Study says Pentagon could benefit from allies' example in buying new weapons

Uncle Sam may think he's second to none in military strength today. But the United States has a lot to learn from its Western European allies - and, ironically, even the Soviet Union - about developing and building military hardware.

These are the conclusions of a Central Intelligence Agency (CIA) analyst who has compared US weapons procurement policies and practices with those of other countries.

He has found this country wanting in many respects.

The report, by Soviet specialist Robert A. Magnan, comes as basic questions about US defense management - particularly the latest installment of the Reagan administration's plan to ''rearm America'' - are being hotly debated.

These new data gathered by an intelligence expert have sparked interest on Capitol Hill, where members of Congress, led principally by angry Republicans, are pushing the Defense Department on weapons testing, warranties, cost overruns , and the relatively low amount of true competition in military contracts.

''When comparing US and foreign weapons acquisition systems it is easy to come away with a pessimistic picture of the US system,'' Mr. Magnan writes. ''Anything that succeeds in US weapons acquisition seems to do so in spite of the system, rather than because of it.''

The study was conducted under the CIA's ''exceptional intelligence analyst program.'' This is a forum for independent, individual research conducted outside the CIA's regular intelligence-gathering and analysis. Magnan interviewed industry executives and Pentagon weapons program managers, and traveled abroad as part of his study.

The General Accounting Office (GAO), a congressional watchdog agency, recently reported that since 1980 there has been ''a quantum jump'' - about $1 trillion - in the projected cost of the Pentagon's five-year defense plan. Two-thirds of this, the GAO reported, was in procurement.

If the historical trend continues, the GAO warned, the Pentagon will need to spend at least $173 billion (and perhaps as much as $324 billion) more than it now anticipates over the next five years.

In looking at other countries, Magnan did not find overruns of this magnitude; cost estimates generally approximated actual costs.

He cites one study showing that aircraft development costs in France, Sweden, and Britain exceeded initial estimates by 10 to 30 percent. In the US, comparable actual costs were 50 to 80 percent above earlier estimates.

There are several reasons for this problem in the US, he found: more political involvement because of congressional interest in local defense industries and a general mistrust of things military since Vietnam; more competition among contractors, who tend to understate cost estimates so that they can ''buy in'' to a program; interservice rivalry; and lack of an independent agency to oversee all military procurement programs.

In most other countries, defense industries are either nationalized or there are fewer builders, who specialize more. This means less competition, but also makes for a tidier and less sluggish system, Magnan finds. At the same time, contractors are given greater authority and are held more accountable for their work. And in Western Europe, Israel, and Japan, there are agencies within the defense ministries to manage procurement programs closely, independent of separate service interests.

In the Soviet Union, systems designers have nearly complete authority and responsibility for their program.

By contrast, weapons program managers in the US typically are uniformed officers who stay on the job a relatively short time before being rotated, who have an understandable bias in favor of their service, who have a longer chain of command to go through than their industry counterparts, and whose careers are not helped by being critical of weapons programs.

CIA analyst Magnan finds that weapons testing in other countries, including the Soviet Union, ''tends to be more thorough,'' even though the contractor himself is more closely involved. Congress has just forced the Pentagon to establish an independent testing office.

Magnan observes that ''mistrust appears to pervade US weapons procurement like nowhere else in the world.''

He suggests that with greater contractor accountability and less direct involvement by the military services in weapons development, Congress would not find it necessary to manage procurement in such detail.

Retiring Senate Armed Services Committee chairman John Tower (R) of Texas has been chiding Congress for attempting to ''micro-manage'' defense.

CIA analyst Magnan is not explicitly critical of lawmakers, but he does include Congress as part of a ''tortured triangle of participants (Congress, the Department of Defense, and industry) that exists in no other country.''

This report differs sharply with the congressional trend regarding competition. Lawmakers want more, and many are pushing a ''creeping capitalism'' bill that would force the Pentagon to award more procurement contracts through open bids.

Magnan joins other experts who suggest that less competition could result in more realistic cost estimates and less lengthy development schedules, particularly if defense contractors were given more responsibility in return for more accountability.

Under US military procurement practice today, the CIA analyst observes, ''authority is so diffuse that responsibility is difficult to pin down, and when things go wrong everyone can point the finger of blame at someone else.''

The result of this mistrust and diffuse accountability is an acquisition process that stretches over years (and sometimes decades), he finds, adding to program costs and sometimes rendering systems obsolete not long after they have been deployed.

''Each acquisition system, of course, reflects the country's unique cultural and economic environment,'' says Magnan. ''But to dismiss foreign systems as irrelevant for the US is to turn our back on ideas that could lead to viable solutions to our most stubborn problems.''

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