racy, and to align authority and responsibility in defense management.

Now I have a more detailed statement that I would like to submit for the record, and I conclude these very brief remarks with the thought that you would probably like us to spend most of your time today in responding to your questions.

[The statement of Mr. Packard and the interim report of the President's Blue Ribbon Commission on Defense Management follow:]

PREPARED STATEMENT OF DAVID PACKARD

Good afternoon, thank you Mr. Chairman and distinguished members of the House Armed Services Committee.

Last Friday, we presented the Interim Report of the President's Blue Ribbon Commission on Defense Management to the President. Today, we are pleased to have the opportunity to discuss with you our findings and recommendations on defense management. Our examination of defense issues has been the most comprehensive since President Eisenhower's effort in 1958.

I can assure you that this report takes a new and different approach to the problem of defense management. We have many

specific recommendations, but the key elements of our report

are:

1.

2.

Effective long-range planning, beginning at the front end of the process, to produce a defense strategy and budget based on national security objectives,

Increasing the responsibility of the Chairman of the Joint Chiefs of Staff and getting him deeply involved in this planning process, and

3. Most importantly, running the Defense Acquisition

process like you would a successful commercial business.
The only difference is that the shareholders are the

American taxpayers and the profit incentive is world
peace.

Let me emphasize that our recommendations are not a series of isolated changes, but instead are a single overall blueprint for better defense management.

In order to implement this blueprint and realize the kind of common sense changes that must be made, the President, the

Congress, the Department of Defense, and Industry must work together as a team to:

Improve long-range planning

Stabilize the acquisition process

Streamline the bureaucracy, and

As directed by the President, we have studied a very broad

range of defense issues. Our report covers four large areas of

Military organization and command

Acquisition organization and procedures, and

Government - Industry accountability.

We have given each of these areas a hard look. Keeping in mind some fundamental management principles, we have come to some straightforward conclusions about how things can be improved.

For

We have to stop playing games with the defense budget. too long, we have determined budgets without sufficient regard to defense plans. What we need is a more stable environment of planning and budgeting, including longer term defense budget levels agreed upon in advance by the President and the Congress. Our defense plans have to make more sense. For too long, we have developed defense plans without any regard to budgets. What we need is more involvement by our military professionals. This would include a stronger Chairman of the Joint Chiefs of Staff with responsibility for planning military forces within realistic budget projections and for balancing the needs and views of combat commanders with those of the Services.

The defense acquisition system has to work better. For too long, we have taken too little time and care in evaluating weapon systems before going into full-scale development. Defense acquisition is the largest management job in the world, but there is no single, full-time person in charge. What we need are better decisions at the front end of the acquisition process and better control and supervision throughout.

Defense industry has to shape up and do a better job of keeping its own house in order, but defense contracting is a two-way street. What we need is a more honest and a more

productive partnership between government and industry.

We offer specific recommendations to address the root causes of these defense management problems. Our recommendations are based on sound principles of effective national security policy and fundamental management concepts.

Let me highlight a few of our major areas of recommendation.

NATIONAL SECURITY PLANNING AND BUDGETING

As congressional leaders increasingly recognize, the whole process of national security planning and budgeting needs to be improved.

We recommend new procedures to establish stronger ties between strategy and resources, based upon budget levels established in advance by the President and the Congress and on military forces designed to fit into these levels. This will require broader professional military advice to design forces within the budget levels and to evaluate how well those forces and budgets will achieve our national security objectives.

We recommend stabilized funding for the whole defense effort, as well as for individual systems. DoD should prepare a broad five year plan and biennial budget for the President to submit to Congress. Congress should review the budget in terms of national strategy, operational concepts, and key defense

issues.

We recommend a focus on longer-term costs, not just on this year's spending. Whatever the level of the defense budget, a coordinated planning and budgeting process will result in more stability and in better links between strategy, resources and forces. It will facilitate more rational decisions on defense issues, instead of the present obsession with line item details.

Overall, our recommendations are designed to get Congress, the President, and the Department of Defense to work as a team. As President Eisenhower said to Congress in 1958.

"This unified effort is essential for long range planning and decision which fix the pattern of our future forces and form the foundation of our major military programs." MILITARY ORGANIZATION AND COMMAND

Effective planning requires better organization of our military leadership and multi-service commands. We recommend a stronger Chairman of the Joint Chiefs of Staff. The Chairman should be given more responsibility and authority to:

Prepare a military strategy based on national security objectives and priorities.

Develop broad defense options based on the President's budget guidance.

Balance the needs for combat readiness and new weapons.

Assess the nation's overall military posture as compared to potential enemies.

In order to accomplish this, the Chairman must become the principal uniformed military advisor to the President, the Secretary of Defense and the National Security Council. He must have exclusive direction of the Joint Staff. He must have proper input from our senior commanders in the field. And he must balance their requirements for readiness with the Services' constant pressure for new weapons.

A Vice Chairman should be made a member of the Joint Chiefs

of Staff to:

Assist the Chairman with his expanded responsibilities.
Represent the views and needs of combatant commanders.

Help define weapons requirements.

The Unified and Specified Command System also should be

improved.

Combatant Commanders must have greater authority over