Panel Criticizes Military Procurement : Pentagon Urged to Use More Off-the-Shelf Items

The blue-ribbon commission studying potential Pentagon reforms Monday recommended streamlining the Defense Department’s acquisition system and called for greater use of commercially available products rather than those designed specifically for the military.

In presenting its second report, the commission, headed by former Deputy Defense Secretary David Packard, concluded that Pentagon procurement is plagued by “deeply entrenched” problems that have worsened over several decades because of “an increasingly bureaucratic and overregulated process.”

World’s Biggest Business

“All too many of our weapon systems cost too much, take too long to develop and, by the time they are fielded, incorporate obsolete technology,” the commission said. It described the acquisition system as “the largest business enterprise in the world.”

After citing the time spent on development of such major commercial projects as an IBM computer, the Boeing 767 airplane and a Hughes communications satellite, the commission recommended that the Pentagon adopt private industry practices to cut by half the eight to 12 years it can take to put a new weapon in the field.

The report expands on initial recommendations made when the panel reported to President Reagan on Feb. 28. At that time, it sharply criticized the nation’s defense Establishment and urged, among other things, creation of a post of undersecretary of defense for acquisition; two-year, rather than one-year, defense budgets, improved long-range planning and greater authority for the chairman of the Joint Chiefs of Staff.

Reagan has moved to implement some of those proposals.

Acquisition Issues

The 43-page report issued Monday deals only with acquisition issues and states that the Pentagon’s annual purchasing budget, nearly $170 billion, is greater than the combined purchases of General Motors, Exxon and IBM.

The commission is conducting its work during a period of intense scrutiny of the Pentagon and efforts to correct its problems. Congress has balked at approving the President’s $320-billion defense budget request, which provides for a post-inflation spending increase of 8%.

Thus, the panel’s reports have taken on added weight and can be used by the Administration to answer criticism that it is not sufficiently concerned with efficiency.

Among the recommendations reported Monday are greater use of commercial products, “rather than relying on excessively rigid military specifications.”

William J. Perry, a commission member and undersecretary of defense for research and engineering during the Jimmy Carter Administration, said at a news conference that the Pentagon spends $2 billion annually on microchips, which are integral parts of all complex electronic equipment.

Cost 10 Times as Much

Perry said that the chips bought for Pentagon use cost three to 10 times as much as the equivalent parts used in commercial products. But, he said, as a result of recent improvement in microchip production, “today there is typically no basis for the Defense Department” to insist on buying specially designed items.

The commission said that the Pentagon should appoint executives to take responsibility for several procurement programs and create “unambiguous lines of authority” to streamline acquisition procedures, stabilize procurement programs through multiyear purchasing and emphasize quality and performance of a supplier, as well as the cost of a product.