PROGRAM APPROVALS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP33-02415A000100060017-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: November 17, 2016
• Document Release Date: December 22, 1998
• Sequence Number: 17
• Publication Date: July 20, 1959
• Content Type: MF

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DD/P 4-7864
20 July 19 59
MEMORANDUM FOR: Acting Chief, Development Projects Division, DD/P
SUBJECT : Program Approvals
1. 1 am returning herewith four Program Approvals submitted for
final approval by me or the DCI upon which I have taken no action. I am
not acting on these documents because the form in which they are made
out seems to me to reveal a misunderstanding of the nature and purpose
of the new program system and the approvals procedure we initiated
some months ago. Now that we are at the beginning of the new Fiscal
Year, I believe we must achieve a common understanding (shared by
section heads, Chief, DPD, and myself) of the way this system is to
work and then operate it as intended. In the interest of such common
understanding, I have summarized below my own views, including some
comments on needed further refinements of our procedures. If there
is any serious misunderstanding of or disagreement with the concepts
outlined below, I would like to resolve it promptly.
2. I would remind you that pending the resubmission of the
attached Program Approvals in the same or different form, there is
no legal authority to obligate funds for the purposes contemplated in
them. Indeed, the legal basis for many DPD activities may be lacking
since it is my impression that I have received few Program Approvals
for the current Fiscal Year. Moreover, I had received no operating
budget for FY 1960 until 15 July and have not yet adequately reviewed
or approved the figures then presented to me.
3. You will recall that prior to the change in our approval procedure
some months ago, three different kinds of approvals were required for
DPD activities. These were: an annual budget (which usually covered
CHALICE and our administrative overhead); Project Approvals for major
new projects such as GUSTO and CORONA; and approval by the DD/P or
the DCI of every contract or contract amendment. The principal change
embodied in the new procedure was the elimination of the requirement
for the approval of contracts and the substitution therefor of a require-
ment for the approval (at the appropriate level) of whole projects or
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programs. It was contemplated that program documents would indicate
contracts proposed to be entered into and that the approval of a program
would constitute authorization to the contracting officer to execute con-
tracts within its terms. A major purpose of this change was to reduce
drastically the number of approving actions required (whether by Chief,
DPD, DD/P or DCI) and at the same time to render such approvals
more meaningful, in that the approving officer would be presented with
whole projects or programs to act on in place of piece-meal contract
documents which are understandable, as a rule, only in the context of
whole projects or programs. It was also contemplated that all DPD
activities (including administrative overhead) would eventually be
grouped into programs so that a single type of approval would authorize
contracting, approve projects, establish the annual budget (since the
several DPD programs when assembled would constitute the total DPD
budget), and thus replace the three types of approval formerly required.
4. As stated.above, this procedure requires that all the
activities of DPD which give rise to financial costs be cut up in a
meaningful manner into projects or programs for review by approving
officers. It was obvious how this should be done with respect to major
projects such as GUSTO and CORONA and comprehensive informative
program documents were prepared for these projects some months ago.
As successive amendments to these two programs were required last
year, the successive Program Approval supplements gave a reasonably
clear picture in financial terms of the way in which the two programs
were evolving.
5. With respect to the basic CHALICE program, it was not
immediately clear how the new procedure should be applied, since in
all previous years the CHALICE budget had constituted sufficient
authorization for all parts of the program. Partly for the purpose
of bringing CHALICE budgeting within the new procedure and partly
also in the interests of better management within DPD, the activities
included in CHALICE were split up into programs and the responsi-
bility for the financial management of these programs assigned to
section heads soon after the new approvals procedure became effective.
The intention of this change was that there should be henceforth a
development program, a materiel program, a budget of administrative
and overhead costs which can be described as an administrative program,
and certain activities constituting a program under the sponsorship of
Operations. Each of these was to be monitored by the indicated section
head who would be responsible for the initial preparation of the program
and for initiating important amendments thereto for submission to
approving officers,
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6. The new procedures were established in the middle of a
fiscal year and could only come into operation gradually. It has been
our intention all along, however, that by the beginning of the current
Fiscal Year the above described system would be in full operation.
By way of recapitulation, the main elements would be as follows:
a. The totality of the activities of DPD, including both
procurement and operational activities, would be divided up
into major projects and programs.
25X1A2d1
b. Certain of these units of activity such as CORONA
and GUSTO of which the costs are predominantly for the
procurement of goods or services on contract rather than
for current operations or the maintenance of an operational
system would be organized as projects. Others, such as
the materiel program and the program of administrative
costs, would in effect be sections of the DPD budget
corresponding to defined areas of activity.
c. Each project or program would be the primary
responsibility of a single designated section head.
d. At the beginning of the Fiscal Year, a budget for
each program or project would be drawn up and submitted
for approval. These budgets would in effect constitute
programs for which DPD is responsible. Taken together
the budgets of all DPD projects and programs would con-
stitute the total DPD budget for the year.
e. As the Fiscal Year progressed and plans and
requirements were modified in the light of changing con-
ditions, section heads would be responsible for initiating
both amendments to projects and programs and new projects
as required. These would be prepared in a form which
has been the subject of exhaustive discussions in earlier
papers,
f. Having in mind the original objectives of these arrange-
ments, it was anticipated that the total number of DPD programs
or projects for FY 60 should not exceed 10 or 12. This would
leave room for all of the following to be treated as separate
units of activity and for several new projects like- 25X1 A2d 1
- to be added to the list:
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CORONA
GUSTO
CHALICE Development
Air Operations Development
Materiel
Administration
CHALICE Operations
Air Operations
Requirements and Special Research
7. 1 am hopeful that the above over-lengthy discussion will
serve to refresh the minds of all concerned as to the basic concept
on which we are operating. I do not wish to insist on a rigid and
bureaucratic procedure and believe that the above arrangements
in fact leave great flexibility to section heads. It seems to me,
however, not unreasonable to insist:
a. That no component of DPD shall obligate funds except
within approved programs, that is approved budgets.
b. That approvals shall not be sought piece-meat but
only for whole projects or programs which constitute coherent
units of activity.
c. That DPD should promptly submit Program Approvals
for the current Fiscal Year covering all DPD activities,
together with a summary sheet, this collection of papers to
constitute the Division's budget for the year.
8. Although the basic concepts of the new procedure, as described
above, seem clear and reasonable to me, there are a number of details
which require clarification, elaboration, or improvement. I will
mention the following which I believe should receive prompt attention
and which I would hope to discuss with you and others in the near
future.
a. Format -- The Program Approval form still leaves
much to be desired, especially when it is used as originally
intended for the presentation of a whole major program or
project.
b. Definition and Assignment of Responsibility for
Programs -- In paragraph 6. g. above, I have suggested that
the work of DPD should be split up into no more than 10 or t2
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major units of activity each of which will be the subject of
a single Program Approval. I gave in that paragraph an
illustrative list of projects and programs. I would like to
emphasize here that the list waa intended to be purely
illustrative and that I am by no means convinced that the
dividing Lines between different spheres of activity implied
in the above list are in fact the most suitable ones,
c. Control and Administration of Procedures -- I
believe it might be helpful to designate one officer in DPD
to review all Program Approvals and supplements thereto
in order to ensure that they are in the proper form prior to
submission to C/DPD or higher authority for approval.
d. Control of Commitment of Funds -- Although the
exercise of control over the commitment of funds is only
indirectly related to the subject matter of this paper, I
believe that clarification of our programming and approvals
procedure should be made the occasion for a parallel
clarification of controls over the commitment of funds.
e. Status of Funds and Projection Reports - When the
procedures herein outlined are in effective operation, changes
may be called for in the Status of Funds and Projection Reports
to ensure their complete consistency with program documents.
Deputy Director
(Plans)
Attachments: Program Approvals
(DPD-4654-59, all copies)
(DPD-4655-59, all copies)
(DPD-4696-59, all copies)
(DPD-479Z-59, all copies)
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