Department of the Army Historical Summary: FY 1986


Organization, Management, and Budget

The limits on the active Army's end strength, the need for high quality in men and equipment, and the most extensive peacetime military modernization in the nation's history-these elements combined to focus attention on the Army's stewardship of its resources. Several changes in organization during the year, and a variety of management programs, continued the Army's efforts to make the most of what it received to carry out its mission.


A realignment of the functions of The Adjutant General Center and the U.S. Army Military Personnel Center (MILPERCEN) neared completion as the fiscal year ended. Under the new arrangement, soldier sustainment and separation will become the principal focus of The Adjutant General, who will serve as a director within MILPERCEN. Soldier services for which The Adjutant General will be responsible include military awards, retirement and separation, civil education incentives,. and the administration of the physical disability program. Although most of these services previously came under the purview of MILPERCEN, the Office of the Deputy Chief of Staff for Personnel and other elements of the personnel community also performed some of them. The Adjutant General was expected to retain staff supervisory responsibility for the U.S. Army Physical Disability Agency, the Military Postal Service Agency, the Institute of Heraldry, the Armed Forces Courier Service, and the Environmental Support Group.

In late 1985 and early 1986, the Army continued to build upon the directions set forth in the Army Space Policy that was published in June 1985. Elements of the Army staff were reorganized and the Directorate for Space and Special Weapons


was established within the Office of the Deputy Chief of Staff for Operations and Plans as a responsible staff focal point for space.

June 1986 marked the establishment at Fort Leavenworth, Kansas, of the U.S. Army Space Institute. Representing the Army user community, the institute develops and integrates space-related concepts and doctrine across various mission areas. Part of the U.S. Army Training and Doctrine Command (TRADOC), the institute assists TRADOC centers and schools in defining requirements for space-related doctrine, training, organization, and materiel. In addition, in conjunction with these centers and schools, the institute develops and disseminates space concepts, doctrine, techniques, and procedures that deal with the application of space systems and technology to land warfare. As the personnel proponent in its subject area, the new entity manages Army personnel who have special space-related training. An important aim of the institute is to help bring about acceptance of a program in which the Army would play the major role in the design and launch of space satellites geared to the needs of ground commanders. Uses of such satellites would include intelligence and weather reconnaissance.

In August 1986 the United States Army Space Agency (USASA) was activated provisionally at Colorado Springs, Colorado. The USASA, which is under the operational command of the United States Commander in Chief, Space, and is a field operating agency of the Office of the Deputy Chief of Staff for Operations and Plans, provides an Army organization analogous to the Air Force and Naval Space Commands, which are components of the United States Space Command (USSPACECOM). The USASA will give USSPACECOM an Army perspective on planning for Department of Defense space system support to land forces; coordinate Army space-related operational requirements; ensure integration of Army requirements into USSPACECOM planning and operations; maintain the Army Space Master Plan; and represent Army interests in the development of strategic defense planning.

A new element of TRADOC established during the year at Fort Monroe, Virginia, sets its sights on a more terrestrial goal. The Army Writing Office seeks to improve the writing style of Army personnel by eliminating "bureaucratese" and replacing it with lucid, crisp prose. Revision or replacement of verbose, unclear Army manuals and regulations is one means of achieving the aim. Another is liaison with instructors,


throughout the Army school system, who are in a position to influence the writing habits of Army personnel.

In October 1985 the Second U.S. Army activated the first Army Reserve military intelligence command at Fort Gillem, Georgia. All but one of the twenty-one Army Reserve intelligence units in the Second Army came under the new command. Within months of its activation, the command was proving its worth to reserve military intelligence unit commanders through its understanding of their problems and its ability to provide expanded training opportunities.

The Army's security assistance function, previously shared by the Deputy Chief of Staff for Operations and Plans and the Deputy Chief of Staff for Logistics, was consolidated at Headquarters, Department of the Army, under the Deputy Chief of Staff for Logistics. This change was designed to provide a focal point for the control, management, and development of policy central to the United States military-to-military relations with its allies and with friendly countries.

On 10 December 1985 the Secretary of Defense designated the Army as the executive agent for all Department of Defense activities celebrating the bicentennial of the U.S. Constitution. The Secretary of the Army directed the formation of an executive committee and an operational committee, or working group, to coordinate the Department of Defense's involvement in the bicentennial celebrations. The work of these two committees produced the Bicentennial Defense Logo and many events, such as a military demonstration at Fort Meade, Maryland, in celebration of the Annapolis Convention, the dedication of the Soldier-Signers of the Constitution Corridor in the Pentagon, and the publication of the U.S. Army Bicentennial Series.


In fiscal year 1986 the U.S. Army Audit Agency issued 340 audit and advisory reports that identified $2.6 billion in potential monetary benefits. By year's end, management had agreed with recommendations that could result in benefits of $1.6 billion. The audit reports included eighty-two formal multilocation summary and participating site reports that addressed acquisition, research and development, data processing, financial management, logistical resources and support, supply and maintenance, reserve components, and personnel training and support. Also included were thirty-one advisory reports, issued


to Army staff and field commanders, that pointed out common problems in programs and operations reviewed in recent audits. The advisory reports suggested actions to correct similar problems that may exist at other installations and activities. In providing further assistance to the Army, the agency accepted forty-eight requests for audit from the Army secretariat and staff, various Army commands, and other federal offices.

There were major changes taking place in the way the U.S. Army Audit Agency does business as a result of the automation of many audit and administrative functions. The agency was in the process of acquiring a shared-logic office automation system in order to improve automation support to all Army personnel. The system will consist of minicomputers, personal computer workstations, terminals, portable computers, printers, and associated software. When implemented, the system will allow agency employees to automate many of their day-to-day tasks and should result in increased productivity.

During the year the Army institutionalized a standard installation structure with standard core functions. This culmination of a concerted effort to improve installation management should have many benefits: facilitating the transition from peace to war by ensuring adequate support to the reserve component units that will replace deploying active units during mobilization; linking organizational and functional requirements to the planning, programming, budgeting, and execution process, so that the Army can develop acceptable performance factors and results for each core function and can measure resources applied against results achieved; providing consistent and predictable support to Army personnel and their families; developing standard management and information systems for use at all Army installations; increasing the efficiency and effectiveness of installation base operations; and assisting in the development of a cadre of professional managers to operate Army installations.

The Model Installation Program continued to produce very positive results, eliminating obsolete procedures and encouraging money-saving ideas. Operating at a total of ten installations, the program has generated approximately 3,000 suggested ways of improving the Army's business methods. Suggestions emanating from the program have caused changes to Army regulations and procedures that will result in better use of limited resources. On 1 October 1985 the Army National Guard began a three-year participation in the Model Installa-


tion Program under the name Model State Program. Five states, one in each Army area, were selected as test states.

In the face of the limits placed on its active end strength and its civilian force, the Army is increasingly examining methods of improving the productivity of its personnel through the use of technology. With the need to be able to deploy light forces rapidly, the service is making special efforts to improve the ratio of combat to support soldiers (commonly known as the tooth-to-tail ratio). These two initiatives are linked in several of the Army's productivity enhancement programs. 

The Army has significantly reduced the personnel and administration support structure of its corps and divisions. To accommodate these cuts, a functional redesign of the personnel and administration system was necessary. After examining every procedure in this system, a task force recommended over 500 work-reducing ideas. During 1986 the Army proceeded with the implementation of many of these suggestions.

Continued benefits accrued from the Army's participation in the Transportation Operational Personal Property Standard System, a joint service management information system designed to automate administrative functions at military personal property shipping offices. The system standardizes, through automated processes, the Department of Defense Personal Property Moving and Storage Program. In addition to increasing productivity in the handling of moves, the system improves the quality control of commercial movers, reduces claims for loss and damage, reduces the number of moves that cause financial hardship to soldiers, and significantly reduces incidents of late arriving documentation.

During 1986 the Army tested prototypes of two complementary logistics item identification systems. Logistics Applications of Marking and Reading Symbols represents the introduction of bar code 'technology into the Department of Defense logistics system. Microcircuit Technology in Logistics Applications embraces a wide range of automatic identification devices and methods of storing and transporting bulk data that does not lend itself to bar codes. Through these programs the Army expects to achieve greater accuracy, improved production flow, increased asset visibility, and reduction of documentation requirements, order and ship time, and stockage investment levels.

During the fiscal year the Army received over 1,625 ideas as a result of the activities of the Supply and Maintenance Assessment Review Team. The team's mission is to improve the


Army's logistics support by eliminating administrative burdens, streamlining current systems, taking advantage of technology, and implementing good ideas or suggestions in an expeditious manner.

At the start of the fiscal year, the Army combined the efficiency programs that review contractible and noncontractible organizations into the Organizational Efficiency Review Program. A focus on the integration of review methodology with the Manpower Staffing Standards Systems resulted in the first Army-wide study of Installation Resource Management Directorates. This study will develop staffing standards based on organizations that have first undergone an efficiency review.

To improve their use of resources, Army commanders continued to pursue aggressively productivity capital investment programs. These programs provide funds for tools, equipment, and facilities that save manpower, reduce costs, increase productivity, and improve readiness. In 1986 the programs had a return on investment of $17 for every $1 invested.

Another successful continuing effort, with an expected return on investment in 1986 of 20 percent, was the Value Engineering Program. Army contracts contain a value engineering incentive clause that encourages contractors to submit change proposals that will conserve resources. Contractors share as much as 50 percent of the net reductions in contract costs that result from accepted proposals. During 1986 the Department of the Army instituted policy that expanded the Value Engineering Program by requiring that all project and program managers of major systems participate in the program.

Avoidance of unnecessary costs is a prime indicator of the success of the Army's selective multiyear procurement program. For fiscal year 1986 contract awards, the Army estimated a saving of approximately $773.2 million through the use of multiyear contracts. In considering candidates for these contracts, the Army uses the basic criteria established in the fiscal year authorization act: benefit to the government; stability of the requirement; stability of funding; stability of configuration; degree of confidence in cost; and confidence in contractor capability. It has proved a challenge for the Army to maintain stability of funding for multiyear contractor candidates while at the same time maintaining the management flexibility required to deal effectively with reductions in total obligation authority. In 1986 the Army approved six additional multiyear procurement programs.


Multiyear procurement is one of seven defense acquisition improvement programs. The others are program stability, economic production rates, realistic budgeting, improved readiness and support, encouragement of competition, and strengthening of the industrial base.

Program stability seeks to maintain production quantity floors for selected programs. In 1986 program stability improved considerably thanks to a new program management control system that provides intensive management for major programs. High-level agreement on program baselines, a more disciplined process of change, more clearly indicated program trends, and greater control over costs are all elements of that intensified management.

The Army continually uses economic production rate information to achieve purchases of production at the lowest possible cost. In 1986 seventeen major systems in procurement were evaluated under these criteria.

A broader implementation of realistic budgeting procedures allowed the Army to increase efficiency in its use of fiscal year 1986 funds. Individual projects included data base development, cost estimating relationships, and cost factors.

General officers and senior civilian executives reviewed working group initiatives at quarterly intervals. These reviews resulted in improved readiness of equipment.

By regulation, the Army must establish competition, where possible. All future acquisition plans must address this issue.

To improve industrial base preparedness planning, the Army has developed a milestone schedule and plan of action. Ongoing efforts include the creation of an automated data base for analysis of industrial base issues.

A key area in the handling of resources in today's Army is information management. The Information System Planning Study for Headquarters, Department of the Army (HQDA), completed in December 1982, created an information model which represented the processes, or Army resources, and information classes, or needed information, required to run the Army. Published in March 1986, AR 25-1, The Army Information Management Program, formalized a management structure and annual review system to ensure standardization, integration, timeliness, and accuracy of information to support the mission and goals of the Army. AR 25-1 required all DA echelons to prepare information models and to update them each year using the information model of the next higher echelon as a guide. Strategic, theater/tactical, and sustaining base comprise


the three major groups of Army information. The ODCSOPS, the CG, TRADOC, and each MACOM in collaboration with the DAS, will submit Information Management Plans annually for the three respective groups for approval and integration by the OACSIM into the Army's Information Management Master Plan.

The Army's goal is to design, build, and field command and control and support systems that will enable the service to operate the same in war as in peace. At the center of this effort is the need to integrate the six major functions of telecommunications, automation, visual information, records management, library activities, and printing and publishing. To this end, the Army on 1 October 1985 established the Personnel Information Systems Command, a subordinate command of the 7th Signal Command, which is located at Fort Richie, Maryland. The new command developed the concept of service centers to develop, process, store, and transmit data. Each service center is under the operational control of the serviced agency.

A large user of electronic media and information systems for computer-based instruction, the Army this year began acquiring an interactive, computer-controlled videodisc system for use in Army schools. This system will be distributed selectively to units in the field in the next fiscal year.

The Army Corporate Data Base is a physically distributed data system that will service the Army's needs for both classified and unclassified data to answer questions that cross functional lines and levels of command. In support of this system, the Army has revamped and accelerated its effort to standardize data elements and identify one proponent for each. During the year, the Army continued to develop a data encyclopedia of the standardized data elements that identifies proponents, users, and storage locations of data elements, as well as their definitions. The Army Corporate Data Base will permit decision-makers and action officers to do their work from an organizationally integrated perspective.

There is a major shortfall in the Army's advanced computing capability for support of weapons system design, modeling, and simulation. With the advanced technology of supercomputers, significant improvements can be made in developing weapons to defeat new Soviet armor, improve armaments, air defense, conventional munitions, and battlefield nuclear weapons, and provide a realistic chemical defense. The Army's proposed solution to the shortfall is to acquire supercomputers competitively. To satisfy immediate requirements, the Army in


September 1986 acquired a machine that, while possessing only an interim capability, was easily available. The contract for this procurement contained an option for a second configuration; additional configurations are programmed at the rate of one each year until Army requirements are satisfied. Through fiscal year 1991 the estimated cost of the program is approximately $200 million.

A decade ago, the Army established the Continental Army Management Information System (CAMIS) to meet the requirements for mobilization and information management for the reserve components. A restructuring of the system in August 1986 divided the system into three modules to support, respectively, Mobilization Command and Control Two, the Standard Army Multi-Command Management Information System (STAMMIS), and Unit Automation. On 4 September 1986 the Army redesignated CAMIS as Mobilization Command and Control Two, an application of software that is intended to integrate existing and planned software primarily between tiers two and three, or organizational information resources and the individual information user, of the total Army's automation architecture. This range includes STAMMIS; the Army National Guard Management Information Systems, Mobilization; and the United States Army Reserve Management Information Systems. Mobilization Command and Control Two will operate within STARNET, the sustaining base telecommunications network that will provide worldwide telecommunications for the Army.

Once created, information of a sensitive nature must be secured. As a result of a rash of espionage incidents involving members of the Department of Defense in fiscal year 1985, the Army placed increased emphasis on counterintelligence and security countermeasures. The Army's program to counter subversion and espionage directed against the Army continued to produce exceptional results, with nearly five hundred incidents reported during fiscal year 1986. A 33 percent increase in confirmed hostile intelligence contacts reflected the continuing aggressiveness of the Soviet Union and other hostile governments. The Army expended considerable effort in implementing the security improvements recommended by the Commission to Review DOD Security Policies and Practices (Stilwell Commission).

Foremost in this Army effort was the Department of the Army Command Inspection. In November 1985 the Secretary of Defense directed the military departments and defense


agencies to conduct a one-time, top-to-bottom security inspection. The purpose was to determine if relevant security policies and procedures were well understood, observed in practice, and enforced. The Department of the Army conducted the inspections between January and July 1986. HQDA formed two inspection teams; one inspected each major command headquarters, the other each major HQDA staff agency. Those headquarters and staff agencies, in turn, inspected their subordinate commands and field operating agencies, and provided overall assessment reports to the Office of the Assistant Chief of Staff for Intelligence (OACSI), HQDA. The OACSI submitted a consolidated report to the Secretary of the Army on 1 October 1986. The inspection report disclosed no major security problems that required action by the Secretary of Defense. In general, the Army security program was found to be in fair condition, with classified information being properly protected. Sensitive compartmented information activities and the general information security program received good ratings. Automated security, communications security, and personnel security were found to be in need of much improvement. As a result of the command inspection, the Army staff and the major commands initiated actions to correct the noted vulnerabilities and weaknesses.


In the absence of a formal appropriations bill, the Army at the beginning of the fiscal year relied for its operations and maintenance appropriations on a continuing resolution. The resolution funded operations and maintenance through 19 December 1985, at which time Congress enacted the Department of Defense appropriations bill. The 1986 operations and maintenance appropriation of $18.975 billion was slightly higher than fiscal year 1985 obligations, which totaled $18.66 billion. Actual obligations for fiscal year 1986 were $19.004 billion.

The Gramm-Rudman-Hollings Act reduced the operations and maintenance appropriation by $961 million or approximately 5 percent of the appropriated amount. This loss of almost $1 billion caused reductions in unit training, flying hours, depot maintenance overhauls, and repair of real property. Additionally, levels of effort in communications, recruiting, administration, and base operations support were reduced. Finally, the Army adjusted its program priorities on the basis of guidance provided by a joint Army staff-major command con-


ference, co-chaired by the Comptroller of the Army and the Deputy Chief of Staff for Operations and Plans, that was held early in January 1986.

Like Gramm-Rudman-Hollings, foreign currency fluctuations caused a substantial adjustment to the appropriation's total obligation authority. The strong U.S. dollar of fiscal year 1985 was replaced by a much weaker one in 1986. In Germany alone the dollar fell from a budgeted rate of 3.73 DM to one dollar to almost 2 DM to one dollar by the end of fiscal year 1986. Although the foreign currency fluctuation account provided relief, a transfer into operations and maintenance of approximately $891 million was still required.

The fiscal year 1986 budget, which granted the Army $75.4 billion-compared to $73.5 billion in the previous year-enabled the Army to continue its progress in correcting decade-old deficiencies and improving force readiness. A comparison of fiscal year 1986 funding and the Army projection in the president's fiscal year 1987 budget is shown in Table 4.


($ in millions)

   FY 86    FY 87
Military Personnel    27,691    28,193
Retired Pay Accrual    (6,682)    (6,871)
Military Personnel, Army    22,358    22,982
Retired Pay Accrual    (5,468)    (5,918)
National Guard Personnel, Army    3,163    3,077
Retired Pay Accrual    (716)    (575)
Reserve Personnel, Army    2,171    2,134
Retired Pay Accrual    (498)    (378)
Operation and Maintenance    22,436    24,034
Operation & Maintenance, Army    19,009    20,301
Operation & Maintenance, Army National Guard    1,573    1,743
Operation & Maintenance, Army Reserve    742    774
Army Family Housing    1,111    1,212
National Board for the Promotion of Rifle Practice    1    4
Investment    ACTUAL    ESTIMATE
Procurement    17,774    15,998
Aircraft Procurement, Army    3,351    2,780
Missiles Procurement, Army    2,762    2,207
Weapons & Tracked Combat Vehicles Procurement, Army    4,267    3,804
Ammunition Procurement, Army    2,375    2,087
Other Procurement, Army    5,019    5,119
Research, Development, Test, and Evaluation    4,563    4,557
Military Construction    1,928    1,871
Military Construction, Army    1,524    1,263
Military Construction, Army National Guard    97    141
Military Construction, Army Reserve    58    87
Army Family Housing Construction    249    380
Stock Fund    378    110
Stock Fund War Reserve    378    110
Peacetime Stock Fund Inventories    0    0
TOTAL PROGRAM    74,769    74,762

Note: Columns may not add due to rounding.
1 Procurement figures for FY 87 are estimated.



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