MEETING ON COST OVERRUN INCURRED BY GENERAL ELECTRIC, PROJECT CORONA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP63-00313A000600120032-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: July 29, 2002
• Sequence Number: 32
• Publication Date: March 4, 1959
• Content Type: MF

mumoggimums
Approved For Release 2002/ A-RDP63-00313A000600120032-8
NRO REVIEW COMPLETED
COR-0364
capy.lor 5
4 March 1959
!MORAN= FOR Deputy Director (Plans)
Meeting on Cost Overrun incurred by
General Electric, Project COMMA
1. The undersigned attended a meeting in Philadelphia on
2 - 3 Miszel2 1959, between Lockheed Missile Systems Division and
its subcontractor, General Electric, for the pureose of discus-
sing and analysing a reported cost overran on
Project CORONA.
2. The subcontractor's actual and projfetedcoaie were
examined in detail and considerable discussion was held regerdm
ing certain aspects of the Program. The resulting conclusions
of the undersigned represent thy the overran: occurred, the action
being implemented by the subcontractor and the prime to prevent
further Lacrosse sad the approximate share of this overrun which
must be funded by the Project.
(a) COMM of the Overrun - It appeared that G.S. had
more than its Mare of trial and error approaches to preblems
which needed to be solved. Difficulties in developing rockets
and rocket propellants were encountered in several areas because
of the stringent limitations of weight mists* imposed upon
their design. Binh developammtwas an advance in the "state of
the art" and there were a good many *busts". The Ablation Shield
of the Mose Cone has created costly problems. In this particular
instance the shield must, be a structural part of the cone and this
has never been done before. A rejection rate of 2 to 1 le being
encountered. Considerable Changes have been made in the Dia-
Medical portion of the Progrsm Whieh has resulted in increased
costs. And last, but perhaps most impartant, it is believed that
the subcontractor was overly optiaistic in its original cost
quotations and did not appreciate the difficult prOblems involved.
(b) Action being taken to prevent further occurrences -
The subcontractor has established a Project Control System by:
(1) Retablishing ceilings on materials and manpower
by operation.
(2) Istablishing heads of individual. operation (I-4-,
Vehicle, Recover)', BlooMedical? GSE and Systeme,
etc.) eho are directly responsible to the Project
Director and the General Menager.
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(3)
Conducting weekly meetings, the various
Reads at erations, Project Director and
General Manager to review status at program
and take ligation where required to stay within
/Wowed ceilings or reduce costs.
Advise Prime Ccetzactor (LEAD) lasediately of
any, problems which arise width Imo, affect the
costs or deliveries older the Program.
Approximate share of the overrun tot* absorbed
The following is a recap of the total Prows=
were prepared on the basis that Air
Yo Program) would absorb all prime equipment costs
peculiar to the Bio.4ed Proems, all Bio-Ked costs, Mark I -
Rocket costs and Basic Ground Support Bquipment. The Agency
(Bleck Program) would assume all prime equipmeat costs peculiar
to its program* all common development costs, all other rocket
costs and Ground Support Equipment peculiar to the Black Pracrma.
Oa this basis, approximately
is allocable to the Black
- 2 -
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Sshibfts A, and. B attached are subcontractors' ertinates and
breakdown by Prograa. However, WOO) has not gives an indica-
tion as to whether or not they will expect a cost buildup of
their C aed A expense before they present it to us for funding.
If this is requested and approved the total overrun could be
increased bylI the ISMD representative vas
queried on th.V17ft-ZZEP-berlial. he wished to discuss it with
his management prior to committing himself. It is anticipated
that an answer will be received on 6 March when he visits
Project Headquarters.
3. om the basis of the foregoing and detailed information
furnished to the undersigned which maybe reviewed by you if so
desired, it is the minim of the undersigned that both Con*
tractors are taking serious action to prevent a further overrun.
The subcontractor stated unequivocably that, in his opinion, the
present overrun would be the maxisaus and there was a possibility
of some reduction in their estimste.
ribution:
Otis - Mt. Bissell
2 - Chief, R&D, EFD
3 - Contracts, DPD
4 - Finance, DPD
. Chrome, COR
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uontracs negotiator
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