Department of the Army Historical Summary: FY 1971


Management, Budget, and Funds

Management is the process of establishing and attaining objectives to carry out responsibilities. It consists of the variety of continuing actions that are required to plan, organize, co-ordinate, control, and evaluate the use of men, money, and materials to accomplish missions and tasks.

Organizational Developments

There were several organizational developments during the fiscal year that were of some significance. At the department level the importance of the shift away from dependence upon the draft and toward a volunteer Army was recognized with the designation by the Chief of Staff, on October 28, 1970, of the Special Assistant for the Modern Volunteer Army (SAMVA). Three days later this special assistant was issued a charter outlining his mission under the Modern Volunteer Army Program: to establish conditions that would contribute to the effectiveness of the Army while reducing reliance on the draft; to raise the number and quality of enlistments and re-enlistments; to promote service attractiveness and career motivation; and to provide for a standby draft law to meet national emergencies. The SAMVA office developed a program for the modern volunteer army outlining actions, incentives, priorities, requirements, experiments, funding, and goals for fiscal years 1971 and 1972.

For the second time within a five-year period, two of the continental armies were merged. As the year closed, the Fourth and Fifth U.S. Armies were consolidated, and their headquarters merged as the Fifth U.S. Army at Fort Sam Houston, Texas. The Fourth Army was inactivated effective June 30, 1971, and the Fifth Army became responsible for an area embracing fourteen states (see chapter 2), while activities in Colorado, the Dakotas, and Wyoming were transferred to the Sixth Army at San Francisco.

Another organizational move grew out of the recommendations of the Special Review (Parker) Panel on Department of the Army Reorganization. Noting that the Military District of Washington (MDW), because of its location and special mission as a headquarters command for the Department of the Army, deals directly with the department and other government agencies in the national capital region, the Parker Panel recommended that the Continental Army Command (CONARC) be relieved of command responsibility for MDW.


On May 22, 1971, a plan was approved under which MDW would become a major Army field command effective July 1, 1971, reporting directly to Headquarters, Department of the Army.

Management Programs and Systems

During fiscal year 1971 the master plan for Army management systems was revised to provide a basic tool for controlling the development, evolution, and operation of Army management systems through the five-year period from 1972 through 1976. The plan will insure that an approved and defensible basis exists for management information systems planning, programing, budgeting, and resource allocation.

A number of automatic data processing systems progressed during the year. The Base Operating System (BASOPSO), the Army's first multicommand and multifunctional computer system, was operating at fourteen CONARC installations as the year closed. It is designed to meet managing and reporting requirements at the installation level and to standardize computer applications and procedures, not only in CONARC but at oversea installations as well. The initial applications are military personnel accounting, supply, and finance.

The first phase of the Army Materiel Command Logistics Program Hardcore Automated (ALPHA) became operational on May 1, 1971. This program is a standard system for the wholesale inventory management operation at the commodity command level within the Army Materiel Command; later phases are to be completed by January 1972 at the prototype installation, the Aviation Systems Command at St. Louis, Missouri.

Conversion from the service number to the social security number for identification of military personnel increased the need for effective controls over registration, correction, and changes in names and social security numbers throughout the Department of Defense, especially in automated data files. The Army was directed to develop a social security number (SSN) verification procedure to be used by all the services. The procedure, known in the Army as the Social Security Number Central Registry System, verifies social security numbers through comparison with the automated individual records of the Social Security Administration. This comparison, in conjunction with other internal Army controls imposed under the Central Registry System, will increase the accuracy of SSN data. Agreements concerning verification procedures were reached with the Social Security Administration, and verification of the social security numbers with Army personnel and finance systems proceeded during the year.

Modern computer technology and management practices were al-


so applied to the development during the year of a number of new personnel models that would provide more accurate and timely personnel information. Among the areas addressed were the Comparison of Manpower Programs using Linear Programming (COMPLIP), a model to estimate the number of personnel projected to be in the Army's trained strength, basic and advanced individual training programs, and the Reserve Enlistment Program; the Personnel Inventory Analysis (PIA), a model to provide management planners with a means to project the status of the Army's personnel inventory as related to force structure; the Student Instructor Load (SIL), a model to predict the number of students that will enter Army service schools; the Military Personnel Army Budget Models Program, to cover six elements of personnel activity; the Simulation of Personnel Operation (SIMPO), a series of models to simulate policies and operations of the personnel system; and the Data Element Cost Model, to estimate acquisition and maintenance data costs.

The systemwide project for electronic equipment at depots extended (SPEEDEX), an information system for use at continental U.S. Army Materiel Command depots, was operational during the year at the Letterkenny Army Depot at Chambersburg, Pennsylvania. Approval was given in February 1971 to extend it to additional depots. The system is being designed by the Materiel Command's Logistics System Support Agency.

Another ongoing program in the logistic field was the USARPAC Standard Supply System, a theater depot and inventory control center for supply and related financial data processing. During fiscal year 1971, RCA Spectra 70 computers were selected to replace existing IBM equipment at six locations within U.S. Army, Pacific. An evaluation of the prototype installation in Hawaii was completed in June 1971, and the new computers will be installed at the other sites during fiscal year 1972.

The automated system for Army commissaries, which would mechanize nine basic commissary applications at the installation level, progressed during the year. Concepts were developed and tested at field installations during 1966-1967 and were developed by contractors during 1970. Prototype testing by the Army Materiel Command and the Continental Army Command was completed at 2 installations in May 1971, and the system is scheduled to be installed at 101 installations Army-wide during fiscal year 1972.

The Corps of Engineers Management Information System (COEMIS), to standardize comptroller, personnel, resource allocation, and real estate management in engineer division and districts in the continental United States, completed prototype application in the South Pacific division at San Francisco, California, during the year


and on May 6, 1971, was approved for extension to the eight other division centers, beginning with the North Central division at Chicago, Illinois, in December 1971.

In Europe, the operating system of the military districts of the U.S. Theater Army Support Command embraces four major subsystems—logistical management, financial management, maintenance management, and property book. During the year, steps were under way to replace leased equipment with government-owned equipment at seven installations. Test equipment was installed in April 1971 at the Sued Bayern district.

During the year division-level Combat Service Support System (CS3) completed prototype testing at Fort Hood, Texas. The system provides an Army-wide standardized and automated logistics, personnel, and administrative system for Army division support. As the year closed, work was in progress to correct certain deficiencies revealed by the test, and a study had been completed to determine manpower requirements.

The Department of Defense Integrated Management Engineering Systems (DIMES) review schedule for fiscal year 1971 included seven Army activities. A joint service DIMES implementation review at Sharpe Army Depot, California, in September 1970 was the first comprehensive appraisal within the Army with primary attention centered on management use of work measurement standards in work planning and control, manpower, and budget determinations. A number of problems were identified. The Army Materiel Command developed a plan that would respond to recommendations for corrective action. Four priority areas were established which would be covered by standards by the end of the fiscal year: supply, supply management, maintenance, and base accounts. The Army Materiel Command plan was forwarded to all field commands as a model to be followed in implementing DIMES. All other DIMES reviews were canceled.

Activities continued under the Logistics Performance Measurement and Evaluation System (LPMES) during the year. Established in 1969 as a means by which to concentrate management improvement actions on persistent problems in the logistics field, the LPMES expresses performance in units, percentages, dollars, items, and other terms applicable to an area under consideration, with comparisons made against a base period and established goals. Seventeen problem areas were under system management during the year, paced by ninety-two performance indicators; thirty-three of these were considered to be primary, with corrective action to be completed in fiscal year 1971.

A comprehensive study of the policies and principles of interservice, interdepartmental, and interagency support was completed during the past fiscal year. In implementing study recommendations, the Army


emphasized the cost benefits to be realized through this kind of support. As the year closed the Army was participating in a multiservice effort to develop joint regulations that would permit installation commanders to respond more effectively to requests for interservice support.

The Army, indeed, has taken a leading role in proposing Defense-wide policies and in negotiating and executing interservice agreements in the field of common logistics support. The Army has proposed that resources allocated to common logistics support arrangements be fully recognized within the program-budget process; that expansion of common logistics support arrangements be premised on efficiency and economy; that existing roles and missions be changed to further interservice support relationships; and that any logistic function performed within the Department of Defense be assigned to one component as a mission responsibility for support of all others. This approach was presented in April 1971 to the Military Logistics Council, and an ad hoc group formed by that body concluded that retail interservice support should be the initial area in which to expand common logistic support arrangements, using as a medium the Defense Retail Interservice Logistic Support (DRILS) program.

The Army Commercial and Industrial Activities Program was an important vehicle during the year in the search for efficient and economical ways of carrying out Army functions under increasingly austere conditions. Because of fund and manpower constraints, major commands appraised functions and performance alternatives to determine ways to save money. In some cases, operational changes sparked both local and national interest because of personnel reductions or contract terminations.

During the fiscal year a civilian career program for transportation management was established. It will provide an orderly input of interns, a formal training plan for all career levels, and a career referral system for selection of candidates to fill vacant transportation positions Army-wide. Also during the year a Department of the Army career planning board met and recommended an expansion of the present Equipment Specialist Civilian Career Program into a comprehensive Materiel Maintenance Management Career Program. The program incorporates formal intern recruitment and training that will enable the department to narrow the age and education gap that now exists in the maintenance management work force.

The report of survey covering lost, damaged, or destroyed property was reviewed during the year, and a number of changes were made to reduce manpower requirements and facilitate the processing of surveys. Under new procedures, a report of survey will not be required in order to waive accountability for lost or damaged organizational prop-


erty nor will an individual be held financially liable and be required to pay for it. A commanding officer will be authorized to sign a certificate stating that the property may be dropped from accountability, and he will rely upon the Uniform Code of Military justice to punish the individual causing the loss or damage if it was the result of negligence or misconduct. There are, however, because of statutory requirements, two situations under which reports of survey may be required. When a service member loses or damages his personal arms or equipment and does not admit liability, a report of survey is necessary before he can be held financially liable. In the case of shortages in the accounts of an officer who is accountable for government property, an investigation by a board of officers or a report of survey is necessary to determine liability.

In June 1970 the Bureau of the Budget initiated a governmentwide effort to improve federal reporting and reduce related paperwork. In August the President established an over-all savings goal of $200 million, and while no specific goal was set for the Army, a savings of some $25 million was anticipated. Under the Army element of the program, called Project SAVER (Study to Assess and Validate Essential Reports), reports were reviewed worldwide and decisions were made to rescind, revise, or consolidate requirements at department headquarters, with estimated savings of $27.1 million. Army field command savings amounted to another $8.9 million.

To improve management practices in military units, a new instructional program for first-line supervisors—junior officers, warrant officers, and noncommissioned officers—was begun during fiscal year 1971. The program provides for instruction in methods improvement, work measurement, quality control, soldier motivation, and the management process. A pilot test was conducted in the 1st Infantry Division (Mechanized), and by year's end the training had been completed in the 82d Airborne Division and at Fort Hood, Texas. The program will be included in the curricula of Army service schools and the Command and General Staff College as well as in unit training programs.

A review of the impact of inspections, reporting requirements, and fund solicitations on morale and mission accomplishment in military units indicated that the average company- and battalion-size unit expends from 20 to 33 percent of usable unit effort meeting inspection and reporting requirements. The results of the review were circulated throughout the Army Staff to be used in connection with Modern Volunteer Army Program actions.

In fiscal year 1971 the use of analytical studies as an aid in resource allocation continued to increase. Economic analysis was especially helpful in improving resource allocation, in evaluating proposed ADP sys-


tems, in ordering priorities for major construction, and in improving the efficiency of the Production Base Support Program.

The Army also continued to rely heavily upon cost analysis to evaluate alternatives among weapon systems and force structures. In addition to conducting continuing reviews of cost estimates for weapon, support, communications, and aircraft systems, cost analysts were called upon regularly to assist in the intensified planning required by force reductions and growing fiscal constraints. Studies were undertaken to determine what portion of the Army's total obligation authority was being allocated to certain systems such as aviation, combat vehicles, and artillery. A handbook of cost methodology and procedures was published, and other handbooks were being written to provide standardized factors for use in preparing or evaluating cost estimates of both materiel and forces.

A Mark Twain Financial Information System was developed during the year, capable of displaying financial resources data in a variety of formats. The system will be a valuable tool for support of major exercises in the planning, programing, and budgeting system. Also developed during the year was a cost model for use in the Strategic Forces Options 83, with an ability to accommodate time-phasing, address triservice costs, and display cost data according to major function and fiscal guidance categories.

Continued emphasis has been placed on the improvement and analysis of selected acquisition reports. These reports serve as a management tool to bring problems to the surface and focus attention on matters requiring decisions by top management on major Army weapon and support systems.

As the year closed the Army was preparing to convert to the joint Uniform Military Pay System. Military pay personnel in the finance system were being trained through the year, old pay files were being purified, and tests were being made of the computers and programs. The new military pay system will go into effect for U.S. Army personnel in the continental United States in August; in Europe and Africa in October; and in the Pacific, Alaska, and Panama in November 1971. The cost of development, test, and first-year operations will be more than paid for in the first year of operation of the more efficient, centrally controlled system.

Budget and Funds

The Army's budget request for regular appropriations for fiscal year 1971 totaled $23,300.5 million in new obligational authority. Following reviews by the Office of the Secretary of Defense and the Bureau of the Budget, the President requested $20,943.7 million for the Army, and the Congress appropriated $20,301.1 million. The


chronological development of this budget is traced in the accompanying table.

The fiscal year 1971 column of the fiscal year 1972 budget originally included $701.9 million for military and civilian pay raises effective December 27, 1969, and for wage board and foreign national increases anticipated through June 30, 1971. Subsequently, this amount was increased to $1,060.7 million due to an additional supplemental request (HR92-73, March 23, 1971) for military and civilian pay raises effective January 1, 1971, and for wage board increases resulting from the Monroney Amendment.

Resources Conservation Program

Beginning with fiscal year 1971 the Army Cost Reduction Program was redesignated the Army Resources Conservation Program in line with policy and procedural changes in the over-all Department of Defense program. Several major changes were made in the program in order to reduce paperwork and administrative work load and to increase motivation and participation.

On January 30, 1971, the Office of the Secretary of Defense canceled its instruction on the Resources Conservation Program and assigned responsibility to the military departments and the Defense Supply Agency for complying with the Office of Management and Budget Circular A-44, "Establishment of a Management Improvement Program applicable to all Government Operations," one element of which is cost reduction. This assignment is in line with the current Secretary of Defense policy to decentralize the operative aspects of program management to the individual services.

Under its new authority, the Army announced changes in the program, such as the modification of certain rules which previously precluded acceptance of savings actions, and the assignment of responsibility for assuring the validity of savings to commanders instead of the U.S. Army Audit Agency.

The 1st Logistical Command, U.S. Army, Vietnam, received a presidential plaque for its outstanding accomplishments in reducing costs and improving management in a combat environment. In addition to this award, the Army received presidential certificates for twenty individuals and one organization in recognition of contributions to improve management and efficiency in government.

Progress in the Resources Conservation Program continued during fiscal year 1971 when $638.2 million was saved against a goal of $346 million. The actions taken in fiscal year 1971 were estimated to have a three-year saving effect of $1,253 million. Several examples illustrate participation in the program.



(In millions of dollars)

Program Element

DA Submission to OSD

President's Budget


Supplemental Budget Enacted

Military personnel, Army





Reserve personnel, Army





National Guard personnel, Army





Operation and maintenance, Army





Operation and maintenance, Army National Guard





National Board for the Promotion of Rifle Practice





Procurement of equipment and missiles, Army





Research, development, test, and evaluation, Army





Subtotal excluding construction





Military Construction, Army





Military Construction, Army Reserve





Military Construction, Army National Guard





Subtotal, construction accounts





Total budget authority





a Figures may not add due to rounding.



(In thousands of dollars)


Fiscal Year 1969

Fiscal Year 1970

Fiscal Year 1971

Military personnel, Army




Reserve personnel, Army




National Guard personnel, Army




Operation and maintenance, Army




Operation and maintenance, ARNG




National Board for the Promotion of Rifle Practice




Procurement of equipment and missiles, Army




Research, development, test, and evaluation, Army




Military Construction, Army




Military Construction, AR




Military Construction, ARNG




Defense production guarantee




Army Stock Fund




Army Industrial Fund




Army Management Fund








Army Trust Fund




Trust revolving funds




Miscellaneous receipts




Total budget outlays




Fin and nozzle assemblies for the 2.75 rocket motor were procured as complete assemblies. A study was made to determine the possible advantages of purchasing complete assemblies as compared with purchasing fin blades separately and furnishing them to contractors for inclusion in the total assembly. As a result of this study, fin blades are now purchased separately, with resultant savings of $230,700.

By using a newly developed loading technique which increases the carrying capacity of the C-141 aircraft from two helicopters to three, the Army saved $732,000 in air shipment costs to Vietnam in the first eight months of fiscal year 1971.

Cost Analysis and Audits

The U.S. Army Field Operating Cost Agency conducted a data-collection trip in Germany, Korea, and the continental United States during the fiscal year. Direct operating costs were computed for the 2d and 7th Infantry Divisions and for selected I Corps units in Korea. As the year closed a unit readiness reporting cost model was nearing completion which should provide Army planners with a tool for determining force unit readiness level costs. In addition, direct operating costs were being developed for all active Army divisions.

The agency also collected and analyzed field data from Korea, Germany, and Vietnam. Emphasis was placed on aircraft operating costs. The costs per flying hour were developed by geographical area for fixed- and rotary-wing aircraft.

In Vietnam, operation and maintenance cost factors were devel-


oped based on U.S. and Vietnamese Regional and Popular Forces combat strength. A comparison was made of the costs of a Vietnamese Army and U.S. Army division slice.

During the fiscal year the U.S. Army Audit Agency assumed responsibility for auditing 75 percent of the officer and noncommissioned officer open messes and clubs. Initial audits were to be completed by June 1972, with annual audits to follow. Since audits of open messes differ from normal mission-type audits, it was necessary to develop new audit techniques, to expand auditor training, and to perfect audit guides. By midyear these requirements had been met, an addition to the audit manual had been published, and a firm schedule of open mess audits had been undertaken. In April 1971, a bulletin on lessons learned from early audits was issued to major commanders Army-wide. By the end of the fiscal year the Army Audit Agency was on schedule for the initial audits of Army open messes, lessons learned were being applied by commanders, and the internal controls over open mess operations were being significantly strengthened.


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