I have taken this much of your committee's time on this subject because of the importance I attach to relief from these limitations. There are others which I have not discussed, such as hire of vehicles, dependents' education, Air Force Academy, congressional liaisonall of which, in my view, warrant your serious consideration. I respectfully suggest a moratorium on these appropriation limitations as recommended in the budget submission. I would suggest that these limitations not appear in the fiscal year 1962 act, but that the committee indicate unequivocally the intent to reimpose limitations in any case where it is not satisfied with our performance in a given area of activity. I believe this would have the salutary effect which you seek in the first instance. I certainly recognize that there will always be areas wherein improvement could be made in the way we manage our programs-this, in spite of our best efforts. Therefore, I suggest if the committee should find some new area in which it is dissatisfied, that before a limitation is imposed, it again make clear its intent to do so beforehand, so that we will have a chance to put our house in order. Mr. Chairman, that concludes my presentation. I shall be happy to answer any questions the committee may wish to ask. UNPROGRAMED FUNDS Mr. ANDREWS. On page 25 you say you have $127.3 million of unprogramed funds carried over from fiscal year 1961. What are those unprogramed funds? Mr. PRITCHETT. $97 million is traceable to the fighter add-on, the F-106. The balance of it is arithmetically possible by gyrating with the B-70 program as approved. That is how the figure got there. I meant by that, we were required to take certain increases for the B-70 out of other funds that were available. AREAS OF POSSIBLE SAVINGS Mr. ANDREWS. You explained very well in my opinion the method you have of getting recoupments over a period of years from these huge procurement programs. I have been reading that Senator Douglas has charged he could show the Air Force $1 billion a year that could be saved in your procurement program and that a conference had been arranged for him with some of the staff members of the Secretary of Defense. Do you think he has in mind these recoupments you have explained to us, or other ways he could save that money? General FRIEDMAN. I believe the Senator has other ways he would arrive at these savings. I think, principally, the fact he would like to see one office charged with procurement. He feels through this action there would be less likelihood of duplication of procurement. I think that is the principal thesis that he rests on. I would be the last to say there is not room for improvement. Whether it would be of the order of $1 billion, more or less, I certainly am not prepared to say. Mr. LAIRD. Do you think there would be a savings? Mr. LAIRD. I could not tell from General Friedman's comment whether there would be a saving or not. General FRIEDMAN. I would be the last to say there is not room for improvement. There is always room for improvement. Whether it would be on the order of $1 billion, more or less, I am not prepared to state. Mr. LAIRD. But you think a savings could be made? General FRIEDMAN. I would have to see the specifics of the plan in order to really comment on that intelligently, Mr. Laird. I have not had an opportunity to review it in that detail, only as a general thesis. MINUTEMAN PROGRAM Mr. FLOOD. What generation MINUTEMAN are we going to buy when we first start buying? General FRIEDMAN. That will be the first generation MINUTEMAN, Mr. Flood, and we have taken a firm position in the Air Force. We are elated with the initial success and we do not want to do anything to upset it. Until this thing is well along and shows up proven, we are going to do without "model improvement," so to speak. Mr. FLOOD. Who will I talk to about the railroad hardware, the R. & D. people, the railroad cars for the mobility of the MINUTEMAN of either generation? Will I talk to the R. & D. people about that, or do you know anything about it? General FRIEDMAN. I am generally aware of what is involved. Mr. FLOOD. I am interested because the American Car & Foundry Co. who are doing the mock-up job, while not in my district, is just across the street, if you know what I mean. The demarcating line puts this plant in a county district across the line from mine, and many of my people work in this plant. This is a matter of great interest in our neck of the woods. Mr. MAHON. Your procurement people and the R. & D. people will be able to speak better on that? General FRIEDMAN. Yes. Since the contracting function-it is performed through the Air Materiel Command in this instance-I think General Bradley would be the man to talk to. AIRLIFT REPROGRAMING Mr. FLOOD. On this reprograming, on this order issued to have these new jets purchased, where did you get the money to buy the new jets? You cut off the purchase in line of other transports, did you not? General FRIEDMAN. I will explain that. The first portion of the funds for the 10 aircraft will be the first 10 aircraft were financed simply by the change in designation of KC135 to C-135's. Mr. FLOOD. This whole thing had to come to your attention at once, or nothing would have happened. At what time, and under what circumstances, did this idea land on your desk? You walk in some morning and there it is, how did it happen? General FRIEDMAN. This had been a subject of discussion over a period of time. Of course I was involved in the determination and the cost of various alternative plans. I think the plan really jelled in terms of its current extent on the 31st of January. At that time we provided a schedule by which we would finance the program. Mr. FLOOD. Were you told what to do by an order from somebody? Did the Secretary of Defense pick up a telephone and say, "I would like 50 jets Monday morning," or what happened? General FRIEDMAN. No, sir; it was not that way. We made a proposal very similar to this in our initial budget submissions, the A, B, C, D budgets. As far as I am concerned, with the exception of minor details here, the current plan represents very closely the C budget we sent down. Mr. FLOOD. How are they going to pay for it? General FRIEDMAN. We will pay for that by Mr. FORD. Off the record. (Off the record.) Mr. FLOOD. What are you going to use for money? Mr. PRITCHETT. There was a contract in the 1960 program for 66 KC-135s. Some of those aircraft were, in effect, converted to the "C" configuration. In the 1961 appropriation for airlift modernization, we had previously earmarked $171.6 million for the procurement of 50 C-130-E aircraft in line with this committee's wishes. Mr. FLOOD. The C-130's are the kind of aircraft that I can use to jump troops from? Mr. PRITCHETT. Yes, sir; and 50 of them are being provided to the MATS fleet. Mr. FLOOD. This 1961 budget asks for $171.6 million to give me 50 C-130's? Mr. PRITCHETT. The Congress provided $194 million-$200 million less 3 percent-in what we call the interim MATS modernization That was to cover a cost of 50 C-130-E's and if any money was left over we could buy a C-135 type, if I recall the words. Mr. FLOOD. I remember that. area. Mr. FORD. The words were "turbofan," or "turboprop." Mr. PRITCHETT. I believe you are correct. We had last fall, in presenting our budgets and getting approval of them, reserved $171.6 million of that fund for the procurement of 50 C-130-E aircraft. Mr. FLOOD. Right. Mr. PRITCHETT. Leadtimewise, we only had to actually put on contract, during fiscal year 1961, 16 of those; therefore, we had reserved, for the 34 additional that we could contract in June or July of this year, some $87 million that was just sitting there earmarked for this program. These funds were used to finance the current procurement of the 20 additional C-135 aircraft added to the 10 I just described. Mr. FLOOD. Jets? Mr. PRITCHETT. We use, of the $87 million, some $61 million for the 20 additional C-135's. In addition to that, we use the balance of the $87 million to increase the order for the C-130-B by 16 aircraft and buy out medium troop carrier transports with the 1961 program rather than the 1962. That will be the last buy of the C-130-B's. We will go on Mr. FLOOD. Wait a minute, the sentence you did not finish—that is the one I want to ask about. What are you going to do about this? Mr. PRITCHETT. Our proposal envisions the procurement of 89 C-130-E aircraft in fiscal year 1962. This will require a budget amendment in this appropriation-not necessarily in total, but in this appropriation-of $141 million over the amount that is contained in the budget as presented by the Eisenhower administration. Mr. ÖSTERTAG. It is new money rather than funds already appropriated? General FRIEDMAN. That is right. Mr. OSTERTAG. On the point that Mr. Flood pursued just a moment ago, are these aircraft completely authorized? General FRIEDMAN. You mean in terms of the new authorization bill? Mr. OSTERTAG. Yes. General FRIEDMAN. Yes; the 1960-61 buys are, since the new authorizations do not become effective except for appropriations made after December 1961. Mr. OSTERTAG. December of? General FRIEDMAN. 1961. I mean of 1960; in other words, this past December. The new aircraft, the 89 additional aircraft that Mr. Pritchett mentioned, will have to be authorized prior to appropriation of 1962 amounts for that purpose. Mr. OSTERTAG. In other words, you take two steps, first the authorization, then the appropriation of funds, in order to achieve this program that you have just discussed? General FRIEDMAN. As pertains to 1962 "buy." Mr. FLOOD. Off the record. (Off the record.) Mr. MAHON. Thank you very much. We will continue at 2 o'clock. AFTERNOON SESSION Mr. MAHON. Shall we proceed? FISCAL TABULATIONS Mr. FORD. Mr. Chairman, I presume these charts that have been submitted by General Friedman will be included in the record. I am referring to these three charts. Mr. MAHON. Do you think they would be helpful? Mr. FORD. I think they would be quite helpful and beneficial. We can check the accuracy of these projections far better several years later if we have them in the record. General FRIEDMAN. We have no objection if the committee wants them in the record. (The charts follow:) |