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Commentary on he Decline of the National Reconnaissance Office (U)

NRO Leadership Replies (U)Dennis Fitzgerald

Although Mr. Kohieradvances some good

arguments, his proposedsolution would notrestore the creativecompetition that heasserts is missing in

today NRO.

Dennis Fitzgerald is DeputyDirector of the NationalReconnaissance Office. (U)

This article is U//FOUO.

Rert Kohler article on thedecline of the National Reconnaissance Office (NRO) that appearedin Studies in Intelligence (Vol. 46,No. 2, 2002) contends that the NROis currently shadow of it s formerself and explores what might hedone to improve he dissolvingrelationship between the NRO andthe CIA. The NRO that Mr. Kohlerknewts former selfas onecomposed of separate designbureaus known as Programs A, B,and C, which competed with eachother. He judges that co-locatingthese organizations and then combining them into functionaldirectorates, or NTs, in January1993 was chiefly responsible for adecline in the NRO ability to innovate. Although his article providesan interesting historical perspective, I have to take issue with anumber of his observations, conclusions, and proposed remedies(U//FOUO)Mr. Kohler contends that the disestablishment of Programs A, B,and C was a mistake because iteliminated the creative technicalcompetition that existed amongthese NRO offices. His proposedsolution would assign all overheadprograms n continuation to themilitary component of the NRO,and all advanced system and technology efforts, along with all newprograms of high risk, advancedtechnology, or tight security, to theCentral Intelligence Agency Officeof Development and Engineering.Both of these activities would

ee Robert J, Kohier. n e Officer Pe rspective The Decline or the National Reconnaissance Office, Situ//es i inteII,gcce,Vol, 46. No 2, 2002, pp 13-20. (U)

remain under the supervision of theDirector of NRO (D/NRO).Although Mr. Kohler advancessome good arguments, his proposed solution would no t restorethe creative competition that heasserts is missing in today NRO.(U//FOUO)\Vhat Mr. Kohler describes as adesign competition mainly betweenPrograms A and B was in reality acompetition among the major aerospace companies that supportedPrograms A and B. The NRO program offices guided the systemsengineering, secured the funding,and sold the ideas to the Executiveand Legislative Branches. But thereal engineering breakthroughs didno t occur within the governmentprogram offices; they occtirred atthe contractor facilities. These contractors, albeit in fewer numbersbecause of consolidations, still support the NRO today. Theinnovation that existed 20 years agois still there, but the ability of theNRO to tap into this creativity hasbeen reduced due to the fundingreductions of the 19905.(U//mOO)

Mr. Kohier claims that the NROtoday is a hadow of its formerself because its expertise in systems engineering has drasticallyeroded. In January of 2001, wespent several days reviewing thestate of systems engineering in theNRO with Mr. Kohler, whichincluded briefings by most of thesystems engineers in each of thefunctional directorates. Afterward,he concluded that our systemsengineering at the NT level wasine. At his suggestion, we did create an NRO Deputy Director for

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Neither of these

Systems Engineering and filled itwith a highly respected CIA SeniorIntelligence Service officer. We ar econtinuing to emphasize the hiringof systems engineers. (U//FOUO)This brings me to an interestingpoint concerning personnel in theNRO. Civilian and military personnel assigned to the NRO today ar esmarter about space and engineering in general. than at any othertime in our histoi But they alsoar e less experienced. This resultsfrom several conditions that Mr.Kohler identifies: First, civilianemployment declined significantlybecause of downsizing during the1990s. Second, militan personnelregrettably can no longer spend acareer in the NROr in thehite space world for that matter. The need to re-establish pacecareers is one of the findings ofthe Rumsfeld Commission. It is anissue that each of the military services is beginning to address.(U//FOUO)

Mr. Koffler also raises an issue thatI deal with frequently: former NROsenior managers nostalgia for themuch simpler past. That is. if wecould lust return to the way thingswere at the NRO when they leftgovernment, then many of the perceived prohlems afflicting the NROtoday would disappear. (U//FOUO)All organizations change andevolve to meet new conditions.Let me compare the environment ofMr. Kohlefs NRO In the l970s and1980s to the one that we foundourselves in (luring the periodroughly from 1990 to 11 Septem

Th e commission hi Assess United statesNational Secunrv Spate Manageiiient and Organizauonno~vn as the Runmfeid comnussion. oi the space Commission~pubhshed isreport In January 2001 (U)

demanding requirementsforums existed whenMr. Kohier was in the

NRO.

her 2001. 1-le left the NRO in themid-eighties (luring an era that Iwill refer to as Technology Driven.as opposed to the last twelve years.which I will call the Peace Dividend era. (U//Folio)

In the Technology Driven era.roughly 1970 to 1990, NRO spacesystems were hased primarily onwhat technology would permit.rather than on the formal requirements process that drives spacesystem development today Thatapproach led to charges of ROarrogance and accusations ofimposing technological solutionsthat went beyond what the customer s wanted or needed. In the PeaceDividend world, you must have theimprimatur of the Joint Requirements Oversight Council on themilitan side, and a nod from theMission Requirements Boai on theIntelligence side, before you canhave any hope of going forwardwith a request for ftinding fromCongress. Neither of these demanding requirements forums existedwhen Mr. Kohler was in the NRO.In fact, the two intelligence oversight committees in Congress, theHPSCI and the SSCI, had barelygotten started ~~en he left theNRO. Today, our customers andtheir needs ar e thoroughly discussed, accepted, and vetted againin Congress before we proceedwith a malor acquisition decision.(U//FOUOI

The last few years of Mr Kohlergovernment service coincided withthe peak of the Reagan build-up of

the early 1980s. during which intelligence in general, and the NRO inparticular, were lavishly funded. Bycontrast, funding during the PeaceDividend years was severely constrainedhe demand was for thesame intelligence. but at less cost.Everything we have clone in theNRO over the past twelve yearsup to 11 September 2001asbeen directed toward cutting costs.This has been accomplished byreducing the types of overhead systems that we build, maintaining thecapability of our systems but building fewer of them, consolidatingground stations, and paring the costof operations and maintenance.(U//FOlio)

Mr Kohler claims that during hisservice at the NRO. new acquisitions were mostly accomplished ontime and within budget. By withinbudget, I believe he means whatwe told Congress a program wouldcost, not what we wrote a contractfor with our industrial partners.This is indeed true because it wasour practice at that time to takewhat a contractor hid and add amargin of 20 to 30 percent. Thispractice was halted in 1995 whenCongress found that the NRO hadaccumulated excess fonvard funding of $3.7 billion. (U//FOUO)

Besides costing the NRO Directorand Deputy Director their jobs, theexcess fonvard funding debaclehad several other long-term consequences to which Mr. Kohler refei.First, it gave rise to a vastlyexpanded and more powerfulResource, Oversight. and Management (ROM) function Otircongressional overseers absolutelyinsisted on a single, credible financial management system. Second,we began budgeting for programsusing verage or ost likelycosts, rather than just ptitting large

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in the NRO over the pastmargins on contractor estimates.This insured that fonvard fundingsurpluses were not built into ourbudgets, but it required Inclependent Cost Estimates (ICE) Mr.Kohier refers to the ICE process asflawed. I disagree. The NRO ICEprocess is the most sophisticated.the most refined estimating tool forspace systems that exists anywhere. The problems that arisewith ICE have more to do withhow its results ar e utilized thanwith the tool itself (U//FOUO)

Mr. Kohler also helieves that theNRO Acquisition Manual, and theDirective 7 process for initiatingmajor contract actions instead ofusing DC! authorities, are propsthat allow managers to make decisions that they ar e unqualified tomake. I disagree and I suspect thathe would also if he sat through aDirective 7 meeting. Directive 7simply arranges information in anorderly fashion, like a checklist.which permits everyone to decidewith confidence that a major procurement is ready to proceed to thenext stage. All those in the Intelligence Community and DoD whothink that they have a stake in theprocurement are invited to statetheir views. Rather than compensating for weak program managers.Directive 7 makes decisions moredifficult because more constituencies must be heard andaccommodated. The hest engineering decisions ar e the ones debatedin public; the worst ones are thedeals made in back roomsndthe very worst ar e the ones hiddenfrom scrutiny under the cloak ofsecurity. (U//FOUO)

During the Technology Driven era,the Intelligence Community and theprimarily civilian National Command Authorities were the majorconsumers of NRO systems prod-

twelve yearsp toii september 2001asbeen directed toward

cutting costs.

ucts. The major consumers todayar e the US military services Todayreality is that most of the intelligence that the NRO collects on adaily basis is in direct support ofcombat operations. The performance of NRO systems has beenspectacular in terms of preventingthe loss of lives, directing the fire ofweapons systems with unprecedented accuracy, and locatingenemy positions. al l the while providing a synoptic understanding ofthe battle space. The military hasbecome a huge consumer of NROresources and dollars, dollars thatarguahly otherwise might be spenton developing the next generationof intelligence space systems.(U//FOUO)

Moreover, during the TechnologyDriven era, when a failure occurredin development, launch, or on-orbitperformance of space systems, ourgovernment overseers generallyaccepted that the NRO adreached to o far or that the prob1c m resulted from he nature ofresearch and development. Today,when a failure or the potential for agap in coverage occurs, theresponse is: ho do we fire2Day-to-day combatant support, sodependent on NRO systems, allowsno room for failure (U//FOUO)

During the previous era, as Mr.Kohler ohsens. program manager s indeed were kings. Theycontrolled costs, schedules, andperformance, and had the ability to

trade those variables, without seeking permission, to make theirprograms work. That program managers have reduced freedom tomake such trades today has nothing to do with the consolidation ofthe NRO. tt is exclusively the product of much.greater oversight bycongressional committees, theCommunity Management Staff, tImeAssistant Secretary of Defense forC31 Staff, the joint RequirementsOversight Council, and the MissionRequirements Board. (U//FOUO)

Finally, Mr. Kohler asserts that thecurrent crop of experienced SISofficers at the NRO is retiring,which is true I3ut his contentionthat no replacements with compaible talent and dedication ar e beingactively developed is both untrueand demeaning to the young seniorofficers who serve in the NROtoday They work on requirementsdriven and cost-constrained overhead technical collection systems inan environment characterized bypublic openness and intense oversight by Congress. In the PeaceDividend era, I believe that they ar epiclucing superior intelligenceunder conditions that Mr. Kohlerand his contemporaries never experienced. (U//FOUO)

Let me close hy commenting thatMr Kohler seems to he conflictedin terms of whether he is trying tofix the NRO or to restore the Officeof Development and Engineering,the CIA presence in the NRO. to itsformer glory. The disestablishmentof Programs A, 13, and C was painful for the many veterans of thoseorganizations. But that is now tenyears behind us. The new NRO isfunctioning as th e reorganizationintended it to, with the D/NROfirmly in charge of dayolay dccisions and operations. We have hadfour D/NROs whose relations with

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Everything we have done

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both the DC I and the Secretary ofDefense have been open andhighly productive. The reorganization, centralization, and creation ofthe NT structure have significantly reduced duplication andcosts. Instead of doing non-recurring developments many times andbuytng in quantities of a few, wedo non-recurring developmentsonce and buy in quantities ofmany. (U//FOLiO)

civilian personnel from many agencies is a replication of the centersmodel that exists in CIA andthroughout the Intelligence Community Timeested teampartnering with industry continuesto provide successful research anddevelopment in the design and production of overhead space systemsthat has always been, and will continue to be. the hallmark of theNb (U//FOUO)

rity demands of the 21st century.Although I recognize that ourfuture successes are built on thefoundation laid by Mr. Kohler andhis contemporaries, the best daysfor this organization lie ahead.(U//F0U0

Many of us miss the enthusiasm,dedication, and accomplishments ofPrograms A, B, and C, but thosedays ar e behind us The NEOs current integration of military and

The NRO appreciates the input ofMr. Kohler. We ar e striving to provide the nation with the best space-based reconnaissance capabilities tomeet the changing national secu

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