Down to the Dog Tags

When John F. Kennedy appointed his Defense Secretary in 1960, he posed him a paradox: 1) meet U.S. military requirements without worrying about arbitrary budget ceilings, and 2) do it at the lowest possible cost. Since then, in Robert McNamara's 31 years on the job, military spending has soared by nearly $10 billion, now hovers around the $50 billion mark.

But McNamara still sees no contradiction between greater expenditures and more economy. Thus, it was with great pride that he last week announced the results of the cost-reduction program that he has pushed relentlessly. In fiscal 1964, which just ended, the Pentagon had saved $2.5 billion. "We haven't even begun to scratch the surface," McNamara claimed, estimated savings of $4.6 billion by fiscal 1968.

Homely Principles. Lest anyone think such penny pinching had jeopardized the nation's military strength, McNamara ticked off some impressive signs of his stewardship: >Nuclear warheads in the strategic alert forces -- up 150%.

>Combat-ready Army divisions -- up 45%.

>Airlift capability -- up 75% .

> Ship construction and fleet modernization--up 100% .

> Special counterinsurgency forces--up 800% .

More an exercise in thrifty housekeeping than economic wizardry, the cost reduction program has achieved results by literal application of such homely principles as buying only what is needed, buying it at the lowest price and reducing operating costs. Closer analysis of materiel requirements enabled the Defense Department to cut purchases and inventory levels by a whopping $1.4 billion. To drive harder bargains, McNamara has insisted on more competitive contract awards and fewer cost-plus agreements. Operating costs were cut $292 million by closing unnecessary installations and standardizing supply management through the new Defense Supply Agency.

32#162 v. $95. Most encouraging note in the report was that the services themselves, under McNamara's prodding, have actually become enthusiastic about saving money. The Navy, planning to buy 1,400 Sparrow air-to-air missiles, found it already had enough, scrapped the order at a saving of $45 million. The Marine Corps found it could adapt Army 120-mm. shells for use in its M103 tanks at a cost of 32#162 per shell instead of paying $95 each for new ones. The Army decided it could get along with $1,200,000 less worth of insect repellent than it had ordered. The Air Force learned that it could safely stretch storage life of the solid propellant for its Minuteman missiles from three to our years, saving $25 million. Not even the old memento of service days, the dog tag, was safe. By ordering tags of corrosion-resistant steel instead of an alloy, McNamara shaved 1.60 from each one for a total saving of $97,000 on the year's supply.

Apparently, everyone from the Pentagon to the remote barracks was getting cost-conscious. Glowed McNamara: "We are literally being flooded with thousands of suggestions from individual military and civilian personnel."

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