United States General Accounting Office

GAO Briefing Report to Congressional

Committees

September 1996 1997 DEFENSE

BUDGET

Potential Reductions

and Rescissions to

DOD’s Procurement

and RDT&E Programs

G O A

years

1921 - 1996

GAO/NSIAD-96-193BR

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272395 

September 4, 1996

Congressional Committees

We examined the Department of Defense’s (DOD) fiscal year 1997 budget

request and prior years’ appropriations for selected procurement and

research, development, test, and evaluation (RDT&E) programs. Our

objectives were to identify potential reductions in the fiscal year 1997

budget request and potential rescissions to prior years’ appropriations.

This report summarizes information provided to your staffs from April

through June 1996.

We identified opportunities to reduce fiscal year 1997 procurement and

RDT&E requests by $3.2 billion and to rescind prior years’ procurement and

RDT&E appropriations by about $454.9 million. These reductions and/or

rescissions can be made because schedules slipped, requirements

changed, and issues affecting program funding emerged since the budget

request was developed. The potential rescissions include about

$35.6 million in excess prior years’ appropriations for which obligational

authority expires on September 30, 1996. DOD has requested congressional

approval to reprogram some of these excess funds in its fiscal year 1996

omnibus reprogramming request and has identified some of these excess

funds for possible use to pay for Bosnia operations.

Procurement

Appropriations

As shown in table 1, we identified about $3 billion in potential reductions

to DOD’s fiscal year 1997 procurement budget requests and $451.1 million

in potential rescissions from DOD’s prior years’ procurement

appropriations.

Table 1: Potential Reductions and

Rescissions to Procurement Programs Dollars in millions

Potential fiscal

year 1997

reductions

Potential prior year

rescissions

Army $207.469 $159.485

Navy 2,302.955 256.330

Air Force 460.106 35.300

Defense-wide 15.200 0

Total $2,985.730 $451.115

Page 1 GAO/NSIAD-96-193BR 1997 Defense Budget
B-272395 

The potential rescissions from prior years’ procurement appropriations

include $416.9 million in excess fiscal year 1996 funds, about $2.4 million

in excess fiscal year 1995 funds, and $31.8 million in expiring excess fiscal

year 1994 funds.

Details regarding the potential reductions and rescissions for procurement

programs are provided in appendix I.

RDT&E

Appropriations

As shown in table 2, we identified $224.2 million in potential reductions to

DOD’s fiscal year 1997 RDT&E budget requests and about $3.8 million in

potential rescissions from DOD’s prior years’ RDT&E appropriations.

Table 2: Potential Reductions and

Rescissions to RDT&E Programs Dollars in millions

Potential fiscal

year 1997

reductions

Potential prior year

rescissions

Army $3.892 $0.142

Navy 19.698 0

Air Force 26.908 2.800

Defense-wide 173.724 0.821

Total $224.222 $3.763

All of the $3,763,000 in potential rescissions from prior years’ RDT&E

appropriations is from expiring excess fiscal year 1995 funds.

Details regarding the potential reductions and rescissions to RDT&E

programs are provided in appendix II.

Agency Comments Commenting orally on a draft of this report, DOD disagreed with virtually

all of the potential funding reductions and rescissions. In many instances,

DOD believed that the funds could be used for other requirements. We have

incorporated DOD’s comments on specific programs throughout the report

where appropriate.

Scope and

Methodology

To identify potential reductions and rescissions, we focused on

unobligated funds and funds on withhold in addition to program cost,

schedule, and performance issues. We examined expenditure documents

to determine whether requests were adequately justified and whether

Page 2 GAO/NSIAD-96-193BR 1997 Defense Budget
B-272395 

unobligated funds from prior appropriations should be retained. Appendix

III provides more information regarding our scope and methodology.

We are sending copies of this report to the Secretaries of Defense, the

Army, the Navy, and the Air Force and the Director, Office of Management

and Budget. We will also make copies available to others upon request.

This report was prepared under the direction of Louis J. Rodrigues,

Director, Defense Acquisitions Issues, who may be reached on

(202) 512-4841 if you or your staffs have any questions. Other major

contributors are listed in appendix V.

Henry L. Hinton, Jr.

Assistant Comptroller General

Page 3 GAO/NSIAD-96-193BR 1997 Defense Budget
B-272395 

List of Congressional Committees

The Honorable Strom Thurmond

Chairman

The Honorable Sam Nunn

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd D. Spence

Chairman

The Honorable Ronald V. Dellums

Ranking Minority Member

Committee on National Security

House of Representatives

The Honorable C. W. Bill Young

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on National Security

Committee on Appropriations

House of Representatives

Page 4 GAO/NSIAD-96-193BR 1997 Defense Budget
Page 5 GAO/NSIAD-96-193BR 1997 Defense Budget
Contents

Letter 1

Appendix I 

Potential Reductions

and Rescissions to

Procurement

Programs

10

Army Procurement Programs 10

Navy Procurement Programs 22

Air Force Procurement Programs 35

Defense-Wide Procurement Programs 46

Appendix II 

Potential Reductions

and Rescissions to

Research,

Development, Test,

and Evaluation

Programs

48

Army RDT&E Programs 48

Navy RDT&E Programs 49

Air Force RDT&E Programs 54

Defense-Wide RDT&E Programs 57

Appendix III 

Scope and

Methodology

62

Appendix IV 

Major Contributors to

This Report

63

Tables Table 1: Potential Reductions and Rescissions to Procurement

Programs

1

Table 2: Potential Reductions and Rescissions to RDT&E

Programs

2

Table I.1: Potential Reductions and Rescissions to Procurement

Programs

10

Table I.2: Potential Reductions and Rescissions to Army

Procurement Programs

11

Table I.3: Potential Reductions and Rescissions to Army Aircraft

Procurement Programs

11

Page 6 GAO/NSIAD-96-193BR 1997 Defense Budget
Contents

Table I.4: Potential Reductions to the Army Missile Procurement

Programs

15

Table I.5: Potential Rescission to Army Procurement of Weapons

and Tracked Combat Vehicles Programs

18

Table I.6: Potential Rescission to Army Procurement of

Ammunition Appropriation

18

Table I.7: Potential Reductions to Army Other Procurement

Programs

19

Table I.8: Potential Reductions and Rescissions to Navy

Procurement Programs

22

Table I.9: Potential Reductions and Rescission to Navy Aircraft

Procurement Programs

23

Table I.10: Potential Reductions and Rescission to Navy Weapons

Procurement Programs

25

Table I.11: Potential Reductions and Rescission to Navy

Shipbuilding and Conversion Programs

26

Table I.12: Potential Reductions and Rescissions to Navy Other

Procurement Programs

28

Table I.13: Potential Reduction to the Marine Corps Procurement

Programs

34

Table I.14: Potential Reductions and Rescissions to Air Force

Procurement Programs

35

Table I.15: Potential Reductions and Rescission to Air Force

Aircraft Procurement Programs

36

Table I.16: Potential Reductions and Rescissions to Air Force

Missile Procurement Programs

40

Table I.17: Potential Rescissions to Air Force Other Procurement

Programs

46

Table I.18: Potential Reduction to Defense-wide Procurement

Programs

47

Table II.1: Potential Reductions and Rescissions to RDT&E

Programs

48

Table II.2: Potential Reduction and Rescission to Army RDT&E

Programs

48

Table II.3: Potential Reductions to Navy RDT&E Programs 50

Table II.4: Potential Reductions and Rescission to Air Force

RDT&E Programs

55

Table II.5: Potential Reductions and Rescission to Defense-wide

RDT&E Programs

57

Page 7 GAO/NSIAD-96-193BR 1997 Defense Budget
Contents

Abbreviations

DOD Department of Defense

RDT&E research, development, test, and evaluation

Page 8 GAO/NSIAD-96-193BR 1997 Defense Budget
Page 9 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix I 

Potential Reductions and Rescissions to

Procurement Programs

The Department of Defense (DOD) requested $38.9 billion in procurement

funding for fiscal year 1997. As shown in table I.1, our review of selected

budget line items in the request and prior years’ appropriations identified

potential reductions of about $3 billion to fiscal year 1997 requests;

potential rescissions of about $416.9 million and $2.4 million from fiscal

year 1996 and 1995 appropriations, respectively; and $31.8 million in

potential rescissions from expiring fiscal year 1994 appropriations.

Table I.1: Potential Reductions and Rescissions to Procurement Programs

Fiscal year 1997 Potential rescission

Dollars in millions

Requesta

Potential

reduction

Fiscal year

1996

Fiscal year

1995

Fiscal year

1994

Army $1,124.292 $207.469 $152.000 $2.385 $5.100

Navy 2,907.970 2,302.955 256.330 0 0

Air Force 2,486.223 460.106 8.600 0 26.700

Defense-wide 86.677 15.200 0 0 0

Total $6,605.162 $2,985.730 $416.930 $2.385 $31.800

aThis is the amount requested for budget line items for which we have identified a potential

reduction and/or rescission.

Army Procurement

Programs

The Army requested $6.3 billion for procurement programs in fiscal year

1997. As shown in table I.2, we identified potential reductions of about

$207.5 million to the fiscal year 1997 request and potential rescissions of

$152 million, about $2.4 million, and $5.1 million from fiscal year 1996,

1995, and 1994 appropriations, respectively.

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Potential Reductions and Rescissions to

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Table I.2: Potential Reductions and Rescissions to Army Procurement Programs

Fiscal year 1997 Potential rescission

Dollars in millions

Procurement appropriation Requesta

Potential

reduction

Fiscal year

1996

Fiscal year

1995

Fiscal year

1994

Aircraft $617.947 $46.031 $2.600 $2.385 $5.100

Missile 186.547 39.786 0 0 0

Weapons and Tracked Combat Vehicles 0 0 142.800 0 0

Ammunition 0 0 6.600 0 0

Other 319.798 121.652 0 0 0

Total $1,124.292 $207.469 $152.000 $2.385 $5.100

aThis is the amount requested for budget line items for which we have identified a potential

reduction and/or rescission.

Aircraft Procurement,

Army

The Army requested $970.8 million for aircraft procurement programs in

fiscal year 1997. As shown in table I.3, we identified potential reductions of

$46 million to the fiscal year 1997 request and potential rescissions of

$2.6 million, about $2.4 million, and $5.1 million from fiscal year 1996,

1995, and 1994 appropriations, respectively.

Table I.3: Potential Reductions and Rescissions to Army Aircraft Procurement Programs

Fiscal year 1997 Potential rescission

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Fiscal year

1996

Fiscal year

1995

Fiscal year

1994

6 UH-60 Blackhawk (Multiyear Procurement) $161.279 $0.824 0 0 0

11 AH-64 Modifications 43.287 6.241 0 0 0

14 OH-58 Modifications 1.147 0.374 0 0 0

16 Longbow 356.957 10.731 0 0 0

20 Kiowa Warrior 9.115 9.115 $2.600 $2.385 0

21 EH-60 Quickfix Modifications 13.912 13.912 0 0 0

29 Training Devices 7.339 0.934 0 0 0

30 Common Ground Equipment 24.911 3.900 0 0 0

UH-1 Huey Service Life Extension Program 0 0 0 0 $5.100

Total $617.947 $46.031 $2.600 $2.385 $5.100

Page 11 GAO/NSIAD-96-193BR 1997 Defense Budget
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Potential Reductions and Rescissions to

Procurement Programs

UH-60 Blackhawk

(Multiyear Procurement)

(Line 6)

The Army’s fiscal year 1997 request of $161.3 million for UH-60 Blackhawk

helicopters can be reduced by $824,000 because an equivalent amount of

excess fiscal year 1995 funds are available to meet fiscal year 1997

requirements. At the beginning of fiscal year 1996, the Army had

$15.3 million in unobligated fiscal year 1995 UH-60 Blackhawk

procurement funds. Through April 30, 1996, the Army had obligated

$645,000, or 4 percent of the amount, leaving an unobligated balance of

$14.7 million. We asked Army program management officials to provide us

specific information on when and how these funds would be used, but

they did not provide us the requested information. Because the Army had

not provided adequate justification for retaining these funds, we initially

concluded that the unobligated $14.7 million could be used to offset the

fiscal year 1997 request.

DOD commented that all but $50,000 of the fiscal year 1995 funds had been

obligated; however, the Army’s latest financial report dated August 1, 1996,

shows that the Army has not obligated $824,000. We believe, therefore,

that these funds can be used to offset the fiscal year 1997 request.

AH-64 Modifications (Line 11) The Army’s fiscal year 1997 request of $43.3 million for AH-64

modifications can be reduced by $6.2 million because an equivalent

amount of excess fiscal year 1996 funds is available to meet program

requirements. DOD is withholding these funds pending reprogramming

action. Program officials said that the program was disrupted by DOD

withholding the fiscal year 1996 funds.

DOD commented that our proposed reduction would adversely affect

planned procurements and upgrades and that it had already requested

approval to reprogram $5 million of the $6.2 million. Nevertheless, since

these funds will not be used for AH-64 modifications in fiscal year 1996,

any funds not already approved for reprogramming can instead be used to

offset fiscal year 1997 requirements.

OH-58 Modifications (Line 14) The Army’s fiscal year 1997 request of $1.1 million for OH-58 modifications

can be reduced by $374,000 because an equivalent amount of unobligated

excess fiscal year 1996 funds is available to meet these requirements. The

Army submitted budgets containing $400,000 in fiscal year 1995 and

$1.4 million in fiscal year 1996 for OH-58 safety and sustainment

modifications, even though it did not have requirements for such

modifications.

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Potential Reductions and Rescissions to

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A program official said that these funds were requested to allow for

contingencies. He added that DOD encouraged such budgeting to keep the

line open and that he did not believe that program funding should be

reduced or rescinded because the funds could be used for other purposes.

Nevertheless, the Army requested the funds for OH-58 safety and

sustainment modifications in fiscal years 1995 and 1996 and they are not

needed for that purpose. Therefore, we believe the unobligated amount

can be used to offset the fiscal year 1997 request.

DOD commented that most of the funds from the prior years had been

obligated. However, according to the Army’s latest financial report dated

August 1, 1996, the Army had not obligated $374,000. We believe,

therefore, that amount can be used to offset the fiscal year 1997 request.

Longbow (Line 16) The Army’s fiscal year 1997 request of $357 million for Longbow can be

reduced by $10.7 million because an equivalent amount of excess fiscal

year 1996 funds is available to meet program requirements if they are not

reprogrammed for Bosnia. This amount is excess because DOD withheld

the $10.7 million from the fiscal year 1996 appropriation to pay for Bosnia

operations.

Program officials said that the fiscal year 1996 withholds are contributing

to difficulties in procuring the quantities planned for the year. However,

since DOD does not plan to release these funds for Longbow production in

fiscal year 1996, they can be used to offset fiscal year 1997 requirements.

DOD did not agree with the reduction because the funds have been

identified for possible use for Bosnia.

Kiowa Warrior (Line 20) The Army’s fiscal year 1997 request of $9.1 million can be denied because

prior years’ funds are available to meet fiscal year 1997 requirements, and

$2.4 million and $2.6 million can be rescinded from fiscal year 1996 and

1995 appropriations, respectively. Fiscal year 1995 and 1996 funds are

excess to program requirements because contract costs are less than

amounts budgeted by the program office.

The Army has about $11.5 million in excess fiscal year 1995 funds and

$2.6 million in excess fiscal year 1996 funds. The fiscal year 1995 funds are

excess because (1) definitized lot 12 contract costs for the remanufacture

of the mast mounted sight were $7.2 million less than the program office

had budgeted for the follow-on lot 12 remanufacturing effort, (2) the

definitized contract for the lot 12 remanufactured airframes was

$3.1 million less than what was budgeted, and (3) the definitized lot 4

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Potential Reductions and Rescissions to

Procurement Programs

contract cost for the retrofit program was $1.2 million less than budgeted.

The $2.6 million in excess fiscal year 1996 funds can be rescinded because

the amount budgeted for the lot 5 retrofit program was greater than the

not-to-exceed lot 5 contract amount. DOD did not agree with the reduction

or rescissions but did not provide new information or further rationale for

its position.

EH-60 Quickfix Modifications

(Line 21)

The Army’s fiscal year 1997 request of $13.9 million to upgrade one EH-60

Quickfix helicopter into the Intelligence Electronic Warfare Common

Sensor Advanced Quickfix configuration can be denied. The Army justified

this request as a low-rate initial production unit for the initial operational

test and evaluation scheduled in September 1997. According to the Army’s

justification, the upgraded system will also support an approved

Operational Requirements Document for contingency forces.

According to the current delivery schedule, the upgraded system, to be

procured in fiscal year 1997, would not be available for scheduled

operational testing. Further, although procurement of an upgraded system

may also support an operational requirement, this is not a justification for

the purchase of additional systems prior to operational testing.

DOD commented that the subsystems for the system will be available in

time for the operational testing. However, Army test plans did not indicate

any need for additional subsystems for the operational tests. Moreover, the

Army requested funding to procure a complete system for the operational

tests and the complete system will not be available in time for the

operational tests. Therefore, we continue to believe that the fiscal year

1997 request can be denied.

Training Devices (Line 29) The Army’s fiscal year 1997 request of $7.3 million for training devices can

be reduced by $934,000 because an equivalent amount of fiscal year 1996

funds is available to meet program requirements. DOD is withholding these

funds and plans to reprogram them for Bosnia operations. Project officials

are concerned that the fiscal year 1997 budget request might be reduced

without the fiscal year 1996 withholds being restored to the program.

However, since these funds will not be used for training devices in fiscal

year 1996, we believe they can be used to offset the fiscal year 1997

request if they are not reprogrammed for Bosnia. DOD did not agree with

the reduction because the funds have been identified for possible use for

Bosnia.

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Potential Reductions and Rescissions to

Procurement Programs

Common Ground Equipment

(Line 30)

The Army’s fiscal year 1997 request of $24.9 million for common ground

equipment can be reduced by $3.9 million because an equivalent amount

of excess fiscal year 1996 funds is available to meet program requirements.

The program office has identified these funds as excess to its fiscal year

1996 airfield support equipment needs due to program delays.

Program officials attempted to return these funds to DOD for inclusion in

the fiscal year 1996 omnibus reprogramming request, but they were not

included. Currently, they are attempting to have these funds

reprogrammed to the Air Traffic Navigation, Integration and Coordination

System. These funds, according to a program official, are necessary for

further development of this system in fiscal year 1997. However, since

these funds will not be used for air traffic control in fiscal year 1996, we

believe they can be used to offset the fiscal year 1997 budget request.

UH-1 Huey Service Life

Extension Program

The Army’s fiscal year 1994 appropriation of $5.1 million for the UH-1

Huey service life extension program can be rescinded because the Army

does not plan to modify the Huey. In fiscal year 1994, Congress provided

$15 million for this effort. The Army conducted a study of the viability of

extending the UH-1’s service life and concluded that there was no need for

such a program. The Army reprogrammed $9.9 million of the $15-million

appropriation to the Kiowa aircraft program and planned to reprogram the

remaining $5.1 million for the Javelin missile. However, the $5.1-million

reprogramming action was not approved and DOD has withheld the

funding. The $5.1 million in excess fiscal year 1994 funds will expire if not

obligated by September 30, 1996, and, therefore, is available for

reprogramming or rescission during the remainder of fiscal year 1996.

Missile Procurement, Army The Army requested $766.3 million for missile procurement programs in

fiscal year 1997. As shown in table I.4, we identified potential reductions of

about $39.8 million to the fiscal year 1997 request. We did not identify any

potential rescissions from prior years’ appropriations.

Table I.4: Potential Reductions to the

Army Missile Procurement Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

5 Javelin $162.104 $20.000

7 Multiple Launch Rocket System 24.443 19.786

Total $186.547 $39.786

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Potential Reductions and Rescissions to

Procurement Programs

Javelin System (Line 5) The Army’s fiscal year 1997 request of $162.1 million for Javelin can be

reduced by $20 million if the Army modifies its third low-rate initial

production contract to purchase fewer command launch units and missiles

in fiscal year 1996 and uses the fiscal year 1996 funding allocated for these

command launch units and missiles to offset the 1997 request. In addition,

Congress may want to consider restricting the Javelin 1997 appropriation

until the Army conducts additional operational tests that prove the

redesigned Javelin is operationally suitable.

The Army is redesigning the command launch unit to reduce production

and logistics costs and plans to begin replacing all 277 low-rate initial

production units within 3 years after the first unit is equipped. To minimize

replacement costs, the Army could reduce the number of command launch

units to be purchased in the third low-rate initial production contract from

125 to 36 units and still sustain the production line. Program office

officials said reducing the number of launch units to 36 would decrease

the cost of the contract by $18.5 million. Additionally, because of problems

with the missile rounds, the Army could reduce the number of missile

rounds to be purchased in the third low-rate initial production contract

from 1,010 to 960, and still produce the rounds at the contractor’s

minimum sustaining rate of 80 rounds per month. According to the Chief

of Javelin’s Cost Branch, reducing the number of rounds to be purchased

to 960 would decrease the contract cost by about $1.5 million. In addition,

the reduction should help ensure that problems are identified and

corrected before procuring additional rounds.

The Army does not agree that the number of command launch units to be

purchased should be reduced to the contractor’s minimum sustaining level

of production. Army officials said that purchasing fewer launch units will

increase the per unit cost of the remaining units because the contractor

has already purchased materials and incurred costs in anticipation of

production. They said, however, that the contractor could use the

materials that are common to the redesigned unit in those units once their

production begins, which would reduce the costs of those future units.

Another reason given by the Army officials for not reducing the purchase

quantity was that it will impact system fielding. But, the Army has already

decided to postpone the purchase of 17 command launch units and a

project office official said the purchase of another 12 units may be

postponed. According to the Army officials, even if production is reduced,

the minimum sustaining level of production that will allow the command

launch unit contractor to proceed to full-rate production in fiscal year

1997, as currently planned, is 72 launch units. But, in our opinion, the

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Potential Reductions and Rescissions to

Procurement Programs

Javelin is not ready for full-rate production because the Army is

redesigning many system components and has not adequately tested the

redesigned system to determine if it is suitable for combat. Operational

testing is needed to ensure that the system’s reliability and performance in

an operational environment will meet the user’s requirements.

DOD did not agree with the reduction but did not provide new information

or further rationale for its position.

Multiple Launch Rocket System

(Line 7)

The Army’s fiscal year 1997 request of $24.4 million for the Multiple

Launch Rocket System can be reduced by $19.8 million (the amount

requested to procure hardware for a second low-rate production of 

852 extended range rockets) because recent testing revealed the rocket’s

grenade submunition does not meet performance requirements.

Additionally, the Army may want to consider postponing the planned

August 1996 low-rate initial production contract award for 1,326 extended

range rockets until the grenade submunition meets performance

requirements.

The grenade submunition has not consistently met its requirement of less

than 1 percent hazardous duds.1

 During preproduction qualification testing

from January to April 1996 on over 1,500 submunitions, the submunition

demonstrated a hazardous dud rate of 2.63 percent. Design verification

testing of planned corrections to the submunition will not occur until April

through June 1997. Program office officials maintain that award of a

low-rate production contract for extended range rockets is necessary in

fiscal year 1996 to avoid a production break during the transition from

basic rockets to extended range rockets.

DOD did not agree with the reduction and our suggestion to postpone

award of the low-rate initial production contract stating that (1) the causes

of the submunition problem have been identified and benchmarks have

been incorporated in the planned verification testing and (2) a delay of the

August 1996 low-rate initial production award would shut down the rocket

production line and result in $67 million in additional costs. However,

production schedules indicate that, even if the low-rate production

contract is awarded in fiscal year 1996, there will be no rocket deliveries in

October and November 1997. Moreover, any costs associated with a

production break or a decision to enter low-rate initial production should

be balanced against the costs of procuring an unproven weapon system.

Therefore, we continue to believe the reduction is warranted.

1

A hazardous dud is one that does not explode or disarm itself within 3 minutes of impact.

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Potential Reductions and Rescissions to

Procurement Programs

Procurement of Weapons

and Tracked Combat

Vehicles, Army

The Army requested $1.1 billion for weapons and tracked combat vehicles

procurement programs in fiscal year 1997. We did not identify any

potential reductions to the fiscal year 1997 request. However, as shown in

table I.5, we identified a potential rescission of $142.8 million from the

fiscal year 1996 appropriation for one item.

Table I.5: Potential Rescission to Army

Procurement of Weapons and Tracked

Combat Vehicles Programs

Dollars in millions

Line

no. Line item description

Potential rescission

(fiscal year 1996)

8 Armored Gun Systema $142.800

Total $142.800

aThe Army did not request fiscal year 1997 funding for this item.

Armored Gun System (Line 8) Unless Congress approves DOD’s reprogramming requests, the Army’s

fiscal year 1996 appropriation of $142.8 million for the Armored Gun

System can be rescinded because the program is being terminated. The

Army had planned to procure 26 low-rate initial production vehicles with

this funding but with the program’s termination, the funds will no longer

be required for this purpose. Termination liability will be funded from

research and development appropriations because the program is

currently under an engineering and manufacturing development contract.

Army project management officials agreed that the procurement funds are

no longer needed for the gun. DOD did not agree with the rescission

because it indicated that it included $105 million of the excess fiscal year

1996 funds in its fiscal year 1996 omnibus reprogramming request and the

remaining $37.8 million in the Task Force XXI reprogramming request.

Procurement of

Ammunition, Army

The Army requested $853.4 million for ammunition procurement programs

in fiscal year 1997. We did not identify any potential reductions to the

fiscal year 1997 request. However, as shown in table I.6, we identified a

potential rescission of $6.6 million from the fiscal year 1996 appropriation

for one item.

Table I.6: Potential Rescission to Army

Procurement of Ammunition

Appropriation

Dollars in millions

Line

no. Line item description

Potential rescission

(fiscal year 1996)

11 81-mm Practice 1/10 Range M880 Mortar Cartridgea $6.600

Total $6.600

aThe Army did not request fiscal year 1997 funding for this item.

Page 18 GAO/NSIAD-96-193BR 1997 Defense Budget
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Potential Reductions and Rescissions to

Procurement Programs

81-mm Practice 1/10 Range

M880 Mortar Cartridge 

(Line 11)

The Army’s fiscal year 1996 appropriation of $6.6 million for 81-mm M880

practice mortar cartridges can be rescinded because the Army does not

plan to purchase the cartridges. The Office of the Secretary of Defense is

withholding the funds because the Army does not have a requirement for

the cartridges. Army officials agreed that the $6.6 million is excess to fiscal

year 1996 requirements and can be rescinded.

Other Procurement, Army The Army requested $2.6 billion for other procurement programs in fiscal

year 1997. As shown in table I.7, we identified potential reductions of

about $121.7 million to the fiscal year 1997 request. We did not identify any

potential rescissions from prior years’ appropriations.

Table I.7: Potential Reductions to Army

Other Procurement Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

6 Family of Heavy Tactical Vehicles $163.343 $2.141

7 Armored Security Vehicles (Combat Support) 9.240 0.285

55 Intelligence Electronic Warfare - Ground Based

Common Sensors (TIARA) 47.091 47.091

57 Joint STARS (TIARA) 85.428 69.135

147 Modification of In-Service Equipment 14.696 3.000

Total $319.798 $121.652

Family of Heavy Tactical

Vehicles (Line 6)

The Army’s fiscal year 1997 request of $163.3 million for the Family of

Heavy Tactical Vehicles can be reduced by $2.1 million because fiscal year

1997 requirements are overstated by $522,000 and $1.6 million in excess

fiscal year 1996 funds is available to meet fiscal year 1997 program

requirements.

The Army’s fiscal year 1997 request for the Heavy Equipment Transporter

System included $1.7 million for government testing, engineering support,

and documentation. However, the Army overstated testing and

engineering support requirements by $24,000 and $114,000, respectively,

and could not support its $384,000 estimate for documentation. Therefore,

the fiscal year 1997 budget request for the Family of Heavy Tactical

Vehicles can be reduced by $522,000.

The Army’s fiscal year 1996 budget request for the Palletized Load

System—trucks, trailers, and flat racks—included $43.7 million to buy 

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179 trucks; however, the Army bought only 173 trucks for $1.5 million less

than budgeted. Similarly, the Army’s fiscal year 1996 budget request for the

Heavy Equipment Transporter System included $667,000 for engineering

support; however, this requirement was overstated by $119,000. The

$1.6 million in excess fiscal year 1996 funds can be used to offset the fiscal

year 1997 request for the Family of Heavy Tactical Vehicles.

Armored Security Vehicles

(Combat Support) (Line 7)

The Army’s fiscal year 1997 request of $9.2 million for Armored Security

Vehicles can be reduced by $285,000 because the Army overestimated

fiscal year 1997 program requirements. The Army incorrectly applied

inflation adjustments and, as a result, overestimated fiscal year 1997

program requirements by $285,000. Therefore, the fiscal year 1997 budget

request can be reduced by $285,000.

Intelligence Electronic

Warfare-Ground Based

Common Sensors (TIARA) 

(Line 55)

The Army’s fiscal year 1997 request of $47.1 million for full-rate production

of six Ground Based Common Sensors can be denied because the system

has not successfully completed initial operational test and evaluation. Two

preliminary operational tests of this system—called customer

tests—conducted by the Army in July 1994 and September 1995 for a

low-rate initial production decision revealed that the system was effective.

However, these tests also revealed that the system would work only

occasionally, in the right conditions. According to the project manager,

planned initial operational test and evaluation and not the customer tests

will be used to support a full-rate production decision. Committing a

system to production without successful completion of initial operational

testing can result, as we have previously reported, in the system later

having significant problems with operational effectiveness and/or

suitability, often requiring major design changes and costly retrofits and

sometimes resulting in deployment of substandard systems to combat

forces. Therefore, we believe the fiscal year 1997 request can be denied

until the system successfully completes initial operational test and

evaluation.

DOD commented that the Army will not commit to full-rate production

before completion of initial operational test and evaluation, scheduled for

September 1996. However, the Army has not established key performance

parameters for the minimum acceptable performance levels, and DOD

believes that the Army should establish such parameters before

conducting the final initial operational test and evaluation. Therefore, we

continue to believe the reduction is warranted for the reasons stated

above.

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Joint Stars (TIARA) 

(Line 57)

The Army’s fiscal year 1997 request of $85.4 million for Joint STARS can be

reduced by $69.1 million if the Army commits to only 1 system now and if

it does not acquire the remaining 15 systems until operational testing is

completed. The Army plans to start operational test and evaluation on the

Common Ground Stations systems in fiscal year 1998. It has already

contracted for more systems than are needed to conduct those tests

without acquiring an additional 15 systems in fiscal year 1997.

DOD believes that because the Common Ground System has the same

functional baseline as the Ground Station Module and, therefore, is not an

immature system, operational tests should pose few problems. Our

concern with DOD’s approach is that the Ground Station Module passed

only 1 of 12 performance related criteria during developmental tests in

1994 and 1995. Moreover, the Common Ground Station operational testing

is not scheduled to occur until fiscal year 1998. The risks of systems

starting production before operational tests are conducted include

reliability that is significantly less than expectations and systems that

(1) cannot meet current specifications and/or (2) require significant and

expensive post fielding repairs for faults identified during operational

testing. Furthermore, by delaying procurement of the 15 systems until

fiscal years 1998 and 1999, contract costs could be reduced by over

$5 million because unit prices of these systems will be lower in the future.

DOD commented that (1) the Ground Station Module passed all critical

operational issues during a multiservice operational test and (2) limiting

the low-rate initial production quantities to those needed for testing would

cause a break in production, thereby offsetting any savings we identified.

We determined, however, that (1) ground targeting, one of four critical

operational issues, was not tested during the multiservice operational test;

(2) DOD’s Office of the Director of Operational Test and Evaluation has not

yet made a final determination on the efficacy of the Ground Station

Module; and (3) the Army has not evaluated the effects of our proposal on

production. Therefore, we continue to believe the reduction is warranted.

Modification of In-Service

Equipment (Line 147)

The Army’s fiscal year 1995 request of $14.7 million for modification of

in-service equipment can be reduced by $3 million because excess fiscal

year 1995 funds are available to meet fiscal year 1997 program needs. The

Department of the Army is withholding these funds because of a problem

with the Logistics Support Vehicle. The Army plans to reprogram these

funds for some other purpose, but a program official said that, as of May 8,

1996, these funds remained unobligated and would not be available for the

vehicle. Since the Army does not plan to use these funds for the Logistics

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Support Vehicle in fiscal year 1996, they can be used to offset fiscal year

1997 program needs. Program officials said that as of June 7, 1996, the

requirement for the vehicle was still valid and will have to be funded in the

future.

Navy Procurement

Programs

The Navy requested $15.4 billion for procurement programs for itself and

the Marine Corps in fiscal year 1997. As shown in table I.8, we identified

potential reductions of $2.3 billion to the fiscal year 1997 request and

potential rescissions of $256.3 million from fiscal year 1996 appropriations.

Table I.8: Potential Reductions and

Rescissions to Navy Procurement

Programs Fiscal year 1997

Dollars in millions

Procurement appropriation Requesta

Potential

reduction

Potential rescission

(fiscal year 1996)

Aircraft $2,487.862 $2,174.249 $229.715

Weapons 37.852 5.568 3.500

Shipbuilding and Conversion 151.655 74.000 16.400

Other 224.549 46.538 6.715

Marine Corps 6.052 2.600 0

Total $2,907.970 $2,302.955 $256.330

aThis is the amount requested for budget line items for which we have identified a potential

reduction and/or rescission.

Aircraft Procurement,

Navy

The Navy requested $5.9 billion for aircraft procurement programs in fiscal

year 1997. As shown in table I.9, we identified potential reductions of

about $2.2 billion to the fiscal year 1997 request and potential rescissions

of $229.7 million from fiscal year 1996 appropriations.

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Table I.9: Potential Reductions and

Rescission to Navy Aircraft

Procurement Programs Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1996)

5 F/A-18E/F (Fighter) Hornet $1,859.856 $1,859.856 0

6 F/A-18E/F (Fighter) Hornet

Advance Procurement 294.867 294.867 $229.715

45 Common Electronic

Countermeasures Equipment 20.069 12.026 0

48 Common Ground Equipment 313.070 7.500 0

Total $2,487.862 $2,174.249 $229.715

F/A-18E/F (Fighter) Hornet

(Line 5)

The Navy’s fiscal year 1997 request of $1.9 billion for the F/A-18E/F aircraft

can be denied if, as we have suggested, Congress does not authorize the

production of the aircraft. The Navy justified the need for the F/A-18E/F in

three key areas where the F/A-18C/D aircraft was expected to be deficient:

range, carrier recovery payload, and survivability. However, operational

deficiencies in the F/A-18C/Ds either have not materialized as projected or

can be corrected with nonstructural changes to the F/A-18C/D.

Furthermore, F/A-18E/F operational capabilities will only be marginally

improved over the F/A-18C/D. While the F/A-18E/F will have increased

range over the F/A-18C/D due to the F/A-18E/F’s larger fuel capacity, the

F/A-18C/D’s range in the high altitude mission profile that the F-18s are

expected to fly will exceed the range required by the F/A-18E/F’s system

specifications. Also, the F/A-18E/F’s range increase is achieved at the

expense of its combat performance—it will have less combat capability in

its sustained turn rate, maneuvering, and acceleration than F/A-18C/Ds

with its enhanced performance engines. Although improvements are

planned to increase the F/A-18E/F’s survivability in combat, the need for

the aircraft was not justified on the basis to counter threats that could not

be met with existing or improved F/A-18C/Ds; also, the effectiveness of the

stealth improvements planned for the F/A-18E/F is questionable. Further,

the Navy’s $44 million (fiscal year 1996 dollars) unit recurring flyaway cost

estimate for the F/A-18E/F is understated. We have, therefore, concluded

that procuring the new F/A-18E/F aircraft is not the most cost-effective

approach to modernizing the Navy’s tactical aircraft fleet.2

DOD commented that it had determined that the F/A-18E/F offered better

capability than the earlier F/A-18C/D in many areas. However, DOD did not

2

Navy Aviation: F/A-18E/F Will Provide Marginal Operational Improvement at High Cost

(GAO/NSIAD-96-98, June 18, 1996).

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provide new information or further rationale for its position. Therefore,

we have not changed our position.

F/A-18E/F (Fighter) Hornet

Advance Procurement (Line 6)

The Navy’s fiscal year 1997 request of $294.9 million for F/A-18E/F advance

procurement can be denied and the $229.7 million fiscal year 1996

appropriation can be rescinded if Congress does not authorize F/A-18E/F

production. We have advised the congressional defense committees that

we have concluded that procuring the new F/A-18E/F aircraft is not the

most cost-effective approach to modernizing the Navy’s tactical aircraft

fleet. Given the cost and marginal improvements in operational

capabilities that the F/A-18E/F would provide, we have recommended that

the Secretary of Defense reconsider the decision to produce the F/A-18E/F

aircraft and, instead, consider procuring additional F/A-18C/Ds. DOD

disagreed with these proposed reductions and rescissions for the same

reasons as indicated in the above section on the F/A-18E/F (line 5) and our

rejoinder to DOD’s comment is the same.

Common Electronic

Countermeasures Equipment

(Line 45)

The Navy’s fiscal year 1997 request of $20.1 million for common electronic

countermeasures equipment can be reduced by $12 million. These funds,

requested for the AIR-67(V)3 radar warning receiver, are not needed

because fiscal year 1996 funds are available to initiate low-rate production,

if DOD certifies the AIR-67(V)3 to be potentially operationally effective and

suitable as required by Congress. In fiscal year 1996, funds to initiate the

procurement of the radar warning receiver were included in the F/A-18C/D

program. However, due to continued schedule slippage, operational

testing is not scheduled to be completed until the second quarter of fiscal

year 1997.

DOD commented that the funds will be needed to complete development

and testing prior to the low-rate initial production decision in fiscal year

1998. We continue to believe the reduction is warranted because the Navy

no longer needs the funds to initiate low-rate initial production in fiscal

year 1996.

Common Ground Equipment

(Line 48)

The Navy’s fiscal year 1997 request of $313.1 million for common ground

equipment can be reduced by $7.5 million because the Navy Comptroller is

withholding $7.5 million in excess fiscal year 1996 funds that can be used

to offset fiscal year 1997 program requirements. According to the Navy

Comptroller’s office, the excess funds are required in fiscal year 1997 and

the President’s budget reflected use of these funds to support fiscal year

1997 requirements. However, we could not verify the accuracy of the

Navy’s position because the Navy did not provide data to support its

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position. Therefore, unless the Navy can demonstrate that it offset its

fiscal year 1997 budget requirements by the $7.5 million in excess fiscal

year 1996 funds, the Navy’s fiscal year 1997 request should be reduced by

that amount.

DOD did not agree with the reduction and provided documentation that the

funds could be used in fiscal year 1996 if they are released by the Navy.

Pending release of the funds, we continue to believe the funds can be used

to offset fiscal year 1997 requirements.

Weapons Procurement,

Navy

The Navy requested $1.4 billion for weapons procurement programs in

fiscal year 1997. As shown in table I.10, we identified potential reductions

of about $5.6 million to the fiscal year 1997 request and a potential

rescission of $3.5 million from the fiscal year 1996 appropriation.

Table I.10: Potential Reductions and

Rescission to Navy Weapons

Procurement Programs Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1996)

6 Advanced Medium Range

Air-to-Air Missile $36.091 $3.807 0

24 MK-46 Torpedo Modifications 1.761 1.761 $3.500

Total $37.852 $5.568 $3.500

Advanced Medium Range

Air-to-Air Missile (Line 6)

The Navy’s fiscal year 1997 request of $36.1 million for the Advanced

Medium Range Air-to-Air Missile can be reduced by $3.8 million because

excess fiscal year 1996 funds are available to meet fiscal year 1997

program requirements. Excess funds are available because the fiscal year

1996 contract was negotiated at $3.8 million less than expected. A Navy

official said that the Navy Comptroller did not release fiscal year 1996

appropriated funds identified as savings from the fiscal year 1996 contract

award. According to the official, the funds are being held to offset fiscal

year 1997 requirements. However, our analysis of the budget did not reveal

unfunded requirements or shortfalls. DOD did not agree with the reduction

but provided no new information or further rationale to support its

position.

MK-46 Torpedo Modifications

(Line 24)

The Navy’s fiscal year 1997 request of $1.8 million for MK-46 torpedo

modifications can be denied, and $3.5 million in the fiscal year 1996

appropriation can be rescinded if this program is terminated. Of the

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$3.5 million, about $2 million is currently unobligated, and the remaining

$1.5 million has been deferred by the Navy Comptroller. The Navy’s

upgrade programs should be terminated because (1) they will only

marginally improve existing torpedoes’ performance and (2) the Navy is

developing a new Hybrid lightweight torpedo that is supposed to

accomplish the same littoral warfare objectives as the upgrade effort.

Our recent classified report on Navy torpedo programs points out that the

Navy is upgrading its existing lightweight torpedoes—the MK-46 and the

MK-50 Block II—to improve their performance against diesel submarines

in shallow, littoral waters. Operational performance tests have not yet

been done for either upgraded torpedo. Without such tests, the Navy will

not know whether the upgrades will improve the torpedoes’ effectiveness.

However, the Navy’s simulation analyses show that the upgrades would

only marginally improve effectiveness. Additionally, the Navy is

developing a new Hybrid lightweight torpedo to improve its capability

against diesel submarines in shallow, littoral waters.

DOD did not agree that the program should be terminated and stated that

the MK-46 upgrade provides a cost-effective means to achieve an interim

capability for shallow-water antisubmarine warfare prior to the

introduction of the Hybrid lightweight torpedo. We continue to believe the

reduction is warranted given (1) the lack of operational test data and

(2) the expected capability of the new Hybrid lightweight torpedo.

Shipbuilding and

Conversion, Navy

The Navy requested $4.9 billion for shipbuilding and conversion programs

in fiscal year 1997. As shown in table I.11, we identified potential

reductions of $74 million to the fiscal year 1997 request and a potential

rescission of $16.4 million from the fiscal year 1996 appropriation.

Table I.11: Potential Reductions and

Rescission to Navy Shipbuilding and

Conversion Programs Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1996)

13 AE(C) $59.665 $30.000 0

15 Service Craft 0 0 $16.400

16 Outfitting 91.990 44.000 0

Total $151.655 $74.000 $16.400

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AE(C) (Line 13) The Navy’s fiscal year 1997 request of $59.7 million for conversion of

Kilauea Class/Suribachi Class ships can be reduced by $30 million because

an equivalent amount of excess fiscal year 1996 funds are available to meet

these requirements. These funds are available because contracts were to

have been awarded in March and April 1996 for the conversion of two of

seven ships that have to be converted by the end of fiscal year 1998.

However, as of May 1996, the Navy Comptroller was withholding these

funds from this program for potential reprogramming for Bosnia;

therefore, it does not appear likely that the contracts will be awarded.

Concomitantly, the Navy has requested $59.7 million for this conversion

program for fiscal year 1997.

DOD did not agree with the reduction stating that the funds will now be

used for fiscal year 1996 conversion efforts. However, it did not provide

documentation to support the spending plans. Unless the Navy can

demonstrate a fiscal year 1996 need for these funds, we believe the funds

can be used to offset the fiscal year 1997 request.

Service Craft (Line 15) If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1996 appropriation of $16.4 million for service craft can be

rescinded because the funds are no longer needed for the purpose for

which they were provided. The Navy Comptroller has placed the

$16.4 million on hold pending reprogramming action. Since the Navy does

not plan to use the $16.4 million for service craft in fiscal year 1996 and did

not request fiscal year 1997 funding for this item, the excess fiscal year

1996 funds can be rescinded. DOD included the $16.4 million in its fiscal

year 1996 omnibus reprogramming request.

Outfitting (Line 16) The Navy’s fiscal year 1997 request of $92 million for outfitting can be

reduced by $44 million because the Navy Comptroller is withholding

$44 million in excess fiscal year 1996 funds that can be used to meet fiscal

year 1997 program requirements. According to the Navy Comptroller’s

office, these excess funds are required in fiscal year 1997 and the

President’s budget reflected use of these funds to support fiscal year 1997

requirements. However, we could not verify the accuracy of the Navy’s

position because the Navy did not provide data to support its position.

Therefore, unless the Navy can demonstrate that it offset its fiscal year

1997 budget requirements by the $44 million in excess fiscal year 1996

funds, the Navy’s fiscal year 1997 request should be reduced by that

amount. DOD did not agree with the reduction but did not provide new

information or further rationale for its position.

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Other Procurement, Navy The Navy requested $2.7 billion for other procurement programs in fiscal

year 1997. As shown in table I.12, we identified potential reductions of

$46.5 million to the fiscal year 1997 request and potential rescissions of

$6.7 million from fiscal year 1996 appropriations.

Table I.12: Potential Reductions and

Rescissions to Navy Other

Procurement Programs Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1996)

2 Allison 501K Gas Turbine $3.445 $3.033 0

4 Other Propulsion Equipment 7.922 6.080 0

5 Other Generators 0.588 0.588 $0.912

25 Hull, Mechanical, and

Electrical Items Under $2

Million 35.545 5.141 0

34 Standard Boats 4.576 4.576 1.337

44 MK-23 Target Acquisition

System 1.347 1.347 1.551

49 SSN Acoustics 44.134 12.463 0

54 Surface Ship Torpedo Defense 5.701 5.101 0

60 AN/SLQ-32 6.358 1.000 0

77 Enhanced Modular Signal

Processor Multiyear

Procurement 0 0 1.060

94 TADIX-B 4.243 2.365 0

109 Submarine Communication

Equipment 29.430 1.200 0

145 Harpoon Support Equipment 0.097 0.097 1.855

151 Rolling Airframe Missile

Guided Missile Launch System 50.765 2.124 0

153 Aegis Support Equipment 30.398 1.423 0

Total $224.549 $46.538 $6.715

Allison 501K Gas Turbine 

(Line 2)

The Navy’s fiscal year 1997 request of $3.4 million for the Allison 501K gas

turbine program can be reduced by $3 million because an equivalent

amount of excess fiscal year 1996 funds are available to meet program

requirements. According to Navy Comptroller officials, $3 million in fiscal

year 1996 funds was not needed for the program and was placed on hold

pending the award of fiscal year 1997 contracts. Since these funds will not

be used for the Allison 501K gas turbine program in fiscal year 1996, they

can be used to offset the fiscal year 1997 budget request. DOD did not agree

with this proposed reduction stating that the President’s budget reflected a

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$3 million reduction for slow program execution. However, we were

unable to independently corroborate or verify that the $3 million reduction

was reflected in the President’s budget because DOD did not provide

documentation or further rationale to support its position. Therefore, we

continue to believe the reduction is warranted.

Other Propulsion Equipment

(Line 4)

The Navy’s fiscal year 1997 request of $7.9 million for other propulsion

equipment can be reduced by $6.1 million because an equivalent amount

of excess fiscal year 1996 funds is available to meet program requirements.

Fiscal year 1997 budget documents show that the fiscal year 1996 program

needs $6.1 million less than the amount provided. According to officials in

the Navy Comptroller office, the excess funds are planned to be

reprogrammed for the Isotta Fraschini Diesel Improvement Program in

support of the Near-term Mine Warfare and Plan of Action and Milestones

projects initiated by the Chief of Naval Operations. However, since these

funds will not be used for other propulsion equipment in fiscal year 1996,

they can be used to offset the fiscal year 1997 budget request. DOD did not

agree with the reduction but did not provide new information or further

rationale for its position.

Other Generators (Line 5) If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $588,000 for other generators can be denied

because an equivalent amount of excess fiscal year 1996 funds is available

to meet program requirements, and $912,000 of the fiscal year 1996

appropriation can be rescinded.

The Navy Comptroller placed $1.7 million in fiscal year 1996 funds on

hold. Comptroller officials told us that $202,000 is required for a contract

award, and that the remaining $1.5 million is available for reprogramming.

DOD included the $1.5 million in its fiscal year 1996 omnibus

reprogramming request. However, since the $1.5 million is excess to fiscal

year 1996 program requirements, $588,000 can be used to offset the fiscal

1997 request and the remaining $912,000 can be rescinded.

Hull, Mechanical, and Electrical

Items Under $2 Million 

(Line 25)

The Navy’s fiscal year 1997 request of $35.5 million for hull, mechanical,

and electrical items under $2 million each can be reduced by $5.1 million

because an equivalent amount of excess fiscal year 1996 funds is available

to meet program requirements. Fiscal year 1997 budget documents show

that the Navy needs $5.1 million less than the amount provided for these

items in fiscal year 1996. Navy Comptroller officials told us that Congress

reduced this program by $4.3 million in fiscal year 1996 and that the

remaining $800,000 will be used to support fiscal year 1997 requirements.

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According to the officials, the President’s budget reflected use of these

funds to support fiscal year 1997 requirements. However, we could not

verify the Navy’s position because the Navy did not provide data to

support its position. Therefore, unless the Navy can demonstrate that

Congress reduced the fiscal year 1996 appropriation by $4.3 million and

that the Navy offset its fiscal year 1997 budget requirements by the

$800,000 in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be reduced by $5.1 million. DOD did not agree with the

reduction but did not provide new information or further rationale for its

position.

Standard Boats (Line 34) If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $4.6 million for standard boats can be denied

because an equivalent amount of excess fiscal year 1996 funds is available

to meet program requirements, and $1.3 million of the fiscal year 1996

appropriation can be rescinded.

The Navy Comptroller placed $5.9 million in fiscal year 1996 funds on

hold. Officials in the Comptroller’s office told us that $5.7 million of the

withhold amount was available for reprogramming. DOD subsequently

included the $5.7 million in its fiscal year 1996 omnibus reprogramming

request. According to the officials in the Navy Comptroller’s office, the

remaining $200,000 will be used to support fiscal year 1997 requirements

and the President’s budget reflected use of the $200,000 to support fiscal

year 1997 requirements. However, we could not verify the Navy’s position

because the Navy did not provide data to support its position. Since

$5.7 million will not be used for standard boats in fiscal year 1996 and we

could not verify that the Navy offset its fiscal year 1997 budget

requirements by the $200,000 in excess fiscal year 1996 funds, the Navy’s

fiscal year 1997 request should be reduced by $4.6 million and the

remaining $1.3 million can be rescinded.

MK-23 Target Acquisition

System (Line 44)

The Navy’s fiscal year 1997 request of $1.3 million for the MK-23 Target

Acquisition System program can be denied because an equivalent amount

of excess fiscal year 1996 funds is available to meet program requirements.

In addition, $1.6 million in excess fiscal year 1996 funds can be rescinded.

The Navy Comptroller placed $2.9 million in fiscal year 1996 funds on

hold. According to the Navy Comptroller’s office, these excess funds are

required in fiscal year 1997 and the President’s budget reflected use of

these funds to support fiscal year 1997 requirements. However, we could

not verify the accuracy of the Navy’s position because the Navy did not

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provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$2.9 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request can be reduced by $1.3 million and the remaining $1.6 million can

be rescinded. DOD did not agree with the proposed reduction but did not

provide new information or further rationale for its position.

SSN Acoustics (Line 49) If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $44.1 million for the SSN acoustics program can

be reduced by about $12.5 million because an equivalent amount of excess

fiscal year 1996 funds is available to meet program requirements. Fiscal

year 1997 budget documents show that the program needs $40.9 million

for fiscal year 1996, or about $1 million less than the adjusted amount

provided for the program. Also, the Navy Comptroller is withholding

$11.4 million in fiscal year 1996 funds and plans to reprogram these funds

to higher priority programs. DOD included about $10.3 million of the excess

fiscal year 1996 funds in its fiscal year 1996 omnibus reprogramming

request. However, since these funds are not needed for the SSN acoustics

program in fiscal year 1996, they can be used to offset the Navy’s fiscal

year 1997 budget request.

Surface Ship Torpedo Defense

(Line 54)

If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $5.7 million for the Surface Ship Torpedo

Defense program can be reduced by $5.1 million because an equivalent

amount of excess fiscal year 1996 funds is available to meet program

requirements. The Navy Comptroller placed $5.1 million in fiscal year 1996

funds on hold. According to the Navy Comptroller’s office, these excess

funds are required in fiscal year 1997 and the President’s budget reflected

use of these funds to support fiscal year 1997 requirements. However, we

could not verify the accuracy of the Navy’s position because the Navy did

not provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$5.1 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be reduced by that amount.

DOD commented that the President’s budget reflected a $4.2 million

reduction for slow program execution and provided documentation that

$900,000 in excess fiscal year 1996 funds were included in the fiscal year

1996 omnibus reprogramming request. Because DOD did not provide new

information or further rationale for its position on the $4.2 million

reduction, we believe the Navy’s fiscal year 1997 request can be reduced

by $5.1 million if the $900,000 is not reprogrammed.

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AN/SLQ-32 (Line 60) The Navy’s fiscal year 1997 request of $6.4 million for the AN/SLQ-32

program can be reduced by $1 million because an equivalent amount of

excess fiscal year 1996 funds is available to meet program requirements.

The Navy Comptroller placed $1 million in fiscal year 1996 funds on hold.

According to the Navy Comptroller’s office, these excess funds are

required in fiscal year 1997 and the President’s budget reflected use of

these funds to support fiscal year 1997 requirements. However, we could

not verify the accuracy of the Navy’s position because the Navy did not

provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$1 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be reduced by that amount. DOD did not agree with the

reduction but did not provide new information or further rationale for its

position.

Enhanced Modular Signal

Processor Multiyear

Procurement (Line 77)

Of the Navy’s fiscal year 1996 appropriation for the Enhanced Modular

Signal Processor multiyear procurement program, $1.1 million can be

rescinded because these funds are excess to program requirements. Fiscal

year 1997 budget documents show that the program needs only

$25.3 million for fiscal year 1996, or $1.1 million less than the amount

provided. Since the Navy does not plan to buy additional processors in

fiscal year 1997, the $1.1 million in excess fiscal year 1996 funds can be

rescinded. DOD did not agree with the reduction stating the fiscal year 1996

program was reduced by $1.1 million to reflect undistributed

congressional reductions, but this does not indicate excess funds based on

reduced requirements. No documentation or further rationale was

provided to support its position.

TADIX-B (Line 94) If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $4.2 million for the TADIX-B program can be

reduced by $2.4 million because an equivalent amount of excess fiscal year

1996 funds is available to meet program requirements. Navy Comptroller

officials told us that $2.4 million in unobligated fiscal year 1996 funds is on

hold pending the fiscal year 1996 omnibus reprogramming request for

higher priority items. DOD subsequently included $2 million of the excess

fiscal year 1996 funds in its fiscal year 1996 omnibus reprogramming

request. However, officials from the Navy Comptroller’s office said the

requirement for TADIX-B terminals will continue. Because the $2.4 million

will not be used for the TADIX-B program in fiscal year 1996, it can be

used to offset the fiscal year 1997 budget request if the reprogramming

request is not approved. If it is approved, $400,000 could be still used to

offset the budget request.

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Submarine Communication

Equipment (Line 109)

If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $29.4 million for submarine communications

equipment can be reduced by $1.2 million because an equivalent amount

of excess fiscal year 1996 funds is available to meet program requirements.

Navy Comptroller officials told us that $1.2 million in unobligated fiscal

year 1996 funds is on hold pending the fiscal year 1996 omnibus

reprogramming request for higher priority programs. DOD subsequently

included this amount in its fiscal year 1996 omnibus reprogramming

request. However, Navy Comptroller officials said the requirement for

which the funds were originally provided is still valid. Since the Navy does

not plan to use these funds for submarine communications equipment in

fiscal year 1996, they can be used to offset the fiscal year 1997 budget

request.

Harpoon Support Equipment

(Line 145)

The Navy’s fiscal year 1997 request of $97,000 for the Harpoon support

equipment can be denied because an equivalent amount of excess fiscal

year 1996 funds is available to meet program requirements, and

$1.9 million of the $2.9 million fiscal year 1996 appropriation can be

rescinded.

The Navy Comptroller placed $2 million in unobligated fiscal year 1996

funds on hold. According to the Navy Comptroller’s office, these excess

funds are required in fiscal year 1997 and the President’s budget reflected

use of these funds to support fiscal year 1997 requirements. However, we

could not verify the accuracy of the Navy’s position because the Navy did

not provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$2 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be denied and the remaining $1.9 million can be rescinded.

DOD did not agree with the reduction but did not provide new information

or further rationale for its position.

Rolling Airframe Missile Guided

Missile Launch System 

(Line 151)

The Navy’s fiscal year 1997 request of $50.8 million for the Rolling

Airframe Missile Guided Missile Launch System program can be reduced

by $2.1 million because an equivalent amount of excess fiscal year 1996

funds is available to meet program requirements. The Navy Comptroller

placed $2.1 million in fiscal year 1996 funds on hold. According to the

Navy Comptroller’s office, these excess funds are required in fiscal year

1997 and the President’s budget reflected use of these funds to support

fiscal year 1997 requirements. However, we could not verify the accuracy

of the Navy’s position because the Navy did not provide data to support its

position. Therefore, unless the Navy can demonstrate that it offset its

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fiscal year 1997 budget requirements by the $2.1 million in excess fiscal

year 1996 funds, the Navy’s fiscal year 1997 request should be reduced by

that amount. DOD did not agree with the reduction but did not provide new

information or further rationale for its position.

Aegis Support Equipment 

(Line 153)

The Navy’s fiscal year 1997 request of $30.4 million for the Aegis Support

Equipment program can be reduced by $1.4 million because an equivalent

amount of excess fiscal year 1996 funds is available to meet program

requirements. Fiscal year 1997 budget documents show that the program

needs $1.4 million less than the amount provided for fiscal year 1996. The

Navy Comptroller placed $953,000 of the fiscal year 1996 funds on hold.

According to the Navy Comptroller’s office, these excess funds are

required in fiscal year 1997 and the President’s budget reflected use of

these funds to support fiscal year 1997 requirements. However, we could

not verify the accuracy of the Navy’s position because the Navy did not

provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$1.4 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be reduced by that amount. DOD did not agree with the

reduction but did not provide new information or further rationale for its

position.

Procurement, Marine

Corps

The Marine Corps requested $555.5 million for procurement programs in

fiscal year 1997. As shown in table I.13, we identified a potential reduction

of $2.6 million to the fiscal year 1997 request for one item. We did not

identify any potential rescissions to prior years appropriations.

Table I.13: Potential Reduction to the

Marine Corps Procurement Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

3 .50 Caliber $6.052 $2.600

Total $6.052 $2.600

.50 Caliber (Line 3) The Marine Corps’ fiscal year 1997 request of $6.1 million for .50 caliber

ammunition can be reduced by $2.6 million because an equivalent amount

of excess fiscal year 1996 funds in the Procurement of Ammunition, Navy

and Marine Corps appropriation is available to meet program needs.

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Program office officials told us that the planned fiscal year 1996 buy of 

.50 caliber ball linked ammunition would have caused the Marine Corps to

exceed the acquisition objective for this item. The Navy Comptroller

placed the $2.6 million in excess fiscal year 1996 funds on hold pending a

review of program requirements. The Navy plans to reprogram the

$2.6 million in fiscal year 1996 funds for a nonlethal weapons program.

The Under Secretary of Defense for Acquisition and Technology directed

the services to implement the nonlethal weapons program in March 1996.

Since these funds are no longer needed for .50 caliber linked ammunition

in fiscal year 1996, they can be used to offset fiscal year 1997

requirements. DOD did not agree with the reduction but did not provide

new information or further rationale for its position.

Air Force

Procurement

Programs

The Air Force requested $14.5 billion for procurement programs in fiscal

year 1997. As shown in table I.14, we identified potential reductions of

$460.1 million to the fiscal year 1997 request, a potential rescission of

$8.6 million from the fiscal year 1996 appropriation, and potential

rescissions of $26.7 million from the expiring fiscal year 1994

appropriation.

Table I.14: Potential Reductions and

Rescissions to Air Force Procurement

Programs Fiscal year 1997 Potential rescission

Dollars in millions

Procurement appropriation Requesta

Potential

reduction

Fiscal year

1996

Fiscal year

1994

Aircraft $1,262.827 $321.097 $8.600 0

Missile 1,207.252 139.009 0 $20.500

Other 16.144 0 0 6.200

Total $2,486.223 $460.106 $8.600 $26.700

aThis is the amount requested for budget line items for which we have identified a potential

reduction and/or rescission.

Aircraft Procurement, Air

Force

The Air Force requested $5.8 billion for aircraft procurement programs in

fiscal year 1997. As shown in table I.15, we identified potential reductions

of about $321.1 million to the fiscal year 1997 request and a potential

rescission of $8.6 million from the fiscal year 1996 appropriation.

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Table I.15: Potential Reductions and

Rescission to Air Force Aircraft

Procurement Programs Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1996)

12 C-130J $62.890 $62.890 0

14 Joint Primary Aircraft Training

System 67.135 67.135 $8.600

18 C-20A 113.805 13.700 0

28 F-15 Aircraft Modifications 179.318 22.300 0

60 Aircraft Spares 314.745 116.200 0

61 Common Aerospace Ground

Equipment 176.422 16.179 0

63 F-16 Post Production Support 81.562 10.654 0

66 War Consumables 56.296 4.039 0

67 Miscellaneous Production

Charges 210.654 8.000 0

Total $1,262.827 $321.097 $8.600

C-130J (Line 12) The Air Force’s fiscal year 1997 request of $62.9 million for a C-130J

aircraft can be denied if the Air Force postpones the C-130J procurement

to fiscal year 1998. According to a program budget document, the fiscal

year 1998 cost includes a quantity discount that starts with the

procurement of two or more aircraft. For example, the average airframe

unit cost is projected to decrease from $51.9 million for one aircraft in

fiscal year 1997 to $43.6 million for two aircraft in fiscal year 1998.

Because the C-130J is also produced under foreign military sales contracts,

postponing procurement until fiscal year 1998 will not cause a break in

production. DOD did not agree with the reduction stating that the fiscal

year 1997 C-130J buy will be more than one aircraft. However, it only

requested funding for one aircraft and did not provide new information on

its procurement plans.

Joint Primary Aircraft Training

System (Line 14)

The Air Force’s fiscal year 1997 request of $67.1 million for the Joint

Primary Aircraft Training System can be denied because an equivalent

amount of prior year funds is available to meet fiscal year 1997 program

requirements.

Program officials stated that the fiscal year 1995 and 1996 budget requests

and subsequent appropriations were set at levels to cover the planned

quantity and expected unit prices for several contractors who submitted

bids on the contract. However, the Air Force contracted for the approved

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quantity at a unit price lower than anticipated. The differences between

the funds provided and those needed are $40.5 million for fiscal year 1995

and $35.2 million for fiscal year 1996. The Air Force can use these excess

funds to offset the fiscal year 1997 request, and the $8.6 million balance

can be rescinded from either fiscal year 1995 or 1996. DOD commented that

the excess funds have already been identified to Congress as a source for

other high priority needs and are not available to the Air Force.

Nevertheless, the excess funds were provided for procuring the Joint

Primary Aircraft Training System and could be used to offset fiscal year

1997 requirements.

C-20A (Line 18) The Air Force’s fiscal year 1997 request of $113.8 million for the C-20A

aircraft, or Small VCX, can be reduced by $13.7 million because the fiscal

year 1997 requirement is overstated. The operational requirements

document, which is being prepared, defines an Air Force requirement for 

2 small, commercial, 12-passenger business-type jets equipped with

commercial communications equipment. The budget request, however,

includes $10 million for design and development of a more robust

communication suite. A program official stated that the $10 million was

included as a contingency in case Headquarters, Air Force, revised the

requirements documents to include a more robust suite; or, alternatively, a

potential contractor submitted a proposal for a larger commercial type

aircraft. Further, although this is to be a commercial off-the-shelf type

procurement, the request includes $3.7 million for engineering change

proposals. A program official stated that engineering changes may be

needed to incorporate commercial service bulletins that could be issued

while the aircraft is being produced.

DOD commented that the $13.7-million requirement was based on industry

estimates for mission configuration changes and known communications

modification needs. However, program officials told us they were not

aware of these needs and could provide no documentation to support

DOD’s position. Therefore, we continue to believe the reduction is

warranted.

F-15 Aircraft Modifications

(Line 28)

The Air Force’s fiscal year 1997 request of $33.7 million for the

Multifunctional Information Distribution System/fighter data link program,

included in this budget line, can be reduced by $22.3 million because fiscal

year 1997 requirements are overstated. The remaining $11.4 million is

needed to complete the qualification efforts of prototype systems

($4 million) and for a simulator upgrade ($7.4 million).

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The Air Force planned to award the fiscal year 1997 modification contract

for this data link during the first quarter of fiscal year 1997. However,

because of a schedule slip, contract award has slipped to November 1997,

or the first quarter of fiscal year 1998. Therefore, not all of the fiscal year

1997 funding is needed. DOD agreed with the reduction.

Aircraft Spares (Line 60) The Air Force’s fiscal year 1997 request of $314.7 million for aircraft spares

can be reduced by $116.2 million—$36 million for C-17 spares,

$44.9 million for B-2 spares, and $35.3 million for other spares—because

excess fiscal year 1994, 1995, and 1996 funds are available to meet

program requirements.

The Air Force’s fiscal year 1997 request of $61.4 million for C-17 aircraft

spares can be reduced by $36 million because the Air Force has excess

prior year funds that Air Force officials informed us will be used to offset

fiscal year 1997 requirements. Program officials agreed that they do not

need about $36 million for C-17 spares in fiscal year 1997. However, they

disagreed with the reduction, stating that they would like to use the excess

funds for future requirements and a reduction would require them to

reduce other critical needs in future years. Nevertheless, the $36 million is

not needed in fiscal year 1997 and can be requested when needed in the

future.

The Air Force’s fiscal year 1997 request of $44.9 million for B-2 aircraft

spares can be denied and other fiscal year 1997 aircraft spares requests

can be reduced by $35.3 million because the Air Force overestimated the

amount of funds required to reimburse the stock fund by $80.2 million for

fiscal years 1994 through 1997. Program officials agreed that the B-2

program will have $80.2 million in excess spares funding if the fiscal year

1997 B-2 spares request is approved.

DOD disagreed with the proposed reduction and provided data on C-17 and

B-2 spares requirements. In analyzing this data, we determined that our

initial conclusion on the amount of excess funds for B-2 spares was

understated; therefore, we have modified that portion of the proposed

reduction.

Common Aerospace Ground

Equipment (Line 61)

The Air Force’s fiscal year 1997 request of $176.4 million for common

aerospace ground equipment can be reduced by $16.2 million because

excess fiscal year 1996 funds are available to meet fiscal year 1997

program requirements. The Air Force received $16.2 million in fiscal year

1996 funding to purchase 231 self-generating nitrogen systems. The

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systems did not meet specifications and, as a result, the Air Force will not

procure them during fiscal year 1996 or 1997. Air Force officials disagreed

that these funds are excess and stated that they could be used for other

requirements. DOD did not agree with the reduction but did not provide

new information or further rationale for its position.

F-16 Post Production Support

(Line 63)

The Air Force’s fiscal year 1997 request of $81.6 million for F-16 post

production support can be reduced by $10.7 million because the fiscal year

1997 request is overstated by $6.7 million and $4 million in excess fiscal

year 1996 funds are available to offset the request.

The Air Force included $4 million for F-16 sustainment costs in both the

fiscal year 1996 F-16 Aircraft Procurement and F-16 Post Production

Support budget lines. F-16 program officials agreed that the same costs

were counted twice. Also, assuming no further F-16 procurement would be

authorized, the Air Force’s fiscal year 1997 request for post production

support included termination costs for the F-16 aircraft production

contract. However, the Air Force has decided to continue F-16 production

well into the year 2000; therefore, fiscal year 1997 funding for termination

costs is no longer justified. The program office agreed that the fiscal year

1997 request was overstated by $6.7 million.

DOD commented that the excess funds are needed to support F-16

procurement; however, it did not provide new information or further

rationale for its position. Therefore, we continue to believe the reduction

is warranted.

War Consumables (Line 66) The Air Force’s fiscal year 1997 request of $56.3 million for war

consumables can be reduced by $4 million because fiscal year 1997

requirements are overstated. The Air Force planned to purchase 158

inboard pylons as war reserves for F-15E aircraft at a unit price of

$130,532. However, after submitting the fiscal year 1997 budget request,

the Air Force determined that existing pylons could be retrofitted at an

estimated cost of $93,700 per retrofit.

According to the Air Force Material Command officials, the Air Force has

a requirement for 177 pylons rather than 158. Therefore, they

recommended increasing the retrofit quantity to 177 to meet the total

requirement. Retrofitting 177 pylons will cost $16.6 million, rather than the

$20.6 million requested and, therefore, the fiscal year 1997 request can be

reduced by $4 million. DOD agreed with the reduction.

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Miscellaneous Production

Charges (Line 67)

The Air Force’s fiscal year 1997 request of $40.2 million for the NAVSTAR

Global Positioning System, included in this budget line, can be reduced by

$8 million because an equivalent amount of excess fiscal year 1995 funds is

available to meet program needs.

The Air Force overestimated the amount of funding required for testing in

fiscal year 1995 by $8 million. A recent internal review by the program

office identified these funds as excess after reviewing program

requirements. Although DOD commented that it included these excess

funds in the fiscal year 1996 omnibus reprogramming request, the funds

were not included. Therefore, we have not changed our position.

Missile Procurement, Air

Force

The Air Force requested $2.7 billion for missile procurement programs in

fiscal year 1997. As shown in table I.16, we identified potential reductions

of $139 million to the fiscal year 1997 request and $20.5 million in potential

rescissions from expiring fiscal year 1994 appropriations.

Table I.16: Potential Reductions and

Rescissions to Air Force Missile

Procurement Programs Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1994)

7 Advanced Medium Range

Air-to-Air Missile $116.299 $8.400 0

20 Global Positioning (Multiyear

Procurement) Space 171.135 0 $5.000

23 Space Shuttle Operations

Space 52.500 10.800 0

24 Space Boosters Space 489.606 40.800 0

25 Medium Launch Vehicle Space 135.361 4.000 2.500

26 Medium Launch Vehicle Space

Advance Procurement 40.238 9.050 0

28 Defense Support Program

(Multiyear Procurement) Space 70.967 62.900 13.000

48 Sensor Fuzed Weapon 131.146 3.059 0

Total $1,207.252 $139.009 $20.500

Advanced Medium Range

Air-to-Air Missile (Line 7)

The Air Force’s fiscal year 1997 request of $116.3 million for the Advanced

Medium Range Air-to-Air Missile can be reduced by $8.4 million because

fiscal year 1997 requirements are overstated by $5.4 million and, unless

Congress approves DOD’s reprogramming request, $3 million in excess

fiscal year 1995 funds is available to meet fiscal year 1997 program needs.

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The Air Force’s fiscal year 1997 request can be reduced by $5.4 million

because of schedule changes for beginning upgrades for depot equipment

and initial overestimates of engineering change orders. Funding for the

depot upgrades to provide a capability to test missiles with product

improvements can be reduced by $2.3 million because the Air Force does

not plan to begin the upgrade until fiscal year 1998. Therefore, the Air

Force can request the $2.3 million in its fiscal year 1998 budget

submission. The program office agreed. Funding for engineering change

orders can be reduced by $3.1 million because in previous Advanced

Medium Range Air-to-Air Missile budget requests and in accordance with

Air Force guidance, the program office used recurring missile hardware

cost to estimate the engineering change orders. However, for fiscal year

1997, the program office based its estimate on total fly-away costs, which

include nonrecurring costs such as production test and support, technical

services, and value engineering, in addition to the recurring hardware cost.

Using total fly-away costs overstated the fiscal year 1997 funding

requirement by $3.1 million. Program office officials stated this missile is a

complex weapon system that justifies increased funds for engineering

change orders. However, the Air Force has purchased over 6,000 missiles

and will award the 11th contract for missiles in fiscal year 1997. In

addition, other Air Force programs use a lower percentage for estimating

engineering changes.

If Congress does not approve DOD’s reprogramming request, the Air

Force’s fiscal year 1997 request can be reduced by an additional $3 million

because an equivalent amount of excess fiscal year 1995 funds is available

to meet program requirements. The missile’s program office identified

$3 million in fiscal year 1995 funds as excess to program requirements.

According to program officials, the funds were requested for engineering

changes but were not required for that purpose. DOD included the funds in

its fiscal year 1996 omnibus reprogramming request. However, they could

be used to offset fiscal year 1997 requirements.

DOD agreed that the fiscal year 1997 request is overstated by $2.3 million

but did not agree with the $3.1-million reduction for engineering change

orders. DOD stated that this would reduce funding for these changes to an

inadequate level. However, our estimates are based on the same factors

provided by the program office and we followed the same methodology

used by the Air Force in prior years. Therefore, we continue to believe that

the Air Force overstated its funding needs

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Global Positioning (Multiyear

Procurement) Space (Line 20)

If Congress does not approve DOD’s reprogramming request, $5 million can

be rescinded from the Air Force’s fiscal year 1994 appropriation of

$171.8 million for the NAVSTAR Global Positioning System because the

funds are no longer needed for the Block IIR program. The $5 million in

excess fiscal year 1994 funds will expire if not obligated by September 30,

1996, and, therefore, is available for reprogramming or rescission during

the remainder of fiscal year 1996. DOD included these excess funds in its

fiscal year 1996 omnibus reprogramming request.

Space Shuttle Operations Space

(Line 23)

The Air Force’s fiscal year 1997 request of $52.5 million for the Inertial

Upper Stage Program can be reduced by $10.8 million because excess

fiscal year 1995 and 1996 funds are available to meet program

requirements. Fiscal year 1995 funds are available because, according to

program officials, $6 million was budgeted for unanticipated problems that

did not occur because of a near perfect fiscal year 1995 launch. These

funds can be used to offset fiscal year 1997 requirements. In addition,

program officials plan to obligate $35.7 million of $40.5 million provided in

fiscal year 1996 for the integration and launch services production

contract and use the remaining $4.8 million for unanticipated problems.

However, the program office has an additional $5.1 million in fiscal year

1996 management reserve funds for similar purposes. Therefore, the

excess $4.8 million in fiscal year 1996 funds can also be used to reduce the

fiscal year 1997 budget request. DOD did not agree with the reduction but

did not provide new information or further rationale for its position.

Space Boosters Space (Line 24) The Air Force’s fiscal year 1997 budget request of $489.6 million for Space

Boosters Space can be reduced by $40.8 million because fiscal year 1997

requirements are overstated by $20.8 million and, unless Congress

approves DOD’s reprogramming request, $20 million in excess fiscal year

1996 funds is available to meet fiscal year 1997 program needs. These

reductions are possible because (1) funds associated with nonrecurring

costs for follow-on procurement are not needed at this time, (2) funds for

launch operations are to be augmented by a classified user, (3) contract

award for launch site support was delayed, and (4) production contract

costs were lower than expected.

According to Air Force program officials, the $69.8 million requested for

the follow-on Titan IV procurement of two vehicles (numbers 42 and

43) included $28.4 million for nonrecurring costs associated with five

additional launch vehicles (numbers 42 through 46). The Air Force is

re-evaluating its acquisition strategy for this follow-on procurement and

does not plan to have the results until April 1997. Funds for the last two

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vehicles (numbers 45 and 46) would not normally be needed until fiscal

years 1999 and 2000, respectively, and there is no justification for

accelerating this effort. The nonrecurring effort associated with these last

two vehicles is estimated at $11.4 million and, therefore, the fiscal year

1997 budget request can be reduced by this amount.

The fiscal year 1997 request of $127.1 million for Titan IV launch

operations was based on plans to receive $83 million from a classified

user. However, subsequent to the budget submission, the Air Force revised

the cost-sharing arrangement between the Air Force and the classified

user for launch operations, increasing the amount of funds to be provided

by the classified user by $9.4 million, or a total of $92.4 million. According

to Air Force program officials, launch operation requirements did not

increase in connection with this adjustment, nor did the Air Force reduce

its launch operations request by an equivalent amount. The Air Force now

plans to use this additional $9.4 million for Titan IV follow-on production

and contract close-out costs and not for launch operations; therefore,

these funds can be used to reduce the fiscal year 1997 budget request.

Additionally, DOD included $20 million in excess fiscal year 1996 funds in

its fiscal year 1996 omnibus reprogramming request. These funds are no

longer needed because of a delay in the award of a contract for launch site

support ($17.3 million) and lower than expected claims against the

production contract ($2.7 million). If Congress does not approve DOD’s

reprogramming request, the funds can be used to offset the fiscal year

1997 request.

DOD commented that the fiscal year 1997 request did not include

$11.4 million for nonrecurring costs for Titan IV and the additional

$9.4 million was received to offset higher than expected negotiated values

for new production and launch operations contracts. However, DOD did not

provide new documentation or further rationale for its position.

Medium Launch Vehicle Space

(Line 25)

The Air Force’s fiscal year 1997 request of $135.4 million for the Medium

Launch Vehicle Space can be reduced by $4 million because excess fiscal

year 1996 funds are available to meet program requirements. Program

officials stated that the Air Force budgeted an additional $4 million in

fiscal year 1996 for launch pad repair work that can be funded by expiring

prior year funds. These excess fiscal year 1996 funds can be used to offset

the fiscal year 1997 request.

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In addition, if Congress does not approve DOD’s reprogramming request,

$2.5 million can be rescinded from the fiscal year 1994 appropriation of

$109.5 million for the Medium Launch Vehicles because the Delta II

Medium Launch Vehicle program has $2.5 million in fiscal year 1994 funds

that are excess to program needs. Program officials stated that although

$5.5 million was budgeted for launch pad repair work, the current

estimated cost of the work is only $3 million. The resulting $2.5 million in

excess fiscal year 1994 funds will expire if not obligated by September 30,

1996, and, therefore, is available for reprogramming or rescission during

the remainder of fiscal year 1996. DOD included the $2.5 million in its fiscal

year 1996 omnibus reprogramming request.

Medium Launch Vehicle Space

Advance Procurement (Line 26)

If Congress does not approve DOD’s reprogramming requests, the Air

Force’s fiscal year 1997 request of $40.2 million for the Delta II Medium

Launch Vehicle can be reduced by about $9.1 million because excess fiscal

year 1996 funds are available to meet program requirements. Program

officials stated that the funds were for advance procurement of long lead

items for a Delta II launch vehicle in fiscal year 1997, but this requirement

was subsequently deleted from the Air Force’s fiscal year 1997 budget

request. Therefore, the excess fiscal year 1996 funds can be used to offset

the fiscal year 1997 budget request.

DOD did not agree with the reduction stating that it included $523,000 of

these excess funds in its fiscal year 1996 omnibus reprogramming request

and has identified the remaining $8.527 million for possible use to pay for

Bosnia operations.

Defense Support Program

(Multiyear Procurement) Space

(Line 28)

If Congress does not approve DOD’s reprogramming request, the Air

Force’s fiscal year 1997 request of $71 million for the Defense Support

Program multiyear procurement can be reduced by $62.9 million because

an equivalent amount of excess prior years’ funds is available to meet

fiscal year 1997 program needs. The excess funds, $35 million and

$27.9 million in fiscal years 1995 and 1996, respectively, can be used to

offset the fiscal year 1997 budget request.

Fiscal year 1995 funds are available due to restructuring of the block 18

production contract, reduced launch service requirements, and

cancellation of laser cross links. DOD included $31.9 million of the excess

fiscal year 1995 funds in the fiscal year 1996 omnibus reprogramming

request. Fiscal year 1996 funds are available because program

requirements were reduced. Program officials stated that excess fiscal

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year 1996 funding is needed to meet unfunded fiscal year 1997 program

requirements.

In addition, if Congress does not approve DOD’s reprogramming request,

$13 million of the Air Force’s $350.3 million fiscal year 1994 appropriation

for the program can be rescinded because these funds are excess to

program requirements. In fiscal year 1995, this program received

$54 million in reprogrammed fiscal year 1994 funds for contractor claims.

In fiscal year 1996, these claims were settled for $41 million—$13 million

less than the amount needed. The $13 million in excess fiscal year 1994

funds will expire if not obligated by September 30, 1996, and, therefore, is

available for reprogramming or rescission during the remainder of fiscal

year 1996. DOD included the $13 million in its fiscal year 1996 omnibus

reprogramming request.

DOD did not agree with the reduction but provided no new information or

further rationale to support its position.

Sensor Fuzed Weapon (Line 48) The Air Force’s fiscal year 1997 request of $131.1 million for the Sensor

Fuzed Weapon can be reduced by $3.1 million because excess fiscal year

1996 funds in the Procurement of Ammunition, Air Force, appropriation

are available to meet program needs. A contracting official said the fiscal

year 1996 contract was awarded for about $3.1 million less than budgeted.

Therefore, the excess funding can be used to offset the fiscal year 1997

budget request.

A program management official agreed that the funds were not required

for the contract; however, he would like to use the funds for potential

engineering changes that could result from a study to extend the weapon’s

shelf life. But, since the study has not begun, he could not identify the

specific changes required nor the cost. He also said if changes were not

required, he would like to use the funding to buy more weapons. DOD did

not agree with the reduction but did not provide new information or

further rationale for its position.

Other Procurement, Air Force The Air Force requested $6 billion for other procurement programs in

fiscal year 1997. We did not identify any potential reductions to the fiscal

year 1997 request. However, as shown in table I.17, we identified

$6.2 million in potential rescissions from expiring fiscal year 1994

appropriations.

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Table I.17: Potential Rescissions to Air

Force Other Procurement Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1994)

63 Defense Support Program 0 0 $5.000

68 Air Force Satellite Control

Network $16.144 0 1.200

Total $16.144 0 $6.200

Defense Support Program 

(Line 63)

Five million dollars of the Air Force’s $28.4 million fiscal year 1994

appropriation for the Defense Support Program can be rescinded because

these funds were provided for engineering change orders and management

risk, but the program office has identified the funding as excess to its

needs. The $5 million in excess fiscal year 1994 funds will expire if not

obligated by September 30, 1996, and, therefore, is available for

reprogramming or rescission during the remainder of fiscal year 1996.

DOD commented that it included $3.5 million in its fiscal year 1996 omnibus

reprogramming request and the remaining $1.5 million has been

earmarked for upward obligation adjustments in the expired account.

However, the $3.5 million was not included in the fiscal year 1996 omnibus

reprogramming request, and DOD did not provide data to support its

position that the remaining $1.5 million was needed in the expired

account. Therefore, we continue to believe the reduction is warranted.

Air Force Satellite Control

Network (Line 68)

Of the Air Force’s fiscal year 1994 appropriation of $30.1 million for the

Satellite Control Network, $1.2 million can be rescinded because the funds

are excess to program needs. Program officials identified these funds as

excess to program needs because contract award costs were $1.2 million

less than the amount budgeted. These funds will expire if not obligated by

September 30, 1996; therefore, they are available for reprogramming or

rescission during the remainder of fiscal year 1996. DOD commented that

the funds have been committed as a contingent liability for a cost overrun

on an engineering change proposal. However, it did not provide

documentation for its position.

Defense-Wide

Procurement

Programs

DOD requested $1.8 billion for Defense-wide procurement programs in

fiscal year 1997. As shown in table I.18, we identified a potential reduction

of $15.2 million to the fiscal year 1997 request for one item. We did not

identify any potential rescissions from prior years’ appropriations.

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Table I.18: Potential Reduction to

Defense-wide Procurement Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

45 C-130 Modifications $86.677 $15.200

Total $86.677 $15.200

C-130 Modifications 

(Line 45)

The Special Operations Command’s fiscal year 1997 request of

$86.7 million for C-130 aircraft modifications can be reduced by

$15.2 million, the amount requested to procure seven directional infrared

radar countermeasures systems in fiscal year 1997, because the system’s

operational effectiveness and suitability have not been proven. However,

operational test and evaluation is not scheduled to begin until August 1997

and will not end until after fiscal year 1997. Additionally, during our review

project office officials expressed concern about limitations of a major

component of the system and said they were considering fielding the

system without this component. Buying systems with known problems

before they have been proven through operational testing can result in the

procurement of unsatisfactory weapons requiring costly modifications to

achieve satisfactory performance and, in some cases, deployment of

substandard systems to combat forces. We believe, therefore, that the

Command could postpone this procurement until the system has been

proven in operational tests.

DOD commented that (1) development testing to date has demonstrated

that all components and system level performance meet or exceed

specified requirements; (2) reducing the fiscal year 1997 funding will result

in cost growth and schedule delay; and (3) before buying the system, the

system will complete environmental qualification, specification

compliance, and operational suitability testing. Although simulations and

laboratory testing provides valuable information about the system and its

components, DOD has previously taken the position that they are not

adequate substitutes for operational testing. This is why operational

testing is still a requirement in DOD regulations. Although testing on a C-130

test aircraft is scheduled for May 1997 and the production option decision

is scheduled for June 1997, testing on operational C-130 Mission

Designator Series aircraft is not scheduled until after the production

decision. Therefore, we have not changed our position.

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Potential Reductions and Rescissions to

Research, Development, Test, and

Evaluation Programs

DOD requested $34.7 billion in research, development, test, and evaluation

(RDT&E) funding for fiscal year 1997. As shown in table II.1, our review of

selected budget line items in the request and prior years’ appropriations

identified potential reductions of $224.2 million to fiscal year 1997 requests

and potential rescissions of about $3.8 million from expiring fiscal year

1995 appropriations. We did not identify any potential rescissions from

fiscal year 1996 appropriations.

Table II.1: Potential Reductions and

Rescissions to RDT&E Programs

Fiscal year 1997

Dollars in millions

Requesta

Potential

reduction

Potential rescission

(fiscal year 1995)

Army $41.478 $3.892 $0.142

Navy 703.644 19.698 0

Air Force 309.187 26.908 2.800

Defense-wide 1,634.781 173.724 0.821

Total $2,689.090 $224.222 $3.763

aThis is the amount requested for the budget line items for which we have identified a potential

reduction and/or rescission.

Army RDT&E

Programs

The Army requested $4.3 billion for RDT&E programs in fiscal year 1997. As

shown in table II.2, we identified a potential reduction of about

$3.9 million to the fiscal year 1997 request for one item and a potential

rescission of $142,000 from expiring fiscal year 1995 appropriation for

another item.

Table II.2: Potential Reduction and

Rescission to Army RDT&E Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1995)

32 Aviation Advanced Technology $41.478 $3.892 0

89 Tri-Service Standoff Attack

Missile 0 0 $0.142

Total $41.478 $3.892 $0.142

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Aviation Advanced

Technology (Line 32)

If DOD does not approve the Army’s reprogramming request, the Army’s

fiscal year 1997 request of $41.5 million for aviation advanced technology

can be reduced by $3.9 million because an equivalent amount of excess

fiscal year 1996 funds is available to meet program requirements. Congress

added $4 million to the fiscal year 1996 request for Improved Cargo

Helicopter Technology. According to the program office, about $100,000

has been used to pay bills, and DOD has withheld the remaining funds

pending an internal reprogramming-related action. A program official also

said that the program has received $2.3 million from the Aircraft

Modification/Product Improvement Program (line 167) for vibration

testing, thereby reducing the severity of the impact of not receiving the

withheld funds. Since the $3.9 million in fiscal year 1996 funds is not being

used for the purpose for which the funds were provided, the funds can be

used to offset the fiscal year 1997 request.

Tri-Service Standoff Attack

Missile (Line 89)

Of the Army’s fiscal year 1995 appropriation of $1.2 million for the

Tri-Service Standoff Attack Missile, $142,000 can be rescinded because the

program has been terminated and the Army has identified these funds as

excess to program requirements. The Army terminated its participation in

the program in fiscal year 1994, and DOD terminated the entire program in

fiscal year 1995 because of significant development difficulties and growth

in its expected unit cost.

DOD commented that the funds have been earmarked as part of the Army’s

portion of the out-of-court settlement for terminating the program.

However, documentation provided to us by the program executive office

for tactical missiles shows that the funds are excess to program needs.

Therefore, we continue to believe that the funds can be rescinded.

Navy RDT&E

Programs

The Navy requested $7.3 billion for RDT&E programs in fiscal year 1997. As

shown in table II.3, we identified potential reductions of about

$19.7 million to the fiscal year 1997 requests for eight items. We did not

identify any potential rescissions from prior years’ appropriations.

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Table II.3: Potential Reductions to

Navy RDT&E Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

48 Ship Concept Advanced Design $13.807 $3.400

55 Advanced Warhead Development (MK-50) 1.329 1.329

56 Marine Corps Assault Vehicles 40.106 1.486

75 Gun Weapon System Technology 42.204 2.000

106 New Design SSN 394.000 4.700

112 Unguided Conventional Air-Launched Weapons 22.322 1.648

154 Tomahawk and Tomahawk Mission Planning Center 136.364 3.700

163 Aviation Improvements 53.512 1.435

Total $703.644 $19.698

Ship Concept Advanced

Design (Line 48)

If Congress does not approve DOD’s reprogramming request, the Navy’s

fiscal year 1997 request of $13.8 million for ship concept advanced design

can be reduced by $3.4 million because the Navy Comptroller is

withholding $3.4 million in excess fiscal year 1996 funds that can be used

to offset fiscal year 1997 program requirements. According to the Navy

Comptroller’s office, these excess funds are required in fiscal year 1997

and the President’s budget reflected use of these funds to support fiscal

year 1997 requirements. However, DOD included $3.4 million in its fiscal

year 1996 omnibus reprogramming request and we could not verify the

accuracy of the Navy’s position because the Navy did not provide data to

support its position. Therefore, unless the Navy can demonstrate that it

offset its fiscal year 1997 budget requirements by the $3.4 million in excess

fiscal year 1996 funds, the Navy’s fiscal year 1997 request should be

reduced by that amount.

Advanced Warhead

Development (MK-50) 

(Line 55)

The Navy’s fiscal year 1997 request of $1.3 million for MK-50 advanced

warhead development can be denied. Funds for the Navy’s upgrade of its

lightweight torpedo are provided from this account. These funds are not

needed, and the upgrade efforts can be terminated because (1) they will

only marginally improve the torpedoes’ performance and (2) the Navy is

developing a new Hybrid lightweight torpedo that is expected to

accomplish the same littoral warfare objectives as the upgrade effort.

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In our classified report on Navy torpedo programs issued earlier this year,

we pointed out that the Navy is upgrading its existing lightweight

torpedoes—the MK-46 and the MK-50 Block II—to improve their

performance against diesel submarines in shallow, littoral waters.

Operational performance tests have not been done for either upgrade

program. Without such tests, the Navy will not know whether the upgrade

will improve the torpedoes’ effectiveness. Additionally, the Navy’s new

Hybrid lightweight torpedo being developed is intended to improve the

Navy’s capability against diesel submarines in shallow, littoral waters. DOD

did not agree that the program should be terminated and stated that the

MK-50 upgrade provides a cost-effective means to achieve an interim

capability for shallow-water antisubmarine warfare prior to the

introduction of the Hybrid lightweight torpedo.

Marine Corps Assault

Vehicles (Line 56)

The Navy’s fiscal year 1997 request of $40.1 million for Marine Corps

assault vehicles can be reduced by $510,000 because an equivalent amount

of excess fiscal year 1996 funds is available to meet fiscal year 1997

requirements. The Marine Corps is developing the Advanced Amphibious

Assault Vehicle as its primary combat vehicle during both ship-to-shore

maneuvers and combat operations ashore. The Marine Corps planned to

award a demonstration/validation phase contract in March 1996 requiring

estimated fiscal year 1996 contract payments of $21.3 million. However, a

delay in the competitive bid process caused the contract award to slip to

June 1996. As a result, fiscal year 1996 contract payments are now

estimated to total about $20.8 million, or $510,000 less than the amount

originally estimated.

According to the program manager, the winning contractor may be able to

accelerate work to regain the 2 months already lost. Given that (1) the

winning contractor would first need to determine an appropriate work

breakdown schedule to accommodate this additional workload and

(2) less than 4 months remained in the fiscal year when the contract was

awarded, we have concerns that the contractor can accomplish 6 months

of work in just 4 months. As a result, we believe $510,000 in excess fiscal

year 1996 funds could be used to offset the fiscal year 1997 budget request.

Marine Corps program officials disagreed with the fiscal year 1997

reduction noting that it would place their already accelerated program at

risk and would affect the selected contractor’s ability to correct

government identified deficiencies in its contract proposal. Given the

additional workload cited by program officials, we still believe the

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$510,000 will be excess to fiscal year 1996 needs and can be applied

toward fiscal year 1997 requirements. DOD agreed with the Marine Corps

officials and noted that the fiscal year 1996 funding profile is $510,000 less

than originally planned.

Gun Weapon System

Technology (Line 75)

The Navy’s fiscal year 1997 request of $42.2 million for gun weapon system

technology can be reduced by $2 million because fiscal year 1997

requirements are overstated. In December 1994, the Chief of Naval

Operations approved a revised naval surface fire support plan that

required the Naval Sea Systems Command to (1) initiate upgrades to the

Navy’s 5-inch, MK 45 gun mount to deliver precision-guided munitions and

(2) develop a 5-inch precision-guided munition with an initial operational

capability before fiscal year 2001. The Navy planned to award an

engineering and development contract to modify its existing 5-inch/MK 45

gun mount in November 1995; however, the contract award slipped to

February 1996 because of the complexities of incorporating all the

required modifications into the gun mount contract. As a result, fiscal year

1996 actual contract payments will total $10 million instead of $12 million

as budgeted by the program office. According to a Navy program official,

the $2 million in available fiscal year 1996 funds was used to accelerate

(1) ongoing gun mount fire control development efforts and (2) mission,

tracking, and targeting software changes to a shipboard computer system

to accommodate a precision-guided munition capability, planned fiscal

year 1997 efforts. As a result, we believe that the fiscal year 1997 request is

overstated by $2 million and, therefore, can be reduced by that amount.

Navy program officials disagreed with the reduction noting that it would

introduce unnecessary risk into an ambitious program and would likely

affect their ability to meet the program’s required initial operational

capability date. DOD agreed with the facts but not the reduction. DOD did

not provide new information or further rationale for its position.

New Design SSN 

(Line 106)

The Navy’s fiscal year 1997 request of $394 million for New Design SSN

development can be reduced by $4.7 million because fiscal year 1997

requirements are overstated. The Navy planned to award an engineering

and development contract to integrate sonar and combat control

architecture with related subsystems. However, a delay in the competitive

bid process caused the contract award to slip from January to April 1996.

In addition, critical item testing demonstrated that state-of-the-art

commercial off-the-shelf equipment could work effectively within the

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anticipated system design, resulting in lower than expected fiscal year

1996 contract costs. As a result, the program office will obligate

$12.8 million less in fiscal year 1996 than was planned as of February 1995.

The Navy and DOD reprogrammed $5.5 million, and the program manager

used $2.6 million to make essential adjustments to other fiscal year 1996

developmental efforts and $4.7 million to purchase materials for a related

new SSN design subsystem development effort in fiscal year 1997. Because

the Navy no longer needs to purchase these materials in fiscal year 1997,

we believe the fiscal year 1997 request is overstated and, therefore, can be

reduced.

Navy program officials disagreed with the fiscal year 1997 reduction,

noting that the program manager must retain flexibility to execute

trade-offs in this highly complex developmental system as long as they are

within the overall scope and plan for the program. DOD commented that

the President’s budget reflected a $4.5-million reduction for

program-related changes. However, it did not provide documentation or

further rationale to support its position. Therefore, we were unable to

verify DOD’s position and continue to believe the reduction is warranted.

Unguided Conventional

Air-Launched Weapons

(Line 112)

The Navy’s fiscal year 1997 request of $22.3 million for the unguided

conventional air-launched weapons can be reduced by $1.6 million

because the Navy Comptroller is withholding $1.6 million in excess fiscal

year 1996 funds that can be used to offset fiscal year 1997 program

requirements. According to the Navy Comptroller’s office, these excess

funds are required in fiscal year 1997 and the President’s budget reflected

use of these funds to support fiscal year 1997 requirements. However, we

could not verify the accuracy of the Navy’s position because the Navy did

not provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$1.6 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be reduced by that amount. DOD did not agree with the

proposed reduction but did not provide new information or further

rationale for its position.

Tomahawk and Tomahawk

Mission Planning Center

(Line 154)

The Navy’s fiscal year 1997 request of $136.4 million for the Tomahawk

and Tomahawk mission planning center can be reduced by $3.7 million

because the Navy Comptroller is withholding $3.7 million in excess fiscal

year 1996 funds that can be used to offset fiscal year 1997 program

requirements. According to the Navy Comptroller’s office, these excess

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funds are required in fiscal year 1997 and the President’s budget reflected

use of these funds to support fiscal year 1997 requirements. However, we

could not verify the accuracy of the Navy’s position because the Navy did

not provide data to support its position. Therefore, unless the Navy can

demonstrate that it offset its fiscal year 1997 budget requirements by the

$3.7 million in excess fiscal year 1996 funds, the Navy’s fiscal year 1997

request should be reduced by that amount. DOD did not agree with the

proposed reduction but did not provide new information or further

rationale for its position.

Aviation Improvements

(Line 163)

The Navy’s fiscal year 1997 request of $53.5 million for aviation

improvements can be reduced by $1.4 million because excess fiscal year

1996 funds are available to meet fiscal year 1997 program requirements.

Fiscal year 1997 budget documents show that the program needs about

$64.8 million for fiscal year 1996, or about $2.1 million less than the

amount provided. According to the Navy Comptroller’s office, these

excess funds are required in fiscal year 1997 and the President’s budget

reflected use of these funds to support fiscal year 1997 requirements.

Program office officials told us they plan to obligate these funds in fiscal

year 1997 for electro-optic requirements that were rephased after

submission of the fiscal year 1996 President’s budget and prior to the

submission of the fiscal year 1997 budget. However, Navy documents

supporting the fiscal year 1997 budget request show that the Navy reduced

its fiscal year 1997 requirements by $621,000. Therefore, unless the Navy

can demonstrate that it offset its fiscal year 1997 budget requirements by

another $1.4 million in excess fiscal year 1996 funds, the Navy’s fiscal year

1997 request for this item should be reduced by that amount. DOD did not

agree with the proposed reduction but did not provide new information or

further rationale for its position.

Air Force RDT&E

Programs

The Air Force requested $14.4 billion for RDT&E programs in fiscal year

1997. As shown in table II.4, we identified potential reductions of

$26.9 million to the fiscal year 1997 requests for four items and a potential

rescission of $2.8 million from the expiring fiscal year 1995 appropriation

for another item.

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Table II.4: Potential Reductions and Rescission to Air Force RDT&E Programs

Fiscal year 1997

Dollars in millions

Line

no. Line item description Request

Potential

reduction

Potential rescission

(fiscal year 1995)

46 Advanced Military Satellite Communications $31.643 $15.100 0

78 Munitions Dispenser Development 56.229 3.808 0

137 Advanced Medium Range Air-to-Air Missile 25.883 5.000 0

174 Satellite Control Network 89.960 0 $2.800

182 Titan Space Launch Vehicles 105.472 3.000 0

Total $309.187 $26.908 $2.800

Advanced Military Satellite

Communications (Line 46)

The Air Force’s fiscal year 1997 request of $31.6 million for advanced

military satellite communications can be reduced by $15.1 million because

fiscal year 1997 requirements are overstated. Air Force officials told us

that $15.1 million was requested for the Processing Subsystem Engineering

Model effort. They stated that this effort has been delayed until at least

fiscal year 1998. DOD commented that the funds could be used for other

critical research and development efforts. However, we believe they can

also be used to offset fiscal year 1997 requirements.

Munitions Dispenser

Development (Line 78)

The Air Force’s fiscal year 1997 request of $56.2 million for developing the

Wind Corrected Munitions Dispenser can be reduced by $3.8 million

because the request is overstated by $300,000 and $3.5 million in excess

fiscal 1996 funds is available to meet fiscal year 1997 requirements. Since

submitting the fiscal year 1997 budget request, the program office has

restructured the planned use of the requested funding for several cost

elements. This revised plan includes $16 million for aircraft integration

efforts. However, program documentation indicates that only $15.7 million

is required. Therefore, the request can be reduced by $300,000.

In addition, $3.5 million in excess fiscal year 1996 funds can be used to

offset the fiscal year 1997 request. Program officials were planning to use

$16.2 million for aircraft integration during fiscal year 1996, but, because

of delays in a related program, they now plan to obligate only $12.7 million

during fiscal year 1996. Program officials said that they plan to carry over

the excess $3.5 million to fund aircraft integration in fiscal year 1997.

Program officials agreed with our analysis but expressed concern that the

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unobligated fiscal year 1996 funds might be reprogrammed, which would

create a shortfall in fiscal year 1997. DOD agreed with the reduction.

Advanced Medium Range

Air-to-Air Missile 

(Line 137)

The Air Force’s fiscal year 1997 request of $25.9 million for the Advanced

Medium Range Air-to-Air Missile can be reduced by $5 million because an

equivalent amount of excess fiscal year 1996 funds, if released, is available

to meet fiscal year 1997 program needs. DOD has not released the

$5 million to the Air Force because, according to program officials, the

missile’s preplanned product improvement program does not have a

requirement for these funds. Program officials said the fiscal year 1996

funds already released to the program are sufficient for fiscal year 1996.

DOD commented that the funds were needed to provide additional testing

for the phase 3 product improvement risk reduction effort. However, since

program officials believe program requirements are adequately funded, we

continue to believe the reduction is warranted.

Satellite Control Network

(Line 174)

Of the Air Force’s fiscal year 1995 appropriation of $90 million for the

Satellite Control Network, $2.8 million can be rescinded because program

officials identified this amount as excess to program requirements. The

fiscal year 1995 funds are available because contract award costs were

$2.8 million less than the amount budgeted. These fiscal year 1995 funds

will expire if not obligated by September 30, 1996, and, therefore, are

available for reprogramming or rescission during the remainder of fiscal

year 1996. Air Force officials stated that they planned to include these

funds in the fiscal year 1996 omnibus reprogramming request, but the

funds were not included. DOD agreed with the reduction.

Titan Space Launch

Vehicles (Line 182)

The Air Force’s fiscal year 1997 request of $105.5 million for Titan Space

Launch Vehicles can be reduced by $3 million because excess fiscal year

1996 funds are available to meet program needs. Program officials stated

that because of a delay in awarding a contract for a new guidance system,

only $3.4 million of $6.4 million budgeted for the guidance system could be

obligated. The remaining $3 million in excess fiscal year 1996 funds can be

used to offset the fiscal year 1997 budget request. DOD commented that the

funds had already been deleted from the program. However, we could not

verify the accuracy of DOD’s position because neither DOD nor Air Force

program officials provided documentation to support the position that the

funds had been deleted from the program. Therefore, we continue to

believe that the reduction is warranted.

Page 56 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix II 

Potential Reductions and Rescissions to

Research, Development, Test, and

Evaluation Programs

Defense-Wide RDT&E

Programs

DOD requested $8.4 billion for Defense-wide RDT&E programs in fiscal year

1997. As shown in table II.5, we identified potential reductions of

$173.7 million to the fiscal year 1997 request for six items and a potential

rescission of $821,000 from expiring fiscal year 1995 appropriation for one

item.

Table II.5: Potential Reductions and Rescission to Defense-wide RDT&E Programs

Fiscal year 1997

Dollars in millions

Line

no. Description of item Request

Potential

reduction

Potential rescission

(fiscal year 1995)

16 Defense Nuclear Agency $195.131 $15.500 0

64 Theater High Altitude Area Defense-Theater Missile Defense 269.000 129.300 0

70 Corps Surface-to-Air Missile -Theater Missile DefenseDemonstration/Validation 56.232 10.790 0

73 Other Theater Missile Defense/Follow-on Theater Missile Defense 520.111 0.489 $0.821

78 Theater High-Altitude Area Defense System-Theater Missile Defense 212.798 15.000 0

80 Patriot PAC-3 Theater Missile Defense Acquisition 381.509 2.645 0

Total $1,634.781 $173.724 $0.821

Defense Nuclear Agency

(Line 16)

The Defense Nuclear Agency’s fiscal year 1997 request of $195.1 million

can be reduced by $15.5 million because fiscal year 1997 requirements are

overstated by $7 million and $8.5 million in excess fiscal year 1996 funds is

available to meet fiscal year 1997 program needs. The Agency received

$8.5 million in fiscal year 1996 and requested $7 million in fiscal year 1997

for the Thermionic Experiment with Conversion in Active Zone program.

On February 15, 1996, the Agency terminated the program’s hardware

purchase contract. Therefore, the $7 million requested for fiscal year 1997

is no longer needed, and the $8.5 million in excess fiscal year 1996 funds

can be used to offset fiscal year 1997 requirements.

Theater High-Altitude Area

Defense -Theater Missile

Defense (Line 64)

The Ballistic Missile Defense Organization’s fiscal year 1997 request of

$269 million for the Theater High-Altitude Area Defense program can be

reduced by $129.3 million because (1) the Army plans to commit

$128 million for production of missile interceptors well before testing

provides some assurance of their operational capabilities and

(2) $1.3 million is excess to program requirements.

Page 57 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix II 

Potential Reductions and Rescissions to

Research, Development, Test, and

Evaluation Programs

The fiscal year 1996 appropriation included $65 million to begin producing

40 User Operational Evaluation System interceptors; an additional

$63 million is requested for fiscal year 1997 to continue production. In

August 1996, the Army plans to exercise a contract option to acquire the

interceptors; however, sufficient data for a limited assessment of their

operational capabilities will not be available until limited user tests are

completed in early 1998. Over the years, we have reported on the

production of systems prior to conducting adequate operational testing.

The consequences have included the acquisition of unsatisfactory

weapons requiring costly modifications and/or the deployment of

substandard systems to combat forces. Delaying the contract until user

tests are completed would delay final delivery of the interceptors to late

2000. This is about 1-1/2 years later than currently planned but before the

system’s initial fielding scheduled for the 2006 timeframe.

The program’s fiscal year 1996 appropriation included $1.5 million to

modify a classified target for use in the demonstration and validation

phase’s flight test program. However, the Ballistic Missile Defense

Organization subsequently determined that the classified target only

required $200,000 for maintenance rather than modifications. Ballistic

Missile Defense Organization officials acknowledged that the remaining

$1.3 million was not needed for the classified target but stated that they

would like to retain the funds for mission support at the flight range.

However, these funds are not needed for this purpose because range

support for the program’s demonstration and validation phase flight test is

already fully funded.

DOD commented that (1) Congress wants this capability by fiscal year 1998

and our suggested reduction would adversely affect that objective, (2) the

contract option for the interceptors will not be exercised until after a

successful target intercept, and (3) the need to fund the classified target

caused an unplanned reduction to other efforts and the $1.3 million not

needed for the target was returned to the original efforts. We continue to

believe that it is premature to procure the interceptors. As stated in our

recent report, we are concerned with the risks inherent in the Army’s

accelerated approach of contracting for interceptors to be deployed before

testing provides assurance of the interceptor’s effectiveness and

recommended that the Secretary of Defense seek legislative relief from the

requirements of the 1996 National Defense Authorization Act in regards to

acquiring the capability by fiscal year 1998.3

 Regarding the classified target

3

Ballistic Missile Defense: Issues Concerning Acquisition of THAAD Prototype System

(GAO/NSIAD-96-136, July 9, 1996).

Page 58 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix II 

Potential Reductions and Rescissions to

Research, Development, Test, and

Evaluation Programs

funding, we determined that the target was funded from a separate

account that funds demonstration and validation targets and that the funds

are no longer needed for that purpose. Therefore, we have not changed

our position.

Corps Surface-to-Air

Missile-Theater Missile

Defense-Demonstration/

Validation (Line 70)

The Ballistic Missile Defense Organization’s fiscal year 1997 request of

$56.2 million for the Corps Surface-to-Air Missile program can be reduced

by $10.8 million—$8.2 million because of slippage in the award of fiscal

year 1996 contracts and $2.6 million because the contract slippage reduces

fiscal year 1997 funding requirements.

On May 1, 1996, the Army awarded international teaming contracts to two

U.S. contractors to define development work to be done by two

international prime contractor teams during the follow-on project

definition-validation phase. According to an Army official, because the

period of performance for the teaming contracts is 120 days and other

actions need to be taken before the contracts are awarded, the follow-on

project definition-validation phase contracts cannot be awarded until the

end of fiscal year 1996 or early fiscal year 1997. Thus, we believe it is

highly unlikely that the prime contracts can be awarded before fiscal year

1997 and, therefore, the $8.2 million provided for the contracts in fiscal

year 1996 can be used to offset fiscal 1997 requirements.

Assuming the project definition-validation phase prime contracts are

awarded in July 1996, the project office estimated the U.S. share of the

fiscal year costs for the two prime contracts would be $46.7 million.

However, because of the delays in awarding the international teaming

contracts, the prime contracts will probably not be awarded until the end

of fiscal year 1996, or more likely, the first quarter of fiscal year 1997. This

delay reduces the contractors’ anticipated effort in fiscal year 1997 and

will result in a $2.6-million decrease in the estimate of work to be done.

DOD commented that (1) even though award of the project

definition-validation phase contracts has slipped to September 1996, the

planned contract completion date of December 1998 agreed to in the

multinational memorandum of understanding has not slipped; (2) the

proposed reduction could result in delaying the project

definition-validation phase completion date and breaking the existing

agreement; and (3) the fiscal year 1997 request was based on industry

proposals for the U.S. share of the effort only and subsequent agreements

Page 59 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix II 

Potential Reductions and Rescissions to

Research, Development, Test, and

Evaluation Programs

to relocate European efforts to the United States will require additional

up-front funding in fiscal year 1997.

The memorandum of understanding states that the project

definition-validation phase is planned for completion in calendar year 1998

and will remain in force until the phase is completed or for 5 years,

whichever occurs first. Therefore, our proposed reduction should not

effect the agreement. Additionally, the budget estimate of the U.S. share of

the prime contractor’s project definition-validation effort exceeded the

contractors’ estimates by $14.7 million, of which about $6.5 million was

budgeted for fiscal year 1997. Considering the 6-month schedule slippage

and the $14.7-million overestimate, the program should have sufficient

funds to maintain stability. Therefore, we continue to believe the

reduction is warranted.

Other Theater Missile

Defense/Follow-on Theater

Missile Defense (Line 73)

The Ballistic Missile Defense Organization’s fiscal year 1997 request of

$37.2 million for the Arrow missile can be reduced by $489,000 because

excess fiscal year 1996 funds are available to meet fiscal year 1997

requirements, and $821,000 can be rescinded from the fiscal year 1995

appropriation.

In February 1996, the project office received an additional $1.3 million in

fiscal year 1995 funds to support the Arrow Deployability Project. Of this

amount, $489,000 was used to fund fiscal year 1996 requirements and the

remaining $821,000 was unobligated as of April 29, 1996. Therefore, we

believe $489,000 in fiscal year 1996 funds—the amount no longer needed

because requirements were met with fiscal year 1995 funds—is available

to offset fiscal year 1997 requirements, and the remaining $821,000 can be

rescinded. The excess fiscal year 1995 funds will expire if not obligated by

September 30, 1996, and, therefore, are available for reprogramming or

rescission during the remainder of fiscal year 1996. The project office

agreed that the $1.3 million is excess to program needs. However, DOD did

not agree with the $821,000 rescission stating that the funds will be

obligated by September 30, 1996. Because DOD did not provide

documentation for its obligation plans, we continue to believe the funds

are available for reduction or rescission.

Theater High-Altitude Area

Defense System-Theater

Missile Defense (Line 78)

The Ballistic Missile Defense Organization’s fiscal year 1997 request of

$212.8 million for the Theater High-Altitude Area Defense system can be

reduced by $15 million because the fiscal year 1997 requirement is

Page 60 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix II 

Potential Reductions and Rescissions to

Research, Development, Test, and

Evaluation Programs

overstated. The requirement is overstated because the current

demonstration and validation phase program for this system includes

funding to procure 20 interceptors for flight tests; however, only 15 flight

tests are scheduled. Because they use the same components, the

remaining interceptors could be used to fulfill a fiscal year 1997

requirement for five partial interceptors for the early engineering and

manufacturing phase safety and hazard assessment tests.

The project office agreed that the five demonstration and validation

interceptors could be used in the early engineering and manufacturing

development tests. Army and Ballistic Missile Defense Organization

officials said that they would prefer using the interceptors for canceled

tests or other requirements that may surface. However, the interceptors

can only be used if the cancelled tests are reinstated, and to reinstate them

would require significant additional funding, which is not currently

available. DOD did not agree with the reduction but did not provide new

information or further rationale for its position.

Patriot PAC-3 Theater

Missile Defense

Acquisition (Line 80)

The Ballistic Missile Defense Organization’s fiscal year 1997 request of

$381.5 million can be reduced by $2.6 million because fiscal year 1997

requirements are overstated by $1.3 million and $1.3 million in excess

fiscal year 1996 funds is available to meet program needs.

According to the project office, program restructuring reduced the fiscal

year 1997 engineering and manufacturing development phase contract

requirements by $1.3 million. An extension of Patriot’s engineering and

manufacturing development phase, according to the product manager for

theater targets, also reduced fiscal year 1996 target requirements by

$1.3 million. These excess funds can be used to offset the fiscal year 1997

budget request.

DOD commented that the funds were still needed for engineering and

manufacturing development phase contractual requirements and that the

proposed reduction for targets is inappropriate because the target

procurement process for the first flight test has already begun. However,

Patriot program officials agreed that the $1.3 million for engineering and

manufacturing development was excess to fiscal year 1997 requirements

and the theater missile defense’s target office agreed that the $1.3 million

was excess to Patriot’s target requirements in fiscal year 1997. Because

DOD did not provide new information or further rationale for its position,

we continue to believe the reduction is warranted.

Page 61 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix III 

Scope and Methodology

We reviewed DOD’s procurement and RDT&E programs that we identified

from our ongoing assignments and the initial phase of this assignment as

having cost, schedule, performance, or programmatic concerns. To

achieve our objectives of identifying potential reductions to the fiscal year

1997 requests and potential rescissions of prior years’ appropriations, we

interviewed program officials and reviewed program documentation such

as budget requests and justifications, monthly program status reports,

correspondence, briefing reports, and accounting and financial reports.

We performed our work at numerous DOD and military service

organizations. Some of the organizations we visited were

• Office of the Secretary of Defense and Army, Navy, Air Force, and Marine

Corps headquarters, Washington, D.C.;

• Army Materiel Command, Alexandria, Virginia;

• Army Aviation and Troop Command, St. Louis, Missouri;

• Army Communications-Electronics Command, Fort Monmouth, New

Jersey;

• Army Tank-Automotive and Armaments Command, Warren, Michigan;

• Army Missile Command and Ballistic Missile Defense Organization,

Huntsville, Alabama;

• Army Space and Strategic Defense Command, Huntsville, Alabama;

• Program Executive Office, Theater Missile Defense, Huntsville, Alabama;

• Naval Air and Sea Systems Commands, Arlington, Virginia;

• Naval Undersea Warfare Center Division, Newport, Rhode Island;

• Air Force Materiel Command, Space and Missile System Center, Los

Angeles, California;

• Air Force Materiel Command, Aeronautical Systems Center,

Wright-Patterson Air Force Base, Ohio; and

• Air Force Materiel Center, Electronic Systems Division, Hanscom Air

Force Base, Massachusetts.

We conducted our review from October 1995 to June 1996 in accordance

with generally accepted government auditing standards.

Page 62 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix IV 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Raymond Dunham, Project Director

Robert J. Stolba, Project Manager

Raymond W. Allen

Jerry W. Clark

Samuel N. Cox

James A. Elgas

Daniel M. Fleming

Lawrence D. Gaston, Jr.

John D. Heere

Daniel C. Hoagland

Rosa M. Johnson

Steven F. Kuhta

Howard R. Manning

Robert D. Outerbridge

Richard J. Price

Wanda M. Slagle

Bruce H. Thomas

Homer H. Thomson

Charles A. Ward

Atlanta Field Office Tana M. Davis

Lee A. Edwards

Leon S. Gill

T. Wayne Gilliam

Thomas L. Gordon

Bobby D. Hall

Barbara H. Haynes

William S. Lipscomb

Carol T. Mebane

Danny G. Owens

John W. Randall, Jr.

Angel D. Sharma

Wendy P. Smythe

Dana S. Solomon

John S. Warren, Jr.

Boston Field Office Raffaele Roffo

Ralph L. Tavares

Paul G. Williams

Page 63 GAO/NSIAD-96-193BR 1997 Defense Budget
Appendix IV 

Major Contributors to This Report

Chicago/Dayton Field

Office

Edward R. Browning

Johnetta C. Gatlinbrown

Daniel J. Hauser

Robert D. Murphy

Richard L. Strittmatter

Myra A. Watts

Kansas City/St. Louis

Field Office

Gary L. Billen

Charles O. Burgess

Richard E. Burrell

Lawrence A. Dandridge

William H. Gansler

Lauri A. Kay

Lillian I. Slodkowski

Robert D. Spence

Los Angeles Field

Office

Samuel L. Hinojosa

Thaddeus S. Rytel, Jr.

Lorene S. Sarne

Allen D. Westheimer

Norfolk Field Office Henry Arzadon

Paul A. Latta

(707136) Page 64 GAO/NSIAD-96-193BR 1997 Defense Budget
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