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Quadrennial Defense Review: Opportunities to Improve the Next Review

(Chapter Report, 06/25/98, GAO/NSIAD-98-155).

Pursuant to a congressional request, GAO reviewed whether: (1) the
Quadrennial Defense Review's (QDR) force structure and modernization
assessments examined alternatives to the planned force; and (2)
opportunities exist to improve the structure and methodology of future
QDRs. GAO did not evaluate the rationale for the Department of Defense's
(DOD) proposed defense strategy.

GAO noted that: (1) QDR did not examine alternatives that would provide
greater assurance that it identified the force structure that is best
suited to implement the defense strategy; (2) the QDR's force
assessments built on DOD's Bottom-Up Review analysis by examining
requirements for a broader range of military operations beyond major
theater wars, and by analyzing the potential impact of some key
assumptions; (3) only one of the three major force assessments modeled
any force structure alternatives; (4) the assessment did not examine
alternatives that involved targeted changes because DOD officials
foresaw problems in obtaining service consensus and DOD's models are not
sensitive enough to assess the effects of some types of force structure
changes; (5) although some technologies consistent with Joint Vision
2010 were modeled, none of the assessments fully examined the potential
effects of new technologies and war-fighting concepts on DOD's planned
force structure; (6) DOD's modernization review examined some variations
of the services' procurement plans but did not include a thorough,
mission-oriented review of the mix of capabilities the United States
will need to counter future threats; (7) DOD divided responsibility for
analyzing major procurement programs and investment issues among 17 task
forces; (8) this approach did not always provide a mission focus that
examined trade-offs or facilitated a fundamental reassessment of
modernization needs in light of emerging threats and technological
advances; (9) the modernization and force assessment panels conducted
most of their work independently and concurrently, which hampered their
ability to explore linkages and trade-offs between force structure and
modernization alternatives; (10) DOD can provide a more thorough review
of U.S. defense needs in the next QDR by preparing early, improving its
analytical tools, and considering changes to the structure and design of
the QDR process; (11) DOD has not yet developed a formal process to
prepare for and coordinate activities related to the next QDR; and (12)
delaying the start of the next QDR until later in the next Presidential
administration may also facilitate a more thorough review.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-98-155
     TITLE:  Quadrennial Defense Review: Opportunities to Improve the 
             Next Review
      DATE:  06/25/98
   SUBJECT:  Military downsizing
             Projections
             Defense contingency planning
             Combat readiness
             Defense procurement
             Weapons systems
             Military forces
             Defense operations
             Agency missions
             Computer modeling
IDENTIFIER:  DOD Quadrennial Defense Review
             JCS Joint Vision 2010
             DOD Bottom-Up Review
             Joint Surveillance Target Attack Radar System
             DOD Deep Attack Weapons Mix Study
             DOD Future Years Defense Program
             Joint Strike Fighter
             F/A-18E/F Aircraft
             F-22 Aircraft
             MV-22 Aircraft
             Tactical Warfare Model
             Joint Warfighting Systems Model
             Joint Integrated Contingency Model
             JSTARS
             
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Cover
================================================================ COVER


Report to Congressional Requesters

June 1998

QUADRENNIAL DEFENSE REVIEW -
OPPORTUNITIES TO IMPROVE THE NEXT
REVIEW

GAO/NSIAD-98-155

Quadrennial Defense Review

(701119)


Abbreviations
=============================================================== ABBREV

  C4ISR - Command, Control, Communications, Computers, Intelligence,
     Surveillance and Reconnaissance
  DOD - Department of Defense
  JICM - Joint Integrated Contingency Model
  JWARS - Joint Warfighting System Model
  OSD - Office of the Secretary of Defense
  QDR - Quadrennial Defense Review
  TACWAR - Tactical Warfare Model

Letter
=============================================================== LETTER


B-277888

June 25, 1998

The Honorable Strom Thurmond
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

This report discusses whether the Department of Defense's force
structure and modernization assessments performed as part of the
Quadrennial Defense Review examined alternative ways of implementing
the defense strategy.  This information should be useful to your
Committees in understanding the basis for the force structure and
modernization decisions reported by the Department in May 1997 and in
your deliberations about the future size and composition of U.S. 
military forces.  The report also contains a recommendation to the
Secretary of Defense and a matter for congressional consideration
that we believe could improve the structure and methodology of future
quadrennial defense reviews. 

We are sending copies of this report to other interested
congressional committees; the Secretaries of Defense, the Army, the
Navy, and the Air Force; the Commandant, U.S.  Marine Corps; and the
Director, Office of Management and Budget.  Copies will also be made
available to others on request. 

If you or your staff have any questions concerning this report,
please call me on (202) 512- 3504.  Major contributors to this report
are listed in appendix II. 

Richard Davis
Director, National Security
 Analysis


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

The Department of Defense (DOD) reported in May 1997 that its
Quadrennial Defense Review (QDR) provided a blueprint for a
strategy-based, balanced, and affordable program to meet defense
needs from 1997 to 2015.  In response to requests from the Chairman
and Ranking Minority Member of the Senate Armed Services Committee
and the Chairman of the House Budget Committee, GAO assessed whether
(1) the QDR's force structure and modernization assessments examined
alternatives to the planned force and (2) opportunities exist to
improve the structure and methodology of future QDRs.  This is the
second of three reports that assess various aspects of the QDR.\1 GAO
did not evaluate the rationale for DOD's proposed defense strategy. 


--------------------
\1 Quadrennial Defense Review:  Some Personnel Cuts and Associated
Savings May Not Be Achieved (GAO/NSIAD-98-100, Apr.  30, 1998). 
Also, GAO will report on DOD's implementation of QDR decisions in the
fiscal year 1999 Future Years' Defense Program later this year. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

In its May 1995 report, the Commission on Roles and Missions of the
Armed Forces recommended that DOD lead a comprehensive strategy and
force review at the start of each new administration.  In August
1995, the Secretary of Defense endorsed performing a quadrennial
review of the defense program.  Congress, noting the Secretary's
intent to complete the first such review in 1997, required in the
National Defense Authorization Act for Fiscal Year 1997 that DOD
report on a number of topics, including the defense strategy; the
force structure best suited to implement the strategy; the effect of
new technologies anticipated by 2005 on force structure, doctrine,
and operational concepts; and key assumptions used in the review.  It
also authorized a National Defense Panel, comprising national
security experts from the private sector, to review the results of
the QDR and conduct a subsequent study to identify and assess force
alternatives.  DOD completed the QDR in May 1997 and the Panel issued
its report in December 1997. 

Much of the analysis performed during the QDR was conducted by seven
panels tasked to simultaneously review strategy, force structure,
modernization, readiness, infrastructure, human resources, and
information operations and intelligence issues.  To assess force
requirements, the force structure panel (1) conducted an assessment
that modeled two major overlapping wars on the Korean peninsula and
in Southwest Asia in 2006, (2) examined the results of a
smaller-scale contingency operations assessment, and (3) led an
assessment to examine the capabilities of U.S.  forces against a
postulated regional great power in 2014.  DOD also conducted an
overseas presence analysis and several individual service assessments
of issues not specifically addressed in the other force assessments. 
The modernization panel established task forces to review a number of
major planned modernization programs.  Its goal was to ensure that
future U.S.  forces will have equipment that leverages new technology
and supports the modern, joint capabilities cited in Joint Vision
2010\2 , the Chairman of the Joint Chiefs of Staff's vision for
transforming U.S.  military capabilities.  The panels briefed an
Integration Group, led by senior officials from the Office of the
Secretary of Defense (OSD) and the Joint Staff, on the results of
their assessments.  A third tier, the Senior Steering Group,
co-chaired by the Deputy Secretary of Defense and the Vice Chairman
of the Joint Chiefs of Staff, was established to oversee the process
and make recommendations to the Secretary of Defense. 

DOD's May 1997 QDR report calls for a U.S.  defense strategy under
which the United States (1) continues to shape the strategic
environment by deploying forces permanently, rotationally, and
temporarily; (2) responds to a full spectrum of military operations
ranging from deterring aggression and conducting concurrent
smaller-scale contingency operations to fighting and winning two
major theater wars; and (3) prepares for an uncertain future by
responding to new emerging threats including the potential emergence
of a regional great power or global peer competitor by investing in
force modernization, exploiting the potential of advanced
technologies, and reengineering DOD infrastructure and support
activities.  The QDR determined that the military force structure
required to meet the strategy would be very similar to that
determined by the Bottom-Up Review, DOD's 1993 review of U.S. 
defense needs (see table 1). 



                                Table 1
                
                  DOD's Bottom-Up Review and QDR Force
                               Structures

                                  Bottom-Up Review
                                   (Planned fiscal         Quadrennial
Service                                 year 1999)      Defense Review
------------------------------  ------------------  ------------------
Army

 Divisions -active                              10                  10
 National Guard enhanced
 readiness brigades                             15                  15
Navy

 Aircraft carriers                              11                  11
 Reserve carrier                                 1                   1
 Air wings -active                              10                  10
 Air wings -reserve                              1                   1
 Attack submarines                           45-55                  50
 Surface combatants                            127                 116
Air Force

 Fighter wings -active                          13                 12+
 Fighter wings -reserve                          7                   8
 Bombers                                 Up to 184                 187
Marine Corps

 Marine expeditionary forces                     3                   3
----------------------------------------------------------------------
Source:  DOD data. 

The Secretary of Defense also established a goal to increase
procurement funding to $60 billion a year by fiscal year 2001.  To
achieve this procurement goal and stay within a projected $250
billion defense budget in constant 1997 dollars, the Secretary stated
that he would reduce infrastructure; cut almost 200,000 active,
reserve, and civilian personnel; and reduce funding for some
modernization programs. 


--------------------
\2 Joint Vision 2010, Department of Defense, Chairman of the Joint
Chiefs of Staff, Washington, D.C. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

The QDR, while broader in scope and more rigorous in some aspects
than DOD's 1993 Bottom-Up Review of U.S.  defense requirements, did
not examine some alternatives that would have provided greater
assurance that it identified the force structure that is best suited
to implement the defense strategy, as required by Congress.  In
addition, DOD's modernization assessment did not always reflect an
integrated, mission-focused examination of modernization
alternatives.  Several factors, including the difficulty of obtaining
internal consensus to examine changes in the services' planned force
structure, the timing of the process, limitations of DOD's models,
and concurrency in conducting force structure and modernization
assessments, hampered DOD's efforts.  Early, focused preparation and
changes to the QDR process could help DOD improve the next QDR so
that it may provide a more thorough examination of U.S.  defense
needs. 

The QDR's force assessments built on DOD's Bottom-Up Review analysis
by examining requirements for a broader range of military operations
beyond major theater wars and by analyzing the potential impact of
some key assumptions such as warning time and enemy use of chemical
weapons.  However, only one of the three major force assessments--the
major theater war assessment--modeled any force structure
alternatives.  Moreover, it only modeled alternatives to cut the
services' forces proportionately by 10, 20, and 30 percent.  The
assessment did not examine alternatives that involved targeted
changes--for example, alternatives that would reduce or increase only
ground forces or air power or naval forces--because DOD officials
foresaw problems in obtaining service consensus and DOD's models are
not sensitive enough to assess the effects of some types of force
structure changes.  Moreover, although some technologies consistent
with Joint Vision 2010 were modeled, none of the assessments fully
examined the potential effects of new technologies and war-fighting
concepts on DOD's planned force structure. 

DOD's modernization review examined some variations of the services'
procurement plans but did not include a thorough, mission-oriented
review of the mix of capabilities the United States will need to
counter future threats.  DOD divided responsibility for analyzing
major procurement programs and investment issues among 17 task forces
and directed them to identify modernization options that would reduce
and increase planned funding for systems within each task force by up
to 10 percent.  This approach may have helped focus task force
participants on developing options for replacing current systems, but
it did not always provide a mission focus that examined trade-offs or
facilitated a fundamental reassessment of modernization needs in
light of emerging threats and technological advances.  For example,
the capabilities used for the close air support mission were examined
by different task forces without an overall assessment of mission
needs.  Also, the modernization and force assessment panels conducted
most of their work independently and concurrently, which hampered
their ability to explore linkages and trade-offs between force
structure and modernization alternatives. 

DOD can provide a more thorough review of U.S.  defense needs in the
next QDR by preparing early, improving its analytical tools, and
considering changes to the structure and design of the QDR process. 
DOD has not yet developed a formal process to prepare for and
coordinate activities related to the next QDR.  DOD has some QDR
follow-on studies and model improvement efforts underway.  However,
DOD can take other steps to improve its analytical tools so it can
better evaluate the impact of force structure and modernization
alternatives on future warfare and smaller-scale contingency
operations.  Also, changes to the QDR process, such as reducing some
of the concurrency in the panels' work and fostering collaboration
between the panels could strengthen DOD's analyses.  Delaying the
start of the next QDR until later in the next Presidential
administration may also facilitate a more thorough review.  If the
Congress chooses to establish another independent panel of experts to
review defense needs, it may wish to require the panel to complete
its work prior to the next QDR to provide DOD with a broader set of
alternatives to consider. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      QDR'S THREE FORCE STRUCTURE
      ASSESSMENTS DID NOT EXAMINE
      SOME ALTERNATIVES
-------------------------------------------------------- Chapter 0:4.1

DOD's assessment of two major theater wars built on the Bottom-Up
Review by modeling shorter warning time, the enemy's use of chemical
weapons, and other factors.  The assessment also modeled the
potential success of smaller force structures comprising 10-, 20-,
and 30-percent proportional reductions to each service's combat
capability.  A 10-percent force reduction, for example, equaled the
loss of one Army division, two Air Force fighter wings, one Navy
carrier battle group, and appropriate Marine and support forces.  DOD
concluded that the current force was required to meet the two major
theater war requirement but a force close in size and structure to
the current force would be successful in some circumstances.  DOD did
not refine its assessment to determine whether fewer or targeted
changes to the services' force structures could be viable force
options.  DOD officials said they did not perform such analyses
because they would not have been able to obtain consensus on the
force changes among the services within the time available to
complete the QDR and because analyzing such alternatives would
require a more sensitive model than currently exists.  Finally,
although some advanced technologies such as stealth assets and
precision-guided munitions were modeled, DOD did not analyze the
effects of some other new technologies planned to be available by
2006, such as digitized communications that enhance situational
awareness.  Some service initiatives, such as the Army's plans to
digitize divisions, are expected to be partially implemented during
this time frame.  DOD officials stated they did not fully analyze the
effects of new technologies because DOD's models are not fully
capable of reflecting their impact and because the services do not
yet fully understand the effects of such technologies on war-fighting
doctrine. 

DOD's war game series called Dynamic Commitment examined the force's
suitability to carry out a wide range of notional smaller-scale
contingency operations and major theater wars projected to occur
between 1997 and 2005.  The contingencies consisted of disaster
relief, evacuations, humanitarian relief, and other operations based
on the history of the number and types of such occurrences since
1991.  Series participants allocated forces to the operations based
on military judgment.  The assessment confirmed that the projected
force is sufficient in size to meet projected requirements and that
some capabilities already known to be stressed will continue to be
stressed in the future.  Although the series provided participants
with some insight into the challenges of conducting multiple,
overlapping operations, it did not identify what force would be best
suited to meet these demands.  Specifically, DOD did not use the
series to identify force structure alternatives that (1) might result
in a better balance between forces required for smaller-scale
contingency operations and major theater wars or (2) eliminate excess
capabilities.  Moreover, the Joint Staff, which sponsored the effort,
did not summarize the results of the analysis. 

DOD's modeling of a notional conflict against a regional great power
in 2014 tested the impact of different levels of modernization on the
forces' ability to achieve success in a future war against such a
power.  However, it did not examine alternatives that varied the mix
of DOD's planned modernization programs to help identify the most
cost-effective investments.  Also, it did not fully assess the
potential impact of new technology on future operational concepts and
force structure.  The hypothetical scenario involved the United
States, with allied support, defending a nation from an invading
adversary possessing significant high-technology combat capability. 
The adversary's capabilities were extrapolated from intelligence data
on a current major power experiencing modest economic growth after
examining projected threat data for several potential future
adversaries.  DOD modeled U.S.  capabilities based on its existing
1997 force structure and examined alternatives, including forces
modernized with systems included in DOD's fiscal year 1998 Future
Years Defense Program projected through 2014 and on forces modernized
at one-third and two-thirds of the planned levels.  Other excursions
tested the effects of enemy ballistic missiles and varying warning
times.  DOD concluded that the more modernized the U.S.  force, the
lower the risk and less time needed to defeat the enemy.  DOD
officials said they did not analyze alternatives that varied the mix
of DOD's planned modernization programs or assess the impact of new
technologies on force structure because they had limited time
available, the services were uncertain about how new technologies
would affect operational concepts and force structure, and the model
used for this analysis lacked the sensitivity to assess the effect of
alternative force structures. 

The force assessments helped senior DOD officials conclude that a
10-percent force structure cut across the board would result in
unacceptable risk in implementing the defense strategy.  Senior
officials agreed on an overall path that made some personnel cuts and
modest force structure cuts to achieve savings that could be used to
increase modernization funding to $60 billion annually. 
Specifically, senior civilian and military leaders agreed that the
services would develop proposals to reduce the equivalent of about
150,000 active personnel to save between $4 billion and $6 billion in
savings.  The services developed proposals to save about $3.7 billion
largely by streamlining infrastructure functions and by making modest
adjustments to force structure.  Senior DOD officials identified
additional savings by restructuring or reducing quantities of some
planned weapon systems and reducing personnel assigned to defense
agencies. 


      METHODOLOGY FOR
      MODERNIZATION REVIEW
      RESULTED IN A PRIMARILY
      BUDGET-DRIVEN FOCUS
-------------------------------------------------------- Chapter 0:4.2

DOD's modernization review provided senior DOD officials with options
for buying major systems in the future, but the methodology for the
review resulted in a focus on budget-driven options rather than joint
mission assessments.  DOD's modernization panel identified 17 topics,
such as tactical aircraft, ships, theater missile defense, and ground
forces.  The panel assigned these topics to task forces that
independently analyzed existing procurement plans for each group of
systems based on their view of the capabilities for Joint Vision 2010
and using the procurement funding reflected in the 1998 Future Years
Defense Program as a baseline.  The panel directed the task forces to
consider increasing or decreasing funding allocated to each group of
systems by up to 10 percent as a means of encouraging them to develop
options to modify planned programs.  For example, the task force that
evaluated tactical aircraft developed an option that decreased the
number of Air Force F-22s, Navy F/A-18E/Fs, and Joint Strike
Fighters, thereby reducing total funding for these aircraft by $30
billion, or nearly 10 percent.  Senior DOD officials considered these
options when reaching decisions to change some procurement plans. 

Neither the modernization panel nor the task forces that reported to
the panel took an integrated look at the mission impact of
procurement options or final decisions to determine if they resulted
in the best system mix.  For example, the helicopter; tactical air;
command, control, communications, computers, intelligence,
surveillance, and reconnaissance; and other ground capabilities that
might be used for the close air support mission were evaluated
separately without an overall assessment of mission needs.  GAO's
previous report on combat air power commented on DOD's need to
examine the services' procurement plans from a joint mission
perspective to better enable the Secretary of Defense to prioritize
programs, objectively weigh the merits of new investments, and decide
whether current programs should continue to receive funding.\3

Furthermore, modernization plans were reviewed simultaneously but
largely separately from force assessments, and the QDR modernization
decisions were not modeled in DOD's regional great power assessment. 


--------------------
\3 Combat Air Power:  Joint Mission Assessments Needed Before Making
Program and Budget Decisions (GAO/NSIAD-96-177 Sept.  20, 1996). 


      PREPARING EARLY AND
      CONSIDERING CHANGES TO THE
      QDR PROCESS CAN HELP PROVIDE
      A MORE THOROUGH REVIEW
-------------------------------------------------------- Chapter 0:4.3

Although there is no current statutory requirement for another QDR,
the Secretary of Defense has endorsed the concept of a quadrennial
review.  DOD could implement this commitment by taking several steps
now to prepare for the next QDR.  The Secretary of Defense has not
yet established formal oversight at a senior level to facilitate
preparation for the next review.  Assigning responsibility well in
advance is needed to provide sufficient time to complete numerous
preparation tasks, including analyzing lessons learned from DOD's
1997 review and identifying a strategy to improve and build on its
principal analyses.  While DOD's 1997 QDR expanded on the analytical
tools used in prior defense force analyses, DOD recognizes that its
models currently have significant limitations in realistically
modeling certain aspects of warfare such as command, control, and
intelligence.  As a result, DOD has a significant effort underway to
improve its models for simulating major theater wars.  However, DOD
also needs to determine how it can improve its analysis of
requirements for smaller-scale contingencies and longer-term threats. 
Moreover, DOD will need to consider how new technologies and concepts
available to U.S.  military forces will impact a wide range of
military operations.  Finally, modeling the existing force structure
prior to the QDR could provide a baseline for comparing alternatives
examined during the next QDR. 

Opportunities may also exist to improve the QDR process.  The force
assessment and modernization panels proceeded concurrently and did
not fully collaborate, which resulted in limited analysis of
trade-offs between modernization and force structure.  For example,
some defense experts argue that spending money on technology such as
stealth aircraft and precision-munitions should enable the United
States to reduce force structure.  In addition, QDR participants
provided different views on the process used to develop the defense
strategy.  OSD officials noted that the strategy review began in the
fall of 1996 and proceeded smoothly.  However, some service officials
and QDR panel members believe that the panels experienced some
confusion because DOD had a draft defense strategy in January 1997,
but did not finalize it until March 1997.  Changing the timing of the
QDR process might also help the thoroughness of analyses.  The QDR
was envisioned to begin immediately after the presidential election
to allow a new administration the chance to affect the next budget
cycle.  Even though the 1997 QDR was performed by a returning
administration, many DOD officials told us the panels did not receive
final, top-level guidance until mid-January, after the new Secretary
of Defense was confirmed.  As a result, DOD had only a few months to
finalize the strategy, complete its force structure and modernization
analyses, and make final decisions.  It may be even more difficult to
adhere to this schedule following the 2000 election because there
will be a change in administration. 

Congress might be able to assist DOD in identifying a broader set of
options to explore during the next QDR.  In the National Defense
Authorization Act of 1997, Congress established an independent panel
to assess the QDR and report on possible force structure alternatives
after the QDR was completed.  As an alternative, Congress might want
an independent panel assessment prior to the next QDR to encourage
DOD to explore different defense strategies, force structure, and
modernization alternatives. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 0:5

The Secretary of Defense has endorsed the concept of a quadrennial
review of defense needs.  To enhance the value of the next QDR, we
recommend that the Secretary of Defense assign responsibility for
overall oversight and coordination of DOD preparation efforts. 
Preparation tasks should include identifying the analytical tools and
data needed to support force structure and modernization analyses,
monitoring the status and funding for efforts to upgrade DOD's
models, summarizing lessons learned from the 1997 QDR, and
considering the need for changing the structure and timing of the QDR
process. 


   MATTER FOR CONGRESSIONAL
   CONSIDERATION
---------------------------------------------------------- Chapter 0:6

If Congress chooses to establish another panel of experts to provide
an independent review of defense needs, it may wish to require the
panel to complete its work prior to the next QDR.  This approach
could assist DOD in identifying a broader set of options to examine
during its review. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:7

In written comments on a draft of this report (see app.  I), DOD
concurred with GAO's recommendation but disagreed with several of
GAO's characterizations of the QDR effort.  DOD's comments and GAO's
detailed evaluation of them are included in the report where
appropriate. 

Specifically, DOD agreed that the Secretary of Defense should assign
responsibility for overall oversight and coordination of DOD efforts
to prepare for the next QDR.  DOD stated it is identifying the
analytic tools and data that will be needed for the next QDR and is
improving existing tools where shortcomings have been identified.  It
also stated that it is examining areas of U.S.  defense strategy that
either were not fully explored in the QDR or were raised by the
National Defense Panel and has commissioned internal and external
studies summarizing lessons learned from the 1997 QDR.  DOD also
agreed that any mandated independent panel similar to the National
Defense Panel should precede the Department's own QDR efforts. 
However, DOD disagreed with GAO's findings that (1) the QDR panel
process may have been hampered by its concurrency, (2) the
modernization effort was "budget driven", (3) modernization and force
structure decisions were not integrated, and (4) beginning the QDR
process later in a presidential administration is a viable
alternative to the timing of the 1997 QDR. 

DOD observed that OSD and joint staff representatives had thoroughly
briefed all other QDR panels on the draft strategy and that any
delays in other panels' work should not be blamed on the absence of a
final strategy.  GAO's report acknowledges that the draft strategy
was circulated to panel chairs in January 1997 and that some DOD
officials see no need to alter the timing of the strategy review. 
However, because some officials perceived that the lack of a final
strategy led to confusion, GAO believes that DOD should consider this
information in evaluating changes to the QDR process.  GAO also notes
that the 1997 QDR was conducted under favorable conditions in that
many senior DOD officials were in place prior to the November
presidential election to begin work on the strategy and major
elements of the strategy remained the same.  GAO believes that
significant concurrency between the strategy review and force
structure and modernization assessments could be more problematic for
the next QDR, which will be conducted by a new administration,
particularly if senior officials decide on a new strategy that alters
key force planning assumptions. 

DOD also stated it disagreed that the force assessment and
modernization panels functioned as stovepipes and noted that the QDR
structure allowed each panel to focus on a tractable set of issues
while enabling senior leaders to evaluate and make decisions based on
an integrated picture.  GAO notes that senior DOD officials
considered broad trade-offs between force structure and modernization
at the macro-level in determining which of three paths to adopt to
meet near- and long-term challenges.  However, the panels that
provided input to senior officials did not fully examine trade-offs
between modernization and force structure.  GAO believes that more
in-depth analysis of these issues would have enhanced the overall
value of DOD's review and the alternatives presented to senior
officials.  For example, DOD's regional great power analysis modeled
planned investments, such as precision munitions and stealth
aircraft, but did not examine whether such technologies would permit
a different force structure. 

DOD also said that GAO's assertions that the QDR modernization
options were budget-driven and based solely on a plus-or-minus
10-percent rule were inaccurate and noted that the primary factor
influencing the modernization analyses was the capabilities of
current and planned systems.  GAO did not assert that the QDR
modernization options were based solely on a plus-or-minus 10-percent
rule.  Rather, GAO's report specifically recognizes that DOD's
modernization assessment was based on a number of factors including
Joint Vision 2010.  However, GAO believes that DOD's guidance to the
modernization task forces to consider increasing or decreasing
funding for planned programs by 10 percent, combined with its
stovepipe approach for analyzing groups of similar weapons systems,
may have limited the types of alternatives considered when compared
with a mission-oriented approach. 

Finally, DOD believes that there are numerous disadvantages to
conducting the QDR later in a presidential administration, including
that the Secretary of Defense would have to submit two budgets before
submitting one that reflects the QDR's results.  GAO recognizes DOD's
concerns but continues to believe that delaying the process would
give a new administration the benefit of more time to perform a more
rigorous review before reaching conclusions that will shape the
future of DOD and its budgetary priorities. 

DOD also provided GAO with technical comments on the report and where
appropriate, GAO changed or clarified information in the report. 


INTRODUCTION
============================================================ Chapter 1

In the early 1990s, the Department of Defense (DOD) conducted two
major defense reviews--the 1991 Base Force Review and the 1993
Bottom-Up Review--to assess military force structure requirements in
the post-Cold War era.  Following these reviews, Congress established
the Commission on Roles and Missions of the Armed Forces to determine
the appropriateness of current allocations of roles, missions, and
functions among the armed forces and make recommendations for
changes.  Among its recommendations, the Commission called for DOD to
conduct a comprehensive strategy and force review at the start of
each administration, or every 4 years, to examine an array of force
mixes, budget levels, and missions to identify the best force mix. 
In August 1995, the Secretary of Defense endorsed performing a
quadrennial review of the defense program.  He expected to complete
the first such review in 1997. 

Congress, noting the Secretary's intention to complete a Quadrennial
Defense Review (QDR) in 1997, identified specific reporting
requirements for the review in the National Defense Authorization Act
for Fiscal Year 1997.\4 Congress expected the QDR to review the
defense strategy of the United States and identify the force
structure best suited to implement the strategy.  Specifically, the
law required a comprehensive examination of defense strategy; active,
guard, and reserve component force structure; force modernization
plans; infrastructure; budget plans; and other elements of the
defense program.  The law also required DOD to identify how the force
structure would be affected by new technologies anticipated to be
available by 2005 and by the changes in doctrine and operational
concepts that would result from such technologies.  DOD issued its
report on the QDR in May 1997. 

The law also established an independent, nonpartisan panel comprising
national security experts from the private sector, known as the
National Defense Panel, to review the results of the 1997 QDR and
conduct a subsequent study of force alternatives.  Congress noted
that it was important to provide for an independent review of force
structure that extends beyond the time frame of the QDR and explores
innovative and forward-thinking ways of meeting emerging challenges. 
The National Defense Panel issued its report in December 1997 as
required by the statute. 


--------------------
\4 Public Law 104-201, title IX, subtitle B, sections 921-926. 


   DOD'S PROCESS FOR CONDUCTING
   THE QDR
---------------------------------------------------------- Chapter 1:1

DOD began the QDR in November 1996 after the presidential election. 
Although the President was reelected, the QDR was underway for
approximately 2 months before a new Secretary of Defense was
confirmed in January 1997.  Following his confirmation, the Secretary
provided guidance to DOD officials concerning the defense strategy
and budget assumptions for the QDR. 

The QDR included participation by the Office of the Secretary of
Defense (OSD), the Joint Staff, the services, and the commanders in
chief of the combatant commands.  DOD organized officials into three
tiers that ultimately reported to the Secretary of Defense (see fig. 
1.1).  The first tier consisted of seven panels that were tasked to
conduct analyses between November 1996 and February 1997.  The second
tier, an Integration Group led by senior OSD and Joint Staff
officials, was designed to integrate the seven panels' results and
produce a set of options to implement the defense strategy.  The
third tier, the Senior Steering Group, cochaired by the Deputy
Secretary of Defense and Vice Chairman of the Joint Chiefs of Staff,
was to oversee the QDR process and make recommendations to the
Secretary of Defense. 

   Figure 1.1:  Diagram of QDR
   Organizational Tiers

   (See figure in printed
   edition.)

Source:  OSD. 

To assess force structure requirements, DOD's force structure panel
(1) conducted an assessmentby modeling of two major, overlapping wars
on the Korean peninsula and in Southwest Asia in 2006; (2) examined
the results of an assessment, led by the Joint Staff, of
smaller-scale contingency operations; and (3) led an assessment of
the capabilities of U.S.  forces against a postulated regional great
power in 2014.  DOD also conducted an analysis of overseas presence
and several individual service assessments of some issues not
specifically addressed in the other assessments. 

The modernization panel established task forces to review a number of
major planned modernization programs.  Its goal was to ensure that
future U.S.  forces will have equipment that leverages new
technologies and supports the modern, joint capabilities cited in
Joint Vision 2010, the Chairman of the Joint Chiefs of Staff's vision
for transforming U.S.  military capabilities for the future. 


   DOD'S ASSESSMENT OF THE
   SECURITY ENVIRONMENT
---------------------------------------------------------- Chapter 1:2

DOD's QDR report states that although the threat of global war has
receded, the United States will likely face a number of significant
challenges between now and 2015.  First, the United States will
continue to confront regional dangers, including the threat of
large-scale, cross-border aggression against allies in key regions by
hostile states with significant military power.  Moreover,
adversaries may use asymmetric means--avoiding conventional military
contact--to attack U.S.  forces and interests overseas and Americans
at home.  In addition, failing states may create instability,
internal conflict, and humanitarian crises. 

DOD also concluded that the proliferation of advanced weapons and
technologies could increase the number of potential adversaries with
significant military capabilities and potentially change the
character of military challenges.  Of particular concern are the
spread of nuclear, biological, and chemical weapons; information
warfare capabilities; advanced conventional weapons; stealth
capabilities; unmanned aerial vehicles; and capabilities to access or
deny access to space.  Moreover, U.S.  interests will be challenged
by a variety of transnational dangers, such as terrorism, illegal
drug trade, international organized crime, and the uncontrolled flow
of migrants.  Finally, the United States will face threats to the
homeland from strategic arsenals, intercontinental ballistic
missiles, and weapons of mass destruction. 

According to intelligence sources, it is unlikely that a "global peer
competitor" will emerge by 2015 with capabilities that could
challenge the United States as the Soviet Union did during the Cold
War.  Furthermore, it is likely that no regional power or coalition
will amass sufficient conventional military strength in the next 10
to 15 years to defeat U.S.  forces.  However, it is possible that a
regional great power or global peer competitor, such as Russia and
China, may emerge after 2015. 


   THE U.S.  DEFENSE STRATEGY
---------------------------------------------------------- Chapter 1:3

On the basis of DOD's assessment of the global security environment
through 2015, the QDR report cited a defense strategy consisting of
three key elements:  shape, respond, and prepare.  The strategy
states that the United States must continue to shape the strategic
environment by promoting U.S.  interests through a variety of means,
including the deployment of forces permanently, rotationally, and
temporarily overseas.  The United States must also maintain the
capability to respond to a full spectrum of military operations
ranging from deterring aggression and conducting concurrent
smaller-scale contingency operations to fighting and winning two
major theater wars nearly simultaneously.  The strategy also cited
the need to prepare for a future that may include the emergence of
new threats and/or a regional great power or global peer competitor
by investing now in force modernization, exploiting the potential of
advanced technologies, and reengineering DOD's infrastructure and
support activities. 


   THE QDR-PROPOSED FORCE IS VERY
   SIMILAR TO THE BOTTOM-UP REVIEW
   FORCE
---------------------------------------------------------- Chapter 1:4

According to DOD, the force structure proposed by the QDR sustains
the forces and capabilities needed to meet the demands of the
strategy in the near term while also beginning to transform the force
for the future.  The QDR endorsed a force structure that is very
similar, although slightly smaller, to that proposed by the Bottom-Up
Review.  The Secretary of Defense also concluded that DOD should
increase procurement funding to $60 billion a year by 2001.  To
achieve this goal and stay within a $250 billion projected defense
budget in constant 1997 dollars, the Secretary directed a reduction
of DOD's infrastructure, cutting almost 200,000 active, reserve, and
civilian personnel, and a reduction in funding for some modernization
programs, such as the Joint Surveillance and Target Attack Radar
System and F-22, F/A-18E/F, Joint Strike Fighter, and MV-22 aircraft. 


   THE NATIONAL DEFENSE PANEL
   EMPHASIZED THE NEED TO PREPARE
   FOR THE FUTURE
---------------------------------------------------------- Chapter 1:5

In December 1997, the National Defense Panel reported that the
challenges of the twenty first century will require fundamental
changes to national security institutions, military strategy, and
defense posture by 2020.  To make these changes, the Panel stated
that the United States must move more quickly to transform its
military and national security structures, operational concepts,
equipment, and business practices.  Specifically, the Panel stated
that DOD placed too much emphasis on preparing for the unlikely
probability of two major theater wars because it serves as a means to
justify the current force structure.  The Panel noted that funds now
spent on preserving forces could be better spent on preparing for the
future, thereby reducing the risk to long-term security. 

The Panel also said that some of the services' procurement plans did
not advance the transformation of current capability to that needed
in the future.  It said the procurement budgets of the services
remain focused on systems that will be at risk in 2010 to 2020
instead of emphasizing experimentation with a variety of military
systems, operational concepts, and force structures.  The Panel
estimated that $5 billion to $10 billion annually is needed for
initiatives in intelligence, space, urban warfare, joint
experimentation, and information operations.  According to the Panel,
these funds should come from acquisition reform and cutting excess
infrastructure.  However, if these reforms do not materialize, the
funds may need to come from reduced operating levels, a smaller force
structure, or cancellation of some procurement programs. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:6

In response to requests from the Chairman and Ranking Minority Member
of the Senate Armed Services Committee and the Chairman of the House
Budget Committee, we assessed whether (1) the QDR's force structure
and modernization assessments examined alternatives to the planned
force and (2) opportunities exist to improve the structure and
methodology of future QDRs.  Although we did not evaluate the
rationale for the defense strategy cited in the QDR report, we
obtained briefings and had discussions with officials in the Office
of the Assistant Secretary of Defense for Strategy and Requirements
and the Joint Staff about its development and content.  We also
reviewed reports and interviewed officials in the Defense
Intelligence Agency and National Intelligence Council about near- and
long-term threats relevant to the strategy. 

To evaluate the extent to which DOD's three principal force structure
assessments--the two major theater wars, smaller scale contingencies,
and future regional great power--analyzed alternatives, we obtained
briefings, reviewed documents, and interviewed officials in OSD, the
Joint Staff, the services, the U.S.  Atlantic Command, and the U.S. 
Central Command.  We also obtained and analyzed key assumptions used
in these force assessments, such as assumptions about warning time
and level of allied participation, and compared these assumptions
with those used by the Bottom-Up Review.  Moreover, we discussed the
rationale for the assumptions with OSD, Joint Staff, and service
officials. 

To evaluate the reliability of computer-generated data produced by
the two campaign models used to assess forces during the QDR--the
Tactical Warfare Model (TACWAR) for the two major theater war
assessment and the Joint Integrated Contingency Model (JICM) for the
war with a regional great power--we examined the process DOD uses to
validate the models and the data DOD used as model inputs.  We
reviewed documents on the TACWAR model from the U.S.  Army Training
and Doctrine Command Analysis Center as well as documents related to
JICM.  We also reviewed Defense Modeling and Simulation Office
documents and interviewed an Office official on DOD's process of
model verification, validation, and accreditation.  In addition, we
observed TACWAR demonstrations so that we could better understand how
the outputs are generated.  Although we did not review or validate
the actual computer-generated data used as input to the two models,
we reviewed various estimates and conclusions that flowed from that
data.  More specifically, we interviewed OSD officials about the
Joint Data Support System as well as DOD and RAND officials about
their verification and validation process and means for maintaining
data entered into TACWAR and JICM.  Also, we evaluated the steps
taken by DOD to ensure the quality of data extracted from a major
TACWAR data source, the Deep Attack Weapons Mix Study, as well as
other sources that served as input.  We believe this to be a
reasonable approach to identifying the strengths and limitations of
these models and the data because 1) there are credible sources
within the defense community such as the TACWAR users group, RAND,
Defense Modeling Simulation Office, and Coleman Research that
evaluate the models and 2) running test data through the models was
not feasible for time and cost reasons. 

To evaluate the extent to which the modernization review evaluated
alternatives, we obtained briefings and interviewed the cochairs of
the Modernization Panel from the offices of the Under Secretary of
Defense for Acquisition and Technology, Director for Strategic and
Tactical Systems, and the Joint Chiefs of Staff.  We also interviewed
OSD, Joint Staff, and service officials who supported the
Modernization Panel, and we were briefed on and reviewed documents
related to the results of 7 of DOD's 17 modernization task forces. 
Specifically, we reviewed results for theater ballistic missile
defense, the Joint Surveillance and Target Attack Radar System,
national missile defense, tactical aircraft, ship acquisition, Marine
Corps ground forces, and Marine Corps rotary wing forces.  OSD
officials and panel representatives did not maintain data on the
total modernization funding associated with each of the 17 task
forces. 

To determine whether opportunities exist to improve the structure and
methodology of future QDRs, we reviewed documents and interviewed
officials from the Office of the Assistant Secretary of Defense for
Strategy and Requirements\5 and the Director, Program Analysis and
Evaluation, concerning the 1997 QDR process.  We drew on our analysis
of the process and implementation of the force assessment and
modernization reviews to identify and summarize factors that hampered
DOD's 1997 QDR process.  We also obtained information on studies
initiated by DOD following the QDR's completion and on DOD's plans to
develop a new joint campaign model.  We discussed our observations
with officials in OSD, the Joint Staff, and the services and obtained
their views on the design and implementation of the QDR and ways to
improve it. 

We conducted our review from July 1997 to April 1998 in accordance
with generally accepted government auditing standards. 


--------------------
\5 This office is now referred to as the Office of the Assistant
Secretary of Defense for Strategy and Threat Reduction. 


FORCE STRUCTURE ASSESSMENTS TESTED
LIMITED ALTERNATIVES
============================================================ Chapter 2

The QDR's major theater war assessment, smaller-scale contingency war
game series, and future regional great power assessment used some
analytical tools different from those used in than the Bottom-Up
Review to analyze a broader range of military operations and conduct
greater analysis of some key assumptions.  These assessments
concluded that the current force structure was sufficient to meet the
U.S.  defense strategy.  However, only one--the major theater war
force assessment--evaluated any alternative force structures, and
they were limited.  Furthermore, none of the assessments fully
examined the impact of evolving technologies and operational concepts
on future force size and structure.  As a result, senior DOD
officials recommended a force structure without examining some
alternatives that would have provided greater assurance that DOD
complied with congressional guidance to identify the best suited
force. 


   MAJOR THEATER WAR ASSESSMENT
   EXPLORED A FEW FORCE STRUCTURE
   ALTERNATIVES
---------------------------------------------------------- Chapter 2:1

According to the U.S.  defense strategy, the United States must be
able to fight and win two overlapping major theater wars, preferably
in concert with regional allies.  As part of the QDR force assessment
analysis, DOD modeled the sufficiency of U.S.  forces to fulfill this
requirement.  This effort was more extensive than the analysis done
during the Bottom-Up Review in that DOD modeled enemy use of chemical
weapons, shorter warning time, and some level of initial engagement
in peacetime operations.  However, other than the current force, the
only force structures modeled were those resulting from 10-, 20-, and
30-percent cuts equally proportioned to each service's forces,
according to Joint Staff and OSD officials. 


      DOD USED THE TACWAR MODEL TO
      ANALYZE FORCES NEEDED FOR
      TWO MAJOR THEATER WARS
-------------------------------------------------------- Chapter 2:1.1

OSD's Office of Program Analysis and Evaluation and the Warfighting
Analysis Division of the Joint Staff's Director for Force Structure,
Resources, and Assessment performed the two major theater war
assessment using the TACWAR model and data from the Deep Attack
Weapons Mix Study.  TACWAR is a theater-level model that assesses
force structures and resource allocations within the context of a
joint campaign.  The model ran on a 12-hour battle cycle, and
operators, using their military judgment, could make periodic
adjustments to the scenario to correct or revise any results that
appeared unrealistic.  For example, the model allowed units in a
sector to move at their own speed.  However, in a realistic
situation, units would travel together to protect each other's
flanks.  The operators could adjust the speed of the units to ensure
that they moved in concert.  The results were then weighed against
measures of effectiveness drawn from the war game for the Bottom-Up
Review.  The Deep Attack Weapons Mix Study data came from a recent
DOD effort to assess deep attack requirements across the services.  A
key objective of the study was to analyze weapon mix requirements for
DOD's planned force in 1998, 2006, and 2014 and determine the impact
of force structure changes on the weapons mix. 

TACWAR was developed in the 1970s and has been revised several times. 
While officials agreed that TACWAR is the best campaign model
available at this time, they also acknowledged that it has
limitations.  For example, it models the ground campaign better than
the air or naval campaigns.  Also, the model provides an aggregated
look at the battlefield, which means it is not very useful for
identifying details of the impact of particular weapon systems or
force structure changes on the battle or the impact of some new
technologies and emerging operational concepts. 

DOD officials used Deep Attack Weapons Mix Study data because they
concluded it was the most current and complete information available
on force structure, movement into theater, weapon system
capabilities, and target locations.  Also, according to officials,
given the short time frame available to complete the assessment, it
was important that the data was in the necessary format for TACWAR
and ready to use.  The recently completed study, according to one
service official, was the most detailed and comprehensive force and
weapon mix analysis conducted by the defense community.  During the
study, the services repeatedly reviewed and revised the data to
ensure its accuracy.  As a result, while the services did not
participate directly in TACWAR's major theater war assessment, OSD
and Joint Staff officials stated they were satisfied the services had
sufficient input to the data used in the analysis. 


      THE MAJOR THEATER WAR
      ANALYSIS REQUIRED DOD TO
      SPECIFY THREAT, SCENARIO,
      AND ASSUMPTIONS
-------------------------------------------------------- Chapter 2:1.2

To run the major theater war force assessment, OSD and the Joint
Staff made assumptions regarding the threat, battle scenario, and
other factors.  The threat was based on the Defense Intelligence
Agency's projection of Iraq and North Korea as aggressors in 2006. 
The scenario was taken from defense guidance.  It featured the first
major theater war starting after a warning period, followed by the
second, overlapping major theater war.  Defense guidance also
provided many of the operational assumptions for the scenario such as
warning times, separation times between the two wars, equipment
prepositioned in theater, call-up of reserve forces, allied
participation, access to overseas bases, and port and transportation
availability.  However, other assumptions came from the war game
analysis used in the Bottom-Up Review.  These included assumptions
about the readiness of U.S., allied and aggressor forces; that some
forces from the first major theater war would be available for the
second war's counteroffensive; and that some forces were already
deployed overseas.  Since TACWAR cannot model command, control,
communications, computers, intelligence, surveillance, and
reconnaissance effectively, the model was adjusted to degrade
munitions effectiveness to represent these projected capabilities,
according to Joint Staff officials. 


      DOD USED MEASURES OF
      EFFECTIVENESS TO DETERMINE
      LEVELS OF RISK
-------------------------------------------------------- Chapter 2:1.3

The success of U.S.  forces in the major theater wars was determined
by assessing the risk associated with each phase of the battle and
the overall campaigns.  OSD and the Joint Staff identified several
specific tasks as measures of effectiveness in achieving the
operational objectives for each war.  These tasks included minimizing
allied losses, holding battle lines, and affecting important targets. 
Operators measured the extent to which these tasks were accomplished
during each battle phase and for the war in each model run.  The
operators were also able to gain insights about critical requirements
for battle success, operational abilities of each force, and problems
that may be encountered in each war. 


      DOD MODELED FORCE SIZES AND
      SOME OTHER FACTORS
-------------------------------------------------------- Chapter 2:1.4

Once the base-case two major theater war scenario was established,
OSD modeled the sufficiency of DOD's planned forces for 2006,
including the new or modernized weapons planned for purchase by that
time, according to OSD and Joint Staff officials.  It also modeled
several excursions based on equally proportioned 10-, 20-, and
30-percent reductions to the forces.  For example, a 10-percent force
reduction meant the elimination of one Navy carrier battle group, one
Army active division, and two Air Force fighter wings, along with
some Marine Corps and support units.  The 20-percent reduction meant
the Army and Navy would lose two units each and the Air Force would
lose four wings.  With the 30-percent reduction, the Army and Navy
would lose three units each and the Air Force would lose six wings. 
There would also be commensurate reductions in Marine Corps and
support units. 

OSD and the Joint Staff also modeled other excursions from the
base-case two major theater war scenario.  They included shorter
warning time, the enemy's use of chemical weapons in both wars, and a
combination of both short warning and the use of chemical weapons. 
Each of these excursions required DOD to make more assumptions in
addition to those already made.  The shorter warning excursion
assumed the U.S.  forces were given fewer days' notice in advance of
the start of the second war than in the base-case scenario. 
According to a Joint Staff official, the chemical excursion modeled a
realistic scenario for the U.S.  force and allies, which was neither
a best nor worst case situation.  This included assumptions about
weather conditions, the number and type of weapons, and delivery
methods.  Information for this scenario was drawn from Defense
Intelligence Agency data on the type and number of weapons in the
enemies' inventories and how the enemies would deliver those weapons. 
Information such as dispersion rates and lethality of chemical agents
modeled came from the Army Chemical School.  In many of the
excursions, OSD and the Joint Staff also modeled the impact of U.S. 
forces being engaged in various types of operations around the world,
such as humanitarian assistance or peacekeeping operations, when the
first major theater war started. 

The Joint Staff was responsible for modeling these excursions,
analyzing the results of the battles, and determining the risk levels
to assign to the battle based on the accomplishment of the specified
tasks.  As shown in table 2.1, excursions were run for each of the
different force levels--the current projected force and 10-, 20-, and
30-percent reductions--using the base-case two major theater war
scenario.  However, not all force levels were modeled against all
variables because, according to officials, the resulting risks for
some force levels would be too high. 



                               Table 2.1
                
                  Excursions Modeled in the Two Major
                      Theater War Force Assessment

                                                              Chemical
                                                               attack/
                             Basic    Chemical       Short       Short
                          scenario      attack     warning     warning
----------------------  ----------  ----------  ----------  ----------
Projected force                  X           X           X          XX
10% reduction                    X          XX
20% reduction                   XX          XX
30% reduction                   XX
----------------------------------------------------------------------
X=Excursion modeled. 

XX=Excursion modeled included an assumption that some forces would be
involved in peacetime engagement at the outset of the first conflict. 

Source:  OSD Program Analysis and Evaluation. 


      THE ASSESSMENT IDENTIFIED
      RISKS TO MAKING BROAD FORCE
      CUTS BUT DID NOT EXPLORE
      OTHER ALTERNATIVES
-------------------------------------------------------- Chapter 2:1.5

U.S.  forces won the two wars in every excursion modeled, but their
effectiveness in achieving all the specific tasks varied to the point
that the risks associated with some excursions were unacceptable,
according to OSD and the Joint Staff.  As a result, DOD officials
concluded that a force close in size and structure to the current one
would be needed to win two, nearly simultaneous major theater wars in
concert with regional allies.  However, the analysis also showed that
a slightly smaller force would be able to win without a significant
increase in risk in the base-case scenario.  When chemical weapons or
shorter warning times were involved, the current force was necessary
to conduct these operations with an acceptable level of risk. 

Although the analysis showed that a slightly smaller force was able
to meet many of the two-war requirements without a significant
increase in risk, OSD did not refine the analysis to model other
force reductions, like 5 or 15 percent, to see if they would produce
viable force options.  They also did not model alternatives that
would have affected the services' forces unequally, such as using a
small reduction to one service's forces, but no reduction or even a
slight increase to other services' forces.  An OSD official stated
that, given the time available to perform this assessment, OSD would
not have been able to obtain consensus among the services on what
smaller force reductions should look like or how unequal force
reductions should be taken.  Also, OSD and Joint Staff officials
stated that the TACWAR model is not sensitive enough to effectively
model slight changes in forces.  As a result, information on
potential alternatives to the current force was not available to the
Secretary of Defense for determining the best-suited force to carry
out the strategy. 

While the major theater war assessment modeled the modernized force
planned for 2006, which includes such things as stealth technology
and precision-guided missiles, DOD did not fully examine how new
technologies might affect future operational concepts or force
structure.  For example, as a result of its Army Force XXI
initiative, the Army plans to begin fielding units that will have an
enhanced situational awareness of the battlefield through digital
technology by 2006.  Also, the Air Force has proposed an alternative
concept of operations using massive air strikes at the beginning of a
war, with more munitions than currently planned, to rapidly halt the
enemy's advance and provide more time for a ground buildup.  Yet,
neither was modeled during the major theater war analysis.  OSD and
Joint Staff officials stated that they did not analyze the effects of
new technologies or concepts because the TACWAR model is not
sensitive enough to do so.  They also stated that the services are
not far enough along in their understanding of how new technologies
and concepts will affect war-fighting doctrine. 


   DOD'S SMALLER-SCALE CONTINGENCY
   FORCE ASSESSMENT EVALUATED THE
   SUFFICIENCY OF THE PLANNED
   FORCE
---------------------------------------------------------- Chapter 2:2

According to the U.S.  defense strategy, the U.S.  military must be
prepared to successfully conduct multiple, concurrent smaller-scale
contingency operations worldwide in any environment, including one in
which an adversary uses nuclear, chemical, or biological weapons. 
The QDR's primary assessment of the ability of U.S.  forces to
respond to such operations was the Dynamic Commitment war game
series.  This series of conferences and war games was designed to
evaluate whether the planned force was sufficient to meet the demands
of the full range of military operations from 1997 to 2005 and how
engagement in smaller-scale contingencies might affect the forces'
ability to respond to major theater wars.  While this assessment
provided several insights into how forces were allocated to a wide
range of operations, it did not evaluate alternative force structures
to identify the force best suited to meet the demands of the defense
strategy. 


      QDR WENT FURTHER THAN PAST
      ASSESSMENTS IN EXAMINING
      REQUIREMENTS FOR
      SMALLER-SCALE CONTINGENCIES
-------------------------------------------------------- Chapter 2:2.1

During the QDR, DOD expanded on the Bottom-Up Review's examination of
force requirements for smaller-scale contingencies.  Smaller-scale
contingency operations encompass the full range of military
operations other than peacetime engagement activities but short of a
major theater war.  These operations include peacekeeping,
humanitarian assistance, noncombatant evacuations, limited strikes,
and disaster relief.  DOD expects the demand for such operations will
remain high over the next 15 to 20 years and that these operations
will pose the most frequent challenge to U.S.  forces through 2015. 
According to the QDR, U.S.  forces must also be able to withdraw from
these contingencies, reconstitute, and then deploy to a major theater
war within the required time. 


      DOD USED THE DYNAMIC
      COMMITMENT WAR GAME SERIES
      TO TEST THE SUFFICIENCY OF
      FORCES FOR A RANGE OF
      MILITARY OPERATIONS
-------------------------------------------------------- Chapter 2:2.2

The Joint Staff developed the Dynamic Commitment war game series to
test whether the currently planned force structure was sufficient to
execute the range of potential military operations.  The Joint Staff
also designed the series to help the services identify stress
points--forces that sustained high operating tempo in conducting
multiple contingency operations.  Dynamic Commitment was not designed
to evaluate the forces' effectiveness, according to OSD officials. 
The forces were assumed to be ready when called upon and effective in
meeting operational requirements.  Two major theater wars were
incorporated in the war game series to test the forces' ability to
sufficiently respond when some forces were already deployed to
smaller-scale contingencies. 

During Dynamic Commitment, participants from the Joint Staff,
combatant commands (geographical and special operations), and service
staffs (including reserve components and the Coast Guard), allocated
forces to multiple, overlapping smaller-scale contingencies and major
theater wars forecasted over 9 years.  Nearly 50 notional
smaller-scale contingencies were developed to illustrate the full
spectrum of potential U.S.  military operations short of a war.  The
contingencies consisted of interventions, shows-of-force, no-fly zone
enforcement, maritime sanction enforcement, disaster relief,
peacekeeping, noncombatant evacuations, and humanitarian assistance. 
The contingencies were based on the type, duration, and general
frequency of such operations since 1991.  Scenarios were developed
using defense guidance and combatant command operational plans. 
Prior to the game, a concept of operations and list of associated
forces list for each operation were approved by game participants
from OSD, the Joint Staff, combatant commands, and the services. 

During the game, participants--primarily combatant command and
service planners--allocated forces to these sequential and sometimes
simultaneous military operations, considering the world situation and
the need to reserve forces to respond to other potential crises,
including major theater wars.  While the participants generally
allocated forces to a contingency using the previously developed
force list, they could change the forces based on military judgment
or sometimes their availability.  For example, in one case, U.S. 
forces were deployed to a large-scale intervention when events in two
other areas of the world became concerns.  Rather than send an Army
air assault brigade to one of the two areas as a show of force as
originally planned, participants decided to deploy Air Force fighters
and a Navy aircraft carrier and hold the Army's one remaining
uncommitted air assault brigade in reserve. 

DOD officials had differing views about whether the force allocation
process in Dynamic Commitment resulted in the appropriate size and
mix of forces being allocated to military operations.  According to
some game participants, there was a perceived need for each service
to maximize the allocation of its forces to justify them and avoid
force reductions.  As a result, more forces than necessary may have
been allocated to some operations.  However, Joint Staff officials
asserted that the force allocations during the game were appropriate,
since they were generally consistent with those used in actual
deployments and each service was there to ensure that others were not
over-allocating their forces. 


      DYNAMIC COMMITMENT CONCLUDED
      THAT THE PLANNED FORCE
      STRUCTURE IS SUFFICIENT
-------------------------------------------------------- Chapter 2:2.3

As a result of the Dynamic Commitment war game series, DOD officials
concluded that the projected U.S.  force is sufficient in size,
though stressed, to execute the defense strategy and that some forces
already known to be stressed would continue to be so.  Another
significant insight was that sequential deployments to smaller-scale
contingencies may have a cumulative, negative impact on the
all-volunteer force.  The series confirmed that high operating tempo
remains an issue for previously identified "low density/high demand"
assets--those major platforms, weapon systems, units, and personnel
that are in continual high demand to support worldwide joint military
operations and that are available in relatively small numbers.  The
series also identified other forces that were in high demand, such as
military police and Army signal units. 

According to DOD, the series helped identify forces that services
should not cut and provided valuable insights into managing the force
and the challenges of responding to multiple, overlapping
smaller-scale contingency operations.  Some service assets,
identified as "low density/high demand" assets, are managed by the
global military force policy, which establishes peacetime
prioritization guidelines to assist senior leaders in allocating
these assets for crises, contingency operations, and long-term
operations.  These assets include the Airborne Warning and Control
System; the EA-6B, electronic warfare aircraft; and civil affairs
units.  According to Joint Staff officials, the Dynamic Commitment
series affirmed their value and gave the services insights into
managing them.  The series also identified issues critical to
ensuring that U.S.  forces can transition from smaller-scale
contingencies to wars.  For example, it found that in the case of
mobilization for a major theater war, the logistics of redeploying
forces already committed in various regions around the world would be
difficult and could seriously strain mobility and support forces. 
Although they did not summarize the results to make force structure
recommendations or decisions based on the series, Joint Staff
officials said, the analysis provided insights into which forces
should not be cut.  It also made clear that there is much work still
to be done in assessing the impact and managing the demands of
smaller-scale contingencies. 

Participants also discussed the potential impact of weapons of mass
destruction and the consequences of limited theater access during the
series.  According to Joint Staff officials, the pace of force
deployment slowed when chemical weapons were introduced.  Also, the
use of these weapons raised the awareness of force protection and the
advantage of forces operating at distance from the battle. 


      DYNAMIC COMMITMENT DID NOT
      EXPLORE ANY CHANGES TO FORCE
      STRUCTURE
-------------------------------------------------------- Chapter 2:2.4

While the Dynamic Commitment series did yield some insights, DOD did
not use it to identify or analyze any changes to DOD's current force
structure.  Evaluating alternatives might have led DOD to consider
reducing some combat or war-fighting capabilities and adding others
more suitable to the specialized needs of smaller-scale
contingencies.  Such alternatives could help alleviate operating
tempo problems while maintaining forces capable of winning two major
theater wars with acceptable risk. 

Moreover, the services' analyses of the Dynamic Commitment data
generally confirmed that certain parts of their forces were
sustaining a high operating tempo.  Had the Joint Staff or OSD
centrally analyzed the data, they might have gained insights on how
to better balance requirements for smaller-scale contingencies and
wars across all services or identified excess or low-utility
capabilities that could be reduced. 


   REGIONAL GREAT POWER ASSESSMENT
   MODELED LEVELS OF MODERNIZATION
---------------------------------------------------------- Chapter 2:3

To test the U.S.  ability to defeat a regional great power in the
2010-2015 time frame, DOD officials believed it was important to
analyze an aggressor with greater capabilities than are currently
anticipated for Iran, Iraq, or North Korea.  The regional great power
assessment attempted to examine this potential by modeling projected
U.S.  weapons and forces modernized at various levels against a
notional enemy.  However, this assessment did not analyze
alternatives that varied the mix of DOD's planned modernization
programs to help identify the most cost-effective investments.  Also,
it did not fully assess the potential impact of new technologies on
future operational concepts and force structure.  Even though the
services are exploring new doctrine arising from advanced weapons,
DOD officials believe that these efforts cannot be modeled yet. 


      ASSESSMENT USED A CAMPAIGN
      MODEL TO ANALYZE SCENARIO
      AND DATA DEVELOPED FOR THE
      QDR
-------------------------------------------------------- Chapter 2:3.1

OSD considered using TACWAR to model the conflict between the
invading enemy nation and allied forces.  However, much of the
baseline data needed for TACWAR to perform this assessment was not
available in the level of detail needed and would have taken 6 months
to prepare.  As a result, OSD decided to use JICM, a multiple theater
combat model developed by RAND, because it requires less definitive
data to model campaigns. 

The scenario for the regional great power assessment involved an
air/land military conflict on a hypothetical continent in 2014.  A
large and technologically advanced regional great power had invaded
its weaker neighbor to prevent its entrance into a fictional
alliance.  The United States was allied with a medium-sized power
that bordered the weaker nation.  The U.S.  objective was to repel
the aggressor nation's forces and push them back to the pre-war
border.  OSD officials told us that they used this scenario because
they did not want to identify any particular country as the focus of
U.S.  threat planning. 

Developing the scenario required assembling large amounts of data
that were not readily available.  OSD constructed the hypothetical
scenario using primarily Defense Intelligence Agency information
regarding terrain, forecasted orders of battle, and weapon systems of
current major powers.  The enemy nation's capabilities were
extrapolated from intelligence data on a major power after examining
projected data for several potential adversaries.  Its capabilities
included large numbers of armored vehicles that were moderately
technologically advanced.  The intelligence community's projection of
the threat data assumed a moderate level of economic growth for the
enemy nation.  The United States committed 75 percent of its forces
to this effort.  U.S.  forces consisted of those projected for 2014,
reflecting the services' 1997 force structure and modernization
projections.  The total number of U.S.  and allied ground and air
forces employed were about 80 percent of the enemy's, but U.S.  and
allied forces possessed more advanced air and ground forces than the
enemy nation.  (See fig.  2.1.)

   Figure 2.1:  Modernization
   Level of Regional Great Power
   Ground and Air Forces

   (See figure in printed
   edition.)

Source:  OSD. 

According to OSD officials, several key assumptions were made for the
regional great power assessment.  JICM assumed that each side had
equal intelligence on the activities of the other.  In addition, it
assumed that projected mobility forces were available and in working
order and that support forces were ready and available.  Success in a
war with a regional great power was based on assessing the extent to
which U.S.  and allied forces accomplished specific tasks, such as
minimizing allied losses and moving battle lines, and returning the
enemy to its pre-war border. 


      SERVICES QUESTIONED BOTH THE
      SCENARIO AND COMPUTER MODEL
      USED FOR THE ASSESSMENT
-------------------------------------------------------- Chapter 2:3.2

Service officials criticized the regional great power scenario for
not representing a full range of threats that would require a broader
range of joint war-fighting capabilities.  For example, Navy
officials told us that main combat actions in the scenario occurred
too far inland for naval aviation to make an effective contribution
to the war and allow amphibious landings to be modeled at all.  In
general, maritime warfare was depicted only in a separate, supporting
mobility analysis.  An Air Force official stated that the proximity
of the hypothetical continent to the United States was favorable to
airlift capabilities. 

Like TACWAR, JICM is an aggregate model and not sensitive enough to
show the impact of other than major changes in force structure,
according to OSD officials.  Also, service officials told us that
JICM did not simulate their forces' capabilities well.  For example,
Army officials complained that the theater-level focus of JICM
modeled aircraft and air-delivered weapons more accurately than
ground forces.  Therefore, the contribution of different ground
forces is not as clearly discernable as various types of air power. 
An Air Force official said the use of the Air Force's space assets
also could not be modeled with JICM. 


      RESULTS OF THE GAME
      CONFIRMED THE BENEFITS OF
      MODERNIZATION
-------------------------------------------------------- Chapter 2:3.3

According to OSD officials, the results of the assessment reassured
them that the 1997 modernization program was the correct one to
follow for the foreseeable future.  They ran numerous excursions with
varying levels of modernization, warning time, and ballistic missile
threat.  In no excursion were the United States and its allies in
danger of losing the war.  However, DOD concluded that some
excursions caused unacceptable levels of risk that the United States
and its ally would not achieve their specific tasks. 

The regional great power assessment modeled four levels of
modernization:  the 1997 force, the 1997 force extended to 2014,
one-third and two-thirds of the 1997 extended force.  The results
showed that the more modernized the force, the faster the adversary
was defeated, with less risk.  In addition, the results showed that
most of the benefits gained by modernization were achieved by the
one-third modernized force.  Increased levels of modernization did
not significantly affect the final outcome of the war but did further
reduce the risks. 

JICM's other excursions also provided insights, according to DOD
officials.  Warning time before invasion of the victim nation by the
adversary was varied in several excursions.  The results showed that
the shorter the warning time, the longer it took U.S.  and allied
forces to evict the adversary.  Although the enemy possessed a
missile threat in all excursions, some excursions examined U.S. 
capabilities against an enemy with a substantially increased missile
threat.  Officials viewed this robust tactical ballistic missile
threat as comparable to chemical weapons employment.  The results
showed that enemy missile attacks delayed but did not prevent the
eventual allied victory. 


      ALTERNATIVE MODERNIZATION
      MIXES, FORCE STRUCTURE
      IMPACTS, AND QDR
      MODERNIZATION DECISIONS WERE
      NOT MODELED
-------------------------------------------------------- Chapter 2:3.4

DOD's regional great power assessment did not examine alternatives to
the mix of modernization programs reflected in DOD's 1997 program. 
Moreover, neither force structure options nor the final modernization
decisions in the QDR report were analyzed in the regional great power
assessment.  Like the major theater war assessment, OSD considered
analyzing reductions to the force by 10, 20, and 30 percent, but
these were not pursued for three reasons.  First, OSD could not reach
consensus with the services on the nature of the reductions because
the scenario took place so far into the future.  OSD officials told
us that imposing reductions to the projected force without agreement
would strain the credibility of this assessment with the services. 
Second, JICM models the campaign at too aggregate a level to show how
changes in the force structure may make a difference in a conflict. 
Third, OSD officials decided to focus on modernization rather than
force structure because they thought senior officials could benefit
more from knowing the potential impacts of modernization on future
wars.  Finally, despite the time frame for the regional great power
assessment, no innovations in doctrine or operational concepts were
modeled.  OSD officials told us that the services' exploration of new
doctrine arising from advanced weaponry was not mature enough to be
modeled. 

U.S.  forces were modeled in large, proportional modernization
slices, that is, one-third, two-thirds, and full.  There was no
attempt to analyze varied mixes of air, ground, and maritime
modernization to test their effectiveness.  Although these slices
were based on modernization plans, varying the mix might have
provided more insight into modernization trade-offs. 

Although the QDR modernization assessment was finished before the end
of the regional great power assessment, OSD did not model the
modernization decisions, saying that there was little interaction
between the two assessment processes and that they had insufficient
time to develop the data needed to model the results. 


MODERNIZATION REVIEW DID NOT
REFLECT A MISSION-ORIENTED
APPROACH
============================================================ Chapter 3

DOD's modernization review examined some variations of the services'
planned modernization programs but did not reflect a thorough,
mission-oriented approach to assessing the mix of capabilities the
United States will need to counter future threats.\6 The
Modernization Panel's assessments were divided into 17 topics, such
as theater air and missile defense, tactical aircraft, and ground
systems, and did not include formal analyses of trade-offs among the
topics.  While DOD officials said they considered Joint Vision 2010
capabilities, the review did not provide adequate assurance that the
decisions reached represent the best mix of capabilities needed for a
future in which emerging threats could generate requirements that
differ significantly from the current mix of U.S.  capabilities. 
Rather, the Panel's work consisted mostly of developing options to
restructure some programs to provide a plan that DOD believes can be
implemented within an expected procurement budget of $60 billion
annually.  Further, the Modernization Panel's analyses were not fully
integrated with the work of the Force Assessment Panel.  As a result,
the QDR did not sufficiently examine linkages and trade-offs between
force structure and modernization decisions. 


--------------------
\6 "Missions" are defined as those functions for which the systems
are used such as close air support, interdiction, intelligence
operations, and electronic warfare. 


   METHODOLOGY FOR MODERNIZATION
   REVIEW RESULTED IN A PRIMARILY
   BUDGET-DRIVEN FOCUS
---------------------------------------------------------- Chapter 3:1

In November 1996, DOD formed the Modernization Panel cochaired by
senior officials from OSD and the Joint Staff.  The Panel was
instructed by OSD to evaluate the services' modernization programs by
looking at what is needed to sustain the force with modern equipment
and superior technology.  It identified 17 topics, grouped into three
broad categories:  cross-cutting issues, equipment-focused issues,
and technology and acquisition issues.  The topics and some of the
systems examined are included in table 3.1. 



                               Table 3.1
                
                   Modernization Topics and Types of
                            Systems Reviewed

Topics                              Systems
----------------------------------  ----------------------------------
Cross-cutting topics

Defense of the United States        Strategic forces, national missile
                                    defense, other nuclear biological
                                    and chemical threats

Theater air and missile defense     Ballistic missiles and cruise
                                    missiles

Command, control, communications,   Joint surveillance and target
computers, intelligence,            attack radar system, unmanned
surveillance and reconnaissance     aerial vehicles
(C4ISR)

Space-based surveillance and        Space-based infrared systems
warning

Information assurance               Defensive systems

Navigation warfare                  Global positioning system, global
                                    air traffic management systems

Equipment topics

Ship acquisition strategies         Aircraft carriers, surface
                                    combatants, and submarines

Deep strike                         Army Tactical Missile System,
                                    Joint Stand-off Weapon,
                                    Hellfire and Hellfire Longbow
                                    missiles

Tactical aircraft                   F-22, F/A-18E/F, Joint Strike
                                    Fighter

Ground forces                       Maneuver, firepower, operational
                                    and command and control systems,
                                    Crusader Howitzer, Comanche
                                    Helicopter

Special operations forces           Air, maritime; command, control,
                                    communication, computer and
                                    intelligence; and counter-
                                    proliferation systems

Strategic lift and prepositioning   System assessments were deferred
                                    for further study

Rotary wing aircraft                V-22, Comanche, Apache

Anti-armor munitions                Close, medium and deep systems

Technology and Acquisition topics

Technology investment               Not applicable

International cooperation           Not applicable
opportunities

Acquisition program stability       Not applicable
----------------------------------------------------------------------
Source:  OSD. 

A separate task force of service, OSD, and joint staff officials was
assigned to analyze each topic and arrive at a set of options.  The
objective of each task force, according to DOD officials, was to
propose affordable plans for procuring systems that would modernize
equipment and technology based on their view of capabilities for
Joint Vision 2010, maximize jointness, and minimize the time to
develop them.  According to Panel officials, affordable meant that
DOD assumed its procurement budget would increase to and then remain
at about $60 billion a year by 2000.  As a result, task forces were
asked to examine the projected funding for systems beyond the Future
Years Defense Program to 2015, based on then-current procurement
plans, and determine whether systems or groups of related systems
were affordable in terms of whether they represented an appropriate
share of the procurement budget, given procurement plans for other
types of systems.  For example, the tactical aircraft task force
developed options to reduce out-year funding requirements for
tactical aircraft systems because then-current procurement plans for
the Joint Strike Fighter, F-22, and F/A-18E/F would require a
significantly larger share of procurement funds than was allocated to
tactical aircraft in 1998.  The task force examining the Navy's ship
acquisition program also explored options to reduce out-year funding
requirements.  Allowing these programs to go forward as planned would
have required senior DOD officials to decrease funding for other
types of systems to maintain overall procurement spending at $60
billion annually. 

DOD was not able to provide the amount of planned funding for each of
the 17 topics, but officials estimated that total annual procurement
plans for the systems amounted to approximately $40 billion, or about
two-thirds of DOD's planned annual procurement budget.  The task
force did not review some planned modernization efforts, such as
antisubmarine and electronic warfare or minor procurement. 

The Panel directed the task forces to assess the acquisition plans
reflected in the fiscal year 1998 Future Years Defense Program and to
consider increasing or decreasing funding allocated to each group of
systems up to 10 percent as a means of encouraging them to develop
options to modify planned programs.  According to DOD officials, the
task forces began briefing their options to the Modernization Panel
and to senior DOD officials in February 1997.  Neither the Panel nor
the task forces made recommendations; each only proposed options. 
Soon thereafter, the Senior Steering Group directed the task forces
to identify adjustments to the fiscal year 1998-2003 budget based on
the options; the programmatic risk associated with each option; how
the option would affect the military's capability to implement the
defense strategy; the impact of the option on the industrial base;
and the statutory, regulatory, and other external barriers to
implementing the option. 

In general, DOD's modernization decisions modified, but did not
cancel, service procurement plans.  The Secretary of Defense
described the modernization decisions in the QDR as a modest
reduction in some of the programs to ensure that the total program is
realistic and executable within the budget.  Some decisions decreased
the number and delayed the procurement of some systems, reducing
associated funding.  For example, to sustain procurement of tactical
aircraft systems at an affordable rate, DOD reduced the Air Force's
plan to buy F-22s from 438 to 339 and delayed its full production
time line.  The Navy's plan to buy 1,000 F/A-18E/Fs was reduced to
785 with a provision to buy only 548, depending on the timely success
of the Joint Strike Fighter.  And the number of Joint Strike Fighters
was reduced as well.  In total, these changes reduced the services'
$270 billion funding estimate for these aircraft by over $30 billion,
or more than 10 percent. 

Another task force examined the Navy's shipbuilding program.  The
Navy had planned to build up to 10 ships a year between 2004 and
2015, but that would increase annual spending in those years to over
$12 billion, well above the fiscal year 2001-2004 average of $7.9
billion.  After examining the number of ships planned for 2015 and
the associated annual shipbuilding costs, the task force presented an
option to reduce the 334 ships planned for 2003 to 303 and thereby
reduce the annual shipbuilding estimate to between $8 billion and
$8.8 billion.  The task force suggested that the annual savings in
operating and support costs associated with maintaining fewer ships
could be used to increase the capabilities on new ships and modernize
existing ones. 

Other modernization decisions proposed increases to investment in
some areas.  For example, DOD increased its investments in biological
and chemical defense by approximately $1 billion and national missile
defense by about $2 billion.  Furthermore DOD set aside $1 billion
over the next 6 years for minor cost overruns and fund disruptions to
ensure the stability of modernization programs, according to DOD
officials. 


   INTEGRATED ANALYSES NEEDED TO
   IDENTIFY AND ASSESS WEAPON
   SYSTEM TRADE-OFFS
---------------------------------------------------------- Chapter 3:2

The Modernization Panel's stovepipe approach to analyzing the
services' procurement plans may have helped the task forces provide
senior DOD officials with budget-based options for changing planned
system modernization, but they did not provide an integrated look at
how the options or final decisions impact joint war-fighting
missions.  For example, capabilities that might be used for the close
air support functions, such as helicopters, tactical aircraft, and
C4ISR systems, were evaluated as separate topics by different task
forces.  We have previously reported on the benefits of looking at
modernization from an integrated mission perspective.\7 The Chairman
of the Joint Chiefs of Staff's Joint Vision 2010 also focuses on the
need to achieve new levels of effectiveness in joint war-fighting. 
Noting today's smaller forces, the Chairman stated:  "Simply to
retain our effectiveness with less redundancy, we will need to wring
every ounce of capability from every available source.  That outcome
can only be accomplished through a more seamless integration of
Service capabilities." Furthermore, he stated that technology trends
will provide an order of magnitude improvement in lethality that
clearly offers promise for reducing the number of platforms and the
amount of ordnance required to destroy targets.  Citing budget
realities, he also stated that DOD needs to be selective in the
technologies it chooses to invest in and will have to make hard
choices to achieve the trade-offs that will bring the best balance,
highest capability, and greatest interoperability for the least cost. 

According to Modernization Panel officials, neither their panel nor
the task forces performed the type of integrated analyses of options
across topics that could facilitate modernization trade-offs.  Some
said that such a perspective might have been provided by senior DOD
officials at higher tiers of the QDR organization when they examined
the different procurement options.  Panel officials pointed to the
senior officials' decision to examine Army ground and Marine ground
force systems together rather than separately as evidence that at
least some task forces were asked to look across some topics. 
However, other officials did not think that anyone systematically
looked across the options to see their impact on joint war-fighting
missions. 

In September 1996, just prior to the QDR, we identified the benefits
of evaluating modernization options from a joint perspective and the
urgent need for such information, given the hundreds of billions of
procurement dollars involved.  In our report on combat air power, we
concluded that DOD is proceeding with some major investments without
clear evidence the programs are justified because of their marginal
contribution to already formidable capabilities, the changed security
environment, and less costly alternatives. 

In its comments on our report, DOD agreed that mission assessments
can improve understanding of military capabilities and limitations
and are important to decision-making, but asserted that it has
mechanisms to provide that perspective.  We recognized steps by DOD
to improve the information available on combat requirements and
capabilities through studies, the Joint Requirements Oversight
Council, and its 10 supporting war-fighting capability assessment
teams, but we noted that they had little impact on weighing
alternative ways to recapitalize U.S.  air power forces.\8 We also
reported that while the individual services conduct considerable
analyses to identify mission needs and justify new weapon program
proposals, these needs are not based on assessments of the aggregate
capabilities of the services to perform war-fighting missions. 
Furthermore, DOD does not routinely review service modernization
proposals from such a perspective.  We believe that the QDR was such
an opportunity and that information on recapitalization alternatives
and redundancies in capabilities, developed from a joint war-fighting
perspective, would have been invaluable to decisionmakers who must
allocate defense resources among competing needs to achieve maximum
force effectiveness.  Without such mission analyses, it is not clear
whether DOD's QDR modernization decisions will simply replace current
systems or buy the most effective mission mix of new systems to
respond to future threats. 


--------------------
\7 Combat Air Power:  Joint Mission Assessments Needed Before Making
Program Budget Decisions (GAO/NSIAD-96-177, Sept.  20, 1996). 

\8 The 10 teams were strike; land and littoral warfare; strategic
mobility and sustainability; sea, air, and space superiority;
deter/counterproliferation; command and control; information warfare;
intelligence, surveillance, and reconnaissance; regional
engagement/presence; and joint readiness. 


   FORCE STRUCTURE AND
   MODERNIZATION ASSESSMENTS NEED
   TO BE MORE COLLABORATIVE
---------------------------------------------------------- Chapter 3:3

The QDR independent force assessment and modernization reviews were
both performed between November 1996 and February 1997 and, according
to DOD officials, did not fully consider the results of each other's
work as bases for identifying potential trade-offs.  Although senior
DOD officials considered broad trade-offs between force structure and
modernization at the macro-level in determining which of three paths
to adopt to meet near- and long-term challenges, we believe that more
in-depth analysis of the relationship between force structure and
modernization issues would have enhanced the value of DOD's review. 

Modernization Panel officials said that the Panel's task forces did
not consider changes in force structure in their deliberations. 
Furthermore, as noted in chapter 2, the regional great power force
assessment, which evaluated the aggregate impact of modernization on
force effectiveness in a future war, modeled DOD's fiscal year 1997
modernization procurement plans.  It did not model the QDR
modernization decisions.  Some Panel officials suggested that a
better linking of the two assessments could improve the quality of
the QDR, because changes in force structure could affect the size of
some procurements.  Moreover, as suggested in Joint Vision 2010,
leveraging new technologies should increase defense capabilities and
could thereby offer opportunities to affect force structure.  For
example, as part of its Army Force XXI future force transformation
initiative, the Army is designing, testing, and fielding new
potentially smaller division designs to capitalize on digital
technology and give commanders and soldiers better capability to
gather and share information. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 3:4

In written comments on a draft of this report, DOD asserted that we
characterized the QDR's modernization options as "budget driven" and
based "solely" on a plus-and-minus 10- percent rule.  While
acknowledging that the overall modernization budget was a central
concern of the QDR, DOD said that the primary factor influencing the
modernization analyses was the capabilities of current and planned
systems.  We agree that the Panel's guidance to the task forces in
proposing alternatives based on budget parameters was not the task
forces' sole consideration when developing modernization options.  In
fact, our report specifically said that the task forces were directed
to develop options that would consider the capabilities required for
Joint Vision 2010, maximize jointness, and minimize the time needed
to develop them.  However, we continue to believe that the Panel's
methodology for the modernization review resulted in a primarily
budget-driven focus rather than a mission-oriented approach. 
According to the Panel's leadership and other participants, proposing
budget parameters of plus-or-minus 10 percent was the means the Panel
used to encourage the task forces to develop options for their
specific group of systems.  These budget parameters were further
evident in the task forces' options on tactical aircraft and other
modernization topics. 

DOD cited the tactical aircraft decisions as an example where
significant technical or other capability advantages of
next-generation systems over current systems resulted in force
structure-modernization trade-offs.  However, while the task force
analyses of the F-22 resulted in an option to reduce aircraft by
nearly 100 (from 438 to 339), possibly changing the future mix of
tactical aircraft, DOD did not examine other options, such as whether
advanced technologies like stealth could reduce the Air Force's 20
fighter wing force structure.  Further, the reductions in F-18E/Fs
and Joint Strike Fighters were generally based on a proposal that
fewer aircraft would be sufficient to replace existing aircraft and
affordable within the budget, not because the Navy expects to reduce
its force structure by cutting the number of carrier fighter wings. 


PLANNING FOR THE NEXT QDR CAN HELP
PROVIDE FOR A MORE THOROUGH REVIEW
OF DEFENSE NEEDS
============================================================ Chapter 4

DOD can enhance the value of the next QDR by providing formal
oversight of QDR preparation efforts, improving models and other
analytical tools, and considering changes to the QDR's structure and
design.  The Secretary of Defense has not yet established formal
oversight at a senior level to facilitate preparation activities for
the next QDR, including completion and coordination of follow-on
studies to the 1997 QDR.  Moreover, although DOD has an effort
underway to improve its theater war models to overcome significant
limitations in simulating intelligence and other capabilities, it has
not determined how to improve its analyses of other types of military
operations, such as smaller-scale contingencies and scenarios
involving longer-term threats.  Changing the timing of the panels'
work, building greater collaboration among some panels, and delaying
the QDR until later in the new administration's term may also provide
a more thorough review.  Finally, if Congress determines that a panel
of experts should provide an independent view of defense
requirements, it might require the panel to complete its work earlier
so that DOD can consider the panel's views when conducting the QDR. 


   DOD NEEDS TO TAKE EARLY STEPS
   TO PREPARE
---------------------------------------------------------- Chapter 4:1

Although there is no current statutory requirement for another QDR
and DOD has not taken formal steps to institutionalize a QDR process,
the Secretary of Defense has endorsed the QDR as a continuing
process.  OSD officials who played a key role in DOD's 1997 review
stated that there is a widespread assumption throughout DOD that the
Department will conduct another QDR following the 1999 election.  DOD
has some initiatives underway that could help it prepare for its next
review.  For example, DOD is working to improve some analytical tools
and is performing some follow-up studies to the QDR.  These efforts
could equip DOD to perform valuable analyses of its planned force
before the next QDR begins.  However, DOD has not yet developed plans
to improve other tools and analyses that could be important for the
next QDR.  Moreover, it has not ensured that its efforts will be
coordinated and completed in time for the next review. 


      DOD HAS PLANS TO IMPROVE
      SOME, BUT NOT ALL, OF ITS
      ANALYTICAL TOOLS
-------------------------------------------------------- Chapter 4:1.1

DOD has efforts underway to improve some of the analytical tools used
in the 1997 QDR.  It is developing a new campaign model, called JWARS
and is looking at ways to improve others, such as TACWAR, as well as
supporting data to alleviate some of the current campaign modeling
limitations.  We did not identify comparable efforts by DOD to
improve the analyses of smaller-scale contingencies or conflicts with
future adversaries who have advanced technologies.  Completing these
efforts in a timely manner would enhance the potential for the next
QDR to provide better analyses of alternatives. 

According to DOD officials, JWARS is expected to improve DOD's
ability to evaluate the forces' effectiveness in combat operations. 
Documents provided by the JWARS Office note that current
theater-level simulations, including TACWAR, have limitations that
make them only "somewhat" or "poorly/not at all" capable of
simulating a number of combat activities (see table 4.1). 



                               Table 4.1
                
                  Limitations of Current Theater-Level
                              Simulations

                                            Somewhat  Poorly or not at
Activity                                     capable       all capable
------------------------------------------  --------  ----------------
Joint warfare                                      X
Ground engagement                                  X
Ground maneuver                                                      X
Air superiority                                    X
Air and missile defense                            X
Strategic air                                                        X
Strike                                                               X
Naval surface warfare                              X
Naval anti-submarine warfare                       X
Naval mine warfare                                 X
Naval amphibious operations                                          X
Command, control and communication                                   X
Intelligence, surveillance, and                                      X
 reconnaissance
Logistics combat support/combat service                              X
 support
Weapons of mass destruction                                          X
Special operations                                                   X
----------------------------------------------------------------------
Source:  JWARS Program Office. 

DOD expects that, based on the current development and funding
schedule, which was planned to coincide with the next QDR, an initial
version of JWARS should be available for the next review.  DOD
expects this version to be useful in analyzing the sufficiency of the
force.  Subsequent versions of JWARS are expected to be capable of
analyzing force and capability trade-offs, force planning, and force
structure design as well as system alternatives, system trade-offs,
and operational concepts. 

DOD's Joint Analytic Model Improvement Program is another effort that
DOD has underway to improve its models.  The objective of this
program, which is directed by OSD's Office of Program Analysis and
Evaluation, is to determine how current models such as TACWAR should
be improved.  The program is tracking and coordinating the models'
improvement schedules with JWARS' introduction. 

Gathering and maintaining the large quantities of data needed to run
the models is another challenge DOD faces.  In the past, DOD lacked a
central repository for data, forcing users to recreate data on
threats, targets, and other factors whenever they began a new study. 
DOD officials told us that the Department has established the Joint
Data Support System to centrally store and update this data.  The
system will include information on U.S., allied, and enemy orders of
battle, terrain, and weapon systems' capabilities, in addition to
other data developed for the Deep Attack Weapons Mix Study.  This
system will be linked to JWARS and will be easier to update than
current methods. 

Although DOD has several efforts underway that should improve the
quality of its major theater war assessments for the next QDR, it has
not determined what improvements should be made to improve its
assessments of force requirements for smaller-scale contingencies. 
Although DOD officials saw the Dynamic Commitment war game series as
a valuable exercise in examining the implications of a post-Cold War
environment in which smaller-scale contingencies may occur
frequently, DOD did not use the exercise to identify and examine
force structure alternatives.  As noted in chapter two, the war game
series was primarily an exercise in allocating planned forces to
military operations based on participants' military judgment.  DOD
does not have an effort underway to analyze how Dynamic Commitment
could be improved for the next QDR or replaced by another analytical
tool.  Examining ways to improve the Dynamic Commitment war game so
that it can be used to identify and examine force structure
alternatives would be a valuable step in preparing for the next QDR. 

DOD also needs to determine how it can improve its analysis of
requirements for conflicts against future adversaries who may have
access to advanced technologies or employ asymmetric concepts of
warfare.  At the same time, DOD will need to consider how to model
new technologies such as digitization that are expected to be
employed by U.S.  forces in the future as well as the changes in
operational concepts and doctrine that could result from such
technologies.  As noted in chapter two, DOD's regional great power
assessment did not model changes in doctrine or operational concepts
that could result from technological advances or place much emphasis
on asymmetric warfare.  In addition, DOD officials built the database
for the regional great power analysis during the 3 to 4 months
allocated for the QDR force assessments.  According to OSD officials
this was a time-consuming process that reduced the time available to
examine alternatives to the programmed force.  Preparing for the next
QDR by working with the intelligence community and other sources to
develop a database containing detailed information on future enemy
and allied capabilities, targets, and weapon performance could help
DOD focus its QDR assessment on examining alternatives. 


      ANALYSES OF PLANNED FORCES'
      CAPABILITIES CAN BE
      PERFORMED BEFORE THE QDR
      BEGINS
-------------------------------------------------------- Chapter 4:1.2

As part of its preparation for the next QDR, DOD could run analyses
of its existing forces that could serve as the basis for comparison
to force alternatives caused by changes to strategy or other factors. 
During the 1997 QDR, DOD spent much of its time modeling the 1997
force's ability to fight and win two major theater wars, meet the
demands of smaller-scale contingencies, and fight a regional great
power.  Had these force assessments been done as part of DOD's
preparation for the QDR, the time could have been spent modeling
alternative force structures, which might have provided insights into
the best-suited force. 


      FORMAL OVERSIGHT MIGHT AID
      PREPARATION FOR THE QDR
-------------------------------------------------------- Chapter 4:1.3

DOD has not established formal oversight at a senior level to
coordinate the overall model improvements, follow-on studies, and
other preparations for the next QDR.  Several offices in DOD are
improving models and databases and are performing follow-on studies
to the QDR and the National Defense Panel report on topics such as
requirements for strategic lift, active/reserve force mix, operations
in a chemical environment, and information technology.  However, DOD
has not issued guidance establishing which office will monitor these
efforts or determined how the results of these efforts will be
coordinated and integrated in the next QDR.  Such oversight might
help to ensure that the efforts are completed in time.  DOD could
also provide direction on issues such as the types of analyses to be
performed, the associated data requirements, who will provide the
analytical support, how lessons learned will be gathered and shared
by analyses, and time lines for completing the activities needed to
support the next QDR. 


   DOD SHOULD CONSIDER CHANGING
   THE QDR PROCESS AND TIMING
---------------------------------------------------------- Chapter 4:2

DOD also may be able to enhance the value of the next QDR by
examining options for changing the process DOD established for the
1997 QDR and modifying the review's timing.  We identified the
following observations for potential improvements to the QDR process
based on discussions with DOD officials and our review of
documentation on how the QDR process worked. 


      COLLABORATION AMONG PANELS
      AND THE SEQUENCING OF THE
      DEFENSE STRATEGY SHOULD BE
      EXAMINED
-------------------------------------------------------- Chapter 4:2.1

Although DOD officials modified the force structure slightly as a
result of the QDR, these decisions were not based on the three major
force assessments.  The QDR report identifies three paths that DOD
considered and that included varying levels of modernization and
force structure sizes.  However, some defense experts have criticized
this framework as being too simplistic in that two of the
options--such as the option to maintain the current force structure
but forego DOD's goal of increasing procurement to $60 billion per
year--were not options that DOD would seriously consider. 

Moreover, DOD's force structure and modernization panels completed
their analyses separately and did not model trade-offs between
modernization and force structure.  For example, DOD's regional great
power analysis modeled DOD's planned force with various levels of
modernization but did not examine whether a more modernized but
smaller force would be effective in defeating potential aggressors. 
According to some defense experts, technologies such as stealth
aircraft, precision munitions, and digitized forces may enable the
United States to reduce force structure in the long term.  DOD has
several options for ensuring better integration of modernization and
force structure decisions.  DOD could maintain separate panels but
provide guidance to ensure that the panels collaborate and that
trade-offs between force structure and modernization are examined. 
Alternatively, DOD could establish one panel to analyze force
structure and modernization issues. 

DOD officials expressed different views on the need to alter the
timing of the defense strategy review.  DOD began developing the
strategy early in the QDR process and provided a draft of the
strategy in January 1997 but did not finalize it until March 1997,
when the force structure and modernization panels had completed much
of their work.  Several DOD officials, including those responsible
for drafting the strategy and OSD officials who were responsible for
leading the force assessments, did not perceive the lack of an
approved strategy as a problem because the strategy was provided in
draft to panel chairs.  However, some service officials and panel
members stated that the draft strategy was not widely disseminated
and that the lack of a final strategy led to confusion, particularly
since the Secretary of Defense changed during the QDR and the new
Secretary could have made significant changes to the strategy. 


      DELAYING THE START OF THE
      NEXT QDR MAY RESULT IN A
      MORE THOROUGH REVIEW
-------------------------------------------------------- Chapter 4:2.2

The 1997 QDR began after the 1996 presidential election and was
performed by a returning administration--although a change in
Secretary of Defense occurred during the early months of the QDR. 
However, if the next QDR occurs following the 2000 presidential
election, DOD will have to conduct its analysis while undergoing a
change in administration.  This may further complicate DOD's efforts
to perform the QDR because of the large turnover of senior DOD
officials that may occur.  Many DOD officials we spoke to
characterized the 6-month time frame for conducting the 1997 QDR as
being extremely tight given the complex nature and large number of
issues, even with relatively little turnover among senior personnel. 
Officials also cited the short time frame as a key factor that
limited the number and types of alternatives assessed.  Delaying the
QDR from the first to the second year of the presidential term is an
option that would allow more time for an administration to put its
key senior people, including the Secretary of Defense, in place;
develop a defense strategy; prepare for the QDR; and conduct
appropriate analyses.  Such a delay in starting the QDR might be
useful in providing a new administration with sufficient time to
conduct a comprehensive strategy review and have a good analytical
basis for making difficult choices among competing priorities. 

Delaying the process for a year may have some disadvantages.  Several
OSD officials stated they opposed a delay because it would postpone
the administration's ability to impact the defense budget until well
into a president's term.  The current timing would allow QDR
decisions made in 2001 to impact the president's fiscal year 2003
defense budget.  A QDR that concludes in 2002 would affect the 2004
defense budget.  Even if the review were delayed, a new
administration could still make some changes in the 2003 budget
through the program, planning, and budgeting system.  However, a
completed QDR may enable an administration to make more fundamental
changes. 


   CONGRESS MAY WANT TO CONSIDER
   CHANGES TO NATIONAL DEFENSE
   PANEL TIMING
---------------------------------------------------------- Chapter 4:3

The Congress has not enacted a permanent requirement for an
independent panel of experts to supplement DOD's analysis of future
defense requirements.  However, work by a congressionally chartered
independent panel, if conducted prior to the QDR, could be used to
encourage DOD to consider a wider range of strategy, force structure,
and modernization options.  Conducting a fundamental reassessment of
defense requirements, as envisioned by the QDR, is extremely
challenging for DOD, given that its culture rewards
consensus-building and often makes it difficult to gain support for
alternatives that challenge traditional ways of doing business.  As
evidenced by the 1997 QDR force and modernization assessments, DOD
spent most of its analytical effort confirming that its current
forces and initiatives were adequate to meet future defense
requirements and restricting its analysis to "salami-slice"
alternatives.  By preceding DOD's own efforts, an independent panel
similar to the National Defense Panel could provide DOD with
alternatives to analyze during the QDR. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 4:4

DOD could add value to the next QDR by establishing formal oversight,
improving its analytical tools, and making changes to the QDR's
structure and design.  Establishing formal oversight would reinforce
the importance of the QDR as an ongoing tool for assessing force
structure and modernization requirements and help to identify and
establish priorities for key preparation tasks.  It could also
provide an impetus for improving DOD's analytical tools to evaluate
requirements for theater wars, smaller-scale contingencies, and
future warfare, including the potential impact of advanced technology
and new concepts of operations.  In addition, summarizing lessons
learned from the 1997 QDR could enable DOD to develop options to make
the process more effective in the future.  For example, completing
the defense strategy early may allow for better sequencing of
QDR-related analyses and provide stronger linkage to final force
structure decisions.  Also, greater collaboration between the force
structure and modernization assessments could focus more attention on
trade-offs between the two.  In addition, delaying the QDR until
later in a new administration's term could facilitate a more
fundamental reassessment of defense requirements by providing a new
administration with sufficient time to appoint senior civilian
leaders and identify key issues that need to be addressed.  Congress
may also want to take steps to encourage DOD to explore a more
innovative set of alternatives.  Specifically, it may wish to charter
an independent panel to develop alternatives for DOD to consider
during its review. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 4:5

The Secretary of Defense has endorsed the concept of the quadrennial
review of defense needs.  To enhance the value of the next QDR, we
recommend that the Secretary of Defense assign responsibility for
overall oversight and coordination of DOD preparation efforts. 
Preparation tasks should include identifying the analytical tools and
data needed to support force structure and modernization analyses,
monitoring the status and funding for efforts to upgrade DOD's
models, summarizing lessons learned from the 1997 QDR, and
considering the need to change the structure and timing of the QDR
process. 


   MATTER FOR CONGRESSIONAL
   CONSIDERATION
---------------------------------------------------------- Chapter 4:6

If Congress chooses to establish another panel of experts to provide
an independent review of defense needs, it may wish to require the
panel to complete its work prior to the next QDR.  This approach
could provide DOD with a broader set of options to examine in its
review. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 4:7

In written comments on a draft of this report, DOD concurred with our
recommendation that the Secretary of Defense assign responsibility
for overall oversight and coordination of DOD preparation efforts for
the next QDR.  DOD stated that it is identifying the analytic tools
needed for the next QDR and is improving existing tools where
shortcomings have been identified.  It also stated that it is
examining areas of U.S.  defense strategy and associated military
capabilities not fully explored by the QDR or that were raised by the
National Defense Panel, in addition to commissioning studies of
internal and external lessons learned from the 1997 QDR.  Moreover,
it concurred with our conclusion that there is no central authority
to ensure that follow-up efforts are integrated and that
centralization could improve QDR preparation efforts.  DOD also
agreed that any mandated panel similar to the National Defense Panel
should precede the QDR. 

DOD did not concur with our characterization of the QDR process in
some areas and with our recommendation to consider changing the
timing of the QDR.  First, DOD stated that our draft was overly
concerned with the benefit of having the QDR's panels report
sequentially.  For example, DOD noted that the draft strategy had
been briefed early in the QDR to the force assessment and
modernization panels and that they were told to base their
assumptions on this draft.  DOD further stated that if panel members
were confused as to the final shape of the strategy, it should not be
blamed on the QDR process.  Second, DOD wrote that our draft placed
undue emphasis on the force assessment and modernization panels
acting as "stovepipes." DOD stated that the QDR's structure allowed
panels to focus on a tractable set of issues and that the Integration
Panel ensured that all the various panel reports were combined into a
coherent set of options.  Finally, DOD wrote that beginning the QDR
process later in a presidential administration would force the
Secretary of Defense to wait two years before submitting a budget
that reflects an administration's strategy, priorities, and program. 

We believe that our characterization of the QDR process does not
overly stress the benefits of having panels report sequentially.  We
acknowledge that DOD officials primarily responsible for drafting the
strategy and leading the force assessments believed that providing
the draft strategy in January 1997 and the final strategy in March
1997 did not pose a problem for the panels.  However, some panel
members perceived that the lack of a final strategy earlier in the
process led to confusion.  We note that the 1997 QDR was conducted
under favorable conditions in that many senior DOD officials were in
place prior to the November presidential election to begin work on
the strategy and that major elements of the strategy remained the
same.  We believe that significant concurrency between the strategy
review and force structure and modernization assessments could be
more problematic for the next QDR, which will be conducted by a new
administration, particularly if senior officials decide on a new
strategy that alters key force planning assumptions.  Therefore, we
believe that DOD should consider the need to finalize the strategy
earlier in evaluating changes to the QDR process. 

In addition, while we agree that senior officials combined the work
of the panels into broad, macro-level alternatives, the panels
themselves lacked a high degree of integration.  For example, more
collaboration between the regional great power force assessment and
modernization analysis, possibly as a single panel, might overcome
challenges to the timely sharing of information and would have
permitted DOD to explore force structure versus modernization
trade-offs.  We acknowledge the benefit of breaking down a giant task
like the QDR into discrete issue panels.  If the overarching
Integration Panel is the best means available for combining those
panels' reports into coherent options, it could benefit from
collaboration occurring at the lowest possible levels to make its
work easier. 

Finally, while we recognize DOD's concerns regarding changing the
timing of the QDR to later in an administration's term, we continue
to believe that the 1997 QDR faced challenges from its tight
time-frame, despite the benefits of a returning administration and
speedy appointment of a new Secretary of Defense.  The next QDR will
be performed by a new administration.  If the next QDR is delayed, it
would allow the new administration to appoint its senior defense
leadership, develop a defense strategy, prepare for the QDR, and
conduct appropriate analyses.  Our observation does not seek to limit
a new administration's flexibility in determining how and when to
conduct the next QDR.  Rather, it attempts to give a new
administration the benefit of more time to perform a more rigorous
review before reaching conclusions that will shape the future of DOD
and its budgetary priorities. 




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================ Chapter 4



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

Janet A.  St.  Laurent, Assistant Director
Ricardo A.  Aguilera, Evaluator
Ann Borseth, Evaluator
Craig A.  Hall, Evaluator

OFFICE OF THE GENERAL COUNSEL

Margaret L.  Armen

NORFOLK FIELD OFFICE

Richard G.  Payne, Evaluator-in-Charge
Paul A.  Gvoth, Operations Research Analyst


*** End of document. ***