AD-A013 261 REPORT TO THE PRESIDENT AND THE SECRETARY OF DEFENSE ON THE DEPARTMENT OF DEFENSE BY THE BLUI RIBBON DEFENSE PANEL Department of Defense Washington, D. C. 1 July 1970 DISTRIBUTED BY: National Technical Information Service U. S. DEPARTMENT OF COMMERCE Report to The President and the Secretary of Defense on the Department of Defense BY THE BLUE RIBBON DEFENSE PANFL I Juy 1970 NATIONAL TECHNICAL INFORMATION SERVICE "11.D vn.22.1 .4,1) L L'° . ,~o t- 7 t,,".1 rnnJ Report to The President and the Secretary of Defense on the Department of Defense BY THE BLUE RIBBON DEFL "E PANEL I July 1970 D b c 1 T i /6,"o hIa $1m1j 7 BLUE RIBBON DEFENSE PANEL WASH]INGTON. D. C. 20301 July 1, 1970 Mlydear Mr. President: 4 It is my honor to submit to you herewith the Report of the (;lue Ribbon Defense Panel appointed by you and Secretary of Defense Melvin R. Laird last year. As you know, you gave the Panel a very broad Charter to study the entire organization, structure, and operation of the Department of' Defense -- but not questions of broad national policy within which the Department operates. In order to get a fresh look, you also selected members for the Panel who were generally unfamiliar with the operations of the Department. k.. We found the assignment to be both broad in scope and massive in detail, and to hold the potential for an important contribution by the Panel. This made your one year deadline for submissionl of our Final Report a very tight one indeed. We found it impossible to cover in depth many matters that we thought nmerited study, so we necessarily had to confine our principal recommendations to ;asic matters. We are confident that the recommendations we do make are both significant and well-substantiated. We have pointed out other areas wherkŽ we believe further study would be fruitful -- much of which can probably be undertaken within the Department of Defense. Despi~e this time pressure, we realized the urgency of our pressed to have our Report submitted on the date you assi.gnment, ~ind set a year ago -- namely, July 1, 1970. As this deadline approached, we realized what could not have been anticipated when we were appointed, tha~t this is a particularly sensitive period with regard in general, to the environwert in which the Department of D)efeinse and the milit~ary' in particular, operate. However, as our Report does not enter the field of national policy, but only miakes recomnmendations we be~ieve will cause important improvements in the effectiveness of 'he Department of Defense, we hope it will be accepted by all as a timely and constructive contribution, and will not be used by anyone to exacerbate present tensions and differences o; opinion. I would like to add a personal note. From my intensive, year-long exposure to our military and civilian leaders in the Department of Defense in Washington, and to our fighting men in Europe, the Mediterranean, and Soutcheast Asia, I have been deeply impressed -- and this applies both to the Officers and the Enlisted Men -- with their competence and their dedication to duty, as theyA see it. The Panel found many things it believes should be corrected, but it believes, and I agree, that many of the difficulties result from the structure of the Department of Defense itself, which almost Inevitably leads people into "adversary" relationships rather than toward cooperation in the interests of the Department -- and the nation It also leads to reliance on the workings of "TheJ -- as a whole. Bureaucracy", rather then individual initiative. I feel sure that the same way, and do not look with many fine military officers fe.el enthusiasm to assignments in the Washington area. * * I hope the Panel's recommendations will not be considered criticisms of individuals, but will help to restructure the Department and "The Bureaucracy" so that the telent and dedication of these fine people both military and civilians -- can be unleashed and redirected to accomplish more effectively the basic objectives of the Department of Defense atid the Nation, in the manner most helpful to you and the Congress. Finally, I would like to express to you my appreciation for the dedicated work of the Vanel nmembers. They approached their assignments with dedication to accomplishing a worthwhile objective. The attendance at Panel meetings was unusually high and each member made valuable contributions and carefully considered the entire Report, through many long sessions and drafts. We all regret that Dr. Marvin Goldberger and for Dr. Martha Peterson found it necessary to resign from the Parnel personal reasons, but each made valuable contributions while they served as members. Without the hard work of a fine staff, we niturally could not have accomplished our assignment, My thanks go to each one 01f them. I know all my colleagues on the Panel join me in expressing toA you our appreciation for giving us the privilege of undertaking this important assignment at this critical period in our Nation's history. Respectfully yours, 6brW.Fitzhugh Chairman, Blue Ribbon The President The White House A a a-si - emoem. ,e.n....i a..e. .m.,ai. 0i im.m.m - - CS i - THE PANEL A GIL Cii B Si' Dr Martha B Peterson WF C diA M P as dani Ba nard Colic0 Columbia U ye a p Leon P W B A Vt.' George Champion Praaldenr ai Enornamia William P. Clement,, Jr. SEUCO,inn. John M. Fake Chairman 0 t Board. Prasidonr, Job,, Pioba iitanutooiurirg Ca., inn. Davalapoart Counoliat NYC fl Robert C. Jackson LoomKirkland Hobart D. Lenny Chairman Teiadpnn Ryan Aeranayrical SeororaryTre anoint APL.CIO Pienidont, Reudyis Liiui.ai Asaaoiariaa, inc. (4$ l Dr. Marvin L. Goldlrergerar Pratnaaor at Phyalos Prirroeron Unlonrairy WIlfred J. McNeil DirAdaisor, Pairobuid Wilier Corp.; Pram., Taa Poundarlon '4Yooag Dr. Rohen P. Mettler Lemis F. Powell, Jr. Dr. George J.Stigler Cloode Pinaideer, TRW, inn. ArrornaparLue, Proleasa, at Ainarican emilluriona, Ueiarna iry at Cii icaua Ottion at Commimmiaesr Prom mm lanai Poarbal * Poand Ir nacessory Ia ranminain her sara loom on 1km Panel due in press ai durlea aa Praaidran at Bannard Collage. "Pound Ii nsarmaarp inrerminarehis arraicesne ha Panaldue iii Ia illness 4 Y THE STAFF J.Fred Baslrordt. Jr. otieC.ata Spaia Asiean and Clifford W. Stroup William G. Howard Stal Coodinoto Bototine Assistant4 HarmonL. Boyum RESEARCH STAFF Betty Heltcal Anthony Rt. Haun~t Norman G. Parsanit Gordon 0. Pehrsao John Pontoro James M. Roberty Dooglos B. Sands Howard L. Sargent Lawrenoe G. Starkey J. A. Stooblisolt Russall F. Stryker, Jr. Jay D. Vonderpoal L~onard Wolostein Albert W. Bloobbora Riof6otd T. Boor William J. Coin, Jr. Morray Drobkln Lenlie R. Haseltort, Jr. Ben G. Half Ka.noethH. Jooobson GegorgA. Joochy WyofredJoshua Lawrence J. Legorer Morrill B. Moraone Mary E. MoCCOosard Ralph C. Hash, Jr. ADMINISTRATIVE STAFF DetozelDorront Soortoty to the Chairma Barbara C. Chamberlain Lois B. Hotter Maria E. Johnson Mary J. Kiscoh Rose L. Krelse Rosali F. Kral Paige Mogee Rita J. Matarrtss Carol A. Mayhew Alice E. Moore MSgtGWendellW. Moor., USAF SPAMelvi Parker, USA Marion K. Smigniow Nancy F. Smilko Margoerite E. Vega SorohE. Zachary PREFACE The Blue Ribbon Defense Pane! was appointed by the President and the Secretary of Defense in July 1969, and giveli the following broad Charter, with instructions to submit its Final Report by July 1, 1970: The general scope of the Panal is to study, report and make recommendations on: (1) The organization and management of the Depart .ent of Defense, including the Joint Chiefs of Staff, the Defense Agencies and the Military Services, as it affects the Department's mission performance, decision-making process, the command and control function and facilities, and the coordination with other governmental depatments and agencies, with emphasis on the responsiveness to the requirements of the President and the Secretary of Defense. (2) The Defense research and development efforts from the standpoints of mission fulfillments, costs, organization, time and interrelation with the scientific and industrial community. (3) The Defense procurement policies and practices, par•icularly as they relate to costs, time and quality. (4) Such other matters as the Secretary may submit to it from time to time. It is important to note that, while the Charter is very broad as to the Panel's function in the fields of structure, organization, and operating procedures of the entire Department of Defense, it excludes considerations of broad national policy. The Panel hIs endeavoted to hew closely to this line. We were told that this is the first broad-scale study of the Department of Defense in many years - in fact sinc the two Commissions on Organization of the Executive Department of the Government chaired by former President Herbert Hoover. We decided to approach our assignment with the same broad objectives as stated in the Hoover Commission Report, namely: "(1) That the primary objectives of the National Security Organization are to preserve the peace, but that it must at all times be ready and able, promptly and effectively, to marshall all of our resources, human and material, for the protection of our national security. "(2) That civilian influence must be dominant in the formulation of national policy and that civilian control of the military establishment must be clearly established and firmly maintained. "(3) That the Nation is eptitled to the maximum possible return for every dollar of military expenditure. "(4) That military efficiency - in other words, readiners for war - must be the fundamental objective of the National Military Establishmer t. "(5) That elimination of wasteful duplication is essential to good government, but that the preservation, within sound limits, of a healthy competitive spirit and of service pride and tradition are basic to progress and morale." Because of the vast scope of the operations of the Department of Defense, the Panel divided itself into four sub-committees, as follows: (I) Organization and Personnel Management. (2) Management of Materiel Resources (including research, development, procurement and management of weapons and supplies) planning, programming, budgeting, and similar procedures. (3) Military operations, intelligence, communications, automatic data processing. (4) Conflicts of interests, contract compliance, domestic action, equal employment opportunity, etc. The Panel interviewed many witnesses in depth, and the sub-committees many more. It made a functional survey of the Defense headquarters organizations in the Washington area covering some 1,600 organizational elements to elicit information on the actual operation of and interface between units of the Department of Defense. It also sent a questionnaire to a large number of people outside the Department of Defense who we thought might wish to give us the benefit of their thinking. We enjoyed a remarkable response, with answers ranging from a page to dozens of pages of detailed suggestions. The Panel members and the staff carefully reviewed many earlier reports of studies of the Department of Defense, and many visits were made to important elements of the Department outside the Washington area. Members representing sub-committees (3) and (4) visited a number of military Comn:•,ds in Europe, the Mediterranean, and Southeast Asia, to see how policies determined :., Washington Headquarters were carried out in the operational units While the members of the Panel have considered carefully the entire report, this does not necessarily mean that there is complete agreement with every detail of each recommendation or statement. Except where otherwise noted, however, there is agreement with the substance of every important conclusion and recommendation. The nature of the general agreement and the extent of incidental disagreement are those to be expected when members of a Panel individually have given serious thought to a major and complex problem, and have sought to achieve a joint resolution in furtherance of the Panel's task as a deliberative body. A concurring statement by Dr. George Stigler, and dissenting statements by Mr. Robert C. Jackson and Mr. Wilfred J. McNeil, appear immediately following Chapter VI. Mr. Lewis Powell has, indicated he may wish to submit a supplemental statement on areas not addressed by the Panel's Report. The Panel had the benefit of the voluntary assistance of many individuals in private industry, whose services were requested by the Panel because of their particular knowledge in various specialized areas. It especially wishes to express its thanks to them and to the companies who loaned their services. vi Department of Defense - both military and civilian - who contributed generously of theirI time in answering its innumerable questions and volunteering so many constructive suggestions. We found them uniformly anxious to help and enthusiastic about the possibilities for improving operations. As it was not deemed feasible to refer its recommendations to all interested parties and agencies for review prior to submitting its report, its recommendations are its own, and have not had the~ benefit of such advance review. To all these people who contributed so much to its endeavors, the Panel extends its deep thanks. Especially, we realize that the fine response would not have happened without the strong support of Secretary of Defense Melvin R. Laird, and Deputy Secretary of Defense David Packard. vii CONTENTS Page LEITER TO THE PRESIDENT........................................... PREFACE........................................................ v EXECUTIVE SUMMARY..................... ......................... BACKGROUND AND INTRODUCTION..................................... I 10 21 CHAPTER I ORGANIZATION......................................... Controi and Management by the Secretary of D~efense............................ 22 The Office of the Secretary of Defense .................................... 24 The Joint Chiefs of Staff and the Joint Staff .. .. .. .. .. .. .. .. .. .. .. .. .. ... . ..... 32 The Military Departments .. .. .. .. .. .. .. .. .. .. .. .. ... . ... . .. ... . .. ....... 36 The Defense Agencies .. .. .. .. .. .. .... .. .... .. .... .. .... .... .. .... ..... 42 The Combatant Commaisds;. .. .. .. .. .. .... .. .... .. .... .. .... .... .. ....... 46 Recomsmendations .. .. .. .. .. .. .. .... .. .... .. .... .... .. .... .. .... ...... 3 Organization Charts Existing Organization .. .. .. .. .. ... . .. ... . .. .. .. .. .. .. .. .. .. ... . ..... 26 Proposed Organization. .. .. .. .. .. .. ... . .. ... . .. .. .. .. .. .. .. .. .. ..... 61 CHAPTER 11 MANAGEMENT OF MATERIEL RESOURCES. .. .. .. .. .. .. .. .... ..... Research and Development. .. .. .. .. .... .. .... .. .... .. .... .. .... .. ....... Technological Base.. .. .. .. .. .. .. ... . .. ... . .. .. .. .. .. .. .. .. .. .. .... Advanced, Engineering, and Operational Systems Development .. .. .. .. .. .. ... . ..... Operational Test andEvaluation. .. .. .. .. .. .. ... . .. ... . .. ... . .. .. .. ..... Procuremenst.. .. .. .. .. .. ... . .. ... . .. ... . .. ... . .. .. .. .. .. .. .... ..... The Industrial Mobilization Bose.. .. .. .. .. .. .. ... . .. .. .. .. .. .. .. .. .. .. .... 62 63 64 67 88 91 95 Supply, Maintenance and Transsportation .. .. .. .. .. ... . .. ... . .. .. .. .. .. ..... 97 Integrated Procurement Management. .. .. .. .. .. .. .. .. .. .. ... . .. ... . . . .... t0 CHAPTER Ill MANAGEMENT AND PROCEDURES .. .. .. .. .. .. .... .. .... .. ..... Planning, Programmsning and Budgeting System .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ... L~ogistics Guidance.. .. .. .. .. .. .. .. .. .. .. .. .. .... ... . .. ... . .. ... . ..... Development Concept Paper. .. .. .. .. .. .. .. .. .. ... . .. ... . .. ... . .. .. .. ... Defense Directives/Guidance System and Management Information Reports. .. .. .. .. .. ... Selected Acquisition Report .. .. .. .. .. .. .. .. .. ... . .. ... . .. ... . .. ... . ..... The Joint Chiefs of Staff Decision-Maklcng Process.. .. .. .. .. .. .. ... . .. .. .. .. ..... Accounting Procedures. .. .. .. .. .. .. .. ... . .. .. .. .. .. .. .. .. .. .. .. .. ..... Contract Audit, Internal Audit and Inspections .. .. .. .. .. .. .. .. .. .. .. .. .. .. .... Ill 112 119 119 121 125 126 129 129 CHAPTER IV MANAGEMENT OF PERSONNEL RESOURCES. .. .. .. .. .. .... .... ... 135 Civilian Personnel .. .. .. .. .. ... . .. ... . .. .. .. .. .. .. .. .. .. .. .. .. .. ..... 135 Military Personnel .. .. .. ... . .. ... . .. .. .. .. .. .. ... . .. ... . .. ... . .. ..... 137 Vill Page CHAPTER V rOffice OTHER MANAGEMENT CONSIDERATIONS....................... Telecommunications .................................................. Automatic Data Pracesaing............................................... Contract Studies .. .. .. .... .... ...... .... .... ...... .... ...... of Civil Defense. .. .. .. .... ...... .... ...... .... .... ...... Equal Employment Opportunity Compliance in Defense Contracts. .. .. .. Equal Fraployment Opportunity within the Department of Defense .. .. .... Industrial Relations. .. .. .... .... ...... .... ...... .... ...... .... Domestic Action .. .. .. .. ...... .... ...... .... ...... .... ...... Defense AtomnicSupport Agency .. .. .... .... ...... .... ...... .... The Military-Indussnrlal Complex .. .. .. .... .... .... ...... .... ...... External Relations of the Department of Defense .. .. .. .... ...... .... Military Installations. .. .. .. .... ...... .... .... ...... .... ...... Physical Security in the Pentagon. .. .. .... .... ...... .... ...... .... CHAPTER VI CONFLICTS, OF INTEREST .. .. .. .. .. .... .. .... .... ...... ....... .... ...... ..... ...... ...... ..... .... ...... ..... ...... ........ .... ...... ....... ...... .... ....... .... ...... ..... ...... .... ....... .... ...... ....... ...... .... ..... .. .... .. .... 145 145 151 158 160 161 164 168 169 170 173 175 177 178 ... 180 Retired Officers and Form~erEmployees .. .. .. .. ...... .... ...... .... ...... .... ..... Current Officers and Employees .. .. .. .... .... .... ...... ...... .... .... ...... ..... No'sapproprlated Fund Activities .. .. .. ...... .... ...... .... ...... .... ...... ....... Consultant . .. .. .... ...... .... ...... .... ...... .... ...... .... .... ...... ..... 180 189 194 196 INDIVIDUAL STATEMENTS OF PANEL MEMBERS Dr. George J, Stigler. .. .. .. ...... .... ...... Robert C. Jackson .. .. .. .... ...... .... .... Wilfred J. McNeil. .. .. .. .... .... ...... .... .... ...... ...... .... .... ...... .... .... ...... .... ....... 198 ...... .... ...... .... ..... 200 .... ...... .... ...... ..... 207 CONSOLIDATED LISTS OF RECOMMENDATIONS Organization .. .. .. .... .... ...... .... ...... Management of Materiel Resources .. .. .... .... Management and Procedures. .. .. .. .... ...... Managcment of Personnel Resources. .. .. .. .... Other Management Considerations .. .. .. .. ...... Conflicts nf Interest. .. .. .... .... ...... .... .... ...... ...... .... .... ...... .... ...... .... ...... ...... .... .... .... ...... .... ..... 211 ...... .... ...... .... ..... 217 .... ...... .... ...... ..... 224 .... ...... .... ...... ..... 228 .... .... ...... .... ..... 230 ...... .... ...... .... ..... 234 APPENDICES (To be published separately) A. Mechanisms for Change - Organizational History B. Missions and Fsunctions, Washington flepvdsuartrrs Staffs C. Functional Analysts.- Washington tIIenstquarters S'taffs D. Personnel Data and Trends in Staff Sizes E. Major Weapon Systems Acquisition Process F. Operational Test end Evaluation G. Supply, Maintenance and Transportatibn H. Telecommunications 1. Automatic Data Procesasing J. Audit Procedures K. Conflicts of Interest L. Comparisons of DOD, NASA and AEC Acqunisition Processes M. Correspondence Control and Mail Distribution in Waslsington lHeadquarters N. Joint Chiefs of Staff Decision-Making ix BLUE RIBBON DEFENSE PANEL REPORT EXECUTIVE SUMMARY The purpose of this summary is to provide a ouick .eview of the six-chapter report resulting from the year-long study by the Blue Ribbon Defense Panel. The Panel's report offers recommendations in a number of areas including organization, managerment of materiel resources, management procedures, personnel management and conflicts of interest. This summary covers the major recommendations of the Panel in the area of the organization of the Defense Department and several of the more signlificant recommlendations in the other areas. As a result of its exanmination of the Defense Departmeait, the Panel found ti:at: - Effective civilian control is impaired by a gene,-aliy excessive centralization of decision-making authority at the level of the Secretary of Defense. The Secretary's ability to selectively delegate authority and decentralize management, while still retaining personal authority on major policy issues of the Department, is seriously inhibited by the present organizational structure. - The President and the Secretary of Defense do not presently have the opportunity to consider all 'table options as background for making major decisions, because differences of opinion are submerged or compromised at lower levels of the Department of Defense. - There are too many layers of both military and civilian staffs, and ,taffs are too large in the Office of the Secretar) of Defense, (OSD) the Military Departments extending down through the field commands, the Jo;ut Chiefs of Staff and the U:iified and Component Commands. The results are excessive paper work and coordination, delay, duplication and unnecessary expense. - The present arrangement for staffing the military operations activities for the President and the Secietary of Defense through the Joint Chiefs of Staff and the Military Departments is awkward and unresponsive; it provides a forum for inter-Service conflicts to be injected into tie decision-making process for military operations; an'd it inhibits the flow of information between ihe combatant commands and the President and the Secretary of Defense, often even in crisis situations. - The Joint Chiefs of Staff could more effectively perform their important statutory role as principal military advisors to the P~esident and the Secretary of Defense if they were relieved of the necessity of performing delegated duties in the field of military operations and Defense Agency supervision. - The present combatant command structure does not facilitate the solution of many serious problems which materially affect the security of the nation. For example, recent advances in technology require much closer coordination in planning for and employing the forces of the Continental Air Defense CommanO and the Strategic Air Command than cats reasonably be expected with two separate commands. Also, the present Unified Commands do not bring about unification of the Armed Forces, but rather are layered with Service component headquarters and large headquarters' staffs. - Thern. is substantial room for improvement and greater integration of management s -- 1 "t throughout the supply, maintenance and transportation systems of the Department. The most critical need for improved effectiveness is in the support of the Unified Commands. - There is no organizational element within OSD with the capability or the assigned responsibility for objectively making net assessments of U.S. and foreign military capabilities. - There is no adequate organizational element within OSD that is charged with the responsibility for long-range planning for the structuring and equipping of forces or for other similar purposes. - No formal mechanism exists within OSD to assure adequate coordination among the various elements of the Department. -The present f'ictional assignments of Assistant Secretaries of the Military Departments contributo to dupliLation between the efforts of the Military Department Secretariats and the Service military staffs, and ,aso between the Military Department Secretariats and OSD. - The polic'.,s of the Department on development and acquisition of weapons and other hardware have contributed to serious cost overruns, schedule slippages and performance deficiencies. The difficulties do not appear amenable to a few simple cure-alls, but require many interrelated changes in organization and procedures. - Operational test and evaluation has been too infrequent, poorly designed and executed, and generally inadequate. - Procurement procedures do not sffi. lently reflect the national need to maintain an adequate, but not excessive, industrial base. - The promotion and rotation systems of the Military Services do not facilitate career development in the technical and professional activities, such as research and development, procurement, intelligence, communications and automati 'Ita processing. - The acquisition and retention of officers and enlisted men in the Armed Services are becoming increasingly difficult for a number of reasons, including (1) personnel policies with respect to compensation, promotion and retircraemt, and (2) the negative attitude of segments of the public. - While policies on equal employment opportunity for military and civilian personnel and for contractors appear adequate, implementation responsibilities and functional assignments are fragmented and diffused and have impaired the achievement of effective results. - The statutes and regulations regarding conflict. of interest are ambiguous, conflicting, and ineluitable, and are not uniformly enforced. To effect substantial improvement in these conditions, the Panel makes the following recommendations: 1. The functions of the Department of Defense should be divided into three major groupings: 2 (a) Military Operationa, including communications (herein called Operations); operational command, intelligence, and (b) Management of personnel and materiel resources (herein called Management of Resources); and (c) Evaluatirn type functions, including financial controls, testing of weapons, analysis of coats and effectiveness of force structures, etc., (hei ein called Evaluation). 2. Each of these major groups should report to the Secretary of Defense through a separate Deputy Secretary. Appointees to these three positions should be drawn from civilian life, and should rank above all other officers of the Department of Defense except the Secretary. One of the three should be designated principal deputy. The General Counsel, the Assistant to the Secretary of Defense (Atomic Energy), the Assistant Secretary of Defense (Public Affairs), and the Assistant to the Secretary of Defense (legislative Affairs) would continue to report directly to the Secretary of Defense. The staff of the Office of the Secretary of Defense should not exceed 2,000 people, 3. The Deputy Secretary of Defense for Management of Resources should be delegated responsibility for the following functions% (a) The Military Departments, supervision of their Secretaries; which should continue under the imnmediate (b) Research and Advanced Technology; (c) Engineering Development; (d) Installations and Procurement (a modification of the present Installations and Logistics); (e) Manpower and Reserve Affairs; (f) Health and Environmental Affairs; (g) Defense Supply Agency; and (h) Advanced Research Projects Agency. Thsere should be an Assistant Secretary of Defense for each of the functions (b) through (f) inclusive, who reports and provides staff assistance to the Secretary of Defense through the Deputy Secretary of Defense (Management of Resources). Thseposition of Director, Defense Research and Engineering should be abolished, and his functions reallocated between the Assistant Secretary of Defense for Research and Advanced Technology and the Assistant Secretary of Defense for Engincering Development. Functions (g) and (hi)should continue to be constituted as Defense Agenscies, each unsder the immediate supervision of a Director. The Advanced Research Projects Agency should be delegated the responsibility for all research and exploratory development budget categories. Funds for such research should be 3 b".. directly to this Agency, and the Agency should be authorized to assign or contract for work projects to laboratories of the Defcnrs l)epartment or in) the private sector, as appropriate. 4. The Deputy Secretary of Defense for Operations should be delegated responsibility for the following functioni:: (a) Military Operations; (b) The Unified Commands: (c) Operational Requircments; (d) Intelligence; (e) Telecommunications (and Automatic Data Processing); (f) International Security Affairs: (g) t)efense Communications Agency; and (h) Civil Defense Agency (if Civil Defense is to be retained in the Department of Defense). Three new major Unified Commands should be created: (I) A Strategic Command, composed of the existing Strategic Air Command, the Joint Strategic Target Planning Staff, tile Coetinental Air Defen.s Command, and Fleet Ballistic Missile Operations: (2) A Tactical (or General Purpose) Command, composed of all combatant general purpose forces of the United States assigned to organized combatant units; and (3) A Logistics Command, to exercise for all combatant forces supervision of support activities, including supply distribution, maintenance, traffic management and tranasportation. No Commander of it Unified Command should he permitted to serve concurrently as Chief of his Military Service. The responsibilities now delegated to the Joint Chiefs of Staff by the Secretary of D)efense to serve as military staff in the chain of operational comnmana with respect to the Unified Commands, and all other responsibilities so delegated which are related to military operations and the Unified Commands, should be assigned to a single senior military officer, who should also supervise the separate staff which provides staff support ous military operations and the channel of communications from the President and Secretary of Defense to Unified Commands. This officer should report to the Secretary of Defense through the Deputy Secretary of Defense (Operations). This senior military officer could be either the Chairman of the Joint Chiefs of Staff, as an individual, not ex-officio, the Commander of the Tactical Command, or some other senior military officer, as determined by the President and the Secretary of Defense. There should be ala Assistant Secretary of Defense for each of the functions (c) through (f), inclusive, who reports and provides staff assistance to the Secretary of Defense through the Deputy Secretary of Defense (Operations). The Defense Communications Agency and The Civil Defense Agency would each be under the imnediate supervision of a Director. 4 All intelligence functions of the Departmert of Defense ard all communications functions should report to the Secretary of Defense through the Deputy Secretary of Defense for Operations. 5. The following steps should also be taken: (a) To provide the staff support on military operations, and the channel of communications from the President and the Secretary of Defense to the Unified Commands, an operations staff, separate from all other military staffs, should be created. (b) The responsibilities now delegated to the Joint Chiefs of Staff by the Secretary of Defense to serve as military staff in the chain of operational command with respect to the Unified Commands, and all other responsibilities so delegated which are related to military operations and the Unified Commands, should be rescinded; and considera ion should be given to changing the title of the Chief of Naval Operations to Chief of Staff of the Navy. (c) All staff ',ersonnel positions in the Organization of the Joint Chiefs of Staff and in the headquarters military staffs of the Military Services which are in support of activities, such as military operations, which are recommended for transfer to other organizational elements, should be eliminated. (d) The Organization of the Joint Chiefs of Staff should be limited to include only the Joint Chiefs of Staff and a reconstituted Joint Staff limited in size to not more than. 250 officers augmented by professional civilian analysts as required. (e) The Unified Commanders should be given unfragmented comma, ,iithority for their Commands, and the Commanders of component commands should lesignated Deputies to the commander of the appropriate Unified Command, in o, make it unmistakably clear that the combatant forces are in the chain of comma 'hich runs exclusively through the Unified Commander; (f) In consolidating the existing area Unified Commands into the Tactical Command, major organizational and functional advantages will be obtained by: (1) Merging the Atlantic Command and the StrWIe Con, .. and; (2) Abolishing the Southern Command and reassigning its functions to the merged Atlantic and Strike Commands; (3) Abolishing the Alaskan Command and reassigning its general purporse function to the Pacific Command and its strategic defense functions to the Strategic Command; and (4) Restructuring the command channels of the sub-unified commands. (g) The responsibilities related to civil disturbances currently delegated to the Army should be redelegated to the Tactical Comnnand; and (h) The Unified Commanders should be given express responsibility and capability for making recommendations to the Deputy Secretary of Defense for Operations, for operational capabilities objectives and for allocations of force structures needed for the 5 effective accomplishment of the missions assigned to their Commands. 6. The Deputy Secretary of Defense for Evaluation should be delegated the responsibility for evaluation and control-type activities, including: (a) Comptroller (including internal audit and inspection services); (b) Program and Force Analyst, (a modification of the present Systems Analysis Unit); (c) Test and Evaluation; (d) Defense Contract Audit Agency; and (e) Defense Test Agency. There should be an Assistant Secretary of Defense for each of the functions (a) thrmigh (c) inclusive, who reports ansd provides staff assistance to the Secretary of the Defense through the Deputy Secretary of Defervse for Evaluat.ion, The Defense Contract Audit Agency should be continued as a Defense Agency, under the immediate supervision of a Director. A Defense Test Agency should he created to perform the functions of overview of all Defense test and evaluation, designing or reviewing of designs for test, monitoring and evaluation of the entire Defense test program, and conducting tests and evaluations as required, with particular emphasis on operational testing, and oil systems and equipments which span Service lines. The Defeni:e Test Agency should be under the supervision of a civilian Director, reporting to the Secietary of Defense through the Deputy Secretary of Defense for Evaluation. 7. The number of Assistant Secretaries in each of the Military Departmen's should be set at three, and except for the Assistant Secretaries (Financial Management), they should serve as senior inenibers of a personal staff to the Secretaries of the Military L)epartments without the existing limitations of purview imnposed by formal functional assignments. The Assistant Secretary (Financial Management) should become the Comptroller of the Military Department, viith a military deputy, aisin the current organization in the Department of the Navy, Tile Secretariats and Service Military Staffs should be integrated to tile extent necessary to eliminate duplication; the functions related to miliary operations and intelligence should te eliminated; l'e type functions, e.g., personnel operations, should be transferred to coumand organizations: and file remaining elemnents should be reduced by at least thirty percent. (A study of the present staffs indicates that tile Secretariats and Service staffs combined should total no more than 2,000 people for each Department). 8. Class II activities (Army), Field Extensions (Air Force), and Commands and Bureaus (Navy), all of which are lile, rather than staff in character, which are now organizationally located under the direct supervision of staff elements in the headquarters military staffs of the Services, should be transferred to existing coinniand-type organizations within the Services. 6 i .... ...... :: 9. "ihe Defense Atomic Support Agency should be disestablished. Its functions for i!nuclear weapons management should be transferred to the operation,• staff under the Deputy Se, xetsry of Defense for Operations, and its wea,ýons A•fects test design function should be transferred to the Defense Test Agency. 10. The administration functions presently assigned to the Assistant Secretary of Defense (Administration) should be assigned to a Director of Pentagon Services, reporting to the immediate office of the Secretary of Defense. He should be responsible for operating the facilities and providing administrative support for the Washington Headquarters. 11. A Net Assessment Group should be created for the purpose of conducting and reporting net assessments of United States and foreign military capabilities and potentials. This group should consist of individuals from appropriate units in the Department of Defense, consultantG and contract personnel appointed from time to time by the Secretary of Defense, and should report directly to him. 12. A Long-Range Planning Group should be created fot the purpose of providing staff support to the Secretary of Defense with remponsibility for long-range planning which integrates net assessments, technological projections, fiscal planning, etc. This group slould consist of individuals from appropriate units in the Department of Defense, consultants and contract personnel appointed from time to time by the Secretary of Defense, und should report directly to him. 13. A Coordinating Group should be established in the immediate office of the Se•..iary of Defense. The responsibilities of this Group should be to assist the Secretary of Defense and the Deputy Secretaries of Defense in coordinating the activities of the entire Department in the scheduling and follow-up of the various inter-Departmental liaison activities: to staff for the Secretary the control function for improvement and reduction of management information/control systems needed within the Department and required from Defense contractors; and to assure that each organizational charter of the Office of the Secretary of Defense is of proper scope and coordinated and in accordance with the assigued responsibility of the organization. The responsibility foi the Department's Directive/Guidance System, currently assigned to the Assistant Secretary of Defense (Administration), should be assigned to this group. The coordinating group should be headed by a civilian Director, who should also serve as executive assistant to the Secretary of Defense. 14. The Army Topographic Command, the Naval Oceanographic Office and the Aeronautical Chart and Information Center should be combined into a unified Defense Map Service reporting to the Secretary of Defense through the Deputy Secretary of Defense for Management of Resources. 15. A new development po!!Ly for weapons systems and other hardware shouid be formulated and promulgated to cause a reduction of technical risks through demonstrated hardware before full-scale development, and to provide the needed flexibility in acquisition strategies. The new policy should provide for: (a) Exploratory and advanced development of selected sub-systems and components independent of the development of weapon systems; 7 (b) The use of government laboratories and contractors to develop selected sub-systems and components on a long-term level of effort basis; (c) More use of competitive prototypes and less reliance on paper studies; (d) Selected lengthening of production schedules, keeping the system in production over a greater period of time; (e) A general eule against concurrent development and production efforts, with the production d&cision deferred until successful demonstration of developmental prototypes; (f) Continued trade-off between new weapon systems and modifications to existing weapon systems currently in production; (g) Stricter "gold-plating"; limitations of elements of systems to essentials to eliminate (h) Flexibility in selecting type of contract most appropriate for development and the assessment of the technical risks involved; (i) Flexibility in the application of a requirement for formal contract definition, in recognition of its inapplicability to many developments; (j) Assurance of such matters as maintainability, reliability, etc., by means other than detailed documentation by contractors as a part of design proposals; (k) Appropriate planning early in the development cycle for subsequent test and evaluation, and effective transition to the test and evaluation phase; and (I) A prohibition of total package procurement, 16. The effectivenew. of Program or Project Management should be improved by: (a) Establishing a career specialty code for Program Managers in each Military Service and developing selection and training criteria that will insure the availability of an adequate number of qualified officers. The criteria should emphasize achieving a -easonable balance between the needs for knowledge of operational requireaments and experience in management; (b) Increasing the use of trained civilian personnel as program managers; (c) Providing authority commensurate with the assigned responsibility and more direct reporting lines for program managers, particularly those operating in matrix organizational arr~angements; and (d) Gihing ihe program manager directive authority, subject to applicable laws and regulations, over the contracting officer, and ciarifying the fact that the contract auditor acts in an advisory role. 17. Increased use should be made of parametric costing techniques for developments and procurements to improve the quality of original and subsequent estimates, and to help ol'sc I the diff'culI ics of estimating I lie coss of unKinowns. 18. A separate program category* should be established for test and evaluation, overview of all Defense test and responsibility forAgency. and the especially operational evaluation efforts shouldtesting, be assigned to the Defense Test 19. Specialist careers should be established for officers in such staff, technical and professional fields as research, development, intelligence, communications, automatic data processing, and procurement. 20. In order to improve the process of acquisition and iretention of military personnel, the Executive Branch should develop, and submit to the Congress for its consideration as necessary, a total military personnel program which coordinates and reconciles all the separate considerations, particularly including; (1) military compensation and retirement, (2) personnel policies on promotion and rotation, and (3)• acquisition programs, such as Reserve Officers Training Cc.ps. 21. The duration of assignments for officers should be increased, and should be as responsive to the requirements of the job as to the career plan of the officer. Oflcers continued on an assignment for this reason should not be disadvantaged in opoortunity for promotion. 22. Executive Orders and Department of Defense Directives with respect to matters of equal employmvnt opportunity for Department of Defense military personnel, civilian employees and contractors, as set forth in the existing comprehensive programs for insuring equal opportunity, should be administered from a sufficiently high organizational level in the Department to assure effective implementation, and the procedures for assessing penalties for non-compliance should be reviewed and clarified. 23. The Secretary of Defense should recommend clarifying changes in conflict of interest statutes, should amend the regulations to clarify them, and should make certain administrative changes to insure unifo.rm enforcement. Program te arethoscategories of activitis usedorinternal planning andmanahementr i theDepartment, e.g., strategic offensive forces, strategic defensive forces, resesr.h and development, intelligence, etc. 9 BACKGROUND AND INTR'DUCTION Background Any effective changes in military organization and management in the United States must be predicated on a thorough unoerstanding of the evolutionary process which has resulted in the existing military structure and procedures. The Department of Defense was established only 23 years ago; however, it has been shaped by historical factors, some of which predate the American Revolution. Among the most significant factors influencing the organization of the Defense establishment are: (1) The traditional attitudes of the Nation toward the military and toward the Nation's role in international affairs; (2) The Constitutional separation of powers of civilian control of the military between the Legislative and Executive Branches of Government; (3) The traditional roles and relationships of the several Military Services; and in recent years; (4) The qualitative and quantitative changes in warfare; (5) T1se revolution in technology; and (6) Rising costs. The concern of Americans to insure civilian control of the military dates back to the colonial era and was reinforced by the examples of other nations in contemporary history. A fear of military rule found expression in the Declaration of Independence with charges against George III that "ise has kept among us in times of peace Standing Armies, without the consent of our legislators" and that "he has effected to render the Military independent of and superior to the civil power." Neither the basic concern to insure, nor the requirement to provide effective civilian control has diminished during the intervening years. There has never been any real challenge to this concept. Military men in this country readily acknowledge its validity. Such difficulties as have arisen result not from the principle, but from how best to make it effective. Many Americans have traditionally tended toward isolationism in international affairs. The reasoning which led President Washington to caution in his farewell address against "foreign entanglements" has never entirely lost its attraction to Americans. Unlike other nations in history that achieved dominant roles in world affairs through design, the United States was thrust into such a role because of its economic, industrial, technical and nmilitar, potential - largely against its will. Before World War II, the United States never maintainted a large, standing military force in peacetime, but the continuous maintenance since then of a large and costly force is a constant reminder of the burden of international responsibilities which must be reconciled with a still persistent desire for the world to "leave us alone." Each exercise of these responsibilities which involves the active employment of military forces stimulates a resurgence of latent reluctance to accept international involvement - a 10 reluctance which tends to increase in dire•t proportion to the 'tngth, intensity and cost of the military involvement in meo and money, unless the security of the United States is obviously and immediately at stake. The deep-seated objections on the part of many Americans to our current involvement in the war in Southeast Asia are partly a result of this long history. Our Country's natural abhorrence of war has been accentuated by a number of new factors - the relatively heavy involvement of American manpower, the long drawn-out nature of guerrilla warfare, the absence of the stimuWating prospect of a "victory," and the "instant reporting" of news, with war's always diJmal face being brought into our living rooms in vivid color. The Panel has not been asked to and does not take a position on these trends, nor has it been asked to consider what basic national policy should be, or what the Defense Department's mission should be in the cotext of such policy. Its as-' ,ned task was to exmine the organization and operation of the Department of Defense, and make recommendations to help the Despartment perform its assigned national security mission more efficiently. However, the Panel cannot be insensitive to the environment in which the Departrnent of Defense operates. It was impossible to be thorough in our assigned area and be blind to the morc fundamental questions. In reading and hearing testimony from people with widely diverse interests and backgrounds, we sensed intimately the wide divergence of opinions in these areas. We could not fail to be interested in discussions as to the nature of the various threats to our Nation's security that the Department of Defense must be prepared to counter. We could not fail to note the effect of developments of the last several years on the public's attitude toward the Department of Defense in general and the military in particular. We could not fpil to be aware of the emotional as well as the intellectual strains these issues cause among Americans. And, we could not fail to recognize the importance to different groups of winning the minds and hearts of the unconmmitted, and the various means used for this purpose. While these matters are outside the scope of our study, we believe they have a profound Influence on the Department of Defense. It is in this context that the Panel formed its recommendations. The Constitutional allocation of the powers of civilian control of the military has had a recognizable impact on each change in military organization. Although the President is assigned the role of Commander-in-Chief of the Armed Forces, the Constitution vests in the Congress significant instruments of control, including (1) the Senate's power of advice and consent to Presidential appointments, (2) declaration of war, fIt the appropriation of funds, (4) raisin; armies and msintaining a Navy, (5) makingt rules for the government and regulation of the Armed Forces, and (6) calling the militia into Federal Service. The Military Services have from time to time found the Constitutional separation of the powers of civilian control of use to them in their understandable and unending effort to maintain and occasionally extend their traditional roles and missions. In short, it has often provided an environment conducive to inter-Service rivalry and competition. Inter-Service rivalry and competition are not necessarily bad, and can be good when II they result in improved effectiveness or economy in our military forces. So long as we have separate Military Services, separate loyalties are inevitable. A mail's pride in his own Seevice is well worth preserving. A difference of opinion as to which Serv;ce should be responsible for a specific mission or for the development of a particular weapon certainly does not reflect upon tile honor, ;ntegrity and dedicaton of the ,fficers involved. 1, is more likely the logical result of each officer's honest belief that his Service or his idea of a new weapon is in fact best for the counitry. The inter-Service difficulties are comiplicated by the increasing budget pressures, thus making the competition for the available dollars keener. The Panel believes that its reconmenda~ii:is can i-apreve the organization so that proper Service loyalties and competition are more likely to be directed to the best end results. During and following World War It, it became increasingly evident that the nature of warfare was undergoing radical change. World War II proved dtat modern transportation capabilities hid vastly increased the size of forces which could be engaged in a war. It also was demonstrated that modern warfare required combined operations by land, sea and air forces, and this in turn required not only a unity of operational conmmand of these forces, but also a unified and courdinated process for structuring forces to achieve the most effective force mixture. As President Eisenhower was to express it, "separate ground, sea and air warfare is gone forever."* Of even greater significance, however, was the markedly increased interdependence of military power and its use with industrial, economic, diplomatic and political factors. The totality of Governmental acions and the utilization of resources have become so interdependent that it is no longer possible to speak meaningfully of a "purely military decision." The explosion of technology has had a profound impact o0 military operations and organization. This has not beer%limited to weapons technology; however, the development of nuclear weapons unquestionably has bces it very significant influence. The rate of technological change influences all segments of our society, and the military have been subject to new opportunities and pressures which conflict with traditional methods. The art of warfare in the post-World War It world has been clharacterized by uncertainty, as the past has provided fewer 4.sd fewer guidelines for the future. It is not surprising that both in and out of the military establishmnent there have been sharply differing opinions oil how the new technology canl be applied to the spectrum of conflict situations for which the U. S. must be prepared, what organizational changes are required to exploit new and radically different capabilities, and the costs of converting technologý to the nses of war. The development of new weapon systems to meet the evolving threats to the security of the United States is a vital part of our National Defense, and is one of the driving forces behind the entire Defense structure. As such, it must be carefully controlled. The principal objective of United States military power is to deter war by having sufficient and credible power to maintain peace. To help reduce the human and material costs of the military power necessary for this purpose of keeping the peace, Americans TPresident Eisenhower's Message to Congress, April 3, 1958 12 .... ..... earnestly hope for the success of the Strategic Arms Limitation Talks (SAL'f). The importance of the concept of keeping the peace by deterring war led to the choice of the title of this Report: "Defense for Peace." While there have been revolutionary changes in warfare and technology, this country's reaction to them has been moderated by the traditional influences and historical political mechanisms. The changes in military organization have thus been evolutionary railrer than revolutionary, and each change has represented a compromise between conflicting pressures and influences. This essentially cautious approach to making necesrtary changes has much to commend it; however, it carries with it the requirements for constant review and consequent adjustment to copt: with current and changing U.S. responsibilities and to counter the current and projected threats to the security of the United States. Changes in Military Organization since World War 11 * * During World War 11, the single direction of military components of the U. S. became a prerequisite to the success of the war effort. It was also a necessity for harmonious interface of the U. S. military command structure with those of our allies. This experience -.irtually ruled out a retumn to tl'e prewar separateness of Services, but by no means suppressed the pressures which derived from traditional .ttitudes withi.. the Services, and from institutional balances between the executive and legislative branches of Government. The Army, whose position was strongly supported by President Truman, became an advocate of close unification. The Army's objective received an assist fromt the proponents of air power, motivated by a strong desire for co-equal status for sir forces with land and sea forces. The Navy - fearing for the future of its naval air power and the Marine Corps - wanted at the time no part of unification, particularly of unified command in Washington. ~divergent l'he history of the U. S. military establishment since World War 11is more clearly told in aseries of evolutionary organizational changes, commencing with the 1947 legislation, which initiated the first move toward "unification," The National Security Act of 1947 The National Security Act o5 1947 reflected a compromise of the~z diverse currents and pressurca. The Congress acknsowledged the need f(_- military "unification" and closer coordination of foreign and military policy, and it was particularly motivated by the substantial economies which it appeared would result from elimination of wasteful inter-Service rivalry. Even these conclusions were tempered, however, by the reluctance of Congress to bestow on the President any additional powers that might weaken the congressional role in the civilian control of the Armed Forces. t~he Act, in addition to creating a National Security Council fw btter coordination of foreign and military policy, and a Central Intelligence Agency for coordination of intelligence in hopes of precluding the diffusion of intelligence responsibility which made possible a "Pearl Harbor," created the Office of the Secretary of Defense to provide the President a principal staff assistanst "in all matters relating to the national security." The characteristics of compromise were most significantly reflected in the powers granted to the Secretary of Defense. kather than presiding over one single Department of the Executive Bransch, as recommended by President Truman, he was to preside over the National Military Establishment, which consisted of three Executive Departments - Arnsy, 13 Navy and Air Force - each headed by a cabinet-level Secretary. The Secretaries of each of the Military Department. retained all their powers and duties, subject only to the authority of the Secretary of Defense to establish "gc:reral" policies and programs, to exercise "general" direction, authority and control, to eliminate unnecessary duplication in the logistics field, and to supervise and coordinate the budget. The Secretary of Defense was given only three Special Assistants. The Joint Chiefs of Staff were given statutory recognition but remained, in effect, a committee depending on voluntary cooperation. The Act, in an effort to prevent a repetition of the haphazard economic mobilization of World War 11, created a Munitions Board and a Research an-° Development Board, but made the representatives of the Military Departments on each ooard co-equal with the Chairman of the Board. The resulting military organization was aptly characterized some years later by President Eisenhower as "little more than a weak confederation of sovereign military units." This was the first step in the post-World War II evolution of the U.S. military organization. Each subsequent step was to be characterized by debace centered upon the powers required by the Secretary of Defense 'v) assure properly unified Armed Forces and their efficient management. The 1949 Amendments to the National Security Act In 1949, armed with the findings of the Honver Commission's Task Force onl National the public plea of Secretary of Dpfense Forrestal (who in 1947 had opposed a strong unification effort), and the Eberb:,dt Task Force report, all of which documented the weaknesses of the 1947 Act and recommended greater powers for the of Defense, the President reinstituted his insistence for nrore effective unific•:tun of the military establishment. "SecurityOrganization, S~Secretary The resulting changes in military organization once again reflected a compromise of the existing pressures and influences, but on balance, represented a major step in t ie direction of unification. The Department of Defense became an Executive Department, with the Secretary of Defense responsible for general direction. The Office of the Deputy Secretary of Defense was created and the three Special Assistants to the Secretary of Defense were converted to Assistant Secretaries. The Executive Departments of the Army, Navy and Air Force were reduced to Military Departments - with the proviso, however, thai they should be separately administered. The position of Chairman of the Joint Chiefs of Staff was created but given little more authority than to preside as a nonvoting member over meetings of the Joint Chiefs of Staff. The President's request for a transfer to the Secretary of Defense of the statutory functions of the Joint Chiefs of Staff, the Munitions Board and the Research and Development Board was denied. The Secretary of Defense was specifically prohibited from transferring assigned combatant functions among the Military Departments and was limited in the transfer of noi combatant functions by a requirement for prenotification of Congress. Subsequent to his submission of tlse request for the statutory changes in the National Security Act of 1947, but before the Congress enacted the 1949 amendments to the National Security Act, the President submitted to thie Congress Reorganization Plan No. 4, by which the National Security Council and the National Security Resources Board were transferred to the Executive Offices of the President. By selecting only these two boards for 14 transfer to the Executive Office of the President, the Reorganization Plan and the language of the President's message of transmittal, by omission, supported the implication that the Munitions Board, the Research and Development Board and the Joint Chiefs of Staff were parts of the Department of Defense, and as such, subject to the "general direction" of the Secretary of Defense. The statutes were uniformly silent as to the organizational location of all five entities. The 1953 Reorganization Plan V Further changes in Defense organization came in 1953, in the form of Reorganization Plan No. 6 submitted to Congress by President Eisenhower. Under the provisions of that plan, which became effective on June 30, 1953, the Munitions Board, the Research and Development Board, the Defense Supply Management Agency sand the Director of Installations were all abolished and their functions transferred to the Secretary of Defense. Insaddition, the selection and tenure of the Director of the Joint Staff by the Joint Chiefs of Staff was made subject to the approval of the Secretary of Defense. The function of managing the Joint Staff was transferred from the Joint Chiefs of Staff to the Chairman of the Joint Chiefs of Staff. Six additional Assistant Secretary positions, supplementing the three in existence, and a General Counsel of equivalent rank, were established to provide more adequate assistance to the Secretary of Defense. 'rhe 19581 Amendments to the National Security Act Faced by continuing inter-Service rivalry and competition over the development and control of strategic wearons, and under the impetus of the successful Lunthing of the Sputnik satellite by the Soviet Union in October 1957, President Eisenhower in 1958 requested, and the Congress enacted, substantial changes in the military organization. The basic authsority of the Secretary of Defense was redefined as "direction, authority and control," which is as strong as the lawmakers knew how to write it. In addition, the Secretary of Defense was given substantial power to reofganize the Department of Defense, The 1949 requirement that the Military Departments be "separately administered" was relaxed to "separately organized." The authority of the Secretary of Defense over research and development programs of the Department was strengthened, and the Secretary was provided with a Director of Defense Research and Engineering. The legislation covering the Joint Chiefs of Staff was amended in several ways. The authority of the Chairman over the Joint Staff was incre~ised, and the authorized msaximum strength of the Joint Staft was enlarged from 210 to 400 officers. The concept of "unified" and "specified" commands was established by law. The statutory authority of the Chief of Naval Operations and of the Chief of Staff of the Air Force to "command" forces was repealed. (The Chief of Staff of the Army had never had statutory command authority). The Military Departments were removed by statute from the chain of command over the operatilug forces in an effort to clarify and shorten the chain of command. However, the Secretary of Defense delegated to the Joint Chiefs of Staff the duty to serve as advisors and as military staff in the chain of operational command. As the members of the Joint Chicfs of Staff are the same officers as the Chiefs of the Military Services, wearing their "other hats," this delegation from the Secretary of Defense effectively put the Military Service Chiefs back into operations. Developments Since 1958 The changes in military organization since 1958 have flowed primarily from the reorganizational powers granted to the Secretary of Defense in the 1958 Amendments to the National Security Act. The nmore significant changes were the creation of the Defense Agencies: The Defense Atomic Support Agency in 1959, The Defense Communications Agency in 1960; The Defense Intelligence Agency in 1961; The Defense Supply Agency in 1962, and The Defense Contract Audit Agency in 1965. Significantly, each new Agency represented s consolidation of a functionsal activity by the Secretary of Defense in an effort to overcome the effects of functional diffusion among the Military Services. Those changes in the nature of warfare vvhlskh became apparent in the mid-I 940s have become even more compelling with the passage of time. The interrelationship of components of the military establishment, and of military policy and actions with other elements of national policy and activity, are even closer and more complex. The technological revolution, both in weapons and in general, continues unabated. Furthermore, it has proliferated to many other nations - both friendly and unfriendly - and has become highly competitive. The increasing sophistication of weapons and of the mechanisms for their control have been accompanied by a vast increase in costs. The need for effective civilian control is certainly no less compelling now than in 1947. Evidence of excessive competition among the Military Services over roles and missions and over the development of new weapons erupts periodically into the open to indicate diffusion of national efforts and resources. The strong interest and efforts of boths the executive and legislative branches to strengthen their respective roles in civilian control have, if anything, increased, Indeed, the period since the middle of the 1960s has been marked by action and reaction of the President and Secretary of Defense, on the one hand, and the Congress, on the other, to increase the effectiveness of their own mechanisms for control relative to the other. These conflicts may well have failed to accomplish the etads that both have sought, and which might have been attainable through a more cuoperative and harmonious effort. While it is not withini the Panel's Charter to recommend changes in the procedures of the Congress. it is relevant to point out the fact that the division of responsibility between the executive and legislative branches of the Government is further complicated by the diffusionS of committee responsibility for Defense matters within the Congress itself. * In retrospect, the evolutionary approach to reorganization of the Depart'-ient of Defense, while falling significantly short of the objectives of organizational and management purists, and at the same time overriding the inhibitions of the organizational traditionalists, has, on the whole, served the Nation's interests well. A more revolutionary approach to military reorganization mnighst have destroyed values inherent in the traditional military organization which have been worth preserving. Even more significant, revolutionary changes would probably have seriously disrupted the operation and reduced the effectiveness of U. S. military forces during a period when the world situation necessitated maintenance of credible military power. 16 The Pancl was conscious of the spectrumn of diverse influences. pressures and considerations in undertaking its study of the Dep';rtnient of Defense. It was against this background that it weighed advices ranging from the extrem, of total unification of the Military Services, through preservation of the status quo, to a reduction of the authority of the Secretary of Defense and increased independence for the separate Military Services, Current External Influences on Defense Management The operation and management of the Department of Defense cannot be evaluated using only conventional management criteria, for the Department does not exist under conventional conditions. On the contrary, it operates in a highly volatile environment, subject to many pressures and conditions which are largely beyond the control and often beyond the influence of those primarily responsible for Defense management. Among the more relevant factors bearing on Defense management are the shifts in national policies and priorities, both in foreign policy and domestic needs, and the accompanying shifts in the range of U. S. commitments and the number and types of crises occurring. Also, the important impact that defense spending can have on inflationary pressures, and vice versa, is currently of great importance. Among the most significant of the environmental factors impinging on Defense management, are the changing attitudes and opinions of the United States public. These heavily influence all aspects of management, but particularly such matters as weapons development and procurement; budgetary planning; personnel acquisition, retention and training; external research and development; contracting flexibility; and a large range of internal management problems. The Panel recognizes that the Department of Defense currently lacks the confidence of a significant segment of the American public. V/hile some of this is undoubtedly due to misunderststsdings, basically the Department must work harder to do the jobs assigned to it as efficiently as possible and to keep the public properly informed. The Panel believes there is considerable room for improvement on botht counts, and offers many recommendations to those ends. At the same time, it is important 'o note that overemphasis of legitimate causes of public concern, as well as ill-founded, or mis-directed charges, have the effect of seriously impairing the capability of the Depastment to carry out its national security mission. Changes in public attitudes are aptly illustrated by the public views about the industry which provides goods and serices fc ense. In times of generally acknowledged extreme national peril, such as the period of World War II, such industry is lauded, placed on a pedestal and characterized by such lofty phrases as the "Arsenal of Democracy." In other times, the public may :egard the same industry (in many cases the same Companies) as a scapegoat for a wide range of problems, and characterize it as a conspirator in a sinister "Military-Industrial Complex," whose objective is believed to subvert the best interests of the country to private gain. Each attitude impinges on the responsibilities for, approaches to, and effectiv'enes: Defense management. In the context of an "Arsenal of Democracy," the Defense manager's primary concern is quantity, quality, and speed of production. In the context of a "Military-Industrial Complex," the Defense manager is more likely to focus on the size of 17 the expenditure involved, the level of profits, and the methodology of contracting. Actually, all of these objectives are important and need attention at all times. Better ways are needed to deal with the complex relationship between a government purchaser of unique goods and services for which there are sometimes no competing markets, and a private seller who generally must operate in a severely competitive environment. The "product" (often a complex weapon system) around which this relationship revolves, frequently cannot be accuratrly described by either party, since it has never been made, and producing it might require spplications of technology never before perfected or even attempted. In the face of such uncertainty, both the buyer and the seller are required to estimate costs which are often unpredictable by any known techniques. Superimposed on these problems which are of special importance to the Department of Defense, is the general problem that inflations poses in all areas involving estimates of future costs. Nevertheless, these estimates nearly always become the major yardstick by which the success or failure of the transaction is measured. In addition, the seller nsust be prepared to operate uider detailed supervision of the buyer, and frequently in accordance with procedures devised or prescribed by the buyer, These problems must be solved, as it is in the best interest of all to malintain a healthy and productive industry which is responsive to overriding national interests. Public attitudes with regard to the conduct of the war in Southeast Asia also significsntly affect the present operations of the Departmenst of Defense. Clearly a; substantial part of tile publlc holds the military responsible for inefficiency In the conduct of the war, resulting in its length and indecisiveness. Such attitudes appear to ignore the fact that mnisy of the rules aisd restraiiits regarding how this war has been fought have isot originated with the military, but with the civil authorities of Government. Many operational tactics, believed by some to be msore militarily efficient, have been precluded by the United States self-imposed "rules of engagement," which reflect many factors is addition to military efficiency. Whether or not one agrees with the weight given the various factors in coming to such judgmental decisions, or with the actual decisions, the fact is that these decisions relating to the war in Southeast Asia were made by civilian, not military, officials -sometimes upon the advice of the military, and sometimes against such advice. Those directly charged with Defense management have little control over many environmental factors that affect public attitudes. But they do have the basic responsibilities of doing the tasks assigned to them as efficiently as possible and of keeping the Congress and the public informed, withsin proper - but not unreason~able - restraints required for security reasons. In any event, as has already beensnoted, public attitudes should obviously be considered in any assessment of, or attempt to enhance, the potential for effective management of the Defense Department. In particular, if the Notion is to be able to recruit and retain competent military manpower, while at the same time keeping the Defense Department's claims on nationsal resources within bounds, any "downgrading" of the military in public esteem cannot safely be ignored. Objectives of Study and Recommendations Operating in this environment, with this background, and in accordance with the terms of its assignment, the Panel has beeis concerned with th-.! mechansisms and efficiency of defense operationsa, not with the substance of the policies to be executed. In short, the Panel has concentrated on the "hows" of doing, not the "what" to do. 18 The objective of the study waa not to devise ways and means to save money, per se; it was rather an attempt to discover the cause of shortcomings and to devise and recommend changes in organization and procedures which appear to have potential for increasing the efficiency of the Department of Defense, Should oor recommendations be implemented, and should tlscy prove as sound as we conceive them to be, substantial savings should result. For example, the Panel is convinced that various layers of staff have grown and proliferated unnecessarily, resulting in substantial increases in manpower and paper work and decrearid efficiency. If oor recommendations are made effective, we anticipate substantial ultimate reductions in dollars and personnel, in both military and civilian areas, We emphasize that such savings as result from inereaseu efficiency will be realized principally in the long term, rather than the short term. Current expenditures yield little to improvements in efficiency, particularly in the Department of Defense where most funds, whether for people or material, require advance obligation. The recommendations of tile Panel are not and could not be designed to support immediate budget reductions, The potential savings are in the long tern. The Panel did not concern itself as a group with whether realized savings should be allocated to achieving more defense capabilities at the same cost, or an equivalent level of defense at less cost, Our efforts were in no way oriented to altering the level of defense capability established by national policy. Ormanization of Revort The size, diversity and complexity of the Decfense establishment make it impractical to consider elements of defense operations or functions separately or isolated from other elements or from the whole. Accordingly, many of our recommendations are interdependent for effective improvement. For example, internal management procedures can and do affect the effectiveness of the weapons acquisition process, but organizational improvements cannot in and of themsevNes guarantee greater effectiveness. Improvements In organization, however, can provide a structure which nmakes it easier for capable people (who must be acquired, trained, motivated and retained by improved p~ersonnel policies) to do a more efficient job. Thse format of this report is designed to group the subjects in part according to the types of recommendations, and in part according to the subject matter to which the recommendations are directed, The scope of the Panel's assignment was extremely broad, and the time for tile study limited. Accordingly, the Panel found it necessary to esti~blisli priorities. The Panel studied in depth as many of the major subjects as its time and manpower permitted. Other areas of relatively minor importance were also included because they were mnure easily addressed. We believe the Panel's efforts in some areas, both major and minor, were sufficiently comprehensive to support specific recommendations. In others, our investigations were only sufficient to conclude that correctable pvoblems exist, but were insufficient to support specific recommendations; in such instances we have recommended that furdher studies and examinations be conducted. In still other areas, there were indications of significant problems, but limitations of time prevented exploration by tile Panel; our Report invites attention to these areas. 19 Selected staff reports have be-,n identified as Appendices to this Report. The Panel's recommendations are in no case based exclusively on these staff reports, amits studies were broader and more extensive than the staff reports alone. Some of the appended staff reports contain detailed facts and evaluations bearing on specific recommendations of tile Panel, while others address subjects, draw conclusions and suggest changes in areas which the Panel as a whole did not choose to address, In some such instances, there was a question as to whether the studies covered all of the particular subject or subjects sufficiently to enable the Panel confidently to make a recommendation, In still other areas of staff reports, the Panel lacked sufficient confidence lit its judgmental capability to deal with the detailed, technical or specialized matter, However, they are of sufficient importance to be submitted with this Report as information, without necessarily implying endorsement of each item by the Panel. General Observations Several other general Lonsments relating to our study are in order. T1hroughout our study and our Report, we have concentrated on problem areas, rather than on areas in which operations appeared to be conducted efficiently and responsibly. Many things are done well in the Department of Defense, and wveare conscious that our Report, because it Is problem oriented, reflects a lack of balance of the positive with the negative aspects. * During the period lin which the Panel conducted its study, changes In organization and procedures of the Department were carried out or initiated which have the potential for improving the responsiveness and efficiency of the Department. The Panel has followed these changes closely. lit some cases, the Panel has already made datiz and evaluations collected lit the course of its, study available to those who might find immediate use therefor -and some of It has already been put to good use. Our observation of the Department's operation indicates that efforts to improve its organization and nmanagement were not generally inhibited or postponed whsile Use study was in progress. Althouah this provided the Panel with a moving target, we welcomed the changes and the concern and sense of responsibility within the Department of Defense which prompted them, In case of changed organization or procedures, the Panel was provided with the specifics of the change and the rationale upon which it was based. The Panel received excellent cooperation and inputs from both within and outside the Department. The Secretary of Defense made' sure that the Panel experienced no limitations oni its access to records and people of the Department. The attitudes of the Dep~artment personnel almost unanimously rvflected interest and a desire to assist in improving the effectiveness of the Department. Similar attitud~es were displayed by people in other Departments of the Government. In particular, the Panel appreciates the valuable help provided by the General Accounting Oftice, the Bureau of the Budget, and the White House staff, The Panel members who visited U.S. military comm-inds in Europe and Southeast Asia were much impressed by the high caliber and dedication of our Nation's fighting forces from general and flag officers down through the ranks, Considering the fact that the ave-1ge age of our military personnel - including officers - is only 22.7 years, the abiity .nd accomplishments of this large cross-section of the youth of America is inspiring. CHAPTER I ORGANIZATION I. GENERAL In approaching its task, the Parnel became increasingly aware that no single organization or set of procedures would be adequate for the Department of Defense for all times. The oranization and procedures of the Department must be sufficiently flexible to respond to a changing environment and evolving objectivec, Certain principles which guide organizational and procedural objectives do remain constant. First among such principles is the requirement for effective civilian control of the Defense establishment. .nder the Constitution, civilian control is exercised through the combined effoi ts of bo.,i the Executive and Legislative Branches. Its effectiveness, however, depends in large measure on the capability of the Secretary of Defense to insure consis'ency of Department operations with policy, to surface the viable alternatives on major issues, and to maintain a high degree of visibility to himself, the President and the Congress of the functioning of the national Defense establishment. Effective control of the military establishment by the Secretary is required not just for the purpose of Insuring the supremacy of civil authority. While the President and the Secretary of Defense must have the benefit of proJfessional military advice based on careers of military training and experience, unified cont,.ol is essential to provide the Nation with maximum security at minimum costs, and to insure that military strategy, force structure and operations are consistent with national policy. Despite the broad authority vested in the Secretary of Defense by the National Security Act of 1947, as amended, experience demonstrates that in practice, the tools available to the Secretary to exercise effective control of the Department are seriously deficient. The evolution of defense organization since 1947 has not substantially rnduced the inherelnt difficulties arising from the fact that the division of roles and missions tmong tire Military I)epartments is still based fundamentally on distinctions between land, seasand air forces which have become increasingly less relevant, This results in continued adversary relations between the Military Services, whicl, although usually confined to the iniwernal paper wars that constitute the Department's decison-nmiaklng process, severely hiuib't the achievement of economy and effectiveness required for adequate defense within avyiliable resources. The continuing Interservice competition seriously degrades tlie decislon-rioaking process through obfuscation of issues and alternatives, and leads to attempts to circumvent decisions, repeated efforts to reopen isues that have already been decided, amid slow, unenthusiastic impplementation of policies to which a Service objects. The results of such "parochialism" are, for example, reflected in: tlie levelopinent of the AX aircraft by the Air Force and the Cheyemne aircraft by the Army for the close air support roleý the lack of enthusiatsm for airlift expenditures by the Air Force aud the Fast Deployment Logistics program by the Navy, both intended to support the Army; the ganization of timeoperational command structure to provide a balance among tt'e Services for senior officer billets; and t(ie continued failure to resolve the issue of t(le bes- balance between land and carrier-based tactical air. 21 -4 It should be noted that inter-Service rivalry fades rapidly in proximity to a zone of combat operations. In Vietnam, despite the encumbrance of a confused, distorted and divided command structure, imposed through a series of Service compromises, the military operates harmoniously as unified armed forces of the United States, due in large degree to the splendid leadership of the senior commanders in the field. During this study, the Panel was exposed to a broad spectrum of experience-based opinion that deficiencies within the Department of Defense could not be remedied without either integrating or drastically restructuring the Military Services. Significantly, this opinion was not confined to civilians. It is based in no small part on the recognition that the changes made in defense organization since 1947, whether by reorganization plan or by statutory amendment, were all designed primarily to remedy the same or related problems to those which most plague the Department of Defense today. Unquestionably, the phrases in the reports of the Hoover Commission's Task Force on National Security Organization, the Eberstadt Task Force, the Rockefeller Committee of 1953, the President's mes•"ge to the Congress in 1958, and many other studies made externally and internally to the Department have the familiar ring of applicability to contemporary conditions. Nevertheless, the evidence, on balance, does not at this time support the necessity nor the desirability, in our opinion, for changes as drastic as elimination of the separate Services. The Panel does, however, recommend that the President and the Secretary of Defense reconsider this basic matter after the results of the Panel's recommendations for immediate action have been observed and evaluated. The fundamental principles of the National Security Act of 1947, as amended, are still sound. Although experience indicates the desirability, and even the necessity, for some substantive changes, mrsy of the deficiencies evident in the operation of the Department could be remedied by more faithful application of the concepts on which the Act is premised. The Department of Defense is too large, and encompasses too many complex and diverse activities to respond to over-centralized management. Some logical division of activities must be made to facilitate management and control. However, wchieving such division by radical reorganization would probably solve few, if ally, of the basic conflicts which now exist; its effect would be more likely to relocate the organizational points at which divergent interests lock in controversy, There is also the danger that valuable morale factors rooted in tradition might be destroyed rather than controlled, or eliminated rather than redirected toward useful objectives. A drastic restructuring would also inevitably risk serious disruptions of uncertain degree and duration in the operational capabilities and readiness of our military forces. In view of the current and foreseeable state of world affairs, only the most crucial need could justify acceptance of such risks. II. CONTROL AND MANAGEMENT BY THE SECRETARY OF DEFENSE The National Security Act bestows a broad expanse of authority on the Secretary of D~efense to enable hils effectively to direct ald administer the Dup. .rtlent of Diefenlse. There is no serious legal impediment to prevent a Secretary of Vefense from naking any ald every decision within the Department, subject only to Presidential and Congressional 22 .i policies. Practical, rather than legal, limitations make such an approach impossible. Even the doubling of his time and attention through the person of his alter-ego, the Deputy Secretary, does not significantly increase the decision-making time of the Secretary. A highly centralized decision-making process oriented to a single decision point, whether the decision point consists of one or two men, is inherently inadequate to mane!3e the spectrum of activities required of the Department of Defense. Indeed, attempts to overcentralize decision-making at the top seriously impair a Secretary's capability to exercise effective control. Under such circumstances, far too many decisions go unmade, critical issues are not addressed, problems are deferred and the principle of pcrsonal accountability is lost in the diffused maze of "staff coordination." Effective civilian control and ma:agement, however, do not require that the Secretary of Defense make all, or even a major proportion, of the innumerable decisions necessary for the operation of the Department. The alternative is for the Secretary to delegate substantial decision-making auth'rity and all executory functions to subordinate levels of authority. Delegation is not synonymous with abrogation of responsibility, however. The application of such delegations of authority and executory functions must be carefully delineated, and paralleled with adequate, but simplified, reporting systems to insure that activities conducted under delegated authority are visible to and subject to audit by the Secretary. Delegations must be sufficiently specific to permit strict individual accountability. Effective civilian control, appropriate delegation of authority, and decentralization of management cannot be effectively accomplished in the present organizational structure of the Department. The organizational structure needs to be improved to attain the following compelling objectives: (1) The organization of the Department must be responsive to the direction, control and authority of the President and the Secretary of Defense in all areas of Departmental operations (2) The lines of author~ty and responsibility within the Department must be made cleer and unmistakable, so that delegation of authority and responsibility will not result in loss of individual accountability; (3) The chain of operational command must be unencumbered, and flexible enough to operate reliably and responsively in both peace and war; (4) The organization of the Department must permit and facilitate objective assessments and innovative, but non-duplicative, long-range planning for structuring and equipping of forces; (5) The organization of the Department must be streamlined to reduce substantially the manpower assigned to staff activities; and (6) The "span of control" of the Secretary must be reduced. 23 A The attainment of these objectives can be facilitated by separating the functions of the Department into three major categories; (a) military operations; (b) management of resources and support; and (c) evaluation and control. An organization structured along these functional lines would permit effective delegation of authority and decentralization of management. Conceptually, the National Security Act, as amended through 1958, organizationally divides the Department of Defense, below the level of the Office of the Secretary of Defense, between support activities and military operations. The Military Departments were given the responsibility for support matters, and military operations were centered in the Unified and Specified Command structure. This separation, prescribed by the Congress, has much to cosmnend it. In addition to providing a logical division of the total military power, it permits a Secretary of Defense to fashion his management decision points so as to concentrate on the interfaces between tlse "suppliers" and the "users" of resources, thereby enhancing his control capability. The utility of this conceptual division has been impaired in practice. President Eisenhower's message transmitting the 1958 Reorganization Act to Congress said: "Clearly, Secretaries of Military Departments and Chiefs of individual Services should not direct unified operations and therefore should be removed from the command channel." Accordingly, the 1958 Reorganization Act separated the Chiefs of Staff as such from operations, and put the Unified and Specified Commands directly under tile cosmaud of the President and the Secretary of Defense. However, the Secretary of Defense then delegated to the Joint Chiefs of Staff the responsibility to act as military staff in the chain of operational commasd to the Unified and Specified Commands. This reinvolved the Chiefs of the Services in combatant operations matters in their capacity as Joint Chiefs. One additional functional division in Defense organization is essential to sound management. Evaluation functions should be organized separately from both support activities and military operations, to enhance the potential tor independence and objectivity in the evaluations. This principle is acknowledged to a degree in the National Security Act by the provisions relating to functions of comptrollers for the Department of Defense and for Military Departments. Dividing the responsibilities of the Department of Defense into these three major divisions would clarify lines of communications, control, and responsibility. It would rephlce divided responsibility for many matters with unified responsibility and accountability for a prescribed area. It would hell) both civilians and the military to concentrate on tise areas in wlsich they have special competence. II. ORGANIZATION OF THE OFFICE OF THE SECRETARY OF DEFENSE The Office of the Secretary of Defense (OSD) has more than doubled from approximately 1700 to 3500 personnel since 1956. This growth appears to reflect an attempt at highly-centralized management, undertaken in frequently futile attempts (1) to overcome difficulties arising from Service rivalries; and (2) to imanage, in lieu of minimizing, the uncertainties inherent in planning, programming and budgeting, particularly as related to advanced weapons systems. 24 The OSD staff is organized by groupings in the offices of the Director of Defense Research and Engineering (DDR&E), the Assistant Secretaries of Defense (ASDs), the Assistants to the Secretary of Defense (ATSDs) and the General Counsel. these offices are structured in parallel and the lines of responsibility of each run directly to the Secretary/Deputy Secretary of Defense. (See Chart) Each of these parailel elements of OSD staff has been delegated responsibilities, inc!kdihg policy formulation, -ityin the assigned area of activity, which is established by a "charter" in the form of a Di eci ice. These "charters" include direct statutory impositions of responsibilities where appli:kble. Currently, the scope of responsibility for each of these O'SD staff element€ is couched in language too general either to limit precisely or to define and fix precisely the responsibility for the intended area of cognizance or function. Policy and guidance directives issued by OSD to subordinate elements of the Department evidence a tendency by several of the parallel elements of the OSD staff to formulate policy and guidance as if its particular function were the principal control element by which the Department is managed. For example, the Draft Presidential Memoranda, preparmd by the Office of the Assistant Secretary of Defense (Systems Analysis), before they were discontinued, tended to control through detailed force levels numbers and sizes of units - manpower levels, numbers of equipments and, indirectly, the dollars consumed. At the same time, the directives from the Assistant Secretary of Defense (Manpower and Reserve Affairs) tend to fix manpower levels and skills to a degree which would impose manpower as the controlling element of force levels, dollars consumed and numbers of equipment. The Assistant Secretary of Defense (Comptroller) manages with dollars, the Assistant Secretary of l)efense (Installations and Logistics) with numbers and types of equipment, while the Director of Defense Research and Engineering prescribes the policies for a~quihing and applying technology. The result is a multiplicity of largely independent, pwmallel managements of the Department from the top, which impose a degree .of rigidity on operations of subordinate elements of the Department that severely inhibits efficient performance. In addition, the expansion of OSD has been accompanied by an increasing involvement of OSD personnel in executory-type activities of the Department. The expanding parallel organization of OSD has contributed to the excessive span of control of the Secretary/Deputy Secretacy of Defense. Twenty-seven major offices of the Department report directly to the Secretary/Deputy Secretary, and of these, twelve are in OSD. No formal mechanitim exists to assure proper coordination among the parallel elements of OSD. This unsatisfactory organizational structure results in frequent contradictions in policy guidance, frictions between the various elements of OSD, and the necessity for exteosive and time-consuming coordination with little assurance that it has achieved its purpose. The lack of convergence of responsibilities for functional areas at an organizational point in OSD below the Secretary/Deputy Secratary level inhibits the flexibility to delegate responsibilities within OSD, for no one below the Secretary/Deputy Secretary level has the requisite breadth of purview or responsibility. The expansion of OSD into many functionally fragmented compartments and their increasing involvement in detailed executory-type activities has resulted in the establishment of a profusion of management information systems and reporting requirements. The excessive detail and duplication of reporting requirements have generated such a sheer mass of informational detail that relevant and important facts are often obscured. Efforts at 25 a . 91.41 . Jr V. Ni. ?1.3.315in"! 5 .55? v. .3: 55!. sunsrlli sieii . :55. 1 3.3.5. ,n ,k m. n. ,IllHam}. 75:32.5: .92: 4 A 5 .9 ?33.53: . . . 1 Hanna Huh {:35 . gnaw: 52.1%! 12.55.. 23.35: 11.12.35! . .. . untuhwa My Egg Cawn was?8502.553 umzubn 33:55reports control and limitation have proved largely futile and have added to the already significant load and costs of paper work.* I Y While the process of OSD expansion was occurring, subordinate elements of the Department gradually adjusted. In fact, the diffusion of responsibility and accountability, the freedom to "pass the buck" to the top on hard decisions, and the opportunity to use the extensive coordination process to advance parochial objectives, are circumstances to which many in the Department have adapted comfortably. Understandably, this usually resulted in substantial increases in the workload of staffs at subordinate levels to provide~ information required by and tn counter the arguments made by the expanded OSD staff, On the other hand, despite recent improvements made in the Military Departments in such techniques as systems snalysis, there is tittle to indicate that the Department could ac-comptish its mission if there were a reversion to the level and type of decentralization of authority which existed earlier. The lack of responsiveness to the needs and direction of the Secretary of Defense is particularly evident in three closely interrelaited functional areas - military operations, intelligence, and communications, N, For all its size, the OSD has no staff element with significant purview of the area of military operations, despite the fact that the Secretary of Defensse, since the 1958 amendments to the National Security Act, is the crucial link in the chain of command between the Commander-in-Chief and the Unified Commanders. If the Secretary of Defense is to discharge effectively his responsibilities as a key element of the National Command Authority, - and the alternative of removing hins from the chain of command would, in practice, reduce "civilian control" to a fiction - it is clear that he must have an adequate staff for the purpose. The present arrangement for providing staff support tn the Secretary of Defense for military operations is awkward and unresponsive; it provides a forum for inter-Service conflicts to be injected into the decision-making process for military operations; and it inhibits the flow of information to and from the combatant commands and the President and Secretary of Defense, often even in crisis situations, While the Secretary of Defense is constituted by the National Security Act as the link in the chain of command of combatant forces between the President and the Unified and Specified Commanders, the only military staffs presently available for operations staff work are in the Joint Staff - reporting to the Joint Chiefs of Staff - and in the Military Departments. This anomalous situation has been dealt with by the delegation of responsibility to the Joint Chiefs of Staff by the Secretary of Defense to act as his staff for military operations. To perform this responsibility, the Organization of the Joint Chiefs of Staff was enlarged. In addition, each member of the Joint Chiefs of Staff has retained on his military staff within his individual Service a staff element assigned to military operations which is larger than the authorized size of the entire Joint Staff. These are the staff officers who support their Chief of Service in his role as a member of the Joint Chiefs of Staff. There is abundant evidence .hat it is in these individual Service staff elements, as much or 'See Werse Di s/Guidancc Systemn andManagement information Reports in Chapter111. 27 more than in the Joint Staff, that issues dealing with military operations and the recommendations of Unified Commanders to the Secretary are screened, analyzed and shaped. The National Military Command Center (NMCC) is a facility essential to the functioning of the National Command Authority and is manned by elements of the Organization of the Joint Chiefs of Staff; the NMCC, however, is responsive to the Joint Chiefs of Staff, not to the Secretary of Defense and the President. This lack within OSD of expertise in military operations critically impairs the civilian control of the military establishment. Virtually all of the combat forces of the United States are assigned to the operational control of the Unified and Specif.ed Commands. There is a statutory prohibition against the transfer of forces in or out of one of the Unified or Specified Commands without the specific approval of the Secretary. It is the Secretary of Defense who, subject to the authority of the Commander-in-Chief, provides the direction and control of the Unified Commanders. The National Security Act, as amended, clearly contemplated a direct relationship betweer, the Secretary and the Unified and Specified Commanders. It is the Operational Commander of the Unified Command who is in the best position - staffed by officers from all Services - to provide military recommendations, alternative courses of actions and assessments of short-term military capabilities to the National Command Authority, A staff, preferably military, is necessary in the chain of command between the Secretary and the Unified Commanders; it is imperative that such a staff be responsive to the Secretary of Defense. rather than to the Joint Chiefs of Staff, and through the Joint Chiefs of Staff to the Military Services. The absence of a staff element for military operations directly responsive to the Secretary of Defense constitutes a deficiency which can be tolerated only at high risk. The OSD cognizance of the intelligence area below the level of the Secretary and Deputy Secretary is too narrow, because it is limited in large measure to resource allocation review. The designation of the Assistant Secretary of Defense (Administration) for intelligence responsibility needs expanding to assure sufficient cognizance. In addition, there should be created a point of convergence below Secretary level at which military operations and intelligence policies and activities are considered together as an interdependent entity. Responsib lity for communications matters in OSD has, until recently, been hopelessly fragmented. The establishment of the position of an Assistant to the Secretary (Telecommunications) to exercise comprehensive policy responsibilities for communications is a major improvement. This function is closely intertwined with both military operations and intelligence. Communications, noted here only in connection with its impact oil the organization of OSD- is addressed separately in this report. Executory functions are intermingled in many of the staff organizations in the Department, and the Office of the Secretary of Defense is no exception. To provide clear and distinguishable lines of authority and responsibility, staff functions, which involve policy formulation and monitoring, should not be commingled with executory or operating functions. The Advanced Research Projects Agency (ARPA) is now all integral part of the OSD 28 I staff, being a part of the Office of the Directr, Defense Research and Engineering. ARPA has tl'e characteristics of a Defense Agency, including separate budgeting (at a current level in excess of $200 million). Another significant weakness of the OSD organization is the Lack of policy guidance, monitoring and evaluation of the test and evaluation functit, * This deficiency has contributed to a number of instances of needless dissipation of res,,irces. In connection with test and evaluation, it should be emphasized that responsibilities for any evaluation function must be exercised independently. When they are subordinated to or combined with responsibilities for the development of the item or subject being evaluated, the requisite objectivity is seriously jeopardized, Still another problem is the commingling of functional assignments in the same office or individual, when the functionis are either greatly dis3imilar (Administration and Intelligence), or generate conflicting pressures or issues which should be raised to a higher organizational level for resolution, instead of being submerged. As an example of the latter, the co-assignment of functional responsibility lor both (a) research and exploratory development, and (b) weapons systems development, makes it possible for the relative balance of effort between the two to be shifted without the issue being addressed at higher organizational levels, as it would have to be if the functions were separately assigned. The Department of Defense must closely coordinate its activities and policies with numerous other agencies of government, particularly the National Security Council, the State Department, and the Arms Control and Disarmament Agency. In order to do so effectively, it is essential that the Deplsartment representatives be vested with the requisite authority to speak for the Departinent and have sufficient access to information in the Department to deal knowledgeably. All too often in the Department of Defense, this function is, in practice, fragmented. This can result in several Defense Department voices, which may well diverge in direction, and cause confusion with serious consequence. The Office of Assistant Secretary of Defense (International Security Affairs) has the functional assignment for most of the Deparntient's external coordination responsibilities on matters which have political-military significance. Frequently, however, personnel from other elenments of OS) are designated on ,ant ad hoc basis to represent the Departnioni on various interagency activities. In addition, the executive levels and functional alignment of the offices of the Defense Department do not mesh with those of the State De-artment, which, in a bureaucratic interface, can and does carse subst..ntive problems. "coordination The Secretary of Defense does not presently have the opportunity to consider all viable options as background tor making major policy decisions because important options are oftens sulilnerged or comproimised at lower levels of the h)epartment. A need exists for an independent source of informed and critical review and analysis of military forces and other problems - particularly those involving more than one Service, or two or more compelltitive or complementary activities, missions, or weapons. At present, the Assistant Secretary of Defense (Systems Analysis) is responsible for this importanmt function. SSect l and in]Vahat~iollITT('hlu or II. "2 29 Test and evaluation functions are presently widely scatterea, tend not to extend above Service level, and are dominated by Service developer agencies. Because so much of the Department of Defense is involved in or affected by weapon systems acquisition, an improved teat and evaluation capability is essential to provide objective test data on the progress and worth of developmental weapon systems. Significantly increased emphasis is needed on operational test and evaluation, particularly on systems and equipment which span Service lines. The internal auditing effort at OSD level is fragmented and lacks sufficient organizational prestige to provide the coordination, audit coverage, and leadership to achieve its full potential. The internal auditing effort at the OSD level is carried on by two different groups, both within the Office of the Assistant Secretary of Defense (Comptroller). One group, the Office of Director for Audit Policy, reporting to the Deputy Assistant Secretary (Systems Policy and Information) has responsibility for developing and providing audit policy guidance for all audit organizations in thle Department. A second group, called the Office of thle Deputy Comptroller for Internal Audit, reports one level higher and provides a quick audit response to matters of special interest to the Secretary of Defense and his staff. This second group is also responsible for audits of programs and procedures which involve more than one military Service or Agency, for audits of the Military Assistance Program, and for audits of certain other Department components. The Directorate of Inspection Services (DINS), organizationally located is' the office of the Assistant Secretary of Defense (Administration), has the responsibility for inspections or surveys of the operational and administrative effectiveness of the Office of the Secretary of Defense, the Joint Chiefs of Staff, the Unified and Specified Comm'ands and the Defensse Agencies. DINS aiso has responsibility for criminal investigation and counter-intelligence activities within the same organizations. The assigned responsibilities of DINS do not include financial and accounting audits. These functions should be grouped with other evaluation and coutrol functions. Some of the Department's "credibility gap" with the Congress and the public must be attributed to the fragmented, and often confused, functional assignments of responsibilities within the Department for legislative and public affairs. At present, there are public affairs and legislative ilaision offices within the Office of the Secretary of Defense, each of the Military Departments and sonic of tht; Defense Agencies, with no effective mechanism for coordination among them. A great many of the matters with which these offices deal affect and are affected by activities of other organiational elements of the Department. Only the public affairs and legislative liaison activities in the Office of the Secretary of Defense have general cognizance of all activities. Representations by other such offices have the potential to be based on partial complete information. At the present time, the activities of the Assistant Secretary of Defense (Public Affairs) account for less than one-fifth of the peit:L, affairs expenditures of the Department. The lack of coordiugation of all public affairs activities of the Department causea confusion among the public and in the Congress, and at the same time, inhibits the most effective use of available resources. 30 The Office of the Assistant to the Secretary of Defense (Legislative Affairs) is less than one-half the size of the smallest legislative liaison office of a Military Department, and only about one-fourth the size of the largest. The necessary flow of information attending the budgetary process would be facilitated by direct contacts between the appropriations committees of Congress and the Comptroller of the appropriate department or agency. The use of legislative liaison services in these budgetary matters, where the Departmental sources of data are few and identified, has greater potential for obstruction than assistance. Three other areas of significant organizational deficiency in OSD are apparent. There is no organizational element within OSD with the assigned responsibility for objectively making net assessments of U.S. and foreign military capabilities. Major program and policy decisions in the Department of Defense tend to be based on an assessment of individual factors, such as the apparent tlucat, the technological capability of the United States and possible opponents, and cost effectiveness criteria. The Detense intelligence community is concerned with foreign developments, but does not make assessmsents of U.S. capabilities. Threat assessments are made for comparison with the projected c-apabitity of some proposed new U.S. development. There is, however, no mechanism within the Department to provide all integrated analysis which systematically places existing or proposed programs in the context of the capabilities and limitations of the United States and its allies versus possible antagonists. The Secretary of Defense should have available, on a continuing basis, the results of complarative studies and evaluations of U. S. and foreign military capabilities, to identify cxisting or potential deficiencies or imbalances in U. S. military capabilities. There is no organizational element within OSD that is charged with the responsibility for broadly supporting the Secretary of Defense in long-range planning which integrates net assessments, technological projections, fiscal planning, etc. Force planning is currently initiated by the Joint Chiefs of Staff and the Military Departments within the constraints of fiscal guidance to each Service and for each major mission and support effort. In order to provide an overall balance of forces, to prevent wasteful duplications, and to develop "ictive but more economical alternatives to those conditioned by traditional approaches of tile Military Services, OSD requires an internal long-range planning capability. The development of alternative solutions should include consideration of all relevant political, ecoromnic, technological and military factors. To the extent to which such a capability exists in the current OSD organization, it is too fragmentd and too limited by timepressure of more imnmediately urgent assignments to be effective. No formal mcchanisis exists within OSD to assure adequate coordinatiou among the various elements of the Department. There is a need for a Coordinating Group in the immediate office of the Secretary of Defense, to assist in coordinating the activities of the entire Dcpartment and in the scheduling and follow-up of the various activities.* In addition to thie deficieicies previously mentioned, many of the individual elements of the Office of the Secretary of Defense have hecome so overstaffed as to reduce their capability. Even with the new functions suggested for OSD, tile staff should iiot total more than 2,000 people. *SeDense Diiroetinas/Guidancn System and Management hiformation Reparts in Chapter '1l. 31 IV. ORGANIZATION O.F THE JOINT CHIIEFS OF STAFF AND THE JOINT STAFF The Joint Chiefs of Stsff With the exceptions of the relatively minor changes in the authority of the Chairman, the reorganization of the Joint Staff in 1958, and the increases in the limitation on the size of the Joint Staff from 100 to 210 officers in 1949, and from 210 to 400 officers in 19S8, there have been no significant changes in the Organization of the Joint Chiefs of Staff and the Joint Staff since 1949. The Joint Chiefs of Staff are still composed of the Chairman, appointed by the President, with the advice and consent of the Senate, from the officers of the regular components of the Armed Forces; tihe Chief of Staff of the Army; the Chief of Naval Operations; the Chicf of Ptaff of the Air Force; and as a practical matter, the Commandant of the Marine Corps, unless the Secretary of Defiense determines that a particular matter under consideration by the Joint Chiefs of Staff does not concern the Marine Corps. Bloth the organizational characteristics and the performance capability of the Joint Chiefs of Staff have been sources of concern almsost since the inception of the organization, From an organizational standpoint, concern has been created by the reliance on a "committee" for the performance of the important functions assigned to the Joint Chiefs of Staff. Despite the theories which would depict the Joint Chiefs of Staff as a "corporate" body, the near unanimity of tlse Joint Chiefs of Staffs' formal decisions in recent years, and the statutory instruction to tile Chairman to report disagreement of the Chiefs to the Secretary of Defense, the Joint Chiefs of Staff must be characterized as a committee. * The "committee" character of the Joint Chiefs of Staff is accentuated by the dual roles of the members, othler than the Chairman of the Joint Chiefs of Staff. Each of the Chiefs most bear the load of responsibility for supervision of his own Military Service and for his duties ass nmemlber of the Joint Chiefs of Staff. The excessive workload occasioned thereby was recognized by the report of the Rockefeller Committee in 1953. In the 1958 amendments to the National Security Act, the Chiefs of Staff of the Army and Air Force, the Chief of Naval Operations and the Commandant of tile Marine Corps were authorized to delegate broad responsibilities for supervision of their Services to their Vice Chiefs of Staff. Despite this delegation, the workload of the Joint Chiefs of Staff is stilt very heavy, and is compounded by the many matters of detail referred to them. Also, in the 19S8 amendments, the Chiefs' authority to "comnmand and supervise" their Services was reduced to the authority "to supervise," and the operational command of combatant forces of all Services was vested in Unified and Specified Commands, responsible directly to the Secretary of Defense and the President. By virtue of the provisionms of Department of Defense Directive 5 100. 1, issued onl 31 December 1958, hsowever, the Joint Chiefs of Staff were assigned the duty to serve as advisors aild as military staff in tise chain of operational command runnhimg from tile Secretary to the Commamnders of the Unified and S:pecified Commands. From a practical viewpoint, the roles of the members of the Joint Chiefs of Staff, other than the Chairman, are probably more neazly triple ill character than dual, The three roles 32 ~ are: (1) the Chief's supervision of his Military Service; (2) participation in the advisory and planning functions assigned by statute to the Joint Chiefs of Staf :i (3) participation, by delegation, as a member of the Secretary's staff for matters of open.-,rnal command. Many consider the dual or triple roles of the Joint Chiefs of Staff to be a fatal deficiency to the effectiveness of the Joint Chiefs. No matter how hard the Chiefs strive to "ri;e above the particular views of their respective Services" * and not to "be restricted by Service positions or instructions,"* It is very difficult for them to free themselves from their understandable Service loyalties. The difficulties of the Joint Chiefs of Staff structure are compounded by other fitctors: (1) the Joint Staff consists of officers assigned from each Service, and they look to their Service for promotions; and (2) the procedures by which major issues addressed by the Joint Chiefs of Staff, require that the issues first be coordinated by the Joint Staff with each of the Military Services.** President Eisenhower referred to these difficulties in his message to the Congress on the Defense Reorganization Act of 1958. The President stated: "These laborious processes exist because each military department feels obliged to judge independently each work product of the Joint Staff, Had I allowed my interservice and interallied staff to be similarly organized in the theaters I conmmanded during World War 11, the delays and resuhling indecisiveness would have been unacceptable to my superiors." The increase in frequency of unanimity in the recommendations and advice of the Joint Chiefs of Staff is by no means conclusive proof of subjugation of particular Service views, Such frequency of unaninmity can just as cogently support a conclusion that the basis of such recommelndations and advk - is mutual accomlnmodation of all Service views, known in some forums as "log rolling," and a submergence and avoidance of significant issues or facets of issues on which ac.ommnodations of conflicting Service views are not possible. Arguments for continuation of the military chiefs as members of the Joint Chiefs of Staff do have merit, however. There could be some risk involved in any approach to restructuring the membership of the Joint Chiefs of Staff which might so remove the members from the daily operations of their Departments as t, relegate the Joint Chiefs of Staff to an ivory tower. The fundamental problem with the multiple role of the members of the Joint Chiefs of Staff, we believe, was perceived in the conmnents of the Rockefeller Committee in 1953. The committee stated: It is essential to keep in mind that the Joint Chiefs of Staff were established as a planning and advisory group, not to exercise commnand. The National Security Act emphasized their planning and advisory role. The Committee considers it unfortunate that this concept of the National Security Act has always been obscured in actual practice, even before the meetings in 1948 at Key West and Newport, at which the Secretary of Defense delegated certain command functions to the Joint *Report of the Rockefeller Committee, 1953. **The JCSDecision-Making Process Isdiscussed inChapter 111. 33 Chiefs of Staff. To clarify the role of the Joint Chiefs of Staff in accord with the basic purposes of the National Security Act, this Committee recommends below that the Key West agreement be revised moremove the command function from the Joint Chiefs of Staff, in order to enable them to work more effectively as a unified planning agency. The Committee believes that the Secretary of Defense has much to gain from receiving the various views of the military chiefs of the Services, and that it is desirable for the topl planning body to continue to include the responsible military chiefs, who will thus have a voice in the JCS planning as well as implementing such planning in their respecti•'e military departments. Despite tl-c many changes, tile members of the Joint Chiefs of Staff have retained their involvement, in one or the ather of their roles, in operational command matters. Prior to 1953, the Joint Chiefs of Staff designated one of their members aistheir executive agent to exercise operational commnand in a specified geographical area. From 1953 to 1958, the Secretary of Defense designated a Military Department as executive agent for a particular unified command and the Service Chief acted for the Secretary of his Military Department, so that for any particular unified command, the chain of operational command ran from the President to the Secretary of Defense to tile Secretary of the designated Military Department to tile Service Chief to the unified command. The 1958 change was intended to shorten and clarify the chain of operational command, by making the channel run from the President to the Secretary of Defense directly to the unified command, Becauna of the delegation from the Secretary of Defense to the Joint Chiefs of Staff to act as military staff in the chain of command to the unified commands, this change proved to be largely one of form, rather than substance, for it merely "changed the hlt" the Chief of Service wears during his involvement in military operational matters. The nuueross functions now assigned to nmembers of the Joint Chiefs of Staff impose an excessive workload and a difficult mix of functions and loyalties. Some of these functions must consequently suffer, and the evidence indicates both the strain on individuals who have served in such capacity and a less than desirable level of performance of the numerous functions assigned, This result has occurred despite the outstanding individual ability and dedication of those who have served on the Joint Chiefs of Staff and despite the attempts to shift a portion of the load from the Chiefs of Service to their Vice Chiefs. The difficulty is caused bly the system, not the people. The excessive workload of the Joint Chiefs of Staff has also resulted in a perceptible shift of responsibilities for the performance as staff of tile Secretary of Defense in operational control of combatant forces from the Joint Chiefs of Staff to the Chairman of the Joint Chiefs, acting individually and "keeping the members of the Joint Chiefs of Staff informed." This trend, while usually increasing efficiency, imposes a severe workload on the Chairman, and does not appear entirely consistent with either tile statutory prohibition against the Chairman exercising command functions or the repeated rejection by the Congress of the single Chief of Staff concept. Of the varied functions assigned to the Joint Chiefs of Staff, those involving operational command are least compatible with tile organizational character of the Joint Chiefs of Staff. A committee is inhibited in its performance of :my function by its very nature, but it is most deficient as a decision-inechanisin in matters which are tinse-critical, such as 34 .... ........ , operational control of combatant forces. The recommendation of the Rockefeller Committee to eliminate the Joint Chiefs of Staff from duties involving operational conmland of combatant forces is as well taken today as in 1953, if not more so, but this time the change should be made in such a clear and unequivocal way that it cannot be circumvented. To other duties of the Joint Chiefs of Staff have been added the responsibility for certain Defense Agencies created since 1958, namely, the Defense Atomic Support Agency (DASA), the Defense Conunnications Agency (DCA), and the Defense Intelligence Agency (DIA). The exercise of administrative control and guidance of these Defense Agencies not only adds to the already excessive workload of the Joint Chiefs of Staff, detracting even further from their capability to perform thes, statutorily assigned missions, but also detracts from the effective and efficient performance of some of these Agencies.* The Joint Chiefs of Staff could more effectively perform their imnportant statutory role as principal military advisors to the President and the Secretary of Defense if they were relieved of the necessity of performing delegated duties in the field of military operations and Defense Agency supervision. This would also have the advantage of terminating much of the involvement ot the Military Departments in the command chain of combatant forces, which results from the dual role of the Military Chiefs of Services as members of the Joint Chiefs of Staff. It would also negate much of the argument that has been advanced for having the Joint Chiefs of Staff consist of different officers from the Chiefs of the Services (tlse "two-hiatted" role). Tile Joint Staff The Joint Staff is placed by statute under the Joint Chiefs of Staff and is limited in size, currently to 400 officers. These statutory limitations have proved to be of no practical consequence, deterring neither the growth past the magic number of 400 officers serving on the central military staff, nor the creation of additional military staff. With the apparent, but statutorily silent, acquiescence of all concerned, including the Congress, the limitations of the statute have been circumvented by the creation of an entity called the "Organization of the Joint Chiefs of Sitaff." Theoftitle, "the of the Joint Chiefs of Staff" was used to include the Joint Chiefs Staff, theOrganization Joint Staff and various committees formed by the Joint Chiefs of Staff prior to 1953. These "committees" were, for the most part, disestablished effective June 7, 1958, in response to President Eisenhower's mnessage to the Congress on defense reorganization transmitted on April 3, 1958. Four committees not so disestablished were redesignated in name from "Committee" to "Council" or "Group" for compliance in form, if not in substance. Despite the "elimination" of the committees included in the Organization of the Joint *The orgunization of them Defense Agencies is addressed later In this Chapter. 35 --------------------------- Cltiefis of Staff, the numiber of personnel serving as staff and staff supiport for the Joint Chiefs oif Staff increased from approximately 486 inl 1958 to 2,145 fin 1969, of whichi some 900 are military officers. The size of this organization is projected to diminish to some 1,996 Iin 1970. The "staff" character and its interrelationship to the officially designated Joint Staff is Iin no way disguised nor camouoflaged, and inothing surieptitious can or should be implied from its constitution. The official Joint Staff, maintained with the 400 officer-size limitation is organtized tinder five directorates and one off-ice of Special Assistant ats follows: J-1 (Personnel), J-3 (Operations), J-4 (Logistics). i-s (Plaits and Policy), J-6 (Coniiitntsicatlians-Electroiiics), aind the Special Assistant for Coiltitcriiistrgcitcy aind Special Activities. lit tlie oiverall Orgattizatioin of' tlte Jintit Chiefs of Staff, bitt outtside the officially designtated Jotint Staff, tire atlarge number of staff elemetits, varioutsly enttitled D~irectorates, Agenicies, Sptecial Assistants. etc., till of whtomtrepolrt either thiroutgh the J-3 (Operations), the J-5 (Plaits anid Policy), or directly to thle D~irector oif the Jitntt Staff, the satme as,do eleitetits of tlie oifficiail Jolint Staff. Less tibviouts 'ex tenitontis' antd"additittts"' ttt tlie Joinit Staff alsotexist. For instanice, flcfeon-se Atomitc Stipport A-.,.,'ticy (DlASA) pterfiormts the stafhf funictioni fttr ltainttaitning iventlory conitrotl otf niuclear weapons, antd !in fatct, ati clemtentt of the I)ASA staff is located contligulous ttt tlte Nathtioal Militatry Cotmmanatd Cett cr, olterated by tlte Orgatnization otf the Jointt Chiefs itf' Staff. Also, the sonte 400 or mottre persottnel, aititnitber of whomitare itilitairy oftficers, workinig iii tlie Natiotial Military Ciommtatnd SystemuStupptort Cetiter, tile assignted to artitichitl stract irittg of' ttrgatnizationi, !ii :iii effort tot circililenit arbitrary lintiuIttittis, however bentign biecauise of thle passage otf tunec, canthatrdly faill ito pterfttrmi less aidequtately t The Orgatnizatiton tof the J oint Chiefis of' Staff pirovides to significatit itteciatisiti ftr coirpotrate mleitory , said possesse litadetittite techtnical anid professiontal anialytical capability. Ctonstitutted its It is oif millitary ofticers whot serve otte, or atitimost twit tfiurs of ttditly Iil tile Organtization ttf' tile Jonut IClic(ts of Stvff, it tacks sit experienice recall capabtility ivlict wotiuld present tin or tiiimize recottetice tof piast mtistakes, This deficiecity cattttot bie remtediedl by thmeactltisitittit of data storage and retrieval capabilities mttde ptossibule Ity comtpituters. Stitie itidividutal ttitst recognize the ftitii~ihr circumitstantces (if earlier expuerience lto inidicate tflat the rectorded data cottnnectedl witIt earlier hiistorty callt pritide gtuidamice tilt citurett pmtbleits. The abscotre itf crporatitte mnemotry call lie mittimiiized bty chtanges in tile wrotationi attd piro titntliitpolicies otif h Military Services toi pertiit tl:2z .`,,-titut(ift peoiple inl the ttrguttizaiitonal structure for sublstanttially miore thati twit, thtree tir four years. There is. (if Cittrse, noi lre~ritiisite for corptra te mtettotry captabillity ttill( lie personts so retainied hie muilitary oifficers; they 'tiihld just its iveti tuecivilitins. V. ORGANIZATION OF TIl MI LITARY I)E.PAwrmu-NTS The oirgantizationt itt tl~eSecretaciats of thle Mhilitary D~epartnie tits call beevaluated onily tg.-itist the buackgrounid tof t(lie evotlvitng role and fuinctiotn oif the Military DepartmtentI Secretary. Ul( itMitttrsitittiy , tfi ile ad itic futuctitin of, thie Secretaries tof thie Military Departmeit s have chaniged . Three printcipal circtiumstanuces have ptrovidted the impectus for the evoluttiont of 36 their role and function: (1) the vesting and increase of authority in the Secretary of Defense to provide coordinated control and direction of planning and structuring of the military establishment; (2) the removal of the Military Departments, including the Secretaries, from involvement in operational control of combatant forces; and (3) the marked increases in complexity and costs - and budgets - for weapon systems the military forcrs now require for execution of their assigned missions. The Secretary must play a difficult dual role of being at once (a) principal advisor and assistant to The Secretary of Defense in the operation of hi- particular Military Department, and (b) the representative of his Militarý Department In the councils of the Secretary of Defense. The office of Secretary of a Military Department has become increasingly demanding of administrative and managerial ability to: (1) cope with the multiplication of complexity and costs of developing and acquiring weapons systems; (2) acquire personnel in the quantity and quality required to maintain and operate the weapons; (3) train miitamy personnel to the high level of skills necessary to function in areas of advanced technology and sensitive operations; and (4) retain enough of those so trained to justify the training investment; but not so many as to impair the vigor essential to successful military operations, which only youth can provide. No private corporate executive in the world has the managerial responsibility in terms of manpower, budget, variety or complexity of operations equal or approaching that resting on the shoulders of a Secratary of a Military Department. Within each of the Military ;)epartment Secretariats there is one Under Secretary, a General Counsel, and four Assistant Secretaries, each of the latter being functionally assigned for Research anid Development, Manpower and Reserve Affairs, Installations and Logistics, and Fisancial Management. The functional designation of the Assistant Secretaries, other than for the Assistant Secretary for Financial Management, is not made by statute, but by internal organizational decision. Below the predomivnntly civilian Secretariats which report to the Secretary/Under Secretary of the Military Departments, are the military staffs which report to the Chief of Staff, Chief of Naval Operations, or the Conmnandant of the Marine Corps, as the case may be. Each of the Miitery Departments has established organizations which are direct extensions of the Departmental staffs. Each of these orgarizations reports to an element of one of the Departmental staffs, and performs functions in direct support of that staff clement. Many of tshese support organizations are physically located with the staff elements which they support. When such support personnel are included, the total staff sizes of the Military Departments are roughly comparable. The trend in sizes of the Washington lleadquarters' staffs (including support) of the Military Departments has, perhaps surprisingly, remained relatively level or has slightly declined during the 1960s. There has, however, been a marked shift of personnel from the "staff" category to the "support" category where it is less visible. Particularly is this noticeable in the Department of the Air Force. Although this trend may be a reflection of changing management and organization philosophies, the lowered visibility factor poses an organization problem in itself. All evidence indicates that the sizes of Headquarters' staffs in the Military Departments 37 are excessive to what is required for efficient performance of assigned functions. Functional analysis of these staffs reveals an astonishing lack of organizational focus and a highly excessive degree of "coordination," a substantial portion of which entails the writing of memoranda back and forth between lower echelons of parallel organizational elements and which serves no apparent useful or productive purpose. The Military Staffs of the Services have accumulated a number of line type activities, called "Class 11 Activities" by the Army, "Field Extensions" by the Air Force, and "Commands" and "Bureaus" by the Navy, and distinguishable by the fact that they are commanded by a member of the staff of the Chief of the Service. The organizational placement of these activities, which presently number about 700 anl contain about 173,000 people, is inconsistent with good management practice and iney should be assigned to commands which are in the line of "supervision" of Service channe~s and divorced from direct supeivision by the Service Headquarters' staffs. Several factors of organization and manning in the Washington Headquarters' staff of the Military Departments are particularly significant. As noted above, there are five senior executive level positions in the Secretariats of the Military Departments below the Secretary/Under Secretary level. The ratio of personnel supervised by these officials to total staff personnel in the Secretariat is surprisingly low. In the Army Secretar'at, these five senior officials supervise the work of only 171 out of approximately 1,000; in the Navy, 124 out of some 1,900: and in the Air Force, only 169 out of some 524. More effective utilization could be made of the Assistant Secretaries who are not functionally designated by statute, should their roles not be restricted by their present functional assignments, and their number could be reduced from three to two. There also appears to be substantial duplication in all Military Departments between the Secretariat staffs and the military staffs. The duplication can be illustrated by an examination of the functions of the Financial Manager/Comptroller in the several Military Departments. Two statutory provisions relating to these functions are relevant. The provisions are separately stated, but identical for each Military Department in 10 U.S.C. see 3014 (Army), sec 5061 (Navy), and sec 8014 (Air Force). These statutes provide, in part: "There are a Comptroller of the (Army-Navy-Air Force) and a Deputy Comptroller of the (Army-Navy-Air Force) in the Department of the (Army-Navy-Air Force). The Secretary may appoint either civilian or military personnel to these offices. If either the Comptroller or the Deputy Comptroller is not a civilian, the other must be a civilian. .Fhe Comptroller is under the direction and supervision of, and is directly responsible to the Secretary of the (Army-Navy-Air Force), the Under Secretary or an Assistant Secretary. However, this subsection does not prevent tie Comptroller froni having concurrent responsihility to the (Chief of Staff-Chief of Naval Operations), (Vice Chief of Staff-Vice Chief of Naval Operations), or a (Deputy Chief of Staff-Deputy Chief of Naval Operations) if the Secretary so prescribes." 38 . .. . .... The Departments of Armny and Air Force, acting under these provisions, each has an office of the Assistant Secretary (Financial Management) in the Secretariat reporting to the Secretary/Under Secretary, and a Comptroller located on the military staff reporting to the Chief of Staff. The Navy has combined the functions of Comptroller in one office, however. The feasibility, arld avoidance of duplicative assignment of functions, of this combination is demonstrated in Figure 1, which is a comparison of Comptroller-type functional asinensi the three Military Departments and the Office of' the Secretary of Defense. AsFigure 1 illustrates, duplication of assignments of comptroller-type functions Sceay(iaca Management) and h ofwe sitn of Air Force funcrtiosendicatesmythatthrformantmeof tht prforanc ofthese functions funcion indcats (FnnilManagement) and the Comptrollers in the Army eulyduplicative. the military comptroller in the are numerous. Ani analysis of by the Assistant Secretaries and Air Force approach being The comptroller function was chosen for illustration because it !athe oxIC functiop most nearly combined in the Secretariat and military staff, and did, therefore, present the opportunity for contrast. In the functional areas of the other three Assistant Secretaries, there has been little consolidation of functions between the Secretariast and military staffs. In functional areas other than those assigned the four Assistant Secretaries, there have been functional consolidationa between the Secretariats and the military at kffs which demonstrate the feasibility of such management economies, In all the military Del. rtments, the public information functions has been largely consolidated: in the Secretariat in the Navy and Air Force; and in the military staff in the Army. The legislative liaison function is consolidated in all Military Department Secretariata. In the Department of Navy, where the Secretariat has purview of both the Navy and Marine Corps, the Secretariat performs the staff function for civilian p~ersonnel Department-wide, while staff cognizance of military personnol is allocated to the Navy and Marine Corps military staffs. The internal audit groups of the three Military Departmnests are largely autonomous. There is relatively little interchange or contact among these Internal audit groups. The hiring, training, and assignmenst of audit personnel to specific tasks are handled by each Military Department or Agency with a mninimunm of~ guidance or direction from external sources, The internal audit organizations of the Army and the Navy are organized along similar lines, with relatively large regional, area, or resident offices located throughout the United States and overseas. The internal auditors of the Air Force, unlike those. of the Army and the Navy, are stationed at numerous air bases amidinstallations as resident auditors. This results in a wide dispersion of audit personnel in small, relatively permanent groups typically consisting of five or six persons. While a single internal audit agency in the Department of Defense would permit a more efficient supervisory and management structure, provide more attractive career opportunities for professional personnel, and provide better coordination and control for the Secretary of Defense, it is, on balance, more desirable to continue to provide each Military Departmenst with an internal audit capability of its own to monitor the attainment of its own objectives. In 1961 certain responsibilities for Civil Defense contained in the Federal Civil Defense 39 FIGURE 1 - COMPARISON OF SUBJECTS ADDRESSED BY COMPTROLLERS SUBJECTS ASSIGNED IN INTRA-DOD DIRECTIVES OSD ASD(C) ARMY ASA(FM) COMPT NAVY COMPT& ASN(FM) AMRFORCE ASAF(FM) COMPT / /b/ PRESCRIBED IN US CODE Budgeting A,2countlng Progress and statistical reporting ._ Administrative organization structure Managerial procedures, relating to budgeting, accounting, progress and statilstical reporting and internal auditing Internal audit x x x x x x x x x x x x x x x % Xo/ x X x x x x x x x x x x ADDITIONAL SUBJECTS PRESCRIBED IN MILITARY prices for Interservice saues X Auditing Finance, including disbursement aBd collection of funds Contract audit x Reports control Cost analysis Fiscal x Management systems and x Improvement Financing of contracts Data automation (ADP) evc Managemont lformation & control ysnterns Claims Reports of survey Contracts for management studies/ services International balance of payments X GAO criticism x Collecting debts from defense contractors (operationac tunctiont) Command )f specified field activitles or a lower staff Ra/ Department of Defense Diroutive x x DEPARTMENT AND OSD DIRECTIVES X x x x x x x x x x x x x X x partial x x x x X x x x x x x x x x x x X x x X x x x x x x x x x x x 0 118. 3, January 16006. L/ Army Regulation 10-5, July 1068, paro 2-. and 2-27. c/ SECNAVINST 5430.711, d/ Air Force Itq Pamphlet 20-1, October 1070, pp. 9, 777-4, and 308. e/ Restricted to organizations involvi.g programming, budgetary and fiscal matters. April 1968. para 5a. and Comptroller Orgn Manuim! 5450. IA (draft). 40 L, x x Act of 1950, as amended, were assigned to the Secretary of Defense by Executive Order 10952. These responsibilities are currently assigned to the Department of the Army. The Office of Civil D-fense (OCD), located in the Department of the Army Secretariat. is essentially anl independent operating activity. The Federal Civil Defense Act, as amended in 1958, includes in the Declaration of Policy the following: "it is the policy and intent of Congress to provi le a system of Civil Defense for the protection of life and property in the United States from attack. It is further declared to be the policy and intent of the Congress that the responsibility for Civil Defense shall bL vested jointly in the Federal Government and the several States and their political subdivisions. The Federal Government shall provide necessary direction, coordination and guidance; . .. and shall provide necessary assistance as herein authorized." Except for a period in 1962-1963 when the fallout shelter program was given a high priority, thle Civil Defense function has apparently been given little emphasis. There has been, since 1961, considerable discussion about the effects of dividing the Civil Defense responsibilities between tlse Executive Office of tile President and the Department of Defense. This question is presently being addressed by the Executive Office of the President. The mission of OCD is also being reviewed. ~I4 The present mission of OCD in the Department of the Army is essentially limited to the development and execution of a fallout shelter program and a communications and w.arning capability. The staff of OCD is divided roughly equal between the Department of Army Headquarters and the OCD Regional Offices which work directly with the Civil Defense organicationls of the States and their political subdivisions, If, aa a result of the present review of Civil Defense by the Executive Office of the President, the Secretary of Defense conltinu~es to be delegated responsibilities for Civil Defense, the OCD should not continue as a part of the Department of the Army Secretariat. The OCD is a line, not a staff, activity. Further, its mission is sufficiently different from, and independent of, the missions of th Military Departments that it should be established as anl independent defense agency. Tile Army has been delegated tile responsibility for contingency planning related to civil disitirbances in the United States aild acts as Executive Agent ill the operational command chain in tile employment of forces in such disturbances. This delegation is inconsistent with normal command arrangements and thle spirit, if not also tile lsetter, of tile Defenlse Reorganization Act of 1958. This responsibility should be assigned to a comlbatant commlland. There is another area of duplication whlich arises from activities throughout tile Washington Headquarters' elements of the Department of Defense, and particularly in connection with tilose activities phlysically located in the Pentagon. To a major extent, each Headquarters so collocated has its own support organization to hansdle furniahings, supplies, mail distribution, correspondence con~trol, etc. In some of tllese activities - such as mail distribution and correspondence control* - this duplication causes hopeless inefficienciea. *Detailed staffstudies of mailhandlingandcorresponsdenee control problemsareappended to this report. 41 The staffs of the Military I)epartments are not properly organized to effectively and efficiently perform their assigned functions. In addition to tile deficiencies previously addressed, many of the individual staff eleients have become so large as to reduce their capability. The Secretariats and Service staffs should be integrated to the extent necessary to eliminate duplication; the functions related to military operations and intelligence should be eliminated; operational-type functions, e.g., personnel operations, should be transferred to conunand organizations; and tile remaining elemenits should be reduced by at least 30 percent. A study of the present staffs indicates that the Secretariats and Service staffs combined should total no more than 2,000 people for each Department. VI. ORGANIZATION OF THE DEFENSE AGENCIES The National Security Act of 1947, as amended, gives tie Secretary of l)efense the responsibility and the authority to provide for the performance of any non-combatant supply or service activity common to more than one military department by one agency (or such other organizations as lie considers appropriate), whenever lie determines it will be more effective, economical, or efficient. There are presently five D)efense Agencies: Defense Atomic Support Agency (DASA); l)efeise Communications Agency (DCA); D)efense Intelligence Agency (DIA); Defei'se Supply Agency (DSA); and Defense Contract Audit Agency (DCAA). The first three report to the Secretary of D)efense through the Joint Chiefs of Staff, the other two report directly to the Secretary. Ani examination of timedocuments and studies which led to the creation of the Defense Agencies reveals the existence of no general criteria for the establistiment of such an entity, except the existence of a fuiction common to more than ouie Military Department. There exist, amid existed prior to the creation of the first Defcuse Agency, innumerable iiOn-conibatait fuiictioims comnunon to more than one Service. Aiuioimg such fuictiois for which Defeise Agencies have not been created, but where sigiificant economies might result froui consolidation, are: (I) Automatic Data Processing Services; (2) Medical, denual ault hospital services; (3) Transportation of materials, movement Of househ/old goods; (4) Personnel security investigations; (5) 'ircraft and aircraft emmgum•'_, depio services: (6) Recruiting; (7) T i and evaluation; and (8) Mapping, Charting and Geodesy. An alternative to tile Defense Agency for consolidation of commooui mOlmn-coimbatant fiuctions is the designation of one Military D)epartment as "Executive Agent" to plerform such functions for all military services. The Military Airlift Command operated by ilie Detartment of the Air Force as Executive Agent, and industrially funded* to serve all military users, is one examlle of the umeof this mlechanism. For ColmparativCly l small function, this itechallisill has tile advantages oft mililizilng tile incurrence of 0- larger admlinistrative overtlead associated with Defense Agencies, and of utilizing established organizational structures for externual supervisiolI alld mionllitoring of the flnction. The organizational ipl:acenlcllt of l)efense Agencies witiin the Department has caursed lproblems. For those Agency theads reporting directly to thie Secretary/Depu ty Secretary of -M iitdustriall, [uded t l ivily isstulle whiFh atid wltich is rmeilibirustd tiSuighihi ilmites w (cl e,,L t w e)urý th i.... killy cpital fuit, ritisihcuieauiiimms. 42 mcii1 imh i uyxlet[. Uiit.i paielilre Defense such as the Director, Defense Supply Agency, there is a less than desirable degree of supervision due to the excessive span of control imposed on the Secretary/Deputy Secretary of Defense by the existing organizational structure. The Joint Chiefs of Staff, through which three Defense Agencies report, has not proved to be the type of organization which can best provide guidance free of the competition of the military services among themselves and between the military services and the Difense Agencies. From an organizational standpoint, three of the Defense Agencies present problems DASA, DCA and DIA. Defense Atomic Support Agenc DASA is the successor to the Armed Forces Special Weapons Project kAFSWP), which in 1947 became the organizational home of those military personnel and some civilians previously involved in the Manhattan Project, which developed the atomic bomb. AFSWP was created to discharge for all military services all support functions relating to nuclear weapons, and as such, was responsible to all three nmilitary services. In 1959, DASA was established as a Defense Agency, with similar functions, reporting on gencral matters through the Joint Chiefs of Staff to the Secretary of Defense, but receiving supervision on nmitters relating to research, development, test and evaluation from the Director, Defense Research and Engine'ring, and for matters relating to liaison with the Atomic Energy Comuission and other special ictivities, from the Assistant to the Secretary of Defense (Atomic Energy). The conditions which led to the assignment of most of the functions initially assigned to DASA no longer exist. Each of the Military Services has acquired and is satisfactorily performing many functions relating to nuclear weapons, such as storage, transportation, inspection, maintenance and training of personnel. In some instances, such as storage, Military Services are doing it more efficiently than does DASA. DASA's storage function is currently being transferred to the Services, It appears that DASA retains two remaining unique capabilities - one related to the design of nuclear weapons effects tests, ain' the other in nuclear weapons stockpile management. Weapon design tests are designed and conducted by the Atomic Energy Commission pursuant to requirements submitted by the Military Services for warhead developments. I)ASA, however, receives and consolidates requirements for weapon effects tests from the Military Services and designs the appropriate tests. The designs for weapon effects tests, after review in OSI), are submitted to the Atomic Energy Commission which provides nuclear devices specified in the test designs and actually conducts the tests, using equipment supplied by the Military Services. In its responsibility for nuclear stockpile management, the role of DASA is logically one of coordination and management. In its support of the JCS, however, DASA provides operating elements that are integral to the National Military Command System. In addition to nainnoiit ng infornmation! on the status and location of nuclear weapons, these elements have responsibility for collecting and displaying information about the Single Integrated Operations Plan both as to the plan and the results of its execution. They also have the resp,unsibility for other functions that fall entirely within the responsibilities of the JCS in their delegated role as military o-crations staff for the Secretary of Defense. 43 ~,. .. DASA also now performs a number of functions which could be more appropriately assigned elsewhere, such as the administration of the base hospital at Sandia Base, (and many similarly inappropriate activities at the same location), and the Armed Forces Radiobiology Research Institute at Bethesda, Maryland, which is a joint medical research facility. The scope of the two unique functional capabilities of DASA no longer justifies the continuation of the administrative overhead load inherent in a Defense Agency. Defense Communications Agency DCA was established in 1960 to exercise operational control and supervision 'f the Defense Communications System (DCS) which is comprised of all long-haul, point-to-point communications facilities of the Department of Defense. After World War II, each of the Military Departments developed its own worldwide communications system to carry out tile global activities of its mission. As the requirements and expenditures for separate long-haul systems rose through thtu fifties, economic and other pressures mounted for the creation of one entity to engineer and manage these increasingly expensive systems for the common use of all Defense elementr. DCA was the response to these pressures. DCA is charged with responsibility to: (I) exercise management control and operational direction over the DCS; and (2) exercise management control over R&D, planning, engineering, and progrta ming of tile activities of the Military Departments, Unified and Specified Commands, and Defense Agencies which support the DCS. The organizational problems connected wit" the telecommunications functions* are not located internally to DCA, but derive from the obscured lines of demarcation between the functions assigned to DCA and those retained in the Military Services, and the ineffectively coordinated direction and policy control emanating from tile various elements of OSD and filtered through the Joint Chiefs of Staff to DCA. The recent establishment of the Office of the Assistant to the Secretary of Defense (Telecommunications) and the assignment to thi.; office of broad policy and directive authority in the telecommunications field should alleviate a large portion of the problems now existing. Defense Intelligence Agency The Defense Intelligence Agency (DIA) was established in 1961 in an effort to create a mechanism to solve the problems presented by the disparate intelligence estimates being produced, and the duplicative efforts being engaged in by the Military Departments. DIA is asigned the responsibility for: 1. Tile organization, direction, management, and control of all Defense intelligence resources assigned to or included within( tie DIA. 2. Review and coordination of those intelligence functions retained by or assigned to the Military Departments. -Teleommuenieations problems are discussed in Chapter V. 44 3. Supervision of the execution of all approved plans, programs, policies, and procedures for intelligence functions not assigned to DIA. 4. Obtaining the maximum economy and efficiency in management of Defense intelligence resources. the ,ilocation and 5. Responding directly to priority requests levied upon the DIA by the United States Intelligence Board (USIB). 6. Satisfying the intelligence requirements of the major components of the Department. Its charter reveals that VIA was originally intended to (1) provide for the assembly, integration and validation of all Defense intelligence requirements, the policies and procedures for collection, and the assignment of relative priorities to the requirements, and (2) develop and produce all the Department's intelligence estimates and information and contribution to the National Estimates for the USIB. It was intended that the Military Departments would retain the resources to collect and process intelligence information, under the supervision of DIA. Concuerent with the establishment of DIA, the Directorate of Intelligence (J-2) of the Joint Staff was disestablished, and its functions assigned to the Director of DIA. The established reporting line for DIA was and is through the Joint Chiefs of Staff to the Secretary of Defense. The principal problems ot the Defense Intelligence Agency can be summarized as too many jobs and too many masters. Two areas of conflict are apparent. In addition to his administrative responsibilities as the Director of a Defense Agency, the Director of DIA must provide the staff assistance on intelligence matters to the Secretary of Defense and must also provide staff assistance on intelligence matters to the Joint Chiefs of Staff. Ons many intelligence issues, particularly procedural issues with jurisdictional implications, the positions of the Secretary of Defense and the Joint Chiefs of Staff can be and often are diverse. As staff officer and advisor to both, the Director of DIA finds himself in all impossible position. The result cals be delays in staff work that, in turn, result in unresolved issues of significant moment. The second area of conflict is between DIA and the Military Services. DIA is charged with responsibilities to supervise the collection and processing of intelligence by the Military Services, specifically by prescribing procedures, allocating requirements, and reviewing the total intelligence programs of tile Services. Yet the Director of DIA reports directly to the Joint Chiefs of Staff, comprised in four-fifths majority by the Senior Officers of the four Military Smrvices for whose intelligence programs the Director of DIA is charged with the responsibility to provide coordinated supervision. In addition, the Services determine which officers of what qualification are assigned to DIA, and the services also retain the power ef promotion and future assignment over those so assigned. In consequence, the "supervision" by DIA of intelligence collection and processing by the Services, and DIA's fiscal control is largely impotent and its visibility of the Service intelligence programs obscured. While the DIA was established primarily to consolidate the intelligence activities at the Washington level, each Military Department currently has a larger intelligence staff than it 45 had before the creation of DIA. Each departmental staff is still engaged in activities clearly assigned to VIA. The Military Departments justify these activities on the basis that VIA does not have the capability to provide the intelligence they need, It is paradoxical that DIA cannot develop a capability to perform its assigned functions while the Military Departments, which provide a large proportion of VIA personnel, maintain the required capability to produce intelligence estimates -or more properly, threat assessments - which are crucial to decisions on weapon systems research and development. DIA is charged with the responsibility, but has never been orvinized to discharge it. The Military Departments produce such estimates and the Air Force, at least, intends to enlarge its capability. Each Military Department has a large organization devoted primarily to Mapping, Charting, and Geodesy (MC&G) activities: The Army Topographic Command of the Corps of Engineers; The Naval Oceanographic Office under the Oceanographer of the Navy; and The Aeronautical Chart and Information Center reporting to the Chief of Staff of the Air Force. L DIA attempts to coordinate these activities to eliminate duplication and set priorities for production. However, VIA coordinates through the intelligence elemienta of the Departmental staffs and only the Air Force MC&G agency is within the staff purview of its intelligence staff. The Army and Navy MC&G elements are in agencies which are not a part of the intelligence conmmunity. While MC&G activities make use of intelligence information, they are not intelligence activities. Savings can be accomplished hii personnel and equipment by consolidating the three Service MC&G agencies in a single agency reporting to the Secretary of Defense, VII. ORGANIZATION OF THE COMBATANT COMMANDS The Combatant Forces of the United States and their direct support are assigned to eight Unified and Specified Commands: Alaskan Command, Atlantic Command, Continental Air Defense Command, European Command, Pacific Command, Southern Command, Strategic Air Command, and Strike Command. This Unified and Specified Command structure has evolved during the period since World War 11. As now designated and assigned the Alaskan Comniand is the oldest of the existing Unified Commands, dating from January I, 1947, and Southern Command the newest (June 1963). The Statutory authority for the establishment, composition, mission assignment, assignment of forces, administration and logistics dates from 1958, and provides: "With the advice and assistance of the Joint Chiefs of Staff, the President, through the Secretary of Defense, shall establish unified or specified combatant commands for the performance of military missions, and shall determine the force structure of such combatant commands to be composed of forces of the Department of the Army, the Department of the Navy, the Department of the Air Force, which shall then be assigned to such combatant commands by the departments concerned for the performance of such military missions. Such combatant commands are responsible to the President and the Secretary of Defense for such military missions as may be assigned to them by the Secretary of Defense, with the approval of the President. Forces assigned to such unified combatanst commands or :;pecified 46 * combatant commands shall be under the full operational command of tile commander of the unified combatant command or the commander of the specified combatant command. All forces not so assigned remain for all purposes in their respective departments. Under the direction, authority, and control of the Secretary of Defense each military department shall be responsible for the administration of forces assigned from its department to such combatant commands. The responsibility for the support of the forces assigned to combatant commands shall be vested in one or more of t•hemilitary departments as may he directed by the Secretary of Defense. Forces assigned to such unified or specified combatant commands shall be transferred therefrom only by authority of and under procedures establiihed by the Secretary of Defense, with the approval of tile President." 'Tae existing structure conmists of functional* and area** commands, and a mixture of both***. Command iv distribtned among the Military Departments as follows: Army European Command (EUCOM), Southern Command (SOUTIICOM), and Strike Command (STRICOM); Navy - Pacific Command (PACOM), and Atlantic Command (LANTCOM); atid Air Force - Strategic Air Command (SAC), Continental Air Defense Command (CONAD), and Alaskan Commnand (ALCOM). Interestingly, very few Navy forces are assigned to Unified Commands in which the Unified Commander is not a Naval Officer, except for the 6th Fleet assigned to EUCOM. Equally significant, all of the Army forces in PACOM, which mse conmanded by a Naval Officer, fall under sub-unified commands commanded by other than Naval officers and the overwhelming proportion of Army forces isl PACOM fall under sob-unified commands which are cotmanded by it tmy officers. Tile mnakeup of the Unified Command structure is significantly infhlenced by various mutual security agreements and arrangements to which the United States is a party. The most influential is the North Atlantic Treaty Organization (NATO), and of another type is the United Nations Command, Korea. The United States Unified Command structure is intended to mesh with the "combined" command structure which would exercise "operational command" of the multilateral forces should combined oprations be undertaken. "The missions assigned to the Unified and Specified Commands, while encompassing a host of varied tasks, may be generally summarized in five categories: (1) Combat operations as required, either strategic or non-strategic, across the whole spectrum of intensities; (2) Security of a specified geographical area, ranging from protecting and evacuating U.S. citizeims to countering an arnmeo attack; (3) Preparation of plais for a wide variety (contingency platning): of possible combat (4) Direction of military assistance matters; and *Continental Air (X,,,,,,inandand Stratjugic Ai, couuniad. -- S-11-rn Conunl d. .'Aiaskan C(1u11uud, Atlantic ( aind, Pt'aciic C( anuud, F,,idoptiru (X-uuiad, and Strike Co( nli,,tand. 47 operations (5) Providing U.S. military representation and participation in multilateral treaty organizations. Serious questions persist about the suitability of the Unified Command structure for the conduct of war, either general or localized, for the conduct of peacetime activities, or for the handling of recurring crises. An examinadon of the primary missions of the present commands and some of the specific problems indicates that the present structure is not effective, and probably would have to be radically changed to support a major war effort. CONAD is charged with responsibility for the defense of the North American Continent. Although CONAD prepares plans for such defense, strategic offensive forces operate in the same geographic area under SAC. The Commander-in-Chief, CONAD also serves as Commander of the North American Air Defense Command, which is a joint United States Canadian Command. SAC, the only Specified Command, is charged with the primary responsibility for the strategic offensive mission. However, since the deployment of Polaris submarines, a strategic offensive mission has been assigned to the Atlantic, European and Pacific Commands. The Joint Chiefs of Staff have established a joint planning group to effect better coordination in target planning and assignment. The Commander-in-Chief, SAC also serves as Director of this joint planning activity. Each of the other six Unified Commands has a mission oriented to a designated geographic area, and each Unified Commander is charged with preparing contingency p!ans for his area. The Unified Commmnder, however, is not given adequate guidance as to what forces will be available to him over and above those assigned. As a result, the plans of two or more Unified Commands for contingencies which can materialize simultaneously, may well be based on the assumption that each will employ the same forces. The Joint Chiefs of Staff review the contingency plans of the Unified Commands, but do not effectively resolve the basic problems of conflict in force requirements. An example of the confusion that can be created in the present Command structure occurred in the Arab-Israeli War of 1967, when the U. S. Military was directed to evacuate U. S. Nationals. The crisis was in the area of responsibility of STRICOM; however, a decision was made to perform the evacuation with airlift issets assigned to EUCOM. In anticipation of commanding the evacuation, STRICOM sent a command aircraft with a command and control element aboard to Europe. Because of indecisions as to whether STRICOM should command the evacuation, the aircraft was first stopped at the Azores then was allowed to proceed to Greece, at which point it was decided that EUCOM should command. The STRICO]I Command aircraft was assigned to EUCOM, and EUCOM was directed to execute the STRICOM evacuation plans. The Alaskan Command is assigned a geographic area of responsibility, but the principal mission of the Commander-in-Chief, ALCOM is not as a Unified Commander, but rather as a subordinate commander under NORAD in the defense of the North American Continent. The Atlantic Command has no Army or significant Air Force forces assigned (one small Air Force unit, designated Iceland Defense Force) and tends to be oriented towards a genieral war maritime role as distinguished from a perhaps more probable contingency involving land operations in its geographic area of responsibility, The Commander-in-Chief, LANTCOM (CINCLANT) is also the Supreme Allied Commander, Atlantic, under NATO, 48 and is responsible for operations in support of EUCOM on a unilateral U.S. basis, if required. CINCLANT aiso has a strategic offensive mission resulting from the assignment of Fleet Ballistic Missile submarines to his Command. EUCOM and PACOM are primarily oriented to contingencies in their respective geographic areas, although each has Fleet Ballistic Missile submarines and a resulting strategic retaliatory role. The Commander-in-Chief, EUCOM, is also Supreme Allied Commander, Europe, under NATO and is responsible for planning for the defense of Europe with U.S. forces integrated with other NATO forces or for unilateral U.S. operations, as required. CINCPAC is engaged heavily in military assistance and advisory activities. SOUTIHCOM is primarily responsible for the defense of the Panama Canal, military assistance activities in Latin America and planning for contingency operations which might be required in Latin America. STRICOM was estabiished to provide a capability for the rapid deployment of combat forces to overseas areas as required. In addition, STRICOM is assigned responsibility for fhe Middle East/Southern Asia and Africa South of the Sahara. Within the major Unified Commands, there are sometimes created "Sub-Unified Commands." A number of such "Sub-Unified Commands" now exist, such as the Military Assistance Command, Vietnam (MACV), the Military Assistance Command, Thailand (MACTHAI) and the U.S. Forces (Korea) Command, all of which fall under the Commander-in-Chief, Pacific (CINCPAC), the major Unified Command. The responsibilities for forces assigned to the Unified and Specified Commands are divided between tbe Commnnders and tile Military Departments. The Commianders exercise "full operational conimand" which includes the responsibility to specify the composition of subordinate forces, assign tasks to these forces, designate objectives and exercise full authoritative direction necesary for accomplishment of their assigned missions. The Military Departments provide the operational forces to the Unified and Specified Commands and have the responsibility to select, traiin, equip, supply, administer (e.g., handle assignments, rotation and promotions), and discipline such forces. Each Unified Comimuander has a joint staff, comprised of officers from all Military Services which have forces assigned to the Command. The staff of the Unified Commander is the only element within the command over which the Unified Commander has total connmand authority - including disciplinary authority and administrative and logistics responsibility. The Unified Commander has no direct responsibility for such functions as supplying, administering and disciplining the combatant and direct sulpport forces assigned to bis command, but only exercises "operational command," or as it is more descriptively used, "operational control" over tbese forces. The Unified Commander reports through the Joint Chiefs of Staff to the Secretary of Defense, and receives his directions through f",e same channel. For each Military Service which has forces assigned to the Unified Command, there is a component command, to which the forces provided by a Military Department to the Unified Command are actually assigned. The Unified Commander exercises "operational command" through the component comnnisuders. Oni matters other than "operational command," such as supply, equipping, maintenance, administration and discipline, the component commander receives supervisory direction from -mmod reports to tile Military 49 L'., Department to which he and his assigned forces belong. With respect to these latter functions, the component commander's chain of authority runs up to the Chief of his Service and to the Secretary of his Military Department and does not run through the Unified Commander. This deficiency was pointed out clearly by President Eisenhower in his message to the Congress on the Defense Reorganization Act of 1958. He stated: "Because I have often seen the evils of diluted command, I emphasize that each Unified Commander must have unquestioned authority over all units of his command .... Today a unified command is made up of component commands from each military depavtment, ear? -der a commander of that department. The commander's authority over these compont immands is short of the full command required for maximum efficiency." What President Eisenhower referied to as "Diluted Command" was at that time defined officially as "Operational Control." In response to Presidents Eisenhower's message, the Defense Reorganization Act of i958 vested in the Unified Commander "full operational command," clearly indicating a Congressional intent to overcome the deficiencies of authority for the Unified Commander cited by President Eisenhower. In Unified Action Armed Forces (JCS Pub. 2) which sets forth principles, doctrines and functions governing the activities and performance of Forces assigned to Unified Commands, the JCS now define "Operational Command" as being synonymous with "Operational Control". Despite the establishment of the unified command concept in the Defense Reorganization Act of 1958, as requested by President Eisenhower, the relationship and relative authority between the Unified Commander and the component commander, and between the component commander and his Military Department, remain substantially unchanged. The net result is an organizational structure in which "unification" of either command or of the forces is more cosmetic than substantive. The resultant organizational structure is also layered with large headquarters and headquarters' staffs. In the case of a Sub-Unified Command, such as MACV, the "operational command" runs from CINCPAC directly to MACV, not through CINCPAC's component commanders, (U.S. Army Forces, Pacific (USARPAC), U.S. Air Forces, Pacific (PACAF) and the Pacific Fleet (PACFLT)), as it does to most other forces in the Pacific. The "'supervisory" direction for such matters as supply, maintenance, administration and discipline, however, passes down a line from the Military Departments to the appropriate major component command (USARPAC, PACAF or PACFLT) and to the corresponding component command of the Sub-Unified Command, (e.g. U.S. Army, Vietnam; Navy Forces, Vietnam; or the 7th U.S. Air Force). One of the most signtificant factors relating to the internal organization of tile Unified mCommand is the fact that only at the single-Service component command level of either tlse major or Sub-Unified Command is tile total command authority which can be vested in a military commander brought together by merging the "supervision" originating in the Military Department and tlse "operational command" flowing from the Secretary of Defense through the Joint Chiefs of Staff and the Unified Command. him It is of more than passing interest to note that General Creighton Abrams, and before General William Westmoreland, as the Sub-Unified Commander in Vietnam, 50 (COMUSMACV) chose to be his own Army component commander. In a further attempt to overcome the deficiencies in this organizational structure, UOMUSMACV has designated one component command as Executive Agent for logistics responsibilities relating to common use items for forces from all military services within each corps area in Vietnam, (The Army component is Executive Agent for II, I11 and IV Corps areas, and the Navy for I Corps area). The capability and effectiveness of the combatant forces would be improved by organizing them into a structure with commands that are mission oriented and with operational command lines that are direct, clear and unambiguous. Tile structure should: (I) assure that all combatant forces are truly unified as necessary to perform tlse command mission; (2) make realistic operational planning possible; (3) consider present international mutual security arrangensents; and (4) reduce the ]sumber of staffs and staff sizes to the minimum consistent with actual needs. The combatant commands which have a functional mission, CONAD and SAC, are dedicated to deterrias, and if detcirence fails, to fighting a general war. The six comnmands which are oriented to geographic areas are equipped primarily for limited war. Three of them (LANTCOM, PACOM and EUCOM) are assigned Fleet Ballist:' Missile submarines which hIve a deterrent and general war role. The forces which provide the prime deterrent against general war must be reserved solely for that mission, because their use and attrition in limited war would reduce an aggressor's incentive for keeping the war limited. The nature of the weapons, tise planning requirements and the concept of operations fuo forces dedicated to deterrence and general war are radically different fronm those for limited war. The weapons systems for general war are designed to defend the United States and to have the capacity to inflict the maximum destruction on the enemy in a short time span. All general war forces must function together in a highly coordisated manner and in accordance with a carefully prepared plan. Recent advances in technology have increased the capability of the forces assigned to CONAD it a way which requires closer coordination than cats reasonably be expected between two separate commands in planning for, and employing CONAD and SAC forces in the sanme physical space. Joint planning alone cannot insure tlte adherence to operational concept and the degree of coordination required in implementation when the forces concerned are assigned to five different commands, as our strategic forces are now. All forces which are dedicated to deterrsnce and equipped for general war should be under a single commander who cat establish doctrine for his forces and assure that tbey are properly trained and kept in a high state of readiness. The forces for limited war must be highly mobile; their weapons must be capable of being rapidly moved to trouble spots and employed iv•a selective manner. It is not possible to plan precisely for limited war. Therefore, contingency plans must be rapidly adjusted to the developing situation, With the forces designed for limited war assigned to six separate commands, it is not possible to achieve the coordinated planning, flexibility in resource allocation and mission assignment, and the training required to assure thte capability to react rapidly and effectively to a crisis situation. 51 The general purpose forces, like the strategic forces, should be placed under a single commander who would be responsible for the contingency planning for the employment of all general purpose forces. He would establish doctrine for his forces and assure that they were properly trained, appropriately deployed, and kept in a high state of reodiness. Current mutual security agreements make it necessary to maintain subordinate unified commands in the Pacific and European areas. All other general purpose forces should he placed in a single command in the United States, where they could be rapidly deployed in a crisis situation. At times, it may be necessary to maintain or establish a special subordinate unified command for the execution of specific missions in a geographically localized area, as for example, in Southeast Asia at the present time. The Commander of such a subordinate Unified Command should normally report directly to the overall Commander of general purpose forces. Tisere is substanstial room for improvement and greater integration of management throughout the supply, maintenance and transportation systems of the Department. The most critical need for improved effectiveness is in the support of the Unified Commands. The logistics system of the Department of Defense, in activities other than procurement and the initial warehousing phas., is decentralized and fragmented in functional assignment. Efforts of tile Congress and the Office of the Secretary of Defense to improve efficiency and effectiveness of these activities through standardization of procedures and approaches have achieved very limited resultsi. As a consequence, the current inventory management, distribution, maintenance and transportation systems are needlessly inefficient and wasteful, and even more important, fall far short of the potential for effectiveness of support of combatant commanders. Integration of supply, maintenance and transportation functions for the support of Unified Commands can substantially improve the effectiveness of logistics support, while at the same time achieving greater efficiency and economy. In addition, thils integration will greatly enhance tile capabilities for logistics planning for contingencies, which currently is very weak due to fragmlentations of logistics functions and responsibilities. A unified, vertically oriented supply and transportation system, including maintenance, should be organlized for support of all combat forces, both those overseas amldthose held in the United States ready for overseas deployment.* The organizational structure of the major Unified Commands constributes significantly to deficiencies in two peocedural areas. The channel for submission of requirements which call lead to materiel developments (variously called Operations Capability Objectives by the Army, General Operational Requirements by the Navy, and Required Operational Capabilities by tile Air Force), to the extent they oIrigimnate at all with operating commands, bypasses the Unified Commander amld the "Operational Command" chain. To the extent there is one, the requirements flow is from the major component commander to the Military Service. As a comnsequence, the senior elements of the "operational command" chain -- nuw the Secretary of Defense, thle Joint Chiefs of Staff and thle Unified Commander -who have the total mission awareness, have no prrcbicnis arecrovred inoeo fully ir Chapter 11. nLogistics 52 opportunity for review and coordination of the requirements submissions, until after the requirements submissions have been processed and validated by the Military Services, if at all. Secondly, there is no offective means for the Unified Commanders to participate in the programming and budgeting process. Presumably, the Unified Commander would be the most knowledgeable source of advice on the force structures, strengths, and equipments necessary to perform the mission assigned to his command for execution. The component c•mmanders participate to an extent in some review processes of the Service budget submissions prepared by the Military Departments. Also, the Joint Chiefs of Staff solicit the views of the Unified Commanders on their requirements prior to the beginning of the Joint Chiefs' annual planning process which culminates in the Joint Strategic Objectives Plan, Neither of these processes, however, provides the senior joint commanders of combatant forces - the Unified Comi.:anders - with any effective mechanism for influencing the programming and budgeting process, nor for materially affecting the planning process ex•cept in the area of contingency plans. The existing command structure provides little flexibility and a considerable potential for confusion in crisis situations. For example, misunderstandings concerning forces to be used and to whom they are assigned; command relationships which are ambiguous, and which require extensive coordination between parallel commanders; confusion over the lines dividing areas of responsibility and jurisdictions; and the increased potential for mishaps created by the assignment of one command to execute the plans prepared by another. The inevitable delays occasioned by the layering of commands literally invite National Command Authorities to bypaos some elements of the command chain. The present combatant command structure does not facilitate the solution of many serious problems which materially affect the security of the nation: there is inadequate coordination between the strategic defensive and strategic offensive forces which must operate in the same physical space; the strategic offensive mission is split between four commands, SAC, EUCOM, LANTCOM and PACOM; the six area commands do not individually have a proper purview to permit realistic contingency planning. The present structure of eight Unified and Specified Commands and a large number of subordinate Unified Commands has proved cumbersome, imposes too broad a span of control for a single decision point in time of peace, is excessively layered, unwieldy and unworkable in crises, and too fragmented to provide hmebest potential for coordinated response to a general war situation. Without exception, every crisis within the last decade that has involved the movement of forces has required both ail ad hoc organizational rearrangement and ad hoc planning.* VIII. RECOMMENDATIONS Based on the preceding discussion of organizational considerations and problems, and on *Vietnam, Cuba Missile Crisis (1962), Panama Riots (1964), Tonkin Gulf Crisis (1964), Congo Rescue Mission (1964), Dominican Republic Crisis (1965), Arab-Isracli War (1967). 53 the findings presented in the remaining Chapters of dais Report, the Panel offers the following recommendations with respect to the Defense Department's organizational structure. 1-1 Tire functions of the Department of Defense should be divided into three major groupings: (a) Military Operations, including operational command, intelligence, and communications (herein called Operations); (b) Management of personnel and materiel resources (herein called Management of Resources); and (c) Evaluation type functio,,s, Including financial controls, testing of weapons, analysis of costs ard effectiveness of force structures, etc, (herein called Evaluation). 1-2 Each of these major groups should report to the Secretary of Defenrse through a separate Deputy Secretary. Appointees to these three positions should be drawlr from civilian life, and should rank above all other officers of the Department of Defense except the Secretary,* One of the three should be designated principaldeputy. The General Counsel, the Assistant to the Secretary of Defense (Atomic Energy), the Assistant Secretary of Defense (Publtc Affairs), and the Assistant to the Secretary of Defense (Legislative Affairs) would contihue to report directly to the Secretary of Defense. The staff of tile Office of the Secretary of Defeuse should not exceed 2,000 people. 1-3 The Deputy Secretary of Defense for Management of Resources should be delegated responsibilityfor the following functions: (a) The Military Departments, which should continue under the Immediate supervision of their Secretaries,; (b) Research and Advanced Technology; (c) Engineering Development; (d) Installations and Procurement (a modification of the present Installationsand *This would not lower the reporlting level oTany officer In the Departrment, sinceall officers now report to the Depuly Secretary or to a lower level.The only change would be to dhide the functlons of the present Deputy Secretary Io pLmrnlt a sharper functional foeus. No neworganizational layerwould result. 54 Logistics), (e) Manpower and Reserve Affitirs; (f) Health and Enevironmental Affoirs; (g) Defense Supply Agency; and (h) Advanced Research Projects Agency. There shouldi be an Assistant Secretary of Defense/obr eachi of the functions (b; through (f) inclusive, who reports and provrides staff assistance to the Secretary of Deftnse through the Dep~uty Secretary of Defense (Managentent of Rcsources). The position of' Director, Defense Research and Engineering should be abolished, and his funictions reallocated between the Assistant Secretary of Defense for Research and Advanced Technology and the Assistant Secretary' of Defe~nse fur Engineering D~evelopment. Functions (g) and (h) should continue to be constituted as Defense Agencies, eachi under thein'imediate supervision o/a Director. The Advanced Research P'rojects Agency should be delegated the resp~onsibilitye for all research and exploratort' developmnent budget categories. Funds for such research should be budgeted directl~v to this Agency, and the Agency should be authorized to assign or conltract fu~rwork projects to laboratories of the Defense Department` or in the priv'ate sector, as approp~riate. 1-4 The Depute Secretary of Iejeense fin- Operations should be delegated responsibility for the fiollowing funnctions: (a) Alilitary Operations. (b) The Unified Crnmmands; (c) Operational Reqtuiremnents,, (d) Intelligence; (e) Telecoonmnunicationis (and Autonwatc lData Procs'ssing) (f) International Security A/fairs, (g) Defense Communications Agency, and (00 Civll Defense Agency (if' Civil Defense is to be retained !in the D~epartnment of Defense). Three ,,ew major Unified Commands should he created: (I) A Strategic Cjonmmand, comp~osed of the existing Strategic, Air Command, the Joint Strategic Target Planning Staff, 55 I the Continental Air Defense Command, and Fleet Ballistic Missile Operations.-(2) A Tactical (or General Purpose) Command, composed of all combatant general purpose forces of the United States assigned to organized combatant units; and (3) A Logistics Command, to exercise for all combatant forces sipervision of support activities, including supply distribution, maintenance, traffic management and transportation. No Commander ofea Unified Command should be permitted to serve concurrently as Chief of' his Military Service. The responsibilities now delegated to the Joint C'hiefs of Staff by the Secretary of Defense to serve as military staff in the chain of operationalcomnmand with respect to the Unified Commands, and all other responsibilitiesso delegated which are related to military operations and the Unified Conisnands,should be assigned to a single senior military officer, who should also supervise the separate staff which provides staff support on nmilitarv operations and the channel of communicationsfrom the President and Secretary,of Defense to the Unified Co•nmnaods. This officer should report to the Secretary of Defense through the Deputy Secretary of Defense (Operations). This senior military officer could be either the Chairman of the Joint Chiefs of' Staff, as an individual, not ex-officlo, the Commander oi the Tactical Command, or some other senior military officer, as determined by the President and the Secretary of Defense. There should be an Assistant Secretary of'Def•,ise lotr each of the functions (c) through (if), inclusive, who reports and provides staff assistance to the Secretary of Defense through the Deputy Secretary of' Defense (Operations). Thle Defense Conmmunications Agency and the Civil Defense Agency would each be under the immediate supervision ofa D)irector. All intelligence jfucnctionis of' the Department of Defense a/id all comnunications functions should report to the Secretary of' )efense through the Deputyt Seiretar,'of Defense fbr Operations. P-S The following steps should also be takeni" (a) To proviide the staff support on iilitary' operations, aitd the channel of' communicationsf-'oin the Presidentasid the Secretary of Defeense to the Unified Conisajids, an operationsstaff, separatefout all oIlier militarly staff', should be created. (b) The responsibilitiesnow delegated to the Joint Chiefis of'Staff hy thc Secretar' of Defense to serve as iiilitary staff in the chain of' operationalcomimnand with respect to the Unified Commands, and all other re,"ponsibilities so delega!ed which arc related to snilitary operations and the Unified 'oncoca'ids, should be resc'inded; and considerationshould be given to changing the title of'the Chief'of'Naval Operations to ('hief of Staff ofthe Nary. in (c) All staff personnel positions in the Organizationof ..'e Joint C'hiefiy of Staff and in the headquartersmilitary staffs of the AMilitars, Services which are in support of'activities, such as mdlitary operations, which are recommes'ded for transfer to other organizational elements, should be eliminated. (d) The Organization of the Joint Chiefy of Staff should he limited to include oncl the Joint Chiefs of' Staff'accn a reconsticutedJointc Staff limited in size to Scotsnore thani 2.50 56 officers augmented hr profesionoal civilian analysts as required. (e) The Unified Unminanders should be given unfragmenled command authority for their Commnands, and the Commanders of component comm~ands should be redesignated Deputies to the conmnander of' the appropriate Unified Command, inl order to make it unmistakable' clear that the combatant forces are inl the chain of command which runs exclusively1 through the Unifiled Commnander,- (Ji Inl consolidating the existing area Unitled Commnands into the Tactical Conmmand, ma) or organizational and finctional advantages wvill be obtained by: (1) Merging the Atlantic Commnand and the Strike Commnand; (2) Abolishing the Southern Commnand and reassigning its functions to the merged Atlantic and Strike C'ommoands; (3) A bolishing the Alaskan Conunand and reassigninig its general purpose function to the Pacific Conunand and its strategic defense functions to t' ."trategic C-ommnod: and (4) Restructuring tihe commnand channels of the sub-unified comunands. (g) The responsibilities related to civil disturbances currently delegated to the Army should be redelegated to the Tactical Command; and (it) The Unifled Commanders should be given express responsibility and capability fo~r making recommnendations to the Depute Secretary of Defiense fur, Operations, for operational capabilities objectives and for allocations of force structures needed for the effiWtive accomplishment of the missions assigned to their Ciommands. 1-6 'The Depute Secretary of IDefrnmn fo~r Evaluation should be delegated the respon~sibilitv fine the evaluation anid conmtrol-tytpe actieitli's, including. (a) Comptroller (including internal audit and inspection services), (b) Program and Force A nallysis (a modification of the present Systemns Anmaly.'ss Unit): (c) Test and E valuation,(d) Defnse Contract A udit Agencev and -Fl, .... unndm olu . i f, eaneý n hUnified Conu,n,%tructmnnnwould resul in a~ sau rdaueio ir(ies nuniber o 57 (e) Defense Test Agency. There should be an Assistant Secretary of Defense for each of the fui ctions (a) through (c) inclusive, who reports and provides staff assistance to the Secretary of the Defense through the Deputy Secretary of Defense for Evaluation. The Defense Contract Audit Agency should be continued as a Defense Agency, under the immediate supervision of a Director. A Defense Test Agency should be created to perform the functions of overview of all Defense test and evaluation, designing or reviewing of designs for test, monitoring and evaluation of the entire Defense test program, and conducting tests and evaluations as required, with particularemphasis on operational testing, and on systems and equipments which span Service lines. The Defense Test Agency should be under the supervision of a civilian Director, reporting to the Secretary of Defense through the Deputy Secretary of Defense for Evaluation, 1-7 The number of Assistant Secretaries iN each of the Military Departments should be set at three, and except for the Assistant Secretaries(FinancialManagement), they should serve as senior members of a p-rsonalstaff to the Secretaries of the Military Departme,nts without the existing limitations of purview imposed by formal functionalassignments. The Assistant Secretary (Financial Management) should becotne the Comptroller of the Military Department, with a military deputy, as in the current organization in the Department of the Navy. The Secr, tariatsand Service Military Staffs should be litegratedto the extent necessary to eliminate dulplication;the functions relatedto military operationsand intelligence should be eliminated; line type functions, e.g., personnel operations, should be transferred to command organizations;and the remaining elements should be reduted by at least thirty percent. (A study of the present staffs indicates that the Secretariats and Service staffs combined should total no more than 2,000 people for each Department). 1-8 Class 11 activities (Army), Field Extensions (Air Force), and Commands and Bureaus (Navy), all of which are line, rather tlhtn staff in character,which are now organizationally located under the direct supervision of itaff elements in the headquartersmilitarv staffs of1 the Services, should be transferred to existing command-type organizations within the Services. 1-9 The Defense Atomic Support Agency should be disestablished.Its functions for nuclear weapons management sould be transferred t, the operations staff under the Deputy Secretary of Defense for Operations, and its I .)ons effects test design finction should be transferredto the Defense Test Agency. 58 ..... ................... , . - ~ ., 1-10 The administration functions presently assigned to the Assistant Secretary of Defense (Administration) should he assigned to a Directorof Pentagon Services, reporting to the immediate office of tthe Secretary of Defense. lie should be responsible for operating the facilitiesamtd providing administratiesupport for the Washington Headquarters. I-1I A separate programm category* should be established for public affairs activities in the Departmettt of Defense. 1-12 A Net Assessment Group should be created for the purpose of conducting antd reporting net a.,sessments of United States attd 6reign military capabilitiesamtd potentials. "lPits group shotuld cons/ct of indtwiduals from appropriate units in the Department of Defense, consultants amtd cottract personunel appointed from tine to tine by the Secretary of Defense, and should report directly to himt. 1-13 A Long-Range Planning Group should he created ft)r the purpose of'proi'/ding staff support to the Secretare of )efnse with respoonsibility tr long-range planning which integrates net assessmeutts, technologicalpro/ectiomts, fiscal planning, etc. Thits group should consist of individualsftom appropriateunits in life Department olDefense, consultantsantd comttract persootnel appoitted firon time to time by tite Secretary of Defense, amtd should report directly to hint. 1-14 A coordinating Group should be establisl-ed in the immediate office of the Secretary of I)efnse. 'The responsibilitiesof this Grotcp should be to assist the Secretary of Defense and the J)eputt Secretaries of' DeJf'nse int coordinating the activities of the entire Department in the schedulimg amid follow-up of' the t'arious inter-Departmentalliaison activities; to staff'fr tie Secretary the control futtnctiomt for improvement acid redtctiot of' management itf.ormnation/comtrol sstein nteededt within the Departmelt amid requiredfrom Deftmtse contractors;antd to assure that each organizatiotal charter of tfie Office of' the Secretary of Defetnse is properl, scoped atid coordinated amid in accordance withI tIt' assigted responsibility of' the organization. 'rite responsibility for the Department's DirectivelGtuidamuce System, 'urremttly assigmned to the Assistant Secretary of' Defense (Admittistration), should ie assigned to this group. The coordinating group should be Pro g-rncawegohtcs are trose categortes of activities used for intersal plannintg and rrtsoagetnaens it tine strategic oflenstec forces, sýtraegic dct'efe ie forces, re-arch and develop 59 enet, inteiligerce, etc. tueporpatteo, e.,, headed by a civilian Director, who should also serve as executive assistant to the Secretary of0Defense. 1-15 The Army Topographic Cominmand, the Naval Oceanographic Office and the Aeronautical Chart and Information Center should be combined into a unified Defense Map Service reporting to the Secretary of Defense through the Deputy Secretary of Defensefor Management of Resources. 6O T?rrf?y??1W2rr~ mun swamav 1 . ZIURIIAHY SECRHARY SLERLIAHY NAVY HF MR it '4 ?r'p l. .- 1.. In: . A;?rqy . To (pace DEPARTMENT OF DEFENSE SECRETARY OF DEFENSE GouQ, CCOCCICIAI[OJ! CHIEFS JOINT Of S!AFF SECRETY DEPUTY .. TR 1 IL -VPs CIICIES I 1n r4b'x? . BLUE 5 JULY mun (UP - '2an I I . PUTY SECRETARY DEPUTY SECRETARY r7. .nnmum"Iii" walk yaw-?mum. MUM cum!? a ., upll 1 I - . ?mu? . man I mt. EJUUM I I J. - I I 'lfl'l' ll?a' . wry;- .n counsu 4 I SEMHGK IN mu ?mum mm? 1 Also . mmuz Incou mount 1 0mm: ms MSTummnr 3 Id? i 1 ?Hummus .. 3 I CHAPTER I1 MANAGEMENT OF MATERIEL RESOURCES I. GENERAL The modern history of military organizations and operations demonstrates that the materiel support of the forces is of ever-increasing relative importance, and presents complex defense management problems. Advances in science and technology comprise the initiating source of this trond. Weapons, coinumuications, transportation - all have been affected significantly by revolutionary advances in the state-of-the-art; and each advance has been accompanied by great increases in complexity of development, acquisition, maintenance, operation and in cost. In short, modern military organizations have become "hardware" oriented and dependent. Military hardware requires an increasing amount and proportion of total defense resources, aggravating a host of inseparable, associated management problems. Materiel management in the Department of Defense can be divided into two distinct overall areas of activity. The first is acquisition related, and includes functions associated with research, development, test and evaluation, and procurement. The second phase is post-procurement, and includes supply, maintenance, and transportation. Although those activities connected with acquisition are more often in the focus of public and Congressional attention, both areas are critical to combat effectiveness and both have a significant cost impact. The growing size of hardware-related expenditures, particularly for acquisition, has been matched by broadening Congressional attention. For instance, the coverage of authorizing legislation, which basically deals with investment items, has been expanded so that it now extends to all research, development, test and evaluation and to all procurements except ammunition, electronics, and general materiel. Congressional concern with the post-acquisition phase of materiel management is demonstrated by the breadth of consolidation authority for logistics functions vested by Congress in the Secretary of Defense by the 1958 Amendment to the National Security Act. The most severe problems in the acquisition of materiel occur when production is dependent on new development, not with off-the-shelf procurements. Military hardware development programs continue to be plagued by the now familiar symptoms of trouble: (I ) Major cost growths or overruns; (2) Schedule slippages; and (3) Failures in performance. 62 Uncertainty is inherent in the nature of programs whichi involve advances in technology, and this uncertainty makes it inevitable that some degree of cost growth, delays and short-falls in desired perfornmance will occur in sonme programs. Tile froqoency and magnitude of such problems which have been experienced, however, surpass significantly those which canl be attributable to unavoidable causes, It is clear that a substantial portion of the acquisition problems must be attributed to management deficiencies. 7 he problems - and resulting deficiencies - !inhardware development programs are clearly too myriad and complex to yield to any single solution, but a combination of changes inl policy and procedures canl achieve significant improvements in costs, time, and performance. Deficiencies in aay part of thle process - establishment of the technological base, formulation of requirements, acquisition philosophy, cost estimating, testing, contracting, program management, etc. - canl adversely affect an entire program. If repetitions of thle weapon systems debacles of the past are to be avoided in the future, earlh element of the policies and procedures followed in the past must be carefully examined and constructively revised. Equally crucial is tlse necessity for strong, continuing management to assure that tile execution of the revised policies and procedures is responsive. Even an effective change hinpolicies and procedures cannot be expected to produce immediate benefits, however, for the most meaningful potential improvements in the acquisition process fail in the initial stages of development programs. The duration of development programs is measured in years, and anl improvement !intile process will produce the most meaningful results in programs initiated after the changes are instituted. 11. RESEARCH AND DEVELOPMENT Research and Development (R&D) by the Department of Defense may be broken down according to activity (budget category subdivisions) and by performer or by mission (Five Year Defense Program, program elements). The types of activity, or budget category subdivisions, are as follows: Within Budget Category VI, Research and Development: 6.1 Research: includes all basic research and that applied research directed toward expanding knowledge in the several scientific areas; 6.2 Exploratory Development: includes studies, investigations and minor development efforts, varying from applied research to sophisticated breadboard hardware and is oriented to specific military problem areas; 6.3 Advanced Development: includes all projects for development of hardware for experimentasl test; 6.4 Engineering Development: includes development programs in which items are engineered for military use, but which have not been approved for procurement or operation; 6.5 Management and Support: includes the overhead expenise for the other subdivisions of research and development; 63 6.6 Emergency Fund: available for use in any category at the discretion of Secretary of Defense; and From other than Budget Category VI: Operational Systems Development: includes development, engineering and test of systems, support systems, vehicles and woapons (Engineering Developmen't) that hove been approved for production and deployment. The breakdown of research and development by perfumter includes (1) Priw c. Industry, (2) Government In-House, (3) Federal Constract Research Centers (FCRCs), (4) Universities and (S) Foreign Performers. Since the second typ'ý of performer, (Government In-House), does not usually include Civil Service salaries in the allocation of funds reported, percentages of effort by category are at best, rough estimates. However, taking such salaries into consideration, it is estimated that R&D funds are distributed among performers as follows: Industry, about 62%; Government In-House, about 30%; FCRCs, about 3.S%; Universities, about 3%; and the Foreign Performers, about one-tenth of one percent. The emiergenscy fund, for which performers vary from year to year accoiding to allocation, accounts for one percent or less of the total R&D funds, Mission breakdowns are by program categories. These include Strategic Programs, General Purpose Programs, Other Programs (Communications, Intelligence, etc.), Technological Base and Support. These subdivisions are quite imprecise, and only moderately useful for analysis purposes. A. Technological Base One of the most critical distinctions to be made is that between research and development to advance the general technological base related to military needs and the remainder of research and development which is oriented to specific mititary applications. There is an elusive boundary between the two. Generally, R&D to advance the technologicat base is acknowledged to fall in the budget categories of Research (6.1) and Exploratory Development (6.2), and to a small extent, in Advanced Development (6.3). It should be noted that the Exploratory Development category is not altogether limited to advancing the technological base. (Thie budget categories of Research (6.1) and Exploratory Development (6.2) are controlled by level funding, e.g., funds are appropriated to support a level of activity rather than being justified on an individual project basis Ps are the other R&D categories). There are several significant characteristics of R&D designed to advance the technologiical base.. First, formal requirements from the military operators are not necessary for, nor do they directly affect, the allocation of funds in these two categories. Second, a much more carefuil analysis of level-funded categories, hinwhich R&D to advance the techsnological base primarily falls, is required to assure relevancy to military neLds than is required in categories which are controlled on a project basis. Third, where control is organizationally dispersed, it is much more difficult to detect duplication than where specific requirements must be justified, and identifiable projects planned and approved as a basis for funding. 64 Fourth, R&D designed to advance the technological base requires more intensive review in order to insure that the proper allocation of funds is made so that all parts of the militarily-relevant spectrum of technology are adequately covered. Fifth, the dispersion of control of such R&D makes it difficult to perform audits adequately to insure that such funds are actually used to advance the technological base, and not used to supplement efforts to develop specific hardware. Under existing procedures, research and development for advancing the technological base is dispersed among the Military Services and the Defense Agencies, including the Advanced Research Projects Agency (ARPA). ARPA now administers research and development which accounts for approximately 12% of the Research (6.1) category and approximately 20% of Exploratory Development (6.2). Not all of ARPA's effort is clearly applied to advancing the technological base. Its advanced sensors project, for example, is more nearly in the Operational Systems Development category. This project still consumes more than one-seventh of ARPA's Exploratory Development dollars. The actual Research and Exploratory Development administered by ARPA, as is that administered by the Military Services, is mostly performed under contract by industry or under work order by in-house Service laboratories, ARPA's objective is to csr.y projects to a certain level in Research and Exploratory Development, and then to transfer them to the appropriate Military Service. Each of the Military Services has a research office: the Army Research Office (ARO), the Office of Naval Research (ONR), and the Office of Aerospace Research (OAR), Each Service also has a number of basic research laboratories. The Defense research performed by universities is small and diminishing. Renewed efforts are being made to insure that such research is clearly defenst-related. Unquestionably, university participation in Defense research is critical to the maintenance of an adequate pace of advance in the military-related technological base. At the present time, only about 14%of Government funds supporting university research is from Defense. Participation by institutions and individuals in university research for Defense is on a purely voluntary basis, and should remain so. The university defense-oriented research contribution is being damaged by anti-military and "protecting academic freedom" attitudes and activities of some students and faculties. The consequences of permitting academic freedom to be so interpreted as to inhibit or prohibit voluntary participation in military-oriented research by universities and faculty members will not on!y be a distortion of academic freedom, but will be a critical blow to the nation's defense research requirements. A substantial portion of exploratory development by the Army is performed in-house in arsenal-type laboratories, a somewhat lesser portion by the Navy in-house, and an even smaller portion by the Air Force in-house.* The technological base is also advanced by independent research and development -See Section nonfense LaboWtorfivin thisChapter. 65 ............. (IR&D) performed on its own initiative by industry, which generally seeks to recover such costs as overhead on contracts with the Government. The potential benefits frons IR&D are inhibited by two factors. First, recent attempts in Congress to limit recognition of IR&D costs as recoverable overhead in Government contracts have inhibited industry investment in IR&D. Second, some of the Department's in-house laboratories display a not-invented-here attitude that inhibits objective consideration of IR&D products as alternatives to laboratory-originated technological approaches. The R&D intended to advance the technological base is estimated to be about seven and one-half to eight percent of the total Defense R&D effort. The increasingly high technological risks, associated with major weapons systems developments Lgsymptomatic, in part, of an inadequate pace of advance in the military-related technological base. There is no adequate or coherent planning for investments in advancing the technological base. Responsibility and management for conducting such research are widely fragmented among and within the Military Services and the Defense Agencies. Research funds so allocated have not always been spent on militarily-relevant technology, nor are all militarily-relevant areas of technology appropriately considered in the allocation of research funds. Existing organization and procedures inhibit the degree of control on research and exploratory development work and of the expenditures necessary to insure proper application. The funds allocated to advancing the technological base are not sufficiently identifiable and auditable to support value judgments as to their sufficiency. There is no adequate mechanism to assure that funds appropriated for research and exploratory development are not diverted to advanced, or engineering development categories, or to operational systems developments. The overemphasis on mission justification for research and development allocations and funding creates additional incentives for such diversions. There is no adequate mechanism to evaluate the performnance of the numerous research groups. The dissipation of research, exploratory development and management and support categories of R&D funds on unproductive work in contractor and in-house laboratories, sometimes to support a preconception or position of the organizational element contracting for the research, occuis all too often. Based on the foregoing observations, it is concluded that R&D to advance the technological base should be constituted as a separate program and subject to a continuing intensive review to insure that all funds are allocated to militarily-relevant research and that all militarily-relevant areas of technology are given due consideration in fund allocations. Further, Defense research policy should be separated by assignment of responsibility from other development policy. The primary objective should be to insure that technology will be available when needed to meet Defense requirements. I1-I Research and Development io advance the technologicalbase should be constitutedas a separate program, under the staff supervision of the Assistant Secretaryv of Defense (Research and Advanced Technology). It should be subject to continuing intensive review to insure that available funds are allocated to militarily-relevant research and that all militarily-relevant areas of technology are consideredin fund allocations. 66 K+ . .• . . . . .. •: • : .. . . .::" 11-2 The responm;bilitv for control of Defense research designated :o advance the technological base and the appropriatedfunds therefor should be asvigned to the Advanced Research ProjectsAgency (ARPA). Further,ARPA should be directed to: (a) Allocate its R&D among quialifiedperjbriners; (b) Assure by review the relevance of all projects and appropriateness of f'uid allocations" (c) Evaluate the effectiveness ofall its R&D participants;and (d) Develop and submit for approval to the Deput.y' Secretary of Defense (Management of Resources) an annualResearch Objective (RO) statement which would be a companion document to the Operational Capability Objectives developed by the Unified Commands and which would provide the Secretary of Defense an information base to determine the overall defense capability objectives. B. Advanced, Engineering, and Operational Systems Development That portion of military research and development which goes beyond advancing the general technological base involves the development of hardware either for experimental test or for production and deployment. The allocation of resources to this portion of R&D is, at least theoretically, based on military operational requirements. 1. Requirements A requirement, in this context, refers to a need for a materiel capability which does not presently exist or to replace one which is inadequate in performance for the conduct of a military mission currently assigned or anticipated in the future. The several Military Services designate this requirement by different nomenclature, which varies within a Service according to the stage of refinement of the requirmment. Traditionally, requirements flow from the operational and materiel commands into the Service staffs. In the Army, the Combat Developenwet Objectives Guide (CDOG), prepared by the Army Staff, provides that all Operational Capability Objectives (OCOs), Qualitative Materiel Development Objectives (QMDOs) and Qualitative Materiel Requirements (QMRs) are to originate in the Combat Developments Command (CDC), which is designated to represent the Army in the field. The Navy's General Operational Requirements (GORs) flow primarily from their Mid-Range Objectives (MROs), a 10-year planning projection prepared by the staff for the Chief of Naval Operations. The early Air Force requirement takes the form of a Required Operational Capability (ROC) which can be prepared in any major command. Upon approval by Air Force Headquarters, the requirement is converted to a Required Action Document (RAD). 67 A major problem with the requirements process occurs at its very beginning. Tile originating command often lacks the capability for operational validation which should be prerequiste to transmittal to higher Headquarters. The application of military judgment to requirements is essential, but not sufficient in itself. Operational validation should be based on a thorough analysis of the assigned mission and the present or programmed means for accomplishing it in the predicted threat environment. The Air Force has for many years maintained operations analysis offices in such originating organizations. The extent to which they participate in the validation of operational requirements varies considerably. The Navy has some analysis capability, though much less, at such levels. The Army analysis capability at this point in the requirements process can scarcely be said to exist at all. There is no doubt that the overall requirements process could be improved greatly by specifying that operations analysts study requirements at the point of origiu. In flis way, those requirements reachbig higher headquarters should have greater validity. The requirements process is highly service unilateral. To the extent requirements originate with combatant units, they are processed not through operational channels, but through unilateral service channels. Unified and Specified Commanders are not in such channels. There is no opportunity for the Office of the Secretary of Defense (OSD) to review total requirements for priority, urgency or duplication before they are screened and filtered by the Services. Many changes can and do occur between the presumed initiator and any validation review by OSD. Each Service has a large section in its Headquarters staff which has tile sole function of translating the broadly-stated requirements received from field commands into more specific statemenlts of their desires for new or improved weapons and other materiel. These staff elements also determine informally the relative priority of the requirements for new and improved weapons. In recent years, there has been a noticeable tendency for the formal requirements documents to become quite specific, and to be stated increasingly more in terms of engineering specifications rather than iii terms of tile performance or operational results being sought. Even when the engineering specifications are properly matched to tile performatce requirement%, the detailed engineering specifications limit the engineering alternatives available to the developer because of tlle irluctance of the acquisition authority to consider change, thereby imposing o0 the development a rigidity which canl cause delays, additional costs, and often fihe application of older technology thtan tie current state-of-the-art would permit. In other instances, the specifications have the result of demanding products which are clearly beyond the state-of-the art or which require developlnental efforts beyond those necessary to perform the prescribed mission. Inept or obsolete specifications also occor too frequently, and in sotne instances, products developed which satisfy the imposed engineering specifications will not perform the mission intended. There is all apparent inability of Service staff elements to divorce themiselves frotl their own Service interests in establishing priorities for requirements. It is evident tilat tile needs of the user in tile field often take second place to weapons developments considered most important to the particular Service for the protection or expansion of its assigned roles and missions. The missioni of the combatant forces should determine their required operational capabilities, which should be the principal factor i inititiling development. This can be accomplished only if the combatant commannaids possess the capability to analyze their 68 missions, determine bOiiroperational capabilities, deficiencies and potential deficiencies, anJ state their requirements in a meauingful way. /1-? The Strategic, 7ajctical and Logistic.t Commands should be assigned the responsibility to develop, and submit to the( Depute Secretary for Operations, Qiscrational Capability Oh! ctives r-elating to) their assigned missions, For this purpose, each Command and major sub-command !leadquaiters should be organized to include an operations analysis element. 11-4 For each Opt ratitonal Capability) Ob/ectire which is validated by the Deputy Secretary fi~r Opemations, I/theDeput, Secretary for Mlanagemnent of Resource~s should require one or inore of the 11ilitarY 1e'rn~t to prepare and submit a dee~elopment plan aimed at .ratisf ring thei Oplerational apabifity Ob/ectiire. 2. Advanced lDevelopmniet Advaimcvd D~evelopmnett, which includes all projects for development of hardware for e,.periniental test, is the essential link between advances in the technological bas- achieved in iResmarch and Exploratory Development, and the incorporation of improved capabilities filnews wveapaons develolmnnets. fit recent years, paper studies and analyses have often been susbmtituted for essential hardware developmtent attd testing. As a result, uncertainties which cvuld be elimjinated or reducce. are carried oiver into engineering developmeunt or operational systemts developmuent, where unresolved technical problems are significantly more expensive and troublesome fuaremeudy. In addition, new techtmo!,,3y which would improve weapons Capabilities is oftent lost ini(tie procem. Increasod emphabsis oil and funiding at Advanced Development to yield various forms of prototype equipilmenit, which call be tested prior to commiitmnent fin a weapon .) stem, is essenti al. Prior to approval iif initiation of Engineering or Operatiomta System Development, test results ofrall nmajor advances iiiftle technological base consideredf for incorporation shtould be available. * 3. Ljigitmeerir'g s~vl~ticmtmd Ojpermtfotal Systems levelopmtnet Fmt lpurposes of' sipecial mtatigeniteti control, Enmgiuteerittg D~evelopmtentt antdI Operttiointl Systems D~evelopmntet oif tmajior systent; (defined as requiritng total R&D fitnatcinig in e-icess of' $25 miilliton or requtirinig it total productiotn investment in excess of $ 100 mtillion) tire subjected to specil ltricedurcs. At any given tlimte, there are between 70 mid 80) such major systemts uinder developoment. The procedures prescribed tor major systeni developtmetit are optiottal for ittitor systemns which dio w01 fall within thie mVts id Fat'iaLI(lli, Oilk.Chapoy 69 established criteria. a. The Major Weapons System Acquisition Process The prescribed process for acquisition of major systems is hinged on the requirement for approval by the Secretary of Defense of the initiation of Engineering Developments or Operational Systems Developments which fall within the prescribed criteria. Concept Formulation is comprised of the activities which precede the decision to go forward with the engineering development. Following the decision, a phase called Contract Definition is prescribed, and that is followed by the actual development. Concept Formulation includes such activities as comprehensive systems studies, and experimental hardware efforts under Exploratory and Advanced Development. Prescribed prerequisites for obtaining a decision to proceed into Engineering Development, which prove to be largely idealistic for application to the totality of a large weapon system and which have not been strictly adhered to in practice, are: (I) Primarily engineeriag rather than experimental effort is required, and the technology needed is sufficiently in hand. (2) The mission and performance envelopes are defined. (3) The best technicl approaches have been selected. (4) A thorough trade-off analysis has been made. (5) The cost effectiveness of the proposed item has been determined to be favorable in relationship to the cost effectiveness of competing items on a Department-wide basis. (6) Cost and schedule estimates are credible and acceptable. Once a decision to proceed with Engineering Development is obtained, it is mandatory to conduct a Contrtact Definition, among the objectives of which are: (I) Providing a basis for a firm fixed-price or fully structured incentive contract for de 'elopment. (2) Identification of high-risk elements. (3) Detailed specifications for all end items. (4) Verification of techramcal appioaches. (5) Establishment of i.,nj schedules and costs estimates including production engineering, facilities, construction an'd production hardware to be funded during the development. (6) Establishment of schedules and costs estimates for the total project including production, operation and maintenance. 70 Contract Definition is itself divided into three phases. The first of these is the preparation and issuance of a Request for Proposal (RFP) and the selection of contractors for Contract Definsition. The RFP is the document that solicits the first fornmal response fromt industry connected with the acquisition of a new weapon systens. It calls for sufficient information nseeded for selection of the contractors who are to undertake thle detailed competition. The lttnle and effort spent in this phase vary widely, hut a period of four-to-six moniths is average. Following the selection of contractors to participate itsContract Definition, thle second phase begins with the award of fixed-price type contracts, under which each constractor prepares proposals for the engineering development effort. These proposals are detailed and voluminous, and one copy of a proposal may weigh asmuch as one tons. The third and final step in the Contract Definition phase is that of source selection. its current practice, the constractors' proposals for development of complex systems are broken downt into a large number of technical and mansagement conssiderations. Each of these iterns is then assigned for evaluation to atsmall number of technical or management experts who in tile aggregate comsprise anlevaluation tramt whtich msaynumber several hundred. Prior to the evaluation of each elenment, weight factors have been assigned but not disclosed to thle small groupls evaluating thle many comtpartmentcd factors. These weight factors are predetermined by atsmall leant of expserts primarily onltile basis of value judgments. After tile evaluation is made of each individual elemnent, the scores assigned to eacth elenment of tite proposal are suninied tip and tite raw data is forwarded to a selectioni board, usually comprised of general or flag officers. The selection board theit apsplies thle predetermined weights attd recommeneds the selections of it coitiractor based oit titese weighted scores pills othter factors sucht as price and past iserformtaince, which are itot given preassigned weightts. Contcurreitt with ltheevaluation atsd selectioni process, cacti of the cotntractors vwsoparticipates itit contract defintitiont atid who submits atprolposal, is engaged itt contlact negotiations. The nlegottiatioins are coniducted by psersoitiel 1101iitvotlved in the evaluation atd selection. Prior to tile compsiletionl of tite evaluations process, tite itego itiatitr htave eaclh oftte participatinlg contractors signita colttract. Whteit the selectionl of' the contractor is D~uring tile conttratct definitiott phias, tile techiticatl 1111designi atpptacitcs Ito tile systemos developmlenlt conttainted lit tile ptroposal of it ptrospective conttractor are oftetn exposed lto 0other ptrosptective conltracttors, sit that ptotenttially better attd/or less costly features of eatchtitrthititl call be consaidered by othimeprospective cotntractors for intcorptorationt lit ttr adaptatiton lto their oiwl ptroposaltis. Inidustry generally coinsiders this practice to consttituteI untethical contduct oisttite pasrt tf the Goveruitttemt, particularly sittce it tils 1to ciounterpart fitttllt-gttvertlcteit bushiness tratlsactions. Tite poleittial inhterent in lhist practice fur its use by goverttitett p ersonntlel tt intfluience tile ultimate Seleclititn Of a1 ------------------------ieftll UPi attd the -pottles thteretot in a major systemss developmttent, atspirescribed, attd as practiced uittil rece .are illtgically brottd. Tile censtral psurpose of timeconltract is cotncertned with elsgitleritsj i, eitpitte .*a, itmatter of ciontiderable techniical uncertainty. Tt expect aitd Itt require thtrought Coumtrct iDetlititiotl tihat ti conltractor htave tilte capaialuity evetn ito identtify till ettd itemts tf tin systemt, letIalttne developt detatiled spsecificationts for eacht, int alt adivainced techntological prtoduict , and conuieirrently (o p~reptare 71 .. ......... reliable predictions in detail on the maintainability, reliability, and the requirement for operations training to use tise product, is unreasonable. Experience proves this procedure impractical, and the many peripheral matters included during Contract Definition tend to obscure the critical issues of technical design and competence, as well as multiplying tile cost of preparing and reviewing the proposals. The mandatory requirement for a formal Contract Definition has a serious impact on the entire development process. While there are cases where the contract definition process is useful, there are others in which there is no logical need for the exercise. Contract Definition is both time consuming and costly. Twelve-to-eighteen months can be devoted to paper preparation and review with little, if any, actual development work going ou, and the cost to the Department for a Contract Definition exercise can exceed one hundred million dollars Such a procedure should be required only on a case-by-case basis, rather than on a mandatory basis presently prescribed in Department of Defense Directive 3200.9. There are also problems involved in the source selection process. Past experience indicates that both weighted and raw scores on responses to RFPs tend to be very close in major source selections. In some instances, contractors reverse positions in going from raw scores to weighted scores, but even then the competitors tend to be almost equal. In this situation, it appears that, generally, the unweighted factors, such as cost and past performance, have a large and perhaps controlling impact on the final selection. Apparently, the large number of peripheral technical elements included in the ratings is the major factor which normalizes the scores of the competitors. Reduction of the number of elements rated would focus attention on the more fundamental considerations, and would give a broader perspective of the relative technical merits of each contractor's proposal. It should be noted that although the prescribed major weapon system acquisition process has not been rescinded, it has been modified in practice in recent months, in recognition of some of these problems. The process was oriented to a single controlling decision point. This decision was the approval or disapproval for initiating Engineering or Operational System Development and was documented in the form of a l)evelopment Concept Paper (DCIP). This emphasis on a single decision point tended to de-emphasize the necessity for continuing review and decision after the system development was approved. The purpose of the l)efense System Acquisition Review Council (DSARC), formed in September 1969, was periodically to review major development programs and to make recommendations for decisions not only with respect to initiating development, but also prior to contractiog for development and again prior to a production decision. This change has the potential for alleviating the overemlphasis on the single decision point. The systems development approach continues to accumulate in one program a dangerously high magnitude of risks, from both cost and technology standpoints. I)evelopment problems connected with one or two of the many critical component,. of the system can case schedule slippagei( which occasion eunormsous cost consequences. Even ilo the absence or" rajor technical difficulties, an accumulation of changes in a variety of components, each relatively nsmall in cost, calt have a total cost impact of great magnitude. This emphasis onl developing all elements for the system as part of a single development project, as contrasted to selected subsystem (ndcomhsponenst development, also has the eftect of reducing the ntiber of developmnlt actions and raising the level of commitment for each development contracted. Among the more far-reaching consequences 72 is chat competition is limited to a few large contractors on most major development projects. In addition, because subcontractors for sub-elements of the system are often tied to a specific prime contractor, there is the potential of inadequate flexibility to obtain the best qualified developer for each sub-element of the system. The prescribed procedure for major systems development places heavy emphasis on fixed-price type contracts, apparently on the assumption that technical risks have beent minimized ay previous efforts. Fixed-price type . - ts have been equated, in effect, with competition. This comeltitive pricing during . "[),-'miition has led to significant underpricing in numerous development contra 0c1',,st overruns have been t frequent and substantial. Tile concentration of risl, a .'iv , -' tractor is often out of proportion to tile contractor's financial structure sod e..ts1'nt, and call result in tile Department of l)efense being faced with either permitting ai : critical program, or of salvaging the particular company with payments not clearly J.under the terms of the contract. Fixed-price contracting requirements also create additional pressures for rigid and frozen design and performance specificationls which, in turn, restrict tile flexibility of the developer to make engineering trade-offl. This factor inhibits the developer's capabilit) to achieve the best product. In addition, the prescribed process by its very terms contemplates a high level of concurrency of developnen t and production which, in practice, has proved to be fraught with propensities for cost growths, schedule delays and performance failhres. In practice, the prescribed process fur major systelis developmeent produces an unwarranted reliance on paper analysis during Concept Formulation and Coutract hefinltion. A review of major systems developh enls clearly indicates that although there had been a proliferation of studies in Concept Formulation, the necessary technology to proceed with Engineering D)evelopmnent frequetiIly had not been accomplished through Exploratory and Advanced Development programs. Assuimptions that all technical problems caii be foreseen prior to the colninencemnent of Engineering l)evelopiment have proved to be wrong. Repeated experiences demonstrate that technical uncertainty is inherent iii the Engineering l)evelopment process ind that paper studies alone cannoit enable government or indiustry to forecast all of the problems that will arise. Siice it has been assumed that tile technical risk is low ill the development, it is not sur'prising that cost estimates, based oni aIlperanalyses, rather than tested hardware, have pIroved to be nireliable. This marked tendency to substitute paper analysis for hardware development hias serious adverse colnsequences, From an internal l)efense sladdpoihit, the systluls development process creates management problems. Understandably, with such large risks Involved ini a major systems development, senior Defense officials are reluctanit to delegate the scope of authlority essential to successful prograni management. From tile review of major weapon system acquisitions, a major revision of policy is required to: ( I ) introiduce flexibility in selecting the strategy or technique to be used for aiy given systeni deveoplolinet (2) place more eliphosis on hardware development during Concept Formulation th reduce technical risks; (3) in.Jertake incremental devehlopment of sulbsystemns and conmponevis independent, in the initial .',tages, from mijor system devclopmnents; and (4) introduce multiple decision points during the development and 73 acquisition of new systems. If more emphasis and direction is given to the advancement of the technological base as previously recommended, then the flow of technology would come from a broad base of research through exploratory and advanced developments into component and subsystem developments and subsequently into new system developments or modificaion programs to existing systems. This approach would both minimize technical risk aad increase the number of options available to satisfy Operational Capability Objectives of the Commands. 11-5 A new development polict fibr weapon systenms and other hardware should be formulated and promulgatedto cause the reduction of'technical risks through demonstrated hardware before fidl-scale development, and to provide the needed flexibility in acquisition strategies. The itew policy'should provide et/r: (a) Exploratory and advanced development of selected subsystems and components independent of the deeelopment of weapon systems: (b) The use of government laboratories and contractors to develop selected sub-systems and components on a long-term level of eflbrt basis,' (e) More use of competitive prototypes and less reliance on paper studies; (d) Selected lengthening of'production schedules, keeping the system in production over a greaterperiod of time; (e) A general rule against concurrent development and production, with the production decision defrred until successfid demonstration of developmental prototypes: (CDContinued trade-off between neewweapon systems and modificalions to existing teeapo/si sstemis currently in production; (g) Stricter limitations of elements of systet-s "gold-plating": to essentials to elininate (hI) flexihility In selecting type of contract most cipropriate for development and the assesssment of the technicalrisks involtced: (i) Flexibilit), in the application of'a requiremient forfifrmal contract deflnitlon, in recognition of its Inapplicability to many' deielopments; ()Assuranre (#' such inatters as intabntainabilitY, reliability, eic., by, other means than detailed documentation by contractors as a part of cesign proposals: (M) Appropriaie planning earl)' In the dev'lopment cycle' subsequent test atid evaluation, and efJlectlve transitiont t Ihe test anid etaluathonphase;Jbr and (1) A prohibition of total mpa''kage procuremnt It. 74 11-6 D)epartment of Defirnse Directire 3200.9, Initiation of' Engineering Development, should be rescinded. 11-7 Research and Development undertaken to satisfy, specifc mnfilitary materiel requirements should •e under the staff superision of the Assistant Secretary of Defense (Engineering )elvetopment). IH-8 77te Advatdnced Research Projects Agency' (ARPA) should be required to provide a fornmal technical risk assessmient on all p)roposed new .gislemts prior to the approval of the Development Concept Paper (D('I). Special Problems in Acquisition of Navy Ships The problems found to exist in the major weapon systems acquisition process, generally, are as applicable to the acquisition of Navy ships its to other weapon systems. In addition, however, Navy ship procurement and construction suffer from several unique problems. The most signilicant differences in Navy ship procurement derive from the fact that the Navy l)epartnient is the only customer which buys from Its suppliers the types of ships involved. Alu aircraft manufacturer has potential customers in the Air Force, the Navy, lhe Army and numerous private air carriers, but the constructors of aircraft carriers and submarines must sell to [lie Navy, or no one. Ship constructors do sell otlier than Navy type ships to non-governuenit buyers. Ilowever, the Navy, while procuring fewer ships in recent years, is the source of all increasingly higher percen[age of the total funds speit for shill) construction ini hlis country. As ia coisequence, fie) procurement process for Navy ships, eveii inure [han in other procurements, must reflect a concern for the existenIce of a sufficiently broad itidustrial base to provide coimipetit ion for such procureinelits. Since only one Service - the Navy - puroccures ships, there is no basis for coniparlson within [lte D)epartment, as there Is with aircraft and missiles procured by more than one Service, to gauge [he efficiency of the Navy ship procureinlit proccs, i'lhis nece•ssetates a much more diligent review oif proposed procuremen ts, based oi analyses of prior ship constrtLo ionS. The procuureinent of ships involves a construction luroceas more t[[ia a1 productiion process. Accordingly, econiomies of scale ire nut as readily available us in other major weapon systems acqhuisitlions. While prolo-t-yping may not be alsfewsible for entire ships as for other weapuon systems, [[mere is a potential for iriproveiuent ifi the Navy ship acquisition turocess t[hro ugh lurototyping of sulh-elements. 75 . ... -.... In recent years, the emphasis has been heavily weighted toward designing into each ship approved for construction the greatest total capability possible. This reflects inadequate consideration in the requirement process for the trade-off advantages of a larger number of ships of less individual capability as compared to fewer ships of maximum individual capability. b. Minor Weapons Development Although Defense management emphasis is heavily focused on major system development, the far mnre numerous "minor" engineering developments account for approximately three times the level of expenditure associated with major systems. Subsequent procurements do not change the proportion; for when RDT&E and procurement funds are combined, expenditures for "minor" systems are also approximately three times those for major systems. Although the formal process prescribed for major system development is optional for other engineering developments, the pattern of concept formulation, contract definition and development, and indeed, die entire systems concept, has largely permeated the "minor" weapons and systems developments. There is one notable exception to the major systems process, and that is the absence of high-level management attention to "minor" developments until things really go badly. In large measure, minor system developments experience the same problems and exhibit the same symptoms that are found in major systems. Some problems, however, are peculiar, either in character or degree, to minor developments. Among these problems is the inadequate level of technical and managerial competence of Defense personnel assigned to operate the minor developments process. The pay is low by industrial standards for jobs of comparable responsibility, billets are limited and opportunities for professional growth and diversity are ishlibited by the requirements of the job. The Government engineer on a small system may write technical sections of the RFP, evaluate the proposals, prepare tie work statement for the winner, provide technical direction for the development effort, write the test specifications, perform the engineering tests and provide technical guidance to management, all single-handedly. Management of the acquisition process is not a career speciality for military officers. In sasaller programs, they are often, If not usually, unlrained in busisess methods and technology. They are well versed in the operalional aspects of the equipment, but their background and experience often make them Ill at ease with cost/tine/ performance trade-offs and with thlir Ilidustrial counterparts and their problems. There is evidence that the Services do not IV•c adequate skills to evaluate die capability of potential suppliers, particularly in the mnanufacturn, area. HI-9 In roncert with the new development policy recommenpded fo~r major weapons ýsytetn,, the same increasedflexiblfity of techniques should be pro 'id d for minor systems. 76 c. Procurement of Proprietary Items Tile broad spectrum of itemis procured Ily and for thc Department of Defense extends from the smallest and most commonplace items to the most sophisticated and compllex systemls. In this process, private innovators make a very significant contribution, for the individual items or comlponents, procured separately or as part of subsystems are or were once thr products of anlinnovator. It most berecognized that the traditional incentives which leadl peopleC to invest their lttle, talent, and resources fin inventing improved products in competition Withi others (called proprietary items),* tire respolnsible fin no smnall part for the technological process of our Nation !in both domestic and military areas. Even thiough the Department rerognizes and stresses tile importance of private innuovation iln inltrodulctory policy statemlents in tihe Armed services Procurement Rtegullations ( ASPRs) sections onl Patent Rightls anld Righlts Iin Data, the spirit of tile policy is often no0t ajpamrelt ini the implltementatioln of procureument practices. Procurement plractices presenltly ill lse throughout the Department of D~efense :lid ottler agencies which lbly for the Department (e.g., General Services Administration) of tel ltead to establishl "nlegative inlcentives"' for timeplrivate innuovaltor to enter tie Defense miarket. Suppdicrs aire often selected anld colilracts awalrded piminarily oil tile basis of p~rice alo~ne,Withi less thlan adtequlate regard for qulality , reliabtili ty, delivery schedule, improvement (If p~roducts, or mlaintcnanlce of production (or innovative) capacity. Reverse enginleering, thlat is plreparing tile nlecessary data tI) manullfacture tlie p~roduct by examlilling tile p~rodulct itself, is used by tile Governmenet to establish nlew suplliiers purely to mlainltainl the lassailnled nlecessity (ofhlavin~gmore thlan onle completitive slource. Adverse disclosures by mlanulfacturers (lId stuppliers (If catalog itemls frequently tire needtlessly requlircd by data !IC(iLliSitioll practices. Ii stimml~ary , tile basio, problleml Withi resplect to procuremuent practices for proprietary itemls is thle deviation (If' IroCLlrClllcllt practlices froml~ tile pollicy of enlcoulraginlg innovat'5ionl, and~ tile belief' by Governmllent bulyers thatl it is tileir duty to force a prcice A signlificantIcolncern Witlli resplect toI pa~ten~ts is tile ilmlcaC5lin numb~~er of in~stan~ces lil wh ich thle D~epartmlent (If D~efense takes ownvlershlip( of imilents dlevelopled i(l colltract, rathler tIlial acqulirinlg licells righlts Ilor gloverlllllel uste, Willi tile colntractor retailning tile righlts for comml~ercial Iuse. ToI attract thle fulllest comlpletitionl (If tile blest qulalifiedl comlpanlies, tile iDellrtaill ' patent policy shou(ldl requlire onily tile gran~ting 1totile (jovernmellt ofl it nonl-exclulsive, royalty-free licenlse IIIder paiten~t% for inven~tionls mad(e fil thle perrfo~rmanllce (If t(lie coIlltract, (1111d11It licellse Unde11rbackgrounld paitents Ill thle conltractolr. A pol(icy (If seeking righmtsfil hackgrollld Isltenlts or tlile talking (If' title to in~vention~s tby the Goverlnment , lend~s tomdiscou~rage thle thest-qllalifiell comlpanlies froml accep~ting oIr, (il soml~ecases, comlelnlltg, for conltralcts. This results fil tile Departmnllt oof D~efense hlavin~g to0 accept less qualllified ('I lll((lllllC, and1 thle stronlg possiblility oIf reduced compelltitionl foll its con~ltractls. Thlis (IIICS Hlot reSLIlt ill (Iciievillg tile D~epartmenlt's princeipal obljective , Whichl Should he tll lObtain t(lie best resullts (It tile dtesiredt lttlle :ai1( lat tile most(5 hV "_m___p____in_____.k -1 mvllupc tur'v MI~ uI"r, ( Ii( IN Lit"',NiP(N IN NInICN Ihi~l~lN,- tt IIN( m -- 111 w N *,lNyir.IoIN I'll I'o 1111 ""'(.11(11' "' .77 IIl)LIIi(H3 IN lIII I (NIN(('II Icyt, ll m1111 lNel ,II~t PR11 (PRIViN. IAY 1 FNI l,, milINNII( ilmIINL (( In I((I 's i. lm laIIIN I ,IIl, l reasonable price. The Department's data policy provides very limited protection for previously-generated proprietary data. The Department's data policy must enable it to perform its missions in the most effective and economical manner consistent with its long-term needs, and in a manner which most effectively maintains the technological base upon which it depends, while taking full advantage of the incentives of the competitive free enterprise system. It is important for the Government to undertake a rededication and re-establishment of adherence to its oft-stated policies for motivating and protecting the private inr,ovator. The Department of Defense should recognize and reverse certain trends within its components which are having the effect of stifling the initiative to invent or innovate. The Department should also recognize that, while obtaining 'mnlythat proprietary information essential to accomplishing Government purposes, Ue price should be commensurate with the value of the information received. 11-10 77he stated policy of the Department of Defense ito provide Incentives to encourage private Innovators' participation in the developnient of de.,nse products should be reaffirmed and promulgated. The reaffirmnation of policy should be supplemented by directives (a) To improve procurement practices by requiring the submittal of bid samples In the procuremeni of catalog Items; (b) With respect 1o patent rights, to define "Subject Inventions": as (1) Those in vent lops origlnally concei'ed pursuai. to the research and developmnent work spectft-ally calledfor by a Government contract;and (2) Those inventions conceived prior to the award of a Governtment research and deoelopment contract which have not been reduced t) practice constructively or actually prior to said award, and are first actually reduced to practice pursuant to the research and development work specifically called f.r by the contract; and acquire f6r the Governtment a royalty free non-exclusive license in paten'ts based on Subject Inventions, fir Gov)erntmlen tal pitirposes: atnd (c) With respect to Rights In Data, to obtain only that proprietarydata essential to ,cconplishlng Governinental purposes other than nianuJflcure or reprocurement, and to sstabllsh new basic categories of'data rights: (1) Unlimiited - including publicationrights; (2) Limited - prohibitedftr reprocurement or mianufacture, and (3) P'rodtutiton - right to use (license) for proctrenuint anid manufitt ure. 78 4. ScilProblems finleveloptinent a. Prograni Manny-, , Lit There are two general approaches to organization for management of engineering or operational systems dtevelopmten ts -vertical indl matrix. The vertical organization is one inl which atspecial Program Maniagemnent Office is constituted, with all staff elemen ts nassigned onl a foil-time basis and reporting to the Project/Program Manager. Typically, for major weapons systems, lthe head of this Project Office, or Program Manager, reports to the D~eputy Commander for Systems Managementt of the procuring command, some live-or-six levels below that of thie Secretary of the NIillitary Services, Ini the ma trix organization, timeProgram Management structure is superimposed upon lthe functional organization of lthe pirocuring or- developmnen t commmnand tif tile particular Military Service. Iin other words, atProgram Manager is appointed for thie specific project, bilt instead of protessiotial personnel bvitig admtiniistratively assigned to timeProgrami Manager atshis staff, personnel within variouts existing staff organizations tire designated to supply staff support in their tech nical or other apecialities to the Program Manager as requ1ired. Those personniel who iprovide the technical staffing to the P'rogram Manager dii so atsanl additional duty to their notrmtally assigned ditties in lthe fiturthiutal tirgalliza ion of' their rotmmanatd. Their efticiency ratings, promottitonts and reporting lutes aire tot to omr thro Ugh ltme Program Manager, butl rattier tio their superior within the filuctionial otrganmizationt. One individual may, theterfitre, cuncurirently be pmerftormning thfenormal ditties o hitIlsfutnctionial assignmletnt anid serving itt at skiftf calpacity to one tor imotrel'rogramt Managers. iThe prescribed lDeparttttelt tof D~efentse Program Manaiigemtentt pomlicy quite clearly recomlmtentds tile tuseotf tile niatrix itrgatlizatittt, antd this is tlte otrgantizationmal appiroachl lutst totteit used.- The exceputionts have beets titi t(hose purogramns wvhichthave received cmtmstanil tiip-level D~epartmlent muanaigemenet a~tttentioitti It priugrattis tmaltaged thtriotghi !)evelmpitiine Cottcept Papiters, ithe P'rograttm Nlanagetneuot structUre is spiecifiedt for each systetm, tit) incltude tnot onity tile PirogramnMttiagetmentt tirgaitizatittil, bitt ilsot Ihe flutes ot' repttrtitig foir tite Proigramn Mattnager. For inistanice, the Pirogratm Mantager lIii the I-IS aircraft developmenti thlos bteenipurovided it reptrtitig poinit ontly mime level belowsvithe Chief ofiStall ofi the Air Foce Pirogramn Mantagemntet assignmtientIs have not getterally beetn rectigitized its ha~vitng gittd poteittal for career atdvatncetientt for millitary oifficers. Proigramtmiantageimetnt is tnot effectively a catreer service for nmilitary iitficers, a lthoight mtilitary ttftici-rs atct aisPirogramt Matmagers oim a majtoirity ott develioptentts, anid tire atlmotst alwsays designtated atsPirogramn Manalgers Itir tmajor systenis. These offticers hive tradhiitionally brett rimmted mitt nomrimal timirs of duty 12-4 yealrs)Iamonmg a variety oif types mifjits. Althoiughi they uisummlly burinigtimthme Programmm Manager assignmtentt knomwleudge if' the op~era tioinal uise mif' the type oif system inisilved immtme developmtent, they otteti have atmmmimliimmmmmm oif trainting antd experiemnce ill liusitlmes pliltltmgenlete:i Yet they are faced with ilii task mitnegottiatinig with indtniltoltitirittg (lie effoirts motinidustrial oirgaitizationis which brinig (ti timeprotblem tateiitei, teciinicaI mmmd maittimgettmrttt perrsionnmel With estetlisvV I.-Oittitlitity autu C~jperietCoi ill til- flartiritiar tylmeitt activity etncoiumpassed imm thle develoiptment. I.i hadditiotn, Pirogramm Maniagers have beeni oftenm rmitlled, based mmililte timmemml their careers, at critical putituhs ill fite dhevelopmenttt (itt time prougriams antdfrequtently witth mmioverlap timl-traitnitng their stuccessior. 79 Indeed, there is no indication of consistent efforts by the Services to select Program Managers from amiong those officers who have the most promising potential. Ideally, a Programs Manager should possess both managerial and technical skills and experience in tle operational eimploymnent of the type of system, weapon or othcr hardware under developmsent. Recently, in colnnection wills major systems, significant emphasis has been placed by the Secretary of Defense onl encouraging the Military Services to providc better setection and tenure and moure continuity in Program Management assignments.* A number of factors detract from a Program Manager's capability to performs Ilsi reslsonsibili ties in aisefficient and effective manner. In a matrix organization, authority is so dispersed. and tile Program Manager is so far below the level of organizations which has' the authority to mnakeaffirmative decisions onl matters of significant import that his manaagement capability is seriously impaired. Imposed onl Program Mianagemnent is a psrolifcration oi reporting reqtuiremnelts for a wide variety o~fcost, schmedule and techinicail data to satisfy tile nmanagemen t ansdreportinig systemss specified by all higher headquarters, whi~ch precCcupy timemanager's time tomthle exclusion of substanltive mainagemnent. This distraction from the substance of the Progranm Mnagimier's responssibility isaggravated by thle necessity iif prolvidinig iniumiuerablie briefings tomcommmnanders and staffs of the many comumanids layered between him and timeMilitary Derpartmnent Secretaries, and to visiting officials. In vertical organiizationis, the managenment system maze iind thle exteissive reporting requirements olftenm result in an excessively liirge staff for the P'rogram Manager. A Program Management Office oil a major system canl iinclude moorethan 200 people, aidding sigimificantly to the overall manaigemnet cost iof the prcoject, Till D~etense managisemientattenitioni is frequnentily givell only tim those deselotpmentIs with high public visibility. Tile conlcentramtionl of filu Defensse mlanlagemlenit at tentioni onl these selec ted miajolr systells has permit ted prougram mianagenmenlt for less visible miajor systems such]fur iminolr deveulopmemi s tom conltinuie tomflounider. Sigilificanithy, recentlhy unldertaikeni corrective aictioni hiis beein directedt at major hmighm-cmst anld conitruoversiali lirlgralills. Unfo~rtunailtely, there lie I'l'tar man1lluiy derve'lopmllent pligilg l 5 for each tombe addressed oil aimad hiic baisis. Btasic directives must be mildifiedi andt grouinid rleCs moist tie dievisedi Irm prligralml nlanagelnemintm geimcral if' the fundmieanmtah weaknesses iof psrogramn mlallagetll~ent are to lie etliminaited. Thie seahsilesses oft piro~gram mamnaigelmlent have hIreulinicreasinigly aggrasatedi Iby timegrowsinlgb~readtth ot respoinsibility amidcllllllemitv oft tasks oft thleProlgramlm Manager. With thle Iinicreased applicatlion of' tile systelms colicetit if' developmluent , Pcmugra-im Managers finid tleniiolvtes responlisitble fori ailminiiimitriig a tixeil-trice conitract fourdevelolpiment mita prodmIhIt to udetailed desigii splecificamtionms ini whmichm thmey are permilltcm lit tie flexibiti- foti-c techniicial trade-mofT.. Inmsystelms desetlomnents, a P'rogrammm Maimager is alsuolikely tol be givell respmmmsibihty swhichienIcompaiisses a spalau of subtmcleimemmts involmvinig a w ide variety ouf dhiscipmlinmes :1miitechnloimmgical shitls, tlile aggregaite oft whlichm lie nay wecll be inamdequmatety traiined timhanidie. A sihift in empihtasis tmowardiwellrste colmponenm~mt devehloplments, as pirevioumsly 's,( I~'I" IV discussed, could result in a more feasible scope of management for the Program Manager, and thereby contribute moure to the elimination of program management weaknesses than would any particular change in the organization of reporting relationship of the project management. The choice of either a vertical organization or a matrix organization for all program management is not a feasible solution to program management deficiencies, for each organizational type has its benefits and liabilities. The vertically organsized, all-on-one-payroll organization has the best record of success in development programns with a high degree of urgency, concurrency, technical span and cost. It prospers at thle expcnse of fudactional organization, however, and there are practical limitations onl the total number of vertical organizations which c:anbe manned with qualified personnel and managed through anlad hoc or special reporting relationship outside thle normnal chain of organization. An advantage of the matrix organization is that it canl be more quickly staffed and more easily dissolved when no longer required, Scarce technical p~ersonniel call be shared between programas. In addition, thmenumbers of development programs which canl be managed through mnatrix organization are not severely limited. Since the use of mnatrix organization appears both desirable and necessary for the majority of programs to be. managed, the deficiencies of the organization, consisting primarily of the many layers of intermediate command and staff between the programn manager land the Secretary of the Service, and the constrained and impaired authority of the program manager must be alleviated. Selection, training said teniure of the program managers operating in matrix organizations cannot continue to be neglected by the top levels of defense management. Thmedivision aiid conifusion of authority among the Program Manager, tile contracting officer ((ld the contract auditor framgmenets and weakens pirogralml managemenet. Although the Program Manager is assignied overall management responsibility for tlie project, the authority for admniilstering tlie contract is vested iii the contracting officer. The conitract auditor is indepenmdent of both. and reports through independent chianniels to high levels in the Department. I- "lie e~clftetocnes ofi/rogral, M'anagemientIshouldd be'improvled by: (a) LEstabli~shing aI careeir spec'ialty rod fir progralin managers~ill each~iAl/i/tare Seorvc, and d'eveoping seiectio(( and training criteria that wi/l insu(re the avaU/5hilablt oj/an adequate imlliti'r o./ q115/iii(d officers1. The cieriOra should em~phiasize' ac1hieving cI balance bet'ween'l nee'Cds ,Ja 4niowh'cigc of lpcrationai re'quiremen'(ts1 and(experienice oi (Inll atelnent: (b) Ilitreasi(g tlie use' of (/lalil led civldianl personnl (lis P( irogrami Managers: (e) l'rol'id/ig liltiiority c1,immll'(.5((2le wi'th /i til assligneld re~spionsibiliy/nd mo1/((re direct rep)ortinlg finles Jarr iProgram Alanagers, /isrlillllar/.v fiuo't ope'rating ill mairix origan~izationalarrailgl'Pne Is; andll (d) Gii'tng thIe P'rogram MnAlager, sulbject to aitiiilhablc' laws, dlirectiive'i' llhorifj ove'r tile rontiactl(Cing offji'cer, 1(ill( 'clarifying t/le( Jolt thatl thll contract auditor act-s on/c inl an ......... b. Management Systems D~uring the past decade, the trend inlgovernment coo tracts for developmen ts hais shifted markedly from cost-plus-fixed-fee toward fixed-price contracts, mlany of which have embodied incentive features. Oin the surface, this trend would appear to dimlinishi thle required level of detailed management by the Defense Department of Contractors' activities. Paradoxically, however, the samteperiod has becn marked by afmultiple increase fin the number and detail of management control systems contractually imposed by the Defense D~epartment. A number of factors evidence the excessiveness of thle existing level of management cin triil systems. For example, the slicer volume of reporting requoiremenlts exceeds, by a substantial margin, the review capability of managers within thle D~epartnment of Defense. More significantly, the increase inl management con trot systems has not cured the cost overrun or- schedule delay p~roblemns. A reductioni in iansagemen t control systems would both reduce thmereport lug load imposed onl industry liy that portion which is duplicative or serves no useful purpose, reduce the cost to thle D~epartment, and imiprove the effectiveness of management control. This protuleim tils beeii formally recognized and acknowltedngcd since 1966, when the D~epartmentI initiated a mhanaigemnieit systems con trot priiject, and established anl office under tile Assistant Secretary of' Defense IComptroller)I as thlecentral responsibility within the D~epartmnen t for thiL% area, Ill 1968, sound policy guidance wits issued and two D~epart ment of Oefenve liistriictions to implement thlat guidance were published. D~espite thmeissiuance of policy statements and the assignment of' specific responsibilityv for the control of develhipment (t'omanagemntcl con trot systems for use iii thle acquisition process by the D~epartment of D)efense, there has been littlei stliidaird izatiim oi reductioii !i thle iiimber of management control s*ystems conitractiially aplpuied, Siominny mianageinent ciontrol systems iiliw exist that (lie process oh'review and analysis, tii d'terilliiie what shiiiild be thle revisions and conlsolidatioiis imt/or , icellatimmins of tlie thi1umiiiss of existing Illanagetinent cointriil systems docuuiiieiis, ciiiisooics mliiiirdina te uuiounit oh lttlie. ULifu-irtuately, timeeffort lust monmeiCiti11illlif te empthtasis of top~ muimnageniemut inl thle process. Ili Septemuber 1969, lthe Office of thie Conilfriill'r wvts rvorganiized aind thle respuonsibility for this ;;ctivits' wits imoved to a lower echmeluoi, thereto desoolphialsiziiig, fii appearing tii de-eimphalske, this activity. Thmeriill-tilclk of apprised iiauiageunenit S' steiiis anid thle stablihaihilltoiiii itlie reimaiiider is iiiiikely tio occur withiiiit utop-level atteiitiiin ini time Depairtmenet if* Dlefeuse fill a ciiitiniiinig biasis uiitil timejith is .oluuie. Akii it) thie pirioblemiof coil Irac Itill vl iiiposed modntiagenieimt ciontroul S.N'telil requiireimenits lire tlie priiblemis it' thle uiiicriilih D~epartmuent of Dl~etese uianageunemutl iilomahruliiiim/ciiitriit requirements. lTmedocaunlcuts ill wvhiichthfe remluireumienis inc dillehhid stemi fromuu thle Departmuent's llirccuive/Guuimlluce SYSteuuu aiii(lCikemiallfiormus ill OSI), (lie Services aind tile Defenise Agenucies, Tlue Assistanut Seicreatry fif' Defeuse I(Coutulriuller)Iilso, hals Officeiitral i espuiiisililitvyI'm these uiiferial etuireuitviuts. As is true mvithiieg'arl coiitricilhc-iuuuimpoeul iiiaiigiieiit conitit rolhui-uues iio Icat progress lilis tieii ihlidti reuiicting ille prluuitiraliol ofi systcuuus auit uhuucuuuuueuuu uusedh withini the Decpartmentu.i 812 11-12 The Secretari' of Defeinse should establish a small staff within the CoordinatingGroup reporting to him a nd Wnignit the responsibility of effi'ctiiig both a major improvement and reduction in the control and information needed for management within the Defeise Department anid, in turn, of its defense contractors. This should be done by specifying what is required, not dictating how to manage. hinmediate top-level support to follow the current management systeti control prm;Iect through to its successful cot -husion should be one of the first actioý,.. Included in this action should be direction to implement Instructions 7000.6, "IDeivelopmnent of Managemenit Control Systems Used in the Acquisition Process," and 7000. 7, "Selection and Application of Managetnent ControlSystems in the Acqu"ition Process," with the control responsibiliti specified therein for the Assistant Secretary of Di'enise (Comptroller).reassignedto the CoordinatingGroup. c. Cost Estimating Studies reveal that on the average, cost estimates on major systems developments have probably improved in relative accuracy over the past fifteen years. So many variables affect the evaluation of cost estimates, however, that confidence in such a conclusion must be qualified. In any event there is much room for inprovement. Cost estimating for development programs has appm'rently been too widely credited in the Defense Department, in industry, in the Congress and by tie public with a potential for accurate predction which is belied by the inherent technical uncertainties in developments. The precise problems which may be encountered in the process of attempting to convert a technological or scientific theory or experiment into practical, producible application cannot be foreseen with accuracy. It should be axiomatic that one cannot place a price on an unknown, yet, the increased resort to fixed-price contracts, the use of precontractual cost estimates as a firm baseline for measuring performance throughout the life of the system, and the shock reaction which is forthcoming when cost overruns or growths are experienced, all evidence an unwarranted degree of confidence in cost estimates. The inherent limitations on cost estimation imposed by technological uncertainties cannot be completely overcome. Other factors, however, also contribute to the inaccuracies of cost estimates. The understandable incentives to sell a development program, either to senior decision-makers in the Executive Branch or to Congress, can influence cost estimates to be on the low side. Contracting policies and procedures also have a tendency to suppress the level of cost estimates. The cost estimates must be used as a basis for requesting and justifying authorizations and appropriations. In addition, the competitive pressures on prospective contraciirs during Contract Definition, is previously discussed, leads to overoptimistic proposals which support the original cost estimates rather than take into account the possible effects on costs of the inherent uncertainties. "Parametric" cost estimation techniques offer the potential for improved planning of cost factors. These parametric techniques require the analysis of historical data to establish sonic broad gauge such as cost per pound for component units of the program being evaluated. The broad niture of the product of this type of analysis precludes detailed comparisons with the estimated program costs developed from its elements, but the difference in gross totals can indicate a probable range of magnitude of the .ost!. of 83 continrgenicies. The Department thas,to somec extent~, recognize(] atsignrificant portion of their potential. Tile iris of t~lr parametric approach toi cost estnimation is, of course, a clear acknowledgement of tile inhierenit limritations amidinmprecision of tiny cost prediction mrethmods. Whatever method or methods of cost estimating are used,thleavailability of a data base on previous programis is essential, and tile eXtent Of availability Of such data it, usbeform is a limiting factor oni tile potential accuracy of cost piredictions. Efforts arc beinge made to collect systematically and lpresrve such dtata oil conitemnporary deCvelopmeniiits. Only time will provide anlimprovedt data base for projection. The potential accuracy of cost estimiates ailso varies according to the time period inwhich it is made, relative to the phanse oif the developmrent program. Cost estimates made eary in the concept formo lalion itlmnse cannot he exprected to yield tire accuracy wvhich is posbefor such an estimate made after the first stage of actual developrment. c:ost estimrating capabilities also fluctuate svith thre reiamtive complexity oif developments. Whieeeryeffrt houd b jude o iproe cstestinmatiuon cnlapabilities thrrouighrcomrpilationi of a junrecs etenrsive data base, wid~er useLand mnorereliance oil pairamnetric ¶"chnririues aiid a conlitinuouris efforrt toi achieve obljectivity iniestimiationir, the moiist funrdamnental prcoblemrns associated wvithrcost estlima turn cannoirt be resoilved wvithrouit a general recogrritionr arid acknowrsledgemrenrt rrf the irnrerentIlimiitatlorns oif corst estimiates for development piroriamns. For this reason, tire orriginral coist estlimates sholdrii he conisidered only its thre initial baseline arid mits imore knosvledge is gained iliese estinmates should Ire revised ;aid atnew suibstanitiatedl baseline established. This apptroachn shioruld Ie lincorpoisted into threSelected Acqurisitionr Rteports I SARs) used svithinr tire D~epartmrenrt arndtry Crurgress /I-/.? 7lii imnairgei'oi'n cosin0fo/rm~rrationi iir'cied wihii/ri dir' Depari'nriii arid Jo '/risifbiityt Conrge's~s oil majorioweaponr .5i'steii'i acqu/isitfionrs .shou/ld hre impriioveid hf' re'ognrizirng t/ile ei'ii/ionfririici ratrrr o f cosf bamselinerr esimatinies. L'stjiirrfr' shoulidi hiereciir/reralae (it irich signrificrun iiijlesfoiii If ii flvlt'i('i)iiiiii. 11-14 Inrcrea~sed ure .shoulrd bre rmade o//iaeanivirief cosing fci-.l~'iniii/u's toirrmprove thei qai/iiiif'v of original anid .sub~sequeint erstimiate's, arnd tor hielp rffi'f fthe d//iffi/fultis ofi e~stirrafiir t/ie cost of m11kor/oorrs. d. Industry Weaknesses 84 A review of the defense development process would be incomplete without a discussion of the role of industry and itWshare of the responsibility for the problems within the process. One serious weakness of industry is the tendency toward overresponsiveness to every expressed or implied desire of Department of Defense personnel. Overresponsiveness should not be substituted for the exercise of responsibility. As a management teamnmember, it is the responsibility of industry to point out to the D)epartment the true nature of acquisitions and developments as seen by industry. For example, the following are areas in which industry has demonstrated an overresponsiveness on specific developments: (I) Unquestioned acceptance of inefficient and unnecessary management control system requirements and related data items. (2) Failure to point out the potential risks associated with the inherent technical uncertainties in the development ofta specific weapon system. (3) Over optimistic cost estimates and, in some cases -nwarranted buy-ins. (4) Unquestioned acceptance and, in some cases, promotion of overly sophisticated design solutions to satisfy the stated requirements. Industry has also demonstrated reluctance to have a continuous meaningful dialogue on certain procurements by communicating to the government Program Manager potential major technical, cost or schedule problems as soon •s they are first identified. Another weakness originates in the possible i. y, a contractor that he has obtained his contract wholly or in part through political ',ivoritism or pressure; this can seriously undermine the authority of the Program Manager. The degree to which the Program Manager's authority is undermired does not depend on whether or not there was, in fact, a political motivation in the selection of the contractor, but on %%. Ather the contractor believes such was the case. Some existing practices contribute to beliefs by contractors and by *he public that political influence can and does affect the selection of contractors. It is a,,. has been customary for the Executive Branch to provide members of the Congress '-ftn 24 hours notice of contract awards in their States or Districts, as the case may be, prior to the public announcement of the contract award. Frequently, therefore, contractors and the public learn of the contract award from a Senator ur Congressman prior to 'Se public announcement. This gives rise to an inference, however much belied by the fac,• that the political officeholder making the announcement of the contract award had some influence on the selection of the contractor. Potentially, the most serious weakness is the trend of the demonstrated reluctance by industry, whether justified or not, to commit resources to defense ' isiness. If this trend continues, the Nation's defense posture will be seriously weakened, as .. ,edicated industrial capability is essential to maintaining that posture. Many of the recommend %"iosin this report are specifically addressea t) making a substantial improvement in the o -. defense procurement environment. Even though the environment is largely controlled by the government, industry must also assume a more 85 responsible role if fihe filli potential for improvement incthe environment is to be realized, and the rising cost of weapion systems stemmed. 11-15 Individual conctractors should accept a more re'sponsible' role (is moanagenment moembhers of a defc'nsc' developmnen t t'ao. anod provide' !the Govercnment celicthfie benefit of greaterJ objectivcity fic thle contractor'~s incdependent ecaluiationt of a prollosc'd cdecvclopmcent. 15-/77ce practice of' provcidincg t/hc membcers of tlit, Congress 24-icricc adc'acce notoice cof )ontract awcards shcould becdiscccnticcced. Succch iccc'oherc sholdccc be icotifled concccrrencllt with pucblic acnnounccemcenct (Icitcicraci awccards. e. D~efencse Laboratories Curren'tly the tDeparlcenet uof D~efecnse lccs 78 labcoratocries .ccd48 test and evaluation centers. These owned activities ccnumicne some 18 percent cof the Reseacrch, Developmenet, Test acndEvalucatiocn appropriations. They alsccdirectly manage acbocut15 percenlt of D~efencse Resarrch acnd Developmniet wvork domneocil conctract outside thle governmcent. Of those funids appropriated tic Reseacrch, Developmcentl, Test and Evalua tioni inl Program VI, the D~efecnse labocratoiries, including test and evalucation facilities spend in-house: about 33 percent osf Research (6.1 ): about 40 pcercenct of Exploreatoiry D~evelopment (6.2); about 12 percent of Advanced Development (6.3): acid abhcout 15 percent of Encgineering D~evelopmcent (6.4). This distribcutionc of funcds clearly inidicaites that Decfeinse Labosratiory in-house efforts are concentrated inithe budget categories of Research acid Exploratory Development, botlh of which are funcdecd fcorlevel of effort, racther thancby projiect. The Defense Laboratlories aind test and evaluation centers arc organlized by (1) ccctary arms (e.g., infanitry), (21 hcardhware fcunction (e.g., mcissiles), (3) technicaiul disciplicne (e.g., vlectroccics ), acid (5) climate (e.g., desert). The pcurpocses of Defense Labocratoiries tire tic: (1) cssculitaics national competence incareas of technology peculiar tic military nceeds; (2) ptrovide attelchnological capability for quick response to unplredictable needs anid ccppcrtcccity : (3) procvide a wocrkicng interface between military commanoders and pclanniers oil lice oice hand anid the techncological comcmunuity ciii the otlier: anid (4) act ics adviscors inctce Defense RDT&E conctract progracin. Overall, file p~rocductivity of D~efecnse icc-lcic selabocratcories appears lcos cocmpared to the very substacntial incvestmcecnts in them. Ticis is particulaurly true with respect to Armcy Laboratccries, and those Army Labocratccries cocnnected wills arsecnats aplpear leacst productive. Detense Labora tories acndtest and evalcuatcioc cecnters are inotcrganiczed ill ally systematic fashioin. They are fragmcecnted aloncg techccccchcgy hiles willh limited scope acid 86 responsibility. The Army has 55, the Navy 45, the Air Force 25 and tile Defense Atomic Support Agency, I. Consolidation of laboratories and centers to achieve a more nearly matched functional alignment with the scope of normal problem areas is very badly needed. Efforts at consolidation are being made, but the rate of progress is far too slow. One of the major impediments to consolidation iN the difficulty with obtaining funds for military construction. There is no legal method, at present, whereby a Seivice may sell ,evralold facilities and use even a part of the proceeds to build a new one or expand all exiiting one. The D)efense Laboraories and test centers suffer from a rigid personnel system which iohibits qualitative improvements to the technical staftfs and fails to promote or move the more competent peopl- into leadership positions. These laboratories and centers are controlled through fiscal means. The Army and Navy laboratories )r,! industrially funded, and the Air Force is moving toward industrial funding for its laboratories. The laboratories are, nevertheless, subjected to arbitrary personnel ceilings and reductions. Since the laboratories' employment of scientists and engineers is within the Civil Service system, seniority criteria, rather than innovative prodoction, is the primary factor determining proumotions and reductions-in-force. It has been eusi,;Puary to appoint laboratory Directors, and often Assistant Directous. i)ron outside the system. Whi!e this can provide a transfusion from the broader scientific and engineering community, it also removes an incentive for career personnel who cuanot aspire to higher than the third level job in the laboratory. There is no workable mechanism for scientific and technical personnel to be moved freely within the Department, because the personnel systems of each of tile three Services and the Office of the Secretary of Defense are separate and different. These personnel inflexibilities result in a high degree of personnel stagnation in dhe Defense Laboratorics, which must account in plrt for their relatively poor productivity. As noted above, the Defense Laboratories and test centers, in addition to their in-house work, actually manage about 15 percent of the Defense Research and Development work done on contiact. This circumstance presents a cunflict-of-interest problem. The laboratories as developers are in competition with private contractors, and are also managers of the contracts under which their competitors operate. There is an inclination on the part of some laboratories to show favor to products "invented here" and to view very skeptically any products "not invented here". The R&D laboratories are located far down in the organizational structure within organizations which have much broader responsibilities than just R&D. There Ls iu R&D chain uf command from bench to the policy level. Consequently, close mnonitorship to control the "not-invented-hicre" attitude is impossible. 1/-17 'he Advanced Research I'rojectsAgency (ARPA) atd the Defrnse Test Agency (DTA) should be directed to mnake a joint re'view to determine which in-house defense laboratories and test and evaluation cetnters are essential to research and development needs of' the Department with the goal of elimninating the nonessential ones, and consolidating (across Services) the reimainder. 1l-18 A procedure should be authorized by Statute whereby all or a part of the proceeds fr'omethe disposal of e.xi'stmng defense laboratoriesor ceniters can be used for constructionof 87 a cceiv faciiicc or exspansionofl an] existinccg one which such/ concstruction or expansioni has beencauthdorized bi- Cuongres's. lINI.9(lie atteni ccfon s/hould hce 'iccc to f/hc pcos~sible advccntacges ccl /avi'ig somenc of £Ic'.cc laborcatoricesanid centcers foccc' bcutrcicc cc coiifrac'for-opc'rccicd. C. Otser.ifional TEjticc1and Evalucationi Everyone seems to agree that Operational Testincg and Evalucationc (OT&EI is very imiportant; however, there are signiticant differenices of opuinioni as to what it encompasses. what its proper objectives are, acid whact organizationi and mieithods are necessary to accuomplishi it most effectively. It hcas been custilmary to thinik of OT&E incterms of physscal testing (under vareiocus dtesigncationcs such as ocperauiounal suitacbility testing, emcplcoymenct testing, service testing, ocr field experimenctationc), It is essenitial tic recoignize thactthe primiary gualt of OT&E is opceratiuonal evaluacticocc and ticat whcile opjeraticonaltlestinig is very impoccrtanct it is only onec nmethod of evalcuatiocc. To be etrectlive, omuti miust be acto tat proccess, ccsiccg all approcpriate uccethods oif evaluationc, whcicthspans ttce ecitire cycle cofa systemcfrcomc icnitialt requiremient ucntil it is phased occitof the opjeracticcalc frcres. If OT&E were Ilimcited to phtysicacl testincg, it woculd tcosecmnchoif its ccppccrt iciciy toc, ribucte tic decisicons oncwhthcler tic produce a systemc,ancd wvoiutd setdomcc be able eveni to iccfticelCCc the systemi's chcarcacteristics anid capabuitities in ancy cccjccr wily. NIuchct OT&E does, hocweve'r, incvolve phcysical testicig acid, thcerefocre, it is imcpocrtcanct to distiniguish tbetweenc 'funcctionalct' testincg ancd "opesractionalct' testincg. Fcunctioncal testicng (ocftenccatted encginecerincg lesticcg is donce tio determcinec hocwwelt vacriuous systemscanccd cccateriel ncet desigcn cnd pcerforcmancce cccntriactual specificactiocns -- inc othcer wcords, whcethcer thcy cuedt techncicalt recquircecents. Bhyan~dlacrge, tfcnctional testiccg iccacid fcorthe D~epacr tmntc o f D)efeccse aclppears tc tic welt uncderstoocd acnd facithfcclly execcc ted, Sericcus polcicy dteficiencies acrenot acppacrent, aocdsuch facilures icc fucnctioncal testiccg as ocecur caccbe pricccarily at tritbucted tic tack ocftcchncicacl ccomcpetecnce, ocversightc,ccrprocceduralt breackdownis. Funcctioncal testicng is nocctcioncidered Icoce acmajcor pcroblemcce * Operationcal testincg, onc thceothcer hancdt is docce tccdetercinice to lice cxtenit possible whethcer suchcsystemcs ;cd ccacteriel call cineet ocperationalt requcirementc s. It muccstprcovide acdvacnce kcncwledge as tic whcatttheir cacpacbiitities ancd tiicitcctioncs wilt tic wthec they arc subjected tccthe stresses ocflice ecnvirocncienit fccrwbicic ticey were desigcned (ucsucally ciombt).c testinig muccsttaike icnto accocunct the inctecfacce with .cttcer systecms ccnd equcipmcent, tactics cccdtechniqccues, orgacnizaticonalt arrancgemienits, ancd tue tiiiicccc skills ccidfrccitties of tue evecnt'ualc users. ~~~~~Operationial 88 "There has been an increasing desire, perticularly at OSD level, to use data from OT&E to assist in the decision-makiog process. Unquestionably, it would be extremely useful to replace Gr support critical assapoptions and educated guesses with quantitative data obtained from realistic and relevant olwi! tional testing. Unfortunately, it has been almost impossible to obtain test results which are directly applicable to decisions or useful lar analyses. Often test data do not exist. When they do, they frequently are derived front tests which were poorly designed or conducted under insufficiently controlled conditions to permit valid comparisons. I is especially difficult to obtain test data in time to assist in decision-making. Significant changes are essential if OT&E is to realize itv potential for costributing to important decisins, particularly where the tests and the decisions must cross Sewice lines. Participation in or supervision of GT&E by OSD and JCS has Leen limited and fragmented. There is no assignment of ovurall responsibility at such levels for deciding what OT&E should be done, prescribing and monitoring bow OT&E is done, or insuring that results reach those who need them. A Directorate of OT&E was established in 1966 within the Office of the Director of Defease Research and Engineering, under the Deputy Director (Administration and Management). Although establishment of thi:; organization was an acknowledgement of the need for attention to the operational aspecls of testing and evaluation, the authority and resources of this Directorate were very limitrd initially and have decreased since. It has had little, if any, influence on OT&E. In 1968, the Deputy Secretary of Defense requested the JCS to consider the establishment of a small Joint Test and Evaluation Agency. The JCS replied such an agency was unuecssary, and expressed the belief tOat there already existed within the Organization of the JCS, the Services, and other agemncies the capability to plan, conduct, and evaluate the results (if operational tests, including tests involvingjoint forces, However, it k-,evident that thk capability does not exist and that t1,k ad hoc testing on which the JCS relies produces very little useful data in support of decision -mnaking. The most glaring deficiency of OT&E is the lack of any iigher-thao-Service organization responsible for overseeing Defense OTVE as a whole. In the absence of regulation or guidance from higher authority, it is not surprising that timeServices differ substantially both in OT&E philosophy and in organization to carry out and report on OT&E activities. There are three basic wsys to organize for OT&E: I. An independent organization reporting directly to the Chief of Service. 2. An organization subordinate lo the developer. 3. An organization subordinate to the user. At the present time, all of these organizational alternatives may be found in the Services. The Army system of testing and evaluation is currently being reorganized to place more emphasis on OT&E - particularly on doing operational testing earlier in the delopment cycle. The objective is to introduce the results of valid operational tests into decisions 89 concerning the initiation and the extent of production. The Army's approach is centered upon a newly-conceived Operational Service Test, scheduled to be conpleted prior to decision to commence full production. The basic problem with Army OT&E is that the developer, in effect, tests and evaluates the operational suitability of what he develops. The Navybysystem of OT&E has organization two main reporting characteristics: it Chief is principally implemented an independent OT&E directly(1) to the of Naval Operations, and (2) there is a formal way of getting operational evaluation (including some operational testing) done early in the overall process. The main deficiency in Navy OT&E is that it generally produces tew hard data. It relies too much on the judgment of well-qualified officers and does not adequately utilize testing techniques available for obtaining measurements of scientific validity. The Marine Corps does not have an organization devoted solely to OT&E, but tile Commandant tasks the Marine Corps Development and Education Command with having it done when deemed necessary. The Air Force currently has the most structured system of testing found in the Services. Basically, it is divided into two types: Acquisition Testing and Operational Employment Testing. Acquisition Testing is made up of three categories: Categories I and 11are essentially R&D testing and are the responsibility of the Air Force Systems Command (AFSC). Category I is actually performed by contractors and has little or no operational flavor. Category II is done by AFSC, with the contractor still very much involved. Ideally, Category I1 tests a complete system in as near an operational configuration as practicable at that stage of development, but in actual practice such tests are seldom operational in nature. Category Ill is the first Air Force testing that can be called OT&E. It comprises tests and evaluations of operationally-configured systems and is done by the appropriate operational command - the ultimate user. Operational Employment Testing is pure OT&E. It is conducted by the using command and is closely related to integrating the new system into that command. Its objectives include the development of tactics and techniques of employment, identification of operational problems sot revealed by earlier testing. and validation of requirements for system modification. This kind of testing places great emphasis on realism of environment and missions, limiting personnel skills and support to those that would be available in such an environment. There are three principal problems with Air Force OT&E, as currently done. First, operational considerations receive much too little attention in Categories I and II. Second, the operational commands responsible for Category Ill and Operational Employment Testing lack both the personnel and facilities to be effective, Finally, all of the categories are too duplicative and time-consuming. Currently, there is no effective method fo5" conducting OT&E which cuts across Service !ines, although in most actual combat environments, the United States must conduct combined operations. The interactions among Services become extremely important during combat, and critial military missions transcend Service boundaries and responsibilities (for example Close Air Support, Reconnaissance, and Air Supply). Because of the lack of joint 90 ... ... . .... ..... : OT&E, it is not only very difficult to detect certain kinds of deficiencies and to predict combat capability in advance, but it is also difficult to make decisions relating to overall force composition. Funding throughout the Department of Defense has been and continues to be inadequate to support much necessary OT&E. Also, the funding of OT&E is confused, both at the CSD level and within the individual Sernices, and neither in OSD nor in any Service is there a single agency responsible for insuring that OT&E is adequately funded. In fact, there is no agency that can even identify the funds that are being spent on OT&E, Funding within the individual Services differs substantially. In general, however, OT&E funds are difficult to identify because they come from several budget categories such as RDT&E and Operations and Maintenance (O&M). Because funds earmarked for OT&E do not have separate status in the budget, or is program elements, they are often vulnerable to diversiorn to other purposes. It seems evident that separate program 'lements for OT&E must be established within the Services if OT&E is to receive the financial support required, and prohibitions provided against diversion of OT&E funds. Even thenl, GSD must assume the e, nonsibility of insuring that the Services budget adequately for OT&E. 11-20 The responsibility for Defense test and evaluation policy should be assigned to lthe Assistant Secretary of Deft'nse (Test and Ei'luation). 11-21 A separate prograincategoryv should be establishedf,';; lest and Ev~aluation, t******tt*t*t********t*t****** *t*t********t~*&*&*,****t*t***********t**** 11-22 The responsibility tbr overview of1 Defense test and evaluation lffort should be assigned to the Def.nse Th-sl Agenc)r. lIt addition, the Agency should be responsible fi)r design or review of test designs, perfosrming or notoitoring of tests, and conitisnuous evaluation of the entire test anid evaluationprograin. III. PROCUREMENT The Department of Defense procurement program involves ap)proximately 12 million project actions a year. These are consummated by the Department of Defense procurement work forces of approximately 46,000 personnel, (if which about 91 percent are civilian employees. For Fiscal Year 1968, contracts were awarded totaling about 43 billion dullahs for supplies and services. The complex and dynamic Defense prGcsireni.ist environment and the associated procurement process are characterized by a varietv of significavt and incresingly serious problems. 91 A. Statutory Frameworkr The basic statute controlling procurement by the Department of Defense, except of land. is the Armed Services Procurement Act of 1947, as amended, now codified and incorporated in Title 10, Chapter 137 of the United States Code. The Armed Services Procurement Act is at variance with the realities of Defense procurement and adds considerably to the overhead costs of the Department of Defense. The Act stipulates that procurement contracts are to be made by the use of formally advertised contracting methods, but to this general rule the Act provides 17 conditions of exception under which negotiated contracts may be used. The priorities established by this ststute do not reflect the realities of Defense procurement. Actual Department of Defense procurement needs are such that only 10 to 12% of the Defense procurement dollars is spent through the method of formally advertised procurement which is established in the statute as the general rule. When a contract for procurement of goods or services is negotiated, it must be under the authority of one of the 17 statutory exceptions to the general rule and such actions, as noted, involve 88 to 90%1of the dollars involved in Defense procurement actions. When a contract is negotiated, the statute prescribes that the procuring agency must prepame a Determination and Finding (D&F) documenting the conditions and circumstances and justification for utilization of the particular exception to the general rule for procurement. The D&F must be attached to the copy of each negotiated contract, which must becfiled with the General Acc-ounting Office, The Determination and Finding is also required by statute to be kept on file iii the office of the officer making the D&F for a period of six Teconsequence of the statutory proscriptions and the l3&F requirements place the officers if the Department of Defense in the position of being required to document and explain - hy they are using the most appropriate procurement method rather than an inappropriate one. The preparation, review, submission and filing of the required D&Fs demand and receive v significanst amount of personnel effort including that of the various Secretaries and Assistant Secretaries of each Military Department. Although the Armed Services Procurement Act is the principal statutory authority for Defense procurement, it is by no means the only statute governing such procurement. There are approximately 40 separate statutes which affect Defense procurement. These statutes cover such diverse matters as budgeting and accounting, sniall business, freedom of information, assignment of claims, adjudication of claims, limiting contracts to available appropriations, extraordinary contracting authority for national defense needs, degree of finality and judicial review of agency decisions on contracts, performance bonds, renegotiation, labor standards on public contracts, anti-kickback proviInions, convict labor, Buy American, conflict-of-interest, and procurement of supplies made by prisoners and the blind. Additional statutory authorizations or restraints on Gover~nmenit procurement and contracting are included in~ the annual authorization and appropriations acts, the organic legislation for specific departments and agencies, and other bits and pieces of legislation scattered throughout the statutes and codes. 92 The body of the statutory law covering Department of Defense procurement is supplemented by a number of other top-level documents which have a pronounced impact on Department procurement. These include such documents as Executive Orders and Bureau of Budget circulars. Judicial decisions, of course, also impact on Department of Defense procurement through their construction and interpretation of statutory provisions relating to procurement. In certain respects, the procurement laws are dated; that is, they do riot take into account legitimate and useful techniques developed and pu. into use subsequent to the passage of the procurement laws. For instance, the law aLcords no recognition to the variety of incentive-type contracts which have emerged in recent years. B. Armed Services Procurement Regulation (ASPR) The principal Department of Defense procurement regulation is the Armed Services Procurement Regulation, commonly referred to as "the ASPR", which is to implement the provisions of the Armed Services Procurement Act, other statutes relating to procurement, Executive Orders, Btueau of Budget circulars and, as appropriate, judicial decisions. The provisions of the ASPR are appticable to the procurement of all Department of Defense materiel and services which obligate appropriated funds. except transportation services procured by transportation requests, transportation warrants, bills of lading and similar transportation rnrms. The provisions of the Armed Services Procurement Regulation (ASPR) are complex and unrealistic to an extent that obscures Defense procurement policy. 'The ASPR is prepared and maintained by a committee and is in a constant state of change. The ASPR Committee, which has been in existence for over 20 years, is chaired by an individual from the Office of the Aasistant Secretary of Defense (Installations and Logistics), Each of the Military Departments and the Defense Supply Agency have two members on the Committee, one of whom is a specialist in procurement policy matters and the other is a tspecialist in the legal and contract aspects of procurement. To accomplish its challenging task, the ASPR Committee meets at least two full days a The actual investigption of matters under consideration h; farmed out to subcommittees, of which there are 50-60 working at any one time. The activities of thesm subcommittees involve 200 - 250 personnel. -eek. The ASPR Committee system suffers an apparent inability to resolve, in a timely manner, the issues brought about by changes resulting from new policy, new regulations and new rules. The ASPR process is burdened with a load of coordination t.sat prevents a prompt and continuous flow of changes to the ASPR which are required. There are a significant number of unresolved ASPR problems which have a great impact upon the effectiveness, economy and equity of the Defense procurement process. Many unresolved ASPR issues have been under active consideration by the ASPR Committee for more than a year, and one significant issue dates back approximately seven years. The principal deficiercies with the ASPR are as follows: i. The ASPR contains a mixture of procurement policies, practices and procedures which obscures procurement policy, making it difficult to identify, interpret and to comply with. 93 : I 2. The complexity of the ASPR structure is unrealistic in that its provisions and prescribed practices are difficult, if not impossible, to use within the highly stratified organization administering Defense spending programs, particularly in view of the various procurement personnel grade levels responsible for compliance with the ASPR. 3. The ASPR is in a continuous process of change, a fact which impedes the timely processing of procurement actions, and consumes an inordinate and expensive amount of time of the procurement personnel responsible for compliance with the ASPR. The ASPR is expanded and supplemented by each Military Department, the Defense Supply Agency and the Defense Contract Audit Agency by means of their separately developed and maintained procurement regulations. Thfse departmental and agency regulations largely parallel A62R in format and provide additional procurement policy and procedural matter related to ASPR provisions. From a substantive standpoint, the ASPR gives minimum emphasis to the need for maintaining an adequate industrial base, although the Armed Services Procurement Act gives policy recognition to this consideration with a specific exception (No. 16) to the general rule requiring advertised bids, In addition to the complex framework of procurement regulations, there is an abundance of Department of Defense and Military Service directives, instructions, memoranda and other guidance material, including circulars, handbooks and guides, which have a pronounced impact on Defense procurement. These documents deal wish organization and management, and administrative policy concepts and procedures. Procurement personnel must be governed in practice by these constraints, as well w' by the procurement family of regulations. The Department of Defense directive and guidance system results in an avalanche of paper instructions which are duplicative, overlapping and sometimes contradictory. There is no evidence of a concentrated attempt to reduce the number and scope of the directives and guidance, or to make these documents consistent and harmonious. The need for assessment and review is conspicuous.* C. Department of Defense Procurement Work Force Regardless of how effective the overall system of Department procurement regulations may be judged to be, the key determinants of the ultimate effectiveness and efficiency of the Defense Procurement process are the procurement personnel who have the chllenging responsibiltity for interpreting and applying the regulations and associated guidance material. The importance of this truism has not been appropriately reflected in the recruitment, career development, training, and management of the procurement work I)rce. As a consequence, the Department is faced with a significant number of immediate and future problems with respect to the availability in adequate numbers of appropriately qualified and capable procurement personnel. For example, major problems exist with respect to their aging, turnover, capabilities, and utilization. *See"Management Symtemn" in this Chapter. 94 There is a particular urgency in t. me•:'er of upgrading personne! involved in contract negotiation and in the system of promotians and reward for the negotiators. That the overwhelming proportion of Defense procurement actions take the form of nogotiated c)ntracts is a fict of life and should be recognized as such. Department of Defense personuel who negotiate this great number and dollar ý,alue of contracts are involved with negotiators from industry who are key personnel with lifetimes of experience, and paid by industry much higher than the pay received by the Deferise contract negotiators. The Defense negotiator is at a disadvantage, to say the least. Skills of Governnmcnt negotiators obtained through experience are often wasted by the existing system of rewards, which appears to promote the most capable negotiators to supervisory positions, thereby removing them from direct negotiating activities. Contract negotiation is a special skill, different from and often more difficult to develop or acquire than gre administrative or supervisory skills. A system of rewards for negotiators, which is commensurate with their skills snd does 1,ot iiecessarily require their removal from active negotiations, should be developed. 11-23 The Secretary of Defense should recommend to the Congress and to the existing ..,;mmission on Government-wide procurement that the Armed Services ProcurcmentAct and other applicable statutes be amended to reduce or eliminate the requirement for Determination and Findings on all negotiated contracts, to reflect the practicalities of Defense procurement needs and activiti.s which result in most Defense procurementsbeing accomplishedby oiher than formally advertised methods, and also to reflect the various new types of contracts developed in recent years. 11-24 The Armed Services Procurement Regulation (ASPR) and the ASPR Committee System should be reviewed with tile objective of formulatinga more efficient management organization for incorporatingchanges into the ASPR and with the view toward reduction in the volume and the complexir) of the AS."l. 11-25 In the implementation of procurement policy, due regardshould be gtPen to the need for an adequate, but not excessive, industrialbase. 11-26 Improvenent should be affected in the acqt.-Jsition, training and retention of procurement personnel, with emphasis on a promotion system for contract negutiators which will not necessarily remove them from negotiatingactivites. IV. THE INDUSTRIAL MOBILIZATION BASE The urgent requirement for increased production to support U.S. Armed Forces in World War II and the reluctance or inability of U.S. industry to invest pri ate capital in the amounts and for the purposes required, forced the Government to build a substantial industrial capability. 95 ~ a Following World War 11,it was recognized that any future war would not allow time for the construction of production facilities after the start of hostilities. In 1948, the Congress passed the National Industrial Reserve Act "to promote the common defense by providing for the retention and maintenance of a national reserve of industrial productive capability. .. The Department has, therefore, maintained ownership of a large industrial mobilization base consisting of industrial plants and plant equipment, As of 30 June 1969, this Defense industrial base represented an original investment of about $18 billion. The out-of-pocket support costs associated with maintaining the Defense industrial base in FY 1969 amounted to $366 million. Departme:et records do not indicate the condition or capability of the plants or plant equipment. In fact, no records are kept on a majority of the plant equipment in the inventory, The ownership of the plants and plant equipment encourages the unwarranted belief that the Department has a viable industrial mobilization base that can increase production of vital war materiel on short notice. Experience in the Korean War and the Vietnam War indicates that the continuing rapid advance of technology is changing both production techniques and the itesis which must be produced at a rate that renders much of the equipment curr,' tiy owned by the Department so outmoded that it has no utility or is hopelessly inefficient. It is imperative that a viable industrial mobilization base be established and maintained. However, it does not now exist under th- !oncept of Department ownership of industrial plants and plant equipment. The Department 'hould reexamine its present holdings and, as a matter of urgency, develop and implement a plan to assure that emergency production of high priority war materiel can be iuitiated quickly and effectively. This can be achieved in many cases only by maintaining an active production life. The Department continues to buy plant equipment an,' -iovideit to contractors on tihe theory that it is cheaper to maintain ownership of the equipment than to allow the contractors to charge it off to the contracts. As of 30 June 1969, contractors held government-owned equipment with an original investment cost of about $4 billion. The Departmept has not bcn able to maintain contidl of its inventory of plant equipment. It attempts to control only the equipment with original unit cost of $1,000 or more. Even for these items where records are maintained, the Department unnecessarily procures some new equipment through failure to consult the inventory records or through incomplete or incorrect records. In FY 1969, the Department provided contractors with $133 million of industrial plant equipment with original unit cost of $1,000 or more. Adequate information is not available to determine the full c;osts to the Department of maintaining ownership of industrial plant equipment; to procure, provide to a contractor for a specific contract, reclaim and store at the end of the confras.t, and maintain inventory records to permit its reuse when needed. However, it is apFarent that the Department is not doing an effective or economical job undPr the preýent concept. 96 11-2 7 The Department of Defense should consider buying and providing industrialplant and equipment to contractors only when it can be clearly shown to be to the economic advantage of the Government or when it is essential to the Department's plan to provide a viable industrial mobilization base. Contractors should be enceuraged to provide necessary industrial plants and plant equipment, and should be permitted to charge off peculiarplant equipmentagainst specific contracts. 11-28 A program should be initiated for lie Department of Defimse to divest all plant equipment where ownership cannot clearly be shown to be to the economic advantage of the Government. 11-29 A plan should be developed and implemented to assure that emergency production of high priority war mnateriel can be Initiatedquickly and eflf',tively. 11-30 The responsibility fir maintaining an Inventory and control of Department-owned equipment should be assigned to the Assistant Secretary of Defense (Installations and Procurement). V. LOGISTICS The term "logistics" has a variety of meanings. Here it is interpreted as encompassing the management of 4U classes of U.S. military consumable supplies and secondary items worldwide, depot maintenance and ove'hqul of military equipment, plus transportation and traffic management. These logistics functions :nevitably account for a significant fi'action of the Defense dollar. The sum of their costs in Fiscsl Year 'Q69 was over $20 billion. The broad scope of the su'jecs ntakes, poipted summary difficult, but one salient generalization seems to encompnMs imost of tile tuadi;-gs. It is clear that significant military logistics improvement can be achieved through efficient, coordinated exploitation of new technologies in the areas of transportation, communications, automatic data processing (ADP), and Integrated Procurement Management. To date, however, the full potential of these new technologies has not been realized, nor will they be realized in long-range logistics programs that are presently proposed by most of the Military Services. A. Supply, Maintenance and Transportation 97 .... W -R "I • tential for increased efficiency and improved effectiveness by standardizing or intega,,, logistics management and activities has long b'~en recognized. Efficient, coordinated exploitation of new technologies in the areas of transportation, comnmunications and automatic data processing offer increasing rewards in effectiveness of logistics support and cost savings. Congressional pressures for standardization and integration of Defense logistics have been strong and continuous. These Congressional pressures have taken various forms, as several examples illustrate. Congress provided by amendment to the 1953 Defense Appropriations Act that no funds would be obligated for procurement, production, warehousing, distribution or related supply management functions except in accordance with regulations issued by the Secretary of Defense. The 1958 Defense Reorganization Act provides that whenever the Secretary of Defense determines it advantageous in tertns of effectiveness, economy or efficiency, he shall provide for carrying out common supply or service activities by a single agency or other organization as he deems appropriate. In 1967, the Defense budget was trimmed by the Congress to "encourage integration" of logistics support. There has been considerable progress in integrating "common item" procurement and the initial phase of supply management. Despite vigorous efforts to achieve standardization or integration in the remainder of the logistics system, both from within the Department and from the Office of the Secretary of Defense, progress has been slow. To date, the full potential of new technology has not been realized in the post-procurement phases of Defense logistics, nor will it be realized in the long-range logistics programs under consideration by most of the Services. As found by L GAO investigation in March 1968, "OSD has permitted the Services and Defense Agencies to develop management systems unt!aterally and independently without regard to inter-Service compatibility or relationships of systems." Because the impact of logistics integration has fallen primarily onihe procurement and initial inventory management phases, the resulting improvements in effectiveness of support of Unified Commands in the field have been minimal compared to the improvements which are possible. The benefits of standardized and integrated logistics have not been extended overseas to any appreciable extent. Defense Supply Agency responsibilities do not er.tend overseas. Overseas logistics management is currently the responsibility of four organizational units, - one in e - e ach of which has many elements. Because of inherent and continuing differences among these organizations, the Unified Commander must accommodate different terminologies, different measures of logistics performances and, most unfortunately, different degrees of readiness. 1. Impact of Decentralized S Systems The differences among the Services in their approaches to theater supply management illustrate the varying degrees of cffectiven;ss of supoort, efficiency and economy which prevail. In the acquisition amidinitial supply phase of Defense logistics, six principal entities are involved: (I) General Services Administration (administrative equipment, including computer hardware): (2) Defense Supply Agency ("common items"); (3) The Air Force (principally the Air Force Logistics Command); (4) The Army (The Army Materiel Command): (5) The Navy (Naval Supply Systems Command); and (6) The Marine Corps. All 98 of these organizations operate in the Continental United States; few operate overseas. The General Services Administration and Defense Supply Agency are procurers and wholesalers whose supply functions are limited to the Continental United States. In estimating new procurement and stockage requirements, the demand an( inventory information to these organizations from overseas is limited to what can be inferred from bulk requisitions and occasional asset level reports. No current consumption data is available to them, The Air Force Logistics Command operates a vertical supply system in "..hich each base, worldwide, is a consumer-customer, supplied directly from wholesales activities located in the United States. The Air Force ha3 no depots overseas. Requisitions 'zceived at the wholesale level provide a clear view of consumption data and demand patterns, because they are not filtered through a series of intervening control echelons that aggý ýgate many requisitions over long periods, thereby obscuring demand trends. The Army supply system, on the other hand, is not verlical, but horizontal. The Army Materiel Conmmai.d operates only in the Continental United States, and coah Theater has its own parallel supply system. There is no greater acc ss for the Army Materiel Command to theater demand trends and consumption data than there is for the Defense S-ipply Agency. The Army Materiel Comnmaid and the theater logistics commands have separate stock funds. In effect, the Army components in the theaters have a..tonomnus logistics systems that procure items from Continental United States wholesale supply agencies. (Vietnam logistics are not separately stock-funded.) The horizontal supply system of the Army provides no effective means for adjustment of inventory imbalances among theaters. The Navy supply system hi the Continental United States is in maul1 more centralized than in the Air Force. At three Inventory Control Points (Ships I , "ontrol Center, Aviation Supply Office and Electronics Supply Office), inventory levw t Naval Supply Centers and other distribution points are monitored, and replenishments o. centrally managed items tire shipped as tnecessary. The Navy supports the Sixth Fleet (Mediterranean Sea) directly from the United States through dedicated Navy cargo ships. Tite Seventh Fleet (Pacific) is also supported directly in part, but the Navy has supply depots in the PI:ilippines and it Japan which also support the Pacitic Fleet. These two supt,lv depots -re largely t autenonous of the supply system in the United States, with d.1cNavy supply sys em in the United States having little visibility of the demand trends, consumption, or inventory levels in the depots, except ott aeronautLal items. The Marine Corps obtains a part of its supply support from the Navy Supply System and some from the Marine Corps Supply System. Its distribution system includes depots and bases and air stations. Despite being icpetdeMt oim numerous other agencies for its procurement of items from industry, tile trine Corps insists upon stocking and disttibuting materiel through its own system, which suffers from many of timesame type ot problem.i found in the Army systemin. Combat Force Commanders in the field have found it necessary to improve the effectiveness of logistics support, and to overcome the lack of logistics integration by creating ad hWc cross-service arrangements. For example, in Vietnam the Navy is designated as F-ecutive Agent for all common items in I Corps area and the Army as Executive Agent for II, Ill and IV Corps. In the European theater, the Army is designated Executive Agent 99 --- I for subsistence items for all Services. Thsere is a close issterrelatiussship between the degree of logistics integration and the use of automatic data processing. 2. Automatic Data Processic'g A distinguishi ig sniac of the decentralized and fragmented supply system inl the Defense Department is the proliferation of Automatic Data Processing (AD)P) systems and programs which are largely Incomspatible, both intra-Service and inter-Service. This results not only in weak nesses in inventory management and distribution imbalances, but ini high and increasing costs of ADP software for atvariety of ADP progr,'ins to accomplish the same types,of functions. The aggregate costs - and confusion - resulting from tile developmeot and periodic upgrading, as advanced computecs are requiired and acquired, of ADP programs for eacth class of suppilies by the DSA, the four Military Services :and the theater logistics commands, with mninional compatibility, critically impact on the D~epartment 's effectivenecIss, efficiency and economy. The long-range logistics programs snider consideration by miost of the Military Services will not remedy this problens. 3. Mainsteniance Maintensance is the ultinmate consumer of all technsical supplies and materials acquired by the Department of D~efenise for vulilort of military thardware - at consumption which amounts to approxsimsately five billion dollars allilustly, Investment in inidustrial tooling, equipment and facility capability to supptxcI this maintenance function accounts for approximately another onie billion dollars annually. About one-third of all Departmsent of Defense personnel arc inivolved in (lie maintenance function. Maintenance mnisagemnent resides basically willh the Services. (Neither GSA nor DSA tossmainitensance responsisibililties.) It eslpossibilities for maintensance withiin the Services are vested for thie smosthart iii the suitnieorganiizastionis having respoissibili ties tor the supply funictioni. The maintensance function is dividee intoli three levels: (1) organizcationsal sorscrvi~e level; (2) initermnediaste, or repair level: aid (3) depost, sir overhaul level. Genserally, the Armiy pserfornms all levels oif siainstenanscc u-theater, 1)ut Navy asid Air Fsorce depsot or oaverhasul msainstensance is perfosrmsed iii the Unsited States, Initegrations of msaisi eisasce snssagesssesi is the excep~tion, asid where it exists, it oaccurs almsost exclusively at the depot level os atselected itesis basis. For examsple, the Air Force is designsated to overhaul A-7 aircraft esiginses for boths Air Force asid Navy, asid the Navy pserformis A-7 aircraft airfrane asid avioniics dcpsot mhinisteniance. As is the case iii supply msaniagemenet, traditisonal aspproasches cause vusriasices iss mnainitenance manaagemesnt to constinuse. For examsple, the Armsy asid Air Force pirescribe aircraft insspectionss tosbe performned atl initervals mieasusred iii aircraft flighi timie, white Navy aircraft insspcctionss (somietimses saf the xsonzvaircraft) are psrescribed tosbe pecformied snims calenidar schcdssC. The smaintleniance funictisus is evensless istierated thtan the supply systemss. For example, the Armny's Tanik and Automnotive Coimimanid (TACOM) is assignsed rcsposssibility 100 for integrated management or procurenment and wholesale supply of combat and tactical vehicle items. Depot maintenance is performed by the Service using the item. kin Vietnarm, the Executive Agent designation of Navy and Army for operations areas includes maintenance as well as supply.) In sonme instances, lack of management flexibility causes uneconomical results. For example, current Department of Navy practices provide for secondary support of reparables through the Navy Stock Fund paid for out of operations and maintenance appropriations. Provisioning spares anti replacement of reparable equipments themselves are financed by procurement appropriations. There is no authority to use procurement funds to finance maintenance costs and vice versa. When operations and msaintenance funds are inadequate to repair the materiel, responsible officers are faced with the decision either to make uneconomical new procurements or bear responsibility for unacceptable "downtime" on critical equipments. Economy dictates that reparable carcasses be utilized to the maximum extent po&sibie, I1-31 Repair in lieut of replacement should be, an allowable charge against the parent procurementappropriationlfnding the basic equipment. 4. Transportation All of the Services have extensive organic* transportation resources, and each of tile Military i-lpartments is the "single Manager" for sonic "common user" transportation service. The Air Force has a considerable number of transport aircraft organically assigned to tactical air units, which are used both for rapid deployment of tactical air units overseas and for intra-theater roles after deployment. The Navy's organic cargo ship fleet, numbering some 78 vessels, is used to deliver supplies to Navy forces at sea. The Navy also operates an amphibious fleet of some 94 ships in support of the Marine Corps and maintains an organic air transport force of 136 aircraft. The Army's organic transportation is comprised of wheeled vehicles and helicopters used for tactical mobility and overland supply Slupport, and does not include any global transportation capatility. The "colimon us','r" a'tivities are the Military Airlift Command (MAC), for which the Air Force is Executive Agent: the Military Sea Transportation Service (MSTS), for which the Navy is Executive Agent; and the Military Traffic Management and Terminal Service (MTMTS), for which the Army is Executive Agent. The Military Airlift Command is an industrially fuldcd*edai.'lift service, using both *Aasilyud as inteprai ¢q(IJturilctt 4 I tts-tntti'ttttna ntg d, -- A,, indu•traI;y ftndud twtitity it toe whticih .1,6 cpe tith a w-,king capital p'aid,and whic h :is h:[r amrd lh,-gliug]trevx t• I-welilfial p !;l]'itll lOt laurd.r"tultwhicthtperatittg expetses tic . owned cargo aircraft (234 C-141s, with 70 C-5s scheduled for operation by 1973) and contracted commercial carriers (amounting to 617 million dollars in 1969). MAC operates aerial ports of embarkation (APOEs) in the United States and aerial ports of disembarkation (APODs) overseas. It also operates the Air Weather Service and the Aerospace Rescue and Recovery Service. In addition, MAC is the contracting agent for airmail services provided by commercial airlines and for contract airlift services used by the Air Force (LOGAIR) and the Navy (QUICKTRANS) within the United States. MAC tariffs represent the weighted average costs of military and commercial augmentation airlift from and to overseas areas. The average costs of commercial airlift to MAC include total costs of commercial operators, plus profit. Industrially-funded costs cf MAC-owned aircraft, on the other hand, are limited to operations and maintenance plus a portion of operating support costs. The pay and allowances of military personnel (about 37,000 out of 43,000 total associated with the industrially-funded airlift service), the cost of the aircraft procurement, and much of the base operating support costs are excluded. The majority of airlift is carried out by MAC-owned aircraft, and when the C-5 enters the inventory, there will be little requirement for commercial augmentation for overseas airlift shipments. MAC carriers are primarily designed for [lie mobility (initial deployment of forces) rather than the steady-state cargo supply mission. (Personnel movements, other than initial unit deployments, are handled primarily by contract commercial carriers,) The Military Sea Transport Service (MSTS) contrasts sharply with MAC. Although it operates a small (37 dry cargo ships) nucleus fleet owned by the Government, only five percent of the MSTS workload is currently accounted for by these ships. Seventy-eight percent of the cargo is carried by privately-owned merchant ships and the remaining seventeen percent by shipi from the "mothball fleet" administered by the Maritime Administration. MSTS "unlike MAC" has no port facilities. Only two of the 37 ships in the "nucleus" fleet are adapted to the mission of military unit deployment. (Only five dry cargo ships have been constructed for the "nucleus" fleet since Werd War II, and MSTS fully controls one other sl.ip which is privately owned, having been built under a "build and charter" arrangement.) The "nucleus" fleet is manned and operated by civilian (civil service) crews. Unlike MAC, MSTS tariffs for sealift costs are effectively total costs, since its available resources are primarily commercial, and because sealift costs, unlike airlift costs, are not discounted through allocation of costs of the alternate mission of "strategic mobility" (although sealift shares this mission). MSTS is, therefore, primarily a traffic management service, with a small additional role as a transportation operator. The Military Traffic Management and Terminal Service (MTMTS) has no intercontinental transportation resources. Traffic management within the U.S. is not industrially-funded, but is billed to tile shipper on an actual carrier-charge basis. MTMTS has the responsibility (which it executes through industrially funded operations) for movement and storage of the personal property of military personnel, the operation of seven overseas ports for the Air Force, and the operation of Military Ocean Terminals in the Continental United States. (The Navy operates two major port facilities for cargo ships in the United States in connection with large supply centers in support of the Atlantic and Pacific Fleets, and three separate ammunition ports in connection with Naval Ammunition Depots, the ammunition ports being "common user" ports through which ammunition is shipped to all Services.) 102 L ~. . . .~ . . . . . . None of thc abovc-ntentioned organizations exercises traffic management functions within o serse.js theaters. Theater Traffic Management agencies overseas are operated jointly, but organic transportation resources tile maintained, operated and scheduled separately by the respective Service components; of the Unified Commands. Thle absence of any significant degree oif traffic management integration contributes to the loss of efficiency and cononity. as well as to impairment of the effectiveness of supply support to combat forces. This canlbe illustrated by discussion sofatfew particular Problemss. Cargo shuipping the world over is now being change'l in atrevolutionary fashion ats old-fashioned "break-bulk" ships are repla-ced by conlainerships. The lutermiodal container canleliminate cargo hsandling between consignor and consignee. It also greatly increases ship productivity and profitability, because, with swift loading and unloading, timei spent in ports is reduced significanstly, and it serves to reduce pilferage. 0iommercial interotodal ctmitainers now account for atmajor portion of tile military cdr-jo shipped to Esirotie, and, inl Fiscal Year 1969, 42 pe'rcent of timeoutbound general estimates of Department (ofD~efense general cargo containerization in the future range fromt 65 percent to over 80 percentt. Recent tests indicate significant advantages fromt containerization of ammunition. Containerizationt benefits airegreatest !in terms of cargo protection, rapid delivery, and economy when containers canlbe 'tlhroughput'' directly front consignors toi consignees and when snutli shipments call be efficietutly consolidated. Container imovemeint scheduling, container carrier hooking, atndcontainer fleet control catn be accomiplishted most efficiently whenhintermodal movemnen t is treated admittistratively as anl integral psrocess, For tlse D~epartmtetnt of lDefense, the IThrotught Govcernment Biil ot Ladiisg (TGBiL) serves as the commuon denomsinator for deatlintgs wvith continoit carriers., The TGIIL is, effectively, at freigh t forwardinig mechtanismo that encomupasses origitt-to-destiisation throughput iii a single fitnatncial transaction with inininitum documetntation. It has%bceit ased extensively by NITMTS for shtipmentt of the household goods of mtilitary persontnel. attd it is now used for abou! one percent of military contaitner cargo, with tile ptercentage e~ipecte'd to increase. TGI3L tenders incorporate what tire, in effect, nsulti-tisodal tariff' bids, or offerings, which airewithdrawn oit-o changed front time to time in reflection of shtort-termi transport market conditions. MISTS tariffs for container shipmtenit reflect rates osffered to MSTS annually by cotttaitsershil oplerastors, its individual conspetitive bids. Low bidders airegivenspriority in the atlocation of alshipmehtsa. The msilitairy shipper Service thatt uses MSTS-admninistered commercial container services does so uiider a so-called "thtrotugh movement'' systems intvolviing sepsarate billitng stud documnenta tiont for: (1) land trasplshortationt to Ilse POE (administered by MTMTS with direct-charge for carriage); (1) Sea transportationt (MSTS tssriff)ý aitd (3) Laind tratnsportationt to the isilaitd destlinations overseas (thceater responsibility). hI direct competition with this systeis Is,the TGIIL system adminsiistered by MTMTS (MSTS calt a' aidmiitister TGBtLs, but chooses isot to do so). ThseMSTS basic conscerni is Ithat TGIJL tenders genterally enicomopass ocesli carrier rates lower thasni those reflected in tlse 103 general MSTS tariff. In effect, the TGBL tender incorporates the carrier's current competitive rate. MSTS has effectively prevented the ocean carrier. from offering discounted rates in TGBL tenders by treating seasonally discounted rates as if they were permanent. Carriers who would otherwise offer temporary low ites in slack periods cannot do so if they are not permitted to revert to higher rates in busier periods, which MSTS practice effectively prohibits. Thus, carriers are inhibited from offering seasonal rates for TGBL shipments. The TGBL issue is less .Ignificant in itself than as a manifestation of the more fundamental question as to whether ii is any longer efficient to divide traffic management along Service lines. Even if container service and the TGBLs are disregarded, it is possible to demonstrate that least-cost land routing* of export break-bulk cargo to nearby ports can lead to greater overall cost than routing to more distant ports "dedicated" to given destinations. Savings in improved ship loading and rediwcr'd coastal movement between multiple ports more than offset increased line-iLaul costs. The principle that the sum of minimum costs negotiated for each of several route legs may exceed a single cost ncgotiated for the entire route also brings into question the management of U.S. traffic overseas. As is noted above, this is the rcsponsibility of joint Traffic Management Agencies subordinate to theater commanders. Modern container service used in the Department until now has been primarily cenimescial, involving dedicated shipping under contract in shipments to Vietnam, and primarily, berth term arrangements** for shipments to Europe. Looking into the future, however, each of the Services is anticipating at least some requirement for container fleets owned or lea_.d by the Government. This requirement reflects expectation that containers may be retained fotwextensive periods in forward combat areas. It also is related to concern over possible needs for containers built to particular military specifications. Thus, while continuing to use commercial container service under MTMTS and MSTS auspices, each of the Services, OSD and the JCS have initiated a variety of investigations into various aspects of container utility and applications. As with vehicles, defense container requirements will vary with respect to both time and geography. Overall container requirements and costs will be less if there is a single manager who can allocate and schedule all of the Department of Defense container resources from a central vantage point. This advantage will be denied, however, if the Services' containers do not conform to common standards (with due provision, of course, for Service-unique requirements). The desirability of consignor-consignee "throughput" of consolidated cargo applies to air shipment as well as to surface shipment. At the present time there is pratetically no intermodal throughput of airlift cargo. Military air cargo is unitized on pallets, which do not provide the protection required of a true intermodal unitization system. When intermodal containers come to be used for military aircraft, the requirement for smoothness and *l'he ro-ite that has (he lowest cost for he land portion of toe haul. *Arrmngimnits with commercial shippers on a space to be available when needed basis. 104 efficiency of action at the MAC-MNITMTS interface will be more important than it is now. The fragmentation of logistics functions has anc.ther critical impact on defense capabilities which is unconnected with economy and efficiency. There is also vigorous competition for resources between r )ml'at force requirerments and logistical requirements. Particularly when budgets are declining, this competition is severe. Being fragmented, there is no unified logistics voice to argue effectively for the balance which best guarantees a high state of nsilitary readiness. An even more critical deficiency attributable to fragmentation of logistics responsibilitiea is the impairment of planning capabilities thereby occasioned. The present decentralized system of logistics presents a confused panorama of participating activities, each of which has overview of only a small portion of total logistic.s capabilities. Under these circumstances, it is hardly surprising that military operations almost always suffer major logistics crises, particularly in their initial phases. The decentralization of logistics functions has resulted in the circumstance that only at ths Office of t! t Secretary of Defense is there any significant overview or merger of responsibility for the broad scope of closely ',nterrelated defense logistics activities. Not surprisingly, the Office of Assistant Secretary of Defense (Installations and Logistics) has beconse involved, not only in broad policy matters, but often in the fine detail of logistics oterations. Directives formulated by this office frequently state not only what should be done, but also how it shouid be done. This condition applies to supply, maintenance and transportation. (The efforts of the Office of Installations and Logistics have been directed primarily at achievement of a greater degree of standardization to promote efficiency, and have met with very limited success.) Integration of logistics functions would, therefore, reduce the necessity for such detailed supervision of, and imposition of reporting requirementts on subordinate echelons by ASD(I&L), and, indeed, should permit a substantial reduction in the manning level of this office. There is a significant potential for improved effectiveness, efficiency and economy which can be realized through increased integration of all logistics functions. There are, of course, logistics problenms unique to each of the Services deriving from their differing missions and compositions. Consequently, some of the existing variances among the Services in logistics practices are meritorious, and will, of necessity, continue to exist. Such differences, however, can and should be accommodated within the framework of all integrated supply, maintenance and transportation system. Nor are the differences in missions and compositions :io fundamental as to preclude the adaptation of advanced techni(lucs developed by one Service to the logistics systems of the others to accomplish improved effectiveness, efficiency and economy. There is substantial room for improvement and greater integration of management throughout the supply, maintenance and transportation systems of the Department. The most critical need for improved effectivenes, however, is in the support of the Unified and Specified Commands, and first priority shomuld be placed on integrating the logistics support activities for the overseas combatant forces. In summary, the logistics system of tii,.sDepartment of Defense is decentralized and fragmented in functional assignment. Ilowever, this is not critical in such activities as procurement and the initial warehousing phsse (excluding a part of wholesale supply, retail supply, maintenance, traffic management a:rd transportation). Efforts of the Congress and 105 the Office of the Secretary of Defense to improve efficiency and effectiveness of the other activities through standardization of procedures and approaches have achieved very limited improvements. As a consequence, the current inventory management, distribution, maintenance, and transportation systems are needlessly inefficient and wasteful, and even more important, fail far short of the potential for effectiveness of support of combatant commanders, There are a number of critical short-falls that could best be remedied by a consolidation of functions in a unified Logistics Command to provide support to all Unified and Specified Commands. Among these short-falls to be remedied are the following: a. There is a profusion of horizontal layering in supply activities, including items handled by DSA, GSA, the Army and to some extent, items handled by the Marines and Navy. This horizontal layering of supply systems obscures the visibility to procuring activities of the consumption data and the demand trends of the user to an extent which seriously impairs Lffective supply flow. The system also provides no effective mechanism for correction of inventory imbalances within or among theaters; b. There is a proliferation of separate, largely incompatible Automatic Data Processing (ADP) systems, which are needlessly duplicative. Software programming for each of these is costly, and the cost of software is increasing at a much higher rate than computer hardware. With each modernization step on the many separate ADP programs, the inefficiencies and incompatibilities of the overall supply system appear to become more tightly locked in; c. There are significant duplications in mainteuance activities, and successful efforts to integrate maintenance activities have been few and isolated: d. Responsibility for both traffic management and transportation of cargo for overseas distributions is divided largely by Service and trans-. .tation mode, and conflicts between activities are numerous, costly and impair effectiveness; and e. The fragmentation of supply (other than procurement), maintenance and transportation responsibilities precludes required overview capability of logistics activities, particularly at the level of the Unified Commands. It stimulates excessively detailed management from the Office of the Secretary of Defense in attempts to overcome excessive spans of control, critically impairs military planning for joint operations, and contributes to the potential for imbalances in allocations of resources between combatant and logistical forces. lntegitmtion of supply, maintenance and transportation functions for the support of Unified and Specified Commands can substantially improve the effectiveness of logistics support, while at the same time achieving greater efficiency and economy. A unified vertically-oriented &uup.ly and transportation system, inc~uding maintenansce, should be organized for support of all combat forces, both those overseas and those held in the United States ready for overseas deployment. With a vertical system, integrated from Continental United States through theater management, items cculd be moved from the United States to overseas commands without financial transactions, and as easily withdrawn in necessary redistribution actions, since supplies in the United States and all theaters, within a given supply class, would all be accounted for withir the same stock fund or working capital fund. 106 In addition to improvements in effectiveness, efficiency and economy, a unified Logistics Command would greatly enhance the planning capability of the Unified and Specified Commanders.* Effective logistics integration will require an advanced computerized control and information system, without which the resultant system would be that of a confederation with subdivisions so loosely connected that few of the benefits of union could be achieved. There are significant disparities among the levels of sophistication of ADP systems the Services have achieved to date. The Air Force, with experience at a relatively high level of technical sophistication, has pJanned a highly advanced systems concept for the 1970s. The Navy, with a wholesale control systerl in some ways more advanced than the system the Air Force seeks to replace, is designing an advanced logistics system. With reasonable effort, these systems can be brought together. The Army, however, is in the process of implementing a system that is in some wayte less advanced than the one the Air Force sieks to replace. In developing a logistics ADP system with common elements for all Services for those functions to be shared, the first step is to stop all current development and procurement activity not necessary for support of near-term operations. In view of the practical problems connected with an integration of these logistics functions, a phased approach is clearly necessary. 11-32 iThe responsibility for providing suppl, distribution, iainitenance and transportation serlices to the combatant forces in Unified and Siecifled Commands under the Strategic and Tactical Conimnands should be assigned to the unijled Logistics Communand, 11-?3 The Logistics Comniand should he assigned the traffic management and terminal management fliictions now allocated to the Military Traffic mnanagenent: amid Terminal Service (YMTM1S),the Military Sea TransportationServ'ice (MSTS) and the Theater Traffic Manage1nemit agencies. 11-34 The Military Airlift Coimmnand and Military Sea TransportationCommaiid both should be assigned to the Logistics Comnmand. 11-35 The Logistics Commimand should be directed to develop, uonder the policy guidance of the Assistant Secretary of Defense (Telecommunications), an ADP logistics siystemn to encomnpass suppl, distribution elements that can be shared amnong the Seriices, amid all development anld prociurement activity toward separate ADP logistics systenms not essential to support of near-term operationsshould be suisOended. *On creating a unifiedLogistics Comnmand, see Recommendation I-A. 107 H. Integrated Procurement Managemen In the late 1940s and early 1950s, Congressional demands for economy and the elimination of duplication were expressed by including in yearly appropniation bills provisions giving authority, and in some cases, direction to the Secretary of Defense to standardize, consolidate and eliminate duplication in logistics activities. In World War II, the Army purchased certain items of subsistence for all Services quite successfully. Based on this experience, the Secretary of Defense, in 1951, established Single Department Procurement of selected commodities. In 1952, coding of items uniter the Federal Cataloging System was accelerated, which required all Military Services to use the same stock number and name for the same itemu, and to group items into homogeneous Federal Supply Classes. Increasing Congressional pressures to expand Single Department Procurement to include supply as well a., procurement resulted in 1955 in the Single Manager Concept which included initial warehousing und distribution, as well as procuren.ent, for selected commodities. An amendment to the 1958 Appropriation Act gave the Secretary of Defense authority to transfer supply and service functions among the Military Services to achieve efficiency and economy, aid this authority was later included hi the National Security Act by the Defense Reorganization Act of 1958. By 1961, the Single Manager Concept had been implemented for eight commodity areas, and implementation in a ninth commodity area was in progress. The Defense Supply Agency (DSA) absorbed the nanagement of these commodity areas when it became operational on January 1, 1962. Conceptually, DSA was to act as manager for "common items". "Common item" does not refer to an item used by two or more of the Service, but' is defined as a "class or category of items of commercial type, largely non-technical in nature, generally used throughout the military and civilian economies." In July 1965, Item Management Coding (IMC) criteria were published, the Services were directed to make a three-year review of all items, and the burden was placed on the Services to justify not coding items for single management. Of the some one million items reviewed, the Services noted withdrawal of interest on 23 percent, and coded 58.4 percent for integrated nmanagement and 18.6 percent for Service management. Department of Defense policy also established "Permissive Coding," by which an item can voluntarily be coded by a Military Service for integrated managemcnt even though it meets one of the ten criteria permitting Service management. As of January 1970, DSA manages about one-half the item count in the total inventory. About 70 percent of these items are of interest to only one Service. By value, the DSA inventory of about $3 billion represents only 13 percent of the dollar value of the total inventory. The rxperience with integrated management of procurement has justified the expectations of improved efficiency and economy. Although the principle has proved 108 .. MAiA S' -- -! sound, problems associated with the procedures of implementation have aris,.n which require evaluation and correction. The Item Management and Permissive Coding have resulted in severe "item turbulence". "Item turbulence" refers to changes to basic information connected with an item, such as stock numbers, name, manager, designation, unit price, unit issue, etc., which is required to order, turn-in, reissue, report on or otherwise transact business with reference to the item. The impact of this turbulence is illustrated by the fact that one change in Federal Stock Number (FSN) could trigger up to 2,800 changes through the Department of Defense Supply System, depending on the number of organizational units or records dealing with that item. Item turbulence is aggravated by a number ot additional factors. A major problem is created when an item is coded to DSA for integrated mnanagement, but at the time of the Effective Transfer Date (ETD), there are few or no items in the inventory available for transfer to DSA. This "Dry Pipeline" results in DSA assuming management oflan item without any items in inventory available to supply customers. This circumstance arises often when the Services do not have tht funds to procure the item. Lack of technical data on items coded for DSA management adds to the problem. Long stor,,ge of technical data can make it unsuitable for photographic reproduction by DSA, as is necessary for distribution for competitive bids. In some instances, the Services do not have the required technical data as they have been procuring the items from known manufacturers or sources of supply, whereas DSA needs the technical data to purchase under competitive procurement. In other instances, coching conflicts occur when all item managed by two or minoe of the Military Services is coded for integrated management by one and for retention under Service management by another. The IMC program provides that the Services can retain management of major end items (tanks, missiles, etc.) even though they fall in a general category of mnater;el assigned to DSA for management. In most such cases, however, the repair parts are managed by DSA. This results in a division of management authority between the major erd item, itself, sad the supporting components and repair parts. The Services retain responsibility for the technical aspects of both end items and their components and parts. This involves planning, engineering development, major item production and maintelance. (The Services are charged with the responsibility for providing engineering support to DSA, which has no engineering staff capability). This division of logistic responsibility between the Services and DSA, involving sudc closely related and interacting functions relating to a single major piece of equipment, requires so much time for coordination that it has become a critical factor in responding adequately to needs of the forces in the field. Some of the troaulcsome iten, !r:•osfcrs by perlnissiv." coding may possibly be attributable to inadecIuale '-ash balances in Stock Funds. Currently, Department of Defense policy provides for adequate cash balances, but actual cash balances have, in fact, been far less than adequate. Sufficient cash balances in stock funds are essential for effective secondary item support and to avoid disruptions of orderly procurement programs. DSA now manages sonne 400,000 items coded as "non-stocked". No meaningful evaluation has been made of the impact on requisitioners of the excessive order and shipping 100 time for such items which are not kept in invenstory. No credit is given when excess quantities of such itemisare turned in, a practice which should also be re-examined. P The potential for improved efficiency and effectiveness of support thoroughly justifies the incentives created by Department of Defense policy for integrated procurement. The degree of turbulence and otlher inhibiting factors now existing indicatL that n comprehensive' policy and status reviev. are now mouch in order. To avoid the turbulence, migration of items managers, needs to be at a more stable pace, IMC criteria for determining item managers should be reviewed against experience, with particular attention being paid to the effect of integrated coding of repair parts for major end items which continue under Service management. Consideration should be given to the establishment of alit 'tis f'or requirements for pipeline fill and standards for availability of technical data as prerequisities for changes in managership. In the review, special consideration should be given to tlse imspact of each factor on th~erequisitioner. ~between 11-36 At soratorium should be declared onl Integratfed Managemient Coding for transfers of' the olanagetnent of items, and a complete review be conducted to determnilic: (a) Thei adeqoosey of lAIC criteria (is indicated hi' experience Witli their ulse. (b) Th/in agnitude of impact of d'eiaouJ ;i~anageimnent responsibility for major end itemts and for the comp/onents and parts Jir the itenn: (c) The ,iunanbr of' itenis coded ftor transftmr~s of mnanagers with partial or dry pipelines, the relationhdip of' "dry pipeline" itemt management transfers and sloc/k fund depletion of transferers, the iiplact of ''dry pipelines" itemn ianage'iient transfers oil requisitioners, and the frasiblilty of establishing pipelhime fill requirements as prerequisites for item Omanagement transfers:(d) The J'asibility of' establishing technical data availability standards for item mnanagemlent tranlsfers. (e) Methods of'reducing conflicts of Integrateds Management Coding by the several Military Sereiees, and (W 'iThe "non-stocked''. imnpact onl requivsitionerys of existing crite'ria byj wh/ichi items are coded as 110 CHAPTER I11 MANAGEMENT AND PROCEDURES 1. GENERAL The Department of l)efense presents an unparalleled management challenge. Many factors contribute to the scope of this challenge, including: the size of the defense establishment; the variety and diversity of its activities, all of which are closely interrelated; its technological dependence; the annual authorization-appropriations cycle; the political sensitivity of its operations; the obscurity of any quantitative standards for measurement of success or failure- the diverse oripin and broad sweep of its policy guidance; the internal t divergencies of Lterests within the Department; and the variances of its objectives due to changing threats, shifting potentials for crises and fluctuating national commitments. Management authority for the Department of Defense is not unitary. Externally, defense management authority is shared by the Congress and the President, and the internal management authority is significantly influenced by the decisions of the Congress and the methods of operation of the President. Congress exercises its management authority through three principal types of control; statutory assignments of authority and responsibility and imposition of rules of procedure; annual authorizations of programs requiring capital outlays; and annual appropriations. Advisory participation in the Congressional decision-making process is provided through legislative hearings. Visibility of Departmental operations is obtained by Congress primarily through required reports, investigative hearings and the audit and investigation activities of th." General Accounting Office (GAO). The principal instrunents of Congressional control are money, manpower, equipments and facilities, The President exercises his management authority through both informal aul formal procedures. He participates directly in the decision-making process, particularly in the area of military operations. He imposes policy guidance, currently by means of National Security l)ecisiom Menron da (NSDMs). In this process, the broad advisory participation necessary from officeis of the Executive Branch is accomplished through the National Security Council machinery and the Defense Program Review Committee (DPRC). Budgetary control is exercised through the activities of the Bureau of Budget. The effectiveness of internal management is influenced by the degree of consistency and harmony between the two external sources of authority, and the degree of consistency and harmony of internal management witll, .nal direction. To provide a structure for internal management, decision points and thresholds of authority must be established, the participants in the decision-making process determined and designated, and provisions made to insure visibility to and of the appropriate decision makers. The effectiveness of the managemnent depends in no small way on this structure and its synchronization with management procedures; the Department is so huge that formal manvgement procedures are much more important than in smaller organizations. Internal management is exercised to a large extent through control of resources, whiicim fall imo three general phases: allocation, justification, and utilization. The emphasis on the three phases of resource control has shifted significantly from time to time. Ill •'•• •~~~~~~............................... •.•................... ... ' .- ,.., ,•l 11. PLANNING, PROGRAMMING AND BUDGETING SYSTEM Since 1961, the process for managing the allocation of resources has centered in the Plaiming, Programming and Budgeting System (PPBS). ThV five budget categories by which funds are appropriated - military personnel, operations and maintenance, research and development, procurement and militwry construction - proved inadequate as management control categories to insure balance among mission-type forces. The new control process was constructed around program categories which are largely mission-oriented. The baseline for the PPBS is the Five-Year Defense Program (FYDP), which is the aggregate of all approved progr'ms projected in force levels for eight years, five of which reflect budget phans. Prior to revision of the PPBS in 1969, the planning, the programming, and the program decisions which modified the FYDP were not constrained by budgetary factors (i.e., the planning was based on conceived defense needs without regard to whether sufficient resources were available for defense purposes). When the budgeting phase of the PPBS was reached, the one-year element of the FYDP was reduced to budgetary levels, and budget decisions were then fed into the FYDP with considerable distortive effect. The 1969 revision of the PPBS injected budgetary guidance into the planning phase to some extent, and fully into the programming phase. A. Description of the Revised PPBS The PPIS is a continuous cycle. It begins with the policy input and overall fiscal guidance front the President in the form of NSDMs. The principal planning documents are the tentative and final Strategic Concepts Memoranda (SCM) prepared by OSD, and the Joint Strategic Objectives Plan (JSOP) prepared by the Joint Chiefs of Staff, Volume I of the JSOP contains a statement of the national security objectives from the NSDMs, the military objectives derived therefrom, and military strategic concepts on a worldwide and regional basis. Volume 11of JSOP contains a detailed analysis of specific forces needed to meet the threat over the succeeding five years. Cost implications are included in Volume II of JSOP, but it is not constrained by budgetary factors. (The JCS also prepares an additional planning document, the Joint Research and Development Objectives Document (JRDOD), which is not a part of t(le PPBS cycle.) After the submission of Volume 11of the JSOP, the Secretary of Defense issues fiscal guidance marking the transition from the planning to the programming phase of the system. The fiscal guidance provides for each of the five years a breakdown of money anticipated to be available by Military Service, and within each, a breakdown by major mission and support effort (and also "logistics guidance," or the money anticipated to be available for war reserves and production plant base). There are two principal types of programming documents. The first is the Joint Forces Memorandum (JFM) prepared by the Joint Chiefs of Staff. This is, in essence, a rework of Volume II of the JSOP to reflect budgetary factors. It co;,tains a force structure broken into FYDP categories, including support programs. Costs and manpower levels are furnished by the Military Services to the Joint Chiefs of Staff for the JFM. 'The second type programming document is the Program Objectives Memorandum (POM) prepared by each Military Service 112 subsequent to the submission of the JFM. For each Service the POM is a more detailed presenltation of their portion of the JFNI and all deviations from the JFM must be explained. Thle PKM must contain both the rationale and risk assessment for each program. Based on the JFM and the POMs, the Secretary of Defense makes program decisions which are published as Program Decision Memoranda (PDMs), which in the initial cycle of the revised PPBS structure, constitute and in subsequent cycles, modify the FYDP. When all PDMs are issued, the PPBS moves from the programming to the budgeting phase, Each of the Military Services and Defense Agencies submits a budget estimate based on the PDMs. After a review, the Secretary of Defense issues a series of Program/Budget Decisions (PBDs) upon the basis of which the Services prepare dicir annual budgets in budgetary categories. The PPBS is ans orderly and systematic procedure and a useful tool, but it is not a substitute for managerial judgment. B. Significant Features of PPBS The 1969 revision of the PPBS offers two principal potential improvements, It constrains the plannhig cycle with strategic and general fiscal guidance, and it can reduce the distortive impact of budgeting on the FYDP by moving tile impact of budgetary constraints from the interface of programnllg and budgeting back to the interface of planning and programming, where time pressures ceated by budget urgencies do not so restrict deliberative risk assessments. Second, tile Movision provides the Joint Chiefs of Staff, through the JFM, and the Military Services, through the POMs, the opportunity for more initiative il force planning, "There ale several other particularly significant factors relevant to the revised PPBS. It tends to put more responsibility on the Joint Chiefs of Staff through their preparation of the JFM. In the past, the Joint Chiefs of Staff have not been able to achieve tile resolution of intcrservice differences on force issues which is essential to the structuring of an effective JFM. Nor has the Joint Staff demonstrated the analytical capabilities essential for reviewing the Service inputs to the JFM on costs and manpower levels. Tile revision lengthens the PPBS cycle, which potentially can inhibit quick responsiveness to changing threats and other circumstances. The first cycle of the new PPBS began in the fall of 1969 and is scheduled to culminate in an annual budget submission to Congress in January 1971, concerning funding for the Fiscal Yeas beginning I July 1971. The planning cycle is thus begun some twenty-one months prior to the immediate period to which the planning is directed. Compressing the PPBS cycle would Improve planning and programming effectiveness, and minimize the number of reprogramming actions required. Neither the former nor the revised PPBS provides an effective mechanism for inputs to programming from the Unified and Specified Commands to the Secretary of Defense. This is a major deficiency. They are assigned specific missions to fulfill. They are delegated responsibility for initial contingency planning to fulfill those missions. The Unified Commands can provide useful recommendations on force structure and operations capability if given the procedural opportunity, paisticularly when the recommendations are coordisated through a Tactical Command. Such recommendations would provide, at the 113 V very least, a check or. tile JFM, and could possibly present a spectrum of feasible alternatives to the JFM, as well as to the JRDOD. The imposition of fiscal constraints on the PPBS has a potential for increasing the rigidity which the PPBS tends to impose. Rigidity, which results from the combination of fiscal restraints in programming and from declining budgets, reduces the flexibility to exploit technological advances or to respond to changes in the threat. "The PPBS, although more simplified in the revised form, stilt is a complicated process, The preparation and review of the extensively detailed documents require a major manpower commitment. Most of the data processed and fed into the submissions are handled by automatic data pro-esbing. Consequently, any change in format or categories of submissions complicates the process and adds both to its cost and the potential for errors. Every effort should be made to stabilize the formats throughout the process. In this regard, there is a difference between the fiscal guidance categories and the FYDP caxegoiies in the initial cycle. Indeed, no satisfactory "crosswalk" or computer conversion program between the FYDP format and the OSD prescribed Land Force Classification System (LFCS) has yet been developed, and the fiscal guidance categories coincide with neither. Furthermore, the fiscal j'tidance categories are not prescribed by the PPBS procedure, which increases the likelit I of chanrges from year to year. Conversion programs between varying categories are I . difficult and expensive to develop, and requirements for new ones should not be impos, lightly. A isajor complication and expense is occasioned by the necessity of constructing a "crosswalk" between program categories essential for management, and the budget categories by which Congress authorizes and appropriates. Much confusion and expense could be avoided by atmapproach which did not require use of budget categorics, and the elimination of the budget categories would not in any way adversely affect either the management or the visibility of Departnmenit of Defense operations, Although the P1I3S is the major planning, programming and budgeting procedure in the l)cpartment, It has more practical use as a budgeting device than as a planning and programmhig procedure. Many major programs result from the development of new weapons systems, which are approved largely independently of the PPBS, primarily through the Development Concept Paper (DCP) procedure.* The PPBS does not contribute significantly to the decision-mnaking process for consideration of programs which center on major weapons systems. It does array a projection of estimated costs on such programs after their approval for development. The absence of a tie-in to the PPBS of the decision-making process ott research and on individual wetipon system developments is a major weakness. C. Description of a Proposed PPIS The Planning, Programming anid Budgeting System (PPBS) should be mnodified to provide a logical and workable merger of the currently independent programtss which involve Research Objectives (ROs), Operational Capability Objectives (OCOs) and their validation, developmzent planis, and Development Conzcept Papers (DCPs). In the steps of the PPBS cycle outlined below, the developmsent, review and approval of these docunens have been added. *See Section IV in this Chap le for a discus.sion of the IXl. 114 For clarity it should be nuted that the cited submittals to the Deputy Secretaries of Defense actually envision evaluation by the Assistant Secretaries (Research and Advanced Technology), (Engineering Development), (Operational Requirements) and (Program and Force Analysis), joint review and evaluation by the Deputy Secretaries, and final review and approval by the Secretary. The Assistant Secrertuy of Defense (Operational Requirements) would be responsible for this coordination. The proposed Plannhig, Programming and Budgeting System would include procedural guidance for: (1) processing changes to the approved resources of the Five-Year Defense Program; (2) submission, analysis, review and approva; of new and revised programs and budgets; (3) maintenance and updating or the Five-Year Defense Program structure: and (4) incorporation of the development progranm decision process of Operational Capability Objectives and Developni"nt Concept Papers. The calendar schedules fixing !ht dinse periods ad dt~ilivs ior each step it the procedure would continue to be established by the Secc'tury of Defense annuailly by memorandum after experience is gained dhrough the ,':tial use of the sy•:;tem. The major steps in the proposed PPBS cycle, with the addiJions underlined are aw follows: (1) The cycle would begin with the preparation by the Joint Chiefs of Staff of Volume I (Strategy) of the Joint Strategic Objectives Plan (JSOP) and the p'ooosed Research Obectives ROs statementb the Advanced Research Projects Agency. These documents wood be somitted to theeputy Secretaries of Defense. Volume I of the JSOP should continue to contain the statement of the national security objectives and the military objectives derived therefrom, and to include military strategic concepts and objectives on a worldwide and a regional basis. The national security objectives are based on decisions of the President as expressed in National Security Council Decision Memoranda (NSDMs). The ROs would indicate the areas in which the technological base should be advanced for the continuing sunnort of the Defense nosture. and would .aroopse an order of priorities. (2) After the review of Volume I of the JSOP, the Secretary of Defense would issue to the Joint Chiefs of Staff, the Military Services, the Defense Agencies, and to the Unified Comumands, a Strategic Concepts Memorandum (SCM) containing thie general strategic concepts and guidelines to be used by all participants in the PPBS. The SCM would first be issued in draft form and, after comment by all recipients, finalized and reissued. (3) Then the Secretary of Defense would issue a preliminary fiscal guidance to the Joint Chiefs of Staff, the Military Departments, and the Unified Commands for each of the succeeding five years for their comments. (4) Following this, the Joint Chiefs of Staff would submit VGlume II of the JSOP to the Deputy Secretaries of Defense, and the Strategic, Tactical asd Logistics Commands would submit proposed/revised Operational Capability Objectives Tcos . Volume II of the JSOP consists of a detailed analysis of the specific forces needed to meet the expected threat over thie succeeding five years, in the opinion of the Joint Chiefs of Staff. Volume II of the JSOP is not fiscally constrained - that is, it is not limited by fiscal guidance, but cost implications of the recommended forces are included. This volume of the JSOP highlights those recommendations which require decisions in the current calendar year. The OCOs would represent an assessment by the Unified Commands of the materiel resources they need to 115 support or perform their assigned missions. (5) Next, the Secretary would issue to the Joint Chiefs and tie Military Departments a tentative fiscal guidance broken down by Military Departments and by major mission and support effort within the Military Departments. (6) After receiving responses from the Joint Chiefs of Staff (JCS) and the Services on the tentative fiscal guidance, the fiscal guidance would be issued. From this point, all submisasions under PPBS would be "fiscally constrained." At this time, the ROs would be finalized and approved, and the selected OCOs would be validated and assigned priorities. (7) Then, the Joint Chiefs of Staff would prepare and submit to the Deputy Secretaries tile Joint Force Memorandum (JFM), which contains the Joint Chiefs' recommended force levels and support programs, similar to that of Volume II of the JSOP, but within the parameters of die fiscal guidance. The JFM includes program costs and manpower requirements furnished to the JCS by the Military l)epartments. (8) Next, the Military Departments would submit to die Deputy Secretaries their Programn Objectives Memorandum (POM) and development plans for the validated OCOs. The POMs are a more detailed presentation by the Services of their portion of the JFM, presented, as in the JFM, in the format of the FYDP categories, and costed in detail. Supporting rationale must be included for each program, as must the risk assessment. Variances of the POMs from the JFM must be identified and costed, and must stay within itheestablished guidelines. Concurrent with the submission of the POMs by the Military lenartinents, the Unified Commands would submit to the Deputy Secretaries their Commausad Program Memoranda (CPMs), which would contain recommended changes in that portion oftile forces proposed in the J3M which are asigned to the submitting Unitied Command. Each CPM would idicate 0riorties for a gesentage or dollar amount of increase and a.rcentaeor doilarainount of dcrease il asi ,ned forces. Tiedevelopment plans for the vwaldated COswoul represnt the assigned Military Department's approach to stisfy the OCO and include a propo7.b.developmn- t concept paper (LDCI). 09) After review and evaluation of the JFM, the POM, the CPMs and the development plans, tile Secretary issues draft decision papers for comment, and after review of tile comments, anlended Program Decision Memoranda (PDM) ald approved )CPs will be issued. These DPMs and DCPs will constitute for the first cycle, and iedify thereafter, time FYDP. (10) Finally, die Military Departments and Agencies will submit to the Deputy Secretaries their budget estimates based on the amended PDMs and the approved DCPs. After review of the budget estimates, the Secretary of Defense would publish a series of Program/Budget Decisions (PBDs) addressing specific budgetary decisions. A procedure and schedole is established for conferences or reclamas to the PBDs. Thereafter, the budget is shaped by review in the Office of the Secretary and in the Bureau of the Budget, with final Presidential decisions on still unresolved issues made prior to submission of the budget to Congress in late January. II-I The IPIIS should be modified to include the formulation of Research Objectives i16 r *-.~ w - . .- (POs) by the Advanced Research Projects Agency (A RPA), the preparationand submission of OperationalCapability Objectives (OCOs) and Command ProgramMemoranda (CJ'Ms) by the major Unified Commands, and development p/ans and Development Concept Papers (il) s/ubnitted by ti/e Mililar' Departments. 111-2 The time prescribed annually for the I'PBS cycle should be constricted after the first crcle and the new 11YDI' is completed in order to bring the planningphase nearerIn time to tthe period o1'operrlions. U.1-3 Thie varlous categories used in and in connection with the PPBS should le made to coincide as nearly as practical and be stabiltzed. 111-4 The fiscal guidanceshould prescribe a declining mliitfor each out year itnthe Research and )eeelopinent and In the I'rocuremnent programn categories in order to preserve a flexibility in tie IYDP to exploit developing technology and to program to ineet unati ticipated threats. 11-5 l'eer. effort should be made to obtain agreement by the Congress to accept defense budgets and to eppropriate lii prograinrather than existing budget categories. 11-r The Joint Staff should Ie augmented wlith a comnplement of civilian analysts, in order to enhance its analytical capability generally, and to Improve Its capability to evaluate Service suhmnissions of cost and manpower levels fir the JIM in partlcular. D. PPIS and Systemns Analysis Techniques The role of the Office of the Assistant Secretary of Defense (Systems Analysis) is inextricably interwoven with the Planning, Programming and Budgeting System (PPBS). Although die Assistant Secretary of Defense (Comptroller) is charged with overall responsibility for the PPBS, and although, in practice, tUe PPBS is far more nearly a budgetary, rather thin a planning or programming exercise, the Systems Analysis office has been and is more involved in thb plastning and programming phases of PPBS than the SComptrs•ller. 117 ~ The Systems Analysis Office has proved to be a controversial organization. Fundamentally, most of the controversy centers around allegations that it initiates, rather than reviews, force structures in the planning and programming phases of the PPBS, and in effect, has made, rather than advised on decisions. Prior to the 1969 revision of the PPBS, the Systems Analysis Office preparers the Draft Presidential Memoranda (DPMs) which constituted the baseline documents for force programming in the Department. The DPMs were in theory predicated on the Joint Strategic Objectives Plan (JSOP) prepared by the Joint Chiefs of Staff (JCS), but the JSOP was prepared without any fiscal constraints and with no limiting mission guidance to the JCS, and, as a consequence, the JSOP forces priced out far beyond the level of resources available to the Department. In effect, therefore, the DPMs prepared by the Systems Analysis Office were the initial force structure plans for the Department. Under the revised PPBS, both fiscal and strategic (mission) guidance is provided the JCS, so that presumably, the Joint Force Memorandum, which, in essence, replaces the DPMs, will provide the initial force structure planning and the baseline document for Department programming. The Systems Analysis Office performs the staff analysis for the Secretary of D)efense which provides the basis for the fiscal guidance, and to an extent, this requires some force planning, particularly in the initial cycle of the mevised PPBS. An effective analytical capability is an essential tool for successful management, particularly fil an organization such as the Department of Defense in which management issues involve large numbers and types of fac!om. It should exist at all managerial levels of the Department. The techniquk% of systems analysis should not be confused with particular functional assignments in which these techniques are the prim!iry tool, such as force and program ..tructuring mnd review, nor should the merits of the techniques be confused with iwntroversial functional assignments or functional usurpations by those using systems analysis technirues. Some of the confusion could be eliminated by giving the Office of Assistant Secretary of Defense (Systems Analysis) (ASD(SA)) a title which describes the functiimal responsibilities assigned to It, rather than one of the methods it uses in the performance of its functions.* Currently, the Office of ASD(SA) is assigned major responsibilities for review and analysis of force structures and programs. This is an essential task, and must be well performed if the management by the Secretary of Defense is to be effective. Every effort should be made to enhance the capabilitiet; of those assigned this staff responsibility, which requires the application of a broatd range of disciplinary skills, maturity born of experience and firm responisible direction, *Se, Recommndation 1-6, 118 ; ! 111-7A4nallrica capabdifil should be sirengthened partiicuri, In/ Ihi Ofici./e of 11WSecretary- ol Defc'nse. ihioghu thec Deoarcef n Ill, LOGISTICS GUIDANCE Although tihe overall fiscal guidance is uniqiuie to ltce revised PPI3S, logistics guidance was plrovidted under thle old and revised PlIBIS. A Logistics Guid~ince Memnorandum (LGM) is pmublished willh the ten tative fiscal guidance and again with the fiscal guidance inlfinal formn onl March I S. The LGMI under the revised PPI3S more clearly reflects the imposition of fiscal constraints, The LGMI (formerly called the D~efense Guidance Menmoranda (DGMs) onl Logistics) provides timeguidance for planning materiel SUppIort, which under the revised PPIIS, is suibmiitted asanlintegral part of the service P'OWs The logistics guidance deals both with materiel inventories for emergencies :and current operation, land with production base plianninig. Ini the past, there has often heeln atsignificant and apparenstly irreconcilable difference bel ween the war reserve objectives andt(the psroduction base plannhig objectives, on thte one saol, and annual logistics guidance, onl the other. These discrepsancies do not appear to htave been remedied. The preparation ot stable objectives cannot he achieved without a significantf effort to analyze the miany tactors relating to thleproblem. range frolu 1smu11llnitiOnl conutinliton rates OSD Incanot ansalyzedethese problemus, sWhichm of existing Isroductioll base plants. New probslemss, such asi Army to thle usefulneCSS ammuslnition Which till a1shell life, have not bieen sufficiently analyzed to determine their effect onlexistilug pianoning factors. IeficienlcieS inl tile types Of resources covered by the LGM tire the ceat visible element omforce readimless 'They incvolve significant extsemdiltirces, however, and tiring less visible are psoten~tially timemosot likely airea for "econonlizing" by the Services when faced with the psinchi of' fiscal constraints. These factors inl combination justify athigh priority for increased attention to establishnmen t of mleaningful and relevant objectives for materiel suppiort and psroduction base planning, as well atsfor effective program reviews of thlese areas. W/-8 71/i faclors herarinig mi lear re.cc'rve slocA levels and proch l~ion base planlts.should be aalrz~ied anid crisdoaed min ocrder Io dice/o~p inlcanioigfic /~iohii oh/itir's wh'ich canl hb' comaibi)iile withl logislici giodacice. IV. DEVELOPMENT CONCEIYT PAPER A seconld mlajosr prolcess by which allocacitionl of resources is macnaged is the Dei elspinent 119 Concept Paper (DCP), although the DCP is also used for management in the utilization phase. The DCP was initiated in an attempt to provide a more complete and comprehensive, yet manageable, display of relevant information to the Secretary of Defense on important issues requiring decisions for major developments. Its preparation and approval is now a precondition to commencement of a major development, of which there are about 80 at any given time. (A major program is one which involves more than $100 million for production ri more than $25 million for resesuch, development, test and evaluation.) The DCP is limited in length to 20 pages. It is required to present the objectives of the program, dte issues, the driving force, or threat, alternatives, test and evaluation, the risks, the pros and cons of alternatives, the resource needs, schedules, management plans, security considerations, thresholds and recommendations. It also prescribes the time when an updated DCP will be submitted. Many items contained in the DCP are required to be agreed upon, or based on consensus. Among these items are the objectives, the issues, and the alternatives. All offices having cognizance must also agree that thu pros and cons for each alteri~ative are fully and fairly stated. Prior to consideration by the Secretary of Defense for decision, the appropriate officers (Chief of Service, Secretary of Military Department, Director, Defense Research and Engineering, the Assistant Secretary of Defense (Installations and Logistics) and the Assistant Secretary of Defense (Comptroller), and, in cases of developments for more than one service, the Joint Chiefs of Staff, and the Assistant Secretary of Defense (Systems Analysi's) (on the initial DCP) must sign the DCP and indicate the alternative preferred. The Secretary's decision is indicated by designation of the selected alternative and his signature. The DCP is updated and reconsidered from time to time, but usually the initial approval is just prior to entering the engineering development phase, and formal approval prior to entering the production phase. Recently, the DCP has included the designation of the Program Manager and the establishment of his reporting lines and chain of authority. This information is specified in the management plan. The Services have the basic incentives to see a DCP prepared, but most of the DCPs now existing were produced by personnel in the Office of the Director of Defense Reseasch and Engineering. DCPs vary in quality. There is not sufficient experience with the process to evaluate the impact wi development programs, ond, indeed, DCPs still do not exist for all major development programs. The DCP has two unique features. First, it is a "discipline" document, with prescribed format and limited length. It is an attempt to summarize all the significant considerations bearing on the decision to be made. Despite the stated requirement, all cognizant offices do not always concur in those portions of the DCP for which a degree of unanimity is specified. Consequently, the format of the DCP has a potential for submerging differences on the assumptions which underlie the alternatives presented. This presents a risk for the decision maker. 120 rrF. 171 Second, tile DCI' appears to have circumsvenited, to a large degree, the many prcssurcs for concutcnere and unanimity amiong advisors onl alternative approaches to developments, thereby p) resring options fur the Secretary's decision. This is a)major accomplishment. Although DCPs have not yet been prepared onl all major systems, and somle of thowe which have been prepared appear mediocre, an attempt is being mlade to use thle DCI' for areas of research and development which do not fall] in the category of major systemss. Approximately 50 DCP-type papers are under way for areas of research and development other than major systems, None has been completed. When applied to major systems, the DCI' has many advantages as a management tool. For general effective use hii this area, however, it Will require the acquisition and training of personnel in the preparation of DCPs, in order to attain anl acceptable standard of quality, which does not nosw appear to exist. The DCI' will continue to be only a tool for management and its limitations should be recognized. Pofmitially, it could foster an ad hoc management approach for each major development, which could obscure the necessity for structuring and maintaining anloverall organization which is effective an~defficient, It call also foster a tendency to establish a direct reporting relationship between Programn Managers and senior decision makers inl OSD in eacti individual case, that, in thie aggregate, call overtax the feasible span of control of the senior decision makers. The application of the l)Cl formiat and procedure to research and development areas be) and major system developmnents portends a degree and stain of centralized control by Defense Research and Engineering svhich is infeasible to,- efficient management. Major developments have such significant cost consequences that decisions must be reserved to the Secretary of Defense decisions onl lesser programns canl more safely be delegated if orguuization is structured so as to permit precise designation of accounitability aitd inainitenanee of visibility. Program approval and review canl be maniged through effective use of the PPl1S. Extension of tie l)CI process beyond major system developments could seriously overlap the mainagement psotential of the PPIIS and result not only inl needless duplication, bill also in overmlanagemlent at top levels. 111-9Increased eImlihavi. should be p)laced onl identitfying. acqufiring (aud training lpecs()nnel C'oncept Papers fin,rmajor developmentIs. thcapabiliry to p~repare D~evelopmenit iV/holhsve'bi 111-10 The Developmnent Concept Paper should nlot be emlblp,ed as ma nnagemenllt tool Ibr area~s of research and developmnent other than ms/or .s~lcmols deeelopoients. V. DEFENSE DIRECTIVES/GUIDANCE SYSTEM AND MANAGEMENT INFORMATION REsPORTS Bleing a large and structured organization, the Department of Defense neccessarily has 121 developed an elaborate system of directives through which to promulgate standing policies and procedures. The Department is so big and dispersed, that only through the formalized procedural documents system can policy be effectively communicated throughout the structural organization. The established system for communicating official guidance throughout the Department is adequate as established, but the implementation of the process leaves much to be desired. New policies which are only pronounced orally or transmitted through unofficial memoranda may not reach the implementation levels of the organizational elements. There is a need for substantially increased awareness of the necessity of promulgating policy and procedures through the formally established system. The Office of the Secretary of Defense employs a system oý"Directives and Instructions to promulgate policies and procedures. This Directives and Instructions system has not been reviewed and codified in many years, with the result that many Directives and Instructions overlap and are inconsistent, contradictory, and irrelevant to current circumstances. The quantity of these documents has increased significantly over the years, and theii appears to be no mr chanism by which the policy changes contained in new Directives and hIstructions are incolporated in previous documents through modifications or recisions. Nor is th ;re a provision for systematically reviewing and consolidating Directives and Instruction. As a consequence, the Department's Directives and Instructions are not adequate to assure that implementation actions are consistent with policy. The Departmeat of Defense is also deluged with reports.* Requirements for reports are initiated by almost all elementn; of all echelons of the Department. So great is the proliferation of reporting requirements that it would be a major undertaking just to obtain a total inventory. These reporting requirements fall in all categories - recurring reports, courtesy reports, external reports, narrative reports, automated reports and manual reports. Despite the general recognition within the Department that reporting requirements have increased to unmaitageable proportions, efforts to reduce and control such requirements have been mostly ineffective. In 1969, the Office of the Assistant Secretary of Defense (Comptroller) inventoried the various management information products received and prepared by OSD. This Inventory included approximately 1,200 reports. An inventory compiled by the Navy in 1969 of recurring reports required by Washington Navy Headquarters Organizations revealed a total of 1,417 requirements, which generated 1,461,607 submissions annually requiring 5,439 n5an-years to prepare. Duplications of substantive information abound, although frequently couched in differing formats. There is little evidence to indicate that estimates of costs of preparation, handling and review are prepared and considered prior to imposition of new reports requirements. Department of Defense Directives and Instructions prescribe the responsibility for reports control, the criteria for establishing reports requirements, the standardization of 'See ihi Managenent System Sccti-, in Chapter 11 r•raddiCwt-al commttents,. 122 reporting forms, the procedure for obtaining uathority for a new reporting requirement and the registration and numbering of reports requirements. The criteria for establishing reporting requirciaemts are genei-'lly adeqe.-..,•ey provide, in part, that: a. The data to be developed must meet a clearly defined need: (I) For managemen, needs of the Department, the cost of developing the data as well as the cost of compiling and utilizing them after receipt should be commensurate with the expected value of the results; the detail required should be directly relhted to the level of management responsibility at which the request is initiated; the necessary resources 3i process the data and take action should be available; and the frequency of reporting should be minimal. (2) In determining the rzsponse to be made when the Department :s requested to supply information to others, 'he cost of developing the data should be commensurate with the degree of public interest involved. b. Requests must be designed to permit respondents to mect data needs as efficiently as possible. Whenever possible, they should provide for the use of available summary totals, the use of data already included on magnetic tapes or punch cards, and the employment of appropriate sampling techniques. c. Unnecessary duplication must be avoided. Although intensive one-time efforts occur from time to time intended to reduce and control reporting requirements, they are at best fragmented and temporary in effect. "Several principal factors appear to be responsible for the failure of efforts to control reporting requirements effectively. Numerous exceptions are made to the generally adequate criteria athd review process prescribed by the Department Instructions for reporting requirements. The exceptions include rei-,,ts required by the Assistant Secretary of Defense (International Security Affairs) and the Directors of the Defense Supply Agency and the l)efense Communications Agency, if thc reports are "operational" in nature. In adm:tion, one-time requests for statistics, data to support the PPBS proce",, and status or progcess reports are exempted. Most crucial to the failures of control efforts is the level at which responsibility and .iuthority for reports control is vested. In OSD, the ASD (Conmptroller) is charged with the central responsibility within the Department, and lie in turn Ihs delegated the responsibility to the Directorate for Information Control, which reports to the Deputy Assistant Secretary of Defense (Systems Policy and Information). The Director with the immediate responsibility is in an ineffectual position to prevent the vatious ASDs front establishing such reporting requirements as they, or their Deputies and Directors acting in their tame, consider necessary, or even "nice information to know". bimmilar situations exist in the Services. lt the Navy, for example, th- responsibility for developing and publishing methods and standards for reports management is vested in the Naval Records Management Branch (NRMB) of the Organizational and Administrative 123 II Management Division under the Assistant Vice Chief of Naval Operations, Director of Naval Administration. This is hardly an organizational vantage point from which to exercise control of a Department-wide proliferation of reporting requirements. Even worse, the authority of NRMB does not extend to ADP generated reports, jurisdiction over which is claimed by numerous sources, nor to the some 2,000 automated reports in Bureau of Personnel. Not only are controls for establishment of control systems and reporting requirements generally ineffective, but there is also no mechanism for terminating systems or reports no longer needed or used. An additional problem in the Department's Directives and Instructions system concerns the charters for the offices of Assistant Secretaries, Deputy Assistant Secretaries and Directors which are published within this system. These charter documents are too often prepared in broad general terms, approved without serious review. This results in many of the present charters being of improper scope or lacking specificity in delineation of the assigned responsibility, and creates jurisdictional questions iegarding the overlaps. One office should be assigned the responsibility for assuring that all charters are of proper scope and coordinated and are in accordance with the assigned responsibility of the office(s). 111-11 The Secretary of Defeinse should establish a small staff function within the Coordinating Grmup reporting to him and assign it the responsibility of effecting both a major improvement and redaction in the control and infbrnmatlon needed for management within the Defense Department, and in turn, of its Defense contraclors. This should be done by specifying what is required, not dictating how to manage. /n objective should be established to further enable the Department components and industry to evolve a ,nore stable management environment by restrictingchanges in control and report requirements to the mininbum basic requirements The Department's Directivesand Instructionsshould be codified through consolidation,recision and restatement. in addition, criteriafor tmposition of contlrolsystems and reporting requirementsshould be expanded to requirea statement of need, benefit, estimated cost (of ireparation, handling and review) and why existing systemns and reports do not satisfy the need. l'eriodic reviews should also be requiredfor the purpose of confirming the continuing need for the controls and information required. in addition, all organization charters of the Office of the Secretary of Defense should be reviewed to assure that they were properly defined and coordinated and were in accordance with the responsibilitiesassigned to the office(s). 111-12 Similar small staff groups should be constituted in the immediate offices of' the Military Dep'ironent Secretariesand the Chairmanof tihe Joint Chiefs of Staff 111-13 Policy makers in the Departmen.' of Defsnse should be acutely aware of the necessity of using forrmal communications channelsjot promulgation of policies and procedures. 124 VI. SELECTED AC(MUISITION REPORT The Selected Acquisition Report (SAR) system is a mangement tool for reporting in detail the original and c~orrcnt estimates of program costs, schedule and performance to top management, and for n't.•suring changes in these factors. The SAR is applied to major development sysem-. Its application has extended from about six programs in January 1969, to some fifty six programs in .Isnuary 1970. Originally intended as an internal management tool, it is now used oil tnirty-four systems for reporting to Congress. SARs are submitted quarterly. Efforts are in progress to collect actual contractor costs through the Bureau of the Budget approved Cost Performance Report, to be used in connection with SARs. To date, efforts to collect accurate data for the SARs have reportedly not been very successful. The basic approach to the SAR is the establishment of a baseline of estimated costs, schedules and technical performance, and the subsequent measurement of the present status against this baseline. Unfortunately, both in concept and in actual practice, baseline reporting in the SAR has led to distorted and unreal use of figures, and a misplacement of management emphasis.* Successfully predicting the course of development of a new weapon system is uncertain at best. The long period of time involved introduces unpredictable changes, as outside events and circumstances shift during the five to nioe years it usually takes to acquire a new weapon. The development process itself contabis hidden unknowns. The original estimates of cost, schedule and technical performance of a weapon system can be made with considerable skill and with total honesty, but; they remain only estimates, tle worth of which can be determined only by the future unfolding of events. The SARs tend to treat the original estimates as accurate predictions aod to measure subsequent events in the development against dte standard of the original estimates. There are two serious consequences of this procedure. Perhaps the most serious consequence of1 the present SAR system is the tendency to di'-t attention from the important objectives of the weapon system and focus it on the wrong issues. The overwhelming concentration now appears to be on maintenance of the costs ai.d schedule within the original estimate. Concern with the quality of the weapon systs.,n and its ability to perform an essential mission are not presented in the SAR. Management based on the SAR is susceptible to permitting excellence in a weapon system to be equated to remaining within the originally estimated cost and schedule, and failure to be equated to cost growth or schedule slippa:le. Inhibition against change is the second serious consequence of the presenI SAR system. Attention is sharply focused on minute changes in cost and schedule, both in the Department of Defense and in the Congress. The SAR report contains detailed explanation of any deviation from the original estimale. Thew explanations i. turn generate further detailed examination of the deviations by the Department and especially by the Congress. All of this has led to an understandable but nonetheless undesirable r.gidity on the part of the project manager to stay as close as possible to the cost and schedule as originally *Sue Cost Estimating Section in Chapter 11. 125 estimated. Careful management of cost, schedule, and technical performance is obviously a highly desirable feature in acquiring new weapon systems. The SARs, however, tend to distort this desired feature into inflexible management and a tendency to regard any change as inherently bad. Change, instead, should be regarded as a desirable feature permitting the flexibility needed to adapt to changirg circumstances and to alter the program when the originally estimated baseline has been proven to be in error in the light of later experience. In summary, the SAR approach ascribes an importance and prophetic accuracy to estimates that simply do not exist. Estimates must be recognized for what they often are educated guesses as to what the future holds, The SAR has tended to shift the objective from that of producing the best possible weapon to that of maintaing a set cost and schedule regardless of what experience and later events show to have been the wisest course,* 111-14 The Selected Acquisition Reports in their present Jbrmiats should no longer be used as Inlanageln•elt louts. VII. THE JOINT CHIEFS OF STAFF DECISION-MAKING PROCESS The decision-making process of the ýoint Chief%of Staff (JCS) is highly formalized. It is a system based not only on coordination with, but also on concurrence by, the Military Services. The Flimsy-Buff-Green System (so called because the first draft was originally on onion skin, the second on buff-colored paper and the third oa green paper) is a negotiation mechanism designed t- exploit every opportunity for compromise and resolution of disagreement. A JCS action may be initiated by the Secretary of Defense, the Deputy Secretary of Defense, an Assistant Secretary of Defense, a Unified or Specified Command, a Military Service, the Chairman of the Joint Chiefs of Staff, or the Director of the Joint Staff. A normal JCS action - not involving a study - takes about three weeks to process. An -iction officer from the Joint Staff is appointed for each action. His immediate task, after receipt of a directive, is the preparation of a Flimsy, the purpose of which is to develop an approach to the problem and to resolve as many divergencies of view as possible before the formal phases of the process are entered. The action officer may either write the Flimsy and send it to the other Joint Staff and Military Service action officers for comment, or lie may call a meeting of such action officers to discuss the problem before writing the Flimsy himself, or may request submis.,ions from the other action officers. Once prepared, the Flimsy most be sent to the other action officers, after which a *S.e Rccomm-cndaton 1-I3. 126 period of 24 hours must be permitted to elapse before the scheduling of a meeting of the action officers. After all differences are resolved among the action officers, the paper becomes Buff. The Buff must first be coordinated with the Joint Staff Agencies, and changes by these Agencies are published as an appendix to the Buff report, The Buff is then forwarded to the Military Services where it receives wide circulation and the attention of more senior officers, the "planners". The Joint Staff action officer is responsible for the Buff's coordination and if there are no dissents by the Military Service "planners", the paper moves to the next phase and turns Green. However, if any Service dissents (a dissenting Service comment Li called a "Purple"), the disseni must be circulated to all the Military Services, and unless all concur and the differences are resolved, a "planners' meeting" must be scheduled. The "planners' meeting" is at the senior Colonel level and is chaired by the Joint Staff "planner," usually a Brigadier General. The Joint Staff action officer having the initial responsibility may attend this meeting, but may not participate unless specifically requested by the Chairman, If differences can be resolved at this level, the paper is rewritten and the Buff turns Green. Where differences cannot be resolved, the dissenting Military Services prepare formal statements of nonconcurrence which are attached to the paper. The Joint Staff action officer who originated the report must then prepare an originator's consideration of the nonconcurrence(s) which is also attached, and the resultant package becomes a formal, numbered JCS green paper. At this point, the Chairman of the Joint Chiefs of Staff, or tie Director of the Joint Staff, may request a briefing, and when changes are suggested by either, they too are appended to the Green. The Green then goes to the Operations Deputies (which consist 'if the Director of the Joint Staff, the Deputy Chief of Staff for Military Operations of the Army, the Deputy Chief of Staff ,a Plans and Operations of the Air Force, and the Deputy Chief of Naval Operations (Plans and Policies) of the Navy). If, when the Operations Deputies consider the paper, they can resolve the disagreement, they approve it and remove it from the Joint Chiefs of Staff agenda; and such agreement constitutes approval by the Joint Chiefs of Staff, unless the Operations Deputies consider the subject of the paper to be one of major importance, in which case they may send it to the Joint Chiefs of Staff, If agreement is not reached, the subject goes to the Joint Chiefs of Staff. The Joint Chiefs of Staff themselves may approve a report as written, approve modifications, return a report for rewrite by the Joint Staff and the Military Service staff planners, or disagree and forward it to ,"e Secretary of Defense. In the latter case, the Chairman of the Joint Chiefs of Staff c. .Jmarily prepares a covering memorandum explaining the nature of the disagreement and, perhaps, his own view. Several procedures are authorized to expedite the process in certain cases. Under the standard procedure described above, the Buff phase may be omitted and the Flimsy processed directly to a Green if (1) there are no substantive issues in the report, and (2) the report is urgently required. Memorandum of Policy 97 (PM 97) permits actions taken on JCS matters by the Joint Staff to become decisions and to be implemented, provided that (I) actions are unanimously concurred in by the Services and the Directors of the pertinent Joint Staff Divisions, and (2) during the five days following submission of the report to the Joint Chiefs of Staff, no member of the Joint Chiefs nor the Director of the Joint Staff requests consideration of the matter by the Chiefs. If all involved agree, the report is not scheduled 127 .. .. .... for anl agenda, but is instead turned Green, with the covcr carrying a datte oji which the report will automatically become a decision, It', prior to this date, a request toe conisiderationi should be made, the report will be pitt oil an agenda. Onl a mattecr of urgency whic[. is not sufficietitly substanutive to warrant consideration of the Joint Chiefs of Staff, at1)1101vote may be empttloyed. At the time of tile vote oil tile Btuff, thle Services may indicate their willingness to use atphione vote instead of a formal meeting, and if there aire no nonconcurrences during the phsste vote, thie repiort becomes at decisioni. Mlemnoranidumn of Policy 133 (PMI 133) authorizes (lie Chairmnal of' the Joint Chiefs of Staff to lak~e actions for tile Joint Chief~s(If Staff atid to inform them onl (1) matters invol, ntg operationis of ttte forces where it decisiont is urgetnt and lttle does not permit foirmnal consultationi with Ithe Chiefs: (2) mat tees on which Joint Chiefs of Staff policy, plants, procedures, or goidance has beentpreviously established; (3) mnatters oil which tile "corporate'" views of tile ;ohit Cttifs of Staff ott atsitnilar problem are kniown to tile Chairman of tile Joinit Chiels of Staff; anld (4) mtatters n((I tmportant enough for Joint Chiefk of Staff consutltationi. PI' 133 also authtorizes the Directors of D~ivisions of the Joint Staff to) issue intstruttcions fit(the niamie oIf the Joint Chiefs otf Staff wlticlt are !in accord with) Joint Chiefs (If Staff alprIoved phins, policies, an~dprtcedutres. Whtile aitlmajoreity of the decisionis mtadle by thle Joint Chiefs of Staff emrploys (oti of tile alternlate decision methods, coilten lillis issues follow tile Flimisy-Buff-Green routec. Thle use of the P'M 133 alternative reached a peak fii 1966, arid hias since steadily declined in both absolute number oh issues and atsit piercenitage of total issues. The Flitnsy-Butff-Grveet procedumre is ponderous an~d slosv, bitt its most serious deficiecimy is the incentilve created folr uniainimit y, complhromlise and imuitual accommilodationl of the views oIf tile Military Services. So stroitg lire. tlie pressures for utnaniminity Ithat fitt 1969. the Joint Chiefs oIf Staff' were unaimiious5 ((il all tutu cigli -tentltis (If oIne percenlt otf tile issuies conisidered , an~d!in 1966, 1967 and 1968, the Jo((int Chiefs ((I Staff split oii ttnly two-tentlls (If Our Ilerceit Otftile issues considered. The process militates againt (iste likelihood of the Joiint Chiefs (ofStaff clearly faciilg-op to difficult lind puAteiltially divisive issues. The repetitious, coiuiuittee-type netgotiaitionsa tenld to reduce issuts to a level of' complromise whticht will citIler tivlld thleptottential coinflicts; or soubstitutIe a solutitonl that call be acceplted (oI a q~tid-pro-quio basis. Loustin the process is the tdvanitagr of' a Jointustaff, which, ideally, should be able to provide a more nlationlal viewpoint( than staffs whlichi are Service-trieiited. This is because tile ptroceduire itnjects the joint participant intto the process its little tmotrethiaii ativtrdinittor of (imeviews of the severatl Sesvices. 111-15Te1tt Iill.Il-flult-Grelel dei'tv~io-Imlllihg pIrocess of thll Jtoint ('/icfiv oj Staff should be effijijnated. 128 111-16 A decision-making process br the KCSshould be established on the pattern of the Development Concept Paper (DCP). Inputs should be requested from the Military Departments, as required, only for th'e initial draft of the position paper, and the Military Services should participate In no other way in the internal decision-making process of the JCS. The draft position paper should contain all known feasible alternatlves;and each level in the process should be required to review for quality and sufficiency, and indicate by signat'sre and designation the recommended alternative, all to the end that fidelity to the originalissue be maintainedand the extraneous pressuresfor unanimity be reduced. VIII, ACCOUNTING PROCEDURES The accounting methods of the Department of Defense have traditionally reflected cash flow and pressures commitments, which tohave sufficed for management needs. There have been increasing for a change accrual accounting methods in the Department. !!::Tlhose [•? S~those Accrual accounting is more costly, and with thi exception of a few special cases, provides very little benefit in a non-business organization. activities such as (fie Military Airlift Command, which operate oil a working capital fund and which allocate costs to establish a charge rate. or tariff for services, should use forms of accrual accounting. 111-17 Accrual accounting systems in the Department of"Defimse should be con'lned to Service activities which operate uinder stock jitnds or industrialf./undo', antd which art, required it establish service charges which reflect total costs. IX. CONTRACT AUDIT, INTERNAL AUDIT AND INSPECTIONS On April 30, 1970, the D)epartment of Defense had seven separate audit organizations with a total complement of 844 military and 5,688 civilian personnel wnd annual budgeted expenditures totaling over $90 million. These organizations and their personnel were as follows: INTERNAL I. OSD - Director for Audit Policy 2. OSD - Deputy Comptroller for Internal Audit 3. Defense Supply Agency (DSA) - Auditor General 4. Army Audit Agency S. Navy - Auditor General 6. Air Force - Auditor General Sub-Totals CONTRACT 7. Defense Contract Audit Agency Civilian 15 101 129 839 519 545 7148 3,540-5,688 129 Military -- 2 -- 81 56 705 8-44 844 'The intlernial auiditiing effort at the 051) level is carried onlby two different groups, bo0thi within the Office of the Assistant Secretary of Defense (Comptroller). One groupl, the Office of lDiector for Audit Policy, reporting to the Deputy Assistant Secretary (Systems Policy :and Information), has%responsibility for developing ;aid providing audit policy guidance for all audit organiviations in thie Department. As second group, railed thle Office of the Deputy Comptroller for Internal Audit reports one level higher inl thle organizatlion anid provides a quick audit response to matters of special interest to the Secretary of Decfense and his staff. This second group is also respionsible for audits of' programs, iaid procedures which inivolve mnure than one military service or agency. foll audits ofl tile MIilitary Assistance P'rogram, aid for auditE of certain utither Department coinponeints. The audit groupts of the three Military lDepart neilts (Army. Navy, and Alir Force ) andt of the I)SA tire largely auitonomous. There is relativety tittlte initerchange or contlact auloiig these internal audit groups. The hiring, training. and assignmenlt of audit personnel to specific tasks tire hanildled by eacti Military Departenllit or Agency with at lillini ur of, guidance or directioni fromt other groups. The inlerlial audit organiizations of (the Arniy aindilte Navy are organizled ailong similllr linies, with relatively targe regionial, area. or residrtti offices Incatled throuighou t tile United States anld olverseas. The illternlal auditors of' tile Air Force, unilike tholse hh'fithe Army aiid (tie Navy. are station~ed Ii numlierouis air ba55se :ill11 inistllatlionils as residlent au~dito~rs.This results initawile dispersionl of audit plersonnllt ill smallal relatively p'rilarien't grouhps called Auditor Geiieral Residenlt Offices IAGROsi. typIically conisistinig oll five orCsix plersonis. 'Die Defenise Supply Agency ( t)SA) iallaliges flie plrhculreiieint illut Iistvitlllon Supplies Collulllnl to) all thle Mtilitary lDetmrtmelits andi D~etense Agencies lid peolvidets relatedt conitract admiiiiktratilln services, The personniel lit the hiiieriiai audlit lorganiietilin lfIt SA lire located at hmajor suppllly ceniters, depots%,andt suppolrt or~ service centers thirouighouit lii. Unlited States. Ttie D~efenlse Con tract Audilit Agency t DCAA), whlichi emplloys uiver half the 11111it personinel ilil the Deparltmlenit. is responlsible~ lor performiiing cloniriwt aulditinig ilr (ite lDi'artleielt Iii so ditniig, it pro~vides accouniitinlg Il inthlancial Iadvisorly services regalrdinig contlralcts told1 sublconltracts Ill all tDelartlnellt clllllllllilts eiigagedill prIlocuireiment mlidi conutroct ldmllilisttilsu.on 'till'-lCAA lilictillli as a virtually auitonomouiils olrganlizationl, beinig reslmnillst Ilor flie hiirinlg, traininhg, slid dircclioui of' its plersonnllle, suibject onily (ll pollicy and budtgetary collitrols of' thie 051). Undiler tile plresenit D~epartmientl lrgaliiina Iio, hilly tile I)CAA has tile responlisibility tol auifilttte reco~rds If defense coniitracto~rs. 'Die )C'AA aliso conldulcts anisill'u cln~racltur recolrds for eightleen otheIIr golvernmiientall agenlcies o111a relimbulrsablec basis, Applroxsimiately' 14 ilerielt of' till(! tlotat efflort tffie i)CAA is expuendiedtIor itiese agencies. Inl addlitionl ill the intlernls audit grouip~s, there Ire various Iotier groupils whoil perforim Ilidit wolrk. 'file largest oft these are tile initernal review groupl~s at Army and1 Navy inistallationls. li~e peop~hilemec part it' tile sliltt oII flei inistallationl commani~lders. rtiey act as lrlllllle'siioliers tlor thle commliaindte's alid pertforml a variety lit lottler funlctionls. in~cludinig, in utiity rises, audlits ut' payrolls iand iilllalhlrollriatellftuiids. It is dhtiffiiult tol determinie exactly who~ is engaged fil suhl illternal review activities beciuse classificationls slid nomilenlatreslr. vary. but it is estlimateut that morevi lilall 1,600 personls tire so enigagedin filite Armiy andtftle Navy. )Ill the Air IVorce liere is nlo separate giii1111 with reslhillsibility for 130 4 internal review, as there is in the Army and the Navy. Internal auditors in the Air Force perform not only the functions normally associated with those of the internal auditor, but also those of the "internal reviewer". While certain of the duities of internal reviewers in the Army and the Nay"- are to some extent similar to the lower-level duties of internal auditors, evidence does not indicate that in practice there is any substantial duplication of audit work. The Inspector General organizations are concerned prinarily with military readiness, morale of military personnel, condition of physical facilities, investigative work, and compliance with established policy or regulations. Although some aspects of management auditing are performed by the Inspector General organizationss, such reviews represent only a minor part of their mission and lack the depth of those made by the internal auditors. It appears that the Inspector General reviews do not constitute a significant dupl!cation of the work done by the present internal audit groupl. The procurement management review .*roups are composed largely of specialists in procurement and are concerned solely with the Department's procurement process. They report to the procurement policy' officials ii. OSD, the Military Departments, and DSA. As in tse case of the Inspector General organizations, the work of the procurement managenment groups does not appear to result in significant duplication of tile work of the internal auditors. A. Nature of Auditing Effort In the DCAA, the auditing effort is confined almost entirely to the cost accounting and financial systems of contractors. This is in marked contrast to the kind of auditing performed by the interna; audit groups of the Department. These groups are concerned largely with operational or management type audits in which tie auditor reviews factual information concerning the manner inwhich a given mission or task is being carried out. Tie terms operational auditing and management auditing have come into conlinon use to describe the extension of internal auditing to all operations of an organization, rather than nmereiy the financial and accounting areas. Internal auditing as a concept was originally limited to tihe review of financial matters. However, It has been expanded to include tile independent appraisal of all operational activities in order to provide nuanagement with Information oil the effectiveless and efficiency with which such operations are being performed. This expansion of activities has become too broad and should be restricted to the audit to determine efficiency of management. Reviews such as those of the operati,,noi readiness and performnance of helicopters in Vietnins should not be pcrformied by thei internal audit function, but are properly assigned to tlse operationa! tvs( and evslaalion fwi.ctious. Determining tlse effectiveness and efficiency of business procedures within the Department should be the responsibility of defense internal audit, However, operational effectiveness should not be within tile scope of their activities. Tise function of program and force analysis, operational test and evaluation, the inspectors general and tlse defense internal audit should remain Selsarated. B. Prob!,imni Areas It was found that tlse I)epartment audit groups are performning their assigned minsions at 131 clearly acceptable levels, In general, the groups are staffed by competent people who are sincerely interested in doinga creditable and constructive job. Their audit findings appear to be reliable, and their suggestions and recommendations are of good quality. They serve the Department and its various components well and contribute to improved performance, the value of which appears to exceed substantially the cost of operating and maintaining these audit groups. The above general evaluation does not mean, of course, that there is not substWitial room for improvement. In an environment of significantly changing technology and conditions, it is understandable that this should be so. There are a number of factors, particularly in the irea of internal auditing, which are preventing the auditing function within tile Dol) from reaching the level of efficiency and competence that we believe call be obtained. The internal auditing eff'oet at OSD level (i.e., tit tlhe level above the Military Departnmeits and Defense agencies) is fragmented and lacks sufficient prestige to provide the coordination, audit coverage, and leadership to achieve its full potential. There is insufficient uniformity of audit policies and procedures, and iniplenlintatio., throughout the Department ot Defense. in their There tre insufficient career opportunities for civilians it professional capacities at all levels of intternal auditing, more efficient education aid training There is substantial opportunity for inproved ann of professional audit persomnel through timeuse f joint facilities and programs. There are Insufficient specialists with experience in EDP auditing and statistical sampling in thie internal audit groups. In general, Internal audits, both operational and fimancial, take longer than necessary because of too extensive investigation and study of timeunderlying facts. While a single internal audit agency in the Department of Defense would permit a more efficient supervisory and nanagement structure, provide more attractive career opporuunities for professional personnel, and provide better coordination and control for tile Secretary of Detense, it is also very desirable to coutitue to provide the Military Departments with an audit capability of their own to monitor tile attainument of their own On balance, it would be nreferable for internal audit organizations of the Army, Navy and Air Force to continue to provide audit calpalbility to their own Departments. "objectives. In addition to these fundamental organizational problems, there is substantial room for improvement ii other phases of the Internal audit activities. A military officer is placed in a difficult position when lie is asked to evaluate and rerdport on an activity under tile command of a higher-ranking officer. It is also desirable to provide more attractive career oplportunities for professionmal civilian auditors to imlprove she likelihood of attracting and retaining highly competent people. In a number of OSD and DSA internal audits, the actual time expended exceeded tile original time estimate by as much as 50 percent to 100 percent. The audit staff should be 132 required to prepare more detailed and realistic timse estimates and should be held accountable fur variances therefrom. One notable orni'sion from audit coverage is the activities of major lieadquarters staffs in the Military Services, which have not to date been subject to audits. The Directorate of Inspection Services (DINS), olrganizationally located inl the Office of the Assistant Secretary of Defense (Administration), has thle responsibility for inspections or surveys of tilc operational and administrative effectiveness of the Office of the Secretary of Defense, the Joint Chiefs of Staff, the Unified and Specified Commands and the Defense Agencies. DINS also hal; responsibility for criminal investigation and coutster-intelligelsce activities withins the same organizations. Their activities do not include financial and accounting audits. For many years, internal auditing Ils the Department of Defense was limited largely to financial and accounting areas, and therefore it was appropriate that thle internal tudlt organimfltons report to the Comptrollers. Now that thleemphasis of internal audit has been extended to management areas, it would be more appropriate Iin thle Military Departments for these Internal audit organizations to report to it level of management with broader scope than thtat (If thle Comptroller. Tue internal auditors of tlie three Military D~epartments feel compelled to go to great lenlgths to be certailn of tlie frequency of occurrensce (If atparticular type (If eirror or a specific deficiency inl a system. There is a possibility for rather substantial reductions in audit time, if tile manlagemenclts (If the Military Deplartmenlts would be willing to accept thie results of reduced chlecking and fewer examples of error situations, While thle Navy has mlanly plreprilnted auidit psrogram~ls, which it uses for tlie m(ost psart In referenlce material, the Army and the Air Force Ii manS~ycases prepare inldividual audit p~rogramns for eachl au(dit, evenl thloughI tile function~ ill be andited is comonll~ to many locations, Tile development (If su~chprogranms Is time-conlsumling and results Iin duplication onla service-wide basis. ///I-18 A in Iternial audit organization s/could b:, cstah/ishc'd at the 0OS1)/1(,el /headed hbya hitgh/v qua/l/cld civii/an audit adminisctrat or ce/cc shocld rcporl ito the JDcpuf c'vSc'crc'alr' of Dejnc'f'c(Eca/nation) f/hroug/c t/ie Assistantii Sc'crc'arcl of] lDeftiiisc (Comupt ro//er). 7711.P(Ccc of/icc' whcc/h/ liicglc he' ca/lled thec Offilc' of /)fi'fdsc' Intefrnial A ((it/, c/oticldcl uiccdc' f/l pcresen'ct fuiicf ions and st afl.vfij Ii fc' Office' of f/cc'Pi'c'if jiltfc AudictiP'olicyi, thIe D('/i(l' Cmtou/)ccc/' fu~r linternal A W(it, ancd thec D)ircefidctrat uf l~i/ic'cf (oi Se'rvcfccs nowccex/st/ing ill f/li', Offie' of fI' teAssisfctan t Serrei'Ifccd of lDc'iccsc' (A dcldlliscraficn ). Iic add ition to f/he rc'.poccisihi/itic'. cc t/he aucdif gruccps hc'bcg c'cccic/aecd, t/he (nelw Officc' of] JDcfc'ccnc Intcrntal ?Icdit shoculd dirc'ct its c'ffirtsc toic ccrcl: * ~~~~~~('Xcisindg * (a) A-icking mcodr'extc'sivcce rc'c'cccsofclf/Ic mnnacecr in cch/ic/hf/cicc f'erncal acccif ing ficincliuc is being carried coucby f/hc interncalacucdit orgcanizccticonsocl i/c AI/if arc' LDi'/adfddi'c s l)c'fi'ccisc Agcnisc''.c' ~~acnd (h) Mak/icg more icctrrccc aucdifs of' hnlcr-S'rcic'e icc'ic'ific'. ancd lhc/ifl'c (Cownlucccc/. . ......... . ....... - nitb the use of its own psersotnsel to a itune/ greater extent f/san is presentfly being done. Jib/V9 T/sr head of each Internal audit group should be a cieillan, and the lnternsal auditors of rac/h oftf/e audit groups should be primarily cit//lan rather that; military personnel, The head of each departmental internal audit group should report directly to f/se Secretariat of' his respective Department. 1/1-20 A single f/srtnal listernal audit editcation atsd training program wilthins the Department shosuld be Iitiltated by the nsew Office of Defietsse Internsal Audit, the executifots of which could het dels'gsated to;one; of f/scMlli/are, Deparitmsents as executise agenst. 1/1-21 7/se followsinsg tssdif isafnis lis;itsternsal asudit shsould bei tmade: ¾ - R1, (a) T/se gsildellines fre- determisslia ots of ssselngs snider i/se Cost Redscitotn Programt to permit such ds'tertminsations to be it5'd' withi grestter rellabillte; ~~~~shosuld he clarified ansdImptrovred (is) A/e protsosed isnewOffice of Ds'fetsse Interenal Audit sisoulid develop Im;provesd smet/sods fJsr busdgetinsg ansdconstrollinsg t/se tittse siti/ized on lIsteretnal asidits; (c) EAclsasidif grosip should expansd Utsausdit cosserage to Inclusde f/se ssfiiettes of sta/oe hseadquiartersstajffs at f/se departmsesntal /sev'l; (d) A sidit tests an;d Itsvsestigastionss s/soulsd not be exi itided lie 'otd tile ohits se/sere fIssdiigs are ssif~is'is'i to ides; ife,sigisifiesost prbemssrss ansdto ssspp'or, reasonsabile cuonclusioslss as tosthseir causses aind seieousisness; uand (e) Stansdard ausdit peograsiss or stsodsiles sisosld bsedev'elotped ansdsused fosr eomtsssos asidit areas. Ti/e;' slosild lbeflext/sic enouighs to /ermttit ttodilfatiotss is;f/se field prior to thse commtetncemetts'if asidii assignmen'tsts. 134 i CHAFPER IV MANAGEMEN'I OF PERSONNEL RESOURCES 1. INTRODUCTION The success of any organization is determined in large measure by the qualifications of the people engaged in its activities, particularly by the caliber of the personnel in positions of top responsibility. The Department of Defense is no exception to this general principle, but the effective organization and management of its operations is made more difficult by the very large number of people on its rolls - both military and civilian - and by the fluctuations in these numbers to meet changing requirements. On June 30, 1969, the Department of Defense had 4.8 million people on its rolls, of whom 3.5 million were military and 1.3 million were civilians. Military personnel is made up of a nucleus of career professionals and a much larger group flowing into the Armed Forces for relatively short periods of service and then moving out again into civilian life, The nucleus of career officers and enlisted men must provide the capability, continuity, and stability needed during periods of peace and at the same time be ready in sufficient numbers and in professional competence to fill the principal leadership positions in time of war. Because of their composition and their mission, the Armed Forces must direct a major part of their effort to training, education and development of their personnel. This means training for tlse parade of short term personnel flowing in and out of the Se'rvices and continuou. education and development for the career professionals. Furthermore, the skill requirements of the Armed Forces are comstantly changing. Advances in technology are reflected in greater soplhistication in weapons systems. This means that better educated and more highly skilled personnel are needed to maintain and operate the machines and equipment of modern warfare. If. CIVILIAN PERSONNEL The DepartmeWt of Defense is a large employer of civilian personnel, who may be classified as fellows: (1) White collar employees, the large majsority of whom are included in the General Schedule (GS) Civil Sesmvice grade structurc; ,2) Blue collar Civil Service employees; and (3) Indirect hires, consisting prinmarily of foreign nationals employed abroad. There are two overriding management problems connected with civilian employees of the Department. The first, and most significant from a management view,-oint, is the rigidity of the personnel system. By far the most troublesome effect of tile rigidity is at the higher levels, or supergrades (CS 16, 17 and 18), of whom there are approximately one thousand in time Department serving as administrators, managers and scientists. Position assignments and 135 grades of these key personnel are subject to approval of the Civil Service Commission, based largely on written job descriptions which are keyed to such factors as the number of persons supervised and the budget of the operations supervised. Esforts to adjust or change job assignments of supergrade civilian personnel are subject to interminable delays and most frequently, to rejections. In such a large organiztion as the Department of Defense, a dynamic management structure requires a continuous review to adapt to changing conditions and to improve management capabilities. This requires, in turn, a flexibility in utilization of senior personnel which currently does not exist, The existing management inflexibility to deal with senior civil servants is incompatible with efficient operations of the Department of Defense. Increased authority for the Secretary of Defense over senior civilian personnel i; essential. He must be able to match individual talents with position assignments, if necessary, based on his judgment of the importance of a job and regardless of the scope of supervision or size of budget involved. He must be able to reassign personnel whose job responsibilities have grown beyond their performance capabilities. He must be able to move younger personnel into more senior positions on the basis of demonstrated capab~lities without being so constrained by seniority requirements. Not even the best organization and management procedures will improve effectiveness of defense operations unless qualified personnel are matched to the requirements of the jobs. The second major management problem connected with civilian personnel is the utilization practices for civilian personnel in the Military Departments, which employ some ninety-one percent of "White Collar" personnel in the General Schedule (GS) grades of the Civil Service In the Department of Defense. All too frequently, non-combat activities in the Military Departments are headed (or commanded) by a military officer whose immediate subordinate is a civilian. This one-on-one relationship (or two men for one job) is predicated on the fact that the military officer who heads the activity is subject to normal military rotation - every three years or less - and his civilian subordinate remains to provide continuity in the direction of the activity. Often the particular activity is technical or specialized in character, with which the military officer in the number one position is likely to have had no prior :xperience or famili ity, necessitating increased reliance, at least initially, on his immediate civilian subordinate. The incentive for the civilian subordinate to excel, however, is inhibited by the fact that he cannot, under this system, aspire to the top job in the activity, for it is reserved for a military officer. While the need for military billets to which to rotate military officers from hardship or hazardous assignments is recognized, as is the desirability of providing an sfficer with broad exposure to Service-directed activities, tMtere is substantial room for improvement in this perso,=-! -tructure. All activities which do not have an essential requirement for mmiLry direction at thl head should be identified. For at least a substantial portion of such activities, civilian direction from the top should be made at least optional, and to the extent the requirements of military rotation policies will permit, should be converted to civilian positions. This will result in manpower savings as well as improved civilian personnel incentives. IV-I The application of Civil Service rules to "'supergrade"positions in the Department of 136 IDefsen should be changed to provcide the Secretary of Dcfcnse with mnoreauthority .tbr pclacemen'ct. rotaticon, promotion and compensation rates in these grades. IV-2 7those act ivities h, the Mfilitarly Departments now headed by a military officer with an jomnediate civ'ilian subordinate should he sicpetved to determine the necessity ol military direction of the activity, and where no such requirement is jocnd to exist, the positionc at the head of the activity' should beccirilianized or made optional for a Inilitary officcer or a ci'iflian to fill, and dual sltaffing should bcepermittedl orclj iccexcep~tiomcal cases. Ill. MILITARY PERSONNEL a. General The accjcisitioc :and retenction of officers and enclisted men incthe Armed Services is adversely affected by the negative attitude of siginificanit segmnents of the p~ublic towards national defense and military service, There is an openchostility toward the military on many campuses. Thle ROTC and cacmpus recrruiting by tice Ar'ned Services and defense-related hindustries have been prime targets. At a numnber omfuniversities, facculties hcave voted to strip ROTC of its academic staniding anid to relegate it to the status of ancextracurricular activity. It has been forced to withdraw entirely incsome inistances, The :Impact oif this accinticilitariscc is not concfinced to the uiciversity campus' nur to thce traincing acndaccjcisiti~o Of Officers. It directly affects recruitincg activities at all levels. While lice total inunmber of' youncg iccei accdwomcen wico ccccyhcave beenideterred from military service cannuot be ascertainced, it is unidoubtedly signcificant. At lice root of miuchc of lhis prccblemc isdisencclantcnent - evenc bittercies:, - with respcect tco thce Southeast AsiancWae. It would be unwise to assume, hcowever, that withcout positive steps to oiverecome anti-cciilitccry feelinigs, accencdto tlcat war will necessarily fully restore respsect for moilitary service. Officers anid enlisted mceniare rotated amonog ccssiginmecits at mouch tocof.-quceiii intervals. It is clear froni the evidencce that the rotactionc practices whcichc have beeni followed result icc (a) excessive and wasteful cost. (b) inefficienccies inc mcanagemcenct, anid (C) difficulty in] fli:i teslpocsibility. A staff study of Army, Navy acndAir i'orce promnotionis to Genceral Officer acndFlag Tank icn1969 revealed this situationi: thece were 174 officers in lice group ancd thceir average service was 24 years; these officers had beenc givecn 3,69S assignments, or an aver,ige of 21 per manc: !ihe average duratioin per assigucuecit was 14 monicthis. Looked at ancother way, lice average ofticer had spent: 8 years iccOneraticiral assigcccents, 5 yeacrsincService Sichotls acid oilier 137 -~z-: educational assignments, and II years in Staff assignments. Although this is a relatively small sample, there is no reason to believe that it is not reasonably typical of the prevailing career pattern of all military officers. It is recognized that some assignments must be of limited duration: for example, operational assignments to hardship or combat duty. School assignments also are of limnited duration as these are determined by the length of the course. However, in the case of the other assignments, there are no such inherent limitations. The driving force in almost all of these assignments (combat assignments excepted) is to give the officer a wide variety of exposure as an aid in his training and development. The problem is that the requirements of the job seem to be secondary to the career pattern which has been mapped out for the officer. This system of rotation of officers leads inevitably to deficiencies in management. Officers assigned for such limited periods simply cannot acquire a knowledge of the work, become familiar with the qualificretions 6f the peopl,, make plans, set goals and push the work ahead. This system of rotation not only fails to provide management and leadership needed on the job, but also has deficiencies in accomplishing its stated purpose -- the development of the officer himself. Men ar" lot developed by being observers; they must have responsibility to assure growth. From tihe point of view of the position to be filled, as well as in the best interests of the officer himself, his job assignments should be of •mffitesnt duration so that lie can become thoroughly involved in the work and be fully responsible for results. There is iierit in giving to officers opportunities in a broad spectrum of military responsibilities. Nevertheless, under existing conditions in which technical or professional training in areas other than commanding men have become of increasing importance, the Services' current rotation policies and rates are counter-productive. In the technical and professional areas, the rotation rules often call for rotation of ais officer out of an assignment at a very critical point in the job lie is performing, in addition, when aii officer is rotated out of a technically complicated job, his replacement often either comes at tihe time of rotation or later, and therefore, does not have an adequate opportunity to acquire the necessary background before his predecessor leaves. One ;olution is to change the rules for career advancemnent, rather than try to conformn the requirements of the jo!: to all arbitrary set of rotation and promotion rules. rhis is particularly true in the technical and professional areas. IV-3 Specialist careers should be established fbr offieers in such staff, technical and proftssional fields as research, development, intelligence, communications, automatic data processing, and procurement, 138 IV-4 The duration of assignments should be increased, and should be as responsive to the requirements of the job as to the career plan of the officer. Officers continued on an assignmentftr these reasons should not he disadvantagedin opportunity for promotion. IV-5 In technical assignments, the officer•s replacement should be assigned to the job sufficiently in advance of his predecessor's departure to be ready to take over without loss of momlentutm whenl he leaves. c. Promotion Officers Opportunity for promotion provides the motivating force and greatest incentive for the military officer. The following table shows the numbers of military officers in the Services by grade. Officers on Active Duty - December 31, 1969 Grade 0-10 0-9 0-8 0-7 Sub-Total 0-6 0-5 0-4 0-3 0-2 0-1 Sub-Total W-1 - W4 Total Commissioned Title Number Army-Air Force-Marines Nav General LU.General Major General ) Brig. General ) General and Flag Officers Colonel LI. Colonel Major Captain lst Lieutenant 2nd Lieutenant Commissioned Officers Warrant Officers and Warrant Officers Admiral Vice Admiral Rear Admiral Rear Admiral ) Captain Commander Lt. Commandei Lieutenant Lieutenant 6g) Ensign 40 142 1,156 18,181 43,993 69,987 116,859 67,917 58,89 377,168 30,783 407,951 Young officers who meet the standards move up fairly rapidly to Grade 0-3 (Captain Lieutenant), Progress above this level is complicated by several factors: (a) "Regular" officers have a better chance of promotion than "Reserve" officers on active duty which is explained by the fact that the better qualified "Reserve" officers have already been transferred to "Regular" status; and (b) the numbers needed in Grade 04 simply will not permit the promotion of a substantial proportion of Grade 0-3 officers. (The number of offi'ers of Grade 0-4 and higher is limited by statute.) 139 The progression to Grade 0-5 and on to Grade 0-6 becomes increasingly difficult, and the ratio of officers in Grade 0-6 to those in 0-7 is 13 to I. For this reason, attainment of Grade 0-6 is looked upon as the measure of a successful c."":r. Not only are the numbers of officers established by legislation, but the procedures handling promotions are also set forth in the law. The Secretary of the Military Department has an important responsibility in the whole promotion procedure. lie appoints the selection board, lie instructs them as to the approach they should use in making their selections, and lie approves (lhe list to be forwarded to the President. Although not specifically mentioned in the law or procedures, the Military Chief of the Service works closely with the Secretary and has an influence on the selection of boards and the decisions made. This is particularly true of promotions to the General or Flag Officer ranks. The fact that promotions are within the exclusive authority of an officer's parent Service creates an incentive for officers, even when serving on assignments with unified organizations, to adhere closely to the official Service position of his p: - m Service on issues in which lie is involved. This circumstance can influence the objectivity of an officer's performance. The extent to which this undesirable incentive motivates officers cannot be precisely measured, but there can be no qmiuestion that many officers are convinced that any evidence of a deviation by them from their parent Service's official position will seriously jeopardize their chance for further promotion. There is substantial evidence that the Services place too mnuch emphasis on "Conimaiid" experience in promotion of officers, particularly at the higher ranks, and do not give adequate weight to the growing importance of functions requiring technical competence or executive management talent - e.g., h'rogram Management, Procurement, Rlesearch and D)evelopment, Intelligence, Communications, and ADP, etc. There should be a better balance. There is too much emphasis in the Military Services on Ipromotion by "date of rank." (There is a common saying among the military that at least the junior officers progress in lock-step.) The importance of seniority is obvious, bitl promotion opportuniities should be premised on criteria which stress pterformance and ability more, and seniority less. This is increasingly important as officers progress up) the ladder. IV-6 Proetotion Boards shouhl consider a larger proportion of candidaltes ]f)toi "helow th/i' zone " in order to encoiuragr younger ofi*c(ers of to/t aii/iti' to remnaint in th/i'servi''e, (Tii percentage so selected migh/itw(ll iivary hy gradel). IV-7 'TheSecretary of l)c'fnsh' s/iou/el hareetiore direct respotsibilitiyfJr the promotion and career mnanagemttent of eofficrs to anid within Generalantd Flag ranks, acd in the selection of' asud iuistruce'tions tiO /)romttitiohn boards. 140 1118 The Secretary of Defense and Secretaries of the Military De)partments should designate specific percentages', or proportions, of promotions in particular joint, technical, or professional fields and should establish special career ladders of promotion in special technical and professionalfields. d. Military Co t Provision of an equitable compensation scale is important at any time, and it is receiving particular attention just now for two reasons: (a) the Office of the Secretary of Defense is nearing conclusion of an intensive study of military pay, and (b) the Gates Commission issued its report in February 1970 on the "All Volunteer Armed Force," among other things in effect, contains recommendations to substitute the incentive of higher pay for the compulsion of Selective Service. In view of the comprehensive study already made by the Gates Commission, a review of the issue of an All Volunteer Armed Force was not undertaken. It should be recognized, however, that whether made up of volunteers or draftees, or a combination of the two sources, the Armed Forces should provide a system of equitable pay, appropriate benefits and conditions of service which are onducive to acquisition and retention of officers and enlisted men in the numbers needed and with the skills required, Short service and high turnover are to be expected in certain categories, but excessive turnover is sher waste, Provision for retirement pay is an important segment of the military pay package. Retirement pay provisions are poorly designed from the point of view of (a) equity to servicemen, (b) retention of qualified men in the Services, and (c) maintaining the age ratios among personnel that will insure young and vigorous forces. IV-9 (a) Military pay and other forms of compensation should be made sufficient to facilitate recruitment and retention of competent officers and enlisted personnel. Tis applies to all grades and position classifications, andparticularly to those that have suffired the highest termination rates. This should he done as a mnatter of equity, and to assure the acquisition andretention of competent military manpower. (b) The military retirement systemt should be adjusted in order to encourage retention of qualified and needed personnel, while at the same time permitting ;iilary forces to be kept young and vigorous. Among retirees, considerationshould be given to the vmrying needs of those still in the working age group and those ove.- such age. 7thetrend of increases in both the number of' retirees on the rolls and the total costs of military retirement necessitate early consideration of.the retirementsystem. e. Accession and Retention of Commissioned Officers 141 Thle Armed Forces salve somewhat more titan 400,000 officers and about one-sixthl of these art replaced each year. Thle Service Academies produce atrelatively sniall proptortion of thle officers entering the Services - inlrecent years les than 4',/,.However, these officers have been selected under rigid standards, they have received anl excellent cdumtaion and they aveliikltiy motivated toward a full career as professional military officers. Graduates of the Service Academies aire commissioned its o~fficers of the Regular Army, Navy, Moritie Corps or Air Force. They now have anlobligation to serve at least 5 years, and every ehtcouragemcrit is given to have themncontinue for a full career. The retention rates of graduates ,)f the Service Academnies are iouch higher Ithan the rates for officers who comte inl from utile, sourccs. The Reserve Officers Training Corps (ROTC) is one of the principal Sources of officers for thle Armied Forces. Over tile S-year period 1965-1 969, it produced 9 limies as many as thle Service Academ~ies and about one-Ithird of all officers contuissioned. There is atwide diversity of types of RoTC programs offered by ihe Services Time ROTC program is offered inl 353 colleges and universities, sonme of which have programs from all three Services while others have only one or twc, of thle Services represented. The ROTC program is dtivided into two parts - Sctholarsthip and Noll-Scholarsttit. Unider the Scholarsti p Plan, there is a very careful seLlection procedure, and thie candidates selected have qualifications closely paralleling those of students adimiltted Ito the Service Academnies. The Schtolarshtip progrcinn is usually fttr tour college years, buti the Arissy offers 2-year sctholarshiips laid the Air Force imms onte-, two- sandthree-year awards~. Tihe Schmolarshtip studenit receives at$50.00 umsonthly stilxud , anid, inl additition, receives tititionti tinstructiotnal fees and anlallowance for books, lie is requmired to serve at least 4 years. Faict of the Services is now authorized ltohave 5,500 ROTC: studenits otnschotlarshtips. The Navy isis looked upontiits Schtolarshipipsrogramitas a souirce tof' regular otlicersý tike other two Services otter an uliortOttity toe ROTC Schloarstiip holders ito becomue Regulars, bitt ott aseleciive basis after a period of service. Ttte Nun-Scbmslarstiip Preogrami Itas tessrigid selectioni standamrds. Ili sttmte ctolleges all situdetnts are required itt take ROTC tratitinitg dutritng. itheir first twto years, istt thleniumtber of insti tutittis with ithese mtanidatuory rehquiremientis is dieclinitng. Regardless tif wthettier tlie first twto years are mandator% otr ttptitotal, psarticiptatiotn ill the thitd and fottrthi year of isot-scluolarslimp ROTC is vo luntiary its all cases, subject tto ite accepstabiliiy ttf the inidividuial by thueMilitary D~eparitientt itnvolved. The Nuti-Schtitarsltip situdenit receives $50.00 per iothti i durintg itte lasi iwtt years tof thme 4-year protgratms. His required active service is at least 2 years. The Officers whit come inito the Services utnder the Nttn-Sctttmarstuil plait are usually coummissionied itt the Reserves. Retenitioni rates ftor these ttfficers after their required perittd of service is ntot might.This lttwer fetentittt rate, atsctompared with graduates of fliteService Academies is exphtimsed by twot factors: first, the mauinipurpose tf (liteROTC promgramts is to sumpphy limelarge ntumber ot'fjmmmimr otfficers retqtired by thme Services. a' tmttci lesser nustmber of 142 officers being needed in the higher grades; second, the major thrust of the ROTC man's undergraduate studies, unlike those of the attendees of the Service Academies, is toward preparation for a civilian career. Because it is both the largest and a proven source of officers, the ROTC program should be strengthened. The ROTC graduate would benefit, and there would be increased acceptance of ROTC on the campus, if typical ROTC curricula were modified to achieve a better balance between technical military subjects and subjects of a more solid academic content. Both the Service Academies and the ROTC program involve a lead time of up to four years in the production of officers. When there is need for rapid expansion in the uusber of officers, the Services have other programs which are productive in shorter periods. These Officer Training Programs offer opportunities for college studernts, college graduates and qualified candidates from enlisted personnel and other sources. They have the advantage of flexibility, since they cats be expanded and contracted rapidly to meet chaniging requirements. In addition to the Senior ROTC program at the college level, there is also a Junior ROTC program offered to .tale students itt 805 high schools. The Army has by far the largest such progranms. Students who have had Junior ROTC receive credit when they enroll in the Senior program in college. However, the principal advantage is in the training itself with its emphasis ott physical fitness, discipline and the development of leadnrclhip. In many areas, and particularly in the larger cities, this program offers constructive opportunities for development of young men, including those from minority groups ftnd broken homes. Total enfollment in these Junior ROTC programs has increased from 63 thousand in October 1965 to 134 thousand in October 1969. This fatter figure represents less than 24% of the tmale enrollnment of these 805 high schools, and is a very small fraction of the more than 8 million male high school students in the country. In the accessio of officers, as in other areas of personnel administration in the l)epartment of D)efense, efforts should be continued to provide equal opportunity for nsi.ority groups. Some progress has been made in recruitment for tfie Service Academies, atsd the Senior ROTC program of one or more of the Services is now offered in 15 predominantly Negro colleges as follows: Military Depar tistent Colleges ROTC EnrolhItet Army 14 5,143 Air Force 5 882 Nivy 1 67 Total 6,092 143 The problem of retaining a sufficient number of competent military personnel has always existed, but in recent years it has become increasingly serious. The reenlistment rate of Regular enlisted men in all Services combined has dropped from 50.2 percent in 1965 to 34.2 percent in 1969. For officers, the retention rates vary considerably, but for certain special essential skills, the trends are particularly serious. In attempting to ameliorate the serious reenlistment problem, the Services devote considerable attention to troop information and education programs. This is an important activity and may well merit more thoughtful and concentrated effort It it has received, In addition to strictly military training there is a need for s .tantially increased emphasis on a thoughtful program, factually and objectively designed, to raise the level of knowledge of American and world history and of our form of government. Troop be infornmation and education officers often notthis given adequate training. There should special training of the officers whoareundertake important educational responsibility, and appropriate recognition given when this tessignlmenm is well performed. IV-I In ,rder to impro cethe proess v'aiqcisitinn antd reletliomt o'nmllilarti personnel, the Executive Branch should develop, and sohnmll lo tie Congress Jor its consideration as necessary,, a total mitilitary' personncel program which coordinates and reconciles all I/the sieparate conslderation~s, particularl'rinceltding; (1) ucilitary compensation and retiremeent, (2) personniel policies oil promotiov and rotation, antd (3) acqlistllon programs, sueh as Reserve Of/leers Training Corps. I1-I Parttcipcmiicn oj predcmcinac ly Negro colleges ic the ROTC program s/hould be encouraged. 1he Nacit and Air Fc'rce itnt parlicular s/iocdd inc'rease their programs it predommicantlc t Negro colleges. IV-12 /ie JucniorIOT(O ' irogram s/hotthl ce .'icpanded. IV-13 Substantialli increased emphasis should Ie placed on iqcjorncation acid educalion programs foer enlisted personnel, with spcc'ial trainingproridedfir off/ters to Ie responsible for cocdutcticng the programs. 144 CHIAPTER V OTHER MANAGEMENT CONSIDERATIONS 1. TELECOMMUNICATIONS A. General Tile telecomomunicationis systemis of the Department of Defense, using every presently Conceivable type Of signal, carry nearly every type of information. Current annual expenditures Lirein tlie two-to-tour billion dollar range. More than 100,000 people on"thle tDeparlmnent's payroll sisend full time Iin teleconinunications activities Iin locations around the wvorld. These locations are of ntecessity often remote and costly to support. The span of technology is nearly all encompassing. The Department has a recognized nevedto loaIdanltejinlas at thle lowest possibsle frequency (SANGUINE) and, by contrast, to ulsethe highest frequency which is just now beginning to be understood (LASER), The signals of radars and other sensing devices, for example, tire transinitt-d over short land very long distances for ainalysis and its decision aiids. Senssor andi~device control, voice laid record, Secure and clear, analog 511(digital, graiphlic and phiotographic signals pass over vast nietworks composed of every type trainsmiissioii system. Buried, serial anid( unjderseas cab~les along sviIh field WIrc tire sigiliflticat system1 elemenlts. LF, IIKF VH F anid UIIF raio~iisystemns tire used extensively. 'Tropospheric scatter, terrestrial poinit-topoiniit tiold celestial (satlellite) mticrowaive radlio systenis tire Iiseilf illmniiiiy forms and configuraitions. Tile signals carried by these systems tire switchied and( pirocessed by a wide variety of switchers, signal processors, coMI)tiilers and/or othier devices to deliver tile information carried by theini to the users Iin useful tormt tfjr decision nmaking or for the suplport andtadmnilistratioti of thle lDepartioeoit's activities, TI'e reliabil~ity midt reduiidaincy needed ill sonic tteiise tel'ýcoiiiiiiiicaitiiuii tire bothtl bonai~tide aiid uniique. Virtua~lly every telecommuiinicaitions techniilogy known is applied somewhere withiniifthe D~epartmniit. Tile staite-of-thie-airt is cotintttiotisly pressed to findt new or better solutions to satisfy legit imaite millitairy requiireienetis. The telecommuniiiicautionis re~oreiicncts of thle leparineiet Lire Ilargehy beiing net, ailthioutgh at LI greaiter cost Ilial inecessairy. Mainy tine systeims anditopeirationis exist. These reflect file eftorts ofaLble techniiicians, engineers, roseaircler.,, iiiaiiagers, Liid executives iii the telecoimniiiicatioiis field il tinlteD~epartmieint aiid Ootntitraictors. Howiever, dutplicaitioni Liiild inaidequai~te ititer-otierabilitiy, Militat~ry D~epa~rtmeint pa~rotchia~lismo, antdI divided Liind weaik cen tral iitaiiageiictit froii the Office of thle Secretary of D~efense hiave redutied the efficieiicy Liid effectiveness ot the procuremtent an utit5 lizatltion of telecommntiiicaitionis resources. The commiianid aniid contlrol of personnel. wveapoiis, aind weaipoin systemis, Liiid their suipphort is the mitlitairy niecesxlity aniidjiistification for telecomiuiiiicat ions ini thle Defeiise D~epartteneit. The effective and efficienit adihniiistraittion of worldwide forces nuiibesriiig iii tile imilllionis is ani eaisily demiionstraited just ification for lairge-scaile telecommuniiiicaitionis. Tliercfiure, Ielecominiviiiicat ions is inearly itnIiversalIitoflie Depart ment' ac .~tivities. 145 Teteconininonications is that capability along with associated devices which enables comimanders at the various levels along thie military opierations chain of command to have timely, appropriate and sufficient infoitnation onl which to base the comimand of operations. Much of this capability has;been traditionally called strategic commnunicationls, but this nomenclature has largely lost its meaning in (lhe wake of technological and organizationali evolution since World War If. The telecommiunications associated directly with basic comnbat units is defined atsthctical and includes telecomnmunications in these categories only: loan-pack, vehicular, aboard naval vessels, airborne, comlbat field units necessiary to tile fluid movement of ground forces in combat, combat airfield navigation aids, air transportable field units while ftocombat deplioynen t and finally, all like assets held for contingencies and in combat readiness, Thle commiiand and control aspect of telecommunications mecans thle telecoimmunications for command and control, including directly coupled displays, conisoles, processors, and other terminals whose lrillully function is telecommliunications, and special subsystems such asminimlinium essential emtergency comilmunlicationis network I MEECN ). B3. Opserations Thle point-to-point land long-hauil telecoimiunicationis requliremenlts tire satisfied, for thle most15part, by the ')cefine Communications Systems ( t)CS), a worldwide telecoiniunicatious capability planned, enigineered and managed by the D~efense Cuommunications Agency CI)CA I, but( promcured, osvned and opera ted ty the Military D~epartmnents (except those that aire leased, which tire opera ted by the Military D~epartmnents). The hulk of the I)CS consists of conmmloon-user switched systems: (I rhe Automatic Digital Network (AUTODIN (is atworld-wide system primarily for handling record and data traffic and used in coummuon by thme Military IDepartinenits and others in thle Delimartieneoof' Defense structure. it employs htigh quality, current technology !ii store and forward switching, mnessage processing, termuinal laid peripheral hardware. Its assets tire largely leased from coimimon carriers in tihe Continental United States CCONITS) anid Hlawaii anid largely ow ned, operated and niaintaiined by thle Military D~epartnments elsewhere, The systeim is planne~d, enlgineered and managed tiy I)CA. (2) The Automatic Voice Network (AUTOVON) is a world-wide dial ne~twork, primarily for voice traffic hut capable of data and record transmission. It is a conimoni-user service inmthat it is used by all eenients of tlile D~epartmen t structure. Its tour wire truniks aiid electroniic switching reflect high quialit y culrren t techniology. Its assets tire also largely teased in thmeCON US and Ilawalii, and largely owned, opierated and maintained by thle Military D~epart ments elseswhere. It is planned, engiiieeredt and mnanaged tiy )CA. 13) The Automatic Secure Voice Comimiunication iietwork IAUTOSEVOCOM I is at woirldwide dial secure voice network. It is used fii ciommon tny timeMilitary tDepartments anid other elmemnets of the D~efense lDepartinent. It is planned, engiiieered aiid managed by t)CA. The Military D~epartmien ts operate anid maintain Govermeniit-owned elemients. The resources mof' tile l)CS aire used also tim meet sonme, hut lnot all, tong-haull telecoimmunications ineeds for dedicated-use systems. D~edicated systeiis, or networks, tire limmlcoimmmiin-lser assets and are thoise irmlcisred aiid used for apareticular need, generally for a partiucilar Military D~epart men t or cumnmiamid.There is a large inuimber o~f these, somue omf which are very large. The temiking for somie of them is iumanaged Isy I)CA. Other eleimeiits 146 use large-scale, fixed-plant routes which are not a part of the DCS and, therefore, are in no way under the management control of DCA. While the DCS is the backbone of the Department's system, it is only a part of the total complex. Telecommunications for military garrisons, weapons systems, dedicated systems and tactical needs comprise an even larger segment of the telecommunications complex. Telecomnmunicationu technology is changing more rapidly than is almost any other discipline and there is no indication that the rate of change will slow in the foreseeable future. Telecommunications are critical to the military mission itself. Effective and efficient administration of the entire spectrum of the Department's activities rests heavily on adequate, readily accessible telecommunications. 1. Military Departments Each of the Military Departments has a large communications command to operate and maintain its telecomnnmunications, 'including the dedicated systems it has retained and the elements of the DCS assigned to it. These commands are: ARMY - Strategic Communications Command (STRATCOM); NAVY - Naval Communications Command (NAVCOMM); and the AIR FORCE - Air Force Communciatluns Service (AFCS), It the Air Force, the Strategic Air Command (SAC) and the Air l)efense Command (ADC) have sizable telecommunications organizations of their own in addition to the AFCS. The Ground Electronics Engineering Installation Agency (GEEIA) is a separate worldwide Air Force command for field engineering and installation, The Air Force proposes to fold GEEIA into AFCS. Field engineering and installation in the Army is a function of STRATCOM while in the Navy these functions are perforlied by the Navy Electronics Command (NEC). Each of these worldwide coimmnands has an organization structure headed by a General or Flag officer. To help these organizations remain sensitive and fully respounsive to mission requirements, the jobs at certain levels of the command structure are dual roledt i.e., these officers serve their own chain of command for the operation and maintenance of communications, as well as serving as the communications staff officer foi the military ,perations chain of command. These Military Department cuannrands for teleconm'nnuications are large scale, complex iundertakings. The largest has over forty thoustno people, most of whom are technically oriented. They, along with the comnmunications and electronic staffs of the Military Departments, do all necessary programming, budgeting, field engineering, installation engineering, transportation, construction, installation, acceptance/performnance testing, operation, mnaintenance, muodification , modernization, removal, relocation, reconditioning, and reinstallation of all telecomnmunications. They maintain contingency assets along with personnel in combat readiness. They train, deploy and support the necessary personnel to satisfy all of the above functions. 2. Office of the Secretary of Defense and the Joint Chiefs of Staff Overall policy guidance and nmanagement of telecomnunications matters is now widely diffused throughout several elements of the OSD staff, largely as a result of the functional desi 3 n of the organization. 147 The Secretary of Defense is the Executive Agent for the National Communications System and tile Executive Agent for the Government in all communications security matters. The Assistant Secretary of l)efense (Administration) is the principal advisor to the Secretary of l)efense for National Communications Systems (NCS) matters, and is his coordinator for all command and control communications. The Assistant Secretary of Defense (installation.s and Logistics) is the principal staff assistant to the Secretary of Defense for transportation, telecommunications, petroleum and logistical services. lie develops both policy and technical guidance to insure the development of compatible I)epartment teleconmmunications systems and plays a piedominant role in the mniagement of the Department's telecommounications resources. The Assistant Secretary of Defense (Comptroller) is the principal advisor to the Secretary of D)efense In programming, budgeting and fiscal matters. Ifis relationship with the defense agencies and Military t)epartmei. extends across the entire financial management field. The DCA and the Military Departments commusnicators work closely with tlse ASD(C), for it is he who establishes and directs, in coordination with other OSD staff elements, the functioning of the Department's Planning, Programming and Budgeting System (PPBS), which is the nmechanisna by which Defense components obtain, first, resource approval for updating their portion of the Five-Year Defense Plan and, fitially, dollar approval through the annual budget hearing procedures. The Assistant Secretary of Defense (Systems Analysis) performs analytical functions spanning the entire operation of the Department. In the teleconmunications area sie performs studies and analyses of quantitative telecomnutunieations requiremnuts in light of strategic missions, force planning, etc., and conducts cost effectiveness studies and reviews coammunications requirements aIsa part of his responsibilllties, The Director of Defense Research and Engineering (DDR&E) has thie basic responsibility in the telecommunicatiots area for the research, development, test and evaluation of new communications techniques and equipment. In addition, by Secretary of lDefense direction, he is assigned the responsibility for planning, directing and supervising the execution of technical support for the National Military Comnmand Center (NMCC) and, in that capacity, exercises supervision over DCA which provides the engineering and actual technical support for the NMCS. Lastly, the Assistant Secretary of Defense (international Security Affairs) participates with DCA and the Military D)epartments when negotiations are required to obtain overseas base rights for telecomnunications facilities and activities. At best, the fragmented responsibilities in the Office of the Secretary oflDeense generate difficulty in coordinating all of the individual considerations which may arise in an issue, even on such an issue as a discrete weapons systenm. The problem is greatly magnified when dealing with a commodity or service such as telecommunications which, by the nature of its universality throughout the Department requires corporate nanagement to optimize costs and mission effectiveness. Within the Joint Chiefs of Staff (CS), as withia OSD, the responsibility for the overview of telecommunications matters is fragmented throughout several functional 148 offices. And, of course. the Director of DCA reports through the JCS to the Secretary of Defense. 13) The Defense Communications Agency The Defense Communications Agency (DCA), a weparrte agency reporting .) the Secretary of Defense through the JCS, exercises managcnic-it control and operational direction over all telecommaunications elements included in the Defense Communications System (D(5). The DCS, and hence the management purview of DCA, stops at thle mainframe of bases, posts, camps and stations, at point considerably short of the total system. This mecans that no one exercises R&D, planning, engineering and nmanagement on anl overall use~r~to-user basis for complex systems like AUTODIN, AUTOVON, AUTOSEVOCONI, etc. UCA his little fiscal control of the t)CS; for example, it is still piossible for money specifically programmed for the t)CS to be unilaterally reprogrammed by a Military Department to other purposes, without either the aIpprovall or concurrence of thle Dfrevtor, DCA. The Director of t)CA allocates, reallocates and restores DCS service but does not determine restoral priorities, that being a function of the JCS. Nor does the Director have :ny command function over the l)CS; thie Military Departments have operating commands who provide for installation, operation, maintenaince and support of their assigned portion of the l)CS. The D~irector of DCA takes direct action, via his D~efense Operations Control Center (DOCC) fin Washington anid its area anid regional centers, to satisfy requirements. route and reroute circuits, authorize alternate routes, etc. Additionally the roles ijid iusponsibilities of the Director, l)CA, have beeln cor~structively expanded beyond [tie original boundaries. The D~irector now has these additional duties: 1) Acting ats manager of the National Commiunica tio is System (NCS), for which (he Secretary o'Dflefense arts atsthe Executive Agent for the entire Government. Sse. (2) Acting its system/project manager for the D~efense Satellite Communicat[ions (3) Providing technical -,upport for the National Military Command System (NMCS). (4) P'roviding cenitealized Ita*simigof D~epartment of D~efense circuitry fromt comnmuniicationss conmnon carriers (but not the programming and budgeting for such leases). (5 ImIiplementing the automatic switched networks, Special Security Comumunications System (D)SSCS). including the Defense (61 Acting asChairman of the Military C'-jmnsuniiicattionis-Ulectronicis Board. 4. Research and tDevelopment (R&D)) The basic responsibility for R&D efforts lies with thle Director of D~efenise Research and Engineering. The D~irector oif DCA exercises management direction over those R&D activities of' [lie Military Decpartmnents which directly relate to [thc lCS. The Military 149 Departments directly manmage all other R&D efforts under the guidance of DDR&E. The R&D is either carried out in the Defense laboratories, or under contracts generally administered by them. Telecommunications R&D in the Army is primarily conducted at the several laboratories at Fort Monmouth, New Jersey, which are under the command of the Army Electronics Command, a major command of the Army Materiel Command. An electronics R&D capability also exists at the Army's Electronics Proving Ground, Fort Ituachuca, Arizona, also under the commanid of the Army Materiel Command. In the Navy, teleconmmunications R&D is carried out by one of two organizations: the Naval Research Laboratories, under the Chief of Naval Research, or the Naval ELetronics Laboratory Center, under the Chief of Naval Materiel. Telecommunicationc R&D in the Air Force is carried out psrinmarily by the Ronme Air Developnsent Center, an activity oif the Air F~orce Systems Comsmand. C. PIangm rhe most obvious weakness of the organizations structure is tlse absence of unitary mtanagement at the tops level to assure effectiveness and efficiency front alt overall Departnment of Defense ississiots poitnt of view, rathter thtan fruits all individual Military Deparitment's point of view. OSD is the ontly level of tlte tmanagemtent structure witht overall Departmenst of Defense perspective which cals be given sufficienst authtority to assure apipropriate standardiz~ations, compatibility atsd inter-olserability among DCA and the Military D~epartmsent elemensts of telecommunications, while protecting tlse lintegrity of tlie mission requiremneits of tile individual combat, constinsgency and support cosmiands. It is the only level itt a positiont to objectively balansce missions capability and cost. Thsis level should be restructured, amsd staffed witht appropriate expertise to provide effective staff mansagement frouit a total Departmsent of Defense pointt of view of (I) all telecommnunicationts resources and (2) all olxwratiitns amsd engineerintg matters relating tot telecomiuntiiicationts. In June 1970, a positions of Assistanst to the Secretary of Defensse (Telecommntsiications) was establishted, This ATSD(T) was assignsed broad. cotnsolidated funsctiotns atid responsibilities in the telecomtmtumnication area !in responise to tlte problemss created by tlse lack of single mansagemtent front the 051) level. Thserespotssiblities assignsed to the ATSI)(T) are cottsistent witls tlse conclusionis of the Pansel. VI V-1 The~ re'sponsibiility Joe defense telecommunicokationi activ'ities should be under the staff'I supervision of the Assisatal Secretary of Defense (Telecommunications). The Assistant Secretary of' Defense ficlecomnmunjcalions) should be directed to review all deftinse communicationis activities withi the goal of elimtinating incfficient duiplic-atioii: spe(if'cifially,, fir example, those telecommunications aetteities of' fthe existing Air D~efense Command (ADC) which can be effectai'ly merged in to .; her telecomtmunicat ions operating actisilies of the Military Departmnenis. The Assistant Secretary of iDefe~nse (Telecommnonications) should also he directed to assure that each mnajor clement of the telecomnmunications 150 ~ .WF,.•....• • .......... .• w ,•m . • •,..•. _.,•: r. -=-- • • .. • •' '.T: • .• ,,v.... -.•-*- .... . •. •- . •, ,.. ,....°" ... ... .... 'ommuty" inl the Department generates pro]essionall.i' planned and managed edumcationt, training and career devlhopmenit programmi for its engineers, researchersand managers, both ciivilian and militari'. V-2 The responsibiliti fer all e.'xs/i ,,, and future dcfense lomig-haul transmissionSystems, regardless of their curren! or intended use, shiimd be assigned to the Defense • he Defpiiise ('ommnunications System, ex, ,, those Conmmuniialions Agenct' as part of ive/hicular and air transportable types when held as eontingencies or while ini temporar'y, deployment for actire combat suipport. In addition, the Defi',ise Commntications Ststem (DCS) sho/id be rede/fined so as to include base, p)ost, camp (aidslitioan telecomminiicationis in the United State•i aiid garrison (permanemi ) tOee imlstallations overseas. The DCA should also be assigned the '.Iscal control of DeS elements. The conminstilicalionis miadelectrontics a/firers of the Unified Comtnantds should be tutder the operatiottaland technical sumperv'ision of the Defi,nse Cotiminunications Agency. Griouid l:'huctronics Engineerinig /nstalati('m Age'ic. (GEEIA) atd the V-3 P/ ,,'itir Force i te'licotiittiicationtsitclii'ites ofl"the Strategic"tir (Commitianid (,SA1C) Yhoildd hIe emged 1i11o the A ir Force (Cofmmitiis icatioiins Service (.4"S). 11. AUTOMATIC DATA PROCESSING A. Getsersl i)uring (he pat decade thm, use of computers has ex :anded at an explosive rate. The ciumoMInu er hams become a part of almost every facet of basimless and industrial life and its effectiveimes, ias been universally accepted. Technological developments during this decade include time shlarig, remote job entry,4' storage allocatiim and data protection,** and highit ,q)ed digital data transmission. as [ S100 flu-" next decade, conputer systems will undoubtedly continue to develol) at a ~rap~idMiuring rate. It is anticilmted that the larger compelwer systems in 1980 whi• have as ninch as filles (lie caaxifiy ol thle largest system todlsy, and thlat the niedium-scale :oniputcr, which is tihe backbone of' th -Jt,ý llt, Ju}l,1:rtl. iCla ..... lllIliCýi, I - Tile inimi llm,alid Defense IDepartirot': systemll today, will be substantially ,l "a~d-d ,t d.113ll~ll 11 ill I mdditiuiIt'. 1( :•,,t l 2I~lI ill •4'g-gwpdiufll) dilfmwttl Ihfianffie siasizlgalrelleeralais, (-ra/ AiitL•cA ltllilnll iW:l;I i'D3 lCclii'll. ilelscdelculained iall0 Irr'l llned 5hlwillng , whvfIll/anllt' N•rCtiatl'lll anditwacli liionIlito iltla 151 ~ll nqo t lilt' iAllit'hallrng O;lad decfljii at l tse mallsuily by l Il diskstorage,utalli o, lld acc.ss to th,' ape q r diusk [s prac of ith' ill t' Jcid sYa replaced by a combination of the new, larger computers and small, desk-type computers. Another major change will result from telecommunications between computer and computer users. Indications are that most computers will be on-line with teleprocessing calability by 1980. At the present tin-e. the majority of .ie Department's computers cannot be used in this mode. The recent trend of unbundling* will affect the acquisition of automatic data procesing (ADP) equipmenet as each part of an ADP system will be available separately. Another trend which will affect the acquisition of ADP equipment is that of the rising software cost. The present systems have about equal investments in hardware and software. By 1980, however, the software cost could be many times the haidware cost. The Defense I)epartment currently has approximately 2,800 computers (1,200 owned by the Department, the others leased) which are used for general purpose data processing, Thirty-six percent of these are considered to be incapable of performing efficiently by current standards. This inventory consists predominantly of small and inedium-size computers with only 113 large second or third generation systems. In addition, It should be noted that a large number of computers are used to considerably less than their capacity.** The majority of management attention, with respect to ADP in the Department of Defense, is directed toward juslification, selection and acquisition of computers, Once the equipment ims been acquired, the management of the computers is by the )elpartment's component where the computer is installed. The challenge which tie Department continues to face Is that of design and development of standard Department-wide ADP sy•tems. Tha? history of AVIP development clearly shows the need for and benefit of, progresLsve standardization, at least for compatibility. Standard systems were first introduced at the Command level, and were followed by the development of Service-wide systems. Today's prinary challenge Is at the Department of Defense level. For examrple, at the present time, the Army is developing a system which etncomlpasses the Army Logistics Commnand function. The Air Force is currently working on an Advanced Logistics System, which performns the same functions as the Army system. The Navy Is planning a redesign and upda~ing of their Uniform Automatic Data Processing System, which ý.upports their key logistics functions. Many of the modules of these systems perform almost identical functions, such as warehousing, shinning and receiving, inventory control, etc. Software programming for each of these is cestly and each independent modernization step takens on the many separate programuv involces unnecessary duplication and aplpears to lock in more tightly the incompatibilities of the various systems. This same observation applies to other functional areas, such as personmel management systems and base level nmanagement. '[itw srparation of ,ystnea dortgnt,hardware, sorlwate, stupporl,trAiningarld maintnlencn arpects lttn indcpettdintly purchasabla andmanageable ltcintnt&s '*Invtnry and uragedata art eit-ntted by 11Wai yenarlo Vic Get eirvlecs Ad lnslirtiaon (GSA),and included In Steir annualreporl on allGen•/lnuent Al)P Nqtuipntent. 152 1t. H-ardware and Software Systemn Design Capabilit~ The Decpartmsent is almost completely dependent on hardware manufactures for systemi design"' for hardware and software. Thosc individuals within the D~epartmecnt who are compe~tent in system deosign are scettered amiong the varioas components of the Department and their efforts are directed primarily to other activities such atsdevelopomentI of application progranis or information systems. Thme lack (If in-house system design capability necessitates placing atsubstantial load of system design work on potenmtial vendors as aIcondition of responding to Requests for Proposals. This condition has a tendency to limit responses tu the larger supp~liers, and, even within thuis group, to those suppliers who assess thteir completitive position atsbeing very high. The net effect inhibits competition for hardware procuremenit s. Timelack of' an In-hmousecapsability for ltardware systemis designm deprivsr the tDepartment of the potential For improved efficiency and lower costs to be obtained Iroom selection amnong separately p~riced elements of at computer system available fromt commnercial S~ililliers, including independent peripuheral manufacturers. This hack of capability also prevents tlie D~epartmentI froomp~rsomoting i higher degree of separate pricing and increased cornOlpeiton through the development by mnanufacturers of hard ware elements with at broader in tertace capablsity, The psotentiat losses froomthis lack of in-lionse capabsility will increarse atsthe unibundling trend fin the private sector continues. It is becoming Increasingly important for tihe D~epartment to have atcapability to develop inmterface standards. InI the cont011ined absence of' such it capabsili ty, thie Department will lbeunabule to keels its ADI)l policy sufficiently flexible tot anticipate and lake advantage of conttinuing chuantges in the ADIl' field, There is no significant Software systeoms design capability in the D~epartmoent. Such capauibility as exists is wvidely dlisperised and Focused oni narrosv spectrumis, usually tied to specific applications. As it consequoence. no effective inechanismn exists for development of' iunore flexible languages, compilers, executive nmonuitors, data storage ;and retrieval software, operating systems, tcan~slators and lilueration programos, etc. Currentt practice makes time D~epartmernt huighmly dependent on hmardsware IIIaumu(facturer-S for design of systems software. Timemlmlmufalctureis have no ilicemutive to priovidle incereased flexibiulity to thle lDepartmoeumt1 tietse 11is oorilis it,, ipti "Ii' ii iite III .i li.is I.t ..It ' iiss's 1i-, tte1,til;ii's stil pab11 slily -'5t 1-1 si a ltltt''t ...Niil sisi II tl itt sitsi I .........es. ils0, a1155a115 ...... .......... t ll I~ilWie .ttliit ..... 'ssii Isii III, essstl'su iii Ill, "lstsleions l.s ,sut 1tt ;tt %ak t utIlt l 1,,.)1,1e1, lt stiil eislrss sis5 it Iti iit'shsl si' Ilts. l l Iii teste [1 lit' , i' tliiiisssl is s-s t pm .. it lis., w hl.rsIsstally ls lmsk. Mim 11"i'sIItt It , itss ,Itt sili l -ie It I l,,-sItk i, lss uttr Asi which might increase the Department's Independence of the supplier's particular machine and increase Department-wide compatibility of ADP programs. C. Justification and Selection of ADP Equipment The justification and selection of computers by the Department of Defense is controlled by procedures intended to assure that the computer is used for beneficial applications, and that the selection process provides the necessary capability at the lowest cost and promotes competition between vendors. The Assistant Secretary of Defense (Comptroller) and each of the Military Departments has prepared documents which establish these procedures. Systems specifications basically consist of detailed information concerning the application which the computer will perform. This description can be as large as several thousand pages and includes each input-output and file description, estimates of the number of instructions in each In ogram or sub-routine, the frequency of use of each sub-routine or program, the number of characters in each record, and the number of records in each file. The file descriptions also include whether the character is alpha or numeric. If tire computer is used for a new application, the effort required to complete the selection documents can be as large as the effort required to actually prepare the programs. The cost of this work is approximately the same as the actual cost of the equipment. In addition to the descriptions of the inputs, outputs, and files, flow diagrams are required for each program or sub-routine. The descriptions are also used to determine whether a computer application should be approved. This system has not worked effectively and its use causes delays of two-to-three years in the procurement of the computer. In the past, the Department has even attempted to use this same procedure to obtain equipment to be used for research and development centers. These descriptions are sent to the computer manufacturers and they then propose to provide equipment which will perform the work described and the l)epartment often buys the lowest priced proposed system. A major difficulty involved in the justification and selection process is the time required to complete the process and the difficulty of predicting the workload with sufficient accuracy to select the ADP system which most adequately meets the requirements over the life span of the equipment. The vast majority of estimates are lower than the actual workload by the time the system is operational, and this causes ilie system to be too small to perform all the required functions. Perhaps the most serious flaw is that all this work is done to determine the best computer system for one psarticular process. If a broader approach were taken, an entirely different computer system might be able to accomplish that process and many others also on a more efficient basis at nto increase it, -ost. Inimany cases, the selection is made by personnel who have no first-hand knowledge of the workload, but depend entirely on the description of the applications. This process hiss caused the D)epartment some difficulties in the past, and inseveral cases the computer equipment selected by this process has been too small to carry the workload for even the first year. There is general agreement among Department personnel that the 154 "....... procedures are too complex and time consuming, and limit competition between vendors. In anl attempt to reduce the problems inherent in these system specifications, the Department, at times, has used other means of computer selection. Thseprimary alternative lisa been thle use of the benchmark. A benchmark is a typical computer workload, either selected from the present computer workload or generated from a knowledge of tile type of work the new computer will perform. These benchmarks require less time aisd effort than the system specificationis to prepare, but they also require substantial investments by potential vendors for programmning, debugging, atsd machiine time for runining these benchmarks. Difficulties result from thlefailure of most benchtoarkB to truly represent the actual computer workload. The samneproblems of estimating tile workload during the systems life exist for this method as exist for the systeiss specificatioins approach. In genseral, forecasting the future is difficult said most likely intcorrect, and Computer workload forecasts are no exceptiolt. The elapsed time between the pireparation (if tile first documentation describing a computer requiremsent and the installatiotn of tile equaipment varies betweent a mninimum of two years atsd a mtaximlum of six or more years. This timte is used in 'he preparation of tile justification documients, timesystemtspecifications. stolicitinsg bids from veitdors, evaluating proposals from ventdors, aind obtainintg equtipsmentt. Oftent it is ntecessary to repeat otic or more of these steps. Tile comptluter workload is a dyniaitic and changing requiremientt aild ofteii by tlie time Ithe compu~ster itis; brett inttalled,. ttte workload is mtuchtlarger slid sigtnificanttly different fruit tlte tote antticipated at tile titte the comlputer psroculremenet began. The time required to change the documtenstation is almost as lonig as tlte intitial preparations. Therefore, oiftent the requtireimenlt is ntot ttpdated duritng the procuremtent cycle and dte systemteffectiveness itay riotobWas htighias it cottld have bceen.If thle Depsartmnttt is tt have effective slnd efficient comtputer 5suppo~rt of its tmissionis, thle timte delays its obtaining comtputer support mtutst be greatly reduced. The currentt proceduires result ii miajor itnefficieutcies withtin the D~epartmtentt. Thte long delay tittes in tobtaitnitng Isew torreplacettenit equiptmentt result iniequipmtenti beinig kept lotng beyotnd its useful life. Thle determintiatiotn of ulsefuli life sholttd be based onl the rust of' perfo~rtming work ott tlte equtipmenit, tnot ott tile agetof tile equliptmentt Anothter mnajor effect of thle piresenit parocedures is tile intstallationt of several smtall an~d nieditti scale comtpu ters itt tite samtegeograpihical area. There are several locaititons which htave over 50 comupuiters. Thtese multiple comptluters cantresult itt costs whtichi are as ituchi as five titmes larger thati would be ntecessary if a few large comusttters were tused in a shared time If tile Dcpartitettt had a systemt designt capability, as previoutsly discussed, tilte requirementt foir equipmenit could be stated itt termosof tlte equlipmlenit's perfortmaince ctharacteristics, rallier ttiait(the specific plaitned applica tioin. Thecjustificatiotn woutld be of the systemt,not of tile individual equlipmienlt acqttisitions, atud tlte system could itnclude ttatny spiecific appllicationts by today's termts. 1). Overall Mantagemientt Thle basic probletm is that thieptresen t organiizational assignmisent of respotsibili ties for 155 ADP policy formulation, management and operation is inadequate to insure the most efficient and economical use of ADP either Department-wide, or within a Military Department ar Defense Agency. The organizational level of policy responsibility within the Office of the Secretary of Defense (OED) for ADP is too low to insure that required and desirablc. policy changes are made and implemented consistently throughout the Department. In addition, there is no single office charged with the responsibility for long-range planning to keep policy abreast of industry development, and to provide flexibility in Department policy to take advantage of evolving technological changes. Neither is any office charged with the responsibility for periodic review of existing ADP installations and operations or for minimizing the total cost of computers. Reviews are now focused on requirement justification and procurements. A standard for measurement of total ADP costs does not exist today, nor does the means of compiling such total costs for a given ADP installation or operation. Present assignment of policy responsibility for ADP in OSD takes inadequate cognizance of the close technical and cost relationship of conmnunications and ADP management. As a consequence, the interface between ADP and communications is inadequate, and will become increasingly inadequate as digital communications technology increases. No office is charged with the responsibility to insure that research and development on ADP done by the Military Services or Defense Agencies, or under contract with them, is benefically utilized Department-wide. In addition, with the major change anticipated in the next ten years with respect to teleprocessing and digital data transmission, the management functions of telecommunications and ADP should be combined. E. Other Factors The following factors and resulting conditions contribute to the current problem within the Department and could be substantially improved if overall management responsibility were consolidated, if the Department developed a system design capability, and the justification and selection procedures were revised. 1. Utilization rates (estimated 50-60%) of computers owned and leased by the Department of Defense are low compared to those of industry. Low utilization rates are primarily due to the following: (a) The long lead time for ADP procurements makes desirable the acquisition of growth capacity, but the specific applications orientation of requirements justification inhibits design for growth capacity. As a consequence, it is largely impossible to plan orderly matching of growth of requirements with growing capacity. (b) Constraints on payment of overtime applied generally in the Department inhibit resort to longer shifts and increased utilization, since no mechanism exists to balance overtime costs against potential savings from increased utilization. (c) Constraints on paying shift differentials, similar to those of paying overtime, inhibit the resort to three shift operations to increase utilization rates. 156 w dereguiations given (tin) organiz tv gbten raational elements peii intais esticpemites ealemets ofwnorcst thhreaetran ter eydifectchalte tod pefctvent appicaioS. aigi oMilhiitar ySexistinor (Diectsaarimentsrousngy for decrisngrts baned ontraeoftas forstins make managemeont ute niie yteoinaino ade oseii rcrmn the Att fiel iaton likdly top 3plcain. The nua cbmputofskiledtechnisa purohsdfsionalspeiic Theibe skillted specf and cstlyor deasig athespeiicaon arictinot availabereire the l~epartst copueartaseirt of i~fnhibrescateed ytl iiamiong technicaltlprfsiona.Cneunlyshavaiabl wihithe seprlmncot.hrebudosnut sevtera computer sns wthin Theaioslckonfpfnexiilty of thet * numbers. Iner a urapidly c eanisttcnolg suchdars ADo determiningeotl , reourcs, in the bsenvce, ofinteinsaiven trgainingtiondl tbecomentobsolesifcn atsthsamelateo asMilidway resources,o curnot andw icmluesete oivstdaitl adparmajreffotw iost e alcuiladtionkes adsaf aore vitaldoqaified tre t saDrpersone whousn dpeiain toduays eonmynt olarcstother basicontalentltai unempllatoyed. basg cupommrciaofoptrganizalaicndtionsng fidtaete hIth tc itr ad iffically proffctvdel forkeepinagemit dcurrent. The tradte-otf murexstdtrine thew 3.Tenumberdtp s of q kalfed ADterhnicel irofewionlt and inee APrvidel th trinn ee dresorce npecessaytodaesiure their avaiabiity. no vialei h eprmnTh kle tuehnicalnARpofdeAssioastaantilaberawifhn h D~epartmen Tfnnuiatis). of areisctsiterdamng severtarlofganizatiose wT/ith ,iinitevati')sous d (a)onnt ofk the nepsartmet sThees to 'not aptearto'mdesn ndeqededanforrpr otiniinageor'trainingrehewe professidnl An subsatiiiiandia nurmbers andi reahiate chn-ging tecnlogywuth raspt toP pesnefl tresoures, of the uizatbsence0 rfinensiures triningt thrngd tobeode! obraolesceth fiash/tr siouirateras of .veceit;resourcenes, * unhichloiy/i. stnardizomeri'and oerganizaton find that sitmhey musithire~i Cuh bas Iicaet traion (o~~~~nit ais and/seiiclypor georaha, id keing'it/teurr ent.ofe Dtepartnmegnhti mshot-adetegrminete Aumberra~ndt/pes of quaifiev:ad CDI) personne Of triilnge fialnd frorvide1 tra/itsn sp' aridorca ncesareero assfore At)1heirsonneablit. 11-4~~~~~~~~~~~~~ eneatmtcdaapoesn epniiiyfn 57 hudb ne h tf V.-5flu procedures gove'Lrninig itit justificatlion and selection 01iofol)utet5 should be revised to requite a statementl iJ'AD e)'quipmenftit (iapailhitj as opposed to specification of intended application 0f1h equipmeniliflt. Ill. Contract Studies The purpose of cintract studies is to provide a capaialitly to thle Department of Defeiise which is not availabile internally, cither because it requires scarce or special skills, required infrequently in tiny D~epartmsental organizational clemnict, or because independence and objectivity are a special concern, Those organizations who regularly provide contract studies, frequently provide a tranismission belt for ideas and informiation across the echelons of defenise organizations. Accurate infornia(ion onl the nature and exteint of contract studies within tile D~epartment is d~fticutt and often impossible to obtain. Large numbers of contract studies tire perfornied for various elements of the Department of D~efense by both profit imaking ,ind not-tur-protit pirivate research organimftilons. There are, however, iio central records of tile studies that are done. It is not poveubte to go to one place in tlie Department or even a few places in eacti of the Services aind get a tabutation of recen I or on-going studies including subject, purpose, significant findings*, cost or anl assessment of thle quality of tlie work. There is iio effective control of' contract studies within the Department. While each study muustbe justified to gel funding, there 'Ions. !vl appear to be, at aily point, anl effective mechanism for establishing a relative ineed for thme study, ior for determining thme exieni to wvhichm the sbetarea tos beeni studied previously. It appears from reviewing ciimpleted studies that many of themn are not objective analyses in provide input,; to thie decision pirocess, but are rallier performed toi support piositionis known to be held by thle coutraclimmg organizations, Thle priicedures used by thie Department of D~efeinse to contract finj studies do not pirovide adequate safeguards to assure that thie Department receives value for its; expenidituores. A study contract does not generally contain a stipulalion as to thie quality of the study to bie made. thmeorganization tha~twants to con tracl tfir a study wiorks with a contracting offticer, ustially not atpart of ttile organizationail eilement waintiiig the study, and provides the information and justification requiired for thle conmtracting. After the contract is let, tlieelemenit for which the study is being done provides a technical representative who repiresenuts the contracting orgauwtratoi in thle substantlive areas of the contract study. Thme coiitrac~ng officer amidthe technical representative frequeintly have little communication .ifier the contract is let. The techiiical represeotlative ioften is not consulted before periodic puaymentls are made to the conitrauctor. Most technical represenitatives aire iiot familiar with cliiitrad~ing procedures, aiid eveni if they see thiat thle contractor is imotperforminig and will inot produce a satisfactory product, they dio lnot know what toi do to priotect thle Departnien ls investmuentI. Con tracts for analy tiral studies tend to belet oil (lhesamie basis ashardware piroductioni contracts. There is conisiderable evidence that they experience many iof the samne purobleims. 158 Thie low bidder is not always the best equipped to make the desired analysis. One major requirement should always be an objective analysis, but often contracts are let to contractors who have a direct interest in the outcome. By bidding low, they buy information which is used to obtain an advantage in a subsequent competition for hardware or software production. The contracting officers make too little use of their authority to exclude study contractors from subsequent production contracts. The Federal Contract Research Centers (FCRCs) are a group of special nonprofit organizations created during and since World War I. Each has a special relationship with some agency of the Federal Government. There are currently 12 FCRCs under the sponsorship of the Department of Defense, with annual funding totalling about $250 million. Based on their principal efforts, they are categorized as: (1) general and continuing research and experimentation in support of military research and development; (2) systems planning, systems engineering, and technical direction of systems development; and (3) operations analysLs, systems analysis, general advice and analysis, and long-range military planning. Originally every FCRC obtained all or most of its financial support from a single sponsor, but some are now attempting, with varying degrees of success, to diversify - to become less dependent on their Department of Defense sponsors, and in their view, less vulnerable. The close ties between sponsor and FCRC often prevent the sponsor from seeking study assistance elsewhere to obtain work better suited to his immediate requirements. It would be highly desirable to provide flexibility, whereby a sponsor could on occasio:n have research done by another FCRC. That this would lessen the reliance of an FCRC on a siugle sponsor could only be beneficial. It would soon be evident which FCRCs were strongest and they would be encouraged to become capable of competing successfidly within their own ranks. Traditionally, there have been close relationships between most FCRCs and universities, and unquestiottably the forging of this link to the academic community was a major reason for c•eating FCRCs. The chariging attitudes of university administrations, faculties, and students have already resulted in the severing of a number of long-standing university-FCIC relationships, and others are in inminent jeopardy. There is little doubt that each YCRC was, wosetn created, the most effective or expedient means of providing certain required capabilities to the Department of l)efense. However, both the needs of the Department and the character of some of the FCRCs have changed substantially. The Panel believes that this is an appropriate time to reassess the special relationship of each FCRC and its Departmental sponsor. V-6 The Secretarv oJ Deji,n.s shotuld delegate to the Deputy Secretar'fia "Eahluation tfc authority to establish and encfir-ce Departitet of Definse policies aind procedcres which mtake it po~sscible to account' focr all contract studies to reduce duplicauion, assure relceaace. and ec/hance quality. Specificallr. the Deputft Secretary f-cr Evaluhation should: (a) Esatabish procedures fi reeic'cc' acccii euaidatc 59rrc'quircceu1s 159 contract studes. (hi) lstablls/i accenitral control record of coiifralct stuldit's to inluhde' subject, purpose, ciost, signit i/nalt finding toit aii assc'ssiml'int of t/h' quality of flthe work aind the nfil/lyj ofi11w prodiuct. (c) Ecstabliii proc eduries for con traclintg fo~r studies In jirot~ide adequate safi/guards to assure fthat f/cc' JDepttriiit'it gels a producf fthat is reletlant and respoiisirt' to lit' require el nti, assute' a chine wiorkinlg relationship btetw'eei f/ct' sciitracliilg officer aiid tie technical rt'/reseillatil't: and develoip trilteria fir sele'ctiing conitractolis fthat willi assure' anitp'ei di ibjc/if velli sut/iport to I/ch'Dep'artiite't. (cd) Revele cact' F/eiide'rcal Co'tntract Rese'arch ('ntier splonosred lie flit' Departminect of IDeliiset'ft deteroline onl an iitdiv'idual ictsis whc'/ih sihottld lit tcointinuetd w'itii sibthsaiiallY lttei pireseint ficrin aiid misiuoi, wihichc shoulti unid~ergo signilif/ailt tccticgt', and lihel/ler aime mal 11111olillilcel tiit'i list'] i/itss atsFC/4.R 7hlie stiudi shottld alssi devetlop lice iiansiito1 macke' tollittivt' IC'IC' tc/apabilitie's if ote tvieile arIstilah/c if) Depatic enitl of IDcf'ipist' sponiisors. IV. OFFICE OF CIVIL, l)EFE&NSE' Itt 1961 certaccin reslllltsibtli ties [icr Civil IDefettse conttaictedl it (liceFederal Civil Defense Act cof 1950, its amtndedlt, were assigned to the Secretary ocflDefentse by Executtive Order 109)52. These respocnsibilities are cturrentIly assigned tic ltce Depatrtmoent of the Armty and Specifically tii lice Office icf' Civil Det'eitst lOCh)). 'Tie Act, tsttctettded iccI1958, inclctdes ii lficeD~eclaract iii ccfPolicy the fiollocwing: " It is lice pliciy cccdicitent ofl' Congress (i prtovide a systeti cf' Civil lDefecise focrtlie lprct'ct ion occf life ancd pirop~erty itt lite Ucitied Sltates front at tack., It is fucrtlter declacred to be thcepolicy tcttd inctentt ocfthe Coccgress tilct lice respocnsibilit y foir Civil Defencse shttll be vested jcoinctly !it (liceFederacl Governenitit and tliteseveral Sltatus antd tceir poiliticacl suibdivisioins. Thce Fedleral Gocvernmieint slhall proivide nciessaryx dieeclioci, cooridinititinc tcndtgtcidtnce; . . .'and shtall pirovide niecessary asisislatice ashcerein authtorizeied Except loricecperiod itt 1962-63 whecn lice fttltccctt shelter prcigraict watsgivenl 1c Iliglc Icriciritly, (liceCi' it D~efenise functo iiciit as apjplarently lieeni giveci little emtplhasis. Thtere hats becei. siitce 1')61, ctonsideraible diLscucssioin abtout lite effects ocfdividitng Ithe Civil D~efentse 'espciisilaili:c5 laetwer'ii tltc Executlive Office if the Presiclei and lice D~epartmetncof liefelise. Thtis quiestiont istpresenitly' beinig adldressed Its' (liceExecuitive Office oif lice Pre'sident . The mcissioncit tillhe Civil D~efencse Oegantiza:tioni is als viic'ig reviesved. Thcepcresent cccissini of OCI) ill ltce D~epartmcetnt of lIce Arimy is essenialbtly licmited hit file develoipmenit acid execuiittcitn ofc: ficllccct shltellr roigriiit tt and:ccicttcuitn tiictis antcl viwrncing cactitbihty, Thte stacff cif OCI) is divided roucghtly equially bet weecnclite Armuy IDepatcelnct hceadquaccrtees acid ltce OCI) Regionca~l Offices whcich woirk directlyr wiith ltce Civil Defense oreganizaitionis ofl (lie StmcescudIlc(eir plciiiiccil sucbdivisionis. If, acsaIrescill of ltce Ipresenct review cif' Civil Dlk'nise Icy lice Execuitive Office cif (licePresidenct, ltce Secretary cif Defencse dcontincies IccIce delegated eesponisibiilitlit's lice Civil lDefencse, ltce Office cif Cisil Defsitse shcould ccct coicciic itiis it part if (licelDeartccecc If cifle Arcmy Secreeltrial. The Office cif 160 Civil Defense is primarily a line, not a staff, activity. Further, its mission is sufficiently different from and independent of the missions of the Military Departments that it should be established as an independent agency reporting to the Office of the Secretary of Defense. The Office of Civil Defense, should it be retained in the Department of Defense, should be converted into a Defense Agency (the Civil Defense Agency), and the Director thereof should report to the Secretary of Defense through the Deputy Secretary of Defense (Operations).* V. EQUAL EMPLOYMENT OPPORTUNITY COMPLIANCE IN DEFENSE CONTRACTS Executive Order (EO) 11246, "Equal Employment Opportunity," was issued on 24 September 1965 and amended by EO 11375 in October 1967. Among its provisions are regulations (Part II) which require that government contractors and subcontractors take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race, color, religion, sex or national origin. This obligation applies to the entire company, and not just to the facility involved with the specifically contracted item. The contractors are also required under the Order to: I. State in all job advertising that all qualified applicants wi!l receive consideration without regard to race, creed, color, religion, sex or national origin. 2. Give appropriate notice to the unions with which the contractor has a contract, advising the union of the contractor's commitment under the Order. 3. Comply with the Order and all rules, regulations and orders of the Secretary of Labor. 4. Furnish all information and reports required by the Order and permit access to books, records and accounts by the contracting agency and the Secretary of Labor. S. Make reference to these commitments in all subcontracts and purchase orders so that such provisions shall be binding on each subcontractor or vendor. The Order specified that the Secretary of Labor shall be responsible for the administration of Part I1 and this function was in turn assigned to the Office of Federal Contract Compliance (OFCC) which was established in January 1966. The OFCC, among its various duties, designates which Federal agency will have contract compliance responsibility for individual contractors, so that each contracting agency is not required to saparately administer the Order for every contractor with which it does business. This designation has been made by using the grouping of industries according to the Standard industrial Classification (SIC) codes and the government agency designated is known as the Predominant Interest Agency (PIA). *Soc Recommendation 1"4. 161 The Department of Defense is the PIA for the following eleven industries: 1. Ordnance & Accessories 2. Textile Mill Products 3. Apparel & Related Products 4. Leather Products S. Primary Lethal Products 6. Fabricated Metal Products 7. Machinery (non-Electrical) S. Electrical Machinery 9. Motor Vehicles & Equipment 10. Miscellaneous Manufacturinmg 11. Printing & Publishing Industries In addition, the Department agreed to perform the compliance activity for the National Aeronautics and Space Administration (NASA) which has been designated the PIA for Aircraft and Parts and Business Services, The organizational assignment within the Defense Department fol this area of responsibility has evolved over the years. Prior to Octobcr 1965, each of the Military D)epartments had its own separate contract compliance unit. There was also a1 Department-wide compliance unit for common-items procuremenit in the Defense Supply Agency (DSA). Each unit was organized and operated independently with its individual policies and procedures. causing a wide variance in implementationl. In November 1965, the contracts compliance programs were consolidated under the Assistant Secretary of D)efense (Manpower and Reserve Affairs). A second reorganization of the D)epartlment's contract compliance functionl was madc in July 1967. II removed operating responsibility for contract compliance front the ASD(M&RA) and reassigned that responsibility to the Defense Contract Administration Service (DCAS, a component of DSA) which is responisible for tfie Department's contract management functions. This transfer was not a complete shift of responsibility. It did not include policy direction and guidance, which was retained by the ASI)(M&RA). The compliance review is the method of examining the Equal Opportunity Program of a contractor. The Contract Relations Specialists, usually GS-13s, beginma compliance review by conducting a conmmounity survey. Ctomulniulity surveys involve examininig local labor market conditions with persons stich as Urban League employment specialists, representatives of the local chapter of the National Association for the Advancement of Colored Peo•mle (NAACP), officials of the state emtployment service, local religious or 162 community service leaders familiar with minority group job prospects, and spokesmen for organizations representing Mexican-Americans. Assuming that the review i: 'ot of a large facility where a team approach is required, the reviewer ordinarily spends four-to-five days in the contractor's locale, with the first day or half-day devoted to the community survey. The initial visit to the job site is usually devoted to general discussions with the plant manager or the industrial relations director regarding the contractor's equal employment opportunity posture and recent affirmative action efforts. The specialist generally will have familiarized him&vif beforehand with the employer's latest employment data. Following the initial discussions, most specialists tour the contractor facility with a representative of the contractor. Subsequent discussions with the contractor deal in specific terms with major problem areas and whatever affirmative actions must be taken to place and upgrade larger numbers of minority group workers. The contractor and the specialist then draw up an agreement on new or accelerated affirmative action steps. In May 1966, OFCC adopted a government-wide program of special compliance reviews called "Pre-Award" reviews. On all contracts and subcontracts of $1 million or more, the OFCC requires that there be a comprehensive review of the potential recipient's employment before is awarded thatFull it not be awarded until the complian'ce with the and Order. reports on all lire-award contractor is system adjudged to bethein contract reviews must be transmitted to the principal contract compliance officer of each contracting agency, which is required to transmit the report to the OFCC within thirty (30) days after the award is made. The Department of Defenda is the Predominant Interest Agency and/or responsible for review of 14,000 contractor facilities. OFCC Order No. a,dated 24 Octoben 1969, requires that by ttoe begining of fiscal year 197 I, at least fifty percent of the assigned facilities will ne reviewed annubely. DCAS currently has a field staff of 149 persons ( 110 professional ad 39 clerical). It is estimated that approximately 450 additional persons (345 professional and 105 clerical) will be needed for the qepartmemt to fulfill its review responsibilities. The rpect of the Depiatment's Coftracts Compliance program concern is the apparent conflict of die Equal Employment procurement unisions within DCAS. Procuremenl officers appear compliance requirement as a hindrance in perfiorming ifheir primary which causes Opportunity to pew the procurement the most and tbe contract function. Since the contracts complbutce program is essentially an audit function, the apparent conflict seems to be in the fact iat the procureyent people are actditing themselves. This conflict could be reduced by relieving the procurement people of the potential trade-off decision which might comipromise the Equal Enmployment Opportunity requirements. Tohere are additional means, of course, of advantcing the general obaiectives which underlie the E¢.qual Employment Opportunity Contracts Compliance Order. There should be equal opportunity for employment for all races by contractors producing for the Department of D~efense, but it is just as important that all persons have an equal opportunity, regardless of race, to be employers who contract with the Department of Defense. Procurement policies should not show preference to prospective contractors either on the basis of race, size or age of tile prosp~ective contractor as a businless enliqy, amiong those capable of perforiving the needed service or supplying the needed materiel. 163 Y * cc/f/c/c f/cc Dc'f/'csc' De'partmie't shooidl be cucdcer the staff sutpervi'sion of' f/ce lDeputy Secretacit fi'fr Ec'cluiat/oni. A rc'stcdi' acid claci/fication of the re'qui/recenet of itce Office of' l~~~c'Fde'ral/ Contlract Cbompliane' wed /ic penialties f/sr nonicompi~liancee fo~r 1/ic'guidance ofti/i Dc'fc'cse Contract Aucdit Agencicy ancd De'fecnse ('ontractors should hi' obtained. V-8i/ic' imp/l'emeniitatiecn of' the' coentract cmcpiancce /)rogracin wit/c/n (lie Del/usc' De'partmnciet sholeiid bi' ass/gnedic fteftic' Det/usc' C'ontrac't Audidt Ageeccy (DCAA ). hicordc'r to f/c/f//I its assigned anniia/ reeveiefw icrcos /cIics addit/ocial professonual aned clerical pecrsoneilc' s/ho/ld he'assigneedc ito A At. lb 11%9P~rcccuremenet policies. shiou/ld be see.//n'cielatc'c ayctee einsureri f/cat there is cno impe'd/imect to /parfici/cation bi- prospectivco' eitracteocs wi'thi f/ic iacab/life' f eer)cf ormc,regarcd/ess oftf/i race-or s/Zc' of f/i' /)rosyiwc'cii' 'ocntractcior, or t/hi per/oil ,/cici i/cc preospec'i'fv'c coeniractor be'cen ienbusiniess. *Iceshs V1. EOUAL IWFENSV EMPLOYMIENT OPPORTUNITY WITHIN THlE I)EPARTMENT OF Iccrecenct years, concsidercabte high level official aittenction lilis liven directed at the cmactter ocf the Eqinal Opplocrtuncity Programcocf lice Iepartcccecct of lDefencse. The mcatter has been studied fit depcticby, for examcple, lice President's Ceccwcithee oii Eqiuacl Opportuniity incthe Armied Foerces (thle Gesell Coccicci tee). euciuiiited by uresideiit Kenncedy inc1963. Execuitive Orders acndSecretary of IDefencse Directives cave beenIissued by eachcrecent Presidecnt lacid ,Se-cretary oif Defecnse, dcownc tocaind inccludincg the pcresent acdminiistractionc which set forthc c'ompcrehcensive procgracms fur acssuriccg eciual ccllccrtcc' city, The receordtoif icmplemienctationc, hocwever, leaves mchccl to be desired. fIc tact, lice responcsibility for impcjlemcentccticon is sic diffused that incsocmeareais it has piroivedt tio tie icneffective. Studiesý of fle aictual ciamibers of' miccicority groupis incvariouis grades cif tiothc tie civilianc cnd cmilitary inidicate' that thIe percenctages are fai- belowv swhat tihe D~epacrtmcenct of Defecise conisiders to lie reasccnable in lice compilanies with which tlile Depacrtmcenct makes conctraccts for gcoods icr services. Ttcis is pcariciclcrly true ficltce ccffice'r grcoup in lice mcilitary acid tlce civilianc sopwrgrccdes. Ocnearea which calls for spiecial acttenctionc is the relatively smaccll percecntage of micncority officers iii lice Military Services. As shccwnc in fle applendcedt tabulactiocn, thiecncicber icccreecsec' fromcc 6,351 icc 1965 ( 1.9/, of the total), tic 8,595 icc 1969 (2.11 oeftlce tictat). Thcere wacs a dlecreaise in ltce numbicter acid piercentaIcge oif Negrocofficers incgrades 0-h ancd 0-2, lied aic inicrease inceach hcighcer grcade. ( see Tatble A). Somccewhcat file' samcesitcuationiis shccwnin Ictheustalstics oncenilistedt personnccel -- ccdeuclie 164 TABLE A rEGRO PARTICIPATION IN THE ARMED FORCES BY 'qRAJE (AGGREGATE) (1969, 1967, 1965) 1965 Total 07.10 1,310 06 16,480 0b 34.734 04 533,707 1967 H.gra Total 1969 N.gro I%,, Total ý.. 1) 1,330 1 (0.1) 1,338 2 (0.2) 17,547 47 (0.3) 18,190 90 (0.5) 238 (0.7) ,3,095 534 (1.2) 43,887 880 (2.0) M%) 1 N.gro (%M (0.1) 1,050 j(1.9' 67,392 1,742 (2.6) 68,259 1,851 (2.6) W.1,742 59,124 2,634 (2.5) 106,313 2,48 (2.4) 115,803 2,991 (2.6) 1,112 (1.9) 62,093 1,309 (2.1) 70,672 1,094 (1.5) 01 46,783 951 (2.0) 80,726 1,605 (2.0) 15,893 875 (1.5) WO Total 16,178 338,068- 340 6,351 (1. 1) (1.9' 24,582 402,078 613 8,335 (2.5) 1'2.1) 30,790 407,847-** 812 8,595 (2.6) (2.1) 03 E12 E.9 14,068 737 (2.0) 16,390 (2.Y) 16,687 578 (3.6) E.8 U(,I I11 1,447 (411) 42,563 2,352 (5.5) 44,886 2,959 (6.6) E-7 120,187 6,453 (5.4) 144,421 11,607 (8.0) 157,906 15,617 '9.9) E-6 235,300 21,290 (9.0) 281,808 34,445 (12.2) 291,690 291,690 (13.1) E-5 ,09,583 52,70' (12.9) 473,641 55,580 l11.7) 495,371 52,625 (10.6) E.4 471,339 55,161 (11.7) 133,903 71.641 (9.80 710,758 63,197 (8.9) E.3 546;315 58,553 (10.7) 691,646 57,4.53 (8.3) 521,744 48,128 (9.2) E-? 369,524 39,229 (10.6) 329,267 31,802 (9.7) 371,813 36,395 '9.8) 2.1 302,860 28,167 (9.3) 268,466 29.702 (11.1) 265,690 19,604 177 10 (5.6) 134 17 (12.7) 2,505.464 263,299 (10.5) 2,843,532 269,A50 (9.5) G'. Ur1k" 'Ttal G:.ad, Tot.l (7.4) 2,982,105 295,040 (9.9) 2,876,679 277,129 (9.6 3,384,183 303,375 (9.0) 3,284,526 285,724 (8.7) It 'ln-l.doa 10 Arm otlic. , walt, g.ada a, J "*Army only, *-*-n1t.d.. 15 Armyoaftf . Soa.,.: 403 anon. -ko - ith grade ad ... .au. Ror0,t. compli.d by th. Ottir1 of the Deputy Asistont Seta,.?ary oa Detense (Civil Rights), 20 April 165 1970. in%the lower grades laid Lil increm., inlgrades E-0 and Ihigher. Effective imoplemen tation of the equal opportunity program of the Department call only be secured through personal and continued intervention by the Secretary, to the extent (fiat Lill personnel of the D~epartmtent become conscious of his scru tiny of the progres at aill levels. Thle Secretary's intervention call take the forin of requiring evaluations, frequent periodic reports and recording his , .isfuctioin or dissatistaction with the progress. A record of complaints and their dispositon could be required by the Secretary. The Secretary should take whatever steps are needed to assure substantial Improvement Ill the trends - inl number and percentage ot minority employment ait ailllevels, The accession of more officer personniel from minority groups would be implemented by increasing ROTW programs inl predominantly Negro colleges. Another useful appr-oachI lies InIanl expansion1 of the Junior ROTC program inl thle high schools. InI this way, anl opportunity would be provided young mena, Including minority children who come fronm broken homes, to get constructive training InI leadership and discipline. The entire approach to handling compliaints of dlscrltnlnatlon, and thle procedures pertaining to their handling, need a review within the D~epar tmen t. Such a review mnust naturalliy consider, especially with regard to civilian employees, sinalliir problems and programs inlotlher branches of the Federal Gus ,ramnent. If'it is found that general policiesI conflict with policies or programs appropriate to tlie Department of Defense, ap~propriate changes linsucth general policies should be recommtended. If anly general comment could be made concerning the existing overall Equal Emptoyment Olinortunity Program inl the D~epartmnen t of Defense, It would probabl'y Ite that it lacks centrai coordination and is de~signed for reaction rather than action. The tendency Is to reactf defensively, or even mtore self-defeatIng, to atttempt to disprove thle complaint rather titan learn what caused It littd lake applroptriaite stepts (ot reasonabiy insure that other such comtptaints are not likely to occur. It does not lend itself to the insight which would cause Inttrosptectiontlt tiall levels lItnto why situations exist anid what call be done to overcome cad imtprove themt. Pecrhaps ttie mtost Imp~ortant ptart of' til effective EqLII 0tal OlprttmIIty Program is the attitude of recruiters anid suptervisors. It does little good for tlie top pteople, no matter how sittcere to etuniciai~ titl equal (titlort umity policy, if at meinber of it mtittority group !s greeteu with itihostile atttituide inl the recruititng or puersonnuel office, ttr witht a supervisor who is untsymtpathtetic to his hltiitatt needs atud iasptirationts tu be given itill equial otppo~rtuntity for ptromtotion till thle way uptilthe flute Ciiatiges itt attitudes itt these atreas a~c tr likely totjust htappent - even if' the President's or the 3ecretitry's directives and nleý.,ages g(Il thtrough , whticth is by ino manets certaint. Ani inutetusive til( effective traiining mutts' i's iteded , to teactt recruiters, ntuonomissiotned otficers, omflcers, laiudciviliatt suits. E:ors tthe impotirtantce of helpting mittnority grotupt; and their white associates get along with othter, ~cach * To tie effective, tlie respotisiblufity mu~istltodge ill tite regulair line organizatiolt, nttt inl ouiitiee strutcture, and supewrvisors mtust reailize tltat their twtn success iii iicciintlisliitg these gutals will ttave iitt imtportiant part fitt deterttinittg their (twit progress within thie ~~~stme 166 D~epartmenet of IDefense. 'They must also apprecia te that it is impoertanlt noet only for till such people ;is individuals, hipitalso for the successful accompluishmuenit of their mission and for the attainmilent of (lie Nation's basic goals. Tiis lodginig of responsibility ini the regular tine organization (foes oot conflict with thie mied for using professional equal ophuort unity personnel to design programus land advise the tite organi7e1i toll, including OSI) regarding evaluation and muoni~oring of the purogramuus. While spiecialized equal oppourtunity personnuiel tire used to sonie extent in the D~epartnmen t of' Defeinse, manay personnel who have equal emptloymnent epporunoit yt responsibilities have no (raininig or experience to quality Itheunfor thie positions at the timec they are assigned. For the most part, (Uis is an oni-thie-job training prougramn. Inisonuic cases, the eqlual emoployment oppuutoualy respoiisilbiliy is an additional responusibility for liersoilnel who have nol int erest in promuoting tlie program. V.11)Ali lot ie'eviatb' evealuatione shoeuld be' eireeth eli(,1 (lee'rvrearev eefDel/unse (Is toethe( extent ofi 111inorilt empn~loymenuct atill proemotionclei all areas ofl the D~epartmnent: cacei adini'steraieturit shoueld di /s eqiret tatee: o euntprol rprst hmo prgessIlie''ee b th e qaitatie! eed eeeilnliativ ters . Me e'ttci/iteac should pe''l/lef III, reee'ecrL. ofetmploymert of~mede'inoityiempoees i/icg ealtl tlevels, cIv/iteknwehtdti (esoah, dongthihs. eeeerecord eice e~reeth v ee ceetilleis vereegeucci tereiscee'er Aertet' Secreea seeeo/cutld/ dieedeeeels''eelceer h tie' hi evitiew red with~ll~ the asis.ft (ieehReveci/ewtheee siveidlee'e'tecomlaintse jar el/lea ce/Ileetelcit /anseedl/ rwlet elivaan ell/l'etleet graeelev/'el/s. andceel career eer perogre'ssicon /eeeeiersholdeceice' pceovide/ee /el elliell eepo/ jctlelitc' peersooeeeeel wvil/c alppropriate'gradee.ctrcltcere' econticcee~letisrle wit/c ot/eer pllicel't /cldgeledte.c cc. L N- -~~~ _ _ UH 0_ N wH N N $5' o00 EnlourtoN Statementsu ofD s et r mC 144 20 U DISSENTING STATEMENT OF WILFRED J. McNEIL The Report of the Blue Ribbon Defense Panel contains many statements and recommendations that are deserving of full support. As an example, I think that the reasoning and conclusions dealing with the development and acquisition of weapons and equipment are excellent and the recommendations should be adopted without delay. However, with certain exceptions, I do not concur in the concept nor in most of the recommendations in Chapt'r I, "Organization," references to organization matters in other chapters or with some if the recommendations on logistics. Following are comments relating to these sect',,ns of the Report together with my recommended organization chart for the Departmcnt of Defense. The results of overcentralized management of the 1960's, the hearings conducted by the Panel, and the preface of the Report itself, all call for decentralization of commarA and management. Panel recommendations on organization, however, go in the other direction, It is proposed that present functions of the Office of the Secretary of Defense be expanded and assigned to an OSD staff of greater stature encouraging more and more centralization. At the same time, the Military Departments and their Secretaries would be downgraded and the Joint Chiefs of Staff, including The Chairman, considered - by implication, at least unsuited because of Service rivalry or parochialism, etc., to lead or direct the fighting forces. This in spite of the fact that they all have thirty to forty years of honorable field or combat expericrnce and are among the best trained and ablest people in the nation. To carry out a program of decentralization, the need for strong, well-organized and well-run military departments is recognized. Yet, for reasons touched oi above, many of the recommendations on organization in the Report - if carried out - would be one long step toward a highly centralized Single Service and in the case of logistics, recommendations admittedly lay the groundwork for a Single Service of Supply. I could not concur with either objective. (Note: There are evidences that the Secretary of Defense and the Deputy Secretary af Defense are attempting to decentralize or delegate some of the decision making tasks and to restore some of the responsibilities that the heads of the Military Departments once carried. This effort may be - for the time being at least - a somewhat frustrating experience. After some eight years of overcentralization, the capability to accept responsibility and to make decisions withers (standing instructions being what they are) and it can take time to reverse the pattern. Temporary lapses or failures should iiot affect the long-term objective.) As groundwork for the comments that follow, I would like to quote from the foreword of oAe of the Panel's Staff Reports: "we tend to meet any new situation by reorganizing and a wonderful method it can be for creating the illusion of pro-,ess while producing confusion, inefficiency, and demoralization." Petronius Arbiter circa. A.D. 60 There is a natural tendency to choose the route of drastic reorganization if some segment is 207 J not living up to expectations. Also, there is the tendency to merge or combine two or more segments of an organization if either or both are operating in an unsatisfactory manner instead of attempting to solve the individual and lesser problem first. It is in this framework that the following comments are submitted. Mr. Robert C. Jackson, a member of the Panel and a person with long experience in observing the strong and weak points of the military structure submitted a dissent from the Panel Report. While he indicated that he still was not in agreement with a number of facets of the Report, he limited his formal dissent to three important areas. I subscribe to his reasoning and his conclusions except that any new Under Secretaries of Defense (for Resources and for Evaluation) should be staff to the Secretary of Defense and ranked next jumor to thie Secretaries of the Military Departments. Because of the thoroughness of his work I will try to avoid undue duplication of Mr. Jackson's observations, although my comments point to the same conclusions. First, there is merit in tlse grouping of certain OSD functions dealing with: (1) Resources and, (2) Evaluation - PROVIDIN,.; that each of the two groups were to be headed by an Under Secretary of Defense whb/was staff to the Secretary of Defense and the Deputy Secretary of Defense, and ranked next junior to the Secretaries of tlse Military Departments. I do not subscribe to the proposal for another Under Secretary of Defense to head a new military operations staff as contemplated in the Report. Next, I urge that the Joint Chiefs of Staff, their Chairman, and the Joint Staff be considered as an integral part of the Office of the Secretary of Defense. In this context I believe that the JCS, and the Chairman should report directly to the Secretary of Defense, or his Deputy acting in his stead, that the JCS represented by the Chairman should be In the chain of command to the Unified or Specified Commaads as Is the practice at present and that the Joint Staff should report to him. No new and separate military operatiors staff is needed although the Secretary of Defense may wish to have a Special Assistant or a.small staff to monitor JCS work. "personal (Note: There is criticism, and with some jitstification, of the size of the Joint Staff, its committees and of the involved procedures that have developed over the years. What is not recognized in the Report is the tendency for every element of OSD - when they have a problem - to "pass the buck" by just asking JCS for their comments. As a result, the Joint Staff and the associated committees devote many man years of effort to matters that should, in my opinion, never go to JCS ai all. For example, the JCS should not get into Budget detail. Rather their contribution to this function should be in the consideration of primary force requirements and tlse general readiness of the forces.) I am not sure what would be accomplished by placing Component Commanders as staff to the Unified Commander. It would result in the creation of a large single staff dealing in a myriad of technical and logistic detail of all Services that normally a Unified Commander should not be burdened with. The present organization gives the Unified Commander clear, unfragmi. ted command authority over all forces assigned to him and the designation of Component Commanders as Deputies would not enhance the Unified Commanders authority. In my opinion, the primary duties of the Unified Commander is to "fight" the assigned forces, or to be ready to "fight" the assigned forces. He should, of course, be able to state his opinion as to his present and future needs and to submit views as 208 to the adequacy and inadequacy of weapons available to him. His requirements, however, are just a part of the overall picture and cannot be accepted without evaluation ainy more thani any other element of the forces. While the dissent submitted by Mr, Jackson presents reasons against the proliferation of lop commands, I would like to add a brief commnent for emphasis, at the risk of repetition. There is no need for, nor do I favor the establishment of a "Strategic Command." The present Joint Targeting system hansworked well and should continue. The creation of a "Strategic Command" would produce-yet another 'layer' between decision makers and the forces, In thieyears to conmcthe maintenance, replacement, and if need be, the use of these forces canl be most effectively ajid efficiently accomplished under the piresenlt systemi. A new "Tactical Comniand'' headquarters is, in moyopinion, unnecesary. Facilities exist today to handle the command relationships with tile Unified and Specified Comimands. The "Tactical Commiand" cloncepit is once again the 'layering' process which piroduices a large staff but leaves in doubt just how this plrolduces miire effectiveniess or clear cut hines of conunand and for planning. I dto lnot subscribe to a "Logistic Comimand''as prPopose evidence in Staff Reports to su~lpport this propiosal. in tlheReport. I find no solid The Long Range Planning Counjcil aiid a Net Assessment Group lisa, merit said should rport directly to the Secretary/Deputy Secretary oft'Defense asspiecial staff groups. Iagree with Mr. it'cksoii that what is low ISA should Iseretitled Political/Military Affairs, as being more descriptive, slid this function should repolrt to the Secretary of Defense. Tihe enclosed chart sllows the Clonimunlications function and1(the Intelligenice functioii reporting toi the Secretary/Deputy Secretary oif lDcfens'. They iiighmtwell repo~rt to thie Unider Secretary of Defense, Regardless of the reporting line, it would be helpfull if these functionis were organized sod staffed Yo they mlighm serve all users - ill a nmanner Similar to the way thie Navy has organized and operated its finanice fanctioni at Headquarters. It is not piossibile fur a Panel such asthis to cover every facet of the work oif the entire Department of Defense. I do feel. homwever, thtat there arc certain deficiencies in the Report that should have been dealt with. For examle,le no1 stalff studies onl organlizatioln of tile Military Depasrtmenits were unldertakenl, alnd except for an1admlonlitioni to redtuce Staff perolilel, no recommlienidationls are inicludedI ill(the Report. Anothler exalmplle - o111several ocasons I proposed that ttue sen~seof mlajor recommlllend~ationls o~r alternative~s that were slnder conisideration by tihl Panel be disculssed with senlior people min thme organlizationlal entities affected in order tol seculre their hiplltt alid idecas.Conceivably, pleople C111rreltl) celiaged lO the actual wmrk of the D~epartment wou~ld have II conltritbutionl tol make. No doubt sonic objections - both real and fancied - would hmavebeen raised whlich the P'anel coul] have accepted or rejected. In any case, I believe thmat t(lie wolrk oif timePamielWould have beeii more thorough alid complete hall this beena done. Thle panel, 11sa whole, took thme opplosite view. Although the dissents relate to im~pirtalt areas of timePouiel's wolrk thmereaim - as stated at the outset -- manly conlulcsionls and recommlliendationls that deserve full support. They arc well wolrthl the year-long effort o~ithle part of tile Palelemiemibers alnd thme Staff. 209 RECOMMENDED ORGANIZATION CHART OFDEFEIJSL DEPARTMENT £0- 25, 1910 N., A,~..- too- A.-, I., Soo. h0,o0 Co00,0, ,otyyUdldo SEr-o fo Statemen,.I Wilfred 1210 . Mc, ofDssn SeiD. CONSOLIDATED LIST OF RECOMMENDATIONS ORGANIZATION i-I The functions of the Department of Defense should be divided into three major groupings: (a) Military Operations, including operational communications (herein culled Operations); command, intelligence, and (b) Management of personnel and materiel resources (herein called Management of Resources); and (c) Evaluation type functions, including financial controls, testing of weapons, analysis; of costs pordeffectiveness of force structures, etc, (herein called Evaluation). 1-2 Each of these major groups should report to the Secretary of Defense through :a senarate D)eputy Secretary, Appointees to these three positions should be drawn from civilian lifte, and rhould rank above all other officers of the Department of Defense except the Secretary. One of the three should be designated principal deputy, The General Counsel, tt!e Assistant to the Secretary of i)efense (Atomic Energy), the Assistant Secretary of D)efense (Public Affairs), and the Assistant to tile Secretary of D)efense (Legislative Affairs) would continue to report directly to the Secretary of Defense. The staff of the Office of the Secretary of i)efeiise should uot exceed 2,000 people. 1-3 The Deputy Secretary of Defense for Managemnent of Resources should be delegated responsibility for the following functions: (a) The Military Departnments, which should continue utnder the immediate supervision of their Secretaries; 1b) Research and Advanced Technology; (c) Engineering Developmnent: (d) Installations taid Procurement (a modification of the present Instaltations said Logistics;: (el Manpower and Reserve Affairs; (f) Health and tinviroimental Affairs: (g) )efemase Supply Agency; anrt (h) Advanced Research Projects Agency. 211 There should be an Assistant Secretary of Defense fer each of the functions (b) through (f) inclusive, who reports and provides staff assistance to the Secretary of Defense through the Deputy Secretary of Defense (Management of Resources), The position of Director, Defense Research and Engineering should be abolished, and his functions the Assistant Secretary of Defense for Research and Advanced between reallocated and the Assistant Secrtary of Defense for Engineering Development. Technology Functions (g) and (h) should continue to be constituted as Defense Agencies, each under the Immediate supervision of a Director. The Advanced Research Projects Agency should be delegated the responsibility for all research and exploratory development budget categories. Funds for such research should be budgeted directly to his Agency, and the Agency should be authorized to assign or contract for work projects to hlboratories of the Defense Department or in the private sector, as appropriate, 1-4 The Deputy Secretary of Defense for Operations should be delegated responsibility for the following functions: (a) Military Operations; (b) The Unified Commands; (c) Operational Requirements; (d) Intelligence; (e) Telecomnmnuications (and Automatic Data Processing); (f) International Security Affairs; (g) I)11fense Communications Agency; and Defense). (h) Civil Defense Agency (If Civil Defense is to be retained in the Department of Three new major Unified Commands should be created' (1) A Strategic Command, composed of the existing Strategic Air Command, the Joint Strategic Target Planning Staff, the Continental Air Defense Command, and Fleet Ballistic Missile Operations; (2) A Tactical (or General Purpose) Command, composed of all combatant general purpose forces of the United States assigned to organized combatant units; and (3) A Logistics Command, to exercise for all combatant forces supervision of support activities, including supply distribution, maintenance, traffic management and transportation. No Commander of a Unified Conamaid should be permitted to serve concurrently as Chief of his Military Service, lihe responsibilities now delegated to the Joint Chiefs of Staff by the Secretary of Defense to serve as military staff in the chain of operatioial command with respect to the Unified Commands, and all other responsibilities so delegated which are related to military 212 operations and the Unified Commands, should be assigned to a single senior military officer, who should also supervise thc separate staff which provides staff support on niilitriry operations and the channel of communications from the Piesident and Secretary of Defense to Unified Command-,,, This officer should report to the Secretary of Defense through the D~eputy Secretary of Defense (Operations). This senior military officer could be either the Chairman of the Joint Chiefs of Staff, as anl individual, not ex-officio, the Commander of thieTactical Command, or somie other senior military officer, as determined by the President and thle Secretary of Defense, There should be tan Assistant Secretary of Defense for each of the functions (c) through (f), Inclusive, who reports and provides staff assistance to the Secretary of Defense through the Deputy Secretary of Defense (Operntions). The Defense Commnullica Lons Agency and thie Civil Defense Agency would each be under the immediate supervision of a All Intelligence functions of the Depiirtinent of Defense and aill communications% functions should report te thle Secretary of Defense through thle D~eputy Secretary of lDefsnse for Operations, (it)ulc"' To provide the itaff support onl military operations, amidthe channel of I-S11LHCit~I Th frlowin the PrshouldansdbtakenSceayo ees o(i nfe 1 tloprtosstaff, separate frommtiall other military staffs, should be created, omns M All rstafperonsibllpositions Idtel Organizato tio fie Join t Chiefs of Staff fytl Scearyd in Defns toedquserve itsmitlitary stafsfthe Milit cary Sevies o which r comnd wip~thi aepctivties sulie Uniitar Coperatinds, whd icohere repomnsbtiesd fordlgtraser toi other relatedto milotary ele enats, sho n be d (lieminated. Cmadsol ershdd n (c)Al stif'pronlpoiin Organnization nte of tile Joint Chiefs sol of' elmtdt Staff nld oily the Joint Chief.%of Staff and atreconstituted Joint Staft limited in size to not more than 250 officers augmented by professional civilian analyst:i atsrequlired. (e) The Unified Commanders, should he given unfraginented command authority for their Commands, and thie Commanders of component commands should be redeslgnat':J Deputies to the commander of 'lie appropriate Unified Command, in order to make it ;mumistakably clear that the combatant forces are in tile cha~mm of command which runs exclusively through thieUntfied Commander; (f In consolidating thie existing area Unified Commands into the Tactical Command, major organi2-ational and functional amdvantlages will be obtained by: 213 (I) Merging the Atlantic Command and the Strike Command; (2) Abolishing the Southern Command and reassigning its functions to the merged Atlantic and Strike Commands; (3) Aboliching the Alaskan Command and reassigning its general purpose function to the Pacific Command and its strategic defense functions to the Strategic Command; and (4) Restructuring the command channels of the sub-unified commands, (g) The responsibilities related to civil disturbances currently delegated to the Army should be redelegated to the Tactical Command; and (h) The Unified Commanders should be given express restponsibllity and capability for making recommendations to the Deputy Secretary of Defense for Operations, for operational capabilities objectives and for allocations of force structures needed for the effective accomplishment of thie missions assigned to their Commands, 1-6 The Deputy Secretary of Defen~se for Evaluation should be delegated the responsibility for the evaluation trod control-type activities, Including: (a) Comptroller (including internal audit and inspection services); Unit); (b) Program and Force Analysis (a modification of the present Systems Analysis (c) Test and Evaluation; (d) Defense Contract Aidit Agency; and (e) Defense Test Agency. There should be an Assistant Secretary of Defense for each o'• the functions (a) through (c) inclusive, who reports aid provides staff assistance to the Secretary of the Defense Cirough the Deputy Secretary of Defense for Evaluation. The Defense Contract Audit Agency should be continued as a Defense Agency, under the immediate supervision of a D)irector. A Defense Test Agency should be created to perform the functions of overview of all Defense test and evaluation, designing or reviewing of designs for test, monitoring and evaluation of the entire Defense test program, and conducting tests and evaluations as required, with particular emphiasis on operational testing, and on systems and equipments which span Service lines. The Defense Test Agency should be under the supervision of a civilian Director, reporting to the Secretary of Defense through the Deputy Secretary of Defense for Evaluation. 214 1-7 The number of Assistant Secretaries in each of the Military Departments should be set at three, and except for the Assistant Secretaries (Financial Management), they should serve as senior members of a personal staff to the Secretaries of the Military Departments without the existing limitations of purview imposed by formal functional assignments. The Assistant Secretary (Financial Management) should become the Comptroller of the Military Department, with a military deputy, cs in the current organization in the Department of the Navy. The Secretariats and Service Military Staffs should bc integrated to tlte extent necessary to eliminate duplication; the functions related to military operations and intelligetce should be eliminated; line type functions, e.g., personnel operations, •ilould be transferred to command organizations; and the remaining elements should be reduced by at leaMt thirty percent, (A study of the present staffs Indicates that the Secretariats and Service staffs combined should total no more than 2,000 people for each Department). I-8 Class I1 activities 'Army), Field Extensions (Air Force), and Commands and Bureaus (Navy), all of which are line, rather than staff in character, which are now organizationally located under tile direct supervision of staff elements In the headquarters military staffs of the services, should be transferred to existing conunand-type organizations within the Services. 1-9 The D)efenw Atomic Support Agency should be disestablished. Its functions for nuclear weapons management should be ttansfurrred to the operations staff under the Deputy Secretary of Defense for Operations, and its weapons effects test design function should be transferred to the Defense Test Agency. ** *** * * ****** *****e** **5***** * **5*55*5*5*5*5*55*5*5*5.55*555*5*55555**** 1-10 The adminlstraolon functions presently assigned to the Assistant Secretary of Defense (Administration) should be assigned to a Director of Pentagon Services, reporting to the immmediate office of the Secretary of Defense. lie should be responsible for operating the facilities and providing administrative support for the Washington Hleadquarters. I-11 A separate program category should be established for public affairs activities it, the Department of )efense. 5*5****555*5*s*****5**555**5*5*r*5**5***5*5*****5*****5***ss*********5*** 1-12 A Net Assessment Group should be created for the purpose of conducting an; reporting net a'sessments of United States and forcign military capabilities and potentials, This group should consist of individuals from appropriate units in the Department of Defense, consultants and contract personnel appointed from time to time by the Secretary 215 .~............ of Defense, and should report directly to him. 1-13 A Long-Range Planning Group should be created for the purpose of providing staff support to the Secretary of Defense with responsibility for long-range planning which integrates net assessments, technological projections, fiscal planning, tc. This group should conmst of individuals from appropriate units in the Department of Defense, consultants and contract personnel appointed from time to time by the Secretary of Defense, and should report directly to him. 1-14 A ctordinatia' 3 Group should be established in the immediate office of the Secretary of Defense. The responsibilities of this Group should be to assist the Secretary of Defense and the Deputy Secretarles of Defense in coordinating the activities of the enthl Department In the scheduling and follow-up of the various inter-Departmental liaison activities; to staff for the Secretary the control function for improvement and reduction of management Information/control systems needed within the Department and required from Defense contractors; and to assure that each organizational charter of the Office of the Secretary of Defense is properly scoped and coordinated and in accordance with the assigned responsibility of the organization. The responsibility for the Department's Directive/Guidance System, currezndy assigned to die 'AssistantSecretary of Defense (Administration), should be assigned to this group. The coordinating group should be headed by a civilian Director, who should also serve as executive aswistant to the Secretary of Defense. 1-15 The Army Topographic Command, the Naval Oceanographic Office and the Aeronautical Chart and Information Center should be combined into a unified Defense Map Service reporting to the Senretary of Defense through the Deputy Secretary of Defense for Management of Resources. 216 CONSOLIDATED LIST OF RECOMMENDATIONS MANAGEMENT OF MATERIEL RESOURCES 1l-I Research and Development to advance the technological base should be constituted as a separate program, under the staff supervision of the Assistant Secretary of Defense (Research and Advanced Technology). It should be subject to continuing intensive review to insure that available funds sre allocated to militarily-relevant research and that all militarily-relevant areas of technology are considered in fund allocations. 11-2 The responsibility for control of Defense research designated to advance the technological base and the appropriated funds therefor should be assigned to the Advanced Research Projects Agency 'ARPA). Further, ARPA should b, directed to: (a) Allocate its R&D among qualified performers; li" (b) Assure by review the relevance of all projects and approptiateness of fund allocations; (c) Evaluate the effectiveness of all its R&D participants; and (d) Develop aod submit for approval to the Deputy Secretary of Defense (Management of Resources) an annual Research Objective (RO) Ftatement which would be a companion document to the Operational Capability Objectives developed by the Unified Commands and which would provide the Sectetary of Defense an information base to determine the overall defense capability objective&. 11-3 The Strategic, Tactical and Logisti,'- Commands should be assigned the responsibility to deyelop, and submit to the Deputy Se'-,etary for Operations, Operational Capability Objectives relating to their assigned missions. For this purpose, each Command and major sub-command Headquarters should be organized to include an operations analysis element. 11-4 For each Operational Capability Objective which is validated by the Deputy Secretary for Operations, the Deputy Secretary for Management of Resources should require one or more of the Military Departments to prepare and submit a development plan aimed at satisfying the Operational Capability Objective. 11-5 A new development policy for weapon systems and other hardware should be formulated and promulgated to cause the reduction of technical risks through demonstrated hardware before full-scale development, and to provide thc needed flexibility in acquisition strategies. The new policy should provide for: 217 :' (a) Exploratory and advanced development of selected sub-systems and components independent of the development of weapon systems; (b) The use of government laboratories and contractors to develop selected sub-systems and components oil a long-term level of effort basis; (c) More use of competitive prototype end less reliance on paper studies; (d) Selected lengthening of production schedules, keeping the system in production over a greater period of time; (e) A general rule against concurrent development and production, with the production decision deferred until successful demonstration of developmental prototypes; (f) Continued trade-off between new weapon systems and modifications to existing weapon systems currently in production; (g) Stricter limitations of elements of systems to essentials to eliminate "gold-plating"; (h) Flexibility in selecting type of contract most appropriate for development and the assessment of the technical ri,,ks involved; (i) Flexibility in fhe application of a requiremnent for formal contract definition, in recognition of its inapplicability to many developments; (j) Asurance of such matters as maintainability, reliability, etc., by other means than detailed dot smentation by contractors as a part of design proposals; (k) Appropriate plaining early in the development cycle for subsequent test and evaluation, and effective transition to the test and evaluatisn phase; and (I) A prohibition of total package procurement. 11-6 Department of Defense Directive 3200.9, Initiation of Engineering Development, should be rescinded. 11-7 Research and Development undertaken to satisfy specific military materiel requirements should be under the staff ,Eupervision of the Assistant Secretary of Defense (Engineering Development). 11-8 The Advanced Research Projects Agency (ARPA) should be reqaired to provide a formal technical risk assessment on all proposed new systems p)rior to the approval of the Development Concept Paper (DCP). 218 11-9 In cocert with the new development policy recomme .ded for major weapons systems, the same increased flexibility of techniques should be pie,:.-I, for minor systems. 11-10 The stated policy G; the Department of Defense to prov/ide incentives to encourage private innovators' participation in the development of defense products should be reaffirmed and promulgated. The reaffirmation of policy should be supplemented by directives (a) To improve procurement practices by requiring the submittal of bid samples in the procurement of catalog items; (b) With respect to patent rights, to define "Subject Inventions": as (I) Those inventions originally conceived pursuant to the research and development work specifically called for by a Government contract; and (2) Those inventions conceived prior to the award of a Government research and development contract which have not been reduced to practice constructively or actually prior to said award, and are first actually reduced to practice pursuant to the research and development work specifically called for by the contract; and acquire for the Government a royalty free non-exclusive license in patents based on Subject Inventions, for Governmental purposes; and (c) With respect to Rights in Data, to obtain only that proprietary data essential to accomplishing Governmental purposes other than manufacture or rep'iscurement, and to establish new basic categories of data rights: (1) Unlimite(i - including publication rights; (2) Limited - prohibited fot. reprocurement or manufacture, and (3) Production - right to use (license) for procurement at:,' manufacture. 11-11 The effectiveness of Program Management should be improved by: (a) Establishing a career specialty code for program managers in each Military Service, and developing selection and training criteria that will insure the availablity of an adequate number of qualified officers. The criteria should emphasize achieving a balance between needs of a knowledge of operational requirements and experience in management; (b) ilcreasing the use of qualified civilian personnel as Program Managers; (c) Providing authority commensurate with the assigned responsibility and more direct reporting lines for Program Managers, particularly those operating in matrix organizational arrangements: and 219 i (d) Giving the Program Manager, subject to applicable laws, directive authority over the contracting officer, and clarifying the fact that the contract auditor acts only in an advisory role. 11-12 The Secretary of Defense should establish a small staff within the Coordinating Group reporting to him and assign it the responsibility of effecting both a major improvement and reduction in the control and information needed for management within the Defense Department and, in turn, of its defense contractors. This should be done by specifying what is required, not dictating how to manage. Immediate top-level support to follow the current management systeisi control project through to its successful conclusion should be one of the first actions. Included in this action should be direction it, implement Instructions 7000.6, "Development of Management Control Systems Used in tiz Acquisition Process," and 7000.7, "Selection and Application of Management Control Systems in the Acquisition Pro-ess," with the control responsibility specified therein for the Assistant Secretary of Defense (Comptroller) reassigned to the Coordinating Group. 11-13 The management cost information needed within the Department and for visibility to Congress on major weapon systems acquisitions should be improved by recognizing the evolutionary nature of cost baseline estimates. Estimates should be reevaluated at each significant milestone of development. 11-14 Increased use should be made of parametric costing techniques to improve the quality of original and subsequent estimates, and to help offset the difficulties of estimating the cost of unknowns. I1-15 Individual contractors should accept a more responsible role as management members of a defense development team, and provide the Government with the benefit of greater objectivity in the contractor's independent evaluation of a proposed development. 11-16 The oractice of providing the members of the Congress 24-hour advance notice of contract awards should be discontinued. Such members should be notified concurrently with public announcement of contract awards. 11-17 'Thie Advanced Research Projects Agency (ARPA) and the Defense Test Agency (DTA) should be dh-cted to make a joint review to determine which in-house defense laboratories and test and evaluation centers are essential to research and development needs of the Department with the goal of eliminating the nonessential ones, and consolidating (across Services) the remainder, 220 11-IS A procedure should be authorized by Statute whereby all or a part of the proceedsV from the disposal of existing defense laboratories or centers can be used for construction of a new facility or expansion of an existing one which such construction or expansion has been authorized by Congress. 11-19 Close attention should be given to the possible advantages of having some of these laboratories and centers, govemnment-owned but contractor-operated. 11-20 The responsibility for Defense test and evaluation policy should be assigned to the Assistant Secretary of Defensse (Test and Evaluation). 11-21 A separate program category should be established for Test and Evaluation. U!-22 The responsibility for overview of Defense test and evaluation effort should be assigned to the Leense Test Agency. In addition, the Agency should be responsible for design or review of test designs, performing or monitoring of tests, and continuous evaluation of the entire test and evaluation program. 11-23 The Secretary of Defense should recommend to the Congres s and to the existing commission on Government-wide procurement that the Armed Services Procurement Act and other applicable statutes be amended to reduce or eliminate the requirement for Determinations and Findings oiz all negotiated contracts, to reflect the practicalities of Defense procurement needs and activities which result in most Defense procurements being accomplished by other than formally advertised methods, and aiso to reflect the various new types of contracts developed in recent years. 11-24 The Armed Services Procurement Regulation (ASPR) and the ASPR Committee System should be reviewed with the objective of formulating a more efficient management organization fur incorporating chasges into the ASPR and with the view toward reduction in the volume and the complexity of the ASPR. 11-25 In the implementation of procurement policy, due regard should be given to the need fur an adequate but not excessive, industrial bass. 221 A 11-26 Improvcment should be affected in the acquisition, training and retention of procurement personnel, with emphasis on a promotion system for contract negotiators which will not necessarily remove them from negotiating activities. 11-27 The Department of Defense should consider buying and providing industrial plant and equipment to contractors only when it can be clearly shown to be to the economic advantage of the Government or when it is essential to the Department's plan to provide a viable industrial mobilization base. Contractors should be encouraged to provide necessary industrial plants and plant equipment, and should be permitted to charge off peculiar plant equipment against specific contracts, 11-28 A program should be initiated fdr the Department of Defense to divest all plant equipment wisere ownership cannot clearly be shown to be to the economic advantage of the Government. 11-29 A plan should be developed and implemented to assure that emergency production of high priority war materiel can be initiated quickly and effectively. 11-30 The responsibility for maintaining an inventory and control of Department-owned equipment should be assigned to the Assistant Secretary of Defense (Installations and Procurement). 11-31 Repair in lieu of replacement should be an allowable charge against the parent procurement appropriation funding the basic equipment. 11-32 The responsibility for providing supply distribution, maintenance and transportation services to the combatant forces in Unified and Specified Commands under the Strategic and Tactical Commands should be assigned to the unified Logistics Command. 11-33 The Logistics Comnand should be assigned tlse traffic management and terminal management functions now allocated to the Military Traffic Management and Terminal Service (MTMTS), the Military Sea Transportation Service (MSTS) and the Theater Traffic Management agencies. 11-34 The Military Airlift Command and Military Sea Transportation Command both should 222 basindto the Logitics Command. 11-35 The Logistics Command ihOV':a be directed to develop, under the policy guidance of the Assistant Secretary of Defense (Telecommunications), an ADPRlogistics system to encompass supply distribution elements that con he shi *d among the Services, and all development and procurement activity toward separate ADP logistics systems not essential to support of near-term operations should be suspended. 11-36 A moratorium should be declared on Integrated Management Coding for transfers of the management of Items, and a complete review be conducted to determine: ()The adequacy of IMC criteria as indicated by experience with their use; (b) The magnitude of impact of divided management responsibility for major (c) The number of items coded for transfers of managers with partial or dry pipelines, the relationship of "dry pipeline" item management transfers and stock fund depletion of transferers, the impact of "dry pipeline" Item management transfers on reqluisitioners, and the feasibility of establishing pipeline fill requirements as prerequisites for item management transfers; (d) The feasibility of establishing technical data availability standards for item management transfers; (e) Methods of reducing conflicts of Integrated Management Coding by the several Military Services; and (f) The impact on requisitioners of existing criteria by which items are coded as "non-stocked". 223 .j•,-.m s.... . . ...... CONSOLIDATED LIST OF RECOMMENDATIONS MANAGEMENT AND PROCEDURES Il1-I The PPBS should be modified to include the formulation 4fResearch Objectives (ROs) by the Advanced Research Projects Agency (ARPA), the preparation and submission of Operational Capability Objectives (OCOs) and Command Program Memoranda (CPMs) by the major Unified Commands, and development pLrns and Development Concept Papers (DCP) submitted by the Militaqy Departments. 111-2 The time prescribed annually for the PPBS cycle ss.ould be constricted after the first cycle and the new FYDP is completed in order to bring the planning phase nearer in time to the period of operations, 111-3 The various categories used in and in connc tion with the PPIfS should be made to coincide as nearly as practical and be stabilized, 111.4 The fiscal guidance should prescribe a declining limit tor each out year in the Research and Development and In the Procurement program categories in order to preserve a flexibility in the FYDP to exploit developing technology and to program to meet unanticipated threats. Ill-5 Every effort should be made to obtain agreement by the Congress to accept defense budgets and to appropriate in program rather than existing budget categories. 111-6 The Joint Staff should be augmented with a complement of civilian analysts, in order to enhance Its analytical capability generally, and to inprove its capability to evaluate Service submissions of cost and manpower levels for the JFM in particular, 111-7 Analytical capability should be strengthened throughout particularly in the Office of the Secretary of Defense. the Department, and 111-8 The factors bearing on war reserve stock levels and production base plants should be analyzed and evaluated In order to develop meaningful policy objectives which can be compatible with logistics guidance. 224 111-9 Increased emphasis should be placed on identifying, acquiring and training personnel who have the capability to prepare Development Concept Papers for major developments. ll-10 The lDevelopment Concept Paper should not be employed as a management tool for areas of research and development other than major systems developments. Ill-II'l ie Secretary of Defense should establish a small staff function within the Coordinating Group reporting to him and assign it the responsibility of effecting both a major improvement and reduction in the control and information needed for management within the Defense Department. and in turn, of its Defense contractors. This should be done by specifying what is required, not dictating how to manage. An objective should be established to further enable the Department components and industry to evolve a inure stable management environment by restrictiag changes in control and report requirements to the minimum basic requirements. The Department's Directives and Instructions should be codified through consolidation, recision and restatement. In addition, criteria for imposition of control systems and reporting requirements should be expanded to require a statement of need, benefit, estimated cost (of preparation, handling and review) and wt'y existing systems and reports do not satisfy the need. Periodic reviews should also be required for the purpose of confirming the continuing need for the controls and information required. In addition, all organization charters of the Olfice of the Secretary of Defense should be reviewed to assure that they were properly defined and coordinated and were in acccrdance with the responsibilities assigned to the office(s). 111-12 Similar small staff groups should be constituted in the immediate offices of the Military Department Secretaries and the Chairman of the Joint Chiefs of Staff. 111-13 Policy makers 'n the Department of Defense should be acutely aware uf the neeessity of using formal communications channels for promulgation of policies and procedures. ****~ t~it ** ***tt*t*li**s*********** .a*** ia*** *,•** ***a**ses***sa**s*** 111-14 The Selected Acquisition Reports in their present formats should no longer be used as management tools. 111-15 The Flimsy-Buff-Green decision-making process of the Joint Chiefs of Staff should he eliminated. 111-16 A decision-making process for the JCS should be established on the pattern of the 225 . . Development Concept Paper (DCP). Inputs should be requested from the Military Departments, as required, only for the initial draft of the position paper, and the Military Services should participate in no other way in the internal decision-making process of the JCS. The draft position paper should contain all known feasible alternatives; and each level in the process should be required to review for quality and sufficiency, and indicate by signature and designation the recommended alternative, all to the end that fidelity to the original issue be maintained and the extraneous pressures for unanimity be reduced, 111-17 Ac~rud accounting systems in the Department of Defense should be confined to those Service activities which operate under stock funds or industrial funds, and which are required to establisl service charges which reflect total costs. 111-18 Ani intl.hal audit organization should be established at the OSD level, headed by a highly qualified civilian audit administrator who should report to the Deputy Secretary of D)efense (Evaluation) through the Assistant Secretary of Defense (Comptroller). This new office, which might be called the Office of Defense internal Audit, should include the present functions and staffs of the Office of the Director for Audit Policy, the Deputy Comptroller for Internal Audit, and the Directorate of Inspection Services now existing in the Office of the Assistant Secretary of Defense (Administration). In addition to the existing responsibilities of the ,udit groups being combined, the new Office of Defense Internal Audit should direct its efforts toward: (a) Making more extensive reviews of tile manner in which the internal auditing function is being carried out by the internal audit organizations of the Military Departments and Defense Agencies. (b) Making more internal audits of inter-Service activities and Unified Commands with the use of its own personnel to a much greater extent than is presently being done, 111-19 The head of each internal audit group should be a civilian, and the internal auditors of each of the audit groups should be primarily civilian rather than military personnel. The head of each departmental internal audit group should report directly to the Secretariat of his respective D)epartment. 111-20 A single formal internal audit education and training program within the Department should be initiated by the new Office of Defense Internal Audit, the execution of which could be delegated to one of the Military Departments as executive agent. 111-21 The following modifications in internal audit should be made: 226 (a) The guidelines 'or determination of savings under the Cost Reduction Program should be clarified and improved to permit such determinations to be made with greater reliability; (b) The proposed new Office of Defense Internal Audit should develop improved methods for budgeting and controlling the time utilized on internal audits; (c) Each audit group should expand its ejuditcoverage to include the activities of major headquarters staffs at the departmental level; (d) Audit tests and investigations should not be extended beyond the point where findin&s are sufficient to identify significant problems and to support reasonable conclusion.,, as to their causes and %criousne•..;and (e) Stantard audit programs or modules should be developed and used for common audit areas. They should be flexible enough to permit inodifications in the field prior to the coimnmsucemen t of audit as-signments. 227 CONSOLIDATED LIST OF RECOMMENDATIONS MANAGEMENT OF PERSONNEL RESOURCES IV-I The application of Civil Service rules to "supergrade" positions in the Department of" Defense should be changed to provide the Secretary of Defense with more authority foly placement, rotation, promotion and compensation rates in these grqdes. 44*4*44*4****** * 4*4****** ******44* 44*4*44***** 4******* **t4* 44***** 44*4*4** IV-2 Those activities in the Military Departments now headed by a military officer with an immediate civilian subordinate should be surveyed to determine the necessity of military direction of the activity, and where no such requirement is found to exist, the position at the head of the activity should be civilianized or made optional for a military officer or a civilian to fill, and dual staffing should be permitted only in exceptional cases, 4*4*4*444*4#****4*4444*444*4****4*4*************4***44*44*444*4*4******** ***************************44'***4*44*44'*444*44*.4****************4******* IV-3 Specialist careers should be established for officers in such staff, technical and professional fields as research, development, intelligence, communications, automatic data processing, and procurement. 44**4*4***********444***************44**4*4*******44444**4*4**4*444*4***** IV-4 The duration of assignments should be increased, and should be as responsive to the requirements of the job as to the career plan of the officer. Officers continued on an a.signment for these reasons should not be disadvantaged in opportunity for promotion. IV-5 In technical assignments, the officer's replacement should be assigned to the job sufficiently in advance of his predecessor's departure to be ready to take over without loss of momentum when lie leaves, *4*4********************** **44**44****44***4***4***4*4*** *4 ***4444 *4*4444*4* **4****444*4***44**4*44*44****4*444****444****4*44*444*44***4**44*44*4*** IV-6 Promotion Boards should consider a larger proportion of candidates from "below lhe zone" in order to encourage younger officers of top ability to remain in the service. (The percentage so selected might well vary by grade). * *4**** ** ****** * *4** 444*4* * 4*44 4* *** * 44* 44* ** 4* 44*4*44 * 44444*4444** ** *4*44*4*444**** 4444*44 4*vi444* ** ** **** ** *44* *444* 44*44*** ** *4* 44*i 44444* IV-7 The Secretary of Defense shoul;d have more direct responsibility for the promotion career management of officers to and within General aid Flag ranks, and in the selection of and inshuctions to promotion boards. "and ** *4*444*4444*44*4*4444444*444*4 *********************************4*4444* IV-8 The Secretary of Defense and Secretaries of the Military Departments should designate 228 specific percentages, or proportions, of promotions in particular joint, technical, or professional fields and should establish special career ladders of pronotion in special technical and professional fields. IV-9 (a) Millutry pay and other forms of compensation should be made sufficient to facilitate recruitment aid retention of competent officers and enlisted personnel. This applies to all grades and position classifications, and particularly to those that have suffered the highest termination rates. This should be done as a matter of equity, and to assure the acquisition and retention of competent nislitary manpower. (b) The military retirement systen should be adjusted in order to encourage retention of qualified and needed personnel, while at the same time vermitting military forces to be kept young and vigorous. Among retirees, consideration should be given to the varying needs of those still in the working age group and those over such age, The trend of increases in both the number of retirees on the rolls and the total costs of military retirement necessitate early consideration of the retirement systeml, IV-10 In order to inprove the process of acquisition and retention of military personnel, tlse Executive Branch should develop, and submit to the Congress for its consideration as necessary, a total nilitary personnel program which coordinates and reconciles all the separate considerations, particularly including; (I) military compensation and rethiement, (2) personnel policies on promotion and rotation, and (3) acquisition programs, such as Reserve Officers Training Corps. IV-l I Participation of predomlhoantly Negro colleges in the ROTC program should be encouraged. The Navy and Air Force in particular should increase their programs in p-redominaanly Negro colleges. IV-1 2 The Junior ROTC Program should be expanded. IV-13 Substantially in.reased emphasis should be placed on information and education orogramis for enlisted persoinel, with special training provided for officers to be responsible for conducting the programs. 229 CONSOLIDATED LIST OF RECOMMENDATIONS OTHER MANAGEMENT CONSIDERATIONS V-1 Th(! responsibility for defense telecommunication activities should be under the staff supervision of the Assistant Secretary of Defense (Telecommunications). The Assistant Secretary of Defcnse (Telecommunications) should be directed to review all defense, communications activities with the goal of eliminating inefficient duplication; specifically, for example, those telecommunications activities of the existing Air Defense Command (ADC) which can f , effectively merged into other telecommunications operating activities of the Military Departments. The Assistant Secretary of Defense (Telecommunications) should also b. directed to assure that each major element of the telecommunications community in the Department generates professionally planned and managed education, training and career development programs for its engineers, researchers and managers, both civilian and military. V-2 The responsibility for all existing and future defense long-haul transmission systems, regardless of their current or intended use, should be assigned to the Defense Communications Agency as part of the Defense Communications System, except those vehicular and air transportable types when held as contingencies or while in temporary deployment for active combat support. In addition, the Defense Communications System (DCS) should be redefined so as to include base, post, camp and station telecommunications in (fie United States and garrison (permanen!) type installations overseas. The DCA should also be assigned the fiscal control of DCS elements. The communications and electronics officers of the Unified Commands should be under the operational and technical supervision of ihe Defense Communications Agency. V-3 The Air Force Ground Electronics Engineering Installation Agency (GEEIA) and the telecommunications activities of ihe Strategic Air Command (SAC) should be merged Into the Air Force Communications Service (AFCS). V-4 The responsibility for defense automatic data processing should be under the staff supervision of the AsIstant Secretary of Defense (Telecommunications). The Assistant Secretary of Defense (Telecommunications) should: (a) take the necessary steps to enable the Department to develop an in-house capability for ADP hardware systems and software systeims design needed for proper management; (b) review proposed ADP activities and monitor and evaluate on-going activities with respect to effectiveness of the utilization of resources; (c) test through model programs the feasibility of compute. c.'vices/centers which could standardize and centralize the ADP system by functions (such as t0c major Commands) and/or geographically, with the intent of determining both short-aid long-range ADP capability objectives; and (d) develop a training program for ADP specialists and a career plan for ADP personnel. 230 V-S The procedures governing the justification and selection of computers should be reviaed to require a statement of ADP equipment capability as opposed to specification of intended application of the equipment. V-6 The Secretary of Defense should delegate to the Deputy Secretary for Evaluation the authority to establish sod enforce Department of Defense policies and pzocedures which make it possible to account for all contract studies to reduce duplication, assure relevance, and enhance quality. Specifically the Deputy Secretary for Evaluation should: (a) Establish procedures to review and validate requirements for contract studies. (b) Establish a central control record of contract studies to include subject, purpose, cost, significant finding and an sassesment of the quality of the work and the utility (c) Establish procedures for contracting for studies to provide adequate safeguards to assure that the Department gets a product that is relevant and responsive to the requirement; assure a close working relationship between the contracting officer and the technical representative; and develop criteria for selecting contractors that will assure competent and objective support to the Department. (d) Review each Federal Contract Research Center sponsored by the Department of Defense to determine on an individual basis which should be continued with substantially their present form and mrission, which should undergo significant changes, and th en ,make collective FCRC capabilities more widely available to Department of V-7 The Equal Employment Opportunity policy direction and guidance responsibility within the Defense Department should be under the staff supervision of the Deputy Secretary for Evaluation. A restudy and clarification of the requirement of the Office of Federal Contract Compliance and the penalties for noncompliance for the guidance of the Defense Contract Audit Agency and Defense Contractors should be obtained. V-8t The implementation of t tOc contract compliance program within the Defense Department should be issigned o the Defense Contract Audit Agency (DCAA). In order to fulfill its assigned annual rev'ow of conuiactors facilities, additional professional and clerical personnel should be qi~sgned to DCAA. V-9 Procurement policies should be so formulated as to insure that there is no impediment 231 to participation by prospective contractors with the capability to perform-, regardless of the race or size of the prospective contractor, or the period which the prospective contractor has been in business. V-10 An immediate evaluation should be directed by the Secretary of Defense as to the extent of minority employment and promotion in all areas of the Department; each adnAnistrative unit should be required to make frequent periodic reports to him of their progress in both qualitativu hnd quantitative aterms.TLe Secretary should personally review the trend of employment of minority employees at all levels, let it be known that he Is personally doing this, and record with each unit his satisfaction or dissatisfaction with the progress made. The Secretary should direct his staff to: (a) Review the field of complainsts in the military and civilian areas and the procedures set up for fair and expeditious dealing with them, and (b) Establish an on-going affirmative action program to discover the reasons for complaints, remove them, and make sure that minority groups are in fact recruited and promoted on an equitable and nondiscriminatory basis. Job descriptions should be established for eqtl opportunity personnel at all appropriate grade levels, and a career or progression ladder should be provided for equal opportunity personnel with appropriate grade structure commensurate with other priority programs. V-I1 Executive Orders aid Department of Defense Directives with respect to matters of equal employment opportunity for Department of Defense military personnel, civilian employcee and contractors, ais set forth in the existing comprehensive programs for insuring equal opportunity, should be administered from a sufficiently high organizational level in the D)epartment to assure effective implementation, and the procedures for assessing penalties for non-compliance should be reviewed and clarified. V-12 The Department of Defense, altiough not expected to act as enforcement agency of national labor laws, should support any -pprnriate action that would permit more flexibility in such matters, so that coitracts could be withheld from companies that have been determined by appropriate authority to have flagrantly, deliberately, and repeatedly violated expressed national labor policy. At the same time, the Department should not use its contracting powers to help or hurt any party involved in a union representation question, a collective bargainin, agreement, or an inter-union dispute. V-13 The objective of the Department of Defense, in determining wage rates for its own employees around the country, should be to have its rates fair and competitive with the 232 wage rates of private employers for employees of comparable skills. V-14The Department of Defense should explore the possibilities of its making a contribution to community betterment through the e':pansion of junior ROTC and by making available unused areas on defense installations in or near central city areas for recreational use of minority youth. V-IS A careful study should be made as to how the successful techniques developed by our armed forces in Vietnam to help rebuild communities could be applied to working with minority and other disadvantaged groups in this country, particularly in areas near military installations in central city and distressed rural areas. V-16 The Assistant Secretary of Defense (International Security Affairs) should be assigned staff supervision responsibility for matters relating to the Panama Canal Zone and the Ryukyu Islands, in lieu of the Secretary of the Army. *******S******************M h********************************************* V-17 The Secretary of Defense should appoint a General Advisory Committee to the Secretary, which is widely representative, to serve without compensation, but provided with a small staff to: (a) Advise the Secretary of Defense, at his request, on matters concerning internal management of the Department that could be of special public interest, such as: (1) opening, closing or consolidating military installat!'ns; (2) community relations; (3) labor relations; and (4) contract compliance and equal opportunity; (b) Smerve as a vehicle through which matters included in the preceding paragraph could be brought to the attention of 'he Secretary of Deferse by interested parties from outside the Department. V-18 A procedure should be authorized by statute whereby all or part of the proceeds from the disposal of existing military installations can be used for construction of a new installation or for expansion of an existing one when scch construction or expansion has been authorized by Congress. These transactions should in no way affect the normal general appropriations. V-19 The responsibility within the Pentagon for determination of criteria for various levels of physical security to be provided for organizational elements should be consolidated under the staff supervision of the Assistant Secretary of Defense (Intelligence). 233 j CONSOLIDATED LIST OF RECOMMENDATIONS CONFLICTS OF INTEREST VI-I Conflict of interest statutes (18 U.S.C. 281; 18 U.S.C. 283; 5 U.S.C. 5532; and 37 U.S.C. 801(c)) should be reevaluated in order: (a) To achieve consistency of appliation, equity of application, consistency of coverage and harmony of sanctions; and, (b) To reorient such statutes toward prohibition of and punishment for specified undesirable acts rather than toward prior restraints. VI-2 Consideration should be given by the Secretary of Defense to establishing a Defense Board of Ethics to provide advisory opinions upon request to past and present military and civilian members of the Department of Defense and to defense conitcav•rs on the propriety of specific activities. **************sa**********u**************s*s******s*********s**s****ss**** V13 In order to develop a more effective standards-of-conduct program applicable to current offict.s and employees of the Department, consideration should be given to: (a) Amending 18 U.S.C. 202(a) to provide that the terms "officer" or "special Government employee" shall for the purpose of Chapter 11 of Title 18, United States Code, include enlisted personnel occupying certain positions of trust as designated by the Secretary of the military department involved. (b) Amending 18 U.S.C. 202 (a) to provide that NAF emnployees as described in 5 U.S.C. 2105(c), shall be considered employees of the United States for purpose- of Chapter 11 of Title 18 United States Code, (c) Further amending 18 U.S.C. 202(a) to provide that a Reserve officer serving on extended active duty or active duty for training will be considered a special government employee only if he has been ordered to active duty for a period not in excess of 180 days, and that all other Reserve officers serving on active duty will be considered full-time government employees. (d) Amending 10 U.S.C. 1033 to provide that it applies only to Reserve officers ordered to active duty pursuant to 10 U.S.C. 672(a), 673, or 673a ,..e., "involuntary" orders to active duty), and amend section 4(f) of the Military Selective Service Act of 1967 to limit its application to individuals inducted into an enlisted status. (e) Repealing 37 U.S.C. 801(a) which applies to active Regular Navy and Regular Marine Corps officers. (f) Amending the Internal Revenue Code to define divestments required of 234 prospective Presidential Appointees as involuntary conversions, the proceeds of which divestments may be reinvested by the appointee within a time period which terminates after leaving office without there being a taxable transaction, but with the taxpayer's basis in the property so divested to constitute his basis in the reinvestment. VI-4 The Secretary of Defense should consider making the following changes to Directive 5500.7: (a) Rewriting the directive in the more lucid manner exemplified by AR 600-50 and AFR 30-30. (10 Providing that repromulgation by the military departments and their subordinate commands will be limited to republication of the Dire-tive in its entirety with the permissible addition by those agencies only of clarifying terms. (c) Providing minimum standards for the effective and relevant dissemination of standards-of-conduct rules. (d) Providing that the rendering of advice on standards-of-conduct matters shall be accomplished by deputy counsellors as much as possible. (e) Requiring the designation by each command of a person of adequate authority who shall have overall responsibility for administration of the standards-ofconduct program. (f) Providing that the supervisor will retain a copy of the confidential statement of employment and financial interest submitted by the employee or officer covered in the directive and will forward a complete job description to the deputy counsellor along with the employee's DD Form 1555. (g) Removing the civil servi,.e and military grade and rank limitations on submission of DD Form 1555, so that applicability is determined solely by job duties and responsibilities. (h) Specifically providing that each member and employee will be given a simple and comprehensible summary of the standards-of-conduct rules upon acceptance of employment or entry on active duty (i) Limiting the "read and sign" requirements to personnel above the grades of GS-l 3/major or lieutenant commander. VI-5 The Secretary of Defense should cause to be prepared and distributed a manual, to be continuously updated, for all the deputy counsellors containing digests of relevant opinions of the courts, the Attorney General, the Civil Service Commission, the Comptroller General, the Judge Advocate Generals, and the General Counsels of the Department of Defense and the Military Departments pertaining to standards of conduct. Prepare and distribute a short movie dealing with standards of conduct and require annual attendance for the first three 235 ................................ ~ years of service or employment in a job, or encompassing responsibilities, designated in Directive S500.7 to necessitate filing of a confidential statement of employment and financial interest. Prepare and distribute posters calling attention to proper standards of conduct. VI-6 The following steps should be considered among the means to insure the more effective Lwvestigations on conflict-of-interest situations: (a) Expand Army procurement inspections to the scope of Air Force investigative surveys, and institute such surveys within the Navy and the Office of the Secretary of Defense. (b) Require the Navy to coordinate its investigations into procurenment fraud snd standards of conduct with local judge advocate offices. (c) Require tile Army to suninit its reports of investigation Dqpartment-level office having staff interest io the subject matter. to the (d) Require that the Army and Navy institute procurement fraud courses including coverage of standards of conduct for investigators similar to that conducted by the Air Force. (e) Require that each Service create standards-of-conduct investigations undertaken. a record-keeping classification for VI-7 To better insure against conflict-of-interest incidents in connection with the Plant Cognizance Progranm, the Department of Defense should: (a) Limit tours of duty of civilian and msilitary personnel stationed a' defense contractors' plants to three years. (b) Explore the possibility of proposing legislation which would prohibit a umilitary or civilian member or employee a"signed as Iplant representative from accepting empsloyment with thie company at whose plant lie was last stationed for a period of three years from the termination of active service. VI-8 The following actions with respect to tie employees of ,sonappropriated fund (NAF) activities should be considered: (a) Retaining a professional management study group to review the operating procedures of the open mensssystenm and other locally coutrolled NAF activities. (b) Amending 18 U.S.C. 202(a) to provide that NAF employees, as described in 5 U.S.C. 2105(c), slhall be considered employees of the United States for purposes of Chapter II of Title 18. 236 J (c) Modifying the exemption of enlisted personnel from the conflict-of-interest law (Title 18) to authorize the service Secretaries to designate categories of enlisted jobs subject to that law. (d) Abolishing the GS-13 equivalency level cut-off for filing financial disclosure statements under Department Directive 5500.7. (e) Improving the dissemination of standards-of-conduct rules in NAF activities as recommended generally for current Department of Defense officers and employees. (f) Holding administrative inspections of subordinate NAF activities in addition to regularly scheduled audits and personal inspections. VI-9 The following actions with respect to Consultants should be considered: (a) Clarification of the applicability of the disc!osure requirements and of the necessity for determining the absence of a conflict. (b) Initiation by the Department of Defense of on-site inspections to establish administrative compliance with the restrictions upon Consultants generally and with special emphasis upon thmne in positions of high level research and development. (c) Revision of Department of Defense Directive 5500.7 and the implementing regulations concerning Consultants to require: (I ) Supplementary statements reflecting changes in financial interests under certain conditions. (2) A redetermination of the absence of conflict of interest whenever the validity of a prior determination is jeopardized by reassignment. (d) Requiring contract financial disclosure statements from the personnel of consulting firms where deemed necessary in the public interest. 237