been reinforced and strengthened by our efforts in Afghanistan and through better interagency cooperation. DOD is providing senior Special Operations Forces officers on rotation to key positions in civilian agencies to bridge the cultural gap and enhance support relationships. DOD, with the help of the interagency, is resourcing Joint Interagency Task Forces on the staff of the combatant commanders to better plan and prioritize the application of DOD and interagency resources. DOD is also actively studying ways to enhance Special Operations Force's organic capability to plan and operate with civilian intelligence agencies in a more effective manner.

54. Senator BINGAMAN. Secretary Rumsfeld, would the Department be adverse to establishing a Service Secretary equivalent (in rank) for Special Forces?

Secretary RUMSFELD. Consideration of such a proposal for Special Operations Forces would have to be based upon a comprehensive analysis of all aspects-resource, policy, legal, and organizational efficiency. Without such a foundation on which to base an evaluation, the Department has not established a definitive position.

QUESTIONS SUBMITTED BY SENATOR STROM THURMOND

ROLE OF THE QUADRENNIAL DEFENSE REVIEW

55. Senator THURMOND. Secretary Rumsfeld, at the conclusion of last year's Quadrennial Defense Review, you and your staff suggested that the fiscal year 2003 budget request would reflect the recommendations of the QDR. How does this budget request support the recommendations of the QDR?

Secretary RUMSFELD. The answer to this question is detailed in the middle half of my statement for the record on the fiscal year 2003 budget request. To summarize, this request supports the QDR's recommendations by funding the priorities and changes reflected in the new defense strategy developed by the QDR and by emphasizing transformation and the six objectives detailed in my statement.

PRECISION GUIDED AMMUNITION

56. Senator THURMOND. Secretary Rumsfeld, the strikes against targets in Afghanistan have again demonstrated the value of precision-guided ammunition. Unfortunately, we have not learned from experiences in that we are expending ammunition faster than we can replace it and must rely on war reserves. I am also informed that the industrial base for this type of ammunition is limited and having a hard time keeping up with the demand. What is the Department doing to ensure we have and will continue to have a readily available stock of precision ammunition?

Secretary RUMSFELD. Success in the War on Terrorism can be partially attributed to the accuracy of precision guided munitions, both laser guided and GPS guided. The fiscal year 2003 budget request and emergency funding have enabled facilitization of the contractors, and accelerated procurement of greater quantities of these munitions to replace depleted stocks.

The Under Secretary of Defense for Acquisition, Technology, and Logistics directed an increase in production rates of both the Joint Direct Attack Munition (JDAM) and the Laser Guided Bomb (LGB) kits. The JDAM contractor was facilitized to a production rate of 2,800 units per month, tripling the existing contract rate. The two LGB contractors were facilitized to a production rate of 1,450 units per month, more than doubling existing production rates.

MILITARY CONSTRUCTION

57. Senator THURMOND. Secretary Rumsfeld, you have testified several times that we need to improve our infrastructure and make sufficient investments to reduce the recapitalization rate of our infrastructure from the current more than 100 years to a goal of 67 by fiscal year 2006. I am especially interested in our depot system and materiel readiness. After reviewing the military construction program, I found that construction funding for "Maintenance and Production Facilities" was slashed by 59 percent. Does this funding level support your recapitalization goal and improve the working conditions of our men and women in uniform?

Secretary RUMSFELD. Our fiscal year 2003 military construction request focuses investments on critical military requirements and resolving readiness shortfalls, as determined by the services, without regard to specific installations or types of facilities.

Funding for maintenance and production facilities in fiscal year 2002 was higher than the historical average. We have invested about $338 million (or 3.8 percent) of the military construction budget in maintenance and production facilities, over the past 6 years. For fiscal year 2003, we have requested $430 million, or 4.8 percent of the military construction request.

DEFER PROJECTS DUE TO DELAY IN BRAC

58. Senator THURMOND. Secretary Rumsfeld, according to the budget presentation documents, a justification for the reduction in military construction funding is a reflection of the "delay in an additional round of base closures." Based on this statement, one could assume that you are deferring construction at installations that could be closed by another round of BRAC. We have been assured repeatedly that the Department does not have a list of bases that will be considered for closure. Yet, the briefing documents could lead to such a conclusion. Why have you reduced construction funding due to the delay in BRAC?

Secretary RUMSFELD. We did not reduce construction funding due to BRAC, and there is no list of bases to be closed or realigned. The fiscal year 2003 military construction request reflects our priority to improve quality of life and resolve critical readiness shortfalls, as determined by the services. Military construction projects were based on mission criticality without regard to potential BRAC actions or specific installations.

OVERARCHING SET OF CAPABILITIES

59. Senator THURMOND. General Myers, your statement for the record states that the blueprint for the transformation of our Armed Forces will include five considerations. The first consideration is that we must base the process of change on an overarching set of capabilities we believe our forces must possess to support the National Security Strategy now and in the future. What do you consider these overarching capabilities?

General MYERS. Our discussion of an overarching set of capabilities is designed to focus DOD's transformation efforts on the primary purpose of our Armed Forcesto fight and win our Nation's wars. Transformation is about keeping our Armed Forces superior to any other nation's in a complex and ever changing environment. To provide focus to DOD's transformation agenda, the Department has identified the following six critical overarching capabilities or operational goals that it must

secure:

• Protecting critical bases of operations (U.S. homeland, forces abroad, allies, and friends) and defeating weapons of mass destruction and their means of delivery;

• Projecting and sustaining U.S. forces in distant anti-access or area denial environments and defeating anti-access and area-denial threats;

• Denying sanctuary to enemies by providing persistent surveillance, tracking, and rapid engagement with high-volume precision strike, through a combination of complementary air and ground capabilities, against critical mobile and fixed targets at various ranges and in all weather terrains;

• Assuring information systems in the face of attack and conducting effective information operations;

• Enhancing the capability and survivability of space systems and supporting infrastructure; and

• Leveraging information technology and innovative concepts to develop an interoperable, joint command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) architecture and capability that includes a tailorable joint operational picture.

INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR)

60. Senator THURMOND. General Myers, at a January 24, 2002 air and space power seminar, General Martin, the Commander of U.S. Air Forces in Europe, stated: "Our ISR posture as a Nation is woefully short of the needs, from space to HUMINT, [in] every bit of intelligence, reconnaissance, and surveillance capabilities." The shortfall in IRS has been one of the more persistent issues, yet we always seem to have higher priorities when it comes to funding this area. How does the budget request address the problem?

General MYERS. This budget provides significant increases in both national and defense intelligence, surveillance, and reconnaissance (ISR) capabilities. National programs raised in your question are found in the National Foreign Intelligence Program (NFIP) submission. In the DOD request are significant investments in manned and unmanned airborne programs, space reconnaissance, and space control systems and processing, exploitation, and dissemination capabilities.

Following the tragic events of September 11, the Department's supplemental request to support Operation Enduring Freedom included both additional ISR aircraft, e.g., EP-3, additional sensors for the U-2, and replacement Predator air vehicles, as well as modifications to existing manned platforms to support operations in the Global War on Terrorism.

The fiscal year 2003 budget includes the most significant increases in ISR capabilities in years. Priorities for investment in this budget are counterterrorism and transformation. For example, the request accelerates investment in the high altitude UAV system, Global Hawk, and sustains an accelerated acquisition program across the FYDP. It accelerates acquisition of the Army short range UAV, continues acquisition of our workhorse Predator systems and replacement air vehicles, invests in an advanced air vehicle testbed, and continues preacquisition activities for a space based radar surveillance system. The budget sustains development and deployment of the Distributed Common Ground Station (DCGS), the multi-source deployed and shipboard systems that process and disseminate fused intelligence to forward forces and fleets. Imagery processing, exploitation, and dissemination received a substantial increase.

Investments included in this budget establish a solid foundation for critical improvements in ISR capabilities that provide our eyes and ears on the battlefield now and in the future.

CARRIER SUPPORT

61. Senator THURMOND. General Myers, I understand that at the height of our operations over Afghanistan, we had to pull the Kitty Hawk from its station in support of Korea to provide support for United States Central Command (USCENTCOM). Although they deployed appropriate aviation assets to Korea, there were some shortfalls in specific types of aviation support for the Korean operation plan. Was this change in mission for the Kitty Hawk due to a shortage of carriers in the number of carriers or due to the unique capabilities of the Kitty Hawk?

General MYERS. The U.S.S. Kitty Hawk and a portion of her Aircraft Carrier Battle Group (CVBG) deployed to the USCENTCOM Areas of Responsibility (AOR) from 10 Oct-10 Dec 01 as an Afloat Forward Staging Base (AFSB) for Special Operations Forces. All Aircraft Carriers and CVBGs have similar capabilities; however Kitty Hawk is home ported in Japan and the transit times from Japan to USCENTCOM AOR is appreciably quicker than from either the east or west coast of the United States.

OPERATIONAL TEMPO

62. Senator THURMOND. General Myers, Title 10 of the United States Code directs that effective October 1, 2002, the number of major headquarter activities personnel in the Department of Defense may not exceed 85 percent of the number in such positions as of October 1, 1999. Considering the current operational requirements, what is the impact of a 15 percent reduction in such headquarters as CINCPAC or CENTCOM?

General MYERS. Whether in peacetime or wartime, a 15 percent reduction will certainly impact the operational capability of the combatant commanders. However, the Department is committed to making further efficiencies within the management structure. All combatant command headquarters are impacted to some degree by the Global War on Terrorism, but the greatest impact is on USCENTCOM headquarters. Additional operational headquarters support for Operation Enduring Freedom has driven increased augmentation requirements at USCENTCOM headquarters. At this time, USCENTCOM is exempted from the 15 percent major headquarters reduction to minimize the impact on the warfighting efforts. The other combatant headquarters are moving forward to execute the 15 percent reduction.

63. Senator THURMOND. General Myers, would you favor a waiver in this requirement beyond the current 7.5 percent authority?

General MYERS. No. However, congressional approval to defer reductions for a year or two would help us stand up UŠNORTHCOM while we focus on current operations and streamline our major headquarters.

CHANGE IN FORCE STRUCTURE

64. Senator THURMOND. General Myers, based on the current operation in Afghanistan and the needs of any further operations in our Nation's war on terrorism, what changes would you recommend to the force structure of our military services? General MYERS. Although we have several on-going studies examining the impact of our forward presence and engagement levels, I do not believe it is necessary to make any major changes to the force structure at this time. During development of the Quadrennial Defense Review (QDR), we spent a significant portion of our effort reconciling the mismatch between strategy and resources. The new strategy calls for, among other things, the ability to defeat the efforts of one adversary while decisively defeating another. The War on Terrorism, including our operations in Afghanistan, approaches a level of effort and commitment from our force along the lines of the forces QDR would call "defeat the efforts." As the war's requirement for military forces matures, and our on going studies near completion, we may have more insight into any emerging requirements in terms of additional force structure.

QUESTIONS SUBMITTED BY SENATOR RICK SANTORUM

ARMY LEGACY PROGRAMS

65. Senator SANTORUM. General Myers, the Army has terminated 18 programs and/or systems as part of the fiscal year 2003 request. Among the terminations are: TOW Fire-and-Forget, M113 recapitalization, Armored Combat Earthmover, Wolverine, Hydra Rocket, Improved Recovery Vehicle, and Bradley Fire Support Team. Is the Army or the Office of the Secretary of Defense expecting Congress to "buy back" these terminations? Put another way, should Congress expect to see these programs and/or systems on the Army's unfunded requirements list? While 18 programs and/ or systems have been terminated, have the requirements that supported these programs gone away?

General MYERS. The full promise of transformation will be realized over time as we divest some legacy systems and transfer those resources toward new concepts, capabilities, and organizational arranagements that maximize the warfighting effectiveness and lethality of our men and women in uniform. Any discussion pertaining to termination of legacy systems can best be articulated by the services.

EFFICIENCIES

66. Senator SANTORUM. Secretary Rumsfeld, a recent report indicated that the Department of Defense is in the final stages of crafting an incentive plan that would allow defense contractors to keep some of the savings they achieve when they cut costs, reduce overhead, and consolidate operations. In other industries, companies slash costs and benefit when profits jump. But when a military contractor consolidates facilities, implements cost-savings technologies, or adopts other efficiencies, the government reaps the benefits by deducting the amount saved from what it pays the contractor for the product. Military contractors have argued that such a system gives them little incentive to make the hard, and sometimes costly, decisions to boost efficiencies. Can you elaborate on the plan and when you hope to implement these changes? Will these changes require legislative changes to current statute? Secretary RUMSFELD. We agree that the Department needs a policy to encourage contractors to undertake aggressive cost reduction programs at business segments that contain a large proportion of DOD cost-based contracts. Our plan is to publish a proposed policy by the end of April for public comment. The policy will be structured to permit the sharing of savings over a 5-year period when DOD will achieve savings of at least $2 for every $1 in costs it pays to generate cost efficiencies. We do not need legislative changes to implement a policy to share savings.

INTERIM BRIGADE COMBAT TEAMS

67. Senator SANTORUM. General Myers, the Army is already forming two Interim Brigade Combat Teams (IBCT), the 3rd Brigade of the 2nd Infantry Division (Medium) and the 1st Brigade of the 25th Infantry Division (Light), at Fort Lewis,

Washington. Yet when it came time this past November to insert ground forces into Afghanistan, it was the Marines that were tasked the responsibility of taking control of a base near Kandahar. Some have commented that these Marine forces combine more tactical maneuver capability and more firepower to sustain themselves than the Army's comparable rapid-deployment forces. Why were the two Interim Brigade Combat Teams-currently using surrogate equipment similar to the Marine Corps' equipment-not deployed to Afghanistan? Wouldn't a deployment to Afghanistan offer the perfect opportunity to demonstrate the training, tactics, and doctrine that are inherent to the Interim Brigade Combat Teams?

General MYERS. The two IBCTs at Fort Lewis have not yet reached their initial operating capability. The first IBCT has received a limited number of surrogate vehicles, but there are not enough for the entire brigade, thus limiting combined arms training at the battalion and brigade level. The focus thus far has been on small unit training, battle drills, and developing the new capabilities. The second IBCT has just initiated its transformation process in January 2002. If the brigades had attained initial operational capability, they would have been candidates for deployment to Afghanistan and this certainly would have demonstrated their capabilities. [Whereupon, at 1:12 p.m., the committee adjourned.]