REQUEST FOR NATIONAL INTELLIGENCE ESTIMATE ON DOLLAR COSTING OF WARSAW PACT MILITARY SPENDING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP93T01222R000100010002-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 23, 2016
• Document Release Date: April 9, 2014
• Sequence Number: 2
• Publication Date: April 17, 1987
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2014/04/16: CIA-RDP93T01222R000100010002-1
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DEFENSE INTELLIGENCE AGENCY 87-1607X
U-0675/DE-1
WASHINGTON. D.C. 20340- 6134
MEMORANDUM FOR THE DIRECTOR OF CENTRAL INTELLIGENCE
1 7 APR 190
SUBJECT: Request for National Intelligence Estimate on Dollar
Costing of Warsaw Pact Military Spending
1. The current methodology used for costing Soviet and non-
Soviet Warsaw Pact (NSWP) defense efforts in dollar terms has
been in use for a number of years. It has required considerable
effort and resources, mostly on the part of CIA, but to some
extent on the part of other agencies as well. Given this
investment, we believe that now is an appropriate time to take a
fresh look at this direct costing methodology, particularly as a
new generation of weapons begins production and requires new
costing efforts.
2. There has been increasing use of dollar cost comparisons of
Soviet-U.S. and NATO-Warsaw Pact defense costs, but often with
insufficient understanding on the part of policymakers as to how
and why we do such costing and its limitations. A definitive
document on dollar costing would serve to clarify a number of
issues.
a. It would provide community agreed results of such compar-
isons as NATO and Warsaw Pact costs and Soviet and U.S. defense
costs.
b. It would provide the strengths and weaknesses of the
methodology, the definitions (i.e., inclusions and omissions)
used in making the estimates, the limitations of the data itself,
the confidence levels associated with the various parts of the
methodology making up the estimate, and the caveats on the use of
the estimates.
c. It would address the detail of the methodology itself, to
include such items as the costs of the equipment, the last time
such items were costed, and the various ways in which different
items are actually costed.
d. It could also provide a review of the non-U.S. NATO costs
and their applicability to these comparisons.
3. The review of the methodology would serve as a basis for an
assessment of our abil4y to cost the next generation of weapons
systems, and to identify the extent of the gaps in our knowledge
of weapon systems.
4. Through the process of developing our own budget proposals,
we expect that policymakers will rely even more on dollar cost
comparisons. The usefulness of such comparisons would be greatly
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enhanced if we could provide a better understanding of the
methodology involved and the limitations of the numbers contained
in the estimates.
5. DIA strongly recommends that an estimate on Soviet and NSWP
dollar costing be undertaken, as well as a review of non-U.S.
NATO costs. DIA is prepared to provide full support to this
effort. In view of the importance of the issue, we hope that
work on this estimate could begin soon.
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LEONARD N. PER300113
Lieutenant General. USAF
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Declassified in Part - Sanitized Copy Approved for Release 2014/04/16: CIA-RDP93T01222R000100010002-1