What I want to point out here, though, is the various technologies that go into a missile like that. You have guidance and control. You have antenna, ordnance, fusing, batteries, propellant, all the various technologies that go into an advanced air-to-air missile.

Dr. COOPER. We are presently in advanced development on the AMRAAM, but if you were to march back several years prior to launching into this phase, you would have looked at efforts that were ongoing in the 6.1 program, which is here, which we call basic research, and that's just what it is. It's basic science, and we do studies here in physics, chemistry, materials, mechanics, electronics, energy conversion, and at the time these things are ongoing you really might not be thinking about building a new missile. Five or six years ago we weren't thinking about the AMRAAM. These are not dedicated to a specific military application per se.

Mr. MOLLOHAN. Mr. Chairman, may I ask a question on that? The CHAIRMAN. Sure.

Mr. MOLLOHAN. Is there any position appropriate for any consideration being given to fusion in our basic research in the military? Dr. COOPER. That's done under the DOE budget.

Mr. MOLLOHAN. I understand. Basically, I know that. But it has no place in any of our basic research?

Dr. COOPER. No. All of that research is done in the DOE account; although the Department of Defense may ultimately use it, it's carried under DOE.

When you move out of the 6.1 phase into the 6.2 phase, this is what we call the exploratory development phase and at this point in time, again relating it to AMRAAM, the Navy and the Air Force said, "We need a follow-on to Sparrow. What do we have in our

tech base that will allow us to build a new missile?" They had people doing research on ordnance, propulsion, guidance and control, airframe, composites. These are all component technologies that had yet to be integrated into a full scale missile.

Two years ago we moved into advanced development on the AMRAAM, and when we moved into that advanced development phase we took these component technologies and married them together into a prototype system, and that's what you saw being fired off the F-16. That prototype system includes the vehicle itself, its various components: sensors, motor, airframe, et cetera, all integrated into a full-sized missile for tests.

Now, in October we will pick a winner, and at that point, assuming the requirement is validated, we'll move into full-scale engineering development, where we build a full-scale model of the AMRAAM, do all the preproduction engineering and integration, hopefully, ultimately leading to full-scale production sometime downstream, probably 2 years from now.

Mr. DICKINSON. At what point is it no longer handmade?

Dr. COOPER. When you move into this phase, the latter parts of this, what you're really doing is engineering the thing for producibility. All the missiles up through here are handmade. They are not made on hard tooling, and you really don't start to pay for that hard tooling until somebody makes the decision that you want to produce the missile. So really, throughout the R. & D. process you're working with handmade equipment.

Mr. BATTISTA. Tom, to this point, has not covered the time sequence of this. But if industry carried out their programs like the Department of Defense carries out theirs they would be bankrupt in a matter of months, primarily because this is a sequential kind of a system that we have right now and, as you pointed out, Mr. Dickinson, because there is no comparison between this phase and this next phase what we're doing is getting into this lock step approach where we just wait until the last step is completed before we embark upon the next one. For example, between here and here, if you were to parallel this to the 747, you would find that Boeing had an empty field. Twenty-four months later they produced their first 747 production aircraft. That's what's missing in here, and we'll cover that in a little while.

Mr. DICKINSON. OK, if you would.

Mr. BADHAM. Mr. Chairman.

The CHAIRMAN. Yes, Mr. Badham.

Mr. BADHAM. What you're saying is that we're probably going to get into multiyear contracting, et cetera because the way we're doing it we're just wasting loads of time. When you know what your physics and chemistry and materials are and you know you want to end up with a missile or a 747 if you do things only one step at a time in between you're just wasting loads of time, and that's one of your criticisms.

Mr. BATTISTA. That's right.

Dr. COOPER. Yes.

I would mention one thing, though, on multiyear. We certainly would propose that you have more concurrency here, and by concurrency what we mean is while you are finishing up the full scale engineering development of, in this case, the missile, that you also

provide some long lead money's to start building the production facilities that you're going to need once the decision is made to produce the thing. If you don't do that, it's like Tony said, you're in a lock step, one after another, and you get_acquisition cycles like we have today where it's up to 20 years. So we definitely would recommend that there be an overlap here between R. & D. and also providing money for production.

As far as multiyear goes, though, the basic recommendation from the panel was that you should not multiyear on a program where there is a high probability that there's going to be significant design changes as you move downstream, and I do think when you're in the early part here, even though you're in production, there's still a chance that the design is going to change. You may also have to decrease the production numbers or provide additional tooling. Then it might not make sense to multiyear. But surely after you get 2 or 3 years into production, and you know you're going to be buying the thing for the next 5 to 10 years it makes sense to put it on a multiyear contract.

Mr. WHITE. Mr. Chairman, may I ask an elementary question? The CHAIRMAN. Yes.

Mr. WHITE. Is the research and development done primarily through industry or by our own governmental testing labs?

Dr. COOPER. I'll let Tony take that because that's been one of his prime initiatives since he's been on the committee, worrying about Government in-house capability. But it's primarily done by contrac

tors.

Mr. BATTISTA. Yes, it is. That's the case, and there's been a dangerous tend over the years because the more you take out of your in-house the more you're losing your capability to be a smart buyer.

Now, industry is very reputable, but they are also profit motivated. What you want to make sure of is that the Government gets a good product and that industry realizes a fair profit. Now, if you're a dumb buyer, one, you can't translate your requirements accurately to industry. That hurts industry also. And two, you're liable to pay a lot more than you should have for your product.

Over the years this subcommittee has been successful in stopping efforts to draw down the in-house activities to a very dangerously low level because a lot of good things have come out of the in-house community. Your Sidewinder missile, that was invented by Bill McLean at China Lake. Your Sparrow missile came from in-house. Your laser Q-switch came from in-house. As a result of those inhouse developments industry realized a $45 billion cash flow from those systems alone.

The thing is, you don't want a very large in-house activity. You want one that's, putting it bluntly, mean and lean, and one that enables the Government to be a competent buyer.

So I think this Government freeze is probably a good idea, but you want to make sure that you don't, through the freeze, stop the infusion of young talent in the laboratories. You want young, fresh engineers who are capable, who are competent, and the only way to retain them is to give them a piece of the action.

Mr. WHITE. Whose budget does this in-house capability come in, under this committee, or civil service?

Mr. BATTISTA. Under this committee, in defense research sciences, in in-house laboratory support, through a number of sources. It comes via this committee. It's also impacted upon by the Civil Service Committee, or the personnel management folks, as they're called today.

Mr. WHITE. Have you looked at the budget this year to see if it's adequate?

Mr. BATTISTA. I don't think it's a question of the budget being adequate or inadequate. I think it's adequate. I think it's what you're asking of your in-house laboratories in support. For example, if all you're going to have them do is just monitor contracts you're not going to keep the young fellow with Ph. D. in physics or mathematics around very long. He wants to go build something. He didn't go through 8 or 9 years of college just to watch somebody else do something.

So there are a number of things you can give the laboratories. It's how you do it. I think the Reagan folks have the right approach right now to a kind of putting a lid on the in-house. But we should run our in-house activities the way we run industry, put them on what they call a project Reflex, where they have to compete for their money in-house and they have to show what they have accomplished every year.

So I think what this committee could do to help the situation is impact upon the way that the labs are being used, as opposed to how much money they're getting. Contracting out, that's fine for janitorial supplies, for guard services in some instances, but contracting out your brains is not a very good thing to do. So you do want to keep your labs involved in basic research and exploratory development, and once the idea has matured then you want to give that to industry for production, with the exception of very, very few articles, like Watervliet producing gun barrels.

Mr. WHITE. If this committee finds it has very little time for that maybe the Investigations Subcommittee might be interested in that.

Mr. BATTISTA. Mr. White, I think that would be the best way to handle it because it's going to require probably several weeks of hearings just to get at the heart of the matter. But something has to be done about it. You have to utilize your labs more effectively, and, as I say, part of their budget comes out of this committee, but I think, to really address the heart of the matter, that should come out of your Subcommittee on Investigations.

Mr. DICKINSON. Tony, would you just name some of the major research facilities we have in-house and sort of what they do to give them a little feel for how extensive this is?

Mr. BATTISTA. Right.

You have the Naval Weapons Center at China Lake in California. They are responsible primarily for air-to-air missiles. They run a work force of about, the last count I had, 3,000 or 4,000.

You have the Naval Surface Weapons Center at Dalgren. They handle surface warfare. They do fire control, weapon control systems for ships.

Mr. Courter in your district you have the folks there at Picatinny, who specialize in small arms, precision-guided munitions.

In Alabama, in Huntsville, you have the ballistic missile defense community, as well as the Missile Command.

Wright-Patterson in Ohio.

Dr. COOPER. Four Air Force laboratories. there are four technology laboratories in Ohio called the Wright-Pat Labs.

Mr. BATTISTA. Yes. At Wright-Patterson.

You have Army Electronics at Fort Monmouth. Harry Diamond Laboratory does a lot of the fuse work for your projectiles and missiles.

There are quite a few of them.

Mr. MOLLOHAN. Mr. Chairman, could we pursue this just a moment, what Mr. White was talking about?

I am most sympathetic to what you had to say about the maintaining of an in-house capability.

Do we have an in-house capability to develop the missile that we were talking about a moment ago that's being developed by two contractors currently? Do we have that level of capability for research and development in our own in-house laboratories?

Dr. COOPER. Probably this part of it we have an inhouse capability [indicating on viewgraph], maybe stretching out into here. But from here on, say, roughly here on, most of that is contracted out as far as actually doing the work.

Mr. MOLLOHAN. All right. Will you detail for me, since I am completely new to this committee, the process we use in moving from that point where we finish our in-house capability and we must move to a private contractor? Will you process that for me? How do you do that?

Mr. BATTISTA. All right. We'll go through the DSARC process. Could you wait for just about 5 minutes until Tom finishes? Then I'll cover that in the DSARC.

Mr. MOLLOHAN. Sure.

Mr. BATTISTA. Mr. Mollohan, we had the capability to do a program like the AMRAAM in-house. We lost it. We lost it because year after year the Defense Department was given mandates by OMB to cut back on in-house. They were coming up with arbitrary figures, for example, contract 60 percent of your work out of house, and as a result of those directives we lost that capability. We can't do that any more, and it's a crying shame because no one has the cornerstone on brains. Good ideas come from every place.

Mr. MOLLOHAN. I gather what you're doing is urging this committee to attempt to do an about-face.

Mr. BATTISTA. To get us back to the point where we were.

Now, Chairman Price wrote a letter in about 1975 that curtailed a 7,000-man cut in the in-house laboratories, and that was the best thing that happened to the system. Otherwise, it would be in a darn near irretrievable shape right now. But that was headed off. The last administration concurred in the fact that that was a very good thing to do, and now you have to carry it a step further. My recommendation to you would be to encourage Secretary Weinberger to run the labs like industry. If they produce, sustain them, keep them going, let them compete for their dollars, make them produce, because right now you do have bad labs in the system, bad insofar as they haven't produced a thing in years.