COSTING SOVIET MILITARY PROGRAMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000900050028-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 20, 2016
• Document Release Date: August 8, 2006
• Sequence Number: 28
• Publication Date: April 25, 1972
• Content Type: MF

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MEMORANDUM FOR: Director of Central Intelligence
SUBJECT Costing Soviet Military Programs
1. This memorandum comments briefly on our work
on costing Soviet military programs and outlines some
recent steps we have taken to improve this work. An
additional action along these lines requiring your
approval is recommended in paragraph 7.
2. In various discussions with you in the recent
past I have sensed your unease concernin
our e
ti
g
s
mates
of military spending. At a recent USIB meeting, General
Bennett voiced some particular problems with the present
estimates. General Graham, DIA's Director of Estimates,
has reservations on CIA's estimates of Soviet military
spending and has been seeking the"opinions of numerous
military analysts, including people from universities
and contractor-organizations. I will comment later
on General Graham's steps, but first let me review a
bit of history and some recent events in our cost work.
3. Over the years the Department of Defense has
been the primary consumer of CIA's work on military
spending as well as a major source of data and advice
on US accounts and US costing methods. We have care-
fully nurtured these links and, on the whole, relations
have been excellent. Defense Department acceptance
of the professional workmanship of the product was
reflected in the agreement in 1965 between Secretary
Vance and Director McCone establishing CIA as,the
central point in the community where the co?ting of
Soviet military programs was to be done. Our closest
ties have been with the Office of the Assistant Secre-
tary of Defense for Systems Analysis, with the Office
of the DOD Comptroller, with DIA, and with the NSC
Staff.
- In n e^r-ti
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4. I believe that over the years CIA has done
its work on Soviet military costing carefully and
well. This is not to say that the quality of the
work is uniformly perfect or that once done well it
can be forgotten. The Office of Strategic Research
regularly evaluates and refines its methods and its
data--again in consultation with components of the
Defense Department.
5. For example; in the past year an arrangement
was made with Admiral Zumwalt's staff for a senior
naval officer skilled in naval-planning and economics
to spend several weeks in Bruce Clarke's shop to,
evaluate the data and analytic approach used by OSR
to cost the Soviet navy. This officer reported to
us and to his own department, commenting favorably
,on OSR's work and offering some useful suggestions
which OSR has incorporated.into its system. Similarly,
OSR has worked with Dr. John S. Foster's people on
ways to improve our analysis of Soviet R&D. Most
recently a number of interagency cost working groups--
chaired by OSR--have been meeting to reexamine all
of the ruble-dollar values now used. These groups
draw on the full expertise of the community and the
military services.
6. I believe that progress is being made in our
work and that,~he' work to date is fundamentally sound.
At the same time, I am convinced that only confusion
can result from General Graham's attempt to draw a
large number of outside experts and contractors--at
a minimum clearance level--into the analysis.
7. To put the problem of costing Soviet military
programs into a clear perspective and to provide you
and others in the community with disinterested but
expert advice, I recommend that you instruct me to
establish a small panel of recognized specialists
outside of government who can go into our methods
and our data thoroughly and on an all-sourco classi-'
fication level. If you approve of this step, I
recommend that you sign the.attached memorandum to
General. Bennett informing him of your instructions
2-
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to me and stating that I will be in touch with him
concerning the membership of the panel.
EDWARD W. PROCTOR
Deputy Director for Intelligence
Attachment:
Memorandum to
General Bennett
Recommendation contained in paragraph 7 is APPROVED.
P5rr11n..rd Helms 25 APR 1E31G
Director of Central Intelligence Date
Distribution: (all with copy of Director's memo to General Bennett)
Original - Addressee
Return DDI
1 - Director
1 - DDCI
.1 - Executive Registry
1 - Director/OSR
1 - Director/OER
1 - Director/ONE
1 - DDI Chrono
1 DDI Director file
~1 - DDI file
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1iuWa m1a1WN~
LJ1V6:I.A il j 3 Cf-1~IJEl~~'Ir~B, SECRET
OFFICIAL O T'Il G SLIP
TO
NAME AND ADDRESS
DATE
INITIALS
Director
2
3
4
5
6
ACTION
DIRECT REPLY
PREPARE REPLY
APPROVAL
DISPATCH
RECOMMENDATION
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
Remarks :
The principal purpose of the attached
memo' is to obtain your approval for us to
set up a panel of outside experts on Soviet
military expenditures under your spongorship.
The secondary purpose is to discourage DIA
from continuing with its unsubstantiated bad-
mouthing of existing estimates. Hopefully,
a panel of outside experts will provide the
entire community with an unbiased assessment
of our estimates and how these might be
improved.
Ed .Proctor
FOLD HERE TO RETURN TO SENDER
~~
FROM NAME, ADDRESS AND PHONE NO.
DATE
Deputy Director. for Intelligence
125 April
foW1N No- 237 Use previous editions
1-67
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