Question. Provide a listing of each project to be funded, its cost, the specific item to be developed and/or procured, and the funds identified in FY 1988 and future years to continue each project. State also for each the date that a useful test capability will be fielded.

Answer. Global Positioning System Instrumentation FY 1987 Request $30.0.

This program will apply Navstar Global Position System technology for Time-Space-Position Information at the test and training ranges to improve accuracy and coverage and reduce the number of ground-based tracking sites. This is a TRI-Service program managed by the Range Applications Joint Project Office, Eglin Air Force Base, Florida. The FY 1987 funds will be immediately applied to existing contracts to accelerate the program and provide range users higher quality and more timely test data at a reduced cost. The FY 1988 estimate is $30.1 million and the FY 1989 estimate is $35.9 million. The instrumentation will be phased in to the test and training ranges over a period of years. The initial capability will be fielded in FY 1989.

OT&E Range Capability: $46.0.

These funds are required to provide realistic operational testing. $39.0 million will be used to acquire threat surface to air missile systems, including the . $4.0 million is required for Global Positioning System instrumentation for operational testing at remote sites. $3.0 million will be applied to supporting contracts which will help define the overall OT&E test requirements. The threat simulators and Navstar GPS instrumentation will be available for use within two years. The FY 1988 estimate is $93.0 million. The FY 1989 estimate is $138.0 million. An initial test capability will be available in FY 1989.

OT&E Targets: $44.0.

This program supports the requirement for realistic helicopter and undersea targets to provide valid OT&E. Specific FY 1987 target requirements are as follows:

Helicopter Surrogates: $34.0.

The FY 1987 funds will be used to develop threat helicopter simulators to provide the Army with a capability to conduct realistic operational testing. The FY 1987 funds will acquire helicopters and their conversion to instrumented threat helicopters. Delivery of the vehicles is anticipated to take two months. The fleet will be available to support testing eight months after delivery. The FY 1988

Deep Fast Undersea Target: $10.0.

The FY 1987 funds will accelerate the development of a capability to adequately test ASW weapons, specifically the MK-50 and MK-48 ADCAP torpedoes. Specifically, (1) $4.3 million will be used to accelerate electronic upgrades to ASW targets including the Fast/Deep prototype target and the follow-on training target; (2) $2.9 million will be used for design/preliminary development of the hybrid simulator modernization. This will improve the Navy's simulation capability to test the MK-50 and MK-48 ADCAP torpedoes; and (3) $2.9 million will be used to accelerate the develoment of a Proofing and Test Evaluator (PATE). The PATE is a pressurized tank facility with extensive acoustic testing capabilities. It will enable the Navy to conduct shore based dynamic testing at any potential target depty. FY 1988 estimate is $8.0 million; the FY 1989 estimate is $12.8 million. These upgrades will be available to conduct testing of MK-50 and MK-48 ADCAP torpedoes in the mid 1990s.

Question. A portion of these funds are for a product improvement to the Navy's FASTMATT target.

The baseline target will not IOC before September 1987. How does DoD justify improvements to a target which has not even been fielded yet?

Doesn't this run counter to one of the "Carlucci Initiatives", which the department is implementing?

Answer. The improvements are being introduced in the development phase rather than waiting until after production because the acoustic and propulsion upgrades to the prototype Fast/Deep target are low risk developments needed to improve the Navy's ASW torpedo testing capability. The acoustics upgrade consists of reliability, capability and maintainability improvements to the Navy's current T&E target. The propulsion upgrade will use the proven Stored Chemical Energy Propulsion System propulsion. These upgrades are required to conduct realistic follow-on test and evaluation of MK-50 and MK-48 ADCAP torpedoes in mid 1990's. If we delay the improvements until after completion of the current program, the torpedoes will not be adequately tested against realistic targets.

NATO COOPERATIVE R&D

Question. The Supplemental includes $60 million to augment the $120.4 million appropriated for NATO Cooperative R&D projects in FY 1987. As you know, our policy is to have a "two way street" with our Allies on such cooperative activities.

Do you anticipate that the NATO allies will allocate supplemental funds of their own to the FY 1987 efforts?

Answer. No. Unless an allied nation has its requested funds reduced, as the U.S. did, no supplemental funds should be necessary. Question. When do you estimate obligation of these funds?

Answer. All FY 1986 funds are either obligated or committed and awaiting contract award. All FY 1987 funds are either obligated to continue projects begun with FY 1986 funds or to continue good faith negotiations with the Allies. The success of this initiative can be directly traced to the Allies being able to track a con

crete U.S. funding commitment in the form of budgeted and appropriated funds.

Question. How much prior year unobligated funding remains? Answer. 50 percent of the FY 1986 funds are obligated and the rest are committed for contracts required by the international agreements that have been signed.

Question. Presumably, the department has now determined which programs it wishes to pursue. Please submit for the record a detailed description of each of the programs, and their costs, for which Supplemental funds are requested.

Answer. New projects are still being evaluated. We will submit the requested list when available.

Question. Please explain the need for $11.8 million to cover OSD "program shortfalls.'

A. What programs?

B. Shortfalls in what amounts?

C. How did each of these shortfalls come about?

D. When was each of these shortfalls discovered?

E. Why must these shortfalls be funded by means of a Supplemental?

Answer. In anticipation of getting the requested $50 million for Defense Agency NATO projects, MOUS were negotiated on three specific projects. Since the actual appropriated amounts for Defense Agency NATO projects was only $37 million, there is a shortfall to fund these MOUS. We need the funds in the supplemental request to fully fund the U.S. share of these projects, which are: Ada Programing Support Environment; Advanced STOVL; and Enhanced Fighter Maneuverability.

Question. The Navy requests funds partly to cover a claimed shortfall in ongoing NATO R&D projects. However, one of these projects, the "NATO AAW System," shows up as a new start in the FY 1988 budget. Has Congress approved any funding for this project to date?

Answer. Yes. Of the $30 million appropriated to the Navy in FY 1987 for NATO Cooperative Initiatives, $9.2 million has been allocated to the "NATO AAW System" project.

Question. Is this an attempt to get some sunk cost into the project in order to counter potential Congressional cuts to its FY 1988 request?

Answer. No. This project is being undertaken with Germany. Canada and the United Kingdom. The Statement of Intent has been signed by Germany, with Canada and the U.K. expected to follow shortly. The formal Memorandum of Understanding is currently being finalized, and initiation of the project in FY 1987 follows.

Question. Does the proposed funding for this project more than cover the stated shortfall?

Answer. No. Plans call for the allocation of $16.5 million to this project. The shortfall being funded via the Supplemental is the $7.3 million balance between the current allocation ($9.2M) and this planned FY 1987 total.

Question. Why should Congress approve an additional $3.1 million in Navy "International RDT&E Support" when Congress spe

Answer. In explaining its actions with regard to the International RDT&E Support program (PE 65857N), the Congress indicated that it considers that program identical to the NATO Cooperative Program (PE 63790N). These are two different programs, and serve differing purposes. PE 65857N provides funding to explore cooperative opportunities with worldwide foreign technology. The NATO Cooperative program deals exclusively with our NATO Allies, and is for the development of hardware systems. However, as the Congress believes that PE 63790N is for the same purpose as PE 65857N, the Navy is pursuing both efforts in PE 63790N.

Question. One of the Navy projects subject to the stated funding shortfall is the NATO Seasparrow System. The Navy has identified excess FY 1987 funds in their funding line for this project. Why should Supplemental funds be provided when excess appropriated funds are already available for the same effort?

Answer. PE 64361N, NATO Sea Sparrow funds U.S. only improvements to the existing surface missile system being cooperatively produced. A portion of these funds were used to fund the Libyan Lessons Learned initiative. The NATO Seasparrow effort funded in PE 63790N, while having the same name, is for the cooperative development of follow-on improvements to the currently produced system.

REPEAL OF SDI INSTITUTE PROVISION

Question. The department requests the repeal of section 9135 of the FY 1987 DoD Appropriations Act, which forbids obligation of funds for an SDI Institute until funds are specifically authorized and appropriated for that purpose.

Repeals of existing laws are made only in the most extreme cases. SDIO does not appear to be in any urgent need for its own technical center. What extraordinary circumstances justify this request?

Answer. SDI has the highest Defense priority; the research program is critical when viewed in the light of the Soviet Union efforts to modernize its ICBM force and to develop an ABM system. The SDI Organization which manages the multibillion dollar program is very talented but limited by a staff of about 200 people. The organization critically needs a technical integrating support capability to continue the successful progress in the SDI research. Question. Last year, SDIO explained that the proposed magnitude of funding and broad scope of SDI research justified such a center. However, SDI's FY 1987 budget was reduced $2 billion and the scope of work narrowed to a smaller number of technologies. Can we therefore conclude that existing FFRDCs and for-profit firms can handle the required FY 1987 workload?

Answer. No. In fact, the budget reductions only served to reinforce the need for a new, dedicated FFRDC. With reduced opportunities for parallel research, driven by budget cuts, the SDI Organization must make very precise conclusions concerning paths of research. The technical data must be compiled and evaluated exactly. Alternative architectures must be examined with precision and a dedicated and unbiased approach. Therefore, the FFRDC should be initiated as soon as possible.

Question. From the date of Congressional approval, how long would it take for this center to become operational?

Answer. Steps could be taken immediately to finalize terms of reference and contract preparation. At the same time, the personnel staffing activities could begin as could actions to locate the center. An initial operating capability could be available shortly thereafter.

Question. In hearings last year, SDIO stated that the contractor to operate the SDI Institute would be competitively selected. However, a few months later SDIO stated that "we have received no proposals to date to operate the SDII other than from the group invoted." Is it still true that only one proposal has been received?

Answer. Yes. From the initial announcements of the requirements to the business community, only one proposal was received even though many inquiries were received about the exact nature of the work.

Question. This Committee has long advocated the benefits of competition. If this issue is considered during the FY 1988 budget cycle instead of the Supplemental, is it reasonable to assume in the interim a competitive proposal could be received?

Answer. The initial announcement of the requirement resulted in many inquiries for additional information. Based on that, as previously mentioned, the actual proposal submission rate was very small. I suspect that the nature of this type requirement is not given to a large number of proposals and the real competition occurred when potential firms decided whether or not to submit a proposal. Because of the large volume of initial interest, and subsequent submission rate, additional steps to obtain competitive proposals would be counterproductive and further delay progress on this critical initiative.

BUDGETING FOR PAY RAISE COSTS

Question. The supplemental includes $99,328,000 to fully fund the 3% military pay raise provided January 1, 1987. Why was this amount included in the "program" portion of the request vice the "pay" portion? (Note: If we did not provide the request up front in the fiscal year 1987 Defense Appropriations Act, the entire amount would have been requested in the "pay" supplemental).

Answer. There is no request for a pay supplemental this year be cause the funds were appropriated in the FY 1987 Defense Appropriations Act. The amounts appropriated, however, were inadequate to finance the entire pay raise. Other DoD programs would have to be reduced to provide funding for this "must-pay" require ment, so it is appropriate to reflect the request in the "program" portion of the supplemental.

Question. Likewise, there is $11,770,000 requested in the "pay" portion for the Federal Employee Retirement System (FERS) retirement costs associated with the civilian pay raise of 3% on January 1, 1987. Why was this amount not included in the "retirement" portion of the supplemental?

Answer. The Office of Management and Budget directed all Federal Agencies to estimate the increased costs associated with FERS