Department of the Army Historical Summary: FY 1985


Organization, Management, and Budget

The Army's efforts to mold its combat forces to successfully meet any military contingency are complemented by the Army's striving to organize its administrative and support structure to provide more effective and efficient management of all Army resources at all levels of command.


At Headquarters, Department of the Army, a major change in the Army Secretariat involved the disestablishment of the position of Assistant Secretary of the Army (Installations, Logistics, and Financial Management) and the establishment of the positions of the Assistant Secretary of the Army (Financial Management) and the Assistant Secretary of the Army (Installations and Logistics), making a total of five Assistant Secretaries. Major responsibilities of the Assistant Secretary (Financial Management) included the Army Planning, Programming, Budgeting, and Execution System (PPBES); cost and economic analysis; management evaluation and improvement; financial systems; finance and accounting operations; and information management. The Assistant Secretary of the Army (Installation and Logistics) is responsible for logistics management; installations facilities management; environment, safety, and occupational health management; commercial activities management; contract policies, procedures, and administration related to installation operations and logistics; mobilization requirements; cooperative efforts involving the Department of the Army, District of Columbia National Guard, and the District of Columbia government; oversight of a number of activities, including the Civilian Marksmanship Program, the Kwajalein Missile Range, and Director of Military Support activities involving civilian law enforcement support, drug interdiction, domestic terrorism,


disaster relief, and civil disturbances; supervision and guidance over Military Traffic Management Command operations; and serving as the designated safety and occupational health official of the Army and principal advisor to the Secretary of the Army for safety and chemical demilitarization operations.

The Army Space Office achieved full operational status within the Office of the Deputy Chief of Staff for Operations and Plans (ODCSOPS). In October 1984, the Army Space Council met for the first time, and met three additional times during the course of the fiscal year. In other significant actions related to the Army's role in space, a new additional skill identifier was created to identify space-related positions and officers with space-related background and experience; the Army Space Policy was approved (5 June 1985) and two major studies in the area of space were initiated-the Rand/Arroyo Center Study on the Army Role in Space and the Army Space Initiatives Study.

In response to the creation of the Strategic Defense Initiative Organization within the Office of the Secretary of Defense, the Ballistic Missile Defense Organization was redesignated the U.S. Army Strategic Defense Command (USASDC) on 1 July 1985. The new command, a field operating agency of the Office of the Chief of Staff, U.S. Army, has responsibility for the Army's role within the Strategic Defense Initiative. USASDC will continue and build on the Army's previous ballistic missile defense program, including research and development in the technologies of interceptor missiles, radar and optical sensors, computers, reentry phenomenology, and directed energy beams.

Early in the fiscal year the role of The Adjutant General of the Army was reduced sharply with the transfer of support functions previously performed by The Adjutant General Center to the new U.S. Army Community and Family Support Center, a field operating agency of the Office of the Deputy Chief of Staff for Personnel. The change better positioned Headquarters, Department of the Army, to focus support of Army families and community life management. In August 1985 the Army information management responsibilities, traditionally referred to as Administration, were transferred from The Adjutant General Center (TAGCEN) to the newly created Office of the Assistant Chief of Staff for Information Management and Information Systems Command. This left The Adjutant General with responsibilities for the Armed Forces Courier Services; the Military Postal Service Agency; the Army Physi-


cal Disability Agency; the Army Reserve Components Personnel and Administration Center; the Environmental Support Group; and the Institute of Heraldry. The realignment also brought the organization of the Army staff more in line with major command and installation configurations, providing a clearer delineation of authority and improved communications and responsiveness.

Plans to upgrade the position of Assistant Chief of Staff for Information Management to Deputy Chief of Staff status moved forward during the year, but Congress had not enacted the necessary legislation by the close of the fiscal year. Congress also denied an Army request to create an Army component for the U.S. Southern Command (USOUTHCOM) in Panama, U.S. Army, South (USARSO), by not approving a reprogramming request for fiscal year 1985 funds needed to form the command.

As noted in an earlier chapter, a fifth CONUS Army (Fourth U.S. Army) was organized as part of a reorganization of the reserve component management structure which also involved the elimination of all Army Readiness Regions. New proposals put forth by U.S. Army Forces Command, now under evaluation, would reduce the number of Army Reserve Commands from nineteen to ten so as to conform to the boundaries and numbers of Federal Emergency Mobilization Agency Regions; and would also provide for the organization of additional functional commands, such as medical, engineer, and signal.

The Army announced a number of basing decisions during the year in a continuing effort to improve organization and achieve more efficient use of existing facilities and limited resources. The move of the U.S. Army Engineer Center and School from Fort Belvoir, Virginia, to Fort Leonard Wood, Missouri, to take place in fiscal year 1989, will consolidate and standardize engineer officer and enlisted training, materially reduce existing duplication in personnel and equipment, and eliminate training restrictions at Fort Belvoir due to urbanization. Moving to Fort Belvoir in fiscal year 1990, from leased space in and around Washington, D.C., will be the U.S. Army Corps of Engineers, including the Chief of Engineers.

In another move, the U.S. Army Intelligence and Security Command (INSCOM) will consolidate its offices, currently located at Fort Meade, Maryland, and Arlington Hall, Virginia, in a new facility at Fort Belvoir by the close of fiscal year 1988. The consolidation of INSCOM in a modern facility will signifi-


cantly enhance the command's operations and will improve security. Also, the Criminal Investigation Command will move from leased space in northern Virginia to Fort Meade in fiscal year 1987 and 1988.


In June of this year, President Reagan announced the creation of a Blue Ribbon Commission on Defense Management to be headed by former Deputy Secretary of Defense David Packard. The fourteen-member commission, composed of former military leaders and government officials, business leaders, educators and scholars, will study the defense budget process, the procurement system, legislative oversight, and organizational and operational arrangements within the Department of Defense. The commission will give particular stress to the adequacy of the acquisition process, the value of intervening layers of command on the direction and control of military forces in peace and war, procedures for developing and fielding military systems incorporating new technologies in a timely fashion, and providing for a more stable and effective allocation of resources. The commission will report procurement issues by 31 December, and issue a final report on the remaining issues in mid-1986.

The fiscal year 1985 DOD Authorization Act directed the formation of the President's Blue Ribbon Task Group (BRTG) on Nuclear Weapons Program Management, which was chartered by Presidential Executive Order in January 1985. Congress took the action out of concern that Department of Energy (DOE) nuclear weapons production costs were not fully considered by the Department of Defense (DOD) in nuclear weapons development. The Army staff, Army Materiel Command (AMC), and Training and Doctrine Command (TRADOC) assisted the BRTG by providing information on how the nuclear weapons requirements process works in the Army. By July 1985 the BRTG had completed a six-volume report and made nine recommendations for developing a process for improving the integrated DOD-DOE determination of nuclear weapons requirements and the management of nuclear weapons production, especially in terms of keeping costs down, maintaining accountability, and preserving the advantages of dual agency responsibility.

Most of the nine BRTG recommendations were acceptable to the Army, the Office of the Secretary of Defense (OSD), the


Office of the Joint Chiefs of Staff (OJCS), the other services, and DOE. There was concern, however, over recommendations to strengthen the Military Liaison Committee (MLC) to the DOE (MLC); integrating DOE incremental costs for nuclear weapons production and nuclear material production, and nuclear testing of stockpile weapons after a production decision is reached into the DOD Planning, Programming, and Budgeting System (PPBS); and directing the joint Chiefs of Staff (JCS) to play a major role in the trade-off and resource allocation process for theater nuclear force issues. In implementing the recommendation to strengthen the MLC, OSD added a DOD Nuclear Weapons Council (NWC) to be senior to the MLC and junior to the Defense Resources Board (DRB) to consider nuclear weapons costs.

By the end of fiscal year 1985, the Departments of Defense and Energy were analyzing the report and had formed an interdepartmental working group to resolve issues raised by the BRTG recommendations.

Army management initiatives undertaken during the year focused on the weapon systems acquisition process, force modernization and integration, resource management, and information management.

The Army exceeded its 1985 goals for supporting the Small and Disadvantaged Business Utilization programs. Army contracting officers awarded contracts for $7.7 billion, or 24.8 percent of its procurement dollars to small businesses. The Director of the Office of Small and Disadvantaged Business Utilization represented the Secretary of the Army before congressional committees, responded to congressional inquiries, provided timely policy to the field, and counseled members of the business community. These efforts continued the Army's leading record among the other military services for small business support.

In the area of acquisition management, the Army instituted a number of improvements during fiscal year 1985. Responsibility for critical review and approval of requests for conditional release (for fielding) of major and designated program equipment was elevated to Headquarters, Department of the Army (HQDA), staff level from MACOM (HQAMC) level. Within the Office of the Deputy Chief of Staff for Logistics, the Contracting and Production Directorate was formed to provide guidance, direction, and assistance to more than 240 Army contracting offices and to develop management information systems, policies, procedures, and methods to make contract-


ing operations more effective and efficient. The Office of the Deputy Chief of Staff for Logistics (ODCSLOG) sponsored the first ever DA-level Integrated Logistics Support (ILS) Conference which brought together ILS leaders from all materiel and combat developer MACOMs. Improved product quality was the goal for doubling the number of quality and reliability engineering interns in fiscal year 1984. In a follow-up action, the position of Product Assurance Director was upgraded at four major subordinate commands, and training for deputy project managers and product assurance directors in reliability growth management was instituted. Independent reviews of contractors conducted by the Army during the year emphasized the correction of problems before procurement items enter production. Also, the Army implemented a new equipment redistribution policy for major items replaced by force modernization equipment. The policy places redistribution responsibility on item managers and relieves the retail system of responsibility for directing the redistribution of replaced equipment.

The role of the U.S. Army Development and Employment Agency (ADEA) in the Army's accelerated pace towards modernization and integration was expanded during the year to include consideration of operational concepts, organization, and materiel requirements of not only the light forces on which it had concentrated its efforts in the past, but also of heavy divisions, special operations, and low intensity initiatives. Since its organization in September 1983 at Fort Lewis, Washington, to replace the High Technology Test Bed, ADEA has been the Army's innovation leader in improving the combat power, deployability, and sustainability of Army divisions. It is supported by TRADOC, AMC, and Air Force and Marine Corps liaison elements.

A key initiative in the Army's resource management system is to link program and budget actions and provide financial and performance data required by managers in both areas in order to establish the necessary balance between force structure objectives and weapons deliveries, between stationing plans and installation support requirements, and between tactical and nontactical mission activities.

During the past year, the Army began converting to a standard installation organization (SIO) for the garrisons which operate Army installations. Standardization is expected to improve the Army's mobilization potential, provide a better capability to deliver services, improve the competitive position of


the Army's "in-house" work force vis--vis the private sector, and improve the administration of contracts at the local level.

In a related matter, the Army has undertaken a Model Installation Program involving ten installations around the country, which will serve as "test beds" for deregulation and decentralization of authority. As part of the test, higher headquarters will generally waive regulations and cut red tape to permit the commanders of the ten installations and their managers to have greater flexibility in developing innovative approaches to improving operations. As an incentive any savings resulting from the program will be reapplied at the installation generating the savings to improve working and living conditions.

The Commercial Activities Program compares the cost of "in-house" operations providing commercial-type services to the cost for similar services provided by private companies. The purpose of the program is to acquire the best services at the least cost. During fiscal year 1985, 39 commercial activities cost studies were completed involving 1,819 civilian and 706 military spaces. Contracts were let replacing 1,321 civilian and 638 military spaces, which were reapplied to high priority Army missions.

The Quick Return on Investment Program, Return on Investment Program, and the Productivity Enhancing Capital Investment Program all rely on "seed money" for the quick purchase of tools, equipment, and facilities that will result in manpower savings, reduced costs, increased productivity, and improved readiness. In the past these programs have returned $14 for every dollar invested. Capital investments in fiscal year 1985 of $74 million are expected to achieve annual savings of $97 million. Next year's investments should reach $100 million with budget and avoidance savings of $127 million.

During fiscal year 1985 two additional major commands, Training and Doctrine Command and Forces Command, were brought into the Value Engineering Program, bringing the number to six. The other participating commands are Army Materiel Command, U.S. Army Information Systems Command, U.S. Army, Europe, and Office, Chief of Engineers. The addition of the two commands and increased emphasis on the application of Value Engineering to spare parts and contractor-developed change proposals should increase savings realized under the program from the current level of $400+ million to $600 million by the end of fiscal year 1986.

A number of finance and accounting reforms moved forward during the year in an effort to cut down personnel costs


by automating labor-intensive functions; provide more timely and accurate management information to formulate and track planning, programming, and budgeting decisions; and improve financial services to soldiers and their families. Specific actions included the automation of manual active Army pay processes which have permitted the reassignment of 500 soldiers from clerical duties to combat missions; institution of "positive" reserve component drill pay systems to eliminate fraud and improve pay service; and the development of internal control systems to ensure compliance with the Federal Managers Financial Integrity Act, which are being implemented throughout the Army.

The Information Science and Technology Assessment for Research (ISTAR) pilot project seeks the cooperation and assistance of industry, other government agencies, and universities in maintaining a technologically up-to-date Army information system. The goal is to maintain technological currency, avoid obsolescence, and provide a method for incorporating improved technology in existing systems in a cost-effective way and without disrupting automation and communications support to the Army. As a first step to accomplish this, the Office of the Assistant Chief of Staff for Information Management undertook a cooperative effort with the Armed Forces Communication and Electronics Association and the information representatives of the major commands. An ISTAR conference was held from 22-24 May 1985 in Washington, D.C., to discover what technology already exists to meet critical needs, to discern what technology can be expected to be commercially available in the next five years,. and to identify technology requirements which cannot be met in the next five years.

Another initiative involved the development of an Army Corporate Data Base (CDB) to address the Army's comprehensive data needs in both a secure and unclassified environment. The CDB will permit the integration, coordination, and synchronization of shared data required by Army personnel to do their job. The goal is to create a centrally controlled but physically distributed data base which contains accurate data and provides decision-makers access to organization-wide information. The CDB will permit logically, functionally, and geographically integrated views of the data. This major effort will be evolutionary and will take many years to complete. Thus far, an Army Data Management Plan has been written for de-


velopment of the CDB in three phases. Data element standardization, which is vital to this effort, is taking place. Other steps in the development of the CDB include creation of a Data Base Management Systems Forum at HQDA to discuss Army data base issues, the start of a data encyclopedia for the entire CDB, and the establishment of the Interim HQDA CDB.

The Army is currently replacing antiquated WWII-vintage telephone switches at Army posts, camps, and stations throughout the continental United States with new state-of-the-art electronic switched systems. The existing systems have become extremely costly to maintain and do not serve the needs of the Army. The new switches, being procured under the Stable Annual Investment for Required Systems (STAIRS) Program, will require less maintenance, will be much more reliable, and will provide the Army with key features and enhancements commensurate with today's technology. The concept of the telephone system upgrade was approved by the Under Secretary of the Army on 9 December 1982. Since this program was initiated, the Army has awarded contracts for the upgrade or replacement of twenty-eight locations throughout the continental United States. The plan is to award contracts for as many as ten sites per year until 1994. These actions parallel actions under way to upgrade outdated and unreliable switches in Europe, Japan, and Korea. Many of these switches in CONUS and overseas will also serve as Defense Switched Network (DSN) dual function switches. The DSN is an ongoing program to improve the overall DOD-wide switched systems architecture.


In spite of the Army's increased capability to meet potential threats in 1985 as compared to 1980, there is still much to be done. The major budget increases provided in fiscal years 1981 through 1985 accelerated programs to eliminate or substantially reduce decade-old deficiencies. The fiscal year 1986 budget, which granted the Army $75.4 billion-as compared to $73.5 billion in fiscal year 1985, would continue the Army's progress in correcting deficiencies and improving force readiness. A comparison of fiscal year 1985 funding and the Army projection in the President's fiscal year 1986 budget, with Gramm-Rudman reductions, is shown in Table 6.


($ in millions)

Military Personnel    26,725    28,537
Retired Pay Accrual    (6,762)    (7,139)
Military Personnel, Army    21,725    22,712
Retired Pay Accrual    (5,468)    (5,640)
National Guard Personnel, Army    2,890    3,297
Retired Pay Accrual    (740)    (825)
Reserve Personnel, Army    2,091    2,394
Retired Pay Accrual    (532)    (602)
Operation and Maintenance    21,859    23,698
Operation & Maintenance, Army    18,604    20,191
Operation & Maintenance, Army National Guard    1,437    1,626
Operation & Maintenance, Army Reserve    733    780
Army Family Housing    1,082    1,121
National Board for the Promotion of Rifle Practice    1    1
Investment    25,294    24,827
Procurement    18,313    17,292
Aircraft Procurement, Army    (3,810)    (3,277)
Missiles Procurement, Army    (3,026)    (2,760)
Weapons & Tracked Combat Vehicles Procurement, Army    (4,232)    (4,055)
Ammunition Procurement, Army    (2,462)    (2,338)
Other Procurement, Army    (4,783)    (4,862)
Research, Development, Test, and Evaluation    4,305    4,567
Military Construction    2,011    2,684
Military Construction, Army    (1,593)    (2,021)
Military Construction, Army National Guard    (99)    (102)
Military Construction, Army Reserve    (69)    (71)
Army Family Housing Construction    (250)    (490)
Stock Fund    366    442
Stock Fund War Reserve    (210)    (285)
Peacetime Stock Fund Inventories    (156)    (157)
TOTAL PROGRAM    74,712    82,006

Note: Columns may not add due to rounding.

The Army's pace in attaining its program goals was slowed by congressional resistance to the President's defense request. By midsummer the fiscal year 1986 Department of Defense budget request had been pared from $313.7 billion to $302.5 billion, and the Army had absorbed a good portion of the cut to the detriment of a number of personnel, modernization, and research and development programs.

The Army Plan, published each year in December as Army Guidance Volume I, was initiated to link the planning and pro-


gramming cycles of the Army Planning, Programming, Budgeting, and Execution System. It is the first step in building the annual Program Objective Memorandum. Each plan represents the culmination of a six-month planning cycle which integrates senior Army leadership guidance with appropriate planning documents and provides instructions for Army staff and major command programmers. Each plan focuses on developing the wherewithal to attain the highest state of capability and performance for all individuals, leaders, units, and systems to achieve Total Army Goals and produce an Army of Excellence. The Army Plan, FY 1987-2001, was approved by Secretary of the Army John O. Marsh, Jr., and Chief of Staff John A. Wick-ham, Jr., in December 1984. This edition of The Army Plan places additional emphasis on providing realistic planning objectives and programming tasks in the face of increasingly constrained resources. Readiness remains the central theme and first priority in this Army blueprint for the future.

In April 1985 Secretary of Defense Caspar W. Weinberger announced the initiation of a biennial planning cycle for the Department of Defense PPBS. The shift to a biennial planning cycle is expected to result in a more efficient and coherent budget process. It will curtail Department of Defense-wide planning activities required for an annual cycle, and will allow for a more in-depth review of Defense Guidance. The institution of a biennial planning cycle would also be supportive of proposals within the Department of Defense and Congress to implement two-year budget authorizations. This action would save both the Department of Defense and Congress considerable time and resources. The first biennial Defense Guidance is expected to cover the fiscal year 1988-92 planning period.



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