2.
Organization, Management, and Budget
In March 1993, Secretary of Defense Les Aspin initiated a comprehensive review of U.S. defense
strategy, force structure, modernization, infrastructure, and foundations from the bottom up. A response to the
sweeping changes in geopolitics and security threats brought on by the end of the Cold War and the collapse of the Soviet Union,
the Bottom-Up Review was the first step in a complete restructuring of the U.S. military. By 1994 the Army had responded to the
Report on the Bottom-Up Review with the genesis of its own plan for an organization capable of meeting the
demands of national security in the early twenty-first century.
The resulting force structure, Force XXI, required substantial changes in the institutional Army, information technology, and
operational units. The transformed units would be easier to deploy and capable of precision engagement and dominance across the
full spectrum of missions. Emerging information technologies would be exploited to maximize the efficiency,
flexibility, and lethality of the new configuration.
The Army quickly articulated its goals for harnessing information technology as the Army Enterprise Strategy, which mandated the
creation of a seamless information environment throughout the range of command, control, communications, computers, and
intelligence (C4I) activities. The Army Enterprise Strategy, as a component of Force XXI reforms, produced substantial changes
in the institutional Army in the late 1990s. The U.S. Army Modernization Plan for 1995 and its successors provided
the architecture for the Army’s transition to the new structure.
By FY 1999, the major organizational realignments and implementation of new technologies called for in the Army Enterprise
Strategy and the Force XXI campaign were well under way, if not accomplished. As a result, the Army Staff introduced few
substantive changes in FY 1999. The year’s organizational activities were marked by the continued pursuit of prior
initiatives rather than the creation of new ones as the Army furthered its transformation to meet the requirements of the
National Military Strategy and the transition to Force XXI.
13
Demonstrating the growing prominence of contingency operations and coalitions in the post–
Cold War era, the Office of the Deputy Under Secretary of the Army (International Affairs) (ODUSA-IA) completed
its second full year of operations in FY 1999. Established in FY 1997, the ODUSA-IA develops, coordinates, supports, and
assesses Army international activities in support of the National Security Strategy, the National Military Strategy, and the
regional strategies of the Combat Commands.
One of ODUSA-IA’s two directorates, the International Policy Integration and Assessment Directorate, houses the
International Policy, Plans, Programs, and Integration Division (IPP). The IPP participated in
restructuring The Army Plan (TAP) mission areas and revising AR 11-32, Army Long-Range Planning System, during FY 1999.
The revisions consolidated ten mission areas into seven and established co-chairs for each mission-area team. The ODUSA-IA
became a co-chair of the mission areas “Promote Regional Stability” and “Reduce Potential Conflicts and
Threats,” integrating its objectives into Army strategic planning guidance. The IPP also translated the requirements for
Army international activities into capabilities for inclusion in Army Planning Guidance, section two of TAP. These developments
promoted the integration, through ODUSA-IA, of the Army’s international programs and coalition-building efforts into
strategic planning.
The potential threat of terrorist acts using weapons of mass destruction was addressed in FY 1999 through an organization that
briefly fell under the Army’s administrative aegis. Originally functioning as a Department of Defense (DOD) office
supported by the Army, the newly created National Domestic Preparedness Office (NDPO) soon transferred to the Department
of Justice. The organization, a working group focusing, synchronizing, and integrating federal support of domestic response to
weapons of mass destruction, coordinated the activities of the DOD, the Federal Emergency Management Agency, the Environmental
Protection Agency, the Department of Energy, the Department of Health and Human Services, and the Department of Justice. The
decision to allow the Department of Justice to lead the NDPO through its designated agent, the Federal Bureau
of Investigation, ended several months of rivalry as various constituents struggled to define the organization’s structure
and role.
Army personnel began implementing a new system for managing temporary-duty travel in FY 1999. The Defense Travel System (DTS) is
a DOD-directed program in which the newly established DTS-Army worked in close cooperation with the DOD Project Management
Office-DTS to create an automated, paperless travel system. Fort Campbell, Kentucky, was selected as the test site for the new
system, which was extended to the reserve components before the end of the fiscal year. Digitizing the
14
management of temporary-duty travel reduced the former forty-eight–– step procedure to only nine steps, shortening the time required for a person to complete travel arrangements from 9.0 to 1.3 hours. The full processing cycle was reduced from twenty-one days to slightly over two days, a clear improvement in efficiency and cost control.
Management and Information Systems
Information technology constitutes one of the Force XXI campaign’s
three axes. To facilitate the campaign, the Army Enterprise Strategy provides
a comprehensive vision for all C4I activities. Information infrastructure,
quality assurance, modernized battlefield communications and network
management, and battlespace awareness were the Army chief information
officer’s priorities for FY 1999. The assistant secretary of defense for
command, control, communications, and intelligence recognized the Army
commitment to those priorities by designating it as the executive agent
for developing theater joint tactical networks. That decision combined
previous appointments as the executive for joint network management
(1993) and tactical switching systems (1992), placing responsibility for
all theater network infrastructure under the Army’s director of information
systems for command, control, communications, and computers (DISC4).
By sharing information networks at the theater level, the armed
services can coordinate their activities and leverage their strengths to an
unprecedented extent. The potential impact of such technology on joint
operations lies at the core of Joint Vision 2010, the operational paradigm
for the early twenty-first century. The DISC4 therefore bears responsibility
both for ushering Force XXI through the ongoing Revolution in Military
Affairs brought about by information systems and new technologies, and for
extending the benefits of those technologies through joint applications.
The Joint Network Management System was approved by the Joint
Requirements Board in October 1998. But the board also required an
assessment of the system’s key performance parameters, addressing
interoperability, that was not completed before the end of FY 1999.
Defense Planning Guidance calls for the Army to develop and field the
system’s threshold requirements by FY 2003; a separate inquiry concluded
that development and deployment of the Joint Network Management
System could not be accelerated to advance that date because of budget
constraints.
Similarly, the Army’s future tactical network management system—
Integrated System Control (ISYSCON), a component of the Warfighter
Information System (Terrestrial)—suffered from budgetary limitations.
The system is intended to establish an automated, theater-wide network that
signal units can use to manage multiple tactical communications systems
15
in support of battlefield operations. ISYSCON facilities will manage
tactical communications and interface with each battlefield functional
area in the Army Tactical Command and Control System architecture.
The Army approved full-rate production of the ISYSCON on 5 February
1999. But the FY99 budget precluded fielding thirty systems as originally
scheduled, thus hampering the ability of signal units to manage voice and
data networks as planned. Although the program continued, it failed to
meet its Army acquisition objective and did not have funding restored to
programmed levels in the FY00 budget.
AUTODIN, the automatic digital network, which had long served as
the principal means of DOD record message transmission, was officially
closed at the end of FY 1999. Its last four switching centers were
redesignated as digital messaging system transition hubs and are scheduled
to remain operational to handle message traffic from remaining AUTODIN
equipment. The DISC4 also maintained several other previously initiated
programs intended to modernize a number of space, communications, and
network systems.
During FY 1999, the Army continued to make progress toward the
creation of the Army Information Warehouse (AIW), one of the primary
initiatives for securing the Army’s information superiority. Based on the
Army’s strategic vision and a revised record-keeping process, the AIW will
collect, protect, and project information to support the Army’s needs. The
new record-keeping process itself was developed during FY 1998, reducing
the standard 117-step procedure of the Army records management program
to a 20-step procedure. As the focus of the Army’s records management
efforts during FY 1999, the AIW concept was further defined through the
creation of a mission needs statement, approved as an Army requirement
and forwarded for review by the Joint Requirements Oversight Council.
That review is particularly important in light of the Army chief information
officer’s FY99 approval of the draft DOD Directive 5015.2. Under the new
directive, responsibility for implementing records management policy
and procedures for the combatant commands will be transferred from the
services to the Joint Staff.
The Army also continued its efforts, begun in 1995, to prepare its
information systems for the arrival of the year 2000. Many systems,
ranging from payroll programs to weapons platforms to the global
positioning satellites, employed software using only two digits to identify
the year. If left uncorrected, those systems could experience a wide
range of errors dealing with the double zeros that would represent the
year 2000, which they might read as 1900. To deal with this Year 2000,
or Y2K, problem, more than twenty-five thousand Army information
systems and six hundred thousand microprocessor-controlled devices had
to be prepared and tested, at a cost of some $600 million, before calendar
16
year 1999 ended. The Internet became a tool in this process, as the Army
Y2K homepage provided information for the entire Army community,
and Web-enabled databases allowed real-time tracking of efforts to defeat
the “Millennium Bug.”
Army Operations Order 99-1, Millennium Passage, was published in
January 1999 to direct Y2K preparations. In response to that order, the
Army Operations Center established a Y2K Transition Operations Cell to
track the status of systems and installations during transition periods and
to monitor worldwide Y2K events that could affect Army operations. An
independent examination by the Army Audit Agency validated contingency
tests, organized by the Joint Chiefs of Staff, that verified the Army’s ability
to maintain its mobilization, deployment, sustainment, and intelligence
capabilities in the face of major Y2K-related systems failures.
In FY 1999. the Army continued to face expanding operational and force
readiness challenges with limited funds. This reality of America’s post–
Cold War defense posture had a significant impact on all areas of military
activity and made cost reduction and fiscal efficiency issues increasingly
important throughout the Army. One telling example of efforts in this
regard was the secretary of the Army’s order that, after 1 December 1998,
paper media would no longer be purchased for administrative publications
and forms. The Department of the Army’s administrative documents were
to be available in electronic form exclusively and to be printed from CDROM
or the World Wide Web only when necessary.
Legislative action underscored the need for financial responsibility
and accurate record keeping. The Chief Financial Officers (CFO) Act of
1990 required major government agencies to prepare auditable financial
statements for the first time. The Government Management Reform Act
of 1994 extended the CFO Act to include all major executive branch
agencies, their components, and the government as a whole. If that was
not mandate enough, the Federal Financial Management Improvement Act
of 1996 (FFMIA) and the Information Technology Management Reform
Act (Clinger-Cohen Act) of the same year required all federal agencies
to develop integrated information systems to produce those auditable
financial reports.
All of that legislation resulted in the publication of the Army Chief
Financial Officers Strategic Plan (General Fund): Five Year Plan (FY
1999–2003). Through FY 1998, the Army had consistently failed to receive
an unqualified opinion from external auditors examining its financial
statements. As a result of this failure to produce verifiable statements, the
Army received special attention in reports to Congress mandated by the
17
FFMIA—reports by the inspector general, the Office of Management and
Budget, and the comptroller general. The Army Audit Agency (AAA),
which provides internal advice, oversight, and evaluation of the Army’s
accounting procedures, itself disclaimed an opinion of the reliability of the
Army’s financial statements for FY 1998. To correct that state of affairs, the
Chief Financial Officers Strategic Plan called for an unqualified opinion
on Army financial statements by FY 2003. The five-year effort to meet that
goal began in FY 1999.
The AAA began to pursue that end with an internal restructuring to
improve its own efficiency. Grouping personnel into dedicated functional
areas enabled auditors to specialize and to receive function-specific
training. The new task-focused orientation allowed the function groups
to build expertise and improved client relationships as it decreased their
learning curves and response times. To further this internal transformation,
the AAA initiated the Army Follow-Up Program. Under the new practice,
functional experts returned to Army activities that the AAA had evaluated
to assess the effects of measures undertaken in light of the previous audit.
As a whole, this transformation of the AAA should serve as a catalyst for
the efficient documentation of Army expenditures and the elimination of
unnecessary costs.
Such gains can have immediate operational consequences. The chief
of staff, U.S. Army, Europe, and Seventh Army, requested that the AAA
create a team in Skopje, Macedonia, to support operations in Kosovo. After
its arrival in August 1999, the team provided the deployment commander
with real-time assistance in creating and employing management processes
and controls to guarantee the effective and appropriate use of resources.
During a review of the Army Strategic Management Plan, the
AAA established a new strategic model (Audit Report AA 99-746) to
be used throughout the Department of the Army. That model directs
senior commanders in the creation and implementation of performance
management systems similar to those developed for Kosovo, which should
assist those commanders in maximizing the efficiency of their accounting
procedures.
Despite its success in overseeing Army expenditures, the AAA
suffered from the same budgetary problems as other establishments. The
competitive labor market of 1999 forced the agency to launch its own
recruitment efforts to overcome shortages of skilled personnel. Relatively
expensive General Services Administration rents forced the AAA to
relocate its capital field office and Fort Belvoir field office to Army-owned
facilities in the Washington, D.C., area. (A similar move was scheduled for
the Atlanta field office in FY 2000.)
The accounts of the AAA itself did not go unchallenged. In a joint series
of peer reviews, the AAA audited the Naval Audit Service and was itself
18
successfully audited by the Air Force Audit Agency. The DOD inspector general conducted two oversight reviews of the AAA, one on the processes used to determine audit requirements and request resources, and one on the Army’s internal review organizations. These efforts at rationalizing Army financial records and checking figures proved their worth. In FY 1999, the AAA spent $51.1 million to issue 522 audit reports of various types that identified potential savings projected at $794 million.
Reducing the Army of the Cold War era into a more economical,
more mobile, and more lethal institution was neither an easy task nor a
rapid process. The original Report on the Bottom-Up Review produced
guidance for budgets from FY 1995 through FY 1999. In June 1994, the
Office of the Secretary of Defense released the Army Program Objective
Memorandum FY 1996–2001, a document that clarified the Army’s intent
in the drawdown of forces to reflect new strategic and fiscal realities.
President William J. Clinton’s FY99 budget request for a total obligation
authority (TOA) of $64.3 billion supported a force consistent with both
of those planning documents. Congress appropriated slightly less than
requested, giving the Army a TOA of $64 billion.
Table 1 compares the FY99 budget with that of FY 1993, the year in
which the Bottom-Up Review originated. The comparison illustrates the
impact of the Army’s continued restructuring on funding requirements.
Even ignoring the effects of inflation, over seven years the Army reduced
its TOA by $1.6 billion—almost $3.1 billion if new expenditures for
chemical weapons demilitarization, environmental restoration, and
former DOD programs are disregarded. Constant dollar savings would be
significantly greater.
The FY99 budget attempted to preserve mission readiness, enhance
modernization, integrate the force structure, and maintain the quality of
life for military and civilian personnel. The balance among those needs
was an elusive one, for the Army faced an accelerating operational tempo
that strained its resources. On a typical day in 1999, the Army had 140,000
personnel abroad in seventy foreign nations—that is, more than 60 percent
of U.S. forces were committed to external engagements.
Maintaining readiness while balancing resources and demands was
particularly difficult. Because of competing priorities and congressional
reductions, the Army consistently proved unable to meet its self-imposed
goals in combat vehicle training mileage between FYs 1997 and 1999. In
FY 1999, M1A1 Abrams tank crews were scheduled to complete 800 miles
of training; M2 Bradley infantry fighting vehicle crews, 934 miles; and M3
Bradley cavalry fighting vehicle crews, 970 miles. Abrams crews recorded
19
TABLE 1: APPROPRIATIONS COMPARISON: FY 1993 AND FY 1999
(Unadjusted Millions of Dollars)
Category |
FY 1993 |
FY 1999 |
Military Personnel, Army |
23,236 |
20,836 |
Operations and maintenance, Army |
17,847 |
16,630 |
Procurement |
||
|
Aircraft |
1,441 |
1,384 |
Missiles |
1,049 |
1,209 |
Weapons and tracked combat vehicles |
921 |
1,538 |
Ammunition |
1,094 |
1,063 |
Other procurement |
3,067 |
3,306 |
Research, development, test, and evaluation |
6,015 |
5,022 |
Military construction, Army |
437 |
869 |
Chemical demobilizationa |
0 |
777 |
Environmental restoration |
0 |
367 |
Army Family Housing |
||
Operations |
1,364 |
1,095 |
Construction |
160 |
135 |
Army National Guard |
||
Personnel |
3,240 |
3,490 |
Operations and maintenance |
2,297 |
2,670 |
Military construction |
215 |
142 |
Army Reserve |
||
Reserve personnel |
2,170 |
2,167 |
Operations and maintenance |
2,297 |
1,199 |
Military construction |
42 |
102 |
Totalb |
65,628 |
64,005 |
| |
||
a. New Category, FY 1999 |
||
b. Discrepancies result from rounding |
||
an average of only 681 miles of training for the year; M2 crews, 710 miles;
and M3 crews, 573 miles—less than sixty percent of the objective for each
type of vehicle.
In a similar vein, the Army National Guard Depot Maintenance
Program experienced continuing shortfalls. The program is intended to
repair equipment and return it to its owning unit. Although the Guard
had no maintenance float that would allow it to replace equipment
awaiting overhaul, the program was funded at only 35 percent of its FY99
20
requirement. Funding for depot maintenance for the enhanced separate
brigades held steady at 60 percent of required levels, and divisions
received only 8 percent of the necessary funds. As a result, backlogs of
Army National Guard equipment awaiting repair grew in FY 1999 while
readiness suffered.
To avoid underfunding such important activities in an era of intense
budget scrutiny, the Army endorsed Defense Secretary William S. Cohen’s
continuing efforts to reduce infrastructure and overhead costs. Savings
from such decreased spending could then be reinvested to promote
force readiness and modernization. The service’s efforts bore fruit in
the FY99 budget, which included $1.3 billion in savings from ongoing
management initiatives designed to promote efficiency. Those funds are
not apparent through a quick glance at budget totals, however, because
they were reinvested in high-priority tasks. Any budgetary comparison
needs to consider an additional $1.5 billion that was transferred to the
Army in FY 1999 from the budgets of DOD programs, including chemical
demilitarization, commissaries, and defense reform initiatives.
When the transferred programs are included and adjustments are made
for inflation, Congress’s $64 billion appropriation for FY 1999 represented
a decrease of less than 1 percent from the preceding year. The president’s
proposed budget for FY 2000 included $3 billion in additional Army TOA.
Such figures may indicate the possible stabilization of, and perhaps even
a rebound in, spending authority as the force drawdown neared its 2003
conclusion and operational tempo remained high.
The approved $2.6 billion in pay for military personnel in the active
and reserve components remained essentially static from FY 1998, despite
a 3.1 percent pay raise, largely the result of continuing decreases in the
Army’s uniformed strength. The active component, numbering 488,000
personnel in FY 1998, declined to just below its targeted 480,000 for FY
1999. Army National Guard and Army Reserve personnel figures also
decreased to targets of 357,000 and 208,000, respectively, as the reserve
components continued their programmed reductions.
Quality of life is a constant concern within the Army. Family housing
accounted for $1.2 billion in Army expenditures, including major projects
at Fort Carson, Colorado; Fort Hood, Texas; Fort Lewis, Washington;
and Fort Meade, Maryland. Of the $1.1 billion appropriated for military
construction, $362 million supported barracks renovations and operations,
including new barracks for 11,700 soldiers. Barracks construction at
Camps Casey and Hovey in Korea received $49 million of the FY99 Korea
supplemental appropriation.
Morale, welfare, and recreation (MWR) programs did not fare so well.
The Army was able to execute only 87 percent of MWR’s programmed
mission-sustaining activities and 86 percent of its planned community
21
support activities. Base commanders were forced to draw on the $206
million budgeted for these activities within the base support account to
meet more pressing needs, thus hampering the scheduled MWR efforts.
Equipment modernization and procurement accounted for $8.5 billion
of spending during the fiscal year. The Army also established modernization
goals for the next decade, an indicator of FY 1999’s transitional role as the
force approached a new century and a major milestone in its continued
restructuring into Force XXI architecture and eventually the Army After
Next. The 1993 Bottom-Up Review had addressed force structure only
through 1999. The updated 1999 Army Modernization Plan, with goals
similar to the 1995 and 1996 versions, extended the Bottom-Up Review’s
priorities and established a series of goals to measure progress toward Army
Vision 2010. The five major modernization goals, which will continue to
drive Army procurement through 2010, are (1) digitizing the Army, (2)
maintaining combat overmatch, (3) sustaining research and development
while focusing on leap-ahead technology, (4) recapitalizing the force, and
(5) integrating the active and reserve components.
Procurement activities in 1999 reflected these goals. The Army spent
$1.5 billion on weapons and tracked vehicles in 1999. Abrams tank and
Bradley fighting vehicle upgrades directly supporting force digitization
accounted for $788 million of that total. Acquisition of command-andcontrol
vehicles to coordinate the improved flow of communications
resulting from such modernization efforts required an additional $44
million. The upgrades and new vehicles, which incorporated enhanced
thermal imaging, navigational, communications, and identification friend
or foe systems to avert confusion and friendly-fire incidents, clearly
expanded the Army’s ability to overmatch potential enemy forces.
Upgrading Apache attack helicopters to the Longbow configuration,
with improved target acquisition and fire-control systems, was the major
focus of Army expenditures on aircraft for FY 1999. The $612 million
devoted to that program accounted for almost half of the $1.38 billion
aviation allocation. Kiowa Warrior helicopter upgrades, modifications and
additions to the fleet of Black Hawk helicopters in various configurations,
and modernization of the CH–47 cargo helicopter rounded out the
aviation program.
Smart, and increasingly brilliant, weaponry figured prominently in
missile spending. Longbow Hellfire, the fire-and-forget antitank missile
for use with the Apache Longbow helicopter, was but one component in
the program. The Brilliant Antiarmor (BAT) submunition for the Army
Tactical Missile System (ATACMS) entered initial production, and the
ATACMS missile entered Block II production in the BAT configuration
so that it could carry the new warhead. Modifications to Patriot, Stinger,
Avenger, TOW (tube-launched, optically tracked, wire-guided), and MLRS
22
TABLE 2- BUDGET APPROPRIATIONS AND REQUESTS: FY 1999 AND
FY 2000, RESPECTIVELY (Millions of Dollars)
Category |
FY 1999 |
FY 2000 |
Military Personnel, Army |
20,836 |
22,006 |
Operations and maintenance, Army |
16,630 |
18,660 |
Total |
37,466 |
40,666 |
Procurement |
||
Aircraft |
1,384 |
1,230 |
Missiles |
1,209 |
1,358 |
Weapons and tracked combat vehicles |
1,538 |
1,417 |
Ammunition |
1,063 |
1,141 |
Other procurement |
3,306 |
3,424 |
Research, development, test, and evaluation |
5,022 |
4,426 |
Military construction, Army |
869 |
656 |
Chemical demobilizationa |
777 |
1,169 |
Environmental restoration |
367 |
378 |
Army Family Housing |
||
Operations |
1,095 |
1,098 |
Construction |
135 |
14 |
Total |
16,398 |
15,933 |
Reserve Components
|
||
Army National Guard |
||
Personnel |
3,490 |
3,571 |
Operations and maintenance |
2,670 |
2,903 |
Military construction |
142 |
16 |
Army Reserve |
||
Personnel |
2,167 |
2,271 |
Operations and maintenance |
1,199 |
1,369 |
Military construction |
102 |
23 |
Total |
9,770 |
10,153 |
Totalb |
64,005 |
67,132 |
|
|
||
a. New Category, FY 1999 |
||
b. Discrepancies result from rounding |
||
23
(multiple launch rocket system), and the acquisition of TOW2 and Javelin
missiles, contributed to the $1.2 billion expenditure for missiles.
Procurement of conventional ammunition and other needs required $4.369 billion. At the same time, the Army continued its research,
development, test, and evaluation (RDTE) efforts to provide the force
with new tools and capabilities. There were no new major initiatives in the
$5.022 billion RDTE appropriation. But that appropriation did support the
development of a number of technologies vital to the ongoing digitization
effort and the implementation of the Force XXI concept.
These technologies included improved night vision systems, control
digital networks, and improvements to the Abrams and Bradley weapons
platforms. The budget also supported continued development of the
Comanche helicopter. Other efforts included research and development
of BAT submunitions, the Block IIA ATACMS, and the Crusader artillery
system, and further developments to the TOW missile. As a whole, the
RDTE effort continued to integrate new technology into weapons and
weapons systems while exploring alternative concepts in future capabilities-based
warfighting.
The president’s proposed FY00 budget maintained the same goals
and strategic assumptions as did the FY99 budget. Table 2 compares
the two budgets, showing the general increases the president suggested.
The increased funding requirements of the FY00 budget underline the
significance of FY 1999 as a transitional year, one marking the end of
a decade of decreases in the Army budget. The tight budget of FY 1999
left little room for unforeseen contingency operations without adverse
impact on readiness and other Army concerns. Subsequent increases
in funding requests for personnel, operations, and maintenance for FY
2000 are indicative of the challenges awaiting the Army as it entered the
next decade.
24