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Chapter XIV - NEW FINANCIAL AND SCHEDULE PROBLEMS 1967-1968<br />
145<br />
system could not in any case reduce<br />
schedule slip since other elements<br />
would be out of balance. 8<br />
After reading this pessimistic report, Flax wrote to<br />
Stewart: “There must be some schedule slip at which<br />
it is cheaper to stop some efforts, but we are informed<br />
that this is impossible because it would preclude ‘orderly’<br />
development of everything.” 9 After the two men discussed<br />
the situation, General Stewart sent a message to the<br />
<strong>MOL</strong> Systems Office advising that a meeting would be<br />
held in Washington on 11 May “to attempt to reach some<br />
understanding and agreement” on the program schedule<br />
and the ‘’near-term contractual actions to be taken.” The<br />
Systems Office would have to justify its unequivocal<br />
assertion that “all possibilities have been examined<br />
and nothing further can be gained” toward retaining the<br />
objective of a first all-up manned flight by the end of<br />
calendar year 1970. Stewart said that Dr. Flax desired<br />
the Systems Office’s views on “the maximum reasonable<br />
curtailment of Martin and McDonnell work in FY 1968,<br />
short of termination, which would permit the continuance<br />
of minimum essential engineering interfaces and the<br />
maintenance of the minimum essential supervisory and<br />
technical teams for each.” 10<br />
Further, he stated that while he and Dr. Flax appreciated<br />
the Systems Office’s desire to have an “orderly<br />
development of the total system” and a balanced funding<br />
approach, the program “is now in a financial/schedule<br />
constraint not of our making and is in for more jeopardy<br />
than I seem to have impressed on you.” If there was<br />
any feasible way in fiscal year 1968 to work toward<br />
a first manned launch by the end of 1970, he said, “it<br />
must be identified and pursued, recognizing its possible<br />
effect on ‘orderly development of the total system.’” For<br />
their information, Stewart provided them the latest OSD<br />
planning NOA figure for fiscal year 1969—$661 million. 11<br />
This message apparently finally convinced both the<br />
contractors and the <strong>MOL</strong> Systems Office that $480<br />
million was all that would be made available in fiscal<br />
year 1968. At the 11 May 1967 management meeting,<br />
they agreed they could live with it. However, $480 million<br />
was still $50 million shy of the amount the President<br />
requested from Congress. Dr. Flax indicated that at least<br />
a portion of the sum ($10 million) would be obtained<br />
from Air Force internal reprogramming action and the<br />
balance sought from the congressional appropriations<br />
committees. Concerning the two alternative schedule<br />
slips—12 or 15 months—Brown, Flax, and Stewart the<br />
next day—12 May— decided to proceed with a “compact<br />
12” schedule, pointing toward the first all-up manned<br />
flight in December 1970 and working against fiscal year<br />
1968 and 1969 “Bogeys’’ of $480 and $661 million. The<br />
three officials agreed that the Phase II contracts and<br />
appropriate supplements should be signed as soon as<br />
possible to put the program on a sound basis. Instructions<br />
to this effect went out to the <strong>MOL</strong> Systems Office the<br />
same day. 12 On 22 May—after all the contracts had been<br />
signed—the Department of Defense announced to the<br />
public a total award of $855,072,744 to the McDonnell-<br />
Douglas Corporation for <strong>MOL</strong> engineering development<br />
work ‡‡ . The Douglas contract was for $674,703,744 and<br />
covered work on the manned laboratory vehicle; the<br />
$180,469,000 award to McDonnell covered preliminary<br />
design, development, and production of the Gemini<br />
B. On 29 May the contract award of $110,020,000 to<br />
General Electric for <strong>MOL</strong> experiment integration work<br />
also was announced.<br />
Even as this important milestone was reached, OSD<br />
and Air Force officials became increasingly concerned<br />
over the effects of the war in Southeast Asia on the DoD<br />
budget. At a meeting of the <strong>MOL</strong> Policy Committee on 1<br />
June 1967, Secretary Brown mentioned the possibility<br />
the Air Force would face severe cuts in its research and<br />
development funds. General Stewart interjected that,<br />
based on comments made to him during his recent<br />
<strong>MOL</strong> briefing to the chairman and staff of the House<br />
Appropriations Committee, he did not think Congress<br />
would reduce the <strong>MOL</strong> budget request. However, in<br />
reviewing for the Policy Committee the status of the<br />
program, he noted that overall program costs had risen<br />
to $2.35 billion. 13<br />
McNamara Visits Eastman Kodak<br />
During the summer of 1967 <strong>MOL</strong> officials began planning<br />
a proposed visit by McNamara to Eastman Kodak. An<br />
orientation and briefing on sensor development and the<br />
overall program was scheduled. To insure there would<br />
be no press coverage of his visit to Rochester, <strong>MOL</strong>,<br />
and other security personnel made extensive advanced<br />
preparations. One” cover” action was release of a short<br />
news item to the press stating that the Secretary of<br />
Defense would be inspecting various military installations<br />
over several weeks. The actual flight to Rochester was<br />
to ‘be made under tight security wraps.<br />
Also, to help make a case for continuation of the<br />
program, Colonel Battle and <strong>MOL</strong> Program Office<br />
personnel prepared a two volume report, titled “High<br />
Resolution Photography,” to be provided the defense<br />
chief. The report analyzed the results of all G-series<br />
of unmanned reconnaissance satellite flights and the<br />
expected <strong>MOL</strong> product. The best photos from the KH-7<br />
‡‡ During 1966 Douglas Aircraft ran into financial difficulties. McDonnell<br />
offered to merge with it and the corporate marriage was formally consummated<br />
late in the year.