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industrial capacities and resources. Meeting these challenges will require, we believe, a rededication by all concerned to some basic principles of management. Capable people must be given the responsibility and authority to do their job. Lines of communication must be kept as short as possible. People on the job must be held accountable for the results. These are the principles that guide our recommendations on defense organization and acquisition. They apply whether one is fighting a war or managing a weapons program.

The present structure of the Department of Defense was established by President Eisenhower in 1958. His proposed reforms, which sprang from the hard lessons of command in World War II and from the rich experience of his Presidency, were not fully accomplished. Intervening years have confirmed the soundness of President Eisenhower's purposes. The Commission has sought to advance on the objectives he set for the Department.

Together, our recommendations are designed to achieve the following significant results:

Overall defense decision-making by the Executive Branch and the Congress can be improved.

Our military leadership can be organized and chartered to provide the necessary assistance for effective long-range planning.

Our combatant forces can be organized and commanded better for the attainment of national objectives.

Control and supervision of the entire acquisition system—including research, development, and procurement can be strengthened and streamlined.

Waste and delay in the development of new weapons can be minimized, and there can be greater assurance that military equipment performs as expected.

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The Department of Defense and defense industry can have a more honest, productive partnership working in the national interest.

Our interim findings and recommendations, presented in the pages to follow, concern major features of national security planning and budgeting (Section I), military organization and command (Section II), acquisition organization and procedures (Section III), and government-industry accountability (Section IV).

I. National Security

Planning and Budgeting

The

"he Commission finds that there is a great need for improvement in the

way we think through and tie together our security objectives, what we spend to achieve them, and what we decide to buy. The entire undertaking for our nation's defense requires more and better long-range planning. This will involve concerted action by our professional military, the civilian leadership of the Department of Defense, the President, and the Congress.

Today, there is no rational system whereby the Executive Branch and the Congress reach coherent and enduring agreement on national military strategy, the forces to carry it out, and the funding that should be provided-in light of the overall economy and competing claims on national resources. The absence of such a system contributes substantially to the instability and uncertainty that plague our defense program. These cause imbalances in our military forces and capabilities, and increase the costs of procuring military equipment.

Better long-range planning must be based on military advice of an order not now always available—fiscally constrained, forward looking, and fully integrated. This advice must incorporate the best possible assessment of our overall military posture vis-a-vis potential opponents, and must candidly evaluate the performance and readiness of the individual Services and the Unified and Specified Commands.

To conduct such planning requires a sharpened focus on major defense missions in the Department's presentation, and Congress' review, of the defense budget. The present method of budget review, involving duplicative effort by numerous congressional committees and subcommittees, centers on either the minutiae of line items or the gross dollar allocation to defense, and obscures important matters of strategy, operational concepts, and key defense issues. As Senator Goldwater, Chairman of the Senate Armed Services Committee, recently observed, “The budget process distorts the nature of congressional oversight by focusing primarily on the question of how much before we answer the key questions of what for, why, and how well."

Of greater concern, congressional approval of the budget on a year-to-year basis contributes to and reinforces the Department's own historical penchant for defense management by fits and starts. Anticipated defense dollars are always in flux. Individual programs must be hastily and repeatedly accommodated to shifting overall budgets, irrespective of military strategy and planning. The net effect of this living day-to-day is less defense and more cost. Although often hidden, this effect is significant-and it can be avoided.

Biennial budgeting, authorization and appropriation of major programs not annually but only at key milestones, and a focus on strategy and operational concepts instead of line items are among the most important changes that could be made to improve defense planning. They would enhance the congressional role in framing good national security policy.

Budgeting based on strategy and operational concepts also would provide a far greater improvement in the performance of the Office of the Secretary of Defense than would any legislated reorganization of that Office. In general, we believe, Congress should permit the Secretary to organize his Office as he chooses to accomplish centralized policy formulation and decentralized implementation within the Department.

The Commission concludes that new procedures are required to help the Administration and the Congress do the necessary long-range planning and meaningfully assess what military forces are needed to meet our national security objectives. Public and official debate must be brought to bear on these larger defense policy questions. The Commission strongly urges adoption of a process that emphasizes the element of sound, professional military advice provided within realistic confines of anticipated long-term funding.

Recommendations

To institutionalize, expand, and link a series of critical determinations within the Executive Branch and Congress, we recommend a process that would operate in substance as follows:

Defense planning would start with a comprehensive statement of national security objectives and priorities, based on recommendations of the National Security Council (NSC).

Based on these objectives, the President would issue, at the outset of his Administration and thereafter as required, provisional five-year budget levels to the Department of Defense (DoD). These budget levels would reflect competing demands on the federal budget and projected gross national prod. uct and revenues and would come from recommendations of the NSC and the Office of Management and Budget.

The Secretary of Defense would instruct the Chairman of the Joint Chiefs of Staff (JCS) to prepare a military strategy for the national objectives, and options on operational concepts and key defense issues for the budget levels provided by the President.

The Chairman would prepare broad military options with advice from the JCS and the Commanders-in-Chief of the Unified and Specified Commands (CINCs). Addressing operational concepts and key defense issues (e.g., modernization, force structure, readiness, sustainability, and strategic versus general purpose forces), the Chairman would frame explicit trade-offs among the Armed Forces and submit his recommendations to the Secretary of Defense. The Secretary of Defense would make such modifications as he thinks appropriate and present these to the President.

The Chairman, with the assistance of the JCS and the Director of Central Intelligence, would prepare a net assessment of the effectiveness of United States and Allied Forces as compared to those of possible adversaries. The net assessment would be used to evaluate the risks of options and would accompany the recommendations of the Secretary of Defense to the President.

The President would select a particular military program and the associated budget level. This program and budget level would be binding on all elements of the Administration. DoD would then develop a five-year defense plan and a two-year defense budget conforming to the President's determination.

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