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Weapons of Mass Destruction (WMD)

STATEMENT OF
THE HONORABLE JOHN W. DOUGLASS
ASSISTANT SECRETARY OF THE NAVY
(RESEARCH, DEVELOPMENT AND ACQUISITION)
AND
VICE ADMIRAL DONALD L. PILLING, USN
DEPUTY CHIEF OF NAVAL OPERATIONS
RESOURCES, WARFARE REQUIREMENTS AND ASSESSMENTS
AND
LIEUTENANT GENERAL JEFFREY W. OSTER, USMC
DEPUTY CHIEF OF STAFF
PROGRAMS & RESOURCES
BEFORE THE
SUBCOMMITTEE ON NATIONAL SECURITY
OF THE
HOUSE APPROPRIATIONS COMMITTEE
ON
FY 1998 NAVY/MARINE CORPS ACQUISITION
MARCH 6, 1997
Mr. Chairman, distinguished members of the Subcommittee, thank you for 
this opportunity to appear before you to discuss the Department of the 
Navy's FY 1998 RDT&E and Procurement budget request.
Once again, world events during the past year reaffirmed the critical 
importance of forward deployed, combat ready naval forces.  Last March 
the NIMITZ and INDEPENDENCE Battle Groups moved into the South China 
Sea in a measured, but swift, response to tensions in the Taiwan 
Strait.  From April through August, the 22nd Marine Expeditionary Unit 
(Special Operations Capable) [(MEU(SOC)] and the GUAM Amphibious Ready 
Group (ARG) supported the evacuation of several hundred American 
citizens and country nationals from crises in Liberia and the Central 
African Republic.  In September the CARL VINSON CVBG was at the center 
of a joint response to Iraqi aggression against the Kurds.  Our 
reliance on the Navy-Marine Corps Team as the nation's premier 
response force should not be surprising.  Sea-based forces are 
sovereign extensions of our nation in international waters.  They a
re unencumbered by the treaties and access agreements that land-based 
forces require to operate in foreign countries.  Naval Forces also 
offer the flexibility of acting either from beyond the horizon or 
within full view of a potential aggressor.  They are, indeed, a most 
flexible, powerful and convincing tool in protecting our national 
interest and supporting foreign policy.
However, with resources limited and operational demands for naval 
forces remaining at Cold War levels, the Department's greatest 
challenge is to strike the right balance between meeting today's 
readiness requirements and modernizing the fleet for the 21st Century.  
With the "rightsizing" of our forces nearly complete, the Department's 
FY 1998 procurement, Research, Development, Test and Evaluation 
(RDT&E) and National Defense Sealift Fund budget requests reflect a 
commitment to the recapitalization of our Naval forces with a 
cumulative increase of more than $710 million over the FY 1997 
procurement budget; driven primarily by increases in our shipbuilding 
and conversion account.
As we invest in our platforms and weapon systems, the Department 
continues our strong commitment to reform the business side of 
acquisition.  Our acquisition reform initiatives have met with great 
success and are well on their way to being institutionalized.  In 
addition, we have made significant progress in both international 
cooperation with our defense programs and in increasing the quality of
our acquisition workforce through our professional Acquisition 
Workforce Program.
The following provides more detailed information of our most 
significant RDT&E, Shipbuilding, Aviation, Expeditionary Force, Mine 
and Undersea Warfare, C4I, and acquisition business management 
programs.  These programs reflect the priorities and requirements 
established by the warfighters-the theater Commanders-in-Chief.
RESEARCH, DEVELOPMENT, TEST AND EVALUATION (RDT&E)
Our RDT&E programs are directly responsible for our status as the most 
powerful and advanced Naval force in the world.  Some of the most 
significant RDT&E projects include the programs that will ensure our 
military superpower status well into the 21st  Century.  They include:  
the V-22 Tiltrotor; F/A-18E/F Super Hornet; Joint Strike Fighter 
(JSF); New Attack Submarine (NSSN); Surface Combatant-21; CVN 77; 
CV(X); Arsenal Ship; Tomahawk Baseline Improvement Program (TBIP); 
Cooperative Engagement Capability (CEC); and Joint Direct Attack 
Munitions (JDAM)/Joint Stand-Off Weapon (JSOW);Advanced Amphibious 
Assault Vehicle (AAAV); and the Commandant's Warfighting Lab (CWL).
The Department of the Navy's RDT&E budget request for FY 1998 is $7.6 
billion, about $245 million less than FY 1997.
Science And Technology
     The Department continues to place emphasis on Science and 
Technology (S&T)--the front end of the research, development, and 
acquisition process.  The goal of science and technology is to provide 
the Department with more affordable and more capable systems, improve 
current systems through appropriate technology insertion, and offer 
the potential for revolutionary technological "breakthroughs."
  A continuing flow of new technology is the cornerstone of on-going 
fleet modernization efforts and translates directly to improved combat 
performance, lower life-cycle costs, reduced risk and increased 
reliability.
     The Department of the Navy budget request for the FY 1998 
integrated Science and Technology program is $1.3 billion which is 
divided between: Basic Research programs-- for generating entirely new 
concepts and establishing the knowledge base required for 
technological advance; Applied Research programs-- for establishing 
the technical feasibility of emerging concepts; and, Advanced 
Technology Development programs-- for demonstrating specific 
technologies for naval systems.  The Department's investments in S&T 
are directed at technological problems that do not have a ready-made 
or easily adaptable commercial solution.
Advanced Technology Demonstrations
     Advanced Technology Demonstrations (ATDs) are the S&T community's 
most identifiable route to acquisition transition.  They are excellent 
vehicles for showing the results of years of patient, painstaking 
research.  In FY 1998, eight new ATDs will be initiated.  Examples of 
these include: Low Observable Multi-function Stack; Rapid Airborne 
Mine Clearance System; Anti-torpedo Torpedo Technology.
     The Low Observable Multi-function Stack ATD will demonstrate a 
surface ship composite exhaust stack with embedded multi-function 
satellite communications antennas.  This technology will provide 
increased information warfare capability while reducing topside 
signature, volume, weight, and mast antenna population.
     The Rapid Airborne Mine Clearance System ATD will demonstrate a 
new system to detect, target and explosively destroy near surface 
mines using laser directed fire.
     The Anti-torpedo Torpedo Technology for Surface and Submarine 
Applications ATD will demonstrate technologies which can be 
incorporated into existing and planned torpedo systems to improve ship 
and submarine point defense.
Advanced Concept Technology Demonstrations
One of the most recent and highly successful Advanced Concept 
Technology Demonstrations (ACTDs) demonstrated great advances in 
cooperative engagement technology.  The Cruise Missile Defense (CMD) 
ACTD "Mountaintop" demonstrated the first-ever beyond-radar-horizon 
engagements of cruise missile targets.  The joint Navy-Army 
demonstration culminated with 100 percent successful Navy live firing 
tests and 98 percent success rate for more than 100 Army-simulated 
engagements.
Examples of ACTDs in FY 1998 include the Precision SIGINT Targeting 
System (PSTS) and the Joint Countermine program.  The PSTS will 
conduct two demonstrations in Korea where tactical users will be 
provided near real time targeting information and sensor-to-shooter 
target updating using existing national and tactical assets.
 The Joint Countermine ACTD will demonstrate the potential to conduct 
seamless amphibious mine countermeasure (MCM) operations from sea to 
land.  The demonstration will integrate Army, Navy, and Marine Corps 
technology developments and fielded military equipment.  The ultimate 
goal is to demonstrate emerging mine counter-technologies, operational 
concepts and doctrine in MCM support of amphibious and other 
operations involving Operational Maneuver From the Sea and follow-on 
land operations.  This Joint Countermine ACTD effort will emphasize 
clandestine surveillance/reconnaissance and detection capabilities.
Manufacturing Technology
     Our Manufacturing Technology (MANTECH) program is designed to 
improve productivity of the industrial base and make our weapon 
systems and platforms more affordable.
Based on budgetary constraints and the need to achieve balance in the 
program that we present to you, we have established overall Department 
MANTECH funding targets at about $36 million per year.  We are 
therefore focusing our program on critical manufacturing technologies 
in core areas.  This past year, a MANTECH Executive Steering Committee 
was established, chaired by the Chief of Naval Research and comprised 
of technical directors from the Department's Systems Commands, program 
executive officers, and a Chief of Naval Operations representative.  
Through the efforts of this steering committee, we have established 
core efforts in composites manufacturing through our Composites 
Affordability Program; electronics through our Programmable Electronic 
Building Blocks effort; shipbuilding through our Gulf Coast Maritime 
Technology Center and the National Shipbuilding Research Program; and 
life-cycle support through our Repair Technology Program.  These 
programs support Congressional direction to better meet naval 
requirements, and the expectation that industry share some of the 
production technology costs to account for some of the commercial 
benefits that they will receive from these technologies.  With this 
targeted focus, we expect to better integrate these technology efforts 
with specific Navy and Marine Corps acquisition programs.
SHIPBUILDING PROGRAMS
The total FY 1998 budget request for Shipbuilding & Conversion (SCN) 
is $7.4 billion for the acquisition of three ARLEIGH BURKE (DDG 
51)Class guided missile destroyers, construction of the lead New 
Attack Submarine (NSSN) and the refueling complex overhaul of the USS 
NIMITZ(CVN 68).  The FY 1998 SCN budget request also includes final 
funding for SSN 23, advanced procurement funds for the follow on
 NSSN, and advanced procurement funds for a refueling complex overhaul 
for USS EISENHOWER (CVN 69).
Shipbuilding Industrial Base
     Our nation's critical shipbuilding industrial base has been in 
decline since 1980.  The downsizing of the Navy and the lack of 
significant commercial shipbuilding business has resulted in a 
reduction in the number of ships (both Navy and commercial) under 
construction at U.S. shipyards from 181 in 1980, to 58 in 1997--a 68% 
decrease-- with a corresponding 60 percent drop in shipyard employment 
levels.  During this same period Navy shipbuilding alone declined from 
108 to 39.  More alarmingly, since 1991 the number of Navy ships under 
construction has dropped from 135 to 39.  If current trends continue, 
this figure could drop to the low 20s over the next five years.  This 
decline in shipbuilding demand is of great concern to the Navy because 
it carries an extra cost burden on remaining shipbuilding programs.  
Clearly, the Navy's shipbuilding requirements alone are not enough to 
sustain the current shipbuilding industrial base.
     The FY 1998 shipbuilding plan stabilizes the nuclear industrial 
base and complex surface combatant industrial base which include not 
only the shipbuilders, but hundreds of suppliers that provide 
equipment and engineering services to support Navy shipbuilding 
programs.  The replacement carrier programmed in FY 2002 and the 
innovative teaming strategy proposed for the construction of four New 
Attack Submarines over the next five years maintains the submarine and 
aircraft carrier nuclear industrial base.  In a similar manner, the 
DDG 51 multiyear plan implements a long-term acquisition strategy that 
lowers costs, reduces disruptions from hiring and layoff cycles, 
level-loads employment, and encourages capital investments; thus 
improving the performance, efficiency, and viability of the complex 
surface combatant industrial base.  These actions have been critical 
first steps toward ensuring the long term viability of the 
shipbuilding industry to support our future construction programs for 
the 21st Century in a fiscally constrained environment.
     In the long term, we need consensus on the future of the 
shipbuilding industrial base from all stakeholders.  This includes 
support of shipbuilders' efforts to become competitive in the 
commercial market, a National Defense Features program, sustained Navy 
construction, Foreign Military Sales initiatives from industry and 
other initiatives, like Charter and Build for our Combat Logistics 
Force.  Many other areas of defense (aircraft, electronics and land 
systems) have seen a consolidation in order to maintain core 
capabilities and business viability.  Similar trends in shipbuilding 
are not apparent but will be required.  The future of the shipbuilding 
industrial base must be addressed in order to assure the long term 
health of the U. S. shipbuilding industry and the procurement of 
affordable warships in the future.
ARLEIGH BURKE (DDG 51) Class Destroyer
The FY 1998 budget request includes $2.82 billion for the first three 
of a planned 12 ship multiyear procurement of DDG 51 class destroyers.  
This is the first time that the multiyear procurement concept has been 
applied to a major shipbuilding program, and savings in excess of $750 
million across the four year multiyear procurement have been reflected 
in the FY 1998 through 2001 DDG 51 class budget.
The ARLEIGH BURKE (DDG 51) class destroyers procured in FY 1998 will 
be Flight IIA ships, with the last ship procured having the upgraded 
SPY-1D(V) radar system installed.  SPY-1D(V) further enhances the 
combat proven capability of this multi-mission surface combatant with 
a significantly improved radar system.  Extensive use of commercial-
off-the-shelf (COTS)equipment throughout the ship ensures improved 
performance at reduced cost.  The first DDG 51 Flight IIA contract was
awarded in FY 1994.
Four DDG 51 Flight II ships will be delivered in FY 1997 and three 
will be delivered in FY 1998, all well within budget and schedule.  
The current DDG 51 program includes a total of 57 ships.
New Attack Submarine
     The New Attack Submarine is the Navy's first submarine designed 
to satisfy a broad spectrum of regional and littoral mission 
requirements while retaining blue-water undersea battlespace 
dominance.  With added emphasis on expeditionary warfare in the 
littoral environment, the New Attack Submarine will surpass the 
warfighting and surveillance  performance of any current or projected 
threat submarine.  The ship will have improved electromagnetic 
stealth, sophisticated surveillance capabilities, special warfare 
enhancements and will provide for SEAWOLF level quieting in a smaller 
platform.  New Attack Submarine will be able to launch advance-
capability heavy-weight torpedoes, all configurations of land-attack
and anti-ship cruise missiles, and mines in the present and planned 
inventory. Special Operations Forces capabilities have been 
incorporated into the ship's design from the start.  Covert launch and 
recovery of forces are supported by an integral lock-in/lock-out 
chamber and/or swimmer delivery vehicles, including the Advanced SEAL 
Delivery System.
     The New Attack Submarine design also focuses on affordability.  
The extensive use of computer aided design and engineering tools and 
virtual models have substantially improved the design process.  
Virtual models allow engineers and designers to accurately assess and 
incorporate new technology to respond to changing missions, threats 
and resources.  Innovations such as open systems architecture 
electronics, enhanced modular construction and the use of COTS 
technology provide the flexibility for and reduce the cost of 
technology insertion.  The New Attack Submarine balances military 
performance requirements with affordability, while providing the 
flexibility for future technology insertion.
The Department is ready to proceed with lead ship construction and has 
requested $2.6 billion in FY 1998 for the design and construction of 
the first New Attack Submarine.  The budget request supports the 
proposed innovative teaming arrangement for procurement of four New 
Attack Submarines over the next five years from Electric Boat 
Corporation and Newport News Shipbuilding.  The use of a single
contract for the four submarines is a key element of the Navy plan 
because it provides the business incentive for the two submarine 
shipbuilders to team.  The approach generates substantial cost savings 
over the previous plans.  This acquisition strategy is affordable, 
executable and supports our national security requirements.
SEAWOLF (SSN 21) Class Submarine
     The SEAWOLF (SSN 21) class submarine is the most sophisticated 
and capable submarine in the world.  It is designed to operate 
autonomously against the world's most capable submarine and surface 
threats.  This impressive capability translates directly into enhanced 
joint warfighting performance in high threat littoral areas.  SEAWOLF 
is multi-mission capable.  In addition to its robust capability to 
counter enemy submarines and surface shipping, SEAWOLF is ideally 
suited for strike, intelligence and warning, reconnaissance and 
surveillance, clandestine missions and Battle Group support.  With an 
increased number of torpedo tubes and an increase in weapon magazine 
size over the 688 class submarines, SEAWOLF is exceptionally capable 
of establishing and maintaining battlespace dominance.
The SEAWOLF program totals three submarines.  SEAWOLF (SSN 21) met or 
exceeded preliminary expectations for power plant and acoustic 
performance during initial(ALPHA) and second (BRAVO) sea trials.  SSN 
21 will complete final sea trials and be delivered this Spring.  SSN 
22 is approximately 75% complete and is scheduled to be delivered in 
1998.  The final funding increment of $154 million for SSN
 23 is in the FY 1998 budget request.  SSN 23 is approximately 20% 
complete and will deliver in 2002.  We are continuing to monitor 
performance against the Congressionally mandated cost cap.  Due to 
aggressive efforts to manage cost, it is expected that we will be able 
to complete the three ships within that cap.  Termination costs for 
the fourth and follow-on ships occurred prior to establishment of the 
cost cap.  The current cost cap language should be clarified regarding 
how such termination costs are to be treated, and regarding the 
backfit of improvement arising from research on the New Attack 
Submarine.
Aircraft Carrier Programs
     The Navy's aircraft carrier programs are proceeding along a dual 
track strategy.  In the near term, to maintain a force structure of 
eleven carriers plus an operational/reserve carrier, the Navy plans to 
build CVN 77, the "Smart Transition" carrier.  CVN 77 will incorporate 
the latest technologies that will reduce life-cycle cost and provide a 
bridge to the carrier of the next century, CV(X).  The next generation 
carrier, CV(X), will be a more modern, affordable aircraft carrier 
that will be a multi-mission, multi-threat tactical aviation sea-based
platform.  Besides affordability, the key objective for the CV(X) 
program is to capitalize on technology in a clean sheet design to 
improve core carrier capabilities including ship survivability, joint 
C4I, and operations for current and future aircraft such as F/A-18E/F, 
JSF and the follow-on to JSF.
     The key to the success of the CV(X) program is acquisition 
affordability and reduction in life-cycle "ownership" costs.  The 
CV(X) carrier program will remain in service throughout the next 
century.  Accordingly, it is critical now to provide adequate research 
and development investment to save on life-cycle costs in the future.  
The FY 1998 budget request includes $90.2 million for CV(X) Research 
and Development funding.
     To better understand the impact on life cycle costs, and the need 
to provide adequate investment early in new ship design, it is helpful 
to observe that each CV(X) aircraft carrier that this nation builds is 
anticipated to have a fifty year service life.  Using historical data, 
we can expect the first CV(X) carrier to respond to approximately 
twenty major crises and possibly three major conflicts; the carrier 
will conduct over 500,000 aircraft launches and recoveries, spend 
approximately 6,000 days at sea, and steam a total of three million 
nautical miles.  Over 100,000 men and women will serve aboard each 
CV(X) over the life the carrier.
21st Century Surface Combatant (SC-21)
The 21st Century surface combatant is the key element in our long term 
surface ship modernization program.  Conceived as a family of related 
ships sharing common architectures, SC-21 ships will eventually 
replace retiring FFG-7, DD-963, DDG-993, CGN-36 and CG-47 class ships 
through the first third of the next century. Conceptual studies begun 
in 1995, will be completed this year and will serve to define the 
nature and character of this critical family of surface combatant 
ships.  SC-21 will incorporate advanced features which will increase 
capability while reducing the life-cycle cost of the ship.  As such, 
SC-21 will benefit from the efforts currently underway on the Navy's 
Smart Ship, USS YORKTOWN (CG-48). The SC-21 class will have two 
primary missions: to establish comprehensive battlespace dominance and 
influence events ashore through the application of precision 
firepower.  The FY 1998 budget includes $55 million for SC-21 Research 
and Development funding.
Arsenal Ship
The Arsenal Ship is a joint DON/DARPA demonstration project.  It is 
conceived as an entirely new concept ship capable of maximum firepower 
supported by an integrated command and control system featuring 
cooperative engagement capability and off-board weapons launch 
command.  Over the past year we have conducted two competitive design 
reviews and down selected from six to three industry teams.  It
is intended that selection of the final design and construction team 
will be made in early 1998 with the goal of going to sea in 2000.
Two of the principle goals of the demonstration project are to  
minimize life-cycle cost through the extensive use of automation in 
the engineering, damage control and ship and weapons control systems, 
and to limit the crew size to no more than 50.  The Arsenal Ship 
effort is funded jointly by the Navy (FY 1998; $103 million) and DARPA 
(FY 1998; $47 million) RDT&E.
Surface Warfare Programs
The budget maintains funding for various ship defense programs and 
battle group defense programs including the Ship Self Defense System 
Mark 1 (SSDS MK-1), the Advanced Combat Direction System (ACDS) and 
Advanced Integrated Electronic Warning System (AIEWS).  Initial 
procurement is underway for the all-up-round and upgrade kits of the 
Standard Missile Block IIIB variant which incorporates the Missile 
Homing Improvement Program (MHIP).  Procurement of the Standard 
Missile Block IV variant continues as requested in FY 1997.  We have 
continued development and procurement of the Cooperative Engagement 
Capability (CEC), the Close In Weapons System (CIWS), and the Evolved 
Sea Sparrow Missile (ESSM), all integral to SSDS MK-1.  Bottom line: 
our budget continues an all out effort to protect our Sailors and 
Marines serving aboard ships against missile attack.
The budget request continues to support our commitment to improving 
our Naval Surface Fire Support capability through the development of 
the high energy upgrade program for the 5 inch MK 45 gun and the 
Extended Range Guided Munition round. These programs will provide 
accurate and lethal naval fires from beyond the horizon to support 
amphibious operations and the continuing land attack.
To ensure strategic deterrence, the annual procurement rate for the 
TRIDENT II (D-5) missile program continues to be 7 missiles per year 
across FYs 1997-1999 and 12 missiles in FYs 2000 and 2001 pending 
final decisions on START II ratification.  MK-48 ADCAP torpedo 
performance upgrades began in FY 1995 and continue though the FYDP.  
The quantity budgeted for procurement over the FYDP has been reduced 
from 1,386 to 1,110 kits, reflecting decreased requirements.
     NAVAL AVIATION PROGRAMS
The Department of the Navy operates ten active USN carrier air wings 
and three active Marine Corps (USMC) airwings.  The FY 1998 Aircraft 
Procurement budget requests $6.1 billion for 51 aircraft and other 
aviation modernization and upgrade programs.  The 51 aircraft procured 
include 20 F/A-18E/Fs, 5 V-22s, 3 E-2Cs, 12 T-45s, and 11 AV-8B 
Remanufactured aircraft.
F/A-18E/F Super Hornet
The F/A-18E/F is the Navy's number one aviation program and critical 
to the future of our carrier airwings.  The Super Hornet program is on 
track, within cost, below weight and meeting all performance criteria.  
All seven of the flight test aircraft have been delivered to the Naval 
Test Center at Patuxent River.  In January, 1997, the Super Hornet 
successfully completed initial carrier qualifications.
The F/A-18E/F modernizes the Navy's tactical aviation through the 
affordable and low risk evolution of the F/A-18C/D.  The FY 1998 
budget request includes $2.2 billion for the procurement of 20 F/A-
18E/F aircraft and $267.5 million for continued RDT&E.  The 
procurement of the first Low Rate Initial Production (LRIP) aircraft 
will begin the orderly transition of the F-14 and F/A-18A/B/C/D 
inventory to this improved strike fighter aircraft.  Compared to 
earlier model F/A-18s, the Super Hornet will immediately and 
significantly increase our capability in every mission area.  It 
provides greater range, greater payload flexibility, increased 
capability to return to the carrier with unexpended ordnance, and a 
new aerial refueling platform compatibility integral to the carrier 
airwing.  It also incorporates enhanced survivability features, and 
provides growth potential for future technology.  This aircraft will 
make up the majority of strike fighter assets for decades, and with 
the JSF aircraft, continue to provide our nation with credible power 
projection capability from our forward deployed carrier battle groups.
Total planned procurement for the F/A-18E/F is 1,000 aircraft.
MV-22 Osprey
The MV-22 is the highest acquisition priority for Marine Corps 
aviation and critical to the implementation of our Operational 
Maneuver from the Sea concept.  The V-22 Osprey is designed to replace 
the Marine Corps CH-46E and CH-53D as well as the Special Operations 
Command TH-53A, MH-53J, MH-47D, MH-60G, MC-130E, HC-130 and HC-130E.
The total FY 1998 MV-22 budget request is $1.1 billion, with $542 
million earmarked for procurement of five MV-22's, and $529 million 
for continued RDT&E.
The acquisition of this medium lift tiltrotor, vertical/short takeoff 
and landing (VSTOL) aircraft represents a revolutionary leap in our 
ability to project forces from over the horizon toward inland 
objectives.  The MV-22 will fly significantly farther and faster with 
a greater payload than our aging fleet of medium lift CH-46 
helicopters.  Its ability to carry 24 combat-loaded Marines at a 
cruising speed of 240 knots is key to the execution of maneuver 
warfare.  This combat multiplier nearly triples the present day 
battlespace and will give commanders the tactical flexibility to 
respond, adapt to, and defeat a wide range of threats.  The MV-22 will 
give us the ability to maintain battlefield dominance well into the 
21st Century.
Low rate initial production began in FY 1997 with an Initial Operating 
Capability (IOC) of 2001.  The current acquisition profile for the MV-
22 will complete the projected 425 aircraft procurement in 25 years.
Joint Strike Fighter (JSF)
The Joint Strike Fighter (JSF) program is the Department of Defense's 
focal point for defining future strike aircraft and weapon systems for 
the Navy, Marine Corps, Air Force, and our allies.  The overall DoN FY 
1998 budget request for the JSF RDT&E is $449 million.  The program 
emphasizes affordability-- reducing thelife-cycle cost of development 
and production programs.  The JSF program merges fully validated and 
affordable joint operational requirements with demonstrated cost 
leveraging technologies and flying concept-demonstration aircraft to 
lower risks and costs prior to entering Engineering and Manufacturing 
Development (E&MD) of the JSF in FY 2001.
JSF will lay the foundation for an affordable family of strike 
aircraft which meet or exceed individual Services requirements.  
Initial delivery of operational JSF aircraft variants is anticipated 
circa 2008.  Maintaining the JSF schedule is vital to the future of 
Navy/Marine Corps aviation.  As directed by Congress, DARPA's Advanced 
Short Takeoff/Vertical Landing concept has been fully integrated into 
the JSF program.
AV-8B Remanufacture
     The remanufacture of the AV-8B Day Attack Harrier to the AV-8B 
II+ Night/Radar Attack configuration will significantly increase the 
multi-mission capabilities of the Harrier.  The FY 1998 budget request 
includes $296.6 million for the purchase of 11 aircraft.  Full AV-8B 
remanufacture requirement is funded in the FYDP for the remaining 33 
aircraft of the 72 total aircraft remanufacture program.
4BN/4BW
     The AH-1W and UH-1N helicopter upgrade (4BN/4BW) addresses 
current operational and safety issues and extends the service life of 
both aircraft until the 2020 time frame.  One hundred eighty AH-1Ws 
and 100 UH-1N will be remanufactured with a new four-bladed rotor 
system, tail drive system and a new integrated cockpit.  The program 
is designed to achieve maximum commonality between aircraft.
     Both the Department and OSD evaluated alternative aircraft 
procurements in lieu of the planned remanufacture and found the 
4BN/4BW plan the most cost effective.  The program is currently in the 
E&MD phase with a FY 1998 RDT&E budget request of $80.7 million.  
Remanufacture is planned from FY 2002 through FY 2011.
EXPEDITIONARY FORCES PROGRAMS
The FY 1998 budget request maintains support for the Operational 
Maneuver From the Sea concept with continued modernization and 
recapitalization of Marine Corps combat forces.  Marine Corps programs 
are budgeted under the RDT&E; Procurement, Marine Corps (PMC); and 
Procurement of Ammunition, Navy and Marine Corps (PANMC) accounts.  
The FY 1998 Marine Corps procurement and ammunition budget request is 
$473 million.  The Marine Corps highest priority programs in these 
accounts are the Advanced Amphibious Assault Vehicle (AAAV), the 
Lightweight 155mm Howitzer (LW155), Medium Tactical Vehicle 
Remanufacture (MTVR), and joint C4I connectivity.  The AAAV, currently 
in the Program Definition & Risk Reduction (PPDR) phase and funded 
under the Research and Development budget , will begin production
after the turn of the century.  Both the MTVR and the LW155 are in 
E&MD.
Advanced Amphibious Assault Vehicle (AAAV)
The Advanced Amphibious Assault Vehicle (AAAV) program is the Marine 
Corps' number one priority ground development program in FY 1998 and 
considered the most critical ground combat requirement within the 
Marine Corps.  With its ability to maintain high maneuverability, 
speed, and firepower during waterborne assaults, the AAAV will 
dramatically improve our forcible entry capability.  For the first
time, Marines will be able to directly link maneuver of ships with the 
landing force maneuver ashore, fully complementing the MV-22's 
capabilities and allowing the full potential of Operational Maneuver 
From the Sea to be realized.  The Advanced Amphibious Assault Vehicle 
will carry 17-18 combat equipped Marines at three times the water 
speed and significantly increases survivability over the current 
Amphibious Assault Vehicle which will soon be reaching the end of its 
service life.  The FY 1998 budget request of $61.3 million reflects 
the second full year of the Program Definition Risk Reduction (PDRR) 
phase contract and includes funds to begin procurement of materials 
for prototypes.
Lightweight 155 Howitzer (LW155)
The Lightweight 155 Howitzer (LW155) program is second only to the 
AAAV in terms of weapons development priority for the Marine Corps.  
The light weight design of the LW155 markedly improves the tactical 
and strategic mobility of artillery units.  The LW155 is a joint 
Marine Corps/Army acquisition program with the Marine Corps as the 
lead service.  A seven month technical and operational "shoot off" 
between competitors was completed in December 1996.  Source selection 
to a single contractor and award of an E&MD contract (with options for 
the first two years of production) occurs in March 1997.
The FY 1998 budget request of $35.3 million supports continued E&MD 
efforts.  Eight additional prototypes will be built during E&MD 
incorporating the lessons learned from the 1996 shoot-off.  
Developmental testing starts in FY 1998 and Milestone III and 
production are scheduled for the second quarter of FY 2000.  Marine 
Corps IOC occurs in 2002.
Medium Tactical Vehicle Remanufacture (MTVR)
Funding is included in the FY 1998 budget request for the Medium 
Tactical Vehicle Remanufacture (MTVR) program.  This remanufacturing 
program extends the life and increases the capability of our aging 5-
ton truck fleet.  The MTVR represents the best value for the Marine 
Corps.  The remanufacture will provide the most capable cargo truck in 
its class in the world; capable of dramatically improved mobility in 
off-road conditions and increased capacity to carry ammunition while
towing 155mm Howitzers.  The MTVR program is managed by the Army and 
harmonized with the future Army truck remanufacture program.  Initial 
Production of the MTVR is planned in FY 1999.
Marine Corps Communications Programs
In an effort to ensure connectivity and interoperability on the 
battlefield, several communications and electronics initiatives are 
under way.  These include Manpack Secondary Imagery Dissemination 
Systems (SIDS) and the Intelligence Analysis System (IAS).  SIDS 
provides the capability to collect, store, display and transmit 
imagery in near-real time.  IAS provides finished intelligence data to 
the commander in near-real time.
To continue base modernization, the Marine Corps will invest in Base 
Telecommunications Infrastructure to upgrade systems with a fiber 
optic backbone capable of disseminating data and information requiring 
high bandwidth, such as computer modeling and simulation, 
intelligence, and video conferencing.  New infrastructure switching 
systems will support garrison units and help sustain those deployed.
In support of the Fleet Marine Force, the Tactical Data Network (TDN) 
will provide an integrated data network to form the backbone for the 
Marine Air Ground Task Force (MAGTF) tactical data network systems.  
It will provide file transfer services and a variety of message 
handling capabilities linked to existing radio networks.  Another 
MAGTF enhancement, the Digital Technical Control (DTC) facility, will 
greatly enhance the control of major tactical communication and data 
systems for the MEF command element and subordinate commands.  Using 
new digital technology, DTC will be integrated with TDN and the 
multitude of single channel and multi-channel communication networks 
to provide seamless communications while making efficient use of 
limited bandwidth and equipment.
Other Expeditionary Forces Programs
The Predator, formally know as the Short Range Assault Weapon (SRAW), 
program will provide a lightweight anti-tank weapon capable of 
defeating the most advanced armored threats in the world.  This 
program is a joint effort with the Army for delivery of their Multi-
purpose Individual Munitions.
 The Marine Corps is also pursuing several night vision equipment 
initiatives to enhance warrior capability.  The Monocular Night Vision 
Device provides night observation capability to small unit leaders and 
the Scout Sniper Night Enhancement Device will replace the current 
sniper scope, allowing for more accurate firing during day and night 
operations.
Commandant's Warfighting Lab (CWL)
     The Commandant's Warfighting Lab (CWL) serves as the cradle and 
testbed for the development of enhanced operational concepts, tactics, 
techniques and procedures which will be progressively introduced into 
the Fleet Marine Force in concert with new technologies.  The CWL is 
the integrating ground for new technologies, a focal point for 
warfighting refinements, and the critical engine to take the Marine 
Corps into the next century.
     The CWL has developed a Five Year Experimentation Plan (FYEP) 
which will serve as a guideline for planning and experimentation.  The 
FYEP is divided into three Phases: Hunter Warrior, Urban Warrior and 
Capable Warrior.  Hunter Warrior began in FY 1996 and continues in FY 
1997.  Urban Warrior will begin in FY 1997 and will continue until FY 
1999.  Capable Warrior begins in FY 1999 and concludes in FY 2000.  
The focus of Urban Warrior will be on operations is urban, near urban 
and close terrain.  Units will conduct intelligence gathering, 
targeting, maneuver and close combat.  For FY 1998, focus areas 
include C4I fires and targeting and non-lethal weapons.
The CWL's experimental activities and strategically placed liaison 
officers enable it to interface and coordinate with the Army Battle 
Labs, other DoD warfighting labs, institutions of higher education and 
private industry in an attempt to capitalize on technological 
innovation.
COMMAND, CONTROL, COMMUNICATIONS, COMPUTER AND INTELLIGENCE (C4I) 
PROGRAMS
   Our future warfighting environment is projected to be 
unpredictable, fast paced, highly lethal, and widely dispersed.  It 
will also involve cooperative, long range engagements and a highly 
responsive Command and Control decision cycle.
Accordingly, we are developing the C4I architectures, drafting our 
platform and system master plans and acquiring systems, products and 
services to meet this challenge.  This approach is called the 
Copernicus...Forward strategy, which serves as the architecture for 
the integration of systems, products and services which together 
achieve the seamless information environment required by our modern 
warfighters.  Copernicus focuses on five main precepts:
* Modern precision weapons require more, not less, information.
* The operator should be able to "pull" information from the outside 
rather than
 having it "pushed" to him, clogging both physical and mental 
channels.
* Information must be handled in multiple formats (e.g., voice, video, 
data).
* Pathways for information must move beyond HF and UHF to include 
Extremely High Frequency, commercial satellite communication (SATCOM) 
and other media.
* Technology should be "commercial off-the-shelf," adhering to Open 
Systems standards.
The following list make up the mainstay of the Department of the 
Navy's Command, Control, Communications, Computer and Intelligence 
programs:
Cooperative Engagement Capability (CEC)
The Cooperative Engagement Capability (CEC) program is designed to 
link Battle Group Anti-Air Warfare units, Airborne Early Warning 
aircraft and joint air defense units ashore into a theater-wide air 
defense system.  CEC provides real-time, high quality, composite track 
data over highly jam resistant links.  From this data, each 
cooperating unit develops its own fire control solution for weapon 
engagements for threats beyond its own sensor horizon.  Engineering 
discussions are under way for interfacing CEC as an element within the 
Army Patriot system and Air Force Airborne Warning and Control System 
(AWACS).
Cooperative engagement has demonstrated the capability of being a 
force multiplier in various warfare areas.  To date, CEC has been the 
major element in two at-sea cruise missile defense demonstrations.  
CEC was successfully employed with the EISENHOWER Battle Group in a 
series of tests off the coast of Puerto Rico and in a major 
demonstration called "Mountain Top" off the coast of Hawaii.  
Detection data from remote sensors located several thousand feet above 
the sea surface was linked to an Aegis ship from which a fire control 
solution was developed and surface-to-air missiles were launched.  The 
target was successfully engaged in every test.  CEC achieved fleet IOC 
at the end of FY 1996.
Theater Ballistic Missile Defense
The President has committed the Department of Defense to pursue a 
robust missile defense program.  The mobile and forward nature of 
naval forces makes sea-based systems a most promising solution to the 
theater ballistic missile defense problem.  The potential for this 
capability was demonstrated by the USS BUNKER HILL(CG-52) in 
operations near Taiwan in March 1996.  Rapidly repositioning in 
response to National Tasking, that ship successfully detected and 
tracked missile shots fired during a Chinese military exercise 
conducted near Taiwan.  Complete tracking was possible from the moment 
the missile rose in its ascent phase above the horizon of the sensor.  
This is critically important if we are to achieve missile kills at a 
distance that will avoid harm to our own forces.
The Navy, in conjunction with the DoD Ballistic Missile Defense 
Office, has conducted analyses to determine the best architecture for 
ballistic missile defense.  Our conclusions point to a two tiered 
approach composed of a Theater Wide system and an Area system.  The 
Area system builds on the current Aegis SPY-1 radar and the Standard 
Missile/Block IV, requiring minimal modifications to the vertical 
launch system.  By adding this capability as an additional mission for 
our Aegis Fleet, we leverage the $40 billion the American taxpayer has 
already invested in these state-of-the-art ships.  Also, we take 
advantage of the thousands of successful intercepts completed in the 
Standard Missile program.
This year the Navy is continuing work on the Theater Wide system or 
exo-atmospheric portion of our two tiered, sea-based approach.  We 
have conclusively demonstrated the concept of modifying an endo-
atmospheric missile for exo-atmospheric use, employing a Terrier 
missile with a Lightweight Exo-Atmospheric Projectile (LEAP) vehicle 
as the kill mechanism.  Several other kill vehicle concepts are also 
being evaluated, including Army, DARPA, and contractor systems.  At 
the same time, we anticipate the value of the CEC can be greatly 
enhanced by linking joint services' sensor detection data with the CEC 
network.
Joint Maritime Command Information System (JMCIS)
     The Joint Maritime Command Information System (JMCIS) strategy 
was the Department's quantum leap forward in Command and Control 
systems.  JMCIS '98, the next version of JMCIS, is the next leap 
forward.  It will play a central role in allowing us to achieve the 
IT-21 vision.
     JMCIS '98 was conceived in direct response to IT-21, turning 
those ideas and new technologies into real systems to provide a 
homogeneous software and hardware environment across each battle 
group, the shore infrastructure, and all tactical and mobile sites.  
Design of JMCIS '98 will capitalize on commercial industry and be 
implemented in phases to allow for better cost vs. benefit milestone a
ssessments.  Acquisition reform initiatives such as cost as an 
independent variable, and vastly accelerated and simplified 
contracting methods ensure significantly accelerated unit level 
installations, with the ultimate goal being an all-new COTS personal 
computer (PC) environment.  To continue support while minimizing 
impact to operations, leading edge logistics will provide efficient 
training, real-time troubleshooting methods and effective spare-parts 
procurement.
Joint Maritime Communications System (JMCOMS)
     The addition of the maturing Joint Maritime Communications System 
(JMCOMS) strategy brings the crucial connectivity and interplatform 
networking elements necessary to fulfill the IT-21 vision.  JMCOMS 
provides an investment and technical strategy that allows for the 
flexible implementation of Naval communication systems in support of 
existing and future Naval missions.  As part of the emphasis of Naval 
forces on littoral warfare and in support of Marine Corps maneuver 
warfare, JMCOMS is implementing an expeditionary warfare module which 
will enable seamless, continuous communications across all warfighting 
environments, providing guaranteed connectivity across the joint 
battlespace.
Information Warfare (IW)
     The Information Warfare (IW) element of IT-21 brings the need for 
incorporation of highly secure environments and sensor platforms into 
the IT-21 totally integrated solution.  While providing our 
warfighters with access to more information than ever before, the 
interconnection of DON networks with public information systems and 
networks exposes us to new threats.  We are delivering IW strategies 
and policy to address these threats.  IW initiatives include the 
fielding of information systems security (INFOSEC) technology 
components and technology from private industry, such as firewalls; 
the fielding of network security detection and monitoring tools in 
Navy Network Operations Centers; renewed emphasis on education and 
training for network administrators; and fleet exercises to more fully 
develop our capability to detect and respond to intrusions and attacks 
on DON networks.
Global Broadcast Service (GBS)
The Global Broadcast Service (GBS) program allows us to take advantage 
of commercial Direct Broadcast TV technology to increase the amount of 
information we can get to the field.  The ability to use very small 
dish antennas--18 to 24 inches in diameter--will allow us to send and 
receive information to small, mobile users nearly world-wide.  As an 
interim measure, we are taking advantage of the Navy's Ultra High 
Frequency (UHF) Follow-On (UFO) satellites currently in production to 
get this capability on orbit in 1998.  We are using the last three UFO 
satellites as hosts and integrating the GBS capability to add 
approximately 100 million bits-per-second communications capability 
nearly world-wide.  The first satellite, UFO-8, is planned to cover 
the Pacific.  IOC is April 1998.
While this does not answer all of our communications needs, it is a 
revolutionary step in getting critical information such as imagery, 
weather and tasking orders to the people who need it most in near 
real-time.  It will also increase quality-of-life by giving ship at 
sea the capability to receive television broadcasts.  The high 
capacity one-way transmission capability will free up capacity on 
other, critical two-way systems.  The interim capability on UFO 
satellites will allow us to refine our operational concept and 
requirements to aid in the DoD Space Architect's work in defining what 
the future, objective architecture should be.
Multifunction Information Distribution System (MIDS)
     Multifunction Information Distribution Systems (MIDS) is the 
Department's joint international program to develop an affordable, 
light weight, tactical radio terminal.  This information system takes 
a major step in solving the joint Warfighter's interoperability 
problems, including combat identification, as its open system 
architecture can easily be configured to meet the requirements of many
different users.  This year the Army and the Air Force joined the MIDS 
program. The increasing demand for this terminal by all services and 
our international partners will dramatically reduce the life-cycle 
support cost.  The Department's share of the MIDS program in the FY 
1998 budget request is $39 million.  IOC is expected in FY 2000 on 
ships.
MINE AND UNDERSEA WARFARE
The Department is modernizing its Mine Countermeasures Forces, 
fulfilling a major deficiency identified during Operation DESERT 
STORM.  The Department's Mine Warfare Plan, as required by Public Law, 
is updated annually by the Chief of Naval Operations and the 
Commandant of the Marine Corps.  The Chairman of the Joint Chiefs of 
Staff supports the DoN plan and has endorsed it for full funding as 
part of the President's budget request.  One of our top Mine Counter 
Measure (MCM) programs is  the OSPREY Class (MHC-51) coastal mine 
hunter ships.  These ships have a glass reinforced plastic hull for 
reduced acoustic and magnetic signatures.  This is a 12 ship program 
divided between two shipbuilders:  Intermarine USA of Savannah, 
Georgia (8 ships); and Avondale Industries of New Orleans, Louisiana 
(4 ships).  MHC 51s are being delivered at a rate of two per year with 
the final unit scheduled for delivery in December 1998.
Additional MCM efforts such as the Shallow Water Assault Breaching 
System (SABRE) and the Distributed Explosive Technology (DET) programs 
are being pursued to neutralize shallow water and surf zone mines.  
Organic mine hunting capabilities are also being developed by 
accelerating the Remote Minehunting System (RMS) program for surface 
ships, and developing the Near Term Mine Reconnaissance System
and the Long Term Mine Reconnaissance System for submarines utilizing 
Unmanned Underwater Vehicle (UUV) technology.  The Remote Minehunting 
System was delivered to the KITTY HAWK Battle Group on deployment in 
the Arabian Gulf in January 1997 as an operational test vehicle to 
examine the utility of future systems.  The RMS concept was also 
evaluated as a success by the Surface Warfare Development Group (SWDG) 
during SHAREM 119 exercise in January 1997.
Finally, the 1996 conversion of USS INCHON into a mine countermeasures 
support ship, with the capability of supporting our airborne and 
surface MCM forces has given the Department the only rapid-deployment 
MCM capability in the world.  In January 1997, INCHON participated in 
the GOMEX Gulf of Mexico exercise.  It is in workups for the NATO Blue 
Harrier exercise in the Baltic Sea this summer.
Other initiatives receiving priority in the development of modern MCM 
capabilities are focused on providing our operational forces an 
"organic" capability to deal with the sea mine threat until dedicated 
MCM forces can be deployed.  These capabilities include:
* The Airborne Laser Mine Detection System (ALMDS), being considered 
for program start in FY 1999.
* The Rapid Airborne Mine Clearance System (RAMICS) which would use 
super cavitating rounds to destroy near-surface mines and is budgeted 
as an advanced Technology Demonstration in FY 1998.
* The Airborne Mine Neutralization System (AMNSYS) which would use an 
expendable homing device deployed by either helicopters or surface 
ships to neutralize sea mines.  A competitive "fly-off" is scheduled 
in FY 1998.
Anti-Submarine Warfare
The department continues to develop Anti-Submarine Warfare (ASW) 
systems to improve our ability to conduct ASW in the littoral/shallow 
water regions.  The Airborne Low Frequency Sonar (ALFS) system is an 
improved "dipping sonar" that will significantly enhance our ability 
to conduct active prosecution of subsurface targets, including those 
in the shallow water environment.  ALFS is in the final stages of 
development and will be incorporated in the SH-60R Light Airborne 
Multi-Purpose System (LAMPS) helicopter.  The SH-60R LAMPS 
remanufacture program will also include upgraded acoustic processing 
to dramatically improve the ASW capability of the LAMPS aircraft.
We continue to upgrade our torpedoes for improved shallow water 
performance.  The MK-46 Service Life Extension Program and MK-50 Block 
I program improve the performance of our existing light weight torpedo 
inventory.  The Lightweight Hybrid Torpedo, to be introduced in FY 
2001, delivers a significant performance increase in shallow water.  
It will utilize available components of the MK-46 and MK-50 in 
addition to extensive use of  COTS electronic components.  The MK-48 
ADCAP MODS heavy weight torpedo program is also updating existing 
torpedoes with propulsion and homing systems improvements for the very 
difficult shallow water ASW environment.
The AN/SQQ-89(V)X Surface Ship ASW Combat System will integrate COTS 
into surface ASW combat systems and generates significant cost savings 
over previous Military Standard Systems.  The AN/SQQ-89 is the ASW 
Combat System for all surface combatants.
     The Advance Deployable System will provide the ability to rapidly 
and covertly deploy an underwater surveillance system designed for use 
in shallow littoral environments.  This surveillance information will 
be available to the tactical commanders for use in controlling any 
region of interest.  The program is currently in the Demonstration and 
Validation phase with Milestone II scheduled for FY 1998.
     Finally, the New Attack Submarine C3I system, through its 
extensive use of COTS and open system architecture, is a pace setter 
on achieving breakthroughs in system affordability and flexibility. 
This innovative approach will achieve new performance standards while 
minimizing risk, and promoting new levels of extended contractor 
responsibility and participation in the maintenance and upgrade of the 
system over its life-cycle.
REFORMING THE ACQUISITION SYSTEM
Acquisition Reform
The Department of the Navy is changing the way it does business.  The 
new streamlined SECNAVINST 5000.2 combines a number of SECNAV, OPNAV, 
Marine Corps, and Information Technology instructions, orders and 
procedures resulting in a reduction of over 300 pages of duplicate 
requirements.  Our new acquisition process eliminates unnecessary 
regulations, delegates decision authority to the lowest possible 
organizational level, eliminates non-essential military specifications 
and standards, and encourages maximum use of COTS equipment.
In a DON survey on May 31, 1996, over 85% of the acquisition workforce 
that responded to a questionnaire agreed there has been improvement in 
the Navy/Marine Corps acquisition process.  These improvements are 
occurring in programs of all sizes.  Positive examples are the F/A-
18E/F, Aegis DDG-51 class and Cooperative Engagement Capability (CEC) 
programs.  The F/A-18E/F program was designed to implement acquisition 
reform.  Cost As an Independent Variable (CAIV) principles were 
applied in the initial planning and Integrated Product Teams are 
guiding concurrent design and manufacturing implementation efforts.  
Government-industry partnering continues as the Integrated Test Team 
continues work at Patuxent River.  Using historical cost data from the 
last seven aircraft programs, this approach projects a unit cost 
avoidance of approximately $3.0 billion.
Since inception of its affordability initiative, the Aegis program has 
identified 972 areas of potential cost avoidance.  The program has 
increased the use of COTS hardware, streamlined manufacturing 
processes, reduced contract oversight requirements and eliminated 
unnecessary specifications and standards.  Costs have been reduced by 
$30 million per ship, per year, with total projected savings and cost 
avoidance of more than $700 million starting with flight IIA ships.
The CEC program has adopted a streamlined approach using COTS-based 
components which has an RDT&E cost avoidance of $1.2 million and a 
procurement cost avoidance of over $366 million for the production of 
174 projected shipboard and airborne units.
The Navy-Marine Corps team, led by our Acquisition Reform Office, is 
implementing acquisition reform initiatives.  DON has embraced the use 
of teams and integrated product and process development.  DON is 
focusing on total ownership cost, which includes designing platform 
systems using an open system architecture allowing for follow-on 
technology insertion.  The Department has made a tremendous effort to 
form a partnership with our industry counterparts to develop, acquire 
and support technologically superior and affordable systems.  The 
strong and continuous DON commitment to acquisition reform is driving 
creation of the Acquisition Center of Excellence (ACE).  ACE will 
research and deploy advanced technology, best business practices, and 
leading edge facilitation and training, and provide real-time access 
to integrated major electronic information systems.  DON is committed 
to meeting the challenges of an affordable Navy and Marine Corps of 
the future.
International Program Initiatives
The Department of the Navy is aggressively pursuing international 
sales and cooperative program opportunities which will result in 
U.S./allied cost savings and technology enhancements as well as 
traditional interoperability and foreign policy benefits.  Examples of 
recent successes reflected in our budget are:
* F/A-18 sales to Switzerland and Thailand.
* Aegis weapons system sales to Japan and Spain.
* Joint Strike Fighter cooperative development with the U.K., Denmark, 
Netherlands, Norway, and Canada.
* Multifunction Information Distribution System (MIDS) cooperative 
development and production with France, Italy, Germany, and Spain.
* Evolved Sea Sparrow Missile (ESSM) with nine NATO allies plus 
Australia.
     In FY 1996 our Navy International Programs Office (NIPO) 
completed 528 Foreign Military Sales (FMS) agreements with 60 
countries and international organizations valued at $2.2 billion.  
With these new cases NIPO now oversees 4,941 open cases with 110 
nations valued at $57.3 billion.  In addition, 22 new Research and 
Development Memorandums of Understandings were completed providing 
over $110 million in foreign R&D contributions.
Acquisition Workforce
Coupled with these business management initiatives, the Department of 
the Navy has made significant progress developing its professional 
acquisition workforce through its centralized professional Acquisition 
Workforce Program.  With full implementation in 1993 of the Defense 
Acquisition Workforce Improvement Act, the Department has focused on 
developing its people with the education, training, and cutting-edge 
skills needed to provide unsurpassed support to our warfighters.
In FY 1996, over 2,500 individuals attended college courses using 
funds earmarked for tuition assistance to enhance the education level 
of our acquisition community.  We also redesigned and expanded our 
Acquisition Intern program to ensure that well-qualified and 
experienced professionals are ready to fill upper-level positions as 
senior executives retire.  This particular program has become a 
diversity showcase for Defense with 55% of its interns being female or 
minority-a rate that significantly exceeds the national average.  In 
FY 1996 the Department of the Navy led the Department of Defense in 
the number of scholarship awardees.
In addition, 8,500 training quotas were used by the Navy and Marine 
Corps acquisition community to complete their certification 
requirements.  As a result, the majority of our acquisition workforce 
has been certified as meeting or exceeding the requirements of their 
positions.  The bottom-line benefit is better, cost effective world-
wide support to the Department's war fighters, now and into the 21st 
Century.
SUMMARY
In summary, Mr. Chairman, there are thousands of people in the Navy 
and Marine Corps community that work hard everyday to make acquisition 
success a routine occurrence.  Our guiding principles are to 
communicate fully and openly with the Congress, industry, our war 
fighters, and our acquisition professionals, to do everything it takes 
to make sure our Sailors and Marines are provided with the best 
equipment possible for the lowest investment possible.  Our highest 
priorities are to bring stability to our acquisition programs-this 
alone could save billions of dollars; strengthen our industrial base; 
and ensure that our children and grandchildren who serve in the Navy 
and Marine Corps of the future, defending America, have what they need 
to prevail.  We believe that the Department of the Navy's budget 
request for FY 1998 supports the requirements to maintain our status
as the world's greatest naval power, forward deployed and combat 
ready.  We appreciate the support provided by the Congress and look 
forward to working together with this committee toward a secure future 
for our nation.
                                  -USN-



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