Align authority and responsibility in defense

management.

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

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

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.

For too

The defense acquisition system has to work better. 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. need are better decisions at the front end of the acquisition process and better control and supervision throughout.

What we

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

their forces.

There must be shorter and more effective lines of

command for forces in the field. The Unified Command Plan must be revised, and a new Unified Command must be established for better management of military transport on land and sea and in the air.

ACQUISITION ORGANIZATION AND PROCEDURES

We recommend an organization and a process for defense acquisition that will result in better decisions, made early and with more resolve. The problems of spare parts, detailed widely in the press, are symptomatic of deeper, structural

inefficiencies that our recommendations address.

Only if we make the right decisions in the first place can we reasonably expect to have an efficient acquisition system. To encourage the right decisions, we recommend a streamlined acquisition organization, headed by a full-time Under Secretary of Defense for Acquisition on the same level as the Service Secretaries.

He would:

Establish policy for all DoD acquisition.

Co-chair the Joint Requirements Management Board with

the Vice Chairman of the JCS.

Oversee the research, development, and production of all weapons programs.

We also recommend that the Army, Navy, and Air Force designate Service Acquisition Executives because the Services will continue to have an important role in the acquisition process. They would establish short, clear lines of authority to responsible program managers.

We recommend a process with greater emphasis on the early stages of weapons development, that picks the right system first and then uses more prototypes for adequate testing.

We recommend that significant improvements be made in the

way the Department attracts, retains, and motivates both seniorlevel appointees and career employees.

We recommend a process that emulates successful governmental

and commercial practices and will:

Reduce the time required to deliver weapons to our
forces.

Provide greater assurance that new weapons will perform
as expected.

More accurately estimate the cost of new programs before

full-scale development.

GOVERNMENT-INDUSTRY ACCOUNTABILITY

The American public deserves better guarantees that defense contracting is both an honest and a productive partnership between industry and government. There is no way public confidence in this partnership can be restored unless both the Department and private business demonstrate by their actual performance that such confidence is truly deserved.

We recommend specific improvements in federal laws governing defense acquisition, and we urge that the law continue to be aggressively enforced.

We recommend that both defense contractors and the Department of Defense take steps to apply the highest standards of ethics and conduct. To do this, contractors need to improve their own self-governance and uncover and promptly remedy all instances of misconduct, and the Department needs to administer existing ethics regulations far better.

In conclusion, let me make a few final observations.