By THOMAS V. JONES Cost overruns are having a major impact on national defense.

During the last 10 years, excessive costs have wiped out as much as 30% of the aircraft, ships, tanks and other major weapons that the Department of Defense had planned to acquire.

An analysis of Defense Department reports shows, for example, that seven key aircraft programs, which were originally planned to provide 3,200 aircraft, will actually deliver only 2,200 aircraft. These Department of Defense reports to Congress indicate that, even after adjusting for infla tion, the United States taxpayers will pay 25% more than originally planned and get 1,000 fewer aircraft in the armed forces.

The conditions and the means exist that will permit us to correct this situation, but it will require bold action and, more impor tantly, self-discipline from both government and industry.

The conditions in which we plan and provide for defense today are a far cry from the cyclical "boom or bust" pattern that characterized defense preparation for most of the nation's history. Unconstrained budgets in time of danger and virtually no budget in peacetime has given way to a general understanding that for the foreseeable future a substantial amount of our resources must be dedicated to defense.

This understanding gives the defense industry a basis for long-range planning and a reasonably stable and predictable budget -in short, a reliable market environment. Erratic Budget Traditions

Yet the defense procurement process in many respects is still based on the erratic budget traditions of the past. Only when defense companies are required to assume the kind of management responsibility demanded elsewhere in the private sector will our national security benefit from the advantages of the market system.

Government, for example, must evaluate defense companies the way companies in any other sector of our economy are evaluated on the basis of the quality of their products, their performance record, their ability and willingness to make binding financial commitments. Large prime contractors place these demands on their subcontractors, but the government doesn't always impose the same demands on prime manufacturers. It is this lack of dis cipline that leads to the expediency of gov ernment loan guarantees or, worse, increasing contract prices to cover cost overruns.

The most serious flaw that has developed in the relationship between government and the defense industry is an insufficient respect for the binding nature of the contract. The sanctity of the contract between the government and the manufacturer must be understood and believed in

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manded elsewhere in the private sector will our na tional security benefit from the advantages of the mar

ket system.

on a fixed price basis. The Defense Depart ment and the defense industry must explore new concepts and technologies and contracts should be written to provide adequate freedom for such creativity.

What it does mean is that decisions to buy quantities of aircraft, ships or other major items of military hardware for deployment with our armed forces should be made only when the government has defined the product it expects to get and has in hand firm and binding contracts with companies that are prepared to stand be hind them. If neither industry nor government is willing to undertake such obligations, it should be considered clear evidence that not enough is known to buy a weapon system in quantity.

What is needed is enforced discipline in the procurement and budgetary process and in implementation. The Defense Department must present the Congress with realistic requirements and reliable cost projections based upon firm commitments by the industry. This is the way to insure that there will be a complete meeting of minds among these three essential groups on the characteristics, quantities, schedule and cost of the systems being counted on by our armed forces. Once the Department of Defense, the Congress and the industry are in agreement and are committed, every effort must be made to adhere to the basic plan and abide by the contractual commitments that have been made. Any changes along the way should be made only after the cost and other impacts of

such changes are fully understood and new commitments are accepted by all parties.

It will not be easy to alter the present attitude toward contracts. It is in the nature of institutions to avoid commitment. Bureaucrats tend to want to retain direction of a project by keeping its requirements incompletely defined and subject to change, and many companies prefer to go along with them since loose arrangements present less business risk than a well-defined commitment. Only strong and uncompromising direction from the top will change this situation.

One of the first steps to take in placing more responsibility on the industry should be for the government to withdraw from its role as landlord of much of the plant and equipment used by a number of companies in the defense industry. Some of these facilities were designed for one product and are being used for another simply because they exist and are provided by the govern ment. With programs awarded solely on technical quality, schedule and price, inef ficient plant and equipment in the industry would quickly be eliminated or replaced by the companies themselves. Private Sector Productivity

With stability and the opportunity for long-term planning, there is no longer any reason why well-managed defense compa

nies cannot undertake investments in the

high-productivity plant and equipment needed to meet military requirements ef fectively and efficiently. Productive capacity is an important resource of the private sector; it should be financed by the private sector, not provided by the government at taxpayer expense.

When such steps have been taken, it will become clear that the government means what it says, and a profound change will take place in the attitude and business character of the defense industry. Boards of directors will become vitally concerned with such matters as technical risk and the resulting effect on product performance, schedule and cost commitments. Decisions on modernizing plant and equipment will be driven by the need to compete in terms of productivity, combined with the financial and legal obligation to deliver under the terms of the contract. Decisions to bid on long production runs will be understood to entail binding commitments in which the future of the corporation is at stake. The contract will carry genuine force as an instrument of faith between the parties to it.

The result will be to eliminate the waste created by past practices, to produce a stronger, more efficient defense industry, and thus to increase the effectiveness of our armed forces.

Mr. Jones is chairman and chief er ecutive of Northrop Corp.