All the rest is life cycle support after it leaves the factory. You are just going to keep pushing that further and further up, if you are operating older and older aircraft; they have to be maintained more frequently.

Mr. SAXTON. Thank you. Let me ask this: With regard to what I refer to as service life extension modifications to aircraft that we are asked to fund from time to time, how do we know, as people who have to sit here and make these decisions, whether those decisions are cost-effective? Let me just give two examples one which we are currently wrestling with and one which now is, I guess, history.

The history lesson is the KC-135, when we moved from the E model to the R model-new engines, new aeronautics, et cetera. That was going to extend the life of that aircraft from 40 to 80 years, or thereabouts, as I recall. We got into that program, and then the Air Force decided, for some, I assume, very valid reasons, not to proceed to do the entire fleet and stopped.

We are now studying on the C-5 with a more extensive, but similar program, which I have advocated for because of the facts involved in it. But how can we look at those issues and know whether the basic question that Chairman Hunter asked is, is this a costeffective way to spend dollars or might we want to enter into a longer-term program for modernization purposes?

Dr. THOMPSON. I think that is a program-specific determination. In the case of the C-5, there is at present no prospect of a new transport that can carry some of the outsized cargo that the C-5 can carry. I don't see that you have a choice but to extend the life on that aircraft.

Mr. SAXTON. So you are saying you just have to kind of look at each of these proposals that come along and judge it on its merits? Dr. THOMPSON. Yes. Looking at a C-141 service life extension, I would say this is foolish; we have a much better aircraft available now, the C-17. There is no point in doing this. But in the case of the C-5, we have no alternative in prospect.

Mr. SAXTON. Thank you, Mr. Chairman.

Mr. HUNTER. Thank you, Mr. Saxton.

Folks, thank you very much for your testimony. It has been very enlightening. I would like you to stick around, if you can, and listen to the testimony that is coming up.

I would ask the next panel-that is Mr. Hoeper, followed by Dr. Buchanan, General Martin, and General Steele, to get in the ondeck circle. We will take a 5-minute break here, and then let's fire up again with our second panel.

Again, folks, thank you for being with us and thanks for your help.

[Recess.]

Mr. HUNTER. The subcommittee will resume.

We will start off. We will have Secretary Hoeper and Secretary Buchanan, General Martin, and General Steele. Secretary Hoeper, you are up.

STATEMENT OF HON. PAUL J. HOEPER, ASSISTANT SECRETARY OF THE ARMY FOR ACQUISITION, LOGISTICS AND TECHNOLOGY; ACCOMPANIED BY LT. GEN. JOHN G. COBURN, DEPUTY CHIEF OF STAFF FOR LOGISTICS, U.S. ARMY; HON. H. LEE BUCHANAN, III, ASSISTANT SECRETARY OF THE NAVY (RESEARCH, DEVELOPMENT AND ACQUISITION); VICE ADM. JAMES F. AMERAULT, DEPUTY CHIEF OF NAVAL OPERATIONS (LOGISTICS); LT. GEN. GREGORY S. MARTIN, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE FOR ACQUISITION, U.S. AIR FORCE; LT. GEN. JOHN W. HANDY, DEPUTY CHIEF OF STAFF FOR INSTALLATIONS AND LOGISTICS, U.S. AIR FORCE; LT. GENERAL MARTIN R. STEELE, DEPUTY CHIEF OF STAFF FOR PLANS, POLICIES AND OPERATIONS, U.S. MARINE CORPS, AND MAJ. GEN. GARY S. MCKISSOCK, COMMANDER, MARINE CORPS MATERIAL COMMAND, U.S. MARINE CORPS

Secretary HOEPER. Thank you very much, Mr. Chairman, members of the subcommittee, for this opportunity to discuss aging military equipment. I am pleased to appear today with Lieutenant General John Coburn, the Army's Deputy Chief of Staff for Logistics.

Mr. HUNTER. You might pull that microphone up a little bit there, Secretary.

Secretary HOEPER. Thank you very much. We have submitted a statement which we would appreciate being a part of today's record.

Mr. HUNTER. Without objection, all your statements, written statements, will be accepted into the record.

Secretary HOEPER. Thank you, Mr. Chairman.

Mr. HUNTER. Please, just feel free to summarize. Don't feel like you have got to go through every excruciating detail that is in the statement. Tell us what you think is important for us to hear.

Secretary HOEPER. We are going to present a very shortened version of our official statement, if that is OK with you.

Mr. Chairman, aging equipment is a serious problem in today's Army. We believe that, if not properly addressed and corrected, it will in time significantly impact our overall readiness. Fiscal constraints, coupled with the requirements of near-term readiness, have had an enormous impact on Army modernization programs. In short, our weapons systems are aging because we have not modernized them as quickly as we should have.

When coupled with the increased operational tempo America's Army has faced since 1989, increased maintenance has been required in order to protect near-term readiness. As you may know, Mr. Chairman, America's soldiers, Army soldiers, have shouldered the lion's share of the participation in 32 of the 36 major deployments in the last decade. Increased deployments mean more maintenance of equipment, and that means increased operations and support cost.

În order to resource these unanticipated Operations and Services costs, the Army has had two choices. Either accept a degradation in current readiness or reprogram money from another source, and that source has usually been procurement. The Army has not, and cannot, accept degradation in current readiness. So we have had to

take money away from procurement, thereby sacrificing future readiness to preserve current readiness.

Maintaining the Army's capability to fight and win our Nation's wars requires modern equipment. Modern equipment is more than the acquisition and integration of new systems with enhanced capabilities. It includes the recapitalization of existing systems with extended service programs, depot rebuild, and technology insertion to ensure operational effectiveness and to control costs.

We expect that 70 percent of our current systems will still be in place in the Army after next. It is vitally important that we recapitalize these systems to account for the wear and aging that is the normal part of the life cycle of any weapons system. It takes both time and money to maintain and upgrade older equipment. However, the inefficiency of failing to recapitalize existing systems drains critical dollars away from other Army requirements, including research and development for next-generation systems.

A balanced, long-term approach to modernization is important to provide the Army with the equipment necessary to assure not only readiness today, but readiness tomorrow. We owe this to our future soldiers.

With your permission, Mr. Chairman, General Coburn and I would like to display just four charts.

Mr. HUNTER. Have we got a microphone down there?

General COBURN. Mr. Chairman, other distinguished members of the subcommittee, we thank you for the opportunity to appear before you this afternoon to discuss the Army's aging equipment problem.

At the outset, let me thank you for not only your current interest, because we, indeed, do have a significant problem, and our soldiers deserve the best equipment that is available, but also for your past efforts as well.

In the past seven years, the Army's equipment posture from the standpoint of equipment on hand has steadily increased. That has been a direct result of downsizing. However, modernization has not kept pace, has not been consistent with downsizing. As a result, our equipment is aging. It costs us more and more to maintain. I would just like to show you about three examples here.

For example, the tactical wheeled vehicle inventory that we have in the Army is 240,000, and, Mr. Chairman, I think all of you have copies of these charts. The average age is 13 years

Mr. HUNTER. Some of us have copies of those vehicles in our garages, and they are getting tough to maintain. [Laughter.] General COBURN. You, indeed, are correct.

The average age is 13 years. We are procuring 5,000 a year, and at that rate, it takes 48 years to completely replace our tactical wheeled vehicle fleet.

Likewise, the CH-47, the average age is 30 years, and we are going to keep that around until the year 2020. That is the plan. Significantly, the oldest 10 percent of our equipment represents 35 percent of our maintenance cost. Put a little bit different way, the average soldier, born about 1980-and you have already talked about this a little bit, Mr. Chairman, in your opening commentsbut 2.5-ton truck, we introduced that in our inventory in 1950. That means that truck is about 49 years old. Likewise, the armored

personnel carrier was introduced in 1956, about 43 years old, and the armored vehicle launch bridge, 1964, and, of course, that is about 35 years old.

So, to sum up-and you already talked about it at some length— this is the dilemma that your Army finds itself in in terms of modernization. We find ourselves in this very delicate balancing act of trying to balance readiness against modernization. We are talking about readiness. We are talking our ability to deploy, of course, and then to sustain, once we deploy. Of course, when we talk about modernization, we are talking about future readiness, and we must modernize; otherwise, we sacrifice future readiness.

You referred to a death spiral, and that is exactly what it is; the older equipment costs more, and since it costs more, you can't take those dollars and put them into modernization. So you end up with less and less dollars. And that is the dilemma that we find ourselves in.

Now let me just turn to Mr. Hoeper, and he will finish up this one chart.

Secretary HOEPER. Mr. Chairman, what you see before you is probably the best chart in the Army's modernization plan. We have a modernization plan. We think it is a pretty good plan.

This chart shows the relative importance in relation to time of the various components of the modernization plan. So, No. 1 in our modernization plan is to digitize the Army, to maintain overmatch, to maintain essential S&T leap-ahead technologies, and of course, recapitalization is in there.

Now you will see that during the near years we are putting emphasis on information dominance and on recapitalization. Specifically, in recapitalization, if we were to get some more money beyond what we already have right now, we would like to put that money toward recapitalization to allow modernization in the future, particularly in some engineering combat equipment, some aviation equipment, and some of our truck programs.

That concludes our introduction. Thanks very much.

[The prepared statement of Secretary Hoeper can be found in the Appendix on page 114.]

Mr. HUNTER. OK. Let me ask you a question while you are up there.

Secretary HOEPER. Yes.

Mr. HUNTER. You have looked at the Army's $5 billion unfunded requirement supplemental, if you will, or supplemental request or unfunded requirement above and beyond last year's baseline? You have seen that?

Secretary HOEPER. Yes, I have, sir.

Mr. HUNTER. Does that provide for the modernization plan for Hercules, Blackhawk, CH-47, et cetera, the systems that are on the right of that page?

Secretary HOEPER. The unfunded list that has been submitted to you does include these items.

Mr. HUNTER. All of them?

Secretary HOEPER. All of them, yes, sir.

Mr. HUNTER. OK. Put up the first chart. OK, tactical wheeled vehicle inventory, you've got 240,000. We are replacing them at the

rate of about 5,000. Average age is 13 years. Obviously, we are going to have a very aged fleet at the current rate of replacement. Secretary HOEPER. That is correct.

Mr. HUNTER. Is there an acceleration of that replacement manifested in the $5 billion plus-up?

Secretary HOEPER. There is some small accelerations in the list,

yes.

Mr. HUNTER. To approximately what?

Secretary HOEPER. I probably will have to go back to the table and get my brains on that one, Mr. Chairman.

Mr. HUNTER. Do you think it is more than 6,000 a year?

Secretary HOEPER. I don't, as I stand here, know that, but I would be happy to provide that answer.

Mr. HUNTER. OK, if you could take a look at that.

[The information referred to can be found in the Appendix beginning on page 187.]

Mr. HUNTER. But let's go to CH-47. Average age is 30 years. Won't be retired until 2020. Is there an acceleration of that replacement?

Secretary HOEPER. In this case, we have a recapitalization plan that we think will be adequate for the Army's needs.

Mr. HUNTER. OK, that is manifested in the $5 billion increase? Secretary HOEPER. I believe that is correct.

Mr. HUNTER. OK. Your truck, Tactical Wheel Vehicle, at current rate of procurement, it will take 48 years. I presume that is basically a summary of the one on the left.

Let's go down to the oldest 10 percent of equipment represents 35 percent of your maintenance cost. After we emplace this $5-billion per year plus-up, will that proposition-that is, the oldest ten percent of equipment represents 35 percent of our maintenance cost-will that still be essentially true?

Secretary HOEPER. We have targeted our recapitalization program at those items that are creating the most expense. So we will wipe out the most costly of the systems. Having, of course, wiped that out, we will look at a new list, and my guess is that the older equipment at that time will still be creating the most expense.

Mr. HUNTER. OK. Are you satisfied, then, having looked at your aging fleets, you are satisfied with the $5 billion per year plus-up, assuming that you get it? If we were to get the $5 billion plus-up and it is distributed as I understand it, we would be able to make a very good start on curing some of these problems. I think if we were to get it, and, let's say, $2 billion were to go to the modernization accounts, we probably would try to use about 40 percent of that for recapitalization, and the remainder of the money in other ways. I think we would be able to make a very good start at addressing the problem.

Mr. HUNTER. Norman, do you have anything?

Mr. SISISKY. I was going to ask another question. On the 240,000 vehicles, do you do preventive maintenance as you would in a car, say, where a car-you know, the manufacturer says every 7,000 miles they have got to go over it. Do we have enough money? Or maybe that is one of the problems that we have got, that to save money, we are not doing the preventive maintenance?