respect to the Airborne Laser, Space-based Laser, and Space-based Infrared Systems.

First, to start the way the Air Force looks at the problem, we tend to characterize it from a kill chain mentality. The key elements of this complex tasks are to detect, track, target, engage, and assess the effectiveness of our engagements. These are functional elements that form the ballistic missile kill chain. While engagements systems, understandably, get most of the attention, they are just a part of a system of systems which perform the other kill chain functions and enable engagement.

For theater missile defense, the Air Force intelligence, surveillance, recognizance assets, such as the U-2 Rivet Joint, provide for preplanning information. Once combat operations are underway, other assets, including Joint STARS, the Defense Support Program, as you note, DSP, provide near real-time information to our Battle Management Command Control Communications and Computer Systems.

Mr. BARTLETT. All right, thank you very much. Mr. Weldon will return momentarily. There are less than four minutes left in the vote, so let me recess the hearing just briefly while I go vote, and Mr. Weldon is on his way back and may walk in the door as I leave. Thank you very much.

[Recess.]

Mr. WELDON [presiding]. The subcommittee will reconvene. I will ask our witnesses to again take their chairs, and, again, we apologize for the delay. I will try to get things started, so we can move along rapidly. General Lyles, were you finished your statement yet?

General LYLES. Mr. Chairman, I had, but there are a couple of key points I wanted to mention, because I think they are germane to some things that we are working together, and it deals with what we are trying to do to control costs in our programs. And when I say that, it is to make sure that we are trying to support the war fighter. I will just mention very quickly the kinds of actions that we are taking to make sure we are getting our arms around the rampant cost growth problems we have experienced in each one of our programs.

We are establishing firm cost baselines for each one of our theater and national missile defense systems, particularly, the theater missile defense systems based on the kind of actual development costs we have seen to date. We have actually never done that before, Mr. Chairman, and that is an issue that we think is very important to understand what our programs really do cost.

We are working very closely with the contractors to verify, validate, and actually audit their cost assessments. We need to make sure the costs that they are telling us are realistic in terms of what it takes to get the job done. We will work with those contractors to identify and implement ways that we can control the development costs to date, so we can make sure that we can get our jobs done and get it done expeditiously. We are identifying and implementing initiatives to reduce the procurement costs in the future, and will I point out in my last statement why I am very, very serious about making sure that is a reality.

We are restructuring our acquisition and contract strategies, something you and I have talked about before, Mr. Chairman. Í

want to make sure that we are incentivizing the contractors to control cost and performance and schedules for all of our programs. To date, they have been only focusing on schedule and have ignored the importance of making sure we understand what these things are going to cost us in the future. If that means providing larger award fees and profits to them to help them to control the costs, we are willing to do that, and we will be working to try to restructure our contracts to make that a reality. We are looking for other levities like competition at the system or subsystem level to make sure, again, that we can keep our arms around the costs, something that is going to be very important in the future.

I could go on, Mr. Chairman, about all the actions we are taking and why they are important. Let me just close with the one statement I mentioned, before all the Members broke here, why I think it is germane and it is critically important for us to address this topic. It is a statement and perspective from the war fighter. It is a comment made by General John Tulleli, a CINC in Korea last fall, in a CINC conference with the Secretary of Defense. At that time, he told the Secretary that he needs missile defense systems today, as soon as possible, to counter the some-600 North Korean theater ballistic missiles that are facing him and targeted towards South Korea today. His bottom line was "Get me the capability," and he needs the kind of quantities to counter the threat, and I am confident, Mr. Chairman, that with our talented team, the government team, the contractor team, the emphasis to contractors making sure we can get our systems into the field, that we will provide him with very effective missile defense systems. As Congressman Pickett said, we will overcome the science and technology problems. I am also confident we will get them to him fairly soon. My fear, however, is that if we don't watch costs today, we will not be able to provide him the quantities he needs to counter the kind of threat that continues to grow everyday. And, so we are really focused on making sure that we make our systems not only effective but also affordable.

I will close there, Mr. Chairman.

Mr. WELDON. Thank you, General. General Martin.

General MARTIN. Mr. Chairman, Congressman Pickett, and other Members of the subcommittee, thank you for the opportunity to speak to you today about the Air Force programs supporting national missile defense and theater missile defense. We are grateful for your serious concern and that support you have provided us in the past and will in the future.

Countering the ballistic missile threat, as you know, is a complex task, and the Air Force is fully engaged with the Ballistic Missile Defense Office and other services to achieve both full dimensional protection for deployed forces and a national missile defense system to protect our Nation. I will briefly review the Air Force's participation in both theater and national missile defense, focusing on our recent decisions with respect to the Airborne Laser, Space-based Laser, and Space-based Infrared System programs.

As the Air Force views the problem, we tend to think of it in terms of a kill chain mentality. The key elements of this complex task are to detect, track, target, engage, and assess the success of those engagements. Those functional elements form the ballistic

missile kill chain. While engagement systems, understandably, get most of the attention, they are only a part of a system of systems which perform the other kill chain functions and enable the engagements.

For theater missile defense, the Air Force intelligence, surveillance, recognizance assets, such as the U-2 and Rivet Joint, provide data for preplanning. Once combat operations are underway, J STARS, Defense Support Program, or DSP as you know it, provide near real-time information to our Battle Management Command Control Communications Systems, such as AWAC and Global Broadcast System, to help rapidly initiate attack operations and cut active defense systems but with more cue active defense systems.

The preferred method of countering enemy theater missile operations is to attack and destroy or disrupt theater missile operations prior to launch, what we call attack operations. The effectiveness of attack operations, which can be executed by all services' offensive forces, depends on our ability to detect missiles on the ground, recognize and classify them, and then attack with precision before they can be launched. The Air Force is working hard to improve precision engagement weapons as well as to shorten sensor to shooter time lines required for effective attack operations.

Should we be unable to prevent the launch of theater missiles, we intend to engage them with the Airborne Laser (ABL), the only system designed to destroy the Theater missiles in the boost stage. This capability will give theater commanders the ability to destroy missiles before they place American or allied troops at risk. Over the last year, the ABL has had a number of successes including building a flight-weighted laser module which has already produced 110 percent of design power four years ahead of need.

With respect to the kill chain for national missile defense, that chain requires the same functions as we find in theater missile defense, but the system of system is used differently due to longer flight duration and different threat trajectories. One of the primary surveillance systems required for both theater and national missile ballistic defense is the Space-based Infrared System, or SBIRS, which will provide the Nation with new and improved warning and sensing capabilities. The Air Force recently announced a restructuring of the SBIRS Program that generated much concern. The Air Force is concerned as well with this three-part restructuringwas concerned and this three-part restructuring was only implemented after careful consideration to mission risk and overall BMD efforts.

SBIRS High first-year launch was recently delayed by two years until Fiscal Year 2004. In the short term, this slip freed up much needed Fiscal Year 2000 funds for near-term readiness and modernization efforts, and, I must add, in an extremely constrained budget environment at that time. Supporting this decision was the longer than expected availability of Defense Support Program (DSP). The slip provides supports and provides BMDO the National Missile Defense C-1 schedule with the SBIRS High IOC in the first quarter of Fiscal Year 2006.

The SBIRS Low first launch was delayed two years until Fiscal Year 2006. This decision was driven by both technical and schedule

changes. Updated assessments concluded that an Fiscal Year 2004 launch was extremely risky and impractical. A SBIRS Low launch in Fiscal Year 2006 supports the NMD with a full capability by Fiscal Year 2010.

The decision to eliminate two on-orbit demonstrations from the SBIRS Low Program was driven by rapidly diminishing returns on the investment, as Dr. Gansler mentioned earlier. Significant risk reductions have been achieved by these efforts to date, however, these demonstrations were on-orbit experimental packages, not prototype SBIRS satellites, and continued cost growth was consuming program funds that made demonstration of that program inexecutable. Meanwhile, other on-orbit demonstrations have demonstrated much of the technology critical to SBIRS. Given these conditions, the Air Force developed an alternative strategy to ensure SBIRS Low remained executable and on schedule for a Fiscal Year 2006 launch. By terminating the two demonstrations, the Air Force was able to redirect funds towards a more timely risk reduction focused directly on the objectives SBIRS Low designed.

The Space-based Laser, or SBL, may provide the boost phase engagement piece to the NMD architecture. SBL is a global, directed energy space platform focused primarily on NMD.

Mr. WELDON. General, on that one point, if those tests were done in 1996 and concluded in 1997, I guess the logical questions is why do we continue to do them?

General MARTIN. Sir, all of the data is still not-has not been regressed and available, but the key reason is that from those previous experiences of Midcourse Space Experiment (MSX) and Miniature Sensor Technology Integration (MSTI), we believe we did gain quite a bit of data, but one area that we had not gained the kind of data that we needed dealt with the FDS profile that calls for two satellites. Not only is it a sensor capability but then it is a processing capability and an ability to link back to a follow-on satellite, such as SBIRS Low consolation might contain; the information on the characteristics of the launch to be tracked, the location, and the ability to direct those sensors. That demonstration which nothing else we had was something that we hung onto as long as we possibly could until it became what we felt a liability to the overall SBIRS Low Program to continue with that direction as opposed to putting that money into the PDR phase and, ultimately, the Engineering, Manufacturing, Development (EMD) phase. That was something that we have still not been able to demonstrate, so we have to do the integration effort without the benefit of the demonstration we had planned.

With respect to SBL, it is a global, directed energy space platform focused primarily on NMD with potential military utility for TMD as well. A major step in proving feasibility and utility of the SBL is the Integrated Flight Experiment, or IFX. The IFX is essential to reducing risk from affordable SBL, putting the Air Force to integrate laser components into a space platform and perform testing in the operational environment. Both the Air Force and the BMDO have increased funding for this important technology demonstration through the FYDP to ensure a viable program that will lead to an IFX in the 2010 to 2012 time frame.

In closing, let me say that the Air Force is proud to be developing many of the systems required for effective, capable theater and national missile defense. The Air Force is committed to an aggressive and productive development of these systems, including the Spacebased Infrared System, the Airborne Laser, the Space-based Laser along with continuing the upgrade of our already important ground-based radar system.

Thank you again for inviting me here today, and I look forward to your questions.

[The prepared statement of General Martin can be found in the Appendix on page 103.]

Mr. WELDON. Thank you, General. In the interest of fairness, Mr. Bartlett has another hearing, and we will let him go first, and he has promised to keep his questions short, and then we will go in the regular order.

Mr. BARTLETT. Thank you very much. The other hearing is the pay raise for the military which I think is a good reason to try to make both hearings.

Secretary Gansler, it is my understanding that our German and Italian allies, believing that we have effectively canceled the MEADS Program, will not commit to the plan the administration has for the MEADS technology development until the United States commits to outyear funding, and, as you show in your slides, there is no outyear funding. When MEADS was a full-fledged program, we had a similar problem. Where exactly is the MEADS Technology Program going? If the answer is we don't know, then why are we spending millions of dollars this year? Also, you have been telling this committee for the last three years that there would eventually be a MEADS Program. How can we, in the Congress, and our allies believe that this program is going anywhere with these conflicting statements?

And the second question: I have read in recent news accounts that the cost of a Naval national missile defense system could reach $19 billion, some 75 percent more than a ground-based system. Can you comment on the validity of these news reports?

Finally, it is my understanding that you have decided to cut our inventory of defensive missiles in half in order to pay for the R&D of our systems. While we, in this committee, are particularly interested in the R&D, I am also concerned about when you are going to give the equipment back to the war fighters that they so desperately need? Would you comment, please?

Secretary GANSLER. Yes, let me comment on all three of those questions. The MEADS, starting there-the Army clearly needs a PAC-3 replacement in the long term. These are systems that have been in the field, in some cases, for quite some time-the overall Patriot Systems-and they need the next generation. They also need the mobility that the MEADS offers. So, if you look at the Department of Defense' 15-year fiscal plan, the Army actually has money in the outyears beyond the 5-year plan that they had planned on for systems such as MEADS. In fact, this has been the plan all along and is in the plan now. By putting in the revised program that we have recommended, $150 million for the three years, we are going to be looking at the critical elements associated