Department of the Army Historical Summary: FY 1979

10.

Logistics

Ranking high among the expressed concerns of senior Army officials were significant deficiencies in force readiness—the ability to rapidly mobilize, deploy, and fight. Correcting the many problems presented a broad challenge to those responsible for logistical support. While materiel readiness, per se, remained a very important part of this challenge, it became apparent that the ability to receive units into the theater, integrate them into the operation, and sustain them as long as necessary is vital to successful support of the Army. Decisions in recent years to reduce supporting forces, thereby increasing the combat-to-support ratio and providing more initial fighting punch, have made the maintenance of this ability more difficult. The expected introduction of many new items of weaponry and equipment in the 1980’s will add to the complexity of the situation.

Although primarily a period of identification and clarification of logistical problems, the past fiscal year saw improvement in many of the Army’s logistics programs. Among logisticians, there was a heightened awareness that improvement must not only continue but also expand and accelerate, to help ensure a sufficient level of force readiness in the future.

In our national defense policy of deterring military aggression and protecting our vital national interests, the defense of Europe is second only to the defense of the United States itself. Army logistics doctrine must be written to work in Europe and be adaptable, where necessary, for contingencies in other areas. NIFTY NUGGET, a massive simulated mobilization exercise conducted in October and November 1978 by the Department of Defense in conjunction with other federal agencies, tested the United States’ ability to mount and logistically sustain a large military force in Europe in the event of a nonnuclear attack by Warsaw Pact forces. Important deficiencies the exercises uncovered included inadequate airlift capability and, in Europe, shortages of prepositioned equipment and insufficient storage facilities. Progress during the year in a number of key programs (and the institution of others) looked toward the alleviation of these problems.

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The Office of the Deputy Chief of Staff for Logistics continued to work closely with the Office of the Assistant Secretary of Defense (Manpower, Reserve Affairs, and Logistics) toward further refinement of the Logistics Master Plan for NATO. Of ninety-nine tasks contained in the revised plan published 1 May 1979, the Army is in the lead with action on twelve.

Another continuing effort is the air line of communication in which repair parts are shipped directly from the wholesale supply point in the continental United States to the direct support unit in Europe. This procedure eliminates the need for intermediate overseas depots and frees resources for other priority requirements. The aim is to reconfigure the logistics structure into that envisioned for wartime operations—a structure that cannot be made effective without a reduction in order-ship time (the elapsed time between the placement of an order and the reception of the materiel by the direct support unit). Order-ship time for the air line of communication to Europe continued to improve in fiscal year 1979 and by 30 September 1979 had reached an average of 25.9 days against a goal of 20 days. Depot processing time at New Cumberland Army Depot in Pennsylvania, the base installation for shipments to Europe, was 2.5 days by the end of September, surpassing the target of 3 days. By that time, the number of support units of U.S. Army, Europe, served by the air line of communication was ninety-five, or six more than the previous year.

The Minimum Required-Logistics Augmentation, Europe, project, begun in 1974, provided for establishment of a line of communication throughout the United Kingdom, Belgium, the Netherlands, and Luxembourg in support of U.S. Army, Europe, in the event of hostilities. Continuing project actions included maintenance of prepositioned equipment, operation of storage sites, provision of equipment to fill shortages, unit training, and acquisition of an additional storage site. At the second annual project conference held in March 1979, conferees established and assigned responsibility for twenty-seven objectives which should allow for more intensive management of the project.

The Office of the Deputy Chief of Staff for Logistics participated in the implementation of logistics initiatives agreed to by NATO nations as part of the NATO Long-Term Defense program. Key features, agreed to for implementation or further study, include harmonizing NATO communications zones, improving war reserve levels, and establishing required NATO logistics staffs and organizations. The program progressed through increases in prepositioned war reserves and NATO funding of

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some of the storage facilities required in Europe. Also, the Army assigned several staff officers to a new logistics coordinating center at Headquarters, Allied Forces Central Region.

Host nation support continued to be a primary consideration for achieving the total logistics support capability that our combat forces would require in war. Progress was evident in some of the functional areas in which support had been requested from the Federal Republic of Germany; however, much additional work remains to be done in order to obtain necessary support commitments. While general and technical agreements have been concluded with the United Kingdom, Belgium, the Netherlands, and Luxembourg, only one detailed line of communication plan has been completed. Negotiations aimed at obtaining lines of communication support agreements continued with Norway, Denmark, and Italy, but the dialog with Turkey and Greece was temporarily suspended for political reasons.

As a possible supplement to the Army aircraft depot maintenance programs, the Army, in fiscal year 1979, contracted with several German firms for modification and maintenance of aviation equipment. With a view toward expanding the number of such agreements, the Department of Defense, in June 1978, submitted to Congress for the second time proposed legislation that would remove cumbersome legal requirements that host nations find objectionable.

Outside of the European area of concern, work continued on air lines of communication to Hawaii and Alaska, with both lines expected to be in operation early in fiscal year 1980. The existing Military Airlift Command channel from Travis Air Force Base, California, to Hickam Air Force Base, Hawaii, will serve the line to Hawaii. The Alaska line is designed to operate between Sharpe Army Depot, California, Travis Air Force Base, California, and Elmendorf Air Force Base, Alaska.

In the area of logistics support for Pacific operational plans, improvements have been made in closing the gap between requirements and capabilities. A Memorandum of Understanding that resulted from an April 1979 meeting of action officers from the Department of the Army, the U.S. Army Materiel Development and Readiness Command, and all Army major commands in the Pacific, called for computation and structuring of resupply packages for U.S. forces and designation of multiple ports of debarkation for supplies. In regard to Army withdrawal from Korea, representatives of the Office of the Deputy Chief of Staff for Logistics visited Korea, attended conferences at U.S. Army Western Command and U.S. Army Materiel Development and

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Readiness Command, and participated in Army staff reviews of withdrawal matters.

The Army continued to support attempts to improve the defense posture of the United States’ friends and allies by furnishing weapons, training, and other military services on a grant aid or sales basis. New security assistance constraints imposed by legislation and by President Carter’s policy on the transfer of conventional arms were considered in the careful review of requests from foreign countries seeking to acquire advanced weapons systems and related services. Some reductions in arms sales as a consequence of this review are evident, but the major reductions resulted from Iranian cancellations both before and after Iran’s revolution in early 1979. The level of foreign military training continued at roughly the same level as in recent years.

Congress passed two laws directly affecting security assistance. The International Security Assistance Act of 1979 directed the President to take into account improvements in the human rights records of countries receiving assistance, authorized lifting of the arms embargo on Turkey, and supported the President on arms control measures. The Department of Defense Appropriation Authorization Act of 1979 prohibited sales of certain types of stocks and war reserves, thus protecting Army readiness.

Seventy-eight country programs comprised the Army’s worldwide security assistance responsibility. Of $28.7 billion allocated, $13.1 billion had been delivered by the close of fiscal year 1979.

Grant aid under the Military Assistance Program has been declining since fiscal year 1977. A tri-service ceiling of $210.3 million was established for fiscal year 1979 of which $157 million was allocated for country programs as follows:

Annual investment in the International Military Education and Training Program has remained close to $30 million since fiscal year 1976. However, during the past year, the program only consisted of $23.9 million for forty-two countries.

Eligible foreign governments purchase defense articles, services, and training under the Foreign Military Sales Program. Total Department of Defense new orders for the year were $13.0

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billion; the Army-managed share of $4.3 billion represented an increase over the fiscal year 1978 total of $2.9 billion. This was attributed to almost $2 billion in new orders during the fourth quarter. Foreign military sales for the year reflected the President’s policy on conventional arms restraints, including a reduction in the dollar volume of new commitments to nonexempt countries for weapons and weapons-related defense articles and services. Under the Foreign Military Sales financing program, which provides credit and loan repayment guarantees to enable eligible foreign governments to participate, $1,973 billion was allocated, including $1 billion earmarked for Israel. In all, twenty-six countries received financing.

Funded under both the International Military Education and Training Program and the Foreign Military Sales Program is the International Fellows Program at the U.S. Army War College. The objective of the fellows program is to establish and maintain special relationships with military officers of selected foreign nations. During the academic year 1979-80, sixteen nations participated.

The Army takes part in security assistance coproduction projects approved by the State and Defense Departments for manufacture or assembly of U.S. defense materiel on foreign soil. Interest in these programs remained high among foreign governments seeking to achieve self-sufficiency, modernize forces, and capitalize on benefits derived from the impetus of standardization and interoperability. During fiscal year 1979, the value of active, closed, and pending coproduction projects totaled $4.49 billion, of which $2.25 billion will eventually be returned to the U.S. economy. In addition to NATO, countries participating in these programs were Germany, Italy, Japan, Korea, the Netherlands, the Philippines, the Republic of China, Turkey, Switzerland, and the United Kingdom.

Events relating security assistance to individual NATO members were mixed during the year. Greece wanted to reintegrate its conventional forces with NATO, but the problem of Greek and Turkish tension over Cyprus and other issues hindered progress toward NATO cohesion on the southern flank. Among other objectives, security assistance for Greece and Turkey was designed to promote alliance cohesion by arresting their centrifugal tendencies. In addition to providing unilateral assistance to Portugal and Turkey, the U.S. made efforts to encourage assistance from other NATO allies, particularly the Federal Republic of Germany, the United Kingdom, and France. Developments in Spain and France suggested increased and continued coopera-

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tion with NATO. One small but noteworthy breakthrough was the expanded accreditation of the U.S. Army Training and Doctrine Command liaison officer to the French Army staff.

In the Middle East and Africa region, defense requirement surveys continued to be an important part of security assistance efforts, with new surveys being conducted in Kenya, Iran, Egypt, and Oman. As a result of the Israel-Egypt Peace Treaty, the U.S. security assistance relationship with Egypt expanded dramatically. Congress approved a $1.8 billion assistance package, of which $1.5 billion was Foreign Military Sales credits. The United States-Israel security assistance relationship remained steady throughout the year. Despite disagreement with Saudi Arabia over the Israel-Egypt treaty, U.S. programs for that country continued to expand.

During the fiscal year, the United States-Iran security assistance relationship underwent a drastic change. As a result of political turmoil and the downfall of the Shah, a provisional government was established and the armed forces of Iran were virtually destroyed as an effective military force. The large U.S. military assistance advisory group was evacuated by mid-fiscal year 1979, and our Foreign Military Sales program came to a standstill. All existing sales programs were terminated pending resolution of the political situation.

Nine Latin American countries received Foreign Military Sales financing or training, or both, under the International Military Education and Training Program. Countries that in previous years had rejected U.S. security assistance or whose programs the U.S. government had terminated due to human rights issues did not receive security funds. Military-to-military relations with Latin America generally remained good, although reduced security assistance still caused somewhat strained relations with some countries.

In the Pacific region, planned compensatory equipment transfers from the U.S. 2d Infantry Division to the Republic of Korea Armed Forces were largely placed in abeyance by the President’s decision to slow troop withdrawal from Korea. Normalization of relations with the People’s Republic of China and imminent termination of the mutual defense treaty with Taiwan required that Taiwan security assistance requests be processed through the quasi-official American Institute on the island. The occupation of Kampuchea by the Socialist Republic of Vietnam stimulated Thai requests for expedited security assistance, which the U.S. began to meet. Completion of Philippine base negoti-

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ations resulted in a U.S. commitment to make a determined effort in fiscal years 1980-84 to reach a cumulative total of $500 million in military and economic assistance to the Philippines.

Closely akin to the security assistance program, although not a part of it, is U.S. support to the United Nations. Since 1973, the U.S. has supported the United Nations Emergency Force, which was established in that year to act as a buffer between Egypt and Israel in the Sinai. Because of the Egypt-Israel peace accord, the Emergency Force’s mandate was allowed to expire on 24 July 1979. Still receiving U.S. aid were the United Nations Disengagement Observer Force, which served as a buffer between Israel and Syria in the Golan Heights; the United Nations Truce Supervision Organization in Palestine; and the United Nations Interim Force in Lebanon, which was established along the Israel-Lebanon border in March 1978 following the incursion by Israel into Lebanon.

The U.S. provided approximately $2.05 million worth of goods and services to these United Nations activities in 1979. All Department of Defense support during the year was provided on a reimbursable basis.

Efficient planning and management are vital if the Army logistics community, with its far-flung, variegated, and important responsibilities, is to function effectively. In October 1978, the Deputy Chief of Staff for Logistics revised his plan for manning, equipping, training, managing, and sustaining the Army by publishing a list of actions to enhance logistics readiness and provide a common direction for the entire Army community. The list, known as Direction for Army Logistics, incorporated recommendations of the major Army commands and the Army staff. At the close of the fiscal year, the plan was being expanded to make it a more useful working document, to identify major accomplishments, and to provide clear, concise, and measurable interim and long-range objectives in attaining Army logistics goals.

During the fiscal year, the logistics community took a number of steps aimed at ensuring the availability of logistic and materiel support when a materiel system is fielded. The Integrated Logistic Support Enhancement Program gained recognition for logistics as an equal partner with cost, schedule, and performance in figuring overall cost in the materiel acquisition process. Also as a result of the program, the Deputy Chief of Staff for Logis-

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tics gained membership on the Army Systems Acquisition Review Council and integrated logistics support became a council agenda item.

The Department of the Army Inspector General in August 1977 completed an audit survey and special inspection of the management of and accountability for Army materiel at the retail level. In October 1977, the Department of the Army Property Accountability Task Force was established within the Office of the Deputy Chief of Staff for Logistics to implement the inspection’s recommendations. Sixteen of the eighteen recommendations, including the new Army report of survey system, had been implemented by early spring 1979.

In March 1979, the Office of the Secretary of Defense Steering Group on Oversight of Defense Activities ordered a combined review by all the Armed Services of the Army’s property management initiatives to determine whether the Army’s new way of doing business could be adopted by all Department of Defense components. The review team had the task of measuring the effectiveness of the new system from data collected each quarter from major Army commands. Initial indications were that the new procedures had been well received by units in the field and had resulted in a higher rate of pecuniary liability in cases involving possible negligence, a much reduced administrative processing time, and increased awareness by commanders of their responsibilities in property accountability.

For commissioned officers, the major development during the year in the area of logistics personnel and training was the Deputy Chief of Staff for Logistics approval of the Army Logistic Specialties Committee recommendation to consolidate the Traffic Management specialty with the Transportation Management specialty. The committee also undertook a major two-year effort to define the Army’s field grade requirements for general logistic officers. For enlisted personnel, the Deputy Chief of Staff for Logistics continued efforts to revitalize the Noncommissioned Officer Logistics Program.

Adding greater efficiency to the Army’s management of its logistics was the service’s continued participation in interservice support agreements. Under the Defense Retail Interservice Program, the Army took part in 900 separate agreements with other services, departments, and agencies. During the fiscal year, the Army exchanged support totaling approximately $175 million and 2,400 man-years. In May 1979, the Army Logistics Evaluation Agency completed a comprehensive study of the Army Defense Retail Interservice Program, and implementation of the

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resultant approved recommendations should be completed in fiscal year 1980. At the direction of the Office of the Secretary of Defense, a Joint Interservice Resource Study Group was established for each of sixty-seven geographic areas, worldwide, having a concentration of Department of Defense activities. The groups will study all 101 defense retail interservice support categories for possible interservicing in their areas.

In 1973, the General Accounting Office recommended that management of conventional ammunition be centralized for all the services. The Department of Defense agreed and issued a directive in November 1975 designating the Secretary of the Army as the Single Manager for Conventional Ammunition, effective 1 October 1977. The secretary is thus responsible for centralized management of procurement, production, supply, maintenance, and renovation of conventional ammunition within the Department of Defense. Under a phased plan for implementation, the secretary’s program responsibilities were limited in the initial phase so the procedures could be established, experiences evaluated, and recommendations developed for expansion of the secretary’s role in the second phase. A General Accounting Office draft report, dated August 1979, stated that the goal was not yet achieved and called for expanded authority for the single manager. Although the Army agreed with the proposed conclusions, the other services did not concur. Attempts to develop an acceptable directive by the Office of the Secretary of Defense is continuing.

The Army, as well as the other military departments and defense agencies, is participating in the development of the National Supply System, a charter for the operation of which President Carter approved on 9 August 1979. Under the system, the Office of Management and Budget will establish standard policies and procedures to improve the efficiency of the wholesale supply operation of the federal government. The Office of the Secretary of Defense, with Army coordination, agreed with the Office of Management and Budget that although the National Supply System will consist of an integrated system of broad policies and procedures, each department and agency will manage its own supply system. Thus, the central system authority will not become involved in operations at the department and agency levels.

Within the Army, a number of logistics systems continued under development. The Standard Army Ammunition System is designed to provide an integrated supply and maintenance

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management system for conventional ammunition. The Standard Army Maintenance System seeks to provide functional procedures and associated automatic data processing support for maintenance of materiel at all levels of command. Eventually replacing two systems currently in use will be the Direct Support Unit Standard Supply System, which will give the entire Army one direct support level supply system. In support of the level between wholesale and the ultimate user, the Army is testing the Standard Army Intermediate Level Supply Subsystem. During the year, the Army made gains in the development of all these systems and expects full implementation of them within the next few years.

Logistics was one of the first areas in which the Army employed automatic data processing equipment. The initial computer support for operations was with punched card processing techniques and first generation computer technology. As technology advanced, both the amount and efficiency of support have increased. However, because of continually growing requirements and dwindling personnel resources, the Army must continue to upgrade its computer support to meet the logistical requirements of a modern, mechanized force. In 1979, the Army awarded a contract for new mobile minicomputers to replace outdated computers used at the first level of supply support. At the second, or corps level, initial installation of new computers resulted in a 50 percent reduction in data processing time. Plans for the post, camp, and station level call for the purchase of more powerful computers or for a comprehensive service contract with private industry.

The Total Army Equipment Distribution Program relates projections of equipment distribution to current budget and program objectives. An evaluation of the program’s projections between July and September 1979 found them timely and accurate, and the Army staff continues to use them extensively.

Keeping today’s complex equipment and weapons systems in a high state of readiness is crucial to the Army’s fighting capability, and equipment readiness is directly dependent upon proper maintenance. When audits and inspection reports from the field indicated a need for improved maintenance practices, the Deputy Chief of Staff for Logistics, in coordination with other staff agencies and major Army commands, developed the Maintenance Management Improvement Program. Launched in February 1979, this program seeks to focus command attention on

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problem areas, upgrade maintenance operations, strengthen maintenance training, improve personnel management, and improve publications, tools, and repair parts support. Actions taken during the fiscal year included briefings of major commanders, simplification of some maintenance procedures and administration, course improvement at service schools and at the unit level, development of a maintenance manpower utilization system, and updating of maintenance publications.

Army logisticians sought uniformity and standardization of maintenance functions at wholesale, retail, and Headquarters, Department of the Army, levels through development of the automated Standard Army Maintenance System. Work on the project during the year consisted primarily of drafting and staffing requirement documents for the retail level of the system.

Improving field command readiness is the aim of maintenance assistance and instruction teams. A new Army regulation to be published in fiscal year 1980 will give these teams added responsibility, including monitorship of the Sample Data Collection System, a procedure for collecting field maintenance and performance data on selected items of equipment for a specified period of time by using sampling techniques. The Sample Data Collection System will reduce the burden on field units of data collection and provide a manageable volume of information to the wholesale equipment developer.

In July 1978, the U.S. Army Metrology and Calibration Center completed a 2 1/2-year study of the Army’s test, measurement, and diagnostic equipment support system. Recommendations included merging levels A and C calibration, combining calibration and repair functions, and placing Army-wide command and control of test, measurement, and diagnostic equipment support under the U.S. Army Materiel Development and Readiness Command. Implementation of the recommendations requires reorganization plans submitted sequentially by geographic areas. Plans for Europe were approved in September 1979 and plans for the Western Pacific and the continental United States were in preparation as the fiscal year ended.

The elimination of waste is an important concern of those in the materiel maintenance field. When a 1977 Army report cited excessive usage rates and failures to meet full life expectancy of lead acid batteries, the Deputy Chief of Staff for Logistics declared a “War on Battery Waste.” Initiated in 1978, the campaign included an extensive publicity program, revision of the battery maintenance manual, and publication of a Department of the Army pamphlet on battery maintenance. Indicative of the “war’s”

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success was the reduction, by 40,278, of the number of batteries used during the first three quarters of calendar year 1979 as compared to the same period in 1978.

When equipment cannot be returned to an operable condition on the battlefield within the time limits prescribed by the using commander, as much of it as possible must be recovered and evacuated to a rear area for repair and reclamation. As part of the Division Restructuring Study at Fort Hood, Texas, a Battlefield Recovery and Evacuation Study has been examining the recovery and evacuation capabilities of the current Army division.

In view of the issues raised by NIFTY NUGGET, and of the expanding requirements for transferring equipment to prepositioned stocks, it was clear that problems associated with the serviceability standard’s for such transfers had increased significantly. The variety of existing criteria and standards, differing interpretations of serviceability, and a proliferation of terminology in various publications all contributed to the confusion that had developed. A Department of the Army conference on the question, held in October 1978, directed the U.S. Army Materiel Development and Readiness Command to write a technical manual giving standardized definitions and serviceability standards for the transfer of equipment between units. The manual was drafted and sent to the field for comments, and is scheduled to be published in the next fiscal year.

As a result of interest in materiel warranty execution and management expressed by the House Appropriations Committee, the General Accounting Office, and the Defense Audit Service, the U.S. Army Logistics Evaluation Agency reviewed Army policies and procedures pertaining to materiel warranties. Representatives of the Logistics Evaluation Agency worked with members of the Office of the Deputy Chief of Staff for Logistics and the Materiel Development and Readiness Command to develop a new regulation covering the subject. A preliminary draft of the regulation was circulated in July 1979.

In 1977 the U.S. Army Materiel Development and Readiness Command began discussions with the National Guard Bureau over the possibility of using the guard’s transportation aircraft repair shops during mobilization. Early in fiscal year 1979, the Vice Chief of Staff, Army, approved such use of four shops located in Connecticut, Missouri, Mississippi, and California. The four shops have been redesignated as Aviation Classification Repair Activity Depots (AVCRAD) and during mobilization will classify, identify, and process reparable secondary supply items.

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Much of the materiel that flows through the Army depot system is financed by the Army Stock Fund, a revolving fund established to finance inventories of supplies and other stores and to provide working capital for industrial type activities. The fund is replenished through annual appropriations incorporated in the Army’s budget. Stock fund obligations for fiscal year 1979 totaled $4.2 billion in support of $3.8 billion in net sales. The Army was authorized to obligate approximately $383.2 million of the procurement appropriation for secondary items, compared to $436.5 million obligated the previous year. This decrease is attributable to a reduction in the reimbursable program (all transactions in which the issue of Army materiel is paid for by the receiving activity), primarily at the U.S. Army Missile Command. Total returns from users were $726.8 million, which is 17 percent higher than had been forecast.

Of the 1979 operation and maintenance appropriation of $9.5 billion, some $2.8 billion, or 29 percent, was allocated to central supply and depot activities. These two areas provide for the receipt, storage, issue, and transportation of supplies and equipment worldwide; the maintenance of an industrial base; and maintenance of supplies and equipment. An increase in the allocation for these activities of $140.6 million over that for fiscal year 1978 reflects Army emphasis on the need to improve force readiness.

During the past year, directorship of the Army Industrial Fund was transferred from the Comptroller of the Army to the Deputy Chief of Staff for Logistics. Army Industrial Fund working capital, acquired initially through congressional appropriation, is sustained on an annual basis by customer reimbursements for goods and services furnished. Typical activities financed under the fund are ordnance plants, depot supply and maintenance activities, and research and development activities. The total obligation authority for the fund for the fiscal year was $2.4 billion.

In February 1979, the Base Operations Division was transferred from the Comptroller of the Army to the Deputy Chief of Staff for Logistics, and the engineer functions (maintenance and repair of real property, minor construction, operation of utilities, and other engineering support) were transferred to the Chief of Engineers. Approximately 31 percent, or $3.0 billion, of the operation and maintenance appropriation was allocated for base operations. Although the amount of money available for base operations was greater than that in the previous fiscal year, salary increases and the overall pressures of inflation ne-

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cessitated a special emphasis on efficiency and economy. To combat a downward trend in the civilian manpower available to provide base operations support, the Army has begun contracting with private firms for industrial and commercial services.

With the aim of increasing the number of reparable secondary items returned from the field for depot repair, the Army initiated the Reparable Secondary Recovery Improvement Program in March 1978. The program merged with the Repair Parts Improvement Program in January 1979, and full implementation is expected within the next few years.

In December 1978, the Defense Logistics Analysis Office proposed that management responsibility for all consumable items be transferred from the military services to the Defense Logistics Agency. Consumable items were defined as those other than major end items (tanks, aircraft, missiles) and components that are repaired or overhauled in military depots. After a comprehensive study, the Army concluded that the proposal did not provide a proper foundation for a transfer decision, and so informed the Deputy Secretary of Defense. The Deputy Secretary directed the Defense Audit Service to review the Army’s findings, and although the review had been completed by the end of the fiscal year, the Defense Audit Service has not yet submitted its report.

In 1978, the Department of Defense instituted a retail inventory management stockage policy for direct support and general support units and installations in the continental United States. The policy, which excludes end items, clothing, subsistence items, medical items, bulk petroleum, ammunition, and war reserves, seeks to minimize costs and to limit the echelons between the consumer and the wholesale level to one. Implementation of the policy within the Army, which continued during fiscal year 1979, rests with the U.S. Army Logistics Center and the U.S. Army Materiel Development and Readiness Command.

A June 1978 Department of the Army study, Logistics Concepts for Use in Policy, Planning, Doctrine, and Training, created new logistical missions for U.S. Army, Europe. In conjunction with the results of the study, a general officer conference held in April 1978 led to the decision that the corps base stockage would be expanded from 8,000 to 15-20,000 lines. Funding for the expanded stocks, whether through the Army Stock Fund, or some other means, had not been resolved by the end of the reporting period.

In Korea, a suspension system problem in M60A1 tanks necessitated their replacement with M48A5 tanks from the conti-

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nental United States. The change was completed in July 1979, 3 1/2 months after approval of the action and fourteen days ahead of schedule.

In April 1979, the Joint Service Cost Benefit Evaluation Committee, including two Army members, completed a concept document for the Defense Intransit Item Visibility System to create a large data bank to keep track of cargo in transit. At the end of the year, a full economic analysis of the concept, which the Senate Appropriations Committee had requested, was underway.

Planning and development of the subsystems of the Terminal Operations and Movements Managements System advanced during the year. A joint service systems design group engineered a plan to correct problems of equipment obsolescence, operational inefficiency, and lack of wartime and backup capability in the Department of the Army Standard Port System. In September 1979, the Office of the Assistant Secretary of the Army (Installations, Logistics, and Financial Management) approved, as the cargo module of the Department of the Army Movement Management System, the Visibility of Intransit Cargo System, which automates the theater cargo function of movements management.

On 1 October 1979, as a result of suggestions by the Deputy Chief of Staff for Logistics, the Military Traffic Management Command, the Military Sealift Command, and the Military Airlift Command began billing the Agency for International Development directly for port handling and ocean and air transportation. Previously, such billings had been estimated and billed to the Agency for International Development by Army depots as added items to other services they provided to the agency. Direct billings will more accurately compensate the Army for expenses incurred in support of the agency.

The Army’s facilities engineering operation is as complex as a large corporation, involving 174 major installations, a work force of approximately 47,300 soldiers and Army civilians, and real property having a replacement value of some $127 billion. Fiscal year 1979 costs incurred to operate and maintain the Army’s real property amounted to $2,336,000,000, a 6.8 percent increase over the $2,187,000,000 cost incurred in fiscal year 1978. During the past year, expansion of the Integrated Facilities System brought the total number of installations served to forty-four. The number of fires increased and fire losses to real prop-

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erty were 23 percent higher than for fiscal year 1978. Also, two fire related deaths were reported, neither of which was in family housing. Although total energy consumption at Army installations continued to decrease, the dollar cost of energy again rose due to increases in the cost of heating fuels and electrical power. At the close of the fiscal year, the total Army maintenance and repair unfinanced work load stood at $2,026,000,000; the Army backlog of maintenance and repair for all appropriations was $1,496,000,000, of which $1,309,000,000 was in the Operations and Maintenance, Army, accounts; and deferred maintenance for family housing was reported at $530,000,000. Because of manpower shortages, the contracting out of maintenance and repair work continued to grow. This trend should accelerate as policies and procedures promoted in DA Circular 235-1 and OMB Circular A-76 are implemented and additional functions are converted to contract where it is determined to be more economical to do so.

In fiscal year 1979, the Army requested $917,100,000 for military construction and received from Congress a total obligational authority of $753,980,000. The majority of the congressional denials and reductions focused on U.S. Army, Europe. While expressing little concern over the validity of U.S. Army, Europe’s, individual projects, Congress cut the European command’s portion of the military construction request by approximately $61 million on the basis that NATO and the host nations should assume a greater role in funding projects that enhance the security of the alliance.

The 1979 appropriation provided $34.9 million in new obligational authority for minor construction projects, of which $10.9 million was for specified locations approved in the regular program and $24.0 million for exigent locations. An additional 12.9 million in prior year funds was also available for obligation. At the close of the fiscal year, all of the funds for exigent locations and $7 million of those for specified locations were committed to finance approved projects. Actual obligations, however, were $23.9 million, due primarily to overseas currency reevaluation requiring time-consuming reprocessing of projects, and to general inflation in construction costs.

In order to match facility capabilities to force structure requirements, the Army conducts long-range logistic base structure planning. In progress is an update of the Department of the Army Worldwide Maintenance Facilities Priority List, which contains every known maintenance facility requirement as submitted by the major commands. To support the Army Ammunition Plan,

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the Office of the Deputy Chief of Staff for Logistics (Directorate for Supply and Maintenance) has continued to assist development of a Total Force Ammunition Storage Facilities program to double the capacity of U.S. Army, Europe.

The impact of the Panama Canal Treaty on military basing has required the development of a Regional Complex Master Plan to determine the most cost-effective base structure in Panama for the life of the treaty. Completion of the plan, which would be based on interservice consolidation, was tentatively set for mid-1980.

The Army Corps of Engineers Construction Engineering Research Laboratory (CERL) during the year completed a technical manual on the computerized Pavement Management and Repair System. CERL also completed and published system documentation on the supervision and administration cost/rate forecast model to be used by the Office of the Chief of Engineers in predicting costs for Corps of Engineer district offices. In addition, CERL developed a users manual, operational procedures, and a data base for a computer-based document search and retrieval system for use in updating construction management guidance. Progress was also made on several computer-aided engineering and design systems.

Through the Corps of Engineers, the Army serves as the construction agent for other components of the Department of Defense. The Air Force program totaled $429 million in 1979, of which $267 million was actually awarded. Of the $162 million shortfall, $97 million was due to criteria changes by the Air Force for the Space Transportation System Launch Complex at Vandenberg Air Force Base, California. Construction for the Navy amounted to $10.7 million and, for the Defense Nuclear Agency, the Defense Logistics Agency, the Defense Mapping Agency, the Defense Dependent School System, and the National Security Agency, a total of $139.3 million.

The Corps of Engineers also provided engineering and construction support to four foreign governments: Saudi Arabia, Israel, Jordan, and the Federal Republic of Germany. As in past years, the major support was for Saudi Arabia, where construction projects with a total value of $718.4 million were completed, and design and construction contracts totaling approximately $2.2 billion were awarded. As a result of the Egypt-Israel peace treaty, on 6 April 1979, the United States signed an agreement with Israel to construct two air bases, with all costs in excess of an $800 million congressional appropriation to be paid by the Israeli government. At year’s end, design of the project was well

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underway with initial construction beginning. For Jordan, the design, specifications, and cost estimate for a $62.2 million armor rebuilding factory were completed. The Federal Republic of Germany entered into Foreign Military Sales agreements for design and construction of an expansion of the flammable storage area for their cargo facility at Dulles International Airport, Chantilly, Virginia, and for design, construction, and testing of a reinforced concrete bridge section.

In the United States, approximately 20 percent of the second increment of site development was completed for the construction of the Mississippi Army Ammunition Plant. A contract for the third increment of site development and contracts for $33 million worth of projectile metal parts production equipment were awarded during the year.

Capability master planning is a comprehensive process which identifies an installation’s total potential for expansion and develops plans to support both current and future missions. The past year saw the revision of this concept as applied to Army forces garrisoned overseas.

Under development was the Tables of Organization and Equipment (TOE)/Tables of Distribution and Allowances (TDA) Facility program involving the design and construction of facilities with a cost of nearly $500 million during the next five years. Individual projects in this program will be guided by technical manuals which provide a method for determining the amount of space required for TOE units to properly maintain their assigned vehicles, and a method for determining the amount of space required for TDA maintenance activities. New design criteria for standard TOE maintenance facilities is under development to provide guidance for design and review of projects in conjunction with the space requirements established. Such guidance should promote savings by reducing design costs and by standardizing the type of construction and quality of details to reflect a more austere industrial technology.

The four-year-old design guide series at year’s end included standard guidance and flexible procedures for the planning, design, and improvement of a wide range of recreation service facilities, criminal justice facilities, administrative offices, service schools, housing for unaccompanied personnel, and others. The guides are tailored to fit local programs and at the same time are sensibly standardized to achieve economies of scale in construction. Two guides were published during the fiscal year, bringing the number issued thus far to ten. Others are in preparation.

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In response to field reviews conducted on behalf of the physically handicapped by the United States Architectural and Transportation Barriers Compliance Board, major Army commands began correcting violations identified at Army facilities. The Army is complying with the board’s request to develop a long-range plan establishing priorities and funding targets for barrier-free design and barrier removal. These actions also anticipate requirements set by the Comprehensive Rehabilitation Act Amendment of 1978 concerning employment opportunities for the severely handicapped.

Acting as executive agent for the Department of Defense Recruiting Facilities Program, the Corps of Engineers took more than 900 separate actions involving the establishment of new offices and the relocation, expansion, and upgrading of existing ones during 1979. At the end of the fiscal year, there were approximately 6,440 recruiting offices for the four services.

In an effort to determine the best organization for the management of the Army’s real property maintenance activities, the Office of the Chief of Engineers sponsored a contract study of facility maintenance systems in government and private industry. The contractor recommended that management of these activities in the continental United States be centralized under the Corps of Engineers using a revolving fund to enable the installation commander to retain control of planning, programming, and budgeting. An ad hoc study group formed by the Chief of Engineers prepared an implementation plan that would have reassigned the installation facilities engineer organization to the Corps of Engineers division/district structure, with the aim of providing more efficient management, particularly in contracting of real property maintenance functions. Since the plan proved to be highly controversial and met stiff opposition from most of the Army’s major commanders, the Army postponed its implementation and elected to develop a test of it at installations in the National Capital Region.

By direction of the Department of Defense, the Army continued to analyze opportunities for achieving increased economy and efficiency through the interservice consolidation of real property maintenance functions in selected geographic areas. A pilot, industrially-funded consolidation of Fort Sam Houston and four Air Force bases in the San Antonio, Texas, area produced mixed results in its first year of testing. Studies of possible consolidations in the Fayettville, North Carolina, area and in the Panama Canal Zone were completed, and decisions on implementation were pending at the end of the year.

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At the close of fiscal year 1979, the Department of the Army controlled approximately 12.3 million acres of military land, which, with improvements, had an acquisition cost of $14.7 billion. During the fiscal year, the General Services Administration (GSA) disposed of 1,264 acres of Army land in the United States and made improvements having an acquisition cost of $17.3 million. In addition, the Army declared in excess and reported to GSA for the disposal of 84,889 acres of Army land and made improvements with an acquisition cost of $196.7 million. At the end of 1979, there were 41,467 outstanding grants covering 6.4 million acres of Army (military and civil works) and Air Force lands.

Continuing its program of land acquisition for other government agencies, the Corps of Engineers acquired, for an estimated $4.2 million, approximately 910 acres of land, with improvements, to expand clear zones at eighteen Air Force bases. For the Department of the Interior, acquisitions by the Beaumont Project Office at the Big Thicket National Preserve in Texas totaled 321 tracts containing 3,366 acres and costing $9.5 million, bringing total acquisitions through fiscal year 1979 to 1,078 tracts consisting of 75,860 acres at a cost of $58.4 million. Also acquired, for the Department of Energy’s Strategic Petroleum Reserve Program, were 394 tracts containing 1,967 acres and costing $14.4 million. Acquisitions for this program through fiscal year 1979 totaled 1,032 tracts with 5,114 acres at a cost of $86.7 million.

In accordance with Executive Order 11954 dated January 1977, GSA conducted forty-five real property utilization surveys of Army-controlled properties in 1979. Of 34,575 acres of land that GSA recommended to be declared as in excess of Army needs, the Army agreed to the disposal of 1,575 acres.

During the year, the Corps of Engineers expended $4 million in relocation assistance payments to 774 applicants displaced by Corps projects.

Losses of Army weapons, ammunition, and explosives continued to be minimal, with the exception of Army National Guard losses of weapons. During the year, the National Guard suffered three armory break-ins with a cumulative loss of 217 weapons. In an effort to speed a security upgrade of National Guard armories nationwide, the Army approved full federal funding of installation of intrusion detection systems. Additionally, steps were taken to tighten management oversight procedures of the physical security upgrade program in the individual states.

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In the area of nuclear security management, the Law Enforcement Division of the Office of the Director of Human Resources Development implemented the concept of a less static, more tactical posture for nuclear security response forces. The division also initiated a move to have the Defense Nuclear Agency install a nuclear security training, test, and evaluation site at Fort McClellan, Alabama. Replicating a European nuclear site, the McClellan installation would aid military police training and offer controlled evaluation of evolving security equipment and procedures. The Law Enforcement Division and the U.S. Army Materiel Development and Readiness Command developed a draft regulation for securing Army nuclear reactors, incorporating closed circuit television, intrusion detection systems, and a phased response force. However, manpower and funds for implementing the new standards are not yet available.

Improvement of security at chemical sites continued. To increase retention of well-qualified guards, the Under Secretary of the Army solicited aid from the Director of the Office of Personnel Management, who approved special pay rates at two sites. A long-term solution is in the Federal Employees Compensation Act, which was before Congress at the end of the fiscal year.

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