In addition to these three deputy secretaries, the Blue Ribbon Defense Panel recommended the establishment of a Long Range Planning Group, Net Assessment Group, and a Coordination Group. Chart 3-8 presents these organizational arrangements as recommended by the Blue Ribbon Defense Panel. Under this exact arrangement, the Secretary of Defense's span of control within OSD would be reduced from 24 to 11 officials. However, if the Blue Ribbon Defense Panel's recommendations were made consistent with changes that have occurred since 1970, the Secretary's span of control would be reduced to nine OSD officials. In the broader DoD context, this option would reduce the Secretary of Defense's span of control from 41 to 14 officials.

b. Improve the control of Defense Agencies.

While reassigning four of the five Defense Agencies that report directly to the Secretary of Defense to other OSD officials (as Options 2A and 2B propose) may improve their supervision and control, these realignments would not solve the problem of inadequate control for the ten agencies that currently report to lesser OSD officials. Two options to improve the control of Defense Agencies have been developed.

• Option 2D-have some Defense Agencies report through the JCS Chairman to the Secretary of Defense.

This alternative would focus on three Defense Agencies with important wartime support missions: Defense Communications Agency, Defense Intelligence Agency, and Defense Logistics Agency. By having these agencies report solely to the JCS Chairman, they may be more closely supervised.

• Option 2E-create an office in the Office of the Director of Program Analysis and Evaluation (PA&E) solely to review the program submissions of the Defense Agencies

Given the weaknesses of OSD control and supervision of the Defense Agencies, it may be useful to create a Deputy Director of PA&E whose office would be responsible for reviewing the program proposals of each Defense Agency. While this option would not improve the day-to-day supervision of Defense Agencies, it could strengthen control of the agencies' major programs.

c. Create a coordination office or under secretary to help manage OSD

If it is not possible to streamline the organization of OSD, an alternative approach would be to attempt to shift the burdens of managing OSD from the Secretary and Deputy Secretary of Defense to other officials in OSD. Two options have been developed along these lines: (1) create a Coordinating Group in the immediate office of the Secretary and (2) create a permanent under secretary. • Option 2F-create a Coordinating Group

A detailed description of such a Coordinating Group is included in one of the recommendations of the Blue Ribbon Defense Panel:

A Coordinating Group should be established in the immediate office of the Secretary of Defense. The responsibilities of

this Group should be to assist the Secretary of Defense and the Deputy Secretaries of Defense in coordinating the activities of the entire Department in the scheduling and follow-up of the various inter-Departmental liaison activities; to staff for the Secretary the control function for improvement and reduction of management information/control systems needed within the Department and required from Defense contractors; and to assure that each organizational charter of the Office of the Secretary of Defense is of proper scope and coordinated and in accordance with the assigned responsibility of the organization. The responsibility for the Department's Directive/Guidance System, currently assigned to the Assistant Secretary of Defense (Administration), should be assigned to this group. This coordinating group should be headed by a civilian Director, who should also serve as executive assistant to the Secretary of Defense. (page 7)

• Option 2G-create a permanent (career position) under secretary to focus on management and coordination tasks.

This under secretary would be responsible for providing more careful oversight of the work agendas of various OSD offices and essentially serving as an OSD management inspector general. If such an official were appointed from the career service (as is proposed here), he could serve as a valuable source of continuity during periods of management transition.

The British Ministry of Defence does have a permanent under secretary position with substantial responsibilities. The incumbent of this position, entitled Permanent Under Secretary of State for Defence, is the permanent head of the Ministry of Defence and the principal accounting officer. His responsibilities, as listed in The Central Organisation for Defence, include:

(a) the organisation and efficiency of the Ministry including the management of all civilian staff, the co-ordination of its business, and establishment of such machinery as may be necessary for this purpose; (b) the long-term financial planning and budgetary control of the defence programme, the associated allocation of resources, and the proper scrutiny of the requirement for all proposals with expenditure implications; (c) advice on the political and parliamentary aspects of the Ministry's work and relations with other Government Departments. (page 3)

3. PROBLEM AREA #3-INEXPERIENCED POLITICAL APPOINTEES AND POOR CONTINUITY IN OSD

Options to correct this problem area can be grouped into two categories: (1) attempt to ensure that OSD political appointees have increased levels of relevant experience and to lengthen their terms of service; and (2) reduce the number of political appointees and improve the skills of career officials. A total of six options has been developed.

a. Provide for more experienced and longer serving political appointees

• Option 3A -require that political appointees have strong defense management credentials.

In many instances, the defense management credentials of senior OSD officials seem to have been given low priority in their selection by the Executive Branch. In many cases, political debts were apparently the pivotal consideration. Not only has the Executive Branch failed to give sufficient consideration to the extensive management demands of these senior positions, but the Senate, especially the Senate Committee on Armed Services, has not challenged nominated officials who lack relevant experience. If the Executive Branch cannot discipline itself to nominate more qualified officials, the Senate could establish more rigorous standards. This option is also discussed in the chapter of this study dealing with the Military Departments.

• Option 3B -require a longer commitment of service from OSD political appointees.

It is reported that Secretary Laird requested political appointees serving during his tenure to commit themselves to a minimum term of service. In addition to such an approach, the Senate Committee on Armed Services could seek a commitment from each senior political appointee during his or her confirmation hearing. • Option 3C-formulate monetary incentives or lessen the monetary disadvantages for political appointees.

A major drawback in recruiting senior officials to serve in OSD is the substantial financial disincentive. Salaries of even the most senior OSD positions are considerably below those of comparable positions in private business. In addition, to avoid potential conflicts of interest, nominated officials are required to divest defenserelated financial holdings. This requirement often results in a substantial financial setback. Three specific actions could be taken:

o increase the salaries of senior civilian officials in OSD;

• alter conflict of interest statutes and regulations to require only notice of conflicts and ad hoc disqualifications; and

• alter Federal tax laws with respect to forced sale of assets to permit the financial gain from such sale to be reinvested in similar assets without applying tax on the gain at the time of the forced sale.

b. Reduce the number of political appointees and improve the skills of career officials

• Option 3D-place a limit, at a reduced level, on the number of political appointees.

If the negatives of political appointments cannot be lessened, it may be necessary to limit the number of political appointees in OSD. There are presently 69 senior OSD political appointees. The Congress could specify in law a lesser number of senior OSD noncareer appointees.

• Option 3E -give greater attention to the development and retention of a strong group of senior civil servants.

The complexities of modern defense management require senior career officials with a wide range of skills and experience. OSD may want to consider a more ambitious executive development program, particularly one that makes adequate provision for crosstraining senior officials in new disciplines. While this is an important topic, detailed consideration of this option is beyond the scope of this study.

• Option 3F -create a permanent (career position) under secretary to provide for greater continuity.

This option, which is the same as Option 2G, proposes that a position for a permanent under secretary of defense be created to provide continuity and to lessen the problems of inexperienced political appointees and their high turnover rates. It is envisioned that this senior official would remain in place during the transition from one administration to the next.

4. PROBLEM AREA #4-OSD MICRO-MANAGEMENT

Six possible solutions to this problem area have been suggested. These include reducing the size of the OSD staff, improved management attention, and lessening outside factors that contribute to the micro-management tendency.

a. Reduce the size of the OSD staff

• Option 4A -reduce the size of the OSD staff.

The Blue Ribbon Defense Panel, in recommending an OSD staff size of not more than 2,000 personnel, stated: "...many of the individual elements of the Office of the Secretary of Defense have become so overstaffed as to reduce their capability." (page 31) Secretary Brown, however, reduced the staff size considerably below this number in 1977 by a personnel reduction of approximately 25 percent. The Departmental Headquarters Study did not recommend a size for the OSD staff although it did indicate that some officials interviewed by the study recommended a 50 percent reduction. If one were convinced that OSD was performing the full range of its responsibilities but merely going beyond these responsibilities into micro-management in certain areas, it would be possible to construct personnel reductions that would solve this problem. However, when, as the case appears, OSD is micro-managing in some areas and is not fulfilling its responsibilities in others like mission integration and strategic planning —it is much more difficult to determine a proper staff size.

Nevertheless, it appears that a rationalization of work responsibilities between OSD and the Military Departments and between OSD and OJCS does offer the potential for some reduction in the size of the OSD staff.

b. Improved management attention.

• Option 4B -draw the micro-management problem to the attention of the Secretary of Defense and seek more clear-cut guidance on OSD staff responsibilities.

If the Secretary of Defense were convinced that OSD was engaging in micro-management of the Services' internal programs, he

may undertake initiatives to curtail this disruptive and inefficient practice. Included in such an effort might be more specific guidelines on the division of responsibilities between OSD and the Military Departments. In this regard, the Department Headquarters Study stated that one opportunity for improved management is:

A more precise delineation of where OSD's responsibilities end and those of the Military Departments begin. (page 26) • Option 4C -reorient OSD's attention away from functional micro-management and toward mission integration.

If one believed that OSD was engaged in activities which are not its responsibility and was failing to perform others, it would be appropriate to reorient OSD toward its unfulfilled responsibilities. Options 1A, 1B, and 1C, which emphasize mission integration, could result in such a reorientation and indirectly lessen functional micro-management.

• Option 4D -create a permanent (career position) under secretary to police OSD micro-management

This proposal is the same as Option 2G (inadequate supervision problem area) and Option 3F (inexperienced political appointees and poor continuity problem area). The management responsibilities of this position, as envisioned in these previously presented options, would be specifically expanded to provide for careful policing of OSD micro-management of internal Service programs.

c. Lessen outside factors that contribute to the micro-management tendency.

• Option 4E --lessen congressional interest in program details. Lessening congressional interest in details would lessen the needs of OSD to be involved with program details.

• Option 4F -hold Service Secretaries more accountable for conformance to guidance from the Secretary of Defense.

Such an effort should reduce OSD's concerns about non-compliance by the Military Departments in executing the decisions of the Secretary and Deputy Secretary of Defense or of senior DoD decision-making bodies. Success in such an effort would depend upon the extent to which the Service Secretary had an independent political base and the relative emphasis he placed on loyalty to the Secretary of Defense versus his Service.

5. PROBLEM AREA #5-UNILATERALISM

There are four options that could strengthen a coalition orientation in DoD planning and programming.

• Option 5A -create a position in OJCS for a 3-star military officer responsible for coalition matters.

Creation of this position would be designed to ensure that the coalition nature of our strategies was considered in issues addressed in the JCS system. This senior military official would report directly to the JCS Chairman.