http://www.strategicstudiesinstitute.arm...pub299.pdf
The McNamara Reforms.
The era of the McNamara DoD reforms also stands out
as a significant period of change in defense management. By
the time that Robert McNamara came to the Office of
Secretary of Defense, the post World War II growth of
government agencies had created significant pressure for
the creation of a new system to rationally allocate federal
resources. Furthermore, information technology and
computers had significantly enhanced the government's
capability for quantitative data analysis. These are some of
the factors that convinced McNamara that it was both
necessary and possible to introduce a new
Planning-Programming-Budgeting System (PPBS) within
the Department of Defense.
The political conditions also seemed to be in place by the
time that the Kennedy administration took office in 1961.
The National Security Act of 1947 had placed the Army,
Navy, and Air Force within a new National Military
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Establishment (NME) under the titular control of a new
Secretary of Defense.9 Unfortunately, the NME system
precipitated intense rivalry between the services that took
time and effort to overcome. Congress enacted additional
legislation a decade later to try to resolve some of the initial
difficulties in establishing the new defense organization.
The DoD Reorganization Act of 1958 clarified the Secretary
of Defense's authority over the services in the areas of
budgeting, force structure, and research and
development.10 Reform to integrate planning,
programming, and budgeting was now possible.
Armed with this new legislative authority, it remained
for McNamara and his staff to implement Planning,
Programming, and Budgeting System (PPBS) reforms in
DoD. Their goal was to develop a process to coordinate
strategy and plans, force requirements and programs, and
resources and budgets. The intent was to centralize
decisionmaking and design explicit criteria for major
systems acquisitions.11 In keeping with the PPB concept,
they sought an analytical approach to assessing costs and
needs and developing alternatives to present to the
Secretary of Defense. They would develop multiyear
programs through the Five-Year Defense Plans. In their
view, an analytical, largely civilian staff would be free of the
influence of military parochialism and thus be independent
both intellectually and careerwise.12
Prior to PPB, under performance budgeting approaches,
budgets and military strategy were not related. McNamara
set out to fix the problems of the existing system, which to
that point had simply set DoD ceilings for each of the armed
services.13 PPB was designed to reverse the traditional
informational and decision flows within DoD. In the past,
estimates were sent upward in the organization to gain
approval in light of existing resources. By contrast, as Allen
Schick has observed, PPB established a "top policy"
approach in which the "critical decisional processthat of
deciding on purposes and planshas a downward and
disaggregative flow."14 Schick also correctly predicted that
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this would in turn require the centralization of policy
making, and subsequent DoD reforms did aim to centralize
key budgeting and planning functions.
DoD operations research analysts Alain Enthoven and
Wayne Smith have provided an insiders' history of the
McNamara PPB reforms. In their book How Much Is
Enough?, Enthoven and Smith chronicle the roles that they
played in support of McNamara's efforts to shape the
defense program in a centralized, top down fashion.15 The
authors proposed that their systems analysis organization,
working directly for the Secretary of Defense, would provide
the analytical staff that would make the relevant data
available for making major program and spending decisions
within DoD.16 Enthoven and Smith's focus was on
developing a sophisticated approach to budgetary
integration that went well beyond the simple control or
bookkeeping function. In the Whiz Kids' view, the process
would optimize the national interest and minimize the
tradition of service budget compromises. To their credit,
their vision for linking planning, programming, and
budgeting is still in effect today within the Defense
Department.17
Enthoven and Smith also write about the myriad
problems that the McNamara team faced, and the many
mistakes that they made, starting in 1961.18 In summary,
they argue that: There was no centralized leadership over
the services; no centralized planning; no coordination of
research and development programs; no quantitative data
analysis; no analysis staff in DoD; and no adequate cost
accounting standards.
9. For a recent examination of the National Security Act of 1947, see
David Jablonsky, et al., "U.S. National Security: Beyond the Cold War,"
Carlisle, PA: Strategic Studies Institute, U.S. Army War College, and
The Clarke Center, Dickinson College, July 26, 1997.
10. Enthoven and Smith, p. 2. See also Schick, p. 274.
11. Ibid., pp. 33-47.
12. Enthoven and Smith devote considerable attention to the
problems of interservice rivalry and military analysts. They believed
greater objectivity was possible with civilian defense intellectuals.
Chapter 3 focuses on "Why Independent Analysts," pp. 73-116.
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13. Enthoven and Smith, p. 13.
14. Schick, 276.
15. Alain C. Enthoven and K. Wayne Smith, How Much is Enough,
Millwood, NY: Kraus Reprint, p. 6.
16. Enthoven and Smith, p. 80.
17. For a detailed description of DoD and Army PPBS, see How the
Army Runs: A Senior Leader Reference Handbook, 1999-2000, Carlisle,
PA: U.S. Army War College, April 1999.