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DEPARTMENT OF T HE AIR FORCE 

OFFICE OF THE SECRETARY I 

l 

MEMORANDUM 11111111111111111111111111111111111111111111111111111111111111111 14000752740 

March 11, 1968 

MEMORANDUM FOR THE DEPUTY 

SECRETARY OF DEFENSE 

If the attached approach is satisfactory 

to you, I would suggest that, in furtherance 

of the practice of informal exchanges with 

the DCI prior to formal action, I expose the 

proposed memorandum to John Bross for 

, comment. 

t~~;~~r 

Alexander H. F l ax 

BYE 12844-68 

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I 
Dear Dick: 

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niE DiEPUTV 5:ECU:l'ARV Of Dl:f~NS~ 

WASHiNGTON, D. C. 20301 

CDimOl SYSTEM 

Over the past several months there has been growing interest in 

defining methods and procedures for considering the costs of alternative intelligence collection programs to meet specific requirements. 

There are also under way, both in the DOD and in your National Intelligence Evaluation Staff, efforts to quantify, at least in a rel ative sense, 

the value of various kinds of intelligence information at various levels 

of accuracy, completeness, and confidence. However, I be lieve that 

the current problems of relating intelligence collection requirements 

should be attacked by the best means currently available; we should 

not defer actions to improve current procedures until more quant itat ive and sophisticated measures of cost-effect iveness can be developed 

and validated for a broad range of applications. I would therefore like 

to suggest a mechanism for effecting coordinated reviews of intelligence 

requirements in light of their cost implications, based on an extension 

and formalization of some of the practices which have evolved in the re';' 

lationships between the National Reconnaissance Office (NRO) and the 

United States Intelligence Board (USIB). 

Although there are currently no formal procedures for USIB review 

of cost alternatives in collection programs, when the Director, NRO, 

sees a case in which moderate changes in the requirements statement 

may have appreciable impact on collection costs, he has been making a 

practice of referring collection cost data to the USIB and its Committees, 

so that consideration may be given to the option of modifying requirements in light of cost data. Also, t he NRO is sometimes asked by the 

USIB to provide estimates of costs to meet alternative statements of 

USIB collection requirements. I note that you have personally encouraged exchanges of this kind. 

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These procedures for introducing collection cost considerations 

into the requirements process could be regularized and extended in 

application by establishing an Intelligence Collection and Exploitation 

Cost Evaluation Panel under the USIB. The initial responsibility of 

this Panel would be to collect more broadly the kind of cost information which the NRO has provided informally, as noted above. To the 

extent possible, the Panel would consider the costs of processing, 

interpretation, and analysis of the collected data as well as the costs 

of collection. It would carry out this responsibility by obtaining adequate and comparable cost data on alternative collection programs 

and related exploitation costs from collection and exploitation organizations such as NRO, NSA, DIA, NPIC and CIA on a timely basis, for 

consideration by the USIB in formulating major collection requirements. 

The next step, consideration of whether satisfaction of the requirements at various levels of accuracy, confidence, and completeness justified the increments of costs associated with those levels, would still 

be left as a judgmental matter to the USIB and to you as the Director of 

Central Intelligence. The budgeting and allocation of resources, in light 

of these collection requirements, other resource needs and overall budgetary considerations, would, of course, remain the responsibility of the 

operating agencies engaged in collection activities. 

Subsequently, if quantitative measures of the value of specific elements of intelligence and the value of various confidence levels in estimates were developed and validated, inclusion of these approaches 

could be added to the responsibilities of the Panel. In any event, it is 

probably not to be expected that quantitative measures of an absolute 

kind would ever completely eliminate the need for subjective judgments 

by the USIB. The Panel would, however, provide supporting data to 

permit these judgments to be made in the light of the best quantitative 

measures available at any given time and insure that the assumptions 

and limitations of any quantitative study were clearly set forth for the 

USIB, along with the study conclusions. 

It seems to me that this arrangement, or something similar, would 

have the advantage of meeting our needs on an evolutionary basis. It 

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would also give us the flexibility to respond to new approaches as they 

evolved and as we gained experience. I would appreciate your views 

on this suggestion and would be pleased to discuss it further with you1 

should you desire. 

lVIr. Richard Helms 

Director of Central Intelligence 

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