[Budget Director David Bell’s] report of April 1962 recommended continuing a heavy reliance on private contractors. The government, however, needed enough in-house competence so that contractors’ technical advice would not become de facto technical decision-making. But the report identified “a serious trend toward eroding the competence of the Government’s research and development establishments—in part owing to the keen competition for scarce talent which has come from Government contractors.” That trend could be reversed by assigning significant and challenging work to government establishments, giving more authority to laboratory directors, easing the rigidities of civil service assignments, and raising salaries, particularly for the higher grades.
That was from a 1962 hearing, “Systems Development and Management (Part 2).” Hearings before a Subcommittee of the Committee on Government operations House of Representatives Eighty-Seventh Congress, Second Session, July 23-27, 1962. U.S. Government Printing Office, Washington.
David Bell argued in the hearing that the government needs to know what competencies it has to contract our and which to keep in-house. But that information is only generated in the process of development, so there needs to be overlapping contracted and in-house work. There is no externally given information that can be analyzed to determine one or the other.
Later in 1965, DDR&E John Foster called for a comprehensive plan to strengthen the government’s in-house R&D facilities. The 1966 Project Hindsight rated government labs comparable to industry.
A DSB study found that industry and program offices performed the most sophisticated weapon systems, while defense labs handled a fair amount of the R&D for subsystems and components. I think that’s a sensible stance, and seems to be somewhat analogous to Bryon Kroger’s view for government in-house in the digital age.
Unfortunately, the 1960s had much larger trends that moved against these intentions. McNamara’s PPBS, by it’s very nature, led to the dissolution of the statutory role of the Army technical service and Navy bureau systems in 1962 and 1966. It biased the acquisition system to minimal overlap, single best systems, and total outsourcing to a lead systems integrator. No longer were these in-house organizations provided their own budget, which was instead oriented to winner-take-all programs destined for contractors.
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