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Second Debate: Defense Department Briefing Book (1)
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1554421
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Second Debate: Defense Department Briefing Book (1)
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White House Special Files Unit Files
Ford - Carter Debates Files
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North Atlantic Treaty Organization. (4/4/1949 - )
Armaments
Arms control
Campaign debates
Federal budget
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Presidential campaign, 1976
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1976-09-30
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1976
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1976
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The original documents are located in Box 2, folder "Second Debate: Defense Department
Briefing Book (1)" of the White House Special Files Unit Files at the Gerald R. Ford
Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 2 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library
NATIONAL ARCHIVES AND RECORDS SERVICE
WITHDRAWAL SHEET (PRESIDENTIAL LIBRARIES)
FORM OF
CORRESPONDENTS OR TITLE
DATE
RESTRICTION
DOCUMENT
2 pages
1. briefing
Soviet MIG-25 in Japan
9/29/76
9/29/76
A
2. briefing
Soviet MIG-25 in Japan
2 pages
8/5/76
A
3. briefing
Prospects for MBFR
1 page
8/5/76
A
4. briefing
FMS Notifications
2 pages
9/21/76
A
FILE LOCATION
Special Files, Ford-Carter Debate Files
Second Debate--Defense Department Briefing Book (1) (Box 2)
plc 3/29/84
RESTRICTION CODES
(A) Closed by Executive Order 12065 governing access to national security information
(B) Closed by statute or by the agency which originated the document.
(C) Closed in accordance with restrictions contained in the donor's deed of gift,
GENERAL SERVICES ADMINISTRATION
GSA FORM 7122 (REV. 1-81)
SECRET
THE SECRETARY OF DEFENSE
SECRET
THE PRESIDENT HAS SEEN
-
CURRENT ISSUES
GERALD R. FORD LIBRARY
This form marks the file location of item number
1,2
as listed on the pink form (GSA Form 7122, Withdrawal Sheet)
at the front of the folder.
September 29, 1976
SUBJECT:
Swedish Payments
QUESTION: Do you have any comment on press reports concerning cash
payments made by the Government of Sweden to an Air Force general?
ANSWER:
The Swedish Government has made it clear (in a September 14
press conference by General Stig Synnergren, Military Commander-in-
Chief) that the payments were made for electronics equipment used for
intelligence purposes. Further, the payments were made bank-to-bank
in a businesslike transaction.
The Secretary of the Air Force has asked his General Counsel to
review the matter to assure the funds transactions were proper.
As to the allegations regarding General Triantafellu, they are
not true. He has never received nor handled funds either on a cash
or personal transaction basis.
BACKGROUND: Press interest arises from an article in a Swedish
magazine that the cash payments were for services or information and
had been done secretly to make the money impossible to trace. DAO
Stockholm reports that in his September 14 press conference, General
Synnergren made a factual and apparently persuasive statement. He
adds that press coverage of the conference produced no sensational new
questions and speculations. The review of the fund transactions by the
Air Force General Counsel continues.
SOURCE:
Major General Keegan, Air Force Intelligence, Air Force
Office of Information
COORDINATION: DepSecDef Ellsworth; ASD (PA) Woods; Air Force General
Counsel; Air Force Intelligence, Major General Keegan.
September 29, 1976
SUBJECT: Executive Dining Room
QUESTION: What can you tell us about the new management initiatives concern-
ing the Executive Dining Rooms in the Pentagon?
ANSWER: The specifics of these new management initiatives have been announced
at a Pentagon Press Conference.
These initiatives were instituted to insure that no individual who dines
in an Executive Dining Room could be considered to be subsidized. This does
not suggest, of course, that the Executive Dining Rooms are totally self-
sufficient. There are numerous examples of Pentagon activities which are
subsidized -- building security, janitorial services, parking lots, even
press parking and the Pentagon Press Room.
These management initiatives were designed to help offset operating
costs in the Executive Dining Rooms as much as possible.
BACKGROUND: Certain members of the Pentagon Press Corps have been critical
of the Executive Dining Rooms and have charged that the food prices amount
to subsidies for senior Defense Department officials. At the September 14
Press Briefing, ASD/PA announced that all menu items in the Executive Dining
Rooms are now priced 5-10¢ higher than comparable items in ARA operating
Dining Rooms, and that there is a minimum $1.50 charge in Executive Dining
Rooms. Further, eligibility for membership in the Executive Dining Rooms
has been increased to achieve a higher utilization rate.
SOURCE: DoD Press Conference, Tuesday, September 14.
COORDINATION: ASD(PA) Woods.
September 29, 1976
SUBJECT: Congressional Action on the XM-1 Tank
QUESTION: What is your reaction to the House Armed Services Com-
mittee action on the XM-1 tank?
ANSWER: The Congress has passed a law (P.L. 94-361, July 14, 1976)
which directs the Secretary of Defense " to the maximum feasible
extent, initiate and carry out procurement procedures that provide
for the acquisition of equipment which is standardized or interoper-
able with equipment of other members of the North Atlantic Treaty
Organization whenever such equipment is to be used by personnel of
the Armed Forces of the United States stationed in Europe under
terms of the North Atlantic Treaty. Such procedures shall also
take into consideration the cost, functions, quality and avail-
ability of equipment to be procured. " Our actions on the XM-1
tank seek to maximize commonality and interoperability and are
intended to support this law.
The recommendation of the House Armed Services Committee
does not have the impact of a Public Law. We will of course be
mindful of the Committee's recommendation as we proceed in the
development of a new tank for the Army.
BACKGROUND: The Committee has stated that " it fully supports
the underlying goal of standardization which prompted the adden-
dum to the Memorandum of Understanding with the FRG, (but) re-
gards the decision-making time-table prescribed in the addendum
as premature and potentially in conflict with the overriding ob-
jective of the XM-1 program which is to field the most cost ef-
fective main battle tank at the earliest possible date. " The
Committee also stated
"
that overriding objective of the XM-
1 program must take precedence over secondary objectives such
as standardization and interchangeability of components. "
2
SUBJECT: Congressional Action on the XM-1 Tank (cont'd)
SOURCE: ASD (PA) Woods
COORDINATION: ASD (PA) Woods
October 1, 1976
SUBJECT: Unionization of the Military
QUESTION: What is the DoD position on possible unionization of the military?
ANSWER: The requirement for effective responsiveness to lawful authority
is well recognized as an integral part of the framework of the military
structure. If the collective bargaining process were applied in this
military environment, command authority could suffer erosion, which in
turn could lead to a decline in our national capability to perform the
basic defense mission of protecting the national security. Existing
laws establish well defined requirements relating to obedience of lawful
orders from duly constituted authority, and prohibit various actions
undertaken to impair loyalty, morale or discipline of the Armed Services.
Commanders are not authorized to recognize or bargain with servicemen's
unions or unions representing or seeking to represent servicemen.
BACKGROUND: We will continue to monitor developments.
SOURCE: OASD (M&RA), Capt. Boywid
COORDINATION: Mr. Alan Woods, ASD (PA)
Adm. Finneran, DASD (M&RA)
October 1, 1976
SUBJECT: Shipbuilding Claims: Electric Boat Division, General Dynamics
Corporation
QUESTION: Has any progress been made in resolving this issue?
ANSWER: This claim was resolved by negotiated settlement on 7 April
1976. While P.L. 85-804 action was ongoing, the SSN claim, $231.5
million (ceiling price), was settled at $97 million (ceiling price).
QUESTION: Where do we stand now?
ANSWER: There are no outstanding claim actions on Electric Boat Division.
However, Navy anticipates another claim from E.B. Division on or about
1 December 1976 at an estimated amount of $300 million.
QUESTION: What are the prospects for settlement?
ANSWER: It is premature to speculate particularly since formal claims
have not yet been submitted but are known to be in preparation.
BACKGROUND: On 14 February 1975, Electric Boat Division of General
Dynamics Corporation submitted to Navy a claim in the amount of $252.2
million (ceiling price). This was later revised to $231.5 million (ceiling
price). Through the cooperative efforts of the contractor in furnishing
required data and efforts of the Claim Team, this claim, the largest
settled by the Navy to date, was received, analyzed, and resolved in 14
months.
SOURCE: Capt Sullivan, OASD (I&L)
COORDINATION: ASD (I&L) Shrontz
October 1, 1976
SUBJECT: Shipbuilding Claims: National Steel & Shipbuilding Company
QUESTION: Has any progress been made in resolving this issue?
ANSWER: National Steel and Shipbuilding Company's request for equitable
adjustment is currently being processed under the terms of the contract.
The contractor has been very cooperative in providing data, thus
enabling the Navy to proceed promptly with its analysis.
QUESTION: Where do we stand now?
ANSWER: It is anticipated that settlement negotiations will begin in
late October.
QUESTION: What are the prospects for settlement?
ANSWER: Since negotiations have not commenced, the prospects of settle-
ment are unknown.
BACKGROUND: National Steel and Shipbuilding submitted a claim on 17
November 1975 in the amount of $20.7 million. In December, the claim was
returned to the contractor requesting additional supporting data. This
claim was included in the unsuccessful P.L. 85-804 action. Since then
the contractor has elected to seek resolution through regular contract
changes procedures.
SOURCE: Capt Sullivan, OASD (I&L)
COORDINATION: ASD (I&L) Shrontz
October 1, 1976
SUBJECT: Shipbuilding Claims: Ingalls Shipbuilding Division, Litton
Systems, Inc.
QUESTION: Has any progress been made in resolving this issue?
ANSWER: Evaluation of the Litton claim has continued since January
1976. To date claims packages totaling $100 million have been received
by the Navy Claims Team and are being evaluated by the Navy.
QUESTION: Where do we stand now?
ANSWER: The Navy has requested Litton to submit by 15 October 1976 the
first part of their $600 million Delay and Disruption package so that
Navy evaluation may commence. Litton and Navy are currently discussing
plans for orderly submission of data from Litton and review by Navy.
QUESTION: What are the prospects for settlement?
ANSWER: It will not be known to the Navy if there is a chance for
settlement until the full claim is disclosed to the Navy Claims Team
and evaluation of the claim is completed. If the Delay and Disruption
claim is presented to the Navy by 15 October 1976, the Navy Claims Team
expects to have a Government position on the claim by May 30, 1977.
Negotiations could commence soon after.
(continued)
2
SUBJECT: Shipbuilding Claims: Ingalls Shipbuilding Division, Litton
Systems, Inc. (Cont'd)
BACKGROUND: In July 1973 Litton/Ingalls filed an appeal of a Contracting
Officer's decision before the Armed Services Board of Contract Appeals
(ASBCA) In October 1974 the Government Trial Counsel filed a motion which
resulted in an ASBCA order for Litton to submit a clearer and more
complete definition of his appeal along with a dollar value of the claim.
Litton submitted this information in April 1975 and the value of the claim
was placed at $504 million. In June 1976 Litton notified the Navy that
the claim was being increased to $701 million. The claim was placed
on suspended status by the ASBCA in January 1976 by mutual agreement of
the Navy and Litton so that an evaluation and negotiation effort could
be made by both parties.
SOURCE: Capt Sullivan, OASD (I&L)
COORDINATION: ASD (I&L) Shrontz
October 1, 1976
SUBJECT: Shipbuilding Claims: Newport News Shipbuilding & Drydock Co.
QUESTION: What can you tell us about the settlement of the shipbuilding
claims at Newport News?
ANSWER: As you know, we have a serious situation facing us in the area
of shipbuilding. On March 30, Deputy Secretary Clements appointed a
Shipbuilding Executive Committee to examine the problem and assist him
in reaching a solution. Then, on April 30, he notified Congress that
the Department intended to invoke Public Law 85-804 in an attempt to
achieve resolution of the problem. However, despite intensive efforts
on the part of the Government negotiators and the shipbuilders' repre-
sentatives, we were unable to reach agreement with all four shipbuilders
concerned. Consequently on 9 June 1976, Deputy Secretary Clements with-
drew his formal notification of the two Armed Services Committees of his
intent to invoke P.L. 85-804. The Navy was directed to process ex-
peditiously the shipbuilders' claims on hand, and to this end they proposed
and Deputy Secretary Clements approved the formation of a special
three man claims settlement board for purposes of processing the nearly
one billion dollars of claims submitted by Newport News Shipbuilding and
Drydock Co. This special board has been delegated the authority for
making the Defense Department's determinations on these claims, subject
to the contractor's appellate rights to the Armed Services Board of
Contract Appeals. Due to the combination of critical national security
(continued)
2
SUBJECT: Shipbuilding Claims: Newport News Shipbuilding & Drydock Co.
(Cont'd)
considerations, substantial long-standing contractual disputes, and
intense interest at high Government levels, Mr. Clements is continuing
to give this very important area his close personal attention.
QUESTION: Where do we stand now?
ANSWER: Analysis of these claims is continuing.
QUESTION: What are the prospects for settlement?
ANSWER: It would be premature to speculate prior to completion of the
analysis.
BACKGROUND: Ships affected include five cruisers, seven nuclear sub-
marines and two nuclear carriers with claims presently totaling $892
million.
SOURCE: Capt Sullivan, OASD (I&L)
COORDINATION: ASD (I&L) Shrontz
October 1, 1976
SUBJECT: Litton Shipbuilding Lawsuits
QUESTION: What can you tell us about the status of the suit which Litton
brought against the government on shipbuilding?
ANSWER: In July Litton filed suit in Los Angeles seeking to stop work,
as of August 1, 1976, on their contract with the Navy to build LHAs.
After careful consideration of all aspects of this situation, the
government has taken two separate actions relating to this general
matter. First, the government filed its own action in the U.S. District
Court in Jackson, Mississippi, against the Ingalls Shipbuilding Division
of Litton Systems, the contractor, and Litton Industries, which guaranteed
performance by Ingalls, to obtain an equitable order to compel the
continued performance of the contract without interruption. On August 3,
the District Court issued a preliminary injunction which ordered the
contractor through April 1977 to continue work under the contract
subject to the government advancing funds during such period for certain
costs incurred subsequent to the date of the Court's order. Second, a
motion was filed by the government in the Litton-initiated action in Los
Angeles, asking that court to dismiss Litton's suit because of lack of
jurisdiction or, alternatively, asking the court to transfer the case to
the U.S. Court in Jackson, Mississippi. This suit has subsequently been
dismissed.
(continued)
2
SUBJECT: Litton Shipbuilding Lawsuits (Cont'd)
An action was recently brought in the U.S. District Court in the District
of Columbia by Litton's outside counsel, as an individual under the
Freedom of Information Act (FOIA), seeking certain Navy records. The
U.S. District Court for D.C. has ordered the FOIA suit transferred to
the U.S. District in Jackson, Mississippi, in order to bring the FOIA
suit under the judicial control of that court. The Navy is presently
compiling and releasing to Litton's counsel all documents determined to
be producible in connection with the FOIA suit. For any further details,
I refer you to the Justice Department, Mr. John Russell, at 739-2017.
BACKGROUND: None.
SOURCE: John Russell, Justice Department PA
COORDINATION: Mr. Wiley, General Counsel
October 1, 1976
SUBJECT: Conflict of Interest
QUESTION: What is the current status of DoD conflict of interest
investigations? Are more disciplinary actions to be taken?
When will these probes be concluded and findings announced?
ANSWER: Several standards of conduct investigations are ongoing within
the Department of Defense at this time. Determinations continue to
be made in regard to individual cases. In some cases individuals accused
of violating the Standards of Conduct have been exonerated while in
other cases individuals have been found guilty and subjected to appropriate
disciplinary action. OASD (Public Affairs) will release within several
weeks an up-to-date listing of disciplinary actions taken or exonera-
tions which have been made to date. As cases continue to be investigated
and decisions made as to whether the regulations have been violated, such
determinations will be announced.
BACKGROUND: None.
SOURCE: Chris Griner, OGC
COORDINATION: Robert Gilliat, Assistant General Counsel (MP and HA)
Richard Wiley, GC
GERALD FORD LIBRARY
22 September 1976
SUBJECT: Officer/Enlisted Ratio
QUESTION: It has been charged that millions could be
saved if the officer/enlisted ratio were brought into
better balance.
ANSWER: I believe the officer/enlisted ratio is in
balance today. (13.5% of active duty personnel are officers
as of May 31, 1976.) We continuously monitor the number
of officers and the percentage of the force they represent.
We strive to eliminate or downgrade officer positions
whenever that can be accomplished without hurting our
mission capability. Since 1973, we have reduced officer
strength by 13%, while reducing enlisted strength by only
6%.
BACKGROUND: The attached graph shows active duty
officer strength as a percentage of total military
strength for each year since 1932. Two phenomena
are responsible for most of the deviation.
1. War/Peace Cycle. When we mobilize, proportion-
ately larger numbers of enlisted people are added rapidly
to the force. This drives down the officer percentage
of the total strength. As the war progresses, the per-
centage of officers increases as qualified personnel
become available to meet the expanded requirements.
When the war ends, a proportionately larger percentage
of enlisted people are released, causing an increase in
the officer percentage. After World War II and Vietnam,
subsequent actions were taken to reduce the percentage
of officers.
Continued -
2
2. Long Term Trend. Since the early 1930s, there
has been a gradual increase in the percentage of officers
in the force. This phenomenon is largely attributable
to the technological increase and the growth of avaiation,
which is relatively officer intensive.
We could, and often do, shift some junior officer
positions to the senior enlisted ranks, but this does
not result in significant savings, as the attached com-
parison of an 0-2 with an E-8 demonstrates.
SOURCE: OASD (M&RA) and Selected Manpower Statistics,
June 1976.
COORDINATION: ASD (M&RA)
ACTIVE DUTY OFFICER PERSONNEL
AS A PERCENTAGE OF TOTAL ACTIVE PERSONNEL
BY YEAR
Percent
30
20
10
World War II
Korea
Vietnam
0
1935
1940
1945
1950
1955
1960
1965
1970
1975
End Fiscal Year
Monthly Pay and Allowance
0-2 with 3 years
E-8 with 18 years
of Service
of Service
Base Pay
$1006.80
$ 971.70
BAQ w/Dependents
194.70
190.80
FICA
58.90
56.84
BAS
53.05
85.50
TOTAL
$1313.45*
$1304.84*
* If future retirement costs are considered, the senior enlisted
man is significantly more costly than the junior officer, because
he is twice as likely to receive retired pay.
October 1, 1976
SUBJECT: Civil Defense Study
QUESTION: The Washington Star reports the U.S. is concerned about the
extensive Soviet civil defense program and the lack of a
similar U.S. effort. Is this true? What is being done?
Does the Defense Department consider the U.S. vulnerable to
Soviet attack without a civil defense program?
ANSWER: Recent publications including translations of USSR civil
defense manuals and the monograph by Professor Leon Goure, "War
Survival in Soviet Strategy--USSR Civil Defense" indicate the broad
scope of what could be an extensive civil defense program in the
USSR. The effectiveness of implementation of the USSR civil defense
plans cannot, of course, be validated before the fact. For a number
of years, the Soviets have devoted considerable resources to their
civil defense effort, which emphasizes the extensive evacuation of
urban populations prior to the outbreak of hostilities, the construc-
tion of shelters in outlying areas, and compulsory training in civil
defense for well over half the Soviet population. The importance the
Soviets attach to this program at present is indicated not only by the
resources they have been willing to incur in its support, but also by
the appointment of a Deputy Minister of Defense to head this effort.
Civil defense in the United States is a part of our Strategic
Defense posture. To the extent that an asymmetry has developed, this
can bear on our strategic relationship with the Soviets and on the
(continued)
2
SUBJECT: Civil Defense Study (Cont'd)
credibility of our deterrent posture. You may be sure that this is
under current review.
A study on civil defense is being prepared. As in all such studies
the direction and scope are classified in part to protect national
security information and in part to prevent speculation as to the
study conclusions, hence I cannot provide you with any specific informa-
tion.
If the Soviets executed a surprise nuclear attack against U.S.
population centers there would be large casualties. I believe our
strategic posture deters this type of attack now and for the foreseeable
future. The consequences of any possible asymmetry growing in our
mutual postures is being examined.
BACKGROUND: Excellent background summary of Soviet civil defense is
contained in the Foreword by Ambassador Foy Kohler to Leon Goure's book,
War Survival in Soviet Strategy--USSR Civil Defense. Ambassador Kohler
concludes that:
1. Civil defense and other war-survival measures have a central
place in Moscow's strategic thinking and constitute a major
element in its military preparedness effort.
2. The Soviet Union has stepped up in very substantial ways its
war-survival program since the advent of the detente (peaceful
coexistence) relationship with the U.S. in May 1972 and is
today steadily increasing its attention and resource allocations
to the program.
(continued)
3
SUBJECT: Civil Defense Study (Cont'd)
3. The Soviet leadership recognizes and evidently attaches great
importance to the USSR's superior position as against the U.S.
in war-survival capabilities from the standpoint of both
scope and effectiveness of civil defense and related programs
and of degree of concentration of population centers and vital
economic resources and activities.
4. The Soviet leadership believes that these asymmetries between
Soviet and U.S. capabilities can so degrade the U.S. threat of
"assured destruction" as to give the USSR a distinct advantage
with respect to risk-taking in the nuclear age and improve its
chances of not only surviving but winning a nuclear war should
it come.
For your information: As a matter of policy, NSC does not comment
publically about the subjects under study in the National Security Study
Memorandum process, therefore, no reference to the National Security
Study Memorandum is included in the answer.
SOURCE: Assistant to the Secretary of Defense (Atomic Energy)
COORDINATION: DCPA
ISA
CERALS FORD LIBRARY
October 1, 1976
SUBJECT: Hollingsworth Report
QUESTION: Some time ago, LTG Hollingsworth was sent to Europe to study
U.S. Army operational capability. What are the findings of
this study? What are your views on those findings? Have any
actions been taken on the findings?
ANSWER: In March, General Weyand, former Chief of Staff of the Army, asked
LTG Hollingsworth to go to Europe to conduct a study of U.S. Army
operational capability there. He reported back to General Weyand in July
with a number of recommendations to improve that capability. These were
offered in light of the recent advances made by the Warsaw Pact forces
and their ability to wage a sudden and violent attack on Western Europe.
I have read the report and found it to be very useful. Since most of the
recommendations deal with Army issues, the Army is examining the report
in detail, and the broader issues are being looked at by the Joint Chiefs
of Staff. Action has already been initiated on a number of the findings,
and others, because of their impact, are still being evaluated.
BACKGROUND: The Hollingsworth Report was briefed to the SECDEF, DEPSECDEF,
and JCS on July 13. Each has a copy of the report. A copy of the report
is in the hands of the Senate & House Armed Services and the House Appro-
priation Committees. LTG Hollingsworth is now retired and working as a
consultant (4-5 days per month) to the Senate Armed Services Committee.
Senator Nunn, very familiar with the Hollingsworth Report, gave a recent
speech to the New York Militia Association in which he referred to the
need for NATO to consider:
- Planning for an intense war lasting two to three weeks with
perhaps only a few days' warning (while at the same time retaining
sufficient hedges in our force structure to deal with a war of extended
duration) as opposed to current posturing for warning of up to 23 days
and a war of one to six months' duration.
- Developing strategy aimed at defeating Warsaw Pact forces in the
vicinity of the West German border rather than containing them in the
interior of Germany, then driving them back to the east.
(continued)
SUBJECT: Hollingsworth Report
2
- Substantially increasing the firepower available to NATO ground
forces including artillery, anti-tank and air defense systems and
ammunition stockpiles.
- Redeploying US and other NATO forces to the north and east to
be better positioned for a quick, intensive invasion across the German
plain.
- Shifting more US Army personnel in Europe from support to combat
missions.
- Standardizing all arms and equipment used by the various armies
beneath the NATO umbrella.
SOURCE: Hollingsworth Report, NY Times and Congressional Record
COORDINATION: Secretary of the Army Hoffmann
LIBRARY
October 1, 1976
SUBJECT: Senate Report on Military Sales to Iran
QUESTION: What is the Department of Defense response to a Senate
Report concerning problems with military sales to Iran?
ANSWER: The staff report on U.S. arms sales to Iran released by
Senator Humphrey's Subcommittee on August 1, 1976, contains no
information that is new to the Defense Department. All programs have
problems; the program in Iran has its share.
Last year the Defense Department took action to improve the
management of this increasingly complex program. It selected and
sent out to Tehran in the autumn of 1975 a Special Defense Representa-
tive, Mr. Erich F. von Marbod. The Senate staff report applauds the
Defense Department's initiative in sending a Special Defense Representa-
tive to Iran.
Mr. von Marbod, who is a member of the staff of the American
Ambassador in Tehran, returns to Washington periodically for a
thorough review of progress being accomplished in the U.S./Iranian
Assistance Program. These periodic consultations will continue; the
most recent having just occurred last month. Mr. von Marbod, working
with Ambassador Helms, has the full backing of the entire Department
of Defense and the Services in devising solutions to any problems
that may exist and to those that may arise.
Iran is an independent sovereign nation state. The Government of
Iran, must in the first instance, determine the country's present and
September 30, 1976
SUBJECT: F-14 Missing Parts
QUESTION: What can you tell me about the F-14 parts theft in Virginia
Beach?
ANSWER: On September 7, 1976, during a routine inspection at the Oceana
Naval Air Station in Virginia Beach, VA, electronic components from an
F-14 Tomcat fighter aircraft were discovered missing. An investigation
was launched. Four of the five missing components are part of an
integrated F-14 avionics system. The separate components are unclassified
but are a part of a system which does have a classified capability. They
could not be combined to reproduce a weapon system. The fifth missing
component is a part of the CNI equipment (Communication, Navigation,
Identification) used in all Navy tactical aircraft.
Parts of four of the missing five components were located on September 13
in a shallow lake in Virginia Beach by residents who notified the Virginia
Beach Police. The components were damaged.
On September 21 Timothy M. Rice, 19, of Worcester, MA, a member of
the squadron involved was charged in connection with the disappearance
of the missing components. ATAN Rice is currently in Navy custody; an
Article 32 investigation (routine preliminary investigation) has been
ordered.
The fifth missing component has not been found; the Naval Investigative
Service has the matter under investigation.
BACKGROUND: The above material is based on previously released
information.
SOURCE: CINCLANTFLT/COMAIRLANT
COORDINATION: CNO
FUND
October 1, 1976
SUBJECT: Honor System Investigation
QUESTION: What comment can you give us on the honor violations
at West Point?
ANSWER: I am concerned about the recent honor violations at the United
States Military Academy. The administration of the Service Academy
Honor Systems is the responsibility of the respective services. Be-
cause of the current situation, the cheating incident, the Secretary
of the Army has appointed a special Commission to conduct an indepth assess-
ment of the current incident and its underlying causes and to make an
assessment of the effectiveness of the Honor Code and System. The
Commission, headed by Colonel Frank Borman, is currently meeting.
Secretary Hoffmann charged the Commission to assess the problems
at West Point "objectively, impartially, broadly and in-depth." I am
confident it will do SO.
BACKGROUND: On 2 September 1976, a Commission chaired by Mr. Frank Borman
was announced. The Special Commission on the United States Military
Academy began its first meeting at West Point on September 28th. This
meeting will continue until October 8th. The second meeting will run from
the 26th through the 29th of October, and the third will be held from
the 9th through the 12th of November. A portion of each of the three
meetings of the Borman Panel will be open to the public. The only
open session of the first meeting was held on September 28. The times
of the open sessions of the second and third meetings will be announced
in the Federal Register at least 15 days before the meetings.
Specific questions to be addressed are:
(continued)
2
SUBJECT: Honor System Investigation (Cont'd)
1. What were the causative and contributing factors underlying the
recent Electrical Engineering 304 cheating incident?
2. Does the Honor Code and System impose a realistic and reasonable
set of standards?
3. Is the Honor Code accepted by cadets as a way of life or do cadets
adhere to it merely because of the consequences of a violation?
4. Are high standards of moral and ethical conduct emphasized in
all aspects of cadet life?
5. Are the pressures on cadets generated by the academic, athletic and
military training at the Academy realistic and do they contribute
effectively to the mission of the Academy?
6. Is an ethical base adequately provided for cadets to develop a
strong sense of integrity, exclusive of the Honor Code and System?
7. Does the institution in its structure, its policies and doctrine
and in its operation appropriately support the Cadet Honor Code and
System?
8. Is there sufficient emphasis and effectiveness in formal instruction
on Honor matters at the Academy?
The commission is to report by early December.
SOURCE: DCSPER, MG Trefry
COORDINATION: Secretary of the Army Hoffmann
September 30, 1976
SUBJECT: F-14 Missing Parts
QUESTION: What is the Navy doing to prevent a recurrence of the theft
of F-14 components?
ANSWER: Security in the area of the hangars and on the approaches
to these hangers has been increased.
BACKGROUND: The number of watchstanders in the hangar, on the flight
line, and the approaches to the hangar area have been increased. In
addition, random checks of the watchstanders have been increased. The
Squadron Commanding Officer, Squadron Executive Officer, Squadron Duty
Officer, Wing Security Officer, Wing Duty Chief and other wing senior
personnel randomly check the various watchstanders to insure alertness,
correct watchstanding procedures and correct admission-to-area
procedures, are being observed. All watchstanders are receiving more
detailed briefing with greater emphasis being placed on the importance
of proper watchstanding.
SOURCE: CINCLANTFLT
COORDINATION: CNO
October 1, 1976
SUBJECT: Americans Lost in Southeast Asia
QUESTION: How do you respond to complaints that the U.S. Government
has not done all it can to obtain an accounting of all
Americans lost in Southeast Asia?
ANSWER: I know the heartbreak for any human being who has a loved one
missing in action. I have friends, very close friends, who've been missing
over a period of time and there are few things that can be more heart-
breaking. I also know President Ford's deep personal feelings about the
heartbreak involved and the extensive time and effort he has devoted to
get the North Vietnamese government to provide information on Americans
lost in Southeast Asia.
This is a humanitarian issue in its most fundamental sense. The
North Vietnamese have an obligation to provide this accounting.
The State Department has been working through international humani-
tarian organizations and third countries in an effort to obtain informa-
tion from the North Vietnamese. Recently, after the North Vietnamese
released information on 12 U.S. servicemen, the President instructed
the American Embassy in Paris to inform the North Vietnamese that we
expect a full accounting without delay. They had provided information on
a handful of men, and we know they have information on hundreds more.
The President further emphasized there can be no normalization of relations
with North Vietnam until this accounting is complete.
(continued)
2
SUBJECT: Americans Lost in Southeast Asia
BACKGROUND: As of 30 June 1976, there were 795 U.S. servicemen listed
as missing in action in Southeast Asia. In addition, there are 1,710
servicemen who were killed there whose bodies were never recovered.
SOURCE: Statement, President of the United States, September 7, 1976;
Press Conference, Secretary of Defense, Jacksonville NAS,
Florida, September 28, 1976.
COORDINATION: ASD (PA) Woods
September 24, 1976
SUBJECT: Cut in the Defense Budget Through Better Management
QUESTION: It has been charged that billions of dollars can be saved
in the Defense Department through better management.
Please comment.
ANSWER: We need the Defense budget proposed in order to maintain
rough equivalence with the Soviet Union and to reverse the trends
of the past ten years which have seen Soviet military expenditures
steadily increase while U.S. military expenditures have steadily
decreased.
In real terms, U.S. defense spending has been going down; Soviet
defense spending has been steadily increasing. As a result, constant
dollars, real purchasing power, with the effect of inflation removed
-- the defense budget of the United States has dropped significantly.
It is today some 30% lower than in the early 1960's. We are spending
a smaller percentage of our Gross National Product, a smaller per-
centage of our labor force, a smaller percentage of our federal budget,
a smaller percentage of our net public spending than at any time before
the Korean War or before Pearl Harbor, depending on which statistic you
use.
Conversely, the Soviet Union has increased defense spending
steadily, by approximately 3% a year, year after year, by the most
conservative estimates. In constant 1977 dollars -- real purchasing
power -- Soviet resources allocated to national defense have grown
(continued)
2
SUBJECT: Cut in the Defense Budget Through Better Management (Cont'd)
32% over the last ten years. These trends are unfavorable to our
national security interests. They must be reversed.
Over the past 10-15 years the United States has gone from a
position of clear superiority over the Soviet Union to one of rough
equivalence. In order to maintain this position we need real in-
creases in the amount of money we spend for our national security.
The proposed Defense budget has within it restraints that would
allow the savings of millions of dollars and better management of
our defense resources. In order to achieve these savings the Congress
needs to act positively.
Meanwhile we are putting forth maximum efforts to better manage
our defense resources. Changing technology, a changing world situa-
tion, and changing force structures require constant attention to
improved management. We have done a number of things to improve the
management of defense positions:
1. We have adjusted and realigned our force structure;
2. We have adjusted and realigned our base structure;
3. We have improved the student/techer ratio;
4. We have cut and our continuing to cut the number of
generals and to reduce the rank within our force
structure;
5. We have increased the combat/support troop ratio; and
6. We have improved the Defense Procurement System.
(continued)
3
SUBJECT: Cut in the Defense Budget Through Better Management (Cont'd)
A cut in our defense budget would be unwise in the face of
increased efforts by the Soviet Union.
BACKGROUND: None
SOURCE: ASD/PA Woods
COORDINATION: ASD/PA Woods
September 24, 1976
SUBJECT: B-1
QUESTION: Do we really need a bomber as expensive as the B-1?
ANSWER: I think most people agree that the strategic nuclear balance
is a critical balance; that is to say, that we have sufficient capa-
bility to survive a first strike and have sufficient survivable
systems to deliver a retaliatory strike, that would impose sufficient
damage on the Soviet Union that they would be dissuaded from using
those weapons.
We;ve arranged our strategic nuclear capability in three areas,
the so-called nuclear TRIAD -- the manned bomber force, the B-52s;
the land-based missiles, the Minuteman; and the submarine-based
missiles, in the Polaris, Trident submarines. The reason for having
them dispersed in the three areas is about as simple as the reason
people with any money tend to buy more than one investment if they
can. The idea of diversification is if there's a failure in one,
it's better to have something else and not have all of your eggs in
one basket. When one looks at technological advances in the mili-
tary area there's no question but that anti-submarine wafare advances
and communication jamming arrangements could in fact interfere with
our ability to use our very survivable submarine systems.
When one looks at our ICBM capacity, the United States has
achieved some very significant breakthroughs in accuracies of
missiles. We know about how it's done; we know about how it progresses
(continued)
2
SUBJECT: B-1
through that process of development and we know that the Soviet Union
has been working very hard on it and we anticipate that about 1980,
the Soviet Union is going to be achieving advances in accuracy. This
puts in jeopardy the survivability of our land-based ICBM Minuteman
Force. We have to recalculate as the Soviet Union's accuracy goes
up, how many of our land-based systems will survive in the event of
attack.
When one looks at our manned bomber force, we know that a manned
bomber is survivable against an incoming attack in that it can get
airborne prior to being hit by incoming missiles.
We know that today the manned bomber force provides about 50%
of the reentry vehicles in that strategic nuclear capability and
about 40% of the total megatonnage of the United States strategic
nuclear capability.
We know that a manned bomber with certain characteristics can
penetrate Soviet air defense systems and accurately deliver its pay-
load and return.
Now, what comprises our manned bomber force -- the B-52. How
old is it? It is somewhere between 15, 20, and 25 years old. Is
it going to last forever? No. Should we expect it to? No. Can we
be expected to replace the B-52? Yes. What's the logical thing
that seems to be coming along the path as a follow-on to the B-52?
(continued)
3
SUBJECT: B-1
The B-1. Has anyone come up with a better idea? No. Have we looked?
You bet your life, for 10 years, looked in every direction for some
alternative option -- cheaper, better, faster, more survivable,
greater penetrating capability, cost -- everything taken into account,
we've looked hard. Four Secretaries of Defense have looked. Has any-
one come up with a better idea? No. Do I think it's very likely that
the B-1 is going to end up being that system that's going to succeed
the B-52 as the major element of the United States of America's
manned bomber force? Yes.
BACKGROUND: None
SOURCE: SECDEF News Conference, September 11, 1976
COORDINATION: None
September 22, 1976
SUBJECT: Defense Procurement and Foreign Policy Objectives
QUESTION: How is defense procurement coordinated with foreign policy
objectives?
ANSWER: Foreign policy and Defense policy are coordinated by the
President. The President is Chairman of the National Security Council
which evaluates potential threats and provides guidance in formulating
our defense posture.
Foreign policy objectives of peace, mutual security and inter-
national stability are all involved in our assessment of defense
procurement and weapons acquisition.
Serious consideration is given to the weapons inventory mix
necessary for us to meet our needs and our weapons acquisition
planning considers the worldwide threat and how we and our allies
will be able to meet this threat.
For example, it has become increasingly clear that procurement of
standard weapons and equipment with our NATO allies is important to
achievement of our foreign defense policy objectives in Europe.
BACKGROUND: The Arms Export Control Act has established guidelines to
make the Foreign Military Sales (FMS) aspects of our defense procure-
ment more closely tied to U.S. foreign policy objectives. The recent
Nunn and Culver-Nunn amendments on NATO Standardization are giving
recognition to the link between defense procurement and our objective
to strengthen the conventional defensive capability of Europe. In
the Arms Control and Disarmament area the groundwork is being laid
for future coordination of defense procurement with policy objectives.
(continued)
2
SUBJECT: Defense Procurement and Foreign Policy Objectives (Cont'd)
SOURCE: ASD/I&L, Frank Shrontz
COORDINATION: DSAA, Lt. General Howard Fish
September 16, 1976
SUBJECT: Dr. Albert C. Hall
QUESTION: Given the fact that Dr. Hall's nomination was withdrawn
from consideration as Assistant Secretary of the Air Force for
Research and Development, how can you justify allowing Secretary Reed
to create a job for him which pays only slightly less than the origi-
nal position?
ANSWER: Dr. Hall withdrew himself from nomination (March 25, 1976)
stating that for personal reasons that he would be unable to accept a
long term appointment.
As you know, at that time an investigation was conducted by this
Department into the various allegations which had been made relating
to Dr. Hall's relationships with his previous employer, Martin-
Marietta Corporation. That investigation resulted in the following
conclusions: (1) that Dr. Hall did not violate any of the so-called
"conflict of interest" studies; (2) that he had failed administratively
to report certain financial interests in the Martin-Marietta Corporation,
although he had reported others and that, therefore, his interests in
Martin-Marietta were generally known; (3) that the appropriate required
action, i.e., disqualification as to Martin-Marietta, had previously
been taken as a result of the financial interests in Martin-Marietta
which had in fact been disclosed; (4) that there was no evidence of
any intent to deceive on Dr. Hall's part in not reporting, as and when
required, the additional financial interests; and (5) that there was
no information reflecting adversely upon Dr. Hall's faithful performance
of his duties.
(continued)
2
SUBJECT: Dr. Albert C. Hall (Cont'd)
At that time we acknowledged that he would be retained as a
consultant from time to time. Because of pressing needs to look at
alternatives for modernizing the ICBM force and warning systems, the
Secretary of the Air Force asked Dr. Hall to accept a temporary
appointment for a limited period of time. (Effective: August 20,
1976; not to exceed one year; salary: $37,800; title: Assistant
to the Secretary for Strategic and Command and Control Systems.)
Secretary Reed feels, and I agree, that Dr. Hall possesses unique
qualifications to advise the Department of the Air Force on
ballistic missile and warning systems.
QUESTION: When Dr. Hall withdrew his name from nomination, had the
Department of Defense found any evidence of previous con-
flict of interest?
ANSWER: The Department of Defense looked into the matter and
determined that there was no evidence of any conflict of interest
on Dr. Hall's part. His record of government service has been one
of hard work and valuable service.
BACKGROUND: Attached is a listing of Dr. Hall's government service.
SOURCE: None
COORDINATION: Sec/AF; SAFOI; Mr. Wiley, OSD Gen. Counsel; Mr. Woods,
ASD/PA
(continued)
Dr. Albert C. Hall
Chronology of Government Service:
1963-1965
Deputy Director of Defense Research and Engineering
for Space, Office of the Secretary Of Defense
Oct 1971 -
Assistant Secretary of Defense, Intelligence
Mar 1976
Mar 1976
Nominated by the President to be Assistant Secretary
of the Air Force for Research and Development
Mar 25, 1976
Dr. Hall requested that his nomination be withdrawn
for personal reasons
Apr - Aug 1976
Consultant - Office of the Secretary of the Air Force
Aug 20, 1976
Appointed as Assistant to the Secretary of the Air
Force for Strategic and Command and Control Systems -
Office of the Secretary of the Air Force (for a
period not to exceed one year).
Duties: To participate in developing a modernization
program for the ICBM force. Analyze and evaluate
objectives and priorities and recommend methods for
funding the allocation of resources. Analyze and
evaluate Air Force policies, plans, and objectives
in areas of ballistic missiles and warning systems.
Advise the Secretary of the status of technology and
requirements and recommend actions. Advise the
Secretary on the status of the current MINUTEMAN
weapon systems, and recommend the best means of
achieving an operational M-X and the necessary
warning systems to protect against enemy attack.
Additionally, contact key officials in the Office
of the Secretary of Defense, other Service Departments,
federal agencies, Congress, news media and private
research and industrial organizations on various
aspects of defense systems.
In addition to the above service, Dr. Hall has participated in the
following government consulting activities:
- Member, Defense Intelligence Agency Scientific Advisory Committee, 1966
- Member, Defense Science Board Task Group on Electronic Warfare, 1966
- Member, Army Scientific Advisory Panel on Ballistic Missile Defense, 1967
- Member, DDR&E Summer Study on the advanced needs for tactical aircraft, 1968
- Member, DDR&E Summer Study on problems in Vietnam, 1967
- Member, several torpedo review groups, 1950-1965
- Member, first technical interchange with USSR (field of automation), 1955
September 15, 1976
SUBJECT: Defense Budget Level
QUESTION: The Defense Budget for this year is higher than the peak
years of Vietnam. What does this say about the value of
the current Administration approach to SALT?
ANSWER: SALT must be placed in perspective. It is not realistic to
expect always to be able to correlate SALT agreements or the process
of negotiations with reduced defense budgets. The foremost objective
of SALT for the United States is to enhance our national security,
and these negotiations should not be viewed primarily as a way to
trim the defense budget. There could in fact be budget savings as a
result of a new SALT agreement, but the defense budget is primarily
a function of Soviet military capabilities. These capabilities have
not stood still in recent years - on the contrary, they have been
steadily growing.
BACKGROUND: None
SOURCE: DoD SALT Task Force
COORDINATION: Dr. Wade, Director, DoD SALT Task Force
September 16, 1976
SUBJECT: FMS - Advantages/Disadvantages
QUESTION: It has been charged that we should drastically cut our
Foreign Military Sales Program. Would you please comment
on the advantages and disadvantages of the FMS program?
ANSWER: First let me emphasize the importance of this program to
the U.S. Throughout the free world the US has friends and allies
who have valid requirements for military equipment and services.
But because of the growing cost, as well as the increasing techno-
logical complexity, of a modern defense structure, they cannot
economically produce the needed equipment themselves. They need the
cooperation of the US in making this equipment available, by means
of the Security Assistance Program.
The resultant defense cooperation is important to the US. With
it, friendly foreign nations can act in concert with us to deter or
defeat aggression, and preserve the peace and stability so essential
to social, economic and political progress. The Congress has recog-
nized these principles in our authorizing legislation, in particular
in the new Arms Export Control Act, which governs our foreign mili-
tary sales program. It is for these reasons also that the Executive
Branch considers this program to be an essential element of US
foreign policy.
In addition to making certain that the program supports US
foreign policy, there are other essential limitations that we must
recognize. We must be certain that the equipment we provide meets
(continued)
2
SUBJECT: FMS - Advantages/Disadvantages (Cont'd)
valid requirements, and is intended for use only in legitimate self
defense, and not for aggression. We must determine that the countries
which seek to purchase from us have sufficient financial resources
to handle the purchase without undue burden to their economy which
would hamper their social and economic development. We must assure
ourselves that the purposes for which the equipment is intended are
in consonance with the security objectives of the US, as well as with
the purposes and principles of the United Nations and will not lead
to arms races. In summary, this means that the program is one that
requires careful management and control at all stages. This is some-
thing that both the Executive Branch and the Congress are very aware
of.
Individual decisions on particular sales transactions are thus
made in terms of their effect on US foreign policy. Domestic con-
siderations are not a primary factor in these determinations.
Nevertheless, there are secondary benefits to the US which one should
note. Foreign military sales assist the US in maintaining existing
base rights and in establishing new ones where they are required.
FMS purchases permit larger and steadier production runs by US manu-
facturers, and help us to maintain an essential industrial mobiliza-
tion base for our own use if needed. And finally, FMS purchases
tend to lower unit costs of items produced for both the Department
(continued)
3
SUBJECT: FMS - Advantages/Disadvantages (Cont'd)
of Defense and the foreign purchaser, as well as provide a source
of partial recoupment of our sunk investment in major defense
systems.
One should recognize that less than half of the total value of
the Foreign Military Sales program represents the supply of actual
weapons and weapons systems. The balance of the program involves
the supply of such items as communications equipment, airfields and
port facilities construction, as well as follow-on support and
training. All of these elements of the program have significant
benefits to the civil infrastructure of the purchasing nations,
contributing to their development and progress for years to come.
Finally, one should recognize that we are dealing with sovereign
governments in this program. They come to us at their own initiative,
and if we do not recognize their perceived needs, there are other
nations who will. The Soviet Union has been pursuing an active role
throughout the third world in promoting sales of military equipment
and services, and has achieved significant influence in many areas
as a result. Similarly, although on a smaller scale, France, the
United Kingdom, Italy and Israel have all indicated their willing-
ness to enter this area. While it is not true that the US sells
only because "if we don't others will," it is true that unilateral
control of conventional arms transfers is for the most part not a
(continued)
4
SUBJECT: FMS - Advantages/Disadvantages (Cont'd)
practical policy in the present world situation. We have inter-
national consultation and agreement before we can achieve truly
effective control.
BACKGROUND: FMS has a significant impact on the US economy. A paper
published on 23 July 1976 by the Congressional Budget Office shows
that a complete ban on new sales under the FMS program imposed at the
beginning of FY 1977 would, by FY 1981, cause a reduction of about
$20 billion in current dollar Gross National Product. The number of
jobs would be reduced by about 350,000, resulting in a rise in the
unemployment rate of about 0.3%. A ban would reduce net exports by
approximately $7.5 billion by 1981.
Favorable effects of FMS are longer and steadier production runs
for manufacturers, maintenance of a production base, and lower unit
costs of items produced. Foreign orders also help to defray research
and development expenses. Another analysis conducted by the Congres-
sional Budget Office, dated 24 May 1976, indicated that based on the
current mix of weapons, services, and construction, an $8 billion
sales program would generate an average annual saving for the Defense
Department of $560 million.
SOURCE: Colonel ME Thomas, ISA/SA
COORDINATION: Mr. McAuliffe, ASD/ISA
LTG Fish, Director, DSAA
BG Thompson, Director, PP&NSC Affairs
August 26, 1976
SUBJECT: General/Flag Rank Officers
QUESTION: It has been charged that our present military structure
is too top heavy, i.e., too many generals and admirals -- more flag
officers now than at the end of World War II when our force level
was much higher -- more captains on the CNO's staff than serving on
ships. Would you please comment.
ANSWER: There are significantly fewer generals and admirals today
than there were at the end of WW II. At that time we had 2,068
generals and admirals (all ranks) compared to 1,184 today. We pro-
ject a reduction to at least 1,170 at the end of FY 1977 and a further
reduction to 1,157 at end FY 1978:
General/Flag Officers
Actual (End Fiscal Year)
Planned
1945
1968
1973
1976
1977
1978
2,068
1,352
1,291
1,184
1,170
1,157
Although their number is reduced almost in half, their proportions
compared to the total military force is higher today than the pro-
portion was in WW II. The point to be understood here is that the
number of senior military officers does not change in direct pro-
1
portion to the personnel size of the Armed Forces, but depends more
on basic organization and functional needs.
The significant organizational changes since WW II include:
establishment of a separate Air Force, establishment of Unified
Commands and International Headquarters, and strengthening the Office
of the SecDef and OJCS. The significant changes in functional
(Continued)
2
requirements include: procurement and distribution of material and
equipment is more technically demanding and requires a much higher
degree of economic control, and command and control systems are more
elaborate.
There are more captains (0-6) at sea than on CNO staff. Those
at sea include commanding officers of ship, squadron, air group and
afloat staff.
262 0-6's on CNO staff; 369 0-6's on sea duty;
310 0-6's in ships; and 59 0-6's in sea duty
category not embarked in ships (e.g., VP Staff).
I do not believe it is unreasonable to find this number of the
most experienced and capable officers assisting the CNO to fulfill
his statutory responsibilities to the Secretary of the Navy.
BACKGROUND: None
SOURCE: Col Sweet, Executive Assistant, ASD (M&RA)
COORDINATION: Mr. Taylor, ASD (M&RA)
August 26, 1976
SUBJECT: Support/Combat Troop Ratio
QUESTION: It has been charged that the military has too many support
troops per combat troop and that millions of dollars could be saved
if this ratio were reduced. Would you please comment.
ANSWER: We are concerned with the ratio of combat troops to support
troops and have been trying to find the best balance. I think we've
been making progress in that direction. We have to be careful in
making statistical comparisons of the ratio from one war to another
due to wide variations in forces and their methods of employment.
However, using the Army as an example, I can give you rough approxi-
mations of the ratios in World War II, in 1964 (the last time we had
16 active divisions in the Army), and today:
Percent Distribution
1945
1964
1976
Combat
33
48
54
Support
67
52
46
As you can see, the ratio of combat troops to support troops has
steadily increased since WW II. Today we have the same number of
combat divisions as in 1964, but much less support manpower. That
does not mean necessarily that there is less need for support troops;
it means that we have consciously structured our active force to
include as much readily deployable combat power as possible, while
recognizing that we would have to rely more heavily than ever before
(continued)
GERALD
2
on the Reserve Components to provide the necessary support forces.
We can't push that too far -- we'll always need some support in our
active forces -- but I believe that we are already taking the sort
of economies your question refers to.
BACKGROUND: None
SOURCE: Directorate for Planning and Evaluation, Land Forces -
J. Finsterle X50881
COORDINATION: Director, P&E, E.C. Aldridge, Jr.
September 14, 1976
SUBJECT: Guard and Reserve Readiness
QUESTION: Do our Reserve and Guard forces suffer from a lack of
readiness, lack of training, lack of coordination with
regular units?
ANSWER: The readiness of our Guard and Reserve forces has definitely
increased during the past several years. The Total Force Policy,
which states that National Guard and Reserve Forces will be the pri-
mary source of expansion of the Armed Forces in the event of future
war, and directs coordinated planning for all manpower and forces
(Active, National Guard and Reserves), has resulted in increased
reliance on the Reserve Components to perform front-line combat and
combat support missions, as well as to provide the expansion of the
supporting base to sustain a lengthy, war-fighting capability. To
achieve the necessary levels of readiness, increased attention has
and is being given to the manning, equipping and training of the
Reserve Components, with particular emphasis on those required for
early deployment. Army National Guard and Reserve forces are
receiving increased quantities of new or modernized combat-capable
tanks and anti-tank missile systems. Naval Reserve, Marine Corps
Reserve, and Air Reserve Forces are upgrading their inventories of
ASW Patrol Planes, Tactical Fighters and Airlift Aircraft. New mis+
sions in Strategic Aerial Refueling, Amphibious Shipping and Ocean
Towing, and Anti-tank Warfare are being studied and assigned to the
(continued)
2
SUBJECT: Guard and Reserve Readiness (Cont'd)
Reserve forces as determined feasible. Closer integration between
Active and Reserve forces is being achieved for both pre-mobilization
readiness training and post-mobilization mission performance. Ex-
amples can be seen in the Army's Roundout and Affiliation Programs,
the Gaining Command concepts in the Navy and Air Force, the Air Force
Reserve Associate Squadron Program, the Marine Corps' "Host Unit"
Program, and the Coast Guard's Augmentation Training. Some deficiencies
which adversely affect readiness continue to exist. These problems
are sufficiency of equipment and recent difficulties in recruiting
in the volunteer environment. Programs to correct these problems
are either already in process or in developmental stages. Substantial
improvement in the status of tanks and other equipment was included in
the FY 1976 defense program and are being continued throughout sub-
sequent years. The need for additional resources for recruiting was
recognized late in FY 1976 and appropriate program adjustments are
being made. Programs to improve recruiting are being formulated.
The Secretary of the Army has announced plans to give priority atten-
tion in the FY 1978 budget request to recruiting and retention incen-
tives for Reserve Components.
GERALD
The Guard and Reserve forces provide significant portions of
our total combat capability and even more of the necessary sustaining
support that would be required to enable the United States to successfully
(continued)
3
SUBJECT: Guard and Reserve Readiness (Cont'd)
prosecute a general war. Their readiness status receives continuing
attention; and we are pleased with the progress that has been
achieved, but recognize the need for continuing effort in this
regard.
BACKGROUND: None
SOURCE: Col. Sweet, Executive Assistant, ASD (M&RA)
COORDINATION: Mr. Taylor, ASD (M&RA)
GERALD
September 21, 1976
SUBJECT: U.S. Forces Overseas
QUESTION: It has been charged that the U.S. has too many troops
and bases overseas and that millions of dollars could be
saved if the overseas troops and bases were reduced.
Would you please comment on the advantages and disadvan-
tages of having the troops and bases in foreign lands.
ANSWER: Charges of this nature have been a recurrent feature of our
domestic political debate for several years now. They have a certain
surface appeal -- for calls to "bring the boys home" and "save the
taxpayers' money" are always attractive in the United States political
arena. The problems arise when one begins to assess the costs to our
national security interests and our foreign policy objectives of
seriously reducing our existing forward deployments and overseas
basing facilities.
Our overseas deployments are concentrated in two areas, both of
which are of central importance to US national security objectives:
NATO Europe and Northeast Asia. In Western Europe, our deployments
form part of the forces of the NATO Alliance, the treaty which has
been the centerpiece of US foreign policy since World War II. Not
only do these forces, both on land in the Central Region and seaborne
in the Mediterranean, contribute vitally to the Alliance's deterrent
posture, but they are regarded by our Allies as politically signifi-
FORD
cant symbols of our continuing commitment to the support and defense
of the Alliance. In the past two years, we have streamlined and
modernized our forces in Europe, first, by converting some
(continued)
2
SUBJECT: U.S. Forces Overseas (Cont'd)
20,000 spaces from support to combat, and also by various deployments
of our forces there to improve their capabilities. Significant
reductions in the existing levels of these forces, however, would
deal considerable damage not only to our military capabilities in
Central Europe and the Mediterranean but to our political relation-
ship with our Allies, who would inevitably interpret any such action
on our part as a clear signal that our interest in Western Europe's
security and our commitment to their support had been downgraded.
It could also give rise to serious miscalculations on the part of
the Soviets, were they to conclude the same thing, and thereby
decide to seize the opportunity to exert pressure, either political
or military, upon the NATO Allies to become more pliant towards
Soviet objectives in Europe. The United States has too many vital
interests at stake in Western Europe -- deep political and cultural
ties, large investments, major national security interests -- to
allow any such incitements to Soviet adventurism there.
We are the more concerned for the stability of the military
balance in Central Europe because the Soviet Union has been increasing
and modernizing its own forces deployed there as part of the Warsaw
Pact. These improvements -- both quantitative and qualitative --
in our adversaries' capabilities make it the more imperative that
we sustain and improve our own strength in that region. Currently
(continued)
3
SUBJECT: U.S. Forces Overseas (Cont'd)
in an effort to reduce the level of forces confronting each other
on the Central Front, without impairing security on either side,
the US and its NATO Allies are engaged in negotiations with the
Warsaw Pact with the objective of arriving at an agreement on
mutual and balanced force reductions in Central Europe. We and
our NATO Allies have agreed to make no unilateral reductions in
NATO deployments outside of the context of these MBFR negotiations.
Any significant unilateral reductions in our forces in Europe
could undermine the Soviets' incentive to reach a mutually satis-
factory agreement in these important and delicate negotiations.
In Northeast Asia, the stakes are similarly high. Stability
on the Korean peninsula is vital to the security of Japan, our
major ally in Asia. It is equally important to prevent the out-
break of renewed hostilities in Korea that would force the Chinese
and the Soviets, out of political rivalry and mutual mistrust, to
vie in backing the North Koreans, for this would tend in turn to
bring the United States into a face-to-face confrontation with
either of these two powers. As in NATO Europe, therefore, the
presence of US troops in South Korea serves a dual purpose:
military and political. On the one hand, they are a necessary
GERALD
addition to South Korean military forces, ensuring that in the
event of attack, the South Koreans will have the air support they
(continued)
4
SUBJECT: U.S. Forces Overseas (Cont'd)
themselves currently lack. On the other hand, they constitute the
same sort of political "signal" to allies and possible adversaries
alike that the US has defined stability in Northeast Asia as essen-
tial to our own national security and foreign policy objectives.
It is also worth noting that the total number of our troops
overseas is currently at a 25-year low. Attached is a table that
shows assigned US troop strength overseas from 1950 to 1976. The
present number is half what it was in 1955, and approximately a
third of what it was at the peack of the Vietnam War in 1967, or
of the Korean War in 1953.
Finally, there is considerable question as to even whether the
US would save very much money by significant withdrawals from over-
seas. If the forces withdrawn were kept in the force structure, we
would need extensive expansion of our CONUS basing facilities to
accommodate the homecoming forces. This would occasion a considerable
one-time expense that would require some years to be amortized.
Furthermore, to maintain our capability to return rapidly and in
force to Central Europe or elsewhere in the event of hostilities,
we would need to expand our existing airlift capability considerably --
another expensive endeavor. If on the other hand we chose to
redefine our overseas interests in much narrower terms that hitherto
since World War II, we might choose to demobilize the homecoming
(continued)
5
SUBJECT: U.S. Forces Overseas (Cont'd)
forces and remove them from the force structure entirely, thereby
severely reducing our conventional capabilities and consequently
lowering the nuclear threshold to a potentially dangerous degree.
We would then very possibly find it necessary to invest more money
in expanding and improving our strategic forces to make up for the
conventional capability, forward deployed, we had sacrificed.
BACKGROUND: None
SOURCE: Dr. Forman, Assistant for Long-Range Strategy, ISA
COORDINATION: Eugene V. McAuliffe, ASD/ISA
James G. Poor, PDASD/ISA
James P. Wade, Jr., DASD/ISA
James M. Thompson, Dir, PP&NSACA (ISA)
Mr. McLaughlin, Eur/NATO (ISA)
Col. Houser, EA&PRA (ISA)
Mr. Morrison, MBFRTF (ISA)
Mr. Willbrandt, OASD (Comptroller)
U.S. Military Sti
n World-wide
and Selected Areas Overseas
Ashore and Afloat
(000s)
West Europe &
South
Total Overseas Incl.
Total World-
Related Areas
Korea
Territories & Poss.
wide
Ashore & Afloat
Ashore
Ashore & Afloat
Ashore & Afloat
As of June 30
1950
123 1/
NA
325 1/
1,460
1951
NA
NA
NA
3,249
1952 (Sept data) 463
306
1,180
3,636
1953
415
327
1,217
3,555
1954 (Sept data) 420
273
1,031
3,302
1955
431
86
867
2,935
1956
428
75
813
2,806
1957
419
70
799
2,796
1958
413
52
734
2,601
1959
411
50
699
2,504
1960
394
56
698
2,476
1961
416
58
703
2,484
1962
463
57
770
2,808
1963
426
57
762
2,698
1964
403
63
755
2,685
1965
401
62
778
2,653
1966
360
52
1,013
3,092
1967
364
56
1,247
3,377
1968
319
67
1,241
3,547
1969
296
61
1,195
3,459
1970
304
54
1,071
3,066
1971
314
43
842
2,714
1972
298
41
628
2,322
1973
319
42
585
2,252
1974
297
38
519
2,162
1975
314
42
517
2,128
1976
297
40
464
2,082
Annex
1/
Excludes Afloat - not available
August 26, 1976
SUBJECT: Navy Ship Building
QUESTION: It has been charged that the Navy should concentrate on
building a greater number of smaller and less vulnerable
ships. Would you please comment.
ANSWER: The question suggests an altogether too simplistic solution to
a most complex problem. We need a fleet with a greater number of ships,
but we also need a fleet with a balanced suite of capabilities. We
could probably obtain larger numbers by building smaller ships, but
that would not necessarily ensure that we would have ships with the
requisite fighting capabilities, including the proper combination of
anti-submarine, anti-air and anti-ship sensor and weapon systems.
Neither can one conclude that a smaller ship is necessarily less
vulnerable than a large one. Indeed, because it can carry less in the
way of weapons and sensors, a smaller ship may actually be more vulner-
able than a commensurately equipped larger vessel. Our study of naval
force requirements under the auspices of the National Security Council
is almost complete, and it appears certain to reach the conclusion that
we need a balanced fleet. Moreover, the Navy's ships are designed to
operate and fight as part of a Task Group, and each Task Group needs
to have a broad spectrum of offensive and defensive capabilities. There
will be a need in our Task Groups for smaller, relatively less
expensive vessels, such as our FFG-7 class frigates, with less complex
armament systems. There will also be a need for larger ships with
greater firepower, more sophisticated sensors, greater command and
(continued)
2
SUBJECT: Navy Ship Building
control facilities and a wider array of weapons. Similarly, we are
convinced that our Navy will best be able to perform its mission with
a fleet that includes both nuclear and conventionally powered ships.
Each has its advantage and each has its place in the fleet. Therefore,
a program that concentrates mainly on building a greater number of
smaller ships would not be an adequate response to the maritime chal-
lenge we face today and in the years ahead.
BACKGROUND: None
SOURCE: Cdr Sutphen, Assistant for Force Planning and Analysis, ISA
COORDINATION: James G. Poor, Acting ASD/ISA
James M. Thompson, Dir, PP&NSCA (ISA)
Arthur Pennington, Naval Forces, DP&E
Capt R. McDaniel, OP-909F
is
August 30, 1976
SUBJECT: NATO Forces
QUESTION: Should our NATO allies assume more responsibility and
should we begin gradual withdrawal of U.S. troops in
Western Europe?
ANSWER: There is no single measure of whether individual nations are
carrying their share of the common defense burden. We must look at
many efforts to make such a determination, e.g., percentage of GNP
devoted to defense, increases in total expenditure for defense in real
terms (excluding inflation), investment in new equipment and R&D, and
costs of and total manpower. When we analyze allied contributions in
these terms the facts indicate that their contribution is significant
and improving total defense spending for all European NATO nations
combined has been rising in constant terms since 1970. The increase
between 1970-1975 has averaged about 2% - 3% per year. This has
resulted in moderate increases in defense spending for capital resource
improvements, e.g., procurement of major new equipment and ammunition,
R&D and construction. While detailed data is not available for 1976
and beyond, indications are that for all non-US NATO nations combined,
the trend in real expenditures will continue to rise. Nonetheless,
the allies are also suffering from many of the internal pressures that
affect our ability to improve US forces. They are having to deal with
increased manpower costs and pressures to shift limited national
resources to satisfy growing domestic needs. This does not mean that
we should not continue to urge the allies to make additional
(continued)
2
SUBJECT: NATO Forces
commitments to the common defense--because we are. But we must
recognize that they are already contributing significantly and there
is evidence that they will respond appropriately to increased Warsaw
Pact military capabilities to assure an adequate and credible
deterrence.
We must constantly remind ourselves that the US has stationed
forces in Western Europe for its own interests. Neither the importance
of NATO nor the significance of US participation in the Alliance has
diminished with the passage of the years. The US force presence in
Europe serves a number of purposes. First, these deployments help to
deter a European war which would inevitably affect our security.
Second, they strengthen our ties with our allies and enhance their
confidence by providing them with tangible proof of our commitment to
their security. Third, they provide a ready, in-place capability to
meet aggression, should deterrence fail, and increase the likelihood
that, if conflicts erupt, they can be limited and deterrence
reestablished.
Financially, we must also understand that so long as we maintain
our current commitment to the defense of Europe it costs less to keep
the same level of forces in Europe than in the continental United
States. The latter scenario would require additional monies for
transport and prepositioned equipment to ensure a rapid and credible
(continued)
3
SUBJECT: NATO Forces
return of forces-the basis of any deterrent strategy.
BACKGROUND: None
SOURCE: Mr. Chapa, European and NATO Affairs, ISA
FUND
COORDINATION: None
LIBRARY
September 15, 1976
SUBJECT: Land-based ICBMs
QUESTION: Why do we need a "new" land-based ICBM missile force?
ANSWER: A new ICBM is consistent with modernization of our other
strategic forces and with our defense policy which continues to
stress reliance on a TRIAD of strategic forces for nuclear deterrence.
More specifically, a new ICBM is needed first, for increased force
effectiveness against time sensitive targets which are both growing
in number and becoming more resistant to attack; and second, to re-
dress projected asymmetries in measures of the strategic balance
(e.g., throw weight) which threaten to jeopardize the concept of
rough equivalence.
While a new land-based missile would be the most cost
effective way to satisfy these two needs, there is a third need,
dictated by the projected threat, for enhanced ICBM survivability.
It is for this reason that the development of alternate basing modes
will be a major part of the MX ICBM development program.
BACKGROUND: None
SOURCE: ODP&E(SP) Strategic Forces Division
COORDINATION: DP&E
September 8, 1976
SUBJECT: Honor System Investigation
QUESTION: Have you directed any investigations of the honor system
violations or honor system at USMA?
ANSWER: I am concerned about the recent honor violations at the United
States Military Academy. The administration of the Service Academy
Honor Systems is the responsibility of the respective services.
Because of the current situation, the cheating incident, the Secretary
of the Army has appointed a commission to conduct an indepth assessment
of the current incident and its underlying causes and to make an assess-
ment of the effectiveness of the Honor Code and System.
BACKGROUND: On 2 September 1976, a commission chaired by Mr. Frank
Borman was announced. Members of the commission are General Harold K.
Johnson, former Army Chief of Staff and now President, Financial
General Bankshares, Inc., Washington, D.C.; Dean A. Kenneth Pye,
Chancellor, Duke University and Dean of the Duke University Law School,
Durham, North Carolina; Dr. Willis M. Tate, President Emeritus and
former Chancellor, Southern Methodist University, Dallas, Texas;
Bishop John T. Walker, Episcopal Diocese of Washington; and Mr. Howard
S. Wilcox, President, Howard S. Wilcox, Inc., Indianapolis, Indiana,
and Chairman, Board of Visitors, United States Military Academy. The
commission is charged with examining "the Honor Code and System in its
concept and operation, the structure and operation of the Military
Academy together with other pertinent internal and external factors,
with a view toward formulating recommendations for improvement."
Specific questions to be addressed are:
1. What were the causative and contributing factors underlying
the recent Electrical Engineering 304 cheating incident?
2. Does the Honor Code and System impose a realistic and
reasonable set of standards?
(continued)
2
SUBJECT: Honor System Investigation
3. Is the Honor Code accepted by cadels as a way of life or do
cadets adhere to it merely because of the consequences of a violation?
4. Are high standards of moral and ethical conduct emphasized
in all aspects of cadel life?
5. Are the pressures on cadets generated by the academic,
athletic and military training at the Academy realistic and do they
contribute effectively to the mission of the Academy?
6. Is an ethical base adequately provided for cadets to develop
a strong sense of integrity, exclusive of the Honor Code and System?
7. Does the institution in its structure, its policies and
doctrine and in its operation appropriately support the Cadet Honor
Code and System?
8. Is there sufficient emphasis and effectiveness in formal
instruction on Honor matters at the Academy?
The commission is to report by early December.
SOURCE: DCSPER, MG Trefry
COORDINATION: Secretary of the Army Hoffmann
September 15, 1976
SUBJECT: Honor Code
QUESTION: It has been charged that the honor code of the military
academies should not be watered down for cadets and it
should apply to public officials as well. Would you
please comment.
ANSWER: There is a perception by the Corps of Cadets that the
administration of the honor code is being taken away from them, that
their honor committee proceedings don't account for as much as they
used to, and they look at the number of cases in which the
Superintendent or the Administration there has reversed a cadet
honor board finding as an indication of this. I think, however, that
there has been a communications gap between the Academy, that is
the faculty, staff and technical officers on the one hand and the
Corps and the honor committees on the other, about the necessary
impact of the enlightened standards of due process that we've seen
in government and in public life generally over the last 10 or 15
years. These have had a very basic impact upon the honor system,
and I don't think they have been recognized as fully for what they
are. The cadets at West Point regard that as an unwarranted
intrusion upon what they have been taught to feel is exclusively
their system. It is by no means a "watering down" of the system.
The Blue Ribbon Panel may make recommendations that will require
further address of either code procedures or contributing factors to
it, to streamline the procedures, if that's required, and to address
(continued)
2
SUBJECT: Honor Code (Cont'd)
the question of the single sanction which is a somewhat controversial
aspect of the code at West Point.
The honor system is based on the fundamental premise that has
attended the officer corps of the Army since before the revolution,
that an officer's word is his bond. That is of paramount importance,
and it is that aspect of an officer's service and the qualifications
of an officer that the honor system is designed to elicit. And it
takes, for public officials, mutual reinforcement to their code of
ethics, in order to keep our institutions on the high road. It
takes all of us to assist each other to not only reinforce
resistance to questionable conduct but to avoid the appearance as
well. So that I think the two are not inconsistent, it's a question
of implementation. But I think the same ethic would apply in both
cases. Anyone in the institution has an interest, if he sees someone
else in the institution who is putting himself in a compromising
position, to go in and say the institution doesn't need that, please
desist. And I think that's done.
BACKGROUND: None
SOURCE: Secretary of Army News Conference, September 10, 1976
COORDINATION: None
September 24, 1976
SUBJECT: Watering-Down of the Honor Code
QUESTION: Has the honor code been softened or watered-down
following the recent events at West Point?
ANSWER: The honor code at the various Service Academies is
administered by the cadets. Regarding the recent problems at West
Point, Secretary Hoffmann believes that the recent violations of
the honor code disclosed a communications gap between the Academy
staff, the Corps and the Honor Code Committees regarding the standards
of due process. Secretary Hoffmann has taken actions to maintain
the standards of due process and to review the administration of
the honor code. The honor system is not being watered-down and I
do not think it should be.
BACKGROUND: None
SOURCE: Secretary of the Army News Conference, September 10, 1976
COORDINATION: None
September 15, 1976
SUBJECT: Congressional Action -- B-1
QUESTION: What is your comment on Congressional action on the B-1?
ANSWER: The Congress has voted to delay the production decision on
the B-1 until next February 1 by limiting the amount the Air Force
can spend on the B-1 program to about $87 million per month. The
Defense Department intends to make a decision on production this
fall after a thorough review of the B-1 test results. These
temporary restrictions will not have a significant effect on the B-1
program. The program can proceed within the funding limits estab-
lished by the Congress. However, by imposing an artificial
restraint on the Department, the Congress has reduced the Air Force's
ability to make the best possible decisions concerning the program.
Even though the impact will not be significant on the B-1 program,
restrictions such as these are not good management practice and do
not allow the Department's program managers to take advantage of
situations where programs can be moved forward at a more rapid pace.
What is significant to the American people is that a timely
decision be made on the B-1.
The manned bomber is one of the three kinds of weapons that make
up our TRIAD deterrent force. The TRIAD has worked and will continue
to work because of the relationship between the ICBM, the manned
bomber and the missile-carrying submarine. They do not simply back
(continued)
2
SUBJECT: Congressional Action -- B-1 (Cont'd)
each other up; rather they are like the three legs of a tripod that
provide the bracing -- for deterrence. Deterrence rests solidly
against the brace of the TRIAD -- because on alert together, the
three legs make a successful disarming surprise attack literally an
insurmountable challenge. A simultaneous surprise attack on all
elements of the TRIAD is virtually impossible -- and a strike on one
element gives warning to the others. It's important to remember that
in some ways, the manned bomber is the most important leg of the
tripod -- for it is singularly versatile and responsive -- con-
trollable at all stages of operation. I think the American people
will recognize that the B-1 is important in maintaining our
deterrent posture.
BACKGROUND: None
SOURCE: ASD/LA and ASD/PA
COORDINATION: ASD/LA and ASD/PA
September 17, 1976
SUBJECT: Corps of Engineers Spending
QUESTION: It has been charged that the Corps of Engineers spends too
much money on public works projects? Will you comment, please?
ANSWER: All of the studies, investigations, plans, construction and
operations of the Corps of Engineers in civil works are authorized and
funded by the Congress, generally as requested by the President in his
annual budget message. Congress has appropriated almost 2 1/2 billion
dollars ($2,471,550,000) for the civil works functions of the Corps of
Engineers for Fiscal Year 1977. All reports of the Corps of Engineers
which recommend expenditure of federal funds for river and harbor
projects are approved by the Office of Management and Budget before
being transmitted to the Congress.
It should be noted that funds for the Civil Works Program of the
Corps of Engineers are appropriated for specific projects by line item
by the Congress and are not part of the Defense Department budget.
In other words, the amount of money spent by the Corps of Engineers
for civil works projects depends on specific Congressional authorization
and funding.
BACKGROUND: Since the General Survey Act of 1824, the Congress has
assigned major responsibilities in river and harbor works to the Corps
of Engineers. The Corps has developed and now maintains 25,000 miles of
navigable waterways and all of our inland and coastal harbors. Since
the Flood Control Act of 1936 when the Federal responsibility for flood
control was assigned to the Corps of Engineers, additional legislation
has assigned to the Corps of Engineers major responsibilities in water
supply storage, hydropower production, water conservation and recreation.
The nearly 400 man-made lakes built and operated by the Corps of Engineers
at the direction of Congress prevent millions of dollars of flood damage
annually, produce 22% of U.S. hydroelectric power, provide municipal and
industrial water supply storage to more than 200 cities and towns and
attract about 100 million more visitors annually than do all of our
National Parks combined.
2
SUBJECT: Corps of Engineers Spending (Cont'd)
SOURCE: Chief of Engineers, D/A
COORDINATION: Chief of Engineers, D/A
September 13, 1976
SUBJECT: XM-1 Tank
QUESTION: Why delay the decision on the XM-1 Tank?
ANSWER: As the time for final source selection approached, it became
apparent that we could obtain a better tank for our forces by sub-
stituting selected components into alternative configurations of U.S.
tanks and at the same time placing greater emphasis on commonality
with our NATO allies. The method we chose to obtain these goals, i.e.,
to request additional alternative proposals embodying these possi-
bilities, adheres to sound management practice and should provide us
with a better tank at minimum cost and minimum schedule increase.
If final source selection had been made as originally scheduled,
we would have been placed in a position of having to negotiate these
changes with a single contractor, a situation in which we are un-
likely to obtain minimum cost and minimum schedule impact. We
examined, and eventually selected, the alternative of delaying source
selection and of asking for appropriate additional modifications to
existing proposals, allowing us to negotiate the improvements in a
competitive environment and thereby minimize both cost and schedule
impact.
BACKGROUND: None
SOURCE: Testimony by DepSecDef Clements before SASC, August 27, 1976
COORDINATION: Same
September 14, 1976
SUBJECT: Defense Budget Level
QUESTION: The Defense budget for this year is higher than the peak
years of Vietnam. What does this say about your foreign
policy success in stabilizing the critical areas around
the world?
ANSWER: On the contrary, in real terms, corrected for inflation,
the Defense Budget has decreased by more than one-third from the
1968 wartime peak, and in real terms, it is 14 percent below the
levels of the prewar, early 1960's. The steady rise in current
dollar levels masks a serious erosion in the Defense Budget's
purchasing power in those years. During that same period, moreover,
the Soviet Union's military expenditures have been rising steadily,
to the point where their advances in several areas threaten to
destabilize the East-West balance of military power unless we take
the steps needed to reverse the trends. Only in the current FY 77
Defense Budget has the long decline in defense purchasing power been
modestly reversed to allow for a small amount of real growth over
last year. But this one small increase is not sufficient to reverse
satisfactorily the downward trend of many years. The United States
is going to have to sustain this effort over the coming years, if we
intend to maintain the military balance with the Soviet Union, a
balance which is the foundation and underpinning of any of our hopes
to build a more stable, peaceful world.
(continued)
September 15, 1976
SUBJECT: SALT TWO Agreement
QUESTION: Why can't you reach agreement with the USSR on a SALT TWO
agreement?
ANSWER: The two sides have in fact reached agreement on a
considerable range of issues in SALT TWO. We have not been able to
finalize agreement, however, on two key issues, i.e., the Soviet
Backfire Bomber and Cruise Missiles. While one should not be overly
optimistic about resolving these two complex issues in the near
future, neither should one be totally pessimistic about the prospects
for a satisfactory resolution of both issues.
BACKGROUND: None
SOURCE: DoD SALT Task Force
COORDINATION: Dr. Wade, Director, DoD SALT Task Force
2
SUBJECT: Defense Budget Level (Cont'd)
BACKGROUND: None
SOURCE: ISA/PPNSCA, Dr. Forman
COORDINATION: ASD/ISA E. V. McAuliffe
DASD(PP&NSCA) J. P. Wade, Jr.
September 14, 1976
SUBJECT: Nuclear Explosions Ban
QUESTION: Why doesn't the U.S. seek to get the U.S.S.R. to agree
to a prohibition of all nuclear explosions for a five-year period?
ANSWER: The U.S. supports the objective of a comprehensive test ban
which would be adequately verifiable. Conclusion of the recent
Threshold Test Ban Treaty and Treaty on Peaceful Nuclear Explosions
were the result of months of complicated negotiations and we hope
these treaties will receive early Senate approval.
BACKGROUND: None
SOURCE: OASD (ISA) Giles Harlow, Col, USAF
COORDINATION: ASD (ISA) E. V. McAuliffe
DASD (PP&NSCA) J. P. Wade, Jr.
State (PM) Mr. Phelps
OATSD (Atomic Energy) Mr. Cotter
September 14, 1976
SUBJECT: Nuclear Proliferation
QUESTION: What positive steps have you taken to minimize the most
significant threat from nuclear proliferation?
ANSWER: The Department of Defense is an active participant in the
USG program to implement its non-proliferation policy. What do you
have in mind as "the most significant threat from nuclear prolifera-
tion."?
QUESTION: Why don't you do more?
ANSWER: At the direction of the President a study group headed by
Dr. Robert Fri, Deputy Administrator of ERDA, has concluded a review
of U.S. nuclear policy. Following the President's decision on this
matter, the DoD and other agencies will take further steps to
implement U.S. policy.
BACKGROUND: None
SOURCE: OASD (ISA) Giles Harlow, Col, USAF
COORDINATION: ASD (ISA) E. V. McAuliffe
DASD (PP&NSCA) J. P. Wade, Jr.
State (PM) Mr. Phelps
OATSD (Atomic Energy) Mr. Cotter
September 14, 1976
SUBJECT: Reduction of Nuclear Weapons
QUESTION: Why doesn't the U.S. adopt a goal of eliminating nuclear
weapons for all nations? ("Reduce nuclear weapons to
zero.")
ANSWER: The United States has always supported a goal of reduction
of nuclear weapons for all, repeat all, nations. Under Article VI
of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), the
United States and all other parties undertake "to pursue negotiations
in good faith on effective measures relating to the cessation of the
nuclear arms race at an early date and to nuclear disarmament
"
When vital national security interests are involved, we must move
deliberately and give careful consideration to the effect of each
step on our national security and that of our allies.
BACKGROUND: (U) Over 100 nations are parties to the NPT but only the
U.S., UK, and USSR among the nuclear powers have signed the treaty
while the PRC and France have not. India has also detonated a nuclear
device.
SOURCE: OASD/ISA Giles Harlow, Col., USAF
COORDINATION: ASD/ISA E. V. McAuliffe
DASD (PP&NSCA) J. P. Wade, Jr.
State (PM) Mr. Phelps
OATSD (Atomic Energy) Mr. Cotter
September 15, 1976
SUBJECT: Nuclear Planning
QUESTION: Do you not agree that developing the capability for
employing nuclear weapons in less than an all-out nuclear
war (i.e., LNOs and RNOs) increases rather than decreases,
the likelihood of nuclear war?
ANSWER: The job of the Defense Department is to maintain peace. In
order to maintain peace, we must be sure that our deterrent forces
are adequate. With the passage of time and changes in the threat
posed by the Soviet Union, adjustments in the composition and
capabilities of our military forces are required. The USSR is
dramatically improving its nuclear capabilities. Much of this
improvement is clearly directed against our own deterrent forces.
We need to continue to improve the flexibility of our own nuclear
forces in order to maintain the deterrent. Basically, we are
striving to maintain a rough equivalence with the USSR. We cannot
allow asymmetries in military capability to develop if we are to
preserve deterrence across the entire spectrum of possible conflict.
BACKGROUND: None
SOURCE: Col. P. R. Drennon, USAF, OASD/ISA
COORDINATION: ASD/ISA E. V. McAuliffe
DASD (PP&NSCA) J. P. Wade, Jr.
(PP&NSCA) H. H. Gaffney
GERALD R. FORD LIBRARY
This form marks the file location of item number
3
as listed on the pink form (GSA Form 7122, Withdrawal Sheet)
at the front of the folder.
August 3, 1976
SUBJECT: Reserve Components
QUESTION: Is weaponry assigned to the Reserve Components "poor"?
ANSWER: Equipping for the Guard and Reserve is a real challenge.
Ground-to-air and anti-tank weapons, tanks, communications equipment
and certain other equipment needed for the General Purpose Forces of
the Army Guard and Reserve are in short supply. Increased production
of M-60 tanks and conversion of obsolete M-48 tanks to modern versions
has improved the armor capability in the Army and Marine Reserve
Forces.
Introduction of the KC-135, programmed replacement of F-100s
with A7s and F-4s, assignment of C-130Es and the planned introduction
of A-10s into the Air Guard and Reserve continues their modernization.
Programmed assignment of amphibious transports and amphibious
cargo ships will modernize the Naval Reserve Fleet. Assignment of
P-3 anti-submarine warfare aircraft, A-7s and F-4s and assignment of
KC-130 tankers continues the modernization of the Naval and Marine
Air Reserve.
BACKGROUND: Drawdowns on equipment resources to support the Mid-East,
Vietnam and other requirements have diminished potential equipment
resources for the Guard and Reserve. However, there is now a real
emphasis on equipping the Reserve Forces.
SOURCE: COL Carl Acree, Asst Director, Force Modernization, Office
of the DASD (Reserve Affairs)
COORDINATION: Mr. Raymond Webster, Special Asst to DASD (Reserve Affairs)
Mr. Will Hill Tankersley, DAS (Reserve Affairs)
September 10, 1976
SUBJECT: Personnel Turbulence
QUESTION: Why is it not feasible to save money by extending the
period in which military personnel are rotated? There
are some findings that indicate that extending a tour of
duty by 2 months would result in annual savings of
$400 million. A six-month extension would save over a
billion dollars.
ANSWER: The proposition that $400 million could be saved annually
by extending the average tour of duty by two months, or over one
billion for six months, is an over-simplification of a complex issue.
It is apparently based on the mathematical assumption that the com-
bined FY 77 TDY/PCS costs of $2.5 billion amount to $200 million per
month.
Extending the average tour length, i.e., extending the average
length of time personnel actually serve on station, will result in
savings. This is one of the goals of the current Department of
Defense PCS/Turbulence reduction effort. However, of the total PCS
costs, only operational and rotational travel would be significantly
affected. Of the $1.7 billion PCS costs, these two categories account
for about two-thirds or about $1.1 billion, with accession and loss
moves accounting for most of the remainder. Extending the average
tour length by two months would therefore more likely result in a
theoretical maximum savings of only $186 million instead of
$400 million.
(continued)
2
SUBJECT: Personnel Turbulence (Cont'd)
BACKGROUND: None
SOURCE: John F. Ahearne, Acting Assistant Secretary of Defense
(Manpower and Reserve Affairs)
COORDINATION: None
September 10, 1976
SUBJECT: Military and Civilian Grade Controls
QUESTION: What can be done to cope with grade creep in civilian
and military ranks?
ANSWER: For the past two decades, there has been a trend toward
military and civilian grade enrichment. There appear to be two
primary causes: the growth in technology and management complexity;
and the tendency to increase compensation through promotion, due to
the lack of pay comparability with private industry. Much of the
growth was in the top management structure.
Military -- The military rank structure is subject to statutory
constraints which have limited disproportionate growth in the rank
structure. In recent years our program efforts have been directed at
refining our requirements and streamlining headquarters, thus reducing
the number of senior people. Our current program calls for continuing
reductions in the numbers of flag and general officers and captains and
colonels. These processes have resulted in an overall reduction since
1973 of 13% in total officers, including an 8% reduction in the numbers
of admirals and generals. Further reductions are anticipated in FY 77
and FY 78.
Civilian -- We have recognized tendencies toward disproportionate
growth in the top layers of the civilian gradestructure and have under-
taken efforts to systematically reduce these consistent with our manage-
ment requirements. Our current program is designed to result in
approximately a 2% per year reduction in the civilian upper grade
structure over the next few years.
(continued)
2
SUBJECT: Military and Civilian Grade Structure (Cont'd)
BACKGROUND: Testimony before Congress on the President's FY 1977
budget and manpower program emphasized the need to curb growing
manpower costs. One factor of the cost growth is grade creep. In
civilians, much of the grade creep was attributed to increases in
GS-13 through 15.
Congress echoed the need to control grades in several
committee reports.
On August 12, 1976, ASD(M&RA) with the Secretary's endorsement,
issued specific two-year numerical reductions to each Service and
the Agencies for military (0-6 and up) and civilian (GS-13 and up).
SOURCE: ASD/M&RA Statement before the SASC, Feb 6, 1976
ASD/M&RA Memos for the Service Secretaries and Agencies,
August 12, 1976
COORDINATION: None
September 10, 1976
SUBJECT: NATO Standardization
QUESTION: It has been said that standardization can save NATO up to
$17 billion. What are the domestic problems with standardization?
What are the international problems? How can we achieve the optimum
degree of standardization? What are the issues associated with
domestic VS. foreign procurement?
ANSWER: I view improved NATO standardization and interoperability as
a major opportunity and as a necessity for the Alliance. I say that
because of the improved combat capability, military efficiency, and
deterrence we can expect from better standardization. The obstacles
to achieving these objectives are many. However, we are finding ways
to deal with these problems.
The major domestic problem which has been put forth is that
increased standardization will adversely affect U.S. employment. Today
we enjoy a substantial trade advantage with our Allies in defense pro-
curements. This has had a beneficial effect on U.S. employment.
Increased standardization will not likely have a significant effect on
U.S. employment -- whether this is brought about through increased
purchases by nations from each other or through production of stand-
ardized systems on both sides of the Atlantic.
The sheer number of countries involved in NATO makes common
decisions difficult. Views on military doctrines differ. Time
schedules for establishing requirements and making decisions for
development and production usually differ from one country to another.
However, we are working to agree more often on what we need and when.
(continued)
2
The optimum degree of standardization falls far short of total
standardization. Diversity of operating characteristics helps
compound an aggressor's problems particularly in the areas of Electronic
Warfare and Electronic Countermeasures. We have seen benefits on a
national basis for a high/low mix -- for example, the F-15 and F-16.
Also total standardization limits the possibilities for maintaining
competitive pressures -- so key to cost efficient products.
Generally, the most satisfactory approach to contending with
domestic problems associated with standardization is through licensed
production of standard equipment in both North America and in Europe
-- examples, are the ROLAND and F-16 programs.
Many of the benefits of standardization can be realized through
ensuring interoperability of equipment -- for example, being able to
service aircraft on each other's airfields, being able to communicate
with each other, and being able to use common fuels and ammunition.
For the equipment needs of our Armed Forces, we must continue to
select the most cost effective equipment available whether of U.S. or
Allied origin. When an Ally system is superior, factors -- such as
cost, availability, mobilization base requirements, quantities required,
and statutory requirements -- will determine whether the item should
be produced in the U.S. or procured from a foreign source.
BACKGROUND: None
SOURCE: Clark DeJonge, OAD(IP), ODDR&E X 74431
COORDINATION: DDR&E, Mr. Robert N. Parker, Principal Deputy X57178
ISA (by source) Col Larsen, ER/NATO Standardization
September 15, 1976
SUBJECT: DoD Student/Instructor Ratio
QUESTION: It has been charged that DoD maintains "less than two
students per instructor in the military." Would you
please comment on the DoD student/instructor ratio.
ANSWER: The statement is incorrect. The DoD program for FY 1977
provides for an average of 5.7 students per instructor. Through
careful review of instructor requirements, use of advanced training
technology and other management actions, this number has been raised
from 5.4 in FY 1975.
This level of students per instructor is lower than that found
in civilian education -- U.S. colleges and universities average about
14 instructors per student. However, military training is fundamentally
different from civilian education. For example:
- Most military training is equipment-oriented and can only be
taught effectively in small groups, using "hands-on" training and
close instructor supervision. In many phases of flight training,
for example, one instructor is required for each student. Civilian
schools make much greater use of the lecture format, in which one
instructor can teach as many students as the classroom will hold.
- Military training operates year-round and generally is a 40-hour
week; civilian education usually provides 25 or fewer instructional
hours per week, with lengthy vacation periods.
- Military students are paid and supported; it is therefore
economical for DoD to make courses as short as possible, even if
GERALD
(continued)
2
SUBJECT: DoD Student/Instructor Ratio (Cont'd)
additional instructors are required, to reduce student (and total)
costs. Civilian schools have no such incentive to reduce course
lengths and usually operate on a fixed schedule -- four years of high
school, four years of college.
If all military and civilian personnel conducting or supporting
training are included -- manpower which operates and maintains
training equipment and training bases and provides medical care and
other support of students and military staff members -- the number
of students per staff member is less than 2 to 1. The reasons for
this level of staffing are the same as for the level of instructors,
plus the obligation to provide full support to military students and
the requirement to operate and maintain large training bases and a
vast quantity of expensive training equipment. Despite this demanding
mission, DoD plans, through careful management, to reduce total man-
power in support of training by 14 percent from FY 1975 to FY 1977,
although the number of students to be trained increases by two
percent.
BACKGROUND: None
SOURCE: Col. Sweet, Executive Assistant, ASD/M&RA
COORDINATION: Mr. Taylor, ASD/M&RA
GERALD R. FORD LIBRARY
This form marks the file location of item number
4
as listed on the pink form (GSA Form 7122, Withdrawal Sheet)
at the front of the folder.
September 9, 1976
SUBJECT: Problems Industry Faces in Dealing with the Government
QUESTION: What are the problems industry faces in dealing with
the government? What can be done to cut the red tape?
What can be done to improve government/industry relations?
ANSWER: There are two major problems concerning industry in dealing
with the Government. Uncertainty of the market is the first and
major problem. Red tape is the second and perhaps most aggravating
problem. Uncertainty of the market includes a fear of program change
in dollars, schedules, quantity, and specifications, and outright
cancellations. Causes of this uncertainty include: (1) annual budget
review and appropriations, (2) lack of advance procurement information
that can be relied upon for marketing and capital investment, and (3)
desire to incorporate technological advances in the system late in
development or during production.
The Department of Defense and Industry need (1) authority to
make multi-year buys with proper funding to cover all termination
costs, (2) a systematic method to present to industry, for all
services, long range procurement forecasts with assurance of
stability so that military marketing is more predictable, and (3)
a systematic procedure to control contract changes. Industry has
complained that excessive red tape includes a requirement to enforce
social legislation including small business, labor surplus, equal
employment opportunity, economic adjustment, and similar goals
through the power of procurement policy. These requirements do
detract from the primary mission of the Department of Defense. Red
(continued)
2
SUBJECT: Problems Industry Faces in Dealing with the Government (Cont'd)
tape also includes an industry concern over excessive public reporting
systems, complex management systems and complex contracting procedure.
The DoD is aware of these problems. Reporting systems are currently
being reviewed, and extensive modification of management systems
affecting industry has taken place including a reduction by 50% of
DoD Directives and Instructions by ASD(I&L). .
BACKGROUND: (Included in answer).
SOURCE: ASD/I&L Frank Shrontz
COORDINATION: None
September 17, 1976
SUBJECT: Cost Overruns
QUESTION: What specific steps are you taking to avoid or lessen
cost overruns?
ANSWER: Steps are being taken in three areas to avoid or lessen
contract cost overruns. First, OMB Circular A-109 has been issued
to require more emphasis on the planning and definition of alter-
natives during the early phases of the design and development of a
new weapon system. Rather than contract on a fixed price basis for
the entire design, development and production of a weapon system
("total package procurement"), new systems are being contracted for
a step at a time. The Defense System Acquisition Review Council
recommends to the Acquisition Executive (DepSecDef Clements) whether
to continue the program into the next step of its development and
acquisition process. Extensive test and evaluation of the elements
of the system are conducted at each step. All of this means that
the work to be done on each contract is better defined and less
subject to the uncertainties which create overruns.
Second, source selection of contractors for the design and
development of new systems is based upon the realism of the
contractor's technical and cost proposals. Independent government
cost estimates are required as a cross check of the contractor's
proposed costs. If the source selection authority concludes that
the contractor is "buying-in" by underestimating the costs or
(continued)
2
SUBJECT: Cost Overruns (Cont'd)
overstating the performance promised just to win the contract,
another contractor whose estimates are more realistic will be
selected.
Third, a better job of monitoring the contractor's progress
during development and production is being done. Definite "design
to" production unit cost and life cycle cost goals are being estab-
lished as contractual requirements during development. The
contractor's progress in meeting those goals is closely tracked
and corrective action instituted when appropriate to make sure that
the goal will be met. Contract incentives are being used to focus
the contractor's attention upon reducing costs. Profit and invest-
ment policy have been established to encourage contractor investment
in capital assets that reduce costs. Contractors who reduce cost
through improved productivity from one contract to another will be
able to earn more.
By contracting in steps, by emphasizing cost and technical
realism in source selection, by retaining competition as long as
economically feasible, by assigning definite cost and technical
goals and evaluation progress against those goals, and by rewarding
contractors who reduce cost, the propensity for contract cost over-
runs is being reduced.
(continued)
3
SUBJECT: Cost Overruns (Cont'd)
BACKGROUND: Recently, the Secretary of Defense has appointed an
Acquisition Executive to be fully responsible for acquiring
weapon systems and is revising DoD Dir. 5000.1, "Acquisition of
Major Weapon Systems" in order to implement new Administration
acquisition policy. An Acquisition Strategy will be required for
all Major Weapon Systems. New systems will be selected based on
the new concept of "Mission Requirement."
An improved contractor Source Selection procedure is being
tested (DOD Dir. 4105.62) to avoid unnecessary technical leveling
and unrealistically low pricing. Periodic evaluation of con-
tractor conformance to scheduled contract requirements including
cost, must still be improved.
SOURCE: ASD/I&L Frank Shrontz
COORDINATION: None
September 17, 1976
SUBJECT: Defense Procurement System
QUESTION: Could money be saved by reforming the Defense Procurement
System?
ANSWER: Money is being saved in the Defense Procurement System.
Major changes have been taking place in our procurement systems.
Recently, the Secretary of Defense established a charter for an
"Acquisition Executive" who will be responsible for the procurement
of all major weapon systems in the Department of Defense. This will
include 115 systems with an estimated total value, when completed,
of $238 billion.
This "Acquisition Executive" will be responsible for all
organizations and functions relating to the acquisition of these
systems. He will chair the Council consisting of appointed
officials having responsibility for research, development, and
production as well as the support of the system. He will work
with the Secretaries of the Departments to insure that in the
acquisition of weapon systems, the required performance is obtained
at the least cost of development, production and operation and
support.
For the moment, the Secretary of Defense has appointed the
DepSecDef to be this "Acquisition Executive.'
* In addition, the Department of Defense is currently revising
its DoD Directives on the acquisition of major weapon systems to
(continued)
2
SUBJECT: Defense Procurement System (Cont'd)
insure that primary attention is given in all functional areas
to the early planning of the program - so that there is better
cost estimating, improved design for production, realistic
performance requirements, realistic support concepts - all defined
before a program goes into production.
*
Defense has developed a new Profit Policy for Defense
contractors which will place major emphasis on the contractors'
investment in cost-reducing facilities.
*
Investment by contractors in new equipment which increases
productivity and reduces cost is being encouraged by reducing
uncertainty in procurement. Multi-year buying is one means of
reducing uncertainty in procurement for both the government and
the contractors.
*
Greater emphasis is being placed upon a program called
Value Engineering whereby contractors can submit design changes
that will reduce costs and share in the benefits with the U.S.
Government.
* A new procedure for the selection of contractors is being
tested on sixteen systems, a major objective of which is to avoid
"buy-ins" and similar unrealistically low pricing. "Buy-ins" have
traditionally caused difficulty for both Defense, the contractor,
and the Congress, since invariably it means reprocessing,
rejustifications, and changes in order to obtain the proper amount
(continued)
3
SUBJECT: Defense Procurement System (Cont'd)
of funds. Obviously, a "buy-in" destroys the decision-making
process and prevents the selection of contractors more capable
of developing and producing a system.
*
Directives and instructions have been issued and others
are in process implementing 24 of the Commission on Government
Procurement recommendations which have been approved by the
Executive Committee and directed by the Office of Federal Procure-
ment. As other recommendations are approved, Defense will take
appropriate action.
*
An aggressive program is developing to improve the technology
of manufacturing methods employed by contractors in the acquisition
of weapon systems.
*
Defense continues to take action to improve its procurement
system.
BACKGROUND: None
SOURCE: ASD/I&L Frank Shrontz
COORDINATION: None
September 17, 1976
SUBJECT: Technical Leveling and Best and Final Offers
QUESTION: Present procurement procedures may promote "best and
final" and "technical leveling" practices that lead
to inequities and cost overruns. What can be done to
reform these procedures?
ANSWER: The term "Best and Final" can be defined as the final
offer submitted by a contractor to the government on a given
proposed contractual action. This applies to both technical and
costs submissions. The final offer is requested by the government
after conclusion of discussions between the government and con-
tractor and after a common cut-off date has been established for
receipt of the offers. The term "Technical Leveling" may be
described as that process whereby all contractor's proposals are
made equal technically through the discussion of individual pro-
posal deficiencies.
In an attempt to alleviate possible inequities in contractor
source selection, the Department of Defense is testing a new
technique to be applied to proposed contracts for advanced,
engineering, and operational-systems development. This new
technique incorporates four distinct steps: (1) receipt and
limited discussion of contractor's technical proposals, (2) receipt
and limited discussion of contractor's cost proposals, (3) evalua-
tion of the contractor's total proposal (including both the technical
(continued)
2
SUBJECT: Technical Leveling and Best and Final Offers (Cont'd)
and cost submissions) and selection of the apparent winner, and
(4) negotiation and award of the contract to the winner. This
technique is currently being tested on sixteen DoD procurements.
The test results will lead to a decision in late CY 1977 whether
to adopt the technique on a permanent basis.
BACKGROUND: The problems of technical leveling and best and final
offers occur when procedures are not properly followed. In an
attempt to be fair to all competitors in negotiated procurements,
we routinely point out the deficiencies in their proposals and give
them an opportunity to correct them if they so desire. We use the
call for a "best and final offer" as a means to establish a common
cut-off date for the negotiations so that all have an equal chance.
The problems arise when we go too far in telling individual com-
petitors what's wrong with their proposal and how to correct it.
It's not equitable to the contractor who submits an excellent
proposal to permit another contractor to improve a poor proposal
so that it matches the quality of the excellent proposal. If for
some reason - such as a change in quantities, requirements, or
funding levels - the contracting officer must ask for a second
"best and final" offer, the opportunity for a "buy-in" is enhanced,
particularly when the contractor feels that his competitors have
submitted a lower price and that there is not really that much
difference among the various technical proposals.
If the test of the four step source selection technique is
successful, we believe that the proper balance between the technical
and cost factors in source selection will be restored.
SOURCE: ASD/I&L Frank Shrontz
COORDINATION: None
September 21, 1976
SUBJECT: Reorganization of DOD
QUESTION: What kind of reorganization of DOD can best serve the national
interest?
ANSWER: The organization of DOD must be constantly reviewed and modified
to meet the constantly changing requirements for defense management and
command/control of the forces. Since October 1973 an intensive, deliberate
review has been underway to accomplish the following:
- Simplify and reduce staff operations in Washington and field
headquarters to increase responsiveness, reduce layering, and improve
command and control.
- Reduce support forces to the minimum level needed.
- Restructure and consolidate the world-wide base structure.
Results to date are as follows:
- Reductions in staff levels world-wide have resulted in the elimina-
tion of 25,600 headquarters positions since FY 1974.
- In August 1976 the Secretary of Defense announced further
reductions in his immediate staff offices averaging 20 percent. The
Chairman/Joint Chiefs of Staff has also accomplished significant reduc-
tions in the staff of the Organization of the Joint Chiefs of Staff in
the last several months.
(continued)
2
- The ratio of combat forces to support forces has been altered
dramatically. Over the last three years DOD has reduced support forces
by 244,000, while improving combat strength by 29,000. Training overhead
personnel have been reduced by 14 percent.
- The Military Services have announced plans to study 149 possible
base realignment actions. Most of these studies and subsequent implementing
actions are planned for completion during FY 1977. If approved, these
actions will result in an anticipated savings of $248 million annually.
BACKGROUND: None.
SOURCE: OASD (LA) .
COORDINATION: Mr. Brehm, ASD (LA) .
September 17, 1976
SUBJECT: Competition
QUESTION: It appears from statistics available that only about
20% of defense procurement is being done on open
bidding. Can procedures be changed to permit more
open bidding for procurement? Will this reuslt in any
savings?
ANSWER:
Competitive procurement in the Department of Defense far
exceeds the 20% alleged. During FY 76, 56.9% of the contract award
dollars were based on competition. Of this, 30.1% of the dollar
value of the contract awards were made based upon price competition;
12.5% were based upon competition which selected the best technical
and design approach. In addition, 14.3% were follow-on contracts
awarded to sources that had been competitively selected on prior
contracts. The remainder of only 43.1% are contracts awarded on
a sole source basis. Sole source awards are only used when the
contractor is the only one with the background, technical knowledge
or capability to provide the specific work called for in the con-
tract. For example, there is only one commercial source available
for large aircraft carriers.
The Department of Defense procurement procedures strongly
emphasize the placement of contracts on a competitive basis.
Legislation, such as the Armed Services Procurement Act, also
emphasizes the need for the maximum competition practicable. OMB
Circular A-109, "Acquisition of Major Systems" and DoD Directive
5000.1, "Acquisition of Major Defense Systems" also emphasize the
use of competition.
(continued)
2
SUBJECT: Competition (Cont'd)
BACKGROUND: None
SOURCE: ASD/I&L Frank Shrontz
COORDINATION: None