APPROPRIATIONS FOR 1964

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

EIGHTY-EIGHTH CONGRESS

FIRST SESSION

SUBCOMMITTEE ON DEPARTMENT OF DEFENSE APPROPRIATIONS

GEORGE H. MAHON, Texas, Chairman

ROBERT L. MICHAELS and FRANK SANDERS, Staff Assistants to the Subcommittee

COMMITTEE ON APPROPRIATIONS

CLARENCE CANNON, Missouri, Chairman

KENNETH SPRANKLE, Clerk and Staff Director

DEPOS BY THE

UNITED STIES OF AMERICA

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR

1964

MONDAY, APRIL 1, 1963.

INSTALLATIONS AND LOGISTICS

WITNESSES

HON. THOMAS D. MORRIS, ASSISTANT SECRETARY OF DEFENSE
(INSTALLATIONS AND LOGISTICS)

PAUL H. RILEY, DEPUTY ASSISTANT SECRETARY OF DEFENSE (SUP-
PLY AND SERVICES), I. & L.

G. C. BANNERMAN, DEPUTY ASSISTANT SECRETARY OF DEFENSE
(PROCUREMENT), I. & L.

JAMES N. DAVIS, DEPUTY ASSISTANT SECRETARY OF DEFENSE
(WEAPONS ACQUISITION AND INDUSTRIAL READINESS), I. & L.
GEORGE E. FOUCH, DEPUTY ASSISTANT SECRETARY OF DEFENSE
(EQUIPMENT MAINTENANCE AND READINESS), I. & L.

ECKHARD BENNEWITZ, DIRECTOR, WEAPONS SYSTEMS, SCHEDUL-
ING AND ANALYSIS, I. & L.

COL. R. H. MCCUTCHEON, DIRECTOR, PROCUREMENT POLICY, I & L.
GLENN V. GIBSON, DEPUTY ASSISTANT SECRETARY OF DEFENSE
(I & L.)

VICE ADM. CHARLES B. MARTELL, D.D.R. & E., DEPUTY DIRECTOR (ADMINISTRATION AND MANAGEMENT)

JOSEPH S. HOOVER, DEPUTY ASSISTANT SECRETARY OF DEFENSE
(BUDGET) (COMPTROLLER)

HENRY G. PUPPA, DIRECTOR FOR PROGRAM OPERATIONS AND
REVIEW, OASD (COMPTROLLER) (PROGRAMING)

Mr. MAHON. We shall resume our hearing on the Defense appropriation bill.

We are honored today to have before us Assistant Secretary Morris.

You and your associates have been before us on several previous occasions. We have your statement. There are many problems which we will want to discuss with you.

There is a great deal of emphasis this year, and there should be every year, on using the best possible procurement practices in the Department of Defense. After you have made your presentation, we shall have some questions to ask.

GENERAL STATEMENT OF ASSISTANT SECRETARY OF DEFENSE
(INSTALLATIONS AND LOGISTICS)

Mr. MORRIS. Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, during each of the past 2 years it has been our privilege to report to you on the efforts

of the logistics managers in the military departments and OSD to bring stronger controls and more businesslike direction to the operation of procurement, supply, maintenance, communications and transportation activities.

In 1961 we reported our tentative views after having spent only 3 months in analyzing problems and opportunities. In 1962 we were able to report on a number of actions which had been begun, but we were not in a position to assess the results of these actions over a full year. This year we can discuss specific progress through fiscal year 1962 and the first half of fiscal year 1963, and more clearly describe the kinds of problems on which we seek your comments and advice. I would like to present this progress report around the outline of the Department of Defense cost reduction program which was summarized in Secretary McNamara's posture statement. The status of this program is summarized in the following chart and set out in full detail in the table at the end of this statement.

(The chart follows:)

In respect to the three key objectives, each military department and defense agency has established individual cost reduction goals to be fully realized and reflected in the fiscal year 1967 budget. Intermediate targets for the years 1963, 1964, and 1965 have been set by each service Secretary and approved by Secretary McNamara, and a quarterly report of progress is submitted to the Secretary of Defense. In each department the principal military logistics chief has been made personally responsible for administering the program. Finally, to assess the firmness of results reported by the departments and agencies, the Assistant Secretary of Defense (Comptroller) is responsible for auditing them and for assuring that firm recurring savings are reflected in future budgets.

Over $1 billion has been reflected in the fiscal year 1964 budget as a result of specific actions taken to date. When fully effective, these actions are expected to produce 40 percent of the $3.4 billion annual savings goal.