hp SECRET

• 11.151111WINal

TALKING PAPER

ON THE

OPTIMUM ORGANIZATION SUBORDINATION OF THE NRO

•

The NRP is assumed to be a viable program and will likely

consume a major share of the foreign intelligence budget.

The program will increase in tactical utility and continue to be important to national decision makers.

The NRP presently is under the Executive Agency of the

SecDef, is managed and operated by the Under Secretary of

the Air Force, and has its resources allocated through an

ExCom chaired by the DCI.

The resubordination issue is not linked to the abuses of

law which have been the subject of the intelligence investigations.

• •

The NRO is a centralized, streamlined management entity which

combines the expertise of the DOD and CIA in the development,

acquisition and operation of reconnaissance satellites.

- Most agree that the NRP is managed efficiently and has

been very successful.

Most agree that criticism relating to the NRO is not a

function of organizational placement, hardware systems

security, or the success of its operations. •

Two major alternatives which affect NRO subordination are:

Maintenance of the SecDef as Executive Agent with resource

allocation overseen jointly with the DCI, and

A reconstituted DFI with overall resource and management

responsibility over the NRP.

Major considerations in addressing the resubordination issue

are:

Policy. SecDef needs to maintain an important policy voice;

subordinating the NRO to the DFI may create an unfavorable

position for the SecDef. The present placement of the NRO

in Defense with a DFI chaired ExCom works well.

etur lossmommo

IMMO

tNfW NNONNtatil

8411P• Mt Mitt aillfi• ~WIN N

CONTROL NO

COPY OF COPIES

PAGE OP PAGES
I

- Logistics and personnel. DOD provides a significant

i amount of organic resources. Maintenance of this support would be more difficult under a resubordination

to the DPI. Personnel practices for the approximately

two thousand military people would be unstabilized.

I Contract administration would require re-exams

as would arr riority assistance

I

from organic DOD res

- Operation support. Satellite operations are supported

1 in great measure by organic DOD resources as well as -

Ispecialized communications, dedicated weather services

support and space tracking support. A resubordination

!

I would require reassessment and possible alteration.

- Resources management. Mission support is derived from

organic DOD resources without reimbursement by the NRO.

This practice would require change under a resubordination to the DFI. The NRP budget, under the DFI, would

be adjudicated by OMB rather than the President under

present DOD practices. This would create an added level

of review to the streamlined NRP management.

It is concluded that the NRO mechanism basically works well.

Resubordination would alter many existing support arrangements. It is questioned that a change in executive management would add any marginal efficiency to the NRO process.

The DCI, however, needs a strong voice in the allocation of

resources of which the NRP is a major consumer. It is recommended that the NRO remain within the DOD structure.

11s4MISO eater

OM it OS

OGICsOos4 SON ssOWIllsOsoollnC•Ol

Mow ISO INKSOSIO•

CONTROL NO

COPT OF COPIES

PAGE OF PAGES
-411P-SECRET---

Problem: To determine'the optimum organization subordiniTiBircif the National Reconnaissance Office. •

Assumptions:

The National Reconnaissance Program will continue

to be a vital program and consume a major share of the total

intelligence budget.

The National Reconnaissance Program will grow to

be of high tactical support interest as well as continue to

be of major national significance.

C. Most observers believe the National Reconnaissance

Program to be a very successful undertaking.

III. Facts Bearing on the Problem:

The National Program is contractor

intensive (approximate nnually), but involves

few governments (abou

rectly assigned).

The present NRP is under the executive agency of the

Secretary of Defense and is managed and operated by a Director

who is the Under Secretary of the Air Force who receives his

fiscal and policy guidance from an NRP Executive Committee composed of the DCI (Chairman) and the ASD(I).

Under the authority of the Director, NRO, satellite

Programs are developed and operated by subordinate managers

including Air Force, CIA and the Navy elements. •

•

First-order processing of the product is accomplished

primarily by the NSA in the case of SIGINT satellites and by

the CIA/DIA National Photographic Interpretation Center in the

case of photographic satellites. Further processing and analysis

of both categories of products are accomplished to a greater or

lesser extent by all members of the intelligence community.

E. The "Options Paper for the President on Organization

and Management of the Foreign Intelligence Community" dated

16 December 1975 has proposed a number of organizational options.•

including those which would retain the NRO operationally under

the Secretary of Defense with the DCI primarily responsible for

dollar resource control or placed under a reconstituted

Director of Foreign Intelligence (DFI) for resources and opera-•

tions.

Alkillir ft * •="—•

ems

esearhmi Irma •ftea mumpSKIM sWM

111110.1•911100/11Ø. • Nom

CONTROL NO

COPY OF COPIES

PAGE PAGES

•
TV. Discussion:

A. General.

In considering the organizational position of

the NRO, it is well to emphasize what may be termed self

evident by some. This issue has not been linked in any way

with the abuses of law and authority which have been the genesis of all recent reorganization discussion and specifically

the "Options" paper of 16 December. Therefore, it is clear

that our discussion centers totally on organizational efficiency in accomplishing the objectives of the NRO.

Simply stated, the organizational objective of

the NRO is to provide the U.S. Government a streamlined centrally managed intelligence collection capability from space

which is responsive to the substantive information requirements, of the various agencies and activities of the U.S.

Government.

3. The NRO was formed in 1961, largely as a result

of the recognition:

That centralized and streamlined research

and development, procurement and operation of very expensive

space reconnaissance vehicles was cost effective;

That the Department of Defense was executive

for the•military space mission with the attendant technology

base and expertise, but that the intelligence community,

specifically the CIA, had significant expertise and prior

investment; and, •

•

c. That the political and technical sensitivity.

of the satellite intelligence collection capability and the

statutory responsibility of the DCI for protecting "sources

and methods" required the establishment of a unique and well

secured organizational structure.

4. Because of early difficulty in operating within

two chains of command, the present DOD/CIA Agreement was established with Presidential concurrence in 1965. The Secretary of

Defense was designated raecutive Agent and the agreement constituted an NRP Executive Committee composed of the President's

Science Advisor, the DCI, and the Deputy Secretary of Defense,

the latter acting as chairman. Over time, and with the abolition of the Science Advisor post, the ExCom evolved with the

DCI acting as chairman and the Assistant Secretary of Defense

(Intelligence) providing the Defense representation. The ExCom

has served as a forum for policy making and all resource

CONTROL NO

1/111111/11,

was

esi.ol tue

SIMIVIINNIMIllia• Oa now

emu*

a0r

coy,. oF comes

PAGE .2___OF 8 PAGES

C
allocation and meetings are attended by the key intelligence

resource managers. In addition, the NRO has taken its long

• term and short term requirements only from the USIB and its

Committees.

Most informed participants and observers of the . • NRP ExCom modus operandi would agree that as a bureaucratic

mechanism, it has worked well in providing a forum where all

views can be and are expressed, and in providing the Director,

NRO the definitive guidance necessary to accomplish his mission.

Only on rare occasions has the ExCom had to refer unresolved -

issues to the President. This is not to say that all consumers

of the NRO product are satsified--many are not, especially

regarding classification, timeliness, parameters of coverage

and the like, but these are not factors resulting from the

organizational placement of the NRO nor the security of the

hardware systems, per se.

The NRO has emerged as an efficient management

entity with excellent contractor relationships and the highest

quality civilian and military space expertise available in the

nation. The mechanism for streamlined decision making has

been 'the major reason for the efficiency and high success of

the program over the years.

B. The rationale for organizational change and options.

Let us now consider in some depth those factors which

appear dominant and the impact of an NRO subordination to Sec

Def with resources overseen jointly with the DCI and to a

reconstituted DFI with overall resource and management responsibility. While possibly somewhat arbitrary, we may approach

our task from the standpoint of Policy, Operations, Support and

Fiscal standpoints.

1. Policy.

The NRO is a common service organization. It

supports highest level decision makers and lowest level tactical

consumers. In the past, due partly to technological state of

the art and due partly to policy decisions, overhead capabilities,

both photographic and SIGINT, were designed primarily to service

scientific, technical, and strategic intelligence requirements. •

The consumers have been primarily those at the Seat of Government

and major military command headquarters.

During the past several years, profound philo--

sophic changes have begun to emerge as new needs have been recognized. Specifically, major initiatives have been undertaken to

•••• INKsnISM. nnnn se t

.11148.1

2 .400•01 OWN MN • nearnin eau

CONTROLL NO

COPT COPIES

PAGE _i_or 8 PAGES
The ves have made satellite collection o prac

and timely value to military operational commanders for the

first time, in addition to enhancing the support which can be

given to national decision makers for force planning, foreign

policy determination and contingency and crises action; Moreover, as these new systems develop, more and more reliance will

be placed on them at the expense of traditional theater collection resources. Historically, Defense has generated the preponderance of satellite collection requirements. The advent of

more timely support to the operating forces has heightened

Defense interest in the operation of the NRP. On the other

hand, the national dependency on the satellites for SALT verification, etc., has increased, thus creating a heightened

interst on the parts of the NSC, State and others.

Thus, there should be maintained a policy

mechanism over the NRO which would safeguard the interests of .

the major decision makers. If one accepts this premise we would

eliminate the placement of NRO in any existing intelligence community member agency such as CIA or DIA. As long as the DCI

retained cognizance over the CIA, the rationale set forth would

also apply. Under a separate DFI and from a strictly policy

view, the NRO could be placed under his cognizance but the major

player, the SecDef, would need very strong representation in an

ExCom type of arrangement. By the same token, policy considerations can be handled in a satisfactory way by the continuation

of the present arrangement with the NRO in Defense and having

the DCI or DFI providing chairmanship of an ExCom, and a USIB .

form of requirements group. • • •

Conclusion. In the context of policy considerations, the present placement of the NRO in Defense with a DFIchaired ExCom works well. NRO could just as easily be placed

under a DFI; however, SecDef would have to have an important

policy voice. Proper guidance might be more difficult to

achieve with NRO being a line subordinate of the DFI.

2. Logistics and Personnel

a. The preponderance of personnel associated with '

the NRO are drawn from military resources. Most of these individuals are dependent upon a stable and identified career pattern

for upward mobility within their respective services. The Air •

Force and the CIA still retain the majority of the expertise for

the design and acquisition of reconnaissance systems. A great

•

CONTROL NO

COPT OF COMES

PAGE 4 OF PAGES
deal of training is provided by the military establishment

to service individuals. In the history of the NRO I .the Air

Force and Navy participants have been favorably treated with

respect to promotions and enhanced career mobility. This

pattern likely would be altered with the placement of the NRO

directly under a DCI for management purposes. Furthermore,

by leaving the parent organization for an overt joint assignment, the stability of the assignment which is required would

mitigate against a favorable career pattern. The present

arrangement appears to be, from a personnel standpoint, highly

satisfactory both within the military and the civilian career••

patterns.

b. The NRO procures its hardware systems on a

so-called "end-to-end" contracting basis. Defense procurement

regulations are followed with certain waivers granted in order

to assure a low profile procurement of sensitive technical

systems. The management of contract administration is largely

handled through the Defense resource. For example, the Defense

Contract Audit Agency has resident teams within the contractor

locations for both the Air Force and CIA program elements.

The Defense Contract Administration Service also provides support in the administration of contracts in the best interest

of the Government. The Air Force Contract Management Division

also participates. A reordering of the subordination of the

NRO would require a significant change to these practices and

require that the level of support provided from DOD organic

resources be re-established and agreed upon between a DFI and

the Secretary of Defense.

.c. The NRO relies upon the Office of the Secretary

of Defense for obtaining priorities assistance through the Commerce Department on DX rated items. The DOD has been granted

DX priorities for the National Reconnaissance Program activity.

It's not certain whether or not a DFI would be permitted to

receive similar priority designation without working through

the DOD.

CairnWO OW

WAY%

OM* ta►eigulig • eh 40 my

coNv ROL NO

COPv _

PAGE -1-0F 0 PAGES
. ........ . ........

e. Conclusion: In the contexeof logistic and

personnel support, it appears on balance that the DOD provides

a significant amount of organic support to the process. This

support would have to be continued under a resubordination;

however, it would be much more difficult to maintain. A host

of agreements and other arrangements would be required and

'responsibility would necessarily be altered in the process of

providing the same level of support which exists today.

e. Conclusion. In the same manner which logistic

..6100

IPA vv. a. e se

4 ..0110 110111.• •MW 'Wow g .110

NW W 101104410 16.11, M.

CONT NO

COPY OF COPIES

PAGE 6 OF 8 PAGES
OP SEGRE

and personnel support require DOD organic resources, operational support also employs significant amounts of DOD support for the day-to-day operation. These arrangements would

be altered to some extent with a resubordination of the NRO

outside of the Defense establishment. New arrangements would

necessarily have to be established in order to assure the

continuity and dedication of the required operational support.

•

4. Resources Management. ..

To reiterate, the organization options include

a subordination of the NRO of the Secretary of Defense with

resources overseen jointly with a DCI or a reconstituted DFI

with overall resource and management responsibility over the

NRO. Much of the incidental support required of organic DOD

resources is obtained on a non-reimbursable basis. For example,

all personnel directly affiliated with the NRO both from the

DOD and the CIA are paid for by the parent organization. A

subordination of the NRO under a DFI would likely bring about

a change to this practice. Similarly, other support would

require reimbursement.

Retaining the NRP budget within the DOD budget

has benefit•to the Secretary of Defense in that the DOD budget

is submitted directly to the President. A DFI budget would be

submitted to OMB which would affect the streamlined management

currently existent for the NRO.

resent arr •

d. Conclusion. A change in the current practices

with a resubordination of the NRO would make the programming

and budgetary process difficult in many ways and also result in

an increased requirement for NRP funding to cover support costs.

On balance, it appears more advantageous to the Secretary of

Defense to retain the NRP budget within the DOD budget but

recognize the requirement for a DCI to have strong influence in

the allocation of resources through an ExCom or similar mechanism.

V. Conclusions and Recommended Position:

The NRO as a mangement mechanism works well today. Some

improvements could be made in 'terms of the internal organization

to permit a more direct control of the program elements by the

C. micamour

romerow

' Illretve• 4 MIME MO I •Ilweser gala

MP. W *Moro • or n•• aw •

CONTROL NO

COPY OF COPIES

PAGE 7 OF 8 PAGES
C07QTR LSYSTEM

DNRO, but on balance the management apparatus is relatively

efficient. In terms of the resubordination alternative, it

appears more prudent to retain as many of the present arrangements as possible which affect policy, support, and resource

management. A resubordination under a DCI or a DPI would

require significant reorientation of necessary support in

order to retain a streamlined operation. It does not appear

as if a change in executive management of the NRO would add

any benefit to its ability to provide a streamlined centrally

managed intelligence collection capability. On the other

hand, it should be recognized that the DCI needs a• strong

voice in the overall resource allocation process similar to

the existing NRP ExComl. Day-to-day management appears to be

more efficiently left under the agency of the Secretary of

Defense.

•

CONTROL NO

COPY OF COPIES

PAGER COI PAGES

es .imer•ftwo

IN 1,11•4111.0 Of

II mi •• n•••••n• to t/

NM, 1111# 1111110410 • Ob qvIN I