craft for foreign military sales or as excess defense articles for grant transfers. SAF/ IA notifies AF/XPP when the aircraft are approved to transfer to the appropriate country.

After all DOD activities have been screened and there are no known excess requirements, the aircraft are offered to GSA. GSA then screens the aircraft with other Federal agencies. Upon completion of all government screening, the non-combat cargo/passenger type aircraft can then be sold to the general public through the Defense Reutilization and Marketing Service.

Mr. HUNTER. Are FMS sales/any other disposals of equipment preceded by an analysis as to whether the parts are valuable

Secretary BUCHANAN. Prior to a Foreign Military Sale or any other disposal of a weapon system, equipment or component, critical U.S. requirements for the same material are reviewed by our weapons systems, equipment and item managers.

The Navy maintains an inventory of material awaiting disposal or destined for foreign sale that has been taken out of use. For example, we have aircraft at Davis Mothan A.F.B. that are not operational. Components and equipment on board these aircraft are available, and used, to fill urgent U.S. requirements. Written directives and procedures define the process of how U.S. users access this material.

In the processing of normal supply system transactions, U.S. users have more access to inventory. Material that is critical is "reserved" for the U.S. and not available to foreign customers.

To the benefit of our foreign customers, we have implemented an "FMS Reserve" program where repair parts not needed to support U.S. systems are retained in the supply system to fill foreign customer needs. We intend to expand this support concept to components, equipment and weapons systems.

Mr. HUNTER. AV-8B's tell me about them.

General STEELE. Well, the AV-8B situation is critical. You mentioned earlier in regard to the safety factor. There is some money-it has been underfunded in regard to the AV-8B. We have had a review panel that has looked at the readiness rate in the AV-8B. We are in the final stages of negotiation for 24 aircraft in the AV-8B remanufacturing program to get it up. The program that we have designed, if we can get the funding for it, will, in fact, meet the need of the AV-8B, as we take the risk in regard to the longer-term requirement, which is necking down for F/A-18C's and D's and AV-8B's to the JSF. But the program that we have and the need that we have, if we can get the money for it, will get us to that condition. Mr. HUNTER. Okay, and that is included in the $1.75 plus-up over last year's baseline-no, it is not-that the Commandant talked about?

General STEELE. In his September testimony?

Mr. HUNTER. No in his testimony back a couple of hours ago.

General STEELE. Oh, this morning? I don't think the AV-8B figures are in that $1.75 billion.

Mr. HUNTER. Okay, could you check with the Commandant and get back with us? That is real important.

General STEELE. Yes, sir.

The $1.75 billion the Commandant referred to was the average shortfall per year, prior to the Administration's topline increase. This shortfall does not include additional AV-8B Reman aircraft, but it does include safety and readiness enhancements identified by the Harrier Review Panel (HARP).

Mr. HUNTER. Take a look at this, our chart here. You have been staring at it for a while.

General STEELE. As you have seen all of this activity on the end of this table here the entire time, not to distract from any of the other witnesses, we have been struggling to find the exact point of those numbers. We agree with the trendline. It is accurate. We wouldn't dispute that. Our numbers just don't match up, and we will need to do that for the record.

These are the Fixed and Rotary Wing Readiness numbers from the 3M data for FY-91 through FY-98:

The maintenance of aging equipment and acceleration of modernization programs are two of the Marine Corps top priorities. The rapidly aging equipment and topline constraints for the last several years have caused the diversion of funds from other critical programs to finance the high state of near-term readiness.

However, Fixed Wing readiness is demonstrating a steady decline. In general, this decline in readiness can be attributed to maintaining older aircraft, a decline in experienced maintenance personnel, spares funding shortfalls, and recent engine issues. Older weapons platforms have caused an increase in maintenance manhours, decreased training time, and a general rise in the cost of aviation spares.

Several Flag level management initiatives have been instituted to reverse the declining trend in aircraft readiness. These initiatives include the forming of the Propulsion Management Board (PMB) to address and prioritize engine issues and the Aviation Maintenance-Supply Readiness (AMSR) Study Group. The AMSR was formed to examine AVDLR concerns and recommend specific actions to reduce overall aviation maintenance and supply costs, increase readiness and provide systemic improvements to support Naval Aviation of the 21st century. These actions must be accompanied by increases in modernization funding in order to ensure to the Marine Corps remains the nation's "expeditionary force in readiness" into 21st century.

Mr. HUNTER. Does the $1.75 billion that the Commandant said he needs, does that include any acceleration of the V-22 production?

General STEELE. The $1.75 billion the Commandant referred to was the average shortfall per year, prior to the Administration's topline increase. This shortfall included funding to accelerate V-22 procurement to the most economical rate of 36 aircraft per year in FY 2004. The Administration's topline increase allowed us to achieve the QDR goal of 30 aircraft per year in FY 2003; however, we still do not attain the 36 per year within the FYDP.

Mr. HUNTER. Okay, lets go to the ground, if you think you have talked about your air assets enough here? If you have anything additional for the record, please give that to us. But on the ground, what are your oldest pieces of equipment and what do we need to replace quickly?

General STEELE. Our commitment to near-term readiness, coupled with constrained toplines for the last seven years, has forced us to defer investment in equipment modernization. As we developed this budget, we had reached a critical point in the life cycle of our equipment, most of which has met or exceeded its projected service life, or will do so by the time replacements are fielded. Maintaining our aging inventory has become very expensive in terms of people, time and money. Much of our equipment is spending more time in the shop and less time in the field, and your Marines are spending more of their time repairing this aging equipment and less time training with it. We simply must get on with equipment modernization. Following is information on our oldest pieces of ground equipment.

• The Amphibious Assault Vehicle (AAV) is 28 years old. It has already undergone one Service Life Extension Program (SLEP), and was under an "Inspect and Repair Only As Necessary" (IROAN) depot period awaiting its replacement, the Advanced Amphibious Assault Vehicle's (ÁAAV). The AAAV's development is ongoing with the initial procurement showing up at the end of this FYDP. To ensure AAV safety and to prolong service life of those remaining in service until full AAAV Initial Operational Capability (IOC) is attained, we commenced the Reliability, Availability, Maintainability (RAM) Rebuild to Standard (RS) program upgrade. RAM/RS will be done to approximately 680 AAVS. This will return the AAV to the original performance specification at a cost of $309M. When combined with the 327 vehicles in Maritime Prepositioned Ships, the Marine Corps amphibious assault capability will be retained until the AAAV is fully fielded in 2012.

• The M-198 Howitzer is within 3 years of the end of its programmed 20-year service life. $5.4 million is in the FY00 President's Budget to ensure the depot level maintenance requirement is funded, keeping Marine Corps artillery readiness at acceptable levels. Its replacement is the Lightweight 155 howitzer, which will cost $449 million from IOC in FY03 to Full Operational Capability (FOC) in FY06.

Our aging five-ton truck fleet has seen its 19th birthday this year, out of a planned life of 20 years. The five year program to replace the five-ton truck with the Medium Tactical Vehicle Replacement (MTVR) will cost over $1.3 billion before it is complete.

• Our fleet of well-worn HMMWVs is also within one year of the end of its programmed service life. The HMMWV (A−2) will improve the basic HMMWV and provide a more reliable, less maintenance intense vehicle. The program, began execution in FY98 and is sustained for 14 years, which is when the last old HMMWV is replaced.

The 1,500 Gallons Per Hour (GPH) Enhanced Reverse Osmosis Water Purification Unit (EROWPU) is a part of a joint DOD effort to replace the existing 600 GPH ROWPU's on a one-for-two basis in order to meet water usage deficiencies identified during Desert Shield/Storm. The EROWPU milestone III and type classification are projected for FY01 with IOC scheduled for FY02.

• Our Generator Sets (GENSETS) have an average age of 22 years. They include the 10, 30, 60 and 100 kilowatt (KW) types of generators. The original programmed service life is 10 years. Due to other funding priorities, our programmed generator replacements for the 10, 30 and 60 KW Generators were coming too slowly to provide timely replacements. The Administration's recent topline increase has more than doubled the GENSET funding for the Marine Corps over the FYDP. The 100 KW Generator replacement is still under development.

Equipment modernization has become a near-term readiness issue. We must accelerate procurement of these, and other pieces of ground equipment if we are to meet tomorrow's challenges and remain the Nation's "expeditionary force in readiness". Your Marines deeply appreciate what you have done for us and ask for your continued support.

QUESTIONS SUBMITTED BY MR. SISISKY
F-16S

Mr. SISISKY. When is the last time the Air Force has requested F-16's? I know you have gotten them over the years, but they haven't been requested. They were requested by some Congressman or Senator.

General MARTIN. Prior to our FY00 request of 10 F-16s, the last time the Air Force requested aircraft in the budget was in the FY97 President's Budget: 4 aircraft.

Recent history of F-16 purchases:

• FY94: 12 aircraft purchased (Air Force budget request for force structure)

⚫ FY95: 0 aircraft purchased

• FY96: 6 aircraft purchased (Congressional plus-up for attrition reserve)

• FY97: 6 aircraft purchased (Air Force budget request: 4 for attrition reserve; Congressional plus-up: 2 for attrition reserve)

• FY98: 3 aircraft (Congressional plus-up for attrition reserve)

• FY99: 1 aircraft (Congressional plus-up for attrition reserve)

Mr. SISISKY. But that AV-8, the cost to remanufacture is enormous, isn't it, as compared to what you paid for it? If I remember, it is $50 or $60 million. Is that right?

General STEELE. I think that number is a little high, sir. We will go back for the record and get it. But for the time that we want to keep that aircraft in service until we can neck-down to the JSF, we think that the remanufacturing program is the most economical and prudent solution to ensure we maintain the capability.

The FY98 procurement of 12 remanufactured aircraft had a unit flyaway cost of $21.8M per aircraft in FY98 dollars.

QUESTIONS SUBMITTED BY MR. RYUN

AGING EQUIPMENT

Mr. RYUN. If the Administration does send a contingency to Kosovo, how will the increased stress and use of your equipment affect the Army's ability to fully train its forces back here in the United States?

Secretary HOEPER. Based on current planning figures for Army forces we would send to Kosovo, if ordered by the Administration, we would expect no short term impact on our ability to fully train forces in the United States as the result of increased stress on or shortages of equipment. Units deploying to conduct and support

this mission would take their organic equipment, and we expect minimal need for cross-leveling items between deploying and nondeploying units.

RECAPITALIZATION

Mr. RYUN. Is recapitalizing the force only the fourth most important Army goal because the current state of your equipment is healthy, or because your budget is limited and a digitized force is a higher priority?

Secretary HOEPER. The Army modernization strategy is executed by the establishment of specific goals. These goals are not listed in order of priority, but work together to achieve our modernization goal of producing a capabilities-based, threatsadaptive Army, which is postured to support the nation's military strategy. The goals must be addressed and achieved in parallel with one another. Digitizing the force is a top Army priority as it will help us achieve the mental agility required of Army XXI. From that mental agility and with future leap-ahead systems, we will achieve the physical agility required to maintain our overmatch over any potential foe.

Recapitalizing the force is required because, as we move towards Army After Next (ANN), as much as 70 percent of those systems will be legacy systems. These legacy systems will have product improvements applied to keep them viable. We have to continually recapitalize to keep the fleet healthy and to keep operations and sustainment costs under control. If we don't, these costs will drain valuable modernization dollars to pay for current readiness. In an already resource constrained environment, the Army can ill-afford this to happen. We will not be able to afford those truly leap-ahead systems we require for Army After Next.

Mr. RYUN. The 190th Air National Guard Air Refueling Wings resides in the district I represent. The newest KC-135 tanker they are flying was built in 1963. That aircraft is scheduled to be flying until 2040, making it 80 years old. What funding shortfalls have accumulated regarding spare parts and replacement engines that are needed to upgrade these aircraft?

General HANDY. Though the 190th ARW's KC-135D/E aircraft were built in the early 1960s, they remain as some of the newer KC-135s in the Air Force Inventory. Spare parts at the present time are readily available for the 190th ARW and do not present an impact to mission ready status.

The Air Force is working modernization efforts and studies ranging from avionics upgrades to aircraft replacement. For example, Pacer CRAG (Compass, Radar, and Global Positioning System) and Global Air Traffic Management (GATM) will allow the KC-135 to continue operations in the future international air traffic environment. These funded modernization programs will be completed on all active duty, Reserve, and Air National Guard KC-135 aircraft.

In 1998, Aeronautical Systems Center conducted a TF33 re-engining study that spanned multiple platforms (B-52, KC-135D/E, RC-135, and other C-135/707 aircraft). This study, validated by the Air National Guard, concluded re-engining of the KC-135D/E aircraft is not economically sound.

Several studies are ongoing to address the current and future plans for all Air Force tanker assets. Here is some information on 3 such studies:

• Headquarters Air Mobility Command is conducting a Tanker Requirements Study FY 2005 to evaluate the capability and number of tanker assets required for the Air Force to support Defense Planning Guidance scenarios. The results of this requirement study will address the “how many" aspect for the Air Force tanker fleet.

• The KC-135 System Program Office at Oklahoma City Air Logistics Center will be conducting a funded study in FY 2000 to analyze and evaluate the remaining economic service life of the KC-135. The outcome will help the Air Force reassess the timing for procurement of a replacement aircraft. Current estimates have the replacement tanker program starting in FY 2013 with completion in FY 2040. The Economic Service Life study will address the "how long" aspect of the KC-135 fleet. • Following the Tanker Requirements and Economic Service Life studies, the Air Force will conduct an Analysis of Alternatives (AoA) for tanker replacement options. The AoA is planned for FY 2003 to allow time for developmental options to be considered prior to planned production start in FY 2013. This study addresses the "which one" aspect of Air Force tanker modernization efforts.

As you can see, several funded programs are underway to modernize all KC-135s, and numerous studies will be completed to address future tanker force structure requirements and capabilities. The Air National Guard will remain a key part of these modernization efforts.

Mr. RYUN. What aircraft in your fleet is being cannibalized at the highest rate?

General HANDY. Overall, the B-1 is currently being cannibalized at the highest rate 84.4 CANNs per 100 sorties for FY99. Below is a table depicting the B-1's annual CANN rate since FY95:

For the Fighters, the F-15E is currently being cannibalized at the highest rate— 29.2 CANNs per 100 sorties for FY99. Below is a table depicting the F-15E's annual CANN rate since FY95:

For the Airlifters, the C-5 is currently being cannibalized at the highest rate56.5 CANNs per 100 sorties for FY99. Below is a table depicting the C-5's annual CANN rate since FY95:

Mr. RYUN. Regarding the Air Force's pilot retention problems, have any of the exiting pilots indicated that aging aircraft and lack of overall maintenance has contributed to their decision to leave the Air Force?

General HANDY. During 1996-98 the Air Force Conducted a pilot bonus non-taker survey to identify reasons why pilots were leaving the Air Force. Our survey results show the top three reasons for separation are TEMPO (19%), quality of life concerns (14%) and airline hiring (11%). These results show the close relationship between increased TEMPO and quality of life. Phrased another way, too much time, often unpredictable, away from their families has a direct bearing on the decision to sepa

rate.

While age and maintenance of aircraft have not been identified as issues by exiting pilots, we note that retention decisions are complex and are made within the context of overall quality of life considerations. To the degree that quality of life involves work environment and equipment, aircraft age and maintenance do become issues, along with a host of others. For this reason, the AF has pursued a balanced program involving attention to modernization, readiness, and people.