been raised by a number of people here, including Secretary Lehman. What are we going to do to control this? We know we are going to be in for tough budget times. Personnel is a big issue. We have too many people working for the Pentagon right now, both within the services, in the civilian area and also within OSD. Can we make reforms that would cut down on the bureaucracy that we have down here? Dr. WADE. Well, first of all, I think it is rather obvious this is not just an internal problem. We are facing an external threat. You can look at the peacetime capability of the Warsaw Pact, you know the numbers are very high indeed. As far as improving upon the numbers involved with the DOD, both civilian and military, we can improve and, I think, improve in a very large way upon how we go about improving, particularly the acquisition process as a whole. We have, and I would like to underline this, since 1981, and the formation of the 32 Carlucci initiatives, the various improvements that have followed therefrom, and have been very, very significant. It is a job that we can all be quite proud of, improving our overall acquisition programs. You know the improvement of the DSARC process. The integration of acquisition with the planning and the budgeting process, multiyear procurement, the economic production rates, better cost estimations, I think these are all, have had a very sizable impact on how well we are managing ourselves overall. But when you look to the future and ask yourself what types of funds will be available, and what types of problems face us, I think, we now have to take a look at some of the more difficult issues that we have stayed away from in the past. Some of these have to do with the overall makeup or work force, the organization that supports the work force, and perhaps, even the requirements proc ess. These have a bearing on acquisition. And I think that the makeup of this committee, the Packard Commission, and the Senate are all addressing these items. I think, having a thorough discussion on matters of this kind will give us the right answer over time. Mr. KASICH. Do we have too many; or don't we, Dr. Wade? Dr. WADE. I don't think we have too many. I think we can do a better job in the context of how we allocate our people to the task. General BABERS. Sir, may I just respond that many of the things we have done to get our collective act together in the acquisition business have added to the work force. That is not going to go away soon unless there is some backoff in the things that drive us to pay special management attention. Mr. KASICH. The final one, Mr. Chairman, is computer technology. Do you need more money from Congress to have better computer technology in DLA? I think you are doing a better job, General, a much better job than when this committee first started 3 years ago. Do you need additional money for upgrading? General BABERS. Well, I am pleased that you recognize the prob lem. We have a major automated information system review council, a MAISRC in process. We will be going before them in about a month to justify to the OSD staff a program that will upgrade and modernize our ADP equipment. We are going to be in big, big trouble unless we get on with modernizing, not only our main frames and all of the ancillary items. This also includes the software systems that go with it. Dr. WADE. I would like to add to that, if I may, Mr. Kasich, that as we go back to the 1983 time period when various horror stories came up on spare parts, that the Department, with the support of the Congress, has addressed the need for a more modern management system, which as a crucial part, entails the use of new computers. People and computers have been provided to the Department of Defense. But I think, the most important point here is it takes time to get this into the Department and functioning well. And we need to understand that we are underway, but we need several more years to complete the job. We feel as a corporate group that we really have this problem underhand. Mr. NICHOLS. Let me ask this question of you gentlemen. You should be generally familiar with the provisions in the Senate bill that address DLA and other agencies; have you generally supported those bills, those provisions in the Senate bill? Dr. WADE. I am not so sure where they are as of this time, Mr. Chairman. If it has anything to do with breaking up DLA, reverting back sizable portions to the services, as I said before, my judgment and, I believe, the judgment of the Secretary of Defense is: One, that is unsound. Two, it will end up costing us more money. And three, I think, to be more pejorative, it is doomed to failure. Mr. NICHOLS. Mrs. Byron. Mrs. BYRON. I have no questions, Mr. Chairman. Mr. Barrett. Mr. BARRETT. Mr. Chairman, I have just one question. As you mentioned, Secretary Lehman has led the criticism of the defense agencies, in particular the Defense Logistics Agency. Has the Navy voluntarily passed on to the DLA for procurement in the last few years national stock items unique to the Navy? Has it shifted items to your organization, or is it jealously guarding the items that it traditionally purchased? General BABERS. Sir, items are being transferred, 23,000 to be exact, by the Navy, these past 2 years. Mr. BARRETT. Is this done voluntarily on the part of Secretary Lehman? Is this something the Navy is asking you to do? Or OSD? Or the Secretary? General BABERS. There is OSD guidance on transfer criteria: a standard against which reviews are to be made to determine whether or not items would be transferred. It is the service's initiative then, in compliance with that directive, that causes items to be moved. As Dr. Wade said, somewhere around 38,000 for all the services this past year, and about the biggest percentages of those are coming from the Navy. Mr. BARRETT. General Babers, could you tell us how many of these items have reverted to the Navy, if any? General BABERS. You mean have gone back to the Navy? I am not familiar with exact numbers. There have been selected items that, because of a special interest, either through problems of design, or determined to be essentially critical to a weapons systems operation, have been shifted back. It would be a very small number, however, just a handful. [The information follows:] You asked Admiral Eckelberger to provide data on transfers from DLA back to the Navy. I have attached figures covering all DLA returns to all Military Services for fiscal year 1983 and fiscal year 1984. The transfers to the Navy for fiscal year 1985 and fiscal year 1986 are as follows: Summary: DLA returned a total of 1,464 NSN's to the military services during fiscal year 1983-84. This figure represents all returns including Mr. BARRETT. I see. Previous reports have indicated that several agencies that have combat support missions may or may not be sufficiently responsive to the needs of their users, in particular the CINC's, but also the services. I am not trying to associate myself with those criticisms one way or another, but those criticisms have been accompanied by a series of proposals of things that might be done to ensure that the Defense Logistics Agency, and other agencies, such as the Defense Intelligence Agency, the Defense Communications Agency and the Defense Mapping Agency, are responsive to the operational needs of their users. I would like to ask you what you think of certain proposals that the subcommittee is considering to take care of that criticism, should the subcommittee determine that it is necessary? One proposal would have the Chairman of the Joint Chiefs of Staff periodically review the Agencies' charters to ensure that they emphasize the combat support mission. Would you have any objection, or any comments on that proposal? Dr. WADE. Not having studied it in detail, I would prefer to do that first. But let me offer a general observation. In addition to the overall mission of the Agency, there are these specific high priority support functions that have application to specific weapons systems. I would note here that during the course of our summer review, as we go through the programs, and when we address the makeup and the funding requirements for an agency, we also will highlight some of the key high priority items that have to have the special focus interest. I think this arena is the place to make that review rather than to try to provide additional legislation which, in many ways, can restrict the flexibility in solving these problems as we look to the future. So, as a general observation, I believe the system can be made to work. But without being too specific, I would like to look at the bill itself. Mr. BARRETT. All right. I had a number of other proposals. But I think it is probably a wiser course to have you look at those proposals and, perhaps, respond in writing. Dr. WADE. Yes, sir; I would be delighted to. Mr. BARRETT. All right. Thank you very much, I have no further questions. Mrs. BYRON [presiding]. Mr. Lally. Mr. LALLY. I have no further questions. Mrs. BYRON. I want to thank both of you for appearing today. I apologize for getting here late, but I was in a procurement subcommittee meeting. The meeting is now adjourned. We will reconvene Wednesday the 26th, at 2 p.m., to hear testimony from Mr. Korb, Major General Antonelli, and General Vessey. Thank you. [Whereupon, at 11:30 a.m., the hearing adjourned.] HOUSE OF REPRESENTATIVES, INVESTIGATIONS SUBCOMMITTEE, Washington, DC, Wednesday, February 26, 1986. The subcommittee met, pursuant to other business, at 2:23 p.m., in room 2216, Rayburn House Office Building, Hon. Bill Nichols (chairman of the subcommittee) presiding. STATEMENT OF HON. BILL NICHOLS, A REPRESENTATIVE FROM ALABAMA, CHAIRMAN, INVESTIGATIONS SUBCOMMITTEE Mr. NICHOLS. Our first witness this afternoon is the Honorable Jim Courter, a very valuable member of the full committee, and a gentleman who has introduced legislation before this committee. Mr. Courter, we recognize you at this time for whatever statements you care to make on this issue. STATEMENT OF HON. JIM COURTER, A REPRESENTATIVE FROM NEW JERSEY Mr. COURTER. Thank you very much, Mr. Chairman. I want to thank the members for permitting me to testify, and I want to congratulate the subcommittee for the work they are doing in looking at the military organization. It is something that should have been done a long time ago and I'm very pleased that the committee is taking such a serious interest in the structure and organization of the Department of Defense. I would like to spend a few minutes supporting legislation that I introduced. The legislation is really quite simple. It abolishes the Defense Logistics Agency and the Defense Contract Audit Agency. It also permits no increases in service personnel, nor would the reconstitution or reconfiguration of the abolished agencies be permitted under the legislation. The proposed legislation has been greeted with less than unanimous enthusiasm, as I expected that it would be. There has been concern by people inside and outside the Pentagon bordering on panic. I would like to take a few minutes to explain the logical foundation of this move because I think it can be supported. It is apparent to me that when Robert McNamara attempted to reform the Department of Defense, he relied a great deal on the concept of centralization, with the idea that that would bring efficiency and economy to the Department of Defense. I believe that time has shown that that attempt at centralization has moved us in the wrong direction and has created an overcentralized, bureaucratic, unresponsive Department. The Defense Logistics Agency specifically was established in 1961. It was supposed to procure and manage items used by more than one military service and, therefore, one can understand the |