1998 Congressional Hearings



 

DEPARTMENT OF THE AIR FORCE

PRESENTATION TO THE HOUSE NATIONAL SECURITY COMMITTEE
SUBCOMMITTEE ON MILITARY PROCUREMENT
&
SUBCOMMITTEE ON RESEARCH AND DEVELOPMENT
UNITED STATES HOUSE OF REPRESENTATIVES

SUBJECT: Air Force Modernization Plan for FY99-03


STATEMENT OF: LIEUTENANT GENERAL GEORGE K. MUELLNER
Principal Deputy Assistant Secretary of the Air Force
For Acquisition


MARCH 1998


Mr. Chairman and Members of the Committee:

Thank you for this opportunity to appear before you and discuss the Air Force's Research, Development, Test and Evaluation (RDT&E) and procurement activities as proposed in the President's FY99 budget request.
The Air Force acquisition community is charting a future that embraces the vision outlined by the President's National Security Strategy and the Chairman of the Joint Chiefs of Staff's National Military Strategy. The Air Force contribution to this vision, Global Engagement: A Vision for the 21st Century Air Force, defines the Air Force core competencies and supports the joint goals established in the Chairman's Joint Vision 2010. The Air Force goals supporting Joint Vision 2010 are to maintain sufficient power projection capabilities to shape the international security environment, and at the same time, be able to respond to a full spectrum of crises. Our Air Expeditionary Force's ability to rapidly and decisively project aerospace power into a theater of operations allows greater flexibility in determining the forward deployed forces necessary to meet the CINC's requirements. Finally, our vision of Global Engagement, along with the United States Air Force Long-Range Plan, focuses our modernization efforts through innovations and improved efficiencies that will maximize the effectiveness of US military forces engaged in conflict.

The FY99 Air Force President's Budget submission supports our long term plan and the objectives of Joint Vision 2010. It represents a balanced and time-phased modernization approach combined with aggressive acquisition reform initiatives-ensuring the Air Force will continue to provide our nation a Global Engagement capability. The modernization plan captures the recommendations outlined in the Quadrennial Defense Review (QDR) while providing modernization program stability. Program stability will determine our ability to efficiently achieve our modernization plan.

HEALTH OF THE MODERNIZATION ACCOUNT

During President Reagan's Administration, the procurement account increased 292% to its peak in FY85, while Air Force total obligation authority (TOA) increased 185% during the same period. The significantly greater increase in the procurement account represents the focus on rebuilding the "hollow" forces of the 1970s with programs such as the F-16, B-1B, F-15, C-5, KC-135, and LANTIRN. These investments later paid immense dividends in terms of efficiency and effectiveness during operations Desert Shield and Desert Storm.

We appropriately began a reduction at the end of the Cold War in a manner which would appear that the modernization account was being reduced proportionate with Air Force TOA. However, the FY99 Modernization Account as a percent of Air Force TOA, which is currently 32.9%, is still near the lowest point ever-31.6% in FY98. Further, it is below the FY75 former low of 33.3% realized during the "hollow" forces of the 70's. Over the past 20 years, the modernization account has averaged 43.7% of Air Force TOA. Within the FY99 modernization account, the procurement account percentage is currently still below the previous lowest point of 20.1% in FY75, and the QDR validated that a procurement shortfall does exist relative to requirements. Within the modernization account, we made tough decisions to balance the RDT&E and procurement investments, and we remain focused on building a joint force consistent with our National Military Strategy and Joint Vision 2010. The QDR concluded that supporting the future warfighting capability requires a sound investment strategy and modernization program which capitalizes on the revolution in military affairs. This was recently corroborated by the independent National Defense Panel (NDP) assessment of the QDR. The Air Force program stands up well when measured against the NDP template as our corporate vision statement-Global Engagement: A Vision for the 21st Century-articulates the importance of these same priorities.

We continue to make acquisition and business area reforms in order to free up funding for our modernization program. Our current acquisition workforce has been downsized to the point where our workforce to procurement dollar ratio is approximately 1 to 10. However, downsizing the acquisition workforce alone will not be enough to fuel our modernization program. We also need to revisit prior efforts taken to reduce the cost of the defense infrastructure if we are to achieve our procurement targets. Each budget year, we are forced to migrate investment funds to pay increasing operating costs to support an infrastructure which is no longer proportional to our force structure. During the FY98 budget process for example, the modernization account lost approximately $750M to offset excess operating costs. The dollars expended to carry this excess infrastructure capacity could instead have been invested in Air Force modernization. We will need the support of the Congress to implement DoD's recommendations on infrastructure sizing.

The need for congressional support, however, goes beyond infrastructure "right-sizing." The Air Force requests congressional support of our FY99 modernization budget submission and restraint with regard to altering it. To clarify, each year the Congress has levied a variety of Congressional General Reductions (CGRs) such as economic adjustments, Federally Funded Research and Development Centers (FFRDC), Advisory and Assistance Services (A&AS) funding, and other pro-rata reductions, which result in significant program content impacts. In formulating the FY98 budget, the Air Force made some tough internal decisions to balance the modernization account. During the budget process, however, the Congress undertook actions which placed the Air Force modernization plan in jeopardy, and especially impacted our space programs. One Congressional action during the final FY98 appropriation preparation, added $754M for the B-2, WC-130J, F-16, and DARP Modifications which were not identified on the Air Force Unfunded Priority List (UPL). These Congressional adds were offset by an undistributed CGR which ranged from 2 to 20 percent per program--a traumatic impact. On average across the RDT&E, Aircraft Procurement, and Missile Procurement appropriations, the CGRs, as a percent of appropriation, have risen from 0.72% in FY94 to 3.25% in FY98. This general trend of increasing magnitude places the modernization plan at risk. Further, the pro-rata levying eliminates our flexibility to allocate the reductions in such a manner as to minimize program impacts.

Compounding the CGR impacts during the FY98 budget year is the fact that funding was also adjusted for inflation three times. OSD presented the Air Force, as part of a FY98 Program Budget Decision (PBD), an inflation adjustment prior to submitting the FY98 President's Budget. The Congress then made certain economic assumptions as part of the CGR process that further reduced the Air Force's modernization funding, after which OSD then adjusted FY98 funds for inflation once again in a FY99 PBD. The intended benefit from economic adjustments cannot always be realized when making adjustments for inflation at a point where programs are on contract, and have forward pricing rates and union contracts in place. Funding stability for the Air Force's critical modernization plan is essential for program stability. Our programs and hence our modernization plan, are approaching their breaking point, and are clearly unable to recover from future CGRs. The final result will be the forced restructure of the Air Force's modernization plan, cost inefficiencies, and potentially, our resultant inability to adequately equip our warfighters.

AIR AND SPACE SUPERIORITY


To achieve full spectrum dominance and realize Joint Vision 2010, our nation must maintain Air and Space Superiority. Both the United States and allied forces must be protected from enemy attacks throughout the conflict. In addition, our increased dependence on space as a means of defending our national security dictates that we protect and strengthen our presence in space.

The Air Force continues with a long-term priority to execute the time-phased modernization plan for replacing the current fighter fleet with the F-22 and Joint Strike Fighter (JSF). Structuring our forces with a "high-end" air superiority fighter and a "low-end" multi-role air-to-ground weapon system has proven effective both operationally and fiscally. The F-22, optimized for the air-to-air role provides Air Dominance, enabling an affordable JSF, optimized for the multi-role precision air-to-ground capability, which provides Precision Engagement across the future battlefield.

The ability to dominate the skies over enemy territory provides the freedom of maneuver for all joint forces. That is precisely why we are investing in the revolutionary leap-ahead capabilities embodied in the F-22 Raptor. With the F-22's blend of stealth, supercruise, maneuverability, integrated avionics, and payload, we will be able to get to the fight fast and operate with near impunity over the adversary's territory. The F-22 is designed to penetrate enemy airspace and achieve first-look, first-shot, and first-kill against multiple targets--all before being detected. This revolutionary technology will allow the F-22 to gain and maintain air superiority, enabling all other air platforms and theater forces to operate unhampered from enemy air attack, bringing a rapid end to hostilities while minimizing friendly casualties. Additionally, in the future, the integrated air-to-ground capability of the F-22 could make it our high end attack aircraft as well.

The F-22 program is on track with first flight on 7 September 1997, and continued flight testing at Edwards Air Force Base, California, throughout 1998. The Air Force and the F-22 contractors are committed to deliver the F-22 within the Congressionally mandated cost caps. On 14 January 98, the Air Force and Lockheed-Martin signed a Memorandum of Understanding (MOU) demonstrating CEO commitment to produce Lot 1 (2 aircraft) and Lot 2 (6 aircraft) within the Congressionally-mandated cost caps. This MOU established a firm fixed price contract strategy for both lots. Funding stability for this critical modernization effort is essential for program stability to ensure the aircraft enters operational service in December 2005 as scheduled!

For the F-22 and our other fighters to prevail in the air battle, they must have air-to-air weapons that have the reach and lethality to destroy highly-capable enemy aircraft. The F-22, with the Advanced Medium Range Air-to-Air Missile (AMRAAM), gives our aircrews unparalleled first-shot, first-kill capability for beyond visual range engagements. However, while we work to improve the AMRAAM to ensure its continued preeminence, we face a significant threat when it comes to the close-in dogfight where enemy air-to-air missiles now outclass our own. To reverse this situation we are developing the AIM-9X jointly with the Navy. The AIM-9X missile will allow us to leapfrog enemy systems and regain the advantage. We expect to launch our first test missile later this year. Our expectations are for success, enabling low rate initial production to commence in the year 2000.

Both our air-to-air missile programs have suffered as a result of CGRs and inflation adjustments. In the case of AMRAAM, these cuts have increased the risk to our critically-funded P3I program which is developing upgrades to keep this weapon ahead of the threat. As for the AIM-9X, these budget reductions have created shortfalls which hamper our efforts to introduce anti-tamper provisions within the missile to protect our technology from foreign exploitation.

In addition to the threat to American assets posed by advanced enemy aircraft, the National Defense Panel also recognized the importance of defending key regional coalition partners against enemy missile attack. The Airborne Laser (ABL) is the Air Force's air superiority system designed to meet this need. The ABL high-energy laser system is DoD's only system designed to destroy theater ballistic missiles during their boost phase and is an integral and complementary component of the Joint Theater Missile Defense Architecture. This revolutionary event-driven program is in the second year of its Program Development and Risk Reduction (PDRR) phase and is on cost and on schedule--meeting all of its technical demonstration and programmatic milestones. The Air Force is collecting and analyzing data to characterize atmospheric optical turbulence in theaters ABL will likely operate. We proved the correlation of optical and non-optical methods for collecting atmospheric turbulence data. This validated our collection approach and received OSD endorsement. We now have over five times the data collected at program initiation, and the results overwhelmingly validate ABL's design specification. This flurry of PDRR activity will culminate with the shoot down of a SCUD-class missile in 2002. The ABL program is a true pillar of defense reform and was one of the first to be completely initiated under the new paradigm of acquisition reform. In concert with this approach, the Air Force purposefully constrained ABL's budget in its first two years. Program and funding stability are crucial to the success of the ABL program. Failure to protect ABL from across-the-board undistributed cuts and assessments will result in a break in the development contract, a tremendous increase in program cost, and a delay in delivery of this vital combat capability.

An independent review team of scientists and engineering experts assessed the ABL program for the DoD. This team was led by Dr. Robert Cooper, noted scientist, former Assistant Secretary of Defense for Research and Technology, and Director of the Defense Advanced Research Projects Agency. The team's results indicate the ABL program is firmly on track satisfying and exceeding all of its technical challenges and demonstration milestones. The Air Force Scientific Advisory Board (SAB) has also reviewed the ABL program. The SAB is pleased with the program's status and progress to date, and is helping the Air Force investigate additional ways to exploit this vital new weapon system's technology to maximize our combat capability.

The Airborne Laser is truly a revolutionary weapon system. This speed of light weapon will help shape the future of warfighting. Ideas previously only imagined in books or seen in movies are turning into realities of doing business--protecting the lives of our young men and women and the lives of our allies. This vital system will give the National Command Authorities a great power projection tool, offers a very real deterrent to the use of weapons of mass destruction, and provides the CINCs a great capability to help shape and prosecute future wars.

To maintain Air and Space Superiority, we cannot afford to narrowly focus on the air environment alone; we must also prepare to deal with threats to our space superiority. Currently, our space programs provide warning, position location and weapons guidance, communications, environmental monitoring, space launch, and the associated infrastructure. As the Air Force evolves from an air and space force to an aerospace force, we need to continue upgrading our space-based assets and pursue space-based solutions where the advantages of space can best meet our defense needs.

Our space programs rely heavily on RDT&E funding to modernize existing space systems as well as develop new capabilities. These space programs have realized a significant impact from the undistributed cuts to the RDT&E account. Congress needs to be aware that the most recent undistributed cuts have placed at risk a significant amount of our space program's content and have potentially delayed the development and deployment of new capabilities.

The Space Based InfraRed System (SBIRS) is an example of one program particularly hurt by funding cuts. SBIRS will consolidate our national infrared detection systems into a single architecture that fulfills the nation's security needs in the areas of missile warning, missile defense, technical intelligence, and battlespace characterization. The program will continue the strategic space-based warning mission of the Defense Support Program (DSP) and also provide the much needed support to Theater Missile Defense. SBIRS High is scheduled to consolidate DSP ground sites by the end of FY99 and launch a significantly more capable infrared satellite in FY02 while the first SBIRS Low launch is scheduled for 4th quarter FY04.

As a key risk reduction effort, the SBIRS Low program is preparing to launch and test two major flight experiments in FY00, prior to entering the program's Engineering and Manufacturing Development (EMD) phase. Due in part to Small Business Innovative research and CGR actions, the SBIRS High and SBIRS Low efforts will both require additional funding in FY98 to maintain program content and schedule. Since SBIRS operates within an uncompromising cost and schedule profile, which was further affected by inflation adjustments, SBIRS High may experience as much as a 5 month delay to DSP ground consolidation and a 1 year delay to the first satellite launch. SBIRS Low stands to experience as much as a 10 month delay to the flight experiments and a 1 year slip to the first launch. The Air Force has coordinated an above threshold reprogramming action and is pursuing a special termination cost clause waiver to maintain program viability.

Another critical element of space superiority is the continued modernization of the Global Positioning System (GPS). Long an important component of our national security strategy, GPS has emerged as a valuable aid to civil agencies and private enterprise in the United States and abroad. To satisfy the growing numbers of users who rely upon the GPS system, we are aggressively working to integrate the DoD navigation warfare requirements with civil sector requirements to increase the accuracy, integrity, and availability of GPS. A number of improvements are currently underway, including the selection of a second civil GPS signal. We project the vast majority of all Air Force aircraft will have GPS by 2000 and the Air Force will look to the Department of Defense to request relief from the GPS 2000 mandate for a few systems. Additionally, we have initiated efforts to identify funding for the $30M unfunded but congressionally-directed Alternate Master Control Station (AMCS) effort. Due to budget limitations, however, FY 1999 AMCS funds were not included in the FY 1999 President's Budget. Funding alternatives to initiate AMCS hardware procurement will be evaluated; and AMCS outyear funding will be pursued during our preparation of the FY 2000 President's Budget. We will continue to seek AMCS funding in the FY00 budget process. Finally, last year's Congressional undistributed reductions have adversely affected several GPS modernization efforts. These reductions are contributing to delays in the development of GPS Block IIF, and will compress the timeline for launch preparations--increasing launch and operations risks

Our space-based communications systems enable Joint Vision 2010, ensuring our air and space dominance by providing flexible and responsive communications to our warfighters in any theater of operations around the globe. We plan to employ a mix of Air Force MILSATCOM systems, which range from highly survivable systems to wide-band, voice, and high-data rate services. We have based our MILSATCOM architecture on the Senior Warfighters' Forum (SWarF) DoD MILSATCOM architecture recommendations that were approved by the Joint Requirements Oversight Council (JROC). We will continue to pursue the Defense Satellite Communications System (DSCS) upgrade, to provide a more than 200% increased capacity to theater tactical users. In addition, the deployment of Global Broadcast Service (GBS) Phase 2 infrastructure, will provide very high data rate communications to small terminals in the battlefield. Also, commercial-like Wideband Gapfiller satellites launched in 2004 and 2005 will be part of our transition from DSCS and GBS to the Advanced Wideband satellite scheduled for first launch in 2008. GBS and Wideband Gapfiller will reduce costs and fielding time by making maximum use of commercial technology and practices. For example, GBS has already reduced the typical acquisition time by 80% through the use of mostly commercial products.

We plan to replenish Milstar, the Air Force's highly survivable SATCOM system, with the higher capacity Advanced MILSATCOM system in 2006, and are investing in the enabling technologies to reduce cost and risk, and take maximum advantage of commercial digital satellite investments.

The direction for our MILSATCOM programs is clear, but Congressional undistributed reductions have eliminated critical sustainment and modernization content from many of our programs. Due to reduced funding, we will be unable in FY98, to test software releases in ground terminals, which will result in software malfunctions and associated downtime. In addition, this downtime may occur throughout the life of the program due to our reduced ability to calibrate the satellite antennas which may cause users to unexpectedly lose communication with Milstar satellites. Without reprogramming of funds, the cancellation of the last DSCS Service Life Enhancement Program (SLEP) satellite would prevent us from achieving the needed 200% capacity increase for our deployed forces. The Air Force is currently looking at funding alternatives to address this problem. In summary, several years of austere budget environments combined with annual congressional reductions have resulted in the removal of critical content from our MILSATCOM programs-they can withstand no more.

Environmental monitoring, which provides data on the atmosphere, space environment, ocean conditions, and terrestrial conditions, is another function where our warfighters depend on space-based assets for information. The National Polar-orbiting Operational Environmental Satellite System (NPOESS) consolidates America's military and civilian polar-orbiting weather systems. NPOESS will become the only U.S. source of polar-orbiting weather data. It will provide military commanders and civilian leaders timely, quality environmental information for the effective employment of weapons systems and the protection of national resources. NPOESS is a DoD, DoC, and NASA tri-agency program. The DoC and the DoD must maintain a 50/50 cost share, by year, through the life of the program. Since DoC was not subject to the CGRs, the FY98 funding is no longer in balance. The FY98 CGRs stretched development of a critical sensor and delayed delivery by three months. Of particular note is the fact that NPOESS is the U.S. contribution to an international effort. This effort is the Joint Polar System which will consist of two NPOESS satellites and one Meteorological Operational (METOP) satellite provided by the European Organization for the Exploitation of Meteorological Satellites (EUMETSAT). This three-satellite constellation is required to meet customer requirements for timely environmental data. Currently, EUMETSAT is fully funded and on track to deliver the first METOP satellite in 2003.

Finally, our space launch and infrastructure capabilities are necessary to place our assets in their required orbit in space. The Evolved Expendable Launch Vehicle (EELV) will replace the fleet of Delta, Atlas, and Titan launch vehicles with two affordable families of launch vehicles, providing heavy and medium spacelift. EELV remains at the cutting edge of acquisition reform by demonstrating that development can be successfully accomplished with a "lean" program office. The Air Force has established an electronic source selection capability which brings DoD closer to the paperless contracting environment Secretary Cohen has called for by the year 2000. Our new acquisition strategy -- which features a co-development program between industry and the government -- funds up to two contractors through system development thereby maintaining competition across the life of the program. This will strengthen the U.S. space launch industry, encourage greater contractor investment, and reduce the Air Force's overall development cost. This new approach reduces the government's overall launch costs by more than 25% and saves $5 to $10B in recurring costs through the year 2020. The cost, operability, and continued industry competition benefits from these two evolved families of launch vehicles affords U.S. contractors the opportunity to become more competitive internationally. It will also create the necessary efficient production environment, allowing the U.S. to regain business lost overseas to foreign launch suppliers. During the FY98 Congressional cycle, the intelligence committees reduced the budget to support EELV by $5M and the program experienced undistributed reductions of $2.8M. Without reprogramming funds from other sources, these reductions would have rendered the two on-going pre-Engineering and Manufacturing Development contracts unexecutable and increased the risk of not meeting the EELV scheduled Milestone II decision. This schedule delay would have slipped the EELV launch schedule approximately six months, adversely impacting early EELV missions with critical schedule requirements. By reprogramming funds from other sources to combat this critical problem, we will ultimately be forced to remove content and delay schedule in other modernization programs.

GLOBAL ATTACK

The Air Force continues to concentrate a great deal of effort modernizing forces to perform the global attack mission. We recognize the absolute necessity to project our forces anywhere in the world at a moment's notice to support our warfighting CINCs, who represent our first line of defense against aggression. No other forces can provide the punch needed to strengthen our forces abroad faster, more reliably, and with greater precision firepower than our B-1, B-2, and B-52 bombers.

The B-1 Lancer is the Air Force's primary long range conventional delivery system. In October 1997, the Air Force suspended the B-1's active nuclear role. The Air Force remains committed to full conventional enhancement of the B-1 under the multi-phased Conventional Mission Upgrade Program (CMUP). However, CGRs and inflation adjustments to RDT&E and procurement have driven a nine month schedule delay to the Defensive System Upgrade Program (DSUP) final operational capability. These CGRs have also forced over a 15 month schedule disconnect between availability of actual aircraft upgrades and upgrades to simulator training systems required for crew training, as well as delayed JSOW, JASSM, and WCMD integration by one quarter.

The B2 modernization program has made tremendous strides. Since the delivery of the first Spirit in late 1993, the 509th Bomb Wing at Whiteman Air Force Base, Missouri, received the first of its Block 30 aircraft in August, bringing the final configuration and most capable B2 weapon systems to the warfighters. The Block 30 aircraft delivers the B2's final low observable signature, as well as full-spectrum situational awareness and automatic terrain following capabilities. With the Block 30 enhancements, the B2 represents marked improvements in both weapons capability and supportability over its predecessors. These Block 30 aircraft will be able to deliver the Joint Direct Attack Munition (JDAM), Joint Standoff Weapon (JSOW) in FY99, the Joint Air-to-Surface Standoff Missile (JASSM) in FY03, and the full array of bomb rack gravity weapons to the B2's already impressive arsenal. Block 20/30 aircraft capabilities also include B-61 and B-83 nuclear weapons, and two Global Positioning System-Aided Munitions (GAMs)-the GBU-36/B 2,000-pound weapon and the GBU-37/B, a 4,700-pound weapon designed to destroy hardened and deeply buried targets with near-precision accuracy.

One of the many factors which dictate the B2's effectiveness in contingency operations is the 509th Bomb Wing's ability to adequately maintain the aircraft's low observable (LO) signature between sorties. The B2 System Program Office (SPO) and ACC have been studying options for improving both the LO maintenance processes and the availability of facilities at deployed locations. The two primary issues to consider are the materials involved with LO maintenance and the environment in which some of that maintenance must be performed. The longest lead times required for LO maintenance involve surface preparation and the cure times for adhesives, fillers, and paints. Through the diligent efforts of the B2 SPO, the contractor, and the wing, improved materials and processes have resulted in dramatic reductions in some cure times, from as much as 72 hours to less than three hours. Cure times on some materials will remain the limiting factors in the reduction of required LO maintenance man-hours. Likewise, some of the LO work must be performed in temperature- and humidity-controlled facilities. ACC has conducted a worldwide study of locations with suitable facilities already available for possible B2 use. In addition, they are examining options for procuring deployable shelters which will provide suitable environments for conducting B2 LO maintenance at any field location where the B2 must deploy.

Lessons learned during the development and fielding of the earlier B2 aircraft have paid immense dividends in the field of low observables (LO) maintainability. Design and materials improvements, as well as changes in some maintenance processes and supply procedures, have reduced the time required to maintain the B2 in its desired combat configuration. Therefore, the B2 will require less maintenance time to prepare it for combat, as well as fewer maintenance man-hours between combat sorties. The net result means more bombs on target. This vast mix of weapons, combined with the B2's low observable characteristics and global range, makes the Spirit uniquely capable in performing its mission within the current planned fleet of 21 aircraft.

While the B-2 program continues to make tremendous strides, B-2 procurement funding of $331M remains under congressional restrictions and faces sizable undistributed cuts. Detailed impacts of these cuts against the B-2 program will depend on final resolution of the specific FY98 funding restrictions imposed on the program.

The B-52 Stratofortress has been the workhorse of the strategic heavy bomber force. The B-52 has the combat proven capability of dropping or launching a significant array of weapons in the US inventory. It is the only Air Force aircraft capable of delivering all of the following precision, standoff weapons: the AGM-129 Advanced Cruise Missile, the AGM-86B Air Launched Cruise Missile, the AGM-84 HARPOON anti-shipping missile, the AGM-86C Conventional Air Launched Cruise Missile, and the AGM-142 HAVE NAP missile. Additionally, the B-52 will integrate future standoff and precision munitions to include the JDAM, JSOW, WCMD by FY01 and JASSM by FY02.

In addition to our bomber force, our Intercontinental Ballistic Missiles (ICBMs) represent a key component of the Air Force's Global Attack forces. The Minuteman III Guidance Replacement (GRP) and Propulsion Replacement (PRP) programs will allow us to sustain 500 Minuteman III ICBMs. The GRP will extend the life of Minuteman guidance sets and improve reliability, maintainability, supportability, and nuclear surety. First asset delivery for the new GRP kits will occur in 3rd quarter FY99 with initial operational capability slated for 2nd quarter FY00. Through the PRP, Minuteman III's three solid rocket motors will be remanufactured to correct age-related degradation, supporting an operational service life through 2020. First asset delivery of solid rocket motors will occur in 2nd quarter FY01 with initial operational capability projected for 2nd quarter FY02. These modernization efforts will result in the continuing viability of one leg of our Strategic Triad.

PRECISION ENGAGEMENT

Today, and for the foreseeable future, successful military operations will depend on the ability to reliably achieve desired effects while limiting casualties and minimizing collateral damage. We are aggressively employing the technological advances of space-based systems to field a new generation of very accurate munitions which exploit the power of satellite navigation to find their way to within feet of any target. Precision Engagement enables our combat forces to acquire and kill selected targets with precision lethality. Our new weapons are capable of use in adverse weather, release from medium/high altitudes, and attack on multiple targets from a single release point. Through this strategy, we are able to conserve both weapons expended and platform sorties required, while significantly reducing both platform risk and collateral damage. In essence, the ability to precisely engage enemy targets truly acts as a force multiplier. Our total effort in today's fiscally constrained environment is to ensure we possesses the necessary munitions to successfully engage and destroy enemy targets with minimal risk to the warfighter and our platforms.

The JSF is our next generation strike aircraft and will replace the aging Air Force F-16 and A-10 aircraft fleets. It will be capable of carrying a wide array of weapons to include JDAM, AIM-9X, and AMRAAM. With superior precision engagement capability and relatively low cost, the JSF complements the F-22 in the high-low mix. The F-22, as the high-end of the force mix, is designed to dominate the air superiority arena through the combination of stealth, supercruise, integrated avionics, and large internal weapons bays. The JSF, as the low-end, will be designed as a stealthy multi-role air-to-ground fighter reliant on the enabling force of the air dominant F-22. The JSF's affordable balance of survivability, lethality, and supportability will bring precision engagement to the future battlespace while simultaneously decreasing life cycle costs. The JSF program is on track to supply over 2,900 multi-role strike fighters to the Air Force, Navy, Marines, United Kingdom Royal Navy and other interested allies. Delivery of the first operational JSF is scheduled for 2008. Maintaining this current schedule will ensure optimal balance between affordably replacing aging aircraft and providing the warfighter the required force structure. To better serve the warfighter's operational needs, the JSF program's approved acquisition strategy provides for the introduction of an alternate engine (AE) during production. JSF AE is being developed by a team of General Electric, Allison, and Rolls Royce. The Air Force currently endorses an AE program as it balances near-term affordability in development with maximum competition benefits and operational flexibility.

We are also aggressively working to field advanced munitions to be used on all our weapon platforms that will further enhance the range of our precision engagement capabilities. Five of our most successful, ongoing acquisition programs are the Joint Direct Attack Munition (JDAM), Joint Air-to-surface Standoff Missile (JASSM), Joint Standoff Weapon (JSOW), Sensor Fuzed Weapon (SFW), and the Wind Corrected Munition Dispenser (WCMD).

JDAM is an inexpensive Global Positioning System guidance kit used to convert 1000 and 2000 pound general purpose and penetrator warheads into highly accurate, adverse weather weapons with in-flight retargeting capability. JDAM test results are impressive, with an average distance well within the established 13 meter requirement. JDAM low rate initial production began in 1997 and deliveries will start in 1998.

JASSM is a long range, low observable, conventional 2000 pound class weapon which will enable precision engagement of high value, heavily defended, fixed and relocatable targets. The FY 98 Appropriations Conference reduced program funding and placed $43M of funding on hold pending completion of an Analysis of Alternatives (AoA) between JASSM and the Navy's Joint Standoff Land Attack Missile (JSLAM). This forced a major restructure of the JASSM program definition and risk reduction phase. The AoA is on-track to deliver the mission and campaign level performance and cost data for Boeing and Lockheed Martin JASSM competitors, JSLAM (SLAM-ER+ modified for Air Force use) and Navy's SLAM-ER+. Congress will be notified in April 1998 of the Defense Secretary's JASSM Analysis of Alternatives (AoA) decision between JASSM and JSLAM. The decision to proceed to engineering and manufacturing development is scheduled for FY98 with the low rate initial production decision to follow in FY00. JASSM is another truly revolutionary weapon system with a very affordable price tag!

JSOW is the only Air Force standoff anti-armor/area munition with suppression of enemy air defenses (SEAD) capability. We are procuring two cluster munition variants which will permit highly accurate, adverse weather employment against land and sea targets at standoff ranges of 15-50 miles to neutralize both soft and heavily armored targets. We will begin buying JSOW soft target variants in 1998 and armored target variants in 1999.

The SFW is a cluster munition which will provide multiple kills per aircraft pass against land combat and support vehicles. Full rate production of baseline SFW began in FY96 and initial operational capability was declared in early FY97. An Air Force initiated pre-planned product improvement (P3I) development expands the weapon's footprint by 50%, incorporates a dual mode Laser/Infrared sensor and a multi-purpose combination warhead, and increases kills per pass to 233% of the requirement for the current baseline SFW. P3I production will begin in FY99.

The Wind Corrected Munitions Dispenser is a guidance tail kit which will provide the capability to correct for launch transients and wind effects and give the Air Force a first time capability to accurately deliver area munitions such as Combined Effects Munitions, GATOR, and SFW from medium to high altitude. Full rate production is planned for FY00.

The F-15E remains our premier dual-role fighter and the major contributor to precision engagement. It fulfills the long range, all weather day/night precision strike role and has under-the-weather navigation and targeting capability with LANTIRN. We are aggressively upgrading its armament capabilities with JDAM, JSOW, and WCMD in the FY03 timeframe. We are adding low frequency coverage (Band 1.5) to the internal ALQ-135 jammer and will integrate a towed decoy which greatly increases aircraft survivability.

These ongoing F-15E development activities, however, have had considerable impact resulting from undistributed cuts and inflation adjustments. For example, cuts have reduced or deferred Operational Flight Program (OFP) weapons integration and Combat Identification capability, delayed key parts obsolescence work (hybrid and integrated circuit development), and reduced flight test capability with resultant development delays in OFP, radar software, and Tactical Electronic Warfare System (TEWS).

The F-16 contributes to precision engagement as a versatile, multinational day/night all-weather multi-role fighter. It currently comprises over 50% of the Air Combat Command fighter inventory and compliments the F-15E with LANTIRN day/night under-the-weather precision strike capability. It also complements the

A-10 in delivering a wide variety of gravity bombs. Funded armament upgrades include JDAM, JSOW, WCMD in FY00, and JASSM and AIM-9X in the FY04 timeframe. In addition, we have initiated several major sustainment efforts to include an airframe service life improvement program, reliability and maintainability upgrades to the engine inventory, and the addition of a Modular Mission Computer. Finally, our F-16 survivability enhancements include the addition of the ALE-47 chaff and flare dispenser, the ALE-50 towed decoy, and the ALR-56M radar warning receiver.

The F-16 program, like other Air Force programs, has been impacted by CGRs and inflation adjustments. These actions have forced the Air Force to cancel the main aircraft battery replacement program, to delay the fielding of an improved canopy transparency by two years and to delay the completion the F110 engine Digital Engine Control retrofit program by two years. Eventually, these programs will significantly improve Mission Capable rates.

The F-117 plays a key precision employment role and is being modernized to meet 21st Century threats. Its strength is penetration of high threat environments to deliver pinpoint accuracy weapons on high value targets as a night, medium altitude, low observable interdiction platform. Our JDAM and WCMD armament improvements in the FY04 timeframe give the F-117 all-weather, near precision capability. Finally, the F-117 is undergoing a series of sustainment upgrades to its stealth coating, weapons attack sensor system, and the weapons delivery computer. CGRs and inflation adjustments, however, will delay the Single Configuration Fleet (SCF) modification program, reduce depot installations of Service Bulletins, reduce Stores Management Processor spares levels and slip Smart Weapons Integration by one year. This results in a delay of JDAM/WCMD operational capability from FY03 to FY04.

 INFORMATION SUPERIORITY

In no other area is the pace and extent of technological change as great as in the realm of information. The volume of information in joint warfare is already growing rapidly. The Joint Team's future ability to achieve dominant battlefield awareness will depend heavily on the ability of the Air Force's aerospace assets to provide global awareness, intelligence, communications, weather and navigation support. While Information Superiority is not the Air Force's sole domain, it is and will remain, an Air Force core competency. The strategic perspective and the flexibility gained from operating in the air-space continuum make airmen uniquely suited for information operations. We must modernize our information forces to attain this objective -providing global awareness and a full range of information warfare and protection capabilities to the Joint Team, and command and control (C2) capabilities for aerospace forces. Last April the Air Force convened a Four Star level meeting on air and space C2 modernization. One result was the creation of an Air & Space C2 Agency to integrate the efforts of C2 users, providers, and developers, and numerous C2 systems across the Air Force. The Agency will act as the single agent for the establishment of Air Force air and space C2 terminology, direction, and scope. It will eliminate duplication of effort and drive towards commonality and interoperability of C2 systems and processes; oversee execution of C2 modernization, draft and maintain the C2 Roadmap, and; build an integrated input into the POM for air and space C2 forces.

One piece of our information superiority architecture, the Joint Surveillance Target Attack Radar System (Joint STARS), provides commanders an unprecedented awareness of the ground situation, battle management, and targeting capability, much like the Airborne Warning and Control System (AWACS) does in the air arena. Joint STARS achieved its initial operational capability (IOC) in December 1997, and has already proved its worth supporting NATO forces with real-time situational awareness of ground activity in Operation Joint Endeavor. While NATO decided in November 1997 to not pursue a fast track Alliance Ground Surveillance (AGS) program based on Joint STARS as the air segment, the United States is working with NATO to develop fresh options that would meet the AGS requirement. The Conference of National Armament Directors (CNAD) will meet in April 1998 to consider these options.

The CNAD decision to not pursue a fast track B707 Joint STARS based solution to their AGS requirement directly impacts a key QDR decision to reduce the E-8C fleet from 19 to 13 aircraft. The QDR presumed NATO could augment the United States fleet with 4 to 6 NATO Joint STARS aircraft. The Air Force feels that a 13 Joint STARS aircraft fleet alone may not fully support the Moving Target Indicator (MTI) requirements for a two MTW scenario. The Air Force is actively supporting the SECDEF directed study underway to consider different force mixes which could provide this required capability either by procuring additional E-8Cs or through the procurement of other MTI platforms such as UAVs.

The undistributed FY98 development reductions forced a complete restructure and significant descoping of the Joint STARS Interoperability Certification Capability contract required to test and certify Joint STARS command and control interoperability with Air Force, Joint, and Coalition users.

The AWACS continues to be a primary force multiplier for our airborne assets and our modernization efforts are designed to ensure that it remains the premier airborne command and control platform through 2025. The target for completing the Radar System Improvement Program (RSIP) IOC is FY00. In addition, the AWACS Extend Sentry program is a combination of numerous projects geared toward improving the platform's overall reliability, maintainability, sustainability, and availability. These initiatives will extend AWAC's life well into the next century. FY98 cuts, however, in R&D due to CGR and inflation rate changes have caused the program to reduce testing and development of missile defense efforts supporting integration of advanced technologies. Additionally, the reductions have canceled testing for Broadcast Intelligence, SATCOM and computer processing upgrades in preparation for Air Force advanced concept technology demonstration exercises (Expeditionary Force Exercise 98). These efforts are necessary for the development of AWACS capabilities to meet the CINC's warfighting needs of the future.

Our reconnaissance force structure is also undergoing significant additions and upgrades. The operational concept of unmanned aerial vehicles (UAVs) has been demonstrated by the highly successful Predator UAV in Bosnia. Future UAVs will provide opportunities for long-endurance improvements at affordable prices. They will augment our reliable U-2, RC-135, and space-based force structure to achieve battlespace awareness. In addition, our sensor acquisitions are geared to precision engagement support, providing the right information to the right decision maker and shooter at the right time. This year we are taking delivery of two new RIVET JOINT aircraft, and have funded the re-engining of a significant portion of the RC-135 fleet.

Exchange of data between warfighters will be enhanced by the Joint Tactical Information Distribution System (JTIDS), enabling them to share a common picture of the battlespace. The Link 16 System Integration Office is working to make Link 16 integration and installation more efficient for all the bomber platforms by finding and tracking common characteristics among current platforms, and re-using current software for later integration. This concept of "generic integration" has great potential for saving money and speeding the integration process. Unfortunately, JTIDS is another example of a critical program impacted by CGRs and inflation adjustment. Based on these impacts, the "generic solution for all bombers" common software solution is eliminated for the B-1B, B-2, and B-52, and an estimated 2 years of risk will be added to the integration schedule. For the F-15C/Ds, 93 JTIDS terminals will be cut out of the FY99 and 00 production buys, negating the competitively gained prices from the NTE structure with a projected 10-20% price increase and six months schedule slip.

Equally important, we are fielding an interoperable Command, Control, Communications, Computers and Intelligence (C4I) infrastructure of unprecedented agility and speed. The Theater Battle Management Core Systems and Air Force Mission Support System will be the primary command tools for the Joint Forces Air Component Commander (JFACC) allowing seamless information flow from planning to execution and from the commander to the cockpit. All of the Air Force Command and Control programs will fully support the philosophy and implementation of DoD's Global Command and Control System (GCCS).

Finally, we are also pursuing an information protection program focusing on providing protection systems and capabilities in two areas. We are in the process of developing systems that can modify fielded systems to provide them information protection capabilities. In addition, we are also pursuing an acquisition strategy that builds in information protection capabilities into systems up front. The result of this initiative is to field systems with this vital protection capability as a core part of the weapon system.

Air Force information superiority modernization activities provide the Joint Team with increasingly agile air and space capabilities. As a result, we will be able to provide the National Command Authorities information superiority and dominant battlespace awareness across the spectrum of conflict.

RAPID GLOBAL MOBILITY

Airlift is the most flexible and responsive means to rapidly project and sustain combat forces during peace and war, and remains the Joint Team's most reliable combat multiplier. Airlift's fundamental objective is to quickly project and sustain combat, peacekeeping, and humanitarian assistance forces anywhere in the world. There are many processes and systems in our modernization plan which support this objective.

Key to meeting the nation's strategic mobility requirements for the 21st century is the C-17 Globemaster III. It continues to serve as the cornerstone of our rapid global mobility modernization activities and your support for this program has been phenomenal. The result has been substantial savings for the American taxpayers. Congressional approval of our stable, multi-year procurement contract at high production rates produced savings of over $1B for the C-17 acquisition program, and our C-17 program has delivered the last 25 aircraft an average of 27 days early. The DoD wholeheartedly embraces the C-17 multi-year program.

We are also upgrading the C-130 which serves as our core theater airlift aircraft. These modifications will help ensure long term fleet mission capabilities. A key part of our modernization plan includes the C-130J which replaces our oldest C-130Es. We now have 23 C-130Js on contract with another five aircraft planned across the FYDP. Earlier C-130J procurement is not warranted due to an average of 12 years service life remaining on the C-130E. The C-130J effort is coming to fruition with the projected delivery of our first production aircraft this fiscal year. The operational enhancements of this "new technology" aircraft will significantly improve our readiness and reduce operations and maintenance costs.

The C-5 serves as the foundation of our outsized cargo strategic lift capability, and will need continued investment if it is to continue performing its mission into the next century. This year marks the beginning of the C-5 Avionics Modernization Program (AMP). The AMP will replace unsupportable and unreliable avionics and flight instruments while simultaneously upgrading the fleet to meet GATM airspace requirements. We are also studying additional aircraft upgrades to further improve the overall reliability of the C-5 fleet so it can efficiently meet our country's significant outsize and oversize cargo carriage requirements.

We also have modernization efforts underway in the passenger airlift area to support our Special Airlift Missions (SAM). The replacement aircraft for the aging C-137 will be an FAA certified commercial transport aircraft designated as the C-32 (Boeing 757) and C-37 (Gulfstream V). These aircraft will be delivered in compliance with Navigation Safety and Global Air Traffic Management. Boeing is using our first C-32 aircraft as the test bed for FAA certification of the Future Air Navigation System (FANS) on all Boeing 757 aircraft.

Global Access, Navigation, and Safety (GANS) is an Air Force management initiative established to harmonize requirements and acquisition of several navigation and safety-related programs. The purpose of GANS is threefold: to organize related navigation and safety programs and integrate Air Force efforts; to serve as a requirements and acquisition management tool for senior Air Force Leaders; and to establish an avionics acquisition modernization strategy designed to minimize platform downtime and integration costs. The GANS process provides implementation planning for one of the largest of these programs, Global Air Traffic Management (GATM). The Air Force will update its rapid global mobility core competency by acquiring the latest technology GANS systems for our air mobility forces. This acquisition will preserve access to prime global airspace routes into the 21st Century.

The C-21 is an excellent example of the synergistic effect of combining projects and leveraging commercially available products. The Air Force plans to install a commercially developed cockpit in the C-21 to meet GATM requirements. The commercial cockpit avionics suite is not only more cost effective than independent military modifications, but provides life cycle cost savings by permitting the military to share future upgrade costs with commercial operators of the same system.

The Air Force also begins modernization of the Special Operations Forces airlift capability with the joint United States Special Operations Command (USSOCOM), Navy, and Air Force CV-22. This funded effort will replace a large portion of older Air Force MH-53J helicopters and C-130s. Our FY99 budget begins our acquisition of a CV-22 training system, with follow-on in FY00 of long lead procurement for an eventual buy of 50 CV-22s for the Air Force Special Operations Command.

To enhance flight safety, state-of-the-art commercial enhanced ground proximity warning systems (EGPWS), using digital terrain database displays and GPS, and traffic alert and collision avoidance systems (TCAS II) are scheduled to be the standard equipment for all Air Force passenger capable aircraft. This equipment is being installed expeditiously to ensure the Air Force continues to safely operate in the higher traffic densities of the 21st century.

The hinge pin for Rapid Global Mobility is the ability to efficiently and reliably on and off load both commercial and military aircraft, and then get the cargo to the warfighters. Our current fleet of Material Handling Equipment (MHE) is showing its age and does not efficiently support wide-body commercial aircraft operations. The 60K "Tunner" and Next Generation Small Loader (NGSL) programs are critical elements of our Nation's future airlift capability. We are acquiring the Tunner to replace the aged 40K loaders and Wide-Body Elevator Loaders (WBEL). Early fielded units are demonstrating the Tunner's ability to substantially improve aerial port operations, providing increased capability, reliability, and supportability. This year we are also initiating a drive-off competition to select a non-developmental Next Generation Small Loader (NGSL) replacement for our vintage 25K loaders. The NGSL will provide the versatility to load wide-body commercial aircraft as well as be transported by C-130 aircraft to support mobility operations at forward bases.

Finally, we are upgrading our tanker fleet to remain viable and provide the necessary refueling support to all of our refuelable aircraft platforms. The PACER CRAG program modernizes the KC-135 cockpit and fulfills human factors and mission requirements to safely complete the most complex missions while reducing overall manpower requirements. With PACER CRAG, the KC-135 also leads the fleet in equipping with Traffic Alert & Collision Avoidance System (TCAS) and Enhanced Ground Proximity Warning System (EGPWS) to enhance safety and support future GATM requirements. The multipoint refueling modification will allow the KC-135 to refuel Navy, Marine, and certain NATO aircraft via multiple drogue-baskets as well as through the current boom.

AGILE COMBAT SUPPORT

As the environment in which we operate continues to change, so must our responsibilities to serve our many customers. We need to be their business advisors and offer up our expertise to implement acquisition reform by using smart business practices to help squeeze the fat from the "logistics tail." Our military infrastructure is too big and is consuming the much needed investment dollars for modernization-- there is currently too much "tail to tooth."

The efficiency and flexibility of agile combat support will be enhanced by the best value approach for depot and sustainment Public-Private competitions, now authorized by the 1998 National Defense Authorization Act (NDAA). However, some hurdles to effective acquisition strategies still exist. For example, although the percentage of depot-level maintenance and repair dollars that may be contracted for performance by non-government personnel increased from 40 to 50 percent, the FY98 NDAA increased the workload pool by changing the definition of "Depot Maintenance and Repair" to include Interim Contractor Support (ICS) and Contractor Logistics Support (CLS). Additional restrictions on the amount of non-core sustaining work performed by private industry are unnecessary. The existing restrictions which keep core requirements in house are more than adequate. Award of the remaining non-core workload should be a market-based determination and provide the best overall value to the Government.

TRAINING

To meet our core competencies, the Air Force continues to modernize our aircrew training programs with modern equipment for joint training. The T-6A Joint Primary Aircraft Training System (JPATS) will replace the aging Air Force T-37 and Navy T-34, and will provide improved performance, safety, reliability and supportability over its predecessors. In July 1997, the Air Force accepted delivery of the last T-1, the Airlift/Tanker follow-on trainer. Also, RDT&E efforts on the T-38 Avionics Upgrade Program are ongoing to support production beginning in FY99.

We are also pursuing a new way to train our operational aircrews such as the Distributed Mission Training (DMT). DMT will provide an interactive simulated battlespace for warfighters to train both individually and collectively, without leaving their respective home stations. Using state-of-the-art simulators networked together in real-time, aircrews will "fly" and train in this synthetic battlespace with other aircrews at separate locations. This will improve the quality of individual training and will allow--for the first time--team training and mission rehearsal in the simulator. DMT's first system to be integrated into the network is the F-15C Commercial Training Simulation Services (CTSS). In this commercial practice "fee for service" contract, a paradigm shift has occurred in the way the Air Force procures simulators. The Air Force buys no hardware and pays for simulator sorties by the hour. The contractor invests in a four-ship set of high fidelity simulators with 360 degree visual displays at each F-15C base, links them together real time, maintains concurrency with the aircraft, and keeps pace with advances in simulation and network technologies. The DMT network, coupled with this CTSS commercial practices acquisition strategy, holds the most promise for reducing aircraft flight training hours without reducing proficiency, extending airframe life, and improving readiness across the entire spectrum of aviation training -- all while reducing the amount of time our personnel are away from home.


SCIENCE AND TECHNOLOGY

The Air Force S&T Program is the foundation of our future military capabilities. We know that investment in S&T is crucial to transforming ourselves from an "air" force into an integrated aerospace force capable of finding, tracking, and targeting anything that moves on the earth. The objective of the Air Force S&T Program, therefore, is to provide the technical foundation for Global Engagement objectives by affordably exploiting advanced technology to provide superior warfighting capability.

The planned funding level for FY 1999 forces us to be more selective than ever about investing in the "best" technological opportunities, yet still enables the Air Force to provide a responsive program by concentrating on core military requirements. The key to this strategy, is carefully integrated planning whereby each S&T effort feeds interdependent technology needs. We also aggressively leverage our S&T dollars by cooperating with other Services, Agencies, the private sector, and international partners. The result is the Air Force S&T Program is now a highly-leveraged, "lean and mean" collection of efforts that the Air Force considers critical to maintaining technological superiority over future adversaries.

Congress has consistently recognized the importance of the small, but crucial efforts the Air Force S&T Program represents and has provided strong support. Yet, over the years, specific Congressional redirection for S&T funds has grown significantly. Almost 16% of Air Force S&T funds appropriated for FY 1998, up from 10% in FY 1997, are Congressionally-directed. While we welcome Congressional interest, we must recognize that this is an era of tight budgets and interdependent program planning. We ask that in the future, Congress carefully consider the impact that specific budget redirections may have on the Air Force S&T Program as a whole, as redirection actions take funds away from our highly interdependent efforts. Redirection of funds alters S&T priorities without regard to warfighter needs and creates inefficiencies, mortgages, and bill-paying demands.

As regards the Dual-Use Applications Program (DUAP), we are committed to increasing our reliance on dual-use cooperative research projects with industry. We believe DUAP will allow the Air Force to take greater advantage of the competitive pressures and market-driven efficiencies that have led to accelerated development and savings in the commercial sector. Congress has been particularly helpful in assisting us in this goal. The Air Force is concerned, however, by two specific requirements for Dual Use Technology Development. First, Congress has set objectives for the Services to obligate 5% (FY 1998), 7% (FY 1999), 10% (FY 2000), and 15% (FY 2001) of their total 6.2 budgets to dual-use projects. The goal for FY01 is about twice as high as what we believe can be achieved. The Air Force S&T Program funds not only contracts with industry, but also grants to universities, as well as the bulk of its intramural laboratory research program out of 6.2. Moreover, not all technology areas (such as munitions) are good candidates for dual-use. Secondly, the Air Force would like to change the requirement that 50% of the cost of a dual-use project be borne by a non-Federal participant. A range of 25% to 75% would permit more flexibility and expand the number of potential partners. For example, a small, but cash-strapped business may be reluctant to participate at the 50% level, but would participate if the requirement were lowered to 25%.

Finally, there is one other S&T issue we would like to bring to Congress' attention: the U.S.-Japan Industry and Technology Management Training (JITMT) Program. JITMT is designed to study Japanese industry and management practices. Although we have supported this program in the past as the agent for funds allocated by Congress to DoD program elements, the Air Force has always believed that this program has little military value and would be more appropriately placed in a non-DoD agency. We agree with Congress that JITMT should move to non-DoD funding as soon as possible.

REVOLUTION IN BUSINESS AFFAIRS

Our ability to respond to future opportunities under tighter fiscal constraints requires that we become even more efficient and effective. A revolution in business affairs within the Air Force is essential. We must deliver better products and services to our customers by developing better tools, taking advantage of information technology, and exploiting the availability of commercial products. In addition, we must accomplish all this doing our part to reduce acquisition lead time. To do this, we must identify 'best practices' and seek new ways of doing business.

Our job in the acquisition community is to provide the warfighters with the effective weapons systems they need in the most efficient manner possible. Given today's fiscal environment, our challenge is to provide both adequate investment in modernization and in development of new capabilities to meet future warfighting requirements. To achieve this, we must continue and expand our efforts to implement a Revolution in Business Affairs (RBA) within the Air Force and our industry partners--thereby achieving the needed performance gains at far lower costs.

Realization of an RBA will transform acquisition and sustainment business practices and processes to deliver products and services better, faster, and cheaper. We are establishing a strategic business planning framework to identify our critical acquisition processes and restructure them as necessary to efficiently deliver superior capability to the warfighter. The focus of the framework will emphasize; (1) using "best value" procurement for all products and services, (2) exploiting new technologies in development, test, procurement, and sustainment, (3) increasing the use of modeling and simulation, (3) streamlining the financial management system, (4) emphasizing cycle time and life cycle cost reduction, (5) accelerating movement toward alignment with commercial practices, (6) getting the acquisition cycle within the technology cycle and (7) investing thousands of hours on training for in-house personnel and industry.

As we experience this RBA and divest ourselves of traditional military standards and specifications, we must be careful to not lose sight of DoD's new role in the "consumer marketplace." Participation in commercial (both national and international) standardization activities is a key element to enabling and expanding the use of commercial technology, processes, and products within the Air Force and the Department of Defense (DOD). The Air Force is currently working with the Defense Standards Improvement Council on how to more efficiently and effectively participate in commercial standardization efforts. New policies, procedures, and tools are anticipated to facilitate improved Air Force and DoD participation in commercial standardization activities.

As we embrace this RBA, the Air Force continues to make great strides in reducing the size of its organic acquisition workforce. There are several methods used to estimate the acquisition workforce size as defined in DoD policy, National Defense Authorization Acts, and Service initiatives and the DoD continues to search for a definition that is easily understandable and acceptable to Congress and the services. The Air Force definition used here, consistent with the baseline drawn in the SAF/AQ testimony to the HNSC in April 1997, sizes the current acquisition workforce at approximately 27,000 military and civilian positions. From FY98 - FY03, the Air Force acquisition workforce will be reduced 15% for a total reduction between FY89 and FY 03 of 36%.

The Air Force has actively supported OSD's initiatives to define and re-engineer the acquisition workforce. In 1997, OSD commissioned Jefferson Solutions Inc. to develop a refined definition of the acquisition workforce built on the previous Packard definition. A preliminary estimate of the workforce size was sent to Congress on 18 Dec 97, in compliance with Section 912 of the FY98 NDAA. Section 912 also directed the Secretary of Defense to deliver a report due 1 April 1998, reviewing the overall DoD acquisition infrastructure, organizations, and workforce.

Apart from legislative reductions, the Air Force has reduced the size of its acquisition workforce through proactive initiatives aimed at increasing efficiency. Some of these initiatives include: consolidating laboratory functions into a single laboratory organization and when combined with prior laboratory reductions, reduces laboratory personnel by 30%; through acquisition reform initiatives, reducing program office size 25%; retiring test aircraft to decrease maintenance and test mission manpower requirements. As part of a larger DoD effort, the Air Force continues to explore consolidation and merger of test ranges owned by DoD, other government agencies, and the private sector based on an assessment of best value to the Government. In response to the Quadrennial Defense Review, the Air Force is assessing those elements of base operating support and infrastructure that can be competed for outsourcing to private industry, allowing the re-allocation of funding to modernization efforts in FY00 and beyond.

The Air Force continues to view contractor support as part of our total acquisition workforce concept. A key element of this contractor workforce is the FFRDCs. These centers provide critical systems engineering expertise in the areas of command and control (C2) and space. In these areas, the Air Force does not possess an indigenous organic system engineering capability. Since 1991, FFRDC funding has been reduced 32%. The FY98 Appropriations Bill reduced DoD FFRDC funding by $71.8M; a $34.5M reduction to the Air Force. These cuts have translated into reduced systems engineering manpower to support C2 and space acquisition programs, with no organic engineering workforce available to backfill shortages caused by FFRDC reductions. Since FFRDCs act as the Government's trusted agent, free from real or perceived conflict of interest, and because they possess a breadth and depth of technical expertise not found in private industry, the Air Force cannot substitute "for profit" companies to replace lost FFRDC capability. In areas where conflict of interest is not a concern, A&AS contractors are used. They provide a wide range of contract services for Air Force acquisition programs spanning three major categories: management and professional support services; engineering and technical services; and studies, analyses, and evaluations. The FY98 Appropriations Bill also reduced DoD A&AS funding by $300M; a $114M cut to Air Force A&AS.

Congress has enacted legislation reducing Air Force organic workforce levels, FFRDC funding, and A&AS funding - all three elements of the total acquisition workforce. Acquisition Reform has, to an extent, helped the Air Force mitigate some of the effects of these reductions. However, with continued reductions across all elements of the total workforce, the Air Force will not have sufficient resources to effectively manage its acquisition programs.

Even with the savings offered by workforce reductions, we are still short of our investment needs. We must now address the resources expended on non-value added infrastructure capacity which could be applied to modernization. "Rightsizing" our infrastructure to reflect our present and future force structure must be vigorously examined and efficiencies exploited. We will need the support of the Congress to implement DoD's recommendations on infrastructure.

AIR FORCE MODERNIZATION SUMMARY

The Air Force's modernization plan represents a balanced and time-phased approach that is coupled with the Air Force's corporate vision--Global Engagement: A Vision for the 21st Century, and honed by the Quadrennial Defense Review (QDR) and National Defense Panel (NDP)efforts. This modernization plan will enable the successful conduct of joint warfare in the 21st century at an affordable price. The FY99 Air Force budget request balances investments across the entire range of combat and support capabilities while sustaining the technology base. To help fund this modernization, we are refining practices to achieve personnel, business, and force structure efficiencies. The QDR was an effective tool in refining our modernization plan, and in doing so, the Air Force has made hard but necessary decisions on infrastructure. The balanced program represented in our FY99 budget request must be maintained if our modernization plan is to remain viable. We will need the full support of the Congress to implement this modernization plan successfully. While the Congress may believe our FY98 modernization budget request was fully supported, the associated congressional general reduction has placed our modernization plan in a precarious balance which is unable to withstand future perturbation.

In conclusion, we have put together and are executing a time-phased and balanced modernization plan. We request the Congress' full support in supporting our plan as submitted in the FY99 President's Budget.