TASK ORDER NO. 1 CONTRACT NO. (SANITIZED)

• Document Type: CREST
• Collection: NGA Records (Formerly NIMA)
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78B04747A000100070009-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 28, 2016
• Document Release Date: September 7, 2007
• Sequence Number: 9
• Publication Date: May 29, 1962
• Content Type: LETTER

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Declass Review,
29 May 1962
Please Reference:
Central intelligence ncy
2430 E Street, N N. W W.
Washir ton 25, D. C.
Attention:
Subject:
References:
Contracting Officer
Task Order No. 1
a ea t1eu* lens
has cone
Pursuant to the requirements of the subject ContMCt, the Contractor
pleted an analysis of pedorvlasnaae under Task Ordet No. I and computad esti-
mates to complete. This analysis indicates that completion of performance,
.xo1usive of fixed fee, will require funds in addition to those presently co3n-
nu tted under this Task Order. Several factors have contributed to this t0quim'
meent for additional additional funding Of prime significance to the application of a
germael and administraiiv+s ate which has a eedad the a etad rtae
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Central Intelligence Agency 2
included in the referenced -posals by the Contractor. Similarly, anticipated
memorable Manufacturing and Engineering overhead rates have exooeded the
bid rates. The combination of theme factors amounts to approximately
which represents the major portion of We request for additional
funding. The percentage rates which we anticipate recovering are explicitly
defined in Enclosure 1. ?
In addition, the following factors contribute to this requirement for additional
funding s
A. our estimates indicate manufacturing direct labor dollars will
exceed the original bids by approximately
additional expenditures were required as a result of mechanical
problems encountered in the scanner and rotating mirror
modulated light source as well as redesign and modification
which were necessary. In addition, during the performance of
this program it became apparent that the precision and tolerances
required to fabricate portions of the image enhancement equipment
dictated the use of Manufacturing Department facilities and caps-
bilities in lieu of the use exclusively of model shop personnel and
techniques as we had originally planned. This change in the
philosophy of performance contributed to the necessity for addi-
tional Manufacturing direct labor dollars.
25X1
Direct material costs are estimated to exceed the original bids
by approximately This additional expenditure was
required for the replacement
ed in
of the equipment which are discussof the
mechanical c hani erttael Portions
the sous paragraph.
25X1
The net effect of the above factors has resulted in a requirement for an addi-
tional A Cost Analysis of actual costs Incurred during the Con-
tractor's fiscal years 1960, 1961, and through 1 Apr 1962, as they relate to
the estimates utilized as a basis for contracting and a rooonci istion by cost
element, Is forwarded he with. as Enclosure 1 for your review.
The above dollar amount is determined, in part, by the application of over-
hood and general and administrative rates based upon costs recorded in our
books of account. The percentage rates reflected for our :fiscal year 1960
are those which have been negotiated and determined by final audit with the
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Central Intelligence Agency
3
25X1
29 May 1962
cognisant auditor for the Department of Defense and have been applied in
settlement of all L)epartment of Defense contracts for p with g of
that Period ? The contractor is presently participating
Defense auditors in the negotiation and determination of final overhead and
general and administrative rates
reimbursement type contracts with theral
for reimbursement of all cost ra Depart-
ment of Defense for that period. The Percentage rates which are reflected
in Enclosure I for our fiscal years 1961 and 1962, represent the Contractor's
estimate of anticipated recoverable indirect costs based upon our records
and books of account.
The delivery schedule as defined in Supplement No. 3 to the subject Task
Order remains unchanged. (i.e., Completion date for the performance of
work under this Task Order is 15 August 1962.)
It, is requested that an appropriate contractual amendment be issued against
ide for en adjusted
Task Order No. 1 to the subject Contract to Prov
fiy
th
i
e
n
no change
estimated cost of
regate total cost plus fixed fee of
an a
i
gg
n
resulting
event additional information may be required, please contact
director of contracts, at
Very truly yours,
25X1
25X1
GEirib
Enclosure I - Cost Analysis
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30 April 1962
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