THE ARMY IS SPENDING $23 MILLION ANNUALLY TO OPERATE, MAINTAIN, AND STORE ITS WATERCRAFT. ADDITIONALLY, IT HAS AN $80 MILLION PROGRAM TO IMPROVE SOME SHIPS NO LONGER REQUIRED. THE ARMY'S WATERCRAFT REQUIREMENTS ARE QUESTIONABLE SINCE ADEQUATE SUPPORTING DOCUMENTATION IS NOT AVAILABLE, SOME ASSETS ARE SELDOM USED, AND THE ARMY HAS IDENTIFIED OTHER ASSETS AS EXCESS. THE SECRETARY OF DEFENSE HAS DIRECTED THE ARMY TO PLAN A CORPS FORCE CAPABLE OF DEPLOYMENT ANYWHERE IN THE WORLD. SUCH AN OVER-THE-SHORE OPERATION IS DOUBTFUL WITHIN THE EXPECTED TIME FRAME BECAUSE WATERCRAFT UNITS ARE REPORTING LOW OPERATIONAL READINESS, COMMERCIAL SHIPS FOR TRANSPORTING THE WATERCRAFT MAY NOT BE AVAILABLE, AND OVER-THE-SHORE LOGISTICS CAPABILITY USING CONTAINERS HAS NOT BEEN SATISFACTORILY DEVELOPED. THE ARMY HAS PLANS FOR 29 ADDITIONAL VESSELS KNOWN AS THE 30-TON LIGHTER AIR CUSHION VEHICLE. THIS PROCUREMENT APPEARS PREMATURE IN THAT SOME ARMY OFFICIALS BELIEVE EXISTING VESSELS CAN SATISFY THE NEED FOR CONTAINER CAPABILITY, AND TESTING HAS NOT BEEN ADEQUATE FOR DETERMINING THE VESSEL'S TRUE PERFORMANCE OR FUEL COST. THE ARMY SHOULD DISPOSE OF UNNEEDED WATERCRAFT, ENSURE FUNDS ARE NOT SPENT ON UNNEEDED WATERCRAFT; DEVELOP MORE REALISTIC PLANS FOR OFF-SHORE RESUPPLY OPERATIONS, AND DELAY PROCUREMENT OF A NEW AIR CUSHION VEHICLE UNTIL ITS TRUE PERFORMANCE AND COSTS ARE DETERMINED. THE ARMY AGREED WITH MOST OF THE RECOMMENDATIONS. APPENDIXES CONTAIN DATA ON THE WATERCRAFT INVENTORY AND REQUREMENTS. (AUTHOR ABSTRACT MODIFIED--RCB)