Engineering Creativity. While new NRO systems have responded to the desires of external customers, NRO engineers have also been free to pursue "the art of the possible" and to develop new technological solutions to solve intelligence problems whenever feasible. This has allowed NRO engineers to focus on improving system performance, rather than being limited by rigid, consensus-driven customer requirements. Given wider latitude, they have been more creative. Thus, the NRO is accustomed to delivering first-of-a-kind satellites.

Performance First. In making design choices for new NRO systems and upgrades, superior satellite performance has been considered more important than constraining costs. Budget constraints have not been ignored, but sufficient funds have been made available to the NRO to pursue promising new technologies.

End-to-End Systems Approach. The NRO's distinctive approach has included end-to-end development of space reconnaissance systems. While developing a concept of operations for a future satellite system, NRO program developers considered how, by whom and under what conditions the system would be tasked. While determining how raw satellite data would be transformed into a useful product, they considered mission ground station operations. In some cases, they actually developed TPED tools and techniques to be used in conjunction with the new satellite system. Understanding the entire process permitted the development of break-through satellite systems and the capabilities required to support them.

Cradle-to-Grave Perspective. In some cases, NRO engineers have also operated the satellites they designed and built, thus developing unique and important insights into possible future capabilities. Among other things, solving on-orbit anomalies, watching and understanding the changes in intelligence targets, and incorporating new hardware and software upgrades have contributed to a thorough NRO understanding of space reconnaissance systems and the targets they must attack.

Senior Level Attention. One of the most important reasons for the NRO's success has been the partnership between the Secretary of Defense and the DCI, explained in further detail in this Report, that has permitted the creation of a single vision for space reconnaissance and allowed the NRO to operate differently than other activities in the national security community.

From its earliest days, the NRO collected information essential to strategic and tactical decision-makers. Part of the DCI's contribution to the partnership has been advocacy, on behalf of the Intelligence Community, for crucial strategic intelligence collection that can only be conducted from space. As the President's primary intelligence advisor, the DCI requires substantial amounts of such information. At the same time, the Secretary of Defense, representing the other half of the partnership, requires NRO information to ensure global situational awareness and battlefield information dominance for his military commanders.

Special Authorities. The Secretary of Defense-DCI partnership also has provided the NRO with the authority to use extraordinary policies and procedures to advance its efforts. Among these are the NRO's exemption from normal DoD procurement policies, procedures and regulations. The NRO has also been allowed to use the DCI's special statutory procurement authorities under Title 50 of the U.S. Code. These authorities helped provide the foundation for the NRO's unique acquisition process and its exceptional relationships with contractors.

Unified Direction. The Secretary of Defense and DCI agreed to establish a single NRO Director with a single vision based upon a single space reconnaissance budget. Internal disagreements involving competing demands for constrained NRO resources are settled by one Director within one organization, based upon an understanding that space reconnaissance is essential for the success of DoD and the Intelligence Community.

Special Security Protections. Until 1992, the NRO was surrounded by a wall of secrecy. This environment kept foreign intelligence services from gaining a comprehensive understanding of U.S. space reconnaissance capabilities. The absence of information on NRO spacecraft attributes, sensors and its approach to the development of new technology hampered those who intended to use cover and denial and deception techniques to counter U.S. space reconnaissance. As a result, knowledge of the NRO was limited.

Experienced Program Managers. NRO program managers have been experienced military and CIA acquisition officers. Many have spent almost their entire careers within the NRO working in many different capacities. Because they were highly qualified acquisition professionals and understood NRO activities so well, they required little supervision and were empowered to make decisions not normally made at their level in other parts of the U.S. Government. They could reallocate funds to meet unforeseen circumstances and could take advantage of opportunities to adopt new technologies. With clear guidance from senior Government officials and sufficient resources, they were able to make decisions in technically risky programs and produce very successful, advanced space reconnaissance systems.

The Impact of Change. The current environment within which the NRO must operate has had an unfortunate effect on these characteristics, which have been so important for the NRO's past successes. For example, the integration of NRO information into many day-to-day decision-making processes has made many national security professionals very familiar with NRO programs. Many have come to expect the NRO to adapt to standard procedures in order to accommodate the needs of a wide array of customers.

The NRO now must respond to rigid requirements for new reconnaissance systems, based on extensive negotiations among a wide variety of strategic and tactical customers. Because resources are constrained across the Intelligence Community, cost constraints have become an increasingly important element in decisions on new NRO programs.

There have been other important changes. The Secretary of Defense-DCI partnership is being managed to a large extent by subordinates or staffs. The NRO is now a publicly acknowledged organization. Some of its latest space reconnaissance initiatives are well-publicized and NRO systems are analyzed and discussed on the Internet.

Thus, the NRO is operating under very different conditions from those under which it achieved its greatest successes. Nonetheless, new, extremely difficult intelligence problems will continue to arise that will require frequent, assured, global access to denied areas. This is the NRO's unique contribution to intelligence and should be the driving force behind its efforts.

The Office Of Space Reconnaissance

Because of the NRO's changed circumstances, the Commission concludes that the NRO Director must free his most advanced research, development and acquisition efforts from processes that inhibit his ability to place the latest and best reconnaissance capabilities on orbit quickly. The Commission believes the best way to do this is to create a new office that builds on the sources of the NRO's past successes and reflects the characteristics of its successful programs. It suggests the new office be called the Office of Space Reconnaissance (OSR).

The first and foremost premise in establishing this Office must be that it responds only to requirements from the President, Secretary of Defense and DCI through an Executive Committee (EXCOM) and to congressional oversight. By implication, the Office's budget would be relatively small and it would focus only on the most significant problems confronting the three principal decision-makers and that require space-based reconnaissance solutions. Because these officials would give the new Office their personal attention, they would exempt the Office from normal DoD acquisition regulations and allow it to use, when appropriate, the DCI's special authorities under 50 U.S.C. 403j. Further, their personal involvement and support would give important impetus to the Office's programs as they wind their way through the complicated budget and oversight process.

Second, the Office would focus narrowly on high technology solutions to the most difficult intelligence problems based on the requirement to gain frequent, assured, global access to denied areas. This could produce space collection systems at least two generations ahead of the rest of the world. The President, Secretary of Defense and DCI would personally identify the problems and approve the new Office's proposed solutions.

The third premise for the new Office is that it should be under the control and direction of the NRO Director. A single overall vision for space reconnaissance must be retained, and that vision is best vested in the NRO Director.

Fourth, the Office must be staffed by both military and CIA personnel. They bring the separate perspectives of strategic and tactical customers to the program level of decision-making. The Commission anticipates they would be senior grade officers with broad backgrounds in space reconnaissance and with extensive experience in program management and acquisition. Their experience and background should be sufficient to give their supervisors and those with oversight responsibilities, including the Congress, confidence in the Office's program management. As a result, Office managers would have the power to make risky technical decisions that are often needed.

Fifth, the Office would approach space reconnaissance programs from end-to-end and cradle-to-grave perspectives. Its solutions would be comprehensive, beginning with effective and efficient tasking of a space reconnaissance system and ending with at least a plan for the dissemination of its products.

Sixth, the Office would operate from facilities separate from other space reconnaissance activities, and it would be covered by a new security compartment. The purpose would be to establish effective secrecy to shield the technologies and collection techniques under development. Accordingly, the Office would have a greater likelihood of defeating adversary attempts to employ cover and denial and deception techniques.

The Office also would have a separate budget element included in the National Foreign Intelligence Program. The Commission envisions that funds for the new budget of the Office of Space Reconnaissance would come initially from the National Reconnaissance Program. The Commission has taken this approach so as to avoid simply recommending that more funds be committed to space reconnaissance. It believes the creation of the new Office will focus senior level attention on high-end space reconnaissance solutions to the most difficult intelligence problems. Further, the Commission believes that, by having the new Office create and defend its own budget, its advanced research, development and acquisition programs would succeed or fail based on their own merits.

The Office of Space Reconnaissance would be separate from the NRO in many aspects. It would have a separate budget, separate facilities, a separate security compartment, and separate program managers. However, the NRO Director's (DNRO) relevant corporate structure should be sufficient to support its activities.

The Commission believes a new Office operating under the specific guidance of the President, Secretary of Defense and DCI would be better postured to place the most advanced reconnaissance capabilities into space than would the current NRO operating mechanisms. Those who oversee and supervise space reconnaissance activities, including those in Congress, should have greater confidence in the importance of programs personally supported by the President, Secretary of Defense and DCI.

Additionally, a smaller budget supporting fewer programs should enable supervisors and those with oversight responsibilities to have a more thorough understanding of each program and the significance of the technology involved. This in turn should give them greater assurance that technical decisions made at the program level are correct and further reduce tendencies to hold back technology development solely for cost reasons.

Finally, the Office's new security compartment would permit access only to those with oversight responsibilities who have an absolute need-to-know. A proper balance must be struck, however, in which secrecy is sufficient to frustrate adversaries using cover and denial and deception techniques, while at the same time care is given to protect only essential information.

The Commission emphasizes that creation of the Office of Space Reconnaissance does not diminish the fundamental importance of the NRO and its mission. As noted throughout this Report, the Commission finds the NRO is responding appropriately to the changed circumstances confronting it. The Commission believes the NRO must continue along the path it is following in order to serve a broad strategic and tactical customer base.

The NRO must continue to evaluate and put into place leading edge technologies to improve space reconnaissance and to meet the needs of its broad customer base. It also must develop and operate space reconnaissance systems to overcome the intelligence problems confronting this same customer base. It must acquire and operate high-technology spacecraft on behalf of the Secretary of Defense and DCI to gain frequent, assured access to denied areas on a global basis.

Recommendation

The Secretary of Defense-Director of Central Intelligence Relationship

The tri-cornered arrangement among the Secretary of Defense, DCI and NRO Director has at times provided great strength to the NRO because it has allowed the NRO Director to draw on the resources and benefit from the advocacy of the two major forces in the Intelligence Community and DoD.

The Commission has emphasized the need for the Secretary of Defense and DCI to be fully aware of, and engaged in, NRO program decisions. In that light, the Commission has reviewed the Secretary of Defense and DCI responsibilities regarding the NRO.

The NRO Director is the head of an agency of DoD that is also a major component of the Intelligence Community. In addition, he serves as the Assistant Secretary of the Air Force for Space. Under four agreements dating back to the 1960s, the Director of the NRO is responsible for reporting to both the Secretary of Defense and the DCI. According to the NRO's General Counsel, all four agreements are considered by the NRO to be still in effect, although more recent statutory and Executive Order provisions have added significant structure to the relationship. (See box on facing page, "Summary of Secretary of Defense--DCI Agreements Pertaining to the NRO." Also, a more detailed explanation of the agreements and the historical development of the Secretary of Defense-DCI relationship regarding the NRO is included in Appendix D.)

Summary of Secretary of Defense--DCI Agreements Pertaining to the NRO The first agreement (1961) created the NRO to manage a DoD National Reconnaissance Program (NRP) that included all overt and covert satellite and over-flight reconnaissance projects. The NRO was to function under the joint direction of the Under Secretary of the Air Force and the CIA's Deputy Director for Plans. Major NRP program elements and operations were to be subject to regular review by a National Security Council group. A second agreement (1962) provided that the NRO Director would be designated by both the DCI and Secretary of Defense and be responsible directly to them for management of the NRP. DoD and CIA personnel were to be assigned to the NRO and DoD and CIA were to provide funds for the NRO projects for which they were responsible. In 1963, a third agreement superseded the prior version and identified the Secretary of Defense as the Executive Agent for the NRP and the NRO as a separate operating agency within DoD. The NRO Director was now to be appointed by the Secretary, with the concurrence of the DCI. A Deputy NRO Director was to be appointed by the DCI, with the concurrence of the Secretary. NRO budget requests were to be presented by the NRO Director to the Secretary and DCI, the Bureau of the Budget and congressional committees. The NRO Director was to report directly to the Secretary of Defense, while keeping the DCI currently informed. The last agreement (1965) made clear the Secretary of Defense had "ultimate responsibility" for the NRO and eliminated the requirement for DCI concurrence in the selection of the NRO Director. The DCI retained authority for appointing the Deputy NRO Director, but with the concurrence of the Secretary. This agreement also provided that the Secretary was the final decision-maker for the NRP budget and all NRP issues. It created an NRP Executive Committee (EXCOM)--consisting of the Deputy Secretary of Defense, DCI and the Assistant to the President for Science and Technology--to "guide and participate" in NRP budget and operational decisions, but the Secretary of Defense was responsible for deciding any EXCOM disagreements.

The tri-cornered arrangement among the Secretary of Defense, DCI and NRO Director has at times provided great strength to the NRO because it has allowed the NRO Director to draw on the resources and benefit from the advocacy of the two major forces in the Intelligence Community and DoD. To some degree, however, the uncertain situation in which the NRO finds itself today--requirements rising, budgets level or falling, and customers and mission partners demanding greater roles in the NRO's decision-making process--can be traced to the ambiguity and recent inadequacy of the Secretary of Defense-DCI relationship as a means of resolving disputes relating to the NRO.

The Commission believes history has shown it is possible for the NRO Director to be responsive to both the Secretary of Defense and DCI and that the dual reporting arrangement is valuable for the NRO Director and should be continued. In previous years, for example, the Secretary of Defense and DCI held weekly meetings that allowed intelligence-related issues to be raised and resolved quickly without having to percolate through the many layers of bureaucracy that have come to separate the two officials from the NRO Director. (See graphic, "Management Structure for the Intelligence Community.") However, the Commission recognizes the relationship is not self-executing and that its success requires the active participation of both parties.

The Secretary or the DCI may choose not to pursue this relationship. Successively lower levels of officials may then be left to "manage" the NRO on behalf of the two principals. Friction among the NRO, the Intelligence Community and DoD has developed in such periods. The Commission believes that the Secretary of Defense and DCI must be involved in managing the NRO and that a close working relationship must be established between them for this purpose.

The Secretary of Defense-DCI relationship with regard to the NRO could be embodied in a comprehensive statute, as there is for NIMA, or it could be established by statute mandating its completion by a date certain. Alternatively, relatively minor amendments could be made to the existing statutory scheme that would have significant impact on the relationship. The relationship also could be established by Executive Order or some other form of Presidential Directive, a combination of statutory and Executive Branch provisions, or a new agreement between the Secretary of Defense and the DCI that would take account of the many changes in the relationship that have occurred since 1965, the date of the last of the previous agreements.

The Commission evaluated the desirability of recommending the creation of an "NRO statute." Such a law could firmly secure the NRO's position in the national security community. After debate, the Commission concluded that congressional action in this regard could make the situation worse, rather than better. It believes senior level Executive Branch attention should be sufficient at this time.

Recommendations

Balanced Response to Customer Demands

Ensuring a proper balance between strategic and tactical requirements--in terms both of the use of current NRO systems and in the design of future NRO systems--is a matter of utmost national security importance.

Strategic and tactical intelligence requirements determine the targets against which current NRO systems collect every day. They also have a direct and substantial impact on the design parameters of future NRO systems.

Tactical requirements include those generated by the Defense Intelligence Agency, the military departments of DoD and the commanders of the various U.S. military commands. They are generated in furtherance of the U.S. military's responsibility to cope with contingencies in any area of the world, to support the worldwide deployment of U.S. armed forces and to organize, train and equip forces for future military operations.

Strategic requirements, on the other hand, include those generated by the National Security Council, CIA, DoD, State Department, and other civilian departments and agencies. These requirements support U.S. Government policy officials, including those in the White House and throughout the various departments and agencies of the U.S. Government who participate in the development of U.S. foreign, defense, military, economic, and technology policies.

An extensive debate has been underway for some time over whether NRO collection resources are being properly allocated between strategic and tactical intelligence requirements. The Jeremiah Panel, referred to earlier, reviewed the state of the NRO and reported in 1996 that both strategic and tactical customers of the NRO were frustrated with the requirements processes for both future systems and daily operations. According to the Panel report, tactical customers believed there was an insufficient NRO commitment to satisfying their needs, while strategic customers believed that overhead systems were being used, and future systems designed, primarily for tactical customers and to the detriment of strategic customers.

The NRO Director identified this tension between the NRO's strategic and tactical customers as the first issue the Commission should address because there is a belief that the NRO is responsible when requirements are not satisfied. Substantial as the NRO's present collection resources are, they cannot satisfy all requirements all the time. Nor will future NRO systems, including the Future Imagery Architecture, be able to satisfy all the needs of both strategic and tactical customers. The NRO is thus caught in the middle of the debate over the respective extents to which strategic and tactical requirements should be satisfied by its current systems and over the influence of those requirements on the design of its future systems.

The classification level of much of the data produced by NRO systems was lowered during and after the Gulf War in response to congressional and military pressure to make it more readily available to military commanders in the field. As explained earlier, this action removed the veil of compartmented secrecy from the NRO. In addition, following the Gulf War, Congress emphasized the need to expand the use of NRO systems to support military operations.

These developments have brought a substantial increase in NRO collection requirements. But there has been no corresponding increase in NRO funding. As has been explained elsewhere in this Report, the program for providing additional funds to the NRO from the DoD budget through the Defense Space Reconnaissance Program for activities related to military-unique requirements was eliminated in 1994. Without such compensating resources, the shift toward expanded support for military operations has stressed the capacities of NRO systems to satisfy strategic, longer-term intelligence needs.

The Commission believes that ensuring a proper balance between strategic and tactical requirements--in terms both of the use of current NRO systems and of the design of future NRO systems--is a matter of utmost national security importance. Factors that have made this an issue include the growing expectations of the NRO's expanding customer base and the lack of an effective policy structure to clarify the NRO's mission and the allocation of its resources in the face of these competing demands.

There also appears to be no effective mechanism to alert policy-makers to the negative impact on strategic requirements that may result from strict adherence to the current Presidential Decision Directive (PDD-35) assigning top priority to military force protection. That Directive has not been reviewed recently to determine whether it has been properly applied and should remain in effect.

It also is significant that the interagency committees and components that consider requirements for NRO systems were moved out of the DCI's Intelligence Community management structure in the early 1990s. These are now managed by the agencies with functional responsibilities for the management of signals intelligence (SIGINT) and imagery intelligence (IMINT), NSA and NIMA, rather than being directed by officials with a broader view of the needs of the Intelligence Community.

Day-to-day collection requirements for current NRO IMINT systems are managed by NIMA through an interagency process that includes representatives of both the national and military customers. This process allocates tasking of NRO imagery systems according to standing requirements based on predetermined intelligence priorities. It allocates daily tasking of these NRO systems in response to ad hoc requirements, driven by current events, that may warrant a higher collection priority. A similar, but somewhat more complicated, process regarding collection requirements for NRO SIGINT systems is managed by NSA.

Requirements that will affect the design of future NRO IMINT and SIGINT systems must be developed, presented and justified prior to the design of those systems. This is a more technical and detailed process than that for current requirements, and it may take months or years. It also requires a sophisticated assessment by the NRO and others of the cost and feasibility of providing the technology needed to satisfy the various requirements set forth by the customers. The most recent example was the 18-month requirements process for the NRO's Future Imagery Architecture (FIA).

In the FIA requirements process, the DoD customers benefited from a well-established and systematic DoD requirements review process. To aid non-DoD customers in developing and justifying such requirements in the future, a Mission Requirements Board has been created under the Deputy Director of Central Intelligence for Community Management. If this Board functions properly, it should allow strategic customers to compete on a more even footing with the tactical customers.

It is clear to the Commission that, in this area as well, it is up to the President, Secretary of Defense and DCI to ensure that the priority needs of both the strategic and tactical customers of intelligence from NRO systems are satisfied now and in the future. The Commission believes that direct and sustained attention by the Secretary of Defense and the DCI is needed to resolve the current debate in a way that ensures sufficient and proper coverage of both strategic and tactical intelligence requirements by current and future NRO reconnaissance systems.

In any event, the President has assigned the highest current priority to collection of intelligence in support of deployed U.S. military forces. So long as this is the case, the needs of the strategic customers will continue to be given secondary priority whenever the two types of requirements conflict and the NRO systems cannot accommodate both.

Recommendations

Defense Space Reconnaissance Program (DSRP)

Pressures on the National Foreign Intelligence Program to address requirements that are uniquely military in nature are increasing and there is no longer a DoD budget program element to offset the rising cost to the NRO of meeting those requirements.

In the 1970s, the NRO's satellite collection capabilities and products began to be made more broadly available to the military. The expanded use of this data spawned the creation in 1981 of the Defense Support Project Office (DSPO) within the NRO. DoD established the Defense Reconnaissance Support Program (DRSP), under the management of the DSPO, and used it as a mechanism to provide additional funds from DoD to the NRO for systems development and operations that directly contributed to the support of tactical military users. Congress later authorized and appropriated specific funding to the DSPO within the DRSP budget to ensure that military warfighting requirements were addressed in the design and operation of NRO satellites.

The DRSP funds were generally used to meet unique military requirements for NRO satellite reconnaissance systems. These funds, on the order of several hundreds of millions of dollars, paid for additional satellites or military-specific systems. The DRSP budget was managed by the DSPO. The NRO Director also served as the Director of the DSPO, thus ensuring that NRO program offices were responsive to the needs and requirements of both the Intelligence Community and the military departments.

Between 1981 and 1994, the NRO was authorized and appropriated annual funds from both the National Reconnaissance Program (NRP) element of the National Foreign Intelligence Program budget (NFIP) and the DRSP element of the Tactical Intelligence and Related Activities (TIARA) program budget. The NRP was used to pay for Intelligence Community requirements for development, operation and maintenance of NRO satellite reconnaissance systems, as well as NRO innovative technology activities. Supplemental funding for NRO efforts to satisfy military requirements was provided from DoD's DRSP budget.

A 1994 agreement between the Deputy Secretary of Defense and the DCI transferred all of the satellite acquisition and infrastructure funding into the NRP. As a result, DRSP funding was reduced to tens of millions of dollars per year to be spent on helping military customers learn how to use collection and processing systems effectively. The DRSP was renamed the Defense Space Reconnaissance Program (DSRP).

The effect of this 1994 agreement is that NRO efforts to support both Intelligence Community and military requirements are now paid for out of the NRP budget. In 1999, Congress directed the abolition of the DSPO and its functions were transferred to the NRO Deputy Director for Military Support.

As explained earlier, military requirements have continued to grow and contention for NRO satellite resources has increased. The number of extended U.S. military commitments and other U.S. interests around the globe that require continuing support is also stressing the capacity of NRO reconnaissance systems to detect critical indications and warnings of potentially threatening events.

Pressures are increasing, as a result, on the NRP and NFIP to address these requirements--even those uniquely military in nature. Yet there is no longer a DoD budget program element to offset the rising cost of meeting those requirements as there was when the DRSP competed against other DoD budget requirements to provide the needed funds.

Experience since 1994 suggests that adaptations of NRO systems for tactical purposes have met with increasing difficulty competing within the NFIP budget and that NRP spending on tactical needs is seen as a drain on the Intelligence Community and the NFIP. Military influence toward improving the tactical support capabilities of future satellite systems is limited because the Intelligence Community believes that many of the proposed improvements are DoD-unique and should not be paid for by the NFIP.

The Commission believes it is time to reinstitute DSRP funding for NRO programs. Besides easing the budget pressures, this would help sensitize military users to the costs associated with added requirements and reduce the current tendency to view NRO products as a "free" commodity with no value attached and no cost-benefit measurement against competing demands.

The Commission supports the language in the report accompanying the Fiscal Year 2001 DoD Authorization Act that parallels the findings of the Commission. That report states that the DSRP has served an important role in providing direct interactions among the NRO and operational military commanders and other elements of DoD. It also states that the Secretary of Defense needs to evaluate the overall role of the NRO in supporting tactical military forces.

This evaluation is to include a review of, among other things, whether a revitalized DSRP would be the best mechanism for giving the Unified Commands a role in determining future space intelligence and reconnaissance capability requirements and raising the visibility of space reconnaissance matters within the DoD program planning and resource allocation process. The evaluation also is to include the role of a revitalized DSRP in funding NRO system developments to satisfy unique military requirements. The Authorization Report directs the Secretary of Defense to provide the congressional defense and intelligence committees a report by May 1, 2001 on his assessment and recommendations in these regards.

Recommendation

Increased Resource and Budgetary Flexibility

The DCI should have greater latitude to redirect funds among intelligence collection areas and agencies in order to respond most effectively to the specific types of program issues that arise at the NRO.

The provisions of the 1997 Intelligence Authorization Act were intended, among other things, to enhance the authority of the DCI in regard to the annual NFIP budget. Thus, the DCI is required to approve any reprogramming of NFIP funds by any Intelligence Community element.

The DCI was also given authority to transfer funds or personnel within the NFIP budget to meet unforeseen and higher priority intelligence requirements. However, that authority is conditional on the agreement of the "Secretary or head of the department which contains the affected element or elements...." This requirement for agreement could negate the DCI's ability to move personnel and financial resources around the Intelligence Community, including to or from the NRO, to deal with unexpected contingencies and technological or other developments.

In this respect, the Commission notes that Section 105 of the FY 2001 Intelligence Authorization Act has ameliorated this situation somewhat in favor of the DCI. That section provides that only the Secretary or head of an agency has the authority to object to a transfer of funds within the NFIP and that such objections must be in writing. The Act further provides that, within the Department of Defense only, the Deputy Secretary of Defense may be delegated the authority to object for the Secretary and that the Deputy Director of Central Intelligence for Community Management may be delegated the DCI's authority to transfer funds.

Recommendations

NRO Technical Expertise

The Commission believes there is a compelling need for an NRO career path and assignment policy that provides the opportunity for highly trained engineers and acquisition and operations specialists to be assigned to and progress through a broad range of NRO positions.

The NRO's success is directly attributable to the high quality and creativity of the DoD, CIA and contractor workforce that has been dedicated to supporting the NRO. The overwhelming majority of the U.S. Government personnel who work at the NRO are employees of the CIA or DoD who have been assigned to the NRO for some portion of their careers and who have the technical expertise needed for complex NRO programs. A substantial number of these are active duty military personnel.

Until recently, many of these personnel served the majority of their careers with the NRO, transferring among its acquisition, development, launch, and operating elements. Some never returned to their parent organization for any appreciable length of time. This allowed a highly skilled cadre of personnel to advance within the management structure of the NRO, gaining experience at various levels of its technical, financial and acquisition programs along the way. Promising young military and CIA officers were groomed to become the NRO program managers of the future. Long tenure and accomplishment at the NRO were valued by their parent organizations and these personnel were promoted along with, and sometimes ahead of, their peers who followed more traditional career paths within their agency or military service.

With the transition from separate programs to a functionally-based organization, there is no longer a unique career path for many of the personnel assigned to the NRO. For example, in the past when there were independent Air Force, CIA and Navy elements called Programs A, B, C, and D, Air Force personnel in Program A were assigned to the Secretary of the Air Force Office of Special Programs (SAFSP). They were hand-selected for assignment to the NRO and their careers were managed by SAFSP. This Air Force element was directly tied to the strategic mission of the Air Force to monitor the Soviet Union's nuclear forces. As a result, there were clear incentives for the Air Force to contribute to the NRO mission, promote Air Force identity and mentor and care for its people efficiently.

Likewise, Program B, which was staffed by personnel from the CIA's Directorate of Science and Technology (DS&T), had its own unique identity and career path within the DS&T Office of Development & Engineering. Those personnel also were hand-selected for a career within the NRO. They were tied directly to the CIA's strategic intelligence mission and the requirements generated by the DS&T and had very clear objectives and career paths to become managers of the NRO's Program B systems.

New personnel assignment practices adopted by the parent organizations have had the effect of limiting the tenure of personnel assignments to the NRO. Because rotational assignments back to these organizations appear to be a requirement for career advancement beyond a certain grade, there is a resulting concern that the NRO could lose its ability to sustain the cadre of highly-skilled and experienced personnel it needs to guarantee mission success. In some cases, this cadre is prevented from gaining equivalent broad space-related experience during the rotational assignments. While it is understandable that a parent organization may want to exploit the special skills their personnel develop in the NRO, the cost to NRO space reconnaissance programs is likely to be greater than the value of broader experience to these other organizations.

In fact, serving too much time supporting the development and acquisition of our nation's most sensitive and unique space reconnaissance systems is often seen as detrimental to one's career. Also, there are no longer any separate military service elements (Air Force, Navy, and Army) within the NRO to monitor personnel assignments or career progression.

The Commission believes there is a compelling need for an NRO career path and assignment policy that allows highly trained engineers and acquisition and operations specialists to be assigned to and progress through a broad range of NRO positions. In this respect, the Commission notes that Section 404 of the FY 2001 Intelligence Authorization Act enables the DCI to detail CIA personnel to the NRO indefinitely on a reimbursable basis and to hire personnel for purposes of detailing them to the NRO.

The Commission recognizes that there may be assignment possibilities within other U.S. Government space or technical programs that could contribute to the professional development of these personnel. However, the technical complexity of NRO systems is unique, and mission success requires the continuity of a dedicated cadre of personnel skilled in the development, acquisition and operation of those systems.

Recommendation

Increased Launch Program Risks

There appears to be no national strategy or effective and engaged National Security Council-level mechanism to provide the guidance and oversight needed to ensure a robust national space reconnaissance architecture. This has led to a situation in which failures in existing or new spacecraft and launch vehicles could result in significant gaps in the intelligence coverage that is available from NRO systems.

The Commission believes the current status of the NRO satellite and launch program dramatically highlights the need for active participation and leadership by the Secretary of Defense and DCI in managing the nation's space reconnaissance program. Because the NRO is managed jointly by the Secretary of Defense and DCI, it is essential that its operating responsibilities be clear and allow for sufficient review of program decisions by other affected agencies. Such reviews are consistent with the responsibilities of the Secretary of Defense and DCI to assure global access through space reconnaissance. Without such senior involvement, there is a real risk that NRO program decisions will be made without a full appreciation of their consequences for overall national security.

The Commission is alarmed that one particular potential vulnerability in the NRO's programs has arisen that might have been avoided with proper foresight, leadership and review at the national decision-making level. The NRO is now on a path that leads toward a future period of unprecedented risks inherent in concurrent satellite and launch vehicle development and transition. It is developing new spacecraft that will be launched by new launch vehicles. Today, the fragility of the satellite and launch architectures offers no margins for error.

Historically, spacecraft and launch vehicle development programs have failed to meet their original estimated delivery dates. In addition, the initial spacecraft and launch vehicles that emerge from new development programs have often experienced failures because of design flaws that were not discovered prior to their first flights. In the past, such delays and failures could usually be mitigated because the NRO either had robust satellite capabilities in orbit, or had satellites or launch vehicles in production that could be accelerated to fill any gaps.

Today, however, sufficient NRO contingency capability does not exist and has not been budgeted. The number of current launch vehicles that remain available to the NRO until the U.S. Government-sponsored Evolved Expendable Launch Vehicle (EELV) program is completed is strictly limited to those necessary for planned NRO launches. In addition, the NRO has adopted more optimistic assumptions for the operational lifetimes for its current satellite systems than it has in the past.

The NRO believed that a significant number of commercial and other U.S. Government launches would demonstrate the reliability of EELV launch vehicles long before the NRO would be required to launch its newly developed satellites on them. This has not happened and current launch projections indicate NRO satellites are scheduled to fly on very early EELV launch vehicles.

In addition, the EELV and some NRO satellites under development are now using an acquisition reform management approach that may cut costs, but has proven to be controversial since it involves less participation by skilled U.S. Government and contract personnel in overseeing the work of satellite and launch vehicle manufacturers. NASA has acknowledged that some of its recent satellite problems directly correlate with programs involving less Government participation and use of acquisition reform techniques. The application of these new acquisition reform techniques and commercial practices to the EELV, and to some NRO programs, may add additional risks and uncertainty relative to technical, schedule and cost success.

The Commission is vitally concerned about the implications of this unprecedented period of concurrent satellite and launch vehicle development and transition that could have major impacts on the U.S. space reconnaissance program. The decisions that have brought about this situation have been based upon resource constraints and NRO assessments. The decisions have not been adequately reviewed at the highest levels of the U.S. Government to assess their overall implication for the national security posture.

The Commission notes the painful lesson of the 1980s that grew out of the decision to launch all NRO satellites from the Space Shuttle. Following the Challenger disaster and the suspension of Space Shuttle flights, the NRO was forced to reconfigure its satellites for other launch vehicles. This cost billions of dollars and placed U.S. national security at risk during the period when replacement satellites could not have been launched if circumstances had so required.

There appears to be no national strategy or effective and engaged National Security Council-level mechanism to provide the guidance and oversight needed to ensure a robust national space reconnaissance architecture. This has led to a situation in which failures in existing or new spacecraft and launch vehicles could result in significant gaps in the intelligence coverage that is available from NRO systems.

Recommendations

Commercial Satellite Imagery

The U.S. Government could satisfy a substantial portion of its national security-related imagery requirements by purchasing services from the U.S. commercial imagery industry.

Background. The NRO's future could be affected significantly by the degree to which it is able to exploit the ongoing development of a competitive commercial space imagery industry. That industry is in an embryonic stage in the United States and abroad, but the technology available to it is already mature. According to a recent classified U.S. Government study, the U.S. Government could satisfy a substantial portion of its national security-related imagery requirements by purchasing services from the U.S. commercial imagery industry.

The National Space Policy promulgated by Presidential Decision Directive-49 in September 1996 includes Commercial Space Guidelines to promote the development of a competitive U.S. commercial space imagery industry. The stated goal of the Policy is to enhance U.S. commercial space activities while at the same time protecting U.S. national security and foreign policy interests.

The Policy further directs U.S. Government agencies to purchase "commercially available" space goods and services to the fullest extent "feasible" and not to conduct activities with commercial applications that deter commercial space activities, except for reasons of national security or public safety.

One-meter pan-sharpened color image of the U.S. Capitol, collected by Space Imaging's Iknoos satellite. This image demonstrates current, first-generation commercial space imagery capability.

The 1996 Space Policy also explains that the U.S. Government will not provide direct federal subsidies to the commercial space industry. It should, however, facilitate "stable and predictable" U.S. commercial sector access to appropriate Government space-related hardware, facilities and data to stimulate private sector investment in and operation of space assets.

Over the last several years, NRO and NIMA officials have considered the means by which the commercial imagery industry could complement U.S. Government collection, analysis and dissemination capabilities to support Government needs. Substantial Government purchases of commercial imagery were promised. As a result, there were high expectations in the private sector.

However, such purchases have been relatively insignificant. Questions have been raised about the effectiveness of the Government's plan for buying imagery products and services. Criticism has been directed at the process for transferring Government technologies that will be needed if the U.S. commercial imagery industry is to be successful. How these issues are resolved will have a great impact on the long-term viability of the industry and its ability to generate products and services of use to the U.S. Government.

Government Acquisition of Commercial Imagery. Over time, the Government has clearly tended toward greater dependence on private sector sources for many of its needs. This has included an extraordinary range of technologies, components, subsystems, and services, as well as integrated systems ranging from microelectronics to space launch vehicles.

A decision to rely on commercial imagery to supply some portion of U.S. Government imagery needs necessarily raises questions about whether the private sector can be relied on to provide services of sufficient quality and timeliness. Further questions relate to how best to structure Government procurement of commercial imagery.

Of no less importance is the question of whether domestic or international sale of high-resolution images will adversely affect the interests of the U.S. Government. These interests include ensuring the security of U.S. and allied military deployments and operations and preventing U.S. adversaries from acquiring information that will aid them in conducting denial and deception operations.

The U.S. commercial imagery industry has made substantial investments in current first-generation space imaging systems and it proposes to make even larger investments in planned second-generation systems. It is also making additional investments to improve the quality, accuracy and timeliness of these systems. Many of these improvements respond to earlier U.S. Government assessments that were skeptical of the utility of commercial imaging systems to the Government.

The commercial imaging industry has received mixed signals from the U.S. Government. While the NRO and NIMA have publicly expressed support for the commercial imaging industry, only minimal Commercial Imagery Program funding has been made available to the industry and future funding has not been added.

The lack of U.S. Government commitment to acquire commercial imagery is further demonstrated by managerial problems that have emerged in NIMA's Commercial Imagery Program. There is no continuity in the Program and the program manager has been changed frequently.

The Commission supports Government purchases of one meter and one-half meter resolution commercial imagery, which can meet a large percentage of U.S. Government imagery requirements. Because of the lack of demonstrated commitment, the Commission believes there is a need for an overall assessment--independent of the NRO--of the utility of commercial technologies to supplement traditional NRO missions.

Assuming that imagery of the required resolution and timeliness is available from both the NRO and the commercial imagery industry, under present procedures NIMA will have a natural preference for NRO imagery over commercial imagery. NIMA does not have to purchase NRO imagery; it is "free."

To deal with similar tendencies in determining whether to use military or commercial airlift capabilities, DoD has created an industrially funded account. The manager of this account determines for the customer whether military or civilian airlift best meets the customer's needs within the budget resources available. Thus, the use of a C-17 aircraft for a routine peacetime cargo flight to a modern European airport is unlikely since a commercial aircraft could perform the same task far more cheaply. The military aircraft would be chosen when circumstances (e.g., unprepared runways) justify doing so.

With regard to U.S. Government imagery requirements, a number of critical national security interests can only be met by Government systems. However, a large number of targets can be covered by commercial capabilities. Through an approach to imagery analogous to DoD's military/civilian airlift practice, Government systems would be focused on targets where their unique capabilities in resolution and revisit times are important, while commercial systems would be used to provide processed "commodity" images.

In the long term, such a division of labor between the public and private sectors will allow the commercial sector to develop without a U.S. Government subsidy. A predictable market will be created, and private sector investors will be able to establish an infrastructure to meet predictable U.S. Government needs. Current Government acquisition practices for commercial imagery have helped create an unpredictable market. This substantially increases the risk to investors and diminishes the ability of the commercial imagery sector to meet U.S. Government needs.

Government Licensing of Commercial Imagery Systems. In March 1994, President Clinton signed Presidential Decision Directive (PDD)-23 establishing a policy permitting U.S. firms to obtain licenses to market imagery products and systems commercially. Its stated goal was to enhance U.S. competitiveness in space imagery capabilities, while protecting U.S. national security and foreign policy interests.

Delays in the U.S. Government licensing approval process, along with several recent failures in commercial satellite ventures and the mixed signals on purchases by the U.S. Government described earlier, are causing investors to reevaluate their financial support for the U.S. space imagery industry. This financial environment, coupled with the decline in the scale and pace of U.S. Government satellite programs, is weakening the portion of the U.S. industrial base that provides the foundation for the NRO's space programs. The skilled workforce on which both the NRO and the commercial imagery industry rely has been eroding, while research and development investment that leads to the technological change necessary for the United States to maintain its global dominance in space has been falling.

In some cases, particularly those involving "first time" applications for licensing of newer technologies, U.S. commercial imagery firms report having faced delays of more than 30 months in getting responses to licensing applications. This is far longer than even the processing time now needed for an export license for defense products.

Planning, building and placing a commercial satellite in orbit requires approximately three to five years to meet required launch and replenishment schedules. In the private sector, strict adherence to these schedules is essential to persuade customers and investors that services will be provided as advertised and that earnings projections will be met. Obviously, a wait of three years for the needed license approvals is not consistent with a commercial space imagery initiative on a five-year development schedule.

The way in which U.S. policy on licensing of commercial imagery initiatives is being implemented is likely to have an adverse effect on the long-term security, commercial and industrial interests of the United States. The present impediments to acquisition and development of commercial imagery will diminish the industrial base available to support U.S. Government space-based imagery needs.

Meanwhile, foreign competitors in the commercial imagery industry enjoy relative freedom from U.S. export and licensing controls. These foreign firms could dominate the global remote sensing market in the 2005 timeframe if their U.S. counterparts are stymied by an ineffective national strategy and a U.S. Government bureaucracy that cannot keep pace with the global marketplace. The United States is in danger of losing an opportunity to develop this market, while stimulating foreign investment in it.

U.S. Defense and Intelligence Community officials are justly concerned that such high-resolution imagery could give adversaries of the United States the ability to monitor U.S. intentions and capabilities, particularly during future crises involving tactical military operations. While this risk certainly exists, current law allows the United States to exercise "shutter control" over U.S. commercial space imagery vendors and systems where necessary for national security or foreign policy reasons. This authority alleviates the risk to some extent.

More significantly, however, impeding the access of U.S. industry to this market is more likely to increase, rather than diminish, this risk by creating incentives for investors to create a capability outside the United States. Several countries are likely to possess high-resolution imagery satellites by 2005. As a result, whether or not U.S. companies are granted licenses to proceed with such systems, it appears that high-resolution imagery eventually will be available on the open market to anyone who can afford the price.

Report of the National Imagery and Mapping Agency Commission. As the Commission was in the final stages of preparing this Report, the Commission to Review the National Imagery and Mapping Agency (NIMA) made its report available. The Commission is pleased to note that the findings and recommendations of both reports are in close agreement in the area of commercial imagery. The Commission also joins the NIMA Commission in applauding the National Security Council's recent decision to approve two license applications for a one-half meter resolution commercial imagery satellite.

Recommendations

NRO Airborne Reconnaissance Responsibilities

Too often, space reconnaissance and strategic airborne reconnaissance are viewed as mutually exclusive capabilities.

Strategic airborne reconnaissance requires serious attention. The earliest NRO reconnaissance successes included strategic airborne, as well as space, platforms. Examples include the U-2 and SR-71 aircraft. Although the NRO still has responsibility for such systems according to a 1964 DoD Directive still in effect, the Commission is unaware that any strategic airborne reconnaissance systems are being considered for further development by the NRO.

Too often, space reconnaissance and strategic airborne reconnaissance are viewed as mutually exclusive capabilities. In fact, they are quite complementary and contribute unique support to a tiered concept of intelligence collection.

Space-based reconnaissance can monitor the entire globe in an unobtrusive, non-threatening way. However, satellites cannot supply long-term, uninterrupted, focused, multi-intelligence coverage of a limited area of interest. Airborne reconnaissance can supply excellent coverage of limited areas, but can be threatened by hostile action and affected by over-flight restrictions.

Aircraft payloads can be changed for specific missions and updated as technology improves. Satellite payloads are fixed in design early and flown for the life of the vehicle with limited ability to update functions. If a tiered collection management scheme were used to combine satellite "tip off" and "deep look" capabilities with aircraft flexibility and dwell capabilities, national strategic and tactical requirements would be well served.

In the early 1990's, the Defense Airborne Reconnaissance Office (DARO) was established. This was intended in part to provide a comprehensive approach to all strategic and tactical airborne reconnaissance platforms. When DARO was abolished, responsibilities for the development of airborne reconnaissance systems passed to the military services. The Intelligence Community therefore has to depend on the military services for intelligence from airborne platforms.

Very high altitude, long range airborne reconnaissance systems provide strategic value and accessibility. These systems merit continued examination by the NRO in light of the features they share in common with space systems.

To achieve and maintain a proper balance between space-based and airborne reconnaissance, the Commission believes the NRO needs to restore its interest in airborne platforms and participate in engineering studies to select the proper platform for the required mission.

Recommendation