Bacon: All right. Let me start with a couple of announcements.
First, to bring you up to date on the military support for the firefighters in the West. We currently have more than 1,800 service members, active duty and Guard, helping to fight fires in the western part of the United States. As you know, the Army has sent -- active duty Army sent about 500 soldiers up from Fort Hood, and they're already engaged in fighting the fires. The Marines will send about 500 people tomorrow. I said to you on Tuesday that they were from -- they were going to come from Twenty-nine Palms. On Tuesday that was correct. Since then, a new unit has been assigned to this task. They've changed the unit. So this unit will come from Camp Pendleton. They'll move out tomorrow morning, and they should start arriving in Idaho Falls at about 8:30 a.m. Mountain Daylight Time tomorrow morning.
The flying fire trucks I told you about, the eight C-130s filled with bags of -- or tanks of fire retardant, have flown more than 383 hours, and that's 318 sorties, made 336 airdrops and delivered more than 7.7 million pounds of fire retardant chemicals since they've been on station. That's the latest on the fire-fighting support.
Second announcement, and last announcement, is that on Tuesday, a moment you've all been waiting for, we're going to announce the winners of the Yahoo! Fantasy Careers contest. As you remember, back in May we announced that we were working with Yahoo! to set up a Fantasy Careers contest whereby people could submit essays to each of the five services and the winners would then get to spend several days with that service. For instance, the winner of the Coast Guard contest will train with search-and-rescue swimmers. The winner of the Air Force contest will fly in some high-performance fighters. The winner of the Army contest will jump in a tandem jump with a Golden Knight, fly in a helicopter, do some other things. The winner of the Navy contest will land on a carrier and spend some time on a carrier and then, of course, fly off. And the winner of the Marine contest gets to go through Marine basic training -- I think a week or five days of Marine basic training. So we'll announce those winners next week.
We thought the contest was very, very successful. It generated a lot of interest and showed us the power of the Internet in terms of helping to support recruiting efforts.
With that, I'll take your questions.
Q: Any update on when the DRR [deployment readiness review] is going to go to Secretaries Gansler and Cohen?
Bacon: Well, it hasn't gone yet. I would anticipate it would go to the secretary in the next week or so. I said earlier that I anticipated the secretary would make his recommendation sometime next week. It could take longer than that. As we like to say about the NMD [national missile defense] program, it will be event-driven, not schedule-driven; that he will make his recommendation to the president probably some time before the end of the month.
Q: Would you keep us posted -- I mean, you're not going to have briefings later in the month, and may not come up on briefing here. Could you take the question and keep us posted on when it goes? I assume it'll go to Secretary Gansler first. Will he be briefed first and then he would brief the secretary, or how will that work?
Bacon: Well, briefing is an ongoing process, and there'll be -- it's also a somewhat evolutionary process in that there will be a lot of briefing, changes will be made, drafts will be written, new changes will be made. So I would anticipate it will take a little bit of time.
Q: By changes, Ken, you mean in the DRR or what the SecDef is going to recommend to the president?
Bacon: I think the whole process is a process of trying to pull together the best information, and then questions will be asked along the way, the questions will be answered; the answers will be incorporated, and at some point they'll say, "Eureka, we've got a good enough product to call the DRR, the Deployment Readiness Review." And that, then, will go to the secretary. The secretary, at that point, may have more questions, and there may be areas that he wants fleshed out, there may be areas that he wants explained. And so it could be a process that takes some time.
Q: Can you let us know when he gets the first draft?
Bacon: No. I'm not going to get into the business of telling you every time a new draft is written. And I may not even tell you when the final draft is sent up.
Q: Well, are you going to get into the business of letting us know why this happened?
Q: Are we going to get a briefing on that?
Bacon: Yes, we'll do that on Thursday. As I said on Tuesday, we plan to do it relatively soon, and the day is a week from today. So that's the current schedule.
Q: What is that you're doing?
Bacon: To explain finally why Integrated Test -- what happened in Integrated Flight Test 5.
Q: Next week?
Bacon: Thursday is what our current plan is, because we're doing the Yahoo! Fantasy Jobs contest on Tuesday, and I wouldn't want to have conflicting news.
Q: There's another report/study that you guys have been in the works for a long time, it's on this Defense Science Board and how do we help -- how do we assist the health of the defense industry.
Q: Dr. Gansler said April 10th I want just briefing charts so I can get this thing out the door fast. We're in August. Where is this thing at, from a status standpoint?
Bacon: That's a good question. I'll find out. I mean, it's somewhere in the system. But I think what you'll find is that good ideas don't have to wait to be sent forward in a report to be acted on, and I think that some of the ideas for helping the -- speed dealings between the department and defense contractors have probably been taking place. But I'll try to get you an update on that.
Q: Specifically, what's the status of the big recommendation to increase progress payment rates from 75 percent to 85 percent? That would have a material impact. Is that still an operative recommendation, or has that been abandoned because of cost considerations? I'd like you to take that for the record.
Q: During Secretary Cohen's briefing to the Senate Armed Service Committee, the hearing, he said that there was a necessity to have allied support. And recently the British have hinted a little opposition to that. Does that have any effect on his recommendation at all? Has he said anything about that?
Bacon: Well, I've read the same stories you've read in the paper. I don't think the British government has taken a view on support for NMD at this stage. Remember, the president has not made a decision on NMD, so there's really nothing for them to take a view on at this stage.
At some point, if President Clinton decides to go ahead with deployment of an NMD system, we would have to make upgrades to radar we have in England, and we would also have to make upgrades to a radar -- an early-warning radar we have in Greenland. So we would be consulting with our allies at that time. We've talked to them in general terms about the threat and about the architecture of the system we're thinking of. We've talked to them about our dealings with Russia and our efforts to amend the ABM Treaty, and those efforts continue. So we'll continue to be in close contact with our allies.
Q: I think we're tied up in semantics here again. The secretary's repeatedly said recently that the president is NOT going to make a decision on deployment but simply make a decision on whether or not to go ahead with contracts. And you've just said "if Clinton decides to go ahead and make a decision on deployment."
Bacon: Well, the president has -- he could decide, if he wanted to, I suppose, to stop the program, in which case we wouldn't have to talk with our allies. I'm not trying to suggest what the president's going to do or not going to do. But he has a range of options available to him.
And you're right -- what Secretary Cohen has talked about is a decision that would deal immediately -- most immediately with the Shemya radar in Alaska. But theoretically, the president has -- he can decide in the simplest terms to go ahead or not to go ahead. That's the simplest way to describe the decision he has to make. The technicality is that he -- a decision to go ahead would involve a decision to go ahead with the Shemya radar. He could decide to go ahead, to not go ahead, to go ahead but delay certain steps. I mean, those are among the options he'll be considering. And I don't mean to suggest in any way what decision he'll make.
Q: I want to go back just for a moment to the Yahoo fantasy contest.
Q: You mentioned that you were pleased with the success and -- (inaudible) -- the power of the Internet. Do you have any idea at this point how the Internet is turning out to be as a recruiting tool? I mean, do you have any idea whether more prospects, for instance, are visiting Internet recruiting sites as opposed to, say, walking in recruiting stations or --
Bacon: I don't. Those are very good questions for the people who will be briefing on Tuesday.
Q: At your last briefing, you said that you didn't yet have the recruiting statistics for July. Have those come in yet?
Bacon: No, I still don't have the final recruiting statistics for July.
Q: Does it appear -- can you say at this point whether it does, in fact, appear that all of the services will meet their recruiting goals by the end of the year to have the required end strength that they're looking for?
Bacon: Right now, the services believe they're on track, if current good news continues, to meet their end-strength goals by the end of the year. Meeting end-strength goals is a function of two things, retention and recruiting. To the extent that retention is higher than anticipated, they have to recruit less. And most -- I think that the Army, the Navy and the Marines so far are experiencing higher than anticipated retention. More people are choosing to stay in. They have to bring in fewer new people to fill gaps. The Air Force, I believe, is still running slightly lower than its retention goal as of June.
So all services have been working on ways to improve retention. I think that the pay raises that have gone into effect recently, as well as some of the other quality-of-life improvements, including for soldiers, sailors, airmen, Marines who have been in a while, the improvement in pensions, have all been incentives for people to stay in longer, to reenlist for new terms of service. That's helped retention.
At the same time, we've bolstered recruiting by adding recruiters, by increasing benefits, bonuses, in particular, education benefits. The Army had a press conference yesterday talking about some of their plans for improving education for soldiers in the Army. All of these have a cumulative effect. We're also in the process of improving our advertising, trying to make it sharper, more focused, and a better tool for attracting people into the military. All of these, I think, have a cumulative effect, and it seems to be working so far.
Q: And just to clarify one point, from what you said, is it the case, then, that the reason that the services met or exceeded their recruiting goals in May and June was because they were able to lower the goals because they didn't need as many recruits because of higher-than-expected retention?
Bacon: I don't know specific facts in terms of numbers, but certainly at least the Navy has lowered its recruiting goal as retention exceeded its plans or its projections. I don't know about the Army, but I would anticipate that that's the case.
So as I say, you have to look at both sides of the scale -- you have to look at retention as well as recruiting, and it's unfair only to look at recruiting because, of course, the number of people required to be recruited reflects retention.
Q: And one last thing. Do you know if this higher-than-expected retention trend is also true for the Reserves and the Guard? Or are we seeing a more difficult problem in keeping people in the Reserves?
Bacon: There have been some retention problems in the Guard and the Reserves, but I don't know the dimensions of them. I'll try to find out, or the briefer who will be here on Tuesday from Personnel and Readiness I think will be able to answer those questions. But the Guard and Reserve have been working hard on retention as well as on recruiting.
Q: Ken, Boeing today agreed to pay the Justice Department $54 million to settle two lawsuits involving defective gears on Chinook helicopters. Do you have any insight into whether the Army or the Pentagon are pursuing whether to administratively debar or suspend Boeing or the subcontractors, since the incidents involve five servicemen dying?
Bacon: I just learned of this settlement before coming in here. I have not had a chance to check with the lawyers to find out what their plans are, what their next step is.
Q: Would you take that question?
Q: Yeah, because normally the Army -- the services have procurement fraud task forces that monitor cases like this for appropriate administrative remedies. I assume that's happening in this case, if you could pursue that.
Bacon: Well, the settlement does call for about $54 million, as I understand, although a big chunk of that goes to the person who filed the fraud claim in the first place. But the rest will go to the Defense Department.
Q: On top of that, though, there's a procedure for looking at whether the companies are culpable from a negligence standpoint and should be either debarred or hit with an administrative sanction. That's the normal follow-up, and we'd like you to track that.
Bacon: Okay. Sure. We'll take that question.
Q: The USS Chancellorsville, a missile -- guided-missile vessel --
Q: -- is visiting China. Is this a new phase is cooperation in Sino-U.S. military relations? As a follow-up, I understand there's going to be a Chinese vessel, warships, visiting the U.S. Do you have any dates and places for that?
Bacon: Yeah. The visit of the Chancellorsville is taking place now. She arrived in China yesterday, China time, and she will depart on August 5th. It is the first visit by a U.S. Naval ship to a mainland port, that is, excluding Hong Kong, since 1998. So it's the first visit since the unfortunate, tragic and mistaken bombing of the Chinese Embassy during Operation Allied Force a little more than a year ago.
It is part of a military re-engagement program with China that involves mutual ship visits, and there will be some Chinese ships visiting, I think, ports in Honolulu and San Diego (sic) [Honolulu and Seattle], I believe, in -- I believe these are upcoming this year or next year. And we are also obviously increasing high-level contacts. Secretary Cohen recently came back from China. We have had -- Admiral Fargo is in China now, both in Beijing and then accompanying his ship in Qingdao, where the ship is visiting.
Q: On the Patriot radar tests in Ocean City and Wallops Island, you're ready to go ahead with that tomorrow, and feel that you have satisfied the few residents' concerns about the environmental impact?
Bacon: Well, this is a radar test. It's designed -- this -- what we're talking about here is a test of radars that would be possibly deployed in connection with the Patriot 3 missile. And it's part of a program designed to expand the radar capability and range -- primarily range, I believe -- of the PAC-3 radar. And as far as I know, we still plan to go ahead with that test.
Q: And again, of course, you're saying that your environmental studies show that it is not harmful to the people or animals in the area?
Bacon: Well, I believe that's to be the case. I mean, there's a lot of radar around, and this is just a -- to the best of my knowledge, there should be no impact available on the public. There have been -- there was a finding of no significant impact. And they're available -- you can get acopy right here of that finding, if you'd like to read through it. They're also available at the Ocean City Public Library, so anybody who wants to go in and read the basis on which we decided that there's no significant impact caused by the test is free to do that. We encourage people to do it.
Q: Just to be clear, this is a test of just the radar; there won't be a missile test involved?
Bacon: No, no, it's not a missile test. It's a test of radar capabilities. And it's using radars at Wallops Island, Virginia, and Ocean City, Maryland, airport, and on board an Aegis cruiser at sea. And as I said, it's designed to help us come up with radars that are better able to detect and track threatening aircraft or missiles at longer ranges than we currently acquire them. So the PAC-3 missile can be vectored toward those enemy attackers.
Q: Is there a simple way to describe how the test takes -- what's involved in the test, or is it something that -- I mean, how do you test the radar to see -- I mean, is there --
Q: Is the -- (inaudible) --
Bacon: Yeah, there would be -- I believe that there will be objects that they will attempt to track. I don't know whether they're -- they --
Staff: Lear jets.
Bacon: Lear jets. They're going to see if they can track down Lear jets from, I think, progressively farther away is how I understand it --
Q: (Off mike.)
Bacon: -- looking for ways to increase the range of the radar.
Q: It's a cooperative engagement capability test, right? One of their CEC tests, the network radars?
Bacon: Well, it's certainly an engagement capability test.
Q: And how do these radars differ from civilian radars that you might find at the airport -- (inaudible)? They're more powerful? They --
Bacon: Well, the Aegis radar is a phased array radar, as you know. And one of them is an airport radar. The one at the Ocean City airport is a standard radar (sic) [An Army Patriot radar will be temporarily set up at the Ocean City airport.] And I don't know what type of radar is at Wallops Island. [The radar to be used at Wallops Island is a permanent, shore-based Navy radar.]
Bacon: Two Lear jets flown by the Navy will fly in military range area over the Atlantic and will act as target objects for the radar network to detect and track. And there will also be a Navy P-3 Orion flying in the area to relay information back.
Q: Change of subject?
Q: I take it that the Pentagon doesn't intend to get involved in this brouhaha off (inaudible) between the Canadians and this private U.S.-owned ship carrying Canadian military equipment.
Bacon: You're right. We do not plan to get involved. It's a commercial dispute.
Q: I have an Iraq question, as we're looking at the anniversary of the conflict in Iraq. Many people have charged that Saddam Hussein has been diverting or skimming some of the proceeds from the U.N.-sanctioned oil-for-food program in order to prop up his regime, and not aiding the Iraqi people. I'm just wondering if the Pentagon, A, shares that view, and B, has any evidence of that, any concrete evidence that that's the case?
Bacon: The oil-for-food program is carefully audited by the U.N. and is designed to prevent the type of skimming you just mentioned. The main source of revenues for Saddam Hussein, as I understand it, comes from the illegal oil smuggling that is done sometimes with the complicity of the Iranians. And that, of course, is increased -- it goes up and down with oil prices. When oil prices rise, the smuggling rises because the profits rise. The risks are compensated for better by the higher oil prices. And because oil prices have been up over the last year or so, the smuggling has increased; it varies from month to month, but it has increased. I believe that's the primary source of the money that he uses to fund his 80 palaces and fancy residences that aren't generally available to the Iraqi people but are available to him and his family.
Q: Yeah, according to several speakers at the Republican National Convention, quoting, you know, from retired General Schwarzkopf, the U.S. military today is much smaller and less prepared than it was 10 years ago, and it has many more commitments. How do you respond to that?
Bacon: Well, the military is smaller. If you look at the size of the military and military spending over the last 10 or 11 years, say starting in 1989, you'll see a reduction in size of the military and reduction in military spending. That pretty much bottomed out in the last couple of years and has started to turn up. I think that the peace dividend of the Cold War, that started after the Berlin Wall came down, has been spent many times over, and the decline in personnel pretty much ended, I think, in 1995, '96, maybe a little before that, and spending began to turn around in '96 or '97.
The most significant increase in spending occurred as a result of meetings that President Clinton had with the Joint Chiefs in 1998, in September. It was those meetings that led to a $112 billion plus-up in military spending that was proposed in January of 1999, January or February of '99, for the fiscal 2000 budget, and that has gone into effect, and what you see now is an improvement in spending and other trends.
So yes, there was a long decline that started at the end of the Cold War. It went through Republican and Democratic administrations, and it's begun to turn around in the last couple of years.
Q: Ken, on a related point, the secretary -- former Secretary Cheney, last night in his acceptance speech, made a point of saying that morale was something like at an all-time low. Stripped away of rhetoric, political rhetoric, he has some insight into the process.
How does this building actually monitor morale? I mean, is there a way to -- on a regular basis, the services actually try to quantify the state of the force from a morale standpoint?
Bacon: Well I think we've just talked about one very tangible measurement, which is retention. And at a time when retention is rising, it seems unlikely that morale is falling. So to the extent that retention is a good measurement of morale, I think morale is pretty good right now. What we find is that when soldiers, sailors, airmen, Marines are busy, when they're doing missions they've been trained to perform, and when they're doing them in a highly professional and satisfying way, such as peacekeeping in Bosnia or Kosovo, that their morale tends to be high. And indeed, we're finding high retention in those areas and units that are deployed to Bosnia and Kosovo.
Clearly, there have been problems with an over-stressed force because of deployments. I think we've addressed those fairly well administratively over the last four or five years. This was a high priority of Secretary Perry's; it's been a high priority of Secretary Cohen's, and you see it in terms of a reduction of inspections in the Navy, you see it in terms of a reduction of duplicative or overlapping exercises, you see it in terms of the creation of an Aerospace Expeditionary Force by the Air Force to try to regularize deployments so they're more predictable. There have been a number of steps that have been taken.
Have we solved the problem to everybody's satisfaction? Probably not. But I think we've made significant progress. And while this has been happening, we've been increasing pay, increasing benefits and trying to improve housing. So it all has a cumulative effect on morale, and I think we're seeing the impact of that in the better retention.
Q: I just want to go back to the Patriot for one second.
Q: Apparently there have been one or maybe two interceptor tests at White Sands without prior notification to the press, as is normal. And I was wondering if that's a new policy or what other reason there might be that people weren't told ahead of time it was taking place?
Bacon: Well, I don't know whether they were announced ahead of time or not. That's, I think, an Army or a BMDO [Ballistic Missile Defense Organization] issue. But there have been two successful interceptor tests. They both involved cruise missile surrogates -- in other words, drones -- that were simulating cruise missiles. They were designed basically to test the Patriot's ability to hit low --
Q: Air-breathing --
Bacon: No, low -- small-profile targets flying at high subsonic speeds, as cruise missiles do.
Q: Well, our people in New Mexico who normally cover them were surprised to hear of the recent success, because they didn't know if it was just planned.
Q: Yeah. There was one on the 23rd that was ballyhooed ahead of time. We covered it. But there was an unsuccessful one on the 28th, and there was no advance notice given of that.
Bacon: But we did -- the Army did put out a notice afterwards that it had happened.
Q: (Off mike.)
Bacon: That's right.
Q: But the problem here is that one suspects that if these tests are not announced in advance and then there's a test failure, there could be a "delay," quote, unquote, in an announcement of a failure. We'd like to know about these ahead of time.
Bacon: I understand this. This is an Army-BMDO issue. I have not looked into it. There may have been circumstances in this test that prevented an early announcement, and I will look into it.
Q: Well, there's one last question on readiness. While watching one of the domestic entertainment networks this week, I noticed another report about spare parts shortages affecting an Air Force unit. I'm wondering -- I remember talking to the Air Force years ago about their spare parts problem, and the Air Force claimed it was getting a handle on that. Is that -- are we still in the situation where there's such a shortage of spare parts that they have to take apart a perfectly good plane in order to repair other planes, or what's going on? Is that an anecdotal thing, or is that a widespread problem?
Bacon: I thought that -- I've been watching CNN -- that everybody was devoting full time to the convention.
Bacon: But it is true that the Air Force has had a spare parts problem. The origin of the problem really started in 1994. And I talked to the secretary of the Air Force about this today. They did not buy enough spare parts for several years in the mid-'90s -- '94, '95, '96 -- for whatever reason. They didn't. That has been remedied recently. There's been over $1.2 billion added in the last year or so to the Air Force budgets to increase purchases of spare parts.
There, unfortunately, is a rather long lag. This isn't like buying an air filter for your car. You don't go down to the local gas station and buy one off the shelf. We're talking about spare parts for aging aircraft, frequently F-16s, F-15s, that have been around since the '70s and early '80s. So there is a lag between the time the money is appropriated and the spare parts actually show up, but they are beginning to show up.
There is still, unfortunately, some cannibalization going on. Obviously, the Air Force, like all the services, concentrates on keeping its front-line fighters at the highest state of readiness. That's one of the reasons we're doing so well policing the no-fly zones in Iraq, and it's one of the reasons why we did so well during Operation Allied Force, in that we put herculean efforts into keeping those fighters at the absolute highest state of readiness.
That has from time to time caused backups in maintenance for the domestic force. Now we're getting enough spare parts into the pipeline to deal with some of those backups. And my understanding is that the backlog of needed parts is falling quite dramatically. So the Air Force is making progress, but the problem isn't solved.
Q: Thank you.
Bacon: Thank you.
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