oversight

Benefits From Centralized Management of Leased Communications Services

Published by the Government Accountability Office on 1971-12-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                             LMO95448
                                                 21
                                                 7




Benefits From Centralized
Management Of Leased
Communications Services,.,,,,,,
Department of Defense




                                   B
UNITED  STATES
GENERAL  ACCOUNTING           OFFICE
                                      UNITED   STATES GENERAL AG~~UNT~NG                      OFFICE
                                                    WASHINGTON,      D.C.     20548


DEFENSE       DIVISION



               B- 169857

               Dear       Mr.   Secretary:

                       This is our report             on the benefits         from      centralized          management
               of leased   communications               services.

                          We believe      our review     has revealed       that centralized        management
               of about 50,000         leases   for minor      communications         services--those            cost-
              ing less than $200,000             a year --is    necessary       and desirable,         Therefore,
              we proposed          that the Department         of Defense       make certain        studies     toward
              this objective.          In response,     the Acting     Assistant     to the Secretary           of De-
              fense       (Telecommunications)          advised     us that such studies          were     being
               initiated.

                      Subsequently        we were  informed      that responsibility                       for the conduct
              of these    studies    had been assigned       to the Joint   Chiefs                     of Staff.  We plan
              to evaluate      the results   of the studies.

                       This report       contains     a recommendation        which      is subject    to the
              provisions      of section      236 of the Legislative        Reorganization         Act of 1970.
              We shall      appreciate      receiving     copies   of the statements        you furnish      to
              the specified       committees        in accordance      with these provisions.

                     Copies   of the report              are being sent to the Director,       Office   of
              Management      and Budget;             the Secretaries      of the Army,    Navy,    and Air
              Force;   and the Director,              Defense     Communications      Agency.

                                                                  Sincerely          yours,




                                                           PDF. Director,            Defense      Division

              The        Honor able
                         Secretary     of Defense




                                             - 50TH    ANNIVERSARY            1921-    1971
          /
i                                                                                                                    5
1 GENiRflL ACCOUNTINGOFFICE                              [   BENEFITS TO THE DEPARTMENT OF DEFENSE FROM
1' REPORTTO THE                                      -       CENTRALIZED MANAGEMENT OF LEASED
I SECRETARYOF DEFENSE                                        COMMUNICATIONS SERVICES  B-169857


; ------
  DIGEST

1 WHYTHE REUEW WASMADE
I
t           The General Accounting   Office   (GAO) examined      into the policies                  and proce-
;           dures in the Department    of Defense     (DdU] for the use and control                     of minor
I           leased communications   services   within     the Uriit2d States.
I
I           Classified      on a cost basis,         a minor service        is one which     costs     less than
I           $200,000      a year to lease.         -Of the $236 million         which DOD spends annually
I
I           on leased      communications       services,      about   $187 million       is for 50,000     minor
I           leases.       More than 13,000        of these leases        having    a yearly    lease cost of
I
I           almost     $74 million,      about 30 percent         of the total,      are for services       ded-
I           icated     to a particular       user,    contrasted     with     common-user    services.
I
I           The leased     services     are used to carry    out the        command and control,    logistics,
            and administrative        functions    of the Office     of     the Secretary  of Defense,       the
I           military   departments,        and the Defense    agencies.
I
I
1 FINDINGS AND CONCLUSIONS
I
I      Most leased services are approved              within     the military      departments     without
I
I           review    or approval    by the Office   of the Secretary         of Defense.      This is be-
I           cause they do not meet the criterion            of costing    more than $200,000         a year
I
I           to lease,    which is necessary      to qualify    for Office       of the Secretary       of De-
l           fense review.        (See p. 9.)
I
I           Often a separate     service      approved      at the departmental    or command level    is
I           part of a large     network      which,    if considered     in its entirety,   would meet
I
I           the criterion    for higher       level    review.     (See p. 10.)

            The approval       procedures       for services     which do not qualify        for Office     of the
            Secretary      of Defense      review    differ    among the military      departments.        Review
            and approval       authority      is at the departmental         level  in the Navy.        In the
            other    departments       approval     of services     costing    less than $100,000       a year
            has been redelegated           to the major      commands.      (In August 1969 the Air Force
            withdrew     this    authority      from the commands as an interim           measure.)       (See
            P* 9.1
            No independent      e-vuZuation
            or coordinated      control

            DOD has established         the Defense   Communications     System--a   worldwide,     long-
            distance,  Government         owned and leased   system--and     the Defense     Communications


1

i   Tear   Sheet                                                1                 BEC.22,1971
;
Agency to        manage the system.     DOD, however,                 has not established a complete            c
inventory        of its communications      resources.                Usage information        is not always
available.         What information    exists     is not            always reliable.          Users of com-
munications        systems   do not always indicate                 the purpose      of their     require-
ments.

Because       the offices        responsible      for reviewing      new requirements        do not have
complete        information        on existing      systems,    they cannot     evaluate     new require-
ments or        existing      resources      from a comprehensive       systemwide       viewpoint.
(See p.       14.)

In each DOD component,       a validating        office   is responsible       for independent
evaluation,  including      certain      funding     and technical considerations,          of new
requirements   and existing        sources     of communications      systems.

These offices,       however,   are hampered     in performing        their   reviews  by a lack
of sufficient     data. Army and Air Force offices                 can only recommend disap-
proval   or alternative       means of providing        a service.       Reevaluations    of exist-
ing services,      if made, are performed        by-the    user of the service           (See
pp. 25 and 29.)

Need for        a central      authority

A central  authority   with adequate                 information           on DOD communicati    ons services
would be in a position     to prevent                the start       or     continuation   of   uneconomical
services.

To illustrate           the   potential    savings     which       could     be achieved   by a central
authority:

   --Use data had not been developed for five               of the 15 terminals        of the Air
      Force Personnel    Facsimile     Network.      Such data,     obtained    at GAO's request,
      showed that   the average     use for each terminal          ranged from 18 minutes to
      5 hours a day.     On the basis of this         information,       the Air Force discon-
      tinued  four terminals      at savings    estimated       at $23,700   annually.      (See
      p. 21.)

   --In 1967 the       Army Provost     Marshal     General     proposed to establish              a voice-
      data network       to tie together      criminal     investigation         activities       within
      the Army.       GAO found that       the objective       of establishing           an integrated
      system had not been achieved--segments                 of the system were being dis-
      continued     while    others   were being installed,            one of the military            police
      groups    never was brought        into   the system,        and the groups         did not use the
      system to communicate         with each other        or with       certain     centralized       ac-
      tivities.       Procedures    for review      of this      requirement      were ineffective,
      which illustrated         the need for independent            review.      (See p. 25.)
o RECOMMENDATIONS
                OR SUGGESTIONS
I
            GAO proposed            that     the     Secretary         of     Defense      study:
I
1
/               --The feasibility        of a centralized          DOD activity    having      authority     and respon-
I                  sibility    for selecting       the means of providing          new service         after  the ap-
1                  propriate      levels   approve    the need for the service.               Consideration      should
I                  be given     to the cost of a centralized            validation      office      compared    with
1
                   the costs of the dispersed            functions     as now performed.
I
I               --Providing     the centralized    activity                         resources     including      a complete    in-
I
I                  ventory   of communications     facilities                           (or,  as an alternative,        access     to
I                  such information)      and data on their                           traffic   volume and purposes.
I
                --Assigning     the activity       responsibility       and authority          for controlling       the
I
I                  scheduling     and monitoring       the qualitative          aspects    of the periodic        reevalua-
I                  tions    of existing    services      and for determining           whether      such services      could
I                  be provided      more economically,          but with acceptable          effectiveness,       by other
I
1                  means, particularly        where common-user         facilities       are available.
i
I
                --Whether    the criteria      for reviewing        requirements        at the Office    of the
i                  Secretary    of Defense     or military       department      levels    should   be redefined
I                  as being applicable       to total      contemplated       (or actual)      network   costs rather
I
I                  than to individual      increments       to networks.

                    --Whether      present         criteria      for        reviewing      at departmental         level   should     be
                       lowered.

                    --The need for a directed          requirement                      that requests        for communications
                       services  provide    information        needed                   for selection        of the most efficient
                       and economical    method of fulfilling                           the requests.

                    --The need      for the remaining               parts    of the Military             Police     Network    that     is
                       discussed      on pages 25 to             27.     (See p. 35.)


    AGENCYACTIONS AND UNRESOLVEDISSUES

             In response,      DOD advised    GAO that studies,     which were expected      to take up to
             6 months      to complete,   were being initiated      to examine    into each of the above
             proposals.       DOD advised    also that it would forward       a response   to the pro-
             posals     upon completion    of the studies.      (See appendix.)

             Subsequently    GAO was informed                      that responsibility                for the conduct   of these
             studies    had been assigned    to                  the Joint   Chiefs             of   Staff.   GAO plans to'evaluate
             the results    of the studies.                      (See p. 37.)




a
I    Tear   Sheet                                                            3
                        Contents
                                                                 Page

DIGEST                                                             1

CWTER

  1      INTRODUCTION                                             4
             Scope of review                                      7

         MOST NEW COMMUNICATIONSREQUIREMENTSHAVE
         BEEN EXCLUDEDFROM HIGHER DEPARTMENTALRE-
         VIEW                                                      8
              Independent review by higher authority
                 limited under current     directives              9
             Individual   requirements     not identifi-
                able in accounting     systems or budget
                reviews                                           12

         MINOR COMMUNICATIONSNOT SUBJECT TO INDEPEN-
         DENT EVALUATION AND COORDINATEDCONTROL                   14
             New minor communications        requirements
               not coordinated        with existing  resources    16
                  No complete inventory        of communica-
                     tions resources                              16
                  Data on use of resources not ade-
                     quate for management purposes                20
                  Information      incomplete on new re-
                     quirements                                   23
             Absence of independent evaluation          of new
               requirements         ,                             25
             Reevaluations      not made independently     nor
               coordinated      with resources data               29
                  Air Force and Army reevaluations         not
                     fully   effective                            29
                  Reevaluations       not made in the Navy        34

  4      CONCLUSIONS, RECOMMENDATION,AND AGENCYCOM-
         MENTS                                                    35
            Conclusions                                           35
            Recommendation                                        35
            Agency comments                                       37
APPENDIX                                                  Page

           Letter dated July 7, 1971, from the Acting
             Assistant   to the Secretary of Defense
              (Telecommunications)   to the General Ac-
             counting Office                               39

                              ABBREVIATIONS

AUTODIN Automatic        Digital    Network

AUTOVON Automatic        Voice Network

CONUS      Continental     United    States

DCA        Defense Communications         Agency

DOD        Department     of Defense

GAO        General   Accounting      Office
Gl'?NERAL
        ACCOUNTINGOFFICE                          BENEFITS TO THE DEPARTMENT OF DEFENSE FROM
REPORTTO THE                                      CENTRALIZED MANAGEMENT OF LEASED
SECRETARYOF DEFENSE                               COMMUNICATIONS SERVICES  B-169857


DIGEST
__----


WHYTHE REVIEW WASMADE

     The General Accounting          Office   (GAO) examined      into  the policies          and proce-
     dures in the Department           of Defense     (DOD) for the use and control              of minor
     leased communications          services   within    the United    States.

     Classified      on a cost basis,         a minor service        is one which costs         less than
     $200,000      a year to lease.         Of the $236 million          which DOD spends annually
     on leased      communications       services,      about $187 million         is for 50,000     minor
     leases.      More than 13,000 of these leases                having    a yearly    lease cost of
     almost     $74 million,      about 30 percent         of the total,      are for services       ded-
     icated     to a particular       user,    contrasted     with common-user        services.

     The leased     services     are used to carry    out the         command and control,   logistics,
     and administrative        functions   of the Office     of       the Secretary  of Defense,      the
     military   departments,        and the Defense   agencies.


FMDINGS AND CONCLUSIONS

     Most leased     services    are approved    within    the military      departments     without
     review    or approval    by the Office    of the Secretary         of Defense.      This is be-
     cause they do not meet the criterion             of costing    more than $200,000        a year
     to lease,    which is necessary       to qualify    for Office       of the Secretary       of De-
     fense review.        (See p. 9.)

     Often a separate     service      approved      at the departmental    or command level    is
     part of a large     network      which,    if considered     in its entirety,   would meet
     the criterion    for higher       level    review.     (See p. 10.)

     The approval    procedures       for services     which do not qualify         for Office     of the
     Secretary    of Defense     review    differ    among the military       departments.        Review
     and approval    authority      is at the departmental          level  in the Navy.        In the
     other departments       approval     of services     costing     less than $100,000       a year
     has been redelegated        to the major commands.           (In August     1969 the Air Force
     withdrew   this   authority      from the commands as an interim            measure.)       (See
     P. 9.1

     No independent       evabation
     or coordinated       con-ho2

     DOD has established         the Defense   Communications     System--a   worldwide,     long-
     distance,  Government         owned and leased   system--and     the Defense     Communications
Agency to manage the system.   DOD, however,       has not established    a complete
inventory of its communications resources.         Usage information    is not always      '
available.  What information  exists is not       always reliable.     Users of com-
munications systems do not always indicate        the purpose of their require-
ments.

Because the offices responsible for reviewing new requirements do not have
complete information    on existing systems, they cannot evaluate new require-
ments or existing    resources from a comprehensive systemwide viewpoint.
(See p. 14.)

In each DOD component, a validating    office is responsible for independent
evaluation,  including  certain funding and technical considerations,   of new
requirements and existing    sources of communications systems.

These offices,    however, are hampered in performing their reviews by a lack
of sufficient   data. Army and Air Force offices can only recommend disap-
proval or alternative    means of providing a service.   Reevaluations of exist-
ing services,   if made, are performed by the user of the service.     (See
pp. 25 and 29.)

Need for a centra2 authority

A central authority   with adequate information  on DOD communications services
would be in a position    to prevent the start or continuation of uneconomical
services.
To illustrate   the potential   savings which could be achieved by a central
authority:
  --Use data had not been developed for five of the 15 terminals of the Air
     Force Personnel Facsimile Network. Such data, obtained at GAO's request,
     showed that the average use for each terminal ranged from 18 minutes to
     5 hours a day. On the basis of this information,  the Air Force discon-
     tinued four terminals at savings estimated at $23,700 annually.   (See
     p. 27.)

   -In 1967 the Army Provost Marshal General proposed to establish             a voice-
     data network to tie together criminal investigation         activities    within
     the Army. GAO found that the objective       of establishing      an integrated
     system had not been achieved--segments of the system were being dis-
     continued while others were being installed,      one of the military        police
     groups never was brought into the system, and the groups did not use the
     system to communicate with each other or with certain centralized             ac-
     tivities.     Procedures for review of this requirement were ineffective,
     which illustrated     the need for independent review.      (See p. 25.)
~ECOMbkNDfiTIOIiSOR SUGGESTIONS

     GAO proposed       that     the      Secretary         of   Defense      study:

       --The feasibility        of a centralized          DOD activity    having      authority     and respon-
          sibility    for selecting       the means of providing          new service         after  the ap-
          propriate      levels   approve    the need for the service.               Consideration      should
          be given to the cost of a centralized                validation      office      comparedwith
          the costs      of the dispersed       functions     as now performed.

       --Providing     the centralized    activity                       resources    including       a complete   in-
          ventory   of communications     facilities                         (or,  as an alternative,        access to
          such information)      and data on their                         traffic   volume and purposes.

       --Assigning     the activity      responsibility       and authority           for controlling       the
          scheduling     and monitoring       the qualitative          aspects    of the periodic        reevalua-
          tions    of existing    services      and for determining           whether      such services      could
          be provided      more economically,         but with acceptable           effectiveness,       by other
          means, particularly        where common-user        facilities        are available.

       --Whether    the criteria      for reviewing        requirements        at the Office    of the
          Secretary    of Defense     or military      department       levels    should   be redefined
          as being    applicable    to total      contemplated       (or actual)      network   costs rather
          than to individual      increments       to networks.

       --Whether       present         criteria       for    reviewing        at departmental       level   should     be
          lowered.

       --The need for a directed          requirement                     that requests     for communications
          services  provide    information        needed                  for selection     of the most efficient
          and economical    method of fulfilling                          the requests.

       --The need       for the remaining    parts    of the Military                      Police    Network    that    is
          discussed       on pages 25 to 27.      (See p. 35.)


AGENCYACTIC'NSAND UNRESOLVED
                           ISSUES

     In response,       DOD advised     GAO that studies,     which were expected      to take up to
     6 months to       complete,   were being initiated       to examine    into each of the above
     proposals.        DOD advised    also that  it would forward       a response   to the pro-
     posals     upon   completion   of the studies.       (See appendix.)

     Subsequently     GAO was informed                  that responsibility             for the conduct   of these
     studies    had been assigned     to              the Joint   Chiefs          of   Staff.   GAO plans to evaluate
     the results    of the studies.                   (See p. 37.)
                               INTRODUCTION

          A Department of Defense goal is to have a single,                    in-
tegrated,       long-distance      communications         system capable of
supplying reliable,           rapid, and, when necessary,            secure
means of exchanging information.                 In 1960 DOD established
the Defense Communications System and the Defense Communi-
cations Agency (DCA) to supervise this worldwide,                       long-
distance,      Government       owned   and  leased      system.    As  it has
evolved,      the system does not include all the communications
services used within            DOD. Principal         exclusions    are (1) post,
camp, base, and station             terminal    facilities       and (2) purely
tactical      facilities      and those organic to weapon systems.
The system, and hence the management purview of DCA, stops
at the point of interface              between the system and the connect-
ing terminals          of posts, camps, bases, and stations;               which
is considerably          less than a total        system on a user-to-user
basis.

      Communications services,   whether or not a part of DCA's
system, are classified   as major or minor on the basis of
cost.   DOD classifies as  major those services  it leases1
for $200,000 a year or more and as minor those that cost
less.

      DOD requires  that the military   departments obtain ap-
proval at the Office of the Secretary     of Defense level be-
fore implementing   major communications   services but has del-
egated to the military    departments authority    for determining
and approving their needs for minor communications       services.

      After  the need for a communications        service has been
approved, it must be validated;        that is, determined to be
technically    feasible,   compatible with other services,       and
capable of being funded.       Validating   offices    are responsible
for determining      the most advantageous methods of fulfilling


1DCA's system in the continental United States (CONUS) in-
 cludes both Government owned and leased services, but
 mainly the latter.

                                         4
new requirements,       considering     existing    facilities     and ser-
vices.
          Each military      department is responsible          for designating
a validation        office    to process its IzeqUirementS.            The Army
Strategic      Communications Command and the Naval Communica-
tions Command Headquarters             are validation      offices     for the
Army and the Navy, respectively.                The Air Force Communica-
tions Service validates             most Air Force requirements.            The
Strategic      Air Command and Aerospace Defense Command, however,
approve and validate            their own tactical      requirements,       and
Headquarters,        Air Force, approves and validates              certain   of
its requirements           and the tactical     requirements       of the Air
University.

      Requests for services    to be furnished    by common-user
networks1 in CONE--principally      the Automatic Voice Network
(AUTOVON) and the Automatic Digital      Network (AUTODIN)--are
forwarded to DCA's Western Hemisphere Area Office,        Fort
Carson, Colorado,  for review.     This is another examination
for technical  adequacy and compatibility      with the networks.

       Validated   or revalidated      requests are submitted         to the
Defense Commercial Communications Office of DCA which is
the DOD office     responsible     for leasing long-distance         ser-
vices.     This office   is responsible      only for leasing the
requested services and not for evaluating              the need for the
requested services,      determining      the availability      of existing
services    that may satisfy     the requests,      or suggesting       alter-
native means of providing        the services.       Short-distance        and
local services     are procured by the installations            involved.

       After a service is installed,         the user is responsible
primarily     for justifying     its retention.    Thus the user de-
termines the initial         need and also the need for retention
of the service.        With respect to minor communications       ser-
vices,    these determinations       are made without   effective  in-
dependent review and coordinated          control,   as discussed in
chapters 2 and 3.


1A network providing   general-purpose   services   to a large
 number of subscribers   for the transmission     and receipt  of
 various types of messages.

                                       5
        In a previous report,     we recommended that the Secretary
of Defense establish       the position     of Assistant    to the Secre-
tary of Defense (Communications)           and give that    position
sufficient     authority   and funding overview to enforce policy
decisions    concerning    all DOD communications matters.           We
recommended also that the Secretary            consider removing DCA
from the chain of command under the Joint Chiefs of Staff
and making the position        of Director     of DCA a civilian     post
to provide a direct      relationship      between the Director      of
DCA and the new Assistant        and to eliminate      doubt concerning
parochial    interests.

        On May 21, 1970, DOD Directive     5'148.6 established the
new position     of Assistant  to the Secretary    of Defense (Tele-
communications).      One of his functions,     as set forth in the
directive,    is to:

      "Review JCS [Joint    Chiefs of Staff],    Military   De-
      partment and DOD component validated        telecommuni-
      cations requirements    to reaffirm    the need thereof,
      including  priorities   for their fulfillment,      and
      recommend    alternatives    as appropriate."

        This directive       provided a focal point for communica-
tions in DOD. We believe,            however, that the effectiveness
of this directive        will be dependent upon the authority        and
resources provided by the Secretary            of Defense and the de-
gree of cooperation          given by DOD elements to the new assis-
tant.     No further     action    was taken on our recommendations
concerning     the chain of command to DCA and the appointment
of a civilian      director.       DOD informed us, however, that the
chain of command to DCA remained an issue for active con-
sideration.

        DOD is spending about $236 million           a year for leased
communications        services    in CONUS, This includes about
$49 million      for major services and about $187 million          for
approximately       50,000 leases for minor services.          It does
not include the costs of terminal          facilities      and such intra-
installation       services    at posts, camps, and stations      as base
telephone systems, which are procured by the installations
involved.       More than 13,000 of these leases having a total
yearly     lease cost of almost $74 million,          about 30 percent
of the total,       are for services dedicated to a particular
user, contrasted        with common-user services.
                                     6
SCOPE OF REVIEW
       Our review included an examination          into policies     and
procedures    established    within    DOD for the use and control
of communications      services,    primarily   leased minor services,
in CONUS. We made the review at the Office of the Secre-
tary of Defense and at DCA's and the military             departments'
headquarters    and various field       offices   and installations.

       We did not attempt a scientifically        determined random
selection    of cases for the purposes of this limited         review.
The cases were selected with the objective          of including    ex-
amples within    each of the military     departments and examples
of various types of communications        services.

      We examined into 21 selected communications      services
or requirements,     eight of which we discuss in this report.
(See p. 27.)      We discuss also two additional   examples where
the Army was able to effect      cost savings through improved
procedures.      (See p. 23.)
                               CHAPTER2
                               --s-w

             MOST NEW COMMUNICATIONSREQUIREMEBTS

     HAVE BEEN EXCLUDEDFROM HIGHER DEPARTMENTALREVIEW

      Less than 1 percent of the total   number of DOD's leased
communications  services in CONUSrequired    approval at the
Office of the Secretary   of Defense level.

         In the Navy approval authority       for all minor communica-
tions requirements        has been retained     at the headquarters
level.      Since August 1969, as an interim         measure, the Air
Force has assumed authority          at departmental    level for ap-
proval of all minor Air Force communications              requirements.
Authority       for approving most services      in the Army rests with
the using major commands, because individual              communications
services usually cost less than the amounts established                 as
criteria      for obtaining    approval at higher levels.         This
condition       also prevailed   in the Air Force prior to August
1969..

      These services,     although individually  classified     as
minor, frequently     are increments to communications      networks
having substantial     annual leasing costs.    We believe that
it is appropriate,     therefore,   that the need for services be
reviewed by a higher and an independent authority          when the
cost of the total     system, of which the instant     services
often  are only components, exceeds the established         threshold.

         Communications costs also are reviewed in the Office of
the Secretary     of Defense during the budget process.          In the
case of minor communications       requirements,    however, the re-
view focuses primarily       on budget categories,     and individual
minor communications      requirements    are not identifiable.
There has been more detailed       reporting    and thus improved
visibility    of communications    costs during the past 2 years.
Additional    steps are being taken or are planned within          DOD
to improve this visibility.
INDEPENDENTREVIEW SY HIGHER AUTHORITY
LIMITED UNDER CURRENTDIRECTIVES

        In accordance with DOD Directive       4630.1, Programming
of Major Telecommunications        Requirements,   dated April 24,
1968, the classification       of a communications     requirement     de-
te-rmines the-level     of review and approval required.          The au-
thority    to review and approve major requirements          (for ser-
vices having individual.leasing        costs of $200,000 or more a
year) is at the Office of the Secretary of Defense level.
The authority     to review and approve minor requirements          (for
services having indivi'dual      leasing costs of less than
$200,000) h as been delegated to the military          departments.

       The Army redelegated,to        major commands the authority     to
approve each minor requirement          for services estimated to
cost less than $100,000 a year.            The same redelegation   ,of
authority   existed in the Air Force until          August 1969 when
Headquarters,    Air Force,'withd-ew        it from the commands.
This withdrawal     was an interim measure to comply with a fis-
cal year 1970 budget decision of the Secretary of Defense,
and it is still      in effect.      In the Navy the Chief of Naval
Operations has retained         approval authority    for all minor
communications     requirements.

        According to representatives        of the Office of the As-
sistant    to the Secretary of Defense (Telecommunications),
the $200,000 threshold        was established      in 1968 to reduce the
volume of communications        requests that were then being sub-
mitted to the Office of the Secretary of Defense for ap-
proval.      Prior to the increased level established          in 1968,
the DOD directive      set the lower limit       for a major require-
ment at $100,000.        The representatives       said that the present
threshold     was unrealistis     and that efforts     were being made
to lower it.

       As df May 1970 records of leases for services,     includ-
ing those in the Defense Communications System and those
not a part of the system, showed that only 55 (of approxi-
mately 50,000) leases were classified     as major requirements
by applying the $200,000 threshold,      This is about one tenth
of 1 persent of the total    number of leases and represents
about 21 percent ($49 million)    of the total  annual leasing
costs.    This small number of leases may not be all of those


                                    9
approved at the Office of the Secretary   of Defense level,
because some leases below the threshold  may have been ap-
proved as part of a subsystem or project   plan.   Records of
such approvals,  if any, however9 were not available.

      Excluding Navy leases, all of which receive depart-
mental approval,    only 108 CONLJSleases exceed the Army and
permanent Air Force threshold      of $100,000 each in annual
cost e Including    Navy leases, only 111 CONKS leases have
annual costs in excess of $100,000 each.        They constitute
about two tenths of 1 percent of the number of leases and
cost about $57 million,     or about 24 percent of the total
annual costs.    This includes the one tenth of 1 percent of
the number of leases which are over $200,000 each annually
and which qualified     for review at the Office of the Secre-
tary of Defense level,

        The above indicates        that most communications require-
ments within      CONUS are individually         inexpensive,     and this
is due to the fact that requests prepared and approved with-
 in the commands involve,          for the most part, leases for
 (1) circuitry     from point to point and related            terminal
equipment,     (2)   circuitry     from  a  switching   center    to a ser-
vice point and related          terminal    equipment, or (3) terminal
equipment only.         Such services are often only a part of a
network that is being established             or an adjunct to an exist-
ing network or service.            We believe that the use of this
incremental     or piecemeal method of obtaining            services ob-
scures the total        configuration,     purpose, and cost of a net-
work or service.         Also it bypasses a more independent over-
view which presumably could be performed at higher levels
with the objective         of achieving a single comications               sys-
tem within     DOD, rather than a narrower,           more parochial     ob-
jective.

     The following   examples illustrate the type and size of
conmnunications networks or services which have been acquired
on an incremental   basis and which did not meet the criterion
for Office of the Secretary of Defense or military   depart-
ment review.

      1. Air    Force Personnel      Facsimile    Network

           This network is used to transmit              reproductions   of
      documents between Air Force elements              at Randolph Air
                                                                       Q
                                      10
Force Bases Texas; the Washington, D.C.$ area; Denver,
Colorado;   St, Louis, Missouri;  and San Antonio,   Texas.
The network has 15 terminals,    13 of which are connected
to a switching   facility  in Texas.  The current  lease
cost of the network is about $110,000 annually under
28 leases9 the most expensive one costing about $9,400
a year.

2, Army Military      Police (Criminal
   Investigation)      Network

        This network was proposed in 1967 to provide
voice-data    communications    services between the five
military    police groups, their      principal    detachments,
and other investigative      offices.      As envisioned,      the
network was to have about 35 terminals           located through-
out corns,      Although we inquired      and searched, we could
not find a cost estimate for the proposed network.                 As
of July 1970, the network had 22 terminals              and the
leasing costs had reached $201,000 a year.               The ser-
vices were being provided under 22 leases9 the most
expensive of which was about $16,600 a year.               The net-
work was approved in increments within           the Department
of the Army and was not submitted to the Office of the
Secretary of Defense for approval,           apparently    on the
basis that none of the increments           exceeded the $200,000
threshold.

3, Military Airlift  Command Logistics
   Readiness Network

       This is a voice network, established              in 1966, to
provide direct        telephone communications        between the
command headquarters,          Scott Air Force Base, Illinois;
McGuire Air Force Bases New Jersey; Travis -Air Force
Base, California;         and 10 other Air Force locations.
It has over 10,000 miles of leased circuitry,                a switch-
ing capability,        a conferencing   arrangement,       and a two-
digit    dialing    feature.     These facilities       are provided
under 13 leaseso none of which exceed $12,500 a year;
the total      annual leasing cost is about $93,000.             This
extensive      network, even if processed as a single entity,
would not have required,          under permanent Air Force reg-
ulations,      approval at departmental         or Office of the
Secretary of Defense level.
                               11
INDIVIDUAL REQUIREMENTSNOT IDENTIFIABLE
                                     - .-.-
IN ACCOUNTING SYSTEMSOR
                      -- BUDGETREVIEWS
        Our review of budgeting and accounting systems within
DOD and our discussions      with DOD officials  showed that in-
dividual    minor communications requirements    were not identi-
fiable.     Consequently  the thousands of individual    minor re-
quirements which constituted      the major part of the cost of
communications     leases discussed in this report are not re-
viewed for need at Office of the Secretary       of Defense or
military    departmental  level during the budget process.

       Our review showed that there had        been greater visibility
of total DOD communications costs over           the past 3 years due
to a requirement     imposed by the Deputy       Secretary    of Defense
that this information       be submitted in    more detail     as to us-
ing organizations      and cost categories     and in a separate bud-
get package.     Visibility    of individual     minor communications
requirements,    however, is not provided.          Furthermore   the
budget amounts are based on estimates          rather than historical
costs m

      As stated by one DOD official    in March 1970 during
congressional   hearings on the fiscal   year 1971 budget:

     *';t-k* there is no formal system to account for
     Defense Communications System costs in the De-
     partment of Defense.      Therefore,  the previous
     figures were estimates,     as are the figures    for
     this year."
          *           *          *             *           *

     I'*** there is no formal accounting  system in the
     Department of Defense to account for communica-
     tions systems.   Therefore, the estimates  that we
     derive through our analysis are based upon infor-
     mation where we can go into the existing   systems
     and draw out pieces and put them together ***."

     To correct   this condition,   DCA has attempted to estab-
lish a functional    category for communications costs so that
more accurate information     on communications expenditures
could be accumulated.      We were told that this attempt had

                                 12
                                           ‘5
.


been unsuccessful.        The Office of the Assistant          Secretary
of Defense (Comptroller),         however, was performing        a study
of functional     categories     in general and was preparing          a di-
rective   to establish     a financial    reporting      system which, if
approved, would require         quarterly   reporting     of communica-
tions expenditures      in some detail      for each installation.
Also the Assistant      to the Secretary       of Defense (Telecommuni-
cations)    planned to consider the overall           issue of visibility
of telecommunications        resources early in 1971.          In view of
these actions,     we have no recommendations at this time con-
cerning the identification         of communications       costs in ac-
counting systems and for budgetary review purposes.




                                     13
                                 CHAPTER3

                MINOR COMMUNICATIONSNOT SUBJECT TO

        INDEPENDENT EVALUATION AND COORDINATEDCONTROL

       Minor communications        services    are not subject to an ef-
fective,    independent evaluation         and coordinated     control.
The absence of information          with which to evaluate the aggre-
gate of individual      requirements       from a DOD systemwide view-
point precludes      coordinated     control    of minor communications.
DOD has not established         a complete inventory       of its communi-
cations resources;      information       on use is often not available
and, when available,        is not always reliable;        and users do
not always indicate       the purpose of their requirements.               F'ur-
thermore the incomplete         information     which-is   available     is
available     only in. part to the offices        responsible     for re-
viewing or validating         new requirements      and existing     resources.

       Without adequate information,        a reviewer is not in a
position    to determine whether existing        resources are ade-
quate to satisfy      new requests for services or, in reevalua-
tions,   whether existing      resources should be retained,      recon-
figured,    or eliminated.       Thus new requirements    and existing
resources have not been evaluated from a comprehensive or
coordinated    DOD systemwide viewpoint.         Also periodic   reeval-
uations of existing       resources are not always made and, when
made, are performed by the users themselves.

      Consequently we believe that the users generally   have
been able to obtain,  subject to the availability  of funds,
the type of services wanted and that users generally   can re-
tain the services desired without comprehensive independent
reevaluations.

       Although it might be argued that a using organization
should have complete responsibility          for the type of services
provided within       its operating  budget, we believe that this
philosophy    conflicts    with the stated objective      of achieving
a single communications        system within    DOD because such a sys-
tem, in our opinion,       requires  strong central    direction.

      The following sections of this chapter discuss the pro-
cedures employed and some examples of the costly effects  of

                                      14
the lack of independent evaluation            and coordinated   control,
from a systemwide viewpoint,        of minor communications within
DOD. We believe that the examples are illustrative                of the
potential      benefits obtainable    from evaluation      by a central
office     having systemwide information        and authority   to im-
plement the most efficient,        effective,     and economical method
of fulfilling       communications  needs.




                                  15
NEWMINOR COMMUNICATIONSREQUIREMENTS
NOT COORDINATEDWITH EXISTING RESOURCES

       Validating     offices'       are responsible     for determining      the
most advantageous means of fulfilling                 new requirements,con-
sidering    existing      facilities       and services.    A validating      of-
fice has information           identifying     the services     it validated
but does not have information               on services validated       by other
military    departments and agencies.              Also the Air Force Com-
munications      Service does not have information             on services
validated     by the Aerospace Defense Command, Strategic                 Air
Command, or Air Porte Headquarters.                 Furthermore    a validat-
ing office      seldom has access to information            on the use being
made of services        it has validated.

      Although DCA has certain   information     relating    to assets
of the Defense Communications System.,,the       information    is lo-
cated at two DCA field offices--neither        of which has complete
data.    Also DCA does not have information      on resources which
are not a part of the system,    nor   on  the  use  being made of
these services.

      Thus these is within DOD no central      inventory     of total
DOD communications   resources or central    point of informa-
tion on the uses being made of resources.         Requests for new
services often lack sufficient   explanatory      information     to
permit adequate consideration   of alternative       means of satis-
fying the requirements.

No cormlete inventory    of
communications  resources

         DCA is responsible  for maintaining     a directory          of fa-
cilities     and circuitry  under its jurisdiction--the              Defense
Communications System.

      Although D&J's Western Hemisphere             Area Office has cer-
tain information      relating    to assets of      the Defense Communi-
cations System, it is not required          to     accumulate,  and does
not have,   information      on the  resources      which are not a part


1See p. 4 for     identification       and description      of responsibil-
 ities.

                                      16
of the system.        These are generally          self-contained     facili-
ties within     commands or tactical           organizations      and intra-
installation     facilities.        For system resources          (Government
owned and leased) DCA's Western Hemisphere Area Office pre-
pares a data base directory            which shows for each circuit
the locations      receiving      service,     points of interconnect,        as-
sociated circuits,         service availability,          speed and type of
service,     and other technical         details,       Government owned and
leased resources which the user classifies                   as not being part
of the system and related           details     are not included in the
Western Hemisphere Area data base directory.

        DCA's Defense Commercial Communications Office,            located
at Scott Air Force Base, although not involved in the vali-
dation process, does maintain a circuit           inventory    of ser-
vices it has leased.        Although this inventory       includes cer-
tain services not contained in the Western Hemisphere Area
data base directory--i.e.,        leased resources which are not a
part of the system but which are directly            connected to the
system-- it does not include technical         information,      such as
interconnecting     points,    speed of service,     and associated
cirsuits    nor does it include information         on Government-
owned resources.

       Furthermore    certain    leased services      acquired at base
level are not contained in either the Western Hemisphere
Area data base directory         or the Defense Commercial Communi-
cations Office circuit        inventory,      and neither    of these in-
formation     sources reflects      the existence     of unused multiplex
channels.      (See p. 18.)      Also, with the exception of AUTOVON
and AUTODIN, these DCA office?            have only fragmentary      infor-
mation on traffic       volume.      At the time of our review,         the
Western Hemisphere Area was not receiving               copies of periodic
compilations     of the circuit       inventory   of the DCA leasing of-
fice.

        It should be noted that DCA is in the process of estab-
lishing,    in addition   to its circuit      inventory,    a computer-
ized file of communications         resource data which will pro-
vide additional      data pertaining     to the physical     and opera-
tional    environment of the Defense Communications System.
This inventory,      however, will exclude those facilities          which
are neither     part of nor required       to support the system.       Thus
it will not constitute       a complete inventory        of DOD communi-
cations facilities.
                                       17
       The two following   situations   illustrate the more pen-
etrating   reviews that could be performed and the management
actions that could be taken by a DOD central       office having
adequate inventory     and use information.

     1. Multiplexing
                The Air Force has a number of leased multi-
        plexers,    devices that divide a single communica-
        tions circuit      into a number of data channels.        A
        set of these devices, one at each end of a circuit,
      . can provide as many as 20 data channels for trans-
        mission over the circuit.          We found that the Air
        Force was using only eight channels for time-shared
        computer services between Scott Air Force Base, and
        Griffiss    Air Force Base, New York, leaving channels
        available    for additional      requirements.    The Arw
        was leasing a circuit        that nearly paralleled     the
        Air Force circuit       to obtain service from the same
        computer complex.        Also the Army was processing       a
        requirement     for two additional       circuits and'had re-
        ceived approval to connect to the computer.

                The Air Force was unaware of the Army require-
        ments and the Army was unaware of the available                Air
        Force channels.       Although the Air Force circuit           was
        a Defense Communications System circuit,             the data
        base directory      of DCA's Western Hemisphere Area
        Office,    the office    responsible  for cataloging        sys-
        tem facilities      in CONUS, did not contain the data
        on available,     unused channels.      Officials      of that
        office    advised us that the recording         of use data in
        DCA9s data base directory        was not required       and that
        they therefore      were unable to identify       the avail-
        able, unused channels.

               We had informed the Army and the Air Force
        validating   offices  of this situation     and were ad-
        vised that the Army's requirements       (three circuits)
        would be met by using three of the unused Air Force
        channels.    We estimated that such action would re-
        sult in savings of about $14,500 annually.         Subse-
        quent to the completion     of our fieldwork,    we were
        advised also that this action was no longer possible

                                   18
because of the loss of time-sharing  capacity at the
computer complex and that the savings would not be
achieved in this case.

      We believe that a central   authority,  with total
system information,    would be in a position  to coor-
dinate the acquisition    of such services and thus permit
the achievement of economies.

2. Microwave   system         .I'
                              Tr
      According to a DCA official,       there are 12 spare
channels in a Government-owned microwave system between
the Pentagon and Andrews Air Farce Base, Maryland.
Concurrently   seven other circuits,       at least one for
each military    department,    were being leased at a total
cost of about $6,000 a year to provide service bettieen
these s&e locations.         Sufficient  information    had not
been assembled to permit us to obtain from DCA a tech-
nical evaluation    as to whether the spare microwave
channels could be used in lieu of the leased circuits.
Use of the alternative       Government-owned facilities,
however, had not been considered.          DCA's Western Hemi-
sphere Area ofeficials    gave the following      possible rea-
sons for this.

--It     was impracticable  to maintain an updated listing
    of resources for the use of the various validating
    offices   because of the large number of daily actions.
    The only current data base for CONUSwas maintained
    by DCA's Western Hemisphere Area, and this was lim-
    ited to Defense Communications System facilities.

--DCA's Western Hemisphere Area was not responsible
   for reviewing   all requirements     to ensure maximum use
   of available  resources.     In general,dt     reviewed only
   Defense Communications System requirements         and did
   not receive information     on requirements   which were
   not part of the system.

--The military   departments could unilaterally    classify
   new minor communications  facilities   as non-Defense
   Communications System assets and, when they did, DCA's
   Western Hemisphere Area received no data on them.
Data on use of resources         not adequate
for management purposes

       Insufficient        or incorrect    data on the use of services
can result       in the retention       or addition  of unneeded services.
Therefore      traffic     studies are essential     to efficient       manage-
ment of communications           services,     Data collected     in   such
studies can be used to determine whether existing                   facilities
(1) are adequate to satisfy             new requests for additional
services,      (2) should be increased or decreased to provide
an acceptable         grade and level of service,        (3) should be
discontinued,          or (4) should be reconfigured.

       We found instances where traffic    studies had not been
made but should have been made. We found also instances
where study reports contained inaccurate       data and conclu-                   .
sions.    Further we found instances where studies had been
made by the user but the study reports had not been sub-
mitted to the userss validating     office  or higher review
levels.

       The military    departments and DCA recognize that traffic
studies are desirable       and suggest that they be made, espe-
cially   of base administrative        telephone services      including
general purpose AUTOVONaccess lines.               Although traffic
studies are made of administrative           telephone services,       we
found that there were no policies,           directives,    or regula-
tions requiring     that studies be made of dedicated networks1
or other circuitry      and facilities      controlled    by the commands.

          The more thorough review possible through the use of
traffic      data is illustrated  by the following example.

                Air Force Personnel Facsimile Network--This     net-
          work (described   on pS lo), in existence   since 1963,
          should have been evaluated a number of times under Air                      .
          Force procedures which required a semiannualreevaluation
          of the need for communications    services.    (See p. 29.)
          Although we did not examine into the complete history
          of reevaluations,   the most recent was made in 1969.


1A service that       is provided to a relatively         limited   number
 of subscribers       for a particular function.

                                     20
      (See p. 31.)   In such evaluations      it seems evident
      that terminal  traffic  data should have been considered.
      We found that traffic   data had been developed for only
      10 of the 15 network terminals.        At our request,      traffic
      data were obtained for all the terminals.           Analysis
      showed that average use, by location,        ranged from 18
      minutes to 5 hours a day.      On the basis of this infor-
      mation, Air Force officials     discontinued     four terminals
      and related circuitry.      We estimate that savings will
      be $23,700 annually.     The remaining terminals       are pro-
      viding the services,   but the Air Force is studying
      these for possible further     reductions.

        Our examination   in two major Army commands showed that
there were varying practices       for making traffic    studies.
The Army Materiel      Command has established    a small group to
make studies of its own installations,         The studies include
administrative     lines and AUTOVONbut not other lines con-
trolled    by the command, such as command and control         lines,
and other dedicated services.         With the exception of data
on selected AUTOVONlines,       the Strategic   Communications
Command (the Army validating       office)  does not receive the
results    of the Army Materiel    Command studies.

        Headquarters,    Continental   Army Command, does not have
a traffic    study capability      and has assigned the responsibil-
ity for making such studies to its subordinate              elements.
One subordinate       element was making extensive       studies of all
circuitry    under its control.       These studies,     however, did
not cover the services controlled           by tenant organizations.
Another subordinate       element does not make traffic         studies.
Prior to July-1970 the Army validation            office  did not re-
ceive traffic      study data from this command, Thereafter,             at
the request of the validation         office,    selected AUTOVON
studies were to be received from two of the four Armies of
the Continental.Army       Command.

       In the   Air Force, traffic     studies are made by a compo-
nent of the     Air Force Communications Service.        These studies
principally     cover base services.       They do not include dedi-
cated lines     controlled     by the Air Force commands. The vali-
dating office      of the Air Force Connnunications Service does
not receive     traffic    study data.


                                     21
       We found no    evidence that traffic    studies were made
by the Navy, and      a representative   of the Navy validating
office   confirmed    that the office  did not receive traffic
study data other      than for AUTOVONand AUTODIN.

       Information    on AUTODIN traffic      is automatically      gener-
ated within      the system and provided to users.,        Traffic
studies of AUTOVONare made by the common carriers                 and are
given to DC&, DCA, in turn, provides the military                 depart-
ments with the traffic        study data,     The studies,     along with
other data, indicate       the current    level of service and the
lines necessary to obtain a desired level of service.

        Officials    of DCA and the military       departments said
that the carrier        studies could be used only as trend indi-
cators,      because they contained errors and lacked required
data.      For example, the Navy validating         office   had traffic
studies for AUTOVONbut used them only as guides.                 Also an
Air Force official         stated that experience had shown that
AUTOVONstudies frequently           contained errors.       An analysis
of the traffic       studies of Air Force AUTOVONservice for 1
month revealed over 130 errors.              The Army validating    office,
which received the traffice           studies on AUTOVONand some
other limited       studies,    complained that the AUTOVONstudies
showed:

      --Incorrect     circuit   quantities       serving   locations.

      --Erroneous     configuration        of lines,

      --Exclusion     of user   locations       from
                                                0    studies,

      --Inclusion     of non-Army     locations.

       The benefits    of using reliable       traffic   study data can
be illustrated      by the experience of the Army Strategic          Com-
munications     Command. This command, as a part of its manage-
ment function,      makes traffic     studies of selected Army AUTOVON
access lines.       Command officials      said that their traffic
studies were more accurate than those made by common carriers
and resulted     in significant     cost reductions      in Army AUTOVON
service.      They said that substantial         savings could be achieved
through studies of the AUTOVONaccess lines;               for example,
the deletion     of a single line at each of its approximately           230

                                      22
locations    would re<ude-1-the system cost about $400,000 a
year D    They told-us.:,$hat  the following    examples were rep-
resentative    of the.results     of their traffic   analyses.
                      :
                          ;-   ;1


      1. Fort    Campbell;          Kentucky

                 This,installation      was being served by 17 AUTOVON
         access lines::        -Common-carrier  studies showed 10
         blocked inward calls for each 100 attempts.               The
         carrier,      on:the basis of studies over an &month
         period,     recommended that additional       lines be in-
         stalled-,     and seven lines were added.        Thereafter
         the Strategic        Communications Command made a study
         which resulted         in the removal of three of the lines
         with resu-lting        cost savings of $5,400 a year.
                                 ,'.
      2. Iowa Army Ammunition Plant, Burlington,            Iowa

                Carrier-studies     at this plant showed 10 blocked
          inward calls for'each      100 attempts and a need for
          three more lines;      After a Strategic   Communications
          Command study, only two lines were installed        and an
          acceptable     level of service was provided.     The an-
          nual savings by not installing       the one line approxi-
          mated $1,800.‘ ;

Information     incomplete          on new recruirements

      Data needed to evaluate a requirement        and to determine
the best means of satisfying     it include such performance
data as volume of traffic     to be handled, purpose of ser-
vice, frequency of transmission,       and timeliness    of trans-
mission required.     This kind  of   data,  however,  frequently
is excluded from the requests to a validation         office   for
services.    Such requests show only data needed to effect
leasing,   such as the specific    circuitry   and terminal    equip-
ment required.    For  example:

            AUTOVONaccess to Mukilteo,Air,Force       Station--A
      request was submitted by the Air Force Logistics          Com-
      mand to the Air Force Communications Service for vali-
      dation of a two-way circuit    between Mukilteo.Air       Force
      Station,  Washington, and   McChord  Air  Force  Base,    Wash-
      ington.   The request described the servcee as follows:

                                               23
           ltInstall    full period,         4 wire, two-way
     voice circuit      between the above locations.
     Terminate circuits        in switching         equipment at
     McChord to allow direct           dialing      thru McChord
     exchange.       Terminate     circuit     in   three    (3) desk
     sets and key equipment at Mukilteo,                   Circuit
     is to be configured         to allow direct          dialing
     thru the McChord PBX [private               branch exchange]
     to and from McChord offices,              AUTOVONand other
     leased circuits       available       to McChord.@'

The requirement was validated as submitted,                 and a cir-
cuit was leased to provide the service.,

        Air Force policy is that where limited     service,
such as station      access to AUTOVON, is required,     such
access be provided through the nearest DOD facility,
if possible.      Although Fort Lawton, Washington,      is
nearer to the station       than is McChord, an Air Force
Logistics    Command representative    stated that other DOD
activities     in the area were not considered as access
points because the air base was to furnish,         in addition
to AUTOVONaccess, logistical        support to the station.
But AUTOVONaccess could have been provided through
Fort Lawton, and the service could have been used also
for logistical      support from McChord.    Because the re-
quest did not show that the primary purpose of the
requirement     was to provide station    access to AUTOVON,
the validating      office  did not consider this alternative.




                                24
ABSENCE OF IJ!JDEPENDENT
                       EVALUATION
OF NEW REQUIREMENTS

        The authority    of the Army and the Air Force validating
offices     is limited   to suggesting       alternative   methods of meet-
ing requirements,       and the using commands can accept or re-
ject their suggestions,           The Navy validating      office  selects
the facilities       and services,      Similar to the Army and the
Air Force, DCA has little          authority     and can only suggest
alternative      methods of meeting requirements         through Defense
Communications System assets.             The method of validation      and
approval in the example discussed below illustrates                the
need for a strengthened         review process,

              Army Military  Police Networkl--In       December 1967
      the Army Provost Marshal General proposed that his of-.
      fice and those of the Provost Marshal, Continental
      Army Command; five military        police groups of the Armies;
      and the Crime Laboratory,        Fort Cordon, Georgia, be con-
      nected by a voice-data      teletypewriter     network using
      AUTOVONfacilities.       This was to be the initial         incre-
      ment of a network that would eventually           include the
      principal    detachments and the field      offices    of the
      military    police groups.

             In October 1967 the 1st Army Military    Police Group,
      aware of the proposal,    requested ADTOVONvoice-data
      service for the group headquarters'     detachments.   In
      October and November 1968, the service was installed.
      Service to the Continental     Army Command Provost Mar-
      shal's Office was added a , year later,  in September 1969.

             We were told that the requests had not been re-
      viewed at Headquarters,    1st Army, because it was as-
      sumed that the Army Provost Marshal had decided on the
      service needed and how it was to be fulfilled.      Alter-
      native methods of providing.the     service were not con-
      sidered.

           The requests were forwarded to the Continental
      Army Command, the next highest command level.   The


1 See p. 11.

                                   25
command requested additional    justification    and coordi-
nation with the Army Intelligence       Command which has a
similar    network.      After receipt    of some additional     in-
formation,     but apparently     without   the coordination     of
the Army Intelligence         Command, the requests were for-
warded to the Army Assistant          Chief of Staff for
Communications-Electronics         without approval or disap-
proval.     We were told by a command official          that its
communications      office    did not agree that the network
should be created but that, because it had been con-
sidered at higher levels and required           further    ap-
proval,    the requests were forwarded to the depart-
mental level of the Army.

       At the departmental         level,  two alternative      methods
to fulfill     the requests were considered:            (1) teletype-
writer     exchange service and (2) leased dedicated cir-
cuits and equipment; both were rejected.                Two addi-
tional     methods--AUTODIN and the Army Intelligence             Com-
mand Network--did        exist;    however, we found no evidence
that they were considered.             The requests were approved
as submitted and were forwarded to the Joint Chiefs of
Staff.      That office     approved the requests,       but it
could not provide us with information             on the nature of
its review,       The requests were then forwarded to the
Army validating       office,    the Strategic    Communications
Command. At that office            we were told that alternative
methods had not been considered because higher levels
had proposed and approved the method to be used.

       In January 1970, about 14 months after the 1st
Army Police Group Network was installed,               it was dis-
connected,   including     the circuit     serving the Continen-
tal Army Command Provost Marshal's            Office.     The com-
mander of the group told us that,           in view of the esti-
mated annual network costs--$54,000--it               was too expen-
sive to justify     retention.       Although records were not
available   showing the use of the network while in op-
eration,   we estimated,       on the basis of discussions         with
the users, that the combined use of the five detachment
terminals   amounted to 7.5 hours a day.              Also we were
told that the network was not used to communicate with
other police groups or with the Crime Laboratory.                  The
commander commented that the loss of the network was

                               26
      detrimental    to the operations   of the group; however,
      it is currently     using telephone service for priority
      matters and mail for routine      business.

              The 4th Army Police Group Network was installed      in
      September and October 1969, about a year after the 1st
      Army Police Group Network was activated.         In May 1970,
      4 months after the 1st Army Police Group Network was
      disconnected,    the 3d Army Police Group Network was in-
      stalled.     Both networks were in operation     at the time
      of our audit.      The 5th Army Police Group Network was
      installed    also in the latter    part of 1969, but was dis-
      connected within     a year,    The 6th Army Police Group
      did not have a network as of June 1970 and had not re-
      quested such service.

             With the exception of the 1st Army Police Group
      Network, the requests for the other numbered Army Po-
      lice Group networks were not processed through the
      Continental    Army CommandDs communications staff, The
      staff was unaware that the other networks had been in-
      stalled.

        It seems evident that the absence of a coordinated          re-
view by an independent authority      had the following    results:
(1) the objective     of the Army Provost Marshal General to
establish    a total  system was not achieved,     (2) segments of
the system were being discontinued      while others were being
installed    and two were in existence   only a short time, (3)
one of the groups never had a network, and (4) the system
as it evolved was not used by,the groups to communicate ei-
ther with each other or with certain      centralized    activities.

     We believe that the circumstances  in this case indi-
cate the need for an independent review of the remaining
segments of the Army Military  Police Network.

        Of the 20 other cases we examined into,       four Air Force
cases, six Army cases, and a joint       Army-Air Force facility
case were not reviewed at departmental        level because of the
$100,000 limitation     for review at that level,        In these 11
cases, our examination      of the review process at lower levels
frequently     was hampered by the absence of documentation
relating     to the scope of review.    Further,   although all Navy

                                   27
requirements   were approved at departmental   level,  we were
not able to determine the quality    of any reviews made of the
six Navy cases because no records of reviews were main-
tained,    Three Air Force cases were reviewed at departmental
level because of special circumstances.      We examined into
the review made on one of the three and found it to have
been adequate.

         The designation    of a central manager, having respon-
sibility      and authority   for an independent review of the
justification      for new requirements,     could provide the focal
point for review of requirements         from the standpoint    of sys-
temwide effectiveness        and methods to fulfill     them. It  would
also be a step toward the objective          of establishing  a single
communications       system for DOD.




                                  28
REEVALUATIONSNOT MADE INDEPENDENTLY
NOR COORDINATEDWITH RESOURCESDATA

        We Selieve that our observations    concerning    the need for
a rather complete inventory     of DOD communications resources,
traffic    data on those resources,    and better data on the pur-
poses of required     services,  as discussed in the preceding
sections of this chapter dealing with new requirements,             also
pertain    to the reevaluation  of existing    resources,    as dis-
cussed in the remainder of this chapter.          Furthermore    reeval-
uations are not always made and, when made, normally are per-
formed by the users without guidance and effective           review by
higher authority.

Air   Force and Army reevaluations     not fully   effective

     We examined into the practices    of two commands in        the
Army1 and two commands and a staff activity    in the Air        Force.
Army procedures provide for an annual reevaluation    and        Air
Force procedures provide for a semiannual reevaluation           of
the need for communications  services.    We observed that        of-
ten:

       --The periodic     reevaluations     were made without  specific
          guidance, standards,       or techniques  provided by the
          military   departments or their       communications commands
          or staffs.

       --The commands that authorized   and used the services
          determined whether they should be continued.

       --Rejustifications      by the user (command or subordinate
          element of a command) of a service frequently       were
          phrased in broad terms, such as "a review of our
          leased circuits/equipments      reveals that all are re-
          quired."


1
 In one of the Army commands, however, a small group had
 been established     to analyze administrative    communications
 circuits    and recommend changes.    Generally  the group did
 not analyze dedicated command and control       circuits.    This
 command also had provided some guidance and standards to
 subordinate    elements for use in these reviews.

                                 29
      --The military      departments8     communications  commands fur-
         nished technical      assistance,    if requested by the user
         of a service,     but did not have the responsibility       for
         evaluating    the user's need or the authority       to disap-
         prove the need.

      --No activity,     apart from the using command, was respon-
         sible for an independent,      critical,   and objective  ap-
         praisal   of the technical    and economic considerations
         necessary to ensure that service was being provided
         in the most efficient,     effective,    and economical man-
         ner from a systemwide point of view.

       That   the reevaluations     were not fully    effective   is   il-
lustrated,      we believe,   by the following     examples.

      1. Army emergency       circuits

              Two dedicated   circuits     were installed      in 1968 be-
      tween Fort Sheridan,       Illinois,     and Fort Carson, Colo-
      rado, to fulfill      emergency communications         requirements
      arising    during periods of civil         disorders.     Periodic
      traffic    studies had not been made. Discussions              with
      the communications      staffs     during our review showed that
      the circuits     were being used for administrative            pur-
      poses.     We estimated    that AUTOVONwould have been a
      less costly means of providing           this service.

            A Strategic     Communications Command official        agreed
      that AUTOVON service would meet the users' requirements,
      would be less costly,     and should have been considered
      during the annual reviews.        He also questioned whether
      the emergency conditions      that justified     the circuits     in
      1968 still   existed.    One official     said that there was
      no evidence that these circuits       were evaluated during
      the 1968 or 1969 reviews.

      During our review of the two circuits,     we brought this
matter to the attention    of the Continental  Army Command. The
command requested that the user reevaluate     the need, and
after  reevaluation   both circuits were disconnected.     We esti-
mate the savings from these actions     to be about $11,400 annu-
ally.



                                         30
     2. Air    Force Personnel   Facsimile    Network

           This network, described on page 10, was reviewed
     by the user for continuing    need in 1969 but not in 1970.
     We were unable to identify    the reason for the 1970 omis-
     sion.    After completion of the 1969 review, the Air
     Force Communications Service was notified      that the net-
     work would be retained.     The notice contained no docu-
     mentation to support the decision,     and the using offi-
     cials could not provide any.

        As stated on page 21, our analysis      of network traffic
data and disclosure     of the results    to Air Force officials
resulted    in the discontinuance    of four terminals    and related
circuitry.

      We believe that,    if an effective review and independent
evaluation   had been made of this network in May 1970, the
scheduled time for the semiannual review, it is probable that
the Air Force would have had sufficient      basis to discontinue
the circuits    and terminals.

      3. Air   Force Logistics    Readiness   Network

           When the Military    Airlift   Command established     this
     network (see pa 11) in 1966, the logistics          managers of
     the command decided that AUTOVON, the common-user voice
     network,   could not provide the required        sermice (switch-
     ing, conferencing,     and two-digit   dialing).     The manag-
     ers stated, however, that the dedicated network would
     be integrated    into a common-user network when it could
     provide the service needed.

             From 1967 the logistics     managers periodically       re-
     viewed this network and concluded that it was needed.
     In 1967 a special review was made of the network and a
     written    justification  for its retention        was submitted
     to the command communications        organization.      The justi-
     fication     included a description     of the network,     the
     purpose for which it was used, the claimed benefits               de-
     rived from its use, and a statement indicating            that it
     was less costly and more efficient         than AUTOVON.



                                  31
             DCA off3cials,      in response to our inquiry,           sug-
     gested a method of utilizing           AUTOVONwhereby the tech-
     nical and operational         requirements      could be satisfied
     at less cost to the Government.              The method suggested
     was to home all members of the dedicated network on a
     single AUTOVONswitch that was not being fully                   utilized.
     This would avoid the possible requirement                 for leasing
     any additional       lines between switches and would use the
     capacity     of the underutilized        switch and thus reduce
     costs 0 Also the switching,          conferencing,        and two-digit
     dialing    services would be provided under this method.
     The AUTOVON service suggested by the DCA officials                     has
     been available       since 1966, except for the two-digit
     dialing    feature.       (The two-digit     dialing    feature     is a
     refinement     which permits connection           by dialing    two,
     rather than the normal seven, digits.)

           In June 1970, on the basis of the result      of a spe-
     cial DOD project   which had been established     to make an
     independent determination     of whether dedicated networks
     should be integrated    into common-user systems, Headquar-
     ters, Air Force, directed     that the Logistics   Readiness
     Network be eliminated     and the facilities   of AUTOVONbe
     used.

        The broad and general statements which had been used to
justify    this network were not, in our opinion,    susceptible
 to a sufficiently    thorough analysis and evaluation,   either
from a technical     or an economic standpoint.   It appears to
us that an effective      semiannual review could have determined
earlier    that this network should have been terminated.

     4. Continental      Army Command Dedicated         Voice Network

            The Continental    Army Command has a dedicated voice
     network costing about $25,000 annually,        which connects
     the command headquarters      with its numbered armies and
     with other locations.       The network was completed in
     October 1969 to provide a conferencing        arrangement.      At
     that time this arrangement could not be provided by
     AUTOVON. The request submitted         to the validating   office
     for the dedicated circuits       stated that the service would
     be required   until    AUTOVON's conferencing    arrangement was
     available.    Although AUTOVON's service was available

                                     32
         from January 1970, the dedicated       service    still    existed
         at the time of our review.

               No traffic   analysis had been made of the dedicated
         service.    Personnel of a subordinate    element of the com-
         mand said that the dedicated    service duplicated   AUTOVON
         service.    In response to our inquiry,    an Army Strategic
         Communications Command official     agreed that duplication
         existed.    A review was made by the Continental    Army Com-
         mand Staff communicat6rs in May 1970 and they recom-
         mended to the command the removal of the dedicated ser-
         vice.

         In rejecting   the recommendation,     the user     (the   command)
stated     that:

         "There is a demonstrated need for continuance          of
         dedicated voice circuits      which overshadows any
         potential    cost savings accruable      through discon-
         tinuance.     Also, operational    limitations   associ-
         ated with AUTOVONmilitate       against sole reliance
         on alternate     means."

      We recognize     that the user should have a voice in deci-
sions affecting     its operational       capabilities.      We believe,
however, that decisions         regarding   the method of providing
the required    services      should receive an independent review
by higher authority,        particularly    when, as in this situation,
the communications       staff has evaluated         the need for the ser-
vice and recommended its removal.

       The Air Force recognized %hat there were inadequacies
in its semiannual review procedures.      A working group was
formed in May 1970 to provide the users with additional
guidance and information.      At the time of our fieldwork  in
September 1970,the group had not made any changes to then-
existing   procedures.

       In the Army, it was determined      that the requirement       for
the using commands to annually reevaluate        circuits    within a
2-month period was not conducive to meaningful           and in-depth
review and guidance was developed requiring         the reviews to
be made throughout       the year.  Also forms were developed for
reporting    the results    of the review of each circuit.       The

                                     33
completed forms were to be submitted   to the Army Strategic
Communications Command, although this command had no author-
ity to modify the decision as to retention   of a circuit.

Reevaluations
           ._ls   not made in the Navy

       Periodic     reviews of leased communications     services were
not being made in the Navy. A Navy inspection            report issued
in November 1969 stated that, as a result          of a special fis-
cal year 1970 review by Navy users, AUTOVONservices              costing
about $100,000 were identified          as excess to requirements.
The report      stated that effective     periodic reviews would have
disclosed     this condition     and that the services would have
been discontinued        sooner.

      A Navy official    told us that the Navy instructions    on
the processing    and reporting   of communications requirements
were being revised     to include procedures for making periodic
reviews.

        Although the changes made or proposed to be made by the
military     departments    in the periodic   reevaluation      of communi-
cations requirements        should result   in improved procedures,
we believe that such reviews cannot be effective              from a DOD-
wide standpoint      unless adequate consideration         is given to
existing     DOD systemwide facilities      which could satisfy       such
requirements.       As stated previously,     users and validators
do not have such information.          We believe also that there
should be an independent and authoritative             review of reeval-
uations at a level higher than that of the user.                We recog-
nize that the needs of the user must be given appropriate
consideration      in such determinations,      but we believe that
such assurance can be provided without           sacrificing     the ad-
vantages of coordinated        management of minor communications
services.




                                    34
      CONCLUSIONS, RECOmNDATION,             AND AGENCYCOMMENTS

CONCLUSIONS

       Our review has shown that, although DOD has established
DCA, which has a partial        inventory     of communications       re-
sources, no office     at the Secretary        of Defense level,        Defense
agencies, or military      departments has a complete inventory
or adequate data on the volume or nature of traffic                  through
the resources.     Therefore      we believe that military         depart-
ment activities    responsible      for validating       requests for ser-
vices lack sufficient      information      on available      resources and
the use being made of them. Also they do not receive ade-
quate descriptions     of new services being requested.               The Army
and the Air Force communications           staffs   have little     authority
in the selection    of facilities       to service new communications
requirements    or to rearrange existing          services.

       We believe that the designation          of a central     office    hav-
ing sufficient     authority     and information     to independently       re-
view new leasing requests and to evaluate them periodically
as to the best method of providing           the required      services
would provide a basis for more economical utilization                   of com-
munications    resources.       We believe also that the operating
functions    associated     with these responsibilities         could be
performed within      the existing     DCA organizational       structure.
The establishment,      reevaluation,      and rejustification        by the
users are not, in our opinion,           the most effective      means to
achieve the objective        of establishing     and perpetuating        a
single communications        system.

       Although the number of cases examined during our review
was too limited      to permit an evaluation     of the overall    effec-
tiveness of the management of minor communications           within
DOD, we believe that certain      current    policies  and procedures
require    the attention   of the Secretary    of Defense.

RECOMMENDATION

      Therefore in our draft        report    we proposed    that   the Sec-
retary of Defense study:


                                     35
--The feasibility        of a centralized    DOD activity     having
   authority    and responsibility       for selecting     the means
   of providing     new service after the need for the ser-
   vice has been approved at the appropriate             levels.
   Consideration      should be given to the cost of a cen-
   tralized    validation    office    compared with the costs of
   the dispersed functions          as now performed.

--Providing    the centralized     activity  resources       including
   a complete inventory      of communications    facilities        (or,
   as an alternative,     access to such information)           and
   data on their traffic      volume and purposes.

--Assigning      the activity      responsibility     and authority
   for controlling        the scheduling and monitoring          the
   qualitative      aspects of the periodic        reevaluations     of
   existingservicesand          for determinating      whether such
   services    could be provided more economically,              but with
   acceptable     effectiveness,       by other means, particularly
   where common-user facilities            are available.       The moni-
   toring that we have in mind would include prescribing
   the types of data and pattern of services                that should
   be jointly      considered in reevaluations,         making compli-
   ance reviews to determine that reevaluations                 are per-
   formed adequately and with appropriate              use of traffic
   studies,    reporting     of deficiencies      through command
   channels,     and initiating       corrective   actions.

--Whether the criteria      for reviewing requirements     at the
   Office of the Secretary       of Defense or military   depart-
   ment levels should be redefined         as applicable to total
   contemplated    (or actual)    network costs rather   than to
   individual   increments     to networks.

--Whether present criteria     for reviewing           at departmental
   level should be lowered, particularly             the Army and
   permanent Air Force criteria.

--The need for a directed      requirement    that requests for
   communications   services   show details    concerning    the
   the purpose of the services;       expected traffic    volume;
   configuration   of the related     network and terminal
   equipment involved,     if any; and such other data that


                              36
       are needed for selection     of the most efficient    and
       economical method of fulfilling     the requests.

     --The need for    the remaining parts of the Military  Po-
        lice Network   that is discussed on pages 25 to 27.

AGENCYCOMMENTS

      A draft of this report was furnished       to DOD on April 23,
1971. The Acting Assistant      to the Secretary    of Defense
(Telecommunications)    advised us that DOD shared our desire
to achieve improved communications management, wherever
possible,   and that studies were being initiated      to examine
into each proposal.     He stated that DOD's response to our
proposals would be forwarded to us upon completion         of the
studies,   which studies were expected to take up to 6 months.
(See app. I.>

       Subsequently we were informed that responsibility       for
the conduct of these studies had been assigned to the Joint
Chiefs of Staff.    We plan to evaluate the results      of the
studies.




                                 37
                                                                                   APPENDIXI



                             OFFICE OF THE SECRETARY               OF DEFENSE
                                        WASHINGTON,     OS.        20301




                                                                                  7 JUL    1971




Mr.     Charles     M. Bailey
Director,       Defense    Division
General      Accounting     Office
441 G Street,        N. W.
Washington,.       D. C. 20548

Dear    Mr.    Bailey:

The Secretary    of Defense             has asked me to respond         to your GAO Draft
Report,   dated April     23,         1971, “Benefits     from Centralized      Management
of Minor   Communications               Services”     (OSD Case #3272).

The Department             of Defense    shares    your desire    to achieve       improved
communications             management      wherever     possible.      To this end, studies
are being     initiated       for the purpose     of examining      each recommendation
or suggestion         outlined     on pages 5 and 6 of the subject         report.

A response   to the recommendations/suggestions                               will be forwarded   to
you upon completion      of the studies,     which                   are   expected  to take up to
six months  to complete.

                                                      Sincerely,




                                                    D. L. “Solomon
                             Acting      Assistant     to the Secretary            of Defense
                                               (Telecommunications)
Copies of this report are available from the
U. S. General Accounting Office, Room 6417,
441 G Street, N W., Washington, D.C., 20548.

Copies are provided without charge to Mem-
bers of Congress, congressiona I committee
staff members, Government officials, members
of the press, college libraries, faculty mem-
bers and students.   The price to the general
public is $1 .OOa copy. Orders should be ac-
companied by cash or check.