Mr. ANDREWS. Now we shall hear General Duff's statement.

GENERAL STATEMENT OF DIRECTOR OF ARMY BUDGET, COMPTROLLER OF THE ARMY

General DUFF. Thank you.

Mr. Chairman and members of the committee, my discussion of the fiscal year 1962 "Operation and maintenance, Army" (O. & M., Army) appropriation will be in three general parts. First, I shall present a general introduction to the appropriation, then I shall discuss each budget program and the operation and maintenance of facilities support for these programs and finally I shall refer to the fiscal limitations which were prescribed for this appropriation for fiscal year 1961.

APPROPRIATION INTRODUCTION

The "Operation and maintenance, Army" appropriation is the financial energizer of the Army's budget. Basically, the other appropriations provide combat potential. For example, the "Military construction" appropriation provides housing and facilities, the "Military personnel" appropriation provides the pay, food, and personal clothing for Army personnel, and the "Research, development, test, and evaluation" and "Procurement of equipment and missiles, Army" appropriations provide means to modernize and equip the Army. The "O. & M., Army" appropriation provides the means, through individual and unit training, supply and transportation, medical care, maintenance, and communications to transform the potential of men, equipment, and facilities into a functional combat capability.

This transformation is accomplished by providing funds, through the eight budget programs of this appropriation as shown on this table, to the organizations and activities responsible for execution of the interrelated segments of the appropriation. (The table referred to follows:)

There is no separate budget program for operation and maintenance of facilities, since the O. & M. costs appropriate for each one of these budget programs have been included in that budget program. It would be possible to have an adequate, well-equipped force and yet be ineffective because of inadequate operating funds provided by the "Operation and maintenance" appropriation for support of the individual soldier and his unit.

year

The "Operation and maintenance, Army," appropriation request for fiscal year 1962 is $3,257 million. This is a minimum with which to execute our assigned missions. Within this amount, the proposed distribution of funds by budget program will provide the best balance we can devise for the diverse activities to be executed in fiscal 1962, and thereby insure the proper meshing of the interrelated ac tivities supported by the eight budget programs. As an example of these interrelationships, the support for recruiting and induction activities which is provided by budget program 2500 must be coordinated with training center and school training capabilities which are funded under programs 2000 and 2100 in order that inductees can be processed and trained without waste of manpower or facilities. These activities, in turn, must be provided with supplies and services in proper proportions to insure that the right amount of equipment is in the right place at the right time. When unbudgeted costs such as wage board pay increases, damage from storms, mail and transportation rate increases and emergency operations occur during the fiscal year, it is necessary to make adjustments in programs in order to maintain balance within the appropriation and to achieve the most efficient and effective utilization of the dollars appropriated.

With this introduction I would like now to move into a description of the highlights of each budget program within the appropriation for fiscal year 1962. First is

BUDGET PROGRAM 2000-TACTICAL FORCES

A brief descriptive title of the major activities financed by this budget program is set forth on this next chart.

(Note: See justifications included on p. 30.)

In fiscal year 1962, through 12 Army training centers and certain strategic Army force units we plan to convert 245,000 nonprior service personnel, including approximately 48,000 Reserve Forces Act trainees, from new recruits into trained soldiers.

In budget program 2000 we provide support for the Army's combat forces and combat support elements in such daily activities as unit training, field exercises, test alerts, annual service practices, and the manning of positions in Korea and Europe. Such activities are vital to a continued state of combat readiness.

A 6.6 percent increase is programed in fiscal year 1962 for tactical aircraft operations. The requirements for qualified Army aviators and for operation of Army tactical aircraft are expanding as new tactical concepts and weapon systems become increasingly dependent upon improved battlefield mobility and better combat surveillance and target acquisition.

New missile systems are further emphasized in fiscal year 1962. DAVY CROCKETT and HAWK will be operational in increased numbers and the first SERGEANT missile units will be activated.

It was indicated to you last year that the Army planned to modify its tables of organization and equipment in fiscal year 1961 to increase the firepower and flexibility of major combat units. This modification is proceeding on schedule and will be completed in fiscal year 1961. It should be noted, however, that efforts to modernize and improve the structure of our combat units is a continuing requirement.

The field exercise program which we described last year is also proceeding as scheduled. For fiscal year 1962, an increase in field exercises over the fiscal year 1961 level is programed to enhance our operational readiness by providing for certain joint mobility exercises and an augmentation of local exercises in the United States and in Europe. Next is:

BUDGET PROGRAM 2100-TRAINING ACTIVITIES

The $195 million in budget program 2100 for fiscal year 1962 will finance the continued professional growth of the Army's career personnel and will provide funds for formal training in new tactical doctrine and techniques and in the skills required to operate and maintain the weapons and equipment of a modern army.

The complexities of new and modern equipment place a heavy load on the Army school system. We must train instructors, cadres, operators, and maintenance personnel. An increase of 1,870 in the Active Army student resident load over fiscal year 1961 is necessary to meet these requirements. This increase is almost balanced, however, by a projected decrease in the school load of Reserve Forces Act trainees resulting from the scheduled drop to 630,000 in Reserve component strength.

In addition to supporting the formal school training of Active and Reserve Forces, the formulation of doctrine, and the preparation of training literature, this budget program provides funds for the operation of the U.S. Military Academy at West Point.

NUMBER OF STUDENTS

(The following chart was referred to in the above statement:)

BUDGET PROGRAM 2200-CENTRAL SUPPLY ACTIVITIES

The backbone of the Army's worldwide supply system, which supports major commands and tactical forces, is financed through the next budget program 2200, central supply activities. As indicated on the next chart, this program supports logistical activities beginning with central procurement; extending through depot operations, supply management and support of reserve plant facilities; and encompassing transportation services, port operations and the disposition of surplus property. An important element of this program is the five single manager agencies and the Military Traffic Management Agency which provide support to all the military services.

(NOTE. See justifications included on p. 34.)

In fiscal year 1962 the Army will continue its depot improvement plan, which is resulting in a better dispersion of stock and more effective utilization of space. It is expected that over 4 million square feet of covered storage space will be inactivated by the end of fiscal year 1961 through implementation of this plan.

The major change in funding within this program for fiscal year 1962 relates to the implementation of new single manager assignments for automotive, construction, and general supplies. During the transition period, as the Army prepares for full operation in these new assignments, it is necessary to retain existing organizations in operation. An increase in overall costs to the Department of Defense estimated at $16.8 million in fiscal year 1962 will result from increased workloads and accounts for the net increase in this program.

The $937 million requested for fiscal year 1962 for central supply activities will permit the Army to support its worldwide bulk supply activities on opproximately the same basis as for fiscal year 1961.

BUDGET PROGRAM

2300-MAJOR OVERHAUL AND

MAINTENANCE

OF

MATERIEL

The complexity and high costs of modern equipment present a challenging problem. For example, in complex equipment there is a higher expectancy for equipment failure, but the high cost of such equipment precludes the establishment of equipment reserve for quick replacement of breakdowns. Our maintenance program must be designed, therefore, to prevent breakdowns to the maximum extent possible and, when they do occur, to execute repairs in a minimum of time and with the least possible cost so as to maintain equipment in effective operating condition. This is being accomplished in three ways: First, in top priority, this program insures that ease of maintenance is built into the design of equipment and that the soldier knows how to use and maintain his equipment in the field.

Second, program 2300 provides repair parts for missiles, special weapons, radio-controlled drones, and Army aircraft; and

Finally, this program provides for the depot overhaul of economically repairable equipment which is beyond the repair capability of field maintenance shops. Since the Army has no depot reserves of missiles and aircraft, we give precedence in this activity to funding overhaul of such equipment.

We have sought ways of stretching available funds in order to cope with the increasing costs of maintaining our modern equipment. Through inspections, written directives, and courses in maintenance management we are insuring that commanders at all echelons know when equipment is economically reparable, what repairs should be accomplished in the field, and when equipment should be evacuated to the depot for overhaul. A vigorously pursued program to identify and eliminate uneconomically reparable equipment has provided, through controlled cannibalization, an important source of low mortality parts without expenditure of funds for these parts. Another approach to cost reduction has been through the practice of an "inspect and repair only as necessary" concept. This is often referred to by an authorized title, IROAN. Previously, in depot overhaul we completely disassembled equipment and then rebuilt it. We now disassemble and repair only to the extent that engineering studies and diagnostic equipment indicate that we should. Through these improved techniques and practices we expect to be able to provide reasonable maintenance standards in fiscal year 1962 with the $269 million requested for budget program 2300.

BUDGET PROGRAM 2400-MEDICAL ACTIVITIES

The primary mission of the Army Medical Service, which is financed by budget program 2400, is to maintain the health of our troops and to conserve the Army's fighting strength under all conditions. In pursuit of this goal, the Army Medical Service assembles, develops, and applies all knowledge that will contribute to this mis