Ordnance Support Equipment General Reduction. The House recommended a general reduction of $10.0 million against the overall request for Ordnance Support Equipment.

Ordnance Support Equipment is composed of ship gun ammunition, ship gun system equipment, surface missile systems, FBM support equipment, ASW support equipment, and other ordnance support equipment. The area where the reduction can be taken is limited in that ship gun ammunition is at a minimum sustaining rate and can't be reduced. Harpoon has already been reduced by the House, FBM Support Equipment is the top priority program in the Navy, and ASW and other support equipment are composed of many line items of relatively low dollar amounts that should not be reduced. Consequently, the $10.0 million reduction must be applied to SMS Ordalts ($7.0 million) and production facilities ($3.0 million).

The impact in SMS Ordalts would result in curtailment of procurement of equipment modifications which have been developed to correct readiness problems reported by the Fleet. This reduction of 16% in SMS Ordalts will seriously impact on the ability to correct known deficiencies in the TERRIER, TARTAR, and TALOS surface missile systems.

The impact in production facilities will result in the curtailment of several production improvement efforts that will be reflected in higher cost for production at several ordnance facilities.

It is requested that the $10.0 million reduction be restored.

Civil Engineering Support Equipment. The House Appropriation Committee recommended a general reduction of $16.0 million and $5.0 million against the FY 1976 and 197T budget submission of $89.0 million and $15.4 million respectively for Civil Engineering Support Equipment. Of the FY 1976 and 197T total Civil Engineering Support Equipment request, $61.8 million and $10.8 million were identified for the procurement of replacement automotive and construction equipment. The recommended reduction would impact most heavily in this area.

The high level of over age equipment at the end of FY 1975 and further deterioration projected required a re-evaluation of the Navy's automobile, truck, trailer and construction equipment replacement program. After a thorough analysis of the Navy's inventory and requirements, a plan to arrest the aging trend and correct this problem on a permanent basis was formulated. As part of the plan, the Naval Shore Activities

equipment inventory was reduced by 10% or $80 million and certain long-life/high value equipments, such as asphalt plants, were excluded from level funding considerations. This study placed the total inventory value at $846 million including over age equipment valued at $347.5 million. An average weighted equipment life expectancy of 10 years was formulated. This 10 year weighted life cycle represents a two year extension beyond DOD economic replacement criteria resulting in an end cycle overage posture of 15%. The resultant annual OPN level funding equipment replacement requirement equates to $84.6 million. By this approach block equipment obsolescence would be avoided although a high level of over age would be tolerated until the level procurement concept continued through one complete equipment life cycle.

FY 1976 was the first increment of the level funding approach to the replacement of automotive vehicles and construction equipment. If replacement funding were to continue at $45.8 million annually, retained over age equipment would increase from 41% to 46% by FY 1978 and hold at the 46% level permanently. It is important to note that this percentile equates to an equipment life cycle of 18-1/2 years versus the recommended 10 year replacement period. This increase in equipment life will compound the logistics problem of providing repair parts and significantly increase O&MN expenditures required to maintain the equipment in safe and serviceable condition.

The deteriorated and over age condition of the entire automotive vehicle and construction equipment fleet, brought on by years of inadequate replacements, renders the procurement set forth in FY 1976 and FY 197T essential and urgent if minimal reliability is to be attained and maintenance costs kept within reason. Full restoration of the House Appropriations Committee reduction of $16.0 million in FY 1976 and $5.0 million in FY 197T is requested.

Medical Support Equipment. The House Appropriation Committee recommendation to reduce medical support equipment by $3.7 million from the $11.7 million requested in FY 1976 is based upon these factors: (1) a $3.2 million reduction by Navy to the FY-75 Medical Support Equipment and Program, (2) the under-utilization of military hospitals, (3) the increased use of CHAMPUS. The following relates to each of these three factors:

1. The $3.2 million reduction in the FY 1975 appropriation for medical support equipment was the result of a similar

congressi

reduction rather than a Navy action. The reduction seriously curtailed procurement of medical equipment in FY 1975 and resulted in the deferral of equipment purchases to FY 1976.

2. A Auction of $3.7 million in medical support equip

ment in FY 1976 will contribute to the under-utilization of military hospitals. The availability of essential items of medical equipment determines the ability of Navy medical facilities to render the appropriate medical care. The proposed reduction rther deteriorates the "in-house" medical support capability.

3. The Navy has strongly emphasized the necessity of reducing referrals to the CHAMPUS program by reducing the number of nonavailability statements issued to active duty dependents from 18,646 in FY 1974 to 11,951 in FY 1975. There has been a 22 percent decrease in Navy active duty dependent average daily patient load in the CHAMPUS program. If this trend is to continue, emphasis must be placed on acquisition of medical support equipment to increase the medical treatment capability within existing military hospital facilities. Moreover, CHAMPUS is not authorized to support patient care of active duty military who will be affected by the reduced ability to replace current obsolete, wornout medical support equipment.

In view of the above, it is recommended that the full $3.7 million reduction be restored to insure that a minimum level of equipment replacement at existing medical facilities can be sustained through FY 1976.

Computer Acquisition Program (CAP). Based on the increase of $9.3 million in FY 1976 over the FY 1975 program and the statement that, "The Navy significantly reduced the fiscal year 1974 and 1975 programs from the amount appropriated" the House Appropriation Committee has recommended a $7.0 million reduction to the $17.6 million requested in the computer acquisition line item. The following table represents the history of this program from its inception:

The CAP program was initiated in FY 1971 through a Congressionally approved reprogramming. The basic precept of the program is to provide a source of funds to procure automatic data processing equipment that is more economical to procure than lease and in some instances procure items that are not available for lease. As can be deduced from the above chart, circumstances have come up every year when additional procurements have come up based on economical anlaysis of the lease vs. procurement cost.

The specific procurements planned for FY-76 include those deferred from FY-75. The impact on each of the programs is

(1) Naval Weather Service ($4,927,000) Funds are required for the establishment of a Satellite Data Processing Center, Monterey, California to receive, process and store environmental satellite data from the Defense Meteorological Satellite Program. In order to fulfill the Naval Weather Service mission of satisfying Navy and Department of Defense environmental/ oceanographic requirements for timely and accurate predictions, comprehensive satellite observations are essential for use in current numerical forecast models. Forecast improvements will only come about by expanding current forecast models from hemisperhic to global. The paucity of initial data in the Southern Hemisphere would preclude such expansion without the use of satellite data available through today's technology. The proposed reduction would impact as follows: (a) Fuel savings resulting from Optimum Track Ship Routing (OTSR) of $2-3 million per year will not be realized, (b) Data to support Tactical Ship Routing will not be available, (c) Fuel savings which would result from Optimum Path Aircraft Routing (OPAR) of $300,000 per year will not be realized, (d) Fuel savings from decreased aircraft reconnaissance of polar ice fields will not be realized, ultimately (1979-1980) it is estimated that

500-600 reconnaissance flying hours could be eliminated per year, (e) Navy access to encrypted, wartime survivable, global data base upon which to base environmental predictions is denied, (f) Navy access to Defense Meteorological Satellite Program (DMSP) which has an Air Force investment in excess of $300 million is denied, (g) Environmental support to electrooptical weapons systems will not be possible without the global data, particularly over oceanic regions, available from the DMSP, (h) Environmental support to Surface Effect Ships will not be possible without access to the DMSP oceanic data, (i) Reliable observations for computation of ballistic winds will not be available. Currently, observations from potentially hostile nations are used.

(2) Shipyard Computers ($1,526,000) These funds are required to purchase the balance of the installed H-6060 components at eight shipyards. The investment of $1,526,000 will save $3,270,000 in rent over the minimum eight year life of the hardware. Failure to purchase will result in an increase in planned costs in FY-76 and 7T of $278,867 and $427,308 in FY-77 and each of the out years. The cost of the hardware will be amortized in less than three and a half years.

(3) Bureau of Medicine and Surgery ($547,000) - OPN funds requested in FY-76 are to purchase leased installed automatic data processing equipment ($360,000) and procurement of a minicomputer ($187,000) to support the Outpatient Appointment Scheduling Information System (OASIS), a validated and approved module of the Tri-service Medical Information System (TRIMIS). Failure to purchase the leased installed ADPE will not allow BUMED to realize a savings of $2,112,000 over the eight year life. The purchase of the mini-computer would reduce the 30 minute delays that are being experienced by patients attempting to make appointments at the larger health care delivery activities to a maximum of five minutes. The system will automatically keep statistics on appointments by required elements such as patient category, clinic, etc., and thus facilitate optimal management of medical resources.

In addition to the program as submitted for FY 1976' two additional items have been introduced and would be candidates for internal Navy reporgramming if we were not precluded from doing so by virtue of the congressional cut to the CAP line. These include:

(1) Naval Weather Service Command

($1,900,000)

The CDC 6500 leased system used by the

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