To one extent or another, each of the technical services carried out research and development (including test and evaluation), procurement, production, supply, and even maintenance functions for the products or commodities under its jurisdiction…
An important source of technical service autonomy lay in the nature and method of appropriation of the Army’s budget. Until FY 1952, Congress appropriated funds, not in bulk to the secretary of the Army, but in chunks to the service’s major organizational elements. Furthermore, only Congress could approve transfers of funds between them. This system weakened the ability of the Army’s top civilian leadership or the Army staff to exercise effective control over the technical services. Amendments to the National Security Act of 1949 strengthened Army headquarters’ authority.
Beginning with the FY 1952 budget, the legislation required the Army, as well as the other services, to prepare budgets based upon what it cost to perform particular functions. In the Army budget, these functions were personnel, operations and maintenance, procurement and production, and research and development. Congress appropriated funds in these functional categories directly to the secretary of the Army, who distributed them to major organizational elements. Implementation of functional “performance” budgeting diminished the independence of the technical services.
That was from Elliot Converse’s excellent volume in the Defense Acquisition History Project, “Rearming for the Cold War: 1945-1960.” He was discussing the implementation of Title IV of the NSA amendments of 1949. To a large extent, the “performance budget” was neglected in favor of crash budgets because of the onset of the Korean War. However, it laid the groundwork for the system that Robert McNamara went full bore on in 1961 under the title Planning-Programming-Budgeting System (PPBS), which is still the foundation for resource allocation in the Department of Defense.
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