oversight

Air Force Budget: Potential Reductions to the Minuteman II Weapon System Budget

Published by the Government Accountability Office on 1990-06-21.

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

_f._                                 IJtrit,t!ti                   States        General   Accounting    Office


GAO                                  Mefing Report t,o the Chairman,
                                     Committee on Armed Services, House of
                                     Ikpresentativcs



                                     AIR FORCE BUDGET
                                     Potential Reductions
                                     to the Minuteman II
                                     Weapon System
                                     Budget


                                                                                                                       141839




                        --.   .__.   ___.   .   _.   _   .-.;...    -.-.   .-.               ---ml,r..            .-




GAO/NSfAI)-90- I96lJR
      United States
GAO   General Accounting Office
      Washington, DC. 20648

      National Security and
      International Affairs Division

      B-23957 1

      June 21,199O

      The Honorable Les Aspin
      Chairman, Committee on Armed Services
      House of Representatives

      Dear Mr. Chairman:

      As requested, we reviewed the Air Force’s funding requirements for
      fiscal years 1990 and 1991 for the Minuteman weapon system. Our
      objective was to identify opportunities for budget reductions associated
      with the anticipated retirement of the Minuteman II force, which con-
      sists of 450 single-warhead intercontinental ballistic missiles. We
      presented the preliminary results of our review to your office on May 2,
      1990. The final results of our review are summarized below and dis-
      cussed in detail in appendixes I and II.

      We identified potential reductions of $66.2 million-$32.4   million
      appropriated in fiscal year 1990 and $32.8 million requested in fiscal
      year 1991-for Minuteman II missile procurement. Also, we identified
      potential reductions of $30.5 million-$13.6  million appropriated in
      fiscal year 1990 and $16.9 million requested in fiscal year 1991-for
      depot repairs and modifications.

      In submitting the Department of Defense fiscal year 1991 budget
      request, the Secretary of Defense announced that an outcome of ongoing
      Strategic Arms Reduction Talks could be the retirement of the Min-
      uteman II force. In response to this announcement, the Air Force modi-
      fied and canceled some Minuteman II life-extension programs, such as
      modifications, replacements and refurbishments, necessary to sustain an
      operationally effective Minuteman II force. Our estimated reductions
      result from differences between the Air Force budget submission and
      more current Air Force estimates that reflect the anticipated retirement
      of the Minuteman II force.

      As agreed with your office, we did not obtain agency comments on this
      report. However, we discussed a draft of this report with program offi-
      cials, and they agreed with our estimated reductions. Our scope and
      methodology are described in appendix III.

      Unless you announce its contents earlier, we plan no further distribution
      of this report until 30 days after its issue date. At that time we will send
      copies to appropriate congressional committees; the Secretaries of


      Page 1 *                                    GAO/NSIAD-90496BR   Air Force Budget
Defenseand the Air Force; and the Director, Office of Managementand
Budget. We will also make copies available to others upon request.
Pleasecontact me at (202) 2764268 if you or your staff have any ques-
tions concerning this report. Other major contributors to this report are
listed in appendix IV.
Sincerely yours,




Nancy RI Kingsbury       r
Director                          tv
Air Force Issues




Page 2                                    GAO/NSIADBO-186BR   Air Force Budget
Page 3   GAO/TWAD-8O-196BR   Air Force Budget
Potential Reductions.tothe Air Force’sMissil6 .
ProcurementBudget for the Minuteman II
WeaponSystem
                                             We identified potential missile procurement budget reductions of $66.2
                                             million: $32.4 million appropriated in fiscal year 1990 and $32.8 million
                                             requested in fiscal year 1991. These potential reductions are based pri-
                                             marily on funding adjustments made by the Minuteman System Program
                                             Office in anticipation of the retirement of the Minuteman II force.
                                             Table I. 1 shows the potential reductions in the fiscal year 1990 appro-
                                             priated funds and the fiscal year 1991 budget request by budget pro-
                                             gram activity code.

Table 1.1: Potential Reductions to the Air
Force’s Missile Procurement Budget           Dollars in millions
(3020 Appropriation)
                                                                                     Fiscal year 1990       Fiscal year 1991
                                             Replacement equipment                              $16.7                   $6.4
                                             Redenishment wares                                   15.7                  26.4
                                             Total                                              $32.4                  $32.8




ReplacementEquipment                         Program office documents show that $60.7 million of the total amount
                                             appropriated for Air Force missile procurement in fiscal year 1990 was
(Budget Program 2200)                        for Minuteman replacement equipment. For fiscal year 1991, the Air
                                             Force requested $2 1.2 million for this equipment.

                                             The program office provided us with updated funding requirements as
                                             of April 1990 for fiscal years 1990 and 1991. Those estimates were $34
                                             million for fiscal year 1990 and $14.8 million for fiscal year 1991. Thus,
                                             we identified an excess of $16.7 million and $6.4 million in fiscal years
                                             1990 and 1991, respectively. Program officials agreed with our calcula-
                                             tion and stated the potential retirement of Minuteman II has reduced the
                                             need for replacement equipment funding.


Replenishment Spares                         Program documents show that $86.3 million of the total amount appro-
                                             priated for Air Force missile procurement in fiscal year 1990 was for
(Budget Program 2500)                        Minuteman replenishment spares. The program office provided us with
                                             updated fiscal year 1990 funding requirements as of April 1990. We
                                             compared updated fiscal year 1990 funding requirements of $69.6 mil-
                                             lion with the amount appropriated and identified an excess of $16.7 mil-
                                             lion Program officials agreed with our calculation and stated that these
                                             excess funds are available due to cancellations and modifications of
                                             some Minuteman II life-extension programs.




                                             Page 4                                     GAO/NSIAD9O-lB6B~   Air Force Budget
.

    Append&I
    Potential Reductions to the Air Force’s
    Missile hxurement    Budget for the
    MhUteman II Weapon System




    Beginning in fiscal year 1991, the Air Force will implement a new con-
    cept of management for replenishment spares which transfers funding
    responsibility from this central procurement account to the Air Force
    Stock Fund. We identified potential reductions of $26.4 million for fiscal
    year 1991 from the Air Force Stock Fund. These excess funds resulted
    from the cancellation of three Minuteman II life-extension programs:
    $16.9 million for Minuteman II Stage III motor replacement, $10.1 mil-
    lion for Stage I nozzle replacement, and $0.4 million for Stage I propel-
    lant replacement. According to Air Force officials, funding for these
    programs still remains in the Air Force Stock Fund.




    Page 5                                     GAO/NSL4D-9O-l96BR   Air Force Budget
Appendix II                                                                                                        *

Potential Reductionsto the Air Force’s
Operationsand MaintenanceBudget for the
Minuteman II WeaponSystem
                                             We identified potential operations and maintenance budget reductions
                                             for central supply and maintenance -specifically    depot repairs and
                                             modification-of    $30.6 million: $13.6 million appropriated in fiscal year
                                             1990 and $16.9 million requested in fiscal year 1991. Table II. 1 shows
                                             these potential reductions. Program officials agreed with our calcula-
                                             tions and stated the potential retirement of Minuteman II has reduced
                                             the need for depot repairs and modifications funding.
Table 11.1:Potential Reductions to the Air
Force’s Operations and Maintenance           Dollars in millions
Budget (3400 Appropriation)                                                           Fiscal year 1990     Fiscal year 1991
                                             Deoot reDairs and modifications                     $13.6                 $16.9




Depot Repairs and                            The Air Force had planned to begin a program to refurbish the Min-
Modifications                                uteman II Stage I propulsion motor beginning in fiscal year 1990. Pro-
                                             gram officials informed us that $13.6 million had been budgeted for this
                                             refurbishment in fiscal year 1990, but funds are no longer needed, since
                                             the Air Force decided to cancel the program in anticipation of the retire-
                                             ment of the Minuteman II force. For fiscal year 1991, the program office
                                             provided us with updated funding requirements, which were $16.9 mil-
                                             lion less than the amount requested: $10.5 million due to the cancella-
                                             tion of the Stage I propulsion motor refurbishment program and $6.4
                                             million due to other miscellaneous reductions. Program officials stated
                                             that the above fiscal year 1990 and 1991 amounts are excess and avail-
                                             able for reduction.




                                             Page 6                                     GA0/NSIAD90496B&   Air Force Budget
       .
Ppe

kz;   and Methodology


              This review is one of a series that examines defense budget issues. We
              reviewed Minuteman II missile procurement and operations and mainte-
              nance appropriations for central supply and maintenance. We inter-
              viewed Air Force officials to identify potential reductions resulting from
              the cancellation and modification of some Minuteman II programs. We
              also examined various budget documents and cost estimates to identify
              budget amounts in excess of requirements. We discussed our findings
              with officials at Air Force Headquarters and at the Minuteman System
              program Office.

              We performed our work at Air Force Headquarters, Washington, DC.,
              and Ogden Air Logistics Center, Hill Air Force Base, Utah. We conducted
              our review from April to May 1990 in accordance with generally
              accepted government auditing standards.




              Page 7                                     GAO/NSIADBO-196BR   Air Force Budget
Appendix IV

Major Contributors to This Report                                                                 .


                        Norman J. Rabkin, Associate Director
National Security and   Steven F. Kuhta, Assistant Director
International Affairs   John J. Klotz, Assignment Manager
Division, Washington,
D.C.

                        James Dinwiddie, Evaluator-in-Charge
Los Angeles Regional    Michael decastro, Evaluator
Office                  Meeta Sharma, Evaluator




(392504)                Page 8                                 GAO/NSIADBO-196BR   Air Force Budget
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