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 * The purpose of this mission was to completely review with the US Country Team in Saigon, Indochina, the cost study for Indochina performed by the Deputy Defense Comptroller Europe in Paris. The review was to consist of checking force basis utilized, initial requirements for supplies and equipment for the approved forces, consumption rates, stock level and operational reserve requirements and all other pertinent information in relation to the report in order to develop a reasonably sound basis for projecting future requirements and funds to support the accepted plan for ultimate victory in Indochina.

It is not possible within the present logistical and operational arrangement in Indochina to arrive at any reasonable estimate of cost to the United States of material requirements for the war in Indochina. With changing force goals, crash requirements for current military operations, lack of knowledge of French operational plans, and serious gaps in logistical data, the costs for FY 1954 are in a constant state of flux. The Air Force MDAP program, for example, which was originally estimated to cost approximately $55 million dollars in FY 1954 is now over $100 million with no end in sight as to final cost for this fiscal year. The Army MDAP program is in the same position with a program of $251 million with new requests providing for sizeable increases. For FY 1955, no MDAP cost estimates have been developed or can be developed until force goals are firmer, requirements and assets of military end items established, and basic personnel cost data determined. These basic facts must be obtained from the French to become a basis for the MAAG to perform its major of function of revising and screening requirements to develop a firm program necessary for determining US logistical and funding requirements.

After review of the information available to the Country Team in Saigon it is recommended that the cost study prepared by the Deputy Defense Comptroller Europe be accepted with such modifications as can be determined as a result of the Saigon visit by the cost study team. Since the cost study was prepared, developments have occurred which will effect the cost study. Specifically these developments are: (1) the pending 300 million piaster ($8.5 million) increase in the cost of the Cambodia military program, (2) the pending gift of the Viet Nam TET advance (or probably other pay increase) estimated to cost 500 to 600 million piasters ($14 million - $17 million), (3) the more rapid activation of certain Laotian and Vietnamese armed forces by the French High Command (rough estimate $20-$40 million), (4) the possible inclusion of personnel cost CY54 CY55

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