The V-22 has completed a highly successful preliminary design phase and is getting ready to transition into full scale development. During preliminary design over 5000 hours of wind tunnel testing have been completed giving the program a sound technical footing and significantly reduced program risk.

The V-22 acquisition strategy maximizes competition. The full-scale development contract is a fixed-price type contract and the production phase will be competed from Lot 1 throughout production. The engine full scale development competition has been completed. A second source will be selected to participate in both the development and production of the engine.

Acceptance testing of the LCAC to date has clearly demonstrated the potential operational effectiveness of this new assault craft, but we have experienced design suitability problems primarily in the area of reliability and maintainability. Fixes for major design deficiencies have been identified and we are aggressively pursuing management initiatives to resolve them. Most significantly, we have brought in a viable second source that will not only drive down the cost but also apply the pressures of competition on the quality of the product.

The need to provide fire support for over-the-horizon assaults has generated new requirements for longer range fire support systems. In response to Congressional direction, we have recently completed a major study of naval fire support requirements in the 1990's. We also have initiated high-payoff projects to increase range and lethality of existing systems such as the saboted subprojectile for the 16-inch gun, as well as examining requirements for single-purpose fire support ships and new systems. Also at your urging, we have taken steps to bring on a second source for the Five-inch Semi-Active Laser Guided Projectile (SALGP). We have initiated a block change to the guidance section that will streamline manufacturing and reduce costs by replacing customized components with off-the-shelf parts. We expect to have full competition by FY 1988.

As you recall, we decided last year to cancel the LVT(X) and defer development of a new assault amphibian until the early 1990's. In the interim, the Marines continue to upgrade the AAV7Al fleet to enhance its survivability and improve reliability and maintainability.

The Light Armored Vehicle (LAV) program continues to be a resounding success. The Marines have the first LAV battalion operational at Camp LeJeune and the second forming up on the West Coast. We have over 289 of the basic 25mm gun versions on hand and deliveries of three of the other mission role vehicles are beginning. We are ready to commence FSD of air defense and assault gun variants which will round out the LAV family.

We are continuing with the Dragon antitank missile improvement program to provide the Marine Corps an interim capability prior to the Army fielding the Advanced Antitank Weapon System Medium (AAWS-M). We have structured

a competitive program for the development of three product improvements to Dragon. In addition to an enhanced warhead which will improve Dragon's lethality, the Marines will also increase the missile range and speed and combine the day and night trackers into one countermeasure-hardened, reduced weight unit.

CONCLUSION

Let me close with Secretary Lehman's answer to the question of whether we are developing the right Navy and Marine Corps for our strategy. Because research and development projects span decades, and ships take many years

radically with each administration. Instead, they evolve over time with policy and technology. The fleet today reflects the wisdom of the deck plates, the labs, and lessons learned from our exercises. The size and design of our ships and weapons reflect the inputs of sailors in contact with Soviet submarines, Kiev-class carriers, and "Bear" aircraft. The wisdom of common sense and the highest available technology are tremendous advantages and these we must bring to the design of today's Navy and Marine Corps.