THE NAVY and the Air Force decided in the late 1970s that they needed fancy new communications systems. So each service designed an expensive, state-of-the-art system that suited its needs. But congressional investigators eventually noticed a problem: Because the two systems were so different, Navy pilots wouldn't be able to talk to their Air Force counterparts on some combat missions.

The folly of two services having separate -- and incompatible -- programs for voice and data communication eventually collapsed of its own weight. But not before the Pentagon bewildered its NATO allies, the Navy and Air Force demonstrated their ability to overwhelm a toothless Office of the Secretary of Defense, and the United States squandered $600 million.

The story of this misconceived $3 billion program, known in military jargon as a Joint Tactical Information and Distribution System (JTIDS), helps explain what's wrong with the Pentagon these days. It demonstrates the interservice logrolling and parochial rivalries that afflict U.S. military performance. And it illustrates why the Senate, fed up with such mismanagement, voted unanimously last week to approve the most sweeping reform of the Pentagon since 1947.

JTIDS was the Pentagon's answer to a orrisome improvement in Soviet ability to disrupt NATO's military communications. To cope with this more sophisticated threat, the Navy, Army and Air Force needed a new generation of high-tech communications equipment. As an assistant secretary of defense emphasized to Congress last year, "I can tell you that if you do not have jam-resistant communications in the cockpit of modern tactical fighters, you might as well ground your air force."

The catch: To truly capitalize on JTIDS and other modern communications gear, our forces -- the Navy, Air Force, Army, Marines and our allies -- all need to use the same equipment. Otherwise, critical information is difficult to exchange.

Sen. Barry Goldwater, chairman of the Senate Armed Services Committee, puts it bluntly: "God forbid we should wait until our troops are committed to combat before we discover that Army troops can't communicate with Air Force close support pilots, or that Air Force interdiction pilots can't communicate with NATO air defenders, or Navy fighter pilots can't communicate effectively with the Air Force or with NATO." The Grenada operation was plagued by these very problems; we were fortunate that the inability of the Marines and Army to communicate on different sides of the island did not have more serious consequences.

Service bickering is at the heart of the JTIDS fiasco. From almost the beginning of the program in the late 1970s, the Air Force and Navy championed their own versions of JTIDS. Expressing frustration with the services' bull-headedness on the subject, a member of the House Armed Services Committee told them that it sounded like "you guys are going to different wars."

The fight between the Navy and Air Force had its roots in the different roles and missions of the services, and it showed the tendency of the services to guard their turf, even at the expense of national security. The Navy wanted a JTIDS that allowed them to communicate most effectively among their F-14, F-18, and E2-C aircraft, and ships in their carrier battle groups. The Air Force was more concerned with communication lines hooking up their aircraft, including the F-15, F-16 and AWACS (their airborne reconnaissance plane). In military logic, these different missions dictated two separate JTIDS programs -- even if that meant the services wouldn't be able to communicate in battle.

Adm. Gordon Nagler, the Navy's former top JTIDS lobbyist, encapsulates the Navy's perspective: "Air Force pilots fly with a white scarf and talk with their wingman; the Navy does not do it that way," he explained in an interview. Adm. Nagler continues to defend the need for two separate JTIDS programs by arguing that the Navy takes a more sophisticated approach to communications and places more emphasis on data rather than voice.

Carl Bayer, a staffer on the House Armed Services Committee, describes the fight in simpler terms. It all boiled down to the fact that the Air Force version of JTIDS required that their "clocks" be "in sync" with each other, he says. The Navy's program would work without such synchronization. The technical differences between the programs, he said, "didn't seem like a big deal."

The depth of military feeling on these seemingly trivial issues was explained to Congress by the assistant secretary of defense who oversees communications programs, Don Latham. "I have been through the stormiest meetings I have ever had in my life in that building on this issue. There is no more emotional issue in the Pentagon than secure, jam-resistant, interoperable communications," he told the Senate Armed Services Committee.

Latham and other senior Defense Department officials found themselves caught by 1985 between the Navy's demand for its own JTIDS program (which Latham supported on Capitol Hill) and growing Pentagon skepticism about the need for it. One skeptic was Latham's own JTIDS expert, John Cittadino, who felt that the Navy's demands demonstrated that the services "are all powerful" and "exert such strong influence that it is extremely difficult to hold their toes to the line." Cittadino conceded in an interview that in the JTIDS case, OSD had abdicated responsibility to assure that military equipment can work together and that the services do not duplicate requirements. He blamed the Reagan administration's decision to pursue decentralized control at the Department of Defense, which delegated more management decisions and independence to the individual services.

The Navy was OSD's biggest headache, according to Cittadino. He complained: "The Navy insists on its own command and control center to fight its own war -- it is not even in the chain of command." Traditionally the most autonomous of the services, with its own air force (aboard carriers) and army (the Marines), the Navy has been the strongest opponent of Penatgon reform efforts. Today, the Navy has set up a special office to combat any changes in the JCS status quo.

The OSD's inability to halt the Navy's separate JTIDS program presented NATO allies with an awkward choice. Which of the competing American versions of JTIDS should they support? The British opted to buy the Air Force version and spent more than $100 million integrating Air Force JTIDS into their forces. The former British air attache in Washington, Cmdr. Michael Beck, explained that the Pentagon's "hard-pressed marketing" for Air Force JTIDS successfully convinced the British of its value. Nevertheless, there were big concerns that the U.S. might not stick with the Air Force program due to the force of the Navy lobbying blitz. The British defenders of collaborative programs feared the consequences of backing the wrong horse.

The Navy, meanwhile, stepped up its lobbying blitz and made an "end run" around OSD to its political allies on Capitol Hill. To the horror of the British, the Navy succeeded last year in convincing the Senate Armed Services Committee to "zero out" -- in other words, to cancel -- the Air Force JTIDS program, while funding fully the Navy's effort. Several ex-Navy pilots on the staff of the committee were said to have played a role in gutting the Air Force program. According to the British air attache, officials at the top level of the British Ministry of Defense expressed "extreme concern" at this development.

By late 1985, the stage was set for a decisive battle over JTIDS. The setting was the House-Senate conference on the fiscal 1986 defense authorization bill. The Senate had declared itself for Navy JTIDS; the House, which leaned toward the Air Force version, had told the Pentagon that it was time to pick one program or the other. The administration position, expressed by Assistant Secretary Don Latham, was that too much money had already been spent on the Navy program to abandon it now.

The logjam was broken by Tony Battista, a senior staff man on the House Armed Services Committee. Hotly disputing Latham's efforts to sell both JTIDS programs to Congress on the grounds that the two systems were "compatible," Battista retorted: "That is like saying I have got an AM radio and you have got an FM radio, and we are interoperable because we welded the receivers together. That is all they have done here."

With their patience wearing thin, the members of the House committee decided to hold back money for both programs, giving OSD an ultimatum: Choose one JTIDS program for all the services or forget about JTIDS altogether. Asked by a distressed Pentagon official, "When the hell is your committee going to stop micro-managing our programs?" Battista fired back, "Just as soon as you start."

The House-Senate conference eventually reached a delicate compromise. Rather than resolving the issue conclusively, the legislators asked for several outside studies of the JTIDS issue. In the meantime, the conferees accepted the House argument that the money should not be released. The compromise left the door open -- just barely -- on the future of JTIDS, but Battista, who wanted the Air Force system, had one more card to play.

Battista's ace in the hole was money. He knew from industry contacts that the Navy's contractors on the JTIDS program, Hughes and Westinghouse, were experiencing severe technical and cost problems. These problems, coupled with continued political prodding from Battista, eventually proved decisive. Secretary of the Navy John Lehman canceled the Navy JTIDS program.

Even the Defense Department conceded that it was the right outcome. "They did us a big favor," said John Cittadino. But would the result have been the same if the technical and cost problems had not surfaced at the right time? Another House staffer expressed skepticism: "If Hughes (the Navy JTIDS contractor) had done well, there would be two systems, and the legislative language would have allowed that to happen."

Have we learned any lessons from the JTIDS fiasco? Congressional micro-management is clearly not a solution, and there are worrying signs that the services, left to themselves, might do the same thing all over again. The follow-on communications system to JTIDS (called ICNIA by the Pentagon's perverse acronym-mongers) is supposed to be a joint program, primarily between the Navy and Air Force. But according to Battista, the services were brought "kicking, screaming and scratching" into the concept of a single program, and a former Navy JTIDS program manager vows that the Navy program "will ressurect itself somewhere, someplace."

A real solution to the problems illustrated by JTIDS will require basic reform of the Pentagon, including a stronger role for the chairman of the Joint Chiefs of Staff. Even Adm. Nagler, a staunch Navy man, agrees: "Until the chairman of the Joint Chiefs gets control of the budget, it will be difficult."

But the issue is broader than just the JCS. In a real war, the unified commanders (called CINCs) for the different regions of the world will direct the fighting. Each CINC has elements of all the services under his command. Can he effectively deter war -- and fight if necessary -- if his Navy and Air Force pilots cannot speak to each other?