Packard’s Strategy for Defense

When Congress concludes debate over the recently proposed defense budget, one of the most quoted documents will have been a 1986 report from the Blue Ribbon Commission on Defense Management. David Packard, 74, co-founder of Palo Alto-based Hewlett-Packard Co. and a deputy secretary of defense in the Nixon Administration, was the commission’s chairman.

Q: Secretary of Defense Caspar W. Weinberger has asked Congress for a two-year defense appropriation of $312 billion, an increase that’s 3% above inflation. Still, many Democrats believe it’s too much, given America’s $169.8-billion deficit. How do you view the Pentagon’s proposed budget? A: I’ve told the White House that a real increase of 1 1/2% per year would be more realistic. It’s closer to what Congress eventually will agree to, and if the department (of Defense) does a careful job of planning within a five-year program, it could maintain an adequate defense capability. Obviously Secretary Weinberger was afraid that (whatever figure) he presented, Congress would cut it back anyway. I’m inclined to think he presented his budget at a higher level than what he anticipated he would eventually get. Q: Why does Washington keep spending large amounts for weapons if it’s generally conceded that smaller defense budgets would be adequate? A: The (armed) services work with the secretary to get a budget put together, but the secretary is never able to include everything that each wants. Quite often the services will campaign with the Congress. Sometimes they’ll get their defense-contractor friends to lobby for things that the secretary didn’t even want in the budget. When I was at the Pentagon (1969-71), we decided we didn’t need any more Navy A-7s. Well, the A-7 plant was in Congressman George Mahan’s (D-Tex.) district, and he always put some A-7s back in the program whether we wanted them or not.

Over the past five or six years, Congress has passed various types of legislation it hopes will improve defense management, but my observation is that everything Congress has proposed causes more problems than it solves. Instead of a long-term defense strategy that sets appropriate levels of manpower, readiness and modernization, they give us the line-item budget. Trouble is, the line-item budget gives members of the Senate and the Congress an opportunity to pork-barrel for their own community. Congress is one of the big problems, and I don’t know how you’re going to get them to reform. Q: What’s wrong with the present system of defense budgeting? A: Major weapons programs require small expenditures during the research-and-development phase. The commitment to spend billions comes when you decide to advance to engineering and production. The problem is that budgets are drawn up on a year-by-year basis, with no consideration given to what happens in the future. Down the line, meaning two or three years later, Congress often won’t vote enough money to cover the commitment. So, instead of losing the funds already invested in the weapon, the program is stretched out, adding waste and delay. Instead of juggling the costs of a program each year, development programs should become more orderly, because stability saves money and allows you to do a better job. Q: Some of the recommendations in the commission’s report to the President last summer already have been accepted. What more could be done to increase defense - management efficiency? A: We need a procedure that gets some discipline into the defense-planning program. The first step should be a shift from annual budgeting to two-year appropriations. The deliberations of Congress take so long now that you’re often well into the fiscal year before the defense budget is decided. Secondly, new weapons programs could be reviewed at certain stages of development instead of on a year-to-year basis, and given funding based upon an estimate of what the program is expected to cost over a five-year period. We also recommended more use of prototype programs in the area of development so that the cost of and problems with a particular piece of hardware could be evaluated. Once all the uncertainties at the research-and-development level are worked out and the costs are reasonably established, operational testing of a production model under field conditions could lead to the program being approved for full-scale production and deployment. Q: Why is there opposition within the military to testing prototypes under simulated combat conditions? A: Some military people think it delays the program and may increase the cost. The people out at Wright Field (in Ohio) tried to drop the F-16 because of the operational testing required. Fortunately, General Dynamics and Northrop realized they had a good airplane. They managed to get it back into the system and did a lot of extra tests that increased the cost, but today the F-16 is the best fighter we have.

The conclusion of our commission was that if you spend a little more up front (for testing), you could save a lot when you get into major production. The DIVAD (Sgt. York) anti-aircraft gun is a good example. Congress itself demanded a prototype program but didn’t give enough money to do it right. The military knew that neither one of the competitors’ systems worked properly on the operational tests, but they didn’t have any more money to do anything else. So they chose one that went into production. But the damn thing didn’t work. Another $25 million spent prior to actual production could have saved $2 billion down the line and perhaps have prevented the weapon from being thrown away. Q: Can this country depend on weapons so expensive that it can’t afford to test them? A: You have to know what happens when you fire a missile, and unless you have some real practice, when the deadline hits you may not be able to do it. The Phoenix missile, for example, is so costly you can’t afford to practice with it very often. But you can’t afford not to practice with it. Q: When you were deputy secretary of defense , the process of acquisition and development that had been used during the Kennedy-Johnson years was completely restructured. Now, 15 years later, you want to revise the system you yourself initiated. What went wrong? A: What’s happened is that we’ve got too many people involved in these defense programs. The two most effective development programs undertaken since World War II--the Minuteman and the Polaris missile--occurred during a period when the services operated without much supervision. Now, a good many of the project managers spend half their time briefing committees. Is it desirable to have a non-military organization develop and build weapons, similar to what’s done in England? I doubt it. Given the civil service structure in this country, there would be no way you could get capable people into such an organization. The services, on the other hand, are able to attract some very outstanding people. What we should do is give the services a little more freedom in developing their programs, plus an established procedure so that program managers don’t have to spend so much time arguing with everybody else about what they’re doing. Q: In the commission report you advocate allowing defense contractors to police their own industry . How can this be justified, when at one point in 1985 almost half of the 100 largest defense contractors were under criminal investigation? A: That’s right. But a lot of the headlines were not about serious fraud. Many defense contractors several years ago didn’t even have codes of ethics. At General Dynamics, for example, the internal auditor wasn’t even allowed into one of the divisions. Now the large companies have codes of ethics. Fraud can be reduced by having a lot of policemen, but it’s better if executives make a commitment to do the thing right in the first place. I’m not saying you shouldn’t have an inspector, but it almost got to the point that people were ashamed to be in the defense industry.

With a self-surveillance program, people can have pride in their job and understand the importance of quality. It’s very difficult to maintain a positive attitude if you have a bunch of policemen standing over your shoulder acting as though you’re a crook. I personally think the inspector general should begin to back off, but it’s a hard thing to know what the right balance is. In general, however, I’m convinced that the adversary relationship between industry and the Defense Department is not conducive to producing quality products. Q: But General Dynamics defrauded the government of $800,000, and after a brief interval, the Reagan Administration allowed it to do business as usual. Is that the right signal to send industry? A: Well, the trouble is that General Dynamics is the only company that can make the Trident submarine. You can’t put them out of business. So you try to make a big show of penalizing them, and it ends in kind of a farce. I think the Administration should probably have been a little more firm in some cases. The commission looked at suspension and debarment, but they’re difficult to use as penalties. But I really think industry has learned a lesson from this and you’re going to have better performance in the future. Q: Will the effort to reduce the federal deficit result in a reordering of defense priorities? A: The fundamental problem is that we haven’t worked out a rational military strategy for what we want to do in the world. We can’t do everything, so we should limit our involvement to those things that are important to us. We may want to respond to every situation in the world, but we can’t afford it. Q: Can the United States afford the “Star Wars” anti-missile defense system, which is based on satellite and laser technology? A: The policy of “mutual assured destruction” is not a very attractive way to live, and I think there’s every reason to try to find a better approach. The reason there is opposition to “Star Wars” is that many people think we’re spending too much on defense, and they think if we make a commitment to “Star Wars,” it’s going to cost some damn billion dollars more on top of everything else. The whole “Star Wars” concept, I think, is not very thoroughly understood. We’re getting to the point where nuclear blackmail is a real possibility. There may be a real justification for a defense against that situation. I think it would be a big mistake to worry about a few billion dollars and cut back “Star Wars.” Q: What should our defense priorities be? A: The whole Western Pacific is in pretty good shape. I think we could, without too much risk, probably reduce our involvement in South Korea. I don’t think there’s any likelihood that we’re going to get into an all-out nuclear war with the Soviet Union. I think both sides understand the dangers of such an involvement. I think we have good enough communication so it’s not likely that there will be any kind of an accident. I would have preferred that we put our money in the stealth program instead of the B-1. We could have saved quite a few dollars and not seriously jeopardized our ability around the world. These are very difficult things to decide. Q: Lenin once said “capitalists will sell us the rope that we use to hang them,” yet you advocate an increase in the overseas sale of advanced American technology. Why should the United States sell computers to communists? A: I think we’ve gone overboard in putting restrictions on technology transfer. For us to maintain strength, individual companies have to have a market for their products. There have to be some restrictions, but the Soviet Union doesn’t have much trouble acquiring the technology it needs. In 1981 the Soviets gave Caterpillar Tractor a very large order for pipe-laying machinery. The Administration blocked the sale, and Moscow bought the equipment from Kamatsu in Japan. Today, Kamatsu dominates the tractor market, and Caterpillar is in trouble. Now that’s a case where you just shot yourself in the foot over concern about technology transfer. Q: Some observers believe that the United States is losing its technological superiority. Certainly it’s true that several essential components in major weapons systems are produced overseas. A: It’s a matter of concern right now because the Japanese have almost a monopoly. I take the view that if we can’t trust Japan to produce some critical parts for us, we’re really in trouble. I would have no trouble in relying more heavily on the Japanese to help us produce high-technology weapons with lower cost and higher quality. I don’t think we need to bring everything home. We ought to consider that Japan is on our team and that we’re working together. We have to learn to depend on our friends. Q: Do you see Americans working together with Russians in the near future? A: I don’t think the Soviet threat is anywhere near as great as a lot of people would say; I don’t think there’s any chance that the Soviets are going to undertake a major drive through Western Europe. There’s no incentive for them to do it. I guess I would like to see us rely more on diplomacy, try to develop a better understanding and accept the fact that we’re not likely to have to settle these problems with an old-fashioned military action. The price is pretty high today for the Soviets to do anything except nibble around these fringe areas. We can’t do much when they move into Afghanistan and badger us in Africa, but we can control situations in Central and South America. Moscow can’t project enough force there to pose any danger if we really are concerned about it. Q: So this country can afford the best defense, if it realistically defines its role as a superpower? A: We could assure peace in the world with a much lower level of military spending, but to assure peace and freedom takes a larger military commitment. To ensure freedom--and, hopefully, expand it--is where the big price comes.