oversight

Economic Issues in Military Airlift

Published by the Government Accountability Office on 1977-12-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          DOCUMENT RESUME
 04545 - [B0064955]

Economic Issues in Military Airlift. December 22, 1977.
                                                         11 pp.
Testimocny before Joint Economic Committee: Priorities and
Economy in Government Subcommittee; by Elmer B. caats,
Comptrcller General.

Issue Area: Military Preparedness Plans (800).
Contact: Office of the Comptroller General.
Budget Funvtion: National Defense: Department of Defense
                                                          -
    Military (except procurement & contracts) (051).
Organizaticn Concerned: Department of Defense; Department
                                                            of
    Defense: Joint Chiefs of Staff.

          The Joint Chiefs of Staff (JCS) completed a study and
 prepared a report on strategic mobility requirements and
 programs, but many questions remain concerning airlift
 requirements for a Europcan contingency. The problem that
                                                            must
 be resolved by ilitary planners is how to provide the needed
 forces in the period of time deemed critical to preclude
 Warsaw act victory. Questions requiring resolution deal a
cost and effectiveness of combinations of airlift, sealift,with
prepositioninq and, possibly, the forward deployment of
additional forces. he study does not adequately show
 justification for new airlift programs in terms of a requirement
to aive certain tonnages to specific iocaticLs in a prescribed
period of time, although a total strategic movement requirement
has beci identified. There are a number of procurement,
modification, and support programs proposed c under
consideration with a total cost that could exceed $10-12
billion. The Department of Defensers fiscal year 1978 budget
presentation showed a total program cost of $3.1 billion
                                                          for
failr programs proposed to improve strategic airlift capability
a': individual costs of: $1.3 billion for the C-5A Wing
Modification Program, $592 million for the Civil Reserve
Fleet Modification Program, $677 million for the C-141    Air
Modification Program, and $561 million for spare parts and
training costs to increase the utilization of the C-5A and crew
C-141. Further study is needed n alternativea tc the airlift
proposals. (uthor/HTi)
                   UNITED STATES GENERAI ACCOUNTING CFFICE
                                WASHINGTON, D. C.
                                              FOR RELEASE ON DELIVERY
                                              EXPECTED .THURSDAY
                                              DECEMBER 22, 1977

                                     STATEMENT OF
                                 ELMER B. STAATS
                   COMPIROLI.ER GENERAL OF THE UNITED STATES


                                     BEFORE THE
          SUBCOMMITTEE ON PRIORITIES AND ECONOMY IN GOVERNMENT
                           JOINT ECONOMIC COMMITTEE

                                         ON
                       ECONOM;C ISSUES IN MILITARY AIRLIFT


     We are        e      appear here this morning at your request      o discuss
some of the ecol           ues involved in strategic mobility, and particularly
new military              -ograms.     As you know, GAO has issued several reports
in the past, and we are currently preparing reports dealing with:
     --The recently completed Joint Chiefs of Staff's sudy on
       Strategic Mobi'ity Requirements and Programs, and
     --The justification for stretching the C-141 aircraft.
     Because of department of Defense-security restrictions,our statement
today, of necessity, will have to omit reference to specific details such
as tonnages and kinds of equipment to be moved, need dates,
warning times, readiness of forces, or assessment of threat.        We will be
happy to discuss these further in closed session if you desire.
     I would like to address my first remarks to the JCS study.         In
several hearings on this subject ltst year concern         as expressed about
how the Defense Department determined the airlift requirements for a
European contingerncy and the cost implications of the proposed air-
lift programs. Since ten, as encouraged by several of the committees of
Congress,the JCS completed a study and prepared a report on strategic
mobility requirements     nd programs.


     This report is a good beginning and it represe         ; the first com-
prehensive look at the strategic nobility mission.         However, there are
a ot of questions yet to be answered.          This has been recognizc' by DOD
and follow-up studies on the matters covered in the initial eort are
being initiated.   in our opinion, because of the many unanswered
questions,tliis study should not be relieC on by the Congress as a
justification for major airlift programs.
     Based on the udgment of senior military officials, there will be
a need to move substantial quantities o' equipment to Europe--to augment
our forces that are currently in place--in the event of a possible attack
by the Warsaw Pact forces.     The augmentation of existing forces is planned
through a combination of airlift, sealift, and prepo!;itioning of supplies
and equipment in Europe for military units that          ' be'moved there
from the United States.
     The problem that must be resolved by military planners is how to
provide the needed forces in the period of time deemed critical to pre-
clude a Warsaw Pact victory.     The questions that require resolution

                                         -2-
deal primarily with the cost and effectiveness of various combinations of
airlift, sealift, prepositioning and possibly the forward deployment of
additional forces.
     Based on our work in this area, we believe there are a number of
critical questions that should be addressed by the Congress--some
necessarily in closed hearings because of the security iplications--
before approval is given for major new mobility programs.     Those
questions are:

    --There is growing concern by iilitary officials that a short
      warning period would precede a Warsaw PACT attack.      What impact
      would there be on the strategic mobility planning if the cur-
       rently anticipated warning time is changed?

    --The Armnny has serious combat readiness problems.    Why does the
      DOD continue to justi fy strategic mobility requirements based on
      a high state of active Army and reserve force readiness?        How
      will the readiness     roilen be   esolvEd within current budget
      constraints?

    -- 'ow cost effective is the program to stretch the C-141 considering
      t:ie minimal additional capability i offers in the period preceding
      a European conflict?

    -- In comparison with other alternatives (such as prepositioning),
      is the C-SA wing modification program cost effective in view of
      the limited amount of U.S. Army outsize equipment it would carry?

                                    - 3-
      --What is being dcne to assure that U.S. and European logistics
        far.ilitics (ports, airports, transportation) have the
        capability required at the time of national emergency?

      --In view of the increase in the availability of various types c,
        containerships, hat is being lone to assess the strategic mobility
       potential these ships woLud offer at the time c a national
       emergency?

      I can not stress enough, Mr. Chairman, the importance of these
questions to the Congress in its consideration of proposed mobility pro-
grams. A good understanding of the complete mobility mission is
essential to a determi,stion of airlift requiremnents and related program
proposals.

HOW WERE PRESENT AIRLIFT REQUIREMEFis
DETERMINED AND JUSTIFIED?

     Our primary concern last year was that DOD had not justified new
airlift programs in terms of a requirement to move certain tonnages
                                                                    to
specific locations in a prescribed period of time. We are still not
satisfied that this has been done in the JCS study--althougil a total
strategic movement requirement has been identified.
      In the event of a European conflict, DOD officials consider a rapid
deployment capability critical in preventing initial Warsaw Pact advances,
as well as being-important-it eterring the actua, outbreak of hostilities.
In case war does begin, the attack would be met with prepositioned forces,


                                  -4 -
supplemented in the early stages    y deployment of forces first by air
and later by sea.   Airlift is,therefore, an important element of U.S.
strategic mobility plans.
     Airlift requirements must be considered, however, in relation to
other deployment alternatives such as sealift and prepositioning.    The

JCS study did not consider sealift, prepositioning, or commercial air-
craft options as alternatives to the current airlift proposals for the
European contingency. Each alternative has certain advantages and dis-
advantages, but, until these alternatives are studied, it will.not be
known which would be the most desirable.
     In prior hearings and in a 1976 report, we recommended that as a
minimum the Department of Defense should identify the airlift require-
ment in terms of specific items and weights and required delivery
dates.   The response from Defense was the JCS study on strategic mobility
requirements and programs.   As part of the study, total movement require-
ments for the period were determined cased on a threat assessment.    Then,

the forces needed in battle and required order of delivery were determined
after considering prepositioned equipment and forward deployed forces.
In the process, less essential or non-essential units and equipment were
either deferred or deleted, and all items were arranged in an order of
descending priority. This list of total movement requirements was then
assigned to existing or projected quantities of either air or sealift
assets. The fastest method of delivery (air or sea) was selected For
given groups of units accordinr    to their relative priority.

                                      -5-
     The sequence followed in the study was to exploit the existing and
projected airlift capability and then use other available and projected
lift assets.      Thus, the current and proposedairlift capability deter-
min:ed how much would be airlifted.     This became the airlift requirement.
     In other wh,rds, the study developed a total requirement based on
specific items of equipment, weights, and delivery dates that need to
be moved to Europe, but it did not develop a requirement limited to
what must be airlifted.     Without this information, Defense does not
know what strategic airlift capability is needed      r whether alter-
natives io airlift, such as prepositioning or sealift, could meet the
needs at a     ver cost.
     During our current eviews, we were denied certain detailed infor-
mation concerning airlift requirements      nd capabilities.   This data was
considered by DOD to be part of the war plans.      Recently, however, we
were told we could have access to these plans and we plan to do a sample
verification of airlift requirements in the near future.
WHAT IS THE STATUS OF THE
PROPOSED AIRLIFT PROGRMS?
      As you requesed, I will now discus the status of the vario,s
airlift programs prorF-    d ni ;nder consideration by the Air Force.
There are a number of procur(?,-t, modification, and support programs
that have been either propr,!;i       iv,r,:
                                          under consideration. The
total cost-is not clear at tiLs i;'           could very   ell exceed
$10-12 billion.

The C-141 Modif'cation Program
     The C-'41 aircraft is being modified because the Air Force has found
that it normally cannot be loaded to its weight capacity.      As a result, the

                                      -6-
   Ai  Force has a $677 million pro.am to stretch the C-i41 fuselage
                                                                      allowing
   the C-141 fleet to carry an additional 21,000 tons during the
                                                                 assumed
   warning period. This increase is relatively minor in terms of total
                                                                       re-
   quiremants and current capabilities, especially in view of the
   estimated cast of $677 million. As I mentioned earlier, tis
                                                                 program should
   be specifically justified by DOD n terms of overall priorities
                                                                   and
   requirements for airlift and the cost effectiveness of this particular
   ndi f cation.
      In May 1975, the Air Force awarded d contract to Lockheed-Georgia
 Company to develop a prototype stretch C-141. Lockheed recently
                                                                  completed
 this prototype ahead of shedule at a cost of $38 million. Structural
                                                                        and
 flight tests have indicated that stretching the aircraft is technically
 feasible.
 Increased Utilization Rates
     The Air Force estimated it would cost $197 million for c-ew costs
                                                                       and
$364 million for ar reserve spare parts and other supplies in
                                                               order tu be
able to increase the utilization rates of the C-5 and C-141 aircraft
                                                                     in an
emergency period.
     To reach high utilization rates, the Air Force estimates that
                                                                   a total
of 280 C-SA and 936 C-141 flight crews will be required. As of
                                                                October 31,
1977, there were only 176 C-SA and 656 C-141 flilht crews.
     The ability of the Air Force to attain significantly higher emergency
use rates is questionable in our opinion. One of the problems
                                                               is the addi-
tional demands placed on the maintenance support required by
                                                             the increased
ut lization rates. This matter is dealt with in much greater
                                                              depth in a
setparate report we issued on October 1, 1977. That report
                                                             is classified


                                    - 7-
but, with your permission, I will provide a copy of the unclassified digest
of that report for the record.
The Civil Reserve Air Fleet
        The estimated cost of the Civil Reserve Air Fleet program over a five-
year period is $592 million. The program is intended to modify commercially
owned ant operated wide-bodied passenger aircraft tu permit them to carry
military cargo.     Some commercial aircraft are already in the Civil Reserve
Fleet. Because of objections to an open ended arrangement which provided
annual payments to the air carriers over the life of the modified arcraft,
the Congress did not approve the program last year.
        We have noted in previous reports that the CRAF program appears to be
cost effective--providing a substantial reserve capacity at a relatively low
co:t.
The Advanced Medium Short Take Off
and Landing Transport Proaram
        Currently, due to considerable changes in the program for the Advanced
Medium Short Take Off and Landing Transport (ATiST),     he Air Force'Ts unable to
project the costs of the program. The aircraft now utilized for tactical
airlift are nearing the end of their useful service. At one time, the AMST
was viewed as a replacement for all the aging C-7, C-123, and C-130 aircraft,
and the program was estimated at $6.3 billion for 277 aircraft.     As of
November 1977, both Boeing and McJonnell-Douglas were flying prototype AMST
aircraft and approximately $236 million had been spent for their development
and testing. Selection of the winning design is scheduled for February 1978.
     Although the AMST was not used in the JCS study as a strategic airlift
asset, the AMST contractors believe itwould offer some strategic airTift
capability.

                                         8
  The dvanced Tanker/Cargo
  A rcraft Prgram
          Because of changes in the Advanced Tanker/Cargo Aircraft program, the
  Air Force was not able to project a current cost estimate for the program.
        This program has been justified as an aerial tanker to support
 increased demands for nflight refueling and because of deficiencies in
 the existing tanker fleet of C-135s.           The AT/CA concept is to purchase
 standard off-the-shelf DC10s and modify them for military use. The
 initial development contract was awarded to McDonnell Douglas this week.
        We have been told that the Air Force initially requested 15 to 20 air-
 craft which was later increased to about 40 by the Office of Management and
 Budget.    The requirement was later increased to about 90 lircrat on the
 basis of a perceived requirement to respond to worldwide emergencies.          The
 actual number of aircraft that may be procured has not been determined by
 the DOD at this time. The price of a modified OC-1O is about $37 million.
        As currently envisioned, the AT/CA could carry military cargo similar
 to that carried by the C-141 stretch aircraft.         It would not have the
capability the C-5A does for outsize cargo          (that is, equipment that is too
la.-ge to be moved in any other aircraft.)         s'e potential airlift capability
of the AT/CA was not considered in the JCS study, although the DC-10 air-
craft have the range and payload for strategic mobility missions.
The C-5A Wing Modification Program
        The C-5A is the only aircra"t   hat can move the relatively small
amount of U.S. Army "outsize" e         lent.     As you know, the C-5A aircraft was
originally expected to have a useful life of 30,000 flight hour-.          Because
of technical problems the wings must be modified in order to achieve that
goal.    The estimated cost of the modification program is about $1.3 billion.


                                         -9-
      In 1977, there were two significant milestones in th's program. In
 January, Lockheed Georgia began building two wierJ kits for initial test and
 evaluation.  In November the Air Force performed a critical design review of
 tle proposed wing fix. Reportedly, the results were favorable.
      No additional major milestonesx are expected until 1979 when (1)fatigue
 and flight testing are begun, and (2)the production decision is scheduled.
 The plans are for the final modifications to be completed in mid-1987.

     As mentioned earlier, we are of the opinion that Congress should review
this program closely to ascertain if it is the most cost effective solution
                                                                             to
the problem of so-called outsize cargo.

 WHAT ARE THE COSTS OF PRESENT
 PROPOSALS AND POSSIBLE SAVINGS
 OF ALTERNATIVE APPROACHES
      The OO's fiscal year 1978 budget presentation showed a total program
 cost of $3.1 billion for fotr programs proposed to imrove the current
strategic airlift capability. The cost of the individual programs are:
$1.3 billion for the C-SA Wing Modification Program; $S92 million for the
Civil Reserve Air Fleet Modification Program; $677 million for the C-141
Modification Program; and, 561 million for spare parts and crew training
costs to increase the utilization of the C-5A and C-141.     The requested funds
are for R&D and procurement for the first three programs, and spare parts and
additional crew training for the Increased utilization program.
     Other alternatives, such as the contribution that     he Advanced Tanaer/
Cargo Aircraft (AT/CA) could make to the movement of cargc , have nt been
considered by the DCD. The AMST, although considered to be a tactical trans-
port, might also offer some strategic airlift capability. Costs for these
programs have not been announced yet.


                                        - 10 -
     We do not agree with the testimony presented yesterday which inJicated
that DOD has considered all alternatives in assessing the strategic
mobility problem.    The JCS study did not make trade-off analyses between
various combinations of airlift, sealift, prepocsitioning, or forward
deployment. Thus, at this point in time, we do not know what the most
cost-effective solution would be.
                i,               *            *             *


     In summary, Mr. Chairman, it is not clear what the current airlift pro-
posals should be or what they should cost given the postulated Warsaw Pact_
threat.   Further study needs to be made on various alternatives to counter
the threat to the European NATO countries.
     Current Department of Defense guidance is based on a specified warnir,
period before a Warsaw Pact attack.j There is growing concern, however, that
the Warsaw Pact could attack with less warning time.    The warning period
guidance to be used must be left to the udgment of military planners.        This
guidance,in our opinion,is the key to strategic mobility planning     nd

should be discussed in great etail with the appropriate committees.
     The Secretary of Defense is currently considering a change in the guide
ance to account for the increased capability of the Warsaw Pact.    This would
have a considerable effect on strategic mobility plans and related funding
requirements.
     That concludes my prepared statement, Mr. Chairman.- We -will be glad
to answer any questions you may have on military airlift.




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