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delving into operational details on a daily basis. The Secretary of Defense is supposed to make policy and to make any decision that is necessary with regard to the functioning of the three military departments. Once his decision bas been made, or his policy has been enunciated, it is incumbent upon the three military Secretaries to carry out the orders, directives, or policies of the Secre tary of Defense.

In the opinion of the subcommittee, the intent of the National Security Act and the basic philosophy surrounding the creation of the Defense Establishment and the Office of the Secretary of Defense, remains unchanged. The Secretary of Defense is to be an overall policymaker. But the subcommittee wholeheartedly endorses what the committee said in 1958 that It was never intended, and is not now intended, that the Office of the Secretary of Defense would become a fourth department within the Department of De fense, delving into operational details on a daily basis.

Nevertheless, with the creation of independent defense agencies, the military departments are steadily losing their status as separately organized entities responsible, through their services, for the roles and missions assigned to them by law.

STATUTORY AUTHORITY FOR DEFENSE AGENCIES AND THE DEFENSE SUPPLY

AGENCY

The subcommittee was directed to examine into the statutory authorization for each defense agency. The statutory authorization for defense agencies in section 202(c)(6) in particular, and section 202(c)(1) in general. Section 202 (c) (6) provides as follows:

(6) Whenever the Secretary of Defense determines it will be advantageous to the Government in terms of effectiveness, economy, or efficiency, he shall provide for the carrying out of any supply or service activity common to more than one military department by a single agency or such other organizational entities as he deems appropriate. For the purposes of this paragraph, any supply or service activity common to more than one military department shall not be considered a “major combatant function” within the meaning of paragraph (1) hereof.

The Department of Defense contends that this is the basic authority for the establishment of defense agencies. The subcommittee attempted to ascertain the definition of the words “any supply or service activity common to more than one military department.” The subcommittee was unable to obtain any definition of this language.

When the former General Counsel was asked for his interpretation of the words “supply or service activity,” he replied: With respect to that, I must admit that the record is not completely clear. However, I think the best guide with respect to what is meant is the language used by Speaker McCormack in describing what was encompassed under supply or service activity.

The General Counsel referred to the following language which appeared in the Congressional Record in connection with the debate on the McCormack amendment to the effect that the amendment was intended to include

procurement, warehousing, distribution, cataloging, and other supply activities, surplus disposal, financial management, budgeting, disbursing, accounting, et cetera, medical and hospital services, transportation-land, sea, and air-intelligence, legal, public relations, recruiting, military police, training, liaison activities, et cetera.

The Secretary of Defense, when questioned on this matter, said: It is quite clear that the majority of the activities of the Department are not covered by that definition and, therefore, the majority of the activities of the Department of Defense could not be put into a single service.

Mr. Hardy said to the Secretary of Defense: The statement of Mr. McCormack-which Mr. Vance has used as his basis for these actions is just about as inclusive as you can get and there aren't very many things that the Department of Defense does except maybe fire rifles, that aren't covered by that.

The Secretary of Defense replied:
I think tactical doctrine is one, Mr. Chairman.

But it then developed that the General Counsel had prepared a memorandum recommending to the Secretary of Defense that a combat developments and test center be established as a separate activity under the command of the commander in chief, U.S. Strike Command. This recommendation was not approved, but obviously it would not have been recommended by the General Counsel to the Secretary of Defense if the General Counsel felt there were legal restrictions; thus even tactical doctrine did not, in the opinion of the General Counsel, appear to be in the exclusive domain of each military service, as indicated by the following:

MARCH 29, 1962. Memorandum for the Chairman, Joint Chiefs of Staff. Subject: Establishment of Combat Developments and Test Center-STRICOM.

As a logical extension of missions currently assigned to the United States Strike Command, I am considering making the decision embodied in the attached draft memorandum.

The comments of the Joint Chiefs of Staff on the draft memorandum are requested, if possible, by 12 April 1962.

Signed ROBERT S. McNAMARA. Attachment

[Draft)
Memorandum for
Subject: Combat Developments and Test Center-STRICOM
Effective

there will be established as a separate activity under the command of the Commander-in-Chief, U. S. Strike Command, a Combat Developments and Test Center-STRICOM (CDTC-S).

The mission of the CDTC-S will be to conduct selected combat developments study projects and inateriel test and evaluation projects which are of joint concern and which are relevant to the organization, equipment, and concepts of employment of land-air forces. The scope of CDTC-S projects will include deployment of forces to theaters of operation and employment of forces under the entire range of possible conditions, namely from large-scale operations of regular forces, both nuclear and non-nuclear, on the one hand, to counter-guerrilla operations, support of indigenous forces in counter-insurgency operations, and other Cold War actions on the other. The CDTC-S organization will specifically provide for a single identifiable point of responsibility and authority for projects primarily concerned with counter-guerrilla, counter-insurgency, and related operations.

Combat developments study projects (i.e., the integration of operational, organizational, and materiel concepts) will be primarily directed at operational and organizational concepts which can be placed into effect with materiel available in time periods from three to ten or more years in the future. Those operational and organizational concepts recommended in such studies which may be placed into effect in less than three years should be identified.

Materiel test and evaluation projects will be directed at items or systems in either the short or long range periods, and may encompass experimental testing of mockup or simulated materiel as well as tests of actual prototypes. Where necessary to materiel test and evaluation, related operational procedures and organizations will also be tested and evaluated.

Where feasible and desirable, CDTC-S will design ways and means to utilize STRICOM joint exercises in test concepts and materiel, to gather data for the purpose of refining planning factors, and to measure the cost and effectiveness of alternate concepts.

The CDTC-S will, as appropriate, establish direct working relationships with related activities of the military departments and other components of the Department of Defense, and will provide a point of contact for interested elements of the sicentific and industrial community.

Projects will be assigned to the CDTC-S by the Secretary of Defense, or by the JCS by the authority and direction of the Secretary of Defense, and may be proposed by any DoD component.

Spaces for the CDTC-S will be provided for by the ASD (Manpower). O&M and personnel funding support for the CDTC-S will be provided in the same manner that such support is now provided to Headquarters, STRICOM. DDR&E will establish procedures to provide such RDT&E support as is necessary to augment the RDT&E support provided by the military departments. It is visualized that the CDTC-S will have operations analysis services available on a contract basis. It is visualized that the JCS Organization, the military departments, elements of OSD, and other DoD components may augment the capacity of CDTC-S with personnel on temporary duty, as necessary for specific projects.

It is the opinion of the subcommittee that the McCormack amendment, as it was understood by the Committee on Armed Services, was not intended as the basis for the creation of an independent agency; instead it was intended that an agency or agencies be created within a military department to carry out the function of procuring common-use items. And it is interesting to note that even the words "common to more than one military department” are not words of limitation in the opinion of the Department of Defense. Mr. Bates stated to the Assistant Secretary of Defense, Thomas Morris

So, anything under a particular category, regardless of whether or not one service only uses it, can be put in the DSA, according to your practice. To this the Assistant Secretary of Defense replied, “Yes, sir." And when asked for the legal authority, Mr. Morris said, "The CurtisMcCormack amendment."

General McNamara, the Director for the Defense Supply Agency, was asked if there was anything that was exclusive to any service that couldn't be taken over by the Defense Supply Agency. General McNamara replied:

I will go back to my definition as you put it. It is in my charter. It says as follows: "Common supplies as used in this directive are those items of supply which are determined through the application of approved Department of De fense criteria to be susceptible of integrated management by a single agency for all of the military services."

The sum and substance of the testimony received by the subcommittee with regard to the Defense Supply Agency is that it is an independent agency; that is not part of the Office of the Secretary of Defense; that is not within the military departments; and is not a military department. The testimony also revealed that in the opinion of the Secretary of Defense he did not believe that he had the authority to transfer such a function as the responsibility for research and development of major weapons systems from a service or military department to the Defense Supply Agency. The Secretary of Defense indicated that he did not have wat authority because of the roles and missions assigned to the respective services by statute.

It should be noted, however, that while the Secretary of Defense could not, in his opinion, assign this activity to the Defense Supply Agency, or any other agency, nevertheless section 202(c) (4) clearly gives the Secretary of Defense the authority to assign or reassign to one or more military departments or services the development and operational use of new weapons or weapons systems. This is further qualified by another provision of the National Security Act, as pointed out by the General Counsel of the Department of Defense, by section 203(b) (1) and (2) of the National Security Act, which states that, the Director of Research and Engineering may be assigned by the Secretary of Defense the direction and control, including the assignment and reassigment, of research and engineering activities that the Secretary of Defense deems to require centralized management.

From a review of the testimony it is obvious to the subcommittee that there is practically no activity of the military departments that could not be considered a “service activity common to more than one military department," and thus placed under an agency completely independent of the military departments, other than research and development of major weapons systems.

The subcommittee also has doubts as to the legal authority of the Defense Supply Agency to enter into contracts. Nowhere in the McCormack-Curtis amendment is there authority to enter into contracts other than through existing law. Existing law vests contracting authority in the military departments under the Armed Services Procurement Act.

But it is interesting to point out that the Congress very clearly gave contract authority to the Director of Defense Research and Engineering and very pointedly did not give this authority to an independent agency under section 202(c)(6) of the National Security Act. It is equally clear to the subcommittee that the reason this authority was not granted nor contemplated is that there was no intention at the time the McCormack-Curtis amendment was adopted to establish an independent agency which would be completely divorced from the Office of the Secretary of Defense or from the military departments. However, each military department has contractual authority and, in the opinion of the subcommittee, it was the intent of the Congress that the single manager system be extended within the military departments.

Instead, however, a separate independent agency has been established which will employ some 24,000 individuals and undoubtedly will expand to an even larger number in the years ahead.

There is almost unanimous opposition among military personnel to the creation of a fourth service of supply or an independent logistic department. The Joint Chiefs of Staff are in unanimous agreement that there should be no fourth service of supply. Informal discussion with other highly respected military personnel completely support the subcommittee's position that each service must have complete control over its own logistical support function. This, of course, would include distribution of supply beyond the wholesale level; yet according to the former General Counsel of the Department of Defense, there is nothing in the law that would prevent the assignment to the Defense Supply Agency of the responsibility for the distribution of supply to the military services.

Much has been said about alleged savings as a result of the establishment of the Defense Supply Agency. During the hearings, General McNamara was asked the following question:

So when we hear about these savings that are announced from time to time, we probably can visualize that most of these savings are in reduced inventories; is that a reasonable assumption at this point?

General McNamara replied:

Most are, right now. Because the only figures that I know that we have quoted has been the drawdown, which is in the neighborhood of the $227 million, versus the alleged saving figure that you used.

Whether or not the Defense Supply Agency will actually produce savings is yet to be demonstrated. Certainly many of the activities of the Defense Supply Agency will bring about improved procure. ment practices. The coding techniques, better inventory control, standard contracting procedures, standard bidding procedures, among other activities, may well produce increased efficiency and might produce savings. However, these savings are yet to be identified and whether or not they will produce the items necessary for our armed services within the time limit required or whether they will be made available for distribution by the armed services to the combat forces with greater efficiency and at lesser cost, is yet to be demonstrated.

A one-time reduction in inventories may result in a saving of nearly $3 billion. But reducing inventories is similar to living off capital investment, and only time will tell whether the contemplated reduction in inventories has actually resulted in a savings. Certainly, some savings should be brought about as a result of standardized procedures. But whether these savings will be offset by increased cost factors remains to be seen.

For example, the Secretary of Defense was asked whether personnel who transferred from the military services or other agencies to the new Defense agencies were upgraded when they were placed in their new positions. The Secretary of Defense said:

Generally speaking, I am opposed to upgrading as a result of transfer. I am not aware that any substantial amount of that has been carried out.

The subcommittee then inquired of the number of employees, GS-8 and above, who had entered on duty in the Defense Intelligence Agency and the Defense Supply Agency with a promotion; the number of employees, GS-8 and above, who had been promoted since the establishment of these two agencies; and the number of employees, GS-8 and above, for whom promotions had been requested. The Department of Defense's reply is many pages long and has not been fully analyzed. It is sufficient to say that more than 1,100 civilians have been promoted, or will be promoted, as of July 27, 1962, since being transferred to the Defense Supply Agency or the Defense Intelligence Agency. How many more promotions will be effected, the subcommittee does not know. Whether or not this is an excessive number of promotions is unknown to the subcommittee. The subcommittee merely points to the information available, which reveals that in the higher civil service grades to date, more than 1,100 promotions have been or will be effected. What the number was below this grade is unknown. What the eventual number will be is likewise unknown.

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