Document created: 22 October 03
Air University Review, September-October 1973
We
don’t want to spend one dollar more on defense than we need, because we need it
for domestic purposes. But let us remember that
spending more than we need may cost us money, but spending less than we need
could cost us our lives. Let’s put the security of America first.l
President Richard M. Nixon, 1972
Last January the ranking member of the armed services, with much fanfare, “re-upped for four more.” After hearing a great deal of debate on the major national issues—the economy, Vietnam, taxes, and defense spending—the voting public re-elected Richard M. Nixon as Commander in Chief of the armed forces of the world’s strongest country.
In spite of the wide margin by which Richard Nixon was re-elected, the issues of the economy and the level of defense spending have not subsided, and they are not likely to soon. To the man on the street, the money we spend on defense means two things: potentially, adequate national security; in fact, less money for domestic needs. To the professional military man, defense expenditures mean the same as to the man on the street; but the difference between these two citizen groups is that the military professional is responsible for insuring that what is labeled “potentially” becomes “in fact.”
The political atmosphere in which the military professional pursues his responsibility will be one characterized by continued criticism. Because of this criticism, and the justifiable concern of many citizens demanding increased expenditures for social causes, the approach taken to force-structure planning will have to be drastically revised if we are to have adequate security in fact.
In this article we will first consider the views of some of those who feel we could do with significantly smaller defense budgets and the foreign policies to which they would commit this nation. Next, we will review the present national security strategy which provides the basis for force-structure planning. Then the remainder of this article will address the who, when, where, and how of force-structure planning, with emphasis on the necessity for cost control to achieve adequate security within the defense budget.
Debate over how much is enough for the security of the country is not new. Until recent years, however, the public did not seem to have much real interest in this question. Now there is a definite shift in public attitudes toward the military in general and defense spending in particular.
With the change in administration in 1969, most of the existing management procedures in the Defense Department, which the new Secretary of Defense felt were the cause of much of the public criticism of the military, were discarded, and more efficient procedures were established. Nevertheless, there are those who believe that the public’s negative attitude toward the military was influenced not so much by the way the Defense Department operated as by the constant barrage of charges by numerous antimilitary opinion-makers.
In July 1972, as a direct consequence of the public’s misunderstanding on defense spending, Robert C. Moot, Assistant Secretary of Defense (Comptroller), published a comprehensive dissertation on this subject. Mr. Moot argued that much of the rhetoric on defense spending emanates from ‘scholars’ who should know better. He said:
In most times and in most areas of public affairs the academic community imposes rigorous standards of scholarship, objectivity, and general competence. . . . Books or articles that are riddled with inconsistencies, unsupported generalizations, and clear departures from reality rarely reach the printer. Even when they do, the half-baked ideas are promptly exposed. These standards are not applied in today’s writing on defense matters.2
strategies and defense budgets proposed by the critics
During the months prior to the last Presidential election, the size of the Defense Department budget became a major issue, at least as far as the Democratic candidate, Senator George McGovern, was concerned. He argued that expenditures for defense of the country should be trimmed to $54.8 billion by 1975, a figure about $30 billion less than what the administration was forecasting.
Throughout the campaign there were numerous editorials and commentaries written on the McGovern defense budget, some in favor and some against. An example of pro-McGovern commentary was an article by Earl Ravenal, director of the Asian division in the Office of the Assistant Secretary of Defense (Systems Analysis) from 1967 to 1969. Mr. Ravenal stated that the McGovern budget was based on three assumptions:
1. The contingencies in which we
would have to use our general purpose forces—whether in Europe or in Asia—
are
extremely unlikely.
2. We should place more reliance on “nonmilitary” instruments of foreign
policy, such as diplomacy and trade.
3. Our present forces are much larger than needed to cope with these
contingencies.3
Mr. Ravenal quickly dismissed the first two assumptions as being partially valid and then analyzed the third assumption—that the McGovern program could do the job with less. He went on to say that cutting the defense budget could mean several very different things, such as:
Typical of the many writers who supported McGovern, Mr. Ravenal found fault with his method but not his conclusions. He concluded by saying that our general purpose forces and virtually all of our military assistance to allies and friends are costing us $50 billion a year and are not even intended directly for the security of America but rather are intended for the security of our allies and friends. Like the Democratic candidate, Mr. Ravenal felt that this expenditure should be drastically reduced because it was “exposing us perpetually to the engagement of our resources, the sacrifices of our youth and the risk of our cities and our society.”
Another critic of the military, Professor Seymour Melman, argued that national security should be viewed in terms of domestic well-being and that current and projected defense spending reflected a “militarist” concept of national security; that the competition is not between defense and domestic needs-it is between militarism and domestic needs. Professor Melman suggested that a reasonable and viable military security policy is one that aims at “providing assurance against destruction from outside” as opposed to one with aims “ranging from a capability to fight multiple wars simultaneously to that for enforcing military commitments to some 47 foreign countries.” He proposed a total military security budget of $29 billion as opposed to the Defense Department’s proposed budget of around $80 billion.4
Both Ravenal and Melman would cut a large portion of the defense budget because they feel that much of our military expenditures supports an inflated military structure which is counterproductive to achieving our domestic needs. They seem to perceive the external threat to this nation to be not as real as the internal threat, claiming that we spend too little on our own society.
How much will be spent for military forces depends in large part on public opinion regarding national priorities and what funds Congress is willing to appropriate to various agencies. The amount that Congress appropriates for defense depends on what that corporate body feels constitutes the threat to this nation and the degree of military preparedness it feels is necessary to provide adequate security in the face of that threat. Finally, Congress, in appropriating defense dollars, is strongly influenced by how it feels the dollars have been and will be used.
strategy of realistic deterrence
In the previous section we discussed the foreign policies that might have prevailed had President Nixon not been re-elected. Since he was reelected, we can assume that there will be little change from the policy enunciated by him in the past.
In terms of foreign policy, the national security strategy of the current administration is reflected in the Nixon Doctrine and is implemented in his Strategy of Realistic Deterrence. This strategy for defense is based on the three key elements of the Nixon Doctrine:
First, the United States will keep all its treaty commitments.
Second, we shall provide a shield if a nuclear power threatens the freedom of a nation whose survival we consider vital to our security.
Third, in cases involving other types of aggression we shall furnish military and economic assistance when requested and as appropriate. But we shall look to the nation directly threatened to assume the primary responsibility of providing the manpower for its defense.5
In testimony to Congress on defense appropriations, Secretary of Defense Melvin Laird stated that these national security planning criteria establish the basic parameters within which we will do our defense planning. Our force planning must be focused on deriving the most realistic mixture of forces and supporting assistance possible in order to cope with four categories of potential conflict: strategic nuclear, theater nuclear, theater conventional, and lesser conventional contingencies.
Secretary Laird went on to say that because of influences either largely or wholly beyond our ability to control, such as a potential enemy’s capabilities and his likely strategy, force planning must be based
. . . not only on a definition of our objectives, but also on a sophisticated analysis of the nature and relative importance of the various impediments and obstacles to the achievement of our objectives-be they economic, political, technological, or military.
Up to this point we have established the broad basis for force-structure planning; we have answered the why. Now we will discuss the who, when, and where.
In order to limit the scope of the discussion, our examination will address only tactical air force-structure planning, which, for brevity, we will refer to hereafter as “tac air force planning.” Likewise, we will refer to that group of staff officers, analysts, and decision-makers whose responsibility it is to develop the tac air force structure as “force planners.” For the purpose of this discussion, the force planner symbolizes the blue-suited Air Staff. We would be remiss, however, not to mention that civilians (scientists, analysts, and managers) also playa significant role in force planning.
A detailed discussion of all the force-planning functions is beyond the scope of this article, since the Air Staff activities directly and indirectly involved are numerous and since much of the planning is based on activities conducted in the major commands. It is possible, however, to summarize the most important force-planning functions.
The force planner, i.e., the Air Staff, develops force structure by two groups of actions:
(1) Continually assessing the projected threat and balancing it against our projected capabilities to identify areas in which our forces are inadequate or possess deficiencies in weapon systems; conducting conceptual studies and mission analysis of new theories and systems to determine their technical feasibility and military applicability; conducting exploratory research, together with industry, to extend the state of the art of technology to provide the RDT&E basis for advanced operational concepts, systems, and equipment; incorporating these new operational concepts of air warfare and by proposing, reviewing, and approving new capabilities to counter the future threat; conducting studies and analysis, to determine the most cost-effective systems or equipments among alternative proposals; and establishing advanced and engineering development programs to translate these ideas into useful and effective prototypes.
(2) Monitoring operational tests and evaluations of new concepts, systems, and equipment to determine validity and feasibility; developing plans and programs for incorporating new systems and equipment into the inventory; conducting budget exercises to establish development and procurement programs within the constraints of budget allocations; modifying programs in the light of higher-level decisions, the changing threat, technological advances, and revised budget allocations; and defending Air Force positions during Congressional hearings on military authorizations and appropriations.
Now let’s discuss the defense decision-making system that ties the force-planning activities of the services to the budgetary process.
the PPBS: how it works
The defense decision-making system is called the Planning-Programming-Budgeting System (PPBS).7 The PPB cycle normally begins in June and ends in January eighteen months later. It consists of eight basic steps executed over this period of time. This means that the initial planning steps are taken about two years before the fiscal year under consideration begins and about three years before it ends.
The Five Year Defense Program (FYDP) provides the central focus of the system. The main objectives of the cycle are to update the entire FYDP and to calculate precisely the money required to implement the first year of the five-year plan. The FYDP contains the planned force structure for eight years and associated costs and manpower for five years. During the cycle, the level and mix of forces are carefully reviewed, and resource requirements are adjusted as needed. The following steps briefly describe the PPBS:
Step 1. The cycle begins with an evaluation of intelligence estimates and a review of national-level policy determinations such as those of the National Security Council (NSC). This leads to the first document of the cycle, Volume I of the Joint Strategic Objectives Plan (JSOP I), which is issued in May by the Joint Chiefs of Staff (JCS). The document contains national security objectives, military strategy, and force-planning guidance.
Step 2. In October, the Secretary of Defense issues the Defense Policy and Planning Guidance (DPPG) and establishes strategic-framework objectives for planning, programming, and budgeting.
Step 3. In December, Volume II of the JSOP (JSOP II) is issued. It translates the national security objectives and military strategy of JSOP I, as modified by the DPPG, into objectives force levels required to support the strategy at a prudent level of risk. JSOP II is not fiscally constrained, but it is fiscally responsible and reasonably attainable.
Step 4. In February, the Secretary of Defense issues the Planning and Programming Guidance Memorandum (PPGM) to the JCS and the services. It provides revised policy and force-planning guidance and assumptions and includes fiscal guidance and materiel support planning guidance for the budget year plus four program years. In the fiscal guidance section, the total dollar amounts for each program year for each service are relatively firm. Totals for some major mission categories are also firm (e.g., strategic forces, support to other nations, intelligence, and security).
Step 5. In May, the JCS submits the Joint Forces Memorandum (JFM) to the Secretary of Defense in response to the PPGM. In the JFM the forces must be within the parameters of the fiscal guidance provided in the PPGM. If the fiscal guidance is less than the amount required by JSOP II, the JFM will also contain an assessment of risks associated with reducing the forces to the constrained level. The key point is that a recommended mix of forces will be constructed by the JCS within a fiscal limitation that is as realistic as it can be made. The JFM may differ somewhat from the service Secretaries’ programs submitted in the Program Objective Memorandums (POM). (See Step 6.)
Step 6. In May, each service Secretary submits a POM to the Secretary of Defense. The purpose of the service POM is to define and describe the program which the service Secretary feels would do the best possible job, within the constraints of the fiscal guidance, of implementing the national security strategy defined in the DPPG. The Office of the Secretary of Defense (OSD) requires that the POM submission be supported by detailed economics analyses conducted by the services.
Step 7. During August, the Secretary of Defense issues a series of Program Decision Memorandums (PDM). These PDM’S are based on OSD’S review of the services’ POM’S, issue papers (written by OSD regarding major issues and alternatives reflected in the POM’s), and the services’ responses to the issue papers.
Step 8. During August and September, work on the service budget submissions progresses; and by the first of October, the services submit budgets that are based on the revised POM’S. The FYDP records, summarizes, and displays program decisions that have been approved by the Secretary of Defense as constituting the Defense Department’s program. The budget is reviewed jointly by the Assistant Secretary of Defense (Comptroller) and the Office of Management and Budget (OMB), and budget decisions are made by the Secretary of Defense. After the budget review, final issues are reviewed with the President, and the budget is transmitted to Congress in January or early February.
who, when, and where
A significant change from the McNamara management philosophy is evident in Step 6. Whereas in the past OSD presented force analyses in the form of Draft Presidential Memoranda, the POM is a service document. It is reviewed and commented on by OSD, rather than the other way around.
The POM requires the services to think systematically about alternatives to current and planned programs. The services must challenge their own programs, design the structure of their analyses, perform the needed research, and present their case in their POM, in Development Concept Papers (DCP), and in other forms of program justification.
Thus it is clear that there is no single branch, division, directorate, deputate, or special activity in the Air Staff that builds planned force structure. All are involved in some manner, including the members of the Air Force Board Structure (Air Force Council, Air Staff Board, and the associated panels and committees). It should also be clear that force planning does not take place at some specific time during the year in some specific place in the Pentagon. There are, however, very specific milestones within the PPBS when force-planning actions must be completed. If one tried to find a single document that tells how the projected force structure was developed, he would come up empty-handed. He could go to the JSOP, the POM, and the JFM for basic rationale; but the detailed studies, the budget exercises, and the decision and position papers leading to that rationale are numerous and can be found in hundreds of files in the various Air Staff offices.
Thus, the who, when, and where of the force-planning activity is a corporate effort of the entire Air Staff, engaged in on a continuing basis throughout the Air Force headquarters.
Now let’s turn to the how of force planning—tac air force planning in particular—and consider the problems that face the planner.
The ultimate goal of the tac air force planner is to develop the optimum mix (in terms of capability and quantity) of all elements of the tactical air force and to do so within the confines of the tac air program budget. The tactical air force, which must be developed within the tac air program budget, consists of many elements, as well as the manpower needed to operate and support these elements. The major elements of the tac air force are —fighter and attack units for conducting sustained offensive and defensive air operations;
—air-to-air and air-to-surface nonnuclear weapon stockpiles for use with the fighter/attack aircraft;
—tactical air control systems for integrating the necessary command, coordination, and control;
—tactical air reconnaissance aircraft, sensors, and processing systems and equipment necessary to provide up-to-date tactical information;
—tactical electronic warfare systems, equipment, and devices integrated into offensive and defensive tactical aircraft; and
—tactical airlift aircraft necessary to move
combat forces and sustaining materiel as required.
Each year the planner tries to develop the best possible balance of aircraft, systems, equipment, weapons, and support by specifying what amount of tac air dollars should be allocated to each element of the program for development, acquisition, and annual operations in each of the next five years. At the same time the planner tries to continue this balance in the years when the current systems will have become obsolete and when the present state of the art of aircraft design and weaponry will have become a thing of the past.
In developing a force that will be balanced in both the near and far term, the planner ultimately tries to insure that the force proposed for each year will provide the capability to deter enemy aggression. If deterrence fails, the proposed force must provide the greatest likelihood of insuring that the outcome of the conflict will be favorable to interests of the U.S. and its allies, regardless of conflict duration or theater of operations.
Now that we have considered what we perceive to be the tac air force planner’s ultimate goal, let’s examine the problems associated with achieving this objective.
The stated goal says that we want the best force that our money can buy in both the near and far term. Given a large enough budget, conceivably we could acquire all the necessary force elements for near-term deterrence or combat and, at the same time, continue development programs for force modernization to insure the highest future capability. However, since we are and probably will continue to be budget constrained, the achieving of all we desire in both near- and far-term force is highly doubtful. Therefore, the planner must decide what to forego in the near term in order to insure that our future force is equal to the projected threat, or conversely, what risks to take in the future in order to enhance the near-term force capability.
Other problems involve considerations of theater of operations and war length. In view of the threat our forces must face in both Europe and Asia and the diverse climatic conditions found in these two areas, it follows that the mix of aircraft and the mix of weapons best suited in one area are different from the best mixes for the other area. In Asia the potential enemy force is characterized primarily by large land armies with relatively little armor and older Soviet types of aircraft. The weather is relatively good except during the rainy seasons. In Europe, by contrast, the potential enemy force consists of large numbers of tanks, armored personnel carriers, and high-performance fighter aircraft, which are bedded down in aircraft shelters on numerous air bases. Additionally, the Warsaw Pact countries are protected by an extensive radar network for early warning, target acquisition and tracking, and control of surface-to-air missiles (SAM) and antiaircraft artillery (AAA). The weather in Europe is characterized by long periods of low ceilings. The kinds of aircraft and weapons needed to counter a European threat are obviously different from the kinds required in Asia.
A further complication in force planning results from uncertainty as to war length. In a war of short duration, the need to conduct deep-penetration strikes against targets such as airfields or power plants may be minimal. Therefore, specialized aircraft, weapons, and additional support suited for these operations take on less importance. Conversely, fighters optimized for close-support missions, antiarmor weapons, and a highly effective command and control system become primary force elements. If a long war is postulated, the need for all kinds of aircraft, weapons, and support increases, and the question of force mix becomes even more complex because of the changing mission priorities as the war unfolds.
theoretical approaches
Let us now examine alternative methods of tac air force planning. In theory, there are at least two distinctly different approaches we can take:
The cost-effectiveness approach.
The superior-performance approach.
Each tac air mission (close support, interdiction, and counter air, which includes subordinate missions such as air defense, air base attack, etc.) would be examined in terms of its importance in the kind of war postulated. The performance required of each tac air force element would be established in terms of its employment in the various tac air missions. For example, if the air defense mission were considered high in importance, the performance of the tactical air control system would receive high priority. Furthermore if the air base attack mission were considered of minimal importance, the requirement for an effective antishelter munition would be very small or zero.
The performance of each tac air element would be maximized for its use in each mission in which it would be employed, commensurate with mission importance, for some specific unit cost per item. This cost would be developed during the initial analysis to determine quantitative requirements and would be considered inviolate. (Thus the emphasis on “cost” in the statement of this approach.)
If, after development got under way, the program experienced unit cost growth, additional money for this program would not be made available. Instead, the program would be stretched out. If the program’s initial operational capability (IOC) date had to be met (perhaps because the program filled a gap in force capability), either the quantity of the buy would be cut, or the desired performance would be relaxed, or both.
the complexity of tac air force planning
It is important to point out that neither of these two theoretical approaches to tac air force planning can be used to develop the optimum tac air force structure. In fact, we will argue that no purely analytical methodology can be used to achieve the optimum force as we have defined it. We assert this on the following basis:
Because of the complexity and dynamics of force-structure planning for tactical forces, both land and air, a great amount of subjective judgment must be injected into the decision-making process. This is particularly true in tac air force planning as opposed to strategic force planning because of the variety of weapon systems and concepts and the interactions possible in nonnuclear war.
Dr. Milton Weiner of the RAND Corporation recently addressed this aspect of tac air planning in a paper on force-structure analysis.8 He recalls that many of the techniques of military analysis which developed after World War II were initially centered on problems and issues of nuclear warfare; but by the early sixties this picture had begun to change. With the war in Southeast Asia, the emphasis shifted to detailed analyses of nonnuclear warfare. This forced the analyst to return to the empirical world, for while his prior “effectiveness” assessments were analytically sound, they were now obviously incomplete.
As an example, the analyst might calculate the weapon requirements to destroy bridges and other targets. From these he might estimate the number of weapons, or sorties, or time required to achieve a certain campaign outcome. But the war in Southeast Asia indicated that the calculations, even if they were correct in detail, were incomplete. A number of other factors entered the real situation. Enemy defenses produced attrition; the relatively unimportant AAA, when coupled with the SAM, became a significant factor. Bridges (and other targets) were not attacked by a few sorties but were supported by other aircraft, such as aircraft for combat air patrol, search and rescue, electronic warfare, and air refueling. With the increasingly hostile defense environment, effectiveness was reduced because of “pucker” factors, and the overall cost for destroying the bridge (prorated over all the associated mission aircraft) was up. The analyst, therefore, found himself increasingly concerned with a host of factors other than the mean area of effectiveness of a 750- pound general-purpose bomb against a girder bridge. In short, the real world involved a much broader context than had been incorporated in many analyses.
Dr. Weiner suggests that tactical analyses in the future are going to require much greater emphasis on the context in which the military action is being carried out, if the analyst is to produce a credible evaluation of any proposed change in equipment, concepts, doctrine, etc. His evaluations are going to be subjected more than ever to questions regarding the type and level of conflict, the types of missions, the tradeoffs with other systems (or equipment, concepts, etc.), the database, etc. For this reason, some context construction is going to be a significant part of any major tactical analysis in the future.
the imponderables—subjective judgment needed
Since neither cost effectiveness nor superior performance—nor any purely analytical approach—can be used exclusively, how does the Air Staff today accomplish tac air force planning?
Tac air force planning today involves some aspects of both approaches, with a fair amount of military judgment incorporated throughout the process. Numerous cost-effectiveness analyses are performed to decide on preferred aircraft types, weapon types, and other systems and equipment, from among alternatives. But where operational or threat or technological uncertainty exists or reliable data are not available, subjective judgment necessarily must be invoked.
Working within the framework of the PPBS, the force planner must come to grips with the problem of force balance. That is, he must constantly assess and reassess how much of each element is required to achieve the maximum military worth possible with the tac air dollars that will be available over time. What makes the task difficult is the need to consider
—the force elements already in the inventory and committed (funded) for development and production; that is, the sunk costs. How long do these systems last, and how well will they perform vis-à-vis the projected threat?
—the nebulous criterion against which the effectiveness of tac air forces must be measured. Who is the enemy against whom we should size the force? How long will the war last? How much will our allies and the other services contribute to the outcome of any given war? Do we try to win the war or just keep from losing it? In other words, what is adequate security?
—the dollars available for research, development, test, and evaluation (RDT&E), procurement, annual operations and maintenance (O&M), and manpower; and the potential “cost growth” of new systems. While the amount of money to be made available for tac air forces can be estimated for the near term, it certainly cannot be for the far term. It is highly probable that the level of funds for tac air will decline rather than increase. At the same time, the cost of new systems is bound to increase, primarily for two reasons: (i) the increased performance requirements necessary to counter the projected threat and (ii) inflation. Indeed, not only does the new system always cost more than the system it replaces, but the last version of a system invariably costs more than the first version.
All these complexities and imponderables obviously have to be addressed in planning the future tac air force. For this reason sound judgment, based on knowledge of the many factors involved and past military experience, is a necessary ingredient in the process of developing future force structure.
At this point the reader is probably disappointed in not having been told “explicitly how” force planning is done in the Air Staff. And we must admit that we have only addressed the theoretical aspects involved—goals, approaches, complexities, imponderables, and judgments. In the remainder of this article we will highlight the most important problem the force planner faces in the real world: cost control. Then, perhaps, the reader will understand why we can’t say explicitly how force planning is done.
In August 1971 Dr. John Foster, Director of Defense Research and Engineering, spoke on the Defense budget to the students at the Industrial College of the Armed Forces. The main thrust of that talk had to do with the course of action the President and Secretary of Defense have taken to carry out national policy in the face of political, economic, and military realities.9 To summarize some of the specific realities, Dr. Foster mentioned:
Dr. Foster went on to outline the course of action being taken. He said that DOD would have to live with the seven percent allocation of the GNP, which would mean smaller forces and fewer military and civilian personnel. The Secretary of Defense, being obliged to choose between two force-structure alternatives—either a small force with current equipment or a smaller force with more modernization—had made the decision to modernize. Under this force-structuring philosophy, many changes have been and are being made in the weapons planning and acquisition process, to insure that costs are kept down without loss of force effectiveness. In his concluding remarks, Dr. Foster stressed the idea that what is needed most of all is a de-emphasis on large, complex, sophisticated systems, with more emphasis on innovation and new concepts.
the need for cost control
Dr. Foster has continued to take every opportunity to point out the cost-control dilemma to industry as well as the military departments of DOD. In August 1972, speaking on the cost of defense systems, he stated: “. . . it is urgent that you understand the crunch is now. We can no longer continue to buy adequate quantities of needed weapons if the unit procurement and lifetime costs of those weapons continue to soar.” He went on to label both alternatives as unacceptable—either buying a very small number of sophisticated (expensive) weapon systems or allowing our forces to remain equipped with aging, obsolescent hardware. New policies regarding weapon system acquisition must be understood and followed, he said, and a crucial element of these new policies is cost control. He then explained that we would have to accept “less than the best” if “the best” could not be procured in adequate numbers:
Within our fiscal constraints, what is really best is the right combination of individual quality and sufficient numbers. And so our objective is the “best” in this broader context and not individually best—which is the narrower view.
Cost control becomes crucial. Therefore “advanced technology must be used deliberately to hold costs down, not to add performance at any price.” He emphasized that setting the right cost ceiling is difficult but essential, and making that ceiling stick is equally essential:
The ceilings will not be met if the new policies are accepted only grudgingly or if people fight the policies. Some in government and industry would like to stick to their present ways—not design to unit cost but design “the best” on an individual basis and hope that the taxpayers will somehow keep paying.
But let me tell you, as the Congress has told me: The taxpayers will not pay an open-ended bill. If costs per unit are high, the public—through the Congress—will restrict the number of units; and already numbers of essential systems are barely marginal.1
In subsequent briefings presented to the Air Staff, members of Dr. Foster’s staff have asserted that there is no way to reallocate resources within foreseen budget limitations to match currently planned force levels with currently planned equipment costs and at the same time retain technological superiority in all our forces. Several solutions to the dilemma have been proposed:
1. Reduce planned force levels.
2. Stress continued product improvement of existing types of
systems to avoid costly startups of new programs.
3. Arrest cost growth associated with continuously expanding
requirements.
4. Adopt a “HI-LO Force Mix.”
Proposal number 1 requires no explanation, and number 2 simply says that we would make what we have better (e.g., by adding leading-edge slats to the F-4E to improve maneuverability).
As for number 3, with each new system we invariably increase performance characteristics, such as payload, range/endurance, and accuracy, the better to counter the projected threat and increase the probability of survival of our crews and equipment. These increasing requirements represent the largest source of cost growth.
To adopt a HI-LO Force Mix would involve planning a balanced force consisting of relatively few high-performance systems and large quantities of simple low-total-cost systems. The small elite force would be designed with technologically superior capabilities to counter the best opposing system in the enemy’s projected arsenal. It would be complemented by the larger force made up of austere systems acquired in large quantities to be deployed against a less complex but numerically stronger force.
Design-to-Cost concept
The concept proposed by Dr. Foster to control cost of new defense systems is called “Design-to-Cost.” It requires that a unit production cost ceiling be established as a primary program consideration from the inception of every system-acquisition program. And that unit cost must be “affordable” in terms of the projected budget. In defining the unit-cost target of a weapon, Design-to-Cost would recognize the potential enemy threat, available resources, and the inevitable relationship between new weapon unit costs and how many of that weapon DOD can buy.
General John D. Ryan, USAF Chief of Staff, in relating his views on the Design-to-Cost concept, stated that, more than ever, emphasis must be placed on cost during the consideration of requirements, performance, schedule, and cost trade-offs and that realistic decisions must be made. He said that this concept offers a partial solution to the problem of cost control
. . . if it is selectively applied to those programs where it makes sense to do so. Selective applications of the concept, plus the many innovative procedures and techniques that the Air Force has and is implementing, can, we think, move us substantially closer toward the realities of the projected budget constraints. (Emphasis added.)11
While General Ryan agreed that cost goals should be established as early as possible in the development of new weapon systems, he stated that the rigidity and credibility of these goals depend on (i) the risk of the development to be undertaken, (ii) the objective of the program, and (iii) the threat to be countered. He said that these considerations are evident in two tac air programs now under way—the A-X and the lightweight fighter.
On the subject of quantity versus quality, General Ryan said we are paying particular attention to the early phases of a program, when we set system requirements. We are trying hard not to overspecify—complexity leads to higher costs. At the same time we do not always want to substitute quantity for quality, which can happen unless we constantly keep in mind what the minimum capability of a system must be.
Regarding the HI-LO Force Mix concept, General Ryan had this to say:
. . .the Air Force must acquire the best possible combination of weapons to perform its role defined by the national authority. The Air Force indorses a planned, balanced force of high performance, technically superior weapons to counter sophisticated enemy threats, complemented by sufficient quantities of’ relatively simple and inexpensive weapons to defend against a greater numerical threat of similar weapons.
General Ryan went on to say the Air Force has recognized the advantages of a HI-LO Force Mix by developing the F-15 as the HI part of the force mix, to operate against the more sophisticated enemy threat such as the Foxbat, while at the same time developing the austere A-X that will allow us to buy sufficient quantities to deploy against less complex but numerically stronger forces. An example of the HI-LO concept would be the use of an F-15 force to provide the air superiority required to operate the A-X in situations where enemy air forces could impede successful close air support operations.
It is important to note that the Design-to-Cost concept of force planning is relatively new, and much study is needed, both by the Office of the Secretary of Defense and the services, to make it work. Of one thing we can be sure: the realities of national economics argue strongly for this concept to be more than just a new cost-reduction program, soon to be forgotten by a new Secretary of Defense.
In this article we have addressed the who, when, where, and how of force planning in the Air Force. By combining some aspects of both the cost-effectiveness and the superior-performance approaches to force planning with reasonable cost-control methods and the proper amount of subjective military judgment, Air Force planners can, we believe, develop the Air Force required to counter the projected threat within the defense dollars that will be available in the years ahead.
Headquarters United States Air Force
Notes
1. Speech by President Nixon in San Francisco as reported in U.S. News and World Report, 16 October 1972, pp. 100-101.
2. Department of Defense (Comptroller), The Economics of Defense Spending, A Look at the Realities (Washington. D.C.: Government Printing Office, July 1972), p. vii.
3. Earl C. Ravenal, “How Much for Security?” Washington Post, 24 September 1972, p. 114.
4. Seymour Melman, “The Defense Budget: Does Security Compete with Domestic Needs?” Perspectives in Defense Management (Washington, D.C.: Industrial College of the Armed Forces, spring 1972), pp. 7-8.
5. U.S. Congress, Senate, Committee on Appropriations, Hearings, Department of Defense Appropriations for Fiscal Year 1973, 92d Cong., 2d Sess., Part 1, 1972, p. 12.
6. Ibid., p. 15.
7. The official source document for the PPBS is Department of Defense Instruction (DODI) 7045.7, “The Programming, Planning, and Budgeting System,” 29 October 1969; however, this instruction does not establish a calendar of PPB activities.
8. Dr. Milton G. Weiner, head of the Military Operations Group, the RAND Corporation has been involved directly and indirectly in the analysis of force structure since the early 1950s. In preparing this article, I asked Dr. Weiner to relate to me his thoughts on the complexity of tac air force planning. For a more thorough discussion on the many considerations in force planning, the reader is referred to E. S. Quade and W. I. Boucher, eds., Systems Analysis and Policy Planning: Applications In Defense (New York: American Elsevier, 1968), Chapter 21, written by Dr. Weiner and L. H. Wegner, pp. 388-417.
9. Dr. John S. Foster, Jr., “The Defense Budget: Realities of Deterrence and Strategic Priority,” Perspectives in Defense Management (Washington, D.C.: Industrial College of the Armed Forces, Spring 1972), pp. 1-5.
10. Speech by Dr. John S. Foster; Jr., before the Armed Forces Management Association/National Security Industrial Association Symposium, Washington, D.C., 16 August 1972.
11. Speech by General John D. Ryan at the Arlie House Conference (Warrenton, Virginia) on 29 September 1972, following a speech by Mr. Leonard Sullivan, principal deputy to Dr. Foster, on the Design-to-Cost concept.
Colonel Edward Stellini (M.S., George Washington University; M.S., University of Rochester) is Chief, Tactical Systems Division, ACS/Studies and Analysis, Hq USAF. He has been a crew training instructor in reconnaissance, a flight examiner in tactical fighters, and an operations staff officer at Hq USAF and Hq Military Assistance Command, Vietnam. Colonel Stellini is a graduate of Squadron Officer School, Air Command and Staff College, and the Defense Systems Analysis Program.
Disclaimer
The conclusions and opinions expressed in this document are those of the author cultivated in the freedom of expression, academic environment of Air University. They do not reflect the official position of the U.S. Government, Department of Defense, the United States Air Force or the Air University.
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