First, national commitments. We must have the necessary Operation and Maintenance resources to meet the national commitments. The deterrence cornerstone of the national strategy requires that we be prepared to meet both longstanding and emerging commitments. Many of the commitments are established as to location and length. But experience has shown that we will probably have some unexpected requirements in fiscal year 1982, and we must be ready.

Unfortunately, the current emergent trouble spot is on the other side of the world, and the supply support must travel extraordinary distances, which adds to our cost. Over 21 transit steaming days are required for ship movements from CONUS to the Arabian Sea-almost an equal trip, whether leaving from east or west coast. The cost of operating our deployed forces is influenced by the mixture of the forces-nuclear power, or conventional power, amphibious ships, or carrier battle groups. The last two factors, availability and emergent repairs are directly influenced by our ships' overhaul and repair resources.

Now, we have tried to balance these factors to achieve the best possible force readiness. This next chart shows our prediction of how we will do.

The column on the right shows the CNO goal for each readiness. indicator. I have mentioned several of these previously but in this chart you can see the improving trend that is generally applicable to all our indicators. These improving trends are directly supported by the resources applied. And this chart shows the same upward trend in resources.

Note the substantial real increases in recent years and the continued request for real growth so that we can continue these trends in 1982.

Now, before concluding the statement, I would like to emphasize the Department of the Navy's continuing initiatives towards effective and efficient resource management. This chart addresses several of these initiatives which we think are especially important to the expenditure of O&M resources.

MORE RAPID MANAGEMENT RESPONSES AND ADJUDICATION OF
AUDIT/INVESTIGATIVE REPORTS

CHART 7

The DON followup system procedures mentioned here mandate that findings and recommendations appearing in audit reports must be acted upon promptly by management. Savings resulting from audit recommendations will be carefully monitored to insure that actual savings reflect the potential savings to the extent possible. Additionally, audit recommendations will continue to be applied in our planning, programming and budgeting process and savings will be reflected in the Department of the Navy's budget. The Department of the Navy Council on Review and Oversight has been established. It is chaired by the Under Secretary of the Navy with the Vice Chief of Naval Operations and the Assistant Commandant of the Marine Corps as leading members. A primary objective of the Council will be to review the results of audits, investigations, and inspections to identify areas needing increased attention, and to assure that prompt action is taken to correct deficiencies.

We have also instituted a special audit response system that insures action on audit reports is taken in a timely manner. Additionally, a system has been established for high-level ajudication of issues on which the auditors and management disagree.

In conclusion, I believe that our progress towards increased readiness and efficient management has been based on the best application of the resources considering the constraints.

Mr. Chairman, that completes my statement on the fiscal year 1982 Operation and Maintenance budget.

REAL GROWTH IN NAVY O&M

Mr. ADDABBO. Thank you very much, Admiral, for a concise and thorough statement.

Your chart is very interesting, because we have heard so much about the committee cutting readiness and making deep cuts. We notice from 1978 to 1982 there is real growth of over 25 percent. When we heard the loudest screams and complaints-in 1980 there was growth of 7.5 percent, 1981, 7.2, and 1982, 5.6. So I think the committee has been cognizant of the problems and the needs of the Navy and has been working and will continue to work very closely on these problems.

INDIAN OCEAN OPTEMPO

One of the problems recently recognized was the question of ship OPTEMPO in the Indian Ocean, where the Navy is steaming over 85 percent, and from time to time steams 90 percent and better. This raises questions of morale and other problems.

Is this problem being looked into carefully and being reviewed to see whether OPTEMPO should be that high?

Admiral MILLER. Yes, sir. I am aware of that concern. This budget is projecting an operational tempo in the Indian Ocean of 80 percent, which is a considerable reduction from the current level.

When the level was at 93 percent, it was very soon after the situation became very tense in the Indian Ocean, and it was necessary that we maintain a higher state of readiness. That required that we have aircraft ready, aloft, and on station. It was a dictate of national policy, and we responded.

Mr. ADDABBO. I think the committee fully agreed with that. What the committee questioned was in the 1981 supplemental, for the period that we are now in, the last quarter, additional funds were being asked to continue 90 percent of OPTÉMPO. I do not think anyone could disagree with you that during times of high tension full steaming is necessary. But the question is, when you do have a leveling-off period, as we have had for several months, whether you defeat your purpose by straining the capabilities of the men involved, by fatigue, and by low morale.

Mr. Edwards

Mr. EDWARDS. Thank you, Mr. Chairman. Just a couple of questions.

SHIP MAINTENANCE

On chart number 4, on ship maintenance-it looks like everything on that chart is going up except ship maintenance, basically. Can you comment on that?

Admiral MILLER. Yes, sir, I can. The number of ships that are scheduled for overhaul in 1981 was 12, and that is based on a period of time between overhauls. After 3 years or 5 years or whatever the cycle may be the ship comes up for overhaul. It happens that we have 12 scheduled in 1981. We only have eight scheduled in 1982.

Mr. EDWARDS. Is that because that is all you need scheduled now?

Admiral MILLER. Yes, sir.

Mr. EDWARDS. That is not dollar-driven.

Admiral MILLER. No, sir.

BACKLOG OF MAINTENANCE AND REPAIR (BMAR)

Mr. EDWARDS. And explain to me, on chart 5-if I understand that chart it looks like basically you are meeting the CNO goals in substantially everything in fiscal 1982. I do not understand the BMAR numbers and the goal zero.

Admiral MILLER. Well, BMAR is the Backlog of Maintenance And Repair of real property. That would be property, such as airfields, barracks, hospitals and roads, at our operating shore bases or other non-industrial activities. We survey the condition of these facilities on a continuing basis and determine what maintenance should be done in a given year. BMAR is the end-of-year tally of all readiness related defects and deficiencies that should have been accomplished that year, but were not, due to budget constraints. We are constantly trying to reduce the backlog with our goal of ultimately getting it down to zero. In recent years we have the trend moving in the right direction. Perhaps a decade ago it was going in absolutely the wrong direction, where we were deferring all sorts of plant maintenance in order to operate.

Mr. EDWARDS. And does this chart show $545 million in the budget, or that you are $545 million short?

Admiral MILLER. Short.

Mr. EDWARDS. How much is actually budgeted for that?
Admiral MILLER. I will have to look that up.

Mr. VANDER SCHAAF. A little over a billion?

Admiral MILLER. I will have to look it up and provide it for the record to give you an exact figure.

Mr. EDWARDS. All right. But if you are a billion in the budget, what you are indicating by this chart is that you need another 50 percent more to get even?

Admiral MILLER. Yes, sir. To get it down to zero.

Mr. EDWARDS. OK. You can put the exact figure in the record. Admiral MILLER. It is $750.2 million. I have it now. That is Navy only, with the Marines, it would be about a billion.

Mr. EDWARDS. Thank you.

Mr. MURTHA. I have no questions, Mr. Chairman.

Mr. ADDABBO. Mr. Robinson.

Mr. ROBINSON. No questions, Mr. Chairman.

Mr. ADDABBO. General Hatch.

General HATCH. I have submitted a formal statement.

Mr. ADDABBO. It will be made part of the record.

General HATCH. I appreciate the opportunity. I will run through this briefly.