanned aerial vehicles (UAV), including $34.5 
million for tactical control systems.
    The committee recommends an increase of $6.0 million to 
complete the UAV multi-function self-aligned gate array 
technology development and demonstration program.

Next generation internet revolutionary applications

    The budget request contained $40.0 million in PE 62110E for 
the Defense Advanced Research Projects Agency (DARPA) component 
of the Next Generation Internet (NGI) program.
    NGI involves DARPA, the National Science Foundation (NSF), 
Department of Energy (DOE), National Institute of Science and 
Technology (NIST), and National Aeronautics and Space 
Administration (NASA) in a three-year, $100.0 million per year 
program to development and demonstrate the technologies, 
protocols, and standards for a very high speed, broad bandwidth 
NGI that will offer reliable, affordable, secure information 
delivery at rates thousands of times faster than today. The 
program has three goals: (1) develop the next generation 
network and connect universities and Federal research 
institutions with high speed networks that are 100 to 1000 
times faster than today's Internet; (2) promote experimentation 
with the next generation of networking technologies; and (3) 
demonstrate new applications that meet important national goals 
and missions.
    A fundamental objective for the NGI is to demonstrate a 
wide variety of nationally important applications that cannot 
be achieved over the current Internet infrastructure. Ideally, 
these applications will include federal agency mission, 
university and other public, and private sector applications. 
Potential application areas for the NGI include the following: 
health care (telemedicine, digital patient records, and 
emergency medical response team support), education (distance 
education, shared learning, and digital archives and 
libraries), scientific research (energy, earth systems, 
climate, and biomedical research), national security (high 
performance global communications and advanced information 
dissemination), environment (monitoring, prediction, warning, 
and response), government (delivery of government services and 
information to citizens and businesses), emergencies (disaster 
response and crisis management), design and manufacture 
(manufacturing engineering and virtual design), and information 
security (active and passive protection of defense and 
commercial information networks and information data bases). 
Many of these areas are of particular federal interest since 
they represent federal mission-critical applications that 
require advanced networking services and capabilities.
    The committee strongly endorses the NGI initiative. The 
committee supports the concept of the NGI initiative working 
with the applications communities--federal agencies, the public 
sector, academia, and private companies--to incorporate new and 
existing networking technologies and capabilities developed 
under the NGI into applications of importance to each community 
and which the community cannot achieve over the current 
Internet infrastructure, and the formation of cooperative 
ventures with regional consortia established for this purpose 
among federal agencies, local governmental authorities, 
industry, and academic institutions. The committee expects that 
such initiatives would leverage the application specific 
funding, knowledge, skills, and methods brought to the venture 
by the members of the regional consortium. Accordingly, the 
committee recommends an increase of $15.0 million to fund 
specific connectivity, functionality, services and software 
among the applications communities and regional consortia that 
will maximize the value of the infrastructure connectivity and 
services deployed by the NGI. The committee directs that 
competitive procedures shall be used for awarding all 
partnership grants and entering into all partnership contracts, 
cooperative agreements, and other transactions under the 
program, and encourages the establishment of cost-shared 
relationships where feasible.

Pulsed fast neutron analysis technology demonstration

    The budget request contained no funds for continuation of a 
program for demonstration of the application of pulsed fast 
neutron analysis (PFNA) technology to the inspection of cargo 
and baggage at ports-of-entry for the presence of drugs, 
explosives, nuclear and chemical agents, and weapons of mass 
destruction.
    Proposals have been made for the development and 
operational field demonstration of a relocatable PFNA cargo 
inspection system, which would be based upon Defense Advanced 
Research Projects Agency (DARPA)'s completed demonstration of a 
fixed-site PFNA system; and a total of $11.2 million was 
appropriated for this purpose in fiscal years 1996 and 1997. In 
March 1997, the Technical Support Working Group initiated a 
contract for modification of the fixed-site PFNA demonstrator 
to a relocatable system for testing in a controlled operational 
environment. The committee understands, based on a recent 
General Accounting Office report, that PFNA system technology 
has not been adopted by the U.S. Customs Service because of 
concerns about cost, size, operations, and safety issues. The 
committee also understands that the fixed site system has not 
yet demonstrated the ability to detect chemical agents or 
special nuclear materials, that an additional $10.0 million 
will be required to complete system modification and the 
operational testing program, and that the Customs' Service has 
not indicated any funding support for the program or intent to 
field the system should operational testing be successful.
    The committee believes that the ability of fixed-site PFNA 
system to detect chemical agents and special nuclear materials 
must be demonstrated before the program proceeds to the design 
and engineering phase for a relocatable PFNA system, and 
recommends no additional funding for the PFNA program in fiscal 
year 1998. The committee directs the Secretary of Defense and 
the Secretary of the Treasury to conduct a joint assessment of 
the PFNA program which addresses Department of Defense and 
Department of the Treasury operational requirements for a PFNA 
cargo inspection system, demonstrated technical performance of 
the fixed-site PFNA inspection system, the ability of a 
relocatable PFNA inspection system to meet the operational 
requirements, the intention of each Department regarding the 
fielding of the PFNA inspection system, and recommendations and 
funding requirements for the completion of the testing program 
and fielding the system. The results of the assessment shall be 
provided to the Congress by December 31, 1997. Should the 
Secretary of Defense and the Secretary of the Treasury jointly 
recommend continuation of the program, the committee would 
encourage the reprogramming of fiscal year 1998 funds for that 
purpose.

Response to threats of terrorist use of weapons of mass destruction

    The budget request contained $49.5 million to improve 
emergency response preparedness and coordination with state and 
local agencies through First Responder training, interagency 
exercises and technical assistance.
     The National Defense Authorization Act for Fiscal Year 
1997 (Public Law 104-201) directed the President to take 
immediate actions to enhance the capability of the Federal 
government to prevent and respond to terrorist incidents 
involving weapons of mass destruction, to provide enhanced 
support to improve the capabilities of state and local 
emergency response agencies to prevent and respond to such 
incidents at both the national and local level. The committee 
has reviewed the President's January 1997 report to the 
Congress, which provided hisassessment of those capabilities, 
and the Counterproliferation Program Review Committee's May 1997 report 
that provides the details of the Department of Defense role.
    The committee notes the actions taken to date by the 
Department of Defense to enhance emergency domestic 
preparedness and response to terrorist nuclear, biological, or 
chemical attacks under the counterproliferation support program 
and the CBD program. The committee notes the initial progress 
that has been made and that much remains to be done to extend 
the program to additional metropolitan areas and local 
jurisdictions.
            Chemical-biological response team
    Public Law 104-201 required the Secretary of Defense to 
establish and maintain at least one chemical-biological 
domestic terrorism rapid response team. The committee 
understands that the Department is establishing a Chemical-
Biological Quick Reaction Force (CBQRF) and directs the 
Secretary of the Army, as executive agent for the domestic 
emergency response program, to ensure that the plans, programs, 
and budget of the CBQRF and its components are reviewed to 
ensure full coordination and integration of all DOD assets. The 
committee also directs the Assistant to the Secretary of 
Defense (Nuclear, Chemical, and Biological Defense Program) to 
ensure that all research, development, and acquisition efforts 
in support of the CBQRF and its components are fully integrated 
and coordinated within the Department's chemical and biological 
defense program.
    The committee understands that the Department of Defense is 
examining a new mission for the National Guard which would 
involve countering chemical and biological terrorism in the 
United States. The committee notes that the Army National Guard 
and the Army Reserve include a number of chemical defense units 
which could be employed in response to a chemical emergency and 
also notes that trained chemical incident response forces are 
present at the Army's chemical munitions storage sites. The 
committee believes that the availability of the National Guard 
chemical defense units to State authorities would make them 
particularly useful in response to a chemical or biological 
incident.
     The committee recommends an increase of $2.0 million in PE 
63122D to accelerate the development and evaluation of 
protective masks for emergency response forces that could be 
used in the evacuation of casualties and other personnel from a 
contaminated area.
     Elsewhere in this report the committee recommends an 
increase of $5.0 million to the Department's chemical and 
biological defense program to support on-going development 
efforts in detectors, decontamination equipment, and protective 
equipment for the CBQRF and its components.
            First responder training
    The committee understands that an interagency training 
strategy is being developed which would initially focus 
training under the domestic emergency response preparedness 
program on professional emergency response organizations in the 
27 cities and metropolitan areas identified by the Federal 
Bureau of Investigation as being at particularly high risk and 
that the DOD Office of Domestic Preparedness (collocated with 
the Army's Chemical-Biological Defense Command) has been 
assigned responsibility for development of the first responder 
training program. The program objective is to complete first 
responder training for 126 major metropolitan areas and cities 
within three years. The committee recommends that emphasis also 
be placed on training of local volunteer emergency first 
response organizations. The training program and priorities 
must be coordinated with State emergency management directors. 
The committee believes that support of the first responder 
training program would be an appropriate mission for the 
National Guard and should be considered by the Secretary of 
Defense and the involved governors. The committee also believes 
that in addition to the ``train the trainer'' approach being 
used in the existing program, an exportable training package 
should be developed that is oriented toward the training of 
volunteer emergency first responders. The committee recommends 
an increase of $7.0 million in PE 65160D to support the further 
development of the first responder training strategy and the 
development of an exportable training package suitable for use 
by volunteer emergency first response organizations.
            Exercise program
    During the committee's review of the budget request, 
several proposals were made for the establishment of major 
exercise and training facilities at the national or regional 
level. The committee endorses the use of training exercises to 
test and improve consequence management response capabilities, 
but believes that the exercise site requirements should be 
based on the training and exercise needs of the agencies to be 
exercised, site capabilities, frequency of use, and proximity 
to participating agencies. These considerations imply the need 
for an overall coordinated training exercise strategy similar 
to that developed for training by the Senior Interagency Group. 
The committee recommends an increase of $5.0 million in PE 
65160D to support the development of a training exercise 
strategy for domestic emergency response preparedness and 
support of pilot training exercises in accordance with that 
strategy.
     The committee directs the Secretary of Defense, in 
coordination with the Director of the Federal Emergency 
Management Agency and the Director of the Federal Bureau of 
Investigation, to provide an annual assessment of progress in 
the domestic emergency response preparedness program. The 
report should be submitted to the Congressional defense 
committees beginning with the fiscal year 1999 budget request 
and extending through fiscal year 2001.

Reuse technology adoption program

    The budget request contained $105.5 million in PE 62301E 
for the Defense Advanced Research Projects Agency (DARPA) 
project for development of new information processing 
technology concepts that may lead to fundamentally new software 
and intelligent systems capabilities. No funds were requested 
to continue the Reuse Technology Adoption Program (RTAP).
    The committee notes the initial progress that has been made 
through the RTAP program in developing the software technology 
that would enable the use of software components, which were 
developed for a specific weapon system or applications, in 
other weapons systems and applications. If successful, 
development of this technology would result in increased 
productivity and reduced costs in the development of software-
intensive systems by the military services and defense 
agencies. The committee recommends an increase of $4.5 million 
to continue the RTAP initiative. The committee directs the 
Secretary of Defense to make an assessment of the goals and 
objectives of the RTAP initiative, results of the program to 
date, andplans and funding requirements for the future, and to 
submit a report on the results of the assessment to the Congress by 
March 1, 1998.

Safeguard

    The budget request contained $60.0 million in PE 62384BP 
for exploratory development of advanced technologies for 
chemical and biological defense in the areas of detection, 
identification and warning, contamination avoidance, individual 
and collective protection and decontamination.
    The committee recommends an increase of $10.8 million to 
continue the program, initiated by the Defense Advanced 
Research Projects Agency, for proof-of-concept demonstration 
and prototype development of multi-spectral sensors for 
detection of chemical agent precursors and agents from medium 
and high altitude platforms. The committee believes that the 
results of the program to date indicate the potential the 
technology has for stand-off detection and identification of 
chemical agents on the battlefield and for detection of the 
production of chemical agents and their precursor chemicals.

Smart unattended undersea sensors

    The budget request contained $69.1 million in PE 63763E for 
the Defense Advanced Research Projects Agency marine technology 
program, including $21.9 million for development of sensor and 
sonar technologies, advanced ship mechanical systems, and 
advanced maritime platforms.
     The committee is aware that the proliferation of quiet 
diesel-electric submarines in the fleets of potentially hostile 
nations represents a significant threat to U.S. Naval forces 
operating in the shallower waters of the world's littoral 
regions, where environmental factors of acoustic propagation, 
reverberation and ambient noise degrade the capabilities of 
existing acoustic detection systems. While improvements are 
being made in active and passive acoustic sensors systems for 
surface ships and submarines, the committee believes that the 
development of smart unattended undersea sensors capable of 
detecting, classifying, and reporting the presence of threat 
submarines to a remote monitoring center could significantly 
improve the capability of the anti-submarine warfare system of 
systems. The committee understands that such sensors could be 
capable of both passive listening and active echo reception, 
and could exploit recent advances in computer chip technology, 
information processing, global positioning system navigation, 
and cellular communications. The committee recommends an 
increase of $4.0 million in PE 63763E for development and 
demonstration of the technology for smart unattended undersea 
sensors.

Special operations intelligence systems development

    The committee is aware of the significant importance of 
mission familiarization for the special operation forces and 
the technology investments being made by joint Department of 
Defense activities.
    The Department, through its development of the Virtual 
Light Table, has displayed a highly effective, user friendly 
environment that is being adapted by the special operations 
forces for mission familiarization. This effort is intended to 
serve as a model for infusion of commercial technology into the 
DOD training environment. The committee views the Mission 
Familiarization Virtual Reality Project (MFVRP) as a 
cornerstone for greatly expanded mission familiarization and a 
new intelligence dissemination methodology. The committee 
recommends that the Special Operations Command pursue 
development of the MFVRP virtual reality technology and 
recommends an increase of $3.0 million in PE 1160405BB for this 
effort.

Special technology support

    The budget request contained $11.8 million in PE 63704D, 
for various Deputy Assistant Secretary of Defense (Intelligence 
and Security) quick reaction intelligence support projects.
     The committee fully supports funding for the Department's 
efforts to quickly respond to unforeseen theater and unified 
command technical requirements. However, the committee believes 
the justifications provided for fiscal year 1998 indicate that 
much of the activities in this program do not fall within this 
category and ought to be pursued, if at all, by the services or 
other DOD technology development agencies.
     Therefore, the committee recommends an authorization of 
$9.8 million for this project, a decrease of $2.0 million.

Strategic environmental research and development program (SERDP)

    The budget request contained $54.9 million in PE 63716D for 
Strategic Environmental Research and Development (SERDP).
    The Department has stated that the objective of SERDP is to 
improve DOD mission readiness by providing new knowledge, cost 
effective technologies, and demonstrations in the areas of 
environmental cleanup, compliance, conservation and pollution 
prevention. In times of increasingly constrained defense 
budgets, it is imperative that DOD efforts are focused on high 
priority, mission-relevant, defense unique, environmental needs 
that are not duplicated by the military services, other 
government agencies, or the private sector.
    The committee notes with particular interest that the 
fiscal year 1998 SERDP program includes projects whose 
objectives are the elimination of toxic materials and solvents 
from explosives and other energetic materials and the 
development of new insensitive materials which meet 
increasingly stringent environmental compliance regulations. 
The committee understands that these projects could lead to 
propellants and explosives that utilize environmentally 
compliant energetic materials for undersea, surface, and other 
weapon systems, and could result not only in higher weapon 
systems performance, but also in significant savings in overall 
life cycle costs. The committee recommends an increase of $3.0 
million to accelerate these activities under the SERDP.

Tactical unmanned aerial vehicle

    The budget request contained $122.0 million for Tactical 
Unmanned Aerial Vehicles (TUAV) in PE 35204D, including $87.5 
million for the Outrider Advanced Concept Technology 
Demonstration (ACTD) program.
    The committee understands that the purpose of the Outrider 
ACTD is to assemble and demonstrate a significant new tactical 
reconnaissance military capability based on matureadvanced 
technology. The Defense Airborne Reconnaissance Office (DARO) 
established the Joint Tactical Unmanned Aerial Vehicle (JTUAV) program 
from two previously unsuccessful programs, the close range and the 
maneuver UAVs. The DARO conducted a competitive selection which 
evaluated nine candidates and awarded a twenty-four month contract for 
the Outrider JTUAV in May 1996. The ``best value'' selection was based 
on the ability to successfully develop and deliver six ACTD systems, 
each consisting of four air vehicles and a ground control station with 
associated equipment, within the 24 months schedule, and, in part on 
the winning contractor's successful flight demonstration of the Hellfox 
air vehicle. The committee is informed that Outrider ACTD is well 
behind schedule and experiencing serious performance problems. Its 
first flight, scheduled for November 1996, did not occur until March 
1997.
    The committee supports efforts to streamline the current 
acquisition process and enable demonstrated capability to 
transition quickly to production. However, the committee is 
extremely concerned that the Outrider ACTD appears to have 
circumvented important acquisition criteria and milestones, 
including the need for the program to address a validated 
military requirement. The Joint Chiefs of Staff Joint 
Requirements Oversight Council (JROC) has failed to formally 
validate a joint operational requirement for the JTUAV, which 
contradicts the Department's own guidance that ACTDs must 
address user requirements clearly enough to firmly establish 
operational utility and system integrity.
    The committee is fully aware of the technical problems that 
have plagued development of the Outrider UAV. Outrider is 
experiencing serious shortcomings that indicate that the 
program is not based on mature technology. The committee 
understands that the program is under special review by the 
Under Secretary of Defense for Acquisition and Technology, and 
is being considered for cancellation by the Department. The 
technical problems with the Outrider UAV, and recent 
observations/statements by the Director, DARO that the 
Department was ``going to cut its losses'' on the program 
appear to lend creditability to this notion. The committee 
recommends a decrease of $87.5 million, resulting in no funding 
for the outrider ACTD. To address urgent service requirments 
for tactical UAVs, the committee recommends an increase $10.0 
million to support a vertical takeoff and landing UAV 
competition that was recently initiated by the DARO. In 
addition, the committee recommends an increase of $11.5 million 
of the funds authorized be made available to provide a 
dedicated Predator UAV system and associated equipment, 
including at least two aircraft equipped with synthetic 
aperture radar and Ku-band link, for operational 
experimentation and testing of the common UAV Tactical Control 
System (TCS).
    To ensure a viable transition from the Outrider ACTD, 
elsewhere in the report the committee recommends an additional 
$10.0 million in operations and maintenance, Army, for 
operating currently owned Hunter UAVs. Finally, the committee 
believes there are a number of existing UAVs, including Hellfox 
(from which the Outrider was derived), the Prowler, and others 
that could satisfy the Army's tactical short range UAV 
requirement. Therefore, the committee recommends $20.0 million 
in aircraft procurement, Army, for acquiring an ``off-the-
shelf'' tactical UAV with minimum development. The UAV selected 
is to be equipped with a digital data link that is compatible 
with the Army digital architecture for the future.
    In summary, the committee recommends a decrease of $66.0 
million for tactical UAVs. The committee directs the Secretary 
of the Army to provide a report to the Congressional defense 
committees outlining the short range UAV acquisition strategy 
no later than February 1, 1998. None of these funds may be 
obligated prior to submission of this report

Three-dimensional microelectronics technology

     The budget request contained $192.2 million in PE 62712E 
for materials and electronics technology, including $56.8 
million for microelectronics device technologies.
    The committee understands that the development of micro-
chip integrated circuit technology and the reduction of the 
size of the individual circuit elements on the micro-chip are 
progressing to the point that the length and density of the 
interconnects between the elements of the integrated circuits 
are becoming the limiting factor in processing speed and 
circuit density. Development of a three-dimensional electronics 
architecture with high lateral and vertical off-chip wiring 
densities could lead to further reductions in chip size, 
significantly increased performance, and reduced micro-chip 
costs. To achieve these goals, advances are required in the 
development of three-dimensional integrated circuit system 
architectures, advanced substrate materials, computer-aided 
design tools, and packaging technologies. The committee 
recommends an increase of $7.5 million in PE 62712E to 
accelerate the development of three-dimensional 
microelectronics technology and demonstration of three-
dimensional microelectronics systems.

Transfer of cooperative engagement capability operating frequency band

    Title VI of the Omnibus Budget Reconciliation Act of 1993 
(Public Law 103-66) requires the federal government to provide 
a span of radio frequencies aggregating not less than 200 Mhz 
for allocation to the public. To minimize negative impact on 
the federal government, the act requires that the spectrum to 
be reallocated must not be ``required for the present or 
identifiable future needs of the Federal Government'' and 
should not result in costs to the federal government that 
exceed the benefits gained. In February 1995, the National 
Telecommunications and Information Administration, U.S. 
Department of Commerce, recommended reallocation of 50 MHz from 
within the operating frequency band of the Navy's cooperative 
engagement capability (CEC) system. In the statement of 
managers accompanying the conference report on H.R. 3230 (H. 
Rept. 104-724), the conferees directed the Secretary of the 
Navy to prepare a detailed report on: (1) progress being made 
to resolve spectrum interference that would result from the 
reallocation of the CEC operating band, and (2) steps being 
taken to resolve interference between CEC and other fleet 
weapon systems and data links.
    According to the Department of Defense (DOD) and the 
General Accounting Office (GAO), this transfer could result in 
the loss of a total of 200 MHz (one-third of the CEC's usable 
operating frequencies) and could severely affect the 
operational capability of the CEC. DOD officials have also 
indicated to the GAO that current and future spectrum 
reallocations could significantly degrade the capabilities of 
many major weapons systems in addition to the CEC and could 
cost the Department hundreds of millions of dollars to modify 
systems and/or rent frequencies from the private sector or 
foreign governments. The committee is informed, however, that 
the full implications of the 1993 act are not yet known and 
that the Department is conducting a comprehensive analysis of 
spectrum requirements for critical systems in order to 
determine the extent that operational effectiveness of these 
systems could be affected by loss ofthe frequency spectrum. The 
committee also understands that a recent DOD study indicates that the 
Department's top level spectrum management for planning, policy, and 
oversight is diffused and weak and that there is no single high-level 
DOD point of contact for spectrum management.
    In response to H. Rept. 104-724, the Secretary of the Navy 
has reported that the Navy is working with the Federal 
Communications Commission (FCC) to minimize interference with 
civilian applications in the reallocated frequency band and the 
effect of the reallocation on CEC performance. The Secretary's 
report also states that the Navy's preferred technical option 
for resolution of interference between CEC and the LAMPS Mk III 
data link is moving the LAMPS data link to the Ku-band. Should 
the Navy choose this option for resolution of the problem, the 
committee expects that the funding required for the transfer 
will be included in the fiscal year 1999 defense budget 
request.
    The committee concurs with the steps taken by the Navy to 
address the issues raised in the House report, but believes 
that the problem should be addressed in a more comprehensive 
manner by the Secretary of Defense. The committee encourages 
the Secretary to assign responsibility for overall radio 
frequency spectrum management to a specific organization within 
the Department. The committee directs the Secretary to prepare 
a report to the Congress, in coordination with the Chairman of 
the FCC and the Secretary of Commerce, which addresses: (1) 
agreements on measures being taken to resolve the impact of the 
transfer of 50 Mhz from the radio frequency operating band of 
the cooperative engagement capability (CEC); (2) the impact of 
transfers of the federal radio frequency spectrum on other 
critical military systems; (3) how the DOD plans to modify the 
CEC and other critical systems, including estimated costs and 
schedule, to compensate for any operational degradation that 
might be caused by losses of the radio frequency spectrum due 
to such transfers; and (4) any unresolved issues in joint 
frequency spectrum management and impediments to the 
resolutions of these issues. The report shall be submitted to 
the Congress by March 31, 1998.

United States imagery and geospatial system improvements

    The budget request contained $109.4 million in PE 35102BQ, 
for the national imagery and mapping agency's (NIMA) 
development, procurement and integration of an end-to-end 
imagery production capability for geospatial information.
    The Director of NIMA has officially embraced the Defense 
Science Board's (DSB) direction to move NIMA from production of 
products to the maintenance of geospatial information, a move 
the committee supports. One of the DSB's recommendation 
included trading off production of lower priority products and 
less critical functions in order to fund NIMA's more pressing 
technical needs, thereby allowing the agency to move more 
rapidly in implementing future technical capabilities. However, 
judging from the budget request, the committee does not believe 
NIMA's technology investment is sufficient to efficiently and 
effectively transition to these capabilities.
    Therefore, the committee recommends $124.4 million, an 
increase of $15.0 million for developing and fielding the 
modern imagery and mapping technologies.

University research initiative (URI)

    The budget request contained $237.8 million in PE 61103D 
for the University Research Initiative. However, the committee 
understands that overall funding fiscal year 1998 URI has 
increased by $23.0 million above the amount forecast just 
months ago in the 1997 Future Years Defense Plan. Requested 
funding for URI includes $10.0 million for the defense 
experimental program to stimulate competitive research 
(DEPSCoR). The committee supports continuation of the DEPSCoR 
program to strengthen the infrastructure, enhance research, and 
develop human resources to assist the DEPSCoR states to become 
more competitive for regular research and training grants. 
Therefore, the committee recommends $20.0 million for DEPSCoR 
within URI funding. Although supportive of URI, the committee 
believes that the overall funding increase is unjustified in 
light of other critical underfunded priorities and recommends 
$224.8 million, a decrease of $13.0 million.

Verification technology demonstration

    The budget request contained $83.4 million in PE 63711H for 
verification technology demonstration.
    The committee understands that the requested funding 
increase of $54.3 million is to initiate a new program for 
monitoring associated with the comprehensive test ban treaty 
(CTBT), and that this program was previously administered by 
the Air Force, with anticipated expenditures for fiscal year 
1998 of $29.0 million. The committee finds that the capability 
to conduct such activities, with regard to seismic events 
within the United States and its territories already exists 
within the U.S. Geological Survey (USGS), an agency of the 
Department of the Interior. Therefore, CTBT functions and 
obligations associated with seismic events occurring within the 
United States should be performed by the USGS, and a redundant 
technical capability should not be created within the 
Department of Defense. The committee recommends no funds for 
use by the Department of Defense for the purpose of 
establishing an independent capability to monitor, analyze, and 
report on domestic seismic events, as part of the CTBT 
functions or obligations.
    The committee, therefore, recommends $69.1 million, a 
decrease of $14.3 million in PE 63711H. Of the amount 
authorized, $11.0 million is recommended to be solely for 
seismic research and technology development. Additionally, of 
the amount authorized, the committee directs that not more than 
$20.0 million may be obligated until memoranda of agreement are 
signed between the Department of Defense and the U.S. 
Geological Survey delineating relationships associated with 
seismic sensing and CTBT monitoring.

Wide bandgap semiconductors

    The budget request contained $101.9 million in PE 62173C 
for applied research for ballistic missile defense programs.
    The committee recognizes the potential of wide bandgap 
semi-conductors that operate at higher power, higher frequency 
and higher temperature and have the ability to operate in high 
radiation environments. The committee recommends an increase of 
$10.0 million in PE 62173C to continue the wide bandgap semi-
conductor program for which funds were authorized and 
appropriated for fiscal year 1997. The committee directs that 
the program continue to involve industry and academia in 
applied research in gallium nitride and silicon carbide 
material growth, characterization, surface behavior and device 
development.

                         LEGISLATIVE PROVISIONS

              Subtitle A--Authorization of Appropriations

              Section 201--Authorization Of Appropriations

    This section would authorize Research, Development, Testing 
and Evaluation (RDT&E) funding for fiscal year 1998.

           Section 202--Amount For Basic And Applied Research

    This section would specify the amount authorized for fiscal 
year 1998 for technology base programs.

               Section 203--Dual Use Technology Programs

    The budget request contained $225.0 million for 
continuation of the Dual Use Application Program (DUAP).
    The committee understands that the Department is attempting 
to structure the DUAP initiative to comply with the guidance 
provided in section 203 of the National Defense Authorization 
Act for Fiscal Year 1997 (Public Law 104-201). The committee 
remains concerned that this program establishes and enforces 
Department guidelines that control the expenditure of valuable 
development funds without linkage to service priorities, during 
a period when Department research and development funding is 
already inadequate to meet critical service requirements. While 
$185.0 million was made available for DUAP for fiscal year 
1997, the committee understands that none of these funds have 
been obligated to date. The committee, therefore, recommends no 
funds for DUAP. This provision would direct the Secretary of 
Defense to fund the DUAP initiative in the service research and 
development accounts.

    Subtitle B--Program Requirements, Restrictions, and Limitations

             Section 211--Manufacturing Technology Program

    This section would amend section 2525 of title 10, United 
States Code, through fiscal year 2000, to establish a funding 
requirement for the manufacturing technology program of 0.25 
percent of the amount available for demonstration and 
validation, engineering and manufacturing development, 
operational systems development, and procurement programs of 
the Army, the Navy, the Air Force, and Defense Agencies, or the 
amount authorized by law for manufacturing technology projects 
of the military departments and defense agencies, whichever 
amount is greater. To ensure efficient implementation of the 
manufacturing technology program, the provision would provide 
the Secretary of Defense with the authority to transfer any of 
the funds made available to another military department or 
defense agency. The provision would require an annual report to 
the Congress through fiscal year 2000 which specifies the 
investment strategy for the manufacturing technology program 
and provides an assessment of program effectiveness; and would 
also require in the fiscal year 2000 report an assessment of 
the formula by which funding for the program is determined and 
any changes recommended in the formula, and recommendations for 
extension of the funding authority.
    The Department of Defense manufacturing technology program 
provides ``seed funding'' for the development of moderate to 
high risk materials, process, and equipment technology to 
enable production of advanced, high quality weapons systems 
with shorter lead times and reduced acquisition costs. The 
committee strongly supports the manufacturing technology 
program in the areas of electro-optics, advanced composites, 
electronics, metalworking, maritime applications, joining, 
advanced manufacturing, energetics, technology transfer, best 
manufacturing practices, advanced gear manufacturing, and 
others. To maintain the Department of Defense manufacturing 
technology program at the funding level needed to assure the 
availability of advanced manufacturing technology and processes 
for use in Defense acquisition programs, the Congress has 
provided annual increases to the budget request each year for 
the past several years. The funding authority that would be 
established by this provision is intended to stabilize the 
funding level and eliminate the uncertainty in annual funding 
that has reduced the effectiveness and efficiency of the 
program. The provision would also tie the funding level and 
advanced manufacturing technologies and processes being 
developed in the program to the manufacturing technology and 
process requirements of the various Defense acquisition 
programs in accordance with the purpose of the manufacturing 
technology program as stated in subsection 2525(b). In meeting 
the funding level needed to support the development of the 
manufacturing technologies required by the acquisition 
programs, the Department would have the alternatives of 
budgeting for the manufacturing technology development programs 
in the appropriate military departments and defense agency, or 
of funding the manufacturing technology program by a small 
percentage tax on the acquisition programs that will benefit 
from the technology.
    In recommending this provision, the committee reemphasizes 
the requirements of section 2525(d) of title 10, United States 
Code, for competitive procedures and cost-sharing in the 
awarding of grants and entering into contracts, cooperative 
agreements, and other transactions under the program.

 Section 212--Strategic Environmental Research and Development Program

    This section would direct the Secretary of Defense to 
submit a report by February 28, 1998 specifying (1) the 
defense-unique and mission-relevant aspect of each SERDP 
initiative, and (2) certifying that each initiative is not 
duplicative of environmentally related research, development 
and demonstration activities of other departments and agencies 
of the Federal, state and local governments, or of other 
organizations engaged in such activities.

             Section 213--Tactical Unmanned Aerial Vehicles

    This section would direct that: (1) no funds be made 
available for the Outrider advanced concept technology 
demonstration program, (2) that $10.0 million be made available 
to carry out a competition for an unmanned aerial vehicle (UAV) 
capable of vertical takeoff and landing, and (3) that $11.5 
million be made available to provide a Predator UAV system to 
facilitate development of a common tactical control system.

 Section 214--Revisions to Membership of and Appointment Authority for 
               National Ocean Research Leadership Council

    This section would amend section 7902 of title 10, United 
States Code to provide that the President shall appoint members 
of the National Ocean Research Council who are not already 
government officers, to represent the views of the ocean 
industries, state governments, and academia, and such other 
views as the President considers appropriate. The section would 
also provide that the President may delegate the appointment 
authority to the head of a department.

   Section 215--Maintenance and Repair of Real Property at Air Force 
                             Installations

    This section would amend chapter 949 of title 10, United 
States Code by adding a new provision to permit the use of both 
research, development, test, and evaluation funds and 
operations and maintenance funds for maintenance and repair of 
real property at Air Force installations.

  Section 216--Expansion of Eligibility for the Defense Experimental 
               Program to Stimulate Competitive Research

    This section would make a technical correction to section 
257 of the National Defense Authorization Act for Fiscal Year 
1995 (Public Law 103-337) and would reauthorize the eligibility 
of the District of Columbia, Puerto Rico, Guam, and the United 
States Virgin Islands to participate in the Defense 
Experimental Program to Stimulate Competitive Research 
(DEPSCoR). It would also expand the definition of ``State'' to 
include the territories of American Samoa and the Commonwealth 
of the Northern Marianas Islands for purposes of the DEPSCoR.

     Section 217--Limitation on the Use of Funds for Adaptation of 
Integrated Defensive Electronic Countermeasures (IDECM) Program to F/A-
                   18E/F Aircraft and AV-8B Aircraft

    This section would limit the Secretary of the Navy to 
obligating no more than 50 percent of the amount authorized to 
be appropriated for development of the IDECM program for 
adaptation to the F/A-18E/F and AV-8B aircraft until the amount 
authorized to be appropriated for development of the IDECM 
program for adaptation to the F/A-18C/D aircraft is completely 
obligated.

Section 218--Bioassay Testing of Veterans Exposed to Ionizing Radiation 
                        During Military Service

    This section would direct the Defense Special Weapons 
Agency to make $300,000 available for the Nuclear Test 
Personnel Review Program, which conducts bioassay testing of 
veterans exposed to ionizing radiation during military service.

             Subtitle C--Ballistic Missile Defense Programs

 Section 231--Budgetary Treatment of Amount Requested for Procurement 
                 for Ballistic Missile Defense Programs

    The budget request incorporated a major change in funding 
policy for BMD programs by transferring all procurement for TMD 
programs from the centralized BMD account to the separate 
service procurement accounts. The committee is convinced that 
the Department, through this action, has placed its professed 
highest priority missile defense initiatives at risk by forcing 
them to compete with underfunded modernization programs of 
higher priority for each individual service. Additionally, in 
transferring fiscal year 1998 TMD procurement funding to the 
services, the Department did not issue any specific guidance 
that outyear funding for these programs was to be sustained or 
that TMD programs were to be considered as a service priority. 
Without such guidance, the committee believes that TMD 
procurement would suffer the same fate as other service 
modernization programs which continue to be restructured and 
have their schedules stretched due to funding shortfalls. 
Finally, despite testimony from the Department on the 
importance of TMD programs, the committee is disappointed to 
note that funding for all TMD programs is significantly reduced 
from the levels provided in fiscal year 1997.
    The committee is opposed to the proposed change in the TMD 
funding policy. This provision would direct the Secretary of 
Defense to transfer all fiscal year 1998 TMD program 
procurement funds back to the BMD procurement account. The 
provision would also require that all National Missile Defense 
program procurement funds be included in the BMDO procurement 
account. The committee considers procurement and fielding of 
TMD systems to be a priority congressional interest item and 
directs the Secretary to retain procurement for these programs 
within BMDO.

      Section 232--Cooperative Ballistic Missile Defense Programs

    This section would establish the ``Cooperative Ballistic 
Missile Defense Program'' within the Ballistic Missile Defense 
Organization, to support on-going and future technical and 
analytical cooperative efforts between the U.S. and other 
nations that contribute to U.S. missile defense capabilities.

Section 233--Deployment Dates for Core Theater Missile Defense Programs

    The committee is disappointed by the Administration's lack 
of commitment to the timely deployment of theater missile 
defenses. While the Administration concedes that theater 
ballistic missiles constitute a clear and present danger to 
U.S. forces deployed abroad, Congressional efforts on behalf of 
the rapid development and deployment of TMD systems to meet 
this threat have been slowed by both Administration action and 
inaction.
    In the National Defense Authorization Act for Fiscal Year 
1996 (Public Law 104-106), Congress established first unit 
equipped (FUE) dates of fiscal year 2000 for Theater High 
Altitude Area Defense system (THAAD), fiscal year 2001 for the 
Navy Theater Wide system, fiscal year 1998 for Patriot Advanced 
Capability Configuration 3 (PAC-3), and fiscal year 1999 for 
the Navy Area Defense system. These dates were based on 
Congressional support for the early deployment of a TMD 
capability, but they were also based on the assumption of 
aggressive and streamlined management as well as robust 
funding.
    However, within weeks of the dates being approved by 
Congress and signed into law by the President, the 
Administration took budgetary and programmatic actions that had 
the effect ofdelaying each of these programs and their 
deployment dates. Compared to the legally directed dates, the 
Administration's plan delayed the THAAD deployment date by six years, 
the Navy Theater Wide system date by at least four years, PAC-3 by one 
year, and the Navy Area Defense system by two years.
    In presenting the fiscal year 1998 funding request earlier 
this year, the Department asserted that all TMD programs had 
been accelerated. Yet in the case of each of these TMD systems, 
the fiscal year 1998 request is lower than the amount Congress 
appropriated for fiscal year 1997. Despite the requirements of 
Public Law 106-104, the Administration target FUE dates for 
PAC-3 and Navy Area Defense remained fiscal year 1999 and 2001, 
respectively, the dates the Administration unilaterally 
established in 1996 contrary to the law. As noted elsewhere in 
this report, the Department has still not reviewed the Navy 
Theater Wide program to determine if accelerating the program 
from its currently anticipated deployment date of 2008 is 
feasible. And while Department of Defense announced in January 
that the THAAD FUE would be accelerated to 2004, the program's 
FUE was immediately slipped back to 2006 following a test 
failure.
    The committee continues to believe that a THAAD user 
operational evaluation system (UOES) can and should be deployed 
by fiscal year 2000 and FUE achieved by fiscal year 2004 at an 
acceptable risk given the high-value payoff associated with 
deployment of an operational THAAD capability. The committee 
also understands that BMDO is considering steps that could 
provide a more robust THAAD UOES capability, thus providing 
greater capability in the field at an earlier date, and 
strongly supports any such initiatives. Accordingly, this 
provision would require the Secretary of Defense to structure 
the THAAD program to achieve a THAAD UOES capability by fiscal 
year 2000 and FUE by fiscal year 2004.
    The committee reiterates its concern that the Department 
still has not defined the Navy Theater Wide program nor 
established a program schedule. The committee finds this lack 
of focus and commitment unacceptable and elsewhere in this 
report has directed the Secretary of Defense to report to the 
Congressional defense committees on the earliest feasible Navy 
Theater Wide deployment date. The committee reminds the 
Secretary of Defense of his obligation under current law and 
urges that the Navy Theater Wide program be structured to come 
as close as possible to achieving a UOES capability in fiscal 
year 1999 and FUE in fiscal year 2001.
    Congressional funding increases have helped to accelerate 
the Navy Area Defense system into engineering and manufacturing 
development and the PAC-3 program into procurement. The 
committee also notes the budget request does not propose to 
slip the deployment dates of these two systems further into the 
future. Given both programs' advanced state of development and 
the increasing likelihood that the currently programmed 
deployment dates will be met, this section would also repeal 
the dates specified in section 234 of the Defense Authorization 
Act for Fiscal Year 1996 (Public Law 104-106) for PAC-3 and the 
Navy Area Defense System.
    The committee remains committed to fielding effective TMD 
systems at the earliest feasible date and once again urges the 
Administration to support full funding and aggressive goal-
oriented management for all of these critical systems.

  Section 234--Annual Report on Threat Posed to the United States by 
  Weapons of Mass Destruction, Ballistic Missiles, and Cruise Missiles

    The committee believes that awareness of information and 
assessments concerning evolving threats to U.S. national 
security is essential to informed congressional debate and 
decision-making. To that end, the committee believes that a 
comprehensive description and assessment of the threats posed 
by weapons of mass destruction (WMD) and ballistic and cruise 
missiles to the U.S. and its allies would be an essential 
informational for Congress and the public.
    Therefore, this provision would direct the Secretary of 
Defense, in consultation with the Director of Central 
Intelligence, to prepare and submit to Congress by January 30, 
1998, and January 30 of each subsequent year, a report on 
threats posed to the U.S. and its allies by cruise missiles, 
ballistic missiles, and weapons of mass destruction, and the 
proliferation of such technologies. The report should be 
prepared in classified and unclassified form, to assure the 
most complete information and widest distribution possible.

 Section 235--Director of Ballistic Missile Defense Organization (BMDO)

    The committee believes that without appropriate senior 
leadership and a streamlined reporting chain, BMDO's ability to 
efficiently develop and deploy BMD systems is at risk. 
Therefore, this provision would requiring that the position of 
director of BMDO be filled by an officer of the armed forces of 
the United States with a rank of at least Lieutenant General or 
Vice Admiral. The committee believes that three star rank is 
essential to provide the BMDO director the stature within the 
Department of Defense commensurate with the job's 
responsibilities. The committee notes that the current director 
of BMDO is a Lieutenant General, and expects that the 
requirement established by this section will continue to be 
filled from within existing statutory authorizations for 
general and flag officers.
    The committee also recommends establishing a requirement 
that the director of BMDO report directly to the Secretary of 
Defense concerning all matters pertaining to the management of 
BMDO programs. Such streamlining will help overcome 
bureaucratic obstacles and allow issues to be promptly and 
definitively resolved.

         Section 236--Tactical High Energy Laser Program (THEL)

    This section would transfer the THEL program from PE 63308A 
to an new PE 63XXXC that would consolidate cooperative 
ballistic missile defense programs under Ballistic Missile 
Defense Organization management and would authorize $38.2 
million for THEL.
                  TITLE III--OPERATION AND MAINTENANCE

                                OVERVIEW

                           Funding Priorities

    The Administration's fiscal year 1998 defense budget 
request provides the illusion that funding for readiness of the 
armed forces was increased over past year levels. The 
Administration's rationale for this operation and maintenance 
(O&M) funding increase is that the preservation of readiness is 
a major priority. However, a significant portion of the growth 
in the O&M budget results from inflationary adjustments, 
additional funding for contingency operations, and in working 
capital funds adjustments (mostly to cover prior year 
expenses). When these factors are taken into account, the net 
effect is that the President's budget request would not 
increase military readiness or increase the resources necessary 
to arrest the shortfalls that are beginning to impact on 
battlefield effectiveness and safety.
    In response, the committee's recommendations for fiscal 
year 1998 extend a significant priority to sustaining an 
acceptable level of readiness for our military forces and 
continuing reforms of the administration and infrastructure of 
the Department of Defense (DOD). Each of these areas is 
extensively discussed elsewhere in this report.
    The committee is convinced that reforming the business 
operations of the DOD is critical since only 36 percent of the 
O&M budget relates directly to force readiness. Although a 
portion of the remaining 64 percent contributes indirectly to 
mobilization capabilities, the majority is directly related to 
the overhead needed to maintain a large and somewhat 
inefficient defense bureaucracy. The committee believes that 
too much of the current defense budget finances an overly large 
defense infrastructure at the expense of resources necessary to 
maintain a ready and capable force. The table below shows a 
breakdown of the readiness related expenditures contained in 
the budget request:

                        [In millions of dollars]

Land Forces...................................................  $3,523.2
Air Operations................................................  21,306.3
Ship Operations...............................................   7,431.0
Special Operations............................................   1,169.4
Drug Interdiction.............................................     652.6
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................  34,082.5

    The remaining $59.5 billion contained in the O&M budget 
request has been identified for activities other than training 
and operating military forces. Therefore, the committee 
believes there is ample room for effecting significant further 
efficiencies in the operations of the Department. The 
committee's recommendations in this area are detailed below.

                               Readiness

    Over the past few years, the committee has closely 
monitored the state of military readiness of our nation's armed 
forces. Two years ago, the committee found that the military 
services were in the early stages of a long-term systemic 
readiness problem. In response, the Congress added additional 
funding to the Administration's budget requests to improve 
force readiness.
    In an effort to assess readiness improvements, the 
committee conducted an intensive scrutiny of U.S military units 
around the world that revealed, in fact, military readiness is 
not improving, and may be declining. This investigation 
included numerous interviews and committee hearings with all 
ranks; from major military commands to individual military 
units, non-commissioned officers, and family members. A 
consistent theme voiced by service members was that they could 
only maintain their readiness levels by sacrificing other 
critical areas such as procurement, modernization, and quality 
of life. A recurring statement by many interviewed was that 
they are doing more with less, and working harder and longer 
just to keep up with peacetime mission requirements. The 
committee believes that U.S. military members should not have 
to choose between readiness and maintenance of equipment, 
facilities and quality of life initiatives.
    The committee is concerned that as readiness levels 
decline, the quality of military life will erode to the point 
at which talented and dedicated Americans will question the 
desirability of a career in uniform. As an example, all of the 
military services may soon be facing a critical shortage of 
experienced mid-level pilots due to increased separations to go 
work for a commercial airline industry that is now hiring.
    The committee strongly believes that readiness is a 
perishable commodity. The committee understands that making the 
necessary changes to return U.S. military readiness to an 
acceptable level will be difficult, particularly as fewer and 
fewer resources are made available. The committee 
recommendations contained in this report reflect a concerted 
effort to pursue a number of targeted readiness initiatives to 
ensure that America maintains the best-trained, best-equipped, 
and most effective military in the world. Some of the readiness 
enhancements recommended by the committee are as follows:

                          [Dollars in millions]

Depot-Level Maintenance and Repair............................    $515.0
Maintenance and Repair of Real Property.......................     200.0
Recruiting and Advertising....................................      22.9
National Training Center......................................      60.2
Force Protection Enhancements.................................      25.8
Mobility Enhancement..........................................      25.0

     In addition to addressing the underfunding of key 
readiness accounts, the committee recommendations includes 
several legislative provisions intended to provide Congress 
with the necessary information to allow effective oversight of 
the readiness programs of the DOD. These initiatives include 
several provisions to increase timely andcurrent information on 
the management of readiness funding; provisions to enhance and protect 
training, particularly combat training; and a provision to improve 
readiness reporting by the DOD to address the disconnect between 
official readiness reports and the reality in the field.

                                 Reform

    After a series of hearings and in-depth reviews, the 
committee believes the DOD continues to support outmoded 
business practices which divert funding from underfunded higher 
priorities. The committee recommendations redirect funding from 
elements in the operation and maintenance budget associated 
with inefficient procedures, administrative overhead and excess 
infrastructure in order to support quality of life and 
readiness priorities.

                            Funding Overview

    The budget request contained $95,439.0 million for 
Operations and Maintenance and working Capital Funds, 
representing an increase of $3.5 billion from the amount 
authorized for Fiscal Year 1997.
    The committee recommended $94,849.8 million. The committee 
recommends approval of the request unless specified otherwise 
in the following table.
    Offset Folios 287 to 313 Insert Here

<SKIP PAGES = 027>

                       ITEMS OF SPECIAL INTEREST

                       Budget Request Reductions

                  Administration and Support Accounts

    Due to the necessity to address the shortfalls created by 
the revised budgetary scoring of the President's request, 
persistent underfunding of key operating accounts, and to 
ensure adequate funding of critical readiness accounts, the 
committee recommendation includes reductions in program growth 
in the administration and support accounts (Budget Activity 4) 
of the military departments as follows:

                        [In millions of dollars]

Army..............................................................$210.0
Navy.............................................................. 230.0
Air Force......................................................... 100.0

    In addition, the committee believes that the support 
structure of the Department of Defense and the various Defense 
Agencies is disproportionate to needs of the military services. 
The report of the Quadrennial Defense Review (QDR) proposes a 
six percent reduction in this area by November 30, 1997. 
Therefore, the committee recommends reductions in 
administration and management funding for these accounts as 
follows:

                        [In millions of dollars]

Office, Secretary of Defense...................................... $81.4
Washington Headquarters Service...................................  42.6
QDR savings....................................................... 168.4

    The committee is convinced these recommended reductions 
will not directly affect the readiness capabilities of our 
combat forces. The committee is mindful, however, that 
headquarters and other administrative support for the forces is 
important, but must be appropriately sized to be economically 
effective.

                               Bulk Fuel

    The committee is concerned that the military departments 
have been overestimating their needs for bulk fuel. The General 
Accounting Office (GAO) estimated that in fiscal year 1996, 
fuel purchases by the services was $440 million below what was 
requested in the budget request, and in fiscal year 1997, GAO 
estimates the overestimation will total $183 million. The 
budget request for fiscal year 1998 includes funding to 
purchase 111 million barrels of bulk fuel. Of this total, the 
services plan to buy 109.5 million barrels from the Defense 
Fuel Supply Center (DFSC) and theremainder from commercial 
sources and from foreign governments. Based on actual DFSC sales data, 
the GAO estimates that DFSC will sell about 104.2 million barrels to 
the services in fiscal year 1998, a difference of 5.3 million barrels 
of bulk fuel, or $201.5 million. Because the over budgeting for bulk 
fuel seems to be a recurring practice, the committee recommends the 
following reductions:

                        [In millions of dollars]

Army..............................................................  $8.6
Navy..............................................................  42.5
Air Force.........................................................  44.5

                    Advisory and Assistance Services

    The committee continues to be concerned with the increasing 
use of Advisory and Assistance Services (AAS) by the Department 
of Defense, which includes contracted experts and consultants, 
studies and evaluations, management support and technical 
services. The fiscal year 1998 budget request contains a total 
of $2,951.0 million for AAS, a 248 percent increase since 1992. 
In addition, the various service operation and maintenance 
accounts show significant growth from 1997 to 1998 for these 
services as follows: Department of the Army, 5.5 percent; 
Department of the Navy, 8.4 percent; the Marine Corps, 14.4 
percent; Department of the Air Force, 13 percent; and Defense 
Agencies, 15 percent.
    The committee believes that during this period of 
significant downsizing, the current level of funding and 
increases for these services are not justified. Therefore, the 
committee recommends the following reductions:

                        [In millions of dollars]

Army.............................................................. $50.0
Navy..............................................................  50.0
Marine Corps......................................................   3.0
Air Force.........................................................  50.0
Air Force Reserve.................................................   0.3
Air National Guard................................................   0.8
Defense Agencies..................................................  50.0

    The committee directs the Secretary of Defense to ensure 
that, beginning with the budget request for fiscal year 1999, 
the Department provide in the justification materials provided 
to Congress a discussion on AAS that includes an identification 
of each of the military department's requirements for AAS, the 
previous two fiscal years' data on AAS expenditures for each 
military service and the Defense Agencies, and specific 
justification for any proposed increases.

                    Defense Support Services Reform

                                Overview

    Reform is not a new issue for the Department of Defense 
(DOD). The Quadrennial Defense Review (QDR) is the latest of 
several studies, including the Defense Science Board, 
Commission on Roles and Missions, and the Bottom Up Review, 
that have attempted to address improving the efficiency of the 
DOD. Despite these studies, the committee is dissatisfied with 
the progress being made to challenge the inertia of ``business 
as usual.'' The committee believes that in this thirteenth year 
of declining defense budgets, combined with an environment of 
balanced budget agreements, and funding shortfalls in 
modernization, readiness and quality of life programs, DOD can 
no longer afford to further study reform.
    The committee notes that since 1990, DOD has eliminated 
eight Army divisions, 14 Air Force and Navy air wings, 216 Navy 
ships, and over 600,000 military personnel. Efforts to reduce 
the defense infrastructure supporting the remaining forces lags 
far behind. Despite the QDR's focus on shrinking the current 
annual infrastructure costs of $146 billion, little detail has 
been provided on how the Department intends to implement the 
QDR's recommended infrastructure reductions. These details are 
crucial, since failure to reduce operations and support 
infrastructure will have significantly adverse impacts on 
funding national defense priorities in the near future.
    Furthermore, the committee believes that the management and 
delivery of a number of support services remain outmoded and 
inefficient in comparison to equivalent activities in the 
private sector. For example, DOD's supply system is roughly 
twice as expensive to administer than comparable private sector 
systems. As a further example, the military departments often 
pay the DOD transportation command upwards of 200 percent more 
than the commercial carriers charged DOD to provide similar 
transportation services. For these compelling reasons, the 
committee recommendation directs a number of reforms within 
DOD.

    Contracting Out Firefighter and Security Activities at Military 
                             Installations

    The General Accounting Office, Defense Science Board, and 
Department of Defense (DOD) have stated that section 2465 of 
title 10, United States Code, which prohibits the consideration 
of Department of Defense firefighter and security guard 
functions from outsourcing to the private sector, is an 
impediment to providing efficient and cost-effective fire 
fighting and security support at defense installations and have 
called for its repeal. However, the committee is concerned that 
absent a clear definition of what fire fighting functions, 
security guard functions, and the related personnel are 
essential to providing a safe and secure environment for our 
military service members, a repeal of this section could 
negatively impact national security.
    Therefore, the committee directs the Secretary of Defense 
to provide a plan to the House Committee on National Security 
and the Senate Committee on Armed Services by December 31, 1997 
that includes the following:
          (1) A listing of both the fire fighting and security 
        guard functions that are considered inherently 
        governmental and the reasons why, and
          (2) An implementation plan for outsourcing fire 
        fighting and security guard functions, should section 
        2465 of title 10, United States Code be repealed.

              Criminal Investigations and Board on Audits

    The committee commends the Department of Defense (DOD) 
criminal investigative services on their efforts to increase 
coordination and reduce duplication of resources through the 
Board on Investigations and Regional Fraud Working Groups. The 
committee believes that DOD should create a Board on Audits 
that would allow DOD to more effectively handle the increasing 
workload from the Chief Financial Officers Act and the changing 
accounting systems, and reduce duplication of effort through 
improved sharing of knowledge and resources among the service 
department's audit agencies. Therefore, the committee directs 
the Secretary of Defense to finalize the working guidance for 
the operation of both boards no later than December 31, 1997. 
The committee believes that DOD is best served by a productive 
and coordinated effort between the military departments and the 
DOD Office of Inspector General.

        Defense Reutilization and Marketing Service Improvements

    The committee is concerned that items in the Department of 
Defense (DOD) inventory are not assigned the proper 
demilitarization when purchased or provided to the Defense 
Reutilization and Marketing Service (DRMS) for disposal. An 
April 1997 report by the DOD Inspector General (Coding 
Munitions List Items Report No. 97-130) revealed that 52 
percent of items sampled were assigned improper 
demilitarization codes when they were purchased. In addition, a 
Congressionally mandated study on consolidating DOD's supply 
centers, submitted in November 1996, also highlighted coding 
inconsistencies. This report recommended improving the coding 
system by establishing a standard code to use when an item is 
purchased and when it is sent to DRMS.
    Improper coding can lead to unnecessary costs due to 
excessive levels of demilitarization and a loss in DRMS sales. 
More importantly, improper coding can result in the sale of 
sensitive military hardware that should have been 
demilitarized. As a result, these coding problems are not only 
costly but present a threat to national security. The committee 
believes that DOD's reluctance to develop an automated system 
for demilitarization codes will seriously delay correction of 
this problem. Therefore, the committee directs the Secretary of 
Defense to provide a report, by December 31, 1997, to the House 
Committee on National Security and the Senate Committee on 
Armed Services on efforts to:
          (1) Identify and correct miscoded inventory items;
          (2) Develop an automated system that standardizes the 
        demilitarization codes across DOD, from the purchase to 
        surplus of an item;
          (3) Dedicate funding for an automated system during 
        the five year defense plan; and
          (4) Implement an automated system during the five 
        year defense plan.

                Defense Supply and Logistics Management

    The current costs of the Department of Defense (DOD) supply 
system are significantly greater than the private sector, even 
after taking into account the need to maintain a wartime 
capacity. The committee believes that DOD's supply management 
and work processes are ideal business re-engineering 
candidates, given the extensive commercial market for these 
services and the recent improvements in private sector 
practices. In doing so, the committee encourages DOD to revise 
the way it provides supply services by making extensive use of 
such commercial options as consolidation, outsourcing, 
particularly prime vendor and virtual prime vendor deliveries 
for most repairable and consumable items. The use of prime and 
virtual prime vendors provide the benefit of lowering 
distribution, warehousing, and inventory costs, which reduces 
the customer rates in the supply and distribution business 
areas of the working capital funds.
    The committee understands that savings, estimated from 
DOD's current initiatives (i.e., ``lean logistics'' and 
``velocity logistics'') to reduce the number of inventoried 
spare parts and associated storage costs, have been included in 
the military services' Operation and Maintenance (O&M) budgets. 
Therefore, the committee directs the Secretary of Defense to 
report to the House Committee on National Security and the 
Senate Committee on Armed Services by March 1, 1998, on the 
savings achieved due to reforms in spare parts inventories and 
logistic operations the savings estimated in fiscal years 1998-
2003 from these reforms and an assessment of the risks to 
readiness associated with relying on projected savings.

            Definition of Mission Essential Support Services

    The committee continues to be frustrated by the lack of a 
clear definition of the support services and functions that are 
essential to the strategic mission of the Department of Defense 
(DOD), otherwise known as inherently governmental functions. 
The committee is particularly concerned that the military 
departments appear to have different definitions and a 
different, and often changing, understanding of the 
relationship between inherently governmental and commercial 
activities. For example, between fiscal years 1994 and 1996, 
the Department of the Air Force, without changing their role or 
mission, redefined roughly 194,000 personnel from the 
commercial activities to inherently governmental categories.
    The committee directs the Secretary of Defense, in 
consultation with the secretaries of the military departments, 
to provide by March 1, 1998, a report to the House Committee on 
National Security and the Senate Committee on Armed Services 
containing the following information:
          (1) A Department of Defense-wide definition for each 
        of following categories; inherently governmental; core; 
        national defense-exempted; and exempted from 
        outsourcing for other reasons;
          (2) A listing of all functions and activities that 
        are considered inherently governmental and the reasons 
        why;
         (3) A listing of all commercial activities, indicating 
        whether the activity is core or non-core including a 
        justification for core activities;
         (4) A listing of all support services, functions and 
        activities that have both a core and a non-core 
        element; and
         (5) A listing of all commercial activities that are 
        exempted for other reasons and the reasons why.
    In addition, the committee directs the Secretary of the Air 
Force to provide a report to the House Committee on National 
Security and the Senate Committee on Armed Services, by March 
1, 1998, providing an explanation for the shift of personnel, 
between fiscal years 1994 and 1996, in the Air Force commercial 
activities to the inherently governmental category, a listing 
of the specific functions that were changed to inherently 
governmental and an explanation why.

                     Extensively Studied Functions

    The committee is aware that within the military services, 
there is little consistency for outsourcing non-inherently 
governmental base operations functions and services. 
Specifically, the military services conduct A-76 studies on 
activities that are similar, if not exactly the same, as 
extensively studied and outsourced functions in their own 
service or in the other military services. This practice not 
only unnecessarily duplicates effort, it is costly. The 
committee believes that by developing standard ``templates'' 
based on previous A-76 studies of similar functional areas, the 
military services would save time and resources in outsourcing 
these functions. The following chart illustrates the percentage 
of base operations support activities that were outsourced in 
fiscal year 1996, an average of 50 percent or more within the 
military services.

                              [In percent]                              
------------------------------------------------------------------------
                                      Air               Marine          
      Base Operating Activity        Force     Army   Corps \1\    Navy 
------------------------------------------------------------------------
Laundry and Dry Cleaning..........      100       85        81        94
Custodial Services................      100       88        82        86
Refuse Collection & Disposal                                            
 Services.........................       96       84        67        81
Food Services.....................       88       88        42        39
Office Equipment Maintenance and                                        
 Repair...........................      100       75        18       100
Contractor-Operated Parts Stores &                                      
 Civil Engineering Supply Stores..      100       71       100      \2\ 
------------------------------------------------------------------------
\1\ Marine Corps figures are as of July 1996; all others are as of the  
  end of fiscal year 1996.                                              
\2\ Not reported.                                                       
                                                                        
 Note.--Percentages represent the portion of the workforce that is      
  outsourced for a given function.                                      
                                                                        
 Source: GAO analysis of services' commercial activities inventory      
  databases.                                                            

         Multi-Service Contracting of Base Operations Functions

    The National Performance Review and the 1995 report of the 
Commission on Roles and Missions indicated that expanding the 
Department of Defense (DOD) efforts in contracting out multiple 
services under a single contract (multi-service contracts) 
would achieve significantly greater savings than single 
contracts. Since 1977 DOD has entered into only a handful of 
such contracts, primarily for base operation support services. 
However, little information exists on how these contracts work, 
what services are best delivered under such a program, and what 
are the actual savings to the military installation. For 
example, the Army recently determined that the multi-service 
contract at Fort Irwin, California was too cumbersome to 
administer.
    The committee directs that the General Accounting Office 
review the opportunities and problems with multi-service 
contracts and provide a report of its findings to the 
Congressional defense committees by March 1, 1998. The review 
should identify the characteristics of selected multi-service 
contracts, what are the lessons learned from past and current 
DOD multi-service contracts, what are the cost and efficiency 
gains achieved in multi-service contracts in contrast to a 
single service contract, what are the implications for small-
business, and what DOD functions are best suited for multi-
service contracts.

                   Oversight of Outsourced Functions

    The committee is aware that the Department of Defense (DOD) 
has increased efforts to maximize efficiencies and improve 
services by planning to study for outsourcing, more than 
100,000 civilian positions between fiscal years 1998 and 2003. 
The committee has several concerns regarding these efforts.
    DOD is pursuing opportunities to outsource services and 
functions currently provided by military personnel. The 
committee questions the savings estimates from such outsourcing 
since the military personnel performing these services will be 
retained and contractor costs will be incurred. In addition, 
the committee is concerned that services and functions that are 
currently used to train military personnel will be outsourced.
    A recent report by the General Accounting Office indicates 
that DOD does not have the adequate personnel or resources to 
conduct or manage new contracts for the planned outsourcing 
efforts. For example, the United States Army Forces Command had 
about thirty staff dedicated to administering the commercial 
activities program during the 1980s. By mid-1996, this staff 
had dropped to three.
    Furthermore, the committee is concerned that recent 
outsourcing efforts do not include studies on whether it would 
be more cost effective to return currently outsourced functions 
and services to the public sector. Without this review, DOD 
cannot ensure that it is receiving the best service for the 
taxpayer.
    Therefore, the committee directs the Secretary of Defense 
to review the planned outsourcing efforts and report his 
findings to the Congressional defense committees by March 1, 
1998. The report should address the following questions:
          (1) What function and services performed by military 
        personnel has DOD planned to study for outsourcing 
        between fiscal years 1998 and 2003?
          (2) What is the methodology used in determining the 
        public costs when reviewing the outsourcing of a 
        function or service performed by military personnel?
          (3) What is the adequate level of staff support 
        required for ongoing and future outsourcing studies?
          (4) What is the adequate staff support necessary to 
        monitor the resulting contracts?
          (5) What are the opportunities for centralizing the 
        personnel and resources into one office that will 
        provide defense-wide outsourcing support?
          (6) What are the competitive costs and savings from 
        the planned outsourcing studies?
          (7) What studies are planned to review the return of 
        outsourced services and functions to the public sector?

    Procurement and Electronic Commerce Technical Assistance Program

    Over the past few years, the acquisition community has 
instituted several reforms aimed at streamlining and removing 
barriers to the federal acquisition process. The passage of the 
Federal Acquisition Streamlining Act of 1994 (Public Law 103-
335) and the Federal Acquisition Reform Act of 1996 (Division D 
of Public Law 104-106), along with administrative actions taken 
by the Executive Branch to streamline the acquisition process 
have helped to fundamentally change the federal acquisition 
system. However, despite these reforms, little has changed for 
the DOD programs that support small business, particularly the 
Electronic Commerce Resource Centers (ECRC) and the Procurement 
Technical Assistance Centers (PTAC).
    Recent findings by the DOD Office of Inspector General 
(OIG) (Electronic Commerce Resource Centers, Report No. 97-090 
and Department of Defense Procurement Technical Assistance 
Cooperative Agreement Program, report No. 97-007) argue that 
the ECRC ``has not been efficient or cost effective in 
promoting'' the use of electronic commerce or electronic data 
interchange technologies between small businesses and 
government organizations. The DOD-OIG also states that PTAC is 
not complying with its authorizing language in section 2415 of 
title 10, United States Code, regarding the requirement to 
award grants based on the comparative ranking of applicants and 
equitably distribute grants across the Defense Contract 
Administration Service regions. Finally, the OIG concluded that 
both ECRC and PTAC functions overlap with services provided 
elsewhere in the government. For these reasons, the committee 
believes the programs should be consolidated to improve service 
delivery and ensure the future of the program is consistent 
with the fundamental changes sweeping the Federal acquisition 
system.

                  United States Transportation Command

    Despite the creation of USTRANSCOM, numerous studies, 
including those by USTRANSCOM, have reported that traffic 
management processes within the Department of Defense (DOD) 
remain fragmented, duplicative, and inefficient, primarily due 
to the lack of integrated and standard business practices. 
Personnel in each transportation component continue to perform 
similar and duplicative functions, resulting in different 
component staff separately negotiating rates and processing 
claims often related to the same shipment.
    The committee is aware that USTRANSCOM is reviewing options 
to improve the management of customer requirements and billing 
through contracted studies and the Joint Mobility Control 
Group. The committee believes that the current transportation 
management issues require more aggressive solutions and 
encourages the use of standardized business practices that 
utilize leading edge technologies. In doing so, the committee 
believes that USTRANSCOM services will improve, transportation 
and financing systems will be easier to understand, and scarce 
resources will be used more efficiently throughout USTRANSCOM. 
As a result, the committee directs the Secretary of Defense to 
reduce the workyears in USTRANSCOM to 66,238, or 1,000 workers 
below the current fiscal year 1997 levels.
    The committee is also aware that DOD transportation costs 
are significantly higher than the private sector. According to 
a 1996 General Accounting Office (GAO) study, USTRANSCOM 
charged its customers as much as 200 percent more than the 
private contractor billed for its services. In the GAO study, 
DOD explained that this difference was largely due to the cost 
of maintaining an additional mobilization or readiness 
infrastructure. Separating the mobilization from the peacetime 
transportation costs would improve visibility over the true 
cost of providing peacetime transportation, and facilitate DOD 
efforts to maximize the most efficient business practices, 
whether public or private. Therefore, the committee directs the 
Secretary of Defense to provide the House Committee on National 
Security and the Senate Committee on Armed Services a report, 
by March 1, 1998, containing the following:
          (1) A description of the charges and services 
        provided through the working-capital funds to satisfy 
        transportation requirements in support of war, national 
        emergency, or contingency operations; and
          (2) A description of the changes and services 
        provided through the working capital funds in support 
        of peacetime transportation requirements.

                          Environmental Issues

                  Air Force Plant #3, Tulsa, Oklahoma

    The committee is aware of the desirability of expediting 
the environmental cleanup of Air Force Plant #3, located in 
Tulsa, Oklahoma, so that the land on which the plant is located 
may be expeditiously conveyed and subsequent re-use and 
redevelopment accelerated. In view of recently identified 
increased funding requirements for the cleanup of environmental 
contamination at this site, the committee directs the Secretary 
of the Air Force to expedite cleanup of this site to the 
maximum extent practicable. In addition, the Secretary of the 
Air Force is directed to submit a revised obligation and 
cleanup schedule for the facility no later than November 15, 
1997.

                           Compliance Funding

    The committee remains concerned about the expenditure of 
funding for environmental compliance activities. Theoretically, 
such funds are supposed to be used exclusively for those 
environmental activities necessary to ensure that the 
Department of Defense complies with all applicable 
environmental laws and regulations. However, anecdotal 
evidence, as well as preliminary assessments made by the 
General Accounting Office, suggest that there is considerable 
migration of funding into and out of compliance accounts once 
such funds are appropriated and obligated as operations and 
maintenance funding at the installation level. A recent study 
by the General Accounting Office suggests that the Department 
of Defense and the Environmental Protection Agency both lack 
the necessary data relative to environmental compliance 
activities to conduct appropriate oversight. In recognition of 
this deficiency, in 1994 the Under Secretary of Defense 
(Comptroller) established a working group to revise the manner 
in which the department budgets for and reports execution of 
environmental quality programs, including compliance, 
conservation and pollution prevention programs. In 1996, the 
Deputy Under Secretary of Defense (Environmental Security) 
established new policies for classifying compliance projects 
and obtaining data.
    Nevertheless, Department of Defense officials concede that 
they are unable to provide budget execution data breakdowns by 
project and environmental area (such as compliance or pollution 
prevention) and that, even where such data does exist, it is 
not sufficiently standardized or accurate enough to permit 
meaningful cross-service or aggregate comparisons. Therefore, 
the Secretary of Defense is directed to develop a standardized 
data accumulation system for environmental compliance 
activities of the Department of Defense. This all inclusive 
system should be designed to yield contract, project and 
installation specific data for all environmental compliance 
activities, including those under $300,000 in value. Data 
accumulated pursuant to such a system should be standardized 
among the military departments, should employ standardized, 
common accounting procedures, and should yield data that will 
permit the tracking of compliance funding from budget request 
to authorization and appropriation to obligation and 
expenditure. The aim is to develop an easily accessible data 
base by which complete and accurate compliance information may 
be assembled and analyzed. The committee directs the Secretary 
of Defense to submit to Congress a report by no later than 
December 31, 1997, on the development and implementation of 
this compliance data system.

           Environmental Cleanup at the Washington Navy Yard

     Demolition, construction and renovation activities 
conducted at Department of Defense facilities are potentially 
subject to a variety of environmental strictures, depending on 
conditions at contaminated sites. Environmental cleanup of 
contaminants found and military installations is regulated 
under a variety of laws, including the Solid Waste Disposal 
Act, the Toxic Substances Control Act, the National 
EnvironmentalPolicy Act, and the Comprehensive Environmental 
Response, Compensation and Liability Act.
    The committee is concerned with the Navy's plan to relocate 
the Naval Sea Systems Command to the Washington Navy Yard. 
Since the preliminary assessment of environmental contamination 
at the yard may not adequately take into account the nature and 
extent of pollutants. The Navy Yard has been used for most of 
its long history as an industrial weapons production facility, 
and the installation has been heavily contaminated with heavy 
metals, polychlorinated biphenyls, and other hazardous 
substances. The contamination at the Navy Yard is such that the 
installation was assigned a hazard ranking score by the 
Environmental Protection Agency of 52. A score of 28.5 is all 
that is required for designation as a Superfund site, and the 
Environmental Protection Agency anticipates making a decision 
whether to propose the installation for inclusion on the 
National Priorities List as a Superfund site in the fall of 
1998.
    In recognition of these circumstances, the committee urges 
the Department of the Navy to be prudent in undertaking 
demolition, construction and renovation of facilities at the 
Navy Yard in anticipation of the relocation of the Naval Sea 
Systems Command. The committee directs the Navy to comply with 
all pertinent environmental laws and ensure the full protection 
of human health and the environment for construction workers 
and military and civilian personnel as it conducts relocation-
related activities at the Navy Yard. The committee is not 
opposed to the relocation of the Naval Sea Systems Command but 
does not want to have money obligated for that purpose until 
the Secretary of the Navy provides assurance that funds for 
that purpose will not be wasted.

        Exploring Options to Reduce Environmental Cleanup Costs

    The committee is concerned about the growing costs 
associated with environmental remediation of active and former 
military installations and believes that the Department of 
Defense (DOD) should explore the development of policies which 
will help minimize costs while accomplishing cleanup 
objectives. The committee also believes that the DOD should 
undertake an initiative involving policy makers with 
scientific, industry and community leaders involved in the 
remediation field, to identify opportunities for more efficient 
cleanup and to consider the use of risk-management and risk-
based corrective action approaches to create more 
environmentally acceptable endpoints and greater incentives for 
innovation in environmental cleanups. The committee is 
particularly interested in expediting remediations, successful 
land transfer and recycling on closed bases and encourages the 
DOD to pursue development of a policy product incorporating the 
input of scientific, industry and community leaders that 
facilitates increased land transfer and acceleration of the 
overall cleanup process.

                     Performance Based Contracting

    One of the approaches to environmental cleanup of 
Department of Defense installations that has the potential to 
generate considerable cost savings concerns performance-based 
contracts. In contrast to traditional ``cost-plus'' contracts, 
performance-based contracts involve measuring contractor 
performance for the purpose of determining the award or fee in 
terms of the attainment of performance milestones, such as the 
demolition of contaminated buildings or the installation of a 
pump and treat system. In effect, contractor performance is 
measured against the achievement of a prescribed, outcome-
oriented result, but the methodology by which those results are 
to be attained is left to the contractor. The appeal in such an 
approach is that it encourages contractors to use smart 
business practices in contract performance and alleviates often 
cumbersome requirements related to the manner of performance. 
In some cases, however, results-oriented performance milestones 
may be unacceptable to regulators, who desire to prescribe the 
manner in which work under the contract must be done. 
Performance-based environmental contracts employed by the 
Department of Energy have shown promise in terms of cost 
savings and accelerating the time it takes to cleanup sites, 
and the committee believes they have the same potential for the 
Department of Defense.
    Although the Department states that it presently uses 
performance-based contracts in its environmental cleanup 
activities, it is difficult to assess the extent to which 
performance-based contracting is now being employed. There is 
no commonly accepted definition of what constitutes a 
performance-based contract, despite some guidance from the 
Office of Federal Procurement Policy. Further, there is no 
readily available data concerning the number, kind and dollar 
value of environmental cleanup contracts that might be 
characterized as performance-based, so it is difficult to 
meaningfully gauge the present and future value of such 
contracts as a more cost effective means of cleaning up 
contaminated sites. Therefore, the Secretary of Defense is 
directed to submit to the House Committee on National Security 
and the Senate Committee on Armed Services a report, no later 
than December 31, 1997, including the following matters:
          (1) A uniform definition of what constitutes a 
        performance-based contract for environmental cleanup 
        activities, and how that definition differs from 
        traditional ``cost-plus'' contracts;
          (2) The number of performance-based environmental 
        cleanup contracts in excess of the simplified 
        acquisition threshold now being employed in each of the 
        military departments;
          (3) The kinds of cleanup activities covered by such 
        contracts and whether there are certain kinds of risks 
        and site characteristics that are favorably or ill 
        suited to the use of such contracts;
          (4) An assessment of the extent to which such 
        performance-based contracts have the potential to 
        generate cost savings in the cleanup of contaminated 
        sites if employed on a broader scale than is the case 
        currently; and
          (5) An assessment of the effectiveness of joint 
        Department of Defense-Environmental Protection Agency 
        efforts to identify and reduce or eliminate regulatory 
        barriers to the use of performance-based contracts or 
        other outcome-oriented approaches to environmental 
        cleanup.
    The committee anticipates that the results of this report 
will permit a determination about the true potential of 
performance-based contracts to become a widely employed 
technique by which cleanup of contaminated sites may be 
accelerated at lower cost to the government than present 
contracting practices permit.

                          Intelligence Matters

                     Budget Justification Materials

    The Congressional Budget Justification Books (CBJBs) for 
the National Foreign Intelligence Program (NFIP) and the 
Congressional Justification Books (CJBs), for the Joint 
Military Intelligence Program (JMIP) and Tactical Intelligence 
and Related Activities (TIARA) represent the official 
documentation provided yearly by the intelligence Community 
Management Staff (CMS) and the Department of Defense to the 
Congress on the President's intelligence budget request. These 
documents provide the official budget numbers, by program, with 
which Congress evaluates the President's proposed intelligence 
program and renders decisions on individual programs and policy 
matters.
    However, the committee is concerned that the current budget 
documents lack several critical components necessary for the 
Congress to ensure the proper alignment of funding within the 
funding appropriations categories. Clear identification of each 
project; its specific budget request numbers; the appropriation 
category (e.g. Other Procurement, Defense-wide; RDT&E, Navy; 
etc.); the budget request line number, and, if a research and 
development project, the Program Element number is essential to 
this task. Further, the committee requires a detailed 
accounting of all program reprogramming and reallocation 
actions, where unallocated cuts were taken, identification of 
total program costs (such as aircraft or spacecraft and 
association ground station costs, including system engineering 
and systems integration costs and operations support). 
Therefore, the committee directs the CMS and the Department to 
provide this specific data in all future budget justification 
documents.
    Finally, the committee is also concerned that past and 
current budget justification documents have not consistently 
shown all direct and associated funds requests for intelligence 
programs. Research and development costs in the Defense 
Cryptologic Program, for example, are not identified 
specifically with the programs that are the direct 
beneficiaries. Also, operations and maintenance costs are often 
carried in a service's total obligation authority and not 
specifically identified in the CBJBs. The committee cannot 
fully understand the magnitude of budgetary actions without 
fully and clearly understanding all the costs of a program.
    Therefore, the committee directs that in future CBJBs and 
CJBs all direct and associated costs, in each budgetary 
category (e.g. procurement, research and development, 
operations and maintenance, military construction, etc.), be 
clearly and completely provided in each program request.

    Command and Control, Communications, Computers and Intelligence 
                      Integrated Architecture Plan

    The budget request contained $3.6 million for the Command 
and Control, Communications, Computers and Intelligence (C4I) 
Integrated Architecture Plan (CIAP).
    CIAP provides the Commanders in Chief (CINCs) in-depth 
analysis of region-centric intelligence issues resulting in 
regional intelligence support plans, resource programming and 
operational architecture designs. The committee has been very 
supportive of this effort, and is concerned that it is once 
again underfunded jeopardizing the completion of CIAP plans for 
several of the regional CINCs. The committee believes these 
plans provide a unique analytical basis for future intelligence 
decisions, and that intelligence funding will be most 
effectively programmed and expended with such analysis.
    Therefore, the committee recommends a total of $9.3 million 
for the CIAP efforts, an increase of $5.7 million.

              Defense Space Reconnaissance Program (DSRP)

    The committee believes there is no longer a need to 
maintain the (DSRP), a program within the Joint Military 
Intelligence Program (JMIP). The Defense Support Program Office 
(DSPO), operated by DSRP funds, was established to provide an 
overt coordination mechanism for providing National 
Reconnaissance Office (NRO) system capabilities to military 
users. Since the NRO is now declassified, the committee 
believes that there is no longer a need to maintain this 
special DSRP liaison function.
    Therefore, the committee directs that, effective October 1, 
1998, the DSRP be abolished, and all funds properly apportioned 
to the services, defense agencies and the NRO. The committee 
further directs that, no later than February 1, 1998, the 
Assistant Secretary of Defense (Command & Control, 
Communications, Computers, and Intelligence) and the Director, 
NRO provide the defense and intelligence authorizing committees 
a joint plan, including the transfer of funding, for 
transitioning the functions of the DSPO and the DSRP.

                  Foreign Instrumentation Intelligence

    The budget request contained no funding or personnel 
billets in the Joint Military Intelligence Program (JMIP) for 
Foreign Instrumentation Intelligence (FISINT) analysis.
    The committee is concerned about the significant reduction 
in the number of weapons-specific FISINT analysts. While some 
decline in this capability may have been justified following a 
decline in Russian missile test activities, it is not 
consistent with the corresponding increase in missile 
developments and testing by other nations. Numerous countries 
that did not retain such weapons capabilities during the bi-
polar Cold War era are now able to obtain or indigenously 
develop high technology missiles and components. Many of these 
weapons could be used to threaten U.S. and allied forces. The 
committee is convinced that weapons FISINT analyst levels have 
dropped too far as important analysis of weapons systems have 
been postponed, and gaps in U.S. understanding of new weapon 
systems are widening.
    Therefore, the committee recommends that of the positions 
realized as result of the abolishment of the Defense Airborne 
Reconnaissance Office elsewhere in this report, ten military 
personnel and five civilian personnel should be made available 
to the Director, Defense Intelligence Agency, under his 
authorities as the Defense General Intelligence Applications 
Program Coordinator, to rebuild weapons FISINT analysis 
capabilities. The Director, DIA will allocate these billets to 
the National SecurityAgency, the National Aerospace 
Intelligence Center, the Missiles and Space Intelligence Center, and 
the Office of Naval Intelligence as required.

                Imagery and Geospatial System Production

    The budget request contained $541.8 million for continued 
operations of National Imagery and Mapping Agency's (NIMA) 
Geospatial System Production and Customer support.
    The Director of NIMA has officially stated that, because of 
the large operations and maintenance cost of older production 
equipment, the Agency will completely phase out the legacy 
Digital Production System (DPS) by the year 2000. Although the 
overall NIMA operations and maintenance budget decreases 
slightly in fiscal year 1998, very little of this decrease is 
due to a reduction in legacy system funding. The committee 
notes that migration away from DPS began in fiscal year 1997, 
and a more significant decline in funding should result in 
fiscal year 1998.
    Therefore, the Committee recommends $501.4 million for this 
activity, a decrease of $40.0 million.

                  Intelligence System Interoperability

    The budget request contained $196.6 million for Command and 
Control, Communications, Computer Intelligence (C4I) support 
system development and interoperability, and for establishing a 
virtual intelligence analysis environment. The systems 
identified within this request are contained within the 
National Foreign Intelligence Program (NFIP), the Joint 
Military Intelligence Program (JMIP) and the Tactical 
Intelligence and Related Activities (TIARA) aggregation, and 
include the following programs:
          (1) Joint Intelligence Virtual Architecture;
          (2) Joint Deployable Intelligence Support System 
        (JDISS)
          (3) All Source Analysis System (ASAS);
          (4) Joint Maritime Communications Information System 
        (JMCIS);
          (5) Combat Intelligence System (CIS);
          (6) Analysis System (IAS); and
          (7) JDISS-Special Operations Command Research, 
        Analysis, and Threat Evaluation System (SOCRATES).
    The committee supports the Department's efforts to provide 
an interoperable intelligence dissemination architecture and a 
``virtual'' analytical environment with which analysts world-
wide can collaborate. However, the committee believes the 
various projects reflected in the President's request do not 
have the necessary direction and control to require the sharing 
of developments and to ensure that duplication of effort is 
minimized, as demonstrated by a review of the budget 
justification documents.
    Further, the committee believes that the systems stated 
above can be broken down into the basic components of 1) a high 
powered workstation with communications; 2) an operating 
environment that, by direction of the Assistant Secretary of 
Defense (C3I) must be Defense Intelligence Infrastructure (FII) 
and Common Operating Environment (COE) compliant; and 3) a set 
of applications software. While the common stated goal of the 
above systems is to provide support to analysts and operators, 
the program managers of these systems rarely, if ever, work 
together to achieve common goals by sharing ideas and 
developments.
    Therefore, the committee is convinced of the need to 
establish a management focal point within the Department that 
would involve includes representation from each of the service 
and agency system program offices. The mission for this 
organization would be to provide oversight, integration, and 
development of collaborative applications for the associated 
C4I systems. The function of this organization should not be to 
dictate specific service or agency hardware solutions or unique 
software applications, but to provide for the development of 
common applications, act as a conduit for sharing analytical 
ideas and processes, and to ensure world-wide interoperability 
via standards. The committee does not support the concept of 
centralizing funding for these efforts, since these systems are 
the responsibilities of the various services and agencies.
    Therefore, the committee directs that no more than 50 
percent of the funds authorized for the above systems be 
obligated or expended, until the Assistant Secretary of Defense 
(C3I) provides the defense and intelligence authorizing 
committees with a plan for creating a management focal point 
within the Department with a charter encompassing the goals 
outlined.

                Interferometric Synthetic Aperture Radar

    The budget request contained $23.2 million to continue 
development of the Interferometric Synthetic Aperture Radar 
(IFSAR) mission to collect Digital Terrain Elevation Data 
(DTED) level 2 information. The IFSAR mission is scheduled to 
fly on the Space Shuttle in the 2000 timeframe. The IFSAR 
mission itself will cost $163.3 million, with $98.4 million for 
follow-on analysis.
    The committee continues to believe that there are other, 
more cost-effective alternatives to the IFSAR mission for 
collecting DTED level 2 data. One such alternative appears to 
be an algorithm developed by commercial industry that allows 
DTED level 2 data to be derived from the European Resource 
Satellites (ERS-1 and -2). The Canadian RADARSAT also appears 
to be able to satisfy this requirement. Additionally, new 
processes for aircraft with SAR capabilities hold great 
potential. Therefore, the committee recommends cancellation of 
the IFSAR mission and a corresponding reduction of $23.2 
million in the National Imagery and Mapping Agency budget.

                   Joint Planning and Program Review

    The budget request contained $6.6 million for Defense 
Intelligence Agency (DIA) general support to the defense 
community. This request included funding for moving DIA 
elements within the Pentagon and to leased space due to anti-
terrorism and force protection direction from the Office of the 
Secretary of Defense.
    The committee supports new DIA efforts, within this 
project, to provide intelligence assessments, intelligence 
inputs to Defense Planning Guidance, and other intelligence 
support functions. The committee hopes that these efforts are 
indeed havingan impact on defense planning and programming. The 
committee further notes that the budget justification materials assert 
that these DIA assessments have ``determined shortfalls in current 
high-cost reconnaissance and surveillance programs and identified/
prioritized specific near-term solutions, which resulted in great 
savings across Future Year Defense Plan (FYDP).'' Therefore, the 
committee requests that the Director of DIA provide the defense and 
intelligence committees a report on these assessments before the fiscal 
year 1998 conference.
    Further, the Committee does not believe there is adequate 
justification in the request for a 35 percent increase in 
funding for moving personnel. Therefore, the committee 
recommends a limitation on the obligation of $2.0 million of 
the request until the Department provides the committee with a 
detailed explanation and rationale for the increased costs 
incurred by the DIA for these forced moves.

         National Imagery and Mapping Agency Civilian Personnel

    The budget request contained $680.3 million for running the 
National Imagery and Mapping Agency's (NIMA) mapping and 
geospatial information operations, including funding for 6,389 
civilian personnel positions.
    The Director of NIMA has stated that NIMA's Digital 
Production System (DPS) will no longer be operational by the 
year 2000, and that NIMA's primary role in mapping will evolve 
to that of maintaining information databases instead of 
producing imagery and other intelligence products. If realized, 
this approach should result in a greater decline in required 
personnel over the current mandatory downsizing reductions, 
since the majority of NIMA personnel currently support the 
development of intelligence products. The committee supports 
the effort to move away from DPS, however, the committee 
believes that NIMA has failed to properly take into account the 
effect this plan will have on personnel levels. Therefore, the 
committee recommends a decrease of $15.0 million in civilian 
personnel funds to accelerate the downsizing of NIMA's 
personnel consistent with the DPS phase out.
    Further, personnel costs account for more than half of 
NIMA's operations and maintenance request and consequently, 
more than half of its budget. The committee believes that NIMA 
must drastically reduce its workforce and become more efficient 
if it is to be able to fulfill its mission in the information 
age. Therefore, the committee directs the Director of NIMA to 
submit a personnel plan to the Congressional defense and 
intelligence committees containing a forecast of the required 
personnel levels over the Future Years Defense Program given 
NIMA's new direction in the geospatial arena. This plan should 
include an assessment of the types of skills required in the 
future versus what NIMA now possesses, a breakdown per year of 
the types of personnel positions that shows how NIMA's 
demographics will change as the agency moves to its required 
skill mix, an assessment of whether cartographer personnel 
slots can be transformed into imagery analyst slots and the 
potential for retraining cartographers into imagery analysts, 
and an assessment of the challenges and obstacles facing the 
agency in achieving the necessary personnel reductions, 
including suggested remedies for such obstacles. The committee 
requests that an interim plan be submitted by August 1, 1997, 
with a final plan to be provided by December 1, 1997.

          National Imagery and Mapping Agency Mission Support

    The budget request contained $147.6 million for National 
Imagery and Mapping Agency (NIMA) facilities management.
    As NIMA consolidates facilities, the committee expects to 
see a marked decline in mission support costs. Such a decline 
is not apparent in the budget request justification materials. 
Therefore, the committee recommends a decrease of $10.0 
million. Further, the committee requests that the Director of 
NIMA submit a facilities plan that lays out locations and 
functions of all current facilities, and describes NIMA's 
strategy to consolidate and reduce its facility holdings. The 
committee requests that an interim plan be submitted by August 
1, 1997, with a final plan to be provided by December 1, 1997.

                 Tactical Unmanned Aerial Vehicle (UAV)

    The budget request contained $2.2 million in the Army 
Operations and Maintenance account for continued operation of 
one-to-two Hunter UAV systems currently owned by the U.S. Army. 
This request was not, however, reflected in the Army's Tactical 
Intelligence and Related Activities (TIARA) request.
    The committee understands that the Army is operating at 
least 2 full Hunter systems and has recently sent a partial 
system to the Navy. The remaining systems are in storage. With 
the cancellation of Hunter procurement, the cancellation of the 
Maneuver UAV, and the delay in the Outrider Advanced Concept 
Technology Demonstration, the committee is concerned with the 
need to satisfy near-term Army tactical UAV requirements. The 
committee believes the best short-term solution is for the Army 
to operate the systems it currently owns. Therefore, the 
committee recommends an additional $10 million in the Army's 
Tactical Intelligence and Related Applications aggregation for 
operation of additional Hunter UAVs to satisfy Army tactical 
reconnaissance requirements and to refine tactical UAV 
operational procedures. The committee does not authorize 
additional or attrition Hunter air vehicle purchases, nor does 
it authorize technical improvements to the air vehicle or its 
electronic systems. Finally the committee notes that this is a 
Congressional interest item and directs that the Army receive 
prior defense and intelligence committee approval before 
redistributing these funds for any purpose other than that 
authorized above.

                      Tactical Information Program

    The budget request contained $5.2 million in Operations and 
Maintenance, Air Force, partly for operation of the Integrated 
Broadcast Service (IBS) executive agency by the Air 
Intelligence Agency (AIA).
    The committee believes the budget request does not 
adequately fund the increased operational demands levied on AIA 
as a result of the decision by the Assistant Secretary of 
Defense (C3I) to direct the Air Force to manage the development 
of the IBS data broadcast program. Therefore, the committee 
recommends an increase of $4.0 million for this purpose. 
Elsewhere in this report, the committee recommends a reduction 
of$3.0 million from PE 0304111F, R-169 and $1 million from 
Other Procurement, Air Force, line 113, as an offset for this increase.

                            Tactical Support

    The budget request contained $9.9 for continued support to 
the Tactical Exploitation of National Capabilities (TENCAP) 
programs, to provide management support to intelligence 
processes, and for funding contingency operations for Operation 
Southern Watch.
    Elsewhere in this report, the committee has recommended 
reductions to the TENCAP programs, as it believes the 
utilization of space has become more commonplace, and therefore 
requires less specialized management support. Additionally, the 
committee does not believe a funding increase for Operation 
Southern Watch is justified.
    Therefore, the committee recommends $8.7 million for this 
effort, a reduction of $1.2 million.

                 Morale, Welfare, and Recreation Issues

            Deferred Payment Programs of Military Exchanges

    Section 337 of the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106) required the Secretary of 
Defense to seek to enter into an agreement with a commercial 
banking institution under which such institution would finance 
and operate the deferred payment programs of the Army and Air 
Force Exchange Service (AAFES) and the Navy Exchange Command 
(NEXCOM). That section further required the use of competitive 
procedures in the awarding of a contract for the financing and 
operation of these deferred payment programs. To date, no 
request for proposals has been published in the Commerce 
Business Daily or otherwise been made public, due in large part 
to the complexities of combining the debt and servicing aspects 
of two separate deferred payment programs into requirements for 
a single solicitation. Therefore, the committee directs the 
Secretary of Defense to consider entering into separate 
agreements with commercial financial institutions for the 
existing AAFES and NEXCOM deferred payment programs. If no 
request for proposals for the financing and operation of AAFES' 
and NEXCOM's combined deferred payment programs is issued by 
July 1, 1997, the Secretary is directed to issue a separate 
requests for proposals for the financing and operation of 
AAFES' and NEXCOM's separate deferred payment programs. The 
Secretary of Defense is further directed to submit a report to 
the congressional defense committees, no later than December 
31, 1997, on the status of the request(s) for proposals, 
including the anticipated date for award of the contract(s) and 
an assessment of the cost savings to the government or 
increased revenues likely to be generated for the military 
exchange systems as a result of commercial financing and 
operation of deferred payment programs.

    MWR Reimbursement from Closure of Foreign Military Installations

    The 1988 Base Realignment and Closure Act (title II of the 
Defense Authorization Amendments and Base Closure and 
Realignment Act, Public Law 100-526) and the 1990 Base 
Realignment and Closure Act (title XXIX of the National Defense 
Authorization Act for Fiscal Year 1991, Public Law 101-510) 
contemplate the transfer of formerly used American military 
installations overseas back to the host country once the need 
for our use of such bases has ceased. In cases where these 
installations are closed and transferred to the host country 
for reuse, the Department of Defense frequently receives 
reimbursement from the host foreign country for improvements 
made to the installation. Current law requires that that 
portion of the proceeds paid to the Department of Defense 
attributable to improvements to the installation made with 
commissary funds or nonappropriated funds must be deposited 
into a Treasury account established for the purpose of 
acquiring, constructing and improving commissaries and 
facilities for nonappropriated fund instrumentalities.
    Recent testimony before the committee suggests that, 
despite the requirements of the law, funds paid to the 
Department of Defense upon the closure and transfer to the host 
country of foreign military installations are not being 
deposited into the Treasury account or are otherwise not being 
made available for use by commissaries and nonappropriated fund 
instrumentalities. Therefore, the committee directs the 
Secretary of Defense to submit a report to the Committee on 
National Security of the House of Representatives and the 
Committee on Armed Services of the Senate, no later than 
December 31, 1997, explaining in detail the following:
          (1) The number of foreign installations closed within 
        the last five calendar years (1992 to the present) in 
        which the United States Government and/or the 
        Department of Defense received financial or in kind 
        payment from the host country for or in connection with 
        improvements made to the property by the United States;
          (2) The total dollar value of payments made to the 
        United States and/or the Department of Defense, and the 
        fair market value of any in kind contributions from 
        foreign countries to the United States and/or the 
        Department of Defense, for or in connection with 
        improvements made to military installations transferred 
        back to the host country;
          (3) The total amount equal to the depreciated value 
        of the investment made on such military installations 
        with commissary and nonappropriated funds;
          (4) The total amount deposited annually for the last 
        five calendar years into the Treasury account 
        established for the benefit of commissaries and 
        nonappropriated fund activities; and
          (5) The total amount of funds spent from that account 
        for commissary and nonappropriated fund instrumentality 
        projects, and a description of the projects for which 
        such funds were expended.
    The committee anticipates that the data provided in this 
report will establish whether remedial legislation is required 
in order to secure full compliance with the law.

               Pentagon Concessions Committee Activities

    The committee is concerned that there are nonappropriated 
fund activities of the Department of Defense that operate 
without adequate congressional oversight and coordination. In 
particular, certain of the nonappropriated fund activities 
conducted at the Pentagon Reservation pursuant to authorization 
from the Department of Defense's Concessions Committee appear 
to be at odds with congressional guidance issued in the past. 
Although the activities conducted under the auspices of the 
Concessions Committee began in 1943 with a $325,000 start-up 
loan from the Army Exchange Service (now the Army and Air Force 
Exchange Service (AAFES)), these activities generated sales in 
excess of $27 million in fiscal year 1996. Evidence received by 
the committee suggests that oversight of these activities by 
the Director, Administration and Management, Office of the 
Secretary of Defense, has not been sufficient to ensure 
consonance with congressional resale policy guidance.
    Given the annual sales volume of these activities, better 
management oversight may have the potential to yield increased 
dividends to MWR programs and an enhanced MWR benefit for 
service members. Therefore, the committee directs the 
Comptroller General to perform a comprehensive review of all 
Concessions Committee operations. The review should include a 
detailed financial and management audit, including an 
assessment of procurement practices and policies. In addition, 
a breakout of the source and amount of appropriated funds 
provided in support of these activities should be included. The 
review should also include an evaluation of the relationship 
between sales, revenues, and the size of the dividend to 
morale, welfare and recreation activities from Concession 
Committee activities. An assessment also should be made of 
whether Pentagon Reservation concession activities should be 
included within the Department's on-going exchange integration 
study and whether Concession Committee activities should be 
formally subsumed within and subordinated to AAFES or one of 
the other exchange systems. The Comptroller General is directed 
to provide a report resulting from the foregoing review to the 
congressional defense committees no later than March 1, 1998.

               Report on Black Marketing of Beer in Korea

    The committee is aware that black marketing of American 
made products sold at commissaries, exchanges and other resale 
facilities in Korea remains a serious problem. Military 
commanders have a duty to try to eliminate illegal activity, 
and the committee strongly supports such efforts. However, at 
the same time, command efforts to restrict opportunities for 
black marketing by reducing the number of points of sale for 
products like beer that have been the subject of black 
marketing have the effect of reducing earnings generated by 
resale activities. Reduced earnings in turn result in a smaller 
dividend paid in support of local morale, welfare and 
recreation (MWR) programs. Therefore, the committee directs the 
Secretary of the Army to submit a report to Congress, no later 
than December 31, 1997, explaining specifically what action has 
been taken to limit black marketing of beer at Army 
installations in Korea and the reasons therefor, and how the 
Army intends to ensure funding continuity for MWR programs in 
Korea despite a decreased MWR program dividend because of 
reduced local beer sales. The report should include an 
explanation of changes in the amount of appropriated and 
nonappropriated fund support in order to ensure provision of 
the same level of benefit for MWR programs in Korea.

                Report on Tobacco Sales at Commissaries

    In November 1996, the Department of Defense required the 
Defense Commissary Agency (DECA) to sell tobacco products at 
commissaries at the same price charged at military exchanges. 
The committee is concerned that the Department of Defense's 
strategy to generate revenue through the sale of tobacco 
products at increased prices at commissaries may not be working 
as planned. Preliminary data suggest that tobacco product sales 
at commissaries are down significantly for the first four 
months of fiscal year 1997. Moreover, grocery volume and total 
sales at commissaries are down, although not as much, for the 
same period.
    Therefore, the committee directs the Secretary of Defense 
to submit a report to the Committee on National Security of the 
House of Representatives and the Committee on Armed Services of 
the Senate detailing the effect upon tobacco sales volume and 
revenue from the decision to raise prices at commissaries. The 
report should include a comparative analysis of tobacco sales 
from the time tobacco prices were raised through the end of 
fiscal year 1997 with tobacco sales figures from the two 
preceding fiscal years. The report should also include a 
detailed explanation of the use to which the revenue from 
tobacco sales at commissaries is being put. This explanation 
should indicate how much revenue is being allocated as 
increased dividends for MWR activities and what use has been 
made of the remaining revenue, as well as the amount of any 
handling charge allocated to DECA. Finally, the report should 
include a recommendation whether DECA should receive some 
percentage of the proceeds from tobacco sales at commissaries 
as a way to improve DECA's financial situation. The report 
should be submitted no later than February 1, 1998.

   Uniform Health Benefit Program for Nonappropriated Fund Employees

    Section 349 of the National Defense Authorization Act for 
Fiscal Year 1995 (Public Law 103-337) required the Department 
of Defense, by not later than October 1, 1995, to take such 
steps as necessary to provide a uniform health benefits program 
for its nonappropriated fund employees. By letter dated April 
2, 1997, the Department notified Congress of its preliminary 
determination to adopt the health benefits plan currently 
provided by the Army and Air Force Exchange Service (AAFES) as 
the uniform health benefit plan for all nonappropriated fund 
employees. The committee is concerned, however, that the 
Department does not intend to subject the initial contract for 
the uniform plan to a competitive bidding process. Although the 
AAFES plan is fully funded and the most generous of the health 
benefit plans presently being offered by nonappropriated fund 
instrumentalities within the Department of Defense, companies 
other than the one administering the AAFES plan may be able to 
provide the same level of benefit at a lower cost than is 
charged for coverage under the AAFES plan. Therefore,the 
committee directs the Secretary of Defense to initiate a competitive 
bidding process for the contract to provide uniform health benefits for 
nonappropriated fund employees.

              Defense Commissary Agency Produce Purchasing

    The Defense Commissary Agency (DECA) has historically 
purchased its produce for sale in commissaries, as well as for 
installation mess halls and other dining facilities, from local 
produce growers. However, a recent study conducted by the Hay 
Group for DECA suggests that DECA could achieve considerable 
annual savings in its produce purchasing by buying produce from 
a ``prime vendor'' or single, large produce seller that has the 
facilities and capability to sell DECA produce and service all 
installations within a given region. The committee is concerned 
that a decision by DECA to purchase its produce from a large 
regional produce vendor might have undesirable consequences. 
Service members might not receive the freshest, locally grown 
produce. Produce is a perishable commodity, and produce that 
must be shipped distances to localities may begin to decay. 
Moreover, large produce vendors may not have the same quality 
standards or service ethic as local produce growers. In short, 
produce quality, freshness and variety may decline under a 
prime vendor arrangement. Therefore, the committee directs the 
Secretary of Defense to submit a report to the Committee on 
National Security of the House of Representatives and the 
Committee on Armed Services of the Senate explaining the 
financial considerations associated with a decision to 
undertake a prime vendor contract for the purchase of produce, 
and the advantages and disadvantages in terms of delivery 
logistics, produce quality, freshness and selection associated 
with such a change in practice. The report should also detail 
the effect of the change to a prime vendor arrangement upon 
small, local produce growers and businesses and should explain 
how DECA intends to take into account the interests of these 
concerns should it go forward with a prime vendor contract. The 
report should be submitted no later than October 31, 1997, and 
DECA may not to award any so called ``prime vendor'' contract 
for the purchase of produce for commissaries and installation 
dining facilities until at least 90 days after the report has 
been submitted to Congress.

                              Other Issues

                            Army After Next

    The committee notes with interest the success of the 
initial efforts of the Army's ``Army After Next'' program. With 
the support of the committee in the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201), 
the Army was able to conduct several highly productive 
wargaming exercises aimed at determining the future strategic 
environment for the employment of land forces and the 
technologies, operational concepts and military organizations 
that may be required. The committee welcomes the support for 
this important and cost-effective program that has been 
expressed by the Secretary of Defense and Chief of Staff of the 
Army, and encourages the other military services to undertake 
similar efforts.
    At the same time, the committee remains concerned about the 
direction of the Army's future modernization and innovation 
efforts, which at the least remain hamstrung by inadequate 
budgets. The process of fielding the next-generation ``Force 
XXI'' Army will not be complete within the active Army until 
well after the year 2020. And one lesson apparent from the 
successful Force XXI exercises at the National Training Center 
is the need to move more rapidly not merely to digitize current 
land systems but to develop more lethal, mobile and deployable 
systems for the future.
    Therefore, the committee directs that, of the amounts 
authorized for Operations and Maintenance, Army, Force-Related 
Training, Special Activities under Budget Activity 3, $7.0 
million be made available to conduct further analysis for the 
``Army After Next'' program. The committee also recommends that 
the Army establish a stable funding profile for the program. In 
addition to allowing United States Army Training and Doctrine 
Command to investigate the possibilities of more radical 
change, both in strategic and operational requirements for land 
combat, than envisioned under the Force XXI, the program 
provides an important hedge should Force XXI funding be reduced 
due to overall defense budget shortfalls. The committee 
continues to consider the small amount of funding required to 
conduct ``Army After Next'' analysis as a wise investment to 
ensure the Army's modernization program is responsive to future 
threats.

                         Army Aviation Training

    The committee is concerned that currently, there are 
approximately 700 Army aviation pilots that were given initial 
pilot training on the Army's older aircraft systems and have 
now been assigned to units that operate only updated aircraft 
systems. As these pilots are not trained on the new aircraft 
systems, and the receiving units do not have the training funds 
to upgrade these individuals, the Army is unable to fully 
utilize these personnel. Therefore, the committee recommends an 
increase of $14.0 million to the Army's operation and 
maintenance account to support the Army's training plan to 
alleviate the excess number of ``non-modernized aviators.'' 
This funding will greatly increase combat readiness by 
providing the Army highly trained aviators in the newer 
modernized aircraft systems.

                   Army Civilian Personnel Management

    A recent General Accounting Office (GAO) report entitled 
``Army Force Structure'' (NSIAD-97-66), determined that the 
Army is unable to ensure that its personnel are being used 
efficiently or even assess what risks would be assumed by 
eliminating civilian positions due to the weakness in its 
institutional force requirements process. This weakness has 
also been identified by the Army Audit Agency. GAO considers 
this problem to be sufficiently significant that it has 
recommended its designation as a ``material weakness'' under 
the Federal Manager's Financial Integrity Act, which would 
require the Army to develop a corrective action plan with 
milestones for completion.
    The committee is similarly concerned that current Army 
downsizing and reductions-in-force are not based upon 
prioritized workload based staffing requirements. Therefore, 
the committee directs the Secretary of the Army to provide a 
report to the House Committee on National Security and the 
Senate Committee on Armed Services not later than March 31, 
1998, on efforts to correct the Army's weakness in its force 
requirements determination process. The committee also 
recommends that the Army Materiel Command automated workload 
management system demonstration project be completed by January 
1, 1998 and the results included in the above report.

                     Army Depot Maintenance Funding

    The committee is alarmed by the declining trend in funding 
for depot-level maintenance and repair within the Department of 
the Army. The Army funded 79 percent of total depot maintenance 
and repair requirements in fiscal year 1996, 65 percent in 
fiscal year 1997, and the budget request for fiscal year 1998 
allows for only 58 percent of requirements. The committee 
believes this declining trend is unacceptable, and if 
continued, could seriously affect the readiness of the Army's 
combat weapons systems.
    Therefore, the committee directs the Secretary of the Army 
to provide to the Congressional defense committees by December 
1, 1997, a report explaining how the Army plans to reverse the 
declining trend in funding for depot-level maintenance and 
repair, and an assessment of the readiness implications of 
funding this account at less than 80 percent of requirements.

                Automatic Document Conversion Technology

    The committee believes that there is the potential for 
significant savings from automatic document conversion software 
for use in weapons systems engineering drawing digitization, 
and that the department should increase it efforts to digitize 
all weapons engineering drawings by the year 2000. Therefore, 
the committee recommends the addition of $10.0 million for 
engineering drawings and document storage and retrieval to be 
directly managed by the Defense Logistics Agency. The committee 
directs that not less than one half of these funds must be used 
toward development of a systems solution for document 
conversion, studies, analysis and integration.

                     Budget Justification Materials

    The committee continues to be concerned with receiving the 
Department of Defense budget justification materials being 
received in a timely or useful manner to support Congressional 
oversight and decision-making. The justification materials, 
particularly for the operation and maintenance accounts, are 
currently provided to the Congress late in the committee's 
review process, often precluding the ability to conduct 
thorough and in depth analysis of the President's budget 
request. Although an extensive amount of material is eventually 
provided, much of it is in formats that conflict between the 
individual services making it difficult to assess trends in 
similar functions. As an example, the data concerning depot 
maintenance for the Air Force is located in a different budget 
activity than found in the Army or the Navy. The complexity of 
the multiple displays of budget information also makes locating 
information on a specific subject difficult and time consuming. 
In particular, details on the allocation of outsourcing and 
efficiency savings are either not provided or scattered 
throughout several tables.
    Therefore, the committee directs the Secretary of Defense 
to convene a working group, consisting of representatives of 
the military departments and the appropriate defense agencies, 
to develop a single Department of Defensewide standard 
formulation for the display of budget justification materials 
provided to Congress. The committee urges this working group to 
consider eliminating repetitive and redundant budget displays 
and directs that budget justification materials provided to 
support the fiscal year 1999 budget request confirm to the 
maximum extent practicable with a new department-wide 
standardized format.

          Computer Crimes and Information Technology Security

    Although highlighted in the Quadrennial Defense Review, the 
committee is concerned by the modest support from the 
Department of Defense (DOD) leadership for improving 
information security for non-classified systems. The committee 
is aware that in response to concerns raised in the National 
Defense Authorization Act for Fiscal Year 1997 (Public Law 104-
201), several computer investigations training, computer 
forensics laboratory, and hardware and software improvement 
programs are under development. To ensure consistency of such 
training and system improvements throughout DOD and build on 
the efforts of the Air Force and Navy, the committee directs 
the Secretary of Defense to establish a standard training 
program, open to participation by members of all relevant 
programs in the military departments and defense agencies. This 
standard program should provide the necessary training, 
forensic laboratory, and hardware and software support to 
strengthen DOD's capabilities to identify, respond, and protect 
information system vulnerabilities. The committee recommends 
that of the funds authorized for Operations and Maintenance for 
fiscal year 1998, $9.8 million should be made available to 
support these programs.

          Contractor Operated Civil Engineering Supply Stores

    The committee continues to be concerned with actions taken 
by the Department of the Air Force concerning the operation of 
Contractor Operated Civil Engineering Supply Stores (COCESS). 
As mentioned in the committee report on H.R. 3230, the Fiscal 
Year 1997 Defense Authorization bill (H. Rep. 104-563), the 
committee believes that COCESS is an important centralized 
supply store function located on military installations to 
provide off-the-shelf parts and supplies, similar to the 
commercial equivalent of a hardware store. At a time when there 
is a great emphasis on outsourcing the supply and service 
functions that are not inherently governmental, the committee 
supports current efforts to consider the desirability of 
contracting out base engineering supply stores.
    The committee is aware of recent efforts to change the 
existing COCESS contracts on several Air Force installations 
that would include the COCESS functions in larger, multi-
service, installation-wide service contracts. The committee 
believes that such efforts to combine existing functions that 
are already performed by the private sector (such as COCESS) 
may not be in the best interest of the government and could 
result in the exclusion of small businesses in these areas.
    Therefore, the committee directs the Secretary of the Air 
Force to not combine COCESS functions with other service 
functions when considering multi-function service contracts 
until a thorough analysis is conducted, including an economic 
analysis, assessing the merits of combining these services to 
increase efficiencies at Air Force installations. Further, the 
committee directs the Secretary of the Air Force to not change 
the current operation of any COCESS, or to permit any 
combinations of supply and services functions in upcoming 
procurements, that would violate or circumvent the tenants of 
any current COCESS contractual agreement.

      Department of Defense Next Generation Weather Radar-Doppler

    The committee believes that the Department of Defense (DOD) 
Next Generation Weather Radar-Doppler (NEXRAD) weather radars 
are an integral part of the National Weather Service (NWS) 
weather radar coverage system, and that steps need to be taken 
to ensure that DOD NEXRADs function as fully committed elements 
of the national weather radar network at the same standards, 
quality, and availability as NWS operated NEXRADs. The 
committee recognizes the importance of fully operational 
NEXRADs for NWS forecasters to accurately monitor, forecast, 
and issue severe weather warnings.
    Therefore, the committee urges the Secretary of Defense to 
consider increasing local stocks of NEXRAD spare parts to 
correspond with both the types and quantity of NWS spare part 
requirements provide additional common support equipment to be 
used during maintenance processes to test and repair NEXRAD 
systems provide additional operator training to correspond to 
NWS training requirements and establish a NEXRAD mobile 
maintenance system. In addition, the committee recommends that 
the Secretary of Defense, in consultation with the 
Administrator of the National Oceanic and Atmospheric 
Administration, consider the relocation of radar product 
generators for all NEXRADs from the field locations to the 
locations of the unit control positions. The committee believes 
that these recommendations will provide the same operational 
standards for DOD NEXRADs as the NWS operated NEXRADs.
    In addition, the committee recommends that the Secretary of 
Defense enlist the National Research Council of the National 
Academy of Sciences to conduct a comprehensive study of DOD 
NEXRADs to compare availability and performance as compared to 
NWS NEXRADs, and to include the feasibility and benefits of 
transferring all DOD NEXRADS to the Department of Commerce.

 Emergency Communications Services for Members of the Armed Forces and 
                             Their Families

    The committee notes that, as of the end of fiscal year 
1997, the Department of Defense (DOD) will no longer provide 
direct financial assistance to the American Red Cross for the 
delivery of emergency communications services. The committee 
believes that the emergency communications services provided to 
the DOD by the American Red Cross are very important to 
military readiness and to the quality of life for military 
service members and their families. Therefore, the committee 
urges the DOD to make every effort in maintaining its long 
standing, close relationship with the American Red Cross and is 
pleased that DOD and the American Red Cross are currently 
engaged in discussions that are intended to lead to the 
continued delivery of emergency communications services for the 
armed forces.

                         Flying Hour Shortfalls

    The committee is alarmed by recent reports of significant 
shortfalls in the Navy and Air Force flying hour programs. The 
committee has learned that during fiscal year 1997, the Navy is 
reporting a funding deficit of $107.0 million and the Air Force 
reports a deficit of $171.0 million in their flying hour 
programs. Compounding this problem, and adding to the 
committee's concerns, is that fact that the Secretary of 
Defense recently informed the committee that the budget request 
for fiscal year 1998 underfunds the Navy flying hour program by 
$350.0 million and the Air Force program by $200.0 million. The 
committee finds these trends unacceptable and believes they 
raise serious questions about the validity of the services 
budget formulation process for these programs.
    The military services have explained to the committee that 
a significant portion of the shortfalls result from 
unanticipated higher costs for aircraft parts, failures in 
revised repair initiatives, and errors in the calculation of 
their requirements. As an example, the Navy estimate for 
aircraft repair parts in the fiscal year 1997 budget request 
was 25 percent below the actual costs experienced to date. The 
Air Force reported that F-15C/D aircraft are experiencing a 50 
percent increase in engine changes. In addition, when the Air 
Force changed the source of repair for F-15E engines, they 
failed to include relevant costs in their fiscal year 1997 
budget request. Both of the services report that repair parts 
usage is greatly exceeding program expectations due to aging of 
their aircraft. The committee believes that anticipating aging 
aircraft repair parts requirements and providing the necessary 
internal management for one of the services' most important 
combat programs should be a top priority for the Secretary of 
the Navy and the Secretary of the Air Force.
    As mentioned elsewhere in this report, the committee 
understands that the services, and particularly fighter 
aviation units, are working harder then ever before. This is 
not a new phenomenon, as these units have been stressed for the 
last several years. From interviews with aviation personnel and 
testimony before the committee, the committee understands that 
flying units are extensively using ``work arounds'' to solve 
the problems of aircraft breakdowns and parts shortages. The 
committee has also heard reports of maintenance personnel 
working long hours to take parts from one aircraft to place on 
another just to meet operational requirements. The committee 
does not understand how the service budgeting systems did not 
recognize and compensate for the impact of the extremely high 
aircraft operational rates in the past two years.
    As these budgeting errors have only recently come to light, 
and at a time when overall funding is being strictly rationed 
to identified needs, the committee fears that any funds 
provided to overcome these shortfalls may not address the true 
underlying problem. Therefore, the committee directs the 
Secretary of the Navy and the Secretary of the Air Force to 
conduct a comprehensive review of its current and future years 
active and reserve component flying hour programs and provide 
to the Congressional defense committees by December 1, 1997, a 
report outlining actions taken to correct these budgeting 
errors.

     Impending Change in Air Force Supply Management Activity Group

    The committee understands that the Air Force is planning to 
combine its three wholesale supply support divisions into one 
division and implement a new way of computing the surcharge 
associated with the purchase, warehousing, handling, and 
management of repair parts. A major impact of this change will 
be to revise the manner in which parts surcharges are computed 
and applied. The new procedures provide that condemnations and 
the associated replenishment spare purchases will be charged to 
the items within the appropriate commodity group rather than 
being spread over all items. The committee is concerned that 
while this change may better align costs with end items, no 
preplanning has occurred with the depot maintenance business 
activity group and that items having high condemnations, such 
as engines, will have a significant cost growth. While the cost 
impact of this change is not known at this time, sales prices 
have already been set for fiscal year 1998 with the depot 
maintenance customers. Any increases in costs will result in 
losses to the depot maintenance activity group. Those losses 
will drive outyear price increases to recoup the loss. The 
committee believes this change should be postponed until fiscal 
year 1999 to allow time for determining the appropriate cost 
impact and adjusting the sales prices to recover the costs of 
this change.

                    Logistics Augmentation Programs

    The Department of the Army's Logistics Civil Augmentation 
Program (LOGCAP) uses a civilian contractor to provide 
logistics and engineering services to deployed forces. LOGCAP 
is used to provide much of the support to U.S. troops deployed 
in support of the Bosnia peacekeeping mission and was also used 
extensively to support operations in Somalia, Rwanda, Haiti, 
Saudi Arabia, Kuwait, and Italy. The General Accounting Office 
(GAO) in a report issued this year entitled, Contingency 
Operations, Opportunities to Improve Use of Contractor Support 
Services (GAO/NSIAD-97-63), stated that both the Air Force and 
the Navy have previously relied on the Army's LOGCAP for 
support during deployment operations.
    Notwithstanding their successful prior use of the Army's 
program, the Air Force and the Navy have developed similar 
contingency support programs. In August 1995, the Navy awarded 
a contract for a similar program called the Navy Emergency 
Construction Capabilities Program, and in early 1997, the Air 
Force awarded a contract for a program called the Air Force 
Contract Augmentation Program. The committee is concerned about 
the need for more than one contract for these type of services, 
particularly as it relates to the potential for duplication of 
effort and unnecessary expense of separate individual 
contingency support programs.
    In order to determine whether the Department of Defense's 
need for civilian augmentation support during operations is met 
most effectively and efficiently through individual programs or 
some other means such as one service acting as a single manager 
for the others, the committee directs the Secretary of Defense 
to provide a report to the Congressional defense committees by 
March 1, 1998, that studies the need for individual service 
contingency support programs. The study should address the cost 
effectiveness and the command and control implications of 
having multiple support contractors in a joint command 
environment, and should specify the reasons, if any, why a 
single service manager program would be unworkable.

                    Military Affiliate Radio System

    Last year, the committee expressed its support for ``the 
continuation and expanded use by all services'' of the Military 
Affiliate Radio System (MARS). MARS is a low-cost Department of 
Defense (DOD) sponsored program that provides DOD and the armed 
forces with an auxiliary and emergency communications 
capability as an adjunct to normal communications. It also 
relies on thousands of highly-trained, volunteer radio 
communications personnel to relay morale and quasi-official 
communications traffic for the armed forces and U.S. government 
civilian personnel stationed abroad. The committee reiterates 
its support for a robust MARS program and notes with concern a 
decline in the use of the system resulting from the development 
of advanced communications modes (e.g., satellites). The 
committee notes that advanced modes of communication may not 
always be available or cost-effective, and that failing to 
exploit MARS resources more aggressively could result in the 
loss of this relatively inexpensive auxiliary communications 
capability.
    In the past, MARS has demonstrated its ability to provide 
limited emergency communication support to non-DOD federal 
entities. The committee supports the continuation of such 
efforts as a way of helping to ensure that a trained and 
qualified reserve of MARS operators remains available to DOD in 
the event of a national emergency. To this end, the committee 
directs the Secretary of Defense to submit a report by December 
31, 1997 identifying how DOD is utilizing the MARS system and 
recommending ways in which it can be expanded. Specifically, 
the report should:
          (1) Explain DOD oversight of the program, identify 
        how the individual service programs are currently 
        organized and configured, and discuss possible mission 
        expansion, contraction, or adjustments;
          (2) Identify ways to improve the reliability of the 
        MARS system;
          (3) Recommend ways to integrate MARS resources in 
        support of other government agencies, identifying 
        options for interfacing and linking MARS with regular 
        DOD communications resources and with other emergency 
        communications resources and systems;
          (4) Propose ways to better organize, train, and 
        utilize MARS personnel resources;
          (5) Identify necessary adjustments and realignments 
        to the structure, staffing, and grade levels throughout 
        the MARS program;
          (6) Provide an estimate of the costs to DOD of 
        obtaining MARS-type services commercially or ``in-
        house'' using other active DOD personnel and identify 
        the cost savings to the Department through the use of 
        MARS; and
          (7) Identify the level of funding that will be 
        required to institute each of the recommendations.

                  Mobility Infrastructure Enhancement

    To improve deployment and mobility of military forces and 
supplies through continued investments in en-route 
infrastructure, the committee recommends an additional $25.0 
million within Operation and Maintenance, Defense-wide, for 
improvement projects including ammunition loading areas, cargo 
staging areas, pier and port facilities, rail-heads, aerial 
port facilities, fuel systems repairs, and identification 
technology to improve intransit visibility. The committee 
directs the Secretary of Defense to provide to the 
Congressional defense committees, prior to the allocation of 
these funds, a report listing the proposed enhancement 
projects. The committee urges the Secretary of Defense to seek 
the views of the Commander in Chief, U.S. Transportation 
Command, in determining how these funds should be applied.

                        Non-BRAC Caretaker Costs

    The committee notes that the Army's budget request 
contained a new program called Non-BRAC (Base Realignment and 
Closure) Caretaker funding. The committee understands that this 
program is designed to reduce the maintenance and repair costs 
for buildings no longer used and are scheduled for demolition. 
The Army requested $102.0 million for this program with the 
intention of using these funds to make safe and ``board up'' 
these unneeded buildings. The committee commends the Army for 
attempting to reduce the cost of unused facilities, but 
questions the method by which funding for this program was 
calculated. By using a raw square footage of unused floor space 
times an amount estimated per foot for the cost of closing up 
and securing buildings, the committee believes this program to 
be over funded. Therefore, the committee recommends a reduction 
of $51.0 million.

                    Repair and Maintenance Projects

    It has come to the committee's attention that the military 
departments are proposing large individual renovation projects 
to be accomplished with real property maintenance and repair 
funds. For example, in the fiscal years 1998 and 1999 budget 
requests, the Navy proposes large, comprehensive renovations of 
two buildings at the United States Naval Academy at $31.5 
million and $35.2 million respectively. The committee is 
concerned that renovation projects of this size unfairly 
compete with what the committee considers the norm for repair 
and maintenance projects. In addition, the budget justification 
materials for these proposals do not provide the level of 
detail that should be provided for high value, complex 
projects. The committee does not specifically question the 
validity of these projects, but feels that projects of this 
size and complexity should be in the military construction 
budget request. The committee also understands that there is a 
question concerning the definition of a repair and maintenance 
project versus a military construction project and addresses 
this issue elsewhere in the report. Therefore the committee 
recommends, without prejudice, no funds for these two projects 
and recommends that they be re-submitted in a future military 
construction budget request.

      Renovation of Building for Defense Accounting Service Center

    Section 373 of the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201) authorized the Secretary 
of Defense to transfer operation and maintenance funds to the 
General Services Administration (GSA) for the renovation of 
Building One, Fort Benjamin Harrison, Indiana, which is owned 
by GSA, and is in use by the Defense Finance and Accounting 
Service. Section 373 also requires that the transfer of funds 
is contingent on an agreement between the Department of Defense 
(DOD) and the GSA that provides for the full reimbursement by 
GSA to DOD for any funds transferred. The committee notes that 
for fiscal year 1997, $9.0 million was authorized for this 
project and the budget request for fiscal year 1998, contained 
$45.0 million. The committee is concerned that, to date, an 
agreement has not been reached between DOD and GSA. In 
addition, the committee questions whether high value, complex, 
multi-phase renovation projects should be included in the 
operation and maintenance budget request and believes that 
these types of renovations should more properly be included in 
the military construction budget.
    Therefore, absent the required agreement between DOD and 
GSA, and because of the committee's concerns for using 
operation and maintenance funding for large, complex renovation 
projects, the committee recommends, without prejudice, no funds 
for this renovation project and recommends that after the 
agreement is finalized, it be re-submitted in a future military 
construction budget request.

                     Shatter Resistant Window Film

    The committee notes that the majority of the more than 200 
serious injuries resulting from the bombing of the Khobar 
Towers complex in Dhahran, Saudi Arabia on June 25, 1996 were 
caused by shattered window glass. Many of these injuries could 
have been avoided if the Air Force had acted on a 
recommendation of a vulnerability assessment of this complex 
completed in January of 1996, which recommended that a shatter 
resistant window film coating be applied to all glass facing 
the perimeter of the complex.
    The committee believes that the Department of Defense 
should make every effort to complete the application of shatter 
resistant window film at all appropriate installations to 
lessen the chances of serious injuries resulting from shattered 
glass due to hostile actions or from weather related incidents.

                          Travel Reengineering

    The committee has several concerns regarding the Department 
of Defense (DOD) travel re-engineering study. First, DOD has 
not complied with section 356 of the National Defense 
Authorization Act for Fiscal Year 1996 (Public Law 104-106). 
Under section 356, the Secretary of Defense was directed to:
          (1) establish pilot studies to evaluate options to 
        improve the DOD travel process at not more than six 
        military installations, and
          (2) one year after the studies begin provide Congress 
        a report on the implementation of and the evaluation 
        criteria used for the pilot studies.
Although the Department conducted travel re-engineering pilot 
studies, these studies did not comply with section 356. DOD has 
also not provided a report on the implementation of these 
pilots. Instead, without providing Congress the opportunity to 
review the options for re-engineering the Defense travel 
process, DOD is planning to issue a request for proposal (RFP) 
for a re-engineered travel system.
    The committee is also concerned that the planned RFP links 
the software development of an automated travel system to 
travel agent services. This arrangement combines requirements 
and expertise that are not related or linked in the commercial 
sector. In addition, this combination potentially prejudices 
the contracting system against medium-size and small travel 
agencies, creating a process that restricts fair competition in 
the travel industry.
    Therefore, the committee directs the Secretary of Defense 
to cease all action on the planned RFP until 30 days after DOD 
provides to the House Committee on National Security and the 
Senate Committee on Armed Services:
          (1) The report requested in section 356 of National 
        Defense Authorization Act for Fiscal Year 1996 (Public 
        Law 104-106); and
          (2) A report demonstrating that there are no adverse 
        effects from the RFP on small and medium-size travel 
        agencies.

                         LEGISLATIVE PROVISIONS

              Subtitle A--Authorization Of Appropriations

             Section 301--Operation and Maintenance Funding

    This section would authorize $92.6 billion in operations 
and maintenance funding for the Armed Forces and other 
activities and agencies of the Department of Defense.

                   Section 302--Working Capital Funds

    This section would authorize $2.3 billion for Working 
Capital Funds of the Department of Defense.

               Section 303--Armed Forces Retirement Home

    This section would authorize $80.0 million from the Armed 
Forces Retirement Trust Fund for the operation of the Armed 
Forces Retirement Home, including the U.S. Soldiers' and 
Airman's Home and the Naval Home.

 Section 304--Transfer From National Defense Stockpile Transaction Fund

    This section would authorize the Secretary of Defense to 
transfer not more than $150.0 million from the amounts received 
from sales in the National Defense Stockpile Transaction Fund 
to the operation and maintenance accounts of the military 
services.

    Section 305--Refurbishment and Installation of Air Search Radar

    This section would authorize $6.0 million for the 
refurbishment and installation of the AN/SPS-48E air search 
radar for the Ship Self Defense Systems at the Integrated Ship 
Defense Systems Engineering Center, Walllops Island, Virginia.

                Section 306--Refurbishment of M1A1 Tanks

    This section would authorize $35.0 million for the 
refurbishment of M1A1 tanks at the Anniston Army Depot under 
the Department of the Army's Abrams Integrated Management XXI 
(AIM XXI) program if the Secretary of Defense determines that 
the program is cost effective. The Department of the Army is 
currently validating the cost effectiveness of the AIM XXI 
program at the National Training Center, Fort Irwin, 
California. If this program is successfully validated, the 
committee expects the Army to provide adequate funding in 
fiscal year 1999 and beyond to continue the AIM XXI program.

 Section 307--Procurement and Electronic Commerce Technical Assistance 
                                Program

    This section would authorize $15.0 million for a single 
program that consolidates the Procurement and Technical 
Assistance Centers and the Electronic Commerce Resource 
Centers. The committee recommendation would provide $15.0 
million in addition to the $18.0 million in prior-year 
unobligated balances remaining in the ECRC program, for a total 
of $33.0 million in available fiscal year 1998 funding.

   Section 308--Availability of Funds for Separation Pay for Defense 
                         Acquisition Personnel

    This section would authorize $100.0 million to fund 
separation pay incentives for defense acquisition personnel in 
the event that a targeted buyout authority is provided to the 
Secretary of Defense.
    The committee expects the Secretary of Defense to make 
these funds available to the military departments, Defense 
Agencies, and responsible for offering the separation pay 
incentives.

                 Subtitle B--Military Readiness Issues

                                Overview

    Based on testimony provided to the committee and in field 
interviews with hundreds of military personnel of all ranks and 
in all services, it is clear to the committee that today's 
operating motto of ``doing more with less'' is incompatible 
with maintaining a highly-motivated, well-trained, quality 
military force able to execute the demands of the National 
Military Strategy. This reality is the result of declining 
defense budgets, a smaller force structure, fewer personnel and 
aging equipment laboring under a higher pace of operations.
    The committee is concerned about the extent to which the 
military services must strip people, parts, equipment and funds 
from non-deployed units to fill shortfalls in deploying units. 
This shell game leaves non-deployed units ill-prepared to 
maintain combat skills and increases the burden on those left 
behind who must work longer and harder to maintain operations 
at home station.
    The committee is very disturbed about the loss of combat 
proficiency being reported from the military services' training 
centers. Degraded combat training, driven in large part by 
funding shortfalls and inadequate time to accomplish needed 
training at home station due to deployments in support of 
contingency operations, strikes at our military forces' ability 
to fight and win high-intensity wars quickly, decisively and 
with minimum casualties.
    Exacerbating the committee's concerns are efforts underway 
by some of the military services which appear to erode training 
standards and requirements, as a means to address resource 
shortfalls and the need to free up funds for modernization 
priorities. For example, starting in fiscal year 1998, the Army 
plans to require units scheduled for training at the National 
Training Center (NTC) to pay for this training out of funds 
budgeted for home station training. The committee believes that 
this proposal wouldresult in less home station training for 
these units which, as noted above, has been identified by the services' 
training centers as a significant cause of degraded combat proficiency. 
Further, the Army, in briefings to the committee on this matter, has 
conceded that starting in fiscal year 1998, units scheduled for 
training at the NTC will not be as well prepared as in the past. The 
committee finds this troubling, particularly in light of a statement by 
Army Chief of Staff, General Dennis Reimer, in a characterization of 
the NTC as ``. . . a cornerstone of our training program, and a 
cornerstone of our readiness program.'' Additionally, the NTC has 
recently begun to reduce NTC live fire exercises by one-third--from 
three to two. The committee believes that such actions are short-
sighted and short-change critical high intensity combat training and 
diminish the ability of combat units to take full advantage of training 
at the NTC.
    As another example, the committee understands the Marine 
Corps is currently revising its aviation training program. 
While the committee recognizes the importance of periodically 
reviewing training standards and requirements in light of 
operational considerations, it is concerned that this review 
may also be driven by the realities of under manning, spare 
parts shortages and aging aircraft which cannot support the 
current level of training. The committee believes that when 
training requirements and standards are changed, the risks 
associated with such changes should be fully understood and the 
military services should not redefine or rationalize training 
standards and requirements as a means of addressing resource 
shortfalls. The committee urges the Secretary of Defense and 
secretaries of the military departments to ensure that units 
are afforded the resources and time at home station to 
accomplish critical combat training.
    The committee commends efforts to maintain warfighting 
skills for units deployed to operations other than war, such as 
the Army's establishment of gunnery ranges in Hungary for units 
stationed in Bosnia. Notwithstanding the limitations of such 
efforts, the committee strongly encourages the Department and 
the military services to maximize combat training opportunities 
for units deployed in support of operations other than war to 
minimize the degradation of combat skills and time needed upon 
redeployment to regain combat proficiency.
    The committee continues to be concerned over the disconnect 
which exists between official readiness reports and the 
readiness reality in the field. While senior military and 
civilian leaders assert that the readiness of military forces 
is as good as it ever has been, reports from military personnel 
in the field depict a much different picture. This disconnect 
exists partly because the existing reporting system fails to 
capture many indicators which would allow for a more 
comprehensive readiness assessment. The committee finds it 
particularly frustrating, however, that as early as 1994, the 
General Accounting Office in its October report entitled, 
``Military Readiness: DOD Needs to Develop a More Comprehensive 
Measurement System'' (GAO/NSIAD-95-29) identified additional 
readiness indicators that would provide a comprehensive 
assessment. Unfortunately, the Department of Defense (DOD) has 
yet to integrate these indicators into the formal readiness 
reporting system.
    The committee notes that in June 1994, the Defense Science 
Board (DSB) issued a report which stated that the DSB Task 
Force on Readiness ``. . . will continue to meet quarterly, or 
on call of the Secretary of Defense, to review the status of 
the recommendations and/or address other readiness issues as 
directed.'' It is the committee's understanding that this has 
not occurred. While the committee recognizes the increased 
focus on readiness issues by the Department with the 
establishment of the Senior Readiness Oversight Council (SROC), 
the SROC is, nevertheless, an internal mechanism to track 
readiness. Given the disconnect between official readiness 
reports and the reality out in the field, the committee 
believes that a standing senior group of outside advisors 
charged with providing independent assessments of readiness 
issues is warranted. The committee urges the Secretary of 
Defense to resurrect the DSB Task Force on Readiness or similar 
senior body of outside advisors to be available to the 
Secretary and the Congress to review readiness issues that 
arise.
    Finally, severely constrained defense budgets are leading 
to the underfunding of many defense accounts resulting in the 
movement of funds from readiness related accounts to fill 
funding shortfalls. While movements of funds between budget 
appropriations accounts are subject to reprogramming actions, 
transfers within budget activities are rarely visible in a 
timely manner. The committee has had a long-standing concern 
over the extent to which funds provided for training, 
maintenance and other key readiness accounts are being diverted 
to cover shortfalls elsewhere. For instance, according to the 
DOD, in fiscal year 1996, the Army shifted $144.8 million from 
depot maintenance to cover costs of operations in Bosnia. The 
Navy shifted $208.5 million from ship depot maintenance to fund 
a range of activities including contingency operations, ship 
supplies and underfunded flying hour requirements.
    Therefore, the committee's recommendation addresses several 
of these concerns and are detailed below.

     Section 311--Expansion of Scope of Quarterly Readiness Reports

    This section would expand the Quarterly Readiness Report 
required by section 361 of the National Defense Authorization 
Act for Fiscal Year 1996 (Public Law 104-106) to include data 
and analysis on additional readiness indicators which would 
provide a more comprehensive readiness assessment. The 
committee is concerned with what it views as a growing 
disconnect between the readiness picture presented by 
``official'' readiness reports and reality out in the field. In 
visits to military installations across the country and in 
recent hearings before the committee, personnel from all 
military services and from all ranks expressed significant 
concern over many issues affecting readiness, including 
operating tempo, increased deployments, the effects of under 
manning, an eroding quality of life, morale, the impact of 
peacekeeping operations, and the increasing use of training 
funds for other purposes. None of these factors are measured by 
the Status of Resources and Training System (SORTS)--the 
foundation for senior level readiness assessments.
    More than three years ago, the committee identified the 
need to develop a comprehensive readiness assessment system. At 
the request of this committee, the General Accounting Office 
(GAO) conducted a review of the adequacy of the current 
readiness reporting system to provide a comprehensive readiness 
assessment as well as to provide predictive indicators of 
change. As a result of that review, the GAO provided to the 
Department of Defense (DOD) specific indicators cited by 
military commanders as being critical to readiness assessments 
but not included in SORTS. The Departmentagreed that it needed 
a more comprehensive readiness measurement system and contracted with 
the Logistics Management Institute (LMI) to assess the GAO's indicators 
to determine which of the 29 recommended by the GAO have the greatest 
potential value for DOD decision makers charged with maintaining high 
readiness. The LMI assessment, completed in October 1994, concluded 
that 19 of the 29 indicators offered high or medium value for readiness 
assessments. That is, those indicators could allow DOD to measure 
factors that cause changes in readiness, provide early notice of any 
adverse changes, provide the opportunity to improve readiness, and 
detect trends that may affect future readiness.
    While the committee recognizes that efforts are being made 
by DOD to enhance readiness assessments through the Joint 
Monthly Readiness Reviews, the Senior Readiness Oversight 
Council, and more recently with efforts aimed at developing a 
Readiness Baseline, it is concerned by the lack of progress the 
DOD has made to integrate the GAO and LMI recommended 
indicators into official readiness reports.
    Given recent reports of declining ``unofficial'' readiness 
indicators, the committee believes that immediate steps must be 
taken to ensure that DOD and the military services have a 
comprehensive readiness assessment system. This section would 
compel the DOD to act expeditiously to integrate these 
important indicators into readiness reports, providing 
comprehensive, and thereby, more accurate information, to 
decision makers on the true current state of readiness.

 Section 312--Limitation on Reallocation of Funds Within Operation and 
                       Maintenance Appropriations

    This section would require the Secretary of Defense to 
notify the Congressional defense committees prior to 
reallocating operation and maintenance funds above a certain 
threshold and to follow procedures currently used when 
transferring funds between appropriations accounts.

   Section 313--Operation of Prepositioned Fleet, National Training 
                     Center, Fort Irwin, California

    This section would provide funding associated with the 
operation of the preposition fleet of equipment used by Army 
units during training rotations at the National Training Center 
(NTC). The committee is very concerned with the Department of 
the Army's decision to change the way unit rotations to the NTC 
are funded. Currently, the Army provides funding to the 
National Training Center from a central account to defray the 
costs associated with units' use of pre-positioned equipment at 
the NTC. Under a new Army proposal, starting in fiscal year 
1998, units scheduled to go to the NTC would have to pay for 
the use of the pre-positioned equipment out of the funds 
provided for home station training.
    The NTC is the only U.S.-based training facility where Army 
maneuver units can train against a dedicated opposing force in 
an environment which most closely approximates high intensity 
combat. It is the premier training event for Army armored and 
mechanized units. The committee is troubled by reports that a 
lack of training resources and time for home station training 
is resulting in units arriving at the NTC less prepared than 
they used to be and, consequently, unable to achieve the same 
level of proficiency by the time they leave. The committee is 
concerned that this policy change will exacerbate this problem 
by putting a further strain on the resources available for 
units to accomplish home station training.
    The committee believes that the Army policy change relating 
to NTC rotations funding will have the result of diminishing 
home station training, would adversely impact the ability of 
units to reach needed levels of proficiency, and degrade the 
NTC training experience--the best training currently available 
for high intensity combat. The committee recommendation would 
also provide additional funding to ensure that the Army has 
sufficient funding for NTC rotations as it has in the past. The 
committee expects the Army to continue funding unit rotations 
at the NTC as it has previously.

 Section 314--Prohibition of Implementation of Tiered Readiness System

    This section would prohibit the implementation of any 
tiered readiness system which would change military service-
specific methods of determining the priority for allocating 
funding, personnel, equipment, equipment maintenance, and 
training resources to military units--and the associated level 
of readiness of those units that result from those priorities--
as they existed on October 1, 1996. Should the Secretary of 
Defense determine that a tiered readiness system would be in 
the national interest of the United States, this section would 
require the Secretary to provide a report on the rationale for 
that determination, and a request for enactment of legislation 
to implement such a system.
    Tiered readiness concepts call for maintaining certain 
portions of U.S. military forces at lower levels of readiness 
based on their likelihood of being called to respond to a 
military crisis and deployment timelines. Units identified to 
be maintained in lower tiers of readiness would be manned, 
equipped, and trained to a level sufficient only to achieve 
that lower level of readiness.
    From testimony before the committee and from interviews 
with service members of many military units, the committee 
understands that currently, in order to meet deployment 
standards and a high operations tempo, military units have had 
to strip non-deploying units of key officers, non-commissioned 
officers, and maintenance personnel due to shortages in key 
military occupational specialties. Under a tiered readiness 
concept, personnel would be eliminated from the force in order 
to achieve cost savings exacerbating the personnel management 
problems and creating higher personnel tempo for those 
remaining active duty personnel. The committee is deeply 
concerned that, at some point, such a readiness system would 
lead to an untenable situation from the standpoint of 
maintaining a quality, highly motivated all-volunteer force.
    During the Quadrennial Defense Review (QDR), an assessment 
was made to determine whether ``tiering'' of the force would 
meet strategy requirements and result in savings. The 
conclusion of the assessment was that such tiering would 
increase the risk to national security at the gain of only 
modest savings, and would limit the flexibility required to 
execute current war plans.
    The committee strongly believes that the military services 
have, over time, developed readiness systems that are 
specifically tailored to their individual requirements.These 
existing systems already represent a form of tiering in that resources 
are allocated on a priority basis to military units that are expected 
to enter into combat first. The committee believes that any further 
tiering of readiness must be carefully assessed to insure that United 
States military strategy can be accomplished at all times. The tiering 
of military forces solely for fiscal gains would be a short sighted 
strategy that largely ignores the demanding reality of the need to 
maintain ready military forces able to fight and win decisively and 
with minimal casualties in any future contingency.

    Section 315--Reports on Transfers From High Priority Readiness 
                             Appropriations

    This section would extend through November 1, 2000, the 
requirement for the Secretary of Defense to report semi-
annually on transfers from high-priority readiness accounts in 
compliance with section 362 of the National Defense 
Authorization Act for Fiscal Year 1996 (Public Law 104-106). 
This provision would also expand the number of readiness 
accounts to be considered in the report.

Section 316--Report on Chairman, Joint Chiefs of Staff Exercise Program 
                   and Partnership for Peace Program

    This section would require the Secretary of Defense to 
report by January 15, 1998, on both past and planned joint 
training exercises sponsored by the Chairman, Joint Chiefs of 
Staff (CJCS) Exercise Program and the Partnership for Peace 
(PFP) program. The report would include the type, description, 
duration, objectives, the percentage of service-unique training 
accomplished, and an assessment of the training value of each 
CJCS and PFP exercise.
    In spite of a significant reduction in force structure and 
personnel since 1989, the October 1995 Defense Science Board 
Task Force on Quality of Life report pointed out that the 
number and scope of joint level exercises has continued to 
increase. In June 1995, the General Accounting Office (GAO) 
issued a report entitled ``Military Capabilities: Stronger 
Joint Staff Role Needed To Enhance Joint Military Training'' 
(GAO/NSIAD-95-109) that noted a large number of the joint 
exercises conducted in 1995 had little training value, with 
nearly 75 percent conducted for reasons other than training, 
such as a show of military presence in a region or to foster 
relationships with other nations. In testimony before the 
committee, witnesses pointed to the continued growth in the 
number and scope of CJCS sponsored military exercises as a 
significant contributor to increased operation and personnel 
tempos.
    The committee is concerned that the number of exercises 
under the CJCS Exercise Program and the military service's 
participation in the PFP program is exceeding the ability of 
the services to meet these requirements in what is already a 
high paced operational environment. Admiral Paul Reason, 
Commander of U.S. Atlantic Fleet, noted in testimony before the 
committee, ``Too many unified CINCs are competing for the same 
scarce assets.'' That many of these exercises may have little 
or no joint training value compounds the committee's concerns. 
Therefore, to address operation and personnel tempo concerns 
and reduce the number of joint exercises, the committee also 
recommends a reduction of $xx in funding for the CJCS Exercise 
Program.

     Section 317--Quarterly Reports on Execution of Operation and 
                       Maintenance Appropriations

    This section would require the Secretary of Defense to 
report quarterly on the execution of the operation and 
maintenance budget.

                     Subtitle C--Civilian Personnel

 Section 321--Pay Practices When Overseas Teachers Transfer to General 
                           Schedule Positions

    This section would provide the Secretary of Defense 
authority to adjust a Department of Defense Dependents Schools 
educator's salary up to 20 percent when that person is moved 
from a position under the Teaching Position (TP) pay system to 
a position under the General Schedule (GS) pay system. 
Currently, when an overseas educator moves from a TP position 
to a GS position, that individual's salary is increased 20 
percent based on a GS work year being roughly 20 percent longer 
in actual work days than a TP work year. However, some TP 
educators, such as principals and assistant principals, work a 
longer school year than teachers. When these individuals are 
moved to a GS position, a 20 percent salary adjustment is 
excessive given that the increase in actual work days may be 
significantly less than 20 percent.

  Section 322--Use of Approved Fire-Safe Accommodations by Government 
                     Employees on Official Business

    This section would require that each government agency 
ensure that not less than 90 percent of the commercial-lodging 
room nights for employees of that agency be booked at approved 
accommodations. This provision would also require that each 
government agency establish explicit procedures to meet this 
requirement.

                   Subtitle D--Depot-Level Activities

   Section 331--Extension of Authority for Aviation Depots and Naval 
     Shipyards to Engage in Defense Related Production and Services

    This section would extend through fiscal year 1999, the 
authority provided by section 1425 of the National Defense 
Authorization Act for Fiscal Year 1991 (Public Law 101--510) 
for naval shipyards and aviation depots of all the services to 
bid on defense-related production and services.

Section 332--Exclusion of Certain Large Maintenance and Repair Projects 
 From Percentage Limitation on Contracting for Depot-Level Maintenance

    This section would exclude from the restrictions contained 
in section 2466 title 10, United States Code, an aircraft 
carrier or a submarine repair or overhaul project that 
represents five percent or more of the total amount made 
available to the Department of the Navy for depot-level 
maintenance and repair. When there is a large single 
maintenance project, such as the complex overhaul of a nuclear 
aircraft carrier or a submarine, the size of the project alone 
can cause an unintended imbalance in the mix of workload 
between the public and private sector. Under current law, not 
more than 40 percent of the total funds allocated to a military 
service for depot-level repair and maintenance may be expended 
for work in the private sector. The committee is concerned that 
a large single project should not cause inadvertent disruptions 
in the mandated percentages.

 Section 333--Restrictions on Contracts for Performance of Depot-Level 
              Maintenance and Repair at Certain Facilities

    This section would establish a definition of depot-level 
maintenance and repair that would require the inclusion of all 
interim contractor support (ICS) and contractor logistics 
support (CLS) to be included in determining the restrictions as 
set forth in section 2466 of title 10, United States Code, also 
known as the ``60/40 rule.'' The committee understands that 
including ICS and CLS would have no effect on current contracts 
for depot level maintenance. The provision would also restrict 
the Secretary of Defense, or the secretary of a military 
department, from entering into a contract for the performance 
of depot-level maintenance and repair at any facility that was 
approved in 1995 for closure under the Defense Base Closure and 
Realignment Act (BRAC) of 1990 (part A of title XXIX, Public 
Law 101-510), unless the following requirements are met:
          (1) The secretary concerned certifies to Congress 
        that all of the other maintenance and repair facilities 
        of that service are at 80 percent capacity as defined 
        by the BRAC commission in 1995;
          (2) The secretary concerned certifies to Congress 
        that the total cost of the proposed contract would be 
        less than if the depot-level maintenance or repair were 
        accomplished in facilities owned and operated by the 
        Department of Defense;
          (3) All of the data which is used to determine the 
        total costs are available for examination; and
          (4) None of the depot-level maintenance and repair 
        work proposed under the contract was considered to be a 
        core logistics capability of the military department 
        concerned prior to July 1, 1995.
    The committee believes that to fully comply with the 
recommendations of the 1995 BRAC to close several depot 
facilities and to consolidate core depot-level maintenance to 
the remaining government-owned facilities or to the private 
sector, these restrictions are necessary. The Committee fully 
supports the BRAC recommendations and believes that elimination 
of excess capacity permits significantly improved utilization 
of the remaining DOD depots and reduces DOD operating costs.

     Section 334--Core Logistics Functions of Department of Defense

    This section would amend section 2464 of title 10, United 
States Code, to clarify that it is essential for national 
defense that the Department of Defense (DOD) maintain a core 
logistics capability that is government-owned and government-
operated. This section would require the Secretary of Defense 
to identify those logistics activities necessary to maintain a 
core logistics capability that would include the capability, 
facilities, and equipment to maintain and repair those weapons 
systems necessary to meet the requirements of the National 
Military Strategy. This section would also require the 
maintenance and repair of all new weapons systems purchased by 
the DOD, that are identified as requiring a core logistics 
capability, in government-owned and government-operated 
facilities within four years of initial operational capability.

      Section 335--Centers of Industrial and Technical Excellence

    This section would direct the Secretary of Defense to 
establish Centers of Industrial and Technical Excellence at 
existing Department of Defense (DOD) maintenance and repair 
depots to encourage the reengineering of industrial processes, 
the adoption of best business practices, and to enable public-
private partnerships for the performance of depot-level 
maintenance and repair.

 Section 336--Personnel Reductions, Army Depots Participating in Army 
                    Workload and Performance System

    This section would prohibit any reduction in force of any 
civilian employees at the five Army maintenance depots 
participating in the demonstration and testing of the Army 
Workload and Performance System (AWAPS), until a report is 
provided by the Secretary of the Army certifying that the AWAPS 
is fully operational and the manpower audits being performed by 
the General Accounting Office, the Army Audit Agency, and the 
Army Inspector General have been completed.

                  Subtitle E--Environmental Provisions

 Section 341--Revision of Membership Terms for Strategic Environmental 
       Research and Development Program Scientific Advisory Board

    This section would amend section 2904(b)(4) of title 10, 
United States Code, to provide that appointments for members of 
the Strategic Environmental Research and Development Program 
(SERDP) Scientific Advisory Board be for terms of not less than 
two nor more than four years. The provision would effectively 
allow the staggering of terms for board members to permit 
greater continuity of service among members in the event 
unexpected vacancies arise.

  Section 342--Amendments to Authority to Enter Into Agreements With 
  Other Agencies in Support of Environmental Technology Certification

    This section would expand the authority conferred upon the 
Secretary of Defense by section 327 of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201) to 
enter into cooperative agreements with state and local 
governmental agencies for the purpose of certifying promising 
environmental technologies by authorizing the Secretary to 
enter into agreements with Indian tribes. This expanded 
authority would be useful to the Department of Defense in those 
cases in which environmental activities occur on land where 
Indian tribes have jurisdictional authority. The provision 
would also remove the restriction in current law that the 
technologies being evaluated for certification be limited to 
those with applicability to environmental restoration. Thus, 
technologies with application for pollution prevention, 
environmental compliance, and safety and occupational health 
could be evaluated.

      Section 343--Authorization to Pay Negotiated Settlement for 
 Environmental Cleanup at Former Department of Defense Sites in Canada

    This section would authorize the Secretary of Defense to 
pay the Government of Canada up to $100 million in annual 
payments over a ten year period. These payments would be 
pursuant to a bilateral agreement between the United States and 
Canada in which the United States agreed to pay cleanup costs 
associated with the operation by the United States of various 
military installations in Canada.

  Section 344--Modifications of Authority to Store and Dispose of Non-
                 Defense Toxic and Hazardous Materials

    Currently, section 2692 of title 10, United States Code, 
prohibits the Department of Defense from storing or disposing 
any toxic or hazardous material, including munitions and 
hazardous materials used in conjunction with space launch 
programs, that is not owned by the Department of Defense. With 
the increasing frequency of multinational military training 
operations, and because the Department of Defense operates 
certain sites in connection with other federal agencies that 
employ hazardous materials, there are occasions in which it is 
in the interest of the Department of Defense and the nation to 
temporarily store toxic or hazardous materials on military 
installations, despite the fact that such materials are not 
owned by the Department of Defense. This section would permit 
the storage or disposal of toxic and hazardous materials not 
owned by the Department of Defense when those materials are 
used in connection with an activity of the Department, in 
connection with a service performed for the benefit of the 
Department, in order to assist law enforcement agencies, or in 
connection with the use of a defense facility. Nothing in the 
changes made by this section is intended to affect the 
authorities and requirements regarding the storage, treatment 
and disposal of hazardous materials under the Comprehensive 
Environmental Response, Liability and Compensation Act, the 
Resource Conservation and Recovery Act, the Toxic Substances 
Control Act or the Federal Water Pollution Control Act.

Section 345--Revision of Report Requirement for Navy Program to Monitor 
                    Ecological Effects of Organotin

    This section would amend section 333 of the National 
Defense Authorization Act for Fiscal Year 1997 (Public Law 104-
201) to delay and alter the reporting requirements established 
in that section. Since enactment of the law, the Navy and the 
Environmental Protection Agency have determined that a program 
to monitor organotin concentration in certain estuaries and 
near-coastal waters of the United States is not required, 
obviating the reporting requirements related to monitoring 
programs. Instead, the Navy would be required to include in its 
report an assessment of the present and future requirement for 
the use of organotin in antifouling paints on Navy ships. In 
recognition of this additional requirement, the date for 
submission of the report pursuant to section 333 would be 
delayed until October 30, 1997.

 Section 346--Partnerships for Investment in Innovative Environmental 
                              Technologies

    This section would authorize the Secretary of Defense to 
enter into partnerships with private sector entities in order 
to demonstrate and validate innovative environmental 
technologies. The secretary would be authorized to enter into 
partnerships only if the secretary determines that the 
technology has the clear potential to be of significant value 
to the Department of Defense in carrying out its environmental 
activities. Information about such partnerships would be 
included in the Department's annual report to Congress, and the 
authority provided by this section would expire three years 
from the date of enactment of the National Defense 
Authorization Act for Fiscal Year 1998.

     Section 347--Pilot Program to Test Alternative Technology for 
  Eliminating Solid and Liquid Waste Emissions During Ship Operations

    This section would authorize the Secretary of the Navy to 
establish a pilot program to demonstrate ``plasma arc'' 
technology for treating solid and liquid waste aboard Navy 
ships. The technology would consist of a compact, stationary, 
high alumina refractory hearth, plasma arc melter system that 
would incinerate solid and hazardous wastes generated during 
ship operations. The secretary would be required to determine, 
in advance of establishment of the pilot program, that plasma 
arc technology has the potential to be of significant benefit 
to the Navy in reducing or eliminating waste disposal problems 
aboard Navy vessels. The pilot program, which would operate for 
one year, would seek to demonstrate whether the technology is 
valid, cost effective, and capable of complying with 
environmental laws and regulations. Upon completion of the 
pilot program, the Secretary of the Navy would be required to 
submit a report to Congress detailing the findings of the 
program and recommending whether plasma arc technology should 
be implemented on a larger scale on naval vessels and at naval 
port facilities.

  Subtitle F--Commissaries and Nonappropriated Fund Instrumentalities

Section 361--Reorganization of Laws Regarding Commissaries, Exchanges, 
          and other Morale, Welfare, and Recreation Activities

    This section would reorganize chapter 147 of title 10, 
United States Code, so that the chapter deals exclusively with 
provisions of law relating to commissaries, exchanges, and 
other morale, welfare and recreation activities. Certain 
sections of the current chapter 147 not addressing this subject 
would be transferred to other chapters of title 10, and other 
sections now found in chapter 147 that do concern commissaries, 
exchanges, and other morale, welfare and recreation activities 
would be redesignated to provide a logical organization of the 
chapter.

Section 362--Merchandise and Pricing Requirements for Commissary Stores

    This section would amend section 2486 of title 10, United 
States Code, to restrict the categories of merchandise that may 
be sold in commissaries. Section 2486 currently limits the 
categories of merchandise sold in commissaries to those 
enumerated in the statute, and this section would permanently 
limit the categories of items to those now listed in the 
statute, unless new categories are prescribed by the Secretary 
of Defense, following advance notice to Congress and a waiting 
period of 90 legislative days. In addition, this section would 
require that no change in the current commissary surcharge 
could occur without a prior authorization in law. Finally, this 
section would provide that the Secretary of Defense may not 
make any change in pricing policies without advance notice to 
Congress and a waiting period of 90 legislative days. This 
section would thus prevent consignment sales of exchange items 
in commissaries without prior notice to Congress and would 
prevent variable pricing based on surcharge adjustments. A 
report to Congress detailing merchandise categories now sold on 
consignment would be required within 30 days of the date of the 
enactment of the National Defense Authorization Act for Fiscal 
Year 1998.

  Section 363--Limitation on Noncompetitive Procurement of Brand-Name 
            Commercial Items for Resale in Commissary Stores

    This section would amend section 2486(e) of title 10, 
United States Code, to make more rigorous the standard for 
determining brand name commercial items that may be sold by 
commissaries. In order to qualify as a brand name commercial 
item which commissaries may procure noncompetitively for 
resale, current law requires that the item be regularly sold 
outside of commissary stores under the same brand name by which 
the commercial items will be sold in commissary stores. This 
section would establish that, in determining whether a brand 
name commercial item is regularly sold outside of commissary 
stores, the Secretary of Defense shall consider only sales of 
the item on a regional or national basis by multi-store 
commercial grocery or retail chains. So called ``discount 
brands'' that frequently are not sold by major commercial 
grocery or retail store chains would not qualify as brand name 
commercial items under the standard that would be established 
by this section.

 Section 364--Transfer of Jurisdiction over Exchange, Commissary, and 
Morale, Welfare and Recreation Activities to Under Secretary of Defense 
                             (Comptroller)

    This section would amend section 135 of title 10, United 
States Code, to transfer administrative responsibility within 
the Department of Defense for the areas of exchange, 
commissary, and nonappropriated fund instrumentalities 
regarding morale, welfare and recreation activities from the 
Under Secretary of Defense for Personnel and Readiness to the 
Under Secretary of Defense (Comptroller). Many of the 
responsibilities associated with the management and operation 
of exchanges, commissaries and the nonappropriated fund 
instrumentalities of the morale, welfare and recreation system 
involve first and foremost, financial management decisions. For 
this reason, transferring administrative responsibility for 
these programs to the Under Secretary of Defense (Comptroller) 
is appropriate.

Section 365--Public and Private Partnerships to Benefit Morale, Welfare 
                       and Recreation Activities

    This section would permit the Secretary of Defense to 
authorize nonappropriated fund instrumentalities to enter into 
leases, licensing agreements, concession agreements and other 
contracts with private persons and state or local governments 
involving real and personal property under the control of such 
nonappropriated fund instrumentalities in order to facilitate 
the provision of facilities, goods, or services to authorized 
patrons. In order to enter into leases or contracts, 
nonappropriated fund instrumentalities would be required to 
determine that the use of the property subject to the lease or 
contract would contribute to the provision of goods, services 
or facilities for a morale, welfare and recreation activity and 
that the lease or contract would not be inconsistent with or 
adversely affect the mission of the Department of Defense or 
the nonappropriated fund instrumentality concerned. Use of the 
facilities, goods or services provided under this section would 
be restricted to authorized patrons of the nonappropriated fund 
instrumentality that is a party to the lease or contract. Funds 
generated by money rentals would be restricted to use at the 
installation at which the property covered by the lease or 
contract is located.

     Section 366--Treatment of Certain Amounts Received by Defense 
                           Commissary Agency

    This section would provide that amounts received by the 
Defense Commissary Agency (DECA) from certain sources be 
deposited in the surcharge account. The surcharge account is 
used by DECA for capital construction and other improvements to 
commissaries. Amounts received by DECA that would be deposited 
in the surcharge account would include funds from the sale of 
recyclables, the disposal of excess property, license fees, 
royalties, incentive allowances, management and other fees, and 
funds received from nonappropriated fund instrumentalities. The 
authorization concerning funds received from nonappropriated 
fund instrumentalities would permit proceeds from the sale of 
exchange-owned tobacco products at commissaries to be deposited 
into the surcharge account.

  Section 367--Authorized Use of Appropriated Funds for Relocation of 
                     Navy Exchange Service Command

    This section would provide that the Navy Exchange Service 
Command (NEXCOM) shall not be required to reimburse the United 
States for appropriated funds allotted to NEXCOM during fiscal 
years 1994, 1995, and 1996 for costs incurred in connection 
with the relocation of NEXCOM headquarters to Virginia Beach, 
Virginia and for the lease of headquarters space.

                       Subtitle G--Other Matters

  Section 371--Assistance to Local Educational Agencies That Benefit 
  Dependents of Members of the Armed Forces and Department of Defense 
                           Civilian Employees

    This section would authorize $35.0 million for educational 
assistance to local education agencies where the standard for 
the minimum level of education within the state could not be 
maintained because of the large number of military connected 
students or the effects of base realignments and closures. The 
Department of Education impact aid program provides 
supplementary funds to eligible school districts nationwide. 
The committee believes that the Department of Education bears 
the principal responsibility for providing support for the 
education needs of the nation's children, and, therefore, does 
not support additional assistance beyond what is authorized in 
this section.

            Section 372--Continuation of Operation Mongoose

    This section would authorize the continuation of Operation 
Mongoose through fiscal year 2003. Operation Mongoose is a 
program that coordinates the identification, prevention, and 
prosecution of fraudulent actions within Department of Defense 
(DOD). The section would also establish the Undersecretary of 
Defense (Comptroller) as the executive agent for this program 
and would require a report on the activities of the operation.
    The committee commends the Department's efforts to improve 
the integrity of its financial management systems while 
reducing waste, fraud, and abuse. However, the committee 
believes that these efforts can be improved. First, the 
committee supports the acceleration of transportation and 
vendor pay reviews. To further this effort, the committee 
directs the Secretary of Defense and the secretaries of the 
military departments to provide all data requested by Operation 
Mongoose on an expedited basis. In addition, the program should 
expand its use of the Board of Investigations and its Regional 
Working Groups for investigating crimes identified through 
Operation Mongoose.
    In addition, the committee directs the Secretary of Defense 
to provide a report to the House Committee on National Security 
and the Senate Committee on Armed Services by December 31, 
1997, on the activities reviewed by Operation Mongoose, the 
savings or costs avoidance identified by activity, the number 
of cases referred for investigation, and the number of cases 
investigated by the investigating agency.

Section 373--Inclusion of Air Force Depot Maintenance as Operation and 
                   Maintenance Budget Activity Group

    This section would require the Secretary of the Air Force, 
beginning in fiscal year 1999, to identify funding for depot 
maintenance in a discreet subactivity group.

Section 374--Programs to Commemorate 50th Anniversary of Marshall Plan 
                          and Korean Conflict

    This section would authorize the Secretary of Defense, to 
begin to plan, coordinate, and execute a program to commemorate 
the 50th anniversary of the Marshall Plan and the Korean 
Conflict.
    The Marshall Plan's goal was to create lasting peace in 
Europe through broad acceptance of democratic values, the 
achievement of prosperity through free markets and cooperation 
and interdependence among nations. This provision would allow 
for the Department of Defense to commemorate the Marshall Plan 
by the observance of the 50th anniversary of the Senate's 
approval on March 13, 1948, the House's approval on March 31, 
1948, and President Truman's April 3, 1948 signing of the 
Economic Cooperation Act.
    The committee recognizes the success of the efforts by the 
Department of Defense to commemorate World War II and expects 
the Department to make preparations for an appropriate 
commemoration of the Korean Conflict. A criticism of the 
preparation for the commemoration of World War II was that 
preparation started late which made it extremely difficult to 
properly coordinate key events with all interested parties. 
This meant that some deserving veterans organizations were 
excluded or were notified with such little notice that 
participation was limited. This provision would provide the 
long lead time necessary to properly plan and coordinate major 
activity with the Korean Conflict allies, interested federal, 
state and local governments and public officials, veteran 
groups, private citizens and other interested parties. The 
committee believes this provision would help ensure that our 
nation properly honors the sacrifices of men and women who 
fought in the Korean Conflict, as well as the sacrifices and 
contributions made by their families.

 Sec 375--Prohibition on Use of Special Operations Command Budget for 
                         Base Operation Support

    This section would amend section 167(f) of title 10, United 
States Code to prohibit the use of funds provided for the 
Special Operations Command for base operations support expenses 
incurred at military installations. The committee notes that 
Congress established the Special Operations Command, including 
a separate major force budget program (MFP-11), to correct 
serious deficiencies in special operations capabilities and to 
ensure special operations combat readiness. The committee 
believes that using MFP-11 funds for base operations support is 
in conflict with the original intent for these funds.

  Section 376--Continuation and Extension of Demonstration Program to 
                 Identify Overpayments Made to Vendors

    This section would reauthorize, through fiscal year 1998, 
section 354 of the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106) which provides for a 
demonstration program to identify overpayments made to vendors. 
Preliminary data from this demonstration project indicates 
there are a significant number of Department of Defense 
overpayments made to vendors with a potentially high cost to 
the taxpayers. The committee believes that based on these 
initial findings, the program should be continued for another 
fiscal year to develop a better understanding of the magnitude 
of this problem.

Section 377--Applicability of Federal Printing Requirements to Defense 
                       Automated Printing Service

    This section would clarify that the Defense Automated 
Printing Service (DAPS) shall comply with chapter 5 of title 
44, United States Code regarding printing services. The 
committee has learned that DAPS, formerly known as the Defense 
Printing Service, is violating section 501 of title 44, United 
States Code. According to this statute, all government printing 
has to be procured by or through the Government Printing 
Office. Although DAPS provides printing services to the 
military departments and defense agencies, there is no statute 
that allows DAPS to provide printing services to non-Department 
of Defense federal agencies.
    The committee has learned, however, that DAPS has recently 
solicited other agencies to provide printing and duplication 
services, and the DAPS world wide web page specifically 
solicits intra-government printing services. Furthermore, 
notifications have been sent to federal agencies indicating 
that DAPS and General Services Administration will be merging 
their printing and duplication services. All of these actions 
violate title 44, United States Code. The committee directs the 
Secretary of Defense to cease all such activity and fully 
comply with current statute.

Section 378--Base Operations Support for Military Installations on Guam

    This section would prohibit the use of nonimmigrant aliens 
(as defined in section 101(a)(15)(H)(ii) of title 8, United 
States Code) for any base operations support contract to be 
performed on Guam.

                      MILITARY PERSONNEL OVERVIEW

    Based on extensive hearing testimony from military 
personnel holding the rank of general through sergeant and from 
military spouses, as well as committee staff visits to more 
than 50 major units and commands, at more than 30 installations 
in the United States and Europe, combined with feedback from 
officer, non-commissioned officer, and military spouse focus 
groups, the committee believes that significant personnel and 
quality of life problems exist across the force. Moreover, the 
committee believes that the President's fiscal year 1998 
defense budget request fails to adequately address those 
problems, and contains initiatives, such as continued 
reductions in active end strength, that will exacerbate the 
difficult conditions under which most of the military personnel 
in the armed forces already labor. Those conditions place 
military people under immense stress because of a pervasive 
requirement to ``do more with less'' in the face of record 
operational tempo levels, and because of significant personal 
financial challenges brought on by the continuing inadequacy of 
pay and allowances for a military force that is now 65 percent 
married.
    The message the committee has heard from commanders, 
sergeants and military spouses was very clear: People are 
overworked and, absent any relief from the financial stress or 
operations tempo, it is only a matter of time before 
significant retention and recruiting problems will occur. The 
message troubles the committee, not only because it was 
repeated with remarkable consistency across the force, but also 
because it warns that the quality of military life is perceived 
to have eroded over a wide range of programs.
    After close examination, the committee believes that the 
President's military personnel budget request, at best, is 
inadequate to provide the forces needed to achieve the current 
national military strategy, support the current operations 
tempo of the force, and preserve the quality of the people so 
important to the future of a smaller force. Nor is the 
committee reassured by the preliminary findings of the 
Quadrennial Defense Review (QDR) that conclude the future 
military missions of the nation can be accomplished with 
155,000 fewer uniformed personnel. Until the committee fully 
understands that the QDR outcomes were strategy and mission 
based, not budget based, it will continue to be highly 
skeptical of any proposals by the Department of Defense that 
have the effect of requiring fewer personnel to continue doing 
more missions with reduced resources. For this reason, the 
personnel initiatives proposed in the budget request, as well 
as those projected by the QDR, would seem to make worse or 
ignore the already significant ``people'' problems. For 
example, despite assurances from senior Department of Defense 
officials that the drawdown was just about over, the 
President's budget request proposes Navy and Air Force manpower 
levels a total of 13,400 personnel below the end-strength 
floors required by law. Even worse, future years' defense 
budgets--based on a suspect rationale that the services have 
found economies and efficiencies that can be achieved without 
hurting readiness--project additional personnel reductions.
    As in past years when the defense budget request 
underfunded recruiting and Congress had to step in to add over 
$100.0 million, the President's fiscal year 1998 budget request 
again contains significant shortfalls in recruiting funding--
more than $160.0 million according to the chiefs of the 
military services. This funding shortfall only heightens the 
committee's deep concerns that the military services are 
already on a slippery slope of eroding recruit quality in order 
to meet increasingly difficult accession requirements. For 
example, the Army, faced with a potential shortfall of 14,000 
recruits from its fiscal year 1997 accession requirement and a 
drop in recruit quality to 88 percent high school diploma 
graduates, seven percent below its objective, took several 
extraordinary measures to meet the crisis, including reducing 
its goal for high school diploma graduates to 90 percent from 
95 percent. Since traditionally Army recruiting difficulties 
have been the precursor of problems in the other services, the 
committee fears that the inadequate action proposed by the 
defense budget request to address recruiting problems will 
jeopardize the quality of the force and put at risk future 
combat capability.
    The budget request also largely ignored the distressing 
financial needs being experienced by the men and women of the 
armed forces. An enduring picture of these needs emerged during 
committee staff visits to the field last fall and was 
emphatically reinforced during committee hearings. Senior 
enlisted witnesses and spouses of military members provided 
compelling testimony that a pay increase was the highest 
priority need for all members, but particularly for the 
enlisted force. Despite the clear evidence of the financial 
pain among military personnel, and unlike an election-year 
effort to provide a pay raise greater than the minimum 
prescribed by law, the President's fiscal year 1998 budget 
reverted to the ``by-law'' formula by requesting a 2.8 percent 
increase. This ``by-law'' formula--one-half of a percent below 
the Employment Cost Index (ECI)--insures that the gap between 
military and civilian pay will continue to grow from 13.5 
percent in fiscal year 1998 to over 15 percent in 2001. The 
budget request justified the pay raise decrease by citing the 
legal nexus that limits military pay increases to the increase 
allowed for federal civilian employees. The committee does not 
believe that it is healthy to allow the pay gap to 
systematically increase year after year.
    The committee also believes that while reforms to both the 
basic allowance for subsistence (BAS) and basic allowance for 
quarters (BAQ) proposed in the budget request were well 
intentioned, the Department's inability to commit sufficient 
funding to the reforms compelled an implementation strategy 
that not only failed to protect income levels of military 
members, but also pitted portions of the armed forces against 
one another. For example, the proposed BAS reform called for 
reducing military family incomes to fund additional BAS to 
unmarried enlisted members. Moreover, the BAS reform did 
nothing to correct long standing inequities and unfairness in 
the compensation of military personnel deployed to austere 
locations and on ships at sea during contingencies and when 
training. The loss of income to families resulting from such 
deployments was a major theme of military members and their 
families in communications with and testimony before the 
committee. Additionally, the proposed BAQ reform did nothing to 
reduce out-of-pocket housing costs for service members, thereby 
reneging for the second year in a row on a three-year old 
commitment that the Secretary of Defense launched as a highly 
publicized, top priority, six-year initiative. During fiscal 
year 1997, Congress had to step in to ensure that the 
Department kept its commitment by increasing BAQ by 4.6 
percent, 1.6 percent above the increase proposed by the 
President.
    To the detriment of more than 120,000 federal employees who 
also have volunteered to serve as members of the reserve 
components, the President's budgetrequest sought so-called 
savings by eliminating the military income of most Federal employees 
who performed military duty during required annual training. In an 
environment when the nation is increasing its reliance on the reserve 
components in order to offset the increasing operations tempo of the 
active forces, and when the Department of Defense ought to be seeking 
ways to provide incentives to reservists, this apparent effort to 
reinvent government seems peculiarly counterproductive and 
shortsighted. Moreover, rather than setting an example of how an 
employer should support the National Guard and Reserve, this 
Presidential initiative sends the message that reservists do not 
deserve any special consideration. For these reasons, the committee 
believes this budget proposal has serious negative implications for 
combat readiness in the reserves and private sector employer 
cooperation programs.
    Finally, the committee finds that for the second year in a 
row, the President's budget request significantly under-funded 
the Defense Health Program (DHP). The General Accounting Office 
(GAO) estimated the shortfall to be between $424.0 million and 
$471.0 million. In response to Congressional concerns over this 
serious shortfall, the Administration plans to submit a budget 
amendment to add $274.0 million to the DHP. The committee is 
concerned that the proposed budget amendment still leaves 
considerable gaps in the funding level of the Defense Health 
Program that could result in a considerable degradation of this 
important quality of life program.
    Given a continuing commitment to curbing the erosion of 
quality of life for military members and their families, the 
committee has acted to reverse the major shortfalls in the 
Administration's fiscal year 1998 military personnel budget 
request. To that end the committee initiatives would:
          (1) Mandate that future military pay raises be based 
        on the full Economic Cost Index (ECI) and not on ECI 
        minus 0.5 percent;
          (2) Require the Secretary of Defense to implement a 
        system of pay and allowances that would prevent the 
        loss of income for military personnel when they are 
        deployed or serving under field conditions at home 
        station and would authorize $50.0 million to facilitate 
        the initiative. The requirement is supported by a 
        restructured deployment pay system including a new 
        hardship duty pay, an increased family separation pay, 
        and more flexible rules for payment of Basic Allowance 
        for Subsistence;
          (3) Initiate a major reform of the housing allowances 
        that would increase allowances in high cost areas and 
        ensure that military personnel experience the same 
        amount of out-of-pocket costs regardless of location;
          (4) Continue reducing ``out of pocket'' housing costs 
        toward the goal of having military personnel absorb no 
        more than 15 percent of the cost of adequate housing;
          (5) Reaffirm that the defense budget request must 
        provide sufficient numbers of personnel to conduct 
        current national military missions by retaining the 
        statutory floors on active end strength;
          (6) Direct a series of reforms to improve recruiter 
        performance and reduce recruit attrition and increase 
        the funding for recruiting advertising by $22.9 million 
        over the amount requested in the budget;
          (7) Retain military leave for Federal civilians in 
        the selected reserve and restore the $85.0 million cut 
        from reserve component budgets by the President in the 
        name of savings; and
          (8) Restore $274.0 million to the Defense Health 
        Program, direct a plan for expanding the TRICARE Prime 
        (HMO) option and propose improvements to the TRICARE 
        program designed to ensure beneficiary access to 
        quality health care providers.
          (9) Direct the Secretary of Defense to report to 
        Congress on the feasibility of extending a mail-order 
        pharmacy program to all Medicare eligible beneficiaries 
        who do not live near a military medical treatment 
        facility.
    The committee believes that funding these initiatives is 
essential to protecting the quality of life of those service 
members and their families who continue to serve. Given the 
many priority programs competing for funding within a limited 
budget, the committee is electing to suspend the authority for 
early retirement during fiscal year 1998 to provide $185.0 
million to offset the increases cited above. The committee 
believes that a one-year suspension of the early retirement 
program is appropriate given:
          (1) The committee's continuing commitment to preserve 
        the active duty end-strength floors needed to support 
        two major regional contingencies;
          (2) That the QDR reductions are proposed for the 
        post-2003 time frame; and
          (3) Congress never intended early retirement to be a 
        permanent authority.
    In addition, the committee believes that action is required 
to addresses issues which have emerged as a result of the 
committee's ongoing examination of sexual misconduct in the 
military. Specifically, the committee directs a review of the 
ability of the military criminal investigative services to 
investigate crimes of sexual misconduct, and mandate a series 
of reforms to drill sergeant selection and training.
    The committee also directs the establishment of an 
independent panel to assess reforms to military basic training. 
The need for such reform comes from mid-level military leaders 
who report that many graduates from basic training do not 
possess the physical fitness, skill in basic military tasks, 
discipline and acculturation to service values needed for the 
actual job and readiness requirements of operational units. 
Included in the review would be a determination of the merits 
of gender-integrated or gender-segregated basic training as a 
method to attain the basic training objectives established by 
each service.
               TITLE IV--MILTARY PERSONNEL AUTHORIZATIONS

                         LEGISLATIVE PROVISIONS

                       Subtitle A--Active Forces

              Section 401--End Strengths for Active Forces

    This section would authorize end strengths for the active 
forces as indicated in the table below:

                                        FY 98 END STRENGTH--ACTIVE FORCES                                       
----------------------------------------------------------------------------------------------------------------
                                    Fiscal year 1997            Fiscal year 1998        Change from fiscal year 
                               ---------------------------------------------------------------------------------
            Service                                                                        1998                 
                                 Authorized    Program      Request    Recommendation    request    1997 program
----------------------------------------------------------------------------------------------------------------
Army..........................      495,000      495,000      495,000        495,000             0            0 
Navy..........................      406,900      402,013      390,802        395,000         4,198       (7,013)
Marine Corps..................      174,000      174,000      174,000        174,000             0            0 
Air Force.....................      381,100      381,087      371,577        381,000         9,423          (87)
                               ---------------------------------------------------------------------------------
      Total...................    1,457,000    1,452,100    1,431,379      1,445,000        13,621       (7,100)
----------------------------------------------------------------------------------------------------------------

    The authorized end strengths for fiscal year 1998 are those 
prescribed by law as the minimum necessary to support two major 
regional contingencies. By taking this action, the committee 
rejects the President's budget request which sought to reduce 
end strengths in the Navy by 4,200, and in the Air Force by 
9,400, below the statutory minimum manpower levels. 
Furthermore, the committee recommends an increase over the 
budget request of $5.0 million in the Navy's active military 
personnel account and $32.5 million in the Air Force's active 
military personnel account to offset the cost of maintaining 
end strength in accordance with Congressional mandates on end 
strength floors.
    The committee's rationale for continuing to maintain the 
end-strength floors is founded on the following:
          (1) As long as the national military strategy calls 
        for this nation to fight and win two nearly 
        simultaneous major regional contingencies (MRC), and 
        until the committee is convinced that the national 
        military strategy can be carried out with fewer 
        personnel than authorized here, the committee believes 
        that significant manpower reductions should not be 
        undertaken;
          (2) The Department of Defense has an extremely poor 
        record in predicting actual manpower requirements. For 
        example, neither the manpower requirements for, nor the 
        intensity, duration, frequency and numbers of 
        operations other than war were accurately forecast by 
        the Bottom Up Review. As a result, the readiness of the 
        armed forces to train and maintain themselves to 
        successfully fight high intensity warfare has suffered. 
        In addition, the men and women in uniform and their 
        families are being required to pay an increasingly 
        higher price because an undermanned force is repeatedly 
        asked to do more with less. There is no reason to 
        believe that the manpower requirements emerging from 
        the Quadrennial Defense Review will be any more 
        accurate about assessing the manpower implications of 
        operations other than war. Until the committee is 
        convinced that such requirements have been factored 
        into the manpower equations, or until there is a 
        reduction in manpower-intensive operations other than 
        war, the committee believes that reducing military 
        manpower only would serve to exacerbate already serious 
        readiness and personnel shortfalls;
          (3) The committee believes that the President's 
        budget request for fiscal year 1998 is a budget-driven 
        attempt to ``jump start'' the manpower cuts presaged by 
        the QDR. Those cuts are not insignificant--90,000 
        active duty military, 65,000 reservists, and 160,000 
        civilians. So far the principal rationale provided by 
        the Department for reducing manpower has been that it 
        seeks economies, efficiencies and savings. The 
        committee believes that without a change in strategy or 
        operational requirements such ``green-eye shade'' logic 
        is insufficient rationale for cutting people. If the 
        Department of Defense wishes to reduce people to 
        achieve savings, the civilian and military leadership 
        must be able to articulate clearly and explicitly the 
        reasons why such reductions make sense from a strategy 
        and operations tempo perspective; and
          (4) Despite a specific legal requirement to fully 
        fund the mandated end strength floors until Congress 
        authorized the Department of Defense to drop below 
        them, the President's budget request ignored the 
        requirement, presumed that Congress would lift the end 
        strength floors, and took the associated personnel 
        ``savings'' for use in other parts of the budget.

                       Subtitle B--Reserve Forces

            Section 411--End Strengths for Selected Reserve

    This section would authorize end strengths for the selected 
reserve as indicated in the table below:

                                      FY 98 END STRENGTH--SELECTED RESERVE                                      
----------------------------------------------------------------------------------------------------------------
                                    Fiscal year 1997            Fiscal year 1998        Change from fiscal year 
                               ---------------------------------------------------------------------------------
            Service                                                                        1998                 
                                 Authorized    Program      Request    Recommendation    request    1997 program
----------------------------------------------------------------------------------------------------------------
ARNG..........................      366,758      366,758      366,516        366,516             0         (242)
USAR..........................      215,179      215,254      208,000        208,000             0       (7,254)
USNR..........................       96,304       95,898       94,294         94,294             0       (1,604)
USMCR.........................       42,000       42,000       42,000         42,000             0            0 
ANG...........................      109,178      109,178      107,377        107,377             0       (1,801)
USAFR.........................       73,311       73,311       73,431         73,431             0          120 
Coast Guard...................        8,000        8,000        8,000          8,000             0            0 
                               ---------------------------------------------------------------------------------
      Total...................      910,730      910,399      899,618        899,618             0      (10,781)
----------------------------------------------------------------------------------------------------------------

 Section 412--End Strengths for Reserves on Active Duty in Support of 
                              the Reserves

    This section would authorize the end strengths of the 
reserves on active duty in support of the reserves as indicated 
in the table below. These end strengths are included within the 
total end strengths authorized for the selected reserve above.

                  FY 98 END STRENGTH--RESERVES ON ACTIVE DUTY IN SUPPORT OF RESERVES (AGR/TAR)                  
----------------------------------------------------------------------------------------------------------------
                                   Fiscal year 1997            Fiscal year 1998         Change from fiscal year 
           Service            ----------------------------------------------------------------------------------
                                Authorized    Program      Request    Recommendation  1998 Request  1997 Program
----------------------------------------------------------------------------------------------------------------
ARNG.........................       22,798       22,798       22,310         22,310             0          (488)
USAR.........................       11,729       11,804       11,500         11,500             0          (304)
USNR.........................       16,603       16,626       16,136         16,136             0          (490)
USMCR........................        2,559        2,559        2,559          2,559             0             0 
ANG..........................       10,403       10,403       10,616         10,616             0           213 
USAFR........................          655          655          963            748          (215)           93 
                              ----------------------------------------------------------------------------------
      Total..................       64,747       64,845       64,084         63,869          (215)         (976)
----------------------------------------------------------------------------------------------------------------

   Section 413--End Strengths for Military Technicians (Dual Status)

    This section would authorize military technician end 
strength as indicated in the table below and would require 
future defense budget requests to include a legislative 
provision specifically detailing the end strength of the dual-
status military technicians to be authorized.

                             FY 98 END STRENGTH--MILITARY TECHNICIANS (DUAL STATUS)                             
----------------------------------------------------------------------------------------------------------------
                                                                                         Change from fiscal year
                                              Fiscal year  Fiscal year  Fiscal year 98 -------------------------
                   Service                     97 program   98 request  recommendation      1998         1997   
                                                  (DS)         (DS)          (DS)         request      program  
----------------------------------------------------------------------------------------------------------------
ARNG........................................       23,125       22,991         23,125           134            0
USAR........................................        5,503        5,205          5,503           298            0
ANG.........................................       22,853       22,574         22,853           279            0
USAFR.......................................        9,802        9,622          9,802           180            0
                                             -------------------------------------------------------------------
      Total.................................       61,283       60,392         61,283           891            0
----------------------------------------------------------------------------------------------------------------

    The National Defense Authorization Act for Fiscal Year 1997 
(Public Law 104-201) provided that dual-status military 
technicians would be authorized and accounted for as a separate 
category of Department of Defense civilian employee; and 
further provided that reductions in military technician end 
strength must be directly related to force structure 
reductions.
    In consonance with the changes made in fiscal year 1997, 
the end strengths authorized above provide only for dual-status 
military technicians. The authorizations do not include or 
provide for non-dual status technicians who the committee 
believes should be funded in the same manner as other federal 
civilian employees who are not military technicians. The 
committee notes that the President's budget request provides 
funding for the following numbers of non-dual status 
technicians: Army National Guard, 2259; Army Reserve, 1296; Air 
National Guard, 394; Air Force Reserve, none. Furthermore, the 
committee notes that the President's budget request sought 
reductions in military technician end strength but did not 
provide the required details about corresponding force 
structure reductions as required by law. Therefore, the end 
strengths authorized would establish military technician end 
strengths at fiscal year 1997 levels.

Section 414--Increase in Number of Members in Certain Grades Authorized 
           to Serve on Active Duty in Support of the Reserves

    This section would authorize increases in the grades of 
reserve members authorized to serve on active duty or on full-
time national guard duty for the administration of the reserves 
or the national guard. The provision would authorize 30 
additional majors, 5 additional E-9s, and 10 additional E-8s in 
the Air Force. The provision would also authorize 16 additional 
colonels and 15 additional E-9s in the Army National Guard, and 
nine additional colonels and six additional E-9s in the Army 
Reserve.

              Subtitle C--Authorization of Appropriations

  Section 421--Authorization of Appropriations for Military Personnel

    This section would authorize $69,539,862,000 to be 
appropriated for military personnel, an increase of $66.1 
million from the budget request.
                   TITLE V--MILITARY PERSONNEL POLICY

                       ITEMS OF SPECIAL INTEREST

                    Family Life Assistance Programs

    The committee believes that military families face growing 
challenges in an environment where high operations tempo, 
frequent deployments and long separations create unusual 
stress. This stress too frequently manifests itself adversely 
in such actions as child abuse. The committee believes that the 
military services should continually be seeking better ways to 
reduce child abuse and its related ill effects. The committee 
has learned of efforts being made by a nationwide consortium of 
educational organizations focused on the needs of children and 
families to demonstrate and evaluate, in connection with the 
Army Chaplain's School, an assistance program for families 
affected by child abuse. The program is designed to be 
facilitated by military chaplains, but depends heavily on 
parent-leadership and mutual support assistance for its 
effectiveness. The committee urges the Department of Defense 
and the Department of the Army to review this program for 
possible testing at military installations.

               Increased Support for Military Recruiting

    Recruiting sufficient numbers of high quality people to 
serve in the armed services remains one of the most difficult 
challenges facing the Department of Defense. The committee 
views with alarm the Army's inability to meet its recruiting 
goals and the resulting Army decision to reduce the accession 
goal for new recruits with a high-school degree to 90 percent 
of those enlisted from the current 95 percent. The committee is 
also concerned that this reduction in the quality standards for 
Army recruits presages similar trends in the other services. 
The committee, therefore, recommends an increase in funding for 
recruiting advertising of $22.9 million over the amount 
requested in the budget. The additional advertising funding 
would be apportioned: Army: $7.0 million; Navy: $7.0 million; 
Air Force: $4.5 million; Marine Corps: $4.4 million.

  Investigation of the Deaths of Military Personnel by Self-inflicted 
                                 Causes

    In response to concerns about how the services handled the 
investigations of the deaths of military personnel from self-
inflicted causes, Congress, in the National Defense 
Authorization Act for Fiscal Year 1994, (Public Law 103-160), 
mandated several actions, including a Department of Defense 
review of the procedures used by the military departments for 
investigating such deaths. That review by the Department of 
Defense Inspector General reported in February 1996 a range of 
investigative shortcomings, as well as recommendations for 
improvements in investigative training, policy and procedures. 
In addition, the then-House Armed Service Committee found in 
March 1994, as part of its investigation into alleged suicides 
by military personnel, that some of the military services were 
inept in their dealings with families of the deceased and 
needlessly uncooperative in releasing information requested by 
the families of the deceased. Finally, the Department's 
Advisory Board on the Investigative Capability of the 
Department of Defense reported in 1995 that to the extent it 
found problems in investigations avoiding self-critical 
analysis, it found them in non-criminal investigations; and 
also that commander-directed investigations were the most 
common but least protected from improper command influence.
    Notwithstanding these previous findings and 
recommendations, the committee remains concerned that the 
military services may not have adequately implemented the 
recommended corrective actions. In particular, the committee 
has heard concerns about the services' ability to carry out 
self-critical, impartial, unbiased, complete death 
investigations in cases where service leadership may have been 
involved in the circumstances leading to a death from self-
inflicted causes. In addition, the committee continues to hear 
reports of family members of the deceased having to go to 
extraordinary lengths to obtain a full report of the 
circumstances surrounding the death.
    For these reasons, and to ensure that past recommendations 
for corrective action are being implemented, the committee 
urges the Department of Defense to undertake an independent 
review of the current military service procedures for 
investigating the deaths of military personnel from self-
inflicted causes.

              Joint Recruiting Information Support System

    The committee is concerned that, despite the high priority 
that the Department of Defense attached to effective military 
recruiting, the Department is more than 18 months behind 
schedule in fielding the Joint Recruiting Information Support 
System (JRISS) which promises to greatly assist a frequently 
overextended recruiting force. The committee believes that such 
a delay is in part due to the fact that JRISS funding has been 
decentralized to the training and recruiting accounts of each 
of the military services and that services have repeatedly used 
these accounts as reprogramming sources to support contingency 
operations. In addition, the committee notes that the 
President's fiscal year 1998 budget request underfunded this 
important program by as much as $57.0 million in the 
procurement and operations and maintenance accounts. For these 
reasons, the committee believes that increased Department 
commitment is essential to put this program back on track. 
Therefore, the committee directs the Secretary of Defense to 
consolidate budgeting and funding execution of the JRISS system 
at the Department level, and to provide the House Committee on 
National Security and the Senate Committee on Armed Services a 
report by June 30, 1998, detailing its plan and funding program 
to ensure the full, expeditious fielding of the JRISS.

                     Military Identification Cards

    The committee is aware that the identification cards issued 
active component service members are a different color from the 
cards issued to reserve component service members. The 
committee notes that reserve component members have expressed 
concern that the color coded identification cards have resulted 
in prejudicial treatment of reservists that is not in keeping 
with good order and discipline. The committee recommends that 
the Secretary of Defense develop a universal identification 
card that includes a non-visual identifier, such as a bar code. 
Such a card would identify the benefits and privileges 
authorized to the card holder while protecting reserve 
component members from prejudicial treatment.

         Military Occupational Specialties (MOS) Consolidations

    The committee is concerned about the elimination and 
consolidation of military occupational specialties (MOS) which 
have occurred in at least two of the military services. These 
actions, used as a management tool to accomplish personnel 
downsizing and generate savings, have resulted in skill 
shortages and imbalances, particularly in the maintenance 
fields. The committee learned through visits to military 
installations and interviews with service members that MOS 
consolidations have negatively impacted the ability of units to 
maintain equipment to standard. The committee directs the 
Secretary of Defense to report to the House Committee on 
National Security and the Senate Committee on Armed Services, 
no later than March 1, 1998, on the extent to which such 
eliminations and consolidations have occurred, the impact of 
these eliminations and consolidations on readiness, and any 
recommendations or actions being implemented to address the 
concerns identified above.

Retention of Military Leave for Federal Civilian Employees Who Perform 
                              Reserve Duty

    The committee is disturbed to learn that the President's 
budget request proposed to terminate a long-standing 
recruiting, retention and readiness incentive for the reserve 
components--the ability of 120,000 federal civilian employees 
who are members of the reserve components to take military 
leave from their federal civilian jobs without penalty to train 
during the required annual military training period. Even more 
disturbing to the committee is the fact that without apparent 
consultation with the military leadership and without analysis 
of the potential implications, the Department's reserve 
component military personnel accounts were reduced by $85.0 
million on the presumption that Congress would agree with the 
proposed amendment.
    Such presumption is misplaced. The committee believes for a 
number of reasons that this budget proposal is misguided, will 
not achieve any real savings, and will cause reductions in 
readiness and retention. First, despite repeated Administration 
claims of the importance of reserve personnel to the military, 
the President's initiative would penalize a federal workforce 
that not only ably serves government in a day-to-day capacity, 
but also has volunteered to go beyond what most citizens are 
willing to do by serving the nation as well in a uniformed 
capacity. Second, the initiative would single out and penalize 
60,000 military technicians. These full-time employees, 
required to be members of the reserve components as a condition 
of their employment, have been deemed by both the Department of 
Defense and the Congress to be critical to reserve component 
unit readiness and to providing active units relief from high 
operations tempo. Third, rather than setting an example of how 
an employer should support the National Guard and Reserve, this 
proposal would send an unequivocal message to the employers of 
America that reservists do not deserve special consideration.
    For these reasons, the committee rejects the President's 
proposal and restores $85.0 million to the military personnel 
accounts of the reserve components, as follows: Army National 
Guard, $33.2 million; Army Reserve, $20.4 million; Air National 
Guard, $11.0 million; Air Force Reserve, $8.2 million; U.S. 
Naval Reserve, $8.5 million; U.S. Marine Corps Reserve, $3.7 
million. As a partial source for the restoration, the committee 
recommends a reduction in operations and maintenance funding 
for the Youth Conservation Corps ($1.7 million), Starbase ($2.0 
million), Civil-Military Innovative Readiness Training ($8.0 
million) and reserve support to the commanders-in-chief of the 
combatant commands ($2.0 million), as well as a $13.0 million 
reduction in personnel funding for the Department directed 
reserve component support to the total force program.

                Sexual Misconduct in the Armed Services

    The committee understands and appreciates the fact that the 
vast majority of members of the armed forces of the United 
States serve with distinction, dedication and integrity, often 
under arduous circumstances. As a result, the committee is very 
concerned that recent allegations of serious abuses of 
authority and criminal sexual misconduct by some individuals at 
U.S. military training facilities and installations around the 
world impugn the hard work and honor of the devoted men and 
women who proudly serve our country. Such misconduct and abuse 
by even a few individuals is unacceptable in our military; it 
undermines the espirit d'corps, morale and readiness necessary 
for the United States to field an effective fighting force 
prepared to defend its interests around the world.
    In light of the recent allegations of sexual misconduct and 
their adverse impact on the reputation and morale of our 
dedicated service members, the committee strongly urges the 
Secretary of Defense to take all appropriate steps necessary to 
ensure that allegations of abuse of authority or sexual 
misconduct are promptly and thoroughly investigated by each 
military service. Furthermore, the committee urges the 
Secretary to ensure that effective reporting mechanisms and 
adequate training methods are identified, implemented and fully 
enforced to prevent such abuses of authority and sexual 
misconduct, and that proven allegations are addressed promptly 
in an appropriate and equitable manner. The men and women who 
serve in our armed forces deserve to be treated with the utmost 
respect and dignity, and they deserve a work environment that 
is free from criminal misconduct and abusive practices.

                         LEGISLATIVE PROVISIONS

                  Subtitle A--Officer Personnel Policy

Section 501--Limitation on Number of General and Flag Officers Who May 
              Serve in Positions Outside Their Own Service

    Five Department of Defense studies between 1988 and 1996 
consistently validated a requirement for no more than 233 
general and flag officer positions in joint headquarters and 
organizations external to the military services--about 16 
percent of all general and flag officer positions validated by 
those studies. With seeming disregard for the study results, 
the actual number of general and flag officers assigned to 
joint and external positions during those same years always 
exceeded 240, grew to as many as 280, and consistently required 
26 to 27 percent of the total general and flag officers 
authorized to be on active duty. Given the tight statutory 
constraints on the total number of general and flag officers 
who may be on active duty and notwithstanding the continuing 
emphasis on jointness, the committee believes that it is 
ultimately detrimental to the military services for the 
Department of Defense and the Joint Staff to assign to external 
positions both numbers and percentages of general and flag 
officers that are greatly inexcess of validated requirements. 
To the extent that the unconstrained tasking and assignment of general 
and flag officers to fill external positions continue, the military 
services will feel compelled to seek increases in the statutory limits 
on general and flag officers. For example, the dominant rationale 
provided by the Marine Corps in its most recent effort to secure 
additional general officers was the need for general officers to fill a 
growing number of joint positions. Additionally, in order to fill 
adequately both the external requirements and internal service 
requirements, the military services recently considered seeking an 
increase of as many as 54 general officers over the current statutory 
limit of 944. Again, increased external requirements was a significant 
driver of the proposed increase.
    The committee believes that the number of general and flag 
officers serving on active duty in external positions must be 
tightly controlled and tied directly to the number of general 
and flag officers available to fill both external and internal 
requirements. Therefore, the committee recommends a provision 
(Section 501) that would limit the number of general and flag 
officers serving in external assignments to no more than 24.5 
percent of the total number of such officers authorized by 
Congress.
    The committee recognizes that a 24.5 percent limit, while 
based on the Department's historical assignment practices, is a 
number that could be adjusted as a result of the outcomes of 
the Quadrennial Defense Review (QDR). Given the committee's 
desire for tight controls on general and flag officers, the 
committee expects that the Department would make 
recommendations for the adjustment of that 24.5 percent limit 
when the Department submits its anticipated post-QDR general 
and flag officer study, and that the Department would explain 
its strategy for review and validation of additional external 
general and flag officer requirements prior to the services 
being required to fill them.

 Section 502--Exclusion of Certain Retired Officers from Limitation on 
                    Period of Recall to Active Duty

    This section would exclude retired military chaplains, 
health care professionals and officers serving on the American 
Battle Monuments Commission from counting against the statutory 
limits on the period of time that recalled retirees may serve 
on active duty.

 Section 503--Clarification of Officers Eligible for Consideration by 
                            Selection Boards

    This section would clarify that officers serving on active 
duty and in the reserve components may be excluded from 
consideration from promotion to the next higher grade if they 
are on a promotion board report, even if that report had not 
yet been approved by the President.

    Section 504--Authority to Defer Mandatory Retirement for Age of 
                     Officers Serving As Chaplains

    This section would permit service secretaries to defer the 
retirement of officers serving as chaplains until age 68 if, 
during the period of deferment, the chaplains served in direct 
support of units and installations, and, in rare cases, beyond 
age 68 for the needs of the service, as determined by a service 
secretary. In addition, the section would permit the chief or 
deputy chief of chaplains of each service to serve until age 
68, but not beyond. Under current law, retirement of all 
chaplains is required at age 62. The section would also 
authorize the Navy's chief and deputy chief of chaplains to be 
selected from among officers on the retired list.

                 Subtitle B--Reserve Component Matters

       Section 511--Individual Ready Reserve Activation Authority

    Under current law, the President may involuntarily recall 
to active duty, at times other than during war or national 
emergency, up to 200,000 reservists for up to 270 days from 
units of the Selected Reserve. This authority is known as the 
Presidential Selective Reserve Call-up (PSRC). However, under 
PSRC, individuals who are members of the Individual Ready 
Reserve (IRR) cannot be recalled to active duty.
    During Operation Desert Storm, the lack of authority to 
recall members of the IRR as part of the PSRC compelled the 
mobilization of portions of late-deploying selected reserve 
units in order to fill manpower shortfalls in early deploying 
units. This strategy had two major disadvantages. First, unit 
cohesion of the later deploying units was damaged. Second, the 
military services, particularly the Army, faced the significant 
challenge of having to rebuild the late deploying units upon 
their mobilization.
    This section would build on the lessons learned from 
Operation Desert Storm by authorizing the President, under 
PSRC, to recall up to 30,000 members of a new category of the 
IRR that would be created by this section. The new category of 
the IRR would consist of those personnel, in the military 
skills designated by the Secretary of Defense, who had 
volunteered prior to leaving active duty to become part of this 
new IRR category. Such volunteers could remain in the new IRR 
category for no longer than 24 months and could be provided 
such benefits (less pay and training) as the Secretary of 
Defense deemed appropriate.

   Section 512--Termination of Mobilization Income Insurance Program

    Operations Desert Shield and Desert Storm involved the 
largest activation and deployment of reserve component forces 
since the Korean War with more than 246,000 national guardsmen 
and reservists from all the armed forces serving on active 
duty. Post war surveys indicated that 45 percent of the 
officers and 55 percent of the enlisted personnel reported 
income losses while activated. Following an extended 
examination of the issues and a survey suggesting that 
reservists would participate in a premium-based voluntary 
income insurance program, the Secretary of Defense proposed a 
program for the ready reserve that was included in section 512 
of the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106).
    Two problems were encountered during implementation. First, 
adverse selection occurred when the insurance enrollment period 
coincided with the notification of units that were subject to 
activation in support of operations in Bosnia. Second, a three 
percent participation rate by reservists was inadequate to 
maintain program solvency. As a result, the program was 
immediately bankrupted and left with an unfunded liability of 
$72.0 million.
    In post-implementation reviews designed to understand what 
went wrong, the Department of Defense Inspector General and the 
United States General Accounting Office concluded during a 
coordinated review that the structure of the current program 
was actuarially unsound. In addition, they determined that the 
Department of Defense Board of Actuaries hadwarned the 
Secretary of Defense in an August 9, 1996 memorandum that an extension 
of the mission in Bosnia may endanger the fiscal solvency of the 
program right away. The committee is severely disappointed that the 
Assistant Secretary of Defense for Reserve Affairs was aware of the 
warning and failed to inform the Congress of the consequences of 
continuing to implement the program as originally planned.
    The committee does not believe it is practical to modify 
the current program to make it actuarially sound. Accordingly, 
this section would terminate the ready reserve mobilization 
income insurance program. The provision would also specify that 
all benefit payments that are due will be paid in full.
    The committee recognizes that many reservists experience 
financial hardships when they are involuntarily called to 
active duty. The committee remains receptive to new proposals 
from the Secretary of Defense to provide protection against the 
loss of income by activated reservists. If the Secretary 
desires to submit a new legislative proposal, the committee 
recommends that the proposal be accompanied by analysis of 
alternative plans to allow comparison with the Secretary's 
recommended plan. The alternative plans should include a 
mixture of voluntary and mandatory programs with varying 
premium levels.

 Section 513--Correction of Inequities in Medical and Dental Care and 
    Death and Disability Benefits for Reserve Members Who Incur or 
                Aggravate an Illness in the Line of Duty

    Section 702 of the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106) authorized for reservists 
the same death and disability benefits as active duty members 
when the reservist's death or disability occurred in an off-
duty period between successive inactive duty training periods 
performed at locations outside the reasonable commuting 
distance from the member's residence. This section would 
authorize the same coverage for a reservist required to remain 
overnight prior to the commencement of inactive duty training.

   Section 514--Time-in-Grade Requirements for Reserve Commissioned 
              Officers Retired During the Drawdown Period

    This section would authorize the secretaries of the 
military departments to reduce the required time in grade for a 
reserve officer to retire in the highest grade held from three 
to not less than two years. The provision would limit the 
number of officers in a grade approved for retirement to two 
percent of the active status reserve strength for that armed 
force in that grade. The provision would expire on September 
30, 1999.

   Section 515--Authority to Permit Non-Unit Assigned Officers to be 
    Considered by Vacancy Promotion Board to General Officer Grades

    This section would authorize the Secretary of the Army to 
consider officers not assigned to units of the selected reserve 
to compete for promotion to brigadier general and major general 
within the same promotion board process.

   Section 516--Grade Requirement for Officers Eligible to Serve on 
                     Involuntary Separation Boards

    This section would reduce the grade required for officer 
separation board members in the reserve components from 0-6 and 
above to 0-5 and above.

 Section 517--Limitation on Use of Air Force Reserve AGR Personnel for 
                   Air Force Base Security Functions

    The committee has learned that the Secretary of the Air 
Force sought in the fiscal year 1998 budget request an increase 
of 215 in the end strength of the reserves on active duty in 
support of the reserves (AGRs). The increase was to provide 
base security at four Air Force Reserve bases in the United 
States. Use of the AGRs for this security mission would have 
replaced 72 Air Reserve technicians and 136 Department of 
Defense civilians now providing the base security at those four 
bases. The committee does not understand the Secretary's 
rationale for seeking additional AGRs for U.S. base security 
purposes. First, the use of AGR's is more costly than continued 
use of a mixed civilian and technician security force. The 
average AGR costs at least $7,000 to $10,000 more than the 
average civilian employed in the security force at the four 
bases. Second, although it acknowledged to the General 
Accounting Office that it has 6,900 fewer security police than 
are needed to meet its active duty wartime requirements, the 
Air Force has decided not to fill those requirements because 
these personnel would not be deployed and would only be 
required to provide security at fixed bases in the United 
States. Such a shortfall, the Air Force told the General 
Accounting Office, could be compensated for in a number of 
ways, including hiring civilian security guards. This latter 
reasoning seems to directly contradict the Air Force Reserve 
proposal to add AGRs--full time, uniformed military personnel--
to provide security at bases in the United States. For these 
reasons, this section would prohibit the Secretary of the Air 
Force from utilizing AGRs for base security at United States 
bases until six months after the Secretary has provided a 
report to the House Committee on National Security and the 
Senate Committee on Armed Services. The provision would require 
the report to address the rationale and cost effectiveness of 
such utilization of AGRs compared to the use of Department of 
Defense civilians or contractor personnel, as well as a plan 
for the re-employment, conversion to AGR status, or retirement 
of the current non-AGR workforce. The restrictions proposed to 
be established by this section on the use of AGR's for base 
security in the United States would not prohibit the proposed 
use of 13 AGR's as part of the deployable force protection unit 
being established by the Air Force.

                    Subtitle C--Military Technicians

  Section 521--Authority to Retain on the Reserve Active-Status List 
  Until Age 60 Military Technicians in the Grade of Brigadier General

    This section would restore the authority that existed prior 
to the enactment of the Reserve Officer Personnel Management 
Act (ROPMA) that permitted the Secretaries of the Army and Air 
Force to retain brigadier general military technicians on the 
active-status list up to age 60.

            Section 522--Military Technicians (Dual Status)

    The National Defense Appropriations Act for Fiscal Year 
1996 (Public Law 104-61) and the National Defense Authorization 
Act for Fiscal Year 1996 (Public Law 104-106) enacted 
provisions defining the term ``military technician'' which were 
not completely consistent with one another. This section would 
remove the inconsistencies by defining a military technician 
(dual status) as a federal civilian employee who is hired in 
accord with titles 5 or 32, United States Code, and who, as a 
condition of federal civilian employment, must maintain 
military membership in the selected reserve, and who also must 
be assigned to a position as a technician in the administration 
and training of the selected reserve, or to a position in the 
maintenance and repair of supplies or equipment issued to the 
selective reserve or armed forces. The section would also 
require that, unless exempted by law, all military technicians 
hired on or after December 1, 1995, (the date of enactment of 
Public Law 104-61) would be required to maintain military 
membership in the selected reserve unit by which they are 
employed as a military technician, or in a unit they are 
employed as a military technician to support. Finally, the 
section would require the Secretary of Defense, in coordination 
with the Director of the Office of Personnel Management, to 
develop a legislative proposal for the National Defense 
Authorization Act for Fiscal Year 1999 that would establish or 
clarify statutory guidelines in title 5, United States Code, 
for the hiring, management, separation, and retirement of Army 
and Air Force Reserve military technicians (dual status).

           Section 523--Non-Dual Status Military Technicians

    In recognition of the important direct readiness 
contributions being made by military technicians (dual status), 
the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106) established special rules and protections 
that set military technicians (dual status) apart from other 
federal civilian employees in the Department of Defense. In 
addition, the act established hiring restrictions that were 
designed, in part, to reduce the numbers of military 
technicians who never were members of the selected reserve, or 
for one reason or another after being hired subsequently became 
disqualified from selected reserve membership. The committee 
understands that at present there are approximately 3,800 such 
so-called non-dual status technicians, many of whom are 
performing clerical and administrative functions. In addition, 
the committee is disturbed to learn that contrary to the 
reductions in non-dual status technicians contemplated by the 
National Defense Authorization Act for Fiscal Year 1996 (Public 
Law 104-106), the number of non-dual status technicians in the 
Army Reserve has grown from almost 800 in fiscal year 1996 to 
nearly 1,300 in fiscal year 1997. This section would address 
that growth by capping the numbers of non-dual status 
technicians permitted in each of the reserve components in 
fiscal year 1998, and require the service secretaries in future 
years to reduce the number of non-dual status technicians by at 
least 10 percent per year. Furthermore, the section would 
require the Secretary of Defense to submit, by March 31, 1998, 
a plan for eliminating non-dual status technicians. In 
developing the plan, the Secretary would be required to 
consider elimination or consolidation of functions or 
positions, contracting out of functions, conversion of 
technicians and technician positions to non-technician 
competitive federal positions or employees, and the use of 
incentives to facilitate the directed reductions.

  Subtitle D--Measures to Improve Recruit Quality and Reduce Recruit 
                               Attrition

           Section 531--Reform of Military Recruiting Systems

    This section would require the Secretary of Defense to 
undertake a series of department-wide reforms to:
          (1) Improve data collection and analysis of the 
        reasons for new recruit attrition as part of an effort 
        to undertake targeted measures to control that 
        attrition;
          (2) Create incentives for recruiters to improve the 
        qualification screening of prospective recruits;
          (3) Assess the trends in the use of waivers to permit 
        the enlistment of persons with otherwise disqualifying 
        conditions; and
          (4) Ensure the prompt separation from the military 
        services of new recruits who are unable to complete 
        basic training.

  Section 532--Improvements in Medical Prescreening of Applicants for 
                            Military Service

    A General Accounting Office review of matters related to 
the 30 percent attrition of all military personnel during first 
terms of enlistment concluded that attrition could be reduced 
through better medical prescreening of applicants for military 
service. The committee strongly concurs with the findings of 
the review. Therefore, this section would direct the Secretary 
of Defense to undertake a number of reforms, to include:
          (1) Requiring each applicant for military service to 
        provide the name of the applicant's medical insurer, 
        the names of past medical providers, and a release to 
        obtain the applicant's medical records;
          (2) Revising the questions asked of applicants to tie 
        the questions more directly to conditions that most 
        frequently result in medical separations;
          (3) Assigning to a contractor or agency other than 
        the Military Entrance Processing Command (MEPCOM) the 
        responsibility for evaluating medical conditions of 
        recruits that are missed during MEPCOM's accession 
        processing; and
          (4) Requiring all applicants for military service be 
        tested for use of illegal drugs at the MEPCOM station.

       Section 533--Improvements in Physical Fitness of Recruits

    This section would direct the Secretary of Defense to 
undertake a range of measures to improve the level of physical 
fitness of new recruits prior to the start of basic training, 
including the use of incentives, monetary and otherwise, for 
new recruits in the delayed entry program to voluntarily 
participate in supervised conditioning activities. This section 
would permit the use of Department of Defense military fitness 
facilities for this purpose, as well as the use of military 
medical facilities if the new recruit is injured during the 
supervised conditioning activities.

              Subtitle E--Military Education and Training

    Section 541--Independent Panel to Review Military Basic Training

    This section would require the establishment of a panel to 
review the basic training programs of the Army, Navy, Air Force 
and Marine Corps and to make recommendations for improvements 
to these programs.
    The committee believes that such reform is necessary based 
on what it has heard in recent visits to military installations 
as well as on the strong, unequivocal statements of non-
commissioned officers and field commanders of all services in 
most of the field locations visited by the committee staff last 
fall. These mid-level military leaders expressed concern that 
graduates of the services' basic training programs were 
emerging without the physical fitness, skill in basic military 
tasks, discipline, and acculturation to service values needed 
for the actual job and readiness requirements of an operational 
unit. In the minds of many who shared their views, such 
insufficiently prepared basic training graduates represented 
significant burdens, not assets, to units already overburdened 
by high operations tempo and constrained resources.
    Therefore, this section directs the panel on military basic 
training to review the course objectives, structure, and length 
of each of the military services' basic training programs. With 
regard to the review of the basic training programs, the panel 
should focus on two key questions:
          (1) Do the services' basic training programs produce 
        graduates who are adequately trained to ensure that 
        they report to operational units with an appropriate 
        level of skills, physical conditioning and military 
        socialization to meet unit requirements and operational 
        readiness?
          (2) Given the demographics, education and background 
        of new recruits, are the basic training systems and 
        objectives most efficiently and effectively structured 
        and conducted to produce graduates who meet service 
        needs?
    This section also would require the panel to review the 
basic training policies for each of the military services with 
regard to the issue of gender-integrated basic training. As 
part of this review, the panel should focus on the historical 
as well as the current rationales for integrating or 
segregating basic training, particularly with regard to the 
relevance of the rationales and their consideration of the 
impact on readiness. In focusing on the historical rationale, 
the panel should determine and evaluate the reasons the Air 
Force and Navy chose to integrate basic training, as well as 
the Army's rationale for implementing an integrated basic 
training initiative in 1976, then abruptly disestablishing this 
initiative in 1982. The panel should also assess the degree to 
which different standards have been established or implemented, 
and determine whether basic training performance standards are 
based on military readiness. Additionally, the panel should 
compare the attrition rates and readiness and morale of gender-
integrated basic training units with gender-segregated basic 
training units.
    This section would require the panel to submit its 
completed evaluation of the gender-integrated and gender-
segregated basic training programs, along with recommendations 
for changing or improving the current programs, within one year 
of the panel's establishment. It also would require Congress, 
based on the panel's recommendations, to consider whether to 
require by law that the military services conduct gender-
segregated basic training.

   Section 542--Reform of Army Drill Sergeant Selection and Training 
                                Process

    The committee believes that because drill sergeants perform 
one of the most crucial, as well as one of the most difficult 
missions in the Army, standards for entrance into and 
graduation from training must be rigorous. As a part of a 
review of the initial entry training system in the Army, 
committee members heard first-hand a range of recommendations 
from drill sergeants, drill-sergeant instructors, and drill-
sergeant trainees about needed reforms to improve the selection 
and training processes of drill sergeants. Building on those 
recommendations, this section would require the Secretary of 
the Army to institute a number of reforms, including:
          (1) Chain-of-command assessments of the suitability 
        and qualifications of all drill sergeant candidates;
          (2) Psychological screening of all drill sergeant 
        candidates;
          (3) Revision of the drill-sergeant trainee evaluation 
        system to expand assessments of qualifications and 
        suitability to include ``whole-person'' evaluations; 
        such revisions could include the use of drill sergeant 
        trainee peer evaluations and subjective evaluations 
        from instructors in the drill sergeant course;
          (4) Providing all drill sergeant trainees prior to 
        graduation with opportunities to work with actual new 
        recruits in initial entry training; and
          (5) Revision of the military personnel records system 
        to permit certain persons, under conditions prescribed 
        by the Secretary, to leave drill sergeant training 
        without penalty or stigma on the person's future 
        military career.
    This last reform stems from the committee's view that it 
takes more than being a good soldier--professionally competent, 
well motivated, and dedicated to the task at hand--to be a good 
drill sergeant, and that an inability to meet all the higher 
standards required of a drill sergeant should not prevent good 
soldiers from continuing to make professional contributions to 
the Army. The section would also require the Secretary of the 
Army to provide the House Committee on National Security and 
the Senate Armed Services Committee a report by March 31, 1998 
of the reforms initiated, or the Secretary's rationale for not 
undertaking the prescribed measure.

Section 543--Requirement for Candidates for Admission to United States 
                Naval Academy to Take Oath of Allegiance

    This section would codify what now is implemented by 
policy--that persons seeking admission to the United States 
Naval Academy take and subscribe to an oath of allegiance to 
the United States as a requirement for admission. The change 
would make the requirement for an oath consistent in law for 
all three service academies.

  Section 544--Reimbursement of Expenses Incurred for Instruction at 
          Service Academies of Persons from Foreign Countries

    The committee believes that the Secretary of Defense has 
forgotten his responsibility for sound fiscal stewardship in 
connection with the attendance of international students at the 
U.S. service academies. Current law authorizes up to 40 
international students at any one time to attend full-time each 
of the respective service academies and requires that the 
foreign country sponsoring a student reimburse the U.S. 
government for the cost of the instruction, as well as any pay, 
allowances and emoluments the U.S. provides to the student. The 
reimbursement requirement can be waived in whole or in part by 
the Secretary of Defense. The committee is shocked to learn 
that of the 115 international students from 39 countries who 
are enrolled in 1997 at the service academies, the Secretary of 
Defense has waived the full cost of attendance for 106students. 
This extravagant use of waivers requires the Department of Defense to 
expend $7.2 million annually, including $4.2 million in operations and 
maintenance funding and $3.0 million in military personnel funding. The 
committee believes this disregard for sound fiscal practice must be 
ended and that foreign governments must share a larger burden of 
sending their citizens to the service academies. Therefore, the 
committee directs the Secretary of Defense to re-negotiate current 
agreements with the nations who have students in attendance at the 
service academies. As an incentive to those negotiations, the committee 
recommends a reduction in fiscal year 1998 of $4.2 million in Defense-
wide Operations and Maintenance accounts and a $1.0 million reduction 
in the amounts authorized for military personnel in the Army, Navy and 
Air Force. In addition, this section would constrain the Secretary of 
Defense's waiver authority for international students entering the 
service academies after the date of enactment to no more than 25 
percent of the per-person cost of attendance by an international 
student, but would permit the Secretary, in exceptional cases, to waive 
more than 25 per cent of the cost for up to five international students 
at each of the service academies. Furthermore, the committee directs 
the Secretary of Defense to provide a report no later than April 30, 
1998, to the House Committee on National Security and the Senate 
Committee on Armed Services detailing the results of the required 
negotiations. If there is not substantial improvement in the 
reimbursement rates for international students at the service 
academies, the committee will consider further constraints on the 
program.

          Section 545--United States Naval Postgraduate School

    This section would amend the current authority governing 
admittance of civilians to the Naval Postgraduate School and 
create new authority to admit enlisted personnel to the school. 
Thus, the section would authorize the Secretary of the Navy to 
admit civilians on a space available basis, with reimbursement 
being required either on an in-kind basis or on a cost-
reimbursable basis. In addition, the section would authorize 
enlisted members to attend courses on a space available basis.

     Section 546--Air Force Academy Cadet Foreign Exchange Program

    The President's budget request sought authority for the 
Secretary of the Air Force to establish an exchange program at 
the Air Force Academy whereby up to 24 academy cadets could 
receive up to a semester of instruction at foreign military 
academies. In turn, on a one-for-one-basis, the Air Force 
Academy would accept students from the foreign military academy 
for up to a semester of instruction. This section would 
authorize the exchange program but would limit the program to 
more than 10 exchanges per year and the academy's annual 
expenditure on the program to $50,000. The limitations reflect 
committee concerns that the Secretary of Defense has liberally 
waived the reimbursement requirements for international 
students attending each of the service academies. The result is 
that the Department of Defense has borne most of the costs of 
international student attendance. While the committee agrees 
with the intent of this new Air Force Academy exchange program, 
the committee believes that this new program should first 
demonstrate an ability to operate on a basis of foreign 
governments providing comparable levels of support as are 
provided by the Air Force.

    Section 547--Training in Human Relations Matters for Army Drill 
                           Sergeant Trainees

    This section would require the Secretary of the Army to 
expand the human relations instruction now provided to drill 
sergeant trainees to at least two days of instruction. This 
instruction could include such topics as instructor-trainee 
relationships, leadership styles, professional conduct, lawful 
and unlawful discrimination, sexual harassment and misconduct, 
team building and counseling. In developing this instruction, 
the committee directs that the Secretary use the capabilities 
and expertise of the Defense Equal Opportunity Management 
Institute, and also recommends the Secretary review the human 
relations training program used by the Air Force in training 
its Military Training Instructors.

 Section 548--Study of Feasibility of Gender-Segregated Basic Training

    This section would require each of the military service 
secretaries to submit a report to the Senate Committee on Armed 
Services and the House Committee on National Security, within 
180 days after the date of enactment, on gender-segregated 
basic training. The report should address the feasibility, 
implications and cost of conducting segregated basic training 
and for requiring drill sergeants of basic training units to be 
the same sex as the recruits in those units.

              Subtitle F--Military Decorations and Awards

 Section 551--Study of New Decorations for Injury or Death in Line of 
                                  Duty

    This section would require the Secretary of Defense, in 
cooperation with the secretaries of the military departments 
and the Secretary of the Treasury with regard to the Coast 
Guard, to determine the appropriate name, policy, award 
criteria, and design for two new decorations. The new 
decorations would recognize the services of members of the 
armed forces who are killed or wounded under non-combat 
conditions and United States civilian nationals who are killed 
or wounded while serving in an official capacity with a United 
States armed force. The provision would require the Secretary 
to submit a legislative proposal to establish the two 
decorations and a recommendation concerning the need for the 
new decorations to the House Committee on National Security and 
the Senate Committee on Armed Services not later than July 31, 
1998.

 Section 552--Purple Heart to be Awarded Only to Members of the Armed 
                                 Forces

    This section would limit eligibility for the award of the 
Purple Heart to members of the armed services. The provision 
would become effective after the end of the 180-day period 
beginning on the date of enactment.

   Section 553--Eligibility for Armed Forces Expeditionary Medal for 
   Participation in Operation Joint Endeavor or Operation Joint Guard

    This section would require the Secretary of Defense to 
designate participation by service members in Operation Joint 
Endeavor or Operation Joint Guard in the Republic of Bosnia 
andHerzegovina as sufficient to meet the requirements for award of the 
Armed Forces Expeditionary Medal.

     Section 554--Waiver of Time Limitations for Award of Certain 
                    Decorations to Specified Persons

    This section would waive the statutory time limitations for 
the award of military decorations to provide for the award of 
those decorations to individuals who have been recommended for 
award of the decorations by the secretaries of the military 
departments.

                       Subtitle G--Other Matters

    Section 561--Suspension of Temporary Early Retirement Authority

    The committee believes that the pace of the drawdown has 
sufficiently slowed to allow a one-year suspension of the 
authority to retire service members under the temporary early 
retirement authority. The committee recognizes that future use 
of the authority may be required to shape the force structure 
and facilitate additional possible reductions in manpower 
levels resulting from the Quadrennial Defense Review. 
Additionally, the committee believes that funding within 
military personnel accounts should be allocated to directly 
address the urgent quality of life concerns expressed by the 
service members who will continue to serve. Accordingly, this 
section would suspend the authorization for the early 
retirement program during fiscal year 1998.

Section 562--Treatment of Educational Accomplishments of National Guard 
                     ChalleNGe Program Participants

    The committee notes that the services restrict the 
accession of individuals who possess general education 
development (GED) certificates, to include participants in 
National Guard ChalleNGe programs. The committee believes that 
participants in the National Guard ChalleNGe program who 
achieved GED certificates as a result of the program have 
demonstrated the necessary commitment and discipline to serve 
successfully on active duty in the armed services.
    Accordingly, this section would deem a GED certificate 
achieved as a result of the individual's participation in a 
National Guard ChalleNGe program the same as a high school 
diploma for the purpose of determining the eligibility of the 
person for enlistment in the armed forces.

 Section 563--Authority for Personnel to Participate in Management of 
                      Certain Non-Federal Entities

    This section would authorize service secretaries to approve 
on a case-by-case basis the limited service of military and 
civilian personnel in their official capacities as directors, 
trustees, or officers of a military welfare society, such as 
Army Emergency Relief, or other designated entities. Such 
entities include bodies that regulate international athletic 
competition and the athletic programs of the service academies, 
educational accreditation organizations that evaluate the 
service academies and other schools of the armed forces, and 
organizations that regulate and support military health care. 
Compensation for such service would be prohibited, as would 
involvement in the day-to-day operations of the entities.

           Section 564--Crew Requirements of WC-130J Aircraft

    This section would require the Secretary of the Air Force 
to study the manpower requirements for the WC-130J aircraft 
engaged in aerial weather reconnaissance and eyewall 
penetration of tropical cyclones. The provision would require a 
report to the House Committee on National Security and the 
Senate Committee on Armed Services upon completion of the 
study. The provision also would preclude navigator and other 
manpower requirements of units engaged in eyewall penetration 
of tropical cyclones from being reduced below the requirements 
established as of October 1, 1997 until the end of a six-month 
period after the submission of the report.

          Section 565 and Section 566--Civil-Military Programs

    The National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106) terminated the authority of the Department 
of Defense to conduct civil-military cooperative action 
programs, an authority that had been enacted in October 1992. 
Congress took the action based on a belief that many of the 
programs being conducted under the civil-military cooperative 
action program had minimal military readiness or training 
value. In recognition of the fact that some military mission 
training undertaken to accomplish valid unit training 
objectives could have an incidental benefit to non-Department 
of Defense entities, the Congress created a limited authority 
in the National Defense Authorization Act for Fiscal Year 1996 
(Public Law 104-106) to permit military units, under certain 
strict criteria, to conduct valid training that would have an 
incidental benefit to non-department entities. The committee, 
therefore, was chagrined to learn that many of the programs 
formerly conducted under the civil-military cooperative program 
were still being funded by the Department of Defense under a 
slightly revised name: The Department of Defense Civil-Military 
Innovative Readiness Training Programs. Even more disturbing to 
the committee was the directive issued by one service 
headquarters that civil-military and community support programs 
would be the number one operational and training priority for 
that service's reserve component at all times other than 
mobilization. To ensure support for the directive and service 
objectives, officers appearing before command selection boards 
were being asked to submit a resume of their personal community 
support and civil-military program involvement. Although that 
service directive was canceled following committee questions 
about it, the committee believes that a review of the 
Department and service civil-military and community support 
programs is needed. Therefore, section 565 would require the 
Comptroller General to conduct such a review. In ordering this 
Comptroller General review, the committee's intent is not to 
quell or deter projects which meet the criteria established by 
Public Law 104-106. Rather, the committee's intent is that 
current and future training efforts that meet the criteria 
established in law should continue apace. In addition, section 
566 would prohibit promotion and selection boards from using 
involvement in civil-military and community support programs as 
a special criteria to evaluate the fitness of members of the 
armed forces for promotion, commandor other competitive 
selection. Finally, the committee recommends a reduction of $8.0 
million in the funding requested for the Department of Defense Civil-
Military Innovative Readiness Training.

    Section 567--Continuation of Support to Senior Military Colleges

    The section would require that the Secretary of Defense 
continue support to the senior military colleges (Texas A&M 
University, Norwich University, The Virginia Military 
Institute, The Citadel, Virginia Polytechnic Institute and 
State University, and North Georgia College and State 
University) in three principal ways: 1) Retention of the long-
standing commitment by the Army to provide active duty service 
for all graduates of the colleges who desire it and who are 
recommended for it by their respective professors of military 
science; 2) Participation by the active duty personnel assigned 
to the Reserve Officers' Training Corps (ROTC) detachments at 
each college in the leadership, academic and military 
development of the corps of cadets, beyond ROTC programs; and 
3) Continued operation of the ROTC program at each of the 
colleges.

 Section 568--Restoration of Missing Persons Authorities Applicable to 
Department of Defense as in Effect Before Enactment of National Defense 
                 Authorization Act For Fiscal Year 1997

    This section would restore provisions pertaining to U.S. 
prisoners of war, those missing in action, and unaccounted for 
persons that were enacted in the National Defense Authorization 
Act for Fiscal Year 1996 (Public Law 104-106) and subsequently 
repealed by the National Defense Authorization Act for Fiscal 
Year 1997 (Public Law 104-201). Specifically, the section would 
expand the scope of current law by:
          (1) Making it applicable to Department of Defense 
        civilians and contractors accompanying armed forces in 
        the field;
          (2) Establish a 48-hour suspense for the commander's 
        initial report of a missing person's status;
          (3) Require the theater component commander's 
        involvement in the initial assessment of a missing 
        person's status;
          (4) Require the status of persons who were last known 
        alive to be reviewed every 3 years for 30 years 
        following initial report;
          (5) Re-establish criminal penalties for the knowing 
        and willful withholding of information from a missing 
        person's file;
          (6) Restore the requirement that a status review 
        board (when making determinations of death) must 
        provide a description of the location of body, if 
        recovered, and, if body not identifiable, a 
        certification by ``a practitioner of an appropriate 
        forensic science that the body recovered is that of the 
        missing person;'' and
          (7) Restore the ability of certain persons to request 
        status reviews of a limited number of Korean War cases.

Section 569--Establishment of Sentence of Confinement for Life Without 
                         Eligibility for Parole

    This section would add a new article to the Uniform Code of 
Military Justice. The new article would establish a court-
martial punishment of confinement for life without parole. This 
new punishment could be adjudged for any offense for which 
confinement for life is now an authorized punishment. Under 
current law, any accused who receives a punishment of 
confinement for life may be considered for parole. The section 
would also provide that a sentence of life without parole may 
only be set aside or modified by the action of the convening 
authority, secretary concerned, or other person authorized to 
act under normal post-trial review procedures, by court 
decision during appellate review, or by presidential pardon. 
Punishment of confinement for life without parole would apply 
to offenses committed after the date of enactment of the 
National Defense Authorization Act for Fiscal Year 1998.

  Section 570--Limitation on Appeal of Denial of Parole for Offenders 
                         Serving Life Sentence

    This section would amend section 952 of title 10, United 
States Code, to reflect a change in parole procedures for 
individuals convicted by court-martial who receive a punishment 
of confinement for life. In the case of a person serving a 
sentence of confinement for life who is denied parole, only the 
President or the Secretary concerned would be empowered to 
grant parole on appeal of that denial. This authority would not 
be delegable to subordinate officials.

    Section 571--Establishment of Public Affairs Branch in the Army

    This section would establish Public Affairs as a special 
branch of the Army. The committee expects that as a special 
branch, the Army will access, promote, manage, and assign 
officers and enlisted personnel of the branch in the same ways 
that it does for the other special branches like the Corps of 
the Army Medical Department, the Judge Advocate General's 
Corps, and Chaplains.
          TITLE VI--COMPENSATION AND OTHER PERSONNEL BENEFITS

                       ITEMS OF SPECIAL INTEREST

      Armed Forces Health Professions Scholarship Program (AFHPSP)

    The President's request contained two provisions that would 
allocate $96.4 million to the AFHPSP during fiscal year 1998 to 
offset the potential expense to individual scholarship 
recipients caused by an Internal Revenue Service (IRS) ruling 
that the scholarships are taxable as personal income.
    The committee is troubled that an IRS ruling can have the 
effect of diminishing the effectiveness of a federal program 
that must subsequently be revitalized by spending additional 
tax revenue. The committee notes that section 747 of the 
National Defense Authorization Act for Fiscal Year 1997 (Public 
Law 104-201) expressed the Sense of the Congress that the 
Secretary of Defense and the Secretary of the Treasury should 
work together to find a solution that results in the continued 
exclusion of AFHPSP scholarships from gross income. The 
committee is disappointed that an agreement could not be 
reached, and further, that there is no evidence that the 
Secretary of the Defense and the Secretary of the Treasury 
personally engaged on this matter when it became clear that an 
agreement could not be reached between officials at a lower 
management level.
    Accordingly, the committee recommends rejection of the two 
provisions included in the President's request. The committee 
is opposed to the use of tax revenue to reverse the affect of 
an IRS ruling in this matter. Before alternative solutions are 
considered, the committee requires a joint statement by the 
Secretary of Defense and the Secretary of the Treasury 
explaining why AFHPSP scholarships must be considered taxable.

         Communication of Retirement Benefits to New Accessions

    The committee is distressed about recent disclosures that 
recruiting materials have for decades failed to provide 
specific information about the total spectrum of retirement 
benefits, or worse, misrepresented the level of benefit that 
was authorized. The committee appreciates the anger felt by 
many retirees who viewed the commitments made by recruiters 
when they entered active duty as promises; promises that the 
retirees now know will not be kept.
    The committee considers this an intolerable situation that 
must be corrected. The committee is aware of initiatives within 
the Department of Defense to improve the documents used to 
communicate future retirement benefits to recruits. 
Accordingly, the committee directs the Secretary of Defense to 
report to the House Committee on National Security and the 
Senate Committee on Armed Services, not later than January 9, 
1998, the full extent of the review of these matters conducted 
by the Secretary, a detailed account of the actions taken and 
anticipated, a projection as to when all actions will be 
complete, and an assessment as to why the Secretary believes 
that his plan will provide a lasting solution to the problem.
    Additionally, the committee believes that an option should 
be considered to guarantee benefits by including the retirement 
benefits explanation document as part of the enlistment 
contract. Accordingly, the Committee directs the Secretary to 
include his assessment of such an option within the report.

                  Study of Certain Compensation Issues

    The committee is concerned about the effectiveness and 
efficiency of bonus and pay programs for aviation service, 
nuclear trained service members, and sea duty.
    The Navy, Marine Corps, and the Air Force have experienced 
decreasing retention among aviators as the airline industry has 
increased hiring. Since the cost of training a fully qualified 
experienced fighter pilot is estimated to exceed $6.0 million, 
the committee believes that an effective bonus is essential to 
protecting this valuable resource. The committee is aware of 
discontent about the structure of compensation for flying 
duties among enlisted and non-aviator crew members. A long term 
retention problem also exists with nuclear qualified service 
members in the Navy. The Navy has operated a series of 
retention bonuses to attract and retain the highly skilled 
officers and enlisted members needed to safely and effectively 
operate the Navy's nuclear power plants. The President's budget 
request included a provision to increase the maximum legislated 
amounts for the full range of bonuses and pay for nuclear 
trained service members. Finally, the committee is aware of 
discontent with the level of sea pay and interest within the 
Department of the Navy to restructure the program to give 
greater incentives for service members to volunteer for sea 
duty.
    In each case, inflation and changing retention conditions 
and attitudes have eroded the effectiveness of these three 
compensation programs. Accordingly, the committee directs the 
Secretary of Defense, in coordination with the secretaries of 
the military departments, to study the effectiveness of the 
compensation systems used to recruit and retain officers and 
enlisted members in aviation service, Navy nuclear duties, and 
sea duty. The Secretary should submit a report with the 
findings and recommendations resulting from this study to 
include three comprehensive legislative proposals to address 
the long-term compensation needs within each area of concern to 
the House Committee on National Security and the Senate 
Committee on Armed Services not later than March 31, 1998.

                       Tax Deferred Savings Plan

    The committee notes that the military services are 
considering a proposal to augment the current military 
retirement system by permitting military members on active duty 
to elect to participate in a tax deferred savings plan. The 
plan being considered would limit member contributions to a 
maximum of five percent of the member's basic pay and would not 
include matching payments by the government. The committee 
encourages the Secretary of Defense to report to the 
Congressional defense committees his assessment of the program 
structure he recommends for adoption and any alternative plans 
that were considered in the review process, the potential for 
implementation, the contribution of the program to sustaining 
the value of the military retirement benefit, and the merits of 
the proposal as a tool for shaping and managing the force.

                         LEGISLATIVE PROVISIONS

                     Subtitle A--Pay and Allowances

        Section 601--Increase in Basic Pay for Fiscal Year 1998

    This section would provide a 2.8 percent military pay raise 
as proposed in the President's budget request. Following an 
encouraging fiscal year 1997 budget request that for the first 
time in four years included a pay raise that kept pace with 
inflation, the committee is disappointed that the President's 
budget request for fiscal year 1998 reverted back to the ``by 
law'' model for military pay raises. The 2.8 percent pay raise 
is one half of one percent below the rate of pay increases in 
the private sector as measured by the Employment Cost Index 
(ECI).

Section 602--Annual Adjustment of Basic Pay and Protection of Member's 
            Total Compensation While Performing Certain Duty

    The committee is concerned that the ``by law'' model 
employed by the Department of Defense to set military pay 
raises systematically fails to provide the protection against 
inflation needed to retain the quality people that serve in the 
military today. The decrease to military pay raises described 
in the discussion of section 601 results from the legislative 
link between military and federal civilian pay increases.
    The committee is also concerned that service members are 
routinely subjected to reductions in income when they 
participate in training exercises. The committee is 
recommending provisions in this bill to respond to that 
concern. These provisions would authorize additional management 
flexibility in the payment of Basic Allowance for Subsistence, 
establish a new authority for hardship duty pay, and increase 
family separation pay. The committee believes that these 
provisions would provide commanders the tools necessary to pay 
deployed service members more efficiently and achieve savings 
that can be used to protect the level of income of service 
members participating in training exercises.
    Accordingly, this section would repeal the legislative link 
between military and federal civilian pay raises and would 
require military pay raises to be independently calculated 
using the Employment Cost Index. The provision would also 
mandate that a service member's total compensation not be 
reduced while assigned to duty away from the member's permanent 
duty station or while assigned to duty under field conditions 
while at the member's permanent duty station. The provision 
would authorize an exception to allow total compensation to be 
reduced during periods of such duty when the reductions were 
unrelated to the duty being performed. The committee is 
committed to ending the financial hardships imposed on members 
and their families when the basic allowance for subsistence 
(BAS) is terminated during training conducted under field 
conditions. Accordingly, the committee authorizes $50.0 million 
to pay BAS during training under field conditions and directs 
the Secretary of Defense to distribute the funds to the 
services according to the priorities established by the 
Secretary.

Section 603--Use of Food Cost Information to Determine Basic Allowance 
                            for Subsistence

    The committee is concerned that the termination of Basic 
Allowance for Subsistence (BAS) during deployment under field 
conditions or assignment to sea duty results in financial 
hardship for enlisted service members. The committee believes 
that service members should not suffer a lower level of income 
when deployed than when they are serving at their home station. 
Accordingly, this section provides the Secretary of Defense 
greater flexibility to continue to pay BAS when rations in kind 
are available. The provision would also index the annual growth 
in subsistence allowance to increases in the cost of the 
moderate food plan of the U.S. Department of Agriculture and 
repeal the current process of increasing the Basic Allowance 
for Subsistence at the same rate as the military pay raise.
    The committee believes that the additional flexibility for 
paying BAS that would be provided by this section would allow 
the Secretary of Defense to maintain income levels for deployed 
service members, restore equity in compensation between 
different groups of deployed forces, and manage compensation 
programs for deployed forces more efficiently.
    The committee does not intend that this reform of the BAS 
be interpreted as an opportunity to reconsider the tax 
treatment of the allowance. The committee firmly believes that 
the BAS must remain non-taxable.

 Section 604--Consolidation of Basic Allowance for Quarters, Variable 
           Housing Allowance, and Overseas Housing Allowances

    The committee is concerned that the current housing 
allowance system comprised of the Basic Allowance for Quarters 
and the Variable Housing Allowance, and based on service member 
expenditures, is inefficient and rife with inequities. The 
committee is also disappointed that the President's budget 
request did not include increases in housing allowances above 
the level of the pay raise. This is the second year that the 
budget request failed to keep the Secretary of Defense's 
promise to continue a six year program included in the fiscal 
year 1996 budget request to reduce the out-of-pocket housing 
costs to the Congressionally established standard of 15 percent 
for military members and their families.
    Accordingly, this section would consolidate the Basic 
Allowance for Quarters and the Variable Housing Allowance and 
would authorize $35.0 million to reduce out-of-pocket housing 
costs. The new allowance would be based on the cost of adequate 
housing for civilians with comparable income levels residing in 
the same area as military personnel. The section would index 
the annual growth in housing allowances to increases in the 
national average monthly cost of housing and repeal the current 
process of increasing the Basic Allowance for Quarters at the 
same rate as the military pay raise. The provision would also 
incorporate the authorities for overseas station housing 
allowance and family separation housing allowance and would 
protect service members from reductions in the rate of overseas 
station allowance not attributable to fluctuations in foreign 
currency rates, so long as the member's housing costs have not 
been reduced.
    The committee does not intend that this reform of housing 
allowances be interpreted as an opportunity to reconsider the 
tax treatment of military housing allowances. The committee 
firmly believes that the housing allowances must remain non-
taxable. The committee does intend that the portion of the new 
Basic Allowance for Housing which represents the amount 
previously characterized as the Basic Allowance for Quarters 
will continue to be reported as earned income for earned income 
tax credit purposes.

           Subtitle B--Bonuses and Special and Incentive Pays

  Section 611--One-Year Extension of Certain Bonuses and Special Pay 
                     Authorities for Reserve Forces

    This section would extend the authority for the selected 
reserve reenlistment bonus, the selected reserve enlistment 
bonus, the selected reserve affiliation bonus, the ready 
reserve enlistment and reenlistment bonus, and the prior 
service enlistment bonus until September 30, 1999.

  Section 612--One-Year Extension of Certain Bonuses and Special Pay 
Authorities for Nurse Officer Candidates, Registered Nurses, and Nurse 
                              Anesthetists

    This section would extend the authority for the nurse 
officer candidate accession program, the accession bonus for 
registered nurses, and the incentive special pay for nurse 
anesthetists until September 30, 1999.

 Section 613--One-Year Extension of Authorities Relating to Payment of 
                     Other Bonuses and Special Pays

    This section would extend the authority for the aviation 
officer retention bonus, special pay for health care 
professionals who serve in the selected reserve in critically 
short wartime specialties, reenlistment bonus for active 
members, enlistment bonuses for critical skills, special pay 
for enlisted members of the selected reserve assigned to 
certain high priority units, special pay for nuclear qualified 
officers extending the period of active service, and nuclear 
career accession bonus to September 30, 1999. The provision 
would also extend the authority for repayment of educational 
loans for certain health professionals who serve in the 
selected reserve and the nuclear career annual incentive bonus 
until October 1, 1999.

    Section 614--Increase in Minimum Monthly Rate of Hazardous Duty 
                   Incentive Pay for Certain Members

    This section would increase the amount paid to service 
members engaged in certain hazardous duties to $150 a month. 
This section would also increase the minimum amount paid to 
service members engaged in non-aviator aircrew duties and air 
weapons controller aircrew duties to $150 a month, and would 
increase the amount paid to service members engaged in free 
fall parachute jumping to $225 a month. To provide for the 
increases, the committee recommends an increase of $33.6 
million in the services' military personnel accounts over the 
amount in the budget request.

   Section 615--Availability of Multiyear Retention Bonus for Dental 
                                Officers

    This section would amend section 301d of title 37, United 
States Code, to give the Secretary of Defense discretionary 
authority to provide multi-year contracts to dental officers, 
particularly critical specialists. These contracts would 
obligate dentists for up to four years and would enhance 
retention and management of the dental corps. The provision 
would require that dentists with a specialty in oral and 
maxillofacial surgery with at least eight years of service be 
automatically eligible for these contracts.

   Section 616--Increase in Variable and Additional Special Pays for 
                        Certain Dental Officers

    This section would amend section 302b(a) of title 37, 
United States Code, to increase special pay for dental officers 
with eight or more years of service. Retention of dental 
officers remains a readiness concern for the military services. 
Retention of dentists is decreasing for every dental officer 
year group. Aggregate retention is 26 percent at 10 years of 
service and 13 percent at 20 years, compared to the Army's 
ideal force profile which calls for 40-50 percent retention at 
10 years and 30-35 percent retention at 20 years. In addition, 
the expected length of service was 7.4 years in 1996, down from 
11.8 years in 1982.

Section 617--Special Pay for Duty at Designated Hardship Duty Locations

    The committee is concerned about inequities in the 
compensation of service members when serving in locations that 
present quality of life hardships. Furthermore, the committee 
believes that service members should not suffer a lower level 
of income when deployed or permanently assigned to hardship 
locations. Accordingly, this section would establish a hardship 
duty pay for service members serving in locations that present 
quality of life hardships up to a maximum of $300 a month. The 
committee intends that this hardship pay be varied, at the 
discretion of the Secretary of Defense, by location, grade, 
years of service, or other factors to recognize the level of 
hardships at different locations and the frequency and duration 
of hardships experienced by individual service members over the 
course of a military career.
    The committee believes that the payment of hardship duty 
pay in coordination with the flexibility authorized in this 
bill to pay the Basic Allowance for Subsistence when deployed, 
would give the Secretary the compensation tools needed to 
ensure that deployed service members are compensated in a fair 
and equitable manner.

            Section 618--Selected Reserve Reenlistment Bonus

    This section would restructure the payment options 
available to the secretaries of the military departments for 
the selected reserve reenlistment bonus and would extend the 
period of eligibility for the bonus from members with less than 
10 years total military service to members with less than 14 
years service.

  Section 619--Selected Reserve Enlistment Bonus for Former Enlisted 
                                Members

    This section would restructure the payment options 
available to the secretaries of the military departments for 
the selected reserve enlistment bonus for former enlisted 
members and would extend the period of eligibility for the 
bonus from members with less than 10 years total military 
service to those with less than 14 years service.

  Section 620--Special Pay or Bonuses for Enlisted Members Extending 
                         Tours of Duty Overseas

    This section would authorize the payment of a bonus as an 
alternative to a monthly special pay to enlisted members who 
extend their tours of duty overseas.

     Section 621--Increase in Amount of Family Separation Allowance

    This section would increase the amount of family separation 
allowance paid to service members to $100 a month. To provide 
for the increase, the committee recommends an increase of $25.4 
million in the services' military personnel accounts over the 
amount in the budget request.

   Section 622--Change in Requirements for Ready Reserve Muster Duty 
                               Allowance

    This section would authorize the payment of the muster duty 
allowance not later than 30 days after the service member 
performs the duty.

            Subtitle C--Travel and Transportation Allowances

  Section 631--Travel and Transportation Allowances for Dependents of 
                   Member Sentenced by Court-Martial

    This section would remove the restrictions on authorizing 
travel and transportation allowances to a dependent of a 
service member who receives certain court-martial sentences.

                   Section 632--Dislocation Allowance

    This section would establish grade-based rates for 
dislocation allowances and would index the annual growth of 
dislocation allowances to increases in the national average 
monthly cost of housing.

    Subtitle D--Retired Pay, Survivor Benefits, and Related Matters

    Section 641--Time in Which Certain Changes in Beneficiary Under 
                   Survivor Benefit Plan May Be Made

    This section would remove the requirement that service 
members may change the beneficiary for the Survivor Benefit 
Plan from a former spouse to a spouse within one year of the 
date of remarriage. The committee notes that this provision 
does not change any of the other requirements with which the 
service member must comply before such a change of beneficiary 
could be selected.

                       Subtitle E--Other Matters

   Section 651--Definition of Sea Duty for Purposes of Career Sea Pay

    This section would authorize duty on a ship-based staff to 
be designated as sea duty for the purpose of qualifying for 
career sea pay.

   Section 652--Loan Repayment Program for Commissioned Officers in 
                       Certain Health Professions

    This section would amend chapter 109 of title 10, United 
States Code, to establish an education loan repayment program 
for specific health professions. The program would allow the 
military departments to repay health professionals' education 
loans in return for active-duty service obligations. The 
program would serve as an incentive for improving the direct 
accession of fully-trained health care specialists needed in 
chronically understaffed specialties.

 Section 653--Conformance of NOAA Commissioned Officers Separation Pay 
       to Separation Pay for Members of Other Uniformed Services

    This section would remove the limitations on the amount of 
separation pay that may be paid to commissioned officers of the 
National Oceanic and Atmospheric Administration (NOAA) and 
would exclude that portion of separation pay withheld for 
income taxes from the amount that must be repaid before 
becoming eligible for disability payments from the Department 
of Veterans Affairs. This section would conform the separation 
pay authority for NOAA commissioned officers with the 
separation pay authority for members of the armed services.

   Section 654--Reimbursement of Public Health Service Officers for 
                           Adoption Expenses

    This section would authorize officers of the Commissioned 
Corps of the Public Health Service to receive reimbursement for 
adoption expenses in the same manner as members of the armed 
forces.

  Section 655--Payment of Back Quarters and Subsistence Allowances to 
     World War II Veterans Who Served as Guerrilla Fighters in the 
                              Philippines

    The committee believes that World War II veterans who were 
captured by Japanese forces in the territory of the 
Philippines, escaped from captivity, and served as guerilla 
fighters in the Philippines are deserving of special 
consideration regarding the payment of quarters and subsistence 
allowances during the period when they served as guerilla 
fighters. Accordingly, this section would authorize the payment 
of quarters and subsistence allowances to qualified individuals 
who served as guerilla fighters during the period from January 
1942 through February 1945.

  Section 656--Space Available Travel for Members of Selected Reserve

    This section would provide authority for members of the 
Selected Reserve and their accompanying dependents to receive 
transportation on Department of Defense aircraft on a space 
available basis under the same terms and conditions that apply 
to active duty members of the armed forces and their 
dependents.

Section 657--Study on Military Personnel At, Near, or Below the Poverty 
                                  Line

    This section would direct the Secretary of Defense to 
conduct a study of members of the armed forces and their 
dependents who subsist at, near, or below the poverty line. The 
Secretary would be required to submit the findings of the study 
to the Congress not later than 180 days after the date of 
enactment of this act.

Section 658--Implementation of Department of Defense Supplemental Food 
        Program for Military Personnel Outside the United States

    Section 653 of the National Defense Authorization Act for 
Fiscal Year 1995 (Public Law 103-337) authorized a supplemental 
food program for military members and civilian employees of the 
armed services and their families assigned to overseas 
locations. The provision specified that the Secretary of 
Agriculture would provide the funding to support the program 
and the Secretary of Defense would administer the program. The 
committee notes that the program has never operated as intended 
because funding has never been provided.
    The committee urges the Secretary of Defense, in 
cooperation with the Secretary of Agriculture, to resolve the 
funding problem. In the interim, this section would authorize 
the Secretary of Defense to use funds appropriated to the 
Department of Defense to carry out the supplemental food 
program pending receipt of funding from the Secretary of 
Agriculture. Additionally, the section would, not later than 90 
days from the date of enactment of this act, require the 
Secretary of Defense to submit to the Congress a plan for 
implementing the program.
                   TITLE VII--HEALTH CARE PROVISIONS

                                OVERVIEW

    The committee is concerned that for the second consecutive 
year the President's budget request did not provide adequate 
funding for the Defense Health Program (DHP). The General 
Accounting Office (GAO) estimated the shortfall for fiscal year 
1998 to be between $424.0 million and $471.0 million. More 
disturbing is the fact that GAO estimated that the health 
program costs for fiscal years 1998 to 2003 could be $8.4 
billion greater than estimated by the Department of Defense.
    In response to Congressional concern that the DHP was once 
again used as a funding source for under-funded defense 
programs, the committee understands that the Administration 
plans to submit a budget amendment to increase the DHP by 
$274.0 million. The committee is very concerned that the 
proposed budget amendment, which has not yet been received by 
Congress, still would not provide for full funding of the 
Defense Health Program.
    The committee understands that the funding shortfall in the 
proposed budget amendment is due in part because the Department 
does not provide a cost-growth factor for technology and 
intensity of treatment. According to the GAO, the Health Care 
Financing Administration and the Institute for Defense Analysis 
consider that a cost growth factor of about one or two percent 
for technology and intensity of treatment is a reasonable 
factor for the Department to apply in estimating the Defense 
Health Program budget.
    The committee further understands that the President's 
budget request contained a $98.0 million reduction in the DHP, 
an assumed level of savings from the application of utilization 
management techniques. The committee is concerned that a 
reduction of this magnitude is not adequately justified. The 
GAO concluded that the Department ``did not have managed care 
program performance data to permit a more reliable estimate 
and, in the absence of such data, did not derive the 
utilization management savings assumption from a formal 
methodology or analysis.'' The GAO also explained that the 
introduction of utilization management generally can be 
expected to generate one-time savings, not continuous 
additional savings as assumed in the future year defense plan.
    In addition to using faulty assumptions to generate 
``savings'' in the Defense Health Program, the President's 
budget request leaves gaps in the DHP budget by not fully 
funding certain programs required by law, such as the Uniformed 
Services University of the Health Science.
    The consistent under-funding of the Defense Health Program 
reflects a serious lack of commitment by the Department to a 
key quality of life issue which service members consistently 
rank as a top concern. The DHP provides crucial health care 
services to millions of men and women who honorably serve or 
have served our country. The committee again strongly urges the 
Secretary of Defense to ensure that the DHP is fully funded in 
fiscal year 1999 and the future year defense plan.

                       ITEMS OF SPECIAL INTEREST

          CHAMPUS as a Second-Payer to Other Health Insurance

    The committee is concerned over the Department's recent 
policy change in the way the Civilian Health and Medical 
Program of the Uniformed Services (CHAMPUS) provides 
reimbursement for health care services after third-party 
insurers have paid their share of the service coverage. The 
committee understands that CHAMPUS has decided to apply its 115 
percent billing limit policy to payments made by other health 
insurance. Since many other health insurers reimburse providers 
at levels in excess of 115 percent of the CHAMPUS maximum 
allowable charge (CMAC), CHAMPUS now rarely pays any remaining 
cost to the beneficiary not covered by the other health 
insurance. This change is unfair to beneficiaries who have 
other health insurance and is seen as a further erosion in 
benefits promised to members who made a commitment to serve 
their country.
    While the committee understands that the new policy is 
consistent with Medicare policy, the committee also understands 
that the Department of Defense does not have the same ability 
to enforce its requirement that health care providers charge 
CHAMPUS beneficiaries no more than 115 percent of the CMAC 
rate. While Medicare can impose significant fines on providers 
who violate the Medicare laws, the Department has no similar 
authority. Therefore, the committee strongly urges the 
Secretary of Defense to establish mechanisms for enforcing the 
requirement that health care providers charge CHAMPUS 
beneficiaries no more than 115 percent of the CMAC rate, or 
that it continue to pay for health care services when paying as 
a second payer to other health insurance under the Department's 
previous policy.

                        Pacific Medical Network

    The committee authorizes $5.0 million in procurement to 
extend the Pacific Medical Network (PACMEDNET) prototype 
capability from Hawaii to the Korean peninsula and other remote 
Pacific areas to enhance military readiness and improve the 
quality of health care in the Pacific theater. This effort will 
ensure that military members and their families stationed in 
the Pacific will have access to state-of-the-art medical 
expertise and information no matter where in the world medical 
experts are physically located.

                            TRICARE Program

    The committee is concerned about several aspects of the 
Department of Defense's TRICARE managed health care program. 
The committee is most concerned that substantial changes are 
being made to the TRICARE program without benefit of a 
comprehensive evaluation of the program, as was directed by 
section 717 of the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106). Moreover, the committee 
is concerned by a General Accounting Office finding that the 
Department does not have a full understanding of the cost 
implications of the numerous program changes. Such frequent, 
significant and potentially costly changes to this complex 
program makes it very difficult to gain a full understanding of 
the effectiveness of the program--to accurately measure its 
successes, failures and need for modification.
    While the committee is pleased with many of the preliminary 
findings of a survey of enrollees of TRICARE Prime, the HMO 
option--that enrollees are most satisfied with the quality of 
medical care they receive through TRICARE Prime, their access 
to care through Primeand the convenience of the plan--the 
committee believes it is critical for a full evaluation of the program 
to be conducted, particularly before significant programmatic changes 
are made. Therefore, the committee recommends that the Department hold 
the program stable while it conducts a thorough, independent evaluation 
of the program's ability to improve beneficiary access to quality 
health care in a cost-effective manner.
    Stabilizing the program for the period of time needed to 
conduct an extensive evaluation would permit the Department to 
focus on internal programmatic improvements such as the 
portability of enrollment, computer systems support and the 
transfer of patient record information to ensure more 
appropriate continuity of care and service for beneficiaries. 
Additionally, such an evaluation could address concerns being 
raised by many health care providers that the TRICARE program 
imposes too many administrative burdens on providers, and that 
TRICARE reimbursement rates are not adequate in some areas to 
attract quality providers. The committee believes that holding 
the program stable for the duration of this evaluation would 
permit full analysis of these issues so that valid 
recommendations for major design changes to improve the program 
could then be incorporated into any new or existing contract.
    While the committee lauds the Department's effort to 
implement capitated budgeting, the committee is concerned that 
this effort has not been fully evaluated on a limited basis to 
determine whether this concept would result in measurable 
improvements to the program. The committee believes that a key 
to successful use of capitated budgeting is the strict 
enforcement of access standards to ensure that access to care 
is not hampered. Without strict enforcement measures, military 
treatment facilities may be inclined to enroll more 
beneficiaries into TRICARE Prime at the military facility than 
the facility can effectively accommodate. As a result, the 
primary objective of the TRICARE program--improving access to 
care--may be difficult, if not impossible, to meet. Therefore, 
while the committee believes that the concept of alternative or 
revised financing appears to have merit, the committee 
continues to believe that efforts to introduce such financing 
mechanisms should be sufficiently tested in only one or two 
TRICARE regions prior to full implementation.

              Vietnam Repatriated Prisoner of War Program

    The committee recommends an increase of $1.0 million in the 
Defense Health Program authorization to support the Vietnam 
Repatriated Prisoner of War Program (RPOW) at the Center of 
Prisoner of War Studies at the Naval Operational Medicine 
Institute in Pensacola, Florida. The committee understands that 
the RPOW program, a longitudinal study that has been ongoing 
for 24 years, is the only repository for prisoner of war case 
studies available in the United States and, as such, has 
provided a tremendous collection health data on former Navy, 
Marine Corps and Air Force prisoners of war (POWs). 
Furthermore, the program provides annual physical examinations 
to former Navy and Marine Corps POWs who are not eligible for 
medical care through the military health services system. The 
committee applauds the Naval Operational Medicine Institute for 
its efforts in this very worthwhile program.

                         LEGISLATIVE PROVISIONS

                    Subtitle A--Health Care Services

  Section 701--Expansion of Retiree Dental Insurance Plan to Include 
   Surviving Spouse and Child Dependents of Certain Deceased Members

    This section would amend section 1076c(b)(4) of title 10, 
United States Code, to allow the survivors of members who died 
while on active duty to participate in the Retiree Dental 
Insurance Plan.

 Section 702--Provision of Prosthetic Devices to Covered Beneficiaries

    This section would amend section 1077(a) of title 10, 
United States Code, to allow for prosthetic devices to be 
provided to CHAMPUS beneficiaries for significant conditions, 
as determined by the Secretary of Defense.

                      Subtitle B--TRICARE Program

   Section 711--Addition of Definition of TRICARE Program to Title 10

    This section would amend section 1072 of title 10, United 
States Code, to include a definition of the TRICARE Program.

   Section 712--Plan for Expansion of Managed Care Option of TRICARE 
                                Program

    This section would require the Secretary of Defense to 
prepare a plan for expanding the managed care option of 
TRICARE--TRICARE Prime--into areas located outside the 
catchment areas of military treatment facilities where the 
Department determines it is cost effective to do so.
    The committee understands that there are certain rural 
areas where it would be difficult to establish a provider 
network to support TRICARE Prime. However, certain locations 
outside catchment areas may be ideal for this option due to the 
size of the beneficiary population at the location, as well as 
the existence of sufficient civilian health care provider 
networks.
    This section also would require the Secretary of Defense to 
evaluate the feasibility and cost-effectiveness of providing a 
health care stipend or a reduction in CHAMPUS cost-sharing 
requirements to active-duty members stationed in areas where it 
is not cost-effective or feasible to establish a managed-care 
option because there are few or no civilian health care 
provider networks in existence.

          Subtitle C--Uniformed Services Treatment Facilities

   Section 721--Implementation of Designated Provider Agreements for 
                Uniformed Services Treatment Facilities

    This section would amend section 722(c) of the National 
Defense Authorization Act for Fiscal Year 1997 (Public Law 104-
201) to clarify the implementation date of the designated 
provider program of the Uniformed Services Treatment Facilities 
(USTFs). This provision would allow for the USTFs to begin 
delivery of health care services as a designated providerwithin 
six months of signing the new designated provider agreement with the 
Department of Defense, or upon implementation of TRICARE in the USTFs 
region, whichever date is later.

               Section 722--Limitation on Total Payments

    This section would clarify the limitation on total program 
payments established in section 726(b) of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201).

        Section 723--Continued Acquisition of Reduced-Cost Drugs

    This provision would allow the Uniform Services Treatment 
Facilities to continue to purchase pharmaceuticals under the 
preferred pricing levels applicable to government agency 
purchases.

   Subtitle D--Other Changes to Existing Laws Regarding Health Care 
                               Management

 Section 731--Waiver or Reduction of Copayments Under Overseas Dental 
                                Program

    This section would amend section 1076a(h) of title 10, 
United States Code, to waive the dental copayment requirements 
for family members of active-duty members stationed overseas 
when they receive host-nation dental care under the Overseas 
Dental Program. The waiving of the cost-sharing requirements 
will afford family members the same level of dental benefit 
overseas that is available when they are stationed stateside. 
Additionally, this provision would eliminate a difficult 
administrative requirement to apply and track the application 
of cost shares. As a result, host-nation providers would be 
more likely to treat beneficiaries since they would no longer 
be required to perform these cumbersome administrative 
procedures.

  Section 732--Premium Collection Requirements for Medical and Dental 
                           Insurance Programs

    This section would amend section 1076b(b) and 1076c(c) of 
title 10, United States Code, to change the premium method 
prescribed for the Selected Reserve Dental Program and the 
Retiree Dental Program. Title 10 currently directs the 
Secretary of Defense to deduct and withhold the premium for 
coverage by the dental plan from the basic pay of a reservist 
or the retired pay of a retired member.
    The Defense Finance and Accounting Service (DFAS) does not 
currently have the capability to deduct premium costs from the 
basic pay of selected reservists or the retired pay of retirees 
and indicates that that capability will not be available for 
two years. As a result, in order for the Department of Defense 
to meet the October 1, 1997 prescribed start date for these 
programs, the premium collection procedures need to be amended.
    The committee is concerned that DFAS does not yet have the 
capability to collect the premiums for these programs as 
directed by the current law. When the Selected Reserve Dental 
Program was established in the National Defense Authorization 
Act for Fiscal Year 1996, (Public Law 104-106) the committee 
understood that DFAS was in the process of preparing to 
implement this capability based on the congressional directive 
that premiums be withheld from the basic pay of the reserve 
member, as well as a requirement for the Department to 
establish procedures for retired service members to pay the 
annual enrollment fee for TRICARE Prime by allotment. However, 
the committee understands that DFAS still has no mechanism in 
place for withholding program premiums from either the basic 
pay of reserve members or the retired pay of military retirees, 
or for allowing retirees to pay their TRICARE enrollment fees 
by allotment. As a result, this provision also would require 
the Secretary of Defense to submit a plan for the timely 
implementation of the necessary capabilities within the DFAS.

Section 733--Consistency Between CHAMPUS and Medicare in Payment Rates 
                              for Services

    This section would amend section 1079(h) of title 10, 
United States Code, to provide for greater consistency between 
CHAMPUS reimbursement rates for health care services and 
Medicare reimbursement rates.
    The committee has learned that in some cases CHAMPUS rates 
are below Medicare reimbursement rates, and that providers 
often are reluctant to serve CHAMPUS beneficiaries in these 
cases. This provision would require the CHAMPUS rates to be 
consistent with Medicare, except in those cases where the 
Secretary of Defense determines that higher CHAMPUS 
reimbursement rates are needed to ensure access to care. Also, 
with the consent of the health care provider, this section 
would allow the Secretary to authorize payments below the 
Medicare rate.

Section 734--Use of Personal Services Contracts for Provision of Health 
            Care Services and Legal Protection for Providers

    A recent opinion by the Department of Justice has 
determined that fee-basis physicians--part-time employees who 
provide medical qualification examinations to military-service 
applicants at Military Entrance Processing Command stations--
are not covered by the government malpractice liability 
coverage that covers civil service employees. This section 
would clarify that personal services contract employees 
providing health care services, including fee-basis physicians, 
are covered by the same malpractice litigation rules as other 
Department of Defense health care providers. The section would 
also enable the Secretary of Defense the authority to provide 
for reasonable attorney's fees in any litigation in which 
government attorneys do not provide representation.

 Section 735--Portability of State Licenses for Department of Defense 
                       Health Care Professionals

    This section would amend section 1094 of title 10, United 
States Code, to authorize members of the armed forces licensed 
to practice medicine and other health professions to practice 
such professions in any state, the District of Columbia, or a 
territory or possession of the United States while performing 
authorized duties for the Department of Defense.
    All military health professionals are required to maintain 
current professional licenses that authorize them to provide 
health services independently as health professionals. The 
licenses allow them to provide health care in military 
treatment facilities in any state, but they will not allow them 
to provide health services outside military treatment 
facilities for any purpose, not even for rendering services to 
military beneficiaries. This provision would remove the 
licensing obstacle that prevents military health professionals 
from practicing outside militaryfacilities, consistent with the 
Public Health Service Act (section 254f(e) of title 42, United States 
Code), that allows Public Health Service members licenses in one state 
to provide professional services in any state.

   Section 736--Standard Form and Requirements Regarding Claims for 
                          Payment for Services

    This section would amend section 1106 of title 10, United 
States Code, to eliminate the requirement for non-participating 
providers who provide services to Civilian Health and Medical 
Program of the Uniformed Services (CHAMPUS) beneficiaries to 
submit claims for payment for services on behalf of the 
beneficiary. This requirement has had the unintended effect of 
impeding access to care for military beneficiaries.

            Section 737--Medical Personnel Conscience Clause

    This section would require the Secretary of Defense to 
establish a uniform policy with regard to a conscience clause 
for abortion and family planning services. Under this policy, 
medical personnel who, for moral, ethical, or religious 
reasons, object to performing an abortion or to providing 
family planning services will not be required to perform such 
procedures unless their refusal to do so poses life-threatening 
risks to the patient.

                       Subtitle E--Other Matters

Section 741--Continued Admission of Civilians as Students in Physician 
         Assistant Training Program of Army Medical Department

    This section would amend chapter 407 of title 10, United 
States Code, to permanently continue a demonstration program 
established by the National Defense Authorization Act for 
Fiscal Year 1995 (Public Law 103-337) that authorized the 
Secretary of the Army to allow students from civilian 
accredited institutions of higher education to attend physician 
assistant training at the Academy of Health Sciences at Fort 
Sam Houston, Texas, in return for the provision of certain 
academic services from the civilian institution.
    The demonstration program, which has helped improve health 
care services to medically under-served areas of Texas, was 
initiated by the late Representative Frank Tejeda. The 
continuation of this worthwhile program is dedicated in his 
honor.

    Section 742--Emergency Health Care in Connection with Overseas 
  Activities of On-Site Inspection Agency of the Department of Defense

    This section would amend chapter 152 of title 10, United 
States Code, to authorize the Secretary of Defense to pay for 
emergency health care services obtained by a military member, 
civilian employee, or contractor employee of the On-Site 
Inspection Agency while on permanent or temporary duty in a 
former Soviet Union or former Warsaw Pact state.

   Section 743--Comptroller General Study of Adequacy and Effect of 
         Maximum Allowable Charges for Physicians under CHAMPUS

    This section would require the Comptroller General of the 
United States to study the adequacy of the CHAMPUS 
reimbursement rates and the effect of these rates on the 
participation of physicians in CHAMPUS.
    The committee has received numerous complaints from 
beneficiaries and providers that physicians are no longer 
serving CHAMPUS beneficiaries because providers are not being 
reimbursed in a timely manner, and they are not receiving 
adequate reimbursement to tolerate such delays. The committee 
is concerned that beneficiary access to care not be denied 
because of slow reimbursement procedures or low reimbursement 
rates. This study is intended to identify possible remedies for 
improving access to care.

    Section 744--Comptroller General Study of Department of Defense 
                           Pharmacy Programs

    This section would require the Comptroller General of the 
United States to evaluate the pharmacy programs of the 
Department of Defense. The study would examine the merits and 
feasibility of establishing a uniform formulary for military 
treatment facility pharmacies and civilian contractor 
pharmacies.
    The committee has received complaints from beneficiaries 
about being unable to receive certain prescribed medications at 
certain military pharmacies. The committee is concerned that 
many military facilities are severely reducing pharmacy 
formularies as a cost-saving measure. In some cases, these 
efforts may simply result in the shifting of costs from the 
individual facility to the Defense Health Program since 
beneficiaries may be forced to use TRICARE contractor 
pharmacies at an increased cost to both the Department of 
Defense and the beneficiary. This study is intended to identify 
solutions for providing for more uniform, cost-effective 
pharmacy programs.

    Section 745--Comptroller General Study of Navy Graduate Medical 
                           Education Program

    This section would require the Comptroller General of the 
United States to evaluate recommendations made by the Medical 
Education Policy Council of the Navy Bureau of Medicine and 
Surgery to restructure the Navy's graduate medical education 
program. The provision would prohibit the Navy from making any 
changes to its graduate medical education program until the 
evaluation is completed and a report on the findings of the 
evaluation is submitted to Congress. The provision requires the 
report to be submitted by March 1, 1998.

 Section 746--Study of Expansion of Pharmaceuticals by Mail Program to 
       Include Additional Medicare-Eligible Covered Beneficiaries

    This section would require the Secretary of Defense to 
provide a report to Congress, within six months of enactment of 
this act, on the feasibility, advisability and cost of 
extending the current mail-order pharmacy program for Medicare-
eligible beneficiaries operating in areas affected by base 
closures to all Medicare-eligible beneficiaries who do not 
reside near a military medical treatment facility.
    Medicare-eligible retirees who live near a military medical 
facility may obtain prescription drugs from that facility. 
However, a large percentage of these beneficiaries reside 
outside of the 40-mile catchment area of a military medical 
facility. These beneficiaries either must drive long distances 
to receive their prescription drugs or pay full retail prices 
to fill their prescriptions. The committee received testimony 
from the General Accounting Office that a mail-order pharmacy 
program for Medicare-eligible retirees and their families who 
do not live near a military medical treatment facility would 
fill a significant gap in the medical coverage of military 
Medicare-eligible beneficiaries since Medicare generally does 
not provide a pharmacy benefit.
    The Department of Defense and Congress currently are 
evaluating various options for ensuring the continued, full 
medical coverage of Medicare-eligible military beneficiaries. 
The committee has long supported efforts to enact legislation 
that would require the Health Care Financing Administration, 
the agency that manages the Medicare program, to reimburse the 
Department of Defense for health care services provided to 
Medicare-eligible military beneficiaries (a concept known as 
``Medicare subvention''). Currently, the committee is 
participating in a joint House and Senate task force effort to 
enact a Medicare subvention demonstration program. The Medicare 
subvention proposal under discussion, which if enacted would be 
part of legislation other than the National Defense 
Authorization Act, would require the Department to provide 
certain ``in-kind'' services, such as a pharmacy benefit. 
Therefore, in light of this requirement, and while efforts to 
evaluate other benefit options are ongoing, the committee 
believes the Department should fully evaluate the feasibility 
and desirability of establishing a mail-order pharmacy program 
to ensure that all Medicare-eligible military beneficiaries 
have access to inexpensive prescription drugs.
  TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED 
                                MATTERS

                       ITEMS OF SPECIAL INTEREST

                    Cost Accounting Standards Board

    On June 25, 1996, the chairmen of the committees on 
National Security and Government Reform and Oversight directed 
the General Accounting Office (GAO) to conduct a study 
analyzing and assessing the mission of the Cost Accounting 
Standards Board in light of acquisition reform. The study was 
due at the end of calendar year 1996.
    To date, the study has not been initiated or submitted to 
the committees. Therefore, the committee reiterates its 
interest in the GAO proceeding with the study, as prescribed in 
the June 25, 1996 correspondence, and submitting 
recommendations to the committees on National Security and 
Government Reform and Oversight no later than the end of this 
calendar year or as soon as practicable thereafter.

            Management Responsibility for Acquisition Policy

    In the report on H.R. 1530, the fiscal year 1996 Defense 
authorization bill (H. Rept. 104-131), the committee noted that 
the Department's current organizational structure may have 
unnecessarily bifurcated the functional responsibility for 
development and implementation of acquisition policy. The 
committee remains concerned that this arrangement has led to 
confusion over who within the Department is charged with 
determining the scope, pace and overall direction of 
acquisition reform policy. The committee is further concerned 
over recent efforts to diminish the role and responsibility of 
the Deputy Under Secretary of Defense (Acquisition Reform) 
position, which remains vacant. The committee understands that 
the responsibility for entire functions, such as electronic 
commerce, have been proposed for transfer to other 
organizations, diluting the focus and effectiveness of this 
office.
    The committee remains convinced that acquisition reform 
still needs an internal advocate within the Department to 
advance, both internally and externally, the recent reform 
initiatives and to continue to move forward with other reforms 
where appropriate. Such an advocate should be afforded the 
necessary functional responsibility, bureaucratic clout, access 
to senior decision makers and staff resources to continue to 
guide the Department down the path of aggressive reforms in the 
acquisition system. The committee remains concerned that recent 
steps by the Under Secretary of Defense for Acquisition and 
Technology may be undermining this goal and strongly urges the 
Secretary to take immediate action to ensure that the 
acquisition reform function remains an effective component of 
the Office of the Secretary of Defense.

          Training and Education of the Acquisition Workforce

    In 1990, the committee conducted a thorough assessment on 
the quality and professionalism, as well as the education and 
training, of the defense acquisition workforce. The committee's 
year long review resulted in the Defense Acquisition Workforce 
Improvement Act (DAWIA), enacted as part of the Fiscal Year 
1991 National Defense Authorization Act for Fiscal Year 1991 
(Public Law 101-510). This landmark legislation was aimed at 
creating a professional acquisition corps within each military 
service-an issue of concern to this day.
    In the past, inadequate training of program management and 
procurement personnel frequently contributed to the systemic 
deficiencies in the defense acquisition system. Today, such 
training is essential to the prompt and effective 
implementation of recent acquisition reform legislation and 
administrative directives. The breadth and depth of these 
efforts are dependent upon ensuring that those involved in the 
process are fully trained and educated and have incorporated 
this knowledge in their day-to-day activities. Indeed, new 
procedures and authorities are dependent on the ability of the 
workforce to master new skills such as market research, capital 
planning and budgeting, and commercial item acquisition.
    The committee recognizes that a number of initiatives aimed 
at improving the education and training of the acquisition 
workforce already have been undertaken. These initiatives 
include: the establishment of the Defense Acquisition 
University's Acquisition Reform Communications Council, 
utilization of the Federal Acquisition Institute, the creation 
of the DOD Deskbook, the establishment of a Commercial 
Advocates Forum, and the development of the National Council of 
Acquisition Professionalism. Most of these new resources are 
non-traditional methods of education and training-allowing for 
increased distance learning and improved real time access to 
new materials. The committee encourages the continued, and 
expanded, use of such new and innovative methods of training 
the workforce-methods that go beyond the traditional classroom 
training (e.g. at specified locations which often requires 
extensive travel and time away from the job).
    Furthermore, the committee believes that a number of other 
steps could be taken to enhance the education and training of 
the workforce. For example, greater involvement in curriculum 
development by the private sector, in coordination with the 
Defense Acquisition University, would add useful and important 
perspectives to the development of education and training 
materials provided to the workforce. In addition, limited 
training and education opportunities are often cited as an 
important obstacle to the goal of ensuring that both the 
government and industry acquisition personnel are fully 
informed of the continuing changes in acquisition policy. 
Greater use of innovative and non-traditional educational tools 
available in the private sector has the potential to be of 
great assistance to the Department in addressing this problem.
    Finally, given the significant reductions in the overall 
size of the acquisition workforce endorsed by the committee, it 
is even more critical that acquisition reform changes be fully 
integrated throughout the Department. The sweeping procedural 
changes inherent to these reforms should invariably lead to 
process, organizational and structural reforms, many of which 
should lead to the elimination of existing acquisition 
positions. Therefore, in allocating limited acquisition 
workforce education and training resources, the committee 
strongly urges the Department to ensure that such resources 
arefocused on positions that will continue to remain relevant following 
the mandated reductions and restructuring.

                         LEGISLATIVE PROVISIONS

                     Subtitle A--Acquisition Policy

    Section 801--Case-by-Case Waivers of Domestic Source Limitations

    Section 810 of the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201) extended the Secretary of 
Defense the authority to waive application of the domestic 
course limitations of section 2534 of title 10, United States 
Code, if he determines that such limitations ``would impede the 
reciprocal procurement of defense items under a memorandum of 
understanding providing for reciprocal procurement of defense 
items that is entered into under section 2531'' and also 
determines that that country does not discriminate against 
U.S.-produced defense products.
    Shortly following enactment of this law, the committee 
requested clarification from the Department as to how this 
expanded waiver authority would implemented. The committee 
received a written response from the Director of Defense 
Procurement stating that ``We plan to implement the McCain 
amendment by permitting case-by-case waivers based on written 
determinations by the Military Departments.'' The response also 
transmitted the planned changes to the Defense Federal 
Acquisition Regulations Supplement implementing this policy.
    Therefore, the committee was surprised and offended in 
receiving word that the Under Secretary of Defense for 
Acquisition and Technology, a few weeks before his scheduled 
departure from that office, issued a determination dated April 
7, 1997 invoking a blanket waiver of all limitations under 
section 2534 for all countries with which the United States has 
memoranda of understanding. This action stands in direct 
contradiction and violation of the position communicated to the 
committee on how the Department intended to implement the 
expanded waiver authority.
    Accordingly, the committee recommends a provision (sec. 
801) that would amend section 2534 of title 10, United States 
Code, to ensure that the waiver authority contained within this 
section can only be exercised on a case-by-case basis and not 
in a blanket manner. The committee specifically intends and 
directs that this provision render null and void the 
``Determination and Waiver'' signed by the Under Secretary of 
Defense for Acquisition and Technology and dated April 7, 1997.
    Finally, the committee is concerned that this episode may 
place in doubt its ability to consider future provisions of law 
affording the Secretary of Defense discretion in exercising 
waivers and other mechanisms of legal convenience. Without some 
assurance that the Department's representations to the 
committee can be trusted and that deviations to such 
representations require, at minimum, an obligation on behalf of 
the Department to extend the committee prior notice or 
consultation, the committee will be hard pressed but to pursue 
the most restrictive course of action in considering future 
legislation.

 Section 802--Expansion of Authority To Enter Into Contracts Crossing 
 Fiscal Years to All Severable Services Contracts Not Exceeding a Year

    This section would expand the authority of the Secretary of 
Defense or the Secretary of a military department to enter into 
severable service contracts which begin in one fiscal year and 
end in the next fiscal year.

    Section 803--Clarification of Vestiture of Title Under Contracts

    This section would establish in statute the title vesting 
provisions currently used by the Department of Defense in 
contractual agreements involving certain forms of contract 
financing.

     Section 804--Exclusion of Disaster Relief, Humanitarian, and 
   Peacekeeping Operations From Restrictions on Use of Undefinitized 
                            Contract Actions

    This section would amend section 2326 of title 10, United 
States Code to add disaster relief, humanitarian, and 
peacekeeping operations to the types of operations for which 
the head of an agency may waive the limits on the use 
undefinitized contracts.

 Section 805--Limitation and Report on Payment of Restructuring Costs 
                        Under Defense Contracts

    This section would codify in title 10, United States Code, 
the policy restrictions contained in section 8115 of the 
Omnibus Appropriations Act for Fiscal Year 1997 (Public Law 
104-208) relating to the allowability of restructuring costs 
under defense contracts and requiring a determination by the 
Secretary of Defense that the proposed business combination 
will lead to savings that are at least twice the amount of the 
costs allowed. This section would also consolidate the 
requirements of section 818 of the National Defense 
Authorization Act for Fiscal Year 1995 into a new title 10, 
United States Code, provision.

    Section 806--Authority Relating to Purchase of Certain Vehicles

    This section would amend section 2253 of title 10, United 
States Code by increasing the limit on the cost of purchase of 
right hand drive vehicles from $15,000 to $30,000.

              Section 807--Multiyear Procurement Contracts

    This section would require that no future multiyear 
procurement contract may be entered into by the Secretary of 
Defense unless such contract is specifically authorized by law 
in an act other than an appropriations act. This section would 
also codify various requirements that the Secretary of Defense 
must meet in order to either enter into or terminate a 
multiyear procurement contract.

           Section 808--Domestic Source Limitation Amendments

    This section would amend section 2534 of title 10, United 
States Code, to add shipboard work stations to the list of 
naval vessel components required to be procured from domestic 
sources. This section would also make permanent the expired 
requirement to procure certain valves and machine tools from 
domestic sources.

  Section 809--Repeal of Expiration of Domestic Source Limitation for 
                    Certain Naval Vessel Propellers

    This section would amend section 2534 of title 10, United 
States Code, to make the existing limitation on the procurement 
of naval vessel propellers permanent.

                       Subtitle B--Other Matters

  Section 821--Repeal of Certain Acquisition Reports and Requirements

    This section would repeal a number of miscellaneous 
acquisition related reporting requirements.

  Section 822--Extension of Authority for use of Test and Evaluation 
                  Installations by Commercial Entities

    This section would amend section 2681 of title 10, United 
States Code, to extend the expiration of existing authority 
allowing Department of Defense test and evaluation facilities 
to make excess capacity available to the commercial sector.

  Section 823--Requirement to Develop and Maintain List of Firms Not 
                     Eligible for Defense Contracts

    This provision would require the Secretary of Defense to 
develop and maintain a list of firms that have been designated 
ineligible for Department of Defense (DOD) contracts because 
they are owned or controlled by governments of countries that 
support terrorism. This required list would be used to prevent 
firms on the list from performing as subcontractors on DOD 
contracts. The Department of Defense would provide a copy of 
the list to each firm that submits a bid in response to a DOD 
solicitation. Such firms responding to DOD solicitations would 
not use a firm on the list for equipment, parts, or services in 
the performance of a DOD contract.
    Under section 2327(a) of title 10, United States Code, a 
firm responding to a DOD solicitation must disclose if it is 
owned or controlled by the government of a foreign country that 
the Secretary of State has determined to repeatedly support 
acts of international terrorism. Under section 2327(b), the 
Department of Defense cannot award a contract to such a firm. 
However, this provision only applies to prime contractors. If a 
subcontractor of a firm performing on a DOD contract is owned 
by a foreign country that supports international terrorism, 
section 2327 does not prohibit their performance as a 
subcontractor.
    The committee notes that such treatment of subcontractors 
owned by governments that support terrorism is inconsistent 
with the spirit of section 2327 of title 10. The committee 
believes that foreign governments that support international 
terrorism must in no way stand to benefit from Department of 
Defense contracts.
      TITLE IX--DEPARTMENT OF DEFENSE ORGANIZATION AND MANAGEMENT

                       ITEMS OF SPECIAL INTEREST

                  Armed Services Patent Advisory Board

    The committee is aware that the Armed Services Patent 
Advisory Board is responsible for coordinating security reviews 
of patent applications to determine if they contain sensitive 
technical information, the public release of which would be 
detrimental to national security. In performing this function, 
the Board fulfills the role assigned to the Department of 
Defense under chapter 17 of title 35, United States Code. The 
Patent Advisory Board is an unfunded program and as such, is 
staffed with personnel from the legal offices of the military 
departments.
    However, the committee notes that the Defense Technology 
Security Administration (DTSA) carries out near the same 
technology security review function when reviewing export 
license applications to determine if the technologies involved 
would harm national security if exported to foreign entities. 
In fact, the Defense Technology Security Administration and the 
Patent Advisory Board confer with many of the same technical 
experts at field activities of the military departments. The 
DTSA staff possesses technical knowledge that enable it to 
prescreen items before resorting to military field activities 
for analyses. A DTSA review can therefore be more expeditious 
than reviews coordinated by the Patent Advisory Board, since 
Board personnel are primarily legal staff members with limited 
knowledge of defense technologies.
    Therefore, the committee directs the Secretary of Defense 
to terminate the Armed Services Patent Advisory Board and 
transfer its functions to the Defense Technology Security 
Administration. While the committee recognizes that as an 
unfunded program the Board's termination would not necessarily 
result in cost savings, the committee believes that transfer of 
the security review function to the Defense Technology Security 
Administration would result in more expeditious and thorough 
reviews.

                     Defense Acquisition Workforce

    In the 104th Congress, the committee addressed specific 
concerns with the size and number of acquisition organizations 
and positions relative to the declining Department of Defense 
(DOD) budget and modernization program. Many of the acquisition 
reforms initiated by the committee were intended to ultimately 
reduce costs both to the private sector as well as the federal 
government. Full implementation of acquisition reforms can, and 
should, also result in fundamental changes and reductions in 
the structure of the Department's acquisition organizations. 
Specifically, it was the intent of the committee in relieving 
the Department from the burden of administering various 
antiquated and restrictive federal procurement laws that 
substantially fewer acquisition personnel would be required.
    In seeking to establish a balance between the Department's 
diminished modernization program and the Department's 
acquisition bureaucracy, the committee supported moderate 
reductions in acquisition personnel in section 906 of the 
National Defense Authorization Act for Fiscal Year 1996 (Public 
Law 104-106) and section 902 of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201). 
The committee understands that in implementing these 
reductions, the Department exceeded the Congressional mandates 
in fiscal year 1996 and plans to do so again in fiscal year 
1997.
    In addition to seeking overall reductions in personnel, the 
committee sought to engage the Department in determining the 
appropriate structure and organization of its future 
acquisition system. Section 906 of the National Defense 
Authorization Act for Fiscal Year 1996 (Public Law 104-106) 
required the Department to examine consolidation and 
reorganization options and report to Congress on its 
recommendations. Unfortunately, the report provided by the 
Department demonstrated no real effort to consider the various 
organizational and management options identified by the law 
and, not surprisingly, failed to propose any significant 
alterations to the current acquisition structure.
    The committee notes the 1995 Commission on Roles and 
Missions (CORM) sharply criticized the Department's acquisition 
organizations for maintaining redundant staffs and facilities 
for many types of common acquisition support activities. 
Therefore, the committee rejects the Department's conclusion in 
its report to Congress pursuant to section 906 of the National 
Defense Authorization Act for Fiscal Year 1996 (Public Law 104-
106) that it has adequately assessed and implemented options 
for restructuring its acquisition organizations for the 
purposes of improved efficiency.
    The committee strongly disagrees with the Department's 
assertion that increased downsizing of the workforce would 
place at risk the ability of the Department to equip combat 
forces and modernize against future threats. Rather, the 
committee regards the disproportionate size of the defense 
acquisition personnel workforce and infrastructure relative to 
the dramatically reduced procurement accounts as a serious 
drain upon current and future resources. The committee believes 
that the Department's continued refusal to restructure and 
streamline acquisition infrastructure will result in the 
squandering of resources urgently needed to offset 
modernization, readiness and quality of life shortfalls.

                     Defense Boards and Commissions

    The committee is aware the Department of Defense (DOD) has, 
in response to Presidential Executive Order 12838, 
``Termination and Limitation of Federal Advisory Committees,'' 
reduced discretionary boards and commissions by almost one-
third since 1993. In compliance with section 1054 of the 
National Defense Authorization Act for Fiscal Year 1996 (Public 
Law 104-106), the Department of Defense submitted a report to 
Congress on the merits of remaining DOD boards and commissions. 
The Department failed, however, to propose any significant 
further elimination of its advisory committees. The committee 
notes the current 53 discretionary and statutorily established 
boards and commissions, to include the Advisory Group on 
Electron Devices, Armed Forces Epidemiological Board, and 
Inland Waterways Users Board, will cost an estimated $16.2 
million in fiscal year 1997. The committee is concerned that 
many of the Department's statutory and discretionary boards and 
commissions may have outlived their original purpose.

                         Defense Reorganization

    The post Cold War global security environment has witnessed 
dramatic reductions in the size and capability of the U.S. 
military force structure while the organizational composition 
of the Department of Defense, especially at the management 
level, has remained largely unchanged. Since 1987, the Army has 
lost eight active divisions, the Navy has decommissioned three 
carriers and over 200 ships, and the Air Force has cut 12 
active and five reserve tactical wings. Notably, 1997 active 
duty personnel levels are equivalent to 1950 pre-Korean War 
levels. Meanwhile, from 1985 to 1996, the Office of the 
Secretary increased its staff 40 percent, military department 
headquarters continue to maintain redundant staffs, and, in 
spite of a 70 percent drop in procurement accounts since 1985, 
the Department's acquisition infrastructure has remained 
largely static.
    The committee maintains that the Department currently has 
sufficient authority to reorganize and restructure itself but 
has demonstrated little willingness to pursue such reforms. Not 
since the passage of the Goldwater-Nichols Department of 
Defense Reorganization Act of 1986 (Public Law 99-433) has the 
defense establishment undergone significant scrutiny and 
reform.
    To address these disturbing trends, the committee undertook 
a number of initiatives during the 104th Congress to encourage 
and compel the Department to focus on these matters and arrive 
at its own options and solutions. The committee deliberately 
chose not to legislate specific prescriptive remedies on the 
belief that the Department was better suited to develop such 
detail on its own. Therefore, the committee provided the 
Department with broad guidance and, where possible, relief from 
existing statutory limitations and dictates on organizational 
matters. To the committee's continuing disappointment, the 
Department's response to these efforts has ranged from passive 
resistance to outright defiance of statutory direction. After 
two years of attempting a preferred approach of cooperation and 
collaboration, the committee finds itself no further along in 
effecting the necessary change in the Department's management 
and organizational structure.
    The committee reaffirms its commitment to pursuing 
meaningful management reform of the Department of Defense and 
intends to make this goal a principal focus of its oversight 
and legislative activities for the remainder of this Congress.

       Management Headquarters and Headquarters Support Personnel

    The committee continues to be concerned with the size and 
cost of the Department's management headquarters and 
headquarters support activities. The committee believes the 
Department needs to further examine the structure and size of 
its management headquarters and headquarters support activities 
to eliminate unnecessary duplication, outdated modes of 
organization, and wasteful inefficiencies.
    The committee notes with concern that the Department has 
yet to submit the report and recommendations required by 
section 904 of the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201). While the Quadrennial 
Defense Review (QDR) has cited reducing and streamlining 
management headquarters and headquarters support activities as 
a priority, it has postponed implementation of reductions until 
another internal study reviews the issue and makes 
recommendations to the Secretary of Defense by August 29, 1997.
    The committee is encouraged with the QDR's assertion that 
the reduction of layers of oversight at headquarters and 
operational commands and elimination of management and support 
personnel will yield 10,000 military and 14,000 civilian 
positions. The committee concurs with the need to drawdown 
unnecessary infrastructure and supports the Department in this 
regard.
    The committee is aware of several organizations that have 
not been reported by DOD as management headquarters or 
headquarters support, but appear to be performing those 
functions. These organizations include the Air Force Studies 
and Analyses Agency, U.S. Army's Forces Command Field Support 
Activity, Air Combat Command's Studies and Analyses Squadron, 
and the U.S. Atlantic Command's Information Systems Support 
Group. Furthermore, the committee understands only a portion of 
the headquarters staffs of the DOD Inspector General and some 
Defense Agencies are reported by DOD as being management 
headquarters or headquarters support. For example, none of the 
headquarters of the numbered air forces are currently reported 
(although they were in the past), and the Navy's Program 
Executive Offices apparently have not been reported in spite of 
the DOD directive requiring their inclusion.
    The committee understands the Department will address the 
inadequacies of the current definition of management 
headquarters and headquarters support activities in its August 
29, 1997 report to the Secretary. Accordingly, the committee 
expects the aforementioned inconsistencies will be addressed in 
the August report.

                         LEGISLATIVE PROVISIONS

 Section 901--Limitation on Operation and Support Funds for the Office 
                      of the Secretary of Defense

    The committee in the 104th Congress passed a series of 
measures designed to improve the organization of the Office of 
the Secretary of Defense (OSD). The basis of the committee's 
action was concern with the expanding and evolving scope of OSD 
staff responsibilities at the expense of the primary role of 
enhancing the Secretary's decision making ability. While active 
duty forces were cut 33 percent over the last ten years and 
have been required to adapt innovative resource management 
techniques, OSD increased its size by 40 percent. The committee 
continues to be concerned with OSD's unwillingness to modify 
its excessive management structure in spite of the overwhelming 
fiscal pressures facing the rest of the Department. The 
committee believes OSD has deliberately avoided any downsizing 
effort and has elected not to lead the Department by example.
    The committee notes with concern the Department's non-
compliance with section 901 of the National Defense 
Authorization Act for Fiscal Year 1996 (Public Law 104-106) 
requiring a report on specific plans for improving 
organizational efficiency and effectiveness of the Office of 
the Secretary. The committee was disappointed to learn the 
Quadrennial Defense Review (QDR) postponed consideration of OSD 
reorganization pending an internal review panel. The committee 
believes the Department has been provided ample time to comply 
with section 901 and fails to support the rationale behind 
delaying these important issues. Specifically, the QDR states 
the Task Force on Reform will commence its examination of OSD 
in the spring of 1997 and will report its findings by November 
30, 1997, almost two years after the law required.
    The committee strongly believes OSD should reduce its size 
and report to Congress pursuant to section 901 of the National 
Defense Authorization Act for Fiscal Year 1996 (Public Law 104-
106). The committee recognizes OSD is not implementing 
personnel reductions at a rate sufficient to achieve the 
statutory requirement by October 1, 1997, as specified in 
section903 of the National Defense Authorization Act for Fiscal 
Year 1997 (Public Law 104-201). Accordingly, the committee recommends a 
provision (sec. 901) that would reduce the funding associated with the 
operation and support activities of the Office of the Secretary of 
Defense by 20 percent, as reflected within section 301 of this bill, 
and would restrict the obligation of 10 percent of authorized funding 
until the Department conforms to the statutory requirement to provide 
reports as required by section 901 of the National Defense 
Authorization Act for Fiscal Year 1996 (Public Law 104-106) and section 
904 of the National Defense Authorization Act for Fiscal Year 1997 
(Public Law 104-201).

         Section 902--Components of National Defense University

    This section would modify the definition of the National 
Defense University by adding the Information Resources 
Management College, and would also clarify the authority of the 
Secretary of Defense to hire professors, lecturers and 
instructors for the Information Resources Management College.

 Section 903--Authorization for the Marine Corps University to Employ 
                          Civilian Professors

    This section would authorize the Secretary of the Navy to 
employ civilian professors at any of the seven colleges within 
the Marine Corps University whose principal course of 
instruction is 10-months or more long.

     Section 904--Center for the Study of Chinese Military Affairs

    Section 904 would mandate the establishment of a Center for 
the Study of Chinese Military Affairs at the National Defense 
University. This center would provide a focus for academic 
study to develop understanding of Chinese political, security 
and military strategy; military operational art; tactical and 
organizational doctrine; and similar and related subjects. The 
center is intended to provide senior Department of Defense 
officials and the broader policy-making community with 
independent analysis of these issues.
    The committee emphasizes that the success of the center in 
fulfilling its mandate would be dependent upon the quality of 
its leadership and scholarship and its ability to operate in a 
manner removed from political influence of any kind. The 
center's director must be a distinguished scholar and possess 
the management skills necessary to shape the center's research 
toward a cohesive end. The director also must serve as a strong 
advocate for the center's academic independence.
    The center's prime mission would be to provide detailed 
analysis of Chinese military affairs. However, the center also 
should balance this requirement with the requirement to place 
military affairs in context. Consequently, the committee urges 
the that the center take a comprehensive ``net assessment'' 
approach to its research. The committee also directs that the 
center publish a report summarizing its research and the 
conclusions of that research not later than December 31, 1998 
and following on an annual basis in succeeding years. This 
report should also provide a summary analysis of current and 
projected Chinese military capabilities and their relationship 
to Chinese strategic goals.
    The committee believes a key strategic question for the 
United States in the coming century will be the role played by 
an increasingly powerful China in military and security 
affairs. The committee regards the center as an important tool 
for developing a deeper understanding of the factors shaping 
the answer to that question. Therefore, the committee directs 
that, of the amounts available to the Secretary of Defense for 
Defense-wide operation and maintenance, excluding funds 
otherwise available for the operations of the National Defense 
University and with no offsetting reduction in funds available 
to the National Defense University, the Secretary shall make 
$5.0 million available for the center.

             Section 905--White House Communications Agency

    This section would limit funding for the White House 
Communications Agency (WHCA) to an amount slightly below fiscal 
year 1997 levels. The committee has been concerned that WHCA's 
functions and activities have been greatly expanded beyond its 
initial mission of providing telecommunications support to the 
President.
    The limitations proposed by this section are intended to 
ensure compliance with the National Defense Authorization Act 
for Fiscal Year 1997 (Public Law 104-201) which requires the 
Secretary of Defense, starting in fiscal year 1998, to ensure 
that support services provided on a nonreimbursable basis by 
the White House Communications Agency be limited to the 
provision of telecommunications support to the President, Vice 
President, and related elements. The act also requires the 
Secretary of Defense to report to Congress at the end of each 
quarter of fiscal year 1997 on the non-telecommunication 
support services that were provided by the White House 
Communications Agency to the President during the preceding 
quarter. The Secretary of Defense provided the first of these 
statutorily required reports on May 13, 1997. The report 
indicates the total cost of non-telecommunications support 
services provided by the White House Communications Agency 
during the first quarter of fiscal year 1997 was approximately 
$2.2 million.
    This section would limit WHCA operation and maintenance 
funds to $55.0 million for fiscal year 1998. The budget 
justification documents provided to the committee inadequately 
support an increase over the fiscal year 1997 level. Further, 
limiting WHCA operation and maintenance to $55.0 million 
represents a reduction from the fiscal year 1997 level by an 
amount equivalent to the cost of non-telecommunication support 
services. The committee notes that the White House can still 
continue to receive non-telecommunication support services from 
WHCA as needed on a reimbursable basis.
    The committee further believes there is no justification 
for non-telecommunication support services to be provided to 
the President by military personnel assigned to the White House 
Communications Agency, as non-telecommunication support 
services can be just as effectively provided by civilian 
personnel. Therefore, the committee directs the Secretary of 
Defense to conduct a review of the services and functions of 
the White House Communications Agency to determine which of 
those services and functions must be conducted by military, 
instead of civilian, personnel for national security reasons. 
The committee further directs the Secretary to provide a report 
to the congressional defense committees no later than December 
31, 1997 incorporating the results of the review and 
incorporating a plan to use civilian personnel to provide those 
WHCA services and functions that do not require performance by 
members of the armed services.

  Section 906--Revision to Required Frequency for Provision of Policy 
                     Guidance for Contingency Plans

    This section would amend section 113(g)(2) of title 10, 
United States Code, to permit policy guidance for contingency 
plans to be given every two years or more frequently as needed, 
rather than annually.

 Section 907--Termination of the Defense Airborne Reconnaissance Office

    This section would abolish the Defense Airborne 
Reconnaissance Office (DARO), and transfer specified management 
responsibilities for the defense airborne reconnaissance 
program to the Director, Defense Intelligence Agency (DIA) 
under his authorities as Director of Military Intelligence 
(DMI) and Joint Military Intelligence Program (JMIP) 
Coordinator. The Director, DIA would be further required to 
provide a transition plan, with a draft DMI DARP charter, to 
the Congressional defense and intelligence committees no later 
than the submission of the fiscal year 1999 President's budget.
    Since creation, the DARO has failed to successfully develop 
new unmanned aerial vehicles, except for Predator, which was 
under development prior to formation of the DARO. DARO-managed 
UAV acquisition programs have been marred with program delays, 
cost escalation, technical problems and in general, failure to 
provide the services with this critical new capability. 
Therefore, this provision is intended to return UAV system 
acquisition responsibility to the appropriate military 
services, while retaining overall airborne reconnaissance 
coordination and oversight responsibility within the Department 
of Defense.
                      TITLE X--GENERAL PROVISIONS

                         Counterdrug Activities

                                Overview

    The budget request for Department of Defense Fiscal Year 
1998 drug interdiction and counterdrug activities contained 
$652.6 million, plus $156.0 for operational tempo which is 
included within the operating budgets of the military services. 
This represents a net decrease of $154.4 million from the 
fiscal year 1997 appropriated level of $807.0, and an increase 
of $5.6 million for operational tempo from the fiscal year 1997 
appropriated level of $150.4.
    The committee recommends an authorization for fiscal year 
1998 defense counterdrug activities as follows:

                        [In thousands of dollars]

FY98 Drug Interdiction & Counterdrug Request..................  $652,582
    Dismantling Cartels.......................................    54,306
    Source Nation Support.....................................   166,763
    Detection and Monitoring..................................   124,686
    Law Enforcement Agency Support............................   223,589
    Demand Reduction..........................................    83,238
Recommended Decreases:
    National Imagery & Mapping Agency (Project #1401).........       800
    Non-Intrusive Inspection Systems (Project #1403)..........     4,611
Recommended Increases:
    Gulf States Counterdrug Initiative (Project #7406)........     4,000
    Multi-Jurisdictional Task Force (Project #7408)...........     1,000
    Optionally Piloted Air Vehicle (PE #305889D)..............     2,500
    Southwest Border Fence Project............................     7,000
Recommendation................................................   661,671

                       Items of Special Interest

C-26 aircraft photo reconnaissance upgrade

    The budget request does not contain funding for the Common 
Airborne Imagery Processing System (CAIPS) and electro optical 
(EO) sensors for the Air National Guard C-26 aircraft.
    The committee understands that the procurement of EO 
sensors and CAIPS would allow the National Guard to upgrade the 
current chemical-based imagery capability to a digital system 
which could provide near-real time photo-quality imagery to 
requesting law enforcement agencies. Accordingly, the committee 
urges the Department to evaluate this reconnaissance capability 
and consider funding the C-26 upgrade from within the fiscal 
year 1998 National Guard program.

Gulf states counterdrug initiative

    The committee continues to support the Gulf States 
Counterdrug Initiative (GSCI) and is concerned that the budget 
request of $1.1 million does not adequately support the funding 
requirements of this program. The committee understands that 
this funding level does not include sufficient system training 
costs or the sustainment of command, control, communications 
and computer (C4) capabilities for the states of Alabama, 
Georgia, Louisiana and Mississippi.
    Therefore, the committee recommends an authorization of 
$5.1 million, an increase of $4.0 million over the requested 
amount to support these program improvements. The committee 
maintains that none of these funds should be utilized for 
construction or other infrastructure-related costs; rather, 
funds authorized for this program should continue to be used in 
support of training, on-site support and maintenance of the C4 
network and software system. Further, the committee encourages 
the designation of non-Department of Defense (DOD) funds for 
additional operations and maintenance (O&M) and procurement 
costs identified by law enforcement agencies to sustain the 
GSCI information system.

Mapping, charting and geodesy

    The budget request contained $8.4 million for continued 
National Imagery and Mapping Agency (NIMA) support to the 
Defense Intelligence Counterdrug Program's (DICP) mapping, 
charting and geodesy (MC&G) requirements.
    The committee has taken action elsewhere in this report 
intended to modernize and streamline NIMA MC&G operations. This 
action would encourage NIMA to move more rapidly toward 
privatization and use of geospatial data maintenance rather 
than developing paper map products.
    Therefore, the committee recommends an authorization of 
$7.6 million for this effort, a decrease of $0.8 million.

Mexican, Caribbean and South American initiative

    The committee continues to support the essential role of 
the Department of Defense (DOD) in reducing the flow of illegal 
drugs into the United States. To accomplish this mission, 
Congress has charged the DOD to act as the single lead federal 
agency for the detection and monitoring of aerial and maritime 
transit of illegal drugs into the United States. In addition, 
DOD is to integrate appropriate command, control, 
communications, and technical assets of the federal government 
into an effective communications network. According to the DOD 
Counterdrug Program, the Department supports foreign law 
enforcement agencies and military governments by providing 
initial detection and monitoring, intelligence, operational 
planning assistance, training in tactical procedures and 
equipment maintenance, infrastructure improvements, and 
logistics/communications support. In this capacity, Congress 
granted authority to DOD through section 1004 of the National 
Defense Authorization Act for FiscalYear 1991, as amended 
(Public Law 101-510) and sections 517 and 506(a)(2)(A) of the Foreign 
Assistance Act of 1961, as amended.
    Section 1031 of the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201) expanded DOD authority to 
provide equipment and maintenance for the Government of Mexico 
to aid in its counterdrug activities. This support was granted 
conditionally as a short-term, limited means of enhancing 
Mexico's counterdrug capabilities and was not intended to 
replace or circumvent the established foreign assistance 
authorities or resources of the Department of State. However, 
the committee is aware of a provision included in the 
Administration's legislative proposal that would expand current 
DOD authority to include support for not only Mexico, but 
Colombia, Peru and selected Caribbean countries; would increase 
the amount of support to $150.0 million over five years; and 
would expand the nature of support to include lethal equipment 
to enhance the interdiction capability of the recipient 
nations.
    The committee acknowledges the recent success achieved by 
participating nations in their combined efforts to stem the 
production and transfer of illegal drugs. Specifically, U.S. 
and regional forces under Operation Laser Strike successfully 
interfered with narcotrafficking along air routes in the Andean 
region and have caused the price of coca to plummet. Analysis 
suggests that the narcotraffickers may have adjusted to this 
initiative and have begun to transit cocaine along the rivers 
of the Andean region and the Amazon basin, particularly in 
Peru. Based upon this presumption, the Administration's 
proposal outlined above is focused on an enhanced riverine 
interdiction plan. While the committee supports the 
Administration's strategy to pursue a program which capitalizes 
upon the achievements of Operation Laser Strike, the current 
proposal is inappropriately resourced and uncoordinated among 
the U.S. and regional governments and militaries.
    The committee is also concerned with the proposed expansion 
of DOD authority to provide funds for a foreign assistance 
program from within the Department's counterdrug account. 
Although the committee continues to support the mission 
established by the DOD Counterdrug Program, it believes that 
the direct provision of material and assistance to foreign 
nations is not a proper utilization of the unique capabilities 
offered by DOD. Rather, the Administration's initiative should 
be authorized and resourced more appropriately as a part of the 
International Narcotics Control Program of the Department of 
State. While the proposed legislation advocates a coordinated 
management effort between the Departments of Defense and State, 
the lack of coordination thus far between the two agencies has 
manifested itself in a major disconnect over strategic planning 
between U.S. Southern Command (SOUTHCOM) and the relevant U.S. 
embassies. Given the absence of overall integration in planning 
among those responsible for the implementation of the program, 
the committee questions the Administration's long-term 
commitment to this ambitious riverine strategy.
    The committee also notes with concern the assumptions made 
by the Administration in developing the enhanced riverine 
interdiction plan. Although it seems plausible, there has been 
no threat assessment to confirm that narcotraffickers have in 
fact shifted their transit routes to the rivers in a magnitude 
that would justify such an expansion of DOD authorities and 
resources. The relevant U.S. embassies and SOUTHCOM have not 
contributed to the proposal a coordinated lessons-learned 
evaluation of problems encountered and solutions developed as a 
result of previous riverine operations in the region, nor does 
the plan include an outcome-based reporting system to measure 
the program's success. Further, the committee understands that 
the Administration's proposal is based upon the presumed 
existence of clear roles and missions within the respective 
nations' institutions. On the contrary, long-standing rivalries 
are certain to hamper the efforts of the host country military 
and national police forces without the establishment of direct 
counterdrug authorities to foster interagency cooperation.
    In addition, the committee is aware of concerns raised by 
the General Accounting Office (GAO) in a February 1997 report 
entitled ``Drug Control: Long-Standing Problems Hinder U.S. 
International Efforts'' (GAO/NSIAD-97-75). The report concluded 
that despite legislation mandating end-use monitoring, past 
history has shown that the United States has been unable to 
ensure that equipment given to Mexico, Colombia and Peru has 
been used by the host nations as intended upon delivery. The 
committee is concerned with the transfer of equipment, 
especially lethal equipment, to unstable governments struggling 
against ``narcoguerrillas'' and other insurgent factions. Also, 
given the pervasive influence of powerful drug lords over all 
levels of government in the proposed participating countries, 
the threat of corruption affecting the use of counterdrug 
equipment needs to be more fully addressed by the 
Administration. The committee notes the existence of corruption 
exhibited most recently in Mexico with the arrest of General 
Jesus Gutierrez Rebollo, the former Mexican ``drug czar,'' and 
by testimony implicating the involvement in drug trafficking of 
several other high-ranking Mexican military leaders.
    In light of these concerns, the committee strongly urges 
the Administration to reevaluate its enhanced interdiction 
plan. Should a threat assessment justify the need for an 
ambitious riverine effort, coordination between the Departments 
of Defense and State needs to preempt any planning at the 
SOUTHCOM/U.S. embassy country team level.

Non-Intrusive Inspection Systems

    The budget request contained $4.6 million for continued 
development of non-intrusive inspection systems, technologies 
that enhance the capability to detect narcotics in cargo 
container and trucks at U.S. ports of entry.
     The committee remains concerned that the agencies involved 
with the development of narcotics detection technologies 
disagree on the types of systems which need to be developed and 
ultimately deployed. According to an April 1997 study by the 
General Accounting Office entitled ``Terrorism and Drug 
Trafficking: Responsibilities for Developing Explosives and 
Narcotics Detection Technologies'' (GAO/NSIAD-97-95), a 
detailed procurement methodology has yet to be determined 
despite near completion of narcotics detection technology 
development. The Office of National Drug Control Policy 
(ONDCP), responsible for the coordination and recommendation of 
counterdrug technology programs; the U.S. Customs Service, 
required to deploy the systems developed by the Department of 
Defense (DOD); and the Office of Management and Budget (OMB), 
involved in the oversight of Customs' technology plans, are all 
currently working to resolve differences in technology 
development and deployment. At the request of ONDCP, these 
agencies are preparing a five-year technology plan for the 
development of non-intrusive inspection systems and currently 
estimate a January 1998 completion date of this report.
    Since December of 1994, DOD has spent about $30.0 million 
to develop technologies which have not been deployed as a 
result of concerns with the operational suitability of the 
systems. Based upon this experience, the committee recommends 
limiting DOD's development efforts until better funding 
priorities have been established by the relevant federal 
agencies.Therefore, the committee denies the $4.6 million 
funding request for non-intrusive inspection system research and 
development.

Optionally piloted air vehicle

    The budget request contained no funding for the ``Owl'' 
Optionally Piloted Air Vehicle (OPV).
     The committee believes development of this multi-
functional aircraft will provide a unique, low-profile, 
airborne observation platform, providing an inexpensive, long-
dwell reconnaissance capability for counterdrug and law 
enforcement agencies. The committee understands that funding 
for this aircraft would be provided by a federal/private 
industry partnership. The majority of funding is to be provided 
by the private industry partners.
     Therefore, pending the commitment of private industry 
funds, the committee recommends $2.5 million for this project 
in program element 0305889D.

Southwest border fence project

    The committee continues to support the Southwest border 
road, fence and lighting project in East San Diego County, 
California. The committee notes the need for a reinforced fence 
along the fourteen miles of international border east of the 
Pacific Ocean, and the construction of second and third fences, 
with roads between the fences, to improve border security in 
this designated high intensity drug trafficking area (HIDTA). 
The committee commends the efforts of the California National 
Guard and the Joint Task Force Six (JTF-6) in allocating 
sufficient resources for this national priority from within 
their respective counterdrug budgets. While the construction of 
a triple fence is currently funded from within the immigration 
control budget, the committee wishes to ensure the efficient 
execution of this project.
     Therefore, the committee recommends an increase of $7.0 
million to facilitate completion of the Southwest border fence 
project from within the law enforcement agencies support 
component of the Department of Defense Counterdrug Plan.

Tracker aircraft

    The budget request contained $10.0 million for operation of 
five specially configured tracker aircraft.
     The committee believes the tracker aircraft mission is 
more properly aligned with similar missions funded within the 
Defense Intelligence Counterdrug Program (DICP) of the Joint 
Military Intelligence Program (JMIP).
     Therefore, the committee recommends the funding request 
for project code 7410, but directs that this amount be 
transferred to O&M, Air Force, within the DICP. Further, the 
committee directs that future funding requests for this program 
be properly identified within the DICP.

                             Other Matters

              Implementation of Whistleblower Protections

    The committee is aware of existing concerns over unintended 
consequences resulting from the implementation of section 1034 
of title 10, United States Code, providing for the protection 
of individuals who engage in whistleblower communications with 
Members of Congress, the Department of Defense Inspector 
General, and any Department of Defense audit, inspection, 
investigation, law enforcement organizations, or chain of 
command communications. Of particular concern are indications 
that the definition of protected communication in the statute 
may be overly broad and result in the extension of protections 
in a manner that needlessly dilutes available investigative and 
other resources. Therefore, the committee directs the 
Department of Defense Inspector General to provide the House 
National Security Committee and the Senate Armed Services 
Committee with a report by March 1, 1998 that examines the 
current statutory framework governing the protection of 
whistleblower activity, assesses the effectiveness of the 
implementation of these provisions and makes any 
recommendations for modifications that the Inspector General 
finds appropriate.

           Intelligence Shortcomings During Persian Gulf War

    The Director of Central Intelligence (DCI) has acknowledged 
that both during and after the Persian Gulf war:
          (1) The intelligence community failed to adequately 
        alert U.S. military forces to the presence of Iraqi 
        chemical weapons at the Khamisiyah storage facility;
          (2) This failure was the result of avoidable errors 
        and oversights in processing and analyzing information;
          (3) The demolition of Khamisiyah in the aftermath of 
        the Persian Gulf war on March 4, 1991, by U.S. forces 
        who were unaware of the presence of Iraqi chemical 
        weapons stored at the facility, may have inadvertently 
        exposed U.S. troops to chemical agents.
     Furthermore, a study released by the Director of Central 
Intelligence on April 9, 1997, acknowledges ``that intelligence 
support associated with Operations Desert Shield and Desert 
Storm--particularly in the areas of information distribution 
and analysis--should have been better. Key issues include 
problems with multiple databases; limited sharing of 
`sensitive' but vital information; and incomplete searches of 
files while preparing lists of known or suspect CW 
facilities.'' The study makes a number of general 
recommendations for avoiding similar intelligence failures in 
the future such as ensuring that intelligence analysts remain 
increasingly careful to avoid ``tunnel vision'' in crafting 
their judgments.
     The committee agrees that these shortcomings in 
intelligence analysis and distribution must be corrected so 
that similar intelligence failures do not occur in the future. 
To that end, the committee directs the Secretary of Defense and 
the Director of Central Intelligence to submit a report, not 
later than March 1, 1997, to the House Committee on National 
Security, the Senate Committee on Armed Services, the House 
Permanent Select Committee on Intelligence and the Senate 
Select Committee on Intelligence describing the actions to be 
taken to implement the study's recommendations for avoiding 
future situations like those surrounding the Khamisiyah issue. 
The report should identify the specific steps planned for 
training analysts, reorganizing data bases, and sharing 
sensitive information on a broader basis. It also should 
outline other steps that will be taken to improve intelligence 
analysis and distribution, explain how broadlythese 
improvements are being made across functional and regional issue areas, 
and indicate when these steps will be implemented.

           Resolution of Commercial Disputes in Saudi Arabia

     The committee notes that during the 1980's a number of 
commercial disputes arose from contracting activity between 
American companies, and ministries and agencies of the Saudi 
Arabian government. The companies in question claimed they were 
due tens of millions of dollars for work performed for the 
Saudis. After years of unsuccessful attempts by these companies 
to resolve the claims, the Fiscal Year 1994 Department of 
Defense Appropriations Act (Public Law 103-139) established a 
process by which the Department of Defense was to monitor 
progress toward the resolution of these disputes and report to 
Congress on their status. The committee understands that as of 
April 1997, a number of these claims remained unresolved. 
Therefore, the committee directs the Secretary of Defense, 
after consultation with the Secretary of State and the 
Secretary of Commerce, to conduct a review updating information 
concerning resolution of commercial disputes between U.S. 
companies and entities of the Saudi Arabian government. The 
committee further directs the Secretary to provide a report to 
the congressional defense committees no later than December 31, 
1997 incorporating the results of the review and including a 
comprehensive listing of claims that were identified as yet 
unresolved. The report shall also identify the circumstances as 
to why these claims have not been resolved.

                         LEGISLATIVE PROVISIONS

                     Subtitle A--Financial Matters

                    Section 1001--Transfer Authority

     This section would permit the transfer of amounts of 
authorizations made available in Division A of the bill for any 
fiscal year to any other authorization made available in 
Division A upon determination by the Secretary of Defense that 
such a transfer would be in the national interest.

            Section 1002--Incorporation of Classified Annex

     This section would incorporate the classified annex 
prepared by the Committee on National Security into the 
National Defense Authorization Act for Fiscal Year 1998.

Section 1003--Authority for Obligation of Unauthorized Fiscal Year 1997 
                         Defense Appropriations

     This section would authorize certain fiscal year 1997 
programs that received appropriations but no authorization.

 Section 1004--Authorization of Supplemental Appropriations for Fiscal 
                               Year 1997

     This section would extend authorization to those items 
appropriated by the fiscal year 1997 emergency supplemental 
appropriations legislation.

     Section 1005--Increase in Fiscal Year 1996 Transfer Authority

     This section would increase transfer authority for fiscal 
year 1996 to $3.1 billion to facilitate transfers of 
authorization necessary to support contingency operations.

                 Section 1006--Fisher House Trust Fund

     This section would authorize the expenditure of funds from 
the Fisher House trust fund.

 Section 1007--Flexibility in Financing Closure of Certain Outstanding 
            Contracts for Which a Small Final Payment is Due

     This section would permit the Secretary of Defense to 
establish an account to transfer funds into for the purpose of 
making small final payments on certain outstanding contracts 
for which funds appropriated for that purpose have expired.

                Subtitle B--Naval Vessels and Shipyards

 Section 1021--Relationship of Certain Laws to Disposal of Vessels for 
Export from the Naval Vessel Register and the National Defense Reserve 
                                 Fleet

     This section would amend three separate titles of the 
United States Code in order to permit the sale of obsolete 
vessels that are presently contaminated with polychlorinated 
biphenyl compounds (PCBs).
    Under current law, the Toxic Substances Control Act 
(section 2601 of title 15, United States Code, et. seq.) 
prohibits the manufacture, processing, distribution in commerce 
or use of any non-totally enclosed PCB after January 1, 1977. 
Obsolete Navy vessels, as well as those in the National Defense 
Reserve Fleet which is administered by the Maritime 
Administration (MARAD), contain PCBs in their wiring system 
that meet the definition of being non-totally enclosed. In 
order to facilitate the sale and scrapping of such vessels as 
targets by the Navy, this section would first amend section 
7305 of title 10, United States Code, so that the sale of a 
vessel no longer qualifies as a restricted export for disposal 
purposes under the Toxic Substances Control Act. Second, this 
section would amend section 7306 of title 10, United States 
Code, to provide that the sinking of a vessel for military 
purposes does not qualify as a prohibited export or disposal of 
that vessel under the Toxic Substances Control Act. Third, and 
in order to allow MARAD to resume the practice of selling 
vessels in approved foreign markets, this section would amend 
section 510 of the Merchant Marine Act, 1936 (codified at 
section 1160 of title 46 App., United States Code), to provide 
that the sale of a vessel from the National Defense Reserve 
Fleet for export does not qualify as a distribution in commerce 
or an export for disposal under the Toxic Substances Control 
Act. Before an obsolete vessel could be sold or otherwise 
disposed, PCBs contained in transformers, capacitors, or in 
hydraulic or heat transfer fluids would have to be removed. 
Finally, this section would amend the National Maritime 
Heritage Act (section5405 of title 16, United States Code) to 
make certain technical corrections and to extend by two years (until 
2001) the deadline for the disposal of obsolete vessels from the 
National Defense Reserve Fleet. This deadline extension will permit the 
expeditious scrapping of obsolete vessels without flooding the 
international scrap market.

Section 1022--Authority to Enter into a Long-Term Charter for a Vessel 
  in Support of the Surveillance Towed Array Sensor (SURTASS) Program

    This section would authorize the Secretary of the Navy to 
enter into a contract in accordance with section 2401 of title 
10, United States Code, for the charter of the vessel RV CORY 
CHOUEST through fiscal year 2003 in support of the SURTASS 
program.

 Section 1023--Transfer of Two Specified Obsolete Tugboats of the Army

    This section would allow the Secretary of the Army to 
transfer two obsolete tugboats to the Brownsville Navigation 
District, Brownsville, Texas.

 Section 1024--Naming of a DDG-51 Class Destroyer the U.S.S. Thomas F. 
                                Connolly

     This section would express the sense of Congress that the 
Secretary of the Navy should name one of the ships of the DDG-
51 class of destroyers the U.S.S. Thomas F. Connolly in honor 
of Vice Admiral Connolly, an architect of the modern United 
States Navy. Cited for bravery during World War II, Vice 
Admiral Connolly also guided the construction of today's 
nuclear aircraft carriers and advocated the development of the 
F-14 fleet defense aircraft.

 Section 1025--Congressional Review Period with Respect to Transfer of 
                      the Ex-U.S.S. Midway (CV-41)

    This section would allow for a 30 calendar day 
congressional review period with respect to the transfer of the 
decommissioned aircraft carrier ex-U.S.S. Midway (CV-41).

                  Subtitle C--Counter-Drug Activities

 Section 1031--Prohibition on Use of National Guard for Civil-Military 
  Activities Under State Drug Interdiction and Counterdrug Activities 
                                  Plan

     This section would amend section 112 of title 32, United 
States Code, to further clarify authority for federal support 
of national guard drug interdiction and counterdrug activities. 
While the committee continues to recognize the valuable 
contributions of the national guard to the Department of 
Defense (DOD) counterdrug program, the committee notes with 
concern that community outreach programs, in direct 
contravention of congressional direction, have been funded as a 
component of the annual national guard state drug interdiction 
and counterdrug activities plans.
    The committee stands by the decision to repeal the 
authority for civilian outreach programs as intended in section 
571 of the National Defense Authorization Act for Fiscal Year 
1996 (Public Law 104-106). This section specifically terminated 
DOD authority for programs currently funded within the fiscal 
year 1997 National Guard State Plans, such as Sports Clinics, 
Just Say No Puppet Show, AmeriCorps, Kids 'N Kops Day, Adopt a 
School, DARE, Jr. Police Cadets, Operation Snowball, The Parent 
Project, Teen Spirit Youth Camp, Big Brothers & Sisters, MADD, 
Leadership Development Camps, Hooked on Fishing and Fitness for 
Life. While these programs are of continuing importance in the 
fight against substance abuse, they are significantly removed 
from the national security mission of the Department of Defense 
and, therefore, inappropriate to fund from within the defense 
budget. The committee encourages the development of appropriate 
non-DOD sources of funding for these outreach programs. 
Therefore, the committee directs that funds for these 
community-based activities, estimated at $8.0 million for 
fiscal year 1998, be reprioritized to meet more critical demand 
reduction needs of the national guard within the Governor's 
State Plans for fiscal year 1998.
     The committee endorses the Department's demand reduction 
strategy involving active duty and reserve forces, DOD civilian 
employees and National Guard members--one of the most effective 
elements of the DOD Counterdrug Program. The drug deterrence 
and testing program; coupled with the drug education, training 
and awareness support, continue to increase military readiness 
by successfully reducing drug use in the armed forces and the 
DOD civilian community. Further, the committee notes that drug 
demand reduction programs established prior to the 
authorization of the various civil-military programs in the 
National Defense Authorization Act for Fiscal Year 1993 (Public 
Law 102-484), including the Young Marines Programs and other 
priority programs of DOD and the military services, should 
continue operations as proposed in the fiscal year 1998 budget 
request.

       Subtitle D--Miscellaneous Report Requirements and Repeals

  Section 1041--Repeal of Miscellaneous Obsolete Reports Required by 
                    Prior Defense Authorization Acts

    This section would repeal miscellaneous provisions of law 
that have expired or are obsolete.

Section 1042--Repeal of Annual Report Requirement Relating to Training 
       of Special Operations Forces with Friendly Foreign Forces

     This section would amend section 2011 of title 10, United 
States Code, to repeal the requirement that the Department of 
Defense prepare an annual report relating to training of United 
States Special Operations Forces with the forces of friendly 
foreign governments.

                       Subtitle E--Other Matters

  Section 1051--Authority for Special Agents of the Defense Criminal 
       Investigative Service to Execute Warrants and Make Arrests

    This section would provide the Secretary of Defense with 
the authority to authorize special agents of the Defense 
Criminal Investigative Service (DCIS) to execute and 
servewarrants and other process issued under the authority of the 
United States. The section also would permit the Secretary of Defense 
to authorize DCIS special agents to make warrantless arrests in cases 
in which an offense against the United States is committed in the 
presence of special agents and in the case of felonies cognizable under 
the laws for which such special agents have sufficient probable cause. 
The authority of a DCIS agent under this section could only be 
exercised in accordance with guidelines approved by the Attorney 
General of the United States.

  Section 1052--Study of Investigative Practices of Military Criminal 
           Investigative Organizations Relating to Sex Crimes

    This section would require the Secretary of Defense to 
provide for an independent review of the military criminal 
investigative organizations and their ability to effectively 
investigate allegations of criminal sexual misconduct in the 
armed services. The review would address several specific 
issues:
          (1) The need for greater organizational independence 
        from the military department chains of command;
          (2) The adequacy of agent training relating to the 
        investigation of sex crimes, including training on the 
        proper conduct of subject and witness interviews;
          (3) The screening, recruitment and hiring of agents;
          (4) The number of allegations of agent misconduct in 
        the investigation of sex crimes;
          (5) The procedures for administrative identification 
        (known as ``titling'') of individuals suspected of 
        committing sex crimes; and
          (6) The accuracy and timeliness of reporting sex 
        crimes to the Department of Justice's National Crime 
        Information Center. A report to Congress would be due 
        upon completion of the review.
    In light of the numerous allegations of sexual misconduct 
in the military services, the committee believes it is 
important for the military criminal investigative organizations 
to ensure that agents are properly trained for conducting 
investigations into these most personal crimes in a responsible 
and appropriate manner. Further, the committee is concerned 
over allegations by some of the recent victims and subjects 
that investigators used coercive or inappropriate tactics 
during the investigative interview process. The review directed 
by this provision would help determine how well prepared the 
military criminal investigative organizations are with regard 
to investigating sexual misconduct. It also should identify 
areas for improvement to ensure these personal cases are 
handled in the most professional and appropriate manner.

            Section 1053--Technical and Clerical Amendments

    This section would make a number of technical and clerical 
amendments.

                 Section 1054--Display of POW/MIA Flag

    This section would expand the dates on which the POW/MIA 
flag must be flown, as well as the locations where it must be 
flown on the prescribed dates. In addition, the section would 
repeal existing law that terminates the requirement to display 
the POW/MIA flag upon the President's determination that the 
fullest possible accounting has been made of all members of the 
Armed Forces and civilian employees of the United States who 
have been identified as prisoner of war or missing in action in 
Southeast Asia.
    The committee recommends this action because thousands of 
Americans remain missing or unaccounted for as a result of all 
conflicts that the U.S. has fought in, not just the one in 
Southeast Asia. Furthermore, the committee believes that not 
only is it fitting to signify the Nation's continuing 
commitment to fully account for all the missing and unaccounted 
for from past U.S. wars, but it is also proper to signify a 
permanent national commitment to fully account for those 
Americans who in future wars may be captured, unaccounted for, 
or listed as missing.

Section 1055--Certification Required Before Observance of Moratorium on 
             Use by Armed Forces of Antipersonnel Landmines

    This section would require that, before proceeding with the 
implementation of a ban on the military use of antipersonnel 
landmines, the Secretary of Defense must provide Congress with 
a certification that such implementation would not adversely 
impact U.S. military combat capabilities.

  Section 1056--Protection of Safety-Related Information Voluntarily 
                        Provided by Air Carriers

    This provision would authorize the Secretary of Defense to 
withhold from public release voluntarily-provided air carrier 
safety-related information if the Secretary determines that 
release of that information would inhibit the provision of such 
information, and that such information aids in fulfilling the 
Secretary's safety oversight responsibilities under section 
2640 of title 10, United States Code. Section 2640 of title 10, 
United States Code prohibits the Secretary of Defense from 
entering into a contract with an air carrier for the 
transportation of members of the armed forces unless that 
carrier meets certain requirements. Included are requirements 
that the carrier meet government safety standards and pass DOD 
technical inspections to become and remain eligible for DOD 
business.
    The committee is aware that access to a carrier's internal 
records, information, and data is essential to determining 
whether the carrier meets DOD safety and quality standards. In 
that regard, carriers must have confidence that company 
information is protected from public release. The Department of 
Defense reports that carriers have been increasingly reluctant 
to provide information beyond the minimum required for 
regulatory compliance for fear that such information would be 
subject to public release when requested by a third party under 
the Freedom of Information Act. Similar information held by the 
Federal Aviation Administration and the National Transportation 
Safety Board previously received statutory protection from 
public release. This provision would provide the same level of 
protection for information that was voluntarily provided to the 
Department of Defense.

Section 1057--National Guard ChalleNGe Program to Create Opportunities 
                           for Civilian Youth

    This section would provide the Secretary of Defense, acting 
through the Chief of the National Guard Bureau, authority to 
conduct a program known as the National Guard ChalleNGe 
Program. ChalleNGe is a 22-week, quasi-military, residential 
program for drug-free, 16- to 18-year old high school dropouts 
who are unemployed and not currently involved with the legal 
system. ChalleNGe, which operates in separate state programs, 
seeks to improve the life skills and potential for employment 
or military service of its participants through military-based 
training, supervised work experience, and post graduation 
mentoring. This section would authorize the Department of 
Defense to provide up to $50.0 million in funding to support 
the program. The section would also limit the Department of 
Defense share of the costs of operating a program in each state 
to 75 percent in fiscal year 1998--with that share decreasing 
by five percent a year, to 60 percent in fiscal year 2001. 
Finally, the section would increase by $30.0 million the $20.0 
million requested in the Department of Defense budget request. 
To pay for the increase, the committee reallocates to the 
ChalleNGe program the $15.0 million that it had intended to add 
to the Army National Guard military personnel accounts for 
initial entry and military skill training. In addition, the 
committee recommends a reduction in the amounts requested in 
the budget for Army and Air National Guard operations and 
maintenance funding by $7.5 million each.

  Section 1058--Lease of Non-Excess Personal Property of the Military 
                              Departments

    This section would require the military departments to 
compete any lease in excess of one year for personal property 
valued over $100,000 and notify the Congress 45 days prior to 
entering into such a lease. The committee is aware that 
military department non-excess assets have been leased sole 
source for extended periods of time apparently below market 
value. While the committee recognizes the need for the military 
departments to manage their own equipment inventories, the 
committee is concerned that lease arrangements should fully 
appreciate the public interest to recoup defense dollars where 
possible.

     Section 1059--Commendation of Members of the Armed Forces and 
      Government Civilian Personnel Who Served During the Cold War

    This section would commend the members of the armed forces 
and government civilian employees who served the nation during 
the Cold War, and would express the gratitude of the Congress 
for their service and sacrifices that contributed to the 
victory in the Cold War.
  TITLE XI--COOPERATIVE THREAT REDUCTION WITH STATES OF FORMER SOVIET 
                                 UNION

                                OVERVIEW

    The budget request contained $382.2 million for cooperative 
threat reduction (CTR) activities, representing an increase of 
$31.3 million over the amounts appropriated for fiscal year 
1997. The request includes $63.0 million for core conversion 
and chemical weapons production facility elimination in Russia, 
and expanded defense and military contact programs throughout 
the former Soviet states. Funding for these programs was not 
included in last year's CTR budget request, but was authorized 
separately in Title XIV of the National Defense Authorization 
Act for Fiscal Year 1997 (Public Law 104-201).
    The Administration is also seeking $210.0 million within 
the request for destruction and dismantlement, $100.7 million 
for fissile materials and nuclear weapons safety and storage, 
$41.0 million for reactor core conversion in Russia, and $30.5 
million for other program support, which includes expanded 
defense and military-to-military contacts.
    The committee recommends a total of $284.7 million for CTR 
activities in fiscal year 1998, a reduction of $97.5 million 
from the budget request. The committee recommends the request 
of $77.9 million for strategic offensive arms elimination 
activities in Russia; $76.7 million for strategic nuclear arms 
elimination in Ukraine; $7.0 million for fissile materials 
storage containers in Russia; and $57.7 million for a fissile 
material storage facility in Russia. The committee recommends 
the following reductions to the budget request: chemical 
weapons destruction ($41.0 million); reactor core conversion 
($41.0 million); nuclear weapons storage security ($12.5 
million); defense and military contacts ($1.0 million); and 
other program support ($2.0 million). The discussion below 
provides additional rationale for these reductions as well as 
other matters of interest and concern to the committee.

                       ITEMS OF SPECIAL INTEREST

                  Arms Elimination Projects in Russia

    The budget request contained $77.9 million for strategic 
offensive arms elimination projects in Russia representing a 
significant increase from the fiscal year 1997 appropriated 
amount of $52.0 million.
    The committee reiterates its support for the accelerated 
dismantlement and destruction of strategic offensive weapons in 
Russia under the terms of the START I Treaty. To this end, the 
committee notes that the Department intends to obligate 115 
percent of the appropriated fiscal year 1997 amount for 
strategic offensive arms elimination programs in Russia in 
accordance with section 1502 of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201).
    The request includes $50.0 million for new commitments made 
last October by former Secretary of Defense Perry, who pledged 
additional assistance to Russia as part of the Administration's 
effort to encourage Russian ratification of the START II 
Treaty. The new commitments pledged by Secretary Perry and 
identified by the Department to the committee would be directed 
toward accelerating Russian strategic offensive force 
reductions to START II levels. While the committee is 
supportive of CTR efforts that would directly assist Russia in 
the elimination of its strategic offensive forces, the 
committee believes that Russia should share in the cost of 
these reductions. However, the Russian Duma has not yet given 
its support to START II ratification and is unlikely to do so 
anytime soon. In addition, at the recent Helsinki summit, the 
United States agreed to postpone for several years the 2003 
START II deadline for elimination of treaty-covered strategic 
systems in another attempt to encourage Russian ratification 
and to ease the near-term fiscal requirements on Russia for 
eliminating strategic systems. The Russians have asserted that 
they lack the fiscal resources to meet START II's reduction 
timelines. However, Russia continues to invest resources in the 
production of additional land-based and sea-based strategic 
offensive arms. For these reasons, the committee recommends a 
provision (sec. 1105) that would prohibit the obligation or 
expenditure of these funds for START II-related elimination 
activities until 30 days after the President certifies to 
Congress that these expenditures are in the national security 
interest and that the Russians have agreed to share the cost of 
such elimination activities. Moreover, the committee directs 
the Secretary of Defense to submit to the Congressional defense 
committees, within 15 days of the date of the above 
certification, a report on the specific cost-sharing 
arrangements that have been agreed to with Russia.

                  Arms Elimination Projects in Ukraine

    The budget request contained $76.7 million for strategic 
nuclear arms elimination projects in Ukraine, a 63 percent 
increase over the fiscal year 1997 appropriated level.
    This increase would fund a new project to eliminate 
additional land-based intercontinental ballistic missiles, 
associated silos and launch control centers, and supporting 
infrastructure. The committee supports these additional efforts 
and approves the requested amount for strategic nuclear arms 
elimination in Ukraine.

                       Auditing of CTR Assistance

    Under section 1206 of the National Defense Authorization 
Act for Fiscal Year 1996 (Public Law 104-106), the Department 
of Defense is required to submit to Congress an annual report 
on CTR assistance. The committee notes that the most recent 
report reflected an improvement in how the Department tracks 
the provision of CTR assistance, although the report was 
submitted almost one year late. The committee welcomes the 
increased number of annual audits and examinations conducted by 
the Department and expects that this level of effort will 
continue.
    The committee also notes that recent press reports indicate 
Russian officials have been imposing duties and ``taxes'' on 
the provision of U.S. assistance, some of which has reportedly 
been used to ``pay off'' local officials and to cover various 
``overhead'' costs. In particular, the committee is concerned 
by reports that equipment deliveries are being taxed and that 
the CTR program has been a source of funding for inappropriate 
Russian activities. In light of these reports, the committee 
recommends a provision (sec. 1109) that would require the 
Secretary of Defense to submit a report to Congress by 
September 31, 1997 providing a detailed explanation of whether 
and how the CTR program has been used to support such 
activities and what actionsthe Department has taken and is 
prepared to take to ensure that CTR assistance is not ``taxed'' or 
misused by Russia.

                      Chemical Weapons Destruction

    The budget request contained $55.4 million for chemical 
weapon destruction activities, including $20.0 million for the 
dismantlement and conversion of a chemical weapons production 
facility, at Volgograd, to non-weapons use.
    Last year, the committee denied the request for $2.2 
million in funding to initiate dismantlement of the facility at 
Volgograd. In so doing, the committee noted its concern about 
establishing a precedent for a new U.S. commitment and program 
regarding the destruction of Russia's declared chemical weapons 
stockpile despite Russia's ability to destroy such facilities 
on its own. The budget request reflects a substantial increase 
in funding. However, formal cost estimates of the dismantlement 
work at Volgograd have not yet been accomplished. Moreover, the 
Department has indicated that the $20.0 million requested for 
this activity may be used for other ``Volgograd-like projects'' 
involving chemical or biological weapons production facilities 
elsewhere in Russia.
    In addition, the committee notes that the Congress has 
previously disapproved the use of CTR funds for defense 
conversion purposes such as envisioned in the Volgograd 
project. Such activities are currently funded through the 
Department of State.
    Because of continuing concerns over U.S. involvement in 
this project and the uncertainty over the eventual cost and 
scope of this activity, the committee reiterates its belief 
that Russia should proceed with the destruction of chemical 
weapons production facilities on its own. Consequently, the 
committee denies the request for this project.
    The budget request also contained $35.4 million for the 
design and construction of a chemical weapons destruction 
facility to be built in Russia. Most of the technology 
development for the chemical weapons destruction process is 
expected to be completed by the end of fiscal year 1997. 
Accordingly, the budget request for this purpose is 
significantly less than the fiscal year 1997 appropriated level 
and is directed toward the design of the destruction facility. 
However, because no specific site has yet been chosen for the 
facility, actual design costs have not been reliably 
determined.
    In addition, the committee has a number of other concerns 
regarding this project. First, the ultimate cost of the 
facility may be as high as $800.0 million, a cost which the 
committee views as prohibitive. A more accurate cost estimate 
based on a one-third completed design is still unavailable and 
is not anticipated by the Department to be available until 
January 1999. The General Accounting Office (GAO) has reported 
that the U.S. share of these costs remains undefined and 
potentially large, and the United States has not agreed to cap 
its financial contribution. Indeed, the budget request for 
fiscal year 1999 for chemical weapons destruction projects in 
Russia is approximately $150.0 million, an increase of 270 
percent over the fiscal year 1998 request. Although detailed 
cost and program information is supposed to be contained in the 
Department's long-term program plan, which is required to be 
submitted to Congress annually at the same time as the 
President's budget request, the latest plan has only just been 
received. Consequently, the committee is unable to fully 
evaluate the long-term fiscal implications of this project.
    Second, the committee is concerned over Russia's ability to 
fulfill whatever financial commitment it makes to this project. 
Although Russia has committed the equivalent of $24.0 million 
for chemical weapons destruction in fiscal year 1997, none of 
these funds have been expended. Russia's chemical weapons 
destruction plan was rejected by the Federation Council--
Russia's upper house of parliament--in January of this year. In 
April 1997, the State Duma--Russia's lower house of 
parliament--refused to ratify the Chemical Weapons Convention 
(CWC), only one day after the U.S. Senate had approved it. The 
Chairman of the Duma's Foreign Affairs Committee, Vladimir 
Lukin, explained the refusal by stating, ``It's simple: There's 
a lack of cash.'' Foreign financing to date for this project is 
extremely limited. While the United States has said it will 
finance a share of the costs of building the facility only, the 
Russians insist that associated infrastructure must be financed 
and built as well. Without an agreement on this matter, it is 
unlikely that construction can proceed.
    Third, the facility is designed to destroy only 14 percent 
of Russia's declared chemical weapons stockpile and will take 
more than 10 years to accomplish even this modest task. It has 
been estimated that Russia would need to construct six 
additional sites to meet the time frames required by the CWC 
for the destruction of the rest of its declared chemical 
weapons stockpile.
    Fourth, the committee disagrees with the United States' 
retreat from its prior insistence that the facility be used to 
destroy air munitions--the types of chemical munitions that are 
more threatening to U.S. interests--and has agreed to Russian 
demands that nerve agent contained in artillery shells be 
destroyed first. Because of their deteriorating condition, 
these artillery munitions are more of a Russian environmental 
concern than a U.S. or allied security concern.
    Finally, the committee is concerned by unclassified reports 
that Russia is continuing to develop chemical weapons, 
including three new and particularly lethal nerve agents. Such 
activity is clearly at variance with the commitments Russia 
assumed when it signed the CWC and suggests that U.S. 
assistance to dismantle older chemical weapons while Russia 
continues to produce newer ones amounts to a subsidy of a 
lethal Russian chemical weapons modernization program.
    The committee believes there are higher priority CTR 
programs with potentially greater benefits to U.S. security. 
The Department apparently shares this view, as it notified the 
Congress that it would transfer $7.8 million of fiscal year 
1997 funds obligated for this project to strategic offensive 
arms elimination programs. The committee also notes that as of 
May 1997, more than $70.0 million in previously appropriated 
funds for this project remained unobligated, almost twice the 
amount actually disbursed. Consequently, the committee 
recommends a reduction of $21.0 million for this project and 
does not endorse proceeding with actual construction of the 
facility. The committee also recommends a provision (sec. 1106) 
that would prohibit the obligation or expenditure of fiscal 
year 1998 funds for chemical weapons facility planning and 
design until the Secretary notifies the Congress that the 
following conditions have been met:
          (1) that Russia has approved a chemical weapons 
        destruction plan that commits it to sharing the 
        financial costs of this program;
          (2) that the United States has agreed to cap its 
        financial contribution;
          (3) that an agreement has been reached resolving the 
        issue of who will pay for construction of 
        infrastructure and facilities associated with the 
        destruction facility and required by Russia; and
          (4) that a specific site has been chosen for 
        construction of the facility.

                   Fissile Material Storage Facility

    The budget request contained $57.7 million for fissile 
material storage activities in Russia. In particular, the funds 
requested are to be used to support the design and construction 
of a storage facility at Mayak to house materials from 
dismantled strategic nuclear weapons. The committee continues 
to support efforts to ensure the safe and secure storage of 
fissile materials in Russia.
    However, the committee notes that significant uncertainties 
remain regarding the Mayak facility. The project is 
approximately two years behind schedule and further delays are 
possible in light of Russia's uncertain commitment to funding 
its share of the costs. Although the United States has informed 
Russia that the U.S. share of Mayak costs will be capped at 
$275.0 million, the projected budget request for fiscal year 
1999 reflects a significant increase in funding, including 
funds for preliminary work on a second fissile material storage 
facility in Russia, although the requirement for another such 
facility is unclear. Significantly, a recent GAO report 
(``Weapons of Mass Destruction: Status of the Cooperative 
Threat Reduction Program,'' GAO/NSIAD-96-222, September 1996) 
notes, ``The draft CTR multiyear plan acknowledges that the 
program cannot measure the impact of CTR fissile material 
storage projects--such as Mayak--on CTR program objectives'' 
because the Department lacks the necessary information to make 
such a determination. Due to the Department's delay in 
submitting the latest annual CTR program plan as required, the 
committee cannot fully evaluate the long-term fiscal 
implications of this project.
    The most significant uncertainty is the lack of any 
transparency agreements that would allow the United States to 
verify the quantity and type of fissile materials stored at 
Mayak and the irreversibility of the dismantlements. The 
committee believes such agreements are essential to ensuring 
that the facility is being used for its intended purpose and 
that materials stored there are not capable of being used in 
the construction of additional weapons. Prior efforts to 
negotiate transparency arrangements with Russia have been 
unsuccessful. To date, Russia has not declared the specific 
type and quantity of fissile material that will be stored at 
Mayak. As the previously-cited GAO report noted, ``Until a 
detailed transparency arrangement is agreed upon, the United 
States does not know exactly how it will be able to insure that 
Mayak is being used as intended. A failure to reach such an 
agreement in the future would force the United States to choose 
between curtailing support for the facility--after investing 
many tens of millions of dollars--and compromising on its 
access rights.''
    Negotiations are expected to resume later this year, and 
the Department has notified the committee of Russia's declared 
commitment to agree to transparency measures. However, the 
committee believes that continuing to fund this activity in 
advance of a formal agreement that clarifies and codifies U.S. 
rights weakens the U.S. negotiating position.
    Based on the above concerns, the committee conditions its 
approval of the budget request for this project on the 
conclusion of a written agreement with Russia acknowledging 
that the U.S. share of the ultimate cost of the Mayak facility 
will be capped at $275.0 million. Moreover, the committee 
recommends a provision (sec. 1107) that would prohibit the 
obligation of fiscal year 1998 funds for Mayak until a 
transparency agreement with Russia is signed. Finally, the 
committee directs that unobligated prior-year funds not be 
obligated or expended on this project until 15 days after the 
Secretary provides the Congressional defense committees with a 
status report on the issues and uncertainties noted above.

                    Nuclear Reactor Core Conversion

    The budget request included $41.0 million for nuclear 
reactor core conversion projects in Russia to support the 
elimination of Russian plutonium production by 2000, an 
important U.S. non-proliferation objective. The requested 
amount is more than four times the amount appropriated for 
fiscal year 1997 and is intended to begin preparations for 
conversion work. However, to date no implementing agreement has 
been negotiated with Russia's Ministry of Energy (Minatom) to 
allow this work to proceed. Consequently, the $10.0 million 
appropriated in fiscal year 1997--which Congress authorized be 
transferred to the Secretary of Energy--is unable to be 
obligated until such an agreement is concluded. Reiterating its 
support for the goal of eliminating Russian plutonium 
production, the committee believes responsibility for this core 
conversion project more properly resides within the Department 
of Energy (DOE), which initially began this effort in fiscal 
year 1996 as a pilot project. For these reasons, the committee 
denies the request for fiscal year 1998 Department of Defense 
funds to pursue this project, but has added $10.0 million for 
core conversion to the appropriate DOE account.

               Nuclear Weapons Storage Security In Russia

    The budget request contained $36.0 million for projects 
designed to ensure the safe storage of nuclear weapons and 
materials from dismantled strategic nuclear systems. However, 
in March 1997 the Department informed Congress that the Russian 
Ministry of Defense has reevaluated its requirement for 
supercontainers to enhance the security of Russian nuclear 
weapons during transit. As a result, the Department proposes to 
reallocate $12.5 million in fiscal year 1996 CTR funds for 
other ``higher priority'' weapons storage security projects. 
Because these previously appropriated funds are now available 
to augment other weapons storage security activities, the 
committee recommends a reduction in the fiscal year 1998 budget 
request of $12.5 million.
    The committee reiterates its support for efforts to ensure 
the safe and secure storage of fissile materials and recommends 
this reduction without prejudice. However, the committee is 
concerned over Russia's unwillingness to allow the United 
States access to certain storage sites. This raises questions 
about the U.S. ability to ensure that equipment provided is 
used solely for its stated purpose.
    In its March 1997 notification to Congress of intent to 
obligate fiscal year 1997 funds, the Department noted that 
``DOD will not be able to perform audits and examinations of 
some portions of the assistance provided under these 
agreements,'' but intends to impose other restrictions to 
ensure that the assistance ``remains under the control of the 
Russian Government.'' The committee is concerned that these 
arrangements may be insufficient to guard against the improper 
use of CTR assistance. Accordingly, the committee recommends a 
provision (sec. 1108) that would limit the obligation and 
expenditure of fiscal year 1998 funds until a formal agreement 
is reached with Russia on a mutually-acceptable arrangement for 
conducting audits and examinations; that agreement is provided 
by the Secretary to the Congressional defense committees; and 
15 days have elapsed from the date the agreement is received.

                         Other Support Programs

    The budget request contained $1.0 million for defense and 
military contacts with Belarus. In light of the recent 
Presidential de-certification of Belarus as eligible for CTR 
funds on the basis of human rights violations, the committee 
denies this request. In addition, the committee notes that, as 
of May 1997, the Department had obligated only $80.3 million of 
the $117.3 million in prior-year funds notified to Congress for 
CTR projects in Belarus. The committee expects that the 
Department will not obligate the remaining $37.0 million for 
projects in Belarus as long as Belarus remains ineligible for 
additional CTR assistance.

                            Program Overhead

    The budget request contained $20.5 million for management 
and administrative costs, project development, and audits and 
examinations. In light of the reductions in various CTR 
programs noted above, and the logical reduction in associated 
administrative costs, the committee recommends a reduction of 
$2.0 million for these activities. The committee notes that the 
Department unilaterally reduced the appropriated level of 
fiscal year 1997 program support by more than $300,000 to cover 
the costs of other higher priorities.

                  Prohibition of Specified Activities

    The committee reiterates its belief that funding for CTR 
activities should be directed toward facilitating the safe 
transportation, storage, and elimination of weapons of mass 
destruction, their delivery vehicles, and components, and for 
programs and activities deigned to prevent proliferation. The 
committee does not support CTR funding for activities outside 
these basic purposes. For this reason, the committee recommends 
a provision (sec. 1103) that would maintain a prohibition on 
the use of CTR funds for peacekeeping-related activities, 
housing, environmental restoration, job retraining, and defense 
conversion.

                         LEGISLATIVE PROVISIONS

  Section 1101--Specification of Cooperative Threat Reduction Programs

    This section would specify the kinds of programs to be 
funded under this title.

           Section 1102--Fiscal Year 1998 Funding Allocations

    This section would allocate fiscal year 1998 funding for 
various CTR purposes and activities.

    Section 1103--Prohibition on Use of Funds for Specified Purposes

    This section would prohibit the use of CTR funds for 
specified activities, including peacekeeping-related, housing, 
environmental restoration, job retraining, and defense 
conversion purposes.

 Section 1104--Prohibition on Use of Funds Until Specified Reports are 
                               Submitted

    This section would prohibit obligation or expenditure of 
fiscal year 1998 CTR funds until 15 days after various reports 
are submitted to Congress.

     Section 1105--Limitation on Use of Funds Until Submission of 
                             Certification

    This section would prohibit the obligation or expenditure 
of fiscal year 1998 CTR funds for certain START II-related 
strategic offensive arms elimination programs until the 
President certifies that such expenditures are in the national 
security interest and the Russians have agreed to share the 
cost of these activities. It would also direct the Secretary of 
Defense of submit a report on the specific cost-sharing 
arrangements.

  Section 1106--Use of Funds for Chemical Weapons Destruction Facility

    This section would prohibit the obligation or expenditure 
of funds for chemical weapons destruction purposes until the 
Secretary of Defense notifies Congress that certain cost-
sharing and site agreements have been reached with Russia.

   Section 1107--Limitation on Use of Funds for Storage Facility for 
                        Russian Fissile Material

    This section would prohibit the obligation or expenditure 
of funds for a storage facility for Russian fissile material 
until the Secretary of Defense notifies Congress that certain 
cost-sharing and transparency agreements have been reached with 
Russia.

 Section 1108--Limitation on Use of Funds for Weapons Storage Security

    This section would prohibit the obligation or expenditure 
of funds for weapons storage security in Russia until the 
Secretary of Defense notifies Congress that an agreement has 
been reached with Russia regarding audits and examinations.

 Section 1109--Report to Congress on Issues Regarding Payment of Taxes 
  or Duties on Assistance Provided to Russia Under Cooperative Threat 
                           Reduction Programs

    This section would require the Secretary of Defense to 
submit a report to Congress on attempts by Russia to tax 
assistance provided under the CTR program.

 Section 1110--Limitation on Obligation of Funds for a Specified Period

    This section would amend title 10, United States Code to 
limit the use of all appropriated funds for CTR purposes to a 
period of three years.

                  Section 1111--Availability of Funds

    This section would make fiscal year 1998 CTR funds 
available for obligation for three years.
              TITLE XII--MATTERS RELATING TO OTHER NATIONS

                                OVERVIEW

    Through investigations, hearings, analysis and careful 
study, the committee has concluded that there is a lack of 
connectivity between defense commitments as an element of the 
foreign policy of the United States and the military forces and 
resources required to execute these policies in an effective 
manner. The effects of inconsistency in policy, exacerbated by 
an insufficient and overtaxed military establishment, diminish 
the position of the United States as a geopolitical leader in a 
chaotic and dangerous world. The committee is concerned that 
the increasing number and scope of deployments of U.S. forces 
in support of U.S. policies abroad, combined with declining 
defense budgets, will erode rather than enhance the security of 
the United States.

                  African Center for Security Studies

    The committee report on H.R. 1530, the fiscal year 1996 
Defense Authorization bill (H. Rept. 104-131), directed the 
Secretary of Defense to develop an African Center for 
Securities Studies patterned after the George C. Marshall 
Center for European Security Studies located in Germany. This 
center would provide a capability to offer advanced study and 
training in civil-military relations, the building of 
democratic institutions, and related courses to members of the 
United States military and to the militaries and defense 
civilian personnel of African nations. The committee directed 
the secretary to provide the Congressional defense committees 
with an implementation plan by December 1, 1995. In March 26, 
1996 correspondence to the committee, the Department advised 
that the development of the required plan was underway but was 
not complete and that the plan should be completed and 
forwarded to the Congressional defense committees by mid summer 
of 1996. The plan has not yet been received. The committee 
fails to understand why the Secretary has not yet responded to 
the committee's direction. The Committee remains interested in 
monitoring the implementation of U.S. foreign policy and 
security interests in Africa and fully expects the directed 
plan to be received no later than November 1, 1997. Of the 
funds authorized for Operations and Maintenance for fiscal year 
1998, $5.0 million should be made available to support 
implementation of the plan.

                      Arms Control Implementation

    The fiscal year 1998 budget request contained $315.1 
million for arms control implementation programs, representing 
a 12 percent increase over the fiscal year 1997 budget request 
and a 27 percent increase over the fiscal year 1997 
appropriated level.
    The budget request is based in large part on planning 
assumptions regarding when various arms control treaties will 
enter into force. These assumptions have changed repeatedly, as 
the entry into force of several treaties--including the Open 
Skies Treaty, START II, and the Comprehensive Test Ban Treaty 
(CTBT)--has been delayed.
    The committee notes that the Chemical Weapons Convention 
(CWC), which was recently ratified by the United States but has 
not been ratified by Russia, entered into force on April 29, 
1997. This treaty places additional inspection obligations on 
the United States requiring an increase in funding for CWC 
activities. However, some of the requested increase in funding 
is directed toward support for the 1990 Bilateral Destruction 
Agreement (BDA) with Russia that is separate from the CWC. 
Because the Russians have refused to implement this agreement, 
the committee recommends a reduction of $4.1 million for BDA-
related activities.
    As has been the case in the past, delays in the entry into 
force of other treaties will likely allow some reduction in the 
amount of funding authorized for these arms control 
implementation programs. For example, the committee believes 
that planning assumptions regarding the entry into force of the 
Open Skies Treaty are overly optimistic. Accordingly, the 
committee recommends a reduction of $1.7 million for Open Skies 
treaty implementation activities.
    In addition, the budget request would almost double the 
amount of funding for research and development (R&D) activities 
related to monitoring, implementation, compliance, and 
technical support for the CTBT over the fiscal year 1997 
appropriated level. The committee is not convinced that such a 
significant increase is warranted given that the treaty has not 
yet been submitted to the Senate for its advice and consent and 
that U.S. ratification is not assured. Moreover, current DOD 
planning assumes that the treaty will not enter into force 
until late 1999. In addition, some of the specific projects 
supported by the R&D request appear to involve the procurement 
of items and are not strictly ``research and development'' 
activities. Finally, the committee has concerns over proposed 
DOD operation of seismic monitoring stations currently operated 
by the U.S. Geological Survey. Although the Department has 
expressed its intention to conclude agreements that delineate 
the obligations of each party responsible for a treaty station, 
no such agreements have yet been negotiated. Consequently, the 
committee directs elsewhere in this report that $13.3 million 
of the R&D budget request be fenced until 15 days after the 
Secretary of Defense notifies the Congressional defense 
committees that the necessary agreements have been concluded. 
Moreover, the committee directs the Secretary to provide the 
House National Security Committee and Senate Armed Services 
Committee with a detailed report no later that September 31, 
1997 on how the Department intends to use these CTBT-related 
research and development funds.
    Finally, the committee notes that Russia has yet to ratify 
the START II Treaty. To encourage Russian ratification, the 
Administration agreed at the March 1997 Helsinki summit to 
postpone the START II deadline for elimination of certain 
strategic offensive arms from 2003 to 2007. The committee 
understands this step constitutes a substantive amendment to 
the START II Treaty and that the administration intends to 
submit such changes to the Congress for approval. However, the 
committee notes that members of Russia's lower house of 
parliament, or Duma, have indicated subsequent to the Helsinki 
summit that Russian ratification of the treaty has been 
deferred indefinitely. As a result of the agreed slippage in 
START II elimination deadlines and the unlikely prospect for 
ratification in the near-term, the committee recommends a 
reduction to the budget request of $5.4 million, for a total 
authorization of $303.9 million.

   Defense Logistics Cooperation with the People's Republic of China

    The committee is aware that the Department of Defense is 
engaged in a broad range of activities to promote and enhance 
U.S. military relations with the Chinese People's Liberation 
Army (PLA) through a policy of comprehensive engagement. Some 
of the Department's activities with the Chinese government and 
the PLA have included frequent and regularexchanges on the 
topics of U.S. military strategy, regional security issues and the 
transfer of U.S. high-technology to China. In particular, the committee 
is concerned that the Department has chosen to advance U.S.-Chinese 
military relations by engaging the PLA in detailed discussions and 
briefings about advanced defense logistics techniques, infrastructure, 
and battlefield employment concepts. The committee's concern arises 
from the fact that China's long-term strategic ambitions remain unclear 
to U.S. policymakers and to the governments of the Asia-Pacific region. 
The committee also observes that the PLA's force modernization 
priorities suggest an intent to create a force capable of projecting 
and sustaining military power beyond China's borders.
    Therefore, the committee urges the Department to reconsider 
U.S. military-to military activities with the PLA that could 
further enhance the ability of the PLA to project and sustain 
military power beyond China's borders. The committee also 
expects to be kept fully informed of all future meetings, 
exchanges other DOD contacts with Chinese defense entities and 
PLA officials for the purpose of discussion on defense 
logistics or other military support subjects.

    The Khobar Towers Bombing and Force Protection in Southwest Asia

    In the wake of the Khobar Towers bombing in Saudi Arabia in 
June 1996, the committee notes that several issues related to 
force protection remain unresolved. Specifically, questions 
regarding the overall authority and responsibility for force 
protection issues prior to the terrorist attack remain 
unanswered. Moreover, although the Administration has elevated 
its emphasis on force protection, it is unclear whether the 
proper balance has been struck between mission and risk. In 
fact, concerns have been expressed, including within the 
military chain of command, that force protection is being 
overemphasized to the detriment of mission readiness and that 
the requirements of greater force protection may impede the 
``freedom of movement'' in theater necessary for U.S. forces 
deployed abroad to fulfill their missions.
    The committee welcomes the increased attention being given 
to force protection issues. Although no level of force 
protection is likely to be completely effective in deterring 
attack from dedicated terrorists, it is appropriate continually 
to reassess the effectiveness of force protection measures and 
the balance between mission and risk. The committee is 
encouraged by the Department's establishment of a directorate 
for force protection issues (J34) and notes that teams from the 
services and the Defense Special Weapons Agency are conducting 
a series of on-site vulnerability assessments at facilities 
where U.S. forces are deployed abroad. Notwithstanding these 
initiatives, the committee is concerned by reports that 
critical vulnerabilities at several sites in the Persian Gulf 
region persist.
    With regard to the Khobar Towers bombing, the committee is 
concerned that so much of the Department's focus has revolved 
around the question of personal culpability for the tragedy. In 
spite of continued requests, the committee has not yet been 
briefed on the findings of the report prepared by Air Force 
Lieutenant General James Record (ret.) on this issue. Neither 
has the Department informed the committee about the results of 
the reassessment of the Record report's conclusions undertaken 
by Air Force officials, reportedly at the insistence of the 
Office of the Secretary of Defense.
    While the issue of personal accountability is important, 
the committee believes that significant organizational, 
operational, and intelligence shortcomings contributed to the 
lack of preparedness for the bombing. As the committee's August 
1996 report on the bombing concluded, and the report of the 
Downing Task Force subsequently confirmed, these shortcomings 
included the lack of timely and accurate tactical intelligence, 
short rotation tours for senior personnel including key 
security officers, and the implications of treating a long-term 
operation (Operation Southern Watch) as a ``temporary'' 
contingency mission.
    The committee believes that providing effective force 
protection to U.S. forces deployed abroad also requires an 
ability to work cooperatively with host countries to ensure 
that necessary force protection actions are taken in a timely 
manner. The issue of host country sensibilities and how to work 
with host governments to provide adequate levels of force 
protection for U.S. forces is assuming greater importance in 
light of the expanding nature of U.S. foreign deployments and 
the increased threat of terrorist attacks. In the Khobar Towers 
tragedy, it is unclear whether specific guidance was provided 
from senior level military and civilian officials to theater 
commanders regarding coordination and cooperation with Saudi 
government officials on force protection issues. The committee 
is still looking for answers to the questions of whether such 
guidance was provided, who provided it (and to whom), and 
whether the guidance was revised in the wake of the November 
1995 Riyadh bombing.
    In order to better understand what happened at Khobar 
Towers and to prevent similar tragedies from occurring in the 
future, the committee directs that the Secretary of Defense 
provide a classified report to the House National Security 
Committee and the Senate Armed Services Committee outlining the 
following:
          (1) The guidance that was provided to theater 
        commanders prior to the Riyadh bombing regarding how to 
        approach force protection issues with the Saudis, 
        including what specific guidance was provided, by and 
        to whom, and when;
          (2) Whether the guidance was revised in the wake of 
        the Riyadh bombing and, if so, how; and
          (3) A detailed explanation of the roles of the Air 
        Force, U.S. Central Command (USCENTCOM), the Joint 
        Chiefs of Staff, and the Office of the Secretary of 
        Defense in providing guidance and support for the force 
        protection mission to all deployed U.S. forces abroad--
        with special attention to the forces deployed in the 
        USCENTCOM area of responsibility--and how their 
        respective responsibilities have changed since the 
        Khobar Towers bombing.
    The above report should be provided no later than September 
31, 1997.

                       Strategic Force Reductions

    The committee notes that the Quadrennial Defense Review 
(QDR) endorsed maintaining U.S. strategic nuclear forces at 
Strategic Arms Reduction Treaty I (START I) levels until Russia 
ratifies the START II Treaty. Despite the QDR's confirmation of 
current policy, the National Defense Panel has advocated 
unilateral U.S. nuclear force reductions to the levels 
specified in the START II Treaty. Moreover, and contrary to the 
QDR, Department of Defense officials also recently expressed 
interest in steps that could result in unilateral U.S. 
reductions.
    The committee believes that strategic nuclear forces remain 
central to U.S. national security, and any proposal to alter 
the nation's nuclear force structure must be considered on its 
own merits. The committee certainly does not believe that 
unilateral reductions to nuclear forces should be considered 
simply to generate savings for the military services to use to 
address program shortfalls, no matter how acute.
    Moreover, the committee believes that unilaterally reducing 
nuclear force structure below START I levels, prior to Russia's 
ratification of START II, would be counterproductive from an 
arms control standpoint. Because mutual obligation is the basis 
of all arms control agreements, unilateral reductions could 
undermine standing agreements and future negotiations. 
Unilateral U.S. nuclear force reductions would reduce Russian 
incentives to approve the START II Treaty by sending an 
unambiguous signal that U.S. reductions will occur with or 
without reciprocal Russian action. The committee continues to 
believe that any reductions to U.S. nuclear forces should be 
based on calculations of national security interest and 
implemented only in a mutual and balanced manner with Russia.

                         LEGISLATIVE PROVISIONS

 Section 1201--Reports to Congress Relating to United States Forces in 
                                 Bosnia

    The committee notes with concern the Administration's 
unilateral decision to extend the participation of U.S. ground 
forces in the Bosnia peacekeeping mission. This extension was 
made without appropriate prior consultation with the Congress 
and in contravention of the President's stated pledge to end 
U.S. participation in the peace implementation force (IFOR) 
mission after one year. The extended U.S. military presence is 
part of a follow-on international ``Stabilization Force'' 
(SFOR) that is expected to remain in Bosnia until June 1998.
    The committee is concerned with the Administration's stated 
reasons for extending the U.S. military ground presence and 
questions whether the declared intention to withdraw in June 
1998 is realistic or credible. The committee is also troubled 
with the escalating costs of the Bosnia operation--which now 
exceed $6.0 billion; the increased requirements Operation Joint 
Guard places on the U.S. armed forces in a time of declining 
defense budgets and resources; and the effect of the prolonged 
deployment to Bosnia on overall military readiness.
    The committee commends the professionalism demonstrated by 
U.S. forces in Bosnia in helping to enforce the military 
provisions of the Dayton peace agreement. As a result of their 
efforts, the military tasks required by the Dayton accord--i.e, 
the separation of the warring parties, the cantonment or 
destruction of heavy weapons, and the transfer of territories--
have been completed. What remains to be accomplished is the 
civilian and humanitarian rebuilding of Bosnia, a task that 
SFOR is supposed to facilitate. Unfortunately, this task is 
much more difficult, especially when, in the words of former 
Secretary of Defense William Perry last November, ``the 
conditions for peace still do not exist in Bosnia.''
    The Administration's contention that U.S. forces can be 
withdrawn in June 1998 is based on an assessment that the 
conditions for a stable peace in Bosnia will have taken hold by 
then. The committee finds this assumption overly optimistic in 
light of recent events, including the fourth postponement of 
municipal elections originally scheduled for September 1996; 
the heightened incidences of ethnic tension and violence 
between Bosnia's ethnically divided communities; and the 
deferment for one year of a final decision on the status of 
Brcko--located in the hotly-disputed corridor connecting the 
eastern and western halves of the Republica Srpska.
    Because the current SFOR mission focuses on ensuring the 
conditions for an effective rebuilding and rehabilitation of 
Bosnia's civilian infrastructure, the prospects for ``mission 
creep'' loom large. In particular, the tasks of keeping civil 
order, ensuring freedom of movement, supporting the war crimes 
tribunal, and providing security for municipal elections all 
carry the potential for mission creep. This potential has been 
substantially enlarged as a consequence of the difficulties 
noted above. The committee is concerned over the potential for 
mission creep and notes that there has been no accurate or 
timely information provided to the Congress regarding the types 
of civilian humanitarian and rebuilding activities that U.S. 
troops participating in the Bosnia SFOR are conducting.
    In addition, the committee is concerned that the 
Administration's fiscal year 1998 budget estimate for Bosnia 
operations is based on expectations of near-term political 
stability that are unlikely to be met. The Administration has 
planned and budgeted for a smaller and lighter ``Deterrence 
Force'' (DFOR) to replace SFOR approximately at the start of 
the fiscal year and the lower operating costs resulting from 
this transition. However, under more realistic political 
projections, the planned reduction of the U.S. ground component 
from 8,500 soldiers to approximately 5,000 soldiers appears 
unlikely and, in the committee's judgment, unwise if U.S. 
forces are exposed to undue and increased risk. In fact, 
additional tanks have been added to the current SFOR in 
response to increased tensions. The committee also notes that 
NATO and U.S. Army Europe are reportedly preparing contingency 
plans to maintain the SFOR well past the date previously 
forecast for the transition to the DFOR.
    The apparent military response to deteriorating conditions 
in Bosnia suggests that the Administration's plans and funding 
for the operation of U.S. ground forces in Bosnia are 
unrealistic, and make the likelihood of a supplemental funding 
request for fiscal year 1998 very probable. Based upon past 
history, the committee is concerned that readiness funding for 
U.S. forces will again be jeopardized.
    Because of the above concerns, the committee recommends a 
provision (sec. 1201) that would require the Secretary of 
Defense to submit to the Congressional defense committees two 
reports identifying all tasks carried out by U.S. SFOR troops 
in Bosnia during the previous quarter that are more 
appropriately conducted by civilian organizations, the reasons 
why U.S. troops were used to conduct the activities, and the 
justification for relying on military forces rather than 
civilian organizations or infrastructure to execute these 
tasks. The reports should also identify the numbers of troops 
involved in each of the activities and whether other SFOR 
troops participated. The first report is to be transmitted to 
Congress no later than December 1, 1997. The second report is 
to be transmitted no later than March 1, 1998.
    In addition, the provision would prohibit the expenditure 
of more than 60 percent of funds authorized to be appropriated 
for the operations of U.S. ground forces in Bosnia until the 
President transmits a report to Congress on the political and 
military conditions in Bosnia and the costs associated with a 
continued U.S. military presence. The report is to be submitted 
no later than December 31, 1997. The committee strongly 
believes that the report should be submitted in a timely 
fashion in order to avoid the need to consider any supplemental 
appropriations request under an imminent threat of curtailed 
and canceled regular training programs. The committee also 
believes that the Administration should speak frankly to the 
Congress and the American people regarding the political and 
military situation in Bosnia and the Administration's plans 
regarding any continued role for U.S. ground forces there.

  Section 1202--One-Year Extension of Counterproliferation Authorities

    This section would extend the authority through fiscal year 
1998 for the Department of Defense to provide support to the UN 
Special Commission on Iraq (UNSCOM) under the Weapons of Mass 
Destruction Control Act of 1992.

 Section 1203--Report on Future Military Capabilities and Strategy of 
                     the People's Republic of China

    This section would require that the Secretary of Defense 
prepare a report on the future pattern of military 
modernization of the People's Republic of China. The report is 
similar to one directed in the National Defense Authorization 
Act for Fiscal Year 1997 (Public Law 104-201), but expands the 
scope of research and the time period to be considered.

 Section 1204--Temporary Use of General Purpose Vehicles and Nonlethal 
  Military Equipment under Acquisition and Cross Servicing Agreements

    This section would amend section 2350(1) of title 10, 
United States Code, to permit the Department of Defense utilize 
general purpose vehicles and other nonlethal military equipment 
under acquisition and cross servicing agreements. Such 
authority should facilitate United States contingency military 
operations by clarifying the conditions under which the 
Department may enter into an acquisition and cross servicing 
agreement and more precisely defining the provisions of the 
United States Munitions List that should apply under such 
conditions.
            DIVISION B--MILITARY CONSTRUCTION AUTHORIZATIONS

                                PURPOSE

    The purpose of Division B is to provide military 
construction authorizations and related authority in support of 
the military departments during fiscal year 1998. As approved 
by the committee, Division B would authorize appropriations in 
the amount of $9,123,748,000 for construction in support of the 
active forces, reserve components, defense agencies for fiscal 
year 1998.

                     MILITARY CONSTRUCTION OVERVIEW

    The military construction authorization request for fiscal 
year 1998 was introduced by request as H.R. 909 on March 4, 
1997.
    The Department of Defense requested authorization of 
appropriations of $4,705,338,000 for fiscal year 1998 for 
military construction, including $2,060,854,000 for activities 
associated with base closure and realignment, and 
$3,668,410,000 for family housing construction and support. The 
committee recommends $5,187,875,000 for military construction, 
including $2,060,854,000 for activities associated with base 
closure and realignment, and $3,935,873,000 for family housing 
construction and support for fiscal year 1998.
    The committee remains concerned about the condition of the 
Nation's military installations and is particularly troubled by 
the continuing underinvestment by the Administration in 
military facilities and infrastructure. The budget request for 
fiscal year 1998 and the preliminary submission of the budget 
request for fiscal year 1999 indicate a continuing pattern of 
significant deterioration in the funding programmed by the 
Administration for military construction despite the evident 
requirement. In constant dollars, the budget request is 25 
percent less than the Administration sought for fiscal year 
1996 and 28 percent lower than the program authorized by 
Congress for that fiscal year.
    The committee noted one year ago the findings of the 
Defense Science Board Task Force on Quality of Life which 
reported that 62 percent of barracks and dormitories are 
unsuitable and 64 percent of military family housing units are 
in a similar condition. The typical military family housing 
unit was built 38 years ago and the typical barracks was 
constructed in the early 1950s. Yet, the Administration's 
budget request proposes, from current spending levels, a 20 
percent reduction for the construction of troop housing and a 
32 percent reduction in funds available for the development and 
construction of military family housing.
    Former Secretary of Defense William J. Perry, in his March 
1996 Annual Report to the President and the Congress, indicated 
that ``deteriorated facilities undermine readiness.'' At the 
onset of the defense build-up in the early 1980s, the majority 
of military facilities were over 25 years old. Currently, the 
average age of U.S. military facilities is 45 years. The rate 
of facilities recapitalization and modernization for the 
military services averages nearly 70 years, far below the 
standards established by private industry or other segments of 
the public sector, such as public universities.
    To alleviate some of the facilities shortfall, the 
committee recommends an increase in new budget authority for 
these programs of $750,000,000. Approximately 64 percent of 
that amount is dedicated to the continuing emphasis of the 
committee upon improvements to military housing and 
enhancements to other facilities that support the quality of 
life for military personnel and their families. The committee 
recommends an additional $472,263,000 for military construction 
that directly supports improvements in the quality of life for 
military personnel. Included in that amount is $269,763,000 for 
the construction, replacement, or improvement of military 
family housing, $116,700,000 for troop housing construction, 
$21,430,000 for child development centers, and $74,600,000 for 
other quality-of-life facilities, such as physical fitness 
centers and education facilities.
    A tabular summary of the authorizations provided in 
Division B for fiscal year 1998 follows:
    OFFSET FOLIOS 453 TO 465 INSERT HERE

<SKIP PAGES = 013>

    A tabular summary of the military construction projects 
included with the authorization of appropriations for fiscal 
year 1998 for the BRAC II , BRAC III, and BRAC IV accounts 
follows:
    OFFSET FOLIOS 467 TO 471 INSERT HERE

<SKIP PAGES = 005>

                            TITLE XXI--ARMY

                                SUMMARY

    The budget request contained $595,277,000 for Army military 
construction and $1,291,937,000 for family housing for fiscal 
year 1998. The committee recommends authorization of 
$706,027,000 for military construction and $1,349,337,000 for 
family housing for fiscal year 1998.

                       ITEMS OF SPECIAL INTEREST

                Improvements of Military Family Housing

    The committee recommends that, within authorized amounts 
for improvements of military family housing and facilities, the 
Secretary of the Army execute the following projects: 
$8,300,000 for Whole Neighborhood Revitalization (32 units) at 
Fort Wainwright, Alaska; $14,200,000 for Whole Neighborhood 
Revitalization (214 units) at Fort Riley, Kansas; $8,500,000 
for Whole Neighborhood Revitalization, Phase IV (86 units) at 
Fort Campbell, Kentucky; $5,400,000 for Whole Neighborhood 
Revitalization (56 units) at the United States Military 
Academy, New York; and $8,000,000 for Whole Neighborhood 
Revitalization (98 units) at Fort Belvoir, Virginia.

                          Planning and Design

    The committee directs that, within authorized amounts for 
planning and design, $3,100,000 be used by the Secretary of the 
Army to conduct planning and design activities for the 
construction of the National Ground Intelligence Center, 
Charlottesville, Virginia.

                         LEGISLATIVE PROVISIONS

    Section 2101--Authorized Army Construction and Land Acquisition 
                                Projects

    This section contains the list of authorized Army 
construction projects for fiscal year 1998. The authorized 
amounts are listed on an installation-by-installation basis. 
The state list contained in this report is intended to be the 
binding list of the specific projects authorized at each 
location.

                      Section 2102--Family Housing

    This section would authorize new construction and planning 
and design of family housing units for the Army for fiscal year 
1998.

      Section 2103--Improvements to Military Family Housing Units

    This section would authorize improvements to existing units 
of family housing for fiscal year 1998.

          Section 2104--Authorization of Appropriations, Army

    This section would authorize specific appropriations for 
each line item contained in the Army's budget for fiscal year 
1998. This section also provides an overall limit on the amount 
the Army may spend on military construction projects.

   Section 2105--Correction In Authorized Uses of Funds, Fort Irwin, 
                               California

    This section would correct the authorized use of funds 
authorized for appropriation in prior years for a military 
construction project at Fort Irwin, California. The provision 
would permit the use of previously authorized funds to 
construct a heliport at Fort Irwin to support the National 
Training Center.
                            TITLE XXII--NAVY

                                SUMMARY

    The budget request contained $530,606,000 for Navy military 
construction and $1,255,437,000 for family housing for fiscal 
year 1998. The committee recommends authorization of 
$675,806,000 for military construction and $1,377,219,000 for 
family housing for fiscal year 1998.

                       ITEMS OF SPECIAL INTEREST

 Co-Composting Facility, Naval Education and Training Center, Newport, 
                              Rhode Island

    The committee notes the proposal by local municipalities in 
the vicinity of the Naval Education and Training Center, 
Newport, Rhode Island, to construct and operate a co-composting 
facility for joint use with the Department of the Navy on 
unimproved real property which would be conveyed to a local 
municipality by the Department for this purpose. The committee 
directs the Secretary of the Navy to conduct a study of the 
feasibility of joint use of such a facility, including an 
assessment of the economic benefit to the Department of the 
Navy and environmental considerations. The Secretary shall 
submit a report on the Department's findings, including any 
recommendations, to the congressional defense committees no 
later than January 1, 1998.

                Improvements to Military Family Housing

    The committee recommends that, within authorized amounts 
for improvements to military family housing and facilities, the 
Secretary of the Navy execute the following projects: 
$4,193,000 for Whole House Revitalization (120 units) at Naval 
Air Warfare Center China Lake, California; $7,700,000 for Whole 
House Revitalization (64 units) at Public Works Center Great 
Lakes, Illinois; $12,390,000 for Whole House Revitalization 
(123 units) at Naval Air Warfare Center Patuxent River, 
Maryland; $11,300,000 for Whole House Revitalization (155 
units) at Marine Corps Air Station Cherry Point, North 
Carolina; and $4,919,000 for Whole House Revitalization (100 
units) at Naval Shipyard Bremerton, Washington.

    Prepositioned Equipment Maintenance Facilities, Blount Island, 
                         Jacksonville, Florida

    The committee is aware of the completion of the study 
required by section 317 of the National Defense Authorization 
Act for Fiscal Year 1994 (Public Law 103-160) on the cost and 
operational effectiveness of co-locating afloat prepositioning 
maintenance facilities for the Department of the Army and the 
Marine Corps. The committee notes the conclusion of the 
analysis that the Army and the Marine Corps should maintain and 
operate separate, but complementary, prepositioning facilities 
in Charleston, South Carolina, and Blount Island, Jacksonville, 
Florida, respectively. The committee further notes that the 
facilities maintained by the Marine Corps at Blount Island are 
leased and acknowledges the estimates provided to the committee 
that ownership of those facilities could save the Department of 
the Navy between six and seven million dollars annually. The 
committee recognizes that the Secretary of Defense, upon the 
recommendation of the Secretary of the Navy, has provided a 
waiver of the current moratorium on land acquisition to permit 
the Navy to determine the costs of ownership, to conduct an 
environmental assessment, and to make other related studies. 
The committee notes its support for the decision of the 
Secretary of Defense.

                         LEGISLATIVE PROVISIONS

    Section 2201--Authorized Navy Construction and Land Acquisition 
                                Projects

    This section contains the list of authorized Navy 
construction projects for fiscal year 1998. The authorized 
amounts are listed on an installation-by-installation basis. 
The state list contained in this report is intended to be the 
binding list of the specific projects authorized at each 
location.

                      Section 2202--Family Housing

    This section would authorize new construction and planning 
and design of family housing units for the Navy for fiscal year 
1998.

      Section 2203--Improvements to Military Family Housing Units

    This section would authorize improvements to existing units 
of family housing for fiscal year 1998.

          Section 2204--Authorization of Appropriations, Navy

    This section would authorize specific appropriations for 
each line item in the Navy's budget for fiscal year 1998. This 
section also provides an overall limit on the amount the Navy 
may spend on military construction projects.

 Section 2205--Authorization of Military Construction Project at Naval 
    Air Station, Pascagoula, Mississippi, for Which Funds Have Been 
                              Appropriated

    This section would authorize $4,900,000 to extend the west 
quaywall at Naval Air Station, Pascagoula, Mississippi, for 
which funds were previously appropriated pursuant to the 
Military Construction Appropriations Act, 1997 (Public Law 104-
196).
                         TITLE XXIII--AIR FORCE

                                SUMMARY

    The budget request contained $495,782,000 for Air Force 
military construction and $1,083,362,000 for family housing for 
fiscal year 1998. The committee recommends authorization of 
$638,447,000 for military construction and $1,171,643,000 for 
family housing for fiscal year 1998.

                       ITEMS OF SPECIAL INTEREST

      Disposal of Real Property, Hancock Field, Syracuse, New York

    The committee notes the pending disposal by the Department 
of the Air Force to the General Services Administration of a 
parcel of real property consisting of 14.9 acres, with 
improvements, at Hancock Field, Syracuse, New York, which is no 
longer required for use by the 152nd Air Control Group of the 
New York Air National Guard. The committee understands that no 
federal agency holds a potential interest in the property. The 
committee encourages the Secretary of the Air Force to work in 
cooperation with the Administrator of General Services to 
include the condition of the improvements to real property and 
demolition as a part of the assessment of the appraisal and 
valuation of the property for sale, if available, to the County 
of Onondaga, New York.

                Improvements to Military Family Housing

    The committee recommends that, within authorized amounts 
for improvements of military family housing and facilities, the 
Secretary of the Air Force execute the following projects: 
$10,500,000 for family housing improvements (147 units) at 
Travis Air Force Base, California; $5,100,000 for family 
housing improvements (50 units) at Dover Air Force Base, 
Delaware; $9,700,000 for family housing improvements, phase IX 
(64 units) at Andersen Air Force Base, Guam; $8,900,000 for 
family housing improvements (147 units) at Cannon Air Force 
Base, New Mexico; $4,600,000 for family housing improvements 
(60 units) at Tinker Air Force Base, Oklahoma; $10,500,000 for 
family housing improvements (98 units) at Shaw Air Force Base, 
South Carolina; and $5,500,000 for family housing improvements 
(42 units) at Fairchild Air Force Base, Washington.

  Inter-Departmental Land Transfer, Bellows Air Force Station, Hawaii

    The committee notes the proposed transfer of certain lands 
at Bellows Air Force Station, Hawaii, from the administrative 
jurisdiction of the Department of the Air Force to the 
jurisdiction of the Department of the Navy for use by the 
Marine Corps for training activities. The committee understands 
that both military departments are currently assessing the 
costs and liabilities expected to accrue to both the Air Force 
and the Navy in the operation of the training area. The 
committee urges the military departments to expedite this 
transfer. The committee directs the Secretary of the Air Force 
and the Secretary of the Navy to report jointly to the 
congressional defense committees on issues relating to the 
proposed transfer including, but not limited to, an assessment 
of the costs and liabilities of each of the military 
departments in the management and operation of the training 
area, environmental effects of the proposed use of the lands 
for training purposes, and a proposed date for the transfer of 
jurisdiction from the Air Force to the Navy. The secretaries 
shall submit their report to the congressional defense 
committees no later than November 15, 1997.

                         LEGISLATIVE PROVISIONS

 Section 2301--Authorized Air Force Construction and Land Acquisition 
                                Projects

    This section contains the list of authorized Air Force 
construction projects for fiscal year 1998. The authorized 
amounts are listed on an installation-by-installation basis. 
The state list contained in this report is intended to be the 
binding list of the specific projects authorized at each 
location.

                      Section 2302--Family Housing

    This section would authorize new construction and planning 
and design of family housing units for the Air Force for fiscal 
year 1998.

       Section 2303--Improvements to Military Family Housing Units

    This section would authorize improvements to existing units 
of family housing for fiscal year 1998.

        Section 2304--Authorization of Appropriations, Air Force

    This section would authorize specific appropriations for 
each line item in the Air Force's budget for fiscal year 1998. 
This section also would provide an overall limit on the amount 
the Air Force may spend on military construction projects.

    Section 2305--Authorization of Military Construction Project at 
      McConnell Air Force Base, Kansas, for Which Funds Have Been 
                              Appropriated

    This section would authorize $6,700,000 for a consolidated 
education center at McConnell Air Force Base, Kansas, for which 
funds were previously appropriated pursuant to the Military 
Construction Appropriations Act, 1997 (Public Law 104-196).
                      TITLE XIV--DEFENSE AGENCIES

                                SUMMARY

    The budget request contained $673,633,000 for defense 
agencies military construction and $37,674,000 for family 
housing for fiscal year 1998. The committee recommends 
authorization of $613,233,000 for military construction and 
$37,674,000 for family housing.

                         LEGISLATIVE PROVISIONS

    Section 2401--Authorized Defense Agencies Construction and 
Land Acquisition Projects
    This section contains the list of authorized defense 
agencies construction projects for fiscal year 1998. The 
authorized amounts are listed on an installation-by-
installation basis. The state list contained in this report is 
intended to be the binding list of the specific projects 
authorized at each location.

           Section 2402--Military Housing Planning and Design

    This section would authorize the Secretary of Defense to 
carry out planning and design activities with respect to the 
construction or improvement of military family housing units in 
the amount of $50,000.

      Section 2403--Improvements to Military Family Housing Units

    This section would authorize the Secretary of Defense to 
make improvements to existing units of family housing for 
fiscal year 1998 in an amount not to exceed $50,000,000.

               Section 2404--Energy Conservation Projects

    This section would authorize the Secretary of Defense to 
carry out energy conservation projects.

    Section 2405--Authorization of Appropriations, Defense Agencies

    This section would authorize specific appropriations for 
each line item in the Defense Agencies' budget for fiscal year 
1998. This section also would provide an overall limit on the 
amount the Defense Agencies may spend on military construction 
projects.

  Section 2406--Correction in Authorized Use of Funds, McClellan Air 
                         Force Base, California

    This section would correct the authorized use of funds 
authorized for appropriation in prior years for a military 
construction project at McClellan Air Force Base, California. 
The provision would permit the use of previously authorized 
funds to construct an aeromedical clinic addition at Andersen 
Air Force Base, Guam, and an occupational health clinic 
facility at Tinker Air Force Base, Oklahoma.

 Section 2407--Modification of Authority to carry out Fiscal Year 1995 
                                Projects

    This section would amend the table in section 2401 of the 
Military Construction Authorization Act for Fiscal Year 1995 
(division B of Public Law 103-337) to provide for full 
authorization of military construction projects to support 
chemical weapons and munitions destruction at Pine Bluff 
Arsenal, Arkansas, and Umatilla Army Depot, Oregon.
      TITLE XXV--NORTH ATLANTIC TREATY ORGANIZATION INFRASTRUCTURE

                                SUMMARY

    The budget request contained $176,300,000 for the NATO 
infrastructure fund (NATO Security Investment Program) for 
fiscal year 1998. The committee recommends $166,300,000.

                         LEGISLATIVE PROVISIONS

    Section 2501--Authorized NATO Construction and Land Acquisition 
                                Projects

    This section would authorize the Secretary of Defense to 
make contributions to the North Atlantic Treaty Organization 
security investment program in an amount equal to the sum of 
the amount specifically authorized in section 2502 of this bill 
and the amount of recoupment due to the United States for 
construction previously financed by the United States.

          Section 2502--Authorization of Appropriations, NATO

    This section would authorize appropriations of $166,300,000 
as the U.S. contribution to the NATO security investment 
program.
            TITLE XXVI--GUARD AND RESERVE FORCES FACILITIES

                                SUMMARY

    The budget request contained $172,886,000 for fiscal year 
1998 for guard and reserve facilities. The committee recommends 
authorization for fiscal year 1998 of $327,208,000 to be 
distributed as follows:

Army National Guard ....................................     $45,098,000
Air National Guard .....................................     137,275,000
Army Reserve 
    ....................................................      69,831,000
Air Force Reserve 
    ....................................................      40,561,000
Naval and Marine Corps Reserve .........................      34,443,000
                    --------------------------------------------------------
                    ____________________________________________________
    Total ..............................................     327,208,000

                       ITEMS OF SPECIAL INTERESTS

   Budget Process to Support the Validation of Military Construction 
                Requirements for the Army National Guard

    The committee notes the increase in the requested level of 
funding for military construction for the support of the Army 
National Guard (ARNG) contained in the budget request for 
fiscal year 1998. The committee recognizes and remains 
concerned about the often unsafe, undersized, deteriorating, 
and inefficient facilities which do not adequately support the 
operational, training, and maintenance requirements meeting the 
federal mission of the Army National Guard. The committee, 
however, is deeply concerned about the budget and planning 
process utilized by the Department of the Army to assess and 
prioritize facilities requirements for the Army National Guard.
    The committee has reviewed the report on ARNG 
infrastructure requirements submitted by the Secretary of the 
Army as directed by House Report 104-563, the report to 
accompany the National Defense Authorization Act for Fiscal 
Year 1997, as well as recent trends in the long-term planning 
for ARNG military construction program. While the committee is 
pleased to note that the Future Years Defense Program (FYDP) 
for fiscal year 1998 through fiscal year 2003 contains a 119 
percent increase in funding programmed for ARNG military 
construction, the committee also notes with serious concern 
that 60 percent of the military construction projects in the 
previous FYDP, which the Congress did not authorize for fiscal 
year 1997, no longer are in the immediate budget plans of the 
Army National Guard.
    The committee is concerned about the significant 
instability in the ARNG budget and planning process. The 
committee strongly urges the Secretary of the Army to undertake 
a comprehensive review of the budget and planning process of 
the Department of the Army as it concerns the validation and 
funding of military construction requirements for the federal 
mission of the Army National Guard and to take the necessary 
measures to ensure that the Army National Guard adheres to an 
integrated department-wide budget and planning process that 
defines critical installation shortfalls and facilities 
requirements.
    The committee authorizes the budget request of $45,098,000 
for military construction for the ARNG.

                         LEGISLATIVE PROVISIONS

   Section 2601--Authorized Guard and Reserve Construction and Land 
                          Acquisition Projects

    This section would authorize appropriations for military 
construction for the guard and reserve by service component for 
fiscal year 1998. The state list contained in this report is 
intended to be the binding list of the specific projects 
authorized at each location.

Section 2602--Authorization of Military Construction Projects for Which 
                      Funds Have Been Appropriated

    This section would authorize $5,900,000 for the Army 
National Guard for additions and alterations to an aviation 
support facility at Hilo, Hawaii, and $4,800,000 for the Naval 
Reserve for a bachelor enlisted quarters at Naval Air Station, 
New Orleans, Louisiana, for which funds were previously 
appropriated pursuant to the Military Construction 
Appropriations Act, 1997 (Public Law 104-196).

 Section 2603--Army Reserve Construction Project, Salt Lake City, Utah

    This section would authorize the Secretary of the Army to 
accept financial or in-kind contributions from the State of 
Utah for land acquisition, site preparation, relocation, and 
other costs in connection with the construction of a reserve 
center and organization maintenance shop in Salt Lake City, 
Utah.
        TITLE XXVII--EXPIRATION AND EXTENSION OF AUTHORIZATIONS

                         LEGISLATIVE PROVISIONS

 Section 2701--Expiration of Authorizations and Amounts Required To Be 
                            Specified by Law

    This section would provide that authorizations for military 
construction projects, repair of real property, land 
acquisition, family housing projects and facilities, 
contributions to the North Atlantic Treaty Organization 
infrastructure program, and guard and reserve projects will 
expire on October 1, 2000 or the date of enactment of an Act 
authorizing funds for military construction for fiscal year 
2001, whichever is later. This expiration would not apply to 
authorizations for which appropriated funds have been obligated 
before October 1, 2000 or the date of enactment of an Act 
authorizing funds for these projects, whichever is later.

Section 2702--Extensions of Authorizations of Certain Fiscal Year 1995 
                                Projects

    This section would provide for selected extension of 
certain fiscal year 1995 military construction authorizations 
until October 1, 1998, or the date of the enactment of an Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

 Section 2703--Extension of Authorizations of Certain Fiscal Year 1994 
                                Projects

    This section would provide for selected extension of 
certain fiscal year 1994 military construction authorizations 
until October 1, 1998, or the date of the enactment of the Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

 Section 2704--Extension of Authorizations of Certain Fiscal Year 1993 
                                Projects

    This section would provide for selected extension of 
certain fiscal year 1993 military construction authorizations 
until October 1, 1998, or the date of the enactment of the Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

 Section 2705--Extension of Authorizations of Certain Fiscal Year 1992 
                                Projects

    This section would provide for selected extension of 
certain fiscal year 1992 military construction authorizations 
until October 1, 1998, or the date of the enactment of the Act 
authorizing funds for military construction for fiscal year 
1999, whichever is later.

 Section 2706--Extension of Availability of Funds for Construction of 
                 Over-the-Horizon Radar in Puerto Rico

    This section would provide for an extension of authority to 
construct a relocatable over-the-horizon radar at Naval Station 
Roosevelt Roads, Puerto Rico authorized by the Defense 
Appropriations Act, 1995 (Public Law 103-335) until October 1, 
1998, or the date of the enactment of the Act authorizing funds 
for military construction for fiscal year 1999, whichever is 
later.

                      Section 2707--Effective Date

    This section would provide that Titles XXI, XXII, XXIII, 
XXIV, and XXVI of this bill shall take effect on October 1, 
1997, or the date of the enactment of this Act, whichever is 
later.
                    TITLE XXVIII--GENERAL PROVISIONS

                       ITEMS OF SPECIAL INTEREST

 Force Protection for Overseas Facilities From Chemical and Biological 
                                Weapons

    The committee is concerned about the adequacy of force 
protection for military installations and facilities abroad and 
is particularly concerned about the condition and ability of 
overseas facilities to contribute effectively to the protection 
of military personnel in the event of contingencies involving 
the use of chemical or biological munitions. The committee 
directs the Secretary of Defense to conduct a study of overseas 
military installations and facilities, with a particular 
emphasis on facilities in the Republic of Korea, and the 
capacity of those facilities to respond effectively to an 
attack in which chemical or biological munitions are used. The 
study should include an assessment of the military construction 
required to enhance and improve overseas facilities for the 
protection of military personnel from chemical and biological 
attack. The Secretary shall submit a report on the Department's 
findings, including any recommendations, to the congressional 
defense committees by March 1, 1998.

   Military Construction in the Republic of Korea and Burdensharing 
                Support for United States Forces, Korea

    The committee recognizes the critical facilities shortfalls 
at United States military installations in the Republic of 
Korea, particularly those that affect readiness and the living 
conditions for military personnel. The committee fully supports 
the $97,525,000 contained in the budget request for overseas 
military construction in the Republic of Korea. The committee 
provides authorization for military construction projects for 
the Department of the Army at Camp Casey, Camp Castle, Camp 
Humphreys, Camp Red Cloud, and Camp Stanley and for the 
Department of the Air Force at Kunsan Air Base and Osan Air 
Base. The committee is satisfied that these military 
construction projects begin to address significant shortfalls 
at installations which are central to current U.S. and Korean 
defense planning. The committee further notes, however, that 
these investments are tied to stationing requirements that may 
not be indicative of a long-term, post-reunification U.S. 
military presence on the Korean peninsula.
    The committee also recognizes the progress made by the 
United States in recent years to improve bilateral 
burdensharing arrangements with the Korean government. However, 
the committee believes that the current level of burdensharing 
provided is insufficient given the conditions of facilities in 
Korea and the importance of those facilities to the mutual 
defense effort. The committee notes the expiration in 1998 of 
the Special Measures Agreement (SMA), the framework for current 
burdensharing arrangements with the Republic of Korea. The 
committee urges the Secretary of Defense to work cooperatively 
with the Secretary of State to improve the level of 
burdensharing in the follow-on agreement to the current SMA. 
Within the context of negotiations with the Government of 
Korea, the committee encourages the Secretary of State to 
ensure that any future negotiated agreement provide for 
adequate and reasonable residual value payments for military 
facilities and installations returned to the Republic of 
Korea.The committee expects that such residual value would include the 
cost of investment by the United States in such facilities and 
installations.

           Withdrawals of Public Lands for Military Purposes

    The committee stresses the importance to military training 
and readiness of adequate ranges and maneuver areas. The 
committee notes the requirement in the Military Lands 
Withdrawal Act of 1986 (Public Law 99-606) that mandates the 
preparation by November 6, 1998 of draft environmental impact 
statements and applications for the continued withdrawal from 
the public domain of the lands comprising the ranges, maneuver 
areas, and other training areas covered by that Act for which 
the appropriate secretary of a military department intends to 
seek continued or renewed withdrawal of those lands. The 
committee urges the appropriate military departments to 
complete by that date the requirements for Bravo-20 Bombing 
Range, Nevada; Nellis Air Force Range, Nevada; Barry M. 
Goldwater Air Force Range, Arizona; McGregor Range, New Mexico; 
Fort Greely Maneuver Area and Fort Greely Air Drop Zone, 
Alaska; and the Fort Wainwright Maneuver Area, Alaska, so that 
continued or renewed withdrawal of those lands for military 
purposes may be considered by Congress in a timely and 
expeditious manner without potential disruption of training 
activities at those sites.

                         LEGISLATIVE PROVISIONS

 Subtitle A--Military Construction Program and Military Family Housing 
                                Changes

 Section 2801--Use of Mobility Enhancement Funds for Unspecified Minor 
                              Construction

    This section would authorize the use of funds made 
available for mobility enhancement for unspecified minor 
construction. Under the provision, mobility enhancement funds 
could not be used for unspecified minor construction if the 
cost of the construction project would exceed $1,500,000.

Section 2802--Limitation on the Use of Operation and Maintenance Funds 
                      for Facility Repair Projects

    This section would clarify the definition of repair of 
facilities using operations and maintenance funds.

    Section 2803--Leasing of Military Family Housing, United States 
                    Southern Command, Miami, Florida

    This section would amend section 2828 of title 10, United 
States Code, to authorize the Secretary of the Army to lease 
not more than eight housing units in the vicinity of Miami, 
Florida, for key and essential personnel, as determined by the 
Secretary, for which the annual rental of such units would 
exceed the expenditure limitations established by law. This 
section would establish certain new expenditure limitations 
relating to such housing units.

 Section 2804--Use of Financial Incentives Provided as Part of Energy 
               Savings and Water Conservation Activities

    This section would clarify the ability of the military 
departments to accept financial incentives or rebates for 
specific energy and water conservation activities.

Section 2805--Congressional Notification Requirements Regarding Use of 
Department of Defense Housing Funds for Investments in Nongovernmental 
                                Entities

    This section would provide for a 30-day notice-and-wait 
requirement on requests to use funds appropriated or otherwise 
made available under the authority of subchapter IV of chapter 
169 of title 10, United States Code, as a cash contribution by 
the Department of Defense toward the investment cost in any 
project entered into under those authorities.

        Subtitle B--Real Property and Facilities Administration

 Section 2811--Increase in Ceiling for Minor Land Acquisition Projects

    This section would increase the maximum limit for minor 
land acquisitions from $200,000 to $500,000.

    Section 2812--Administrative Expenses for Certain Real Property 
                              Transactions

    This section would authorize the secretary of a military 
department to accept reimbursement from non-federal entities 
for the cost of certain real estate services and transactions, 
including real estate exchanges, grants, and licenses, done at 
the request of, and for the benefit of, those entities.

 Section 2813--Disposition of the Proceeds From the Sale of Air Force 
                      Plant 78, Brigham City, Utah

    This section would provide that the proceeds from the sale 
of Air Force Plant 78, Brigham City, Utah, by the Administrator 
of General Services shall be available to the Secretary of the 
Air Force for facility maintenance, repair, or environmental 
restoration at other industrial plants of the Department of the 
Air Force.

            Subtitle C--Defense Base Closure and Realignment

Section 2821--Consideration of Military Installations as Sites for New 
                           Federal Facilities

    This section would require the head of a federal agency to 
consult with the Secretary of Defense on the availability of 
federal property or facilities at a military installations to 
be closed or realigned prior to acquiring non-federal real 
property for a new or replacement federal facility of any type.

 Section 2822--Prohibition against Conveyance of Property at Military 
            Installations to State-Owned Shipping Companies

    This section would prohibit the Secretary of Defense from 
conveying, by sale, lease, or other method, any portion of real 
property to be disposed under the Defense Base Closure and 
Realignment Act of 1990 (part A of title XXIX of Public Law 
101-510) to a state-owned shipping company. The section would 
also require the Secretary, as a condition on each conveyance 
of real property, that the property may not be subsequently 
conveyed to a state-owned shipping company. The section would 
provide for a reversionary interest of the United States in 
such property in the event of a conveyance to, or use by, a 
state-owned shipping company.

                 Subtitle D--Land Conveyances Generally

                        Part I--Army Conveyances

  Section 2831--Land Conveyance, James T. Roker Army Reserve Center, 
                            Durant, Oklahoma

    This section would authorize the Secretary of the Army to 
convey, without consideration, a parcel of real property with 
improvements in Durant, Oklahoma to Big Five Community 
Services, Incorporated. The property is to be used for 
educational purposes. The cost of any surveys necessary for the 
conveyance shall be borne by Big Five Community Services, 
Incorporated.

        Section 2832--Land Conveyance, Fort A.P. Hill, Virginia

    This section would authorize the Secretary of the Army to 
convey, without consideration, a parcel of unimproved real 
property at Fort A.P. Hill, Virginia, to Caroline County, 
Virginia. The property is to be used for a waste transfer 
station. The costs of any surveys necessary for the conveyance 
shall be borne by the County.

  Section 2833--Expansion of Land Conveyance, Indiana Army Ammunition 
                      Plant, Charlestown, Indiana

    This section would amend section 2858 of the Military 
Construction Authorization Act for Fiscal Year 1996 (division B 
of Public Law 104-106) to provide for the additional conveyance 
of 500 acres of real property to the State of Indiana.

   Section 2834--Modification of Land Conveyance, Lompoc, California

    This section would modify the purpose of the conveyance 
authorized by section 834(b)(1) of the Military Construction 
Authorization Act, 1985 (Public Law 98-407). The modification 
would permit the real property to be conveyed by the Secretary 
of the Army to the City of Lompoc, California, to be used for 
educational or recreation purposes.

Section 2835--Modification of Land Conveyance, Rocky Mountain Arsenal, 
                                Colorado

    This section would permit the Administrator of General 
Services to enter into a negotiated sale of 815 acres of real 
property at Rocky Mountain Arsenal, Colorado, to Commerce City, 
Colorado.

  Section 2836--Correction of Land Conveyance Authority, Army Reserve 
                    Center, Anderson, South Carolina

    This section would correct the name of the conveyee in the 
conveyance authorized by section 2824 of the Military 
Construction Authorization Act for Fiscal Year 1997 (division B 
of Public Law 104-201). The correction would permit the 
conveyance to be made by the Secretary of the Army to the Board 
of Education, Anderson County, South Carolina.

       Section 2837--Land Conveyance, Fort Bragg, North Carolina

    This section would authorize the Secretary of the Army to 
convey, without consideration, a parcel of unimproved real 
property at Fort Bragg, North Carolina, to the Town of Spring 
Lake, North Carolina. The property is to be used for improved 
access to a waste treatment facility and to permit economic 
development. The cost of any surveys necessary for the 
conveyance shall be borne by the Town.

  Section 2838--Land Conveyance, Gibson Army Reserve Center, Chicago, 
                                Illinois

    This section would authorize the Secretary of the Army to 
convey, without consideration, a parcel of real property with 
improvements in Chicago, Illinois, to the Lawndale Business and 
Local Development Corporation. The cost of any surveys 
necessary for the conveyance shall be borne by the Lawndale 
Business and Local Development.

          Section 2839--Land Conveyance, Fort Dix, New Jersey

    This section would authorize the Secretary of the Army to 
convey, without consideration, a parcel of real property with 
improvements at Fort Dix, New Jersey, to the Borough of 
Wrightstown, New Jersey. The property is to be used for 
educational and economic purposes. The cost of any surveys 
necessary for the conveyance shall be borne by the Borough.

                       Part II--Navy Conveyances

    Section 2851--Correction of Lease Authority, Naval Air Station, 
                         Meridian, Mississippi

    This section would correct the name of the conveyee in the 
conveyance authorized by section 2837 of the Military 
Construction Authorization Act for Fiscal Year 1997 (division B 
of Public Law 104-201). The correction would permit the 
conveyance to be made by the Secretary of the Navy to the 
County of Lauderdale, Mississippi.

                    Part III--Air Force Conveyances

       Section 2861--Land Transfer, Eglin Air Force Base, Florida

    This section would authorize the Secretary of 
Transportation to transfer, without reimbursement, to the 
administrative jurisdiction of the Secretary of the Air Force a 
parcel of real property with improvements at Cape San Blas, 
Gulf County, Florida, previously withdrawn for use as the 
location of a lighthouse. The Secretary of the Air Force would 
incorporate the property as part of Eglin Air Force Base, 
Florida.

  Section 2862--Study of Land Exchange Options, Shaw Air Force Base, 
                             South Carolina

    This section would amend section 2874 of the Military 
Construction Authorization Act for Fiscal Year 1996 (division B 
of Public Law 104-106) to require the Secretary of the Air 
Force to conduct a study to identify real property suitable for 
exchange to affect the land exchange at Shaw Air Force Base, 
South Carolina, authorized pursuant to that law.

    Section 2863--Land Conveyance, March Air Force Base, California

    This section would authorize the Secretary of the Air Force 
to convey a parcel of real property at March Air Force Base, 
California, to Air Force Village West, Incorporated, of 
Riverside, California. As consideration for the parcel to be 
conveyed the Corporation shall pay to the United States an 
amount equal to the fair market value of the real property as 
determined by the Secretary. The section would also make 
technical modifications to section 835 of the Military 
Construction Authorization Act, 1985 (Public Law 98-407).

                       Subtitle E--Other Matters

Section 2881--Repeal of Requirement to Operate Naval Academy Dairy Farm

    This section would amend/repeal section 810 of the Military 
Construction Authorization Act of 1968 (Public Law 90-110) 
which prohibits the Department of the Navy from taking any 
action to close, dispose, or phase out the operation of the 
Naval Academy Dairy Farm.

        Section 2882--Long-Term Lease of Property, Naples, Italy

    This section would permit the Secretary of the Navy to 
enter into a long-term lease, not to exceed twenty years, for 
structures and real property relating to a regional hospital 
complex in Naples, Italy, that the Secretary determines to be 
necessary for purposes of the Naples Improvements Initiative.

 Section 2883--Designation of Military Family Housing at Lackland Air 
  Force Base, Texas, in Honor of Frank Tejeda, a Former Member of the 
                        House of Representatives

    This section would authorize the Secretary of the Air Force 
to designate military family housing developments to be 
constructed at Lackland Air Force Base, Texas, in honor of the 
late Frank Tejeda, a Representative in Congress from the State 
of Texas.
              TITLE XXIX--SIKES ACT IMPROVEMENT AMENDMENTS

                         LEGISLATIVE PROVISIONS

    Section 2902--Definition of Sikes Act for Purposes of Amendments

    This section would clarify references to the Sikes Act.

            Section 2903--Codification of Short Title of Act

    This section would codify the short title of the Sikes Act.

       Section 2904--Integrated Natural Resource Management Plans

    This section would amend the Sikes Act to require the 
Secretary of Defense to prepare and implement integrated 
natural resource management plans on all appropriate military 
installations, including installations of the guard and reserve 
forces.

  Section 2905--Review for Preparation of Integrated Natural Resource 
                            Management Plans

    This section would direct the Secretary of each military 
department to review, within nine months of the date of 
enactment of this title, each military installation under the 
jurisdiction of the Secretary concerned to determine the 
applicability and appropriateness of integrated natural 
resources management plans to those installations. The section 
would require the Secretary of Defense to report to Congress on 
the findings of the Secretaries of the military departments. 
The section also would provide for a schedule to initiate 
implement integrated natural resource management plans on 
military installations where appropriate.

                Section 2906--Annual Reviews and Reports

    This section would require the Secretary of Defense and the 
Secretary of the Interior to submit annual reports to Congress 
regarding the implementation of integrated natural resource 
management plans.

   Section 2907--Transfer of Wildlife Conservation Fees from Closed 
                         Military Installations

    This section would permit fees charged for the purpose of 
wildlife conservation at military installations scheduled to be 
closed to be transferred to another military installation to be 
used for the same purpose.

   Section 2908--Federal Enforcement of Integrated Natural Resource 
             Management Plans and Enforcement of Other Laws

    This section would clarify the responsibility of the 
Secretary of Defense for enforcement, on military 
installations, of federal law relating to the conservation of 
natural resources. This section would not affect the 
enforcement authorities of the Secretary of the Interior for 
the same purpose.

           Section 2909--Natural Resource Management Services

    This section would require the Secretary of Defense to 
provide a sufficient number of professionally trained natural 
resource management and law enforcement personnel to perform 
the duties required by this title.

                       Section 2910--Definitions

    This section would define terms used in this title.

                  Section 2911--Cooperative Agreements

    This section would clarify that cooperative agreements 
between and among the Department of Defense, the various 
States, local governments, non-governmental organizations, or 
other private parties, which are entered into to implement an 
integrated natural resource management plan, shall be funded on 
a cost-sharing basis.

              Section 2912--Repeal of Superseded Provision

    This section would repeal certain reporting requirements 
and definitions of terms which would be superseded by enactment 
of this title.

                   Section 2913--Clerical Amendments

    This section would make various technical and clerical 
changes to the Sikes Act.

             Section 2914--Authorizations of Appropriations

    This section would authorize appropriations for programs on 
public lands related to the implementation of this title for 
fiscal year 1998 through fiscal year 2000.
 DIVISION C--DEPARTMENT OF ENERGY NATIONAL SECURITY AUTHORIZATIONS AND 
                          OTHER AUTHORIZATIONS

      TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

                                PURPOSE

    Title XXXI would authorize appropriations for the national 
security programs of the Department of Energy (DOE) for fiscal 
year 1998, including management and operations of programs for 
research, development, and production in support of the armed 
forces, the production of strategic and critical materials for 
the armed forces, the protection of critical materials, 
materials and information necessary for national defense, 
management of defense radioactive wastes, environmental 
management, naval nuclear propulsion, and other military 
applications of nuclear energy.

                                OVERVIEW

    The fiscal year 1998 budget request for DOE national 
security programs totaled $13.6 billion. Of the total amount 
requested, $3.6 billion was for weapons activities, $5.0 
billion for environmental restoration and waste management, 
$2.2 billion for defense fixed asset acquisition, $1.0 billion 
for environmental management privatization, $1.6 billion for 
other defense activities, and $190.0 million for defense 
nuclear waste disposal. The committee recommends $11.0 billion, 
a decrease of $2.6 billion. The following table summarizes the 
request and the committee recommendations:
    OFFSET FOLIOS 495 TO 506 INSERT HERE

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                       ITEMS OF SPECIAL INTEREST

Accelerated Strategic Computing Initiative and Control of Supercomputer 
                               Technology

    The budget request contained $204.8 million for the 
Accelerated Strategic Computing Initiative (ASCI) and $151.5 
million for stockpile computations and modeling. The committee 
recommends funding these two programs within the stockpile 
stewardship program at the requested level. While the committee 
believes that the continued viability of these two programs is 
critical to the Department of Energy's ability to certify the 
reliability of our nation's nuclear stockpile, it is disturbed 
by reports that U.S. manufactured supercomputers have been 
transferred to the premier Russian nuclear weapons laboratories 
without the required government export licenses. In fact, a 
company that recently admitted transferring supercomputers 
without an export license to a Russian nuclear weapons 
laboratory is a DOE contractor on the accelerated strategic 
computing initiative.
    Supercomputers can be used to enhance and maintain a 
nuclear device by processing complex computer simulations to 
determine the effect of modifications of the device. The U.S. 
government requires exporters to apply for licenses to export 
supercomputers to such Russian nuclear facilities so the 
government can review the prospective transfer and determine 
the appropriateness of the computer in question for its stated 
end-use, the history of the facility in question, and the risk 
the computer would be diverted to prohibited end-uses. It is 
the stated policy of the U.S. government to deny such exports 
for use in proliferation-related activities such as research 
on, or development, design, manufacture, construction, testing, 
or maintenance of any nuclear explosive device or components 
and subsystems of such a device. The use of U.S. supplied 
supercomputers in such proliferation-related activities could 
have detrimental effects on U.S. national security. The 
committee expects the Department of Energy to take a more 
assertive role in the export control of sensitive technologies 
that have nuclear proliferation implications. The Department of 
Energy should take the lead in the preventing hazardous 
transfers of nuclear technologies to countries and end-users of 
proliferation concern. Therefore, the committee directs the 
Secretary of Energy to implement the necessary policy and 
programmatic changes to ensure that the Department is able to 
effectively track and assess the flow of specific technologies 
with nuclear applications to countries of proliferation 
concern. The committee recommends elsewhere in this title 
additional reporting requirements for the Department and the 
ASCI contractors to ensure the protection of this program.

 Chemistry and Metallurgy Research Facility at the Los Alamos National 
                               Laboratory

    The budget request contained $15.7 million for the 
incremental component of the construction upgrades at the 
Chemistry and Metallurgy Research Facility at Los Alamos 
National Laboratory. The total project cost has been estimated 
at $174.0 million. The committee has been advised by the 
Department that construction has been suspended as the result 
of a preliminary review indicating that work was being 
performed outside theauthorized scope and that an investigation 
has been initiated. The committee is further concerned with reports of 
high cost and apparent overruns during the first phase of this project. 
Because of the uncertainty and the likely need for substantial 
revisions in the estimates of the total project cost, the committee 
does not recommend funding of the incremental request. The committee 
adopts this position, without prejudice, and upon receipt of additional 
information and the results of the investigation will reevaluate the 
budget request for incremental funding for this project in this fiscal 
year.

                       Defense Asset Acquisition

    The budget request contained $2.2 billion for defense asset 
acquisition. The committee rejects the recommendation of 
Department to establish a new defense asset acquisition 
account. This proposal would have consolidated construction 
projects for all DOE national security programs into one 
account. The committee believes that this proposal would 
unnecessarily complicate its ability to ascertain appropriate 
funding levels from year to year in what are clearly distinctly 
different programs. The committee also rejects the Department's 
proposal to fully fund construction projects in the year they 
are first requested. Not only does the Department's proposal 
request full funding for projects which are being requested for 
the first time in this fiscal year but also for projects which 
have been authorized in prior years. The Department's proposal 
would require an additional fiscal year 1998 authorization of 
$1.5 billion above the funds requested in fiscal year 1997 for 
this purpose. The committee recommends authorization of the 
fiscal year 1998 incremental funding component for each of the 
authorized construction projects in weapons activities, 
environmental management, and other defense activities 
accounts.

         Defense Environmental Restoration and Waste Management

    The budget request contained $5.0 billion for the 
activities of the Office of Environmental Restoration and Waste 
Management. The committee recommends an authorization of $5.3 
billion.
    The committee also recommends transferring $743.6 million 
from the subaccount entitled ``environmental restoration'' to 
the closure fund for the purpose of accelerating the closure of 
the Rocky Flats Environmental Site and the Fernald 
Environmental Management Project. This action would allow the 
consolidation of management and funding activities for these 
sites into one account at the level requested in the budget. 
The committee recommends transferring $45.2 million from the 
operations and maintenance account within the stockpile 
management program to the closure fund. This transfer of $45.2 
million represents the costs associated with the provision of 
security at the Rocky Flats Site and the Fernald site. The 
committee believes that this consolidation of all activities 
and the costs associated with those activities will provide 
greater control and accountability. The committee is further 
designating these sites as ``closure sites'' pursuant to the 
provisions of section 3143 of the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201). 
The committee believes that the Department should consider, as 
part of its fiscal year 1999 budget request, the continued 
consolidation of all national security funding for these two 
sites into the closure fund. The committee is disappointed that 
the Department chose to include only $15.0 million in the 
closure fund in fiscal year 1998.
    The committee further recommends an increase of $102.0 
million for the closure account. Of this amount, the committee 
recommends allocating $69.9 million to the Rocky Flats site and 
$32.1 million to the Fernald site. The committee strongly 
supports the efforts of the adjacent communities to close these 
two sites within the next ten years. The committee intends to 
assure through appropriate funding levels that this goal is 
achieved. The committee is persuaded that the overall savings 
to the Department by accelerating the clean up at these sites 
will be measured in the billions of dollars.
    The committee also recommends that of the funds authorized 
within the subaccount entitled ``waste management'', an 
additional $40.0 million be allocated to the Savannah River 
site to allow the consolidated incineration facility to operate 
at full capacity, as originally intended, to assure that the 
Defense Waste Processing Facility operates at its designed 
capacity, and that the site has sufficient funds to accelerate 
the disposal of transuranic waste. At the funding level 
requested, only periodic burning and treatment of benzene 
produced in support of the high level waste vitrification 
effort is possible. These additional funds will allow the full 
time incineration of other low and mixed radioactive wastes, 
meet the site treatment plan commitment, and mitigate the use 
of the E-Area low level waste vault. Finally, the committee 
urges the Department to assess the cost savings that may be 
available if it is able to successfully develop a spent fuel or 
high level waste storage cask system using high density 
concrete. Of the funds authorized in section 3102 of this 
title, no more than $3.0 million may be made available for this 
demonstration project.
    The committee recommends reducing the budget request for 
the subaccount entitled ``program direction'' by $100.0 
million. The committee recommends reducing support service 
contractors, training and other related expenses by $60.0 
million and federal employment expenses, including salaries and 
travel, by 15 percent or $40.0 million. Despite reductions to 
this account in each of the last two fiscal years, the 
Department has failed to significantly reduce federal 
employment levels as directed by this committee, particularly 
at DOE headquarters. Instead, the Office of Environmental 
Restoration and Waste Management has chosen to transfer federal 
employees and their headquarters function to the field and to 
detail individuals to the Environmental Protection Agency. This 
action occurred despite protestations from site managers who 
were not requesting additional employees.
    With respect to the detailing of employees to the 
Environmental Protection Agency, the committee is concerned 
that scarce DOE funds are being spent on activities which are 
unrelated or only tangentially related to the Department's core 
remediation effort. The committee notes that the Office of 
Environmental Restoration and Waste Management currently has 
staffing levels that are almost 20 percent above the levels 
recommended by the Department as part of its own Strategic 
Alignment Initiative.
    Finally, the committee recommends reducing the budget 
request for the subaccount entitled ``technology development'' 
by $75.0 million. The committee does not support the 
Department's proposal to create a new technology deployment 
initiative office. Based on the supporting documentation 
provided to the committee, it appears thatthis program is 
really not a program to deploy innovative technology, but rather an 
effort to accelerate remediation efforts by using existing commercially 
available technology. This appears to be the case at several sites, 
particularly at Fernald. The committee notes that the Department has 
chosen to reduce the level of funding for this account below last 
year's request. The Department apparently agrees with the committee 
that this office has been unable to execute a program which was 
intended to develop and deploy new remediation technology in a timely 
manner.
    The committee remains concerned that the fundamental 
problems that have resulted in expenditures of over $2.0 
billion for technology development over the last several years, 
with very little actual field deployment, have yet to be 
corrected. With the transition to fixed priced contracts over 
the next several years, the role of technology development will 
necessarily shift to the private sector. With the proper profit 
incentives included in these contracts, the private sector 
will, on its own, develop the technologies needed to fulfill 
the terms of the contracts. The Department should consider 
these facts in preparing its fiscal year 1999 budget request.

         Enhanced Surveillance Program at the Production Plants

    The budget request contained $60.0 million to implement the 
Enhanced Surveillance Program (ESP) within the weapons 
stockpile management account. The committee recommends $75.0 
million, an increase of $15.0 million. The ESP, involving the 
four production plants and the three laboratories, is designed 
to develop new technologies for detecting degradation in aging 
weapons components in order to ensure, reliability, safety, 
effectiveness, and performance of existing weapons beyond their 
planned service life. While the committee recognizes that this 
is a complex-wide initiative, it expects that the additional 
resources provided by this increase will be directed to the 
production plants, particularly those engaged in pit 
disassembly activities and monitoring of limited life 
components. For example, if the Pantex Plant does not receive 
additional funds for enhanced surveillance activities, it will 
not be prepared, from an engineering and process development 
standpoint, to perform its stockpile life extension mission.

                      Inertial Confinement Fusion

    The budget request contained $217.0 million for inertial 
confinement fusion (ICF) operating program. The committee 
recommends $217.0 million, the amount requested. Within the 
total committee recommendation, $26.1 million shall be made 
available for the University of Rochester's Laboratory for 
Laser Energetics, an increase of $2.5 million.
    The committee notes that many non-governmental 
organizations have questioned the need and the cost of the 
Department of Energy's National Ignition Facility (NIF). The 
committee also notes that currently the Department is in 
litigation over its Programatic Environmental Impact Statement 
on Stockpile Stewardship and Management. The committee urges 
the Secretary to ensure that the defense program office manages 
the NIF construction project in a manner that does not make 
irreversible commitments of resources to construction until the 
outstanding environmental process issues are addressed in the 
district court.
    Peer review is a fundamental element of analyzing, 
developing and understanding the answers to the complex 
scientific, engineering and technical issues that go into 
determining whether or not to continue the substantial 
investments required in any facility such as the NIF. The 
committee directs the Secretary to request the National Academy 
of Sciences to continue to review, operating in full compliance 
with applicable law, the scientific and programmatic issues 
surrounding the NIF.

  Infrastructure and Manufacturing Improvements at Weapons Production 
                                 Sites

    The budget request contained $588.0 million for 
infrastructure programs within the core stockpile management 
program. The committee recommends $623.0 million, an increase 
of $35.0 million. This increase would assist the production 
sites in successfully completing the transition from older, 
excess-capacity facilities to smaller, more efficient units. 
The committee is concerned that the Department has failed to 
address basic infrastructure problems, such as roof repairs, 
steam and condensate piping upgrades, power deficiencies, 
obsolete smoke detectors, and fire alarm control panels at the 
Pantex plant. Pantex is the central facility where the 
mechanics of the stockpile life extension program (SLEP) will 
be performed for every weapon in the enduring stockpile. A 
degraded Pantex places the success of the SLEP into question.
    The committee also believes that substantial long-term cost 
savings will accrue to the Department if it is able to 
accelerate the downsizing initiative currently underway at the 
Kansas City plant. With this acceleration, the Department will 
need to purchase and install new manufacturing equipment to 
enhance the expected efficiencies that should occur. The 
committee expects that the remainder of the increase, would be 
applied to address the manufacturing problems at these two 
sites through implementation of the Advanced Design and 
Production Technologies (AdaPT) program and the Process 
Development Program (PDP).

                Initiatives for Proliferation Prevention

    The budget request contained $234.6 million for activities 
related to the prevention of weapons proliferation within the 
office on nonproliferation and national security. The committee 
recommends $205.0 million, a reduction of $29.6 million from 
the request. The committee recommends that this reduction be 
applied against the Initiatives for Proliferation Prevention 
program. The committee remains unconvinced of the merits of 
this program and other programs whose goal is to promote long 
term stability within the states of the Former Soviet Union. 
The committee is further concerned by reports that nearly half 
the aid intended for Russian scientists is being siphoned off 
by duties, regional taxes, overhead charges and suspected 
payoffs.

                 Laboratory Review of Missile Defenses

    In House Report 104-563 accompanying the National Defense 
Authorization Act for Fiscal Year 1997 (Public Law 104-201), 
the committee required the directors of each of the nuclear 
weapons laboratories to submit a report that assessed ballistic 
missile defense expertise and problem solving capabilities 
within their respective organizations. The laboratories have a 
long-standing role in nonproliferation, counter-proliferation, 
and conventional defense activities, and a history of 
significant contributions to missile defense programs. The 
committee required this most recent assessment of the 
laboratories' capabilities to determine if greater laboratory 
involvement could strengthen the U.S. Ballistic Missile Defense 
(BMD) program. Options for greater involvement by the nuclear 
weapons laboratories ranged from the use of supercomputing and 
modeling capabilities, which can provide simulation tools to 
support risk reduction in BMD system development and 
deployment, to the use of the laboratories' Strategic Target 
System for Theater Missile Defense and National Missile Defense 
test and evaluation.
    As a result of this study, the committee recommends, 
elsewhere in this title, the establishment of a new program 
office that will integrate the existing BMD weapons laboratory 
expertise with the Department of Defense Ballistic Missile 
Defense Organization (BMDO). This new program office would be 
chaired on a rotating basis by the laboratory directors. Office 
staff would be assigned specific-problem solving tasks in 
response to requests for assistance by the BMDO. Of the funds 
available for core stockpile stewardship in fiscal year 1998, 
the committee recommends that $50.0 million be made available 
to implement this program. The committee believes that the 
laboratories have resources and expertise that can be of great 
use to the Department of Defense not only in the areas noted 
above, but also in areas such as metallurgy, acoustics and 
component analysis. The committee believes that if the 
laboratories are successful in solving the problems related to 
the BMD program in a cost effective way, then it is likely that 
this program will be expanded in future years to such areas as 
submarine development and component analysis.

      Management and Organization of DOE's Nuclear Weapons Program

    Section 3140 of the National Defense Authorization Act for 
Fiscal Year 1997 (Public Law 104-201) directed the Department 
to conduct a study of the current management structure of the 
nuclear weapons program, including an analysis of the functions 
performed at headquarters, the operations offices, and the 
applicable area and site offices. The study made a number of 
recommendations designed to improve the management operations 
within the weapons programs. These recommendations were made as 
a result of conclusive evidence assembled by the authors of the 
report that significant management problems existed between 
headquarters and the field offices and that there were too many 
employees at both locations. The report concluded that these 
excess employees create work not only for themselves but for 
others as well, undermining attempts to establish disciplined 
staffing processes. The report recommended that DOE 
``streamline and reduce headquarters and field staffing--
federal employees and contractors by a least 20-30 percent.''
    The committee is concerned over the possible confusion and 
inefficiencies that may result from the existing organizational 
arrangement. While the committee received a letter from the 
Department on June 4, 1997 explaining the actions taken to 
date, these actions were long overdue in light of the serious 
nature of the report's findings. It remains to be seen whether 
the actions proposed will in fact address the fundamental 
problems outlined in the report. Therefore, the committee 
directs the Secretary of Energy to provide a follow-up report 
to the congressional defense committees by October 15, 1997, on 
the status of the corrective action being taken. Upon receipt 
of this follow-up report, the committee intends to schedule a 
series of hearings to examine the state of the nuclear weapons 
complex, its future missions, and its organizational structure.

         Materials Protection, Control, and Accounting Program

    The committee recognizes that the development and 
implementation of the Materials, Protection, Control, and 
Accounting Program for fissile materials in Russia addresses 
important national security interests of the United States. 
Because fissile materials will remain in Russia for 20 to 40 
years before disposition can be safely implemented and 
completed, the security of these fissile materials during all 
aspects of storage and disposition is of considerable 
importance to U.S. national security. Out of the unexpended 
balances in the Nonproliferation and National Security account, 
the Department is urged to allocate up to $3.0 million for the 
implementation of a nuclear materials safety management program 
modeled after the best lessons-learned from the joint U.S.-
Russian disposition activities. The committee recognizes the 
Amarillo National Resource Center for Plutonium for its leading 
work within the Department on joint U.S.-Russian efforts in the 
area of nuclear materials safety management. Finally, the 
committee recommends that the Department develop a 
comprehensive nuclear materials safety management program 
budget for fiscal year 1999.

                             Naval Reactors

    The budget request contained $632.5 million for naval 
reactors. The committee recommends $678.5 million, an increase 
of $43.0 million, to allow the orderly completion of the 
prototype inactivation work. This increase would prevent delays 
in the A1W-A defueling; expedite related data retrieval from 
the plant's core; prevent delays in the inactivation of the 
Windsor site and the D1G and S3G reactor plants at the 
Kesselring site; and allow planned remediation efforts to 
continue on schedule at the naval reactor facility in Idaho.

                             Nuclear Energy

    The budget request contained $81.0 million for nuclear 
energy activities, including $25.0 million for nuclear 
technology research and development and $50.0 million for the 
international nuclear safety program. The committee recommends 
$47.0 million, a decrease of $34.0 million. The former 
activity, which involves electrometallurgical research, was 
funded in fiscal year 1997 by DOE's civilian technology office 
and not through an authorization within this committee's 
jurisdiction. The committee continues to believe this research 
should not be funded within DOE'snational security 
authorization and, therefore, recommends $12.0 million be authorized 
for this purpose. The committee does not intend to fund this program in 
future years. The international nuclear safety program has in the past 
been carried out by the Agency for International Development using 
foreign assistance funds. The committee believes these activities 
should be funded in the foreign assistance budget. Accordingly, the 
committee recommends $25.0 million be authorized for this purpose. 
Again, the committee does not intend to fund this program in future 
years within DOE's national security authorization. Within line items 
entitled Nuclear Security and the Chornobyl Shutdown Initiative, the 
committee recognizes the United States commitment to its G-7 
obligations. However, the committee believes these programs are 
essentially civilian programs and should be funded from the foreign 
assistance accounts. The committee recommends $10.0 million for 
plutonium core conversion, which was funded last year through the 
Department of Defense.

                      Operation of F and H Canyons

    The budget request contained $492.3 million for operations 
and maintenance within the nuclear material and facility 
stabilization account at the Savannah River Site. The committee 
recommends $533.3 million, an increase of $41.0 million over 
the amount requested, to allow for the operation of both the F-
canyon and the H-canyon facilities at the site and to maintain 
the unique capability for the stabilization of aluminum clad 
spent nuclear fuel. The committee believes that the long-term 
storage and direct disposal of spent nuclear fuel, currently in 
wet storage or being shipped to the site, presents significant 
risks and costs that can be more appropriately addressed by 
using the reprocessing capability of the canyons.

                             Privatization

    The budget request contained $1.0 billion for the defense 
environmental management privatization initiative. The 
committee does not recommend funding for this initiative. The 
committee recognizes that this is an important initiative of 
the Department, and it accepts the premise that the remediation 
effort undertaken to date at many of the former nuclear weapons 
defense sites has been overly costly and, to a large degree, 
ineffective. The committee further understands and supports the 
desire to reduce costs and to improve efficiencies through the 
use of performance-based fixed price contracts. However, the 
committee is not persuaded that the privatization proposal has 
been properly developed at this point and to the extent 
required, considering the amount of money being requested, the 
technical complexity of many of the projects, the large margin 
of error in the cost estimates, the Department's poor track 
record of successful project completion, and the lack of 
suitable staff and procedures to oversee the contracting 
process and the contractors' activities.
    The committee believes it should defer further 
consideration of this initiative until the Department's fiscal 
year 1999 budget request. While the committee provided funding 
for a limited privatization initiative in fiscal year 1997, it 
did so based on the assumption that the Department would be 
able to support its continuation based upon a rigorous analysis 
of projected cost savings that would accrue to the government. 
The committee directed the Department to provide that report to 
the committee no later than December 31, 1996. The Department 
has not submitted the required report nor has it provided the 
level of documentation to support a request of this magnitude. 
The committee is not persuaded by estimates of cost savings 
where the comparisons are between traditional non-competitive 
management and operating contracts and ``privatized'' 
contracts.
    The committee believes that several additional comments are 
warranted. It is important to note that DOE's privatization 
initiative is not a divestiture, which generally involves the 
sale of government-owned assets or functions. For all practical 
purposes, DOE's activities are already privatized, in that the 
private sector contractors already conduct DOE's programs at 
its major sites.
    What sets the proposed privatization initiative apart from 
DOE's traditional approach is the attempt to shift the 
responsibility for financing, and much of the risk, to the 
contractor. Thus, under the Department's proposal, private-
sector contractors would be responsible for the funding, 
construction and operation of the ``privatized'' facility. At 
the time the facility is completed, DOE would begin paying the 
contractor for the services provided. In fact, as presently 
contemplated by DOE, virtually no expenditures of the 
government's funds would occur until fiscal year 2003, when 
outlays of between $1.0 and $2.0 billion would begin. From the 
limited cost estimates available, the projects that are being 
requested in fiscal year 1998 are expected to result in 
construction costs exceeding $2.8 billion and operating costs 
exceeding $5.8 billion.
    At least one of the projects chosen for privatization, the 
tank waste remediation project, is perhaps the most technically 
complex, risky, and expensive environmental remediation project 
in the DOE program. DOE has spent about $2.5 billion on this 
project alone since 1989 and its life-cycle cost is estimated 
to be $36.0 billion. DOE has estimated that the ``privatized'' 
approach for a portion of the $36.0 billion project would 
result in a cost of $9.6 billion. Using DOE's traditional 
noncompetitive management and operations approach, the same 
project is estimated to cost $13.6 billion. However, a recent 
General Accounting Office (GAO) study determined that both 
estimates were based on a range of values with a margin of 
error of plus or minus 40 percent. That is, the cost of the 
privatized approach could range from $5.8 billion to $13.4 
billion and the noncompetitive approach, from $8.0 billion to 
$18.6 billion. Because of the large margin of error in these 
cost estimates, GAO concluded that the ``privatization approach 
could be more costly.''
    At least eight of the other projects being proposed for 
privatization suffer from even less analysis and more 
uncertainty regarding cost savings. In many of these cases, DOE 
obtained an estimate from its existing management and operating 
contractor and apparently arbitrarily reduced it by anywhere 
from 10 percent to 35 percent. In several cases, it is clear 
that the funding is not required this fiscal year because the 
contracts could not be executed. In fact, in the case of the 
tank waste remediation project discussed above, it is clear 
that DOE may not even obligate in fiscal year 1998 the funds 
that were authorized and appropriated for this project in 
fiscal year 1997. The rationale and justification for a request 
of an additional $427.0 million in fiscal year 1998 for this 
project alone is lacking. In other cases, it is apparent that 
projects were chosen which were not of the highest priority nor 
were required by compliance agreements. It appearsthat these 
projects were simply chosen because they would not result in outlays 
during the next five years. It is clear to the committee that deferral 
of this program for one budget cycle will not result in any irreparable 
harm or in any way affect the safety of the nuclear weapons complex. 
The committee strongly suggests that the Department consider obtaining 
outside independent assessments as to the life-cycle costs for these 
projects before continuing to recommend their privatization. Finally, 
DOE has cited several examples of successful privatization projects. 
Two of these involve the ``privatizing'' of a laundry facility for 
contaminated worker clothing. Another involves the remediation effort 
at Pit 9 near Idaho Falls which is now the subject of a contract 
dispute and which could result in a doubling of the original contract 
price of $179.0 million for this one-acre site out of 88 acres that 
need to be cleaned up. The committee believes there is substantially 
more complexity in managing the tank waste remediation project than in 
building a laundry.
    The committee's concern is amplified by the knowledge that 
of the 80 projects initiated in the last 16 years, only 15 have 
been completed, most of which were behind schedule and over 
budget. After billions of dollars had been invested, 31 of 
these projects were terminated before completion.
    In rejecting the blanket approval of the privatization 
initiative, the committee is not suggesting that it is 
abandoning the effort to develop a successful and cost 
effective remediation program across the DOE complex, 
particularly at the Hanford tank waste site. In the case of the 
Hanford site, the committee recognizes that a substantial 
investment by the Department is required for many years, 
regardless of the method chosen to finance the effort or the 
scope of the effort. Accordingly, the committee recommends 
elsewhere in this title a funding level sufficient to allow 
this remediation effort to continue on schedule. The committee 
believes that the $170.0 million authorized for fiscal year 
1997 and which remains unobligated, added to the $54.0 million 
which is being paid out this year to the prospective bidders 
from fiscal year 1996 funds for the cost of bid preparation, 
coupled with the $70.0 million authorized elsewhere in this 
title, should be more than sufficient to allow the remediation 
effort to continue, whether the project uses private capital or 
annual appropriations. In doing so, the committee recommends 
that the Department provide substantial and detailed 
documentation to the congressional defense committees 30 days 
prior to the execution of a contract. The committee will 
require that a compelling case be made before it will accept a 
proposal of the scope currently being proposed. The committee 
believes that the Department should assess the cost and the 
need to construct two low-level waste treatment facilities that 
will for all practical purposes be performing identical 
functions. The committee recommends that the Department 
evaluate very carefully the long term advantages and the 
disadvantages of privatization to the United States, the State 
of Washington, the stakeholders and the contractor or 
contractors before it renews its proposal to seek private 
sector financing for an activity this complex and this 
expensive.
    As noted above, the committee remains concerned that many 
of the Department's projects have been mismanaged, leading to 
cost overruns, delays, and in some cases, project failures. The 
committee believes that the Department's excessive red tape, 
bureaucracy, and an unclear chain of command make it difficult 
if not impossible to manage a large complex project like the 
one at Hanford. Regardless of the ultimate method chosen for 
financing this project, the committee believes that the 
Department should immediately seek to correct these basic 
management deficiencies.

                 Program Direction for Defense Programs

    The budget request contained $303.5 million for the program 
direction function within the office of Defense Programs. The 
committee recommends $208.5 million, a reduction of $95.0 
million. Program direction provides funds for all federal 
personnel-related expenses, capital equipment, travel, outside 
contractual services, and the community assistance program at 
Los Alamos. The committee further recommends that this 
reduction be obtained by reducing support services, training 
and other related expenses by $70.0 million. The committee 
recommends that the remaining reductions be obtained by 
reducing federal employment, including salaries and travel 
costs, by 15 percent or $25.0 million.

     Recurring General Provision Relating to Availability of Funds

    The committee does not recommend the inclusion of a 
provision which would provide that amounts authorized to the 
Department of Energy for operating expenses or for plant and 
capital equipment remain available until expended. This change 
is consistent with the approach adopted by the committee with 
respect to Department of Defense authorization and 
appropriations accounts. This change would allow greater 
financial accountability and would allow a better analysis of 
uncosted balances carried over in future fiscal years.

             Stockpile Life Extension Program at Y-12 Plant

    The budget request contained $1.8 billion for core 
stockpile management. Within this program, the committee 
recommends an additional $35.0 million for the stockpile life 
extension program. Recent risk reduction analysis has indicated 
a need for additional funding in fiscal year 1998 to support 
near-term W87 workload activities at DOE's Y-12 plant and to 
provide additional resources at that plant for future stockpile 
extension activities.

                          Technology Transfer

    The budget request contained $60.0 million for technology 
transfer. The committee recommends $52.5 million, a reduction 
of $7.5 million from the amount requested. Funding is not 
provided for projects under the program entitled ``Partnership 
for a New Generation of Vehicles.'' The committee believes 
that, if this program is meritorious, funding in future years 
should be requested within other non-defense programs of the 
Department of Energy. Of the remaining amount made available 
for technology transfer, the committee recommends $10.0 million 
for the American Textiles Partnership project, an increase of 
$4.5 million above the amount requested for this activity.

Transfer of Funds Associated with Security at Rocky Flats Site and the 
                              Fernald Site

    The committee, as noted above, in the discussion on the 
Defense Environmental Management Program recommends 
transferring $45.2 million from the operations and maintenance 
account within the stockpile management program to the closure 
fund. The transfer of $45.2 million represents the costs 
associated with the provision of security at the Rocky Flats 
site and the Fernald site. The committee understands that the 
Department has no objection to this transfer from the stockpile 
management account. The committee believes that this 
consolidation of all activities and the costs associated with 
those activities will provide greater control and 
accountability. The committee also believes that this transfer 
more accurately reflects the programmatic responsibility for 
those costs and the provision of those activities. The 
committee believes those costs should be borne by the 
environmental restoration and waste management program. The 
committee urges the Department to assess other areas and costs 
which are not clearly related to the weapons activities 
accounts and to consider a realignment in the fiscal 1999 
budget request.

                           Tritium Production

    The committee continues to support the Department of 
Energy's dual-track strategy for determining the most reliable 
and cost-effective method for the production of tritium for 
national security, however, it did not receive the 
Administration's proposal for legislative changes to certain 
underlying statutory provisions affecting tritium production 
until after the conclusion of the hearing process on the 
Department's annual authorization. These proposed changes are 
significant and, in some cases, seek to address issues such as 
the sale of power generated from commercial tritium production 
facilities which may involve matters within the jurisdiction of 
another committee. The committee will seek to address these 
technical, policy and jurisdictional issues during the 
remainder of this Congress.

                    Worker and Community Transition

    The budget request contained $70.5 million for Worker and 
Community Transition. The committee recommends $22.0 million. 
The committee further recommends that this program be 
terminated at the end of fiscal year 1999.
    The worker and community transition program was created 
pursuant to section 3161 of the National Defense Authorization 
Act for Fiscal Year 1993 (Public Law 102-484). This Act 
established requirements and objectives to guide the Department 
in its efforts to restructure the private contractor workforce 
following the end of the cold war. The build-up in contractor 
employment within the Department, especially across the defense 
nuclear weapons complex, accelerated during the late 1980s and 
reached its peak at the end of fiscal year 1992, when the 
Department employed over 148,000 contractor employees. With the 
end of the cold war, the Department recognized that the weapons 
production mission would need to be reduced and that its 
primary mission would shift toward environmental management. 
Section 3161 was designed to minimize the impacts on workers 
and communities during this transition.
    Since the enactment of section 3161, the Department has 
spent over $609.0 million to provide benefits to contractor 
employees separated in workforce restructuring and downsizing 
efforts. In addition, approximately $150.0 million has been 
provided to communities affected by the downsizing. Payments to 
displaced workers took the form of enhanced severance payments, 
relocation allowances, educational benefits, and enhanced 
retirement benefits.
    The committee recommends that the provisions contained in 
section 3161 be phased out by the end of fiscal year 1999. This 
recommendation is based on a number of factors. First, most of 
the separations have now occurred. At the end of fiscal year 
1998, the DOE contractor employment levels will be at 100,000. 
Second, with DOE's movement to fixed price contracts, 
administration and determination of employment levels will be 
within the purview of the contractor, not the government. 
Third, much of the upcoming work will be dictated by 
environmental compliance agreements and not by nuclear weapons 
production demands. Separations that occur to a large extent in 
the future will have nothing to do with the end of the cold 
war. However, if the weapons complex requires a similar or 
significant downsizing at some point in the future, Congress 
can, at that time, develop remedies appropriate to those 
situations. Fourth, the program has come under significant 
scrutiny by the DOE Inspector General and the U.S. General 
Accounting Office (GAO) for questionable payments and 
ineffective administration. For example, the Inspector General 
reported that during the first restructuring at the Fernald 
weapons plant, of the 255 separations effective in fiscal year 
1994, all but 14 of the positions had been refilled within one 
year by either previous employees or ones with similar skills--
a 95 percent rehire rate. Moreover, the 255 separated employees 
were provided severance payments based on their length of 
service, medical benefits, outplacement support, and retirement 
benefits at a cost of $2.9 million. Similarly, a subsequent 
restructuring plan for fiscal years 1995 and 1996 was uncovered 
by the Inspector General at that same site. Had it not been 
stopped, it would have cost an additional $12.9 million for 
workforce restructuring that would have provided little or no 
benefit to the Department. Audits of worker and community 
transition programs at DOE sites at Mound, Pinellas, Oak Ridge, 
and Rocky Flats, and Las Vegas likewise revealed questionable 
or u