Mr. FORD. Was the total amount of $1,682 million made available at the time of the beginning of the fiscal year?

General DUFF. No, sir.

With regard to the $158 million additional appropriated by the Congress over the President's budget request, we have available for obligation all but $45 million of that, and this has been made available at various times during the fiscal year. Thirty-seven million dollars was made available immediately in the OSD financial plan and an additional amount of $76 million has been made available subsequently.

Mr. FORD. At the beginning of fiscal 1961, how much was made available for obligation?

General DUFF. The amount available right from the very beginning was approximately $1,513,000,000.

Mr. FORD. And all but $45 million has currently been made available?

General DUDD. That is correct.

Mr. FORD. As of December 31, only 28 percent of it had been obligated?

General DUFF. Only 28 percent of our direct and customer programs. I am speaking of the entire accounts, not only the $1,637 million of Army accounts, but $701 million for customer accounts. The total of $2,338,700,000.

Mr. FORD. How much do you anticipate obligating by June 30 out of the total?

General DUFF. We anticipate that the full program, or $2,338,700,000, will be obligated. This does not include the $45 million which is currently withheld for utilization in fiscal year 1962.

Mr. FORD. It seems to me your obligation picture in this account, bearing in mind the amount you have available, is not as good as it should be.

General DUFF. I believe the obligation account is extremely favorable, comparing our situation at this time in this fiscal year with the same period in past years.

As I stated, on the 11th of February, which was our latest reporting date on obligations and commitments, 61 percent of this appropriation of the total amount was either obligated or committed.

Mr. FORD. What do you mean?

What is the difference between an obligation and a commitment? General DUFF. An obligation is the actual legal contract for the use of funds. A commitment is the preliminary procedure in preparing to make a contract, but with the final obligation of funds not having yet been made at the particular moment. So this is very close to the obligation date, sir, but not quite to the point where the actual legal obligation of the fund has occurred.

Mr. FORD. Out of the 61 percent, how much falls in the commitment category, and how much in the obligation category?

General DUFF. Thirty percent would be commitment and 31 percent obligations.

Mr. FORD. Then between December 31 and February 11, you have only gone up from 28 percent to 30 percent in obligations? General DUFF. That is correct, sir.

Mr. FORD. That is not very much progress.

General DUFF. Not in this particular period. In this particular period there has not been much progress. As you know, the period of greatest progress in the obligation of these funds is normally the last 2 months of the fiscal year, but we are much better from an obligation standpoint at this period than normally has been the record for past years.

Mr. SHEPPARD. In what category would that differential show up in procurement? What category of procurement would be involved? General DUFF. The funds that have been obligated, sir?

Mr. SHEPPARD. That is right.

General DUFF. I will ask General Myers. I am not sure we have the information readily available.

General MYERS. I will have to trust to memory on this, Mr. Sheppard.

I would say that the best answer to that is, we have obligated as fast as we could across the board in all types. I do not know of any particular category where there has been any appreciable slowdown. We have had a great deal of pressure put on us this year to get obligations made just as fast as we could.

General ĎUFF. Through the end of December, I can give it to you by budget programs. That in general would indicate the category of items.

"Aircraft," $67.7 million, or 41.3 percent was obligated.

"Missiles," $195 million, or 25 percent.

"Electronic and communication equipment," $120 million, or 52.7 percent.

"Ordnance vehicles and related equipment," $167.4 million, or 16.7 percent. That is where we are most behind.

And "Other," $105 million, or 62.6 percent, this being the total of $655 million, and a total percentage of 28 percent.

Mr. SHEPPARD. Thank you, Mr. Ford.

Mr. FORD. How much in dollars as reflected in direct obligations is involved in this 2-percent increase in obligations between January 1, 1961, and February 11, 1961?

General MYERS. The amount, sir, through the 31st of December was $655 million. The cumulative obligations through February 11 are $744.6 million.

It is about a $90 million increase, sir.

Mr. FORD. In a 6-week period?

General MYERS. Approximately a 6-week period, yes, sir, from the end of December until the 11th of February.

Mr. FORD. What is your anticipated rate of obligation in the next month, or the next quarter?

General MYERS. Because of the fact that 61 percent of the funds have been committed and the obligation follows very shortly within a relatively short time after the commitment, we anticipate the rate of obligation will be quite high in the next month and the following month.

Mr. FORD. What was the commitment figure on January 1, 1961? General MYERS. I do not have that figure, sir.

Mr. FORD. It seems to me you have two factors here, the Army wants to get this equipment, the committee wants them to do it; secondly, we are hearing a great deal about the need for a shot in the arm for the Nation's economy. It does not appear to me from

the facts submitted here that the Army is very successful at either objective.

General MYERS. Sir, maximum effort is being made by everyone who has any portion of the execution of this program to make sure that we are proceeding with the maximum speed possible at the same time assuring that safeguards to protect the Government funds are implicit in the contracts being made.

Mr. FORD. Will you proceed with the next account, General Duff? General DUFF. $710.5 million had been obligated for research, development, test, and evaluation, or 60.6 percent of our program. Mr. FORD. As of what date?

General DUFF. This is as of December 31, sir.

Mr. FORD. That is a good obligation picture.

General DUFF. That is correct, sir. As of the 11th of February, the commitment percentage is 76 percent.

Mr. FORD. You mean commitment combined with obligation? General DUFF. Commitment combined with obligation, the total is 76 percent; yes, sir.

MR. FORD. What is the picture for obligations only as of February 11?

General DUFF. Obligations only, cumulative obligations as of February 11, $755.6 million. This is a $45 million increase since the 31st of December.

Mr. FORD. What do you anticipate will be your unobligated balance, if any, at the end of the fiscal year in this column?

General DUFF. We anticipate, sir, about $37 million only would be unobligated at the end of this fiscal year.

Mr. FORD. That is about the usual figure at the end of the fiscal year?

General DUFF. That is correct, sir.

For military construction, sir, obligations through the 31st of
Mr. MAHON. That is not covered here.

General DUFF. Very well, sir.

DEUTSCHE MARK SUPPORT

Mr. FORD. On page 5 of your statement, General Duff, you mention something about a $12 million item of deutsche mark support. GENERAL DUFF. Yes, Mr. Ford.

Mr. FORD. Would you explain that item?

General DUFF. Yes. Under current procedures, sir, even though this is a contribution by the Berlin Magistrate to the U.S. Government, and is for the support of troops that are stationed in Berlin, it is now required that we get appropriated funds in order to make these appropriated funds balance the contribution, so this is an administrative transaction. This is an actual gain to the Federal Treasury, but it is now required for the Department which is the beneficiary of this contribution to provide the same amount in new obligational authority which it would be anticipated it would receive from the Berlin Magistrate.

Mr. FORD. Is this the amount we budgeted for at the time legislation was approved for fiscal 1961? There was a contribution in the budget. Was this the amount?

General DUFF. Mr. Ford, this was the amount which was anticipated would be made available by the Berlin Magistrate.

Mr. FORD. Let's get the precise amount budgeted, and the amount we are now anticipating.

General DUFF. We will insert that in the record. (Information to be supplied follows:)

DEUTSCHE MARKS

In fiscal year 1960 and fiscal year 1961, the Army received certain deutsche mark support in the Berlin Magistrate. In terms of U.S. dollars, this support

In accordance with section 619 of the fiscal year 1960 Department of Defense Appropriation Act and section 519 of the fiscal year 1961 Department of Defense appropriation the acceptance of the services, real estate, and commodities represented by the above amounts was authorized. As a result, these amounts were not included in the Army budget submitted to the Congress for those 2 years.

For fiscal year 1962, the proposed change in the language of section 519 requires that funds be appropriated for such services, real property, and commodities. Therefore, the Army has included in its fiscal year 1962 budget request the following amounts for anticipated deutsche mark support to be provided in Berlin:

Mr. FORD. What is the figure for 1962 fiscal year, if any? General DUFF. This figure of $13 million in "Operation and maintenance, Army," is the figure for fiscal year 1962. The figure for fiscal year 1961 was in the order of $12 million in "Operation and maintenance, Army," to the best of my recollection.

RETIREMENT BENEFITS FOR NATIONAL GUARD TECHNICIANS

Mr. FORD. Why are we starting this employer's share of retirement contribution for the Army National Guard technicians?

I noticed you emphasized that in your statement. Is this a new law, or is this a voluntary act? What are the circumstances?

General DUFF. I will ask General Schewe to go into this. The amount included is $2.8 million.

There are 25 States that are participating in the program at the present time, and I would be glad to put the names of those States in the record if you wish.

For those States not currently participating in the program, it is anticipated that the State legislatures will be in session prior to the beginning of fiscal year 1962 so they will be able to take action to permit the use of these funds to be provided by the Federal Government if provided by the Congress.

This is the first year in which this has appeared in the budget, and that was the reason I particularly referred to it.

Mr. FORD. We have had these programs before, the programs being those of the Army National Guard civilian-manned NIKE-AJAX and NIKE-HERCULES sites.

General DUFF. That is correct. We have had the civilians, but since they are paid by Federal funds, they were not covered in their retirement benefits from State funds. To this extent, I believe-and I will ask General Schewe to correct me-they did not, therefore, share the same benefits, as far as retirement was concerned as other State employees because of the fact they were paid by Federal funds rather than State funds. It was an attempt to put them on the same basis as other State employees paid by State funds that this provision has been made, sir.

Mr. FORD. I must admit I am not clear on this.

General DUFF. This is a provision whereby funds would be provided by the Federal Government for retirement benefits for National Guard technicians, National Guard employees. They do not now participate, to the best of my knowledge, in any retirement benefits because of the fact that while they are State employees, they are paid from Federal funds. This provision has not previously been made available to them from Federal funds. At the same time, the State has not from State funds made these benefits available to them as they do to State employees who are paid from State funds. So this is an attempt to put them on the same basis as far as retirement benefits are concerned as State employees who are paid from State funds.

Mr. FORD. In other words, the Federal Government starting in fiscal year 1962 will pay the employer's share to the State retirement programs?

General DUFF. That is correct, sir.

Mr. FORD. And this circumstance is coming about because of the change of law in the various States?

General SCHEWE. That is correct.

As General Duff has stated, there are some 25 States which do have such a law on their books. It is anticipated by the Chief of the National Guard Bureau that the other remaining States will have this enacted or considered this particular fiscal year in their legislatures. However, General McGowan, when he appears here, will go into this at greater detail if you so desire, and I think that might be appropriate. I can answer any particular general questions, but for current specifics, I could not go down through all the

Mr. FORD. The amount is?

General DUFF. $2,800,000.

Mr. LACROSSE. I might call attention to the President's budget which corrected this action on the part of the Army, on page 96 of the abstract here. It limits the payment to the rate authorized for Federal employees participating in the civil service retirement program. You have the Bureau of the Budget directing that State employees be covered in this manner. We will insert at this point, if you wish, this excerpt from the record.

Mr. MAHON. That is a good idea.

Mr. FORD. That will be very helpful for the record.