Department of the Army Historical Summary: FY 1971

IX.

Logistics

Logistics as it is known today is the science of planning and carrying out the movement and maintenance of forces. A century or more ago, logistics might have been described as getting there first with the most. In today's more sophisticated and more carefully managed environment, it means getting there with the right amount of support when needed. In other words, it means providing the American soldier with what he needs, where and when he needs it, and in the condition and quantity required for his use, all within the framework of available monetary resources.

The Army's logistics mission in fiscal year 1971 has been to support combat operations in a limited war; support allies as they replace U.S. combat forces; maintain a high state of combat readiness for both U.S. and allied forces; and maintain a modern and responsive industrial base. This chapter describes the highlights of operations related to procurement, maintenance, supply, transportation, facilities, construction, military assistance, and support services.

The economic benefits of the Logistics Offensive Program continued to grow at a rapid rate. At the close of the fiscal year, the total amounted to approximately $6.1 billion. Of this amount, $4.5 billion has a direct impact on the Army's budget requirements. While the balance of these benefits is not related directly to the budget, it represents bonus effects from such things as reduced training requirements, increased efficiency, and improved readiness.

Materiel Acquisition

In fiscal year 1971, $3.6 billion was allocated for equipment, missile, and ammunition procurement, about a billion dollars less than 1970. The program was designed to provide prudent stock levels in the light of the diminishing commitment in Southeast Asia. Over $1.2 billion involved war-related procurement as compared with $4.5 billion in 1969. The table compares costs in the various commodity categories over the past three years.

Of the $5.1 billion in contracts awarded during the year, $4.2 billion ($3 billion from current year and $1.2 billion from prior-year funds) was for the Army and $900 million for customers who buy Army equipment and ammunition.

Ammunition procurement programs for fiscal years 1969-1971

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ARMY PROCUREMENT PROGRAM

(In millions of dollars)

were developed to meet fixed requirements; contingency procurement was excluded because an active production base was operating in case of need, and balance could be maintained between allocations and requirements by drawing upon depot stocks and extending procurement schedules. Although consumption rates varied significantly during the period, no critical shortages occurred.

As the Army must have its equipment readily available to respond to emergencies, it owns certain manufacturing facilities and industrial equipment to produce a significant portion of its materiel, particularly ammunition. This production base, most of it still active, is valued at nearly $9 billion. The Army also owns approximately $400 million in tools used by contractors in private plants.

This production base was constructed in great part during the early days of World War II. Wartime exigencies made it virtually impossible to develop new production techniques or, in some cases, to wait until more desirable construction materials became available. Although these plants, which were used during the Korean and Vietnam Wars, were idle during peacetime, funds were available for minimum maintenance only, not for rehabilitation and modernization. Thus today many of these facilities are outdated, present safety hazards, and raise pollution problems.

The Army is in the third year of a program to modernize ammunition production facilities. At current budgetary levels the Army will need from eighteen to twenty years to complete the $3 billion program. Priority is being given to eliminating hazards connected with the production of explosives and propellants. Pollution is also receiving attention in line with executive orders.

Materiel Maintenance

Under the Maintenance Support Positive program, there was progress in fiscal year 1971 in tailoring maintenance concepts to specific

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commodity and weapons systems—part of the effort to achieve maximum materiel readiness at minimum cost. Systems were reviewed to determine where piece-part repair and modular replacement could be most effectively employed. Also, under the Army Maintenance Management System, evaluations were made of the need for maintenance operational records and requirements to report maintenance data to Department of the Army and Department of Defense levels. New data-collection techniques were developed so that record-keeping and reporting related to the maintenance of Army equipment was brought to a level appropriate to the resources required to manage it.

Fiscal year 1971 saw the continued application of certain projects designed to reduce the number of repair parts selected and shipped with equipment as initial support items. Concepts were developed in 1969 and guidance issued to insure that only the required range and quantities of repair parts would be designated for initial distribution; and while the 1971 experience had not produced sufficient data for firm estimates, by year's end a reduction of 25 to 30 percent in repair parts initially furnished the soldier seemed likely.

Also promulgated during the year were standards for the maintenance, care, and preservation of prepositioned equipment, which is not covered by existing guidance concerning materiel used by the active Army and in the depot system. Maintenance standards for prepositioned materiel are essential to insure that it is ready for use under emergency conditions.

Management of the distribution of selected items throughout the Army's supply and maintenance systems under the so-called Closed Loop Support Program was expanded to cover additional commands and items, while a new "Call Forward" procedure was initiated in United States Army, Pacific, to safeguard against over-stockage in a period of rapidly changing requirements.

Recent studies have concluded that about 75 percent of the Army's tire replacement requirements can be satisfied by using retread tires. Maximum use of retreads has become Army policy, and indeed the Army has been assigned a leading role in the Department of Defense tire management program. During fiscal year 1971, over 302,000 tires were retreaded, resulting in savings of $9.9 million.

Depot materiel maintenance and support funding totaled about $668.8 million in direct obligations in fiscal year 1971, including $515.8 million for depot maintenance activities, $10.2 million for base operations costs, $6.5 million for technical, administrative, and new equipment training, and $136.3 million for maintenance support activities.

Although inspections are recognized as necessary tools in any effective management program, they can be both expensive and bur-

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densome if they are not properly conducted. Thus in fiscal year 1971 the Army challenged both the concept and the objectives of command maintenance management inspection (CMMI) to determine the extent of harassment and irritation caused by unannounced inspections and the costs associated with preparations for team visits. Under the Maintenance Assistance and Instruction Team (MAIT) program, procedures were modified to reduce both irritants and costs by eliminating unannounced inspections, preparations for inspection, and scoring of units, and by using personnel resources at the post-division level for MAIT rather than at the Army command level to support the CMMI's.

Aviation Logistics

Because logistic support requirements for Army-type aircraft used by U.S. and allied forces in Southeast Asia were substantially enlarged with the transfer to Vietnamese forces of a large number of helicopters under the Vietnamization program, a single pipeline was established to support these forces. The consolidation of the pipeline for aircraft components and repair parts increased aircraft availability and reduced costs. Goals were set, under the over-all program, to reduce the aviation repair parts and components in U.S. Army, Vietnam. Pipeline control over aircraft engines has made it possible to reduce procurement and release existing stocks for installation in new aircraft. As the fiscal year closed, details were being worked out for a single Army repair parts and components pipeline to support all Army aircraft in the Far East, including those used by allied as well as U.S. armed forces.

Attention was also focused during the year on using the heavy lift helicopter (HLH) in the Army's worldwide logistics mission. A study project (Log Lift) addressed all facets of the HLH role to determine its cost and effectiveness in comparison with other modes of transportation and to develop estimates as to the quantity required.

Supply and Depot Management

The Department of the Army Distribution-Allocation Committee was established to provide Department of the Army staff control over allocations of critical items of supply during the buildup of Army forces in Vietnam. During fiscal year 1971 the committee's emphasis shifted from expediting logistical support to Southeast Asia to preventing the buildup of excess stocks as redeployment modified requirements. More attention was given to Continental Army Command and Reserve Component readiness, and these units were provided M16 rifles, tactical and combat vehicles, trailers, radios, and engineer equipment, all made available as a result of the diminishing commitment in Southeast Asia.

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At the same time, modernization actions were implemented in U.S. Army, Europe.

The Army Stock Fund finances much of the materiel that flows through the depot system. Stock Fund purchase authority in fiscal year 1971 amounted to $2.6 billion, about 12 percent under 1970, while the issue program was $3.1 billion, about 14 percent below the previous year. Changes in stockage requirements and continuing decline in demands reduced stockage levels at all echelons of supply. A test of a direct delivery support system was made to some of the units in oversea commands. This system has further reduced oversea operating stockage requirements. Test results will be analyzed in the first quarter of fiscal year 1972. If the increased cost at the wholesale level of providing direct support can be offset by significant savings in inventory levels without degrading unit readiness, direct delivery will be extended to other areas.

Modernization of depot storage facilities in the United States began in fiscal year 1967 as part of a $14.7 million three-year program to equip the depots with the most efficient materiel-handling systems and in general to modernize facilities. By the end of fiscal year 1971 the original program had been completed with an expenditure of $12.4 million for handling equipment and alterations to facilities and $2.3 million for military construction. As a result of this modernization, 294 personnel spaces representing $1.98 million in annual operating costs had been saved through fiscal year 1971. When the program is completed in December 1972, 524 spaces and $3.9 million in depot operating costs will have been saved.

There were refinements during the year in the distribution management of petroleum products, which concerns Army units throughout the world. Terminal reporting was standardized for all services, and all regulations pertaining to petroleum management were consolidated into one regulation. Computations related to reserve requirements were also refined with the publication of a revised bulletin. The relationship between civilian and military distribution systems was strengthened.

Transportation

In fiscal year 1971 there was a decline in the movement of cargo and passengers worldwide. A total of 12,681,500 measurement tons of Army-sponsored cargo was moved over-ocean by the Military Sealift Command, 2,687,900 tons less than in fiscal year 1970. In addition, 189,900 short tons were airlifted by the Military Airlift Command. This was 37,100 tons less than in fiscal year 1970.

The policy of using airlift for the over-ocean movement of passengers as the most expeditious means with resulting savings in man-

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days of travel was continued in fiscal year 1971. A total of 1,208,000 Army sponsored passengers were moved by the Military Airlift Command, 365,400 less than the number airlifted in fiscal year 1970. Movement of passengers over-ocean by surface amounted to 88,100, about 11,800 lower than in fiscal year 1970.

A curb on the use of premium transportation was maintained through the year under the Airlift Challenge Program, which provides for automatic review, screening, and challenge of requests from field commands. An average of 3,500 shipments per month was diverted from airlift to sealift at an estimated savings of about $8.5 million per month, all without detriment to delivery dates.

Military standard transportation and movement procedures (MILSTAMP) continued to provide an effective standard program for worldwide movement and documentation of cargo within the Defense Transportation System. MILSTAMP was improved during the report period by expanding the provisions covering break-bulk and documentation of container shipments of ammunition, explosives, and other dangerous articles.

In the field of containerization, production proceeded during the year on a total procurement of 6,700 containers (called MILVAN's), with a completion date of October 1972. As the year closed there were 2,600 leased containers in the MILVAN pilot program, while there were 4,287 chassis on hand of the 5,600 on order. Military transportation managers are considering the use of MILVAN's for contingency deployments, their use by the Navy and Air Force, containerized ammunition distribution systems, and container use for general cargo service worldwide and in the direct delivery test program covered under support of operations in Europe.

The exploitation of surface containerization became Department of Defense policy during the fiscal year, and the Army established a project manager's office, staffed by all of the military services, to develop container-supported distribution systems for all services.

During fiscal year 1971, the Army initiated action to evaluate current and future Army rail capabilities and requirements. This evaluation will culminate in the establishment of policy, procedures, and responsibilities for the Army rail fleet. The Army's policy has been to maintain a diversified rail fleet with sufficient motive power and rolling stock to meet daily peacetime requirements for utility railroad operation on a post, camp, or station.

Logistics Improvements in Supply, Maintenance, and Transportation

A major challenge in the logistics field in fiscal year 1971 was to do

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the planning and take the actions that would insure the continuation of a strong and viable logistics base in the United States and an efficient and effective logistics system around the world in a period when combat operations, oversea deployment, and over-all strength were diminishing. Thus the Streamline program, a logistics operation described in last year's report as it was begun in the Army's Pacific and European commands, was extended in the 1971 fiscal year to the Continental Army Command, Army commands in Alaska and Panama, and the Reserve Components. The actions were administered selectively to meet the needs of individual cases.

In the Continental Army Command the concepts and plans for initiating the direct supply support system were developed while storage operations, property disposal, and distribution programs were reviewed and refined. In the Army's Southern Command, logistic support activities were consolidated, while in Alaska the entire logistic support system and organization was studied. The objectives and actions of the Streamline program in the Reserve Components were, similar to those of the active Army.

As the fiscal year opened there were about 1.4 million items of supply with federal stock numbers in the Army's supply system. A concerted effort was begun to reduce this supply, by limiting Army requisitioners to items only in the active portion of the Army Master Data File (Army catalog) ; by reducing the number of catalog items, through elimination of slow-moving items and cutting-back on the great range of types, sizes, and grades of an item; and by reconciling field data banks with the master file to assure that all echelons in the supply system are current in base data and are using the same identification, units of issue, prices, and other management data. By the end of the year the Army catalog had been reduced to 1.2 million items.

Stockage policies for support activities of the Army in the field were modified during the year. The number of items to be stocked below the continental U.S. depot level were reduced from 1,063,000 federal stock numbers at the opening of fiscal year 1970 to 327,000 at the close of fiscal year 1971. Here again the aim is to reduce inventory investment by eliminating stockage of slow-moving items below depot level. Fewer items will improve management, while more economical ordering will reduce requisitions and transaction volume both in administration and handling.

Under Project Clean, review of supply stockage in Vietnam indicates that during fiscal year 1971 the levels were reduced by over $189 million. This reduction was the result of judicious control over supply requisitions for both U.S. and allied forces, of normal attrition, of redistribution within Vietnam, and of the withdrawal of stocks. Also during the year, some $525 million in excess stocks was disposed of through

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sale, redistribution, or return to the United States. As the year closed there was about $24 million of identified excess materiel on hand in Vietnam depots. Redistribution of excess materiel from the Pacific area under the PURA program was expedited through an accelerated cycle that reduced screening time from 300 to 75 days. At the same time, requisition and shipment control under Project Stop-See led to cancellations of some $650 million worth of materiel no longer needed in Vietnam (including $136 million for fiscal year 1971). Under Project Transplant, technical evaluation assistance teams, composed of specialists in sales management and scrap processing, helped develop procedures to expedite the removal of scrap from Vietnam, by dealing with off-shore test sales, property disposal priorities, and shipment by military sea-lift of surplus materiel at special rates to Selected Pacific area ports.

The test of a direct support system for commissaries in Europe, described in last year's report and launched as that period was closing, was applied to six stores. A midperiod evaluation in October 1970 indicated that the concept was feasible, and the test was extended to June 1971. The program will be expanded during fiscal year 1972 to include a total of thirty-five stores.

During fiscal year 1971 the initial phase was completed of an automatic data processing system that provides a monthly record of air and surface transportation movements in tons of passengers from the continental United States to oversea destinations as well as from overseas to the United States. The first phase of the system was designed to eliminate the time-consuming manual manipulation of tonnage data, which often took from forty-five to sixty days to formulate, and provide more accurate data within fifteen days.

Logistics Doctrine and Systems

There were developments in a number of logistic systems during the year. The Division Logistics System was expanded to include all Seventh Army divisions, three in the Continental Army Command, one in Eighth Army, and a brigade assigned to U.S. Army, Hawaii. The system standardizes stock control management procedures by automating functional tasks. It improves the quality and flow of data, simplifies procedures for soldiers with limited experience, and promotes a smooth transition to future automated systems.

One of the techniques tested during the year to offset the impact of reductions in materiel procurement authorizations, operating funds, and personnel was the Direct Support System (DSS). This system provides for a reduction of oversea depot stockage levels by routing replenishment shipments direct from the continental United

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States to direct support units in oversea areas. Under this practice, oversea depot stockage levels are limited to theater reserve and project materiel plus a safety level for items supported by theater demands and not included in reserve and project stocks.

The DSS uses two theater-oriented depot complexes—one on the east coast serving Europe, one on the west coast serving the Pacific—and a logistics control office in San Francisco. Each complex utilizes one of its depots as a consolidation point for the containerization or palletization of shipments, and the control office maintains a computerized logistic intelligence file to control all phases of the system.

Following an Army-wide review of the logistic system to validate current and developmental systems and achieve greater standardization in materiel support at the intermediate levels in the continental United States and overseas, a standard Army intermediate level system (SAILS) was approved; development of the system was in progress as the year closed. Also developed was a selected item management system that will provide management control over materiel with special characteristics of cost and need. Development continued on the Logistics Master Plan, which will guide the development and maintenance of the Standard Army Logistics System. Also, the Army Materiel Command continued to work on the five-year automatic data processing program intended to standardize its automated systems.

Facilities and Construction

The 1971 Military Construction Authorization Act approved on October 26, 1970, provided $264.9 million in new funding authorization for the Army, added to $325.2 million that had already been approved on October 7, 1970, under Public Law 91-441 for Safeguard construction. A fiscal year 1971 military construction appropriation of $646.9 million in new obligational authority was approved in December 1970.

The Army in fiscal year 1971 thus had available for military construction a total of $1,099.8 million: $647 million in current appropriations; $408.9 million in unobligated carry-over from prior-year appropriations; $12.6 million transferred from Department of Defense military construction contingency funds; and $31.3 million from recoupments in the infrastructure program. The funds for new work were allocated as follows:

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Delay in congressional action on the fiscal year 1970 appropriation bill limited construction starts during the first half to projects authorized and funded in prior years. Temporary delays in contract awards also resulted from the suspension of the Davis-Bacon Act provisions (prohibiting discrimination in hiring on government contract jobs) during the period February 23-March 29, 1971. A total of thirty-nine MCA (Military Construction, Army) projects valued at $88.2 million were awarded without Davis-Bacon Act provisions. Results of the suspension on contract costs were inconclusive. Inflationary pressure on construction costs continued during the year, limiting progress in reducing the backlog of unawarded projects.

Construction awards to improve and update industrial facilities at government-owned plants totaled about $53.5 million. During the year thirty-seven projects were completed at a cost of $16 million.

At the beginning of fiscal year 1971 there was $68.2 million in unobligated military construction funds for Southeast Asia, including $34.2 million in unapportioned funds for Vietnam from fiscal year 1969. Congress approved $25 million more in construction funds for Vietnam in 1971, and by the close of the fiscal year all had been apportioned, with the unobligated balance totaling $47.9 million. Over $1.3 billion in regular, supplemental, contingency, and military assistance funds were allocated to military construction in Southeast Asia during fiscal years 1965-1971.

Long-range, military construction, known requirements (exclusive of family housing, Safeguard, and NATO infrastructure) amount to $6.9 billion. Over $4 billion is required to eliminate the backlog of projects to replace temporary frame structures constructed in World War II and modernize permanent structures in line with current standards. Funds for these purposes are limited to $400 million annually.

The Army, through its Corps of Engineers, provided construction support to numerous agencies and projects, among them the Air Force (including its National Guard and Reserve) ; the National Aeronautics and Space Administration; the Department of Health, Education, and Welfare; the U.S. Postal Service; various Department of Defense agencies; the Agency for International Development; the U.S. Information Agency; the Trust Territory of the Pacific Islands; the Robert F. Kennedy gravesite; national cemeteries; and various foreign governments. During the fiscal year Army engineers contracted for approximately $457 million of construction for these purposes.

To establish a reserve of nontactical mobile electric power, high voltage generators that are excess to needs in Vietnam will be returned to the United States. A survey was conducted by the Army Corps of Engineers to identify recoverable generators and ancillary equipment for shipment to the zone of the interior during the next two fiscal

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years. This equipment, added to the four existing power barges, will provide the Army with about 170,000 kilowatts of generating capacity for use in contingency operations, natural disasters, and other emergencies.

The Army is one of the largest real estate agencies in the world, with broad responsibilities for base and installation planning, administration, construction, and operation. There were numerous actions in this general area during fiscal year 1971. Under Executive Order 11508 the Army reviewed its real property holdings to assess the degree of utilization. Commanders were directed to review all real property under their jurisdiction and to report excess holdings for disposal. A study of long-range stationing requirements was made to identify priorities for retention of installations under various projected force levels. An Army installations planning committee was established to review and make recommendations on the stationing of major units and activities, long-range strengths and missions for installations, military construction and family housing, and base development.

A number of changes regarding Army installations were announced during the year. Scheduled to be closed are the Burlington Army Ammunition Plant in New Jersey, the Gateway Army Ammunition Plant in Missouri, the Lawndale Army Missile Plant in California, the Sunflower Army Ammunition Plant in Kansas, and Fort Wadsworth in New York. The Burlington, Gateway, and Sunflower plants will be retained in a standby status. Also announced and accomplished during the year were the consolidation of base operations of the Aberdeen Proving Ground and Edgewood Arsenal in Maryland and the closure of Two Rock Ranch Station in California. Edgewood Arsenal was disestablished as an installation and concurrently established as a class II activity at Aberdeen Proving Ground. Two Rock Ranch Station was transferred to the Department of Transportation. The Coraopolis Army Tank-Automotive Steel Foundry in Pennsylvania and the Muskegon Army Engine Plant in Michigan were discontinued as Department of the Army installations.

An Army base development board was established in October 1970 to explore facility requirements, identify command and departmental staff responsibilities, and examine ways of improving base development planning and Army support of contingency operations. New regulations were published to assist commanders and staff officers in base development; a base development planning assistance office was established; and a computer-assisted system for engineer planning was developed. And development continued on an integrated facilities system to provide accurate and timely information on Army real property resources and programs.

Expenditures for real property maintenance activities at Army in-

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stallations in fiscal year 1971 were slightly over $1 billion. Building space decreased by about 36 million square feet as some facilities were discontinued. Unfinanced real property maintenance and repair at the close of the fiscal year was approximately $368 million, a decrease of 4 percent from 1970.

Several major programs were in progress during the year, at home and overseas, to renovate or replace old and inadequate facilities. One was the design and construction of a new Walter Reed General Hospital. Another was the renovation of troop living facilities for U.S. Army personnel in Germany.

The background of the Walter Reed General Hospital project is of interest. Major William Clive Borden, commander of the hospital at Washington Barracks in the nation's capital, was the first to envision a complete medical center capable of carrying on research, teaching, and care of the sick and wounded. In 1905, Congress authorized construction of Walter Reed U.S. Army General Hospital, and in May 1909 the new eighty-bed hospital opened.

Many physical changes have taken place at Walter Reed in its short history. In 1967, initial planning began to replace the now inadequate facilities that constitute the general hospital at the Army's prime medical center. Thirty-five separately constructed, interconnected buildings (some dating back to 1909) will be replaced by a new 1,280-bed hospital.

A team of nationally recognized medical architects and special consultants was retained to design the new facility. Concept design was completed in June 1969. It provides for the most modern health care facilities and will be able to accommodate technical advances and will be assured of a more extended life span than has been possible heretofore with conventional design.

The new hospital, now in final design, will provide for thirty-seven medical specialties and will be the heart of a patient care, teaching, and research center. The new hospital is expected to provide not only the Army but the nation with a medical resource of unlimited human value.

In another stateside action, the United States Military Academy Planning Advisory Board was established. Composed of eleven members appointed by the Secretary of the Army from civilian life and the ranks of retired senior military officers, the board will review and make recommendations concerning the USMA construction program.

In Europe, essential programs concerned the renovation of troop living facilities in some 120 old German kasernes and the replacement of old coal-burning boilers with more reliable and economical oil-burning boilers in heating plants. In the light of fund limitations for the barrack renovation program, greater emphasis is being placed on se-

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lective rehabilitation to correct the worst living conditions, and on procurement of supplies to support the troop self-help program and the facilities engineer effort.

In December 1967 the Secretary of the Army was assigned responsibility for the Homeowners Assistance Program, under which military and civilian employees of the Department of Defense are provided financial assistance to reduce their losses if they are required to dispose of a home when a military installation is closed or activities are curtailed. Through June 30, 1971, 9,351 applications for assistance had been received and 5,581 applicants had been given assistance totaling $15.024 million. Some 1,316 mortgages totaling $10.751 million were assumed, while 2,075 applications were rejected.

Support of Operations in Europe

The logistics posture and combat effectiveness of U.S. Army, Europe, improved during the year as a result of the introduction of new equipment and the modernization of existing materiel. Newly developed armored reconnaissance vehicles were supplied to armored cavalry squadrons; helicopters were modernized; Pershing equipment was converted from tracks to wheels and the Hawk to a self-propelled configuration; and air defense control centers and base defense were modernized. There were also improvements in the materiel readiness of units, in the status of war reserve stocks, and in protective construction. New communications equipment was issued and old equipment rebuilt, while Autovon facilities were extended throughout the command.

As noted earlier, a direct support system was tested during the year, designed to maintain and improve supply responsiveness with a reduced expenditure of resources by taking advantage of technological advances in communications, automated data processing, and transportation. The test was being carried out with a number of divisional and nondivisional direct and general support units in Europe and Korea as the year closed. An evaluation of the system is scheduled during September 1971.

Combat readiness in Europe was also furthered during the year in continuing preparations to house and maintain equipment for reinforcing units in case of need. Under this concept, deploying reinforcements would be issued prepositioned equipment on arrival in Europe from controlled humidity warehouses. The program to house this equipment was approximately 50 percent complete by the close of the fiscal year.

Actions to establish a wartime line of communications to provide emergency support for U.S. forces in central Europe, necessitated by the withdrawal from France, continued during 1971.

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Under the military construction program, the Army continued to fund the U.S. share of the NATO Common Infrastructure Program. The Congress authorized $41.5 million and appropriated $33.5 million of the budget request. The other NATO nations continued their agreement to share the cost of relocating U.S. facilities from France. At the end of calendar year 1970, $28 million had been recouped. The remainder of relocation costs, up to the agreed-upon ceiling of $96 million, will be direct-funded by NATO at the rate of $5.6 million per quarter.

Military Assistance

The materiel portion of the 1971 Army Military Assistance Program (MAP), Grant Aid, totaled $729 million and included varying degrees of support for countries and international organizations. Grant aid recipients received $299 million in materiel, for which the Army was reimbursed, and $270 million without reimbursement during the fiscal year. Materiel delivered was predominantly from prior-year undelivered balances or from excess Army stocks.

Aid to Thailand and Laos, funded under military assistance service procedures, required special attention as a result of the war in Vietnam. Materiel orders amounting to $95 million were received from those countries and $78-million worth was delivered.

During the fiscal year the Army transferred, under special long supply and excess programs, materiel included above with an acquisition value of $190 million to MAP at no cost and an additional $4 million to Thailand and Laos. This program encourages participants to accept major items of excess materiel "as-is" with rehabilitation and shipping expenses being borne by the recipient. The Republic of China, Korea, Greece, and Turkey were the principal recipients of materiel under this program.

Through a combination grant aid and foreign military sales agreement, equipment for an additional air defense (Nike) unit was supplied to the Republic of China during the fiscal year. A large portion of this materiel was made available from Army excesses under the program described above, requiring no reimbursement from MAP funds. A program to modernize and improve Republic of Korea forces during the period 1971-1975 was begun in January 1971. Requirements are being filled by transfer of equipment from withdrawing U.S. units, from new procurement, and from Army long and excess supply. The cost will total $1.25 billion in funded increments and $0.25 billion from the long supply and excess program.

Cambodia received modest Army grant aid assistance amounting to $6.6 million in fiscal year 1970, increased to about $149 million in 1971.

The Strategic Communications Command continued to manage

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and install fixed communications projects for allied countries during the year, including Spain, the Philippines, Thailand, Indonesia, and Iran.

Also during the year the Office of the Secretary of Defense directed the Department of the Army to supply selected quantities of grant aid materiel to Jordan with an estimated value of $21.5 million, the first such aid since 1967. A new MAP program was also initiated for Lebanon, the first since 1963.

Under a new base rights agreement with Spain, signed on August 6, 1970, and extending U.S. government use of Spanish bases to September 1975, the United States agreed to provide Spain through grant aid with specific quantities of helicopters, tanks, howitzers, guns, and various types of carriers, along with credit to purchase aircraft and a territorial communications command network.

The April 1967 suspension on delivery of selected military equipment to Greece was lifted in September 1970 and shipments were resumed.

In fiscal year 1971 the Army sold materiel and services valued at $540.6 million to fifty-eight countries and five international organizations. In conducting its sales activities the Army adhered to the policy that materiel readily available through commercial sources would be sold by U.S. industry directly to the recipient.

Under the Army's Logistical Orientation Tour Program a number of groups of high-ranking military personnel visited the United States to see new military systems and equipment of mutual interest in free world defense. Several demonstrations were conducted in Europe and the Far East.

The Army also participated in seventeen coproduction programs with six foreign nations and NATO, under which the foreign nations assemble or manufacture major end items or weapon systems of U.S. origin. These programs were valued at $1,502.3 million, with expenditures for goods and services in the United States valued at $559.3 million. Participating countries are the Republic of China, the Netherlands, Norway, Italy, the Federal Republic of Germany, and Japan. Items of U.S. origin being coproduced include the UH-1D and UH-1H helicopters, the M-60 tank, the M-113 armored personnel carrier family of vehicles, the M109 self-propelled howitzer, wheeled vehicles, a light antitank weapon, and small arms.

In the field of co-operative logistics, the Army maintained supply support arrangements with seventeen allied and friendly nations and with NATO. These programs provide participating countries with continuous follow-on support for major end items and weapon systems on a reimbursable basis. The program was valued at $173 million during the fiscal year and involved the support of a variety of

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items such as conventional weapons and vehicles and the Sergeant, Pershing, and Hawk missile systems.

International logistics management activity was broadened during the year to place increased emphasis on planning and provisioning for current and near year requirements. As U.S. Army procurements were reduced or acquisition objectives were satisfied, it became necessary to seek total 1971 fiscal year funding and some advance 1972 funding for international logistics customer requirements. This action was taken to combine procurement and take advantage of contract options. Major item groups were reviewed for possible procurement of equipment peculiar to international logistics program customers. When an item can no longer be provided economically by the U.S. Army supply system, it will be withdrawn; U.S. industry will provide direct support to countries on commercial items.

Support Services

The Army continued to administer eighty-five national cemeteries during the fiscal year. The proposal that the National Cemetery System be transferred to the Veterans Administration was kept before the Congress but not acted upon. There were 37,270 interments in the cemeteries in the 1971 period, 721 of them combat casualties interred in fifty-seven national cemeteries. Forty-six cemeteries were open for general interment, while thirty-nine were closed, with gravesites available only for combat casualties, pre-1962 reservations, and surviving family members. The Andersonville National Cemetery in Georgia was transferred to the Department of the Interior, the changeover to be effective July 1, 1971.

A total of 8,280 bodies of military, dependent, and civilian personnel on a worldwide basis were processed under the Army Mortuary Program during fiscal year 1971. Included in the total were twenty-four World War II casualties that were identified in Germany, the Netherlands, Okinawa, Celebes, and New Guinea. In addition, four other recoveries in New Guinea and Austria were being investigated.

The Subsistence Operations Review Board was formed in fiscal year 1971 to examine the Army Food Program, including all aspects of subsistence management, and with the broad mission of determining what actions in this area would contribute to recruitment and retention in the light of plans for an all-volunteer Army. The board visited Army units, industrial and educational facilities, food service installations, and the British Catering Corps as part of a study completed as the year closed. Recommendations will be considered for implementation in the coming year.

Over the past several years the military services have been grad-

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ually converting their food service programs from military to civilian staffs. Kitchen police (KP) duty was identified in volunteer Army studies as one of the most unpopular tasks. The Army Staff developed a five-year program of civilianization that would ultimately require 23,400 spaces at an annual cost of $115 million.

Along another line, the Army proceeded with plans to test a contract food service operation in the metropolitan Washington area. The purpose is to determine the feasibility of using a civilian food service firm to provide the food, management, and personnel for military dining facilities. A one-year contract for $931,200 was awarded for this service at the Tri-Service Dining Facility, Fort Myer, Virginia.

In January 1971 the master menu was revised to include a daily short order menu. It provides for such popular items as hamburgers, cheeseburgers, frankfurters, and sandwiches, as well as french fried potatoes and potato chips. Soft drinks were also authorized for issue in Army dining facilities. The short order menu is served in addition to the regular dinner meal.

The Army commissary system also came in for some attention during the year with the preparation of a marketing guide to assist commissary officers in selecting stock to meet the needs and desires of their customers. With the guide, scheduled for publication in fiscal year 1972, customer satisfaction is expected to be enhanced while savings will accrue through less markdown and spoilage of goods.

During the period covered by this report, excess, surplus, and foreign excess personal property with an acquisition cost of $1.3 billion was turned over to Army property disposal activities for disposition by redistribution, transfer, donation, sale, or other authorized action. Useable property valued at $478.7 million and 511.8 thousand short tons of scrap were sold. The proceeds from sales amounted to $57.3 million, against a cost of $54.7 million for the disposal program.

Inventories of useable property for disposal decreased during the year from $564 million to $446 million.

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