The Winds of Reform

By WALTER ISAACSON

COVER STORY

Runaway weapons costs prompt a new look at military planning

ITEM: The Army decided to build a light antitank bazooka at a cost of about $75 each. But once all the designers and program directors had finished tinkering, the weapon ended up costing $787. Even so, it would be hard pressed to knock out a modern Soviet tank. Reason: its shell cannot pierce the tank's forward armor. Congress tried to kill the project, but there is still money for it buried in the Pentagon budget.

ITEM: Allowing for inflation, the Army is spending the same amount of money ($2 billion in 1983 dollars) on new tanks as it did 30 years ago, toward the end of the Korean War. But the number of tanks produced has declined by 90%, from 6,735 to 701. In 1951, 6,300 fighter planes were funded by the military at a cost in 1983 dollars of $7 billion. The U.S. is now spending $11 billion to build only 322 planes, 95% fewer than in 1951.

ITEM: The Navy is budgeting for six new ships this year. To afford them, it is mothballing 22 older ships, many of which were recently overhauled, because it must cut operating and maintenance costs. For the same reason, it is reducing the sailing time of its ships by 10% from 1982 to 1984. With its net loss of 16 ships, the Navy would appear to be sailing full speed astern in its effort to build a 600-ship fleet.

He came blinking into the brilliant glare of the television lights, an obscure Pentagon bureaucrat suddenly brought before the eyes of two powerful committee chairmen, a dozen Senators, eight television cameras and scores of lobbyists from companies with contracts to build new weapons systems. Even though it was Friday afternoon, a time when most members have either headed home or gone out to campaign for President, the special hearing called by the Senate Armed Services Committee last week was packed. The object of interest: a young bureaucrat who had finally been freed from his drab office on the second floor of the C-ring of the Pentagon in order to present his maverick assessment of the underlying problems of defense planning and weapons procurement.

Franklin ("Chuck") Spinney, 37, a quiet but dogged Pentagon analyst, thus became the unlikely hero of an intensifying reform movement that is challenging the way the defense Establishment does business. At issue is an entire philosophy of military spending that has governed Pentagon practices for a quarter-century. At stake may be the nation's ability to defend itself for the next quarter-century.

In a flat, earnest voice, aiming his pointer at charts and graphs projected on a small screen, Spinney explained how the costs of high-technology weapons inexorably race out of control. "There is a systematic tendency to underestimate future costs," he said. "Deepseated structural problems need to be addressed." Within the building where he has worked for ten years, Spinney noted, "everybody is fighting to save their programs." His words often lapsed into Pentagon jargon, but his point was clear: "Planners become desensitized to cost growth over time."

His two-hour presentation of case studies meticulously demonstrated that a basic cost assumption made by the Pentagon--that the price of each new weapon will significantly decrease as soon as it is being produced at an efficient rate--is fundamentally flawed. "When we predict long-term price declines, we assume design stability," he said. In reality, the cost of high-tech systems invariably skyrockets because of unrealistic initial estimates, obsessive design changes and erratic production rates. "Our plans have got to take into account that instability."

"Do all your charts show the same thing?" asked Senator Howard Metzenbaum of Ohio, as the relentless catalogue continued. "I think you want to see some more, sir," Spinney replied with a burning intensity. "This is important."

David Chu, Spinney's boss, who had tried to prevent him from testifying, sat next to Spinney at the felt-covered witness table and listened warily. When it came his turn to speak, Chu argued that Spinney's analysis did not really apply to the Reagan defense budget. Said Chu: "Those charges ignore the various steps this Administration has taken ... to deal with these problems on a systematic and decisive basis. I urge patience." Did Spinney agree, Senators asked, that the initiatives taken by the Administration would bring costs under control? Spinney was cautious about criticizing his superiors. Said he: "The 1984 pattern appears to be the same."

"I'm shocked," said Senator Charles Grassley of Iowa. "Not only do we have a budget problem, but a major problem of national defense." Grassley had led the fight to hold hearings on Spinney's analysis. After learning of the study, the conservative Republican called Defense Secretary Caspar Weinberger and asked to meet with its author. To Grassley's surprise, Weinberger refused. So the Senator got into his car and drove out to the Pentagon to find Spinney. He was met there by Chu, director of the Program Analysis and Evaluation office, who told him that Spinney would not be available to give any briefings.

Senator John Tower of Texas, chairman of the Armed Services Committee, also wanted to keep the controversial analyst under wraps. But Grassley persuaded his fellow Senators to schedule a hearing; they also threatened to subpoena Spinney if the Pentagon refused to let him appear. Tower tried to downplay the appearance by setting it for late Friday afternoon. He also wanted to hold it in a small committee room and ban television cameras. That way he hoped to confine daily press coverage to the lightly read Saturday newspapers. But pressure from other Senators forced Tower to move the session into the cavernous Senate caucus room, where the Watergate and McCarthy hearings were held, and to allow cameras.

The crux of Spinney's analysis, titled The Plans/Reality Mismatch, is that the Administration's $1.6 trillion military buildup (which would amount to $20,000 for each U.S. household over the next five years) is likely to be underfunded by as much as 30%. This means that unless major new weapons are eliminated or other drastic changes made, the final bill may be $500 billion more than expected. The latest findings are a sequel to a 1980 Spinney report, Defense Facts of Life, which argued that the pursuit of complex technology has resulted in the production of weapons that are high in cost, few in number and questionable in effectiveness. That analysis gave impetus to the incipient military-reform movement, but had little impact within the Pentagon.

Indeed, the military brass has taken to Spinney's findings like ducks to buckshot. "He is a lousy systems analyst," says Under Secretary of Defense Richard DeLauer, who oversees the purchase and development of weapons. "His work is purely historical," Weinberger told Congress last month. Neither man has met the rebel. In fact, a week after dismissing Spinney's latest study, Weinberger turned to DeLauer at a staff meeting and asked, "Spinney's work is historical, isn't it?"

President Reagan's election was in part a mandate to restore America's military might. The ensuing debate has been over the size of the much needed buildup: whether military spending should rise by 7% after inflation, as Reagan proposes, or closer to 5%, as President Carter and others have urged. Now the spreading suspicion that billions are being wasted is chipping away at that consensus. Most of the attention has thus far been focused on apocalyptic strategic issues: How can we best deter or fight an all-out nuclear war? Should we deploy new MX missiles in the U.S. and Pershing II missiles in Europe? But only 9% of the U.S. defense budget is spent on nuclear deterrence; the rest goes to the materiel and manpower to fight conventional battles and prevent them from escalating into nuclear exchanges.

Now the debate is shifting to more fundamental issues. What Spinney's briefing clearly shows is that attention must be paid not only to how much is spent, but how it is spent. According to his sobering analysis, the Administration's proposed buildup presents funding problems that go well beyond the question of how to shave $10 billion or $15 billion from this year's budget. The traditional methods of assault--whittling away at frills, stretching out weapons purchases, skimping on maintenance money--will be as futile in the short run as they are wasteful in the long run. In a windowless office in the basement of the U.S. Capitol, where 18 congressional staffers known as the "bean counters" scratch for potential savings in the defense budget, a small sign on the wall sums up the dilemma: A BILLION DOLLARS JUST DOESN'T go AS FAR AS IT USED TO.

Enter the military reformers, a group essentially composed of several young Senators, Congressmen, independent research groups and a few Pentagon insiders like Spinney. The reform movement has attempted to focus attention on the need to build weapons that will work and to develop doctrines that are adaptable to fighting the battles of the future. It has also addressed the widespread evidence of waste and mismanagement in military spending, whether for major strategic systems like the B-l bomber or basic weapons such as tanks and rifles. The reformers argue that new systems should be carefully examined not only for what they can do on paper, but what they can do in actual combat--and at what cost. The central question: how to get more bang for the buck.

Among the early reformers were two of Spinney's former mentors in the Pentagon bureaucracy, Air Force Colonel (Ret.) John Boyd and Research Scientist Pierre Sprey. It was the lobbying of Boyd and Sprey for simpler, more maneuverable weapons that made possible the development in the early 1970s of the F-16 fighter jet, an effective and affordable complement to the expensive F-15.

Today the military reform movement has gathered support from all sides of the political spectrum. The Heritage Foundation, a conservative Washington think tank, published last month an unsparing critique of Pentagon management, arguing that complex technology is not only busting the budget but detracting from the military's ability to fight. "Tactics have been driven by technology," wrote former Army Captain George Kuhn in the report. "The evidence suggests that complex technology is usually relatively ineffective." The Council on Economic Priorities, a liberal research group in New York, also released a study of weapons procurement last month that zeroed in on the Pentagon's continuing inability to control costs. The Project on Military Procurement, run by Analyst Dina Rasor, is an independent research group in Washington that has worked to draw attention to massive cost overruns and technological failures in weapon systems.

The best way to understand the interrelated problems that the reformers hope to tackle is by examining the haphazard method by which weapons are chosen, tested and funded. The lack of coherence in the process can be seen through a simple example: the way money is spent for close air support. American and NATO defense doctrine hinges on effective close air support: the Soviets invade Central Europe, the U.S. Army's M-60 and new M-1 tanks confront them, and the U.S. Air Force is called upon to coordinate bombing and strafing attacks on enemy artillery and tanks. "Close air support is the single most important air mission of maneuver warfare," says Sprey.

The fundamental problem with close air support is that the Air Force does not like the subservient task of aiding Army troops. It provided that service grudgingly during the Viet Nam War, preferring the glory of long-range bombing runs and dogfights with MiGs. Only in the last decade has the Air Force produced a good close-support plane, the A10, which can fly slowly enough to find enemy tanks, is sturdy enough to take hits, and is capably armed with a simple and effective 30-mm cannon. Tactical Air Command pilots ridicule the A10, joking that they fear being hit from the rear by birds. In recent years, the Air Force has tried to delete the plane from its budget.

Enter congressional politics. The Senate last year eliminated funding for the A10, using the money instead for more F-16s, a faster plane that the Air Force favors but which is not suited to close air support. (It is built in Texas, home state of Armed Services Committee Chairman Tower.) But the House voted to keep the A-10 alive. Defense Appropriations Subcommittee Chairman Joseph Addabbo of New York, who is usually eager to cut military spending, is a strong proponent of the plane. (It is built on Long Island, within commuting distance of his home district.)

Enter the White House. Instead of supporting the Air Force and Republican Tower, it comes down in favor of Democrat Addabbo. Why? To win the votes of Long Island Congressmen last August for Reagan's tax increase, the White House promised to buy 20 more A-10s. At this inefficient production rate, the price of the plane has jumped from $5.9 million apiece in 1975 to $18 million (more than an F16) in 1983.

In the meantime, the Army decided to get its own close air support. But by law only the Air Force can build fixed-wing aircraft. The solution: develop a helicopter for the mission. The Army did, the Cheyenne. Unfortunately, helicopters are fat and vulnerable targets for ground fire. In the late '60s, the Army tried to make the Cheyenne maneuverable yet adequately armored, in the process boosting the cost to $7 million, more than that of a sophisticated fighter jet at the time. But no amount of money could turn a sitting duck into a soaring eagle. So the Cheyenne program was dropped in favor of the AH-64 Apache helicopter. The cost overruns on that project have forced up its price from $9 million to $17 million per chopper (more than an F-16 fighter) and even the Army balked at paying the builder, Hughes Helicopters. The Apache also has a characteristic that its pilots find disconcerting. To fire its laser-guided missile the AH-64 has to hover motionless in the open for up to 30 seconds, a difficult and dangerous business.

The AH-64 would be an expensive machine to lose in combat, so the Army began searching for a cheaper, smaller scout and observation chopper. It settled on the OH-58 Kiowa. The contractor, Bell Helicopter, apparently followed the time-honored practice of "buying into" a contract by submitting an artificially low initial estimate. Within two years, the projected cost of the total scout program doubled, from $1.3 billion to $2.7 billion, even though the number of aircraft to be bought was reduced from 720 to 578. Part of the problem is that the scout's complex laser sight has run into development problems, and new stabilizing devices may be needed to make it work. What is more, the Army is considering adding sophisticated new missiles. Congress is upset because the price of the "affordable" helicopter has now more than doubled to $4.6 million apiece. But instead of killing the program, it decided instead to cut the funding this year by 30%, and the Army decided to stretch out the production time. That will reduce the manufacturer's efficiency and make the program more vulnerable to inflation. Hence the unit cost will continue rising.

Another classic case of waste and confusion involves the Viper antitank weapon. Ten years ago, the Army decided to provide infantrymen with cheap, light antitank bazookas. The Vipers were projected to cost about $75 apiece, but design changes began almost as soon as the weapon was proposed. The weight, it was decided, must be reduced to less than seven pounds This meant the warhead had to weigh less than a pound, which sharply limited its potential destructive power. The size of the rocket motor was also reduced to cut blast noise. By the time the contractor finished redesigning it, the Vipers cost not $75, but $787 apiece. Worse yet, the scaled-down warhead could no longer penetrate the front armor of modern battle tanks nor stop Soviet tanks headon. The Kafkaesque solution: if the weapon will not do what it is supposed to do, redefine its mission. The Army decided the Viper should be used to snipe at tanks from the side or the rear, however limiting that might seem to a soldier in the field.

Even Congress, which is usually tolerant of procurement high jinks, was appalled by the Viper debacle. So the lawmakers cut the program last year. But is it dead? Buried in the 1983 Defense budget is $10 million for testing a light antitank system. The 1985 budget authorizes $122 million to purchase the first weapons. Like many discredited weapons systems, the Viper is a Lazarus. A slavish devotion to the latest high technology is perhaps the most basic cause of problems in the weapons-buying process. It results in massive sacrifices in the quantity of arms to achieve what seems on the surface to be improvements in quality. "The fallacy of the past 40 years has been that technology will save us," says the Heritage Foundation's Kuhn. The trend toward relying on high-tech weapons to offset the numerical advantages enjoyed by the Soviet bloc accelerated during the tenure of Robert McNamara as Defense Secretary and has led to a bureaucratic infatuation with "gold plating" every new system. Spinney's seminal 1980 report concluded with the warning: "Our strategy of pursuing ever increasing technical complexity and sophistication has made high-technology solutions and combat readiness mutually exclusive."

The 90% decrease in tank production and 95% drop in fighter-plane construction over 30 years is only the most obvious manifestation of the huge sacrifices of quantity being made to achieve technological sophistication. The Navy's decision to retire 22 ships this year starkly illustrates the dilemma. It placed the ships in mothballs in order to comply with a congressional order that it trim the sails of its 1983 spending. But the Navy did not want to cut planned procurement of new ships. Of the 13 Forrest Sherman-class escort destroyers that were retired, twelve had been extensively overhauled within the past two years. Of the four Decatur-class guided-missile destroyers retired, three had been recently overhauled. Even some Navy fleet commanders were dismayed by the retirement of five landing-dock ships (four of which had recently been overhauled) that are essential for quickly moving troops to trouble spots. This was done to keep just one new landing-dock ship in production. The new landing dock has no real advantage over the five being retired. Total savings from the 22 retirements: $249 million. Eventual cost of the five ships preserved by the move: $4.4 billion. "[Navy Secretary John] Lehman is not interested in achieving the 600-ship fleet," says a critic. "He just wants to build ships."

Norman Augustine, a former top Pentagon official and currently president of the Martin Marietta Aerospace division in Denver, has published a set of tongue-in-cheek maxims about military spending. He contends: "From the days of the Wright brothers' airplane to the era of the modern high-performance fighter aircraft, the cost of an individual aircraft has unwaveringly grown by a factor of four every ten years." Thus his Final Law of Economic Disarmament: "In the year 2054, the entire defense budget will purchase just one tactical aircraft."

Defenders of the system obviously claim that the quantitative decline in weapons has been offset by the qualitative advances in performance. No doubt the new M-1 tank, at least on paper, is faster and more powerful than the M-60 tank now in use. But the same amount of money could buy three times as many of the reliable M-60s as the problem-plagued M1s, a ratio that might strike battle commanders as quite attractive. Sprey, the former Pentagon official, argues that this type of numerical gain could come by buying cheaper rather than superexpensive weapons for a variety of specific missions. For hunting tanks, five times as many A-10 planes could be bought for the same money as F-15Es. For ground-to-air defense, the same outlay would buy 30 Oerlikon 35-mm guns for every DIVAD, the new and troubled computer-guided artillery. For antitank warfare, 30 times as many 106-mm recoilless rifles could be bought as TOW missiles. A comparison of antitank ammunition shows that the unproven Maverick, an air-to-ground missile with heat-seeking sensors, is 75 times as expensive as reliable 30-mm shells.

Defenders of the new weapons say this is like comparing apples and oranges, since the advanced armaments are either more powerful or versatile than the simpler ones. But reformers like Sprey, Boyd and Rasor argue that in many cases the simpler weapons are actually more effective. The F-16 fighter jet was developed as a leaner sister to the F-15, which is loaded with high-powered radar and weapons guidance systems. Because the F-16 is smaller, less detectable and gives off less exhaust smoke, it is more capable of catching the enemy by surprise. It also has a sizable advantage in maneuvering during dogfights because of its quicker acceleration, better rolling ability and longer flight time. At half the price, twice as many can be deployed. Likewise, the M-60 compares well with the expensive M1: the M-1 breaks down five times as much and must refuel 40% more often; it is available for combat only half as often, which when added to the 3-to-l price differential means that six times as many M-60s can be placed in battle for the same price.

The pursuit of the latest "bells and whistles," as high-tech frills are called in the military, is a major factor in producing massive cost overruns. The technological tinkering also causes production delays, pushing up inflation costs. Getting a final 5% to 10% improvement in performance can raise the cost of a weapons system by anywhere from 20% to 50%, according to Jacques Gansler, former Deputy Assistant Defense Secretary for materiel acquisition. Augustine's Law of Insatiable Appetites puts it more bluntly: "The last 10% of the performance sought generates one-third of the cost and two-thirds of the problems."

A crucial institutional problem in procurement is that the testing of a new weapon is handled by the same Pentagon brass and bureaucrats who are responsible for its research and development and who are likely to be the most anxious to see that it is funded and produced. This leads to field-testing standards that bear little resemblance to combat. The Maverick antitank missile, for example, is being tested by pilots who know both the terrain and target locations ahead of time. The expensive ($1 billion apiece) Ticonderoga-class guided-missile cruisers equipped with the AEGIS air-defense system have never been pitted in simulated combat situations against low-flying missiles like the Exocet. When the Army's new DIVAD-system air-defense gun, called the Sergeant York, was unable to hit maneuvering planes, it was tested instead on hovering helicopters. The Army says that is now the gun's main function, even though it does not fulfill that task particularly well.

There is nothing wrong or unusual about experimental weapons flunking field tests. Indeed, that should be the purpose of the tests: to weed out weapons that do not work. In the Pentagon procurement process, however, tests are often a formality. Production funds for such weapons as the Maverick and DIVAD are locked into the budget even before their testing has been completed.

The symbiotic ties between the military and defense contractors, reflected in the revolving door that allows top officials of the Pentagon to go to work for the firms they dealt with, drives costs still higher. In addition, stars and bars are awarded for pushing a major project to completion, whatever the price. "No one ever gets promoted for killing a project," says one analyst. Thus it is no surprise that Pentagon officials wink at the unrealistically low cost estimates initially submitted by contractors. These fanciful figures are needed to get a green light from Congress; the price escalates to its true level after the funding commitment is secure. The inevitable overruns are disingenuously blamed on inflation or the need for design changes to meet new threats.

An example of the cozy relationship between the Pentagon and contractors was revealed last week: the Navy has negotiated contracts for 13 cargo ships under which the Government will compensate the builders in the event they lose a dispute with the IRS over a questionable tax deduction. The Navy claims this is a standard charter contract procedure.

Less than 10% of contracts for weapons are subject to stringent competitive bidding; the Defense Science Board has said that competition might lower costs by as much as 20% on an average contract. "You obviously can't compete on aircraft carriers," says Sprey, "but there are thousands of other programs that would benefit if competition, one of the basic forces of the marketplace, were allowed in."

As it is, major defense contractors are all but impervious to market forces. In most respects, they are monopolies. They are assured a predetermined profit, a minimum of 5% and usually 12% and up over their costs. Since their contracts are long term, they are guaranteed business for years at a time. Once a weapons system is in production, they rarely face competition from another manufacturer. There is limited incentive to hold down overhead. Defense industry labor costs, for example, are generally higher than those in comparable industries. Says one Pentagon analyst: "Many of our defense contractors would go belly up if they had to operate in the real world."

In 1981, Frank Carlucci, who resigned as Deputy Defense Secretary last year, initiated 32 well-publicized procurement reforms designed to control costs. Their object is to make production schedules more stable and cost estimates more reliable. So far they have failed to have much impact. Says Gordon Adams of the Council on Economic Priorities: "The Carlucci initiatives don't even begin to get near the problem and in many cases may actually exacerbate it."

Carlucci's reforms have helped contractors by introducing multiyear contracts and fixed production rates. This has been done without forcing the contractors to bid competitively for projects (although that was one of the proposed initiatives) and without reference to the contractors' past performance. For example, Lockheed Corp. and Rockwell International Corp., both contractors with long histories of inadequate cost controls, have been given exclusive contracts to build the C-5B cargo plane and the B-1B bomber respectively.

The inability of the military to control weapons costs is creating a severe shortage of funds for operations, maintenance and readiness. Some disturbing consequences: The availability rate of battle-ready fighter planes will decline in the next five years. The Navy is cutting the steaming time of its ships from 44 days per quarter year in 1982 to 42 days per quarter in 1983 and 40 days per quarter in 1984. The Pentagon's planned buildup of ammunition stockpiles has not been accomplished. A maintenance backlog that was supposed to be cleared up this year will last at least until 1985.

Spinney points out that the military continually underestimates the maintenance required for its super sophisticated weaponry. The Air Force projected in the mid-'70s that the advanced F-15 fighter would require eleven maintenance man hours per flight hour and that the mean time between systems failures would be 5.6 hours. In 1980, the plane required 27 man hours of maintenance per flight hour, and the time between failures was a shockingly low 1.2 hours. The complex automatic testing circuits now being used in tanks and planes were supposed to be more than 95% reliable. They turn out to be less than 60% reliable. A review by the Defense Science Board in 1981 is blunt in its criticism of such built-in electronic testing devices: "While these promises looked good on paper and were incorporated into almost all specifications, the actual field performance has been nothing short of a disaster."

Despite these problems, Reagan proposes to increase funds for weapons purchases twice as fast as funds for operations and maintenance. The 1985 budget for operations and maintenance is about the same as Carter had projected, even though allocations for weapons procurement are 50% higher than Carter's totals. Spending for operations and maintenance will decrease from 32.6% of the Defense budget in 1982 to 27.3% in 1988, while the share of funds for procurement will jump from 23.7% to 31%. Funds for personnel costs will decline from 31% to 19% of the budget.

If the Pentagon has underestimated the costs of weapons now in the pipeline--and Spinney presents overwhelming evidence that they have--then the readiness crunch will be even worse. When the big bills come due, many of the overruns will likely be paid out of operations and maintenance funds. Under Secretary DeLauer has suggested that the military could cope with this by, for example, using the M-1 tank less extensively for maneuvers than the M60. "If the tanks are sitting around in a garrison, you're not going to spend that much," he says. But Major John Meyers, an Army spokesman, disputes this solution, saying that the M-1 will have to be used more frequently than the M-60 because the Army will have far fewer of them.

In Congress, a loosely knit "reform caucus" of 50 members, ranging from conservative Republicans to liberal Democrats, has tried to steer a course between the hawks, who would give the generals whatever they request, and the doves, who are dedicated to beating all new weapons into food stamps. "Our emphasis is not on where we can cut, but where we can replace with something more cost effective," says Democratic Senator Gary Hart of Colorado, one of the group's founders. Among the leading members are Democratic Senators Carl Levin of Michigan and Sam Nunn of Georgia, Republican Senators William Cohen of Maine and Warren Rudman of New Hampshire, and Republican Congressmen Newt Gingrich of Georgia and William Whitehurst of Virginia.

So far the caucus can point to few, if any, substantive accomplishments. One reason is pointed out by Senator Tower, an ardent defender of the military Establishment: "If you got the reform group together and started going through specific programs, you couldn't get them to agree on any of them." Another reason is that the reformers are as susceptible as any member of Congress to seeking pork for their constituents. Whitehurst rejects the reformers' suggestion that two new nuclear aircraft carriers are unnecessary; they are being built near his Norfolk, Va., district. Nunn defends Lockheed's controversial C-5 transport planes; they are made in Georgia. When the Senate approved funding for three AEGIS-system cruisers, it decided to split the work between two shipyards. One of the lucky shipyards happened to be in Maine, home state of Reformer Cohen, chairman of the seapower subcommittee.

Indeed, the scramble for goodies for the folks back home often seems to be the overriding concern of many members of Congress. Even those doves who argue most for defense cuts have their pet interests: House Speaker Tip O'Neill and Senator Edward Kennedy support the F-18 because its engine is built in Massachusetts; Senator Alan Cranston supports the B-1 because its prime contractor is based in California; Senator Carl Levin supports the M-1 tank, built in Michigan; Senator William Proxmire, who likes to hand out "Golden Fleece" awards to others, added $100 million to the defense budget last year by winning approval for a new minesweeper to be built--where else?--in Wisconsin.

By the time the cost overruns begin and tests show that high-tech wonders are low-success blunders, Congress is hooked on the project. "Once on the drawing board, these weapons build a constituency . .. the weapon develops a local chamber of commerce," says Arkansas Senator David Pryor, who tried and failed to shoot down the misguided Maverick missile. The Pentagon knows how to exploit this weakness. Parts of the B-1B bomber, for example, are now being built in 47 states and 400 congressional districts. When Congress considered cutting a proposed nuclear aircraft carrier, the Navy sent representatives to every Congressman whose district might get a contract to stress the number of jobs that could be lost.

One solace is that the Soviet military, which has been trying to close the "technology gap" by building more complex weapons, is falling into some of the same traps. As Defense Analyst Andrew Cockburn writes in his forthcoming book The Threat: Inside the Soviet Military Machine, "The Soviet Air Force is now busily imitating [Western] 'advanced technology' systems, including 'all-weather' radar and complex 'look-down-shoot-down' systems--the same features that have made American fighters so expensive and unreliable." The Soviet T-72 tank, Sprey notes, is slower than the American M60, breaks down 50% more often, is highly flammable, and uses an unreliable ammunition loader. The "advanced" MiG-23 fighter plane is less effective than an F-16 because it is bigger, smokes heavily and is far less maneuverable.

A root cause of weapons waste in the U.S. is the absence of clear guidance from the top about where and how America should be prepared to fight. "If you don't know what you want to do, you can't plan how to do it," says John Collins, senior defense specialist "for the Library of Congress. The defense guidance report produced by the Pentagon often seems to be a web of rationales for buying all possible wonder weapons. "It does little to set meaningful priorities," says General David Jones, former chairman of the Joint Chiefs of Staff. As Edward Luttwak, a conservative analyst, writes: "In lieu of strategy at all levels, we have only budgeting, programming and politics."

Indeed, weapons often seem to dictate strategy, rather than the reverse. Critics cite Navy Secretary Lehman's goal of building a 600-ship Navy. "What is termed strategy is a mere collection of justifications for more ships," says Steven Canby in his paper Military Reform and the Art of War. At the core of the naval building plan are two new $3.5 billion nuclear aircraft carriers, the heart's desire of every admiral, and the supporting ships they require. Advances in missile warfare make these surface ships far more vulnerable. Retired Admiral Hyman Rickover has estimated that carriers would survive only two days in an all-out nuclear war; the Navy reportedly refused to station one off the coast of Iran during the hostage crisis for fear it would be sunk. Yet the Navy justifies its desire for 15 carrier groups as necessary in case of a major war with the Soviet Union. The entire $96 billion five-year buildup of surface ships would only result in 70 more attack planes being available to project American might.

Part of the problem with overall U.S. strategy, reformers say, is that it is based too much on attrition warfare, relying on heavy weaponry and long supply lines to overpower an enemy along fixed fronts. Even the new Rapid Deployment Force has become bogged down with such weapons as the Bradley Fighting Vehicle. John Boyd, a leading tactician in the reformers' camp, argues that battles are usually won by maneuver, speed and surprise. Instead of heavy armor like the M-1 tank, which requires fleets of fuel trucks and frequent maintenance, the Army should rely on light infantry units.

Although the Pentagon is uncomfortable with much of what the reformers propose, some of the military's doctrines have been evolving in a direction that emphasizes maneuver warfare. An example is the Army plan called AirLand Battle. The idea is for the first line of allied defenders to confront an invading army while reserves counterattack deep into the rear of enemy lines. In addition, long-range air and missile strikes would be used to attack enemy supply lines and reinforcements. The new weapons involved, called assault breakers, include sophisticated self-guided bombs which are designed to home in on tanks using radar or infrared sensors.

The emphasis on troop maneuverability in the AirLand Battle plan is a promising development. But the doctrine still depends heavily on expensive and complex long-range weapons. Although the new assault-breaker munitions have performed adequately in controlled tests, they bear worrisome similarities to such radar-guided weapons as the Sparrow missile, which was supposed to score "kills" in 90% of its firings but which critics say has achieved only an 8% kill rate in combat. The Pentagon has long been pushing the high-technology weapons that are involved in the AirLand plan. To some degree, it appears that the desire for advanced weapons has once again dictated strategy, rather than the other way around.

True military reform, getting more bang for each buck, will involve fundamental changes at all levels of the weapons procurement process. The first step must be to determine accurately the costs of weapons. Contractors and Pentagon program directors should not be allowed to "buy into" long-term procurements with pie-in-the-sky price projections. Contractors should bear direct financial responsibility for cost overruns. This would force the Pentagon to refrain from "gold-plating" and tinkering with designs once a weapon moves into production.

Competitive bidding should be used whenever possible. Contractors should compete to produce the best possible design to perform a clearly defined mission. Once a model is chosen, and the winner has been paid by the Pentagon for the design and the further research needed to build prototypes, bids should be taken from the winning firm and others to produce the final weapon. The Pentagon argues that gearing up more than one production line would be expensive and inefficient. But with most armaments, even fighter planes and tanks, awarding construction contracts to at least two companies (known as dual sourcing) could save money.

Within the Pentagon, the research and development group in charge of designing a new weapon should not also have the responsibility for testing it. A separate testing group, which would have no vested interest in seeing that a project is carried to completion, should oversee testing. Shoot-offs between proposed new tanks, ammunition, guns and planes could be held between both existing and other alternative models. In addition, a new weapon should be compared with the full number of alternative weapons available for the same price. In other words, the effectiveness of F-15 planes under a variety of battle scenarios should be compared with what five times as many A-10 planes could do.

A clear decision should be made on whether a weapon is necessary and effective before production begins. Those that appear too costly should be killed outright; the others should be bought at optimal rates. Budget limitations require that the Pentagon and Congress set priorities among weapons rather than deferring production schedules. The missions that the weapons must perform should be clearly defined and dictated by real needs rather than an infatuation with advanced technology. Whether a weapon can be afforded in adequate numbers should be a more important concern than whether it is state-of-the-art; all the latest bells and whistles will do scant good if a weapon is overwhelmed by superior numbers.

The institutional tendency for each service to pursue and protect its own glamorous weapons systems can only be cured by a restructuring at the top. Most important, the Joint Chiefs of Staff must be reformed. At present, the Joint Chiefs make their recommendations as a group. The chairman, who is ostensibly removed from representing the interests of just one branch of the services, is supposed to mediate when, say, the Army and the Navy disagree. But since the Chairman has only the power of persuasion, disputes are frequently left unsettled. Thus, if the Navy wants one plane and the Army another, the Joint Chiefs are apt to recommend the development and acquisition of both.

The Chairman ought to be given a stronger hand to deal with interservice disputes. An even more radical suggestion, made by Army Chief of Staff General Ed ward Meyer, should also be considered: removing the dual hats that the Joint Chiefs wear as the heads of their respective services. Upon promotion to the Joint Chiefs, a general or admiral should be beholden to only the President and the military as a whole. The current Chairman, General John Vessey, has resisted major reforms to the structure of the top command.

The 400-member staff that serves the Joint Chiefs should all wear "purple uniforms," meaning they should not owe their allegiance to their respective service branches. The law restricting tenure on the staff to three years should be repealed, and the Chairman, rather than the four services themselves, should appoint the members. The fear that a powerful "general staff" could become a dangerous political force is outdated and bogus. Potentially, the Joint Chiefs, with a truly independent staff, might even be able to budge the entrenched bureaucracies in the Pentagon to adopt innovative doctrines. At the very least, they could be responsible for setting priorities in weapons procurement.

The ideas proposed by the reformers have been sharply disputed by many in the military Establishment. Indeed, there are compelling arguments on both sides of most questions about weapons procurement and fighting strategy. The disputes -- which are healthy -- will no doubt become more contentious. In the next two weeks, Spinney is expected to brief three more congressional committees.

The one issue that is clear from this growing debate is that the problem of funding the nation's much needed rearmament cannot be solved by knocking out a billion dollars here and there each year. To be sure, Congress will have to look carefully at the proposed fiscal 1984 budget and set priorities, which the Pentagon has thus far failed to do. But the real challenge will be to reform the way the military spends its billions. If the defense Establishment continues to squander money on a small number of expensive weapons, it will also squander the public support that is crucial for a defense buildup. But if the winds of reform swirling within and around the Pentagon help dispel the climate of mismanagement and waste, the military will have not only more money but also more fighting strength. -- By Walter Isaacson. Reported by Bruce W. Nelan, Christopher Redman and Evan Thomas/Washington

With reporting by Bruce W. Nelan, Christopher Redman, Evan Thomas This file is automatically generated by a robot program, so viewer discretion is required.