INTELLGENCE COMMUNITY MANAGEMENT IN THE FACE OF COST GROWTH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00681R000100020001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 24
• Document Creation Date: December 15, 2016
• Document Release Date: April 19, 2004
• Sequence Number: 1
• Publication Date: June 24, 1971
• Content Type: MF

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NRO review(s) completed.
?S of 10 copies
24 June 1971
MEMORANDUM FOR: Director of Planning, Programming, and
Budgeting
SUBJECT : Intelligence Community Management in the
Face of Cost Growth
1. This responds to action item 3 of the 2 May 1971 Director's
Planning Conference:
"3. The Director instructed DD/S&T and DD/I to
determine if documents exist which will support the DD/S&T
observation that the present Intelligence Community, manage-
ment of the large collection systems has effectively held down
and leveled out resources for these systems. "
Mr. Duckett, in the conference, stated that in general the cost of the
larger systems, as projected, evens out to about the current level due to
decisions by. USIB and the Director. He, presented charts for Fiscal Years
1965 through 1973 indicating (a) a fairly static manpower level (Tab A)
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and the Agency portions of the National Reconnaissance
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and (b) the maintenance
of a cost level (Tab B) of
through 1971, with an esti-
such programs
mated increase
to
for 1972 and 1973. These
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were presented as examples to "destroy the myth presented in the
OMB report."
2. The OMB paper of 10 March 1971, "A Review of the
Intelligence Community," to which Mr. Duckett was responding makes
a number of very broad charges:
(p. 9)113. The Community's growth is largely unplanned
and unguided.
? Serious forward planning is often lacking as decisions
are made about the allocation of resources.
? The consumer frequently fails to specify his product
needs for the producer; the producer, uncertain
about eventual demands, encourages the collector
to provide data without selectivity or priority;
and the collector emphasizes quantity rather than
quality. "
(p. 10)
"4. The Community's activities have become
exceedingly expensive.
? The fragmentation of intelligence functions and the
competitive drive for improved collection technology
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are important reasons why the cost of intelligence
has almost doubled during the past decade.
? A significant part of this growth is attributable to
the acquisition of expensive new systems without
simultaneous reductions in obsolescent collection
programs.
..In the absence of planning and guidance, internally
generated values predominate in the Community's
institutions. These values favor increasingly
sophisticated and? expensive collection technologies
at the expense of analytic capabilities.
? Few interagency comparisons are contemplated.
Potential tradeoffs between PHOTINT and SIGINT,
between PHOTINT and HUMINT, and between data
collection and analysis are neglected.
? While the budgetary process might be used to curb
' some of the more obvious excesses, it cannot
substitute for centralized management of the
Community. "
(p. 11) "Because each organization sees the maintenance
and expansion of its collection capabilities as the principal
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route to survival and strength with the Community, there
is strong presumption in today's intelligence set-up that
additional data collection rather than improved analysis,
will provide the answer to particular intelligence problems.
It has become commonplace to translate product criticism
into demands for enlarged collection efforts. Seldom does
anyone ask if a further reduction in uncertainty, however
small, is worth its cost. "
(p. 5) "In the absence of an authoritative governing
body to resolve these issues rsubstantive and functional
responsibilities within the Community], the Community has
resorted to a series of compromise solutions that adversely
affect its performance and cost. "
3. As you know the Director of Central Intelligence does not
have decision authority with respect to program and resource
allocation questions for the Intelligence Community except for
those of the' CIA. The National Intelligence Resources Board was
created administratively to assist with Community resource questions
and issues, but is only advisory to the Director. The United States
Intelligence Board which the Director chairs is, in effect, also
advisory to the Director on matters bearing on resources. The USIB
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establishes requirements, objectives and priorities in this area, but
usually in substantive intelligence terms only. Practice has established
an unwritten "law" to the effect that USIB and its Committees do not
determine or approve resource programs or resource allocations
proposed in response to established requirements, objectives and
priorities. This type of action would be viewed as an unwarranted
intrusion into the line manager's responsibility, unnecessarily restricting
"desirable" flexibility. With the exception of the Director's participation
in the Executive Committee, "EXCOM", which does make resource
decisions for the National Reconnaissance
there are no other Community forums available to the DCI for his
continuing overview and coordination of intelligence activity and programs.
NIPE staff representation for the Director in annual DOD reviews of its
intelligence programs has served in an observer role for the most part.
4. Given these arrangements for the Director and USIB, one would
not expect a wealth of explicit documentation to substantiate Intelligence
Community 'management which has worked "to hold down and level out
resources." Inquiry with the Chairmen of the SIGINT Committee and
COMIREX tends to bear this out, though a number of interesting cases
have been identified to indicate the type of pressure or impact the Director
can bring to bear openly and officially on important resource questions:
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b. The Chairman of USIB in 1968, with the concurrence of
USIB, recommended to the Secretary of Defense that project
with the understanding that the
need for any augmented capability for the proposed initial system
would be subject to later Board consideration.
c. By a letter of 6 December 1968 the Director advised the
Deputy Secretary of Defense of his reservations concerning
continuing development
d. In a 4 December 196 8 letter to the Secretary of Defense
the Director advised that a NIRB evaluation of products of the
indicated that then current
levels of effort for major portions of this work could not be
justified in substantive intelligence terms.
e. The Chairman with the approval of the Board on 29 October
196 9 advised the Deputy Director of Defense Research and Engineering
that it was essential for NSA to test adequately the technical aspects
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of a proposed expansion of
prior to any recommendation to the Board for
establishment of standing intelligence requirements for such a
capability in these areas.
f. In two significant cases. the Director has elected not to
dispute Deputy Secretary of Defense proposals to decrease
major overhead collection capabilities: 1) The mothballing of the
OXCART aircraft in 1968, and 2) the stretching-out of CORONA
Tab C lists the formal references to the foregoing examples.
5. Whether explicit documentation exists in rebuttal to the OMB
allegation on a case-by-case basis may be the least of two questions.
Has, in fact, the cost of U.S. intelligence almost doubled during the
past decade as alleged by OMB? If it has, I would suggest that no
one, including the OMB, has come forward with agreed data to
prove it, In measuring shifts and trends for U.S. intelligence resources
the basic problem has been and continues to be two-fold: (a) agreement
in identification of the type of activities to include or exclude, and
(b) agreement in the identification of related support costs, particularly
in regard to drawing lines within Department of Defense programs
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where the bulk of the effort is accounted for. Data, compiled by OMB,
the NIPE Staff and by staffs in the Office of the Secretary of Defense at
various times over the years has not always been consistent with respect
to either scope or approach. All available data indicates that cost growth
has been experienced in U.S. intelligence programs. A comparison of
data developed by the Bureau of the. Budget (predecessor to OMB) for
the Fiscal Year 1962 with NIPE/CIRIS staff data of January 1971 for the
Fiscal Year 1972 indicates an overall increase of
Tabs D and
E show these comparative levels for the major elements of the "Intelligence
Community Program" then and now, respectively. It is believed that these
two sets of data are sufficiently comparable in definition of programs
included, and approaches used to costing, that they can serve as a useful
measure
of gross trends for the Community.
The FY 1972 program
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includes
which clearly did not
exist in 1962.
When one adjusts for these, the
increase for previous on-
going National
Intelligence Community resource programs is on the
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order of
a figure largely accounted for by inflation during the
decade.
These
data do tend to confirm the OMB observation that major
increases relate to collection programs. More detailed information
would have to be presented to identify the significant changes in the
composition of these programs including the phase-out of older collection
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6. Intelligence Community resource data cited in the 10 March 1971
OMB paper is not comparable in total with data discussed in the foregoing
paragraph for the reason OMB has chosen, in its paper, to increase the
definition of intelligence resources by adding
for tactical
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military resources. Note Tab F for this and other differences.
7. Tab G was furnished by NRO through Mr. Duckett's office subsequent
to the Director's Planning Conference to show how the National Reconnaissance
Program has been projected through FY 1977 at
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curves in this tab, however, also show the cost growth in this program
since FY 1963.
8. It would appear to me that cost growth data shown in the Tabs D
and E give evidence of management activity that is otherwise not wholly
apparent iri the workings of formal Community arrangements. The fore-
going, for example, excludes consideration of the Director's access
to the National Security Council, the Secretary of Defense, the President
and members of the Congressional leadership. The prestigious posture
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of the Director and his record of objective balance can and have had
effective weight on substantive intelligence matters considered at
these highest levels, including consideration of related resource and
operational questions and issues.
Attachments
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Distribution:
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addressee
DD/I
DD/P
DD/S
DD/S&T
D/DCl/NIPE
C/COMIREX
C/SIGINT
PPB subj
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TAB C
Sub.-paragraph.
of text
References
a.
1)
USIB-M-430 of 28 April 1966.
2)
COMOR-D-48/110 of 4 April 1966 (Limited Distribution);
Subj: "COMOR Evaluation of the Current Satellite
Launch Program. "
b.
1)
Memorandum
of 1 August 1968 to the USIB from the
Chairman concerning the initiation of
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conveyed to the Secretary o Pe ense.
2)
USIB-M-517
of 1 August 1968.
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C.
The 6 December 1968 letter from the Director to the
r
Deput Secretary of Defense commenting on the Develop-
ment
d. The 4 December 1968 letter from the Director to the
Secretary of Defense concerning intelligence value of
e.
1) Memorandum of 29 October 1969 from the Chairman
of USIB to the DDRE on the subject: "Intelligence
Requirements - Soviet Naval Forces. "
2) USIB-M-557 of 30 October 1969.
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