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costs of certain regional militia units in Associated States military budgets of which the fist installment is estimated at $8 million and (5) the additional costs of pacification of areas liberated by operation "Atlante" estimated at 200 million plasters ($5.7 million). These developments plus adjustments such as changes in force goals and consumption and initial provisioning requirements where known should be incorporated in the cost study. However, it should be made clear that in revising the cost study based on the known factors these areas more or less tend to increase tho estimate. It is estimated that there are many unknown areas that would, if known, in all probability reduce the estimate considerably. With these revisions, the report of DC/E should be accepted as the best possible estimate of cost of the Indochina military operations until such time as the French and MAAG Saigon can provide improved experience factors and costs. From an overall standpoint, it should be noted that MAAG Saigon has no basis for determining the costs of the FY 1954 and FY 1955 MDA Program at this time. The MAAG feels that until such time as the French inform then of future plans it is impossible to develop a costing of the FY 1954 and FY 1955 Indochina operations. Thus, any estimates contained in tho FY 1955 budget and Congressional presentations are illustrative only and in no way reflect what the costs for FY 1955 will be.


 * The MAAG must be given authority to review requisitions along the line indicated in this report in order that they may no longer merely act as a transmission agency for French requisitions.

When and if the French provide the required logistical date, the MAAG must make some fundamental changes internally, designed to establish a system of supply control which will be geared toward the screening of requirements. This will necessitate a proper integration of the present record system with the needs of the screening and review process.

There is no question that requirements of the French and Associated States must be met, but the problem is one of providing sufficient equipment of the right type needed to support the military mission. Otherwise, both funds and effort will be dissipated and the military mission weakened by providing equipment in excess of requirements or not of a type that can be utilized. For example, 2094 rocket launchers 3.5" have been delivered along with 66,000 rounds of ammunition, and an additional 190,000 rounds programmed, which the French do not want or use. Without close liaison with the French in the planning and logistical phases, which will enable the MAAG to have an understanding of future operations, assets, and requirements, there will be continuous problems of an unbalanced supply situation and inadequate data for US logistical end funding planning.

An improved system of inspection of end use of MDAP equipment must be developed. At present the MAAG is permitted 30 inspections of units a month. The MAAG must give 60 days notice of proposed units to be inspected, which necessitates assuming that specific units will be non-operational and at given location 60 days in advance. Even when the schedule is approved by the French, units to be inspected are made operational without notifications to tho MAG, who, upon arriving at the site find that inspections cannot be accomplished because the unit was made operational. More freedom of choice of units to be inspected Rh