Department of the Army Historical Summary: FY 1992


Organization and Management

During FY 1992, a time of declining personnel strengths and shrinking fiscal resources, the Army made several changes in its organization and management procedures to improve efficiency. Among other measures, the Army leadership relied more fully on automation to manage personnel and materiel. Faced with the decline in personnel and resources, planners prepared budgets for fiscal years 1992 and 1993 that reflected the changes proposed by Congress and the administration.


During FY 1992, the Army made several changes to its Table of Distribution and Allowance (TDA) organization. Implementing a proposal in President Bush's State of the Union Address in January 1991, the Department of the Army created in July 1992 the new U.S. Army Space and Strategic Defense Command (USASSDC) from the U.S. Army Space Command (USARSPACE) and part of the old U.S. Army Strategic Defense Command (USASDC). Maj. Gen. Donald M. Lionetti became the first commander of the new headquarters. From part of the old USASDC and the U.S. Army Missile Command, the Army formed the Program Executive Officer for Global Protection Against Limited Strikes (PEO-GPALS) as an agency separate from USASSDC.

The PEO-GPALS established its headquarters in Arlington, Virginia, but most of its personnel were located in Huntsville, Alabama. Its mission was the development of systems to counter the threat of ballistic missiles in an increasingly unstable world. The new organization contained two program offices: the Army National Missile Defense (ANMD), which would provide ground-based and space-based sensors to protect the United States from long-range ballistic missiles, and the Army Theater Missile Defense (ATMD), which would safeguard deployed U.S. forces and American allies. The ANMD program staff focused on the Ground Based Interceptor (GBI), Ground Based Radar (GBR), Ground-based Surveillance and Tracking System (GSTS), Site Development Project Office, and Regional Operations Center. The ATMD program office han-


dled the Patriot, Theater High Altitude Area Defense (THAAD), Extended Range Interceptor (ERINT), CORPS SAM, ARROW, and Extended Air Defense Test Bed (EADTB) projects.

Under the reorganization, USASSDC performed many functions. With the addition of USARSPACE, USASSDC had the mission of space operations. As a subordinate command of USASSDC, USARSPACE coordinated the Kinetic Energy Anti-Satellite project, the Mid-Infrared Advanced Chemical Laser/SeaLite Beam Director, the Advanced Communications Technology Satellite, Milstar, and the Army Space Exploitation and Demonstration Program. The command also operated the Army post at Kwajalein Atoll in the Marshall Islands and several field offices across the United States. Even with the addition of the space mission, however, the USASSDC's primary responsibility was management of Army strategic defense research and development for the Strategic Defense Initiative Organization. The command also administered the Department of Defense-funded High Energy Laser Systems Test Facility at White Sands Missile Range, New Mexico.

Using Defense Management Report Decisions (DMRD), the Office of the Secretary of Defense continued to merge functions, both within the Army and at the DOD level. The most significant of these mergers consolidated the services' commissaries under the Defense Commissary Agency. Effective 30 September 1991, the Army shifted over 9,000 civilian positions to DOD and dissolved the U.S. Army Troop Support Agency, an Army Staff field operating agency. On 1 October 1991, the Army transferred the latter agency's Army Commissary System, Directorate of Clothing and Services, and Army Food Service to the Defense Commissary Agency, Army Materiel Command, and Training and Doctrine Command, respectively. As a result of the savings and budget reductions identified by DOD in the DMRDs, the Army also established the Strategic Logistics Agency (SLA) to administer short-term and longer-range logistical initiatives.

During the fiscal year, the Army made several changes in its personnel organization. In 1980, the Army had established the Soldier Support Center-National Capital Region (SSC-NCR) under the Soldier Support Center to consolidate personnel support functions previously handled by ODCSPER, TRADOC, and PERSCOM. The SSC-NCR became the United States Army Personnel Integration Command (USAPIC) in 1989, but USAPIC remained subordinate to the Soldier Support Center until 1 October 1991. On that date, USAPIC became the Deputy Chief of Staff, Personnel Integration (DCSPI), in PERSCOM, in line with the PERSCOM VANGUARD implementation plan. PERSCOM thus assumed the responsibility for producing the Personnel Management Authorization Plan (PMAD) and the Update Authorization Document (UAD). These two


documents allowed the personnel community to update and edit manually personnel authorization data, which helped managers make critical decisions on accessions, assignment of personnel, training, promotions, and downsizing. The PMAD also provided timely personnel authorization information to personnel managers throughout the Army.

As a result of the incorporation of the USAPIC into PERSCOM, the Manning Integration Directorate of USAPIC became the MANPRINT Division of the DCSPI, PERSCOM. This division managed the Army MANPRINT Training Program and served as the Army's Manpower, Personnel, and Training (MPT) Integrator. In the latter role, it acted as the Army's proponent for MPT methodologies, developed guidance and procedures for MPT integration into the MANPRINT process, analyzed the impact of proposed and ongoing materiel acquisitions upon Total Army MPT, and carried out independent MPT assessments of major systems. For fiscal years 1992-2002, the DCSPER's MANPRINT Futures Task Force proposed that the MANPRINT Division manage MANPRINT training, produce MANPRINT assessments, and maintain the FOOTPRINT database on the Direct Support System. Other duties would include the development of the Operator/Maintainer Decision that identified all new or improved items of equipment entering the Army inventory and the collection, cataloging, and distribution of technical information on MANPRINT methods, tools, and techniques.

The Army carried out other major organizational changes during FY 1992. The Army Medical Specialist Corps (AMSC) underwent its most fundamental structural change since its authorization on 16 April 1947 as the Women's Medical Specialist Corps, adding the Physician Assistant Section to its organization and including Army physician assistants as commissioned officers in the corps. In addition, the AMSC increased from three to four medical specialties and more than doubled its active duty personnel strength, which, for the first time in AMSC history, was predominantly male. As a result of the Army's downsizing and an FY 1991 VANGUARD recommendation approved by the Army Chief of Staff, in June 1992 the ROTC Cadet Command announced the closure of the Third ROTC Region headquarters at Fort Riley, Kansas, effective in December 1992. The responsibilities and ROTC units would be transferred to the other three Cadet Command regions. The Army also eliminated twelve brigade and battalion headquarters from the Army Recruiting Command. In addition, it reorganized the military intelligence community and reduced and restructured the Criminal Investigation Command.

Laboratory Consolidation

Responding to President Bush's February 1989 directive to implement the recommendations of the Packard Commission, the Deputy Secretary


of Defense in October 1989 issued a draft DMRD challenging the services to create a new, more efficient, and less redundant approach to science and technology management. The Army responded with the Laboratory 21 (LAB 21) study to improve its laboratories. LAB 21 built upon reforms instituted since 1986 in the Army's Program Executive Officer (PEO) and Program Manager (PM) organization. Planners applied a set of uniform guiding principles to evaluate the Army's laboratories and research centers for productivity, efficiency, and quality. They identified four distinct research and development domains: the combat materiel domain, the infrastructure domain, the medical domain, and the manpower, personnel, and training domain. Each of these areas possessed a unique focus, customer base, product line, and product approval and acquisition process. Analysts considered consolidation across these domains to be counterproductive but contended that savings were possible through consolidation within these areas.

In all, the Army planned to consolidate forty-one laboratory functions into twenty-one restructured organizations. These included the Army Research Laboratory, 6 Medical Research and Development Command laboratories, 4 Corps of Engineers laboratories, the Army Research Office, 8 materiel-developing Research, Development, and Engineering Centers, and the Army Research Institute of Behavioral and Social Sciences. These laboratories would conduct most of the Army's Technology Base programs. A key element of LAB 21 was the creation of a world-class "flagship" laboratory, the Army Research Laboratory (ARL), within the domain for combat materiel. The ARL would maintain the basic core capabilities essential to the Army, including advanced computing and software, battlefield environment effects, electronics and power sources, human research and engineering, materials, vehicle structures, vehicle propulsion, survivability and lethality analysis, weapons technology, sensors, signatures, signal, and information processing.

The Army managed to obtain most of what it wanted with regard to a consolidated Army Research Laboratory. It included the planned consolidation of the ARL in its base closure and realignment submission to OSD, and Congress eventually passed most of these recommendations into law on 2 October 1991. In December, the military deputy to the Assistant Secretary of the Army for Research, Development, and Acquisition (ASA [RDA]) requested that Army Materiel Command (AMC) submit a plan for the consolidated ARL. The ASA (RDA) approved the plan on 13 March 1992, and the Army provisionally established the new ARL on 1 October 1992.

From interservice discussions regarding reduction of overlap in research, development, test, and evaluation (RDT&E) activities came "Tri-Service Science and Technology Reliance," or Project RELIANCE, one


of the most comprehensive restructuring efforts involving the science and technology base of the Department of Defense. The Project RELIANCE study phase lasted from September 1990 to March 1991, when dozens of interservice working groups examined twenty-eight technology areas that were of interest to two or more services and showed the potential for better coordination between the services. The working groups completed the "Tri-Service Reliance Strategy Report" in April 1991, and by late November each of the three assistant secretaries for research, development, and acquisition had directed full implementation of the report within his service.

Project RELIANCE led to the reduction in the number of Army medical research laboratories from nine to six and collocation of seven tri-service medical programs at single service sites. Under its provisions, the Army would dissolve the Letterman Army Institute of Research, the Biomedical Research and Development Laboratory, and the Institute of Dental Research. It also would consolidate its trauma research and medical materiel development facilities with existing Army medical RDT&E facilities, relocate its programs for blood research and combat dentistry research with those of the Navy, and station its programs for laser and microwave bioeffects with those of the Air Force. In addition, Army and Navy research on biodynamics, environmental quality, and occupational health would be stationed alongside that of the Air Force. The Navy's infectious disease research and the Air Force's environmental medical programs would move in with the Army.

The Army implemented recommendations of Project RELIANCE during FY 1992. OSD and the Army included the medical realignments in their submission to the Base Realignment and Closure (BRAC) Commission on 15 April 1991. On 15 December, the military deputy to the ASA (RDA) requested that the Medical Research and Development Command submit an implementation plan for the BRAC-approved realignments and disestablishments. The ASA (RDA) approved the implementation plan on 24 April 1992, and disbandment of Letterman Army Institute of Research and the Biomedical Research and Development Laboratory followed on 27 March and 12 June 1992, respectively.

Project RELIANCE and LAB 21 left in the air the issue of the Research, Development, and Engineering Centers (RDECs). The Army had initially considered but then removed the RDECs from the LAB 21 study in favor of a more focused study, Vision 2000, which had sought to develop an organizational and operational plan for the centers in light of known and anticipated personnel cuts. The Army had planned to include Vision 2000's recommendations in a BRAC submission but dropped these plans when it discovered that their implementation required significant funding.


On 21 July 1992, the Secretary of the Army requested that the Army Science Board (ASB) review the AMC RDEC business plans during the Program Objective Memorandum (POM) process to address various levels of funding across the POM. An ASB ad hoc panel reviewed LAB 21, Defense Management Report Decision 922, Project RELIANCE, Base Realignment and Closure 91, the Federal Laboratory Commission on Consolidation and Conversion, and the Laboratory Demonstration Program. It used the technology classifications developed under Project RELIANCE for its peer review of the technologies being worked on in each research center and then evaluated the RDEC business plans to judge their relevance to the Army customer at a time of increased emphasis on technology infusion. The ASB Ad Hoc Study, completed on 1 October 1992, recommended reducing the centers. At the end of the fiscal year, the final report remained unfinished.

The reductions and reorganizations of the Army's laboratory system were part of overall Army restructuring and downsizing as a result of a declining budget and reduced force strength during FY 1992. The Army expected that the LAB 21 and Tri-Service RELIANCE programs would revitalize its laboratories and strengthen its research and development establishment enough to compensate for the reductions in personnel and funding. This outcome would assure that the Army had the necessary technology to address future challenges in accordance with the new OSD strategy for science and technology.

Base Realignments and Closures

The Base Realignments and Closures (BRAC) process was intended as an apolitical means of designating surplus facilities for closure as part of the overall federal effort to downsize the military establishment in the aftermath of the Cold War. The recommendations of the Secretary of Defense's 1988 Commission on Base Realignments and Closures received the designation BRAC I. Additional 1990 recommendations by the service secretaries became BRAC II, and overseas closures received the label BRAC III. BRAC 91 stood for the recommendations for 1991 and BRAC 93 for the 1993 recommendations.

During FY 1992, the Army proceeded with the implementation of the earlier BRACs. Under BRAC I, the Army shut down fifty-eight of the seventy-six active Army installations recommended for closure, completed the phaseout of training at Fort Dix, New Jersey, except for Air Base Ground Defense training, and moved the ammunition storage mission of Pueblo Depot Activity to the Red River Army Depot. In addition, the Army transferred Fort Douglas, Utah, to the University of Utah and 7,600 acres at Fort Meade, Maryland, to the U.S. Department of the Interior. Under BRAC II, the Army inactivated the Mississippi Army Ammunition


Plant and began to shut down the Sunflower Army Ammunition Plant. The Army also returned 217 installations outside the continental United States to host nations under BRAC III. For BRAC 91, the Army started the transfer of the 5th Infantry Division (Mechanized) from Fort Polk, Louisiana, to Fort Hood, Texas. As part of BRAC, several recruiting units relocated during the fiscal year. In accordance with the Defense Base Closure and Realignment Act of 1988, the U.S. Army Recruiting Command (USAREC) moved from Fort Sheridan, Illinois, to Fort Knox, Kentucky. The U.S. Army Recruiting Support Command, currently stationed at Cameron Station, Virginia, was to relocate next to the USAREC headquarters.

After achieving some—but not all—of their objectives in BRAC 91, Army planners expected, with assistance from the MACOMs, to explore further adjustments to the base structure in BRAC 93. Although the Army had received no mandate to close or realign additional installations, planners anticipated DOD pressure to do so and wanted to satisfy themselves that the Army had no excess installations. After the Army Chief of Staff and the Director of Management provided initial BRAC 93 guidance to the MACOMs and the Army Staff, the Vice Chief of Staff on 9 July approved the Army Basing Strategy, which served as the foundation for the MACOMs' approach to BRAC 93. This design backed closures and consolidations to improve efficiency and cut long-term costs, but it stipulated that these actions must be governed by current commitments, fiscal requirements, the need to maintain a quality infrastructure for the Army, and the need to minimize the effect on soldier families and the local communities. Shortly after releasing the strategy, on 1 August 1992 the Army established the Total Army Basing Study (TABS) Group and directed it to prepare the Army's BRAC 93 recommendations.

The BRAC 93 process for the Army consisted of two stages. During Phase I (August-September 1992), the various MACOMs—AMC, FORSCOM, TRADOC, USARPAC, Intelligence and Security Command (INSCOM), Information Systems Command (ISC), Military District of Washington (MDW), Health Services Command (HSC), and National Guard Bureau (NGB)—assessed the military value of their installations using categories, weighted factors, and a decision support model provided by TABS. After balancing these factors against other considerations, planners completed detailed analyses before presenting a BRAC recommendation. Headquarters, Department of the Army, agencies, MACOMs, and TABS then identified BRAC 93 study candidates based upon the Army Basing Strategy, the MACOMs' strategies, and planned force structure. During Phase II, TABS would analyze those study candidates approved by the Undersecretary of the Army and the Vice Chief of Staff for the Army's BRAC 93 recommendations. As with


BRAC 91, all BRAC recommendations had to meet the DOD selection criteria and force structure plans.

Total Quality Management

During FY 1992, the Army leadership established Total Army Quality (TAQ) as the Army's management philosophy. TAQ sought to enable all members of the Army to do the right things, the right way, for the right reasons. It focused on continuous improvement, attempting not only to meet but to exceed the expectations of all Army customers. In short, it represented the Army's approach to Total Quality Management (TQM).

The Army devoted much of the fiscal year to developing a strategy for implementing TAQ. At a TAQ training workshop in October 1991 in Hampton, Virginia, seven eight-person teams, aided by facilitators from the Army Management and Engineering College, sought to align the Army's management philosophy with TQM principles and to develop training strategies to implement TQM. The workshop also prepared a draft revision of the Army Management Philosophy (AR 5-1), which the Army published, effective 13 July 1992, after review by Army commanders and HQDA principals. To develop more fully the concepts of implementation presented at the workshop, an Army-wide team met in Atlanta in February 1992 and produced an implementation strategy, which the Army Chief of Staff and the Secretary of the Army signed on 25 September 1992. In addition, the Director of Management, Maj. Gen. Thomas M. Montgomery, formed the Army Management Division on 1 February 1992 to develop, coordinate, and implement the Army's management philosophy and to provide staff support to the Army leadership on management issues. With the encouragement of the Under Secretary of the Army and the Vice Chief of Staff, the commanding general of TRADOC moved to integrate TAQ throughout the Army's training and educational systems by 1 August 1992.

Army Membership on the Conference Board

In February 1992, the Army joined the Conference Board, a 75-year-old nonprofit organization dedicated to improving the business enterprise system and to enhancing the contribution of business to society. The board sponsors a variety of forums for the exchange of ideas and experiences among senior executives from the public and private sectors, distributes reports and periodicals on business issues, and maintains informational materials on a broad range of topics of interest to its members. The Army joined the Conference Board to expose its leadership to current management practices and business ideas as well as to promote Army programs, such as the Army Career and Alumni Program, within the business community. During FY 1992, the board elected Douglas A. Brook, the


Assistant Secretary of the Army for Financial Management (ASA [FM]), to serve on its Council of Financial Executives, and it also selected W J. Haynes III, General Counsel of the Army, to join the Council of General Counsels.

Financial Management

In the 1990s, the Army faced a number of issues that had a significant impact upon financial management. The Army sought several ways to promote sound management and innovative ways of doing business, notably through the Defense Management Review (DMR) process. The major objectives of this process included the principle of "users pay for services" and the elimination of any function, organization, equipment, or facility that did not contribute to the Army's mission. During the fiscal year, the Army participated in over seventy-five DMR initiatives that were predicted to save over $20 billion and eliminate about 21,500 civilian jobs and 10,300 military spaces between fiscal years 1991 and 1997. During fiscal years 1991 and 1992, the management review process helped the Army save nearly $1.7 billion, thereby enabling the service to preserve force structure and continue purchases of military hardware. Two of the major management improvements that affected Army financial operations were the creation of the Defense Business Operations Fund and the consolidation of the Department of Defense's and the services' finance and accounting operations.

There were several different types of Army funds. General funds contained most congressional appropriations, including operations, research and development, and investment/construction accounts. Revolving funds, balancing outlays with repayments, were an effective means of financing inventory and controlling costs. The Army operated two revolving funds: the conventional ammunition working capital fund, which showed an operating profit of $232.9 million during FY 1992, and the Corps of Engineers (COE) Civil Works fund, which showed an operating profit of $12.7 million. The Army also maintained a number of trust funds that, unlike the reimbursable revolving funds, received revenues directly from various sources for specified expenses. Civil works trust funds included the Inland Waterways Trust Fund (IWWTF), the Harbor Maintenance Trust Fund (HMTF), and Rivers and Harbors, Contributed Funds. The Army trust fund showed an operating deficit of $100,000 and the Civil Works trust fund an operating surplus of $238.3 million, respectively, during the fiscal year. Army-managed special funds could be used only in accordance with specific provisions of law during FY 1992.

The Army generally used deposit funds to hold assets that were awaiting legal determination or were being maintained by the service as agent


or custodian. Since the Army required that all check collections pass through a deposit fund, these accounts also acted as repositories for unidentified remittances. During the fiscal year, the Army maintained twenty-four deposit accounts and the COE (Civil Works) ten deposit accounts.

The creation of the Defense Business Operations Fund (DBOF) had a major impact on the Army's financial operations. Effective 1 October 1991, the Army transferred the Army Stock Fund, the Army Industrial Fund, and the Military Traffic Management Command Fund to DOD. The amounts from the Army Stock Fund included assets of $16.9 billion and liabilities of $1.3 billion. The assets and liabilities of the Army Industrial Fund totaled $2.9 billion and $342 million, respectively.

The former funds became the Supply, Depot, Maintenance, and Transportation Business Areas of the DBOF. Supply Management, Army, a business area under the DBOF, replaced the Army Stock Fund. This business area paid for the acquisition, storage, distribution, and repair of secondary items, including depot-level reparables. It also funded wholesale logistics operations for secondary items, including personnel pay, rent, supplies, and temporary duty. The area's budget for FY 1993 will support a sales program of $11.48 billion, while the FY 1993 Reapportionment Request included $4.796 billion for retail elements and $3.261 billion for wholesale elements.

With the creation of the DBOF, responsibility for the purchase of automation equipment and changes to automated logistics systems moved from Operation and Management, Army (OMA), and Other Procurement, Army (OPA), accounts to the DBOF Capital Account. This account was controlled by the Joint Logistics System Center (JLSC), a source of some discomfort to the Army leadership. With the JLSC establishing priorities and determining project funding, the Army leadership effectively lost control of its logistics systems to joint agencies, leaving them without knowledge of available resources as they planned their programs.

The Army did manage these DOD-funded activities, but DOD called for significant changes in their operation. In the past, for example, the Army had provided many of these services at no cost. But business areas would now operate under a "cost per unit" concept in which they defined their products, set the cost of providing them, and charged customers for services or supplies. Starting in FY 1992, the individual components or business areas competed with each other and private sector companies for their customers' business. The DBOF reported $14.9 billion in Army-managed inventories as of 30 September. During FY 1992, DBOF components also completed intragovernmental sales worth $8.8 billion.

As part of the post-Cold War downsizing, the Army shifted some missions common to all of the services to the Department of Defense. The


consolidation of finance and accounting operations stipulated by the DMR transferred the responsibility for most accounting systems and their operation from the services to DOD. At the direction of the DMR, the Defense Finance and Accounting Service (DFAS) established a group of senior representatives from DOD components to develop an implementation plan for the transfer of personnel, resources, and assets to the DOD. The transfer would affect approximately 4,450 civilian and military spaces in the Army, although it would exclude finance officers serving the reserve components, COE, and tactical units and, initially, include only accounting, accounts payable, and disbursing tasks. At three sites, the Army experimented with capitalization of the entire finance office, including the additional functions of military pay, civilian pay, and travel.

As directed by the DMR, on 1 April 1992, the Army began the Stock Funding of Depot Level Reparables (SFDLR) at the retail level. Users of major components of Army systems, such as tank engines and helicopter transmissions, now had to budget for their purchase instead of receiving them without charge. The Army ensured that each MACOM had enough funds, using the guidance of the OPTEMPO Working Group of the Program Budget Committee, which drew on historical needs and ODCSLOG-established credit rates. The Army structured the system to encourage the MACOMs to repair old parts and components rather than purchase new ones.

The Army took several other initiatives under the DMR during FY 1992. These initiatives included the transfer of distribution functions at nine Army depots to the Defense Logistics Agency, the retirement of over 55,000 worn-out or obsolete vehicles, and the streamlining of the AMC through the reduction of organizational and supervisory layers. The Army also consolidated thirty-two data processing facilities into six regional centers; centralized the design, development, and maintenance of Army software programs; and through consolidation reduced the number of correctional facilities from fourteen to nine.

Much of the Army's attention in the field of financial management was devoted to implementation of the Chief Financial Officers' (CFO) Act. On 15 November 1990, President Bush had signed the act, which established CFOs in twenty-three Executive Branch agencies and adopted several other measures to improve financial management in the federal government. The Department of Defense then selected the Army to participate in a pilot implementation program that would cover the service's operations in fiscal years 1991 and 1992. In compliance with the act's requirements, the Army prepared its first-ever Annual Management Report, covering FY 1991 operations. This "corporate" style report, which would be a continuing annual requirement, included an organizational overview of mission descriptions and accomplishments, audited financial statements, and an


independent audit requirement. In accordance with the last provision, the FY 1992 audit was under way at the close of the fiscal year.

This baseline financial audit, which measured the Army's compliance with the act's standards, was critical. Following the principles of the CFO Act, Secretary of the Army Michael E W Stone established a Senior Level Steering Group and a Special Action Group to review the audit's findings and develop corrective actions. The Secretary realized that the Army must continually improve its decision-making processes to maintain its credibility as an effective steward of public resources, and he believed that careful attention to the audit would be a step in that direction.

Creation of the Defense Health Program

To reduce duplication and save resources, the Office of the Secretary of Defense had been considering for some time the consolidation of the command and control structures and fiscal resources of the services' medical programs. After several months of study and coordination with the services, the Deputy Secretary of Defense decided to strengthen the position and responsibilities of the Assistant Secretary of Defense for Health Affairs (ASD [HA]) rather than establish a new Defense Health Agency. On 1 October 1991, he issued the memorandum "Strengthening the Medical Functions of the Department of Defense," which led to the establishment of a centralized Defense Health Program (DHP). The Assistant Secretary of Defense for Health Affairs received overall responsibility for the DOD medical mission and "authority, direction, and control" of the medical personnel, facilities, programs, funding, and other resources within the department. ASD (HA) was to prepare and submit a unified medical program budget that included all funding for the DOD and services' medical programs, including operation and maintenance, procurement, research and development, Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), and medical facility construction. The memorandum also established a Defense Medical Advisory Council (DMAC), composed of a civilian appointee and a general officer from each department, to advise the ASD (HA) on military medical matters. These actions effectively moved health care planning, programming, and budgeting from the overall Army budget submission to that of ASD (HA). The Department of the Army, the Surgeon General, and HSC retained the responsibility for developing and processing of the annual Army medical budget within the Army's budgetary process before sending it to ASD (HA) for submission and also for execution of the approved program.

AMEDD Realignment

During FY 1992 the Surgeon General and HQDA continued to work on a basic reorganization of the Army Medical Department (AMEDD).


This process had been under way for several years as a result of QUICKSILVER and VANGUARD reductions, the Surgeon General's own internal reviews of the AMEDD command and control structure since the late 1980s, and the introduction of the Gateway to Care program in FY 1991. In December 1991, the Logistics Management Institute (LMI) completed a draft AMEDD Realignment Study after analyzing the alternatives as directed by the ASA (IL&E) in November 1990. The study recommended eliminating Headquarters, Health Services Command (HSC), at Fort Sam Houston, Texas, and establishing the U.S. Army Medical Command (MEDCOM) collocated with the Office of The Surgeon General (OTSG) in the National Capital Region. The Surgeon General would also serve as the commander of MEDCOM, under which HSC's CONUS-based medical structure and OTSG's field operating agencies would be consolidated and realigned. The ASA (IL&E) approved the further study of this approach in April 1992.

After resolving some manpower issues with HQDA, by late September 1992 the Surgeon General's Office had prepared a concept plan that was briefed to the Vice Chief of Staff, Army (VCSA), and ready for HQDA's consideration. The proposed realignment of AMEDD would produce a single command and control framework responsible for the Army medical mission worldwide; would link AMEDD assets into a high-quality, cost-effective, and accessible health care organization serving the Total Army; and would enhance planning, coordination, and integration of the Army-wide medical mission. Once HQDA approval was received, the Surgeon General would establish an organizational study group that would refine the structure proposed in the concept plan and conduct a full assessment of AMEDD to develop organizational structures properly aligned with validated functions. When this process was completed and the realignment implemented, the Surgeon General believed that these changes would ensure medical readiness, improve AMEDD's delivery of health care to its customers, and promote relationships with the rest of the Army and DOD.

Financial Liabilities and Cost Estimates

During FY 1992, the Army was a party in various administrative proceedings, legal actions, environmental suits, and claims. Most were tort claims resulting from aircraft and vehicular accidents, medical malpractice, contract disputes, and property and environmental damages caused by Army activities and likely to entail sizable future costs for the Army. The Army expected that its largest future liabilities would consist of funds needed to control and clean up environmental hazards, especially costs associated with the chemical demilitarization program and the environmental program. The costs were difficult to estimate because of the uncer-


tainty involved in determining the extent of damage and the necessary processes.

The Chemical Stockpile Disposal Program was an unprecedented and extremely complex national program. Although it was closely managed, the Army expected its costs to increase as it passed from the planning and developmental phases into full-scale operations and also as it encountered changes in costs for facility construction and operations. During the fiscal year, the United States Army Cost and Economic Analysis Center helped formulate a structured review process for ensuring management control of the program and reducing its costs. The center also prepared an Army Cost Position to support the program's inaugural Army Systems Acquisition Review Council (ASA [RC]), which convened on 19 March 1992. The Army's 1992 estimate for the Chemical Stockpile Disposal Program was $7.9 billion. Public Law 102-484 changed the program's completion date from December 2000 to 31 December 2004, and the Army planned to finish in April 2003.

Since the Chemical Stockpile Emergency Preparedness Program was still evolving during FY 1992, it was hard to estimate the future costs associated with it. Congressional interest in cryofracture and alternative technologies could result in the construction of an additional plant or an expensive technology development program. Lists of plant closures and estimates of dismantlement costs were partially available, but when the Army attempted to identify all possible expenditures at the end of the fiscal year, it concluded that costs could increase as the process defined cleanup criteria and established monitoring requirements. States and groups opposing on-site destruction or the incineration process could delay issue of permits or engage in litigation that would lengthen schedules and increase costs.

Costs associated with environmental activities and concerns represented a large percentage of the Army's prospective costs. The Army's environmental program had undergone tremendous growth in the decade preceding FY 1992. In the future, the service expected contingent liabilities from the environmental program to increase, but it could not estimate their cost, in part because the technologies used in environmental cleanup were still in the developmental stage. The Army also expected costs to rise as a result of increasingly stringent legal requirements and BRAC initiatives. It anticipated additional costs from the new authority of regulatory agencies, under the Federal Facilities Compliance Act, to fine federal agencies for noncompliance with the nation's hazardous waste laws.

The Army foresaw escalating expenses in restoration as it moved from the planning and study phase to the actual cleanup of contaminated sites, especially as it accelerated the cleanup of closing bases so that they could be returned to local communities. It also foresaw constraints on training


due to the need to take into consideration endangered species, wetlands, cultural resource sites, and soil erosion. While the Army estimated the cost of its environmental protection at close to $14.3 billion, Army planners thought that an additional $7.1 billion would probably be necessary.

Part of the high environmental liabilities stemmed from the continuing generation of low-level radioactive waste by Army activities around the world. Improper handling and disposal led to the listing of several sites as potentially contaminated. During FY 1992, the Army confirmed that 98 sites and 36 installations were contaminated and an additional 157 were suspected of contamination. Army managers, because of their limited experience with the cleanup of radioactive materials, found it difficult to determine the cost, but estimated the expenditure at $294 million to $471 million.

The Army handled legal claims under two federal statutes, the Federal Tort Claims Act and, for military claims, Title 10 United States Code, Chapter 163. The Army's liability for claims under the former act was limited to $2,500 and under the latter to $100,000. Awards and settlements over these amounts came from the Treasury Department's Claims, Judgments, and Relief Acts Fund. During the fiscal year, the Army was involved in five litigation actions, each involving a request for judgment of more than $100 million. The Department of the Army was also a party to 626 contract appeals before the Armed Services Board of Contract Appeals (ASBCA) and the Engineer Board of Contract Appeals with a total potential liability of $559.9 million. The Army successfully defended fifty-five contract claims worth $9.2 million in FY 1992 and initiated contract claims worth $87.4 million during the fiscal year. The total value of contract litigation against the Army, not involving claims before the ASBCA and the General Services Board of Contract Appeals, was $992.6 million. Also in FY 1992, plaintiffs filed 110 medical malpractice claims—worth $260.1 million-against the Army under the Military Claims Act and filed another 462 claims for $4.705 billion pursuant to the Federal Tort Claims Act. A total of 8,697 nonmedical malpractice claims were filed for $6.228 billion. The Army paid 7,155 tort claims totaling $36.5 million.

The reduction of the military and civilian workforce created contingent liabilities—specifically, probable expenses for past personnel benefits and compensation. The Army estimated expenses for severance pay of U.S. employees, unemployment compensation, and continuing health benefits at $2.2 billion through FY 1994, and planners believed an additional $47 million might be necessary. The Army also owed $319.1 million in workers compensation to current and former employees for the period 1 July 1990 through 30 June 1992. The payment would come from FY 1993 and 1994 appropriations, as applicable.


In response to the DOD Inspector General's 1992 report on cost estimates for major DOD acquisition programs, the Assistant Secretary of the Army (Financial Management) (ASA [FM]) established the Army Cost Review Board (CRB) on 2 April 1992. The CRB, which would begin work on 26 June 1992, was to recommend an Army Cost Position to the ASA (FM), who would employ it for major milestone reviews at the Army Senior Acquisition Review Council and the Major Automated Information System Review Council. Once the ASA (FM) approved the Army Cost Position, he would publish it in the Cost Analysis Brief. The CRB consisted of an ASA (FM)-appointed chair, the Deputy for Cost Analysis as the executive secretary, the Deputy ASA (FM) for the Army Budget, and the Deputy Director, Program Analysis and Evaluation, as permanent voting members. Others joined the committee depending on the issue at hand.

Productivity Capital Investment Program

Three productivity capital investment programs received funding during the fiscal year: the Productivity Investment Program (OSDPIP), the Army Productivity Enhancing Capital Investment Program (PECIP), and the Army Quick Return on Investment Program (QRIP). OSDPIP and PECIP projects each received over $100,000 and had the same required amortization times—four years or less—but OSDPIP projects competed at the OSD level against Navy, Air Force, and Defense agency submissions. The Army considered projects that did not qualify for OSD funding for PECIP funding. The QRIP program underwrote projects costing less than $100,000 and amortizing in two years or less. During FY 1992, funds allocated to the three programs totaled $65.5 million, of which $30.3 million were OSD funds and $35.2 million were Army resources from Operation and Maintenance, Other Procurement, MILCON, and RDT&E accounts. Although specific numbers for a particular year were unavailable, the investments historically showed a 16 to 1 rate of return for the life of the purchased equipment. During 1992, the Office of the Secretary of Defense decided to eliminate funding for the OSDPIP beginning in 1993. As a result, the Army decided to eliminate central control and funding of PECIP and QRIP starting in 1994. However, the Army leadership expected the MACOMs to provide their own funding for these projects.

NAF Centralized Cash Management and Investment Highlights

The decline in appropriated funds forced Army leaders during FY 1992 to reassess the use of nonappropriated funds (NAF) generated by Morale, Welfare, and Recreation (MWR) activities. NAF dollars had successfully supported MWR requirements in the past, and the Army leader-


ship decided that, with adequate safeguards and good business judgment, these dollars could play a more significant role in the Army's future.

With the need to use NAF funds, however, came the need to improve guidelines for NAF procurement. These guidelines had to provide valid procedures to meet regulatory and internal control requirements without unduly restricting NAF procurement. Army planners decided that a centralized, independent NAF procurement office would be immune from the appearance of undue pressure or influence. At the same time, a separate office would stimulate more efficient and effective uses of NAF procurement through consolidated purchases, establishment of purchasing agreements, and provision of an information distribution center to support all areas of NAF contracting. The U.S. Army Community and Family Support Center designated their NAF Contracting Office as a separate directorate effective 1 October 1992. It would provide the same timely professional customer support required of any service organization.

The Army had already taken several steps to centralize NAF investments. In the early 1970s, the Army had begun to centralize those investments for maximum returns and improved oversight. In 1981, the Army inaugurated the Army Central Banking Program to improve banking services for installation NAF activities and to eliminate the estimated 25 percent of cash held in transition accounts. Now, in FY 1992, the Army Banking and Investment Fund took charge of both functions. The fund managed nearly all NAF generated and used by the Army's MWR program. Army installations worldwide deposited their cash receipts in local banks and then arranged for their transfer into the fund's central contractor bank. The Army Banking and Investment Fund daily calculated each installation's balance. Program managers wrote checks to withdraw funds for expenses. The banking fund removed cash not needed to clear daily checks from the contractor bank and invested it in securities issued by the United States Treasury and government-sponsored enterprises. At the beginning of FY 1992, the NAF investment fund stood at $671 million and at the close of the year at $633 million. During the fiscal year, the fund paid a compound interest of 7.02 percent to depositors, for a total of $46.2 million.

Value Engineering

Value engineering was a unique program that encouraged contractors and Army officials alike to achieve greater efficiency in their operations. Value engineering contracts allowed the contractors to share up to 50 percent of the net three-year savings. The Army retained the remaining net savings to reduce procurement costs. A similar value engineering arrangement operated within the Army at depots, arsenals, and government-owned/contractor-operated plants, except that the Army retained all savings. During FY 1991, the Army's share of the program's total net savings


had amounted to $342.6 million. The Office of Federal Procurement Policy in the Office of Management and Budget (OMB) noted the program's success and requested that the Army help draft the revision of OMB Circular A-131 that would expand the value engineering program to all federal agencies. The OMB then published the circular in the 10 September 1992 issue of the Federal Register as a proposed rule for comment.

Commercial Activities Program

The Army had instituted the Commercial Activities Program to open the Army's commercial activities—such as warehousing, buildings and grounds maintenance, utility plant operations, data processing, and food services—to competition. On 20 July 1992, the Vice Chief of Staff directed the Inspector General to conduct a "quick look" assessment of the program. The Inspector General visited five FORSCOM, two TRADOC, and two AMC installations, and a third AMC installation provided written input.

The Inspector General's report, which appeared on 9 October, found several problems in the program. The report stated that, while installation commanders acknowledged that the program had been a major catalyst for change, they believed it had outlived its usefulness. The commanders contended that the program was not timely, used too many resources, and was too restrictive and that efficiency reviews, budget cuts, and TQM would produce similar results at lower cost. They particularly expressed dissatisfaction with the number of staff personnel, the amount of paperwork, and the amount of time necessary to conduct a credible cost competition.

Several other aspects of the program drew criticism. At most Army installations, commercial activities management slots were among the first eliminated as a result of mandated personnel cuts. Installations also had no incentive to use the Commercial Activities Program, since they realized no savings except, possibly, during the year of implementation. In addition, commercial activities studies demoralized the civilian workforce, causing a drop in productivity. Inadequately trained contracting officer representatives and the lack of policy oversight, contract administration, and cost and price analysis at the installation level discouraged further use of the program. In sum, the commanders thought that the Commercial Activities Program should be optional and that they should have more latitude in managing their resources.


Fiscal Year 1992 Obligations and Outlays

The Army incurred $86.5 billion of obligations in FY 1992, and outlays came to $79.1 billion (Table 6). Because obligations exceeded out-


lays, Congress provided supplemental funds for such demands as hurricane relief, additional Operation DESERT STORM requirements, and environmental restoration projects.


Army Obligations:





Military Personnel



Operation and Maintenance









Military Construction



Family Housing



Revolving Funds (CAWCF)









Army Outlays:





Military Personnel



Operation and Maintenance









Military Construction



Family Housing



Revolving Funds (CAWCF)









Status of FY 1993 Budget Request

The FY 1993 Army Amended Budget requested $63.6 billion in total obligations, a $4.2 billion decrease from the FY 1993 budget submitted in the FY 1992/93 Biennial Budget Submission. However, $4.1 billion of the represented funds, such as the Army Medical Program and other programs, transferred to DOD, and $100 million covered other budget adjustments, resulting in a 0.1 percent total reduction in the budget. Although the Army's Total Obligation Authority increased $4.3 billion in FY 1992 to support Operation DESERT STORM, the budget fell 33 percent from FY 1986 to FY 1993. The President's FY 1993 budget request included the items shown in Table 7.





Military Personnel


Operation and Maintenance






Military Construction


Family Housing


Reserve Components




The proposed budget funded TOE-unit readiness through various training allowances. OPTEMPO levels were 800 miles per year for ground vehicles and 14.5 flying hours per month for aircraft. The USAR was allocated an OPTEMPO of 200 miles per year for ground vehicles and 8.1 flying hours per month for aircraft. The ARNG OPTEMPO was 288 miles annually for ground vehicles and 9 hours per month for aircraft. The Combat Training Center Master Plan provided for 33 battalion rotations through the National Training Center (NTC), 25 battalion rotations through the Combat Maneuver Training Center (CMTC), and 16 battalion rotations through the Joint Readiness Training Center (JRTC), as well as 1 corps and 12 division rotations through the Battle Command Training Program. To support training, the Army funded depot maintenance at 79 percent of requirements.

Much of the proposed budget went to RDT&E and procurement of advanced technology. The RDT&E aircraft appropriation for FY 1993 deferred production of the Comanche helicopter but included funds for continued development of its prototype, as well as production of the Black Hawk UH-60 helicopter and funding for the New Training Helicopter, the RC-12 Guardrail Common Sensor, and continued fielding of the CH-47D Chinook and AH-64 Apache. The RDT&E missile appropriation continued procurement of the Avenger system, the Multiple Launch Rocket System (MLRS), the Hellfire Optimized Missile System with its improved warhead, and the Army Tactical Missile System (ATACMS). It also omitted funding for the terminated Air Defense Antitank System (ADATS). The RDT&E appropriation for weapons and tracked combat vehicles provided funds for the XM-35 gun for the Armored Gun System and continued procurement of the M119 Light Howitzer, while it reduced appropriations for the buildup of ammunition stocks and operation of several government-owned/contractor-operated ammunition plants. Other RDT&E procurement appropriations provided funds for improved tactical transportation in the form of the Family of Medium Tactical Vehicles (FMTV), Family of Heavy Tactical Vehicles (FHTV), and High Mobility Multipurpose Wheeled Vehicles


(HMMWV). RDT&E funding also helped to improve tactical command and control systems, antitank weaponry, and electronic countermeasures.

Construction and housing appropriations focused on efforts to meet environmental, health, safety, and essential quality of life requirements. The FY 1993 budget stressed the CONUS "Whole Neighborhood" renewal by allocating funds for construction of 200 housing units and improvements in 702 family housing units in Hawaii. The Army also funded Annual Recurring Requirements (ARR) at 62 percent for facilities and 94 percent for housing. The budget paid for chemical demilitarization at Anniston Army Depot and Pine Bluff Arsenal. In all, the budget provided $555 million for full compliance with environmental standards, as well as $563 million for environmental restoration.

Other elements of the Army's budget addressed personnel concerns. To reduce personnel end strength, the budget included incentives to induce voluntary separations and minimize involuntary separations, while providing transition assistance through the Army Career and Alumni Program. The budget also provided a 3.7 percent pay raise for the military and civilian workforce.

Significant Audit Findings

Using U.S. General Accounting Office Government Standards and the DOD Inspector General Internal Audit Manual, the U.S. Army Audit Agency (USAAA) conducts audits to find fraud, waste, and abuse and to determine whether Army activities are effective, economical, and efficient. In March 1992, Harold L. Stugart, the first Auditor General of the Army, retired, and Secretary Stone appointed Francis E. Reardon as his replacement. The new Auditor General initiated a Total Quality Management program to involve all agency personnel in the effort to improve customer satisfaction. The agency's executive group defined the agency's vision and objectives and established seven working groups to assess the agency's operations.

In the financial and personnel management area, one of the USAAAs most significant FY 1992 audits concluded that the Army's operational rations did not effectively support units deployed in the field. According to the report, the Army relied too much on meals, ready-to-eat (MREs), largely because peacetime use of tray rations (T rations) never reached the levels needed to adequately support a war reserve stock or an industrial base. During Operations DESERT SHIELD and DESERT STORM, the Army had to improvise a food system that was less reliant on tray rations. The auditors recommended updating the Army's master action plan for the field feeding system, making analyses to determine the best mix of operational rations, and reevaluating the need to increase tray production to satisfy ration


requirements for operations such as DESERT SHIELD and DESERT STORM. The Army agreed with the findings, recommendations, and potential monetary benefits, which the audit estimated as $121.2 million.

Not surprisingly, the massive troop deployments during Operations DESERT SHIELD and DESERT STORM were accompanied by accounting irregularities. When the USAAA audited overseas transportation costs for the two operations, it found that faulty accounting procedures by transportation agencies resulted in incorrect coding of $95.5 million of the $1.3 billion in bills submitted to the Defense Finance and Accounting Center—errors that the center's automated processing system did not detect. It also found that USAREUR and Seventh Army had understated cost offsets at a level of $87 million, shifted approximately $49 million to meet unfinanced requirements, understated operations costs by $31 million, and inaccurately computed costs related to foreign currency fluctuations.

To recover about $80.5 million, the auditors recommended revision of cost estimates, reduction of future budget requests by the amount of funds used for unfinanced requirements, and establishment of separate foreign currency fluctuation accounts to capture actual costs. The Army accepted the auditors' recommendation that the Finance and Accounting Center identify and correct erroneous transportation charges and expand the automated routine for processing bills in order to verify codes, and it also agreed with the USAAA's recommendations on transportation costs for USAREUR and Seventh Army. USAREUR and Seventh Army, however, did not fully agree with USAAAs recommendations on its procedures. At the close of the fiscal year, the Army was resolving these disagreements through official channels.

The USAAA also contributed to the Army's efforts to improve the overall management of test instrumentation. A USAAA audit found that researchers had not fully identified and documented the requirements for new test instrumentation and that Army policies and procedures did not require the participation in the budget process of all activities involved in the acquisition, development, or funding of instrumentation. Furthermore, the Army's automated test instrumentation system did not accurately show the availability of existing test instrumentation. The audit identified potential monetary benefits of around $257.6 million. It believed such potential savings could be achieved through requiring all activities involved in test instrumentation to process requirements through the project manager, establishing procedures to identify requirements for instrumentation in installation budgets, and updating the Army's inventory of test instrumentation assets. The Army agreed with the auditors' findings, recommendations, and potential monetary benefits.

Several significant audit reports covered force management. An audit of tank training devices at the U.S. Army Training Center, Fort Eustis,


Virginia, found that soldiers were making effective use of the Multiple Integrated Laser Engagement System (MILES), but it also discovered that the Army was using a platoon gunnery trainer that met the same training need, functioned similarly, and trained soldiers in similar tasks. Field commanders had acquired this trainer from commercial sources without following established guidelines. Auditors recommended that the center more closely monitor training device needs to avoid the development of duplicate devices, issue clarifying guidance on prescribed policies and procedures, and use gunnery training devices to reduce the firing of full caliber training rounds. The center agreed with the recommendations but not with the estimated savings of $269.4 million. At the close of the fiscal year, the center and USAAA were resolving the disagreements through the command-reply process.

An audit of the Reserve Component Regional Maintenance Training Program concluded that the planning process for the program was ineffective. The auditors found that an analysis conducted to support nineteen of the twenty-one training sites overstated training requirements while failing to take into account the establishment of the European Maintenance Center or the downsizing of Army forces. Furthermore, planning did not ensure accurate training requirements for military occupational specialties and did not consider borrowing some special tools and test equipment from Reserve maintenance units that would deploy early. The report recommended that the Army eliminate four training sites and reevaluate four others, reduce the number of military occupational specialties taught at the sites, and use borrowed special tools and test equipment from early-deployable Reserve maintenance units, steps that would save $60.3 million. The Army agreed with the recommendations and the savings.

During FY 1992, the USAAA issued 142 formal audit reports, 128 memorandum reports, and 7 advisory reports resulting in potential monetary benefits of approximately $2.4 billion (Table 8).


Functional Area

Monetary Benefits

Research and Development


Major Systems Acquisition


Procurement—Inventory Control Activities


Procurement—Research and Development




Contract Administration


Forces Management





Functional Area

Monetary Benefits

Rebuild and Overhaul of Equipment


Supply Operations—Wholesale


Supply Operations—Retail

29, 843,175

Military Personnel Management


Real and Installed Property




Information Technology


Intelligence and Security




Military Pay and Benefits


Program and Budget


Other Comptroller Functions


Support Services


Nonappropriated Fund Activities


Security Assistance Program


Health Care




Management and Accountability of Army Materiel

Army Regulation 735-5, Policies and Procedures for Property Accountability, guided the Army's accounting of materiel from the time of acquisition until ultimate consumption or disposal. Past audits found that property management and accountability suffered from inaccurate and incomplete property accounting records, a failure to conduct required physical inventories, and inadequate investigation into discrepancies. A General Accounting Office (GAO) report pointed out several cases where accountable records did not agree with unit inventories of tanks, trucks, and weapons and other cases where units improperly dropped a number of sensitive items from accountable records. Reconstitution from Operation DESERT STORM and turbulence from reshaping initiatives exacerbated the problems with property accountability.

The Army moved to emphasize proper management of materiel at all command levels. The Army leadership directed commanders to use the Command Inspection Program as described in AR 1-201 for the management and accountability of Army materiel. It also ordered the Logistics Evaluation Agency to establish a quantitative baseline for selected management indicators, including inventory adjustment reports, inventory performance and accuracy, continuing balance system expanded reviews, receipt processing efficiency, special interest items observations, and reports of survey made during Command Logistics Review Team (CLRT) and CLRT-


Expanded inspections. Commanders were to use the command supply discipline program to improve property management and accountability.

Management and Information Systems

The magnitude and complexity of Army operations required an aggressive, imaginative program for information management. The Army found several ways to improve the productivity and efficiency of its automation technology, which was becoming increasingly essential to its operations. During the fiscal year, the Army reviewed its existing system organization and processes and revised them where appropriate. The Army also planned and implemented new programs.

Primarily, the Army sought to standardize and modernize business applications and to migrate to the Open Systems Environment (OSE). The Sustaining Base Information Services (SBIS) Program was the centerpiece of this strategy. This program will move the Army's base information management functions to OSE, a step that was expected to reduce sustainment costs, improve compatibility and standardization, and increase vendor competition. SBIS issued a Request for Proposals (RFP), and the Army expected to award a contract in the middle of FY 1993.

Although the Army took steps during FY 1992 to enable automated identification of transactions, other priorities took precedence. Army programmers did improve their manual internal control processes to provide audit trails and to ensure a proper separation of functions. Nevertheless, at year's end most installations and MACOMs still had not enabled their automated systems' programs to recognize multiyear designations given by the Supplemental Appropriation Act. Even though their systems computed ending balances, the transactions did not contain the level of detail required to produce the financial statements. The planners recomputed and replaced the values for the budget execution system.

During the fiscal year, the U.S. Army Decision Systems Management Agency developed the Base Operations Integrated Database (BASOPS IDB). This system will support base operations, base realignment and closure, and installation management activities. By the close of FY 1992, data were available only on installations in the continental United States.

The Army also began fielding Installation Support Modules (ISM) to provide standardized and efficient software for the automation of day-to-day business operations. Installations will use ISMs to perform daily functions, reduce redundant data entries, print necessary paperwork, and speed the processing of soldiers at installations. The sharing of common information across functional areas is a key aspect of this system.

During FY 1992, the Army also implemented the Integrated Computer Aided Software Engineering (I-CASE), an integrated set of


software engineering and development tools and repository for developing software. The DOD-wide I-CASE contract took advantage of new and emerging technologies to develop automated information systems. Developers planned to use I-CASE to automate strategic and sustaining base operations. In July, DOD approved cost sharing for eleven pilot projects of I-CASE support. Planners expected these projects to provide the media for specific requirements in AMC, TRADOC, and USAISC as well as to build the foundation for expanding the employment of I-CASE methods in future projects.

The Army also developed the Personnel Electronic Records Management System (PERMS) to replace the paper and microfiche military personnel record-keeping systems with optical digital imagery technology. Personnel officers planned to convert all official military personnel files to the PERMS at the Army Personnel Center (ARPERCEN), the Enlisted Records and Evaluation Center (EREC), Personnel Command (PERSCOM), and the National Guard Personnel Center (GuardPERCEN). After delivery by the PERMS contractor, the ARPERCEN system was undergoing technical testing by an independent evaluator at the end of the fiscal year. The Army expected to finish technical and operational testing in early FY 1993, after which the program would seek approval from the Major Automated Information System Review Council for final deployment.

The Total Army Personnel Management Information System supported all officer career and distribution managers in the Headquarters, Department of the Army, as well as worldwide G-1 activities, with officer management data. During FY 1992, engineers redesigned the system from a sequential "flat file" environment to a relational database system. Each module would use state-of-the-art technology to provide Total Army support, with standard names and values for all data elements. Program designers also automated the MILPC25 report, submitted by the field in hard copy for over twenty years, to furnish an on-line updated capability for the efficient management of assignments for Army colonels worldwide.

During FY 1992, the Army moved to upgrade the Army Manpower Cost System, a family of manpower life-cycle cost models that the Army had established to provide manpower costs for Independent Cost Estimates, Baseline Cost Estimates, and tradeoffs of alternative weapon systems designs. The system supported the availability and management of Operating and Support Costs, Army Force Cost System, and Enlisted Personnel Inventory, Cost, and Compensation Model. Close to 100 users of the system could modify databases, create personnel profiles to address almost any personnel analysis, and include or exclude selected cost elements. The Army hoped to complete its upgrade of the system in FY 1993 so that it could be used on personal computers and local area networks.


The Standard Installation/Division Personnel System (SIDPERS-3), under development during the fiscal year, was designed to support the active Army in peacetime and the Total Army during mobilization, wartime, and demobilization. In October 1991, DOD approved full-scale development of the SIDPERS-3 software. The program then moved into the design, code, and informal test phase, with researchers incorporating changes into the system to reflect lessons learned in Southwest Asia. Managers expanded the program to include hardware and training for all reserve components and also established a laboratory for initial functional testing. In August, the Army decided to use a single Commercial Off-the-Shelf (COTS) platform for both sustaining and tactical environments. Army planners expected to field the system in the third quarter of FY 1994.

After the Enlisted Distribution and Assignment System (EDAS), version 4.0, went into operation on 1 October 1991, programmers devoted FY 1992 to improvements. Some changes eased the identification of soldiers electing to leave the Army under one of the voluntary separation programs. The Army also established an EDAS modeling region in St. Louis so system managers could test changes on a "look alike" computer region before incorporating them into production operations. During FY 1992, EDAS processed over 5 million transactions while transmitting assignment information via AUTODIN to sixty-seven personnel processing activities worldwide. By the end of the period, assignment managers had accepted close to 50 percent of EDAS-generated assignment nominations.

The Army also prepared for the fielding of the Reserve Component Automation System (RCAS), a comprehensive office automation network to manage ARNG and USAR units. RCAS utilized COTS computers, office automation software, secure Wide Area Network telecommunications, specialized application software, and a fully relational database for each reserve component unit in the United States. The Army plans to use RCAS to mobilize these units as well as to perform day-to-day administrative functions at the units' home stations. During August and September, twenty-one units in California; Atlanta, Georgia; and Washington, D.C., conducted a Limited User Test with COTS computer hardware and standard office automation software that were linked via electronic mail. At the close of the fiscal year, the Army worked on correcting minor problems encountered during the test prior to fielding RCAS in FY 1993. By its completion in FY 1998, RCAS was expected to connect over 9,800 units at 4,700 locations with their headquarters and mobilization stations.

Automation helped other Army functions as well. After DESERT STORM, the Army leadership approved the development of an automated casualty information system to replace the manual operations performed


by PERSCOM and Casualty and Mortuary Affairs Operation Center personnel. The Army directed the Mortuary Affairs and Casualty Support Division in PERSCOM to develop programs for the disposition of remains and personal effects, line of duty investigations, mortuary affairs, memorialization, and administration. During the fiscal year, mortuary affairs personnel worked closely with programmers from a contracting firm to design the Army Casualty Information Processing System to track remains, coordinate disposition instructions, and communicate with casualty area commands, personal effects depots, and port mortuary and theater of operations units. The system included automated administrative systems for line of duty investigations, special interest correspondence and inquiries, and claims for funeral expense reimbursement. It was ready for testing at the end of the fiscal year, and the Army set an implementation goal of FY 1993.

The Army Food Management Information System provided automated installation-level food service and troop issue subsistence processes. The Army developed the system in response to a congressional requirement to eliminate substantial annual losses in worldwide food service. During FY 1992, the Army instituted the system at thirteen sites, with a goal of completing worldwide fielding of the system by FY 1995.

To improve the management of organizational and individual equipment, the Office of the Deputy Chief of Staff for Logistics increasingly turned to automation. Several major commands and separate activities used automated systems, but most central issue facilities still employed manual ones. To solve this problem, the Army began to develop a standard automated system. In August 1992, logisticians met at the Systems Development Center in Atlanta to review proposed changes to the baseline system and to finalize its specifications. The Configuration Control Board took these specifications and set priorities for those capabilities that it would field either with the baseline system or later with the ensuing system change packages. The board planned to begin fielding prototypes during the second quarter of FY 1993. In addition, logisticians included selected items of organizational and individual equipment in the Army's Total Asset Visibility (TAV) System, which would begin its prototype testing in December 1992.

To develop a more efficient means to handle soldier records, Army records managers also turned to automation. During the fiscal year, the Records Maintenance Division, PERSCOM, processed 165,366 soldier separation records for shipment to ARPERCEN, the largest number handled since FY 1979. On 29 September 1992, the division awarded a three-year contract to MSTC Incorporated to transfer the active duty enlisted Official Military Personnel File, both paper and microfiche, onto optical disk. The division would then load the disk into the Enlisted Records and


Evaluation Center's Personnel Electronic Records Maintenance System/Optical Digital Imagery System, scheduled for installation in April 1993. Planners scheduled the conversion to continue through September 1995.

Significant Records and Publications Management Developments

The Army made other improvements in its record-keeping process. During FY 1992, Congressman G. V "Sonny" Montgomery (D-Mississippi) received complaints that it often took six months for the Veterans Administration to receive veterans' health records from the Army, thus delaying the adjudication of Veterans Administration compensation claims. He asked DOD to review the current procedures and establish new ones to speed the transfer of these records. The resulting 7 September 1992 Memorandum of Understanding between the Army and the Department of Veterans Affairs (VA) significantly changed procedures for the disposition of the health records of separating soldiers. Effective 16 October 1992, the Army would send all health records of these soldiers directly to the VA, bypassing EREC, PERSCOM, and ARPERCEN. Records managers would transfer the records of soldiers who filed a VA compensation claim to the VA regional office that supported the soldier's transition center. The Army would send the records of those soldiers not filing claims to a central VA repository in St. Louis, Missouri. The Army expected that the new adjudication system would handle compensation claims months faster than was the case under the old system.

The Records Service Division in PERSCOM also implemented programs to improve the NCO-ER (Noncommissioned Officer Evaluation Report) processing system. The division upgraded the Interactive Voice Response System to allow soldiers to request that a copy of their Official Military Personnel File be mailed to their unit. In addition, the division mailed over 280,000 Trans-O-Grams to NCOs notifying them of errors in their NCO-ERs that would prevent the evaluation reports from being processed. The Trans-O-Grams also informed an NCO if an NCO-ER had not been posted to his or her personnel file within the preceeding fifteen months. The division also completed an automated link with Personnel Service Companies through e-mail and PROFS that allowed the NCO-ER Section to communicate daily with the companies and reduce correction time from thirty days to twenty-four hours.

Improved manuals helped make critical cost information available to Army users. During FY 1992, the U.S. Army Cost and Economic Analysis Center published an automated cost factor handbook for Army-wide distribution. The handbook provided common use data applicable to the field and the Army Staff. Publication of a condensed version of the information


on a 3.5-inch computer disk facilitated distribution and eliminated the need for paper publishing with its inherent costliness and bulk. The center planned initially to update the handbook annually and then make it available over an automated cost bulletin board that would ensure that the updated factors were always available to the user. In August 1992, the center also published and distributed the Department of the Army Cost Analysis and Economic Analysis Manuals, which provided procedures for developing accurate cost and economic analyses of Army programs, materiel systems, facility acquisitions, automated information systems, forces, and activities. These manuals helped the cost analyst provide better customer service and facilitated decision making.

During FY 1992, the Army worked on organizing, operating, and managing its multitudinous activities in the most effective and efficient manner possible. From reorganizations under DMRDs, which consolidated functions at the DOD level, to internal consolidation and reorganization, the Army diligently worked to improve its operations while simultaneously downsizing and cutting back on modernization of weapon systems. Many of these decisions, especially those in the BRAC arena, were unpopular in some quarters, but generally they improved the operation of the Army. While most observers noted the greatly increased reliance upon automation for training, few noticed the systems that military personnel used daily and in the planning stages to run tomorrow's Army. Even in the midst of a turbulent period, the Army continued to work on providing the best possible service to its troops, its government, and its country.


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