The evolution of management techniques for the acquisition of naval material has resulted in general acceptance of the “Project Manager” system. Since the successful development of several complex weapons systems, —e.g., Polaris, Minuteinan, and Nike—under project management, Secretary of Defense Robert S. McNamara has encouraged wider use of this system by the military services. Within the last decade, weapons acquisition programs have become so vast, costly, demanding, and interservice related that it is not now considered feasible to assign the total responsibility for the accomplishment of these programs to a single functional organization. It is Defense Department policy that all new production projects and operational systems developments, above a specified dollar cost, shall be accomplished under Project Managers. As might be expected, those programs that are so managed are most often approved and most readily funded. So much of the defense budget is currently allocated to Project Managers that it behooves military officers and others involved in management within the Department of Defense and the defense industry to understand the functions and implications of this centralized management system.
The concept of project management is not easily defined, for neither the authority nor the responsibility of any two Project Managers is identical; each manager is issued a charter that designates him by name, assigns him responsibilities, and delegates to him authority for the centralized management of the particular project. This centralized management provides the personal responsibility that is so often lacking in complex administration.
The old bureau structure of the Navy Department, as well as the technical groups in the other services, has developed along functional lines. Further, the subdivisions of the bureaus were also functionally organized and the reorganization of the Navy Department in May 1966 did not and was not intended to break down that structure. The co-ordination of the very efficient, functionally oriented groups has always been necessary in procurement of ships, aircraft, and armament systems and this has been effected by “Class Desk Officers,” “Type Desk Officers,” and “Project Officers.” The term project manager is not just a new name for the same job, for this individual has authority beyond that enjoyed by his predecessors—he can enforce co-ordination. The trend to centralized management is not a condemnation of the functional management in the old material bureaus of the Navy, the New Systems Commands, nor of functional organizations as such. There are many operations that can best be handled through functional organizations. It may be, however, that project management is a substitute for thorough planning in the functional organizations. Currently much more extensive planning is required, and had perfect planning been effected, this centralized management probably never would have evolved. Perfect plans are, of course, impossible; good plans can be very expensive, and some evolutions are so dynamic that plans are in a continuing state of change. In dynamic, complex evolutions it would seem most effective to appoint an executive agent to make decisions as the changing conditions warrant and thus to avoid costly delay. It is not intended that a project manager operate throughout the life cycle of a weapon system but only during the acquisition phase. During this period he must, using the functional groups, plan the entire system life cycle.
The Project Manager system is not new to the Navy as this concept has been standard in the operating forces for some 30 years; the concept is inherent in the type commander system. When type commanders such as Commander Naval Air Force Pacific Fleet, Commander Cruisers and Destroyers, Commander Amphibious Forces, and Commander Service Forces assign fleet units to the operational commanders, such as Commander Seventh Fleet, the type commanders serve as heads of functional groups supporting a Project Manager. The type commanders retain certain authority over and responsibility for these fleet units during the time that they are operating with the Seventh Fleet even though Operational control is vested in the Fleet Commander. As shown in Figure 1, the authority of the Commander Seventh Fleet cuts across that of the type commanders as the authority of a project manager cuts across that of functional groups.
It has been often stated, and not often disputed, that expertise in the art and science of management has lagged far behind the state of the art in engineering and technology. Scientific knowledge seems to be doubling every 15 years currently, while some 50 years have been required to double management knowledge. In systems design, management must make decisions between available options and, to a first approximation, the number of options available is a function of the existing body of knowledge in the field. As technology continues its expansion, the constant man options expand exponentially, thus the need for improved management techniques becomes ever more urgent.
The principles of management expounded by France’s Henri Fayol in 1916 can hardly be expected to meet all the requirements of 1967, with its vast production capability, fast changing technology, and rapid communications. It might be that we can no longer afford the luxury of subjecting a person to direction from one and only one supervisor.
We can not ignore the fact that the Soviet Union seems to be able to develop a weapon system in about five years, while the United States requires up to nine years to perform a similar task. Furthermore, the recent French development of the tactical vertical take-off and landing aircraft BALZAC V, within some two years after the contractor’s proposal, indicates that the French may be able to develop on a shorter time scale than either of the two pre-eminent powers. The period between the promulgation of specific operational requirements for weapon systems and the advent of the operational capability of systems must be shortened lest obsolescence overtake the developments. There is no lack of technical capability in the United States, and the ability to produce needed weapons must not be degraded by inefficient management.
The authority of the typical Navy Project Manager cuts across functional lines in absolute violation of Fayol’s classic management principle of unity of direction. Project management as usually practiced in the Navy is not greatly different from that found in many modern multi-product manufacturing organizations. As indicated in Figure 2, the technical and business management of a major product line is the responsibility of a single individual. The one man would be responsible for planning, directing and controlling the definition, development, and production of a new product of unusual complexity or importance.
Figure 3 indicates the horizontal flow of a typical Navy project manager’s authority and responsibility and the vertical flow of functional authority and responsibility. The project manager exercises executive authority over planning, direction, and control of his project and over the allocation and use of the fiscal resources assigned. He does not, of course, act independently but seeks the advice of functional groups, for his mission can only be accomplished through the people within these functional groups who are assigned to the support of his project. Tact and diplomacy are valuable assets to a project manager for, while his authority is de jure, being specified by charter, and de facto, because of his control of funds, he must enjoy the cooperation and support of the people in the functional groups if his project is to proceed efficiently. An effective basis for co-operation is planning, and thus he must assure that the requisite planning is accomplished by those responsible for development, testing, logistics, maintenance, personnel, training, and fleet introduction. Both the heads of the functional groups and the project managers here operate in a line capacity. The heads of functional groups exercise authority in their specialty areas as to how tasks will be accomplished. The project managers exercise authority over specified individuals within functional groups with respect to what and when relative to project activities. This authority must be meaningful; thus the personnel assignments should be analogous to “temporary additional duty” even though these people may not work on the project full time. These project people within the functional groups are more valuable to the project as a result of the dual assignment, for they thereby enjoy access to a larger pool of specialized talent when the project requires additional assistance. Herein lies economy in personnel and one of the advantages of this complex form of organization.
Clearly the authority of the project manager cannot extend beyond that of the officer who issued his charter, but upon occasion his interests do extend beyond these limits. Often the authority of the project manager is extended through agreements between the charter officer and his counterparts, but frequently these interests must be limited to coordination and co-operation in such areas.
The Secretary of the Navy has authorized the Chief of Naval Material (CNM) to charter managed projects and the Commanders of the several Systems Commands have been delegated this authority; however, all charters are to be approved by CNM. The best known designated project is the Polaris Fleet Ballistic Missile Project (FBM), managed by the Navy Special Projects Office (SP). The Project Manager of the FBM Project is a rear admiral reporting to CNM. When originally designated a Project Manager he was chartered by and reported directly to the Secretary of the Navy. The SP charter, like others, will probably be reissued by CNM. Special Projects is highly centralized and vertically organized with a staff of some 400 people, the largest and most self sufficient of the Navy project offices.
The Surface Missile Systems (SMS) Project and the Anti-Submarine Warfare Systems(ASWS) Project were also designated by the Secretary of the Navy under CNM. The ASWS Project is much broader than the usual project and might best be described as a program, for several designated projects operate under the direction of the ASWS Project Manager.
There are currently some 5 2 designated projects within the Naval Material Command; 12 have been designated by CNM. Figure 4 lists these designated projects. Most of these projects operate with staffs of between nine and 17 full-time people and obviously must rely heavily upon the functional organization for support.
Projects are usually designated by CNM when they involve extensive co-ordination with other government agencies, other military services, or between Systems Commands. Projects are usually designated by the commanders of the subordinate Systems Commands when the project activity is, for the most part, under the cognizance of one Systems Command. A project is to be designated and chartered only if it involves costs in excess of a given amount, is of exceptional importance, is unusually complex and will not constitute a permanent requirement. Projects are to be terminated when their missions have been accomplished.
While centralized management is necessary, it should not be used to excess; there are disadvantages. A centralized project, independent of any functional organization, is, in general, more extravagant in personnel than is a single functional organization. A project of moderate size and scope cannot use all of the requisite skills on a full-time basis. An excessive number of people on a project staff overmanage, and overmanagement can strangle a project with reports, evaluations, analyses, and reviews. Another hazard of the excessive use of centralized management is a conflict in demands on resources and on support facilities. The exceptional authority delegated to project managers to enable them to act promptly can be counterproductive if these projects become too numerous.
The breadth of responsibility that is delegated to the project manager has not been common in the Naval Support Establishment. He is, through his charter, delegated the broad directive authority necessary to the successful management of the project. An appreciation of the qualifications necessary for his position might best be obtained from a survey of his task. Ideally, a manager is designated at the birth of the project. If so, his first responsibility will be that of formulating a concept which will meet a specific operational requirement. This will involve experimental tests, analytical studies, and systems engineering studies. Once the requisite technology can be shown to be sufficiently in hand to provide effective hardware, he must obtain DOD approval for the project. Further, he must obtain (usually from industry) an adequate set of specifications for the proposed system. Industry is provided freedom in design approach in order that optimum trade-off solutions may be effected among schedules, costs, technological risks, operational effectiveness, production, and similar factors. During this contract definition phase, the evaluation of contractors’ proposals is the most demanding effort. With that phase complete, the Project Manager must obtain funding through DOD and place a contract that will result in engineering development. The funding problem, is, of itself, no simple matter, as it involves the program/budget cycle, appropriations, and the allocation of funds down through the government structure to his level. During the development phase, the Project Manager’s attention is given to: the engineering development schedule; funding of effort; data control; configuration management; standardization; reliability engineering and tests.
If the tests show that the hardware meets requirements, the next milestones which must be accomplished are DOD approval, funding for production, and the placing of the production contract. During the production phase, operational testing becomes an important factor. Here, timing is of the essence because of the risk of production prior to thorough demonstration of satisfactory performance. During the production phase, new items come into focus and new problems develop in: quality control; engineering changes; production schedules; allocation of facilities; training programs; operational facilities; provisioning of spares; support equipment; and other fleet introduction problems too numerous to mention. It would be difficult to conceive of the successful and timely culmination of such a process without strong centralized control.
Although project management is most necessary in the acquisition of material of joint interest, no clear-cut pattern of procedures has been developed for use in projects established to acquire material for two of the military services. When the Navy is designated the “Executive Agent” in a project involving another service, the other service may assign personnel to the office of the Navy project manager and that service might also establish a separate project office to co-ordinate related effort within that service. Of course, the Navy may similarly co-operate when another service is named executive agent. When either service is designated executive agent, an inter-department memorandum of agreement should be promptly signed, spelling out an agreed concept of operation for the project. A project charter should then be negotiated and jointly signed; it should set down the responsibilities of the project manager and the functions that he will perform for each service. Operating relationships with the several commands and field activities within each service must be defined. Procedures for staffing and the allocating of resources should also be spelled out in the charter. Since administrative procedures in the services still differ, the development of operating procedures can be expected to pose problems. An acceptable solution seems to be to use the normal procedures of the executive agent as the primary basis for operating and to supply the associate agency with the additional data which is believed to be absolutely necessary. Specifically, questions must be resolved related to: form and specifications for technical data; engineering cognizance over specific items and integration; decision levels; logistic support; and information flow.
In the exercise of executive authority over the expenditure of the large sums of money involved in the acquisition of modern weapon systems, a project manager must be competent in the use of the most effective methods and techniques of modern management. Cost effectiveness analysis is currently the foundation of the decision-making process, is an essential tool in the justification of new programs, and a real help to the project manager in his decision process during the life of the project. Estimating costs of a yet-to-be-developed system is a demanding problem but a necessary prerequisite to budgeting and contracting. The advent of incentive contracting has made accurate costing of the contractor’s effort and material increasingly important. Through accurate estimating and balanced incentives, the project manager is hopefully able to obtain the most effective system at the most reasonable cost, and by providing such a system at the lowest cost feasible, the contractor maximizes his profits. The development of a contract that accomplishes this is complex and risky, but there are programs in which such contracts are producing the desired results. Program Evaluation and Review Technique (PERT) is a management system which project managers can use effectively in research and development projects for the planning and controlling of cost, of time, and of technical performance. Line-of-balance technology is a valuable tool to the manager in the analysis of performance and in predicting problem areas in the production process. The Project Manager must expect to become involved in conflicts involving systems engineering, reliability engineering, value engineering, configuration control, data control, and documentation control. No amount of diplomacy can keep harmony in the project unless the manager has a basic understanding in these fields. Though he need not be an accountant, he can best protect the interests of the government if he has a general knowledge of accounting practices and of the Armed Forces Procurement Regulations. The Project Manager must have a broad experience in the technology fundamental to his project, he must also be experienced in development and production, but most importantly, he must be a proficient manager.
Weapon system production projects and development projects are being placed under project managers within the Navy if they:
• Carry an urgent priority, or
• Require research and development expenditures in excess of twenty-five million dollars, or
• Require production expenditures of a hundred million dollars, or
• Are critical to the military posture, or
• Are exceptionally complex technically or administratively.
Such a modification to our system of management makes necessary no significant reorganization within the Navy, as project management operates most efficiently in conjunction with a functional organization. This intensified management concept, now accepted, must receive the enthusiastic support of the entire Naval Establishment. It provides the means by which the Navy can most effectively gain approval for necessary equipment acquisitions and can most promptly deliver to the operating forces improved weapon systems, developed to the point that they meaningfully enhance combat capability.