STATEMENT OF HON. WILLIAM H. TAFT IV, DEPUTY SECRETARY OF DEFENSE, DEPARTMENT OF DEFENSE

Mr. TAFT. Thank you, Mr. Chairman. It is a pleasure for me to appear before this committee. I have a few brief remarks that I would like to make at the outset, and then I will be delighted to take your questions.

Mr. Godwin, as Under Secretary of Defense for Acquisition, resigned on Monday, September 14th. His resignation raises a number of questions which I am prepared to discuss with the committee this morning. At the outset, I would like to respond to four specific questions which I posed myself, because they occurred to me as a result of the resignation.

The first question, and I think the most important, is, "How has the Department of Defense implemented the Packard Commission's recommendations for improving the acquisition system and establishing the Under Secretary of Defense for Acquisition, and is it committed for the future to continue to implement those recommendations?"

The answer is that, except where it is inconsistent with statute, this has been done in the past and it will be done in the future. This is the case both with respect to the substantive proposals relating to the acquisition process and with respect to the Department's organization. It is the case specifically with respect to the establishment of the Office of the Under Secretary of Defense for Acquisition.

The Under Secretary of Defense for Acquisition's authority for directing the Services in acquisition matters was established in his charter as reflected in the statute. His span of authority over offices in OSD conforms to the Packard Commission's recommendations except that the Office for Test and Evaluation and certain audit responsibilities of the Inspector General are not included in it inasmuch as these proposals were disapproved by the Congress.

At its meeting 2 months ago, the Packard Commission itself noted that the organizational changes that it had recommended to streamline acquisition management within the Department were in place. The Commission did question whether the authority given to the Under Secretary of Defense for Acquisition was adequate, but the specific concerns raised were in the following areas: the relationship between contracting officers and auditors; the fact that audit policy had been placed by the Congress still with the Inspector General; the policies that related to debarment and suspension of contractors; and the use of firm fixed price contracts for the development of systems, that is systems in the research and development phase.

None of these issues suggests that the Under Secretary of Defense for Acquisition had not been given the requisite authority over the Services and the other DOD components in acquisition matters. If there were any lingering doubts about his authority, they have in any case been addressed unambiguously in the recently issued regulations 5000.1, 5000.2, and 5000.49.

Collectively these directives make it clear that the Under Secretary of Defense for Acquisition is the principal advisor to the Secretary on all matters pertaining to the DOD acquisition system. They

also embody all of the substantive recommendations of the Packard Commission relating to acquisition. They show that the Department has been and remains committed to the Commission's goals and to the specific proposals that were set out to achieve them.

The second question is, "Why does Mr. Godwin feel that he does not have the support of the Secretary in putting the Packard Commission recommendations into place?" As I have said, the recommendations have been put into place as they appear in the report. Mr. Godwin has not identified any recommendations to me or to the Secretary that he supports and that we oppose. So what is going on? I would offer two points for consideration. First, I believe that Mr. Godwin was misled about the nature of his duties and authority before he undertook them. Probably no one should be inveigled into coming to Washington with the promise that he is going to be a czar. Mr. Godwin was told this and he read it.

When he got here, he had to work with people who did not always agree with him or to immediately do what he wanted. I think that Mr. Godwin was disappointed when subordinate officials in the Department of Defense disagreed with him or resisted his efforts, and he may have attributed this to a lack of support by the Secretary.

In candor, and I should never admit this but I will, I think that he overestimated the Secretary's authority in this regard. The same thing happens to him. My guess is that it also happened to the czar before he passed from reality into metaphor.

However that may be, Mr. Godwin occasionally cited instances in which the Services resisted or disagreed with his proposals or instructions as evidence of lack of support by the Secretary. In these instances, the Secretary almost invariably supported Mr. Godwin. I think that Mr. Godwin felt, however, that the simple fact that he had to solicit support was evidence more support was needed than was being given.

In retrospect, it should have been given more emphasis during the courtship that the marriage would have to be worked at and that there would be resistance in the Department. It is because there is resistance indeed after all that any of us is necessary.

Second, Mr. Godwin differed with the Secretary about the nature of his relationship with other staff offices of OSD, particularly the Under Secretary of Defense for Policy, the Assistant Secretary of Defense for Force Management and Personnel, and the Office of Program Analysis and Evaluation.

The Packard Commission did not give us much guidance on this issue. The Secretary proposed to Mr. Godwin in June that these offices and the Office of Test and Evaluation be included on the Defense Acquisition Board. Mr. Godwin did not want them on the board. The Secretary acquiesced in Mr. Godwin's preference except with respect to PA&E. I think that Mr. Godwin felt that the Secretary should have supported his preference entirely in this regard. The third question is, "Should the Under Secretary of Defense for Acquisition be given more authority than the Packard Commission recommended or than current law provides?"

There are only two ways that the Under Secretary's authority can be increased. Either he can be elevated so that additional officials in the Department are subordinate to him in acquisition mat

ters, or his authority can be expanded horizontally to include offices and activities whose principal responsibilities lie outside the acquisition system.

I am leaving aside here the issues of OT&E and the IG that I referred to earlier which have been resolved in statute. Those, of course, also could be done in that statutory matter.

With respect to elevation, only the Secretary and Deputy Secretary are currently not subject to the Under Secretary's authority in acquisition matters. A number of people in the Department seem to think, from time to time, that the Secretary works for them instead of the other way around. Secretary Weinberger's appetite for work and his unfailing courtesy do very little to dispel this disillusion where it exists. But no one has seriously proposed establishing this approach as a formal organizational principle.

The Deputy Secretary's authority and responsibilities currently coincide with the Secretary's. The Deputy extends the Secretary's range and enhances his ability to manage the Department. I will return in a moment to the possibility of changing the Deputy's job. As it has been known for decades with the exception of one brief experiment under Secretary Rumsfield which was quickly abandoned, and as it is currently constituted, however, the Deputy's office is inherently not subordinate or coordinate with any other in the Department. In fact, that is just about how the statute defines it.

Expanding the Under Secretary's authority over offices not principally engaged in acquisition would defeat one of the main objectives of the Packard Commission. This was to establish an official with substantial authority which would work full-time on acquisition matters.

You cannot have it both ways. A full-time acquisition executive cannot simultaneously direct the activities and determine the views of offices responsible for advising the Secretary on strategy, alliance relationships, arms control or structure, manpower, reserve forces, special operations forces, or the allocation of scarce resources over the full range of defense requirements.

Yet the activities of these offices and other quasi-independent enterprises such as OT&E and the IG certainly do intersect with the acquisition system. Currently, the Secretary, with the assistance of the Deputy, manages that intersection. This, too, is a full-time job. In my view, whoever does that job should not also be the acquisition executive. This was, I believe, a central tenet of the Packard Commission's approach to these issues. Mr. Godwin has told me repeatedly that as Deputy he did not have sufficient time to carry out his duties as acquisition executive. I was the acquisition executive for 2 years myself while I was Deputy and I agree with him. It has been proposed but not by the Packard Commission that the job of the Deputy Secretary be divided into two, with one person being responsible for acquisition and the other for everything else. This would not increase the number of people reporting to the Under Secretary of Defense for Acquisition, although it would enhance his prestige, I suppose. For at least two reasons, it is a bad idea.

First, as I said before, the Secretary uses the Deputy to extend his own range and manage the Department. He is able to do this

because the Deputy's authority, and responsibilities, and perspective coincide precisely with his own. Like the Secretary, the Deputy has no large personal staff or office.

As Congress recognized in creating a Vice Chairman of the Joint Chief of Staff last year, the Deputy makes a principle of being able to do his job better. The balkanization of OSD has already, in my judgment, gone too far and has unreasonably complicated the Secretary's management tasks. To suggest that the single official who now shares the Secretary's perspective and helps him perform his difficult job be disestablished seems most unwise.

None of the many recent studies of the Department, including the Packard Commission, has ever proposed it. The idea sometimes may appeal to those who are preoccupied with a particular aspect of the Department's activities as a way of promoting their concern. But for those who view the Department as a whole, it has nothing to recommend it.

Second, it does not seem to me to be wise to give the Department's acquisition community so much preeminence as establishing a Deputy Secretary who would go over those who are engaged in other activities, particularly the policy cluster.

Until 1977, the Director of Defense Research and Engineering was the third ranking official in OSD. Secretary Brown, himself a former DDR&E, proposed to establish the Under Secretary for Policy to outrank the DDR&E. Crudely put, this ranking reflected a feeling that policy and strategy should determine acquisition practices and acquisition, and not the other way around.

This ranking was reversed last year when USD(A) was established. The concern for ensuring the priority of policy making remains a real one, however. Indeed, it is prominently featured in the first section of the Packard Commission's report. I think having the acquisition and policy functions both represented at the Under Secretary level preserves the right balance in OSD.

The reason for USD(A)'s outranking of USDP lies, and I think quite rightly, now in the need that he has to be able to direct the Service Secretaries in acquisition matters. That fact and authority, is it seems to me, clearly established in statute and sufficiently reflected in USD(A)'s Level II billet.

Finally, "what were the circumstances of Mr. Godwin's resignation?" Secretary Weinberger enjoys the story of Lord Randolph Churchchill's resignation citing with particular approval Lord Salisbury's rapid acceptance of the offer. The truth, however, is that Secretary Weinberger is no Lord Salisbury. Whatever aspects of firmness he may display to the Soviets, to the Congress, to the press, or his colleagues in the Cabinet, and they are formidable, to his subordinates he is invariably benevolent and even indulgent, often compensating with his own long hours for the shortcomings of his staff.

He does not like people to resign from the Department. He likes to think that people enjoy working there. If they do not, he tries to make it so that they do. I think that the stability in our senior appointees, which was of great concern prior to the Secretary coming to the Department, is an indication of the Secretary's success in this regard.

Specifically, the Secretary did not want Mr. Godwin to resign and he urged him many times not to do so. I also tried to persuade Mr. Godwin not to resign. Mr. Godwin first told the Secretary that he intended to resign in July. He stated that his decision was definite and not intended to pressure the Secretary into any particular action. The Secretary hoped that this was not true.

We deferred publication of the directive putting PA&E on the Defense Acquisition Board with which we knew that Mr. Godwin was unhappy, and we tried to identify specific problems we could address that would lead Mr. Godwin to change his mind. For his part, Mr. Godwin said that he was leaving because he had concluded that the Secretary did not support the Packard Commission's recommendations and that the job that he had come to Washington to do was, and I quote, "not doable".

The Secretary disagreed with him, but disagreeing with someone does not stop him from resigning when he wants to, even if you are right and he is wrong. Mr. Godwin delayed his resignation, but he did not change his mind.

Mr. Godwin resigned on Monday. His resignation does not alter the Department's commitment to carry out the recommendations of the Packard Commission with respect to the acquisition system. The Chairman made a reference to the fact that we have a weak hand. I think that what must be referred to is that our appointee, a man whom we wanted to stay, will not stay. We are disappointed. At the same time, we need to go forward, and we need to put the Packard recommendations into place, and we intend to do that and we will do that.

Thank you, Mr. Chairman. I would be delighted to answer any questions that the committee has.

The CHAIRMAN. Thank you. The gentleman in the witness chair is right, that the weak hand is the Packard recommendations which were endorsed by this administration, and that Packard was set up by this administration, and endorsed by the President and endorsed by the Secretary of Defense. The Secretary of Defense's appointment was made and his man was picked. I think that a lot of people, and I have heard a lot of people privately saying Mr. Godwin does not have any experience in the defense area, but everybody thought that it would be compensated by the fact that it was Cap Weinberger's appointment and somebody who would be close to him. I guess if it does not work with Dick Godwin, then who is it going to work with, if he is Cap's appointment and Cap's choice? It does not look good.

Let me ask you just to get this on the record, and then I will defer to other members, and I will come back and ask some questions later. On the question of the backing that Godwin got in the Department, let me discuss three areas, charters, backing on specific areas, and legislation.

Was the only disagreement over the wording of charters that would lay out Mr. Godwin's jobs and the parts related to it? Was the disagreement over the issue of the DAB, the PA&E being on the DAB? Is that the only incident that there was of a disagreement over the charter that Mr. Godwin was operating under?

Mr. TAFT. I think that a sensible place to start the discussion would probably be May or June. Because while there may have