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REPORT OF THE SECRETARY OF THE AIR FORCE

The United States Air Force remains the world's premier air and space force and is a critical contributor to our national security. The U.S. Air Force exists as a separate Service to project air and space power -- and American influence -- over long distances. That capability has improved over the years and today we are a decisive global force. Our mission is "To Defend the United States Through the Control and Exploitation of Air and Space." Since 1990, the most difficult challenge to that mission has been managing the shift in our strategic posture. Today, we are no longer the Cold War Air Force; nor are we the post-Cold War Air Force, concentrating on drawing down, closing bases, or defending our roles and missions.

We worked through this drawdown and preserved our core competencies, supported our people, and improved our readiness. We made some tough choices early on, targeting force reductions that brought us swiftly to an optimum level. At the same time, we sustained credible forces that consistently met the challenge of the National Military Strategy. We succeeded because we started with a clear vision that emphasized our primary responsibility -- to fight and win our nation's wars. That vision, Global Reach -- Global Power, remains our fundamental strategy for building the future Air Force. Global Reach -- Global Power is a living strategy that was first put to the test during Operation Desert Storm. It proved sound. Since Operation Desert Storm, that strategy has been more rigorously tested by global involvement in operations involving tens of thousands of flying hours and an operating tempo far beyond our Cold War norm. Global Reach -- Global Power met this challenge; and we are confident the basic principles of Global Reach -- Global Power will continue to serve the Air Force and our nation well into the next century.

While Global Reach -- Global Power provides the blueprint for a technologically superior force, expertly trained, highly skilled men and women are the backbone of that force. The sustained readiness, as well as future viability of our Service, demands that we continue to attract and retain quality people -- the very foundation of the Air Force. Today, the nation's Air Force is over 400,000 strong; and at any given moment, more than 14,000 airmen are temporarily deployed in support of global contingency operations, exercises, or humanitarian relief missions. We are proud of our men and women -- more than anything else, people are our future.

AIR FORCE CORE COMPETENCIES AND CORE VALUES

Central to Global Reach -- Global Power are Air Force core competencies -- air superiority, space superiority, precision employment, global mobility, and information dominance -- and core values -- integrity first, service before self, and excellence in all we do. Core competencies are the basic skills we bring to the joint table. Air Force core competencies provide America's CINCs the degree of air and space control necessary for U.S. and allied forces to freely position, maneuver, employ, and engage, while denying the same to adversary forces.

Core values are the standards we use to guide our efforts. Integrity is the source of our self-control -- the basis for trust that is imperative in today's military. In this world of me first and relative ethics, integrity is the hallmark of the military professional and marks military service as more than just another job. Air Force members realize, from their first day on active duty, that their individual needs are subordinate to those of the nation. That translates into service before self. Those who accept that commitment have earned our respect. Theirs is a passion for excellence -- seized by young men and women who have felt the personal satisfaction of performing at the peak of their abilities and who mentor others to excel with them. Integrity first . . . service before self . . . excellence in all we do -- these values set the standard for our behavior, our service to country, and our treatment of one another. They ennoble us, reminding us of the importance of the profession we have chosen and the oath we have taken.

FUNDAMENTALS FOR A QUALITY AIR FORCE

As stewards of the nation's air and space forces, it is critical we responsibly allocate our resources to build a force capable of meeting future demands. The forward-looking initiatives of recent years have produced an air and space force that is proficient, versatile, and tailored to support our National Security Strategy. We will continue to execute our responsibilities with the disciplined approach we have followed in the past. This approach is based on four key commitments:

Motivated, Disciplined People

Military service requires a high level of professional skill and a willingness to make personal sacrifices far beyond those in other occupations. It is an uncommon profession that calls for people of uncommon dedication. That dedication demands a commitment to core values and a duty environment free from discrimination and harassment. To get the most from Air Force people, we must give them the opportunity to perform to their potential. At the same time, we must keep sight of the fundamental reason we exist -- to fight and win our nation's wars. Reshaping our forces and training our people must be for this purpose above all others.

UNAMBIGUOUS, HIGH STANDARDS

The Air Force has always operated on the leading edge of technology, and the tools of our trade are lethal. This means we must recruit, train, and retain the right people. We are unwavering in our commitment to unambiguous, high standards -- personal and institutional. We expect every person to honor their vocation -- service to our nation -- and the nation demands it of us. This service does not come without personal responsibility. There is no tolerance of sexual harassment, discrimination, or substance abuse.

ACCOUNTABILITY

Accountability is a prerequisite of effective military operations. Further, it is essential to our ability to gain and sustain the trust of the American people. Consequently, standards must be enforced and responsibilities stressed. This sense of accountability is paramount for the good order and discipline of our force. In the Air Force, accountability begins at the top. We will not tolerate arrogance. By example, our senior leaders set the tone -- living the standards they expect of others. This message is a key component of Air Force education and training programs. It is a fundamental of the leadership training we reinforce during Command Orientation courses -- which challenge our wing, group, and squadron commanders to appreciate the human dimensions of command and to acknowledge they are responsible and accountable to a higher standard.

People First

Assuring our people an equitable quality of life has been the continuous priority of our leadership. As a force that relies heavily on its technological advantage, we depend on retaining highly experienced, motivated, well-trained people. We recognize the correlation between readiness and care for our families. We succeed in our mission by putting people first. To assure a balanced approach toward people first programs, we developed the Air Force Quality of Life Strategy. This strategy focuses our efforts on improving the quality of life for our members and their families.

PROTECTING OUR PEOPLE

Quality of life is about people -- our most important resource. Therefore, we have redoubled efforts aimed at protecting our people. At the top of our list is fair and equitable compensation. We stand with President Clinton and Defense Secretary Perry in support of maximum military pay raises allowable by law. These raises are essential to prevent accelerated growth of the widening pay raise gap between military members and their civilian counterparts. We are also working to decrease the amount of money members must absorb during a Permanent Change of Station (PCS). When we move Air Force families to satisfy military needs, they should not have to foot one-third of the bill.

Our next priority is access to safe, affordable housing -- where we continue to emphasize improved living standards for all our people. For instance, we strongly support the one-plus-one standard for single and unaccompanied dorms, an initiative aimed at enhancing individual performance while assuring personal privacy. Additionally, we fought for and won a one-time adjustment to monthly Basic Allowance for Quarters (BAQ) rates in FY 1996. As a result, in January 1996 our members can expect a 5.2 percent increase in their BAQ allowance. We are also working hard to establish variable housing allowance (VHA) locality floors. This effort would reverse survey trends that serve to drive our junior personnel into substandard housing. Our people do not expect to live in luxury. They simply want to be able to place their families in housing that will give them peace of mind when they are deployed.

Other priorities include base and community, health care, and education programs. Air Force Child Development Centers, for example, provide care for 43,000 children daily; however, we are still unable to accommodate nearly 8,000 children, most of whom are under three years of age. So, we are building new centers and refurbishing others to expand child care services. Similarly, commissaries provide a vital benefit. Our people depend on commissary savings, and we are committed to preserving them. They also depend on accessible, quality health care; and we firmly support current DoD health care initiatives, including TRICARE and the Overseas Family Member Dental Program. We are also committed to preserving and expanding educational opportunities. Tuition assistance has been a valuable recruiting and retention tool, providing all our airmen the means to obtain associate, undergraduate, and masters degrees. At the same time, the Montgomery GI Bill continues to be a success story, with nearly 95 percent of those entering the Air Force enrolling in the program.

We also remain committed to our retirees. For those who have served and retired and for those who will retire from serving our nation, we are working to preserve the benefits they have earned and deserve. A solid retirement benefits package is what we use to offset the extraordinary demands and sacrifices we place on our people over the course of a career. We owe it to our retirees and to ourselves to honor the retirement pledge we make when each member of the team signs on.

REDUCING OPTEMPO

The operating tempo for many units remains high. While we believe we have a handle on this, it will present further challenges if we are called upon to support additional contingency operations. We are working hard to move the high level of PERSTEMPO toward the maximum desired level of less than 120 deployed days per person per year. We have developed three main initiatives to achieve this goal. First, we adopted global sourcing to balance the workload throughout the entire Air Force. Second, we reduced taskings where appropriate. Third, we are using our reserve components while we simultaneously seek new ways to use Guard and Reserve forces to ease the strain on our active component. Associate Reserve squadrons are one example. Recently, we established Associate Reserve squadrons to augment our KC-135 units, and we are in the process of standing up an Associate AWACS squadron as well. These innovations continue to demonstrate that after 22 years the Total Force policy still works.

USAF - Global Involvement

The Air Force is Committed to the Joint Team

With this year's publication of the National Military Strategy and its focus on flexible and selective engagement, we are more certain than ever that our guiding construct, Global Reach -- Global Power, hits the mark. Global Reach -- Global Power ensures that the United States Air Force -- Active, Guard, and Reserve -- is fully prepared to fight and win our nation's wars. Its six objectives serve as the building blocks we use for planning and programming future forces.

SUSTAIN DETERRENCE

Deterrence of hostile actions against the United States, its allies, and vital interests remains a key objective of air and space forces. This is as true today as it was during the Cold War. The key to providing deterrence remains military strength and national will. The Air Force continues to provide a decisive element of that national military strength that enables the United States to deter aggression.

Nuclear deterrence remains a bedrock of national security. Even at reduced levels, Air Force people manning bombers -- B-52, B-1B, B-2 -- and land-based missiles -- Minuteman III and Peacekeeper -- remain ready and committed to support all Single Integrated Operational Plan requirements. Concurrently, these forces are planned to permit full compliance with START I and, if implemented, START II obligations while maintaining the flexibility to maximize our nation's nuclear deterrent posture.

Air Force combat forces help form the backbone of our nation's regional deterrence strategy. When combined with sea-based and land-based forces from the other Services, we work in synergy to deter aggression and assure friends and allies. At the same time, the proliferation of weapons of mass destruction (WMD) increases the importance of a strong conventional deterrent capability. To counter the chemical and biological threat, we plan to deploy greatly improved individual self-protection ensembles and aircraft decontamination technologies. We are also investing $700 million in an Airborne Laser (ABL) in the current Future Years Defense Program (FYDP). To maintain our leadership in counterair, ABL will be designed to provide our CINCs a boost-phase intercept capability that will protect our soldiers, sailors, airmen, and Marines by keeping the effects of chemical, biological, and nuclear warheads over enemy territory. When combined with joint terminal defenses, ABL will become part of a layered defense against threats from WMD. ABL offers the most revolutionary advance in warfighting technology in 40 years. Similarly, we are exploring the feasibility of placing exoatmospheric kinetic kill vehicles on existing Minuteman missiles as a capable, cost effective solution to evolving National Missile Defense needs.

PROVIDE VERSATILE COMBAT FORCES

The United States Air Force provides superior air and space forces, combining the responsiveness and firepower of long-range bombers and the flexibility of sophisticated fighters with the global presence of an air and space command, control, communications, computers, and intelligence (C4I) architecture. Air Force bombers can reach any point on the globe with lethal strikes in 20 hours. This was most vividly demonstrated in July, when the men and women of Dyess AFB, Texas, launched and recovered two B-1Bs that flew nonstop around-the-world after delivering ordnance on military training ranges in Italy, Korea, and Utah. Our bomber force remains crucial to the opening hours of a conflict. Over the past year, we have worked aggressively toward integrating the widest range of our newest munitions into the B-1B and B-2. B-1B weapons delivery modifications are on track and are phased to match weapons delivery schedules. B-2 flight testing at Edwards AFB, California, is half-way complete and is on schedule toward successful completion in 1997. Already, eight B-2s have been delivered and are operating at Whiteman AFB, Missouri.

Our rapidly deployable fighter forces provide us the staying power to overwhelm an opponent's forces, infrastructure, and command elements. In September, NATO air operations in Bosnia and Herzegovina once again proved airpower can have a decisive role when serving explicit policy objectives. Airpower's efforts in helping to lift the siege of Sarejevo saved lives and helped pave the way for a new round of negotiations. Our success over Bosnia and Herzegovina also demonstrates the value of unquestioned air dominance. Yet, air superiority is not an American birthright. It is a mission area in which we have no desire or intention to fight an equal fight. Our commitment to air superiority is a commitment to ensure American soldiers and Marines can operate free from the threat of hostile aircraft and missiles. Future success in this mission area rests on our next generation fighter, the F-22. The F-22's lethal combination of stealth, supercruise, and advanced integrated avionics will provide an unmatched capability for decades to come.

Advanced, sophisticated airframes are only part of the equation. Fully trained, combat ready aircrews are an essential ingredient of combat readiness. To maximize economy and efficiency, our aircrews think globally but train locally. That means they depend on cooperative use arrangements with those who have competing interests for the same land and airspace. For our part, we are committed to responsible custodial care, preserving the environmental and cultural uniqueness of our nation's resources. To guarantee that our combat aircrews remain prepared to meet the security needs of our nation, assured access to local training ranges and airspace is an Air Force priority.

We are also working diligently to improve the accuracy and capabilities of our weapons throughout the force structure. Our Joint Direct Attack Munition (JDAM) will significantly improve our ability to conduct adverse weather, round-the-clock operations. JDAM is on a fast track -- successful Milestone II Defense Acquisition Board (DAB) was in September; down-selection to a single contractor occurred in October; and flight testing began in November. Our Joint Air-to-Surface Standoff Missile (JASSM) is on an equally aggressive procurement schedule -- our Milestone 0 DAB was in September; and by summer 1996, we plan to select two prime contractors to compete for this critical Precision Guided Munition (PGM) program.

SUPPLY RAPID, GLOBAL AIR MOBILITY

America's air mobility fleet gives our nation the speed and agility to respond to the full range of contingencies. No other nation in the world has this capability. Our airlifters and tankers can deploy fighting forces or humanitarian assistance worldwide. Air Force airlifters, including the C-17, made it possible for our nation to respond swiftly and generously to requests for aid in the wake of Hurricanes Marilyn and Opal. At the same time, Operation Provide Promise in Bosnia and Herzegovina and Operation Provide Comfort in Northern Iraq continue to demonstrate the enormous staying power of Air Force airlift.

This year, our C-17 program overcame past challenges and is now providing a highly capable military airlifter to lead our global mobility force into the next century. The recent Reliability, Maintainability, and Availability Evaluation was an unqualified success, with 99.2 percent on-time takeoffs. The aircraft has surpassed almost every performance standard set for it and has exceeded expectations with the last 11 aircraft delivered to the Air Force ahead of schedule. This year the C-17 Service and Industry Team was awarded the prestigious Collier Trophy for achievement in aeronautics. In addition to the C-17, we are modernizing our proven C-130 fleet by replacing older aircraft with the updated C-130 J.

CONTROL THE HIGH GROUND

Space offers an unsurpassed vantage point and the possibility to access any point on the earth's surface in a matter of minutes. Militarily, this means we gain an extraordinary advantage. That is precisely why we continue to move out on a number of key space modernization programs -- one of the few mission areas where you will find new program starts. In May, we awarded a Space Missile Tracking System contract and in August we awarded two Space Based Infrared Systems (SBIRS) contracts. Both are key elements of the Air Force's SBIRS architecture and will greatly enhance our joint missile warning capabilities. The SBIRS will incorporate new technologies that will enhance detection, improve reporting of ICBM/SLBM and tactical ballistic missiles, and provide critical tracking data for national and theater missile defense.

Concurrently, to help us assure continued access to space, we awarded contracts starting the Evolved Expendable Launch Vehicle (EELV) program. The goal of this program is to provide the nation with a family of low-cost launch vehicles early next century. The EELV is expected to lower the cost of both military and commercial access to space and to ensure the long-term competitiveness of our commercial launch industry.

This year we also put a request for proposal on the street -- worth a potential $3.6 billion -- for the next generation of 33 Global Positioning System (GPS) satellites. The GPS is integral to our warfighters and is rapidly becoming a true utility in the civilian community. It provides highly accurate positioning, velocity, and time information to an unlimited number of users on the ground, at sea, in the air, and in space. This next generation GPS constellation, designed to give our military forces decisive advantages in combat, will assure continued commercial access to all the advantages of this comprehensive space-based measuring system.

Air Force space acquisition programs have already felt a positive impact from the significant strides we have made this year improving the management of space programs. The new DoD Space Architect and Deputy Under Secretary of Defense for Space are two initial and important steps toward improving the integration of DoD and Intelligence Community space programs. The close cooperation of these two communities, particularly on SBIRS, resulted in the most cost-effective architecture for the nation. We are optimistic that the DoD Space Architect's next task, to evaluate military satellite communication architectures, will reap similar outstanding results.

ENSURE INFORMATION DOMINANCE

Dominating the information spectrum has become as critical to conflict as occupying the land or controlling the air. Within the information domain, events are seen and felt at the speed of light. We believe if we can analyze, assess, and act faster than our adversary -- we will win. At the heart of this process is the Air Force C4I Horizon, our concept for an overarching C4I architecture. This system of systems consists of Air Force space platforms such as Milstar and GPS; aircraft such as the U-2, RC-135, Joint STARS, AWACS, and Unmanned Aerial Vehicle (UAV); and ground command and control elements comprising the Theater Air Control System.

Recently, the Air Force was appointed DoD executive agent for Theater Air Defense Battle Management C4I. As part of our charter, we are developing a joint architecture providing our nation's leaders and theater CINCs with the information necessary to anticipate and monitor a crisis, act with a decisive advantage, and rapidly fine-tune operations to take full advantage of our highly responsive forces. In future military operations, information will be a weapon used not only to support other operations, but also to directly attack the enemy. To help face this information challenge, we activated our first UAV squadron at Nellis AFB, Nevada. This squadron is designed to bring improved information capabilities directly to the theater commanders.

Beyond these efforts, rapid technological improvements produced dramatic increases in storing, processing, and disseminating data and initiated a revolution in military affairs. That is why we developed Cornerstones of Information Warfare -- so we will have a sound doctrinal basis to fully exploit those capabilities while addressing our own vulnerabilities. That is also why we have decided to activate an Information Warfare Squadron at Shaw AFB, South Carolina. Additionally, we added funding this year to implement an expansive base information infrastructure of fiber optic networks. These networks will provide increased data throughput for the evolving information requirements of our warfighters. They will also provide essential digital switching, network control, and information protection capabilities to core facilities on each Air Force base.

BUILD U.S. INFLUENCE

Global Reach -- Global Power also serves as a blueprint to help the Air Force to extend a helping hand, to use airpower for diplomatic and humanitarian purposes, and to support other U.S. objectives worldwide. Indeed, the arrival of the first airlifters demonstrates commitment and resolve few can ignore. To put it into perspective, in 1994 the U.S. Transportation Command (USTRANSCOM) executed the equivalent of five Berlin airlifts in terms of ton-miles of cargo delivered in support of operations in Somalia, Rwanda, Bosnia and Herzegovina, and Haiti.

Global access and influence ultimately depend on the bonds of alliance and international cooperation. Partnership for Peace (PFP) is one of many initiatives the Air Force supports that underscore this conviction. This year, I went to Central Europe to assess first-hand the ongoing transformation in the European security environment. I met with military and civilian officials from Hungary, the Czech Republic, Romania, and Poland. In each country, I discovered a strong respect for our nation and its values, and an equally strong desire to improve the political, military, and economic ties between our nations. The Air Force, through the Air National Guard, also supports the National Guard State Partnership Program, linking U.S. states to Central and Eastern European nations. These types of efforts combine with the work our security assistance personnel do around the globe to foster stability, sustain hope, and provide relief. These efforts are samples of Air Force programs that pay direct dividends by building trust and cooperation with our friends and allies.

Lean and Agile Acquisition System

To remain the world's most respected air and space power, we must continue to modernize our forces with systems that possess a clear advantage over any potential challenger. Given the blistering pace of technological change, we will require a lean, agile acquisition system to capture and integrate key discoveries. We are building that system by streamlining acquisition processes, optimizing the use of our resources, and integrating innovative approaches to everything from computer software to depot maintenance.

ACQUISITION REFORM

In the spirit of reinvention, we have attacked acquisition reform with a vengeance, disassembling every process. At the heart of our reform efforts are Lightning Bolt Initiatives, designed to jump start cultural, business, and process changes within the acquisition revolution. We are revamping how we define requirements, select major system contractors, manage programs, and establish business arrangements. We are scrutinizing all our programs to translate needs into performance requirements. We are eliminating unnecessary specifications and encouraging contractors to propose streamlined industry standards and commercial practices. We are basing government source selection decisions and contractor performance on how well each contractor plans, manages, and trades the technical, schedule, and cost aspects of the program. Government and industry stakeholders are openly and continuously involved in making key program and business decisions, employing Integrated Process Teams (IPTs) and shared automated data bases. As a result, we are improving communications, decreasing contract and program lead-times, reducing program costs and personnel, and streamlining the information exchange and approval process.

Examples of Lightning Bolt Initiative successes enjoyed by the Air Force include elimination of obsolete or redundant acquisition policies. We started with 412 acquisition policy documents; only 131 remain -- a 68 percent reduction. As a result, we moved from acquisition programs requiring 1,000-page proposals, 100 contractual documents, and a 300-member System Program Office (SPO) to success stories like the Wind Corrected Munitions Dispenser Program with its 96-page proposal, 21 contract data items, and 20-member SPO. Another initiative enabled us to start the EELV program with zero military specifications (MILSPECS) -- compared to the Titan launch vehicle's 104 MILSPECS. Likewise, by limiting the use of MILSPECS for the SBIRS program and including more agencies on our IPTs, we reduced that program's cost estimate by some $300 million and advanced the initial launch capability by more than two years. These statistics tell us we have just started a new paradigm for program management.

OPTIMIZING OUR RESOURCES

To realize more economical and efficient acquisition programs and to ensure that the forces we field complement the joint team, we have moved increasingly into cooperative programs with industry, our sister Services, other government agencies, and our allies. While the C-17, EELV, SBIRS, Milstar, and most of our PGM programs have joint users, two real success stories are the Joint Primary Aircraft Training System (JPATS) and Joint Strike Fighter (JSF) programs. By combining acquisition efforts when our needs coincide, we have been able to increase cost and manpower savings. JPATS made this a reality. JSF offers similar opportunities -- we have agreed to equally divide expenses and expertise with the Department of the Navy and the Services expect this approach to facilitate the development of an affordable multi-role aircraft. Another success story is the follow-on polar-orbiting meteorological satellite program that we combined with a similar program the Department of Commerce was developing. By joining together in this effort, called the National Polar-orbiting Operational Environmental Satellite System (NPOESS), we anticipate a savings of up to $300 million.

We also have joint-Service and international cooperative Science and Technology (S&T) efforts that will make significant contributions to joint warfighting. For example, we are currently conducting joint S&T programs with France and Germany in the field of ducted rockets, a technology that is crucial to extending the range of air-to-air missiles. We are working with the Navy and multinational partners on a new crew escape system to expand the crew escape envelope and increase the occupant size range for our crew ejection seats. The most successful example of our joint-Service, multinational S&T cooperation is the Speakeasy radio program. Speakeasy is a modular, reconfigurable radio system that will provide near-seamless communication abilities for our joint-Service and allied operations.

COMMERCIALIZATION

By breaking down the barriers between the defense and commercial sectors of the economy, we can also make better use of the nation's resources. For example, our EELV program is not only taking us to the next generation of spacelift capability, it is also proving that our new way of doing business is better and more efficient. We have included commercial-sector members on the team, removed layers of management, and eliminated MILSPECS. Private sector involvement is particularly crucial for this program because we expect the EELV will not only satisfy the needs of the military, but it will also help U.S. industry bolster its competitive position in the world space-launch market. Our S&T investments have complemented this effort and have contributed to America's economic stability by increasing our awareness and our emphasis on dual-use and generic manufacturing technologies.

ENHANCING AIR FORCE HEADQUARTERS

Balancing the competing demands of quality of life, modernization, and readiness, while preparing for the future, requires enlightened decision making. Because Global Reach -- Global Power exists in a dynamic environment -- influenced by sudden surges in technology and major shifts in the security environment -- we streamlined Air Force planning and programming to maximize our effectiveness and our efficiency. The result: we are appropriately postured to take full advantage of boundless opportunities on the horizon.

Initially, we focused on revitalizing our planning process. We introduced Air Force Executive Guidance as a common reference for all planning actions. We developed Global Presence, our reconceptualization of the nation's presence strategy; A New Vector for modeling and simulation, our blueprint for establishing a Joint Synthetic Battlespace and improving how joint force commanders use air and space resources; and Vistas, our strategic plan for Information Resources Management. We also strengthened our commitment to S&T, the foundation for future Air Force modernization; and we are celebrating the publication of New World Vistas, renewing our S&T vision. To ensure we achieve the clearest sense of our planning horizon, and help us institutionalize across-the-board long-range planning, we organized a team to develop a strategic vision for the Air Force of 2020 and to improve the front-end guidance for our 25-year mission-area plans.

With planning improvements well in hand, we developed an integrated process for collective Secretariat and Air Staff review of programming issues. We established the Air Force Group (AFG) to serve the senior leadership by providing an initial corporate-level integrated review and evaluation of programs. We also created Mission and Mission Support Panels to serve as centers of expertise, developing program and issue options for review at and above the AFG level. In addition, we formed IPTs, bringing experts together in cross-functional teams and ensuring a single point of contact for each item requiring corporate review. As a complementary measure aimed at ensuring issues outside the programming arena receive this same integrated review, we instituted weekly staff meetings where issues under work across the range of Air Force responsibilities are aired and worked by the combined Air Staff and Secretariat leadership.

Next, we took aim at financial management processes. This year, we cut negative unliquidated obligations (NULOs) -- where financial disbursements appear to exceed obligations -- by 71 percent and overaged in-transit disbursements -- the matching of overaged disbursements to obligation records -- by 63 percent. We are working to eliminate all overage NULOs by the close of FY 1996. We also took positive steps toward achieving an auditable financial statement. Current audits indicate we are in compliance in the key accounts of military and civilian pay. Finally, we are continuing to improve key financial management systems. These improved systems provide the information Air Force commanders need to run their operations while ensuring full compliance with current laws governing financial management.

TOWARD THE HORIZON

With the military drawdown substantially behind us, we are prepared to face whatever challenges may come our way. Those challenges are achievable because we have a vision that continues to provide America the world's greatest air and space force. That vision is Global Reach -- Global Power. It served us well over the past five years and promises to serve us even better in the years ahead.

We are poised to accept the challenges of the future. With the benefit of experience, insight, and imagination, the United States Air Force will continue to provide the premier air and space force for the 21st century. We are mindful that our basic mission remains bedrock -- to be prepared to fight and win our nation's wars, and to do so with the most efficient use of the nation's treasures -- its young people and scarce resources. To get there, we will continue to ask much of our people and they can continue to expect much from their leadership. We are a team within a team. We understand our responsibilities and live by our commitments. As a team, the Air Force will continue to provide Global Reach -- Global Power into the 21st century.






                                                     /s/
                                               Sheila E. Widnall
                                               Secretary of the Air Force


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