oversight

Management of Research and Development in Electronics-Communications Equipment Needs Improvement

Published by the Government Accountability Office on 1971-02-11.

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

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Management Of Research An
Development In Electronics-
Communications  Equipment
Needs Improvement _ B-162008
Department   of the Army




UNITED        STATES
GENERAL        ACCOUNTING   OFFICE
                                 UNITED STATES GENERAL ACCOUNTING OFFICE
                                              WASHINGTON,      D.C.   20548


    DEFENSE   DIVISION




                         B-165008


                         Dear   Mr.    Secretary:

          v                    This is our report      on the need for improvement     in the
!                   2    management     of Army   research    and development   in electronics-                    %z
                   .--   communications     equipment.

                                  The findings   in this report     deal with requirements          docu-
                         ments,    management      reviews,     and  concurrent     development        and
                         production.      The reply from the Assistant          Secretary      of the Army
                         (Research      and Development)       to our draft report      indicated     con-
                         currence     in our proposals      and stated that corrective         actions      ei-
                         ther had been taken or were in the process               of being taken,       In-
                         cluded in the report      is our evaluation      of his reply.      If the actions
                         cited by the Assistant       Secretary     are properly     implemented,         im-
                         proved    management,      with accompanying         savings,    should result.

                                  Cohies of this report  are          being sent to the Director,   Of-
                         fice   of Management    and Budget;           and the Secretary   of the Army.

                                                                              Sincerely     yours   ,




                                                                              Director,     Defense     Division

                         The Honorable
                         The Secretary        of Defense        <
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    I               GENERALACCOUNTINGOFFICE                         MANAGEMENTOF RESEARCH AND DEVELOPMENTIN
    I


    I
            -
                    REPORTTO THE                                    ELECTRONICS-COMMUNICATIONS EQUIPMENT
                                                                                                       NEEDS
    I               SECRETMY OF DEFENSE                             IMPROVEMENT
    I                                                               Department of the Army B-165008
    I
    I
    I
    I                DIGEST
    I               ------
    I
    I
    I
    I               WHY'THEREVIEWWASMADE
    I
    I
                           During fiscal    1970 the Army awarded contracts        valued at about $758 mil-
    I                      lion for the production     of electronics-communications       equipment.   The
    I
    I
                           Army Electronics    Command   is responsible    for the management of research                      91
    I                      and development of that equipment.          The General Accounting    Office (GAO)
    I                      reviewed selected    aspects of the Electronics        Command's management, be-
    I
    I                      cause of the amount of funds involved         and because of the importance    to
    I                      the planned combat effectiveness        of the Army.
    I
    I
    I
    I
    I
                    FINDINGS AND CONCLUSIONS
    I
    I
    I
                           A need for       improvement     was found in:
    I
    I                            --Management practice         during development.          Procedures were not imple-
1
                                    mented properly       to ensure that exploratory          development work was jus-
I                                   tified   by approved objectives,         thus avoiding       unnecessary     development
I                                   expenditures.       (See p. 7.)       There were excessive        delays in approving
I
                                    the statements      of the required      characteristics       of the materiel.
                                    These statements        are important,     since they specify        the goals to be
I
                                    achieved by the development work.               (See p. 9.)      In addition,     sub-
                                    stantial    expenditures     were made for (1) development of an item for
;
                                    which no user had been identified             (see p. 12) and (2) testing          under
                                    development     requirements     that were no longer valid.             (See p. 14.)
I
)                                --Conduct    of management reviews.       Required management reviews were
I                                   not always held {see p. 16) and personnel participating           did not al-
I
I                                   ways have necessary authority.         (See p. 18.)   The result   was that
I                                   the reviews did not fulfill      their   intended purposes,   which included
I
I
                                    providing   a decision-making    point in the development     process.
I
I
                                 --Concurrent     development arid production    of materiel.      A majority   of
I                                   the items placed in production        during the review period had not been
I                                   put through the complete development process.             This high-risk   proce-
I
I                                   dure is authorized      only in exceptional    circumstances.      (See PO 20.)
I                                   The Blue Ribbon Defense Panels in its July 1970 report             to the Presi-
I
I                                   dent and the Secretary       of Defense, recommended that a new policy
I                                   prohibit   concurrent    development and production       and defer the produc-
I
I
                                    tion decision    until   development prototypes     have been successfully
I                                   demonstrated.       (See p. 24.)
I
I
I                   Tear Sheet
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                                                                                                   5       I
RECOMMENDATIONS
             OR SUGGESTIONS                                                                                I

                                                                                                       I
    GAO proposed   to the Secretary    of Defense      that:                                           I
                                                                                                       I
      --Projects    be developed and justified        in accordance     with   approved                I
                                                                                                       I
         Army objectives    and requirements.        (See p. 8.)                                       I
                                                                                                       I
                                                                                                       I
      --Organizations   involved in reviewing         and approving     original    require-           I
         ments documents act more promptly.           (See p. 10.)                                     I
                                                                                                       I
                                                                                                       I
      --Procedures  be established      so that necessary changes in requirements                      I
         documents would be made on a timely basis.        This would require  that                    I
                                                                                                       I
         the changes be coordinated      promptly among the various using, devel-                      I
         oping, and testing   agencies.      (See p. 15.)                                              I
                                                                                                       I
                                                                                                       I
      --Army regulations     governing management reviews be followed    to ensure                     I
         that required   reviews are held and that personnel attending     are                         I
                                                                                                       I
         given the proper authority    to make decisions.   (See p. 19.)                               I
                                                                                                       I
                                                                                                       I
      --The number of items to be produced before completion      of development                       I
         be kept under close control;    the regulatory  criteria for allowing                         I
         this procedure be followed;    and all items so treated  be reviewed                          I
         periodically,  as required   by regulations.   (See p* 21.)                                   I
                                                                                                       I
                                                                                                       1
                                                                                                       I
AGENCYACTIONSAND UNRESOLVED
                          ISSUES
                                                                                                       I
                                                                                                       I
    The Assistant Secretary     of the Army (Research          and Development)     said    ac-        I
                                                                                                       I
    tion had been taken to
                                                                                                       I
      --ensure  that all projects   have documentation  and authorization    and
         are developed in accordance with Army objectives    and requirements
         (see p. 8.)
                                                                                                       ;
                                                                                                       f
      --ensure   that review and approval        of requirements      documents    are
                                                                                                       I
         prompter (see p. 10.)
                                                                                                       1
      --change Army procedures   to ensure that changes in requirements                   docu-        I
                                                                                                       I
         ments are made in a more prompt manner (see p. 15.)                                           I
                                                                                                       I
                                                                                                       I
      --clarify  the applicable  Army regulation   so that the purpose              of the             I
         management reviews is fulfilled    (see p. 19)3 and                                           I

                                                                                                       I
      --rewrite   the applicable Army regulations to strengthen   the manage-                          I
         ment of items to be developed and produced concurrently.     (See                             I
                                                                                                       I
          p. 21.)                                                                                      I
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                                                                                                       I
    I ‘                If the actions  cited by the Assistant  Secretary  are successful,    improved
    I                 'management, with accompanying savings should result.     GAO will    examine
    I     '
    I                  the area again to determine  the degree of success.




I
I             Tear Sheet
                        Contents
                                                                Page
DIGEST                                                            1
CHAPTER

  1       INTRODUCTION                                            4
  2       MANAGEMENT  PROCEDURES   DURING DEVELOPMENT
          REQUIRE IMPROVEMEKC                                     7
             Exploratory    development work not justi-
               fied by approved objectives                        7
                  Agency comments and GAO evaluation              8
             Delays in approving qualitative    materiel
               requirements                                       9
                  Agency comments and GAO evaluation             10
             Development of an item for which an Army
               user was not identified                           12
                  Agency comments and GAO evaluation             14
             Testing against obsolete requirements               14
                  Agency comments and GAO evaluation             15
  3       NEED FOR COMPLIANCEWITH AND CLARIFICATION
          OF REQUIREDMANAGEMENT  REVIEWS                         16
              Lack of management reviews                         16
                  Agency comments and GAO evaluation             17
              Lack of authority at management reviews            18
                  Agency comments and GAO evaluation             19
  4       EXTENSIVE CONCURRENT        DEVELOPMENT AND PRODUC-
          TION                                                   20
               Extensive use of limited      production  type
                 classification                                  20
                    Agency comments and GAO evaluation           21
               Quick-erect      antenna mast                     22
                    Agency comments and GAO evaluation           23
   5      INTERNAL AUDITS                                        25
  6       SCOPEOF REVIEW                                         27
APPENDIX                                                   Page '
  I        Letter dated February 10, 1970, from the
             Assistant   Secretary of the Army (Research
              and Development) to the General Accounting
             Office                                         31
                          ABBREVIATIONS

ECOM       U.S. Army Electronics       Command

GAO        General Accounting      Office
'    GENERALACCOUNTINGOFFICE                 MANAGEMENTOF RESEARCH AND DEVELOPMENTIN
    'REPORTTO THE                            ELECTRONICS-COMMUNICATIONSEQUIPMENTNEEDS
     SECRETmY OF DEFENSE                     IMPROVEMENT
                                              Department    of the Army      B-165008


    DIGEST
    ------

    WHY'THEREVIEWWASMADE
         During fiscal    1970 the Army awarded contracts        valued at about $758 mil-
         lion for the production     of electronics-communications       equipment.   The
         Army Electronics    Command is responsible for the managementof research
         and development of that equipment.          The General Accounting    Office (GAO)
         reviewed selected    aspects of the Electronics        Command's management, be-
         cause of the amount of funds involved and because of the importance            to
         the planned combat effectiveness        of the Army.


    FINDINGS AND CONCLUSIONS
         A need for   improvement     was found    in:

           --Management practice        during development.          Procedures were not imple-
              mented properly      to ensure that exploratory          development work was jus-
              tified   by approved objectives,        thus avoiding       unnecessary     development
              expenditures.       (See p. 7.)      There were excessive        delays in approving
              the statements      of the required     characteristics       of the materiel.
              These statements       are important,     since they specify        the goals to be
              achieved by the development work.              (See p. 9.)      In addition,     sub-
              stantial    expenditures     were made for (1) development of an item for
              which no user had been identified            (see p. 12) and (2) testing          under
              development     requirements     that were no longer valid.            (See p. 14.)

           --Conduct    of management reviews.       Required management reviews were
              not always held (see p. 16) and personnel participating           did not al-
              ways have necessary authority.         (See p. 18.)   The result   was that
              the reviews did not fulfill      their   intended purposes,   which included
              providing   a decision-making    point in the development process.

           --Concurrent     development and production     of materiel.      A majority    of
              the items placed in production        during the review period had not been
              put through the complete development process.            This high-risk     proce-
              dure is authorized      only in exceptional    circumstances.      (See PO 20.1
              The Blue Ribbon Defense Panel, in its July 1970 report to the Presi-
              dent and the Secretary       of Defense, recommended that a new policy
              prohibit   concurrent    development and production       and defer the produc-
              tion decision    until   development prototypes      have been successfully
              demonstrated.       (See p. 24.)
                                                                                           .
                                                                                               I
RECOMMENDATIONS
             OR SUGGESTIONS
    GAO proposed   to the Secretary    of Defense      that:

      --Projects    be developed and justified        in accordance     with    approved
         Army objectives    and requirements.        (See p. 8.)

      --Organizations   involved in reviewing         and approving     original    require-
         ments documents act more promptly.           (See p. 10.)

      --Procedures  be established      so that necessary changes in requirements
         documents would be made on a timely basis.          This would require that
         the changes be coordinated      promptly   among the various using, devel-
         oping, and testing   agencies.      (See p. 15.)

      --Army regulations     governing management reviews be followed    to ensure
         that required   reviews are held and that personnel attending     are
         given the proper authority    to make decisions.   (See p. 19.)

      --The number of items to be produced before              completion of development
         be kept under close control;    the regulatory          criteria for allowing
         this procedure be followed;    and all items          so treated be reviewed
         periodically,  as required   by regulations.           (See p. 21.)


AGENCYACTIONSAND UNRESOLVED
                          ISSUES
    The Assistant Secretary     of the Army (Research          and Development)     said           ac-
    tion had been taken to

      --ensure  that all projects   have documentation  and authorization    and
         are developed in accordance with Army objectives    and requirements
         (see p. 8.)
      --ensure   that review and approval        of requirements      documents    are
         prompter (see p. 10.)

      --change Army procedures   to ensure that changes in requirements                    docu-
         ments are made in a more prompt manner (see p. 15.)

      --clarify  the applicable  Army regulation   so that the purpose              of the
         management reviews is fulfilled    (see p. 19), and

      --rewrite  the applicable Army regulations  to strengthen                the manage-
         ment of items to be developed and produced concurrently.                  (See
         pa 21.)




                                        2
    .
.
.
        If the actions  cited by the Assistant  Secretary  are successful,    improved
        management, with accompanying savings should result.     GAO will    examine
        the area again to determine  the degree of success.




                           P
                                                                           .
                              CHAPTER1

                            INTRODUCTION

       The General Accounting Office has examined into the ef-
fectiveness    of the management of research and development of
electronics-commuqications       materiel   in the Army. This manage-
ment responsibility      is assigned to the U.S. Army Electronics
Command (ECOM), Fort Momnouth, New Jersey.           The overall mis-
sion of ECOM, a subordinate       command of the U,S. Army Materiel
Command, is tomanageassigned        electronic    equipments and sys-
tems throughout     the Army, including     research and development,
procurement,    production,   and control of this materiel.

       Research and development projects         at ECOMare under the
direct   supervision    of laboratory    directors    who report to the
Commanding General, ECOM. The work is performed by six op-
erating   laboratories:      Atmospheric Sciences; Combat Surveil-
lance9 Night Vision and Target Acquisition;            Communications-
Automatic Data Processing;       Electronic     Warfare; Avionics;
and Electronic     Components.     The ECOMDirectorate       of Research
and Development performs staff functions           and provides cer-
tain common support services for the operating            laboratories.
       In addition,   the Institute     for Exploratory    Research is
responsible     for basic research in the fields        of the physical
sciences relating     to the broad areas of communications and
surveillance,       ECOMwork is identified     through varying stages
of research and development by categories          of effort,   among
which are basic research,       exploratory   development, advanced
development, engineering      development, and operational        sys-
tems development.

       The D'epartment of Defense proposed budget for fiscal
year 1970, included $8.2 billion--     of which $1.8 billion        was
for the Department of the Army--for research,            development,
test, and evaluation.     The portion actually       allotted    to
ECOM's research', development,     test, and evaluation        program
for that fiscal    year amounted to $157 million.           ECOMreceived
also about: $40 million   for research and development wofk for
other Army and Government organizations.           During the same
period,   the Atiy awarded contracts      valued at about $758 mil-
lion for the production     of electronic     equipment whose design
was based largely upon the work of ECOM.

                                    4
.


          The Commanding General, Combat Developments Command,
    submits recommendations to Headquarters,      Department of the
    Army, for establishing    development objectives    and for spe-
    cific materiel   requirements   on the basis of these objectives,

          The Assistant    Chief of Staff for Force Development has
    responsibility     for overall   staff supervision    and for coordi-
    nation of Army combat developments and related policy with
    research and development functions         assigned to the Office
    of the Chief of Research and Development.           The Deputy Chief of
    Staff forLogisticshas       responsibility     for the Army procure-
    ment and materiel maintenance support policy in conjunction
    with the research and development effort.

           The Army Materiel   Comnand performs its research and de--
    velopment mission under the functional      supervision    of the
    Chief of Research and Development, who has staff responsibil-
    ity for planning,   programming, coordinating,       and supervising
    all Army research,    development,  test, and evaluation      func-
    tions,   including funding and setting    of priorities.

           The Army regulations   pertaining to materiel 'development
    objectives   and procedures   state, in pertinent   parts, that:

         "**  The ultimate   objective    of the Army research
         and development *** is to develop weapons, equip-
         ment and techniques ** qualitatively       superior to
         those of any potential     enemy, in any environment,
         and under all conditions      of war."
              *           *          *           *           *
                                                             -   ..
         '#Research and development activities       are primarily
         directed   toward achieving ** qualitative       materiel
         development objectives     (QMDO's) and developing
         materiel   which satisfies   ** qualitative     materiel
         requirements    (QMR's) and small development require-
         ments (SDR%Ltf

          With regard to the practical    execution of materiel     de-
    velopment and production,   the applicable     guidelines state
    that:
     ss*** The most important and relatively        inexpen-    *       ,
     sive phase of the materiel      life cycle is research
     and development ***.       Research and development is
     most efficiently      conducted sequentially     because
     problems at one stage are not fully apparent until
     the test data is available      from the previous
     stage *** eI'
     We examined seven active projects        in varying stages of
the development process as of Harch l.968, The seven were
randomly selected from a list of 145 items in four of the
six operating   laboratories    at ECOM.

      Because of security   restrictions,      this report does not
include a complete identification         or description   of the
items selected for our review; however, we have furnished
Army officials  with complete information         regarding the items
that we reviewed.

      The Assistant    Secretary of the Army (Research and Be-
velopment),   in a letter    dated February 10, 1970, commented
on our draft report.      This letter   is included as appendix I,




                                  6
                              CHAPTER 2

                  MANAGEMENT
                           PROCEDURES
                                    DURING

                 DEVELOPMENT
                           REQUIRE IMPROVEMENT

     Effective    management controls   over research and devel-
opment require that all projects      be conducted in accordance
with approved Army objectives     and requirements.   Our review
showed that there was a need to implement or improve manage-
ment procedures i'n order to‘manage more effectively     develop-
ment effort    at ECOMand higher Army levels.

       We found that procedures neither were implemented prop-
erly nor were sufficient      (1) to ensure that exploratory     de-
velopment work be performed only to meet approved objec-
tives and (2) to eliminate       delays in approving Qualitative
Materiel Requirements.      We found also that ECOMwas develop-
ing an item (1) for which there was no user and (2) which
was tested against development requirements        which were no
longer valid.    We attribute     this to the fact that the ap-
proved development requirements        documents were not updated
to incorporate    changes agreed upon, as required by regula-
tions.

EXPLORATORYDEVELOPMENTWORKNOT
JUSTIFIED BY APPROVEDOBJECTIVES

       The Army policy for research and development provides
that exploratory    development projects     support the objec-
tives stated in the Combat Development Objectives            Guide.
The objectives   guide is an Army compilation         of approved ob-
jectives   which need to be met to fulfill       the Army's mission.
These objectives    must be quoted in the qualitative          materiel
development objectives     document authorizing        the exploratory
development work.     A qualitative   materiel     development objec-
tive is an Army-approved statement of a military            need for
the development of new materiel,       the feasibility      of which
cannot be determined sufficiently       to permit the establish-
ment of a qualitative     materiel  requirement.        These objec-
tives provide guidance for combat development activities                and
the research and development program.         Army procedures re-
quire that documents supporting      proposed development work

                                    7
                                                                       .
                                                                               .
cite the Combat Development Objectives        Guide as reference           .
for the objective to be met.

       As of April 1968 our analysis of 506 active exploratory
development projects   showed that there had been no support-
ing documents or objectives    guide references  for initiation
of 148 of these projects.    This same finding was previously
reported by ECOM's Research and Development Directorate         in
a January 1966 report entitled     "Instructive Analysis of the
RDT&E [note 11 Program."    Our review disclosed    that no ac-
tion had been taken to correct the recognized deficiency.

        The necessary procedures evidently    were not being fol-
lowed by ECOMand Headquarters,       Army Materiel    Command, to
ensure that items under development were directed         to objec-
tives guide references.      We believe that this unsupported
development work could result     in the expenditure     of research
and development funds on projects      that might not be of suf-
ficient    value to the Government to justify      the expenditure.

Agency comments and GAO evaluation

      In our October 1969 draft report,    we proposed that all
development projects   be supported in accordance with ap-
proved Army objectives   and requirements.

      In reply to our proposal,   the Assistant   Secretary of
the Army stated that the Army concurred with the proposal
and that action had been taken to accomplish this objective.
He stated that all subtasks now had the proper documentation
and Combat Development Objectives    Guide reference.      (See
p. 36.)

       The Assistant  Secretary stated also that the findings
that 148 exploratory    development subtasks lacked recorded
supporting   documents or Combat Development Objectives    Guide
references   was correct at the time of the review, but that
the problem was merely one of a recordkeeping     nature, since
all of the 148 subtasks were authorized     and had valid objec-
tives guide references.      He said that ECOMregulations


1Research,   Development,   Test,   and Evaluation
       .
.

    . required an objectives        guide reference      for any proposed sub-
      task before its activation           could be approved and that a re-
      cent review     disclosed    that all mission subtasks in this cat-
      egory had valid references.            (See p. 33.1
             The failure     to record agreed changes in the authoriz-
      ing documents can result         in inappropriate      expenditures.
      Thus, it is important that adequate recordkeeping                be main-
      tained to avoid the possibility            that unauthorized     expendi-
      tures will be made. Our followup review showed that action
      had been taken to correct the situation              and that valid ref-
      erences now were required          for exploratory     development proj-
      ects.
     DELAYS IN APPROVING
     QUALITATIVE MATERIEL REQUIREMENTS
            According to Army regulations,  qualitative     materiel re-
     quirements are to be stated as soon as a need is recognized,
     the technical    approach is approved, and the probable feasi-
     bility   of development has been determined.       An internal
     study   made by ECOM in January      1966 reported     that   the   diffi-
     culty in securing requirement     documents was caused by the
     long waiting period between the submission of a proposed re-
     quirement and approval by higher headquarters.       It stated
     also that the long waiting period presented a problem for
     ECOMlaboratory   and fiscal   planners and programmers who
     must decide whether resources should be set aside to cover
     future jobs which might materialize.       The 1966 study pointed
     out that the average waiting period at that time was about
     18 months; however, reductions     were anticipated   in the fu-
     ture.
           Our examination of five of the seven projects         included
     in our review showed that the length of time required            to ap-
     prove a qualitative    materiel   requirement    for two projects
     was almost 2 years, a small development requirement           for an-
     other project    took about 15 months, and the requirements
     documents for two projects      were still    pending.
            We were informed by Combat Developments Command offi-
      cials that it should take about 1 year between the submis-
      sion of a proposed requirement     and its approval by the As-
      sistant  Chief of Staff for Force Development.       Our discus-
      sions with ECOMofficials    revealed,    however, that the av-
      erage waiting period was still     about 18 months.


                                          9
                                                                           .
      In our opinion more timely action is required on the             -
part of all organizations    involved in reviewing and approv-
ing requirements   doctunents so that the developing agencies
can better plan, program, and conduct their work.     In this
respect,   there is a need to improve procedures to assure
that such timely action is taken.

Agency comments and GAO evaluation

       The Assistant   Secretary has stated,in  his reply to our
draft report,     that the times to approve the requirements
document cited by GAO are not unreasonable      if the time count
begins with the initial      distribution of the draft proposed
requirements    and ends with Department of the Army approval.

      He has noted that a qualitative        materiel     requirement
represents    major Army equipment and large expenditure           of
funds and requires considerable       effort   and time by all con-
cerned to complete the required studies and to determine
cost effectiveness.      He has stated that it is far better to
take this time to have a valid requirement            than to push the
process and have an invalid     requirement.       He did say, however,
that, if later events prove that the requirement was not or
is no longer valid,     a rapid means of making a change would
be required.      (See p. 33.)

       It is, of course, necessary to take the time required
to validate    a requirement.     If the length of time required,
however, is greater than that expected by lower level plan-
ners and thereby creates problems (see p. 91, we believe
that action should be taken to either shorten the length of
time taken to process qualitative        materiel requirements   or
to stabilize    the length of time necessary so that lower
level planners will know the time frame in which they are
operating.     The Army evidently    favors the former since the
Army reply notes procedural       changes that should lead to a
more orderly    and timely establishment     of requirements   docu-
ments.     (See p. 35.)

      In our draft report of October 1969, we proposed that
more timely action should be taken by all organizations       in-
volved in reviewing   and approving qualitative    materiel re-
quirements and small developme[It cequircments to ensure
that the developing   agencies cou1.d beti.er plan, program,
and conduct their work. The Ass,istant Secretary of the
Army (Research and Development),  by letter dated Febru-
ary 10, 1970, stated that he concurred with our proposal    and
that the Army is implementing this policy.   (See p. 36.)
DZVELBPMENT OF AN ITEX FOR WHICH
AN ARPlY USER WAS NQT IDENTIFIED                             _j
                       _ ”
                           h _                        .                 i
         Requirements     .for new equipm&it,,,dr'for,major'changes                        or
improvements       in,materiel        originati'ng'       from new concepts-,           are
normally      expressed      in a qualitative            materiel      requirement        or
a small development            requirement.            A qualitative       materiel       re-
quirement       is an Army-approved            statement       of a specific        mili-
tary need for a new item,               a system,        or assemblage        the devel-
opment of which is believed                feasible       on the basis of prior
experimental       work.      A small development              requirement       states
an Army need for the development                     of equipment        of proven fea-
sibility     which can be developed                in a relatively         short time
and which does not warrant               the major effort            required     in sat-
isfying     a qualitative         materiel       requirement.

     Army regulations     state that any changes to these docu-
ments after    they have been approved will      be reviewed     by the
Combat Developments     Command with the developing       agency--and
when appropriate    with using field   agencies--and      forwarded    by
the Developments    Command to Headquarters,      Department     of the
Army, for approval.

        The approved   qualitative       materiel     requirement,     dated
December 1965, for the development                of a mobile weather        radar
set included     a requirement        for three sets to be used by the
Army at each field       Army1 level,       i.e.,    one to each corps.*
On January    29, 1968, the Developments             Command advised       the
Assistant    Chief of Staff        for Force Development         that,   since
corps levels     would not be significant            users of the data
furnished    by the radar,       it would not be appropriate           for them
to operate    it and that they had conducted              an extensive


1
 A field    Army is an administrative        and tactical     organization
  composed of a headquarters,        certain   organic    Army troops,
  service   support troops,   and a variabie       number of corps and
 divisions.
2
 A corps     is a tactical     unit  larger   than a division     and
  smaller    than a field     army.    A corps consists     of two or more
 divisions      together   with auxiliary     arms and services.



                                             12
                                 -.   _   ,.         1




survey to find other legitimate
                         - "_       Army 'users but had been un-
successful.   The Command .stated als'o*that    it could not jus-
tify the personnel spaces'a$     training   program'that  would be
required to operate .the:radar,

        In February 1968 the Command informed the same Assis-
tant Chief of Staff that 'questions had been raised concern-
ing the organizational         levelY'at'which         the radar should be
used.     They said that the Air“Force,Air                Weather Service was
contemplating     use of the radar at the division1               level of the
Army since it was furni.shing.weather  *_,.,        'sup$o& I. to the field
Army level.
                            _                    -'.::
                                  . -_I
        In April 1968 the Assistant           Chief of Staff for Force
Development advised the Development's Command by letter                     that,
since the Army was responsible             for the procurement,         mainte-
nance, and operation       of the‘mo‘bile weaiher‘radar             sets and
since the Command had recommended emploment of-this                      radar
at the division      level, -it.waS congidered'appropriate               that
the approved Qualitative          Materiel     Requirement'be       changed to
reflect    the different     leve.1 o‘f use.;..          +'
                                    ;       . 1, .          .
     We were informed by Developments Command officials
that they had never recommended use oF’the        set at the divi-
sion level and that use at such level would increase the
number required at least 'three,times.'     They* stated also
that it had been their po3ition     that the radar set should
be used by the Air Force,   although    the Air Force had not
made any firm commitment on its use o.f the item, and that
the Army should not be hxkXde%bd       as a user.

      Developments Command ,officials     informed us that they
did not intend to establish     any military     spaces to train
personnel to operate and maintain this equipment.          As of
April 30, 1969, however, ECOMwas still          continuing develop-
ment work on the item.(and,had incurred       total development
costs of over $1 million,~~even     though a-valid Army user had
not been identified   and there was no assurance that the Air
force would use the radar.
                         '‘      :a
1A division is a tactical   unit smaller than a corps which
 combines in itself   the necessary arms and services re-
 quired for sustained combat.
                                          13
      The Army had projected  total costs of approximately             *
$1.8 million  for this radar as of September 30, 1969, and
was planning to type classify    it as Standard Al in fiscal
year 1972, even though a user had not yet been decided
upon.

       An official  from the office of Assistant   Chief of Staff
for Force Development informed us in September 1970 that the
Army is going to use the mobile weather radar.       He stated,
however, that the Army had not decided at which level--corps
or division--the    sets would be used.  The decision will be
made after the completion of engineering      test and service
tests.    These tests are to be completed by July 1971.

Agency comments and GAO evaluation

        The Assistant    Secretary of the Army (Research and De-
velopment),    by letter    dated February 10, 1970, listed     sev-
eral regulations      which provide guidance to the user and de-
veloper for preparation        of objectives   and requirements  and
for development of hardware.          He stated that procedures
outlined    in these documents are monitored by the Army staff
to prevent development of items for which a need is not
identified.      (See p. 32.)

      In our opinion, the problems noted in the development
of this item, selected at random, illustrate      the need to
ensure that these procedures are actually    followed.

TESTING AGAINST OBSOLETEREQUIREMENTS

      The small development requirement   specifies      the per-
formance, p hy sical, and maintenance requirements       for the


1In the normal method of conducting    development and produc-
 tion, wherein these operations   are performed sequentially,
 an item is type classified   as Standard A-upon satisfactory
 completion of development and prior to production.      The
 action indicates  that the item is suitable    for Army use
 and is approved for full production.



                                 14
item.    The small development requirement       states a need for
a new item for which development is of proven feasibility
and is relatively   inexpensive.       These requirements  are
known as either essential       or desired characteristics    and
serve as the testing    criteria    used by the Army Test and
Evaluation    Command in determining     whether the new item is
suitable   for Army use.

      Our review of the development of a quick-erect     antenna
mast showed that the Combat Developments Command, in Sep-
tember 1966, agreed to a change in the small development rc-
quirement to increase the allowable    repair time from 1 hour
to 3 hours.    This change finally  was approved by the Chief
of Research and Development in July 1967. The document it-
self, however, was not revised to reflect     this change.
Subsequently,   the mast was tested by the Army Test and Eval-
uation Command in September 1967 against the original      re-
quirement of 1 hour and was found unsuitable      for Army use.

       We discussed this with an ECOMofficial    who stated
that the failure    to record the changed requirement   at the
Combat Developments Commandhad occurred before with other
items.
      The mast actually  required 5 hours repair time and
thus did not meet the revised requirement.     It is conceiv-
able, however, that equipment which does meet current re-
quirements could be found unsuitable    for Army use because
of the failure  to revise the requirements   document.  The
comment that this is not an isolated    case shows that this
should be of concern to the Army.
Agency comments and GAO evaluation
       In our draft report,      we proposed that procedures be
established     to effect any necessary revisions     to approved
qualitative     materiel  requirements    and small development re-
quirements.       This would require that the changes be coordi-
nated promptly among the various using, developing,          and
testing     agencies.
      The Assistant Secretary of the Army stated that the
Army concurred with our proposal,   and that appropriate   Army
procedures are being changed to correct    these problems.
(See p. 36.)

                                 1.5
                             CHAPTER3

        NEED FOR COtiLIANCE WITH AND CLARIFICATION OF

                  REQUIREDMANAGEMENT
                                   REVIEWS

       To provide for periodic   evaluation     of progress in the
development of materiel,     the Army has established       in-process
reviews at specified   decision-making      points in the research
and development cycle.     These reviews are designated as ei-
ther formal or informal and are required to'be held for the
purpose of obtaining   from each‘responsible       Army organization
its opinion and recommendations concerning the future devel-
opment course of the items.      The in-process     reviews are, ac-
cording to Army regulations,     decision-making      review points
in the development. of new Army materiel.

       We found that required management reviews were not al-
ways held.     We found *also that, when these reviews were
held, organizations    required   to attend were not always rep-
resented and that personnel participating       did not always
have the necessary authority      to state their organization's
position   concerning   the future development course of the
item under consideration.

LACK OF MANAGEMENT
                 REVIEWS

       In our report to the Congress entitled      "Need to Improve
Management Controls over Ammunition Development'" (B-157535,
September 27, 19681, we stated that certain-organizations
responsible    for the development of ammunition were not com-
plying with Army regulations      dealing with in-process    re-
views.    As stated in our report,     the Army, in a letter    dated
April 9, 1968, advised that corrective       action had been
taken, .including    the issuance of an Army Materiel     Command
Regulation    11-19, dated July 26, 1967, applicable      to all el-
ements of that command and for all types of materiel.

      We examined into the extent of overall  participation in
these research and development management reviews for the
seven ECOMitems selected for review.    These items were in
various stages of development and as many as from three to
five in-process  reviews should have been held for each

                                 16
.   item.  In total,  29 of these reviews should have been held,
    but we found that only 15 actually   had been held.

           We were informed in discussions          with ECOMand Army Ma-
    teriel   Command officials      that s'dme‘of the reviews were not
    held, because the-items        did nd‘t have an afiproved qualitative
    materiel 'requirement      or 'small developinent requirement.      We
    noted, however, that ECCPIRegulation            70-5, dated August 4,
    1965, required that the initial          in-process   review be held
    after the preparation       of the techn-ical characteristics      but
    prior to the initiation        of deve'lopment, even though a re-
    quirements document had not been approved.             We noted that
    the initial   in-process     reviews had-been.held       for only two of
    the seven items we. reviewed.    .._..
            In addition, our review showed that ECOMhad received
    copies of instructions    cited by'the Army as'providing       the
    necessary corrective    actions taken in response to our previ-
    ously mentioned report.?     One of these instructions     was a
    letter,    dated September 14, 1967, from'the U.S. Army Muni-
    tions Command, which stated that in-process         reviews should
    be held for each item in the engineering      development phase
    of the research and development cycle,'even         though a re-
    quirements d'ocument had-not been approved.       .

    Agency comments and GAO evaluation

           We proposed that Army regulations       governing management
     reviews be complied with to ensure that the required reviews
    were held.      The Assistant   Secretary of the Army in his re-
     ply, dated February 10,      1970,  to our draft report stated
     that, while the GAO had found the number of in-process            re-
     views actually    held were less than those then required by
     regulations,    some reviews were not held because it had
     proven impractical     to hold each.review    separately    and that
     some combined reviews were held on individual          items.    He
     stated that, on November 25, '1968, 'Army Materiel         Command
    -recognized the practicality      of this 'viewpoint    by issuing a
     revised Army Materiel      Command regulation   which considerably
     relaxed the requirements      for in-process   reviews.     (See
     p. 34.)




                                       17
       When counting   the number of in-process   reviews that              '
actually    were held, we took into consideration      the combina-
tion of some reviews to arrive at our finding        that 29 re-
views should have been held.      Thus, it was evident that fur-
ther action was needed to assure that in-process          reviews
were held when required.      We plan to evaluate the effective-
ness of these actions in a future review of the command's
operations.

LACK OF AUTHORITY AT MANAGEMENT
                              REVIEWS

       Army Regulation    11-25 states that in-process     reviews
will be decision reviews rather than learning        and informa-
tion reviews.      In this respect, Army Regulation     705-5 states
that the developing      agency should publish an agenda for each
in-process    review.    This agenda should identify    each area
for which a decision      is required and should contain enough
background data to permit each participant        to establish     a
valid position     for his command or agency.     In addition,     Army
Regulation    705-5 states also that representatives       of each
participating     command and agency at formal in-process       re-
views should be prepared to state the official         position    of
his agency or command on matters cited in the agenda.

       We have been informed by ECOMofficials         that one of the
major problems in conducting the in-process         reviews is the
lack of decision-making    authority    by representatives    who
participated   in these reviews.     They have stated that the
reviews are usually learning      sessions and no decisions     are
made due to this lack of decision-making        authority.

       Cur discussions     with Army Materiel      Command and Combat
Developments Command officials        revealed,     however, that there
was a difference     of opinion as to whether in-process          reviews
were decision-making        points or not.    We believe that Army
regulations    needed to reemphasize that the reviews are in-
tended to be decision-making.         We believe also that it is
important that     participants    in the in-process      reviews are
aware'of their organization's        position    concerning the item
under review and have sufficient         authority    to make a deci-
sion concerning     the future course of the program.




                                    IS
.
    - Agency comments and GAO evaluation

            In our October 1969 draft report,    we proposed that Army
     regulations   be complied with to assure that required manage-
     ment reviews are held and that regulations      be clarified to
     assure that agency representatives    at management reviews are
     given the authority    to make firm decisions   for their agen-
     cies.

            The Assistant    Secretary of the Army (Research and De-
      velopment) in his reply stated that the Army concurred in
      this proposal.      He said that the applicable   Army regulations
      had been or would be revised to (1) indicate       which reviews
      are mandatory and specify the content and format of the min-
      utes recording    the reviews and (2) assure that in-process       re-
      view attendees have the authority      to make firm decisions     for
      their agencies.      (See p. 36.)
            These changes, if properly   implemented, should enable
      the in-process  review to become the important     link in the
      management of developmental   materiel   it was intended to be.




                                        19
                                                                             .
                                                                                 .

                                 CHAPTER4

        EXTENSIVE CONCURRENT
                           DEVELOPMENT
                                     AND PRODUCTION

       In the Army, concurrent    development and production    of
an item is authorized     by classifying   it "limited production.:"
A limited    production item is described in Army regulations
as:
       tvc**an item under development *** for which an
      urgent operational     requirement   exists and for
      which no other existing       item is adequate **
      dnd Fg promising enough operationally        to war-
      rant initiating    *** production    for troop issue
      prior to completion of development and/or test
      ***, 8'

       Items authorized        for limited     production    are developed
and produced on a concurrent            basis.     This basis involves ex-
pedited development under high-risk               conditions     and requires
extremely careful planning.             It usually entails        the expendi-
ture of additional        funds and often results          in major retrofit
programs.    For   these     reasons,     it is  essential     that only
those projects     with a genuine need for the earliest               delivery
be considered for concurrent           development and production.
Army policy,    officially,       states that the use of the limited
production   classification        will be restricted        to exceptional
cases to meet urgent operational             requirements.

EXTENSIVE USE OF LIMITED PRODUCTION
TYPE CLASSIFICATION

        Of the 77 items classified     either as Standard A1 or as
limited    production    by ECOMin a Z-year period from April
1966 to April 1968, 56 items, or 73 percent, were classified
as limited     production.    It appears that, while this classi-
fication     is high risk in nature, its usage was becoming the
rule rather than the exception,        and, as a result,  consider-
able‘amounts     of money were being spent on items which had
not completed development.        An example of this is in the
section on the quick-erect       antenna mast on page 22.


1
 See page 14.
                                     20
Agency comments and GAO evaluation

        In our October 1969 draft report,      we proposed that the
number of items being classified        as limited    production     be
kept under close control,       since it appeared that this classi-
fication    was the rule rather than the exception;          that the
regulatory    criteria   for assigning   this classification        to an
item be followed;      and that all limited     production     items be
reviewed on a periodic      basis as required by regulations.

       The Assistant    Secretary of the Army (Research and De-
velopment),    in his reply to our draft report,         stated that
some nontactical     communications    systems procurement was
based on performance specifications          and therefore    must be
obtained under limited      production    authorization,      He said
that, if the use of limited       production     procedures was fur-
ther restricted,     the Army would lose the ability         to acquire
needed nontactical      communications    systems on the basis of
required operational      performance.

       The Assistant  Secretary stated also that numerous ad-
ditional   controls  had been instituted  within Army Materiel
Command and Department of the Army to limit limited      pro-
duction action to essential     items of reasonable risk and to
more closely monitor such programs.      (See p. 36.)

      He noted that a provision     for the control       of the number     s
of items being classified    as limited    production      was included
in a new regulation    that replaced the one that         formerly had
governed this area. (See p. 37.)

       We have examined the new Army Regulation             71-Q and it
appears that, with effective         implementation,      the limited
production   classification      will be more closely monitored
in the future.       The additional    controls   instituted     to limit
limited production       actions include the issuance by the Army
staff and the Army Materiel         Command of new directives         to
define conditions      for renewals and the requirement          that
proposals have the signature         of a general officer.




                                    21
QUICK-ERECTAXTEHNAMGT

       A quick-erect    antenna mast, one of the seven items we
reviewed I was among the 56 items classified       as limited pro-
duction.     (See p0 20.)     The Army initiated limited produc-
tion of the mast prior to completing development, even
though there was a question as to whether the mast could be
successfully     developed.

        The mast was initially    authorized  for development to
satisfy    a small development requirement      approved in April
1964, and a contract      for its development was awarded in
April 1965. While the mast was undergoing development,
ECOMreceived a crash directive         to expeditiously  develop a
radio terminal     set for Vietnam users.     It was subsequently
decided to use the mast with the set, even though it had not
been tested to determine its reliability.
      During early testing   of the mast, the ECOMCommodity
Management Office directed     procurement for a limited produc-
tion of 300 masts for use with the radio terminal       set, and
a contract was awarded in April 1967. In October 1967 the
mast was found to be unsuitable      for Army use after being
tested as an individual    development item.    The mast was
found also to be deficient    when tested with the radio termi-
nal set.    During the same month, the laboratory     considered
10 existing   standard Army masts for use with the radio ter-
minal set and a decision was made to use one of the 10 stan-
dard masts under consideration      and not the mast undergoing
development.

      Cur discussions with an ECOMrepresentative     indicated
that, at the time of the procurement,     both the ECOMlabora-
tory personnel and the contractor   believed that production
of the developmental  mast at that time would be premature
and advised against its procurement.      The Commodity Manage-
ment Office initiated  the procurement,    however, apparently
because of the urgent need for the radio terminal      set on
which the mast was to be used.

      The Army had programmed approximately $179,000 for the
research and development of this mast as of September 1969
and had procured 300 masts for about $817,000.


                                22
.

            We do not believe that procurement of the mast was
    justified    since the criteria     for the use of the limited       pro-
    duction classification       had not been satisfied.        The mast
    undergoing development had not been shown to be promising
    enough operationally       to warrant initiating     limited produc-
    tion or production      for troop issue prior to completion of
    development and/or test.

    Agency comments and GAO evaluation

           The Assistant     Secretary's  reply stated that the facts
    pertaining     to the antenna mast were correct,        to the best of
    his knowledge, but it did not necessarily          follow that they
    represent excessive concurrent        development and procurement
    under a wartime environment.         He stated that they reflected
    the inordinate      demands placed on the Army in that time frame
    by the increased need to furnish equipment to the troops in
    Southeast Asia, but that the current situation             was different
    and new controls had already been established             to insure that
    limited    production    status was judiciously    used.      He noted
    that no item in any subordinate        command could now be type-           ,
    classified     as limited production    without Headquarters,        Army
    Materiel    Command group, approval.       He stated that these
    improvements in Army Materiel        Command controls       should assure
    compliance with the applicable        regulations.       (See p. 34.)

          It  is encouraging that new controls have been estab-
    lished over the use of the limited production         classification.
    Effective   implementation   of these controls     should result      in
    better management of this area.        Even during wartime, how-
    ever, it would seem prudent to get some indication           of an
    item's ability    to fulfill  a requirement    before ordering its
    production.

           The Assistant    Secretary stated also that, with regard
    to limited   production     items, corrective     action had been
    undertaken by Army Materiel         Command. He stated that the
    quick-erectmast      was cited as an example in the discussion;
    however, it was not considered a prime example of improper
    management of limited production.           According to him, the
    quick-erect     mast represented     low risk and expenditure     and
    had the potential      of providing     a much improved capability
    for the highly mobile terminal.           A standard mast was used as
    a fallback    item only after the quick-erect         mast failed  the

                                         23
                                                                           .
                                                                                   .

Test and Evaluation    Command test.   He stated that limited                  '
production    of the mast was approved as a part of the radio
terminal   facility  and that the overall  objective of provid-
ing this new terminal    capability  was met through this action.
(See p. 35.)

      In this case, we believe that a proper course of action
for the Army would have been to procure the existing    mast
for the urgent requirement    and continue development of the
new mast.    Perhaps a less pressured development approach
would have resulted   in a mast that met all the requirements
of the Army.

        The Blue Ribbon Defense Panel, in its report to the
President    and the Secretary of Defense dated July 1, 1970,
recommended that a new development policy for weapon systems
and other hardware be formulated        and promulgated.        The new
policy should provide for a general rule against concurrent
development and production       and should defer the production
decision until     successful   demonstration     of developmental
prototypes.     We believe that this general rule would be
proper policy,    although it may be necessary,          in exceptional
circumstances,    to allow concurrent      development and produc-
tion.     The new Army controls    imply such a rule while provid-
ing for the exception in the limited          production    type classi-
fication.




                                   24
                               CHkTER 5'      =
                                   . ,..       ,_

                           INTERNAL AUDITS

       The U.S. Army Audit Agency has completed two audits
at ECOMrelating    to its research and development mission.
A third audit also was performed as part of an audit of the
management of the Army Mater,iel Command's research and de-
velopment program.

        The first    report,     NE 66-15, dated April 26, 1966, was
issued for the purpose of evaluating              the effectiveness    and
efficiency      with which ECOMutilized         resources in accomplish-
ing its research and development mission.                Some of the more
important areas in need of improvement were found to be in
the research and development management of funds, estimat-
ing, engineering        surveillance     of contractor    progress,  cost
analysis,     and determination       of requirements.        ECOMgener-
ally concurred with the deficiencies              and agreed to initiate
corrective      action.

      The second report,   NE 69-6, dated November 1, 1968,
was issued for the purpose of evaluating       the effectiveness
and efficiency  with which the Avionics Laboratory         utilized
resources in accomplishing    its mission.     The deficiencies
cited were concerned primarily     with operating   procedures.

        Subsequent to the completion of our fieldwork,     a third
report,    NE 70-23, dated February 13, 1970, was issued for
the purpose of evaluating    the management of the Army Mate-
riel Command's research and development program.        The au-
dit was performed at 19 commands and activities,       including
ECOM, and involved a review of transactions      representative
of procedures and controls     in effect during the first
quarter of fiscal    year 1970.

       Deficiencies similar to those found in our review were
notedsin the areas of type classification      of materiel and
performance characteristics   of developmental    items.

      With regard to type classification     of materiel, it was
found that limited  production   procurements were made al-
though (1) existing  items were available     to meet the urgent

                                    25
operational     requirement,     ( 2) urgent operational       require-
ments were not substantiated,           (3) quantities     procured were
far in excess of the quantity needed, and (4) tests dis-
closed that there was more than a moderate risk that ade-
quate performance would not be achieved.               With regard to
performance characteristics          the Army Audit Agency found
that (1) agreement on performance characteristics                 could not
be reached for long periods of time and (2) performance
characteristics      were not adequately defined.           In addition,
other deficiencies      were found in the area of development
under the family concept, the in-house laboratory                 indepen-
dent research program, and research and development test
models. The internal         audit effort,    applied to date in the
areas covered by our review, appears to be comprehensive.




                                   26
                            CHAPTER6

                         SCOPEOF REVIEW

       Our examination was made at ECOM, Fort Monmouth, New
Jersey; Headquarters,      Army Materiel  Command, Washing-
ton, D.C.; the Combat Developments Command, Fort Belvoir,
Virginia;   and the Office of the Assistant     Chief of Staff for
Force Development, Washington, D.C. We directed          our exami-
nation primarily     toward the policies   and procedures estab-
lished for the management of development phases of programs
and toward an evaluation      of the actual practices    followed in
carrying out such policies      and procedures.

      We reviewed regulations   and directives   issued by the
Department of the Army, Army Materiel      Command, and ECOMre-
garding the management to be exercised over the research and
development of electronics-communications      materiel.

     We examined seven active     projects  in varying stages of
the development process as of     March 1968. The seven were
randomly selected from a list     of 145 items in four of the
six operating   laboratories at   ECOM.

      The Assistant   Secretary of the Army (Research and De-
velopment),   in reply to our draft report,  commented that:
     "Although the Army does not feel that the scope
     of the report (7 projects    randomly selected from
     145 items at only ECOM) is broad enough to make
     the Army-wide recommendations contained in the
     GAO report,   the Army concurs in general with the
     findings,   conclusions,  and recommendations at the
     time of the audit ***it*    (See p. 32.1

     In addition    to the fact that serious problem areas
were disclosed   in our random selection,    the similar  findings
in the internal    audits previously  discussed indicated    the
Army-wide recommendations were warranted.




                                  27
.

    .




        APPENDIXES




           29
                                                                                  APPENDIX I
                                                                                      Page 1

                         DEPARTMENT  OF THE! ARMY
                   OFFICE OF THE ASSISTANT   SECREI-ARY
                                 WASHINGTON,        D.C.   20310




                                                                            10 FEB 1970


Mr Charles M, Bailey
Director,   United States
General Accounting   Office
Washington,   D. C. 20548




Dear Mr Bailey:

This is in reply to your letter  of 10 November 1969 concerning                      the
review of Research and Development Management of Electronics/
Communications  Materiel (OSD Case I/3034).

The inclosed    statement     provides the Department of the Army position
on your report,      This   reply is made on behalf of the Secretary    of
Defense.

                                               Sincerely           yours,




1 lilcl
Department   of the Army
Position




                                               31
       APPENDIX I
           Page 2

                                        DEPARTFlEKT OF THE ARNY POSITION
                                                        ON

GAO Draft   Report  GAO RD-33, dated October        1969, Subject:                           Review of        Research
and Development    Hanagenent  ofaElectronics/Communications                                 Hateriel.         Department
of the Army (Code 67018).

I.      Pos it ion      .Sut>gar ie s

        A.     $A0 Position            Summary

GAO found           need   for
                      improvement         in manageme,nt of research         and development       of
electronicsfconwnications           materiel.     Areas needing       improvement      included
determining  development       requirements,      p rocedures     used during      development,
compliance  with   and clarification          of existing     management     reviews,     concurrent
development  and production         of equipment,
     [See GAO note on p. 373                  The report    covers    the time period        1 March
68 through  22 sovember      68.

        B.     Army     Position        Summary

Although     the Army does not feel          that   the scope                of the report       (7 projects
randomly     selected       from 145 items     at only ECOX)                 is brand enough to make
the Army-wide        reconnzndations      contained     in the               GAO report,     the Army concurs
in general      with     the findings,    conclusions,       and             recommendations       at ehe tim-e
of the audit        (CY 1968).       The GAO report     is not               current   in all     areas,    however,
the corrective         effort    planned  and/or    executed               is described      below.      In
addition,      reasons      for specific   nonconcurrence                  in some of the details           of the
report    are also provided,

II.      Backaround             for   Army   Posit   ion

Many of the problem             areas touched           by the GAO are not new to the Ar;ly.                            Some
have been the subject              of considerable             inquiry       and study within            the Army for
extended       periods      of time.       The dynamic           nature     of research         and.developmenc
                   is a constant        source        of difficulty          in management          planning        of
research       effort     at the subordinate              level.        Special       expediting        act ions
associated        with    developments          for use in Southeast                Asia are a typical              case.
No one can question             their     need, but they still                 disrupt     planning.          Frequent
problems       arise    when the subordinate                cortiand     finds      itself     the victim        of
circumstances.
                                                                                   Sometimes      a too-literal
interpretation          of higher       level      directives         restricts        the flexibility           which
laboratory        directors       should      rightly       have in fulfilling             their      responsibilities.

III.         Army    Position         on GAO Findings

        A.     Chapter      [21

AU 705-5,   AR 71-1,  AR 11-25,    Anr.es C, CKX and DA Paz 11-23 provide            c,uida?ce
to :ha user and d=zv*lo?ar     for preparation   of o’bjectives     and reqJi.r?..:en:s      ai:d
for developaeat    of hardware a Procedtires    outlined     in these doczentj          are


                                                             32
 .                                                                             APPENDIX1
                                                                                   Page 3
monitored  by the Army staff      to prevent    development   of items   for    which   a
need is not identified.

     8.   Chapter    [21’

          (1) The findings      that 148 exploratory    development  subtasks
lacked recorded supportin, = documents or CLOG references       was correct     at
the time of the review.      However, the problem was merely one of a record-
keeping nature,  since all of the 148 subtasks were authorized,         had valid
CDOG rcfercnces,  etc.    ECON has corrected    this problem, and a recent
review disclosed   that’ all 455 mission subtasks in this category       had valid
CDOG references.    ‘ECOM Regulation  11-9 requires   a CDOG reference      for any
proposed subtask before its activation       can be approved.

           (2) The times to approve the QXRs and SDRs cited by GAO are not
unreasonable. if the time count begins with the initial           distribution    of the
draft-proposed   requirements     and ends with DA approval.        CDC, after  receiving
Army-wide comments -and recommendat ions, including          those of ANC, staffs     the
comments on the draft      proposed requirements    internally,     (a process which
t.akes 60-90 days).     After obtaining    CDC approval,     the proposed document is
then staffed   at HQ DA for about 120 days before DA action.

          (3) .A QHR represents        major Army equipment and large expenditure
of RDTE and PEXA funds            To complete    the studies required     and to determine
cost effectiveness       req;ircs    considerable      effort and time by all concerned.
It  is far better      to take this time and have a valid requircmGnt           than to
rush the process and have an invalid             requirement.    When later   events prove
that the requirement        was not or is no longer valid,a         rapid means of making    a
change-is    required.




                    [See GAOnote on p. 37.1




     c.   Chapter    [33




                    [See GAOnote     on   p. 37.1
                                           33
   APPENDIX I
       Page 4

                            [See GAO note           on p. 37.1



             (2) While the GAO has properly         found the number of IPRs actually
held were3ess      than those then required         by regulations,       some IPRs were not
held because it had proven impractical            to hold each XPR separately,           and soae
combined IPRs were held on individual           items..    On 25 Nov 68, Al4C recognized         the
practicality     of this viewpoint     by issuing a revised WC Regulation               70-5 which
relaxed the requirements      for IPRs considerably.            Sinaller,   non-project
managed items below certain        dollar   thresholds     now can be covered by one
formal ZP-R.




                            [See GAO note           on p? 37.)




          (4)    AR 705-5   is being    rewritten      to correct   shortcomings.

     D.   Chapter [41

          (1) The facts pertaining           to the antenna mast are correct,         to the
best of our knoxrledge.        However, it does not necessarily            follow that they
represent    excessive concurrent       development and procurement under a wartime
environment.      They reflect    the inordinate       demands placed on the Arn\y in
that time frarxe by the increased          need to furnish      equipment to the troops in
Southeast Asia.       The current    situation     is different      and new controls     have
already been established        to insure that LP status          is judiciously    used,    For
instance,    no item in any subordinate         cotrtmand can now be type classified         LP
without   AXC HQ command group approval.             These improvements in AX controls
should assure compliance with the applicable               regulations.


                          [See GAO note on p. 37.1




                                                34
                                                                                APPENDIX I
                                                                                    Page 5

                           [See GAOnote on p. 37.1




IV.   Army Position    on GAO Conclusions.

The conclusions    are considered    generally        valid.   The following    comments on
each conclusion    on Page [S 1 and 2] of the report            are also   important.


                            [See GAOnote on p. 37.)




     B. It is true that socle exploratory       development efforts       in the
past were not documented as beins valid CDOG references           or QXDOs. This
has been recognized     for SOR:Otime and major organizational        and
procedural   changes have been implemcntcd to correct         the situation.       These
include total    concept formulation    as prcscribcd    in the DA Disciplined
Management Nodel.      Organizations established      to insure early requirements
generation   are the CDC Institute    for Land Combat,       AMC’s Advanced Materiel
Concepts Agency, and ACSI’s Threat Analysis         Group.    The necessity     for
accelerating    approval of QM-Is and SD& also has been recognized           and the
procedure mentioned above should lead to a more orderly           and timely      establish-
ment of QXRs and SDB.

      c. In regard to LP items, corrective           action has been undertaken       by
AX.     The quick erect    mast cited ae an example in the discussitin,           however,
is not considered     a prime example of improper management of LP. The quick
erect   mast represented    low risk and expenditure.         It. had the potential      of
providing’s   much improved capability         for the-highly    mobile terminal     than
any standard available      mast.    A standard mast was used as a fall          back item,
only after   the quit k erect mast failed         TECOXtest.     LP of the mast was
approved as a part of the radio terminal            facility  and the overall     objective
of providing    this new terminal     capability     wa; met through t’he L? action,


                            [See GAOnote on p. 37.1




                                                 35
APPENDIX I
      Page 6

                        [See GAOnote on p. 37,]




v.   Army Position   on GAO Rccomnendations.   The Army generally concurs with
the recomnendations.     The following  comments apply to each of the recommenda-
tions on pages 2 and 3 of the report:

     A.   The Army'concurs   with the recommendation that procedures   be
established     to effect, in a timely manner, any necessary revisions    to ap-
proved'QMRs and SDRs. Appropriate      Army procedures are being changed to
correct    these problems.

     B. The Army concurs with the recommendation           that the use of SDRs
be confined to materiel     already proven feasible.         This policy is now re-
quired by Army regulations.

      C. The Army concurs with the recommendation  that all projects  be
developed and supported in accordance with approved Army objectives    and
requirements.   Action has been taken to accomplish this objective   and all
subtasks now have the proper documentation  and CDOG reference,

     D. Concur that more timely action should be taken in reviewing                and
approving QE%Rsand SDRs. The Army is implementing   this policy.

     E.   The Army concurs in this recommendation.            AR 705-5, Army Research
and Development,     is currently    being revised and should be published during
4th Quarter,     FY 70. The revision      will  indicate    which reviews are mandatory
and specify    the content and format of minutes recording           the reviews.    In view
of the fact that AR 11-25 states In-Process            Reviews (IPR) will    be decision
reviews rather than information        reviews,    IPR attendees should have the
authority    to make firm decisions      for their agencies.      This shortcoming
will be corrected      in the revision     of AR 705-5.

      F.  (1) Numerous additional    controls already       have been instituted
within   AK and DA to limit   LP action to essential        items of reasonable      risk
and to more closely  monitor such programs.

          (2)    Some non-tactical  communications    system.procurement   is
based on performance specifications     and therefore      must be obtained under
LP authorization     since the hardware specifications      can not be defined prior




                                           36
           .                                                                   APPENDIX I
.         .                                                                        Page 7
    to competitive     systems procurement.           This procedure is used to make maximum
    use of existing     commercial communications          equipment.   If the use of LP
    procedures    is further   restricted,        the Army would lose the ability    to acquire
    needed non-tactical      communications         systems on the basis of required   operational
    performance.     This ability      is essential.       The draft report does not address
    non-tactical    communications       materiel.

                 (3) AR 71-6, replacement    for AR 700-20, has been approved and
    released      to TAG0 for publication.     A provision for the control of the number
    of items      being classified   as LP is included in this regulation.




                                  [See GAOnote below.]




    2    Incls
    as




GAOnote:            Deleted comments relate to matters discussed in the
                    draft report but which have not been discussed in this
                    final report.




                                                37