Chapter IX: Logistics - DAHSUM FY 1974

Logistics plays a vital role in maintaining a professional Army in wartime and in peacetime. Compared to the Army of ten years ago, today's Army is more complex, and the requirements to support it are necessarily more sophisticated and involved. In logistics the Army's objective is to provide better support at relatively low cost, and to do this it must take full advantage of modern technology.

The extensive resupply of equipment to Israel in the fall of 1973 is an example of the responsiveness of the logistical system and of the capabilities for emergency air and sea lift. Logistical support is seldom dramatic and is often taken for granted. Nevertheless, innovations of value and interest are coming about in logistics, including a revised direct support system and a new method of selecting aircraft for depot maintenance, both of which can save many dollars and man-hours.

This chapter describes fiscal year 1974 highlights of these and other operations related to maintenance, supply, transportation, aviation logistics, military assistance, logistics systems development, and logistics management information systems.

The Logistics Studies Steering Group (LSSG), formerly the Logistics System Steering Group, met on 16 and 17 April 1974 and reviewed 102 proposed logistic studies to be started or continued in fiscal year 1975. The group identified possible duplication, selected studies to be included in the Army's Logistics System Master Plan (LOGMAP), and screened all proposals before review by the Army Study Review Council. The work of the group helps to simplify the study review process and to correlate the development of the Army study program and the budget cycle.

The sixth meeting of the Army Logistics Policy Council (ALPO), also held in April 1974, covered items of major importance affecting the operation of the logistics system. Because of recent reorganizations at Headquarters, Department of the Army, and within major commands, the organization of the council has been changed considerably and the ALPO Charter is being revised.

time as a DA Pamphlet series. Four pamphlets were prepared. Two of these were later revamped to reflect improvements in techniques for displaying data and revisions in LOGMAP objectives that were developed during a comprehensive Army-wide review of LOGMAP.

The Army continued working with the Navy and Air Force to standardize policy and procedures for the logistic support of defense communications equipment. A working group composed of representatives of the Army Materiel Command, the Naval Electronics Command, and the Air Force Logistics Command developed a proposed joint regulatory document that guides logistic support planning by any service designated as the executive agent or a participating service for the acquisition and development of shared communication systems. This document should lead to less duplication and to better planning and execution of logistics support.

Cooperation in logistics took place on several other fronts. During the year the Army submitted to the Office of the Secretary of Defense a proposed revision to the Department of Defense Integrated Logistic Support Planning Guide. The objectives of this revision are to increase emphasis on supportability in the design of new or improved equipment and to make it easier to assess matters of logistic support during the materiel acquisition process. The Army also participated in a study sponsored by the Office of the Secretary of Defense on ways to better manage the support costs of weapons systems. The objective of this study is to find ways to make better life cycle cost estimates for use in the weapons systems acquisition decision process. A joint regulation affecting the Interservice/Interdepartmental/Interagency Support Program was published. It requires cost analyses of savings, provides a system for resolving differences among the services, and revises the method of reporting at approximately 70 percent less cost. In cooperation with the other military services and the Joint Chiefs of Staff, the Army revised the joint logistics policy for pre D-day materiel distribution and established minimum acceptable levels of prepositioned war reserves to support the operations plans of the unified commands. Through more than 2,500 agreements, the Army during the past year provided more than $204 million in support to other services and agencies.

During the past year the Army Materiel Command's (AMC) Five-Year ADP Program made progress in two areas. Portions of the AMC Logistics Program Hardcore, Automated, were extended to the Army Missile Command and approval for extension to the

Army Troop Support Command was granted. The System Project for Electronic Equipment at Depots Extended (SPEEDEX) was expanded to all AMC depots and the follow-on systems were evaluated and found acceptable.

The Division Logistics System (DLOGS), which is now used by all Regular Army divisions except the 1st Cavalry and the 2d Armored Divisions, was refined over the past year. Installation of DLOGS was started in eighteen Reserve Component support brigades and completed in ten of them.

Simulation and Gaming Methods for Analysis of Logistics, a computerized system of models, was applied twice last year to the war plans of U.S. Army, Europe (USAREUR). The results were useful in revising USAREUR war plans and in justifying a program change request to fund an updated concept for a wartime line of communications in Europe.

Within the Army's Logistics Management Information Systems (LOGMIS), a number of advances were made in the subsystems that comprise the Integrated Transportation Management Information System. The Standard Port System module of the Terminal Operations and Movements Management System was installed at Rotterdam and Bremerhaven and will be extended to several ports in the Far East during the coming year. The Standard Port System furnishes users with machine-produced documentation for receipt planning, inventory accounting, movement, and control of cargo. Development of a general functional system requirement for the Administrative Use Vehicle Management Information System (AUVMIS) was completed, and work was begun on the supporting economic analysis. The AUVMIS will provide a data base for the development of budgets and plans for operating and maintaining the vehicle fleet.

As part of the Weapons Management Improvement Program, specifications were completed for instituting throughout the Department of Defense a standard system for controlling small arms. Based on the Army's Small Arms Information Registry System, which was suspended in December 1973 because of a lack of funds, the new system will give investigative agencies the identity of the last accountable activity having a specific, serially numbered small arm within seventy-two hours. The Army will maintain the DOD Central Registry on small arms on an IBM 360/65 computer located at the U.S. Army Armament Command, Rock Island, Illinois.

In other developments, functional requirements for a Selected Item Management System-Expanded were established, and work

on a supporting economic analysis for the Standard Army Maintenance System was begun. Also, four changes were incorporated into the operational units of the Standard Army Ammunition System within USAREUR and USARPAC. These changes considerably improved the system's capability to provide central management of command ammunition assets.

The end of American involvement in the Vietnam War made it no longer necessary to perform depot maintenance in Japan, Okinawa, and Korea. Depot maintenance at these locations ceased during fiscal year 1974, and the facilities reverted to general support maintenance.

Completed in March 1974 was the study noted in last year's report on the need for depot maintenance facilities in Europe to support the Army wholesale supply system. It concluded that labor savings once realized - in USAREUR no longer existed. The USAREUR depot maintenance program for fiscal year 1975 will therefore be reduced. More than $10 million, approximately 25 percent of the funding originally projected for the program, will be transferred to support USAREUR direct and general support maintenance activities. One of the six USAREUR activities performing depot maintenance was eliminated on 30 June 1974, and another is scheduled to close by 31 December 1974. When the cost would be less, items will be returned to CONUS for depot maintenance. Next year the residual depot maintenance work load in USAREUR will be reexamined to determine if all depot maintenance operations in USAREUR should be ended.

The Depot Maintenance Cost Accounting and Production Reporting System is operational at all Army Materiel Command depots in CONUS. Work continued on expanding the capability of the depot maintenance cost model that forecast costs under varying force levels and readiness objectives and on relating these costs to work load and capacity.

Begun in fiscal year 1973, the decentralization of aviation logistics within Headquarters, Department of the Army, continued, and aviation logistics spaces were reduced from twenty-four to six. On 20 May 1974, the Aviation Office, Directorate of Supply and Maintenance, Office of the Deputy Chief of Staff for Logistics, was

disestablished. Aviation maintenance and supply functions were retained within the Directorate of Supply and Maintenance, and a separate Aviation Logistics Office was established. Reporting directly to the Deputy Chief of Staff for Logistics, this office controls the entire aviation logistics program.

The second Worldwide Aviation Logistics Conference was held at Headquarters, U.S. Army Aviations Systems Command, from 13 to 17 May 1974. Attending were representatives from all Army commands and from Department of Defense activities that are authorized Army aircraft. Conferees made recommendations that could save as much as $1.7 million annually in aviation logistics costs and developed programs for managing the distribution of aircraft. They also agreed that conferences, to be hosted by the Army Materiel Command, should be held annually.

As recommended in a recent study, the U.S. Army Materiel Command and the U.S. Army Training and Doctrine Command began to combine direct support and general support maintenance units. This consolidation should decrease personnel and equipment requirements and improve maintenance service.

During fiscal year 1974 the Army changed its criteria for selecting Army aircraft for depot overhaul. Before, maintenance was scheduled on the basis of accumulated flying hours or the time elapsed since new or the last overhaul. Called on condition maintenance (OCM), the criterion is now the condition of the aircraft as determined through on-site inspections made by aircraft condition evaluation teams. Those aircraft in most need of repair are then scheduled for depot maintenance first.

On 20 May 1974 the U.S. Army Agency for Aviation Safety (USAAAVS) completed two years of research on aviation accidents and gained considerable understanding of the problem of pilot error. In the past the Army had relied on preconceived notions of what happened and why it happened, and its analyses were little more than a tabulation of accident frequency. The USAAAVS research indicated that pilot errors were caused by overloads on a pilot's ability resulting from out-of-tolerance conditions among eight basic aviation system elements. The application of factor analysis revealed that mistakes in nine basic flight skill areas were involved in 96 percent of all pilot error accidents. Corrective measures reduced the number of aircraft accidents, as indicated in the accompanying table. To reduce pilot error accidents further, USAAAVS is continuing its research in the nine basic flight skill areas.

Fiscal Year	Average Number of Aviators	Total Aircraft Accidents	Flight Hours	Accident Rate (per 100,000 flying hours)	Fatalities
1958	5,611	633	1,221,855	54.26	44
1962	7,099	418	1,425,170	29.33	69
1966	9,778	497	2,485,591	20.00	186
1970	23,856	1,056	6,273,246	16.83	538
1973	17,945	125	1,686,791	7.41	71
1974	16,470	116	1,638,083	7.08 ^a	24

^a Combined rate for active Army, Army National Guard, and Army Reserve. Active Army rate was 7.08. Rates for 1973 and prior years were active Army only.

The Floating Army Maintenance Facility (FAMF) resumed depot maintenance operations on aircraft engines and components at Corpus Christi, Texas, in October 1973, following a high-priority project for the Defense Nuclear Agency (DNA). Damage sustained to the FAMF while on the DNA project prevented the vessel from meeting the sixty-day readiness status required for its primary contingency mission. Because of the high cost for repairs, the Army Audit Agency has recommended that the requirement to retain the ship be reviewed. At the close of the fiscal year the future of the FAMF was still in doubt.

In other aviation logistics matters, the backlog of aircraft modification work orders continued to drop-down from 1.1 million man-hours to about .6 million, and plans were completed to field test next year a concept for the scheduled inspection of helicopters (Project Inspect). Also, the Loglift II and III and air cavalry combat brigade test exercises were canceled because of the uncertainty of fuel availability.

Army Stock Fund obligations during fiscal year 1974 amounted to $3.2 billion in support of $2.9 billion in sales. Obligations were $.5 billion above fiscal year 1973 levels. The higher rate reflected the replenishment of inventories depleted during the Vietnam conflict; longer procurement lead times due to delays in the delivery of supplies caused by materiel and energy shortages; rising materiel costs; the additional repair parts required for an enlarged depot rebuild program in the United States; and the use of the Army Stock Fund to purchase nonstandard, nonstocked items which had previously been carried under the Operation and Maintenance, Army (OMA), account. Sales remained steady and satisfied 91 percent of customer demand, as compared with 93 percent last year. They were, however, inhibited by longer production and shipping times, which increased the value of back orders by 34 percent.

The management of back orders was carried out effectively through the Back Order Validation (BOV) Program, a quarterly

validation and reconciliation of high-priority requisitions over thirty days old and other requisitions over seventy-five days old. During fiscal year 1974 over 80,000 requisitions valued at some $200 million were canceled under the program. This represented approximately 8 percent of the requisitions referred for validation.

From September 1973 to March 1974, the Army Audit Agency (AAA) surveyed selected depot and accounting activities in the United States and overseas, uncovered problems in virtually every area of the Care of Supplies in Storage (COSIS) program, and concluded that better management attention was needed. The AAA report noted that neither the Deputy Chief of Staff for Logistics nor the Army Materiel Command had sufficient staff personnel to oversee the program adequately. To help correct the deficiencies, a COSIS program manager was added to the Office, Deputy Chief of Staff for Logistics.

The current edition of the Mobilization Reserve Stockage List (MORSL) was published in August 1973 with added detail. The new MORSL includes items authorized for the Mediterranean and the Middle East and for each subcommand within U.S. Army, Pacific. In later editions, equipment for allied countries will be deleted, and there will be a separate listing of components of major systems such as radios and armament.

The obligational authority for secondary items under the five Army procurement appropriations was $183 million for fiscal year 1974, as compared to $125 million for the year before. Parts and assemblies returned by users were valued at $600 million, almost $200 million less than the 1973 figure. Current return levels reflect the amount that can be reasonably expected from normal wear and tear in peacetime.

In March 1974, the Department of Defense tasked the military departments to develop a joint plan for establishing by June 1977 integrated materiel management of all nonconsumable end items and depot repairable components. Approximately 547,000 items are involved, of which 47,000 are already dual managed. The plan should be ready for consideration early next year.

As directed last year, the Army transferred most of its property disposal operations to the Defense Supply Agency. It has, however, retained some disposal functions, among them: the demilitarization of condemned, obsolete, and surplus ammunition, small arms weapons, explosives, and other dangerous articles; the disposal of surplus personal property generated by the civil works program of the U.S. Army Corps of Engineers; the donation of combat materiel for public displays; the operation of the Pacific Utiliza-

tion and Redistribution Agency, which handles foreign excess personal property; the Exchange/Sale Program; the Precious Metals Recovery Program, and the Lumber and Timber Program, which involves harvesting and selling timber on Army installations.

Army property disposal operations in Vietnam were temporarily withheld from transfer to the Defense Supply Agency because of the high level of activity associated with phasing down military operations. They were later transferred on 27 January 1974. During the seven-month period of fiscal year 1974 when this activity was under Army control, proceeds from the sale of usable property amounted to $32.5 million, and the return on sales, based on original acquisition cost, was 11.2 percent.

The downward trend in oversea cargo shipments noted in last year's report continued throughout fiscal year 1974. The Military Sealift Command moved about 5,500,200 measurement tons and the Military Airlift Command carried approximately 58,000 short tons. Under the Airlift Challenge Program, which validates all Army-sponsored cargo shipments of 500 pounds or more designated for airlift within or from the United States, 25,560 shipments weighing 50,937 short tons were diverted from air to land or sea movement. These diversions resulted in a cost avoidance of $37,181,299. With Department of Defense concurrence, the Army sponsored a number of shipments for the Department of State, including twenty-five famine relief vehicles for Ethiopia, 370 tons of structural steel to Bangkok to repair the American Embassy building, and approximately 10,000 metric tons of bagged rice to Cambodia.

About 322,830 Army-sponsored passengers were transported during the year, 322,800 by air and approximately 30 by sea. On 18 February 1974 the Army instituted Port-Call Centralized Assignment Procedure (PORTCAP), a new method for issuing port calls to advanced individual training graduates that should reduce administrative requirements. Under PORTCAP, the U.S. Army Personnel Center will send oversea assignment instructions to both the student's school installation and the Military Traffic Management and Terminal Service (MTMTS). Upon receipt of instructions, MTMTS will reserve a tentative port call date for the student at least two weeks before graduation. The losing installation will acknowledge receiving the date, and, if there is any change in the soldier's status, will cancel the port call reservation.

Travel and transportation entitlements were extended to include members in pay grade E-4 who have over two years' service. Certain transportation entitlements were also made available to members in pay grade E-4 with less than two years' service. In addition, administrative restrictions placed on weight allowances for personal property shipments from Alaska, Hawaii, Puerto Rico, and U.S. territories and possessions were removed, and procedures were established to permit the shipment of certain privately owned vehicles without paying excess costs in advance of shipment.

Two major problems continue to hinder the Army's program to integrate containerization fully into its logistics systems: (1) the offshore discharge of non-self-sustaining containerships, which comprise the major part of the containership fleet, and (2) the lack of an adequate commercial container for shipping ammunition. Regarding the first problem, preliminary testing of existing nonrigid, lighter-than-air craft indicated that their use as cranes would reduce the problems associated with offshore unloading. Regarding the second, a number of parallel efforts were under way to develop restraint systems that will permit the safe and effective use of commercial containers for ammunition shipments. Also, the Army in the Field Container Systems Study, which was noted in last year's report, was completed and the final study report is being prepared.

During the last half of the fiscal year the Army and other Department of Defense components experienced a worldwide container shortage caused by significant increases in exports of commercial cargo, reduced sailing speeds to conserve fuel, and the withdrawal of some container ships during the energy crisis. The problem came to a peak in February when unbooked cargo on the east and west coasts reached 49,000 and 43,000 measurements tons, respectively.

Preparations for the movement of nuclear weapons from the forty-eight inactivated Nike-Hercules sites within the United States to Army depots were especially thorough because of public concern over the possibility of theft by- terrorists, a concern expressed in several journals and newspapers, and because of a General Accounting Office report that criticized Army procedures employed in transporting nuclear weapons. The Army Materiel Command prepared the movement plan, guided by a directive from the Vice Chief of Staff. The directive stated that nuclear weapons would be transported by military aircraft whenever possible and that for unavoidable surface movement road convoys would be supported by a surveillance helicopter, which would

check for unauthorized diversions or road obstructions. The convoy would be in constant communication with the surveillance craft and the appropriate Army movement monitor. Movement of the nuclear weapons began on 12 March 1974 and is scheduled for completion early in fiscal year 1975.

The inventory of watercraft continued to decline during fiscal year 1974 to about 1,200 vessels and amphibians, a reflection of the disposal of obsolete and unserviceable craft without new procurement. Meanwhile, the development of a new family of Army watercraft came a step closer to reality with the completion of field testing for the Trans-Hydro Craft study. The study, details of which were described in last year's summary, is now undergoing final review by the Army staff. Some standard craft are being programmed for upgrading and modernization, and the modernization program includes the installation of a new small craft radar.

The Army rail fleet has approximately 11,000 pieces of equipment with an estimated replacement value in excess of $200 million. The age of the equipment ranges from fifteen to thirty years. During the year the Army took several steps to modernize the rail fleet. Procurement of 750 20,000-gallon general purpose tank cars for the Military Traffic Management and Terminal Service interchange fleet was started. A review is under way to determine if the remainder of the interchange fleet's freight cars (box, flat, and tank) should be rebuilt or replaced. A five-year depot maintenance program for diesel electric locomotives is continuing. Meanwhile, the Army was left without mobilization and contingency stocks for rail freight operations overseas when the 40-ton, rolling stock fleet was declared excess.

In other transportation matters, the extension of Military Standard Transportation and Movement Procedures (MILSTAMP) overseas was approved for implementation early in fiscal year 1975, and plans to simplify the applicable Department of Defense regulation were made. Testing of the Direct Inland Transportation to Overseas (DITTO) concept, which would expand the use of scheduled commercial flights for military-sponsored passengers going overseas, was turned down by the Department of Defense.

As a prelude to the reorganization of the Army staff, the functions and responsibilities of the Deputy Chief of Staff for Logistics in the area of facilities, construction, and stationing were transferred to the Chief of Engineers on 14 January 1974. The former Director of Installations became the Assistant Chief of Engineers,

For fiscal year 1974 Congress approved a Military Construction, Army, budget of $679.3 million, as compared to the Army request for $895.7 million and the President's amended budget request for $732.2 million. The amount budgeted included $406 million for replacement and modernization of existing Army facilities; $6.5 million for projects identified with Army reorganizations, base closures, and activity realignments announced in 1973; and $15 million for minor construction projects. An additional $21.4 million in reprogrammed funds brought the total available for construction to $700.7 million, as contrasted to last year's $586.6 million.

During fiscal year 1974 construction was virtually completed on projects costing $92 million in the Army Materiel Command's Production Base Support program for modernizing and expanding ammunition production facilities. Meanwhile the Army awarded another $41.6 million in new construction contracts and grappled with the complexities of engineering design, complicated by expanding technology in the manufacture of ammunition. Because delays in preparing and in changing design criteria have plagued the program, the Corps of Engineers has provided additional management and engineering support.

During fiscal year 1974, several hospital construction projects, some related to meeting accreditation standards, were submitted to Congress for approval. These included a new hospital at Redstone Arsenal, Alabama; clinic additions to the hospitals at Fort Leavenworth and Fort Riley, Kansas; and electrical and mechanical improvements for hospitals at Carlisle Barracks, Pennsylvania; Fort Belvoir, Virginia; Fort Benning, Georgia; Fort Bliss, Texas; Fort Bragg, North Carolina; Fort Devens, Massachusetts; Fort Jackson, South Carolina; Fort Leonard Wood, Missouri. Alterations to the 97th General Hospital in Frankfurt, Germany, were also proposed. Meanwhile construction progressed on the new seven-story, 1.1million-square-foot, 1,280-bed Walter Reed Hospital. Now about 27 percent complete, this sophisticated facility should be finished in June 1976 at an estimated cost of $130 million.

The Army provided construction support to many organizations, among them the Air Force, the Navy, the Aeronautics and Space Administration, the Coast Guard, the Postal Service, various Department of Defense agencies, the Trust Territory of the Pacific Islands, national cemeteries, and several foreign governments. Contracts totaled $301 million, and the Air Force program alone exceeded $176 million.

Concentrating on a program to collocate recruiting facilities in support of the all-volunteer force, the Corps of Engineers, as executive agent, completed over 1,200 actions during 1974, some in cooperation with the General Services Administration. Of these, 403 were projects to modernize or renovate existing facilities. The balance consisted of leasing arrangements for 269 new offices and 541 expanded or relocated offices. At year's end, there were 5,415 collocated facilities in 2,495 locations. The urgency of previous years was tempered somewhat during 1974, and the program was aimed more toward standard budget cycles.

The Army announced a number of planned changes in the status of Army installations. Many of these were an outgrowth of Project Concise, started by the Chief of Staff in May 1973 to reduce the size and number of installations. Fort Hancock and Highlands Army Air Defense Site, New Jersey, Fort Lawton, Washington, Fort MacArthur, California, and Fort Tilden, New York, will be closed during fiscal year 1975. Fort Hancock and all of Fort Tilden, except the Army Reserve Center, will be transferred to the Department of the Interior under provisions of PL 92-592. Those portions of Fort MacArthur, Fort Lawton, and the Highlands Army Air Defense Site not needed by the Department of Defense will be reported to the General Services Administration for disposal. The closure of Military Ocean Terminal, Brooklyn, which was originally announced in fiscal year 1965, was reconfirmed.

Among the previously approved closures, the Army inactivated the Charleston Army Depot, South Carolina; Fort Wolters, Texas; and Valley Forge General Hospital, Pennsylvania. The mission of the Atlanta Army Depot was phased out, and the installation was redesignated Fort Gillem, a subinstallation of Fort McPherson, Georgia. Hunter Army Airfield, a subinstallation of Fort Stewart, Georgia, was reactivated to accommodate additional units planned for stationing at the Stewart-Hunter complex.

At the end of fiscal year 1974, the Army controlled 12,732,484 acres of land for military use worldwide. These holdings had an acquisition cost, including improvements, of over $12,834,981,000. During the year the Army disposed of 30,450 acres of land and improvements having an acquisition cost of $44,220,639. It also reported 14,955 acres of improved land, with an acquisition cost of $36,465,584, to the General Services Administration as excess.

Acquisitions amounted to 156,689 acres at a cost of $91,184,809, most of which (approximately 95 percent) were for civil works. Some 4,441 acres costing $5,947,442 were acquired for the Air Force, Atomic Energy Commission, National Aeronautics and Space Administration National Science Foundation and the Department of

the Interior. Also acquired were the Felsenthal Wildlife Refuge in Arkansas and Lake Waurika in Oklahoma. Relocation assistance payments of $5,252,013 were made to 3,161 applicants primarily for civil works acquisitions.

PL 93-166, enacted on 29 November 1973, authorized the Army to purchase 71,159 acres of leased, privately owned land that forms part of the White Sands Missile Range and to resolve 210 mining claims associated with the range. Approximately 61,000 acres of this land has been acquired. The range also has 341,952 acres of state-owned land under lease and 1,312,392 acres of land withdrawn from the public domain. The Army plans to acquire the leased, state-owned acreage either by purchase or by exchange for government-owned lands.

Concern about physical security was apparent throughout fiscal year 1974. After a soldier misappropriated a helicopter and landed on the White House lawn, the Army took several measures to improve the security of Army aircraft and vehicles. In Europe it began an extensive four-year program to upgrade the physical security of its ammunition storage areas. The first procurement run for the joint-Services Interior Intrusion Detection System (J-SIIDS) was completed, and final testing of the system was conducted by the Test and Evaluation Command. Army Materiel Command began to expand the use of J-SIIDS, which had been developed primarily for the protection of stored arms and ammunition. For the Army National Guard Intrusion Detection System, which before June 1971 covered only 246 of the Guard's 4,333 arms vaults and ammunition storage facilities, installation contracts have been awarded for 3,365 additional vaults. Some $3.1 million in federal funds have been spent on this program, which will be virtually completed by the end of fiscal year 1975.

Development continued on the Integrated Facilities System, an automated information system for the life-cycle management of real property from conception through design, construction, operation, maintenance, and disposal. The U.S. Army Computer Systems Command prepared a total of eighty-nine computer programs for the system. Testing of the programs began in March and will continue throughout most of next year.

The Army entered into a six-year agreement with the Alyeska Pipeline Service Company permitting the latter to lease certain available facilities at Fort Wainwright, Alaska, in support of the construction of the Alaska oil pipeline. Alyeska will pay an annual fee of $1,250,000 for the use of the facilities.

Since 1968 the U.S. share of NATO infrastructure has been authorized and funded through the Military Construction, Army (MCA), authorization and appropriations bills. The fiscal year 1974 budget provided for $80 million in authorizations. To meet the unbudgeted cost of dollar devaluation, an additional $21 million in authorizations was provided through the Secretary of the Army's authority under Section 603, PL 91-511, and prior year military construction authorization bills. Funding authority for fiscal year 1974 totaled $101 million, including $40 million in new obligational authority, $36 million transferred from unused prior year funds (PL 93-194), and $25 million in recoupments from prefinancing of prior year items. Obligations during the year were $87.4 million and unobligated funds as of 30 June 1974 amounted to $15 million. Recoupment for the year reached the programmed figure of $26 million.

The Office of the Deputy Chief of Staff for Logistics helped to develop U.S. positions on Mutual and Balanced Force Reductions negotiations between NATO and Warsaw Pact Nations by verifying the logistic feasibility of proposed reduction packages and the adequacy of impact statements related to logistic reductions. By the end of the fiscal year negotiations had not progressed beyond a discussion of basic assumptions. Detailed reduction packages are scheduled to be tabled early in fiscal year 1975.

In NATO matters, several activities were taking place. The NATO Land Force Logistics Working Party held its third annual meeting in Brussels during 22-26 April 1974. A number of projects were selected for study and development, specific tasks assigned, and goals established for the standardization of logistic procedures. Priority was given to the development of updated ammunition consumption rates. The Secretary of Defense established a Department of Defense NATO Task Force in July 1973 to implement his proposals to the NATO Ministerial Conference the previous spring. A major topic at the conference was logistic support of U.S. forces in Europe by NATO allies. In this regard, logisticians from the United States and the Federal Republic of Germany met twice during the year to discuss general agreements for logistic support. The thirteenth in this series of Logistics Staff Talks is scheduled for November 1974.

The approved Army military construction program for the Republic of Vietnam through fiscal year 1974 was $939.15 million.

As of 30 June 1974, the work in place totaled $922.080 million. The unobligated balance reported for withdrawal as of 30 June 1974 was $6.084 million. As directed by Congress and the Secretary of Defense, new construction and new obligations in support of construction in the Republic of Vietnam will be carried out with other Military Construction, Army, funds, effective 1 July 1974. Construction appropriations for Army facilities in Thailand was $116.474 million. As of 30 June 1974, completed construction came to $114.921 million, with an additional $1.054 million to be spent.

A midyear review of U.S. Army support to the Army of the Republic of Vietnam was held at the International Logistics Center, New Cumberland, Pennsylvania, from 19 February to 4 March 1974, arid funding adjustments were made in the fiscal year 1974 program to comply with limitations imposed by Congress. At the end of the year, management of the program was transferred from the Army to unified command channels.

Beginning with the cease-fire of 27 January 1973, ammunition shipments to the Republic of Vietnam were limited to replenishing South Vietnamese ammunition supplies held on that date. From January 1973 to 30 June 1974, 302,101 short tons of ammunition were shipped to Vietnam, and ammunition issues to the South Vietnamese averaged about 15,000 short tons per month during the fiscal year. Close control was exercised by Headquarters, U.S. Army, Pacific, to see that cease-fire levels were not exceeded. When necessary, shipments were diverted to offshore areas to avoid violating the cease-fire.

Since the beginning of the Military Assistance Program (MAP) in 1950, the Army in response to government policy has provided $18.2 billion in materiel and logistic services as grant aid. Congress in fiscal year 1974 reaffirmed this policy and authorized MAP appropriations of $512.5 million to thirty-one countries. Military assistance for Vietnam and Laos during fiscal year 1974 was provided by the military departments under Military Assistance Service Funding (MASF) rather than under the Military Assistance Program.

Under the terms of the Foreign Assistance Act of 1973, items excess to force acquisition objectives, located in the United States, and provided to foreign countries under MAP were charged to the receiving country's program at actual value. For items overseas, however, the country program was not charged until the value of

excess defense articles provided to all countries during fiscal year 1974 exceeded $150 million.

The Army portion of the fiscal year 1974 Military Assistance Program was $414.2 million, excluding Laos and Vietnam. In addition, $2.1 million was programmed from excess defense articles generated in the United States and $3 million from overseas. The Army's share included $218.7 million for materiel. During the year the Army filled orders for materiel and services totaling $316 million for 1974 and prior years and furnished $230 million of excess defense materiel as well. Virtually all materiel provided was purchased from United States vendors. Most of the MAP appropriations were used for major end items and ammunition as MAP recipients were encouraged to spend their own currencies for spare parts and for maintenance. Principal recipients were Cambodia, Jordan, Korea, the Philippines, Spain, Thailand, and Turkey.

Cambodia received the largest amount of MAP funds. The Army program was $333 million, of which $218.7 million was the result of special legislation. By presidential determination under Section 506 of the Foreign Assistance Act of 1961, as amended, the Department of Defense was authorized to provide up to $250 million in articles and services to Cambodia in anticipation of reimbursement from future appropriations.

Little grant aid was offered to Latin American countries for materiel and logistic services, and funds became relatively scarce because of the legislation previously mentioned. With the Foreign Assistance Act changed so that country programs are charged for excess materiel at actual value, Latin American countries had little incentive to spend their grant aid money on used equipment.

In other MAP developments, the delivery of material to Spain as part of the Spanish Base Rights Agreement was essentially completed by the end of the year. The fourth year of the projected five-year Republic of Korea modernization program was completed. The program, however, is behind schedule because of reduced MAP funding. The Indonesia Communications Project and the Philippines Communications System were close to completion at year's end.

During the fiscal year, the Army sold $3.7 billion in materiel and services to sixty-two countries and five international organizations under the Foreign Military Sales program. Forty-four outstanding cases were balanced and closed out. In conducting its sales activities, the Army adhered to the policy that materiel readily available through commercial sources would be sold directly by American industry to the recipient. The Army also arranged for

visits by high-ranking officers from eight allied nations to view military equipment.

The Army participated in eleven coproduction programs, which allow a foreign nation to assemble or manufacture major end items or weapons systems of U.S. origin. Arranged with the Republic of China, Italy, Japan, and NATO, these programs were valued at $610.8 million, with $301.3 million expended on goods and services in the United States. Coproduced items included the M113 armored personnel carrier, the M 109 self-propelled howitzer, helicopters, wheeled vehicles, the Hawk and Nike-Hercules missile systems, a light antitank weapon, and small arms.

In the field of cooperative logistics, the Army maintained supply support arrangements for major end items and weapons systems with seventeen nations and with one NATO component. Included were conventional weapons and vehicles and the Sergeant, Pershing, and Hawk missile systems. The cost of the program, for which the United States is reimbursed, was $153 million in 1974.

Before this year; the financial responsibility for the Army's international logistics program, which includes materiel for grant aid and foreign military sales, was divided between the Comptroller of the Army and the Army Materiel Command. As a result of a management improvement study, the Army Materiel Command proposed that financial management be centralized at the International Logistics Center, New Cumberland Army Depot, Pennsylvania. Approving the plan and implementing it in February 1974, the Army transferred the international logistics fiscal, accounting, and disbursing operations of the U.S. Army Finance Support Agency and the Military District of Washington to New Cumberland. This centralization has helped to eliminate duplicative operations and increase responsiveness in billings and reimbursements.

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