Department of the Army Historical Summary: FY 1972

IX

Logistics

In the fall of 1969, against a background of numerous developments of major logistical import -Army strength beginning to recede from a wartime plateau, major redevelopments from the war zone getting under way, worldwide redistribution of materiel in prospect, comprehensive adjustments being launched to make an all-volunteer Army workable- it became essential to develop a plan to bring the logistics system under intensive management. Because of the magnitude and operational urgency of the task, the plan was called the Logistics Offensive.

The initial phase was devoted to making some immediate and short-term management improvements that would contribute to the success of the highest priority missions. The second phase, extending from January 1971 through all of fiscal year 1972, involved comprehensive action to develop standardized information and communication capabilities to improve management of the logistics system at all levels. The central feature was a Logistics System Master Plan to standardize management and to control future logistics system developments. As this was completed in May 1972, the next phase-to move the logistics system along the newly established development paths-was initiated as the fiscal year closed.

Certain clearly defined improvements had been attained as the period ended. The Army's logistics was providing the American soldier with what he needed, where and when he needed it, and in the condition required for his use. The dollar impact on the nation's budget, the citizen, the taxpayer, had been reduced; logistics budget requests were cut by $1.8 billion, and high priority requirements that would have called-had the plan not been instituted-for about $3.5 billion in funding over the past three years were satisfied.

The United States Congress restructured the Army's single procurement appropriation, breaking it out into five separate procurement appropriations starting with fiscal year 1972. The long familiar Procurement of equipment and Missiles, Army (PEMA) appropriation is supplanted by

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Aircraft procurement, Army
Missile procurement, Army
Procurement of weapons and tracked combat vehicles, Army
Procurement of ammunition, Army
Other procurement, Army

This change in the appropriation structure appeared in House Appropriations Committee Report No. 92-666 of November 11, 1971, and Senate Appropriations Committee Report No. 92-498 of November 18, 1971. The House report noted that the Army's single appropriation gave the Army far greater flexibility to move funds within the appropriation than that enjoyed by the Navy and the Air Force, each of which have three separate procurement appropriations. It was also stated that Congress had only limited visibility and control over the one large Army appropriation, and had difficulty in relating procurement authorizations for separate categories (aircraft, missiles, weapons, tracked vehicles) to the total appropriation.

The change was implemented by the Office of the Secretary of Defense through conversion of its computer records, and by the Army, by the end of calendar year 1971. At Army level, every effort was made to avoid complications in the existing management structure and procedures and to take advantage of the restructuring of the five appropriations to make necessary adjustments.

Shown below is a comparison of actual procurement programs, including approved reprograming, under the new structure covering the last three fiscal years (in millions of dollars)

The Army's aircraft procurement appropriation finances the acquisition of tactical, training, and utility airplanes and helicopters, and associated electronics, communications, and armaments systems; modification of in-service aircraft; ground support equipment; and centrally managed high-value depot reparable assemblies and repair parts such as engines, transmissions, gear boxes, and major components. Of the $106.6 million aircraft procurement authorization in fiscal year 1972, $33.8 million was allocated to purchase 400 OH-58 light observation helicopters, $3.3 million was for avionic test sets, $40.3 million

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was assigned to modification of aircraft already in hand, $10.1 million was allotted for spare parts to support a worldwide inventory of 10,500 aircraft, and the remaining $19.1 million was for ground support equipment, first destination transportation, and production base support.

Congress appropriated sufficient funds in fiscal year 1972 to permit substantial improvement in surface-to-surface and surface-to-air capabilities. Safeguard, the antiballistics missile system, however, was funded at the same level as fiscal year 1971. Missiles and launchers for the Dragon, TOW, and Lance systems were procured in quantity. These will provide surface-to-surface weapons with greater flexibility, range, and accuracy than any previously available. The Lance is designed for use by higher combat echelons against long range targets, while the Dragon and TOW will provide the individual soldier with accurate and lightweight antitank weapons never before available to him. The TOW demonstrated its capabilities successfully in Vietnam. In the surface-to-air role, the improved Hawk was about to enter the inventory as the year closed, and a major modification of the Chaparral was in progress.

In fiscal year 1972, the procurement of weapons and tracked combat vehicles amounted to $107.3 million for tracked combat vehicles and $42.5 million for weapons and other combat vehicles. This provided financing for tanks, armored vehicle-launched bridges, grenade launchers, laser range finders; improvements to personnel carriers, tanks, howitzers, recovery vehicles, and weapons; and support equipment and facilities, among other things. Amounts in both categories will rise in fiscal year 1973 to $189.1 million and $70.4 million respectively. The major elements were the tank programs. The M60A2 modification program moved ahead, with orders for 210 tanks awarded to the Chrysler Corporation on November 29, 1971, with initial delivery scheduled in October 1972. Appropriated was $20 million to terminate the XM803 (MBT70), with an equal sum to initiate development of a new main battle tank. A special task force was formed in January 1972 to develop new performance characteristics within guidelines established by the Congress.

The fiscal year 1972 budget was essentially designed to meet forecasted worldwide losses of ammunition-primarily consumption

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in Southeast Asia and in training. Funding had been based upon estimated consumption-actual rounds-per-tube experience for the twelvemonth period ending in November 1970; it provided full support for the Army of the Republic of Vietnam and an anticipated drop in consumption by U.S. troops. Unforeseen was the forthcoming North Vietnamese invasion of South Vietnam, which required a budget amendment on which action was pending as the year closed.

This appropriation, covering such commodities as trucks, trailers, communications equipment, materials handling equipment, and boats was divided into three categories, with allocations of $211.1 million for tactical and support vehicles, $143.0 million for communications and electronics, and $153.1 million for other support equipment.

Among the significant developments in this area during the fiscal year: the 1 /4-ton truck, the M561, was released for shipment worldwide; the 8-ton GOER truck contract was restructured from a five- to a four-year procurement of 1,300 units; the tactical and support vehicle program was reduced; communications and electronic contracts for command and control systems, computers, and radios were awarded or funded; and support equipment procurement was programed.

The over-all decrease in ammunition consumption in Southeast Asia coupled with worldwide improvements in the over-all ammunition situation, led to a reduction from 33 to 24 in the number of ammunition items controlled by the Department of Army Allocation Committee for Ammunition.

Fiscal year 1972 was the fourth year of a twelve-year and $3.5 billion program to modernize ammunition facilities. Future year expenditures must average $400 million to complete the program as planned. Priority is being given to eliminating hazards connected with the production of explosives and propellants. Pollution is also receiving attention in accordance with executive orders.

There was further progress in fiscal year 1972 in tailoring maintenance concepts to specific commodity and weapons systems. Revised maintenance support concepts for six additional commodity groups were developed, and the allocation of maintenance tasks for the major payload vehicles of the Army was revised and plans prepared for a limited

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field evaluation. Computer models were used increasingly to evaluate alternatives in the allocations of maintenance tasks.

Efforts 'were also continued to simplify maintenance tasks. Requirements for modular design were incorporated in documents defining new equipment to further the concept of repair by modular replacement. To insure availability and control, the system for direct exchange of unserviceable for serviceable modules was being expanded and standardized. A manual system to achieve this in field units was developed and tests were scheduled. An automated version of the system will follow.

To improve the maintenance of Army equipment in troop units, an intensive motivation and education program was undertaken as a part of the Command Maintenance Program. A departmental board for command maintenance was formed to conduct seminars and briefings in the subject area, and traveled to thirty-two locations at home and abroad to inform commanders at all levels of the principles underlying maintenance policies and programs and to solicit recommendations to improve them.

During fiscal year 1972 the Army Maintenance Management System was simplified and streamlined through the use of new data collection methods. The requirement to report a large volume of data to the national level was eliminated, and new statistical sampling techniques were introduced. The latter are incorporated into a series of sample data collection plans for selected types of equipment, plans that provide for a controlled reporting system to limit the amount, of recording and reporting of maintenance actions at the troop unit level to the minimum essentials needed for management purposes. To test the concept, reporting was initiated in February 1972 on the 1/4-ton utility truck, covering 2 percent of the fleet or 1,500 vehicles, and by year's end had been expanded to eight types of equipment. Others will be added in fiscal year 1973.

Concepts were developed in 1969 and 1970 and guidance was issued to insure that only the required range and quantities of repair parts would be designated for initial distribution with new equipment. Experience during fiscal year 1972 indicates that the repair parts initially furnished to the soldier are being reduced by some 45-50 percent, about double the magnitude envisioned when initial provisioning concepts were revised. The changes have improved the Army's ability to support the initial deployment of equipment; increased the ability of mangers to control the initial provisioning process; reduced the investment costs; and minimized excesses inherent in provisioning judgments.

There was progress also in the effort to control and reduce the

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costs of ancillary items required to operate major equipment. Policy changes were issued relating to accountability, transfer, retrograde, and turn-in of major equipment for repair and overhaul, and should result in reduced inventories and expenditures for these items.

To insure the serviceability and readiness of prepositioned materiel configured as unit sets, revised guidance was developed concerning care and preservation. As the year closed, preparations were under way for a serviceability and property management survey of these stocks in Europe.

As American involvement in Vietnam declined, the emphasis of the Closed Loop Support System was gradually redirected to the Army's logistics readiness worldwide. Conferences were held in the year to identify items that are adversely affecting command logistical readiness. Major commanders were encouraged to accept the program as a means of upgrading materiel readiness and to nominate items to be added to the program.

The Maintenance Assistance and Instruction Team Program, described in last year's report, was evaluated during fiscal year 1972 and was judged to be valid and accepted Army-wide.

The maintenance capabilities of the Army National Guard have been used to expedite the redistribution of equipment from Vietnam to Guard sources in the United States. Selected unserviceable equipment is moved to National Guard shops without going through the normal Army wholesale system for redistribution. The active Army provides repair while the Guard supplies the labor, a procedure initiated in 1971 with 250 2 1/2-ton trucks as a test case. Both time and money were saved, and in fiscal year 1972, armored vehicles were added to the program. Other items will be phased in until National Guard requirements have been met.

Finally, the Army's policy-adopted in August 1970-to use retread tires to satisfy 75 percent of replacement needs has produced significant savings. In fiscal year 1971, 303,632 tires representing 52 percent of total tire requirements were retreaded at a saving of $9.9 million; in fiscal year 1972, 322,943 tires representing 63 percent of needs were retreaded at a saving of $9.2 million. Because of the success the Army was asked to develop a joint regulation that would extend the program to all of the services.

During the Vietnam conflict the Army used special materiel management and shipping procedures to support weapons systems in Vietnam. The highly controlled system was co-ordinated directly between Vietnam and the aviation commodity manager of the U.S. Army

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Aviation Systems Command at St. Louis, Missouri. The Aviation Management Center in Vietnam provided central management of aviation materiel. Early in 1972, U.S. Army, Pacific, prepared plans to transfer aviation weapon system management from Vietnam to Okinawa effective July 1, 1972. The new organization will be titled the Theater Aviation Materiel Management Center. It will manage aviation materiel for all United States and Free World military forces in the Western Pacific that use Army aircraft, and will be integrated as a directorate into the Okinawa Base Command.

Various elements of aviation logistics have been and will be tested in exercises. In fiscal year 1972, an exercise to test the offshore discharge of containership included an air element. LOG LIFT I, as the air portion was called, demonstrated that medium and heavy lift helicopters have the capability to serve in a logistics role in offshore discharge operations. An airhead clearance exercise was scheduled for the spring of 1973 to evaluate the medium and heavy lift helicopter capability for sustained operation and to evaluate air terminal equipment for compatibility with U.S. Air Force systems. The exercise will also test requirements for the forthcoming heavy lift helicopter.

Since April 1966, an Army aircraft depot maintenance unit, the 1st Transportation Corps Battalion, has been stationed offshore in Vietnam aboard a Navy ship, the USNS Corpus Christi Bay. The unit and ship comprise a Floating Army Maintenance Facility. With the reduction of American forces in Vietnam, it was decided to return the facility to Corpus Christi, Texas, where it would remain operational to support contingencies anywhere in the world. Departing Vietnam on April 16, 1972, the ship had stopped for maintenance at Sasebo, Japan, when the Army Command in Vietnam requested its return to provide further aircraft maintenance support required by an upsurge in enemy activity. The floating aircraft maintenance facility demonstrated its mobility and flexibility by returning to its duty station off Vietnam and becoming fully operational on May 31, 1972.

The concept of employing a military aircraft depot maintenance unit aboard a ship has been highly successful. By the time the phasedown began in Vietnam, the facility was repairing or overhauling each year about 80,000 items with a new value of $18 million and filling over 26,000 parts requests for grounded aircraft. It also provided unique technical and fabricating capability to Vietnam and supported numerous emergency requirements, contributing to the highest operational readiness rates ever achieved by Army aircraft.

During the buildup of U.S. forces in Vietnam, a Department of the

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Army Distribution/Allocation Committee was established to control the allocation of critical supply items. This has proved to be so effective that the process has been continued as a means of insuring the best possible worldwide readiness with the limited quantities of materiel available. In fiscal year 1972, direction over the flow of controlled items to subordinate elements of U.S. Army, Pacific, was emphasized. Also at departmental level an asset control task force was established in March 1972 to review control, reporting, and accounting procedures.

In fiscal year 1972, Army stock fund obligations amounted to $2.5 billion to support $2.9 billion in sales. The obligations were only slightly below those of fiscal year 1971, while the sales level declined by 6 percent ($0.2 billion) from the previous fiscal year. The 1972 trend-of obligations holding steady with a slight but continuing decline in sales-reflects the leveling off of declining support requirements, evident in operational trends of the last two years. The direct-support system became operational in U.S. Army, Europe, and in the Eighth U.S. Army, Korea, during fiscal year 1972, resulting in a further reduction in oversea operating stockage requirements.

Fiscal year 1972 obligations for equipment and missile secondary items totaled $80.7 million in support of $933.9 million of issues. While fiscal year 1972 obligational authority was only $2.0 million (or 3 percent) less than fiscal year 1971, it should be noted that provisioning obligation authority in support of new equipment deployments increased by $15.4 million, or 100 percent over fiscal year 1971. Disregarding the provisioning obligations, decrease in replenishment obligations amounted to $17.7 million, or 22 percent, while issues declined $207.3 million, or only 18 percent. This trend of obligations, decreasing at a rate greater than the decrease in demands and issues, indicates increased utilization of on-hand long stocks and a corresponding decrease in year-end levels. It is expected that this trend will level off after all excess assets have been returned from Vietnam. However, there was a very high level of unserviceable applicable returns, and the favorable overall relationship of returns to issues is expected to continue.

Continued attention was given to physical inventory procedures during fiscal year 1972. The frequency with which sensitive items are inventoried was increased; effective in January 1972 selected items -those controlled under the Selective Items Management System (SIMS)- will be inventoried at least once each fiscal year at stateside and oversea depots; sample inventories are prohibited. Quarterly inventories will be conducted at stateside installations and direct and general supply units. All sensitive items in the hands of units on property books will be completely inventoried at least quarterly.

In April 1972 the Office of the Secretary of Defense approved a

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plan for the integrated management of bulk fuels. This function, which has been performed by the Army Petroleum Center under the Army Materiel Command, will be transferred on May 1, 1973, to the Defense Fuel Supply Center of the Defense Supply Agency. The Army will retain responsibility for physical management and control of inventories in Army-controlled terminals, but product ownership passes to the Defense Supply Agency. The Army Petroleum Center will be dissolved and remaining service petroleum functions will be transferred to the General Materiel Parts Center, New Cumberland Army Depot, Pennsylvania.

In consonance with decisions related to fielding a thirteen-division force, the 9th Infantry Division and the 101st Airborne Division (Airmobile) were activated and reconstituted at Fort Lewis, Washington, and Fort Campbell, Kentucky, respectively. This action required careful co-ordination to insure that equipment delivery would coincide with the arrival of personnel assigned to component units. As the year closed the phasing-in of equipment and personnel was working effectively.

The Army's oversea passenger and cargo movements were down slightly in fiscal year 1972 from those of the previous year. The Military Sealift Command moved about 11,074,900 measurement tons, while the Military Airlift Command moved about 172,200 short tons, both about 9 percent below fiscal year 1971 levels.

With respect to passengers, the Army continued to use the most expeditious means to move personnel and save man-days of travel. About 1,056,600 Army-sponsored passengers were transported worldwide, 992,200 by air, the remainder by sea.

An intensified customs inspection program was initiated by the Department of Defense in June 1971, under which the Department of the Army was designated executive agent for customs matters. The Department of Defense Customs Inspection Program was instituted to prevent the use of the Defense Transportation System to transmit illegal narcotics, drugs, and other forms of contraband. It established policies and procedures for customs inspection and examination of personnel, personal property, and military cargo, and of mail originating in oversea areas and destined for customs territory of the United States or movement within the Defense Transportation System overseas. The regulations were to be effective July 1, 1972.

Restraint on the use of premium transportation was maintained through the year under the Airlift Challenge Program, which provides for automatic review, survey, and challenge of requirements initiated by field commands. An average of 3,300 shipments per month was

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diverted from airlift to sealift at an estimated saving of $5.3 million per month, all without detriment to delivery dates.

Military Standard Transportation and Movement Procedures (MILSTAMP) continued to provide effective means to control the movement and documentation of cargo within the Defense Transportation System. The Army identified a need to extend MILSTAMP overseas as a prerequisite to obtaining total pipeline visibility in oversea areas. The extension will provide a data base to develop standard port operating procedures using automated data processing systems. Initial moves in the project were taken in the last half of the fiscal year.

Sealift remains a critical consideration in Army planning and operations. Economic factors have compelled the civilian maritime industry to convert merchant ships from a break-bulk to a container fleet. The Military Sealift Command has predicted that there will not be enough break-bulk dry cargo ships after 1972 to meet Department of Defense cargo requirements. Since the Army must rely upon the commercial maritime industry to transport the bulk of its cargo, it is imperative that the Army logistics system be compatible with the civilian maritime industry. Experience in Vietnam revealed that containerization offers a potential means for reducing logistical cost and improving the responsiveness of the logistical system in both peacetime and wartime. The Department of Defense has been using commercial container services to distribute a significant portion of its materiel to locations worldwide. But present military facilities, equipment, concepts, and doctrine are inadequate and incompatible with the newly developed commercial container system, and the Army's logistical capability in the 1972-1982 decade will be impaired unless the potential of the commercial industry is capitalized upon.

Within the Department of Defense a steering group comprised of service representatives was established in September 1971 to coordinate surface and air container systems development and provide systems managers with guidance and direction. A Department of Defense project manager's office was established, jointly staffed, to handle surface container-supported distribution systems development, and located with the Commander of the Army Materiel Command. This office prepared and the services approved a master plan that addressed funding, equipment, research, and evaluation. In addition, improvements in the container chassis (MILVANS) were under study to improve surface mobility. The MILVAN is being tested for air movement under the supervision of a land-air-land container task group, and operational evaluations were conducted in the area of offshore discharge of containerships.

The Army's railway fleet (motive power, rolling stock, special

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equipment) consists of approximately 13,000 pieces of equipment, with an estimated replacement value about $800 million. Equipment age ranges from 15-30 years. The fleet is adequate to support utility railroad operations; however, most of the equipment that would be used by military railroads in oversea operations and in continental United States interchange service is or will shortly be technically obsolete. To insure that the Army's railway fleet is a viable element in the mobility structure, and adequate to meet operational contingencies, a program to upgrade and modernize it was begun in fiscal year 1972. Over the course of five years the diesel electric locomotive fleet will be rebuilt. General purpose tank cars of 20,000 gallon capacity will be purchased for the interchange rail fleet operated by the Military Traffic Management and Terminal Service. Modernization of the contingency rail fleet maintained in storage is being examined, and elements that cannot be upgraded for oversea operation after 1975 will be disposed of. Procurement that would standardize motive power to two types of locomotives is being planned for 1975.

In the area of water transportation, the interagency study, Sealift Procurement and National Security (SPANS), was launched in May 1971 to identify the sealift procurement system that would make the best use of Defense financial resources in the light of its national security mission. Defense representatives, including the service secretaries, joined those of the Department of Commerce, the Federal Maritime Commission, and the Office of Management and Budget on a senior advisory group to review elements of the study. Two of the four parts of the study had been completed by year's end.

The majority of the Army's watercraft fleet is over-age and rapidly approaching technological obsolescence. Extensive use in Southeast Asia, with only limited opportunity for maintenance and with increasing difficulty in obtaining repair and replacement parts, has compounded the problem. To insure the best possible utilization at the minimum cost, and to insure that the Army's watercraft fleet is prepared to support active Army and reserve units, new policies and objectives for fleet use were issued in August 1971 covering management, procurement, disposal, and maintenance, and the withdrawal of watercraft from Vietnam.

In fiscal year 1972, the Army gradually disengaged from its operational logistics role in Southeast Asia as large numbers of American soldiers were withdrawn from Vietnam. Huge stocks of supplies and equipment had to be redistributed. Air and surface transportation were brought under tighter control, and assets and requirements were reviewed so that the needs of the residual forces could be met and excess stocks disposed of in the most practicable and economic way. Although

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some supplies and materiel did not warrant either the labor and cost of salvage or the expense of shipment back to the United States, a large amount of Army materiel -about 643,000 short tons as of July 1971- was considered to be suitable for return. Through careful control over shipments, using airlift for selected items, expanding the use of containerization, and co-ordination of shipping in Southeast Asian waters, all but 20,000 tons had been returned to the United States by the end of the year.

To measure the cost effectiveness of moving perishables for American troops from home to overseas, a test was begun in February 1972 to compare costs of the shipment of lettuce by air and by sea. Costs and spoilage under both modes of shipment will be compared. The test should contribute to policy determinations concerning the airlift of perishable substances.

Annual reports of military activities regularly record the establishment of all kinds of committees, programs, and projects, but rarely take note of terminations. In fiscal year 1972, a logistics operation called Streamline was terminated effective with the- end of the year. The program was designed to promote the maximum in logistics efficiency, to reduce manpower and money requirements, and to improve readiness through new logistic management and operational concepts. The principal objectives were to reduce stockage, eliminate excesses, reduce order and ship times, and apply inventory-in-motion principles, and these had either been accomplished or were near completion on June 30, 1972. Streamline tasks that had not been completed were moved into the Army-wide upgrading effort.

The concerted effort begun in 1971 to reduce the vast quantity of items in the Army supply system, and which saw the Army Catalog reduced from 1.4 to 1.2 million active items, was continued in 1972. A special effort was made to reduce further the number of items and to limit requisitioners to items listed in the active portion of the Army Master Data File. Exceptions were made for medical items and repair parts. Slow moving items were eliminated and the range of types, sizes, and grades of items was reduced. As the year closed there were 815,000 active items in the Army Catalog.

In the spring of 1971, against the background of a sharply declining American involvement and the increasing possibility of an end to the war, U.S. Army, Vietnam, undertook a study to determine the quantities of supplies and equipment on hand in the war zone, the possible extent of American requirements, and the magnitude of the task of

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returning unneeded stocks to the United States. It was concluded that, beginning July 1, 1971, some 650,000 short tons of Army materiel would remain to be shipped out of Vietnam, assuming that all U.S. Army units departed the country. This tonnage included materiel in the hands of units, in depots, being used by contractors, or excess to needs and available for disposal. The study was inhibited by such considerations as estimating how much materiel would be lost to combat, accident, deterioration, and theft; and how much would be turned over to foreign governments or remain in the country as a result of government decisions.

The over-all estimate of 650,000 tons proved to be remarkably accurate. After shipping 612,400 short tons out of Vietnam during fiscal year 1972, U.S. Army, Vietnam, had only 66,400 tons remaining, an amount well in line with residual force and contractual requirements. Economical utilization of excess materiel generated by troop redeployment became a major logistical task from 1969 onward, and especially during the accelerated withdrawal in 1972. The equipment withdrawal was performed without restricting presidential options related to Vietnam negotiations.

Over and above these efforts in Vietnam, the Army continued to act as executive agent over the redistribution of excess materiel of the military services throughout the Pacific area. Since 1968, excess materiel with a value of over $2.5 billion has been reported, with $347.1 million referred for redistribution and $805.3 million designated for return to stock in the continental United States. As the current year closed, $54.3 million of materiel was being screened for disposition.

In connection with property disposal, there were several actions at Department of the Army level in fiscal year 1972. One of these was the transfer of property disposal functions from the Office of the Chief of Support Services to the Office of the Deputy Chief of Staff for Logistics. Historically, large quantities of surplus property have been generated by the military services during and immediately following the end of combat operations. The rapid reduction in combat operations in Vietnam left vast quantities of surplus property there. To assist in the disposal of surpluses there and elsewhere in the world under the most advantageous terms possible, a logistics task force was established. Virtually all property disposal functions of the Department of Defense were assigned to the Defense Supply Agency, thus bringing operations under a single manager. The Army Corps of Engineers will retain responsibility for disposal of surplus property generated under the civil works program, and the Army will retain responsibility for operating the Pacific Command Utilization and Redistribution Agency. The demilitarization of surplus combat materiel will remain with the Army but

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will be funded by the Defense Supply Agency through receipts from the sale of surplus property.

In Vietnam the acquisition cost of usable property inventories increased from $36 million in fiscal year 1971 to $65.7 million as of June 30, 1972; scrap decreased in the same period from 260,000 to 109,000 tons. The sharp increase in usable property inventory was of course the result of the rapid phasedown of ground combat operations and in part the difficulty inherent in conducting commercial business affairs in a combat environment. Prospective buyers had to contend with a shortage of vessels; a lack of dockside storage and loading facilities; corruption at local government levels; difficulties in obtaining export licenses, and inadequate labor force; and labor union slow-downs and work stoppages. To overcome some of these problems, a sales office was opened in Singapore and high-value items were shipped there from Vietnam for sale to interested buyers from friendly nations throughout the world. The percentage of return was measurably higher than on the same property sold in Vietnam. Property was also shipped to Subic Bay in the Philippines to promote higher returns on sales there than would have been possible in Vietnam.

In connection with property disposal worldwide, the purchase value of usable property decreased from $446 million in 1971 to $436 million as of June 30, 1972; scrap inventories decreased from 326,000 tons to 176,000 tons in the same period. Excess and surplus property with a purchase price of $251.4 million was redistributed among the military services and other federal agencies; $71 million in property was donated to state surplus property agencies through the Department of Health, Education, and Welfare under the provisions of Public Law 152, 81st Congress; public airports received $2.9 million; educational activities of special interest to the armed forces received $1.2 million; and other eligible organizations received $1.4 million. The total acquisition cost of all donated property was $26.5 million.

The acquisition value of usable property sold to the public amounted to $504.9 million; proceeds of the sale were $24.3 million, or 4.8 percent of the acquisition cost. Some 416,900 tons of scrap were sold for $26.8 million, and the Department of the Army joined the Department of Defense in concurring with a State Department plan to make huge quantities of scrap metal available to the government of Vietnam under highly favorable terms.

In November 1971, the chairman of the Committee on Government Operations informed the Secretary of Defense that the committee would conduct an inquiry into the effectiveness of surplus property disposal operations in Europe and the Far East. A team arrived in Germany on

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November 18, 1971, and remained until mid-June 1972. The principal concern seemed to be over the sale of military equipment without adequate demilitarization and allegations that military hardware was being sold at unjustifiably low rates compared with prices subsequently obtained by surplus property dealers. Senate hearings were to be held in July 1972.

The task of redistributing or disposing of American stocks in the Pacific region was magnified not only by the sharply declining war in Vietnam but by the return of the Ryukyu Islands to Japan and a reduction in the American commitment in Korea. Stateside teams from the Army Materiel Command and the Continental Army Command went to the Pacific area during the fiscal year to assist regional agencies in depot stock management and to expedite the disposition of excess materiel. Use of these special logistics assistance and instruction teams with their special skills and technical knowledge has improved logistics management.

In past years the Army has been able to use Military Airlift Command logistics carriers between the continental United States and oversea theaters for high priority cargo only. As heavy lift cargo aircraft like the C-5A have been developed, Army planners have prepared to use it for routine air shipment of selected items overseas. This offers a potential for substantial savings in pipeline and stock level operations. Under an Army program called Routine Economic. Airlift (REAL), oversea commands are provided authorized replenishment by air. Savings could be effected because pipeline and on-hand inventories are reduced by air resupply to oversea theaters, worldwide inventories are easier to control, item managers obtain better visibility over stocks, supplies are moved more expeditiously, and materiel readiness is improved. The Army employed a contractor to develop selection techniques and formulae based upon pipeline savings, holding costs, transportation costs, and packaging differentials. By September 15, 1971, 442 items had been placed on the air shipment program, and in ensuing months this was expanded to cover 725. By the close of the fiscal year, 8,884 items were judged to be eligible for the program, and shipment on a routine basis was, expected to be instituted before the end of calendar year 1972.

During fiscal year 1972, attention was focused upon procedures for collecting accurate, comparable data concerning the cost of maintenance of Army equipment, especially at depot maintenance level. Such data are essential for maintenance management and for procurement decisions, for instance, when it is necessary to determine whether it is more economical to overhaul unserviceable items or buy new equipment. Thus new procedures were developed and incorporated in the existing

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maintenance cost accounting system to insure uniform methods throughout the Army for defining and computing costs.

Transportation reporting also had continuing attention during the year as actions continued to mechanize what has been a manual compilation of statistical data concerning cargo and passenger movements into and out of the continental United States. Such data is compiled to identify commodity groupings, budget appropriations, passenger categories, and origin and destination, among other data, to assist the Military Airlift Command, the Military Sealift Command, and the Military Traffic Management and Terminal Service to forecast long-range work load. The first phase of a program to mechanize selected transportation movement reports-automating surface cargo and air cargo reports-was completed in fiscal year 1971; a second phase that will attach dollars to the work-load data thus developed was in final stages as fiscal year 1972 ended. The product of this effort will be more accurate operation and maintenance budgets in the transportation area.

In May 1972 the Army published a Logistics System Master Plan (LOGMAP) that provides in one document a central source of information and guidance for improving the entire logistic system. The plan covers all logistics functions from Headquarters, Department of the Army, out to the user. The plan provides direction and co-ordination through a process of management by objectives that complements the Army Management Information System. It supports current Department of Defense logistics system policy objectives and serves as the Army counterpart to the Defense Logistics Systems Plan.

The general objectives of the LOGMAP are to standardize and improve the Army's logistic system by: enhancing logistics professionalism in the combat service support force; simplifying and making the system more responsive and cost effective; expanding inventory visibility and control; and operating the system with minimum resources consistent with readiness and operational requirements.

In the past, both manual and automated logistics subsystems were developed independently to meet the specific needs of the user. As a result, there was no cohesive common base or structure from which the essential elements of information needed by commanders and logistics managers could be generated and reported from the source up to the appropriate echelon. The Standard Army Logistic System (SALS), a product of LOGMAP, is an evolutionary program that will capitalize on past limited standardization efforts by encompassing all major logistics systems-supply, maintenance, transportation, support, and readiness at each echelon of the Army.

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During the year the Army was involved in a number of actions to expand common logistics support arrangements with the other services. Common logistics support is that by which logistic requirements common to two or more services can be satisfied by interservice support arrangements where efficiency and economy can be achieved. This support includes actions in which materiel or services are provided or received between components of the Department of Defense or between a Defense Department component and another federal department or agency.

The Army also participated in a number of ongoing efforts aimed at eliminating wasteful duplication in service logistic support activities. At Army behest the Military Logistics Council formed a joint ad hoc group of general and flag officers, under Army chairmanship, to develop plans and procedures to expand common logistics support. The Army also participated in a Defense Supply Agency review, directed by the Logistics Systems Policy Committee, to determine the common supply potential and requirements in oversea areas and to plan further improvements in interservice logistics systems. Also at Army initiative, the Army and the Air Force launched a pilot study into the possibility of consolidating support activities at Fort Lewis and McChord Air Force Base in Washington; a study whose outcome will determine whether further investigation is warranted concerning consolidation of other biservice contiguous installations in the continental United States and Alaska. And, finally, within unified commands the Army took an active role in the formation and operation of a joint Interservice Logistics Support Board at Pacific Command Headquarters and in the Southern Command to further the principles and operation of common logistics support.

Tests of the Direct Support System (DSS) -the procedure under which Class II, IV, and IX materiel is supplied from designated depots in the continental United States to general and direct support units overseas, bypassing theater depots* -initiated in Europe and Korea in fiscal year 1971, were extended to Vietnam in fiscal year 1972. Under the DSS, stocks are reduced on the ground, sophisticated management is retained in the continental United States, visibility and control over stocks are enhanced, and transportation, maintenance, and supply systems are integrated. Under this system, space reductions have been made in logistics rather than in combat units. The order-ship time -the time between the initiation of stock replenishment action for a specific activity and the receipt by that activity of the materiel- has been reduced by one-half of that formerly required. Under the DSS

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concept, stocks at the overseas theater depot level will be reduced to a safety level, war reserve, and project requirements; routine operating requirements are satisfied on a routine basis by direct delivery from the continental United States, thereby reducing peacetime operational level stockage in the oversea theater by about 90 percent.

The Army Materiel Command (AMC) Five Year Automatic Data Processing (ADP) Program is designed to develop standard systems operating on standard equipment with standard computer programs and standard software. It encompasses the full range of data processing that supports the Materiel Command's mission-to provide wholesale support to the Army. The automatic data processing is provided by ninety-eight data processing installations. The more essential components of the five-year program are ALPHA and SPEEDEX.

The AMC Logistics Program Hardcore Automated (ALPHA) is designed to standardize all major systems-stock control, supply management, provisioning, procurement and production, financial management, cataloging, and maintenance-within seven national inventory control points and commodity commands, using standard automated equipment. It was installed by phases at the U.S. Army Aviation Systems Command during the year and will be extended, following evaluation, to all commodity commands.

The System Project for Electronic Equipment at Depots-Extended (SPEEDEX) is the depot portion of the five-year program. It provides for the first time a system-wide standardization of all applications used by more than one depot. At the wholesale level, the supply distribution mission systems of SPEEDEX were prototyped at Letterkenny Army Depot, Pennsylvania, and extended to Tobyhanna and New Cumberland Army Depots in that state. Operational evaluations concluded that SPEEDEX was an effective and viable system that provided adequate support to all three depots. It was approved for extension to the remaining Army Materiel Command depots in January 1972.

A related element in logistics system development is the U.S. Army Test and Evaluation Command's plan for the development of standard automatic data processing systems and programs. The Test, Evaluation, Analysis and Management Uniformity Plan (TEAM-UP) has two objectives: to provide the financial, logistical, and other resource information required to manage the testing mission, and to provide the scientific and engineering ADP support essential to testing. The Office of the Secretary of Defense approved extension of the business applications for TEAM-UP to five installations during fiscal year 1972, while the U.S. Army Strategic Communications Command was assigned the responsibility for providing a scientific and engineering system for the Electronic Proving Ground. A similar system is scheduled to be com-

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pleted at the White Sands Missile Range by the end of calendar year 1972, and remote terminal equipment will be installed at nine Test and Evaluation Command boards and centers to link them through remote terminals to the five test installations.

During fiscal year 1972, there was continuing progress and refinement in another logistics management tool, the Army's Selected Item Management System (SIMS). The primary objective of this program is to manage and control selected items of materiel which represent the Army's greatest procurement costs-items such as those of high category value, heavy demand, and critical need. Rigid control over these items in the Army inventory insures better distribution and more efficient utilization as well as substantial savings. For example, estimates of cost avoidance achieved under the program ranged from $22.6 million at the start of the fiscal year up to almost $70 million as the year closed. The goal is a cost avoidance of $125 million by the end of fiscal year 1973, made possible under SIMS through back order cancellations, requisition denials, redistribution of stocks and referrals of orders, and reduced procurement. The program was publicized widely by message and pamphlet, and the services of the Inspector General and the Army Audit Agency were enlisted to make it work more effectively.

During the report year, logistical systems that support tactical Army units were continually refined and improved based upon user-recommended changes in supply and maintenance policy. The Division Logistics System (DLOGS) Class IX (repair parts) subsystem was completely revised. The system is operating in all Seventh Army divisions, the Combat Equipment Group in Europe, three divisions in the Continental Army Command, one in the Eighth Army, and a brigade in U.S. Army, Hawaii, and was extended to the U.S. Army Aviation Materiel Maintenance Center in Vietnam. As the year closed it was being installed in the 9th Infantry and 101st Airborne Divisions in the United States.

The Army's Logistics Management Information System (LOGMIS) is composed of a number of elements. SAAS, SAMS, ITMIS, ISSMIS, IFS-these are the acronyms, the short titles of various systems that are being developed to operate in such specialized areas as ammunition, maintenance, transportation, support services, and real property, to promote speed and efficiency in the large and complex field of modern logistics.

During fiscal year 1972, the initial design of the Standard Army Ammunition System (SAAS) was begun. When completed, a standard

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management information system for conventional and special ammunition supply and maintenance will be implemented Army-wide. Four conferences were held in the fiscal year, attended by representatives from around the world, to determine the standardization approach, identify the baselines, and schedule system developmental phases.

In the opening months of the year a general system description was prepared for a Standard Army Maintenance System (SAMS). By June 1972, official guidance had been distributed covering continuing development, and general functional system requirements had been drafted for use at several operational levels. Within the Integrated Transportation Management System (ITMIS) effort, existing subsystems were examined for adoption as Army standards to reduce development and implementation time. Areas selected for initial development included water terminal operations, movements management, and administrative motor services. An Integrated Support Services Management Information System (ISSMIS) was under development to provide Army-wide support services data in a more timely and accurate manner, and work progressed on details related to property disposal, laundry and dry cleaning, and commissary operations. And finally, a functional field test of the real property maintenance activities portion of an Integrated Facilities System (IFS) was conducted, and the design subjected to an economic analysis of functional and ADP resource requirements and the costs and benefits of the system.

The fiscal year 1972 Military Construction Appropriation Act, Public Law 92-160 of November 18, 1971, allocated $438.3 million in new obligational authority for new construction. The fiscal year 1972 Department of Defense Appropriations Act, PL 92-204 of December 18, 1971, allocated $98.5 million to Safeguard System construction. In addition, $630.1 million in unobligated balances from prior year appropriations and $10.9 million in infrastructure recoupments brought the total available for construction in fiscal year 1972 to $1,177.8 million.

The fiscal year 1972 military construction execution program authorized new starts totaling $1,123.2 million. Delays in congressional action on the fiscal year authorization and appropriation bills limited construction starts during the first half of the year to projects authorized and funded in prior years. Excluding work in Vietnam (see below), contract awards were more than 50 percent above the level of the three prior years.

A major part of the program was devoted to improvements in barracks and bachelor officer quarters and other projects that would

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make the Army more attractive to volunteers. Thirty million was earmarked for work at various installations in the continental United States, including the new Walter Reed Hospital, and o$12 million for work in oversea areas. On December 10, 1971, an offset agreement was concluded under which the Federal Republic of Germany would rehabilitate U.S. Army troop barracks in that country.

With the drawdown of U.S. military strength in Vietnam and the completion there of construction that had been essential to support military operations, new construction in the war zone was directed toward nation-building and security programs. As a result, the work of the Raymond-Morrison-Knudsen/Brown-Root-Jones (RMK/BRJ) construction combine was terminated on June 30, 1972.

During fiscal year 1972 the combined new construction effort of U.S. military units, (RMK/BRJ), and local contractors amounted to $58 million. Logistical installations were completed that would be required by the Republic of Vietnam to operate independently, and the highway construction program was continued to stimulate economic and social development. The line of communication program provided employment for the South Vietnamese and furthered countrywide pacification efforts by opening up previously inaccessible areas to government control. The road system is available not only to move the products of farm and factory to market but to move troops and materiel for military purposes.

The long-range military construction program, exclusive of family housing, Safeguard System, and North Atlantic Treaty Organization infrastructure, amounts to known requirements that would cost $8.1 billion. Of this total, over $5 billion is needed to replace and modernize deteriorated or inadequate existing, facilities that do not meet current standards.

The Army through its Corps of Engineers provided construction support to numerous agencies and projects, including the Air Force and Navy; the National Aeronautics and Space Administration; the Department of Health, Education and Welfare; the Postal Service; the Trust Territories of the Pacific Islands; the R. F. Kennedy gravesite; national cemeteries; other Department of Defense agencies; and various foreign governments. During fiscal year 1972 the Army contracted for about $337 million of construction for these purposes.

As a part of the volunteer Army program, the Army designated approximately $325 million in new construction funds to be expended in fiscal years 1971-1973 to improve the soldier's living environment. During fiscal year 1972 the Corps of Engineers had rehabilitated approximately 11,000 barracks spaces at a cost of $4.2 million at three

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volunteer Army posts: Fort Bragg, North Carolina; Fort Benning, Georgia; and Fort Carson, Colorado. The Engineer Corps also started construction totaling $36.4 million that will provide 40,000 improved barracks accommodations at installations in various parts of the world, about 29,000 of them at 29 installations in the United States. Criteria were developed. during the year for the commitment of the remainder of $325 million-$284.3-in the 1973 program, to provide 17,000 new barracks spaces, improve 54,000 existing quarters, and expand recreational and morale facilities to offer the soldier a living environment comparable to that of his civilian counterpart.

Most of the troop living facilities occupied by Army troops in Germany, it may be noted, were constructed prior to World War II many, indeed, before the turn of the century. Since 1968 a concerted effort has been made to improve barracks and dining facilities and to replace old coal-burning boilers with more reliable and economical oil-burning boilers in heating plants. Because of fund limitations, selective rehabilitation to correct the worst living conditions was emphasized; in consonance with congressional guidance, boiler conversions were limited to units that failed and could not be repaired economically. A large share of the renovation was assumed by the Germans (see below), while the United States continued to finance the procurement of supplies for the troop self-help program and facilities engineer efforts.

In the field of installations planning, one of the significant accomplishments of the year was the completion and publication of the Army Stationing and Installations Plan. This document projects forces and strengths, including all authorized personnel, over an extended period. It serves as the basis for installation master planning and the commitment of military construction funds.

Expenditures for real property maintenance activities at Army installations in fiscal year 1972 were slightly over $1.1 billion. Building space decreased by about five million square feet as some facilities were discontinued. Unfinanced real property maintenance and repair at the close of the year was approximately $396 million, 8 percent above the figure for fiscal year 1971.

Surveys of Army-controlled real estate were accelerated in the year in accordance with Executive Order 11508; by the end of the year, over 150 installations had been surveyed. Pursuant to directives of the Secretary of Defense in January 1972, the Army established a senior board to review the surveys and determine the degree of utilization and availability of properties under Army control. Special studies were requested on utilization of reserve facilities in six metropolitan areas.

No planned closures, consolidations, or realignments of installa-

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tions were announced during fiscal year 1972; those forecast in previous years were carried out. The Gateway Army Ammunition Plant in Missouri, the Ravenna Army Ammunition Plant in Ohio, and the Sunflower Army Ammunition Plant in Kansas were placed in an inactive status. The Birdsboro Army Tank-Automotive Steel Foundry in Pennsylvania, the Kingsbury Ordnance Plant in Indiana, and the Sioux Army Depot in Nebraska were disposed of and discontinued as Army installations. Fort Detrick in Maryland was transferred from the jurisdiction of the Army Materiel Command to The Surgeon General, the Army Materials and Mechanics Research Center in Massachusetts was designated as a permanent installation, and the Hays Army Ammunition Plant in Pennsylvania was established as an Army installation.

The Army Base Development Board, established in October 1970, convened periodically to realign and vitalize base development planning and logistic facilities support for contingencies. The Board tasked the Engineer Strategic Studies Group of the Office of the Chief of Engineers to appraise the Army's capability to support base development for contingency operations and make recommendations for improving that capability. Army staff policies and procedures were analyzed in this connection, and a Base Development Planning Assistance Office was established in July 1971 in the Engineer Strategic Studies Group office to assist Army component commanders in base development planning for contingency operations. That office, by the close of the year, had prepared or was developing half of the twenty-five most important contingency plans, using updated concepts and techniques. The base development planning process was enhanced by a series of sophisticated computer programs.

To meet military contingencies that would require readily available mobile power-generating equipment, high-voltage electric generators in the 500- and 1500-kilowatt class with ancillary power transmission equipment are being returned from Vietnam to Army depots in the United States. These generators are being repaired and rebuilt by the Corps of Engineers. Of forty-three units returned by the end of fiscal year 1972, twelve were loaned to the Defense Supply Agency and the others were being readied for overhaul. In combination with Corps power barges, this generating equipment will be available not only for military contingencies but for natural disaster or other kinds of civil emergency. It is planned to develop a reserve of 250,000 kilowatts of mobile generating capacity under the Non-Tactical General Program.

Base operation in the Army includes installation supply and maintenance, chaplain activities, special services, military police, transportation, food, laundry, dry cleaning, buildings and grounds repair and maintenance, and other administrative housekeeping. To bring these

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diverse elements under central budget control, base operations were made a separate administrative program within the operation and maintenance budget appropriation.

As the fiscal year closed, construction was about to begin on a new seven-story general hospital at the Walter Reed Army Medical Center in Washington, D.C. Walter Reed Hospital provides the most sophisticated treatment available to active-duty military personnel and their dependents as well as retired personnel and government officials. The hospital is also the Army's primary teaching facility for physicians, nurses, and other paramedical disciplines. The hospital currently admits an average of 16,000 patients annually and offers one of the largest outpatient services in the Army with an average of more than 1,000 outpatient visits daily.

The new hospital will include 1,280 beds and a wide variety of specialty clinics and diagnostic facilities in an area covering more than one million square feet. The hospital plan has been designed to accommodate the functional relationships required by the various services and departments. The architects were asked to develop the most innovative medical facility possible, with flexible structural and equipment systems to accommodate to future developments in medical technology. The building project includes related site development, demolition of existing structures, and a subsurface two-level parking facility designed to handle more than 1,000 vehicles.

Several planning bodies functioned, during the year to correlate other construction programs. The U.S. Military Academy Planning Advisory Board continued to provide advice and recommendations to the Department of the Army on the military construction program required to support the expansion of the Corps of Cadets. And the National Capital Region Planning Commission, established in November 1971, addressed such problems as site selection and relocation of Army activities in the National Capital region and identification of substandard and unoccupied administrative space in the metropolitan area and at Fort George G. Meade, Maryland. The committee suggested relocations that would reduce by 746,000 square feet the administrative space used in the region, in accordance with Secretary of Defense directives.

The Homeowner Assistance Program continued during fiscal year 1972. Since enactment in 1967, a total of 9,762 applications for assistance have been received and 9,478 processed. Of these, 6,273 were settled at a cost of $17,639 million, and 1,612 mortgages were assumed for a cost of $14,210 million. There were 2,356 applications rejected, 752 submitted, and 769 settlements without payment.

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Complete renovation of troop living and dining facilities in some 120 of the old German barracks complexes has been proceeding since 1968. By the fall of 1971, over $62 million had been obligated for 26 kasernes. On December 10, 1971, an Offset Agreement was signed between the United States and the Federal Republic of Germany under which the German Government would fund the Army's "stem-to-stern" program and other rehabilitation efforts with 576 million deutschemarks-then the equivalent of $176 million-over a two-year period. By the end of June 1972, the U.S. Army Engineer Command in Europe had turned over to German construction authorities the plans and specifications for rehabilitation of 30 kasernes. Close cooperation between German and American authorities and German appreciation of the urgency of the program all augur well for great improvement in the living conditions of American troops in Germany.

On June 26, 1972, the House Appropriations Committee passed a continuing resolution that prohibited the expenditure of funds for Exercise Reforger, a dual-base exercise designed to evaluate and further develop techniques for the deployment of American troops-stationed in the U.S. but assigned to the North Atlantic Treaty Organization to Europe. In 1968, some 33,000 U.S. troops were redeployed from Germany to home bases in a move to improve the balance of payments while continuing to meet the NATO commitment. The Army portion of the program was called Reforger. The redeployed forces remained under the operational control of the Commander in Chief, Europe, and committed to NATO. The equipment of these elements, under the Reforger concept, was to be maintained in Germany in sufficient quantity and state of readiness to insure that the troops could be returned to Europe if needed.

In 1969, 1970, and 1971, these units and other elements in Germany participated in exercises (Reforger I, II, and III, respectively) to test proficiency and deal with special requirements of the European Theater. Orderly disposition and execution rather than speed of deployment was emphasized. In the latest of the exercises, the 1st Infantry Division returned to Germany in September-October 1971 with two brigades to link up with the division's 3d Brigade on station in West Germany. The deploying units drew combat gear and vehicles from prepositioned storage sites in Germany and moved by road and rail to an exercise area extending from Munich to Nuernberg. Following a field maneuver, the Reforger units test-fired artillery and tank main guns before returning their equipment to storage sites. The redeployed forces then flew back to the United States.

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Further Reforger exercises will depend upon the release of funds by the Congress.

The broad range of actions associated with establishment of a wartime line of communication in Europe for U.S. forces positioned in central Europe continued during fiscal year 1972. The relocation of the line of communication was necessitated by the withdrawal of France from participation in the North Atlantic Treaty Organization.

Under the military construction program, the Army continued to fund the U.S. share of the NATO Common Infrastructure Program, currently 29.67 percent of the program. Congress authorized $15 million and appropriated $14 million of the budget request in fiscal year 1972. At the end of fiscal year 1971, the unobligated balance for NATO infrastructure was $33.4 million. Recoupments in fiscal year 1972 amounted to $10.9 million; this, plus the $14 million appropriation, less obligations, left an unobligated balance of $44.1 million at the end of the fiscal year.

The Foreign Assistance Act of 1971, as amended, authorized $545 million for total triservice obligation authority for military assistance in fiscal year 1972. The act contained a new restriction which applied to most recipients of grant aid and excess defense articles; such countries must deposit in a special account in host country currency, to the credit of the United States, an amount equal to 10 percent of the value of grant aid, or, in the case of excess defense articles, 10 percent of the fair value as determined by the Secretary of State.

The Army materiel portion of the Military Assistance Grant Aid Program, including excess defense articles, excluding Laos and Thailand, amounted to $881 million for fiscal year 1972, covering varying levels of support for 25 countries. In addition, undelivered balances of $705 million were carried forward from prior years, for a total fiscal year 1972 sum of $1,586 million. Deliveries during the year totaled $843 million, leaving an undelivered balance of $743 million at the end of the year. This balance represented the value of undelivered materiel carried forward to fiscal year 1973 programs; in some instances, such as materiel excess to Army needs, the figures represented acquisition cost rather than current value.

Military assistance for Vietnam, Laos, and Thailand was again excluded from the fiscal year Military Assistance Program (MAP) appropriation; assistance to those countries was funded under regular military department appropriations. The Foreign Assistance Act, signed by the President on February 7, 1972, states that military assistance to Thailand would be provided only under this Act or the Foreign Military

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Sales Act, effective July 1, 1972, and would no longer be included in the regular military department appropriations.

To supplement limited MAP funds and to make maximum use of Army assets available in excess of approved force acquisition objectives, transfer of these excess defense articles to MAP at no cost except for packing, crating, handling, and transportation, and for rehabilitation and repair when required, continued during the reporting period. Excess materiel with an acquisition value of $162.3 million was delivered to recipient MAP countries during the year. Approximately $15.8 million (acquisition value) in excess materiel was delivered to Laos and Thailand during the year.

The government of Iran requested that U.S. grant aid be terminated on July 1, 1972. It expressed a willingness to assume responsibility for the operating expenses previously incurred under grant aid.

The President in 1971 authorized a triservice grant aid program of $3 million for Ceylon. The Army's portion of $2.2 million covered commercial pickup trucks, radios, helicopters, tractors, and graders, all except the trucks delivered by June 1972.

The Republic of Korea completed the second year of an austere $1.5 billion five-year modernization- program to bolster her forces and offset a reduction of U.S. forces in Korea. The Army-funded portion of the program was $83.6 million. This amount was reduced from the approved State/Defense program of $127.1 million as a result of the over-all congressional reduction of the Foreign Assistance Program for fiscal year 1972.

The Foreign Assistance Act of 1971 established a ceiling of $341 million upon assistance to or for Cambodia. The Military Assistance Grant Aid portion of the ceiling for fiscal year 1972 was $135.4 million. Under this latter program, Ethiopia received helicopters, general purpose vehicles, small arms, ammunition, communications equipment, and repair parts to a total grant of $4.7 million, and Jordan received a modest grant as well. The Secretary of Defense also authorized materiel grant aid totaling $2.5 million for seven Latin American countries.

The Spanish Base Rights Agreement, signed in 1970, was amended by a memorandum of understanding of March 9, 1972, under which the United States agreed to provide all quantities of end items included in the original agreement plus ancillary equipment valued at $3.9 million. This was accomplished without increasing the original dollar ceiling.

And, finally, Turkey was provided materiel and services valued at $97.1 million, of which $52.7 million was in excess materiel.

During the fiscal year the Army sold materiel and services valued at $655.3 million to fifty-seven countries and five international organi-

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zations. In conducting its sales activities, the Army adhered to the policy that materiel readily available through commercial sources would be sold directly by American industry to the recipient. Within the year a total of 814 outstanding sales cases were balanced and closed-out in supply records.

High-ranking military personnel from six allied nations were brought to the United States during the year for orientation on new military systems and equipment of mutual interest in Free-World defense. Briefings were conducted in Europe for NATO personnel on Lance Field Artillery Missile System and the improved Hawk Missile System; the latter briefing was also furnished to Spanish, Iranian, and Japanese authorities.

The Army participated in eleven co-production, programs with three foreign countries and with NATO. Under this program, and based upon bilateral agreements, a foreign nation may assemble or manufacture major end items or weapon systems of U.S. origin. The programs were valued at $610.8 million, with expenditures for goods and services in the United States valued at $301.3 million. Participating were the Republic of China, Italy, and Japan, as well as NATO. The U.S. items being co-produced include the M113 armored personnel carrier family of vehicles, the M109 self-propelled howitzer, helicopters, wheeled vehicles, the Hawk and Nike Hercules missile systems, a light antitank weapon, and small arms.

In the field of co-operative logistics, the Army maintained supply support arrangements with sixteen allied and friendly nations and with the NATO international organization. These programs provide participating countries with continuous follow-on support for major end items and weapon systems on a reimbursable basis. The Army provided support for conventional weapons and vehicles and the Sergeant, Pershing, and Hawk missile systems to a total of $144.7 million during the year.

International logistics management activities were concentrated on providing timely logistical support to friendly foreign governments in a period of sharply declining resources. While U.S. Army procurement and rebuild programs were being reduced in consonance with over-all troop reductions, foreign customer requirements for military equipment were increasing. To lessen the impact of reductions in resources, management improvements and prompt reaction were emphasized. The time phasing of requirements was highlighted to insure stability in production lines, while attention was centered upon identifying and planning for a progressive phase-out of support of major items which could be transferred to U.S. industry.

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In fiscal year 1972 the Army continued to pursue the objectives set out in the National Environmental Policy Act of 1969. In general, primary attention was given to controlling air and water pollution at Army installations, as required by Executive Order 11507, and incorporating the environmental factor into the Army's normal planning process.

The requirement to assess the environmental impact of all Army programs has become the most significant element of the environmental effort. Environmental considerations have been brought into the decision-making process through the written evaluations required of a program's impact upon natural resources. Until recently, the planner and decision-maker weighed primarily the operational and cost factors of various alternatives in selecting a course of action; the environmental factor has now been added to the equation. Although numerous assessments have been made to date, it has only been necessary for the Army to prepare and submit sixteen impact statements. These have been connected with complex construction projects, the demilitarization of munitions, and selected research and development projects.

To develop increased awareness throughout the Army concerning the environmental issue, and to insure effective response to rapidly evolving regulations and environmental quality standards, an education and training program was developed during the year. Environmental subjects are being added to the soldier's basic training program; through manuals and posters, drivers and mechanics are being taught that a properly timed and operated engine cuts pollution; environmental workshops were held throughout the United States for managers and engineers.

Air and water pollution control measures were working effectively during the year. New or improved sewage treatment plants, modern incinerators, and better controlled heating plants were being built or awaiting Congressional approval and funding. Approximately $140 million has been invested in facilities for this purpose to meet current standards, and another $160 million of work still remains. If stricter emission regulations are imposed by the states, and indications are that this will happen, additional funds will have to be programed in future budgets.

Pollution controls for Army vehicles depend, in large measure, upon what the automotive manufacturer advances to produce clean engines. No major problems are foreseen in meeting emission standards in new equipment over the next two years. The major problem comes in 1975 when emissions must be reduced by 90 percent over what they are today. To solve this problem, the Army Materiel Command is working closely with engine manufacturers and continuing to develop the strati-

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fied charge engine. At the same time, attention is being given to cleaning up older engines through product improving and refitting. Older engines are being tested to see what pollutants are produced and what modifications are needed, and various types of gasoline, including those with low lead content, are being tested.

Solid waste disposal has presented no major problem. For many years the Army has employed the sanitary landfill, now regarded to be ecologically safe for domestic-type wastes. On the other hand, because of the emphasis on all types of waste disposal, it has become necessary to address such unique problems as the disposal of explosive contaminated wastes by developing special incinerators for ammunition plants. Highly sophisticated and safe procedures have been required to dispose of large stocks of chemical and biological weapons, especially since ocean dumping has been considered to be an ecologically unsafe procedure.

Another element of the solid waste disposal picture is the requirement to salvage materials that may be returned to the manufacturing process. These efforts have only just been started, but the Army has increased its use of retreaded and rebuilt tires, and many useful chemicals have been recovered as a byproduct of the extensive munitions demilitarization program.

Army posts have established recycling centers for paper, glass, and cans, similar to those found in civilian communities, and have co-operated with local community organizations in joint programs.

In the field of preservation, the Army has joined in the national effort to preserve our historical and cultural heritage. A number of military installations such as West Point, New York; Fort Monroe, Virginia; and the Presidio of San Francisco, California, have been registered as national historic sites.

In addition to preserving landmarks, more attention has been given to beautification-to making posts more attractive, modern, progressive. In the multimillion dollar barracks and family housing construction programs, there has been a deliberate departure from institutional architecture of the traditional style. More emphasis has been placed upon modern master planning and landscaping. At the same time, land and forest management and fish and wildlife considerations have been brought to the fore.

Research and development related to pollution control are in the Army's environmental program. Some of the areas under investigation are biodegradable packaging materials, emission standards for Army vehicles and aircraft, waste and wastewater treatment procedures, and low fuel consumption and low emission engines such as the stratified charge plant for the quarter-ton truck.

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Much has been accomplished under the Army's environmental program to date, and substantial contributions have been made toward achieving national goals in this field. Institutionally and nationally, of course, much remains to be done.

Since August 1, 1962, the Office of the Chief of Support Services has supervised the operation and maintenance of the National Cemetery System, has procured government headstones and markers, and has exercised staff supervision over post cemeteries and over the care and disposition of remains and the personal effects of deceased Army personnel. The office was also responsible for a number of other Army-wide logistical support services. On May 15, 1972, the Office of the Chief of Support Services was discontinued and the U.S. Army Memorial Affairs Agency was established to handle the death-related functions outlined above. The organizational change came as the work load connected with the disposition of remains and the personal effects of deceased Army members had been appreciably reduced by the curtailment of U.S. participation in the Vietnam War.

Ten Army-operated mortuaries located overseas provided mortuary services for uniformed personnel, eligible civilian employees, dependents, and certain other categories of decedents; two of these were in Vietnam -at Tan Son Nut and Da Nang. Remains were received at three ports of entry in the United States-Oakland Army Base, California; Fort Hamilton, New York; and Dover Air Force Base, Delaware. Posts, camps, and stations in the continental United States contracted for mortuary service as required. Worldwide, 4,952 remains were handled under the Army Mortuary Program in fiscal year 1972.

As in past years, the Army had some residual mortuary activity from past wars. The remains of five World War II dead were recovered and identified, three from an aircraft lost in New Guinea on March 12, 1944, and two from isolated and unmarked graves in Holland, members of the 101st Airborne Division who were lost on October 5, 1944.

Operation and maintenance of national cemeteries was heaviest in those located in heavily populated areas; for example, Long Island National Cemetery where 11,624 burials were made out of 36,449 interments in the 84 cemeteries operated by the Department of the Army during the year. In the, area of development, maintenance, and construction, the major demands centered upon Arlington National Cemetery, Arlington, Virginia. Arlington serves as a pilot in a recently adopted program of master planning for selected cemeteries. This was initiated at Willamette National Cemetery, Portland, Oregon, during the year, and other cemeteries will be added.

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The City Point National Cemetery, Hopewell, Virginia, was closed for future interments except for combat dead or reserved and single gravesite cases. Forty national cemeteries under departmental jurisdiction have now been closed except for these categories.

There were 207,359 headstones and markers procured during the year-54,571 marble, 71,956 granite, and 80,832 bronze, with 38,073 destined for national or post cemeteries and 169,286 to be placed in private cemeteries.

The morale of the soldier and of his family is closely connected to the quality of food, commissary, laundry, and clothing services provided by the military. This is an important area in the effort to develop a volunteer Army, and a number of developments during fiscal year 1972 are worth noting.

A Subsistence Operations Review Board was organized and chartered by the Army in December 1970. Its purpose was to give impetus to and revitalize the Army Food Program. The board submitted its first report in August 1971, making 153 recommendations and suggestions concerning dining facilities, subsistence supply, issue commissaries, and commissary sales stores. During fiscal year 1972, 107 of these recommendations were adopted or implemented, leading to vastly improved service to the soldier and his family.

On March 23, 1972, Army installations all around the world were directed to establish commissary store advisory councils to advise the commissary officer and the installation commander on such operational matters as stockage, pricing, quality, operating hours, employee courtesy, and sanitation. The councils consist of active and retired officers and enlisted men, widows, dependents, and other authorized patrons. Customer satisfaction improved considerably after the councils were established.

Automatic data processing systems (0488) are scheduled to be installed in 100 installations; the system was operational in 92 commissaries by the end of fiscal year 1972. Four additional program applications will be incorporated into the system by June 1973.

The pilot program to evaluate the concept of supporting six commissaries in Europe with direct containerized deliveries of brand name resale subsistence from the continental United States was completed successfully in the summer of 1971. By August the Defense, Supply Agency, the Air Force, and the Army had completed arrangements to expand the program to thirty-five stores and one depot in Germany. This was completed in April 1972, and about 85 percent of Europe's brand name resale nonperishable tonnage is received through this

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system. Planning for further expansion of this Direct Commissary Support System was begun in February 1972, to cover commissaries in England and the Pacific region.

To improve customer satisfaction even further, a Commissary Store Marketing Data and Guidance pamphlet was published in March 1972. This brings the commissary management and marketing policies into line with those of modern commercial retail chains and will insure customers of a wider selection of items and allocation of shelf space based upon sales volume.

In addition to the attention accorded commissary activities during the year, detailed plans were made to modernize the Army Food Service Program. A major element of this program is the central food preparation concept. Natick Laboratories in Massachusetts conducted a test at Fort Lewis, Washington, of this concept. Food was prepared centrally and transported to satellite dining rooms; used tableware was returned to a central warewashing facility. The test indicated that central preparation and washing provided uniform quality, decreased food costs, and reduced manpower, equipment, and maintenance requirements. The concept was adopted by the Army as a way to achieve more economical and efficient food service and greater patron satisfaction. It will be expanded during the period of fiscal years 1974-1978, with construction of central facilities to commence at two installations in the continental United States in 1974.

In December 1971, the Department of the Army directed that each command submit detailed plans for upgrading dining facilities. These were evaluated at the Troop Support Agency, Fort Lee, Virginia. Food service facilities have been modernized at Army facilities around the world as a result of strength reductions and the increased availability of equipment. Existing equipment was inventoried during the year, serviceable items were redistributed, and commands were provided with lists of new equipment against which to plan for gradual transition to more modern food service techniques comparable to those used in first-class commercial cafeterias.

Operational rations also came in for attention during the year with actions to rotate war reserve subsistence stocks. Commissaries were authorized to restructure the composition of theater reserve contingency stocks and to apply 50 percent of peacetime operating stocks against war reserve requirements. A study of the problems of rotating contingency stocks was completed in November 1971, followed by a conference involving major commands in January 1972. A number of recommendations were approved, including the sale of operational rations at reduced prices to other government agencies, commissary patrons, and the Vietnamese armed forces; donation of excess rations to other

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government agencies and to programs for the needy; development of a data collection system to cover location, condition, and age of stocks worldwide; and a training program for food service personnel to cover the preparation of operational ration components. During the year, marginally acceptable B ration components were eliminated from Army stockage, excess stocks were reduced by sale and donation, and the stock rotation requirement was reduced.

One of the most effective innovations in improving soldier morale has been the program under which the job of kitchen police was transferred from the soldier to civilians. Use of appropriated funds to pay civilian KP's began overseas in fiscal year 1971. In fiscal year 1972, $33.9 million was spent for this purpose. Early in the year, Army commands reviewed their requirements, and the estimated $99.4 million total requirement, subsequently reduced to $66 million, was included in the 1973 President's budget. The switch to civilian KP's is part of the over-all effort to improve professionalism and increase the desirability of service life and is a key factor in the service program to achieve an all-volunteer force.

Another experiment in ways and means to enhance service life in the food service area was to contract for the operation of the Tri-Service Dining Facility at Fort Myer, Virginia. Here a civilian contractor provided the personnel, management, and food for the whole operation, on a one-year contract with an option to renew for two additional years. The contract facility began on July 1, 1971, and as the fiscal year closed it was to be renewed in order to gather more data for evaluation of the feasibility of providing similar service in military facilities in other large metropolitan areas.

New procedures for issuing and accounting for field rations, authorized on an optional basis in March 1971, were implemented widely during fiscal year 1972. The Army Ration Credit System, as the new method is called, offers increased flexibility in adjusting local menus to meet the preferences of those who use the dining facilities. Under the system, mess stewards are authorized to requisition designated foods in required quantities within monetary limitations. Mess stewards have thus been able to schedule food specialty nights and provide short orders and ethnic foods. The result has been to increase the patronage of dining facilities and certainly to improve troop morale. The system is based on ration credits accrued through head count, and is not to be confused with the Monetary Allowance System (the old garrison ration) where actual cash is involved.

Another area that came under attention in recent times was laundry service. To improve this service, which plays a part in soldier satisfaction, commands were directed to provide additional spaces and funds.

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The intention was to improve the quality of laundry service provided to patrons participating under the payroll deduction plan. Among new procedures that have been or are being implemented: conversion from permanent ink marking of items to temporary marking with removable strips; authorization of replace folding and bundling of laundry by hanger service; more accessible pickup and delivery service; extension of payroll deduction privileges to officers; conversion of monthly laundry rosters from manual to computer preparation; reduction of laundry service from four to three days.

The time-consuming requirement to pay separately for each bundle of laundry created dissatisfaction among patrons. To simplify this problem, monthly payroll deductions were authorized for patrons availing themselves of the service. Financial accountability is maintained at Fort Benjamin Harrison, Indiana, where the funds become automatic reimbursements to the servicing installations.

Equipment replacement is a major consideration in laundry service. As standard washing machines require hand loading and unloading, a revolutionary new washing concept called "continuous flow" offered an opportunity to modernize laundry operations. Requiring manual handling only in the loading, this new washer automatically meters in all supplies, washes, extracts, and conditions the load without human intervention. Three of these machines were being readied as the year closed. They will eliminate the need for unskilled and hard-to-recruit employees who load and unload washing machines.

Over the past two years, new laundry techniques have been introduced which radically alter the traditional finishing methods for garments. Synthetics last longer than traditional materials and are easier to process and to press. A unique new finishing machine is called a "hot box" or "steam tunnel." Garments are fed into the machine, either wet or partially dried, on slow-moving conveyors; blasts of hot air or steam relax the fibers, and clothing emerges wrinkle-free on hangers, ready for return to patrons. The machine handles up to 2,400 pieces per hour, and it eliminates the need for conventional conditioning and pressing on flathead equipment and for the labor force to perform it- the most expensive and difficult to recruit because of the unpleasant nature of the work. Present budget projections envision the need for about $1 million annually to modernize laundry operations.

In the clothing field, the Army has developed two prototype summer uniforms to replace the cotton khaki uniform. One is a 65/35 blend of polyester and rayon with a durable press finish, the other is a 50/50 blend of polyester and cotton with the same finish. Both will be tested under the supervision of the U.S. Army Infantry Board at Fort Benning, Georgia, with that location and Washington, D.C., as wear areas. Tests

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were begun in the last quarter of fiscal year 1972 and will be completed by the fourth quarter of fiscal year 1973.

The Army also developed a durable press fatigue uniform to replace the standard cotton sateen type, and this will be tested in fiscal year 1973.

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