DRAFT HAC UNCLASSIFIED REPORT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G00186R000800950003-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: October 14, 2010
• Sequence Number: 3
• Publication Date: October 29, 1985
• Content Type: MEMO

Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
00 NOT o b tons as REOORD~ d magma
Al am MIA42-mm
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
29 October 1985
MEMORANDUM FOR:
FROM:
SUBJECT: Draft HAC Unclassified Report
The section of the subject report on General Purpose Automated Data
Processing Resources has four guidance items: 1) a prohibition on new
starts for major projects ( $100M lifecycle costs or greater than $25M
in one year ) unless Congress explicitly approves; 2) Use of financing
and acquisition plans that ensure lowest overall total cost to the
Government; 3) buy-out of all leased office automation equipment; and 4)
submission of the fiscal year 1987 budget request for ADP resources at
the same level of detail in the relevant exhibits as required for the
Department of Defense. My preliminary assessment is that only item 2
will potentially cause us some problems. My experience tells me we (OIT
and CIA) are in compliance with the Congressional notification
requirement for programs at the dollar level specified. With respect to
item 3 (buy-out of office automation equipment), I believe we are in
good shape. Almost all Wang equipment is purchased under
lease-to-ownership plans (generally two years) and thus complies with
the Congressional intent to avoid "uneconomical leasing." Finally, it is
not possible to assess the impact of more detailed reporting to Congress
on ADP resources because the required level of detail is not described
in the package we received. Generally speaking, however, the additional
detail, whatever it is, will be burdensome. The detail that is currently
required is already burdensome (as you know, I have direct experience
in this area, as I was responsible for pulling the ADP exhibits
together for the 1986 budget.)
In terms of the guidance on methods of financing and acquisition
for ADP resources, I believe we are generally in compliance. In the
Spring of 1986, the Information Handling Group of the Office of the
Comptroller prepared a study on the cost-effectiveness of the Annual
Payment Plan (APP) method. In almost all cases, continuation of the APP
plan was less expensive than a single payment (i.e., outright purchase.
The analysis utilized a 10 percent discount rate to handle
time-value-of-money (this was the method of analysis prescribed at the
time by Government procurement regulations.) I have no reason to believe
that the situation, in general, would be different today---i.e., our
typical financing method is in line with the proposed Congressional
guidance. However, to maintain flexibility, I believe the Congressional
language should be modified, to wit:
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88G00186R000800950003-1
...acquisition of ADP equipment in the most economical manner,
including outright purchase, unless ADP and contracting officials can
specifically justify a method of acquisition and financing that will
produce a lower total overall cost to the Government,
or the method of acquisition and financing can be
otherwise demonstrated to be in the best interest of the Government.
(suggested modifications underlined.)
The above suggested addition would cover cases where "lowest cost"
is not the overriding issue; e.g., unplanned procurements (i.e.,APP's
may be necessary if purchase funding is not available); acquisition for
test and evaluation (systems life unknown, lease possibly preferred);
acquisitions with an unknown systems life (lease-with-option-to-purchase
possibly preferred), etc. In the dynamic Agency and OIT environment
funding and acquisition flexibility is a necessity. The Congressional
language should be modified to reflect that reality.
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88G00186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
The Director of Central Intelligence
W"MG6W.. D.C. 20505
Intelligence Community Staff
23 October 1985
MBIDRANMM FOR: Mr. Briggs, CIA
NSA
Mr. Geisen, DIA
SAF/SS
Ws. Andrews, DASD(I)/C31
FROM: Robert D. Kline
Chief, Legislative Liaison
9JB.TB.'r: Draft HAC Language To Appear in the HAC's Unclassifed Report
Attached for your information and use is draft language that will appear
in the House Appropriation Committee's unclassified report on the
FY 1986 budget, which the Defense Subcomittee staff provided me late yesterday
afternoon. My understanding is that the unclassified report will be available
late Friday afternoon, or on Monday 28 October 1995.
Attachment:
As Stated
STAT
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
54OU79 0044 OxiniitDOC NAM
45
9M
end
at the 23rd Air Fora to no more than were on
of fiscal year 1984.
use of the imp~oortance of Project 46 to the
The
F con
perai
ta hsn sect
eet they I ments,
and communic 0 ,N ores to 4u Jul- U too, ca ties,
Operations L ow L "e
0-130 and C-141 aircraft
2. The Department is
Spy NOpera
lions cross witir,
to pr
uds th
e
G
the Air_ Fern is directed to my
Force is directed to stop deli
i
atons eq
report
a
nd
this
the u
it required
Committee I
the FY 1887
Wing permanent i
,LL) modllicatians to
report to the Commis
h the C-
-MAirMA
to t
ovide a rergaaisational changes which
i or fleet commanders from beiac dives
avy_Special Warfare operations muuona at
he
be
the
tic
d
bel
to
de-
rting
LvrzLucsrrcz AHD INT urxNcz MAT= Acnvrrm
The Committee reviews the intelligence and intollipence related
activities budgets with the same intensity and cos Ieteness as is
afforded other portions of the Departmeflt of Defense (DOD)
budget. Because of the highly sensitive nature of these activities,
the results of the Committee's budget review are published in a
separate detailed and comprehensive classified annex to this
report. The intelligence community is expected to comply fully
with the recommendations and direction in the classified annex ac-
companying the fiscal year 1986 DOD Appropriation bil.
cosaa'rrzz's OVUSIGHT FUNCTION
In pursuing its oversight function in the intelligence and intelli-
gence related activities areas, the Committee held numerous sepa-
rate hearings and briefings which resulted in several thousand
pages of transcript and written responses for the record relating to
those hearings. Additionally, there were several hundred p+ of
written responses for the record not related to any specific hearing.
The Committee remains convinced that a continuing, intensive
investigative effort of the overall intelligence area is warranted be-
cause of the relative isolation of the intelligence community from
outside scrutiny. Traditionally, the intelligence agencies generally
have been exempt from routine review by the General Accounting
Office (GAO) except in a limited number of instances. The GAO
review efforts primarily encompass the intelligence related activi-
ties areas.
Over the years, the investigative efforts of the Committee's Sur-
veys and Investigations Staff have served a common good, both in
furthering and assisting in the Committee's oversight function, and
in identifying important issues for the intelligence community.
I I PART A
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88G00186R000800950003-1~~
:46117! 004WIXIi rmei .poc W1m:r i 8 INS
46 .
These investigative studies will be continued. The Committee has
authorized additional reviews involving the intelligence community
which will permit the Committee to ensure that the agencies of the
directives and recommendations. ' Additionally, thee. forts
_
assist in the discovery of new problem areas or issues requiring
both Committee action and remedial measures by the intelligence
agencies affected.
NATIONAL 1O$iIGN IIiTTii.IGRNCa PeOGSAM
The National Foreign Intelligence Program consists of those in.
telligence activities of the Government which provide the Presi-
dent, other officers of the Executive Branch, and the Congress with
national foreign intelligence on broad strategic concerns bearing an
U.S. national security. These concerns are stated by the National
Security Council in the form of long-range and shorty requim
meats by the principal users of intelligence, and inch political
trends, military balance trends, economic trends, treaty monitoring
and support to military theater commanders.
The National Foreign Intelligence Program budget funded in the
Department of Defense Appropriation Act consists primarily of re-
sources of the Central Intelligence Agency, the Office of the Secre-
tary of Defense, the Defense Intelligence Agency, the National Se-
curity cy, the Departments of the Army, Navy, and Air Force,
the Inte ' nee Community Staff of the Director of Central Intelli-
gence, and the CIA Retirement and Disability System Fund.
The Committee has recommended a substAlitial seduction in the
fiscal year 1986 National Foreign Intelligence Program budget, the
details of which are explained in the classified annex to this report.
In spite of this reduction, funding growth is provided, and the Com-
mittee believes that the funds recommended are adequate to sup?
port a viable National Foreign Intelligence Program in the forth-
coming fiscal year.
NICARAGUAN DEMOCRATIC RsaiZlANCR
The Committee has included bill language identical to that con-
tained in the House passed Intelligence Authorization bill provid-
ing that during fiscal jeeaarr 1986, no funds available to the Central
Intelligence Agency, Department of Defense, or any other agency
or entity of the United States involved in inter' ence activities
may be obligated or expended, directly or indirectly, for material.
assistance to the Nicaraguan democratic resistance including arms,
ammunition, or other equipment or material which could be used
to inflict serious bodily harm or death, or which would have the
effect of providing arms, ammunition or other weapons of war for
military or paramilitary operations in Nicaragua by any group, or.
ganization, movement, or individual.
Additional bill language was included to clarify that nothing in
the above described section of the bill "shall be construed to impair
or affect the authority of the Nicaraguan Humanitarian Assistance
Office to administer humanitarian assistance to the Nicaraguan
democratic resistance of the nature and to the extent provided by,
and under the terms and conditions specified in, the Supplemental
PART A
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88G00186R000800950003-1
1
-w ?
$-01"3 COI*IXI .CCT-Is. 31) SINJOC WnM ::T
47
Appropriations Act, 1986 (Public Law 99-88)." The Central Intelli-
gence Agency is prohibited from participation in any of the activi-
ties of the Nicaraguan Humanitarian Assistance OQice..
As agreed by the Congrw In enacting the fiscal ~r 1985 Sup
elemental Appropriations bill, nothing in this' pe+ovi oa shall be
construedo
to the prohi it United States Goweameet froee eachang.
ins the Nicaraguan demorraeie rssistaa 'e.
QUANT! OF JUrmicATrow MATS IAL
By the very nature of the appropp~~,~~n~ process. the Committee
is highly dependent upon the individual aaggeencies whose budgets
are being reviewed for the great bulk of information necessary in
producing the annual Defense Appn i bill. Since alternative
sources for acquiring information on y classified programs are
virtually non-azistant, this dependency is especially evident in re-
viewing th annual budget request for intelligence and other comr
partmented programs.
While some organizations such as the National Security Agency
submit well documented budget justification material supplement.
ed by timely and responsive answers to specific addi onal requests
ti
made by the Committee, other organizations are clearly remiss in
the adequacy of the justification provided for the substantial appro-
priations being ested. The Committee wishes to remind the Di-
rector of Central Intelligence of the Committee's traditional policy
that it is incumbent upon him and the organizations he oversees to
provide. adequate detailed justification' for every dollar being re-
guested of the Congres upon submissio~F? of the budge each year.
In the future, failure to com-pl with this policy may fforce the Com-
mittee to recommend no fun ' for programs which might have
contributed to our national intelligence capability, but which were
not adequately justified.
GAL PU1POei AUTOMAT DATA IRO G aXIOU1
Over the last several years, the Committee has become increas-
ingly concerned with the lack of adequate management of general
purpose ADP in the national security activities of the Executive
Branch. Elsewhere in this report, the Committee discusses in detail
some of the findings resulting from the most recent in-depth inves-
tigation into this area.
The Committee wishes to make it clear that the general thrust of
the guidance contained in this major review of ADP resources
should be considered to apply to the intelligence community as
well. In particular, the following guidance should be clearly imple-
mented within the intelligence community: a prohibition on new
starts of major automated information systems ($100,000,000 life
cycle costs or $25,000,000 in one year) unles previously submitted
to the Congress in a budget submission for that fiscal year or a
proved in a reprogramming request; Won-of ADP equipment
in the most economical manner, incl ' outright
unless ADP and contracting officials can purchase.
method of and financing that will specifically justify a
acquisition ag produce a a lower total
overall cost to the Government; a program to buy out uneconomi.
cal leasing of office automation equipment; and submission of ex-
i PART A
On
I/
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
S-01379 OMMXI6.ocT4s-or s m n DOC wu
48
hibdta 43A and 40 or an equivalent tt et ADP jvs JtL f oo with
the final 1987 budget request at% same level of detail that
has been for the Department of Defense.
comment on the extent to which these reforms may be applicable et? F'T
to, or have been implemented in, the intelligence community. The JAZL d
DCI should ensure that the report to the Committee addresses the
status of any reforms being implemented, future initiatives which
may be implemented, savings produced, and future goals.
p
ea en
or being
e
,
n LUC
partment
ense w
ich LUC In-
spector General believes will be of significant -benefit- there, and
im
l
t
d
i
De
of De
h
0L.
=7445 eonault with the Inspector' GeaerR- the.Depart- tt c ..
e to ascertain the procurement forms implemented, ,~,,
contract audit and inspection; reveres in insert "sboold cost
reviews; and overpricing. In addition, the. =- wtintral Intel-
1, 1986 usting the eff y OR -on i e+ m ftt sot /
the intelligence commune be is~at~ being V
limited to, the following isms` ini#iatiwe oar than.
last few Tears; potential for increes ng volume of sole -
source contracts; adequacy of contractor
gee formanosi.types of can-
As a result of reviews by this Committee as well ae other inter-
ested Congressional Committees, of internal investigations by Do.
partment of Defense audit and inspection organizations, of investi-
gative journalism by the various media, and of dedicated individual
military and civilian workers who would not accept bureaucratic
resistance and inaction, significant new procurement management
reforms are being implemented to ensure that the best possible de.
Tense is purchased for the least possible price. However, the Com-
mittee is concerned that by the very nature of the business con-
ducted by the intelligence community, the same vigorous and far
re a htisng scrutiny they not be available to t where improve.
aft . .ee-aeaniaa r
ree As a result, the is din
that t l~ir3efar a?C r
Intelligence provide a report to the Commutes no latter than Merck
BURG NG FOR norac,-rm INTLATION
Over the past several years, the Department of Defense has
worked with the Congress to ensure that the amounts budgeted for
inflation are readily visible. While there may not be universal
agreement as to the appropriate amount to be included for infla-
tion in the annual Defense Appropriations bill, at least the Depart-
ment has made significant strides in attempting to justify the
amount requested as being based upon some index associated with
fuel, procurement items, or expense items, or based upon specifical-
ly signed and legally binding contracts with escalation clauses.
The Committee has some concern that the same rigor in justify-
ing projected inflation in the budget request is not pursued in the
intelligence community Therefore, the Committee is requesting
that, as a part of the fiscal year 1987 budget request, the Director
of Central Intelligence provide a breakout by intelligence program
for each appropriation, the amount of inflation included, and
PART A
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88G00186R000800950003-1 --
8.013 OOU(OlX1 -OCT-S1- JSi3) VaaAOC sums
49
snppto the Committee spadfle snppoetin~ doeosreq~ioa is
cate basis for the requaet.
DITUNATIONAL TIUORI5M
In his Annual Report to the Congress, the Secretary of Defense
stated that "the United States will continue to seek a more active
defense against terrorist attacks throughout the world." The Com.
mittee y su ports maintaining an active defence against terror.
ism. It is noted, however, that unlike conventional at nuclear war
an active defense against terrorism does not require hundreds of
billions of dollars in hardware nor millions of troops. Given the rel-
atively small allocation of resources necessary, the Committee be-
lieves that counter-terrorism programs should be given a top priori
ty, especially by the intelligence services, since the terrorist threat
is the most y one to be faced by the U.S. in the near term.
As discussed elsewhere in the Committee report, the Congress
has rejected the President's pro posal for a five percent reduction in
civilian pay for fiscal year 1986. As a result, the fiscal year 1986
budget request as submitted by the President does not fully dmd
the civilian, pay requirements for the intelligence community. In
recommendng elsewhere in this re the restoration of fifty per,
cent of the required additional fung for all agrees and activi-
ties funded in this bill, the Committee expects the intelligence com.
munity not only to receive a
above film* dOhs additional
funds being provided thpo" =' request, but also to ac-
commodate a "fair share" of the absorption required. The Director
of Central Int. is requested to provide a r~the Com-
mittee on how the absorption has been by intel-
ligenw ' as Mart of the fiscal year 1857 budget submission.
ncIaNAL AUDrr AND n"Nq TION PROGRAM
Over the past decade, the Committee has increasingly relied
upon the many outstanding reports produced by the various audit
agencies of the Department of Defense. The Committee has found
these reports to be invaluable in evaluating the success or failure
of the thousands of programs requiring billions of dollars in de-
fense expenditures each year. Because of the relative isolation of
the intelligence community as discussed previously, the Committee
intends to ensure that the intelligence community maintains a
strong and aggressive internal audit function. Full compliance by
the intelligence community with the provisions of the classified
annex will fulfill this objective.
The Department of Defense Tactical Intelligence and Related Ac-
tivities 'IARA) encompass a diverse array of reconnaissance. sur-
veillance and target acquisition programs which are primarily a
functional part of the basic military force structure, and provide
direct information support to combat operations. TIARA includes
those activities outside the General Defense Intelligence Program
PART A
Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
 Sanitized Copy Approved for Release 2010/10/14: CIA-RDP88GO0186R000800950003-1
s-0ss7! OSe IX,s.OCr-a r. nws ooc