Senator CULVER. I sympathize with you. They criticize you if you are too slick, they criticize you if you are too primitive. You cannot win.

Dr. PIERRE. I used to be a professor and this is the way we did our charts in class. We were not able to be slick.

For M-60 production we are planning 480 tanks for the fiscal year 1979 buy, at $383 million. We have a modification program to upgrade not only the A1 to A3 conversion program, which is 220 tanks, but additional upgrading of the M-60A1 fleet. We have $98.4 million for that.

I might make a point about that. It seems to me that no matter how fast we want to field the XM-1, we can build up to a large production rate later on, but there is not much we can do to get them earlier. In the meantime we will rely on Al's, and A3's so the product improvement program is one that we have to maintain in order to have a near term qualitative edge in our fleet.

The fiscal year 1979 XM-1 program includes 110 tanks. This dollar amount is not only for the tanks but includes facilitization, production base support of the XM-1 line for a total of $592 million.

These production base support and facility dollars are to support a surge capacity of 150 tanks per month.

I would like to distinguish between the issue of the facilities we buy and tanks we produce. The tanks we produce will be an affordability issue later on but the facilities we are buying now are justified to accommodate a range of production rates that we might eventually get to. Right now we are committed to going to at least 90 per month. We are asking this year for those facilities so that when we get to the point where we have the opportunity to go to 120 per month the production base will be sized to support that option.

The program represented here, in case there is any doubt, is fully supported. This is the President's program in addition to being the Army's program.

At this point I would like to ask General Lawrence, who is the Army's manager of tank programs, and is managing the implementation of the tank program study we did last year, to give you a comprehensive view that will relate to what we have done in the past and what we are trying to do today.

Senator CULVER. Thank you.

[The prepared statement of Dr. Pierre follows:]

STATEMENT BY DR. PERCY A. PIERRE, ASSISTANT SECRETARY OF THE ARMY (RESEARCH, DEVELOPMENT AND ACQUISITION)

Mr. Chairman, Members of the Committee, I welcome the opportunity to dis cuss with you this morning the Army Tank Program. In describing the various aspects of this complex issue, I intend to limit my opening remarks to a dis cussion of our current tank posture and how the fiscal year 1979 tank procure ment request improves that posture. While this short term consideration of the tank program is useful in highlighting budget issues that must be addressed in the near future, these issues can be meaningfully reviewed only as a part of our overall long term goals for tank modernization. To explain to you the Armys long term tank modernization goals and rationale that ties those goals into az integrated, cohesive program, I will be followed by General Lawrence, the Chief of the Tank Forces Management Office. General Lawrence, in describing the Army's long range tank programs, will focus on the relationship between tank procurement goals and our ability to counter an ever increasing threat within force structure and affordability constraints. Finally, during this discussion we

will highlight the difference between the Army's out year tank procurement goals and that portion of those goals that have currently been approved by the Secretary of Defense.

At the end of fiscal year 1977 our tank asset posture showed the Army to be in a quantitatively poor position, with only half of our authorized prime tank asset on hand. Our inventory includes recently upgraded M-48A5 assets, M-60's built between 1959 and 1963, a large fleet of M-60A1's, and the recently fielded low density M-60A2. These assets represent both a considerable sunk cost and a firm basis upon which to structure future tank procurement plans. The size of the investment in our current inventory drives us, through product improvement programs, to attempt to extend the useful lives of these existing assets. Moreover, the quality advantage these tanks enjoy over similar vintage Soviet vehicles leads us to believe that M-60 series vehicles will be of use to us and our allies in selected missions into the 1980's. However, the continued reliance on what is essentially a 1960's technology tank fleet in the face of a rapidly modernizing Warsaw Pact threat would not be a prudent course of action to adopt. What is necessary in the coming years is a tank program that addresses quality as well as quantity issues in a practical, affordable manner. After an extensive review of this question, we believe we have developed such a program.

Consider now the Army's tank posture when procurement plans as included in the fiscal year 78 budget are executed. In effect this is a snap shot of the tank fleet as it will look when we initiate procurement with fiscal year 79 funds; the specific issue we are addressing today. Our asset posture will be considerably improved with a 77 percent fill of total requirements. However, only about 1,000 of those tanks will be modernized, M-60A3 assets. The M-48A5 program, which provides prime assets to Reserve and National Guard tank units, will be completed. Almost 6,000 M-60A1's of various configuration will be fielded and its follow-on, the M-60A3, will be in full production. Preparations to build the first XM-1 will be near completion.

These factors place us clearly at a cross roads in the tank program with several possible procurement alternatives to consider. With 77 percent requirements fill we are in a position, thanks to your support, to examine quantity versus quality tradeoff in future years. Consequently, there are at least two major modernization options to be considered. One approach would be to product improve the large, existing M-60A1 fleet and constrain both M-60A3 and XM-1 new tank production. A clear alternative to that option would be to minimize the funds spent on M-60 assets and accelerate the XM-1 program. The Army has considered a number of such options in terms of the cost effectiveness of each in meeting the future threat. I will address in detail the fiscal year 1979 portion of the modernization program that we have determined best meets our long term needs. General Lawrence will follow with a detailed overview of this aspect of the entire program.

The tank procurement request for fiscal year 1979 reflects the long range modernization strategy the Army has adopted. In simple terms we have decided that the most cost effective option in the long run is to limit M-60A3 procurement to that necessary to provide minimum near term readiness while allocating all available funds to the acceleration, and increase in quantity, of XM-1 procurement. We have adopted this course because we believe the XM-1 will be the best tank in the world; a quantum improvement over any tank in our current inventory. The fiscal year 1979 request represents the first step in implementing that strategy. The M-60A3 procurement request is for 480 tanks, enough to maintain a warm production base with one casting foundry throughout the funded delivery period. To augment the reduced production program, and enhance near term readiness. 220 conversions are requested to produce a total of 700 M-60A3 configured tanks. In another initiative aimed at extending the useful life of our existing fleet, we plan to upgrade an additional 420 M-60A1's to more modern standards. The money saved in M-60A3 production has been used to increase XM-1 facilitization funding in fiscal year 1979. Simply put, we want to accelerate the completion of XM-1 production base construction by two years and that takes more near term money. That acceleration will allow us to build a total of 7.058 XM-1's by FY87; our primary tank modernization goal. The quantity of XM-1's funded in fiscal year 1979. a period of production line test out. is unaffected by this increase in the rate of production base construction. Total funding requested for these tank procurement initiatives totals over 1 billion dollars. Before turning the presentation over to General Lawrence, who will project this near term, fiscal year 1979 snap shot into our overall program

framework. I'd like to make one final point. We consider the fiscal year 1979 budget request to be pivotal in that we are setting a new course for the tank program, a course that should remain constant in the foreseeable future. That course is directly tied to the accelerated fielding of the XM-1; as it goes so goes the Army of the future. We solicit your support in this endeavour.

STATEMENT OF BRIG. GEN. RICHARD D. LAWRENCE, CHIEF TANK FORCES MANAGEMENT OFFICE, OFFICE OF THE CHIEF OF STAFF

General LAWRENCE. I am General Lawrence, Chief of the Task Force Management Office in the Office of the Chief of Staff. My office was recently established to provide staff management of our tank forces program in the area of personnel training, logistics, and development and to assure the coordination of an integrated Army tank program.

I would like to submit the remarks that we had planned to give for the record and summarize, with a few charts, a perspective of the Army tank program, and the rationale behind it so that you can see what the direction is for the tank program in future years.

THE FX79 WATERSHED

We see fiscal year 1979 as the watershed year for the Army tank program for several reasons. First of all it is the first year in which we commit to a procurement of the XM-1 tank. In doing so we have to consider procurement of the A3 and the proper mix which we gain by tradeoffs between the two tank programs. Also it is the first year that the Army can begin to implement the strategic guidance provided by the administration which reinforces or reconfirms our commitment to NATO. That commitment is to enhance our capability to conduct a forward conventional defense against an armor heavy Warsaw Pact threat in NATO.

Also, it is the first year that we have begun to see crystalizing some of the key elements of the threat which I will speak to in a moment. In view of that the Chief of Staff commissioned a group of experts in the tank business in the Army to conduct an extensive program review last April. We did this with the thrust of our activity being more XM-1's for NATO faster.

One of the analytical tools that we use in wargaming analysis and in battlefield simulation is what we call firepower scores. Firepower scores are a measurement of the contribution of a particular generic weapons system to a battle. In examining firepower scores we determined that for a corps operation in the central battle in Europe, tank units, armor, provide about 36 percent of the firepower of the corps. Now armor units do this for about 20 percent of the cost of that corps force, and at about 2 percent of the manpower of that force. So that you can see that tank forces do provide considerable combat leverage on the battlefield in the central battle. Thus we do say that the Army's most important system is the tank.

I do not mean to imply that we consider the tank on the battlefield in isolation. Certainly the Yom Kippur War in 1973 considered the tank as part of the combat arms team, but the centerpiece for that combat arms team. As a matter of fact we are consistent with modern land armies of the world in that all of them are taking considerable steps at this point to improve their tank posture.

[Slide [deleted].]

What is the threat we face? This we view is the problem. At the current time in the near to mid-term, the T-64 and T-72 represent the principal armor threat. I have shown the T-64 and the T-72 here together because although the T-64 was perhaps the prototype of the T-72 it is being produced in accordance with the latest development information we have received in quantity. There are several thousand with the group of Soviet forces in central Europe and in terms of characteristics for all intents and purposes the T-64 does have about the same combat potential as the T-72. The main gun is 125 millimeter, which gives added killing power and range over the 115 millimeter in the T-62. The T-64/T-72 includes a considerably improved fire control in that it has [deleted].

This range finder is a more sophisticated device than found in the T-62.

Power pack, the first major engine change since the T-34, gives the T-64/T-72 considerably more agility with its lighter weight. The protection we believe is [deleted].

Senator CULVER. Is that assessment on [deleted] yours or that of the intelligence community?

General LAWRENCE. Sir, my information is what we received from the Assistant Chief of Staff for Intelligence, U.S. Army, several weeks ago. It is a collection of sources, compiled, analyzed, and published. To the best of my knowledge most of those sources were [deleted] I am not aware of the DIA position on this.

Senator CULVER. Are the DIA people here?

Major BROMLEY. Yes, sir.

Senator CULVER. Major Bromley. Would you comment on that point?

Major BROMLEY. Our assessment of the armor protection is different from the ACSI assessment. We do not believe that a [deleted].

Senator CULVER. Thank you. Major Bromley, why don't you submit what you have on this for the record, what you base your judgment on, and so forth.

Major BROMLEY. Yes, sir.

Senator CULVER. I just think we have to be awfully careful and responsible about how we handle these intelligence estimates. They are one of the most abused exercises imaginable. I realize how highly speculative these estimates often are, but it has to be a considered intelligence assessment to merit basing a major program decision on it.

I was interested several weeks ago when we had a group of Army witnesses in here. They said in view of the fact [deleted] we have to assume that the armor has been compromised. I asked why, and the answer was, "because of the acknowledged political instability of that regime and the likelihood of penetration."

That was one of the reasons I fought the AWAC's sale so vigorously, because that plane with its look-down radar was headed for the same place with the same risks and dangers of compromising that technology. I am very concerned about the implications for our own forces. particularly in the NATO theater, when the Russians could learn from a compromise how to shoot the eyes out of our air defenses and accelerate their own work in this area. If we so readily assume that this technology is going to be compromised, I don't know why we sell it into a high risk environment. [Deleted.]

General KEITH. [Deleted.] Indeed there was some concern expressed. That is about as much as I can say about it.

Senator CULVER. These things have a way of coming back and fighting us someplace.

General KEITH. The only point I wish to make, sir, is that many of the decisions are made on an entirely different base line of logic. Senator CULVER. The bottom line should be the welfare and effectiveness of our own forces. How many of us live and how many of them die.

General KEITH. It is very difficult to get good hard intelligence on Soviet systems, and our information is constantly changing. The sources as I understand them, that provided this [deleted].

Senator CULVER. New intelligence estimates always seem to com on the scene about 2 weeks before a hearing too. I can't help but somewhat cynical about the coincidence of timing.