ing to attract and the number of men the Marines are trying to attract. Our number is substantially higher. Within the Army we have very similar approaches to the Marines. For instance, for our Special Forces, and for our paratroops we are trying to attract lesser numbers and we use what I will call the Marine approach, because we are not looking for large numbers. But we believe that the approach of the Marines-that we are not promising you a rose garden-is a very good approach if you are trying to attract a relatively few individuals. We think our approach is the better approach, at least it is "with it" as far as the younger generation is concerned, when you want to attract larger numbers. Senator SMITH. This is what I wanted for the record. CONTRIBUTORY RETIREMENT SYSTEM Mr. Secretary, I have been concerned, as you have and everybody, probably, in this room, about the constant demand for cuts in our defenses. We are going down in our equipment, and so forth; we are going up in the cost of personnel. What about a contributory-and I am thinking more particularly about the retirement, because there are rumors that there may be some changes in the retirement plans-what consideration, if any, has been given to a contributory system? Secretary FROEHLKE. At this stage, Roger Kelley, the Assistant Secretary of Defense for Manpower and Reserve Affairs, is heading up a committee in DOD looking at retirement. One of the things, I presume, they will look at is the possibility of having a contributory system. In theory, I believe, and now I am trying to remember back more than 3 years ago when I was in the insurance business and involved with pensions, in theory, I am opposed to a contributory system in private enterprise because of the tax ramifications. A noncontributory system is better from the standpoint of the employee and taxability of income. However, just yesterday morning, I had the occasion to meet with most of your administrative assistants and this subject came up and we discussed it and there is something unique about the Federal Government as distinguished from the employer on the outside. For instance, the individual who likes to feel as though he is a part of the organization, he would like to have a vested interest in the retirement which would come about as a result of his contributing. And I was surprised. I think most of your administrative assistants were of the opinion that a contributory system had much to recommend it; and, of course, the obvious recommendation is that it cuts down on the cost to the Federal Government. That is why most people have gone that way, because it is of less expense to the employer. In theory, I think I hope we do not have to go that way. But Roger Kelley's committee is looking at it and maybe dollars and cents will dictate that we must. Senator SMITH. It might be a way of saving the retirement plan? Secretary FROEHLKE. I certainly agree, that at all costs, we must save the retirement program. I recognize how much it is costing. Senator SMITH. Do you have anything to add, General Westmoreland? General WESTMORELAND. I have nothing to add. PREPARED QUESTIONS FROM SENATOR SMITH I have other questions but I will submit them for the record, to be answered for the record. (Questions submitted by Senator Smith. Answers furnished by Department of the Army.) Question. Would you provide for the record, the Safeguard unobligated and unexpended balances by appropriation for end fiscal year 1969-1971? Would you also provide that data for December 1971? Provide also the reasons for the $900 million increase in the cost of the 4 site Safeguard deployment. ANSWER 1.-SAFEGUARD UNOBLIGATED AND UNEXPENDED BALANCES 2. The current estimate for the total DOD acquisition cost for the Safeguard four-site program is $8.0 billion. This reflects a $0.9 billion increase over last year's estimate of $7.1 billion. The increase in the estimate is attributed to a further stretchout of the deployment schedule from last year ($0.2 billion), to added inflation allowances ($0.2 billion), and to program changes and revised cost estimate ($0.5 billion). a. The $0.2 billion increase because of stretchout is caused by an approximate two-thirds of a year delay in the estimated completion of the four-site deployment which in turn is a result of the delays experienced in the construction of the second site at Malmstrom. The delay causes the retention of personnel and support activities over a longer period of time. In economic terms, our fixed (as opposed to variable) costs will be extended by two-thirds of a year. b. The $0.2 billion inflationary increase amounts to about 5 percent of last year's estimated total acquisition cost-to-completion and includes the effect of higher inflation rates allowed by OSD this year as compared to last. The increase can be divided into two categories: (1) about 70 percent represents inflation already experienced, or the increase from December 1970 to December 1971 price levels and (2) the remainder reflects the effect of more liberal and realistic allowances for anticipated future inflation in our estimates as compared to the factors permitted in preparing last year's budget and cost estimates. c. The remaining cost growth of $0.5 billion falls in two subclassifications-program changes and revised estimates. The following specific examples comprise over 85 percent of these cost increases: (1) Program changes include the cost of effort not previously recognized as well as modification in programs. About $0.3 billion cost growth is due to significant program changes since last year's estimate as follows: (a) A post development test program has been added. This program provides for laboratory and flight testing of missiles after having been stored in their operational environments for periods of time. We concluded that such a program is necessary to give us confidence in the continued reliability of the missiles over the life of the deployment and also to satisfy an AEC requirement for periodic reliability flight testing of warhead components. (b) The MCA estimate has been increased to add funds requested in FY 1973 for Community Impact Assistance through other Federal assistance programs. Funds were included in last year's cost estimate for Community Impact Assistance only through FY 1972. (2) Revision of estimates of the cost of completion of work already planned has also occurred during the past year. The $0.2 billion cost growth in this category is due to such significant changes as follows: (a) The labor problems we have experienced at Malmstrom have caused us to increase significantly our estimates of construction costs both there and at the remaining sites. (b) Our estimates for installation and test costs at the sites have also increased as revised estimates are completed of the cost of such items as site activation materials and contractor remote-location benefits. 3. These estimates are in terms of DOD acquisition costs. They exclude operating costs (OMA and MPA) and do not include nuclear warhead costs which would be borne by the Atomic Energy Commission. Also not included are certain indirect costs that are budgeted elsewhere, such as national range support and family housing. Question. The cost of the M60A1 tank has increased significantly from the approrimate $200,000 price in 1971 to about $350,000. The cost is forecast to remain at $350,000 each in the outyears even though the quantity is increased. Would you explain the reasons for the 75% increase in cost? Answer. The M60A1 Tank unit cost for fiscal years 1971 through 1977 are stratified as follows: Includes $4,900,000 ($16,300 unit cost) for chassis diverted from the M60A2 program and provided to the fiscal year 1971 M60A1 program. The M60A1 tank unit cost increased by $69,000 from fiscal year 1971 to fiscal year 1973, a 29% increase in costs. The major reasons for the 29% increase include price escalation; the impact of producing less vehicles in fiscal year 1973 (fixed cost and burden distribution); and the application of product improvements on the fiscal year 1973 production tanks. The fiscal year 1974 unit cost is lower due to the increased procurement quantity. This decrease is partially offset by the inclusion of additional product improvements to the last 60 tanks produced. These product improvements, which will significantly increase the combat effectiveness of the tank, are Laser Rangefinder, solid state ballistics computer, tube-over-bar suspension, improved electrical system, and reliability improvements for the engine. The unit costs of tank procurement during 1975 through 1977 are higher due to escalation and the inclusion of the above product improvements to all tanks produced in those years. The unit cost increase between the fiscal year 1975, 1976, and 1977 programs is due only to escalation. Question. Last year, Congress denied funds for a conventional warhead for the Lance surface-to-surface missile. Are any funds requested in fiscal year 1973 for a conventional warhead for the Lance missile? Answer. No. The Army has forwarded to the Office of the Secretary of Defense a prior approval reprogramming action requesting authority to complete development of the conventional warhead for Lance using FY 72 RDT&E funds. Question. In an earlier R &D Subcommittee meeting, the Army indicated that because of damaged helicopters in Vietnam there are many of the major components that are salvaged. If you use those components to reduce the cost of buying new helicopters, they can also be used as spares. With that in mind, why has the Army request for aircraft spares increased from the 1972 level of $9.8 million to a fiscal year 1973 request of $16.7 million? Answer. The FY 1973 initial provisioning program reflects a $1.2 million increase over FY 1972 because of procurement of the VH-IN helicopter. The increase in the replenishment program is primarily due to depletion of stocks of high cost, finite life CH-47 rotor blades as a result of the aging of the CH-47 fleet. CH-47A aft rotor blades, for example, cost approximately $13,200 each and must be disposed of after 2400 hours use because of safety-of-flight considerations. (They can be overhauled up to the 2400-hour maximum.) The FY 1973 budget request includes approximately $8 million for procurement of CH-47 rotor blades. Question. You state on page 23 of your statement that, Site Defense of Minuteman formerly known as "Hardsite Defense will provide the protection of Minuteman against increasing levels of threat sophistication (in quantity and quality) beyond those which Safeguard is designed to counter." Can you describe what are some of these increasing levels of sophistication and why Safeguard is necessary in addition to a Site defense of Minuteman? Answer. Examples of possible threat sophistication include: (1) increased number of RVs and attendant increased RV arrival rates in defended areas. This has the effect of decreasing the number of silos that a safeguard radar can protect. (2) greater RV reentry angle which has the effect of decreasing the number of Minuteman silos which a Safeguard radar and the planned Sprint can protect. (3) highly coordinated attacks on single Safeguard radars which multiple, netted radars, such as those of the Site Defense of Minuteman formerly known as Hardsite defense system, can counter. (4) increased RV accuracy which requires more Minuteman silos to be defended to preserve a constant number of surviving silos. Safeguard has been developed and is being deployed; only a prototype demonstration of the Hardsite Defense is being undertaken. Safeguard will fulfill multiple objectives as stated by the President on 14 March 1969. They are: "1. Protection of our land-based retaliatory forces against a direct attack by the Soviet Union. "2. Defense of the American people against the kind of nuclear attack which Communist China is likely to be able to mount within the decade, "3. Protection against the possibility of accidental attacks from any source." He also added: "We will provide for local defense of selected Minuteman sites as an area defense designed to protect our bomber bases and our command and control authorities. "By approving this system, it is possible to reduce U.S. fatalities to a minimum level in the event of a Chinese nuclear attack in the 1970's or in an accidental attack from any source." Therefore, the multiple defense missions of Safeguard are: Minuteman defense, protection of SAC bomber bases and the National Command Authority, and light area defense. The Site Defense of Minuteman formerly known as Hardsite system is being designed for the single mission of augmenting Safeguard only in its Minuteman defense role. The Site Defense of Minuteman formerly known as Hardsite system will be deployed only if the future threat to Minuteman so warrants. Question. What is the enlistment and re-enlistment rate that the Army would like to attain in fiscal year 1973? Have you attained these? If not, when do you expect to? In this regard, provide a quality breakout of enlistments during the last three months. This breakout might be in terms of category rating, number of high school graduates or other appropriate measure. In your opinion, is the Army now attracting the quality personnel that it needs? Answer. The Army would like to achieve an average monthly enlistment rate of 17,500 in FY 73. That average rate will require over 20,000 enlistments in good recruiting months in order to make up for months like May and December which are historically the poorest recruiting months. The Army has not achieved 17,500 enlistments in any month since early FY 70. Draft calls of more than 20,000 per month during the 1st Quarter, FY 70 contributed to high enlistment rates. The Army expects to reach the required enlistment rate, without the assistance of draft motivation, by the end of FY 73. The enlistment quality breakout for the last three months is as follows: The Army is now attracting the quality of personnel that it needs. We must now concentrate on enlisting sufficient numbers of these quality personnel so that no draftees are required. Reenlistment rates that the Army would like to attain in fiscal year 1973 are broken into two categories. One category is first term personnel (Regular Army and inductees). In order to achieve established requirements, it is desirable that the reenlistment rate for this category be about 17 percent of those eligible. This rate is not being attained presently. However, it is anticipated that this rate will be attained commencing in July 1972. The other category is career personnel. For statistical analysis, careerists are defined as personnel with more than three years' service. The desired rate for this category in fiscal year 1973 is 37 percent. This rate has been attained previously without any problem. Due to programs recently established to control the quality and grade/career field balance within the career content, the reenlistment of a number of careerists has been delayed. It is anticipated that the desired reenlistment rate for careerists will resume by July 1972. Question. In regard to Army deployment you state on page 26 of your statement that, "While major airlift improvements have been made, the Army will continue to rely on sealift for more than 90% of its requirements. The decline in the size of the U.S. Merchant Marine and the change from traditional break-bulk cargo ships to specialized container ships have compounded our deployment problems." Would you be more specific as to just how this has compounded your deployment problems? Give examples if you think they are appropriate. Answer. The break-bulk dry cargo ship, the traditional vehicle used to deploy both military equipment and supplies, is rapidly disappearing from the Merchant Marine. The new containerships entering the fleet while faster and larger, are fewer in number and are ill-suited for the deployment of vehicles and helicopters that make up the bulk of deploying Army units. All but one of the 29 new dry cargo ships presently under construction in US shipyards are of the container/container-barge type. These ships are designed primarily to transport the 8x8x20 and 40 foot containers that are placed on and off the ship by large shore-based cranes. This requires that the ships be used only when you are assured that the reception port has the required equipment. While there is great potential in the movement of supplies by container there are a number of unsolved problems that are associated with containers. Less than |