Back in 1963, in those optimistic days when things such as systems analysis and computers seemed to offer a glimpse of an orderly and rational way of making decisions in the future, then-Defense Secretary Robert S. McNamara had a study and an idea.
The study had discovered that the Army, the Navy, and the Air Force each maintained its own bureaucratic kingdom for the purpose of doing the tedious administrative work on mundane military contracts. McNamara's idea was that time and money could be saved by the creation of a single, streamlined agency to manage contracts for all three services.
In 1964, as part of the reorganization that transformed the Defense Department's business operation from a fragmented collection of offices into the nation's largest industrial management. McNamara turned his idea into an agency, the Defense Contract Administration Service.
Last month, upon the completion of another study, a group of congressional investigators concluded that McNamara's idea - which will cost $328 million a year - did not work. His system, it seemed, had failed to take into account a basic human instinct survival.
"DCAS has made a little if any progress in carrying out its assigned mission," reads the new report. "A question arises as to the need for the DCAS organization as presently organized and functioning."
What happened to DCAS, according to the report by the investigation staff of the House Defense Appropriations Subcommittee, was an ambush that took place before the agency got to the pass.
Instead of making DCAS the focal point of the military's contract management effort, said one investigator, "it turned out that the services just didn't give them much to do."
What DCAS' creators had overlooked, said the study, was the tenacity with which the service contract management bureaucracres would fight for their continued existence.
In some respects, it is curious that anyone would want to hold on to the job DCAS is supposed to do. It is without the glamour of major contract competion and decisions; rather, it involves making sure things like clamps and grease and cotter pins are produced according to specifications and on time.
Nevertheless, the bureaucracies dug in after DCAS was formed, burrowing their deepest foxholes into the soil of the fatal flaw in DCAS's charter; its lack of authority to demand contracts to administer. DCAS was and is entirely dependent on the service bureaucracies' willingness to give it contracts to administer - in effect, to give up the bureaucracies' only turf.
The most ferocious resistance to the DCAS concept comes from the Navy, according to the study's statistics. Of its still-active contracts, the Navy, which also oversees contracts for the Marines, gives DCAS only 10 percent, keeping the other 90 per cent for itself.
Even DCAS' parent organization, the Defense Logistics Agency (DLA), assigns only 15 per cent of its contracts to DCAS, the study found.
The man who heads the logistics agency and DCAS, Lt. Gen. Woodrow W. Vaughn, does not dispute the study statistics, because, he said, he provided them. But he does argue with the conclusions.
DCAS was designed, he said, to eliminate a situation in which plants doing work for more than one of the services often found themselves deluged with contract adminstrators in different uniforms doing essentially the same job.
Since DCAS' creation, he said, "instead of three people (one from each service) being in a plant, only one person is there . . . I think that it's been highly successful in doing that. In 20,000 plants throughout the United States, the DCAS people are the only ones telling them how to administer the contract."
In response to criticisms about how little his own agency uses its $328 million stepchild, Vaughan said many small contracts, typically with values less than $10,000, do not need DCAS' specialized administrative services.
Of those contracts that do not need administration, he said, DCAS handles about 93 per cent.
But according to the study, 62 per cent of the 189,349 contracts DCAs had on hand in late 1975, when the study was gathered, had a value of less than $10,000. Over 15 per cent of DCAS's contracts, in fact, were worth less than $500.
Vaughan's reply is that the determining factor for sending a contract to DCAS is its need of administration. "All I can say is that 93 per cent of the contracts needing administration are given to DCAS," said a spokesman for Vaughan.
There is nothing illegal about the services, or DLA's, administering their own contracts. Military regulations provide that on unusually sensitive or important contracts, the services, with special knowledge of their needs, should retain administrative control.
The question the study raises is the wisdom of spending more than $300 million a year on an agency whose role, it suggests, is limited to doing the kind of contract management work the services find two uninteresting or unpleasant to do themselves.
"The ambigious regulations, freedom of interpretation by the military services and DLA, together with the passive role adopted by DCAs management have led to the costly abuse of the DCAS function and extensive duplication of contract management functioning," reads the report.
"Thus, from the first, DCAS had little chance of achieving its assigned goal of eliminating duplication and costly overlap."