Dear Mr. Chairman: In response to your September 1, 1987, letter, we have reviewed selected aspects of the Air Defense Initiative(ADI) Program. As requested, we examined the use of AD1funding for fiscal year 1988 and the planned use of funding for fiscal year 1989. We also surveyed Department of Defense (DOD) officials for their opinions on the advantages and disadvantages of, and possible alternatives to, the AD1management structure. The purpose of the AD1 Program is to develop an air defense system to defend North America against low-observable penetrating bombers and air- and sea-launched cruise missiles. The Office of the Secretary of Defense (OSD)manages the program, which is executed by the Air Force and the Navy. The AD1 Program is currently in the concept/exploration phase of the DOD acquisition process. OSD officials expect the program to enter the demonstration/validation phase during fiscal year 1990. Although an overall plan has not been finalized, they also expect the program to complete the demonstration/validation phase and enter the full-scale development phase at about the same time as the Strategic Defense Initiative Program, which is intended to defend North America against land- and sea-based ballistic missiles.