Department of the Army Historical Summary: FY 1973

IX.

Logistics

During the past several years Army logisticians have supported a comprehensive Logistics Offensive Program that has successfully met the short-term needs of Vietnam, the withdrawal of men and materiel from that country, and the development of new plans, systems, and techniques to better manage existing and emerging logistics systems. A number of actions taken during the first two phases of the program were mentioned in last year's report.

The third and final phase of the program was completed this year. It defined and harmonized the relationship between the Logistics Offensive Program and the Army's Logistics System Master Plan (LOGMAP), and it specifically dealt with the design, development, testing, and standardization of automated systems for managing the emerging logistics system. This phase was characterized by a continuing transition from a wartime to a peacetime environment and from a situation demanding quick solutions to specific problems to one that permitted the application of deliberate and incessant management efforts to determine and eliminate the causes of the problems.

By the end of the fiscal year the evaluation of a number of Phase III projects had been completed. The projects indicated that many of the immediate obstacles to providing efficient logistics support had been overcome and that greater stress could now be given to consolidating gains, tidying up the logistics battlefield, and improving peacetime logistics readiness in support of contingency operations.

Logistics Systems Development

The Logistics System Master Plan received considerable attention during the past year: a major revision was published in October 1972, an update followed two months later, and a vigorous program to improve and refine LOGMAP was begun in March 1973. A key part of this program was the approval of a change to the charter of the Army Logistic Policy Council (ALPC) in May 1973 which charged the ALPO with providing advice and assistance to the Deputy Chief of Staff for Logistics in the evaluation and development of logistic concepts, objectives, and policies designed to improve the efficiency and effectiveness of the Army's worldwide logistic system. The Logistics System Steering Group (LSSG ) is a working unit of the Army Logistic. Policy Council that periodically reviews logistic studies to assure the study efforts are compatible with

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LOGMAP objectives and to identify studies which may be of marginal value or may represent a duplication of efforts. The group met in April to review 110 study proposals to be continued or started during fiscal year 1974.

Over the years many attempts have been made to achieve simplicity and responsiveness in the Army's logistics system, for example, the Standard Army Integrated Logistic System (SAILS), which was described in last year's report, and the Division Logistics System (DLOGS), which was expanded during fiscal year 1973 to cover all divisions within the Army except the 1st Cavalry and the 2d Armored Divisions. Information from the field, however, indicated that some recent systems changes have had the opposite effect. The Simplified User Logistics Program (SUL) was formally established in September 1972 to correct this problem through eliminating or simplifying paper work at the user level and through achieving maximum responsiveness to the user at the support level.

The philosophy of the Simplified User Logistics Program, which encompasses the entire spectrum of the logistics functions of supply, maintenance, transportation, facilities, and services, is that logistics support must come from the rear and that complexity of the system must be reduced as support moves forward to the user level. The underlying belief is that support unit commanders are responsible for insuring that sufficient and appropriate logistics support is provided to the combat soldier.

Early in the fiscal year the Defense Logistics Studies Information Exchange (DLSIE) underwent expansion to further a Department of Defense objective to improve the process of logistics research by assuring ready availability of information regarding planned, in process, and completed logistics studies and research efforts. DLSIE is now a Department of Defense repository for such information, and it has also been made responsible for distributing copies of completed logistics studies to all U.S. government agencies.

The Army continued to develop a standard Direct Exchange System that encompasses all Army-managed repair parts and assemblies at all supply levels. The system is designed to provide controlled return of reparables in order that the materiel may be made operable. When put into use, the Direct Exchange System is expected to improve cost effectiveness and materiel readiness of field units. As the current year closed, policies and procedures for a standard expanded Direct Exchange System at the retail level were being published. Testing and initial development of automated direct exchange programs are planned for fiscal year 1974. A task force will also set up standard direct exchange policies and procedures for the wholesale level.

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Several actions were taken during the year to further refine Selected Item Management System (SIMS) techniques and to increase the effectiveness of the program in general. Report requirements were revised, procedures and regulatory guidance consolidated and updated, and the selection method for including items under SIMS was improved. The 6,200 items currently included in the program represent approximately 90 percent of the annual dollar demand for secondary items. The Defense Supply Agency (DSA) -Department of the Army memorandum of understanding concerning responsibilities and procedures for worldwide asset reporting for selected DSA items was changed to require all U.S. Army commands to make available to the Defense Supply Agency, to the maximum extent possible, those agency-managed items for which referral action was requested. Also, continued emphasis on referrals and redistribution has improved cost avoidance under the SIMS program from $66 million at the beginning of fiscal year 1973 to approximately $100 million by year's end, which was short of the $125 million goal noted in last year's report.

Fiscal year 1973 marked the continued expansion of the Direct Support System (DSS) whereby requisitions filled from the Army's wholesale system are shipped directly to support units in the field, bypassing theater depots. With only minor exceptions, DSS was expanded in USARPAC to include all requisitions for Classes II, IV, and IX items submitted by units in Thailand, Okinawa, Japan, Hawaii, and, until all support units were withdrawn, Vietnam. In USAREUR, DSS was expanded to include 102 out of a possible 125 units. Savings continued to accrue as stocks in oversea depots were drawn down and the amount of supplies in the pipeline reduced. In CONUS, DSS was applied on an experimental basis at Fort Bragg, North Carolina. The application of the system there is similar to the overseas experience, except that it is the installation account that is being bypassed rather than the theater depot. Plans for fiscal year 1974 include expansion of the system to twenty-one additional CONUS installations; incorporation of USAREUR depot replenishment requisitions, requisitions for missile repair parts, and a greater percentage of routine customer requisitions; and the completion of an analysis of the feasibility of including package petroleum products, certain medical supplies, and major items in the system.

Recent developments in the Army Materiel Command (AMC) Five Year Automatic Data Processing (ADP) Program, which was described in the previous report, include approval of the extension of Phases A and B of the AMC Logistics Program Hardcore Automated (ALPHA) to the Army Mobility Command and the Army Troop Support Command and the extension of Phases A, B, C, and D to the Army Missile Command. The System Project for Electronic Equipment at Depots Ex-

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tended (SPEEDEX), the other major component of the AMC Five Year ADP Program, has been extended to all AMC depots. The follow-on systems functional policies and procedures, regulatory requirements, output products, and the ability of the system to satisfy user requirements have been evaluated and found acceptable.

Progress was also noted during the past year in several components that make up the Army's Logistics Management Information System (LOGMIS). Within the Integrated Transportation Management Information System (ITMIS ), a transportation financial management and forecasting subsystem for over-ocean second destination movement and shipment of personal property and household goods was developed. The first phase in standardization of worldwide port operations was started when the USARPAC Standard Port System was adopted as the DA Interim Standard Port System. Work was also initiated to develop a General Functional Systems Requirement (GFSR) for an Administrative Use Vehicles Management Information System (AUVMIS). This system will provide a data base for the development of budgets and plans for the operation and maintenance of the administrative use vehicle fleet. The property disposal function of the Integrated Support Services Management Information System (ISSMIS) was transferred during the year from the Army to the Defense Supply Agency. In the laundry and dry-cleaning area an automated system was approved for programing at the Logistic Data Processing Center. Also, an automated data processing system was approved and installed in support of commissary operations, and approval was being sought to procure automated data processing support for a Central Food Preparation System at Fort Lee, Virginia.

In another LOGMIS development, standardization of software packages, user procedures, and training packages relating to conventional ammunition supply between United States Army, Europe, and United States Army, Pacific, was achieved when the Standard Army Ammunition System (SAAS) became operational in both commands. Finally, GFSR's for the army in the field and table of distribution and allowances maintenance management were developed. At year's end the two GFSR's were being consolidated into a single requirement at the newly created Logistics Center at Fort Lee, Virginia.

As fiscal year 1972 was closing, the Army issued to major commanders and heads of Army staff agencies a policy document incorporating guidelines for materiel acquisition. Appropriate commands and agencies provided representatives for a study group to develop procedures for effecting the new guidelines, and a letter of instruction was issued on 23 August 1972. Revision of pertinent regulations to bring them into line with the new guidance continued through the fiscal year. The Com-

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bat Developments Objectives Guide was also reviewed, and it was concluded that the guide would be replaced by a largely automated Catalog of Approved Requirements Documents.

Materiel Acquisition

The fiscal year 1973 procurement program reflected downward adjustments resulting from the Strategic Arms Limitations Agreement, but it provided the necessary equipment to maintain the Army's required state of readiness. The table below compares the amounts appropriated by the Congress and available for the last three fiscal years.

ARMY PROCUREMENT APPROPRIATIONS
(In millions of dollars)

The Army's aircraft procurement appropriation for fiscal year 1973 totaled $122.5 million, of which $20.1 million was for new aircraft, $58.9 million for modification of aircraft already on hand, $6.7 million for spare parts, and $36.8 million for ground support equipment, first destination transportation, and production base support. An additional amount of approximately $592 million was appropriated for customer programs, such as the U.S. Navy and foreign nations. Nearly one-half of the fiscal year 1973 appropriation (49 percent) was programed to modernize and improve the Army's existing aircraft fleet. The major action during the year in this regard was the institution of a program to convert OV/1B/C Mohawk surveillance airplanes to the more versatile OV-1D. Current plans call for the conversion of eighty-six Mohawks through fiscal year 1977. The U-X, a fixed-wing, twin-engine, utility-type airplane, was the only major new aircraft procurement programed during the past year. Discrepancies in procurement procedures caused the cancellation of the Army's initial request for proposal for the U-X in January 1973. At the end of the fiscal year the U-X program still awaited final congressional approval.

With the exception of curtailments in missile procurement authorizations for the Safeguard antiballistic missile (ABM) program, Congress appropriated sufficient funds in fiscal year 1973 to provide for both quantitative and qualitative improvements of the Army's surface-to-surface and surface-to-air missiles. In the surface-to-surface area, additional TOW and Dragon missiles entered the inventory, the Lance

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system was funded at the programed level, and funds were provided for the continuation and improvement of the Pershing system. Surface-to-air development included the authorization and funding of a modification to the Nike-Hercules system and an expanded day and night air defense capability as additional improved Hawk missiles and ground support equipment were procured to replace the basic Hawk system.

The $259.5 million request for weapons and tracked combat vehicles procurement contained in the President's budget for fiscal year 1973 provided financing for tanks, Vulcan air defense guns, grenade launchers, and laser range finders and fire control selector groups for air defense guns; improvements to tanks, howitzers, and air defense guns; and support equipment and facilities. The Congress deleted $20.3 million in the following areas: Vulcan procurement, $15.2 million; advanced production engineering for the XM198 howitzer, $3.6 million; and layaway of the M60 machine gun facility, $1.5 million. Congress deleted all but $3.6 million for the purchase of 37,533 M16A1 rifles in a supplemental request of $115.6 million for weapons and tracked combat vehicles, resulting in a total of $242.8 million in appropriations for the year, which included funds to perform retrofit/production -of the remaining 316 M60A2 tanks. Other major actions during the year included a projected slippage of six months in fielding the improved M60A 1 tank (M60A3), because of technical problems with fire control improvements, and the approval by the Department of Defense of the development concept paper for the competitive development and procurement of 3,312 XM1 tanks, and the subsequent awarding of contracts to Chrysler Corporation and General Motors Corporation. A contract was also awarded to the Food Machinery Corporation for the full-scale development of the mechanized infantry combat vehicle.

Ammunition Procurement

The continued decrease in ammunition consumption in Southeast Asia and the progress made in building up war reserve stocks to meet the Army's acquisition objective permitted a cutback in ammunition procurement in fiscal year 1973. The elimination of hazards connected with the production of explosives and propellants, a major activity within the twelve-year program to modernize the ammunition production base, received priority treatment during the year. Pollution control was also stressed.

Other Procurement

The "Other Procurement, Army," appropriation covers such items as tactical and commercial vehicles, communications and electronics equipment, strategic worldwide defense communications systems, medical support equipment, and such other support equipment as mobile assault

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bridges, construction equipment, materials handling equipment, generators, and floating equipment. The levels of the fiscal year 1973 program and the fiscal year 1974 budget request are shown below.

A major development during the year was the implementation of the WHEELS Study (see Chapter VIII), which has resulted in a $1.1 billion reduction in programed procurements for fiscal years 1973 through 1978—including cancellation of the XM852 1 /4-ton truck program—and an estimated life-cycle savings of $4.5 billion. Procurement plans were being developed for the acquisition of standard commercial replacements for military design vehicles, that is, 12- to 34-ton and 40-ton low-bed semitrailers and 1 1/4-ton trucks, which will be brought into the inventory during the next two or three years. In addition, the feasibility of leasing vehicles to support training needs of certain Reserve forces is under study.

Other significant actions taken during fiscal year 1973 included congressional approval of $23.4 million to procure commercial equipment required to provide American television programs to United States personnel in Europe (see Chapter V) and appropriation of $7.4 million in advance production engineering funds for the forward area tactical teletypewriter. The first production buy of the teletypewriter is scheduled for fiscal year 1974.

Materiel Maintenance

Depot maintenance management received special emphasis during the past year. The data input to the Depot Maintenance Data Bank at Letterkenny Army Depot was updated and validated in order to assure that the automated Army Materiel Plan—Part II, which will serve as the basic source document for depot maintenance programing, planning, and budgeting, is reliable and interfaces completely with other data systems, such as those dealing with procurement planning and cost and production reports. Also, a study was begun to determine whether—in view of reduced requirements placed on the CONUS depot system resulting from disengagement in Southeast Asia, advances in transportation capabilities and technology, recent economic developments impacting upon the dollar, and the probability that savings once realized in terms of the use of foreign labor may no longer exist—the depot maintenance facilities in Europe are needed to support the Army wholesale supply system.

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The program that transfers unserviceable equipment on a selective basis to the Army National Guard for repair and subsequent use was expanded during fiscal year 1973 to include armored personnel carriers and M60 tanks. This "self-help" program contributes significantly to the Army's efforts to modernize the Reserve Component equipment fleet, provides valuable training for Guard maintenance technicians, relieves Army depot maintenance facilities of a sizable work load, and affords an appreciable savings in time and dollars.

Finally, a survey of Prepositioned Materiel Configured to Unit Sets (POMCUS) revealed that while the equipment was at an acceptable level of serviceability improvement was needed in the management of POMCUS assets. Periodic reviews of the European-based POMCUS program have been started to assure that the program is on the right track.

Aviation Logistics

The U.S. Army Aviation Systems Command hosted seventy-three representatives of the Department of the Army staff and major Army commands at the first World-Wide Aviation Logistics Conference in June 1973. A wide range of aviation logistics problems were discussed at the conference (which has replaced the Aviation Closed Loop Support Conference), and a number of actions were taken that could reduce aviation logistics costs by as much as $6.5 million. An expanded conference to include commands that did not participate this year—the Army Air Defense Command, the Readiness Command, the Strategic Communications Command, the Health Services Command, the Army Security Agency, and the Office of the Chief of Engineers—is scheduled for the spring of 1974.

A new concept for the selection of Army aircraft for depot overhaul was initiated during the past year. It is based upon an aircraft's condition and serial number rather than accumulated flying hours or the amount of elapsed time since the last overhaul. Under the new concept, an aircraft condition evaluation team develops aircraft condition profiles based upon an analysis of designated airframe parts, the over-all condition, and the status of major modification work orders. The condition profile determines the order for scheduling aircraft for depot maintenance. A related program, the fleet management system, provides for the collection, recording, and analysis of an aircraft's condition by serial number based upon data obtained through various reports and the Army Maintenance Management System (TAMMS). The full use of the fleet management system should reduce the number of annual inspections needed under the condition maintenance concept.

Project EXTEND, an interim measure taken to lessen the impact on depot maintenance facilities of large numbers of aircraft returning from

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Vietnam, was terminated on schedule at the end of the fiscal year. This highly successful program furnished retrograde aircraft to users (357 first-line aircraft in fiscal year 1972 and 304 in fiscal year 1973) in a safe, reliable, and maintainable condition at far less cost and in less time than would have been possible if a complete depot overhaul had been performed.

Each company-size aviation unit has been authorized some direct support maintenance. Since experience in Vietnam, where only 20 to 25 percent of general support maintenance was handled in that country, showed that this type of maintenance could not be performed adequately in the field, a study was undertaken by the U.S. Army Logistics Doctrine, Systems and Readiness Agency to evaluate the requirement for separate direct support and general support maintenance units.

The Floating Army Maintenance Facility (FAMF) had continued to provide valuable aviation maintenance service at the depot level in Vietnam prior to its departure for Corpus Christi, Texas, on 31 October 1972. In addition to its primary contingency mission, for which it is held in a sixty-day readiness status, the FAMF provides a mobilization training base to maintain depot-level military skills in the force structure. The FAMF also began depot maintenance operations in February, and late in the fiscal year it was assigned to assist in a high-priority project for the Defense Nuclear Agency.

Substantial progress was made during the past year in reducing the backlog of aircraft modification work orders. The backlog, which totaled 2,900,000 man-hours at the beginning of fiscal year 1972, was reduced to 1,930,000 man-hours by the end of that year and to 1,130,000 man-hours by the end of fiscal year 1973. Much of the success was due to the employment of field contract assistance teams on a worldwide basis and the scheduling of required modification installations during depot repair and overhaul operations.

In other aviation logistics matters, action was taken to alleviate aircraft refueling and rearming deficiencies in forward areas; new Army aircraft operational readiness standards were approved; and preparations were made to field test a new helicopter scheduled maintenance inspection concept designed to provide aviation units with increased efficiency, aircraft readiness, mission reliability, and maintenance cost savings. LOGLIFT 11, second in a series of three exercises designed to demonstrate the ability of heavy lift helicopters in moving large tonnages of materiel in support of the field army—thereby reducing the number of people, facilities, terminals, and construction that would be required—was combined with LOGLIFT III and rescheduled for the third quarter of fiscal year 1974. The combined exercise will be run concurrently with the air cavalry brigade test.

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Supply and Depot Operations and Management

Fiscal year 1973 Army Stock Fund obligations amounted to $2.7 billion to support $2.8 billion in sales. The sales figure remained about the same as for fiscal year 1972, but obligations were up by 8 percent, the first year-to-year rise since materiel orders reached the Vietnam War peak in fiscal year 1967. Increased obligations reflect the depletion of stocks of many items generated since the Vietnam buildup, a situation that required new procurement to meet current and projected customer demands. Despite a general decline in military strength, rising materiel costs indicated that sales were moving to a level higher than that for the pre-Vietnam period.

Obligational authority for secondary items financed by the Procurement of Equipment and Munitions, Army (PEMA), appropriation was $126 million. Increased procurement authority was required to support new equipment deployments and to satisfy a high order rate for reimbursable items.

During the period of this report, the need for special management programs established at Department of the Army level to allocate items that were in critical short supply during the Vietnam buildup, and which later proved effective in using available materiel to attain the most in worldwide readiness goals, diminished. Accordingly, the Department of the Army Allocations Committee—Ammunition (DADAA) discontinued operations, and the responsibility for management control of the few ammunition items that remained in short supply was passed to the Army Materiel Command. The Department of the Army Distribution Allocation Committee (DADAC) continued to function throughout the year, but plans call for its elimination as soon as possible. Committee actions to reduce the flow of DADAC-controlled critical materiel to U.S. Army, Pacific, subcommands met with marked success during the last half of the fiscal year, and the number of these items was reduced from 192 to 94 by year's end.

Final action had been taken by the end of fiscal year 1973 on forty-nine of the sixty-three recommendations made by the Asset Control Task Force to improve control, reporting, and accounting procedures. These included two important actions. The first was the development of a continuing balance process based primarily upon Army Materiel Command and major command transaction records to keep track of the worldwide distribution and the number on hand of some 7,000 major items, including tanks, vehicles, and radios. The new concept was undergoing testing at year's end. The second action was the setting up of a new supply loss reporting system that provides for a reduction in the number of codes required for categorizing losses and loss recoveries, expansion of the num-

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ber of reportable items, and flexibility in terms of the future expansion of item coverage.

A number of actions were taken during the year to further the objective of the Inventory Control Effectiveness Program to bring the procedures and practices up to established standards. These took in revision of reporting criteria to provide for inclusion of small arms in the Selective Item Management System (SIMS) ; increasing and/or establishing goals for inventory accuracy, location audit accuracy, small arms inventory accuracy; and on-time posting and storage of receipts. In a related development, the Direct Support System was extended throughout the Pacific and was being tested in the United States. This system reduces operating stocks at retail divisions which arrange for direct shipment of supplies from wholesaler to consumer.

Action taken under the Care of Supplies in Storage (COSIS) Program included the publication of new guidance to improve the program's effectiveness and a reduction in the number of line items requiring shelf-life management from 15,960 to 1,521. Severe funding constraints imposed upon supply depot operations for the year have, however, limited the amount of resources available to put the program into effect.

The continuing effort to reduce and standardize the number of stock items required to support the Army progressed during the year. The number of sizes, types, and grades of items listed on the Army Master Data File has been reduced from 1,388,000 at the beginning of fiscal year 1971 to 630,094 active items by the end of the current fiscal year. An additional 332,133 items were on hand in an inactive status pending disposition. The Mobilization Reserve Stockage List (MORSL) was reduced by 4 percent during the year. The 2,585 items currently listed represent a 26 percent reduction over the past three years in an effort to achieve a more credible and defensible MORSL.

The conversion of Federal Catalog System publications from 16-mm. microfilm and printed manuals to the standard Department of Defense microfilm system—which uses microfiche at a reduction rate of 48 to 1 and compatible reader and reader/printer equipment having a 48-power magnification—registered a number of gains during the past year. Conversions were completed for the Management Data List, Supplementary Interchangeable and Substitute Item List, Army Tailored Master Cross Reference List, and the Army Master Data File Reader Microfilm System. Also, over 5,000 microfiche readers were distributed to Army customers for visual data retrieval.

Replacement of the current eleven-digit federal stock number by a thirteen-digit National/NATO stock number and the implementation of the Defense Integrated Data System was again deferred. Estimated completion date for both actions is 30 September 1974.

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Substantial gains were also registered in the Integrated Materiel Management program. Continued implementation of the item management coding process resulted in the review and processing of over 92,000 items during the year, of which 51 percent were retained under Army management, 30 percent were transferred to the Defense Supply Agency for integrated management, and 10 percent were dropped. While the coding effort was under way, the Defense Supply Agency and the services developed a formula for processing Program Change Requests (PCR) to reflect the reallocation of management resources as items were transferred. One interim PCR was processed during the year, resulting in the transfer of twenty-three personnel slots to the Defense Supply Agency. An additional PCR will be processed in the coming year to conclude this program. Also, machine implementation of the Weapons Integrated Materiel Management (WIMM) process began at the start of the fiscal year and was completed by year's end. More than 1.3 million items retained by the military services for management have received a computerized WIMM designation. The Army was made the integrated manager for approximately 66 percent of the WIMM items. In a related development, a jointly developed agreement between the General Services Administration and the military services outlining the terms under which the latter would furnish wholesale supply support to other federal agencies was signed and put into use.

The major development in the integrated management of bulk fuels was the disestablishment of the Army Petroleum Center and the decapitalization and transfer of the Army Petroleum Stock Fund to the Defense Supply Agency, both actions taking place on 1 May 1973. Accountability for bulk product and financial management of worldwide bulk fuel inventories are now accomplished by the Defense Supply Agency, while the Army has retained responsibility for operating bulk petroleum terminals under its control and determining its own requirements for bulk fuels.

The success of the Integrated Materiel Management program resulted in the elimination of item management duplication for all consumable items in the Department of Defense supply system. Wholesale interservice supply support agreements are no longer required for consumable items, for under the new one-item-one-manager system, a potential customer submits a supply support request directly to the integrated manager. Long-range effects of the integrated approach should include a reduction in materiel management requirements within the Department of Defense, an increase in supply responsiveness, and simplification of supply procedures.

Integrated management concepts had a decided effect on the Army's property disposal program. At the beginning of fiscal year 1973 a force

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of 1,538 military and civilian personnel were heavily committed to the orderly disposal of vast quantities of surplus property and materiel on hand throughout the world; by the end of the year virtually all of the functions and most of the personnel assigned to the program had been transferred to the Defense Supply Agency in order to achieve centralization of property disposal management functions. Functions retained by the Army under centralization were as follows: disposal of surplus property generated by the Corps of Engineers civil works program; responsibility for the Pacific Command Redistribution Agency; and, along with the other military services, reclamation and demilitarization of ammunition, explosives, other dangerous articles, and small arms weapons and parts. Reclamation and demilitarization activities will be funded by the Defense Supply Agency using monies received through the sale of surplus personal property.

The assumption of property disposal functions by the Defense Supply Agency and the issuance of a Secretary of Defense directive on 2 May 1972 instructing the transfer of the existing stockpile and future generations of scrap located in Vietnam to the Republic of Vietnam to further that nation's economic development caused a sharp drop in the Army's disposable property holdings. During the course of fiscal year 1973 the acquisition value of usable property decreased from $430 million to $47.1 million, and scrap inventories declined from 176 thousand tons to 71 thousand tons. Excess, surplus, and foreign excess personal property having an acquisition cost of $134.9 million was redistributed; another $62.4 million was donated to state agencies by the Department of Health, Education and Welfare under provisions of Public Law 152, 81st Congress, as amended; public airports received $2.2 million; schools of special interest to the armed forces received $0.9 million; and other authorized recipients received $0.1 million. Usable property with an acquisition cost of $304.4 million was sold, bringing in a return of $20.6 million, or 6.76 percent, of the initial acquisition cost. Some 210.6 thousand tons of scrap were sold for $16.4 million.

Two projects that dealt with property disposal operations and the redistribution of surplus materiel and equipment were completed and terminated during the year.

Project Scrub Clean, initiated on 1 July 1972, called for a complete reconciliation of unit property books with authorization documents and a 100 percent inventory of all unit equipment. The objectives of Scrub Clean were to identify and classify unrecorded property, repair items for which a valid requirement existed, redistribute such stock within commands, and provide disposition instructions for materials that exceeded command requirements. Under this program approximately $42.7 million in major item assets were recovered.

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Project Clean was established in November 1969 to identify and eliminate stocks in overseas commands that had become excess because of the phase-down of combat operations in Vietnam, the implementation of the Direct Support System, and the sharp reduction in the number of items on Theater Authorized Stockage Lists (these were cut from 1,063,000 to 201,930 items during 1 January 1970-30 June 1973). Approximately 490,000 short tons of materiel valued at $1.6 billion were returned to the United States Army Materiel Command, and 263,900 short tons of materiel valued at $.7 billion were shipped to property disposal under this program.

Transportation

Since the official retrograde cargo program was near completion during fiscal year 1972, the movement of oversea cargo and passengers was down considerably in fiscal year 1973. The Military Sealift Command moved approximately 7,422,000 measurement tons and the Military Airlift Command transported about 118,800 short tons, both about 27 percent less than fiscal year 1972 movement levels. Efforts to reduce air cargo movements under the Airlift Challenge Program by screening and challenging requisitions for air-eligible materiel succeeded in diverting 103,012 short tons from air to surface transport during the year, resulting in savings of $67.4 million.

Passenger movements, which totaled 471,800 for the year (429,800 by air and 42,000 by sea), continued to reflect the policy of using the most expeditious means to move personnel and save man-days of travel. New port call procedures were implemented in April 1973 whereby all personnel, regardless of grade, are called directly to the embarkation point in lieu of reporting to personnel centers for processing before departure. The new procedures should enhance both the efficiency of passenger movements and traveler convenience.

There were a number of significant developments during the year in the mechanization and automation of transportation statistics and reports. Over-ocean transportation forecasting procedures were automated as part of the Automated Forecasting of Transportation Movements (AFTRAM) program. AFTRAM permits major oversea commands, the Army Materiel Command, and other Department of Defense shipping agencies to submit short- and long-range movement requirements via the Automated Data Information Network (AUTODIN). Requirement forecasts are duly reported, analyzed, adjusted as required in accordance with the latest Department of the Army policy guidance, and then developed into worldwide movement programs for the Military Airlift Command, the Military Sealift Command, and the Military Traffic Management and Terminal Service.

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Commodity unit cost statistics stored in the AFTRAM data bank are used in developing input for the Operation and Maintenance, Army, second destination transportation budget. During the past year preparation of this budget became fully automated in accordance with the Mechanization of Selected Transportation Movement (MECHTRAM ) program, an automatic data processing system designed to mechanize the manual compilation of monthly statistical data relating to tonnage and passenger movements entering and leaving the continental United States. In another MECHTRAM development, the mechanization of dollar data provided, for the first time, timely worldwide over-ocean movement and unit cost expenditure information. Mechanization of work load data had been accomplished earlier.

The Army participated in a series of joint and unilateral test, evaluation, and developmental exercises and studies during fiscal year 1973 in a continuing effort to derive maximum benefits for the Army's logistics system from the evolving containerization program. In November 1972 a joint evaluation of currently available means to unload non-self-sustaining container ships anchored offshore was conducted. The technical data obtained proved helpful in developing and refining applicable operational procedures. The Army in the Field Container Systems Study (AFCSS), which is still in progress, is concerned with the design of a transportation supply system that will effectively support Army forces in overseas areas. The study will develop operational concepts and procedures required by an oversea theater container distribution system and recommend the types of equipment and units needed to make the system functional.

The transition from palletized and break-bulk cargo operations to a container system poses a number of problems, including numerous requests for new equipment from the military services to accommodate the new system, and hazards involved in transporting ammunition, which is shipped under stringent regulations. The first problem is being closely monitored under the Department of Defense chartered Surface Container Supported Distribution System, whose project manager is responsible for co-ordinating equipment requirements submitted by the military services to insure that duplication is avoided. The second is of special concern to those agencies participating in the Containerized Ammunition Distribution Systems (CADS) program. Tests employing Army-owned containers with integral restraint systems have demonstrated the benefits and economies that can be derived through using properly equipped containers to transport ammunition.

In the area of water transportation, the Army's inventory of amphibians, landing craft, and coastal, harbor, and inland waterway craft declined from approximately 1,800 at the beginning of fiscal year 1973 to 1,386 at year's end. The loss in inventory was due to the transfer

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of approximately 300 watercraft to the Republic of Vietnam and the disposal of obsolete and unserviceable equipment.

The upgrading of watercraft communications and electronics, initiated during the year, is scheduled to continue through fiscal year 1975, at which time all operational watercraft will be equipped with modern communications and electronics equipment.

The Trans-Hydro Craft (1975-1985) Study was completed in April 1973 and forwarded for field co-ordination. The study recommended that existing Army lighterage be gradually replaced by a modernized landing craft, utility (LCU), a 25 to 30-ton air-cushion vehicle (ACV), a 300-ton displacement hull beach lighter, and a 60-ton fixed hydrofoil amphibian. The study further recommended that the Army's aging harbor-craft fleet, which has proliferated from its World War II origins into over seventy designs, each with numerous modifications, be replaced by eight craft capable of performing all identified harbor-craft missions.

In other transportation actions, the railway ambulance train equipment formerly assigned to the Surgeon General was declared excess, and the major portion of it was transferred to the National Rail Passenger Corporation where it will be converted for use in rail passenger service. A project was begun under the Military Standard Transportation and Movement Procedures (MILSTAMP) program to develop automated standard port operating procedures. Also, Department of the Army responsibilities pertaining to special assignment airlift and short-range forecasting of air and surface cargo were transferred to the Army Materiel Command in May 1973.

Facilities and Construction

The fiscal year 1973 Military Construction Appropriations Act, Public Law 92-547 of 25 October 1972, allocated $413,955,000 in new obligational authority for military construction. In addition, reprograming of $159 million appropriated in prior years for Safeguard System construction, $10 million in NATO recoupments, and funding approval within available resources for three projects in Germany costing $3,674,000 brought the total available for construction in fiscal year 1973 to $586,629,000.

The fiscal year 1973 military construction execution program authorized new starts totaling $1,036.4 million, but, as in fiscal year 1972, delays in congressional action on authorization and appropriation bills limited construction starts during the first half of the year to carry over projects authorized and funded in prior years. Full implementation of the program was also hindered by the escalation of building costs, which required the redesigning of a number of projects in order to reduce their size and cost. As a result, only about $472 million in new construction contracts were awarded during the year. These included sixty-six proj-

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ects to improve service attractiveness, programed at $195.4 million; the new Walter Reed Army Hospital project, for which $122.96 million has been approved; major hospital additions at Fort Benning, Georgia, and Fort Eustis, Virginia, costing in excess of $113.4 million; and pollution abatement starts, which totaled about $30 million.

Cost figures for long-range military construction program requirements, excluding family housing, the Safeguard System, and North Atlantic Treaty Organization infrastructure, are set at $7.1 billion, or $1 billion less than the cost of known requirements noted in last year's report. The reduction reflects the elimination of a number of backlog replacement and modernization projects. The cost of carrying out the current backlog, which includes replacement of deteriorated or inadequate existing facilities and construction to modernize substandard permanent facilities, is over $4 billion.

In addition to the military construction program, the Army, through its Corps of Engineers, contracted for approximately $995 million in construction support to other government agencies and foreign governments during fiscal year 1973. The largest such construction effort was for the U.S. Postal Service, the cost of which exceeded $700 million. Other recipients of Army engineer construction support included the U.S. Air Force, the U.S. Navy, the National Aeronautics and Space Administration, the Department of Health, Education, and Welfare, and the Trust Territory of the Pacific Islands.

Expenditures for real property maintenance activities at Army installations came to about $1.3 billion in fiscal year 1973. Building spaces decreased by some 8 million square feet as certain facilities were discontinued, and grounds decreased by 8,100 acres because of the declaration of Army-held lands as excess. Unfinanced real property maintenance and repair at the close of the year was approximately $431 million, an increase of 14 percent above the amount for fiscal year 1972. Detailed functional system requirements for the first increment of the Integrated Facilities System (IFS), which will provide data relating to real property maintenance activities, assets accounting, and facility engineer work management to all command echelons on a rapid basis, were updated and approved. Also, preparations were begun for the prototype operation of this phase of the system at Fort Lee, Virginia, in March 1974. Initial implementation of the system at other posts within the continental United States is scheduled at the rate of four installations monthly, beginning in August 1974.

A number of changes in the status of Army installations took place during the year. Hunter Army Airfield, Georgia, was inactivated and placed in standby status; Sandia Base, New Mexico, was transferred to the Department of the Air Force; and Fart Wayne, Michigan, Fort

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Hayes, Ohio, the Army Pictorial Center, New York, and Henry Barracks, Puerto Rico, were disposed of and discontinued. Announcement was made that the Charleston Army Depot, South Carolina, Valley Forge General Hospital, Pennsylvania, North Fort Wainwright, Alaska, and Fort Wolters, Texas, would be placed in an inactive status, and those portions of the installations determined to be excess to Department of Defense requirements would be reported to the General Services Administration for disposal. In addition, the Atlanta Army Depot will lose its primary mission and be redesignated as a subinstallation of Fort McPherson, Georgia.

The closure or transfer of installations and facilities are closely related to surveys on the use of Army-controlled real estate that are being accomplished in compliance with Executive Order 11508. Issued on 10 February 1970, the order provides for the identification and disposition of unneeded federal property. By the close of fiscal year 1973 over 260 installations had been surveyed. During the past year the Army, acting in accordance with legislation enacted by Congress in 1970, initiated transfers of certain excess holdings to state and local governments for park and recreational uses, totaling 1,258 acres valued at $2,015,000. Since 1971, seventy-four Army properties comprising 11,992 acres and valued at $36,753,470 have been declared excess and conveyed to state and local governments under what has become known as The President's Legacy of the Park Program.

In base development planning, joint Staff/Services Construction Board for Contingency Operations (JSSCBCO ) developed new planning criteria for the construction of utilities, maintenance, and petroleum-oil-lubricant facilities in support of joint contingencies. At the Department of the Army level an omnibus bill of materiel for contingency operations has been developed into an operational project and is being processed for staffing. In a related action, a new concept to increase the current Class IV accompanying and resupply planning factors has been recommended for inclusion in Field Manual 101-10-1. The concept is based upon phased, decreasing, multiplying factors to allow for an initial surge of construction materials during the early stages of a contingency operation. Finally, plans were completed for the redistribution of mobile cargo piers from Southeast Asia to meet worldwide contingency requirements.

Support of Operations in Europe

The Army's military construction appropriation continued to fund the United States' share of the NATO Common Infrastructure Program. Congress authorized $58 million and appropriated $48 million for the program in fiscal year 1973. At the end of fiscal year 1972, the unobligated balance for NATO infrastructure was $14.2 million. Fiscal year

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1973 recoupments of $24 million plus the $48 million appropriation, less obligations, resulted in an unobligated balance of $1.7 million at the end of fiscal year 1973, excluding $20.6 million proposed for reprograming which is awaiting congressional approval.

The Office of the Deputy Chief of Staff for Logistics completed a staff study in November 1972 to determine the most effective method for increasing the amount of logistic support given U.S. forces in Europe by our NATO allies. Follow-on studies to identify specific logistical support functions that might be assumed by other NATO countries are under way. Also, multilateral and bilateral negotiations on burden sharing and offset are being conducted in an effort to reach agreements that will reduce the costs borne by the United States in maintaining military forces in Europe.

Efforts to provide a wartime line of communications through the United Kingdom and the BENELUX (Belgium, the Netherlands, and Luxembourg) countries for U.S. forces in Europe continued throughout fiscal year 1973. Support for the project was reaffirmed by the joint Chiefs of Staff and the Office of the Secretary of Defense, but the Appropriations Committees of both the U.S. Senate and the U.S. House of Representatives effectively blocked it. At year's end, the Army, in response to a request by the Office of the Secretary of Defense, was reanalyzing the need for a new wartime line of communications within the context of the latest defense policy and force planning guidance.

Support of Operations in the Far East

Logistical support operations in the Far East during fiscal year 1973 involved three major tasks: completion of the redeployment of men and materiel from Vietnam, continued assistance to the Army of the Republic of Vietnam, and support of U.S. forces in other areas of the Far East.

The redeployment of U.S. forces from Vietnam, designated Operation Keystone, was begun in July 1969. By March 1973 fifteen separate redeployment increments had been completed as follows:

KEYSTONE REDEPLOYMENTS

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Operation Keystone generated $200 million in major equipment items released by departing units during fiscal year 1973 and $1.4 billion in assets through the entire redeployment period. Equipment turn-ins were used locally to satisfy a number of requirements in Vietnam, including the modernization of the Republic of Vietnam Air Force, for which over $437 million in assets was provided.

The retrograde of supplies and equipment from Vietnam continued into fiscal year 1973, although the formal program had terminated on 30 June 1972, by which time the great bulk of materiel had been removed. More than 67,000 short tons were shipped out of Vietnam during the first half of the year. At the time of the signing of the cease-fire agreement in late January 1973, slightly over 150,000 measurement tons of surface cargo and 6,000 short tons of air-eligible cargo remained to be withdrawn. This, as well as 95,738 measurement tons of equipment belonging to Republic of Korea Forces in Vietnam, was transported out by 28 March 1973. The final shipment marked the end of a two-year program instituted to insure that U.S. disengagement did not result in a large quantity of supplies and equipment being left in Vietnam. During the retrograde program, over a million-and-a-half tons of equipment were withdrawn.

During fiscal year 1973 approximately 41 percent of all Army-sponsored cargo movements and 10 percent of all passenger movements were either to or from Southeast Asia. The Military Sealift Command moved about 1,835,500 measurement tons, and the Military Airlift Command moved about 40,700 tons into the area. Major air passenger movements included the transportation of 10,700 personnel from the continental United States to support operations in Southeast Asia, 1,880 within the theater, and 34,500 Republic of Korea military personnel back to Korea following the cease-fire. An additional 39,900 Koreans were moved into the area by surface transportation before and after the cease-fire.

Approximately 6,500,000 short tons of ammunition were issued for combat forces engaged in Southeast Asia during fiscal years 1964 through 1972, of which 5,000,000 short tons (77 percent) were expended by U.S. forces and the balance by Republic of Vietnam and other allied forces. Ammunition consumption rates remained high during the first quarter of fiscal year 1973—the average monthly level was 99,000 tons, but decreased to average monthly issues of 70,000 tons during the second and third quarters. In order to provide adequate ammunition supply to allied forces, particularly those in Vietnam, a sizable pipeline from the continental United States was maintained. This was supplemented by drawing from the offshore reserve maintained in Okinawa and Japan and from U.S.-owned ammunition stocks in Korea. A sharp decrease in ammunition expenditures during the last quarter of the fiscal year—down

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to less than 12,000 tons per month—required the diversion of many incoming shipments to Okinawa, Japan, and Korea in order to preclude a buildup of ammunition stocks in Vietnam that would be in excess of the level prescribed in the cease-fire agreement.

Attention in the coming fiscal year will be focused upon supplying a maximum amount of ammunition to the offshore reserve in Japan and Okinawa, to increase the Republic of Korea war reserve level to maximum fill, and to meet Southeast Asia requirements without exceeding agreed-upon cease-fire levels.

The approved Army Military Construction program for the Republic of Vietnam through fiscal year 1973 totaled $952.6 million. As of 30 April 1973, work-in-place amounted to $930.9 million, of which $10.3 million was completed during fiscal year 1973. Construction was funded by prior appropriations and was limited to nation-building efforts, such as the line of communications and military assistance service funded construction programs. During fiscal year 1973, 98 kilometers of new road construction were completed, bringing the total of completed construction in the revised 3,967 kilometer line of communications program to 3,113 kilometers. Another 292 kilometers of roads were under construction at year's end. New construction authorized during the year for the military assistance service funded program totaled $4.8 million. Through 30 June 1973, 29,380 dependent shelters had been completed. An additional 9,190 shelters were under construction. United States Army participation in this program is limited to furnishing construction materials. Actual construction is carried out by the Vietnamese.

Management of the military construction program was transferred to the Defense Attache Office of the American Embassy in Saigon in March 1973 as a result of the disestablishment of the United States Military Assistance Command, Vietnam. Construction management for operations in Thailand continued to be the responsibility of the United States Military Assistance Command, Thailand. Construction in Thailand was limited to modest improvements in troop housing and logistical and communications facilities. Funds made available for this purpose through realignments of appropriated amounts within the approved Southeast Asia military construction program totaled $2,579,200.

Supply support by the U.S. Army to the Army of the Republic of Vietnam was directed toward achieving combat self-sufficiency through large-scale materiel deliveries and improved supply posture. Requirements for direct and general support maintenance and processing of equipment for transfer were successfully met, and efforts to improve the ability of the Vietnamese Army to provide depot maintenance support of its own were maintained on schedule. This mission was accomplished in a climate of uncertainty and rapidly diminishing U.S. presence in terms

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of both ground and advisory forces. U.S. Army supply support was further complicated by increased combat activity in late fiscal year 1972 and early fiscal year 1973, which required the Army to replace abnormal combat losses and to fill increased materiel needs simultaneously for an enlarged Vietnamese force structure.

In addition to meeting required levels of equipment and supplies, intensive management techniques for major and secondary items were refined to assist the Vietnamese Army in accounting for materiel and to attain self-sufficiency in that area as well. The major effort in this regard has been the development and implementation of the Republic of Vietnam Armed Forces Automated Materiel Management System (RAMMS). The basic objective of RAMMS is to improve the Vietnamese armed forces logistics system through effective processing of logistical data. In June 1972 RAMMS was expanded to support the consolidation of Vietnamese technical service base depots into a general depot complex. Early in fiscal year 1973 two subsystems dealing with management of major items and depot maintenance were incorporated into the basic system. A major expansion of the RAMMS contract was approved in December 1972 to provide for continued support of logistical management in a cease-fire environment. The present effort in the development and use of RAMMS concentrates on the critical logistical functions of finances, supply, and maintenance management. The degree to which the development of RAMMS can be completed and the effectiveness of its implementation will largely dictate the success of resource management in the absence of U.S. logistical support personnel.

The U.S. Army's depot maintenance program in the Pacific was funded at $55.6 million for fiscal year 1973. The funding level continued to be substantially higher than that for prior years because of the accrual of equipment backlogs and an increased capability to accomplish depot-level maintenance within the theater. This increased capability had shortened the time equipment is retained in the overhaul cycle, lessened transportation costs, and reduced requirements for replacement equipment. These factors and favorable labor rates make depot maintenance in the Pacific more responsive and cost effective than returning all equipment to the continental United States for depot maintenance.

Since the Vietnam cease-fire agreement in January 1973, depot maintenance facilities in the Pacific have been actively overhauling the residual unserviceable equipment generated by U.S. troop withdrawals. Following overhaul, this equipment will be redistributed worldwide to fill active Army shortages, reconstitute United States Army, Pacific, reserve stocks, and satisfy the requirements of international logistics customers. The overhaul of remaining equipment should be completed by

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the end of fiscal year 1974, at which time it is envisioned that depot maintenance in the Pacific will be terminated.

The Army continued to act as the executive agent of the Project for Utilization and Redistribution of Excess Materiel in the Pacific (PURM). Under this project all military services in the Pacific report

their excess materiel holdings and replenishment needs to the Pacific Utilization and Redistribution Agency for geographical redistribution. Since 1968, excess materiel with a value of over $2.8 billion has been reported, of which $407.4 million has been redistributed within the theater and $900.3 million designated for return to continental United States depots. As the current year closed, $35.8 million worth of materiel was being screened for redistribution.

Military Aid (International Logistics)

Since 1950 the Army Military Assistance Program has provided $17.7 billion in materiel and services on a grant basis to meet the urgent priority needs of allied and friendly countries. In recent years the number of grant Military Assistance programs has declined as the economic capabilities of recipient countries have improved, thus permitting them to assume an increasing share of their defense requirements. Grant aid for Greece ceased on 1 January 1973, and grant aid materiel programs were terminated for the Republic of China and Liberia on 30 June 1973.

With few exceptions, all grant aid military materiel provided to recipient countries is purchased in the United States. No funds or credits are provided under the Military Assistance Program for local procurement by recipient foreign governments or their representatives.

Army assets which are excess to approved force acquisition objectives are provided to grant aid recipients at no cost except for packing, crating, handling, and transportation charges and for rehabilitation and repair when required. These assets supplement the limited funds currently available to the Military Assistance Program. Excess materiel having an acquisition value of $202 million was delivered to recipient Military Aid Program countries during the fiscal year, well under the $555 million limit established by Congress.

The 92d Congress adjourned before enacting a Foreign Assistance Act for fiscal year 1973, but it did pass a resolution that authorized the continuance of grant aid programs through 30 June 1973 at a level of $553.1 million. Major restrictions included in the continuing resolutions were as follows: military assistance other than training in the United States was limited to forty countries; the supply of "sophisticated weapons systems" to underdeveloped countries would be prohibited with certain specified exceptions; assistance to Latin American countries was

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limited to $100 million, excluding training; and assistance, including training, to African countries was limited to $40 million.

The Army materiel portion of the Military Assistance Grant Aid Program for fiscal year 1973, including excess defense articles, amounted to $661 million for twenty-one countries. In addition, undelivered balances of $743 million were carried forward from prior years, making a total authorization of $1,404 million. Deliveries during the year totaled $663 million, leaving an undelivered balance of $741 million at the end of the fiscal year.

Military assistance for Vietnam and Laos was again excluded from the fiscal year Military Assistance Program appropriation. Assistance to these countries was funded under regular military department appropriations. Support for Thailand, however, reverted to the Military Assistance Program on 1 July 1972.

During the reporting period the Republic of Korea completed the third year of an austere $1.5 billion five-year modernization program to bolster her forces and offset a reduction of U.S. forces in Korea. The Army portion of the Korea Military Assistance Program was $47.8 million in new funds, a reduction of $107 million from the approved program of $154.8 million.

In other Military Aid Program developments, materiel supplied to Cambodia continued at an accelerated rate to meet urgent requirements; Jordan received tanks, armored personnel carriers, mortars, mortar carriers, rifles, and trucks; and delivery of materiel to Spain under the Spanish Base Rights Agreement continued. Also, 240 medium tanks requiring servicing and overhauls were supplied to Turkey in an "as-is" condition. An approved supply program for Laos totaling approximately $120 million in Army materiel was authorized from the regular defense budget for fiscal year 1973. Items supplied included crew-served weapons, trucks, ammunition, and communications equipment. Support for eight Latin American countries continued during the fiscal year at an estimated value of $3 million. Items supplied included helicopters, trucks, trailers, communication equipment, and repair parts.

During fiscal year 1973, the Army sold materiel and services valued at $1,847 million to fifty-nine countries and five international organizations under the foreign military sales program. Sales activities were conducted in accordance with the policy that materiel readily available through commercial sources would be sold directly by American industry to the prospective buyer.

Under the coproduction program, foreign nations may enter into bilateral agreements with the United States to assemble or manufacture major end items or weapons systems of U.S. origin. The Army participated in eleven such programs during fiscal year 1973 valued at $610.8

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million, which generated expenditures for goods and services in the United States amounting to $301.3 million. Participating in the program were the Republic of China, Italy, Japan, and the North Atlantic Treaty Organization. Major items coproduced included the M113 armored personnel carrier family of vehicles, the M109 self-propelled howitzer, helicopters, wheeled vehicles, the Hawk and the Nike-Hercules missile systems, a light antitank weapon, and small arms.

In the field of co-operative logistics, the Army maintained supply support arrangements with sixteen allied and friendly nations and with the North Atlantic Treaty Organization. These programs provide participating countries and multinational organizations with continuous follow-on support for major end items and weapon systems of U.S. origin on a reimbursable basis. The Army provided support for conventional weapons and vehicles as well as for the Sergeant, Pershing, and Hawk missile systems totaling $173 million during the year.

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