Panel I Of A Hearing Of The Airland Subcommittee Of The Senate Armed Services Committee - Army Modernization And Management Of The Future Combat Systems Program In Review Of The Defense Authorization Request For FY 2010 And The Future Years Defense Progr

Statement

Panel I Of A Hearing Of The Airland Subcommittee Of The Senate Armed Services Committee - Army Modernization And Management Of The Future Combat Systems Program In Review Of The Defense Authorization Request For FY 2010 And The Future Years Defense Program

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SEN. LIEBERMAN: (Off mike) -- welcome General Chiarelli and General Thompson.

We meet this afternoon for what is our final hearing prior to the markup by the Senate Armed Services Committee next week of the fiscal year 2010 National Defense Authorization Act. Today's topic, which is Army modernization, merits particular concern because of the many changes that are under way to reorient and restructure our national defenses. There are three particular challenges we face today as this subcommittee attempts to carry out our responsibility to conduct oversight.

First, Secretary Gates has announced and the fiscal year 2010 Army budget implements major program changes that restructure the Future Combat System, limit the Army's structural growth to 45 instead of 48 combat brigades, start a new ground combat vehicle program and direct the integration of Mine Resistant Ambush Protected, or MRAP, vehicles into the Army's force structure. These changes are reflected in the fiscal year 2010 budget request but in a manner that I would say is incomplete.

The implementation of these decisions will require detailed analysis and planning prioritization and resource alignment, none of which has been done yet. That's why I hope our witnesses can help us understand the risks that are faced by the Army's modernization program in the absence of such analysis.

Second, the fiscal year 2010 Army budget request does not include long-range investment plans ordinarily provided in the Future Years Defense Program. This is not unusual, of course, in the first year of a new administration, but it does make our subcommittee's work on Army modernization oversight that much more difficult.

Finally, Secretary Gates has stated that additional major decisions for the FY 2011 budget request are contingent upon the conclusions of the Quadrennial Defense Review. The QDR is not required until February 2010; however, we understand that initial insights, so called, will be available to Army budget planners as early as the end of July with final budget guidance by the end of September. Even as they await this guidance I hope that our witnesses this afternoon will discuss to the extent that they're able long-range modernization plans for the Army, especially for those programs that may be at risk of reduction or restructuring.

We have an excellent -- two excellent panels of witnesses: the first, General Peter Chiarelli, vice chief of staff of the Army and Lieutenant General Ross Thompson, the military deputy to the assistant secretary of the Army for acquisition, logistics and technology and director of acquisition career management. He's got a much longer title than you do, General Chiarelli, but I know you're -- (laughter) -- vice chief.

The second panel immediately following will include witnesses from the Government Accountability Office and the Office of the Undersecretary of Defense for Acquisition Technology and Logistics, and that panel we will ask to examine the management history of the Future Combat System program and the lessons that we may learn from it as we go forward with the Army to future modernization.

I look forward to the hearing.

Senator Thune?

SEN. JOHN THUNE (R-SD): Thank you, Mr. Chairman.

I want to join you in welcoming General Chiarelli and Lieutenant General Thompson back to the committee and thank them for their long and distinguished service to our nation.

Modernizing the Army is necessary to preserve our technological edge over potential adversaries, deliver better protection for our soldiers and provide our men and women in uniform with improved capabilities to accomplish their mission. The success or failure of our efforts to modernize and transform the force of the future rests on decisions proposed, discussed and implemented today.

There's concern among members of the committee, which you will hear, regarding the recent history of Army modernization efforts. The challenge of delivering capability amidst unrelenting technological change and shifting requirements is indeed a difficult one. We are eager to understand the Army's vision for the future and the strategy to achieve it.

Last month Secretary Geren and General Casey testified that while the Army remains the best led, trained and equipped army in the world, it is out of balance. General Casey outlined for us his plan to bring the Army into balance and he emphasized four imperatives: sustain, prepare, reset and transform. The committee's heard testimony from inside and outside the Army this year on each of General Casey's imperatives and today we hope to explore more closely the Army's plan for transformation and modernization.

In the area of special interest is the uncertain future of the Army's recently restructured Future Combat System. This multiyear, multibillion-dollar program was at the core of the Army's weapons modernization efforts and its successor programs will comprise a significant portion of the Army's research, development and acquisition program. The witnesses will be asked about the way forward in light of restructuring, the implications to current and future planning and continuing technical challenges associated with a networked battlefield.

Also the witnesses will be asked how the modernization program will meet Army Reserve and National Guard requirements about progress toward resetting all components of the Army, how Army transformation plans will impact future requirements for strategic and tactical mobility, about the Army's aviation requirement, the proper mix of vehicles in the tactical wheeled fleet, including Mine Resistant Ambush Protection (sic) vehicles, and what type of future vehicle and weapons programs will meet the Army's needs to conduct full-spectrum operations and hybrid warfare.

In closing I'd like to emphasize that while the focus of this hearing may be the weapons systems and processes that support the soldier, the center of gravity has and will always be the soldiers themselves. Our thanks and gratitude extends to all service members at home and overseas and the families that support them.

Mr. Chairman, thank you for convening the hearing. I look forward to hearing from our witnesses.

SEN. LIEBERMAN: Thanks very much, Senator Thune.

Without further ado, General Chiarelli, thank you for being here. Thank you for your extraordinary service to our country. And we would welcome your testimony now.

GEN. CHIARELLI: Mr. Chairman, Ranking Member Thune, distinguished members of the subcommittee, I thank you for the opportunity to appear here today to discuss Army modernization and the management of the Future Combat Systems program in view of the fiscal year 2010 budget request.

This is my first occasion to appear before this esteemed subcommittee and I pledge to always provide you with an honest and forthright assessment and my best military advice as requested.

I submitted a statement for the record and I look forward to answering your questions at the conclusion of opening remarks.

As all of you know, it's been a busy time for our nation's military. We are at war and we have been at war for the past seven- plus years. Since the very beginning, this conflict has been in many ways different and more complex than past wars. We are dealing with less clearly defined and highly savvy adversaries in two theaters. In fact, the only thing we can know for certain in this new strategic environment is that the enemy will purposely go where we are not.

Therefore, in order to stay ahead of the threat and to ensure that our force is prepared and capable to respond to any contingency, we have consistently made improvements and adjustments to our capabilities based upon lessons learned. In every aspect of the Army's modernization strategy our purpose is to improve soldiers' survivability and ensure they're able to maintain a decisive advantage over whatever enemy they face. We are adamant and I know the members of this esteemed committee are equally adamant that we never want to send our soldiers into a fair fight.

The Army is currently transitioning to a brigade combat team modernization strategy focused on building a versatile mix of networked brigade combat teams and enablers that can leverage mobility, protection, information intelligence and precision fires in order to more effectively operate across the full spectrum of conflict.

As you all are aware, on 6 April 2009 Secretary Gates recommended the cancellation of the manned ground vehicle portion of the Future Combat System, or FCS. The Army now is moving forward to analyze operational requirements and lessons learned from seven-plus years of war to develop a ground combat vehicle as a critical capability for the brigade combat team modernization.

Understandably, this platform has received much of the attention and focus in recent days following the secretary's recommendation and the release of the president's FY 2010 defense budget. Some are of the belief that a majority of the money previously allocated for FCS now should be reallocated elsewhere pending the cancellation of the manned ground vehicle. With all due respect, I must strongly disagree with this position.

While the platform was a key piece of FCS modernization strategy, I believe the most critical component of the new brigade combat team modernization strategy is the network and I am concerned that cancellation of the MGV has been misunderstood to mean, to some, cancellation of all things FCS, to include the network.

Today the situation on the battlefield is increasingly complex. Information is collected and shared by various systems across the battlespace, including platforms, sensors, computers, radios, transmitters and satellites. In the Army's new BCT modernization strategy, the network will serve as the hub for all these separate nodes, connecting leaders and soldiers at all levels and at every echelon of command in every formation -- infantry brigade combat team, heavy brigade combat team, Stryker brigade combat teams and, ultimately, even across the interagency -- with the right information quickly and seamlessly.

Simply put, this network is the centerpiece of the Army's modernization efforts and any shortfall in funding will put that effort at risk.

I assure the members of this subcommittee that the Army's senior leaders are focused on the Army's total modernization efforts and the management of the Future Combat Systems program, and we will continue to coordinate with senior DOD officials and Congress to identify the best possible solutions in order to ensure we never send our soldiers into a fair fight.

In conclusion, on behalf of over 1.1 million soldiers serving in the Army today, I respectfully request your support of the department's fiscal year 2010 budget, a budget that in its entirety reflects the resources required to grow the network, field and early spin out technologies to brigade combat teams on the ground in Iraq and Afghanistan, and restart our development of the next ground combat vehicle.

Chairman, members of the subcommittee, I thank you again for your continued generous support and demonstrated commitment to the outstanding men and women of the United States Army and their families. I look forward to your questions.

SEN. LIEBERMAN: Thank you, General Chiarelli.

General Thompson?

GEN. THOMPSON: Chairman Lieberman, Senator Thune and distinguished members of the subcommittee on air and land forces, I want to thank you for this opportunity to discuss Army modernization and management of the Future Combat Systems program in view of the fiscal year 2010 annual budget.

With all of our programs and our funding requests, the Army's highest priority remains the protection of our warfighters in an operational environment that is increasingly ambiguous, unpredictable and dangerous. Force protection has taken on an even greater importance as we shift major operations from Iraq to Afghanistan.

We are grateful to the members of this committee for your guidance and your steadfast support. We continue to meet the equipping demands of our soldiers and ongoing overseas contingency operation and in other operations worldwide because of the resources and guidance provided by this committee and the Congress. We constantly strive to be good stewards of those resources.

The Army's comprehensive modernization program is the key to ensuring that our soldiers maintain a decisive advantage over a diverse array of potential adversaries while continuously improving their survivability. In every aspect of our Army modernization programs we leverage lessons learned from soldiers in the current fight, speed fielding of enhanced capabilities to the force and concurrently developed capability soldiers will need both today and tomorrow.

As General Chiarelli stated, our modernization strategy is focused on building a versatile mix of networked brigade combat teams. The most critical component of the new BCT modernization strategy is the network. By growing the network in regular increments, we will provide out soldiers and their leaders with a continually enhanced, common operating picture of the battle space, which is a significant advantage in combat.

The Army and the Department of Defense remain committed to the requirement for a manned armed scout helicopter capability and to deliver this capability to our soldiers in a responsible and timely manner.

We are also committed to extending spinouts of our critical, war- proven enablers to all of our brigade combat teams and working with the Office of Secretary of Defense and Congress to field a new combat vehicle as expeditiously as possible -- a capability that is long overdue.

In all areas of future commitments, we are planning for continued development of systems and technologies to ensure that our soldiers maintain a decisive advantage over potential adversaries.

Mr. Chairman and members of the subcommittee on air and land forces, your deep and abiding commitment to our men and women in uniform is widely recognized throughout our ranks. We thank you for your continued support of the outstanding men and women of the United States Army and their families, as well as your support of the fiscal year 2010 budget.

This concludes my opening remarks, Mr. Chairman. I look forward to your questions.

SEN. LIEBERMAN: Thanks, General Thompson.

We'll have seven-minute rounds of questions.

Let me say to both of you who have graciously thanked the committee for our support of the men and women in uniform in the Army, in this case particularly. I'm sure I speak for my colleagues here saying that really it's our honor, let alone our responsibility, to give whatever support we can to the men and women in our armed services, in this case again, particularly the Army, and to say that the service of the personnel of the Army has been extraordinary.

And you know, I -- whatever the phrase is, it seems to me that this is the next greatest generation in service of our country -- who have been drawn into a battle that in many ways -- I don't want to say they were unprepared for, but in its details it was hard to foresee. And with extraordinary leadership, such as represented at the table before us, the Army has transformed itself and really by personal skill, courage, characteristically American goodwill and compassion has succeeded first in Iraq and are on the road to success. And now I think I'm confident we'll turn things around in Afghanistan in a way that's really historic and very consequential for our country.

So you evoked that by saying thank you. You really -- we don't deserve any thank you when I think about what you all are doing.

I want to -- and speaking about that, about the service of our troops, General Chiarelli, this is about the Army modernization program, but you've really given great leadership in a host of areas, including as an advocate for Army personnel, which ultimately is what the Army is all about.

There are a lot of us on this committee who are concerned that the end strength of the Army now, the statutory end strength, is inadequate to the moment. And while we talk about a lot of different programs for reducing stress on our Army personnel, perhaps the best thing we can do is to make sure there are more of them so that the dwell time they have between tours of active duty increases instead of decreases.

And I wanted you to know that there will be a serious effort in this committee as there has been -- I've been working with Senator Thune on this, and others -- and as I noticed there has been in the House this week to increase the authorized end strength of the Army by 30,000.

Do you have a reaction to that?

GEN. CHIARELLI: Well, first of all, Mr. Chairman, I'm in complete agreement with your analysis. As the ranking member said also, soldiers are at the heart of our formations.

SEN. LIEBERMAN: Right.

GEN. CHIARELLI: And we have this constant balancing act between things like modernization and soldiers, because soldiers cost money.

At the same time I'm concerned with dwell time. And I know that individual dwell is less than unit dwell. We have finally been able to model that and show that and it has tremendous significance. And as I have worked with the secretary of the Army on suicide prevention and realized this isn't more -- about the wellness of the entire force and its families. I have come to the point to believe the Army is stressed. And there may be a requirement for us to have a temporary authorization of additional soldiers to fill some of the holes we have in our formations and to take the stress off the force in what is going to be a critical 12- to 18-month period.

SEN. LIEBERMAN: Well, that's -- thank you for that statement. That's exactly the terms in which we're seeing it, which is as a temporary increase, because, as General Casey said to us when he testified I believe before the full committee, this dwell time and stress is really a matter of supply and demand. I mean, how many troops do we have to supply? And what's the demand? And we know for a fact that we're going to be increasing our presence in Afghanistan and not drawing down our presence in Iraq immediately. So that will mean in the short term there'll actually be more people deployed -- a higher demand.

And to help you meet that and reduce the stress -- increase the dwell time and reduce the stress on individual soldiers, as you said -- very important distinction -- we're going to work to increase the authorization by 30,000 and hope that together we can find the money for the chief and you to do that as circumstances require.

Let me go on to ask you an overall, general question on our Army modernization. As you look back over the last decade or so, there've been a lot changes in plans and investment priorities and even in titles, names. We've gone from "digitization" to Force 21 to Army After Next to Interim Force to Objective Force to FCS and "modularity." And I understand that part of this is obviously a reflection of changes in the battle. I remember General Shinseki said at one point that his aim was to see us get to a stable modernization strategy in which there was irreversible momentum in favor of that strategy.

I wanted to ask you if you'd comment on -- as you look back over the 10 years -- whether there were too many changes in modernization strategy of the Army and where you see this focus going in the chapter of -- ahead of us.

GEN. CHIARELLI: Well, as you know, a majority of the last 10 years have been spent in the operational Army, deployed with combat forces. And I watched us over a period of time in Iraq -- a three- year period -- move from soft-skin humvees up to humvees with Frag Kit 5 and now today to the MRAP, and thought thank goodness we were able to go ahead and make those kind of modernization leaps forward to protect our soldiers.

As I have been in my current job, I'd just like to remind everyone that the manned ground vehicle was a portion of the FCS program. FCS is spinouts. And we have now spinouts for 73 brigades. That's what we're looking at over time. And it is that network. And that network is the key and critical piece that's going to pull this whole thing together and provide that soldier in combat the information he needs when he needs it to survive in the fight.

And we are very pleased with the secretary of Defense's commitment to an Army modernization plan and to a ground combat vehicle. And the chief and the secretary of the Army have charged us with moving ahead, moving ahead rapidly and fielding something to our forces, fielding that vehicle within the next five to seven years. And we are well into the planning to do that right now.

And we held a very successful blue ribbon symposium yesterday at National Defense University where we brought in people from OSD, from the building, from the think tanks to get their ideas on where we should go.

But we are committed to this in a five- to seven-year period.

SEN. LIEBERMAN: So, I appreciate your answer. I take from that that you support the changes in the FCS program as recommended by Secretary Gates and ultimately the president. And I take it, based on your opening statement, that you feel that the most important part of FCS, which is the networking capability, is being preserved.

GEN. CHIARELLI: We must preserve the network, and we must preserve what we need to move ourselves to a ground combat vehicle in a five- to seven-year period.

SEN. LIEBERMAN: Right. So we obviously need a new ground combat vehicle, whether we call it MGB or GCV. I know that there's been a pledge that the funding will be preserved to transition to the new ground combat vehicle. Are you worried about that, that the money -- I suppose -- are you worried about us, the pots of money that are left unspent in a short order tend to be very attractive to members of Congress.

GEN. CHIARELLI: I support the president's budget; the president's budget will get us to where they need to be, and we are hoping that we will not see that money taken. That money is made available to move ahead. We think that's absolutely critical.

SEN. LIEBERMAN: Let me ask one final question on this topic about ground vehicles.

We've invested a lot of money, appropriately so, and bought a lot of MRAPs to deal with the situation our were facing in Iraq and now in Afghanistan. What's the role of that particular ground vehicle over the next five or 10 years or beyond?

GEN. CHIARELLI: The Army is committed to integrating the MRAPs into our formation. General Dempsey is working that right now. The MRAP has saved arms, legs and lives and I hope one day to be able to show exactly how many it has. It's an absolutely amazing vehicle. But it cannot be integrated everywhere in our formation and I know you know that there is 16,000 MRAPS but 200,000 vehicles in the Army inventory. So MRAPs today represent 8 percent of the total vehicles in the United States Army. They will be integrated into our formations but in places where that vehicle is, in fact, most suited.

One of the things that came up out of our blue ribbon symposium yesterday was noncommissioned officers who told us that carrying infantry around in an MRAP is fine and it protects them but they have to wait from the time somebody pushes the button to the ramp coming down nine seconds.

They feel very vulnerable in that vehicle as that ramp slowly comes down. So it's those kinds of things that make the MRAPs better suited for certain places in our formation and I know General Dempsey and TRADOC are working to determine that now with our force and vehicle mix.

SEN. LIEBERMAN: And of course, the MRAPs play a very different role or have a different function than either the main ground vehicle or the oncoming ground combat vehicle, correct?

GEN. CHIARELLI: That's correct.

SEN. LIEBERMAN: That's correct.

Senator Thune.

SEN. THUNE: Thank you, Mr. Chairman.

I want to come back to the chairman's last question there. The DOD, I understand, is currently selecting a scaled-down Mine Resistant Ambush Protected vehicle which, by way of greater off-road mobility, would be suited for use in Afghanistan. And I understand that at least 4,500 of these MRAP ATVs will be required for use in theater, mostly belonging to the Army. The Army has not outlined whether or not they are -- or how they plan to institutionalize the capability of the thousands of already fielded MRAP vehicles.

So General Chiarelli, I guess my question would be, what does the Army intend to do with the MRAPs that are ill-suited for Afghanistan as troops are redeployed from Iraq?

GEN. CHIARELLI: Well, you know, Senator, we brought some home. We're using them in the training base and we -- as I indicated before, we will in fact integrate those into our formations in a place they're best suited. We are very, very happy with the MATV; we think that is a great step forward. And we're also very happy that many of the MRAPs, the old MRAPs that don't have the independent off-road suspension, can be retrofitted for that off-road suspension and we expect to do some of that in theater, both the United States Army and the Marines.

And I think Ross, you've got some information on that.

GEN. THOMPSON: Yes, sir. One of the things that we're doing with one of the variants of MRAPs that already exist today before we go forward with the source selection decision, which is within the next several weeks, on the MRAP all-terrain vehicle, is to take the suspension system that goes with the medium truck for the Marine Corps and retrofit some of the existing MRAPs so we get that off-road capability to be able to use in Afghanistan and incorporate those vehicle as well as the MRAP all-terrain vehicles once we start to produce those by the end of the summer and begin fielding them in the fall is the current plan.

SEN. THUNE: And is the Army experiencing shortfalls in other areas when it comes to equipment and trying to meet some of the changing dynamics of operations in Afghanistan relative to what we've been dealing with in Iraq? I mean, the MRAP's a good example of how you have to adapt that vehicle either through retrofitting it or coming up with a new model. Is the Army facing other -- those types of issues with regard to the conditions in Afghanistan?

GEN. CHIARELLI: Back to what we're doing for the individual soldier, one of our main efforts is lightening the load for the soldier. We have a brigade out of the 4th ID coming out of Fort Carson that will be going into country, I believe, this month that's going to be going with a set of gear that, depending on the position you hold within that unit, is 14 to 23 pounds lighter than what soldiers in country have today.

So this lighten-the-load effort, particular up in MND East at the high altitudes is absolutely critical and something the field has asked us for. And we are constantly working to figure out ways that we can lighten the load for the individual soldier. I think that is a real need.

SEN. THUNE: Coming back to the Future Combat Vehicle, the Army has begun, I guess, working groups to help define the concept for the next ground vehicle, which would likely be tracked and armored. And the Army, as I think you mentioned already, has asserted the requirements and forward planning for that will be done by September. Has the Army been given any further guidance by OSD pertaining to the cancellation of the FCS manned ground vehicle?

GEN. THOMPSON: Well, sir, I can -- I'll take that question. One of the things that we've been working with the Office of the Secretary of Defense since the FY' 10 budget was submitted is the wording on the acquisition decision memorandum, which is the formal guidance from the defense acquisition executive on that program. And we are in the final stages of the wording on there to make sure it's exactly right. It captures the decisions of the secretary of Defense and it gives us the flexibility to be able to move forward to restructure the program, to cancel the FCS program as we know it today, to terminate the manned ground vehicle portion of that existing FCS program, but to keep the other parts of that program that we want to move forward with, in particular the network and the spinouts to the infantry brigade combat teams, the spinouts, the modernization efforts beyond the first spinouts to the infantry brigade combat teams, and then to do the concept work with TRADOC through the summer and then begin a new acquisition program for a replacement ground combat vehicle.

SEN. THUNE: Is there an operational urgency to develop that new ground system, General Chiarelli?

GEN. CHIARELLI: We feel it's critical that we work to get something that we can fielding to our forces, understanding the amount of time that it's going to take to do this within five to seven years. And we've kind of taken on the secretary's challenge to look at how we can do that. And I think you should take great solace in the fact that we are working very hard to pull all those things we learn in the FCS MGV program, all those technologies that we brought from TRL Level 2, some to six and seven right now. That is not money that has been wasted; those are all things that we will use and look at for integration into the GCV, or the ground combat vehicle.

SEN. THUNE: In the 2010 budget request, you know, the request for hundreds of millions of dollars for FCS termination costs. General Thompson, can the Army say with certainty what those termination costs are going to be? Can you quantify that?

GEN. THOMPSON: Sir, I can't say with certainty; I can give you a range, because the actual termination costs that go with this program are to be negotiated with the contractor, who is Boeing, and then the subcontractors, and there's 25 tier-two contractors and around 600 contractors below the tier-two contractors. So that will be a negotiated settlement because we are, at the government's convenience, restructuring this contract in a major way.

So there are termination liabilities that are called out for in that contact; the guidance from the federal acquisition regulation and the defense supplement to that. I don't know what that exact number is, but it's fair to say it's in the hundreds of millions of dollars. And the money that is in the FY '10 budget that we think is needed to pay those termination liabilities -- if that money is not there to pay those termination liabilities, then some piece of the work necessary to do the spinouts to the infantry brigades or to do the network development will have to be used to pay those termination liabilities because they are mandatory. And that's work that won't get done and capability that won't be provided to soldiers.

SEN. THUNE: Are there lessons, General Thompson, you've learned from the FCS experience and the acquisition, I guess, process that can be applied to future developmental programs?

GEN. THOMPSON: Yes, sir. There's many lessons to be learned. In addition to the blue ribbon panel that we had yesterday at the National Defense University, we conducted a full after-action review to look not just at the acquisition portion of the FCS program over time but also look at the requirements process and the modeling and all the work that we've done.

One of the lessons that I take away -- and this is a challenge not just for the Army, but the Department of Defense -- a systems of systems acquisition program and dealing with the challenge to look at an integrated acquisition approach is hard to do. And I don't think either the Army or the Department of Defense is well positioned to be able to deal with complicated systems of systems acquisition approaches, which FCS is. FCS was groundbreaking in that approach.

To the program's credit, we just finished in May a systems of systems preliminary design review, which is one step on the way to begin to do the final integration and the testing and the prototypes.

That systems of systems preliminary design review was built on 57 preliminary design reviews on all of the other pieces of the program leading up to that and it shows fairly conclusively that we are where we need to be at this point in the program to have the technologies at the right technology level to be able to integrate those and to produce the capability.

And it's not just MGVs. It's not just network. It's making all parts of the materiel systems work together to give the soldier an integrated capability, and doing that up front instead of after the fact.

GEN. CHIARELLI: Just one lesson learned I have from this entire experience in two years in Iraq, that deployability and ease of deployability, expeditionary capability is always more attractive on this side of the next war, but once you get into the next war and on the other side of that war, survivability and crew protection are key and critical elements.

And we've seen that happen in Iraq. And I think we always have to keep that in mind when we're sitting here in Washington, D.C., as opposed to downrange.

SEN. THUNE: Right. Thank you very much.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you, Senator Thune.

Senator Inhofe?

SEN. JAMES M. INHOFE (R-OK): Thank you, Mr. Chairman.

Let me start by saying happy birthday from one Army soldier to two others.

GEN. CHIARELLI: Happy birthday, sir. (Laughter.)

SEN. INHOFE: And the rest of you back there. I never looked that good, though. You guys really --

GEN. CHIARELLI: Don't look a day over 233. (Laughter.)

SEN. INHOFE: Two hundred and thirty four.

First of all, let me say, General Chiarelli, that during the years that you were the ground commander in Iraq, I've said publicly that there's never been anyone as capable as you are and then the great job that you've done. And I think on the other side you probably would say that you saw more of me over there in Iraq during the time than you did any other member.

So I'm very much concerned about some of the things and I think you know one of my concerns. Most of what I was going to ask has been covered by the chairman and the ranking member, except for the cannon.

And it just really bothers me that since 1995, Mr. Chairman, we've been trying to come up with -- replace the Paladin with something that works. Right now -- well, let's go back 15 years ago. Even then, four other countries had a better cannon than we had: Germany, Russia, South Africa, of all places, and U.K. Now, 15 years later, those four countries still have a better cannon than we do.

Now, we can talk about the Abrams, a 1970s technology. We can talk about the Bradley fighting vehicle, 1970s technology, but the Paladin is 1950s technology.

We've talked about it since 1995. We came up with the Crusader. We were going to do something with the Crusader and then Bush came in in '02 and cancelled that program. And I have to say that he did it rather abruptly.

We were actually, if you'll remember, Mr. Chairman, we were in our markup at the time they did that. And no -- I don't think anyone on the committee had any warning. So anyway, after that took place, then we started recognizing again that we're going to have to do something about the Paladin.

And that's when, I think it's General Shinseki talked about the Future Combat System that we need to have the first major transition in about -- or transformation, I should say -- of ground capability in quite a number of years, maybe 30 years.

And so we thought there the lead vehicle was going to be that which we felt that we needed the most, and that is the most antiquated platform that we have for ground capability, I believe you would agree, is the Paladin.

So here we are and now we're saying that even though we've written into the law -- I believe the law -- doesn't it say 2010 we're supposed to have that fielded and out there? That's still in the law. And that still has been the request and the -- what we've done in the House and the Senate.

So I guess I just ask, why is it that we don't want to send our kids out to battle with a better cannon than prospective enemies?

GEN. CHIARELLI: Senator, I know that you know we are totally committed to the Paladin integrated management program, the PIM program. We plan to correct many of the deficiencies we have in the Paladin with that program --

SEN. INHOFE: But --

GEN. CHIARELLI: -- spending $181 million from FY '08 to '11, and when the program's completed in 2021, I believe this is the final date, we will have converted over 600 Paladins.

I am a believer in direct-fire systems and I am pleased that the Army is committed in the way that it is to this program, which I think is absolutely critical, particularly given the loss of the MGV program and the criticality of having that upgraded system in our HPCTs.

SEN. INHOFE: Haven't we gone through about, what, four incarnations now of the Paladin? PIM programs, upgrades?

GEN. THOMPSON: Senator, I can answer that question. Currently the Paladin system that's out there is version six, so it has six major upgrades at this point --

SEN. INHOFE: Six major upgrades, so now we're going to do another one. And as my understanding that originally -- right now it's my understanding that we have 900 of these vehicles. We're going to do the PIM program on 600, and then on the other 300 we're going to jump ahead, in terms of rate of fire, in all the things that would -- that the Paladin would still be deficient in, so that way out we see at the end of that tunnel that we're going to have better equipment than prospective enemies.

Wasn't that it, with 600 of the 900 would be upgraded but the other 300 would be the new system?

GEN. THOMPSON: Sir, that was the plan with the manned ground vehicle portion, and the non-line-of-sight cannon system as a subset of the manned ground vehicle portion. So you'd have the new system of 300 and then the other 600, and, you know, eventually when you've got a new modern system like we've done with a lot of other our systems, you begin to replace the older ones.

And so, you know, I don't know exactly what we would have done in 2025, but I suspect we probably would have made a decision to begin to replace the Paladins with a new system if it was a non-line-of-sight cannon.

SEN. INHOFE: What do you propose to do if the law is not changed?

GEN. THOMPSON: Sir, one of the things that the Office of Secretary of Defense has got to do is work back with the Congress to determine what do we need to do because of the law and adjust the law because it is in statute right now.

My professional opinion, though, is if we're going to terminate the manned ground vehicle, the non-line-of-sight-cannon program is highly leveraged and intertwined with the manned ground vehicle program. And it's very, very difficult from an acquisition and a contracting perspective for us to produce a non-line-of-sight-cannon system that doesn't have the MGV program wrapped around it.

It would be prohibitively expensive for us to be able to do that.

SEN. INHOFE: Well, that's, when you look at it from what we're talking about doing now, I would agree with that, but when we went through this change that started when they stopped the Crusader, at that time it was all planned out in the future.

I guess I look at it, and I know I come from some -- I'm a little bit prejudiced in that Fort Sill is in my state of Oklahoma and that's where they do this stuff, and I don't have a parochial interest in this other than that, other than wanting to have the best because we would be doing the PIM work there anyway. In fact, we're the only place where you can have these capabilities right next to a live range, so it's a logical place to do it.

But I am concerned about not going forward with a -- where we can see down the road a modernization program that would put us in a position where we are -- you know, you talk about the fair fight and I read -- I was coming back from the air show and I was reading your statement and I agree with that. The adage that we never want to send our soldiers into a fair fight is at the core of the Army modernization strategy. And it seems to me that if we send our soldiers out with equipment that is not as good as the prospective enemy, then that's not a fair fight.

Where am I -- what am I overlooking?

GEN. CHIARELLI: You're not overlooking anything, Senator. And we are working very, very hard to work the ground combat vehicle. And that maybe an individual vehicle but it could be a series of vehicles. And General Dempsey and the team is working and I would not be surprised if we didn't see a family of vehicles that may include a vehicle that has an indirect fire capability.

SEN. INHOFE: I would hope that's the case.

Thank you very much.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thanks very much, Senator Inhofe.

We'll do a second round, if the members want, up to five minutes and then we'll go on to the second panel.

That was an interesting answer, General Chiarelli, about the follow-on to the manned ground vehicle, the ground combat vehicle, might be more than one vehicle.

SEN. INHOFE: Mr. Chairman, would you do me a favor because I can't be here for the second panel?

SEN. LIEBERMAN: Yeah.

SEN. INHOFE: Would you mind asking a similar question to the DOD that's on the second as I've been in pursuing this canon thing?

SEN. LIEBERMAN: I will.

SEN. INHOFE: Just to get on the record some kind of an answer.

SEN. LIEBERMAN: Of course. Okay, glad to.

SEN. INHOFE: Thank you so much.

SEN. LIEBERMAN: Tell us a little more about that; we may have more than one vehicle coming out in that program.

GEN. CHIARELLI: Well, it's entirely possible, sir. And I don't want to take away any of the options that General Dempsey and TRADOC are looking at right now. And I haven't been able to have a readout of exactly what the blue ribbon symposium told us yesterday, but that's an entire -- entirely a possibility that it could make a recommendation of this vehicle morphing into more than one vehicle.

SEN. LIEBERMAN: Well, we'll watch that and follow it with a lot of interest.

I know that the fielding target, time target, for the ground combat vehicle is in the 2015 to 2017 range. I know it's early, but are you confident that we could do that, we can get it ready by then?

GEN. CHIARELLI: I think we have to.

SEN. LIEBERMAN: Yeah.

GEN. CHIARELLI: I just absolutely believe we have to.

SEN. LIEBERMAN: The need is there?

GEN. CHIARELLI: Well, the need is there, but plus, I just think that the technology is moving so quickly that we have got to find a way, like we have done with the MRAP ATV, to be quicker in our fielding of these systems, creating systems that over time maybe modified but provide that key base off which we will build over time.

And I really believe that's where we have to go with this particular --

SEN. LIEBERMAN: Well, I couldn't agree with you more, that the time frames for the development of some of the weapons systems are so long. It's part of, I think, why the costs escalate just over time. But obviously the relevance is diminished, as you said, because of advances in technology and even because of changes in the threat environment by the time they get ready.

And we did show -- I know it's a different kind of vehicle, maybe some would say a simpler challenge -- but we did show with the MRAP that under conditions of urgent necessity, the Pentagon, working with defense contractors, can turn out an awful lot of a particular piece of equipment that is critically necessary to protect our service -- our troops.

So, okay, well, obviously this is what -- we'll stay on top of that as we go along.

Let me ask you about the Stryker program, either one of you, really.

What can you tell us about the Army's thinking now with respect to the Stryker system and the potential growth in the number of combat brigades and plans to modernize and improve the capabilities of the current fleet?

GEN. CHIARELLI: Want to take it?

GEN. THOMPSON: Yes, sir.

The Stryker program has been a very successful program for the United States Army. As you know, there's about -- 3,600 Stryker vehicles are the requirement; over 2,700 of them have been fielded and are in the inventory today, seven Stryker brigades. And one of the things that the Army is looking at from a force structure perspective is, do we need more Stryker Brigades to provide a balanced force with different capabilities across the spectrum of conflict?

SEN. LIEBERMAN: What are the factors that you will consider in making that decision?

GEN. CHIARELLI: Part of that decision, sir, is going to be made as part of the Quadrennial Defense Review.

SEN. LIEBERMAN: Right.

GEN. CHIARELLI: And it's looking at the force mix, Stryker brigades, heavy brigades, infantry brigades, the enabler brigades -- and there's many other types other than the brigade combat teams in the Army. But what is the right force mix? And as we look at a balanced force to handle things across the spectrum of conflict, it is a possibility that we would want to build more of the Stryker brigades than the seven that we have today.

SEN. LIEBERMAN: What kind of reaction do you get from our troops to the Stryker system as compared to other systems that they're using? In other words, are the troops happy with the Stryker?

GEN. CHIARELLI: They're very happy with them. If you (run into ?) a Stryker crewman he's going to brag on his vehicle like any Army soldier brags on their vehicle, but they love the Stryker.

We have some concerns with the current Strykers right now in power, in some power and weight issues that we've got to work out way through, but the Stryker has proven to be an amazing addition and the Striker Brigade Combat Team an amazing addition to the United States Army.

As you know, we're on our ninth deployment. We have Strykers in Afghanistan today and we'll have a brigade up and operational in Afghanistan this summer. So we are looking hard at the Stryker, as General Dempsey, again, wraps his arms around this entire Army modernization piece as a force mix issue to determine whether or not we may need additional Stryker Brigade Combat Teams.

SEN. LIEBERMAN: So here as well as in some other key decision areas you're really waiting for the QDR to give some guidance about where we go from here; is that correct?

GEN. CHIARELLI: The QDR is a critical element, Mr. Chairman, but in addition to that it's kind of stepping back and re-looking at this after cancellation of the manned ground vehicle and looking at where we're going to go.

And we are working day in and day out now, between now and Labor Day, when we hope to come out with that plan, soon after Labor Day, that lays out where we're headed.

GEN. THOMPSON: Chairman Lieberman, can I --

SEN. LIEBERMAN: Go right ahead.

GEN. THOMPSON: -- if I could just offer some context from my perspective as the senior military acquisition officer. But I was also the Army's programmer for a number of years, looking at the balanced investments across all the capabilities.

There's roughly 16,000 combat vehicles in the Army's inventory -- Abrams, Bradleys, 113s; Strykers dominate those numbers. There is a need over time in a portfolio of capabilities to have a modernization program.

I've been associated with armored systems modernization in the late '80s and early '90s, and then we had the Future Scout Cavalry System, we had the armored gun system, we had the Crusader, and now we've got the manned ground vehicles -- five programs. And every one of those programs got to the point where they were pretty far along in the development, getting ready to go into testing and production of prototypes, and for various reasons all of those programs have been terminated or significantly restructured.

At some point in time, the existing vehicles -- even Strykers, as good as they are -- will reach their design limits. The 113s we're not using at all today in theater because they're not survivable and they don't have the capabilities, but Bradleys, Strykers, tanks, the Abrams today, as capable as they are, eventually they reach their design limits. They reach their design limits in two key areas. One of them is survivability because, like the vice chief said, on the other side of the deployment, you want your soldiers in systems that are as survivable as possible. We need enough power margin and we need enough energy, electrical energy, to be able to put the network systems on the combat platforms that we put our soldiers in. So eventually we're going to need to modernize and replace some of those existing systems.

The Army needs a stable set of funding across a number of years to be able to keep that portfolio of ground combat vehicles as capable as possible so that our soldiers are as capable as possible and never in a fair fight.

We are not there today. It's been over 20 years since we started the Armored Systems Modernization Program and we're now going to start our sixth iteration of trying to modernize the ground combat vehicle capability in the Army. And that bothers me greatly.

SEN. LIEBERMAN: Me, too. Thank you.

Senator Thune, do you have other questions?

SEN. THUNE: Well, let me just ask, if I might, Mr. Chairman, as you all know, the president has signaled his intention to move away from the use of supplemental spending bills to deal with overseas operations and instead to incorporate these costs into the regular budgeting process, and my question, I guess, General Chiarelli, is what challenges does that create for the Army, that change?

GEN. CHIARELLI: I believe we've been consistent in testimony -- not only I have, the chief has, but those that went before us -- indicating that reset is a critical piece that is going to continue in the Army.

I believe we have $11 billion in this particular budget, in this particular OCO (sp), for reset. And it will continue as long as we're fighting and it will continue two years after we complete fighting. So it's our hope that everybody will remember that and the need to reset this equipment that is going at OPTEMPO rates that are much higher than they would if they were back here in the United States.

SEN. THUNE: Right.

GEN. THOMPSON: And, Senator, if I could just, you know, add to that again what I said earlier about having some responsibility for the Army's, you know, programming for a number of years: If supplementals decrease or go away, the requirements that are covered by the supplemental funding in most cases don't. And so if the supplemental goes away and you don't increase the base program there are things that won't get done. There are probably fewer soldiers. The modernization programs are the first thing that people look at to be able to cut. And so if you just say there's no more supplementals and you don't increase the base program, then something's got to change.

My analogy would be it's like a two-income family and one of the income earners no longer is employed. Your lifestyle is going to change significantly because you just can't do the same things that you were doing with one income instead of two.

And not that the supplementals and the base program are equal, but there's a lot of requirements that are covered with supplemental funding and you just can't say they go away and just do it with the base program without increasing the base program.

GEN. CHIARELLI: And so many of those are Army (bills ?).

SEN. THUNE: Let me ask, too, the Army is in sort of a financial hole, I guess you'd say, estimated at over $2 billion in its personnel accounts. Is there a plan for closing that gap right now?

GEN. CHIARELLI: Well, we have a plan. We're hoping to get all the help we possibly can, but we have a plan over the next couple of years to go ahead and do that. And we will have to do that.

As I indicated and you indicated, Senator, people are absolutely critical. And thank goodness we have those people; we were able to make 5474 and a little bit more right now as we're kind of rolling that number back, because it's critical when I have almost 9,000 soldiers are in WTUs, another 10(,000) to 11,000 that are currently non-deployable, and then individual augmentees. That adds up to a pretty sizeable bill that I'm not able to put into my formations, as they deploy on a dwell that's at 1.5 a unit dwell less an individual dwell today.

SEN. THUNE: And can we keep up with all those personnel costs and still ensure good recruiting and retention?

GEN. CHIARELLI: Well, we are blessed right now, Senator. Recruiting and retention is as good as I've ever seen it in the time that I've been in the Army. We have to be concerned, though. And we all pray that the economy turns around, but for recruiters that'll make life difficult again, I'm sure. But we will have to continue to recruit the best for our nation's Army and we are totally focused on doing that.

SEN. THUNE: Thank you.

I thank you gentlemen for your great service to our country and make sure that you convey that same appreciation to your families, too, for the sacrifices that they make for your service. Thanks.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you, Senator Thune.

That last exchange with Senator Thune, we're in a most unusual moment which is, as you said, recruitment's going very well, a high level of recruits coming in. We understand part of it may be the economy, but there's a lot of other factors. Re-enlistments are very high.

So part of what originally drew our attention to trying to increase the Army end strength is not only the effect on dwell time but this, as I understand it, most unusual and unacceptable phenomenon where you may actually have to, because you don't have adequate statutory authorized end strength, slow down on recruiting and re- enlistment, in fact, to let some people go, as it were, hoping that attrition brings you down.

And you know when the demand is so high for personnel in active deployment we just ought not to let you -- we ought to protect you from that kind of pressure. But anyway, we're going to pursue that as we go to our markup next week.

I thank you very much for your testimony. You've been extremely responsive. You're two impressive people that our country is very fortunate and the Army is very fortunate to have in positions of leadership, and I'd really put you up against any group of people in any field or corporation or anything else. You represent the best of our country. Thank you very much.

GEN. CHIARELLI: Thank you, Senator.

GEN. THOMPSON: Thank you, Senator.

SEN. LIEBERMAN: We'll call the second panel, Mr. Ahern and Mr. Francis.

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