programs. A second area of needed reform relates to the role and authority of the Unified and Specified Commander (CINCs). Useful reforms have been made in this area in recent years, but more needs to be done. Again, the thrust of the changes included in the Committee bill deserves support. In particular, I recommend the following changes.

Giving the CINCS authority in peacetime as well
as wartime to direct the planning, exercises and
training of the forces in their component com-
mands. This would include authority, within
limits, to organize the Command in the way the
CINC feels is best to carry out his wartime
mission.

Strengthening the CINCs authority in the area of
personnel, especially in selecting their own
staff and commanders of the major elements of
the components.

Increasing the CINCS influence in the resource
allocation process to include the right to
review and change the broad allocation of funds
by the component commands, and to have more
direct control over the funds allocated for
training and exercises. In the scramble for
funds in program and budget process, the CINC's
voice which normally advocates readiness and
sustainability deserves to be heard more
forcefully.

The reforms noted above will not be fully effective unless concurrent steps are taken to ensure that the joint system gets its share of our best officers. Moreover, we must ensure that a reasonable portion of the officer force receives regular and indepth experience in Joint organizations and operations. The lack of joint experience by officers serving in key positions in the Joint and CINC staffs has been well documented. The "Joint Service" officer must be assured of a rewarding career if we are to attract excellent officer to joint duty and we must provide them with the training and experience they need to be effective. The reforms being considered by your committee would go a long way toward fixing these problems.

War and crisis planning is another area that deserves greater attention from the joint military structure.

This task should be

seen as one of critical importance by the Joint Staff and the CINCS. It also deserves the support and involvement of the

Chairman and the Secretary of Defense. Without their support any improvement is not likely to be sustained.

Internal DoD Management

Given the scope of the Defense manage

ment task, its technical complexity, and the myriad influences that buffet the DOD manager, it should be no surprise that problems abound in all areas. Nonetheless, there are reforms which can make a real difference in the way we manage our programs. Let me emphasize two primary areas:

First, we must fix responsibility and authority for management. OSD, let alone the Congress, cannot manage the research, acquisition, maintenance and personnel programs of the departments. This responsibility can only be carried out by the Services and the Service Secretaries and Chiefs of Staff must be granted that responsibility and the needed authority. It should be made clear that this is their principal role managing the dollars, materiel, and personnel under their control. Indeed, one of the side benefits of strengthening the Chairman of the Joint Chief of Staff is that it will reduce the time and energy the Service Chiefs spend on JCS matters, giving them the time they so badly need to focus inward on management issues.

Second, the Service management structure needs to be overhauled with a clear goal of simplifying the staff organizations and removing management layers to speed decisions and make it easier to fix responsibility. Several areas deserve attention.

Separate civilian and military staffs in the mili-
tary departments are not needed. Instead the Ser-
vice secretary and his key assistants should rely
primarily on the military staff, reducing overlap
and essentially eliminating a review level.

The Service headquarters staffs are large and pond-
erous and need to be streamlined and reduced in
size. But before this can be expected to happen,
OSD and the Congress must change their way of
operating, since much of the Service staff effort is
responsive to questions, study demands, and overly
detailed management from above.

The service system commands also need hard

scrutiny. Their size, multiple layers, and

complexity clearly slow the acquisition process.

The steps the Navy is taking in this area should be
commended, and hopefully emulated by the Army and

Air Force.

I commend the committee for recognizing the important role of the Defense Agencies. They perform a range of critical services yet are frequently ignored or given little management oversight. The series of actions you are considering would greatly enhance the attention given the agencies and tie them much more closely into the operational planning of the CINCS. I have not been close enough to the Defense Agencies to comment on the specific proposals, but their thrust seem to be correct and needed.

Acquisition Reform No area of management has received greater attention and criticism in recent years than the way DOD buys weapons, equipment nd supplies. Indeed, no area has been so subject to reform via internal DoD regulation as well as legislation. Yet the problems persist, and in fact seem to be more difficult. I don't claim to be an expert in this area. let me suggest several themes when considering further change.

But

If we

As noted earlier, the current acquisition process is
collapsing from its own weight. Further tinkering is at
least as likely to be counterproductive as helpful.
are to make change, it must be fundamental and
broadranging, and the fixes must be systematic, nor at the
margin.

Fresh new approaches are needed to simplify and

speed up the process. We should look hard at how
large commercial enterprises buy equipment and
supplies, as well as what the practice of foreign
governments can tell us.

The system should rely primarily on incentives to
make sound decisions rather than complex rules and
regulations. Industry should have profit
incentives to hold down costs and meet schedules.
The Services should be rewarded for good management
by being able to buy more or better weapons.

Greater competition is need, but not simple minded
awards based on bid price, with little attention to
a firm's past performance, including its ability to
meet quality and schedule goals. For example, in
the area of procuring services (some $10 billion a
year) awards are increasingly made based on low
price, with little attention to the quality of the
services or the resultant value to the
government. But using the low price to determine
the award is the "safe" approach, even though it
may not serve the government well in the end.

The Packard Commission has proposed a new approach for the Congress and DoD to consider. The outline in their preliminary report is promising and I look forward to their detailed report and analysis. Another promising effort is the Georgetown CSIS study on weapons acquisition which was launched a few months ago. Its goal is to explore fundamental, root and branch reform, not mere change on the margin. Drastic reform, not tinkering, is needed and these studies may well point the way.

III. BENEFITS

The reforms suggested above would, I believe, over time make

a real difference. I see three major benefits:

A more coherent defense program with funding
focused on those programs deserving of priority.
In particular, I would expect a sensible balance
between force structure, modernization and
readiness as we adjust to the realities of no
growth Defense budgets in the late 1980s

Better planning for crises and conflicts, better
prepared forces to fight if needed, and a more
responsive and effective command structure.

Improved program implementation to include more
efficient and timely program execution and greater
attention to value in return for the resources we
expend on the programs

You hear that it is people that matter not the boxes on an organization chart. I wouldn't dispute the importance of people in the management equation. Yet structure and process also matter. They can be and often are real impediments to effective management. So organizational change is needed and it can make significant differences in the way DoD is managed and carries out

its missions.

Nonetheless, we must give greater attention to people. Without good people no organizational scheme, regardless of its perfection will work. I am deeply concerned by the decline in our ability to attract the best people to government service. Moreover, we are steadily losing many of the best career staff as they see the rewards and opportunities available in other areas. This clearly impacts defense management, and the problems are growing steadily worse. In my view at least, this area also deserves your most careful consideration.

We must now take steps to change this trend and attract and retain the best people to public service. Among the actions that should be taken are:

Remove or relax pay caps for senior people, career as well as those in appointive positions.

Make conflict of interest and related rules more realis-
tic. We must be able to attract able technical people from
Defense industry if we hope to manage complex wea-pons
development and production programs effectively. Such
individuals will not take government position if their
future careers are seriously limited.

Provide a sense of importance and worth for those that

accept jobs in the public sector. Psychological income can
offset, at least to a degree, lesser financial rewards.
But today's government jobs often provide less in both
categories.

Gentlemen, that completes my testimony. I would be happy to answer any questions you may have.