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Marine Corps: Improving Amphibious Capability Would Require Larger Share
of Budget Than Previously Provided (Chapter Report, 02/13/96,
GAO/NSIAD-96-47).

Pursuant to a congressional request, GAO reviewed the Marine Corps' and
Navy's capability to conduct amphibious assaults, focusing on the: (1)
status of the amphibious fleet; (2) Marine Corps' and Navy's plans to
better conduct amphibious operations; and (3) cost of planned changes
and how they will affect future defense budgets.

GAO found that: (1) although the amphibious fleet meets the Corps' and
Navy's readiness requirements, it has reduced vehicle lift capability
and other operational limitations; (2) the Marine Corps and Navy plan to
procure new amphibious equipment to modernize their vehicle lift
capability, but they have delayed procurement until 1998 to save money;
(3) the cost of procuring amphibious ships is expected to increase due
to inflation and proposed future defense budgets do not provide
sufficient procurement funding; (4) the Marine Corps plans to replace
older amphibious vehicles and helicopters because they create undue
risk, are not compatible with the new warfighting concept, are
vulnerable to enemy fire, have limited range, and carry an insufficient
number of troops; (5) the Marine Corps and Navy plan to improve
amphibious support communications systems, mine countermeasure
capabilities, and naval surface fire support; (6) the Marine Corps and
Navy estimate that modernizing the amphibious force will cost about $58
billion over the next 25 years and require a much larger share of their
procurement budget; (7) there is more than a $16 billion gap between the
Navy's projected shipbuilding budget and the estimated cost to build the
ships; and (8) if Congress wishes to support planned amphibious
programs, it must increase Marine Corps and Navy procurement funding or
reduce other parts of the defense budget.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-96-47
     TITLE:  Marine Corps: Improving Amphibious Capability Would Require 
             Larger Share of Budget Than Previously Provided
      DATE:  02/13/96
   SUBJECT:  Combat readiness
             Military procurement
             Military vessels
             Command/control/communications systems
             Defense capabilities
             Military cost control
             Future budget projections
             Procurement appropriations
             Mobilization
             Defense budgets
IDENTIFIER:  DOD Future Years Defense Program
             Persian Gulf War
             F/A-18E/F Aircraft
             DDG-51 Destroyer
             F-22 Aircraft
             Osprey Aircraft
             CH-46 Helicopter
             CH-53D Helicopter
             Marine Corps Vision 2015
             LPD-17 Amphibious Ship
             LSD Dock Landing Ship
             AV-8B Aircraft
             LPH Amphibious Ship
             LHA Amphibious Ship
             LHD Amphibious Ship
             Single Channel Ground and Airborne Radio System
             SINCGARS
             Apache Helicopter
             Marine Corps Operation Maneuver from the Sea
             MV-22 Aircraft
             
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Cover
================================================================ COVER


Report to the Chairman and Ranking Minority Member, Subcommittee on
Military Readiness, Committee on National Security, House of
Representatives

February 1996

MARINE CORPS - IMPROVING
AMPHIBIOUS CAPABILITY WOULD
REQUIRE LARGER SHARE OF BUDGET
THAN PREVIOUSLY PROVIDED

GAO/NSIAD-96-47

Marine Corps

(701031)


Abbreviations
=============================================================== ABBREV

  AAV - Amphibious assault vehicle
  AAAV - Advanced amphibious assault vehicle
  DOD - Department of Defense
  FYDP - Future Years Defense Program
  LCAC - landing craft, air cushion
  MEB - Marine expeditionary brigade
  OMFTS - operational maneuver from the sea
  SINCGARS - Single Channel Ground and Airborne Radio System

Letter
=============================================================== LETTER


B-270285

February 13, 1996

The Honorable Herbert H.  Bateman
Chairman
The Honorable Norman Sisisky
Ranking Minority Member
Subcommittee on Military Readiness
Committee on National Security
House of Representatives

This report discusses the current status of the Navy's and the Marine
Corps' capability to conduct amphibious assaults, improvements being
made to that capability, the cost of those improvements, and how they
will affect future budgets.  The information in this report should be
useful to your Subcommittee in its deliberations on the readiness of
Navy and Marine Corps forces for amphibious assaults and the funding
needed to modernize this capability. 

We are sending copies of this report to other interested
congressional committees; the Secretaries of Defense and the Navy;
the Commandant, U.S.  Marine Corps; and the Director, Office of
Management and Budget.  Copies will also be made available to others
on request. 

If you or your staff have any questions about this report, please
call me on (202) 512-3504.  Major contributors to this report are
listed in appendix II. 

Richard Davis
Director, National Security
 Analysis


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

Throughout their history, the Marine Corps and the Navy have
conducted amphibious operations, including complicated major assaults
or invasions of enemy-held territory.  Recently, the Marine Corps has
adopted a new concept for performing amphibious operations in the
future, and planned new systems are important to effectively
implementing it.  In response to a request from the former Chairman,
Subcommittee on Readiness, House Committee on Armed Services, GAO (1)
reviewed the status of the Marine Corps' and the Navy's amphibious
fleet, (2) identified the changes the Marine Corps and the Navy are
planning to make to more effectively conduct amphibious operations,
and (3) identified what the planned changes will cost and how they
will affect future defense budgets. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

Amphibious operations include, but are not limited to, assaults,
raids, noncombatant evacuations, and humanitarian assistance.  To
effectively conduct these operations, the Marine Corps must transport
Marine personnel and equipment ashore in a quick, concise manner. 
The high complexity of major amphibious assaults necessitates many
Navy and Marine elements working together:  amphibious ships from
which to launch an assault; helicopters and landing craft to move
troops, equipment, and supplies ashore; command and control systems
to enable communication; mine countermeasures to clear a path to the
shore; and naval surface fire support to suppress enemy forces. 

The Marine Corps has conducted amphibious operations throughout its
history, including numerous assaults throughout the Pacific during
World War II.  Since World War II, the Marines have conducted one
large-scale amphibious assault--the landing at Inchon, Korea, during
the Korean War.  During the Persian Gulf War, an amphibious task
force was embarked on ships for a large-scale amphibious assault. 
Although an amphibious assault was not conducted because of the
additional time required to clear mines, the potential for damage to
the Kuwaiti infrastructure, and the risk of casualties and loss of
equipment, the threat of an amphibious assault held several Iraqi
divisions in place, so that they could not be used for inland
operations.  In addition, amphibious forces have been used on a
smaller scale on numerous occasions, including during the Cuban
missile crisis, the Vietnam War, the invasion of Grenada, and the
peace operations in Somalia and Haiti. 

In concert with naval forces, the Marine Corps also provides (1)
forward presence around the world and (2) the ability to rapidly
respond to crises.  The Marines believe that in the next century the
Pacific will supplant Europe as the region of the world most
important to the United States, increasing the importance of naval
expeditionary forces and their amphibious capability. 

The Secretary of Defense's 1995 defense planning guidance requires
that the Navy and the Marine Corps have available 2.5 Marine
Expeditionary Brigades of amphibious lift, including lift for
vehicles--such as tanks, amphibious assault vehicles, and
artillery--as well as four other categories of lift. 

The Marine Corps is developing a new warfighting concept that
emphasizes speed and maneuverability of its amphibious forces and
places them at less risk than its current doctrine.  Under this
concept, for an amphibious assault, ships would be stationed 25 to 50
miles offshore, allowing them more range to defend against missiles,
aircraft, and small boat attack, and the troops with their equipment
would maneuver from ship to shore.  The concept is intended to
maximize surprise and give the Marines better control of a
confrontation with the enemy.  To most effectively implement the new
concept, the Marine Corps is planning to procure various types of new
equipment. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

The Marine Corps and the Navy currently have the capability to
conduct amphibious operations, but the current amphibious fleet has
reduced vehicle lift capability and other equipment has operational
limitations that limit their effectiveness.  To modernize their
capability and allow them to effectively implement the new
warfighting concept, the Marine Corps and the Navy plan to buy new
amphibious ships, aircraft, and other systems.  However, this
modernization has been delayed and costs have increased. 

The Marine Corps and the Navy estimate that it will cost about $58
billion to modernize the amphibious force over the next 25 years. 
GAO's analysis of the Department of Defense's fiscal years 1996-2001
Future Years Defense Program showed that the Navy and the Marine
Corps plan to spend a much larger share of their procurement funds to
buy upgraded equipment for amphibious operations than has been the
case for most of the past 40 years.  Beyond fiscal year 2001, the
Navy and the Marine Corps will need to continue allocating a large
share of available procurement funds for amphibious equipment to
avoid delays.  This could be a major challenge for the Navy because
between fiscal years 2002 and 2005 there is more than a $16-billion
gap between the projected shipbuilding budget and the cost estimate
to build all the ships planned for these years. 

Amphibious programs are competing for funding with other major
planned procurements, such as the Navy's F/A-18E/F combat aircraft,
DDG-51 destroyer, additional surface combatants, and a new attack
submarine, the Air Force's F-22 tactical aircraft, and the Army's
Apache helicopter.  If the Congress determines the amphibious
capability requirements to be valid and wishes to support the planned
amphibious programs, three options seem plausible:  increase Navy and
Marine Corps procurement funding, spend less on other Navy or other
services' planned procurements or other parts of the defense budget,
or implement some combination of the first two options.  These are
the trade-offs that the Congress and the senior Department of Defense
leadership will have to decide. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


   ACQUIRING NEW EQUIPMENT HAS
   TAKEN LONGER THAN PLANNED AND
   COSTS MAY INCREASE
---------------------------------------------------------- Chapter 0:5

Although the Marine Corps and the Navy currently have the capability
needed to conduct amphibious operations, the services plan to improve
equipment that is key to carrying out the Marines' new warfighting
concept.  The Navy plans to buy 13 new amphibious ships for $10.8
billion, which would bring vehicle lift capability back to the 2.5
Marine expeditionary brigade level required by the defense planning
guidance.  According to a Navy official, some eventual increases are
expected in the ships' procurement cost due to inflation.  The Navy
originally planned to buy these ships between 1996 and 2003. 
However, to save money in the short term, the Navy delayed purchasing
the ships until 1998 to 2005.  The Congress funded procurement of two
of the amphibious ships in the fiscal year 1996 Department of Defense
Appropriations Act, which is several years earlier than the Navy
planned to procure them.  Table 1 shows the current equipment status
and planned improvements. 



                                Table 1
                
                     Current Status of and Planned
                  Improvements to Amphibious Equipment

               Current
Equipment      status         Planned improvements
-------------  -------------  ----------------------------------------
Amphibious     Net reduction  The Navy has developed an amphibious
ships          of 17 active   enhancement plan to cover vehicle lift
               ships since    shortfall and 13 new ships are planned
               fiscal year    to be available by 2009.
               1993 has
               resulted in
               reduced
               vehicle lift
               capability.
               Planned
               construction
               of most new
               ships has
               slipped.

Amphibious     Slow water     A replacement vehicle is being developed
assault        speed makes    and will be available starting in 2008.
vehicle        vehicle more   In the interim, the Marines are
               vulnerable to  considering a major overhaul of the
               enemy fire     current vehicle.
               and
               unsuitable
               for the
               Marines' new
               warfighting
               concept.

CH-46E         Speed, range,  A tiltrotor aircraft (MV-22) is being
helicopter     and troop-     developed to replace the CH-46E, and it
               carrying       will be available starting in 2001. An
               capacity are   interim overhaul to the CH-46E is
               limited, and   planned and others may be needed.
               it needs
               intensive
               maintenance.

Command and    Current        Communication equipment is being
control        communication  procured to provide improved
systems        equipment has  compatibility and better communication
               limitations    over the horizon.
               making it
               less than
               optimal to
               support the
               Marines.

Mine           Capability to  Research and development is underway to
countermeasur  clear mines    improve mine countermeasures, but in
es             and obstacles  some areas, such as detecting mines,
               close to       technology is still being developed.
               shore and on
               the beach is
               limited.

Naval surface  Current ships  The Navy is pursuing improvements to
fire support   have 5-inch    increase range, accuracy, and lethality
               guns that      needed for the new warfighting concept.
               lack the
               range and
               lethality to
               support the
               new
               warfighting
               concept.
----------------------------------------------------------------------

   SERVICES PLAN TO UPGRADE AND
   REPLACE MUCH CURRENT EQUIPMENT
---------------------------------------------------------- Chapter 0:6


      SHIP-TO-SHORE EQUIPMENT
-------------------------------------------------------- Chapter 0:6.1

The Marines plan to replace their 25-year-old amphibious assault
vehicles and the CH-46E helicopters, which are used to move troops,
equipment, and supplies from ship to shore, because of their age and
limited capabilities.  Although the readiness ratings for both pieces
of equipment remain acceptable to high, they can create risks during
amphibious assaults and are not compatible with the Marines' new
warfighting concept.  Both are slow, vulnerable to enemy fire, and
limited in their range.  Also, the helicopter can carry only a
limited number of troops. 

The Marine Corps plans to replace the amphibious assault vehicle with
1,013 advanced amphibious assault vehicles for $6.7 billion,
including a $456-million increase due to a 2-year procurement delay. 
With a water speed of 23 to 29 miles per hour, the new vehicle could
be launched from amphibious ships 25 miles or more offshore and reach
shore far more quickly than the current vehicle.  This improved
mobility would reduce the risk to Navy ships from missiles, aircraft,
boats, and mines.  Until the new vehicle is fielded, beginning in
2008, the Marine Corps anticipates spending more to maintain the
current vehicle.  Therefore, the Marines are considering a service
life extension program that they estimate will cost $473 million, but
believe will reduce normal depot-level maintenance, thereby more than
offsetting its cost. 

The Marine Corps plans to replace its CH-46E and CH-53D aircraft with
425 MV-22 tiltrotor aircraft over a 25-year period, beginning in
2001, for $36.5 billion.  The CH-46E, the Marines' primary
medium-lift aircraft, has a cruise airspeed of 110 knots with a
mission radius of 75 miles.  It can carry nine troops.  The Marine
Corps has been using the CH-53D, originally a heavy-lift aircraft,
because of the reduced inventory of CH-46Es due to attrition.  The
Marine Corps plans to overhaul the CH-46E for $160 million and is
considering over $1 billion in other overhauls that may be needed to
keep the CH-46E in safe and effective condition until the MV-22 is
available. 


      SUPPORTING CAPABILITIES
-------------------------------------------------------- Chapter 0:6.2

Supporting capabilities play a major role in the success of
amphibious operations, particularly assaults.  The Navy and the
Marine Corps are making efforts to improve three of these supporting
capabilities:  communication systems, mine countermeasures, and naval
surface fire support.  These improvements will be important to fully
implement the Marines' new warfighting concept. 

The Navy and the Marine Corps are buying improved communication
systems to better support amphibious operations.  The radios the
Marines now use ashore are not compatible with the Navy's shipboard
radios, and they cannot communicate over the horizon because of their
short range.  Department of Defense officials said they have been
able to work around these limitations. 

The Navy has begun several programs to improve its limited
shallow-water mine countermeasures.  Some of its programs are using
existing technology to develop countermeasures that will be ready
before 2000.  Other longer term programs depend on advanced
technologies that are still being developed.  With its current
capabilities, amphibious assaults against a heavily mined area appear
to place troops and equipment at serious risk. 

The Navy plans to upgrade its 5-inch gun and develop a longer range
precision-guided munition to improve fire support for amphibious
forces.  Until the 5-inch guns are upgraded, the Navy plans to use
more tactical air support. 


   FUNDING AMPHIBIOUS PROGRAMS
   WILL REQUIRE A LARGER SHARE OF
   THE PROCUREMENT BUDGET
---------------------------------------------------------- Chapter 0:7

The remaining cost to develop and buy the new amphibious ships,
advanced amphibious assault vehicle, and MV-22 is $58 billion over
25 years.  (See table 2.)



                                Table 2
                
                Cost to Complete Selection of Amphibious
                                Programs

                    (Then-year dollars in billions)

                                Quantity  Developme  Procureme   Total
Program                          planned    nt cost    nt cost    cost
------------------------------  --------  ---------  ---------  ------
Amphibious ship                       13      $ 0.1      $10.8   $10.9
Advanced amphibious assault        1,013        0.9        6.7     7.6
 vehicle
MV-22                                425        2.5       36.5    39.0
======================================================================
Total                                          $3.5      $54.0   $57.5
----------------------------------------------------------------------
Source:  Developed by GAO from December 1994 selected acquisition
reports and other information provided by the Department of Defense. 

The Congressional Budget Office estimated that the military services
as a whole face a potential shortfall of $11 billion to $25 billion
per year between 2000 and 2010, compared with the funding projected
for the 1999 budget year in the fiscal years 1995-99 Future Years
Defense Program.  For the Navy and the Marine Corps, the estimated
shortfall was $4 billion to $13 billion per year from 2000 to 2010. 
Although the administration has since increased projected funding by
several billion dollars per year through fiscal year 2001, the
increase appears insufficient to overcome these shortfalls. 

The amphibious ships' portion of Navy shipbuilding procurement for
fiscal year 2001 will consume one of the highest percentages of
funding for such ships in the 40-year period beginning in 1962 and
will probably continue to require substantial shares of Navy
shipbuilding procurement funding through fiscal year 2005.  Between
fiscal years 2002 and 2005, there is more than a $16-billion gap
between the Department of Defense's projected shipbuilding budget and
the Navy's estimate for building all the ships planned for those
years. 

The MV-22's share of the Navy's aircraft procurement budget is
projected to be about 10 percent each fiscal year from 1997 to 2001
and is likely to require a substantial share for many years after
2001.  Since fiscal year 1962, the proportion of the budget spent for
aircraft for amphibious operations exceeded 7.5 percent in only 2
years and was below 5 percent in most years.  The Marine Corps
procurement budget for fiscal year 1996, $459 million, is far less
than would be required to procure the advanced amphibious assault
vehicle.  While that budget is projected to double by fiscal year
2001, GAO estimates that it would have to almost triple over the
present level to fund the advanced amphibious assault vehicle when
procurement begins late in the next decade. 


   AGENCY COMMENTS AND GAO'S
   EVALUATION
---------------------------------------------------------- Chapter 0:8

The Department of Defense concurred with a draft of this report.  The
Department's comments appear in appendix I. 


INTRODUCTION
============================================================ Chapter 1

The Marine Corps provides expeditionary forces to project combat
power ashore in support of naval campaigns or in advance of Army and
Air Force units.  Power can be projected ashore through amphibious
operations as well as by flying in the Marines to join equipment
offloaded from its maritime prepositioning ships.  In concert with
naval forces, the Marine Corps also provides (1) forward presence
around the world and (2) the ability to rapidly respond to crises. 
The current amphibious fleet can deploy about one-third of fleet
Marine forces at any one time; the other two-thirds deploy by air and
other ships. 


   MARINE CORPS FUNCTIONS
---------------------------------------------------------- Chapter 1:1

Title 10 of the United States Code directs that the Marine Corps,
among other things, be organized, trained, and equipped to provide
fleet marine forces of combined arms, together with supporting air
components, for service with the fleet in the seizure or defense of
advanced naval bases and for the conduct of such land operations as
may be essential to the prosecution of a naval campaign.  As such,
together with the Navy, the Marine Corps is statutorily charged with
functions that demand that it preserve and perfect the national
amphibious capability. 


      AMPHIBIOUS OPERATIONS ARE AN
      IMPORTANT MARINE CORPS
      FUNCTION
-------------------------------------------------------- Chapter 1:1.1

Conducting amphibious assaults is a primary function of the Marine
Corps.  Amphibious operations include, but are not limited to,
assaults, raids, noncombatant evacuations, and humanitarian
assistance.  An amphibious assault is a principal type of amphibious
operation that involves establishing a force on a hostile or
potentially hostile shore.  It involves projecting force from the sea
to displace shore defenders, take and hold the beachhead, and mount
offensive action further inland toward an ultimate objective.  A
major assault stresses resources the most because it is against a
defended beach and generally involves a large number of troops and
equipment.  Major amphibious assaults are among the most complex
military operations.  They require the coordinated use of diverse
capabilities, including amphibious ships from which to launch an
assault, helicopters and landing craft to move troops, equipment, and
supplies ashore, naval surface fire support to suppress enemy forces,
mine countermeasures to clear a path to the shore, and integrated
command and control systems. 

The Marine Corps has conducted amphibious operations throughout its
history, including numerous assaults throughout the Pacific during
World War II.  Since World War II, the Marines have conducted one
large-scale amphibious assault--the landing at Inchon, Korea, during
the Korean War.  During the Persian Gulf War, an amphibious task
force was embarked on ships for a large-scale amphibious assault. 
The force conducted feints and raids when the ground offensive began
and was ready to execute a major amphibious assault.  However,
according to the Department of Defense's (DOD) Final Report to
Congress on the Conduct of the Persian Gulf War, an amphibious
assault was not conducted because of the additional time required to
clear mines, the potential for damage to the Kuwaiti infrastructure,
and the risk of casualties and loss of equipment.  However, according
to the report, the threat of an amphibious assault held several Iraqi
divisions in place so that they could not be used for inland
operations.\1 In addition, amphibious forces have been used on a
smaller scale on numerous occasions, including during the Cuban
missile crisis, the Vietnam War, the invasion of Grenada, and the
peace operations in Somalia and Haiti. 

Since the Persian Gulf War, the Navy and the Marine Corps have
shifted their strategy from focusing on a global threat to
influencing events in the world's littoral regions--areas next to
oceans and seas that are within direct control of, and vulnerable to,
the striking power of sea-based forces.  In addition, the Marine
Corps has undertaken an effort called Vision 2015 to predict future
requirements 20 years hence.  Vision 2015 predicts that the Pacific
will supplant Europe as the region of the world most important to the
United States for economic reasons.  With the Pacific's vast
distances and resulting long transit times, Vision 2015 asserts that
strong naval forces will be needed in the region. 


--------------------
\1 Although the amphibious assault was not conducted, the troops and
equipment in some of the amphibious ships were offloaded in Saudi
Arabia and used in the ground campaign.  The remaining Marines on
amphibious ships could have been offloaded if additional combat
forces were required. 


   AMPHIBIOUS OPERATIONS ARE
   COMPLEX BECAUSE A VARIETY OF
   EQUIPMENT IS NEEDED
---------------------------------------------------------- Chapter 1:2

Several types of equipment are needed to conduct amphibious
operations.  Amphibious ships transport troops and equipment
throughout the world.  Once amphibious ships reach the area of
operations, amphibious vehicles, landing craft, and aircraft move
troops and equipment ashore.  Maritime prepositioning ships,
stationed in three locations throughout the world, carry equipment
that could be used to support an amphibious task force.  However, the
ships are used primarily to support troops that are flown into a
benign airfield to be married up with the equipment from the ships. 
Various types of supporting equipment for command and control, mine
countermeasures, and naval surface fire support are also essential to
the success of an amphibious operation. 


      AMPHIBIOUS SHIPS
-------------------------------------------------------- Chapter 1:2.1

Amphibious ships carry Marine Corps troops and equipment throughout
the world for two primary purposes:  forward presence and crisis
response.  The Chairman, Joint Chiefs of Staff, requires the Navy to
provide forward presence in three areas of responsibility--the
Mediterranean Sea, Indian Ocean, and Western Pacific.  The Navy and
the Marines require
12 amphibious ready groups to meet part of this requirement.  Each
group consists of either three or four ships and carries a Marine
expeditionary unit of about 2,800 Marines and sailors and their
equipment.  Amphibious ships also transport troops and equipment for
crisis response, such as to major regional conflicts, as well as
smaller operations.  In crisis response, these ships carry the
assault echelon of the Marine expeditionary force.\2

The lift capability--that is, the space available on a ship and the
weight that can be carried--of amphibious ships consists of five
components:  troops, vehicles, cargo, helicopters, and landing craft. 

  Troop space is defined as the accommodations available to carry
     embarked troops. 

  Vehicle space is defined as the quantity of square feet available
     to carry vehicles such as tanks, amphibious assault vehicles
     (AAV), and trucks. 

  Cargo space is defined as the quantity of cubic feet available to
     carry cargo such as food, water, and ammunition. 

  Helicopter space is defined as the number of landing spots on the
     flight deck or in the hangar deck. 

  Landing craft space is defined as the number of craft--such as
     landing craft, air cushion (LCAC)--that can be carried in the
     ship's well deck. 

The Navy currently operates five different types of amphibious ships. 
One type is the amphibious assault ship, also known as a big deck
ship, because it serves as a floating airfield for helicopters and
AV-8B Harrier jets.  There are three classes of this type of
ship--Amphibious Assault Ship (helicopter), known as the LPH;
Amphibious Assault Ship (general purpose), known as the LHA; and
Amphibious Assault Ship (multipurpose), known as the LHD. 

A second type of ship is the amphibious transport dock, known as the
LPD-4, that has secondary aviation support and carries vehicles,
cargo, and troops.  There is one class of this type.  A third type of
ship is the dock landing ship, known as the LSD, which performs
functions similar to the amphibious transport dock ships.  There are
three classes of this type--the LSD-36, LSD-41, and LSD-49.  A fourth
type of ship is the tank landing ship, known as the LST, which is
designed to allow vehicles to roll directly off the ship onto the
beach.  There is one class of this type.  A fifth type of ship is the
amphibious cargo ship, known as the LKA, which carries heavy
equipment and supplies.  There is one class of this type.  The Navy
plans to place a new ship in the fleet--the LPD-17--that would
replace three types of ships--the LPD-4, LST, and LKA--and the LSD-36
class of ship. 


--------------------
\2 A Marine expeditionary force consists of approximately 50,000
troops and the equipment and supplies to sustain it for up to 60
days. 


      MARITIME PREPOSITIONING AND
      AMPHIBIOUS FORCES
-------------------------------------------------------- Chapter 1:2.2

While some Marine expeditionary forces deploy on amphibious ships,
other Marines are transported by air and assemble with equipment and
supplies carried by maritime prepositioning force ships.\3 A maritime
prepositioning force can perform many of the same missions as an
amphibious force, such as reinforcing an amphibious assault after the
initial landing, or occupying or reinforcing an advanced naval base. 
Marines using this equipment and these supplies are not in the
initial amphibious assault waves because a secure environment is
required to unload the maritime prepositioning ships.  Therefore,
maritime prepositioning forces can be used as follow-on forces and
are not a substitute for amphibious assault forces. 

The maritime prepositioning force consists of a total of 13
commercial charter ships in three squadrons located in the
Mediterranean Sea
(4 ships), Diego Garcia in the Indian Ocean (5 ships), and Guam in
the Pacific Ocean (4 ships).  Each squadron's ships provide enough
ground combat equipment, combat support equipment, and sustainment
supplies to support a Marine expeditionary brigade (MEB).\4 The
equipment and supplies are prepositioned on the ships for 30 months
at a time.  Then, on a rotational basis, one ship at a time unloads
all its equipment and supplies for maintenance at Blount Island
Command in Jacksonville, Florida.  The equipment and supplies are
reloaded, and the ship sails back to its original location for
another 30-month deployment. 


--------------------
\3 Maritime prepositioning was developed in the 1980s, in part,
because of the Navy's limited amphibious lift capability. 

\4 An MEB consists of approximately 17,000 troops and the equipment
and supplies to sustain it for up to 30 days. 


      SHIP-TO-SHORE MOVEMENT
-------------------------------------------------------- Chapter 1:2.3

The landing force--troops and equipment--is transported to shore by
amphibious vehicles, landing craft, and aircraft.  The Marine Corps'
primary means of transporting troops on water is the AAV, which
converts from a water to a land vehicle.  The AAV provides mobility,
firepower, and armor protection for troops.  The Marine Corps
currently has 1,322 AAVs. 

The Navy and the Marine Corps use two different types of landing
craft--the LCAC and the landing craft, utility--to transport heavy
equipment such as tanks and artillery from ship to shore during an
assault.  These landing craft are also used to transport supplies and
troops.  LCACs are the primary heavy equipment craft used for the
surface assault.  They are high-speed (over 40 knots) amphibious
landing craft that use a cushion of air under their hulls to glide
over water, beach, land, and obstacles up to 4 feet in height.  The
LCACs can land on 70 percent of the world's beaches, whereas the
landing craft, utility can only land on 17 percent.  The Navy has 81
LCACs, with another 10 to be delivered by 1998, which will bring the
total to 91.  The Navy and the Marine Corps continue to use the
landing craft, utility, which is a World War II-type of flat-bottomed
craft.  These craft carry troops and equipment to the shore where
they beach, unload the payload, and retract off the beach.  Their
maximum speed is about
12 knots.  The Navy has 35 landing craft, utility. 

Troops and equipment are also transported from ship to shore by
aircraft.  The Marine Corps' current medium-lift helicopters--the
CH-46E and the CH-53D--are the primary troop transport aircraft.  The
CH-46E entered Marine Corps service in 1964 and has been out of
production since 1971.  The Navy procured 624 CH-46s for the Marine
Corps, but 382 have been lost, primarily in Vietnam, resulting in an
inventory of 242 CH-46s as of the start of fiscal year 1995.  To make
up for the reduced inventory of CH-46s, the Marines now use their
inventory of 52 CH-53D helicopters, even though they were originally
designed as heavy lift helicopters to primarily transport supplies
and equipment.  According to a Marine Corps official, the CH-53D
helicopters were first delivered to the Marine Corps in 1966 and have
been out of production since about 1971.  The Marines plan to replace
it with the MV-22 by 2015. 

In 1981, the Marine Corps replaced the CH-53D as the heavy lift
helicopter with the CH-53E.  At the end of fiscal year 1995, the
Marines had 146 CH-53Es to transport heavy equipment, such as
artillery, trucks, and light armored vehicles, from ship to shore and
retrieve crash-damaged aircraft, such as the AV-8B Harrier jet and
the CH-46E helicopter.  The CH-53E can also transport 55 troops per
helicopter. 


      SUPPORTING CAPABILITIES ARE
      CRITICAL TO AMPHIBIOUS
      ASSAULTS
-------------------------------------------------------- Chapter 1:2.4

In order for the Marine Corps and the Navy to conduct successful
amphibious operations, particularly amphibious assaults, certain
supporting capabilities are essential.  These include command and
control systems, mine countermeasures, and naval surface fire
support. 

An amphibious operation requires reliable command and control systems
that can operate in a hostile environment and provide communication
between all elements of the amphibious task force.  These
communication systems include those used by amphibious ships,
helicopters, and ground forces to control ship-to-shore movement,
assault vehicles and landing craft, naval surface fire support, and
tactical air operations. 

Naval mines can pose a significant threat in littoral environments. 
In an amphibious assault, mines must be cleared--particularly in
water less than 40 feet deep and on the beach--to bring troops and
equipment from ship to shore.  Mine countermeasures involve
preventing or reducing damage from mines, including hunting for and
clearing mines with various types of equipment. 

Navy surface combatant ships provide fire support for amphibious
operations.  They provide supporting firepower for amphibious
operations, including suppressing and destroying enemy air defenses
and artillery, delaying and disrupting enemy movement to oppose a
landing, and responding to calls by troops under attack during an
operation. 


   MARINE CORPS HAS DEVELOPED NEW
   AMPHIBIOUS WARFIGHTING CONCEPT
---------------------------------------------------------- Chapter 1:3

The Marine Corps plans to augment its current doctrine for amphibious
assaults with a new warfighting concept, called operational maneuver
from the sea (OMFTS).  Although the current doctrine includes
elements of maneuver warfare, amphibious assaults today would consist
of more attrition-style warfare\5 than the Marines would like to use
because its current equipment does not facilitate maneuver warfare. 
Because the planned new equipment and aircraft will increase
capabilities, the Marines can better incorporate maneuver warfare
concepts, which will allow them to exploit weaknesses or gaps in the
enemy's defenses and surprise the enemy. 



--------------------
\5 Attrition-style warfare involves direct confrontation with the
enemy where one force wears down the other and eventually defeats it. 


      CURRENT WARFIGHTING DOCTRINE
-------------------------------------------------------- Chapter 1:3.1

Under the Marine Corps' current warfighting doctrine, the mission
objective for amphibious operations is accomplished in stages.  The
first stage involves maneuvering the ships.  The second stage is
moving the landing force from the assembly area to the shore, known
as the ship-to-shore movement.  The third stage is to maneuver
ashore, including establishing a lodgement--a secured area of land
where combat power can be built up.  The lodgement is used as
maneuver space to conduct combat operations toward inland objectives,
as well as a base for building up combat power and sustainment
capability ashore.  Examples of mission objectives on land are to
free a city from enemy control, secure an airfield, or destroy a
communication facility held by the enemy. 

The current doctrine is, in large part, based on the capabilities of
the current equipment--such as the AAV and the CH-46E--responsible
for moving troops from ship to shore.  For example, due to the AAV's
slow-water speed (8 miles per hour), the current doctrine states that
AAVs should be launched from about 3 to 9 miles from shore to land
within 1 hour to (1) build up combat power ashore and (2) prevent the
troops' fighting capability from diminishing during travel time. 
Likewise, due to the CH-46E helicopter's constrained speed and range,
only relatively shallow insertions into enemy territory can be made
during the initial assault waves.  As a result of these capabilities,
amphibious ships are usually stationed no more than 25 miles from
shore, putting them at increased danger from antiship missiles,
according to Marine Corps officials. 


      NEW WARFIGHTING CONCEPT
-------------------------------------------------------- Chapter 1:3.2

Unlike the current doctrine for amphibious assaults, OMFTS is
designed to conduct an assault as a single, seamless maneuver from
the ships directly to the assigned objective.  OMFTS emphasizes
maneuver warfare more than current doctrine because new equipment and
aircraft--such as the advanced amphibious assault vehicle (AAAV) and
the MV-22--that the Marines and the Navy plan to procure and the LCAC
that the Navy is procuring will provide greater speed and
maneuverability and force the enemy to defend significantly more
shoreline.  Also, under OMFTS, amphibious ships would be stationed
approximately 25 to 50 miles offshore, or over the horizon, thereby
allowing the ships to stay out of some missiles' range and provide
more time to react to missiles that have a range of 25 miles or more. 
According to a Marine Corps official, OMFTS will become doctrine as
the Marines field the new equipment and aircraft needed to fully
implement it. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:4

The former Chairman, Subcommittee on Readiness, House Committee on
Armed Services, asked us to (1) review the status of the Marine
Corps' and the Navy's amphibious forces, (2) identify the changes the
Marine Corps and the Navy are planning to make to more effectively
conduct amphibious operations, and (3) identify what the planned
changes will cost and how they will affect future defense budgets. 

To review the status of the Marine Corps' and the Navy's amphibious
capability and related improvements, we interviewed knowledgeable
officials about amphibious capability at the Office of the Secretary
of Defense; the Joint Staff; Assistant Secretary of the Navy for
Research, Development, and Acquisition; the Chief of Naval
Operations; Navy, Atlantic Fleet; Navy, Pacific Fleet; Naval Air
Station, Patuxent River, Maryland; Naval Base, Norfolk, Virginia;
Naval Amphibious Base, Little Creek, Virginia; Naval Station, San
Diego, California; Marine Corps Headquarters; Marine Corps Combat
Development Command; Marine Corps Systems Command; Marine Corps
Forces, Atlantic; Marine Corps Forces, Pacific; Marine Corps Base,
Camp Lejeune, North Carolina; Marine Corps Base, Camp Pendleton,
California; Blount Island Command, Jacksonville, Florida; and
Military Sealift Command. 

We reviewed relevant documentation on the cost, schedule, and
capabilities of the current and planned ships, equipment, aircraft,
and systems.  We did not evaluate the cost estimates of the new
programs; instead, we reported the official estimates from the
services.  We also reviewed documents, such as the bottom-up review;
defense planning guidance; the Navy's and the Marine Corps' Forward
From the Sea, Operational Maneuver From the Sea, and amphibious
shipping plans; and cost and operational effectiveness analysis
reports. 

To determine the resources projected to be available in future
defense budgets, we interviewed officials and obtained funding
estimates from the Office of the Chief of Naval Operations and Marine
Corps Headquarters.  We also determined the proportion of Navy and
Marine Corps budgets allocated to amphibious operations by analyzing
DOD's 1996-2001 Future Years Defense Program (FYDP)--a database
providing DOD planning assumptions for those years.  To determine
funding trends for amphibious operations, we analyzed FYDP data from
1962 through 2001, which we converted to constant dollars to adjust
for inflation.  We focused on the development and procurement costs
for major amphibious capabilities, such as ships, medium-lift
aircraft, and amphibious vehicles. 

We also interviewed officials at three warfighting commands--
Atlantic, Pacific, and Central--to obtain their views on whether they
have sufficient amphibious capability to carry out their assigned
responsibilities. 

We conducted our review from February 1994 to September 1995 in
accordance with generally accepted government auditing standards. 


REPLENISHING AMPHIBIOUS SHIP
INVENTORY WILL BE EXPENSIVE AND
TAKE LONGER THAN PLANNED
============================================================ Chapter 2

As a result of the military downsizing and a Navy and Marine Corps
plan to accelerate the decommissioning of amphibious ships, the
amphibious fleet has been significantly reduced.  Carrying out this
plan would have resulted in retaining fewer amphibious ships than
needed to meet the 2.5 MEBs of amphibious lift required by the
defense planning guidance.  To restore lift to the required level,
the Navy and the Marine Corps developed a revised plan that includes
relying on seven ships in an inactive status.  However, Navy
officials believe that they may not be able to reactivate the ships
quickly. 

The Navy plans to procure 13 new amphibious ships at a cost of $10.8
billion.  The Navy's schedule for completing procurement of the ships
has slipped by 2 years.  The Congress, however, advanced the
procurement of 2 of the 13 new ships in the fiscal year 1996 DOD
Appropriations Act.  As the 13 new ships are phased in and older
ships are phased out, vehicle lift will reach 2.5 MEBs by 2009,
meeting the level directed by the defense planning guidance. 


   AMPHIBIOUS FLEET HAS BEEN
   SIGNIFICANTLY REDUCED
---------------------------------------------------------- Chapter 2:1

According to a Navy official, at the end of the Persian Gulf War in
1991, the amphibious fleet had 62 ships, but declined to 54 by 1993
as part of the military downsizing.  In August 1993, the Navy and the
Marine Corps agreed to accelerate the fleet downsizing to save money
and accelerated the decommissioning of 21 ships from fiscal years
1993 to 1995.\1 At the same time, the Navy took delivery of 4 new
ships it had ordered before 1993, changing the fleet's size from 54
to 37 ships during this period.  The Chief of Naval Operations and
the Commandant of the Marine Corps agreed in 1993 that temporarily
reducing amphibious lift was a prudent risk to provide funds for
modernizing the fleet by procuring the 12 LPD-17 amphibious ships. 
The Commandant said the plan was acceptable only if the LPD-17
procurement remained on schedule, and the Chief of Naval Operations
agreed. 

In 1990, the Navy and the Marine Corps established an amphibious lift
requirement of three MEBs to meet their forward presence and crisis
response missions.  In fiscal year 1992, due to fiscal constraints,
the FYDP established a goal of 2.5 MEBs.  The Secretary of Defense's
1995 defense planning guidance affirmed this fiscally constrained
2.5-MEB goal. 

As discussed in chapter 1, amphibious lift consists of five
components:  troops, vehicles, cargo, helicopters, and landing craft. 
Vehicle lift is important to transport tanks, armored vehicles,
artillery, and trucks, all of which are essential to establish combat
power ashore in an assault.  Vehicle lift is the only one of the five
components that fell short of 2.5 MEBs from fiscal years 1993 to
1995.  Vehicle lift which, according to a Navy official, stood at
2.90 MEBs at the end of the Persian Gulf War, declined to 2.56 MEBs
as the size of the amphibious fleet fell from 62 to 54 ships from the
end of the Gulf War to 1993.  As a result of the accelerated
decommissioning plan, vehicle lift declined further--to 1.88 MEBs--in
fiscal year 1995.  As discussed in the next section of the report,
the Navy developed a revised plan in August 1994, called the
amphibious enhancement plan, to rectify this decline. 

If the accelerated decommissioning plan had continued, vehicle lift
was scheduled to reach 2.48 MEBs by fiscal year 2009, virtually
meeting the defense planning guidance level of 2.5 MEBs.  (See fig. 
2.1.) The planned vehicle lift shortage between 1994 and 2009 would
have meant that the Navy and the Marines would not have had
sufficient lift to deploy all the equipment needed to fully support
2.5 MEBs. 

   Figure 2.1:  Projected Vehicle
   Lift Under Accelerated
   Decommissioning Plan

   (See figure in printed
   edition.)

Before the accelerated decommissioning plan, vehicle lift would have
remained at or above the 2.5-MEB level through 2007, then fallen
slightly below 2.5 MEBs, to 2.45 MEBs, in 2008 and 2009. 


--------------------
\1 Navy officials said they could not tell us how much money would
have been saved by accelerating the decommissioning of 21 ships
because the Navy did not retain the data. 


      NAVY DEVELOPED AMPHIBIOUS
      ENHANCEMENT PLAN TO ADDRESS
      VEHICLE LIFT SHORTAGE
-------------------------------------------------------- Chapter 2:1.1

The Congress has been concerned about the reduction in amphibious
lift.  The Senate report on the fiscal year 1995 National Defense
Authorization Act expressed concern about the reduction in amphibious
lift capability due to the retirement of amphibious ships. 
Subsequently, the Congress authorized the transfer of nine amphibious
ships to various foreign countries, and it made the transfers
conditional on maintaining amphibious lift capability for at least
2.5 MEBs.  As an interim measure to ensure this minimum lift
capability, the Navy developed the amphibious enhancement plan in
August 1994. 

The plan called for increasing vehicle lift from 1.88 MEBs at the
beginning of fiscal year 1995 to 2.62 MEBs by the end of fiscal year
1995.  The plan increases the number of ships in the amphibious fleet
by placing two previously decommissioned LKA ships in a reduced
operating status with the Military Sealift Command (which are planned
to be available within
5 days) and retaining seven ships--four LSTs and three LKAs--in an
inactive status, called maintenance category B, which are planned to
be available within 180 days of the order to reactivate them.  The
two ships scheduled to be with the Military Sealift Command are in
the process of being reactivated.  There has, however, been a delay
in implementing the plan.  The first ship is now scheduled to
complete reactivation in September 1996 and the second ship in
December 1996.  The other seven ships have been placed in maintenance
category B. 

Without the seven ships in the inactive status, vehicle lift would
stand at only 2.13 MEBs as of the end of fiscal year 1995 and the
highest level reached through 2008 would be 2.39 MEBs.  Figure 2.2
compares vehicle lift under the amphibious enhancement plan with and
without these seven ships.  According to a Navy official, it may be
difficult to reactivate the ships within 180 days because the Navy
has not reactivated ships in this category before.  In addition, Navy
officials indicated that the longer a ship remains inactive, the
longer it takes to reactivate, often because more extensive
environmental work has to be done and older systems need to be
replaced with newer systems.  In addition, officials said that the
180 days excludes the time needed to tow the ship to the shipyard (up
to
14 days). 

   Figure 2.2:  Vehicle Lift Under
   Amphibious Enhancement Plan
   With and Without Maintenance
   Category B Ships

   (See figure in printed
   edition.)

The Congress, in enacting the fiscal year 1996 DOD Appropriations
Act, funded two amphibious ships in fiscal year 1996 that the Navy
had postponed to later years.  A Navy official said that, by March
1996, the Navy will determine the impact of this change on the ships
that make up the amphibious enhancement plan and the Navy's ability
to meet the required 2.5 MEBs of amphibious lift. 


   NAVY HAD DELAYED PROCUREMENT OF
   13 AMPHIBIOUS SHIPS
---------------------------------------------------------- Chapter 2:2

To recapitalize (i.e., modernize) the amphibious fleet, the Navy
currently plans to buy 13 new ships--12 LPD-17s and 1 LHD-class big
deck ship, the LHD-7.  Because of budget constraints, and after the
accelerated decommissioning plan was agreed to, the Navy delayed each
ship's procurement date.  (See table 2.1.) According to a Navy
official, the Navy did not reassess the risk of delaying the LPD-17
production schedule. 



                               Table 2.1
                
                  Procurement Schedules for LPD-17 and
                  LHD-7 Ships Prior to Passage of the
                Fiscal Year 1996 DOD Appropriations Act


Fiscal year             Original\a     Current  Original\a     Current
----------------------  ----------  ----------  ----------  ----------
1996                             1                       1
1997
1998                             2           1
1999                             2
2000                             2           2
2001                             2           2                       1
2002                             2           2
2003                             1           2
2004                                         2
2005                                         1
======================================================================
Total                           12          12           1           1
----------------------------------------------------------------------
\a Procurement schedule at time of accelerated decommissioning plan. 

As previously mentioned, as part of the fiscal year 1996 DOD
Appropriations Act, the Congress provided funding for the first
LPD-17 ship and for the LHD-7 ship, 2 and 5 years earlier,
respectively, than the Navy's current procurement plan.  The lead
ship is now expected to be delivered in fiscal year 2002.  The 1996
DOD Appropriations Act did not affect the balance of the LPD-17
procurement schedule.  Each of the other 11 LPD-17s will be delivered
about 4 years after their respective procurement contract award
dates.  The last of the 12 LPD-17s is scheduled for delivery in 2009. 

According to a Navy official, the estimated cost to procure the 12
LPD-17 ships, starting in fiscal year 1996, is approximately $9.4
billion, with some eventual increase expected due to inflation.  By
March 1996, the Navy expects to know by how much the $9.4 billion
will increase.  The estimated cost to procure the LHD-7 is $1.4
billion.  The total cost of procuring the 13 ships is now estimated
at $10.8 billion (then-year dollars). 

As the 12 LPD-17 ships and the LHD-7 are phased into the fleet, the
Navy plans to phase out the 9 ships in the amphibious enhancement
plan.  As this process takes place, vehicle lift will fall slightly
below 2.5 MEBs in fiscal years 2007 and 2008, and then increase to
2.5 MEBs by fiscal year 2009, after all 13 new ships have entered the
fleet. 

The Navy is required to provide 12 amphibious ready groups for
forward presence, allowing one to be present in the western Pacific
Ocean, Indian Ocean, and Mediterranean Sea at all times.  According
to the Navy,
12 amphibious ready groups are needed to allow the Navy and the
Marine Corps to maintain their established personnel and operating
tempo targets.  At present, there are only 11 amphibious ready
groups, which creates a 19-day gap in coverage for the Central
Command's area of responsibility (South West Asia and West Africa),
during which the ability to respond to an emerging crisis would be
limited. 

In addition to providing vehicle lift, the 12 LPD-17s and the LHD-7
will contribute to having 12 amphibious ready groups.  The LHD-7 is
particularly important because there will only be enough big deck
ships for 11 amphibious ready groups until it enters the fleet as
scheduled in 2001. 


   MARITIME PREPOSITIONING FORCE
   IS AVAILABLE TO SUPPORT
   AMPHIBIOUS OPERATIONS
---------------------------------------------------------- Chapter 2:3

The equipment and supplies on the maritime prepositioning ships are
used for several purposes, including supporting responses to crises
and reinforcing an amphibious assault.  For example, in responding to
the crisis in Somalia, after the Marine expeditionary unit had
landed, ships from the prepositioning squadron in Diego Garcia were
sent to provide equipment and supplies. 

The Marine Corps considers maintaining the equipment prepositioned on
the ships to be a high priority.  As of July 1995, 97.8 to 100
percent of major items on the 13 ships, such as weapons and vehicles,
were considered ready for use.  Also, 91.1 to 100 percent of the
required equipment and supplies were available on the 13 ships.  The
availability of equipment and supplies is measured against the list
of items that the Marine Corps determines are most needed on the
ships. 

The size of the 13 ships limits the quantities of equipment and
supplies prepositioned to less than the Marine Corps believes it
needs.  This is because (1) some of the equipment has increased in
size, (2) the required quantities for some equipment have increased,
and (3) the Marine Corps believes it needs additional prepositioned
capabilities--such as an expeditionary airfield, a Navy mobile
construction battalion, a command element augment package, and a
fleet hospital.  The Marine Corps already has these equipment items,
so procurement funds will not be needed for them.  To preposition
these items, the Marine Corps said it needs three additional ships,
one for each squadron.  The Congress authorized up to three
additional ships and appropriated $110 million in fiscal year 1995 to
acquire and convert one ship. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 2:4

The Navy and the Marine Corps agreed to accept increased risk over
the next decade by reducing the amphibious fleet in the short term to
provide funds for long-term amphibious ship needs.  Reducing the
number of amphibious ships has reduced vehicle lift, a critical
component in total amphibious lift, to levels below what is called
for in the defense planning guidance.  The risk associated with this
temporary reduction was judged to be acceptable as long as LPD-17
procurement remained on schedule.  However, the Navy has delayed
procuring new amphibious ships because of budget constraints, which
has prolonged the period of risk. 

To address the decline in amphibious lift, the Navy and the Marine
Corps developed an amphibious enhancement plan.  Achieving the goals
of this plan depends, in large part, on reactivating seven amphibious
ships in a maintenance category requiring reactivation within 180
days.  Navy officials said that it may be difficult to meet this time
frame.  Therefore, the Navy and the Marine Corps may, for all
practical purposes, not be able to achieve the plan's goals. 


NAVY AND MARINE CORPS PLAN TO
MODERNIZE EQUIPMENT TO IMPROVE
AMPHIBIOUS CAPABILITY AND MORE
EFFECTIVELY IMPLEMENT OMFTS
============================================================ Chapter 3

To improve amphibious capability and more effectively implement the
new warfighting concept, OMFTS, the Navy and the Marine Corps plan to
modernize ship-to-shore and supporting equipment.  The modernization
includes procuring the AAAV and the MV-22 Osprey aircraft, as well as
improving supporting equipment for mine countermeasures, command and
control systems, and naval surface fire support. 


   MARINE CORPS PLANS TO REPLACE
   THE AAV WITH THE AAAV
---------------------------------------------------------- Chapter 3:1

The Marine Corps is developing the AAAV to replace the AAV as its
primary combat vehicle for transporting troops on land and from ship
to shore.  The AAAV must satisfy many operational requirements, which
will provide increased capabilities compared to the AAV and improve
the ship-to-shore movement, thus allowing the Marine Corps and the
Navy to more effectively implement OMFTS.  Table 3.1 compares
selected AAAV requirements with the AAV's current capabilities. 



                               Table 3.1
                
                Comparison of Selected AAAV Requirements
                    With AAV's Current Capabilities

Function                        AAAV requirement\a  AAV capability
------------------------------  ------------------  ------------------
Water speed                     23-29 miles per     6-8 miles per hour
                                hour

Cross-country land speed        Keep up with main   15-20 miles per
                                battle tank, which  hour
                                travels at about
                                30 miles per hour

Range on water                  65 miles            45 miles

Range on land                   300 miles           300 miles

Troop-carrying capacity         18 combat-          18 combat-
                                equipped troops     equipped troops

Survivability (armor            Survive 14.5mm      Can only survive
protection)                     bullets without     14.5mm bullets if
                                attaching enhanced  enhanced armor
                                armor plating to    plating has been
                                vehicle's hull      attached to
                                                    vehicle's hull

Lethality (main armament)       Defeat light        40mm and .50
                                armored combat      caliber machine
                                vehicles of 2005-   guns, which cannot
                                2025 time frame     defeat light
                                during day and      armored combat
                                night while moving  vehicles of today
----------------------------------------------------------------------
\a Because the AAAV is in an early development stage, we were not
able to assess whether its requirements will be met. 

The AAAV's required maximum water speed (23 to 29 miles per hour)
will make it much easier to implement OMFTS because AAAVs will be
able to transport troops the 25 miles from ship to shore in an hour. 
Marine Corps officials said the current AAV's 8-mile-per- hour water
speed makes implementing OMFTS extremely difficult and risky because
AAVs need 3 or more hours to travel 25 miles from ship to shore. 
Taking this long to reach shore would delay the buildup of combat
power ashore, increase the AAV's exposure to enemy fire, and degrade
the troops' combat effectiveness because of the adverse conditions in
the AAV's troop-carrying compartment. 

According to a Marine Corps official, to overcome the AAV's limited
water speed, the Marines have two primary options for transporting
troops in AAVs from ship to shore during an amphibious assault:  (1)
bring the amphibious ships carrying the AAVs within several miles of
the shore and let them swim in from there or (2) station ships 25 to
50 miles out to sea and bring AAVs in from there on LCACs.  Both
alternatives have drawbacks.  Bringing the ships close to shore
places them at greater risk from precision-guided missiles, aircraft,
boats, and mines.  Therefore, when a high enemy threat is present,
the Navy and the Marines plan to use LCACs to transport AAVs to
shore.  However, this diverts LCACs from their primary mission of
transporting heavy equipment, such as tanks and artillery, thus
decreasing the Marines' ability to build combat power ashore quickly
and counter enemy forces.  Because of the AAAV's 25-mile- per-hour
water speed, LCACs would not be needed to carry the AAAVs to shore. 

The Marine Corps has a requirement to procure 1,013 AAAVs.  Prior to
December 1994, the cost to develop and procure AAAVs was estimated at
$7.2 billion (then-year dollars).  Due to budget constraints, DOD
reduced AAAV funding in the FYDP by $189 million in December 1994. 
As a result, the Marine Corps extended the demonstration and
validation phase 22 months and delayed procurement by 2 years, which
increased the program's cost by $456 million, to $7.6 billion.  As a
result, low-rate initial production has been delayed from fiscal year
2003 to 2005; initial operational capability from fiscal year 2006 to
2008; and full operational capability--fielding all required AAAVs to
the active assault amphibian battalions and the maritime
prepositioning squadrons--from fiscal year 2012 to 2014. 

Due to the AAAV schedule delays, the Marines must use the AAV longer
than planned.  Although the AAV's readiness ratings are acceptable,
according to a Marine Corps official, the AAV's maintenance costs are
increasing.  For example, depot-level maintenance is now needed every
4 years, 400 hours, or 4,000 miles, whereas, it used to be every 6
years, 600 hours, or 6,000 miles.  Therefore, to ensure that the AAV
can continue to operate safely and effectively until the AAAV is
delivered, the Marine Corps is considering upgrading the AAV with a
service life extension program.  If the extension program is not
implemented, depot-level maintenance is projected to be needed even
more often--every 3 years, 300 hours, or 3,000 miles. 

If approved, the service life extension program, which would start in
fiscal year 1998 and end by fiscal year 2001, would include replacing
the engine and suspension and rebuilding other parts to improve
reliability, maintainability, and readiness.  The program is
estimated to cost $473 million--$243 million to procure the engine
and suspension and $230 million in labor to rebuild the vehicle and
procure other parts.  The Marines believe the program will allow
depot-level maintenance to return to once every 6 years, 600 hours,
or 6,000 miles, which would result in spending $933 million less than
currently estimated for operations and maintenance in fiscal years
1998 through 2010.  Therefore, the Marine Corps believes the program
would result in net savings of $460 million from fiscal years 1998 to
2010.  Despite the substantial savings, the Marines are not sure that
they will implement the program because it requires spending $473
million by fiscal year 2001, a 4-year period, whereas, the $933
million for depot-level maintenance is spread out over a 13-year
period. 


   MV-22 AIRCRAFT PLANNED TO
   REPLACE EXISTING MEDIUM-LIFT
   HELICOPTERS
---------------------------------------------------------- Chapter 3:2

The Marine Corps plans to replace its CH-46E and CH-53D medium-lift
helicopters with the MV-22 Osprey tilt-rotor aircraft.  According to
the Marine Corps, the MV-22's improved capabilities will allow the
Marines to implement OMFTS more effectively and with less risk. 
Table 3.2 compares selected MV-22 requirements with the CH-46E's
current capabilities.  The Navy and the Marine Corps plan to procure
425 MV-22s at an estimated cost of $36.5 billion (fiscal year 1996 to
completion in then-year dollars).  The Navy plans to procure the
aircraft over a 25-year period, primarily due to the $1 billion per
year funding cap that DOD placed on the program.  Production of the
MV-22 is scheduled to begin in fiscal year 1997.  The Marine Corps
plans to have initial operational capability in fiscal year 2001. 
Full operational capability is planned for fiscal year 2018. 



                               Table 3.2
                
                Comparison of Selected MV-22 Operational
                    Requirements With CH-46E Current
                              Capabilities

                        Marine Corps minimum    CH-46E current
Function                requirements (MV-22)    capabilities\a
----------------------  ----------------------  ----------------------
Cruise airspeed         240 knots               110 knots

Internal payload        24 troops or 8,000      9 troops or 1,700 lbs.
capacity                lbs. of cargo           of cargo

External payload        10,000 lbs.             4,000 lbs.\b
capacity

Mission radius          200 nautical miles      75 nautical miles
with internal payload

Mission radius with     50 nautical miles       75 nautical miles
external payload

Refueling               Capable of being        Cannot be refueled in
                        refueled in flight      flight

Self-deployability      2,100 nautical miles    None
                        with one refueling in
                        flight

Range                   1,200 nautical miles    236 nautical miles\c
----------------------------------------------------------------------
\a The current capabilities are less than the original capabilities
because of the weight restriction imposed on the helicopter. 

\b The maximum average external payload that can be carried depends
on factors such as the outside ambient temperature, altitude,
humidity, and wind speed and direction. 

\c Some aircraft have external fuel tanks that extend the range to
411 nautical miles, but reduce the payload that can be carried. 

The MV-22 is a tilt-rotor, multimission aircraft, currently being
developed, which is designed to take off and land vertically like a
helicopter and fly like a fixed-wing aircraft.  The MV-22's missions
include transporting Marines in the initial and follow-on stages of
an amphibious operation, transporting supplies and equipment,
evacuating casualties, and tactical recovery of aircraft and
personnel. 

The MV-22's greater speed will provide more maneuverability; build up
combat power ashore more quickly because it carries more Marines per
aircraft; and allow amphibious ships to be stationed further out to
sea, such as 50 miles, because of its longer mission radius.  For
example, the MV-22's required mission radius is 200 nautical miles
versus the CH-46E's capability of 75 nautical miles.  If aircraft
were launched from 50 miles out to sea, the enemy would have to
defend a significantly greater land area against the MV-22 because of
its greater mission radius and about three times the length of
coastline than it would if the Marines used the CH-46Es.  Figure 3.1
illustrates how much more area the enemy would have to defend if the
Marines were to use the MV-22 versus the CH-46E. 

   Figure 3.1:  Comparison of
   Mission Radius With Internal
   Payload of the MV-22 and the
   CH-46E Launched From 50
   Nautical Miles at Sea

   (See figure in printed
   edition.)

To ensure that the CH-46E continues to fly safely and effectively
until it is replaced by the MV-22, the Marine Corps plans to
institute an upgrade program and may institute up to two others,
which could cost up to $1.2 billion.  The CH-46E has been out of
production for over 20 years and requires additional effort to keep
it flying safely.  Nevertheless, the CH-46E's readiness ratings
remain high. 

According to a Marine Corps official, if all three upgrade programs
are implemented, they are expected to restore the aircraft to its
original capability, increase its service life, and keep it safe for
flying until 2018, when the MV-22 is fully operational.  None of the
planned programs will increase the helicopter's capability beyond
what it was originally.  According to the Marine Corps, without at
least the planned upgrade and one of the other two upgrades under
consideration, the helicopters will begin to be taken out of service
starting in 2010, because they will no longer be safe to fly. 
Although the CH-53D helicopters are almost as old as the CH-46Es, the
Marine Corps has no plans to upgrade them. 

The three programs that may be necessary to keep the CH-46E flying
safely and effectively are the dynamic component upgrade, super-
scheduled depot-level maintenance, and service life extension.  The
Marine Corps has decided to implement the dynamic component upgrade. 
It is conducting a service life assessment of the CH-46E to determine
if it needs to do the super-scheduled depot-level maintenance and/or
the service life extension program.  The cost of the assessment is $3
million and is scheduled to be completed by July 1996.  Table 3.3
describes the three upgrade programs. 



                               Table 3.3
                
                        CH-46E Upgrade Programs

                    (Then-year dollars in millions)

Program     Cost\a  Start     Complete  Description
---------  -------  --------  --------  ------------------------------
Dynamic     $160.2  12/95     9/99      Replace rotor head, drive
component                               system, transmission and rotor
upgrade                                 controls

Super-       145.2  Undecide  Undecide  Extend service life of
scheduled           d         d         fuselage by 3.5 years
depot-
level
maintenan
ce

Service      895.4  Undecide  Undecide  Extend service life of
life                d         d         fuselage by 20 to 25 years
extension

======================================================================
Total      $1,200.
                 8
----------------------------------------------------------------------
\a Based on 242 CH-46E aircraft. 

From 1989 to 1994, the average CH-46E maintenance hours per flight
hour increased by about 50 percent.  Also, because of problems with
the shafts in the drive systems, the Navy now requires a mandatory
maintenance inspection every 10 hours in peacetime and wartime and
restrictions on the weight that a CH-46E can carry.  The dynamic
component upgrade program will replace the rotor heads, drive
systems, and other related parts on each helicopter, which will
eliminate the 10-hour maintenance inspection and weight restriction. 
The program is fully funded and is scheduled for fiscal years 1996
through 1999.  At a cost of $662,000 per aircraft, the total cost for
242 aircraft is $160.2 million. 

The Marine Corps will decide whether the super-scheduled depot- level
maintenance program and/or service life extension program are needed,
based on the service life assessment, as well as the MV-22's delivery
schedule.  The sooner the MV-22 is delivered to the squadrons, the
fewer CH-46Es that will need to undergo either of these two upgrade
programs.  The super-scheduled depot-level maintenance program may be
needed to extend the service life of the aircraft's fuselage by 3.5
years.  At a cost of about $600,000 per aircraft, the program's total
cost would be $145.2 million.  The service life extension program may
be needed to extend the life of the aircraft's fuselage by 20 to 25
years.  The estimated cost of the program is $3.7 million per CH-46E. 
If all 242 helicopters undergo a service life extension, the total
estimated cost would be $895.4 million. 


   NAVY AND MARINE CORPS EFFORTS
   TO IMPROVE SUPPORTING EQUIPMENT
---------------------------------------------------------- Chapter 3:3

The Navy and the Marine Corps are taking actions to improve the
supporting equipment needed for amphibious assaults--including mine
countermeasures, command and control systems, and naval surface fire
support.  Because mines can be a significant problem for an assault,
the Navy has initiated efforts to improve its mine countermeasures
capability since the Persian Gulf War.  The Navy and the Marine Corps
are procuring improved communication systems to support amphibious
operations because current systems lack some of the needed
capabilities.  The Navy plans to upgrade its 5-inch gun and develop a
precision-guided munition to provide much greater range than the
current gun. 


      NAVY IS DEVELOPING
      SHALLOW-WATER MINE
      COUNTERMEASURES
-------------------------------------------------------- Chapter 3:3.1

Mines can be a significant deterrent to amphibious assaults because
they are hazardous to amphibious ships and landing craft and could
prevent ships from getting close enough to shore to launch the
assault force and fire their guns to support the assault.  Studies
done for the Navy indicated that shallow-water mine countermeasures
need significant improvement and identified this as a high priority. 
Available capabilities for use in water less than 30 feet deep
include Navy special forces swimmers and explosive ordnance disposal. 
According to Marine Corps officials, until additional mine
countermeasures capabilities are provided, conducting amphibious
assaults in a heavily mined area would place troops and equipment at
risk. 

During the Persian Gulf War, the mine threat contributed to the
decision not to conduct an amphibious assault.  Mine countermeasures
were principally needed to clear a path to the Kuwaiti coast for
naval gunfire support and a possible amphibious assault.  The
amphibious task force was deployed and prepared to conduct an
amphibious assault.  However, clearing the Iraqi mines to prepare for
an assault was estimated to take
10 to 14 days.  This was one of the reasons that the U.S.  Central
Command decided not to conduct the assault. 

After the Persian Gulf War, the Navy emphasized improving
shallow-water mine countermeasures and issued a mine warfare plan
that identified providing efficient, effective, and speedy mine
countermeasures in shallow water and on the beach to support
amphibious assaults as having great urgency.  Also, the Marine Corps
and the Navy are working on a concept paper that will stress mine
detection and avoidance, while efforts are continuing to develop
improved capability to clear mines. 

In 1991, the Navy began a program for clearing shallow-water mines
and beach obstacles.  The program's projected funding from fiscal
years 1996 through 2001 is $179 million for research and development
and $85 million for procurement.  Several projects are planned to
start procurement by 2000, including line demolition charges and
distributive explosive technology (i.e., nets) to clear mines and
light and medium obstacles.  Others are currently in development, and
procurement is not planned to begin until after 2000.  Examples
include an advanced, lightweight mine sweeping system and a system to
breach heavy obstacles in the surf and on the beach.  These projects
will take additional time to complete because more development work
is needed to obtain the best approaches and technologies.  The Navy
is also considering buying modularized kits that can be mounted on
LCACs to allow them to carry the new shallow-water equipment and is
focusing its development projects toward using this equipment from
LCACs. 


      IMPROVED COMMUNICATION
      SYSTEMS FOR COMMAND AND
      CONTROL ARE BEING PROCURED
-------------------------------------------------------- Chapter 3:3.2

The Navy and the Marine Corps are procuring improved communication
systems to support amphibious operations because current systems lack
some of the needed capabilities.  These capabilities include systems
that are compatible with each other and that can communicate over the
horizon.  However, DOD officials said they have been able to work
around these limitations.  Since the Persian Gulf War, some
improvements have been fielded.  Because an amphibious assault is
complex and requires significant coordination and OMFTS requires
over-the-horizon capability, current communication systems would
increase the risk of an assault to troops and equipment. 

The Navy is upgrading communication capabilities on surface ships,
including amphibious ships.  The Navy is

  providing satellite communication to ensure reliable global
     communication to and from flagships, including LHAs and LHDs;

  procuring improved high-frequency radios that allow over-the-
     horizon communication, as well as provide a backup to satellite
     communication;

  acquiring a shipboard single channel ground and airborne radio
     system (SINCGARS), which is the same radio the Marines use, to
     provide ship-to-shore communication; and

  buying a relay to be flown on helicopters that will allow
     communication over the horizon using SINCGARS. 

The planned procurement costs for these systems is about $101 million
from fiscal years 1996 to 2001. 

From 1996 to 2001, the Marine Corps plans to spend about $269 million
to procure SINCGARS, microcomputers for tactical combat, position
location reporting systems, and advanced field artillery tactical
data systems.  SINCGARS will be the Marines' primary equipment for
battlefield communication for command and control and fire support
because it (1) improves voice and data communication capability on
the ground, (2) allows the Marines to communicate between ship and
shore with the Navy's SINCGARS equipment, and (3) is compatibile with
Army and Air Force equipment. 


      NAVY PLANS TO IMPROVE
      SURFACE FIRE SUPPORT
-------------------------------------------------------- Chapter 3:3.3

The Navy has 5-inch guns on its destroyers and cruisers that can
provide fire support for amphibious assaults.  In 1992, the Navy
decommissioned the last of its battleships, which had 16-inch guns,
providing a 26-mile maximum range.  Because the current 5-inch guns
have a 13-mile maximum range, the Navy has to bring its surface
combatant ships closer to shore in order to reach the targets. 
However, bringing the ships closer to shore increases their exposure
to missiles, aircraft, boats, and mines.  In addition, because the
5-inch gun fires about a 70-pound shell, whereas, the 16-inch gun
fired shells up to 2,700 pounds, the 5-inch gun shell does not have
the explosive power of the 16-inch gun shell.  Due to the limitations
of the 5-inch gun, the Navy plans to use tactical aircraft to provide
fire support for amphibious assaults. 

We recently reported on the Navy's surface fire support program.\1

The Navy plans to upgrade its 5-inch gun and develop a precision-
guided munition with an effective range of 41 to 63 nautical miles,
which will allow the ships to remain further out to sea.  The Navy
plans to field the upgraded gun from fiscal years 2001 to 2006 on 18
new destroyers built during that time and one other destroyer or
cruiser.  The 5-inch guns on existing destroyers and cruisers may
also be upgraded.  The Navy included $270 million in the FYDP for
fiscal years 1996-2001 for research and development for the upgraded
5-inch gun and precision-guided munition. 


--------------------
\1 Naval Surface Fire Support:  Navy's Near-Term Plan Is Not Based on
Sufficient Analysis (GAO/NSIAD-95-160, May 19, 1995). 


   CONCLUSIONS
---------------------------------------------------------- Chapter 3:4

The Marine Corps has the amphibious assault vehicles, aircraft, and
supporting equipment necessary to conduct amphibious assaults and
other operations.  Because of the equipment's operational
limitations, the Navy and the Marine Corps are modernizing it to
reduce the risk of conducting such operations.  Although the planned
modernization will require large capital investments, without the
entire amphibious package, which is greater than the sum of the
individual components, the risk of an assault would not be reduced as
much as it could be. 


AMPHIBIOUS PROGRAMS WILL REQUIRE A
LARGER SHARE OF PROCUREMENT
BUDGETS FOR MANY YEARS
============================================================ Chapter 4

The projected costs for major amphibious programs will be $58 billion
over the next 25 years and will require increased proportions of Navy
and Marine Corps procurement budgets.  Amphibious programs are
competing with other Navy and the Marine Corps procurement programs,
as well as other services' programs.  We found that the funding
projected to acquire amphibious ships, aircraft, and vehicles will
take a much larger proportion of procurement funding than has been
the case for most of the last
40 years. 

Acquiring amphibious ships is projected to require substantial shares
of the shipbuilding budget until 2005.  There is more than a
$16-billion gap between the projected budget and the estimated cost
of all ships planned to be built from 2002 to 2005.  Procuring the
MV-22 is projected to require about 10 percent of the Navy's aircraft
procurement budget for fiscal years 1997 to 2001 and is likely to
require substantial shares of the budget for many years after 2001. 
We estimate that the Marine Corps procurement account would have to
almost triple over the present level to fund the AAAV when
procurement begins late in the next decade. 


   THREE MAJOR SYSTEMS ESTIMATED
   TO COST
   $58 BILLION
---------------------------------------------------------- Chapter 4:1

The remaining projected cost to develop and buy the new amphibious
ships, AAAV, and MV-22 is $58 billion.  (See table 4.1.) This
investment is planned to occur over the next 25 years, which means
that the cost per year averages $2.3 billion.  The Marine Corps
believes this is a modest annual investment to maintain this
capability because it represents less than 1 percent of the current
annual defense budget. 



                               Table 4.1
                
                 Cost to Complete Acquisition of Major
                           Amphibious Systems

                    (Then-year dollars in billions)

                              Quantity  Developmen  Procuremen   Total
Program                        planned      t cost      t cost    cost
--------------------------  ----------  ----------  ----------  ------
Amphibious ship                     13       $ 0.1       $10.8   $10.9
AAAV                             1,013         0.9         6.7     7.6
MV-22                              425         2.5        36.5    39.0
======================================================================
Total                                         $3.5       $54.0   $57.5
----------------------------------------------------------------------
Source:  Developed by GAO from December 1994 selected acquisition
reports and other information provided by DOD. 


   CONGRESSIONAL BUDGET OFFICE
   REPORTS ON BUDGET SHORTFALLS
---------------------------------------------------------- Chapter 4:2

In 1994, the Congressional Budget Office analyzed each of the
military services' budget plans through 2010.  Using the 1999 budget
year in the fiscal years 1995-1999 FYDP as a benchmark, it projected
a total shortfall for all the services of $11 billion to $25 billion
per year from 2000 to 2010.  Since this analysis, DOD has issued the
1996 FYDP, covering fiscal years 1996 through 2001, which increased
projected funding levels.  For example, for fiscal year 1999, the
projected budget increased from $253.8 billion in the 1995 FYDP to
$257.3 billion in the 1996 FYDP.  However, the Navy faces large
procurement requirements in the future because of low procurement
budgets in recent years, according to a Congressional Budget Office
official. 

In its November 1994 report on the Navy,\1 the Congressional Budget
Office observed that three key factors influence the Navy's long-term
costs:  the number of forces (ships and aircraft); plans for
modernizing the forces with new weapons; and the expected cost of
those weapon systems.  Although the size of the fleet is declining,
the Navy is still developing expensive new ships and aircraft that it
will begin purchasing in the late 1990s and the next decade.  This
has resulted in a gap between the projected Navy budget and the
amount that the Congressional Budget Office estimated would be needed
for the 330-ship Navy.  Using the 1999 fiscal year in the 1995 FYDP,
it projected a shortfall of $4 billion to $13 billion per year from
2000 through 2010--5 to 15 percent of the Navy's budget. 


--------------------
\1 The Costs of the Administration's Plan for the Navy Through the
Year 2010, Congressional Budget Office (Nov.  1994). 


   AMPHIBIOUS PROGRAMS WILL
   REQUIRE LARGER PROPORTION OF
   PROCUREMENT FUNDS
---------------------------------------------------------- Chapter 4:3

The major amphibious programs will require a larger proportion of the
Navy's and the Marine Corps' projected procurement budgets than has
been the case for most of the last 40 years.  The percentage of
funding needed for amphibious programs will increase greatly toward
the end of the 1996-2001 FYDP period, requiring more than 10 percent
of the fiscal years 2000 and 2001 budgets for the first time since
1966.\2


--------------------
\2 We examined the period from fiscal year 1962 to 2001, using 1962
as the starting point because the FYDP database that DOD provided us
covers the period from 1962 through 2001. 


      AMPHIBIOUS SHARE OF NAVY
      SHIPBUILDING WILL INCREASE
      SIGNIFICANTLY
-------------------------------------------------------- Chapter 4:3.1

As discussed in chapter 2, the Navy plans to procure two amphibious
ships in fiscal year 1996, two in fiscal year 2000, and two in fiscal
year 2001.  These ships are funded from the shipbuilding and
conversion portion of Navy procurement funds.  For fiscal year 1996,
the proportion of the Navy shipbuilding procurement account that is
used to buy amphibious ships would be the highest percentage since at
least fiscal year 1962.  Procurement funds budgeted for amphibious
ships through fiscal year 2001 are projected to reach 24 percent of
the Navy's shipbuilding budget in 2001.  (See fig.  4.1.)

   Figure 4.1:  Proportion of Navy
   Shipbuilding Procurement Funds
   Spent for Amphibious Programs

   (See figure in printed
   edition.)

Source:  Developed by GAO from historical FYDP data beginning in
fiscal year 1962, the fiscal years 1996-2001 FYDP, and the fiscal
year 1996 DOD Appropriations Act. 

The funding budgeted through fiscal year 2001 includes 6 of the 13
amphibious ships the Navy plans to procure from fiscal years 1996 to
2005.  The Navy plans to procure two additional amphibious ships in
each of fiscal years 2002, 2003, and 2004, and one amphibious ship in
fiscal year 2005.  Navy shipbuilding procurement funding is projected
to increase from fiscal year 2001 to 2002, primarily to fund the
acquisition of an aircraft carrier, and then decline to lower levels. 
However, the Navy estimates that the building costs planned in these
years will be substantially higher than its projected shipbuilding
budget.  (See fig.  4.2) The gap between the two for fiscal years
2002 through 2005 totals $16.5 billion.  This suggests that funding
for the ships between these years will continue to require
substantial shares of the Navy shipbuilding budget and will pose a
challenge because of other competing ship procurements. 

   Figure 4.2:  Comparison of
   Long-Range Estimates for
   Shipbuilding Procurement
   Funding and Estimated
   Shipbuilding Costs (Fiscal
   Years 2002-2005)

   (See figure in printed
   edition.)

Source:  Navy Programming and Surface Warfare Offices. 


      MV-22 SHARE OF NAVY AIRCRAFT
      FUNDING WILL ALSO INCREASE
      SIGNIFICANTLY
-------------------------------------------------------- Chapter 4:3.2

The MV-22 is funded from the aircraft portion of Navy procurement
funds.  Since fiscal year 1962, the portion of the Navy procurement
budget spent on amphibious aircraft has exceeded 7.5 percent only
twice and was below 5 percent in most years.  (See fig.  4.3.)
Beginning in fiscal year 1997, funding for the MV-22 is projected to
be about 10 percent of the Navy's aircraft procurement budget through
2001. 

   Figure 4.3:  Proportion of Navy
   Aircraft Procurement Funds
   Spent for Amphibious Programs

   (See figure in printed
   edition.)

Source:  Developed by GAO from historical FYDP data beginning in
fiscal year 1962 and the fiscal years 1996-2001 FYDP. 

As discussed earlier, the Navy plans to procure the MV-22 aircraft
over a 25-year period.  Navy aircraft procurement funding is
projected to decline after fiscal year 2000 and not reach fiscal year
2000 levels again until fiscal year 2007.  This suggests that funding
the MV-22 will continue to require substantial shares of Navy
aircraft procurement for many years in addition to funding other
aircraft procurements, including the F/A-18E/F aircraft. 


      MARINE CORPS NEEDS TO ALMOST
      TRIPLE PROCUREMENT FUNDING
      FOR THE AAAV
-------------------------------------------------------- Chapter 4:3.3

The two largest categories in the Marine Corps procurement
appropriation are currently (1) communication and electronics
equipment and (2) ammunition.  From fiscal years 1996 through 2001,
less than 3 percent of the Marines Corps' procurement budget each
year is planned for major amphibious programs because amphibious
vehicles are not now being procured.  (See fig.  4.4.)

The Marine Corps procurement budget is projected to double from $459
million in fiscal year 1996 to $918 million in fiscal year 2001. 
However, more procurement funding will be needed when AAAV
acquisition begins late in the next decade.  Cost estimates show that
$874 million (constant dollars) will be required in 2008 and over
$700 million will be required in each of the three following years. 
We estimate that the procurement budget would have to almost triple
over the present level--from $459 million to $1.3 billion in fiscal
year 2008 and to $1.2 billion in fiscal years 2009 to 2011--to allow
the Marines to procure the AAAV, while continuing to procure other
required items, such as ammunition.  The Marines believe they need
$1.1 billion to $1.5 billion per year (in constant dollars) to
recapitalize the force, based on projected force structure and
equipment needs. 

   Figure 4.4:  Proportion of
   Marine Corps Procurement Funds
   Spent for Amphibious Programs

   (See figure in printed
   edition.)

Source:  Developed by GAO from historical FYDP data beginning in
fiscal year 1962 and the fiscal years 1996-2001 FYDP. 


   AMPHIBIOUS PROGRAMS WILL
   COMPETE FOR FUNDING WITH OTHER
   MAJOR DOD PROGRAMS
---------------------------------------------------------- Chapter 4:4

Navy and Marine Corps amphibious programs will compete with many
other major defense programs for procurement funding.  For example,
major procurements include the Air Force's F-22 advanced tactical
fighter and C-17 cargo aircraft; the Army's Apache Longbow helicopter
and Javelin missile system; and the Navy's new attack submarine and
F/A-18 E/F Hornet combat aircraft.  Table 4.2 shows the estimated
procurement costs for some of DOD's major programs and years to
complete from 1996. 



                               Table 4.2
                
                Procurement Costs and Years to Complete
                      for Selected Major Programs

                    (Then-year dollars in millions)

                                             Completion       Years to
Program                                           costs       complete
----------------------------------------  -------------  -------------
Longbow Apache Helicopter                        $8,278             16
F/A-18 E/F Aircraft                              83,351             19
DDG-51 Destroyer                                 29,575             13
F-22 Aircraft                                    53,807             18
----------------------------------------------------------------------
Source:  Developed by GAO from December 1994 selected acquisition
reports. 

To increase funding for amphibious programs, three choices seem
plausible:  (1) increase Navy and Marine Corps procurement funding,
(2) spend less on other Navy or defense planned procurements or other
parts of the defense budget, or (3) implement some combination of the
first two choices. 

Both the administration and the Congress plan to increase future
defense funding.  The administration plans to increase overall
defense funding by $12.6 billion between fiscal years 1996 and 1999,
but plans to reduce procurement funding by $27 billion by
eliminating, reducing, or deferring to 2000 and beyond planned weapon
systems modernization.  In fiscal years 2000 and 2001, the
administration plans to increase procurement funding above the 1999
level. 

In the fiscal year 1996 concurrent budget resolution approved by the
Senate and House in June 1995, the Congress plans to increase defense
funding by $35.6 billion above the administration's plan between
fiscal years 1996 and 1999, in part, for the procurement of weapons. 
The budget resolution then envisions reducing defense spending $11.4
billion below the administration's plan in fiscal years 2000 and
2001.  Since the planned amphibious programs' procurement spans more
than 20 years, we believe that increases in the next few years may
benefit the planned procurement of some amphibious ships whose
procurement had been deferred, but reduced defense funding could
adversely affect planned procurement of the MV-22 aircraft and the
AAAV, as well as some of the amphibious ships whose procurement had
always been planned after fiscal year 2001. 

Within procurement funding, the administration examines its
priorities as it prepares each new defense budget.  As discussed
earlier in this report, planned procurement of amphibious ships and
the AAAV have been delayed as a result of budget decisions.  Other
decisions could have been made, however.  For example, we reported
that because the Air Force does not urgently need the F-22 aircraft
and the concurrency between development and production is high, the
Congress could choose to restrict production planned in fiscal years
1999 and 2000.\3 This would save $2.5 billion in those 2 fiscal
years.  We also reported that due to a variety of factors, the
Congress might consider canceling plans to buy the third Seawolf
submarine and defer acquisition of a new generation submarine to
2003.  This would save $8.6 billion between fiscal years 1996 and
2000.  These savings could be made available to fund other programs
or be taken out of the budget and so not add to the deficit. 


--------------------
\3 Addressing the Deficit:  Budgetary Implications of Selected GAO
Work for Fiscal Year 1996 (GAO/OCG-95-2, Mar.  15, 1995). 


   CONCLUSIONS
---------------------------------------------------------- Chapter 4:5

The Marine Corps and the Navy estimate that it will now cost about
$58 billion to modernize the amphibious force.  DOD's current FYDP
indicates that through fiscal year 2001, the Navy and the Marine
Corps plan to allocate a higher percentage of their procurement funds
for amphibious equipment than has been the case for most of the past
40 years.  Beyond fiscal year 2001, the Navy and the Marine Corps
will need to continue to allocate a large share of available
procurement funds for amphibious equipment to avoid delays.  This
could pose a challenge for the services because of the many programs
that will compete for procurement funds. 

If the Congress determines the amphibious capability requirements to
be valid and wishes to support the planned amphibious programs, three
options seem plausible:  increase Navy and Marine Corps procurement
funding; spend less on other Navy or other services' planned
procurements or other parts of the defense budget; or implement some
combination of the first two options.  These are the trade-offs that
the Congress and the senior DOD leadership will have to decide. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 4:6

DOD concurred with our draft report.  It suggested that because of
the dynamics of the planning, programming, and budgeting system and
congressional action, the charts in the report should clearly state
the source and date of data.  We agree and have added this
information. 

Regarding our discussion of the competition for funds, DOD stated
that programs we cite, such as the Navy's F/A-18E/F and the Air
Force's F-22, are not directly linked to the amphibious mission area
capabilities.  It also stated that major funding trade-offs across
service programs are made at the highest levels within DOD and that
DOD sees no basis for us to cite what it describes as apparently
arbitrary potential sources of funds.  We stated in this chapter that
the administration examines its priorities as it prepares each new
defense budget.  Our discussion regarding this matter is intended to
illustrate the choices available to DOD and the Congress and draws
from our past reports in identifying different decisions that could
be made. 




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================ Chapter 4


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Steven Sternlieb, Assistant Director
Alan M.  Byroade, Senior Evaluator


   LOS ANGELES OFFICE
-------------------------------------------------------- Appendix II:2

Joseph E.  Dewechter, Evaluator-in-Charge
Lorene Sarne, Evaluator
James Nolan, Evaluator

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