Perhaps the most significant causal event that signaled the demise of the arsenal system was the gradual centralization of decision-making authority within the Office of the Secretary of Defense, a process that began in 1947 and culminated in the elimination of the independent status of the Army technical services nearly two decades later. Until that time, the Ordnance Department and the other six technical services operated as autonomous organizations under the direction of a relatively weak Army Staff. In 1962, however, institutional rigidity within the Army’s procurement system prompted Secretary of Defense Robert McNamara to wrest control of the weapons acquisition process from the technical services and place it within a new centralized unit—the Army Materiel Command.
That was from Thomas Lassman’s book, Sources of Weapon Systems Innovation in the Department of Defense.
The decline actually started about a decade earlier. The National Security Act amendment of 1949 implemented the “performance budget.” Whereas the chiefs of Army’s organic technical services like Ordnance, Engineering, Chemical, etc., used to go to Congress to justify their budgets, the new budgeting process put the Army staff in between them and their funds.
Still, for the remainder of the 1950s, the Army technical services remained relatively strong and had reasonable discretion over their programs. It wasn’t until McNamara’s “revolution” with the Planning-Programming-Budgeting System that spelled the beginning of the end of organic capabilities in the Army and Navy. Soon thereafter, Watertown, Springfield, and Frankford arsenals shut down. These organizations didn’t have a clear place in the programming system as responsibility for weapon systems planning moved to the staff and Army Materiel Command levels, and responsibility for production moved entirely to contractors.
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