DEAR MR(Sanitized)

• Document Type: CREST
• Collection: NGA Records (Formerly NIMA)
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78B04747A001600020115-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 28, 2016
• Document Release Date: February 25, 2003
• Sequence Number: 115
• Publication Date: May 8, 1963
• Content Type: LETTER

nT A Tr,-r" M Approved For Release 2003/04/17 : CIA-RDP78B0474,7A001600020115-6
8 May 1963
STATOTHR
Declass Review, NIMA/DoD
Washingt tfA OCtH R
Main P. x
a High Speed Precision Coordinatograph.
STATOTHR
In accordance with your, request to our Mr. I 1w we are pleased to
bmit the following information which supplements our proposal of 24 January 1963
Dear Mrs
thoroughly reviewed our earlier cost estimates for this
STAT
ry of the estimated costs Is as follows:
A. Direct labor
Burden [~f Item 1)
Direct Material
4. Other direct costs
5. Selling expense
Total direct cost and burden
that the estimates are still current in total, though there are a
few specific changes In the breakdown. As you requested we have added In our
estimates shipping costs Involved In changing the F. 0.B. point to Washington, D. C.
In addition, we found we Inadvertently omitted selling expenses from our previous
estimates, and since our earlier proposal we hove received a contract for similar
equipment which will allow us to make some minor savings In both labor and material
on the protect. A complete breakdown of our present cost estimate is attached. A
STAT
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G&AIIofItem 6)
Total estimated cost
Fixed fee
As we have previously indicated, we strongly recommend a CPFF type
contract for this program and our detailed cost-estimate breakdown and the above
mmary is base u this type of contract. There are two important factors which
port this recommerdation in the present program.
First, in the design of apiece of equipment of this type, considerable
latitude exists for trading one characteristic for another, for example, accuracy vs.
sue, flexibility vs. operating simplicity, etc. We have already done some of this
e-off in discussions with your technical personnel and Our discussions have
Sher study may very well lead to further optimization of design
While we do not expect such changes to affect the cost of the equip-
we strongly believe that such trade-off decisions should be made in
to understand the over-
freeze a set of specific
least about the benefits
pie to fit your problems and objectives as we both come
eblem: better. Otherwise we will be breed at this point t
when we know toast about your applications and you know
ad .penalties of individual specification items.
Second, we must necessarily assume a more conservative attitude in o
sect management under a fixed-price contract. Under a flexible price contract, it is
often desirable to by-pass some experimental breadboard experimentation end leap
one step fro
rent that the
breadboard we
nos in toy-passing expensive and time-consuming
he ever present risk of serious error and consequent Increa
costs. Our CPFF estimate is based upon our best estimate of the net results to be
obtained by a judicious amount of such corner-cutting, some of which will be success-
me of which
in examin
~y after adequate consultation with the project sponsor and full agree-
t design to final hardware, The decision to do so in any particular
ram in terms of risks which are reasonably related to
must plan for a heavy increase in
STATOTHR
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breadboard work to minimize the probability of expensive changes in final h
Thus, the probable cost of the program is increased, though the range of probable
costs is materially reduced (the possible minimum cost Is increased while the possible
oximum cast Is decreased).
ht of the above, our faxed-price post estimate differs from
estimate d
CPFF
t ireect I;gbor - The most difficult design task In this project is In the area of
servomechanism design. Extensive breadboarding of servo designs will be
required to assure that contract performance specifications are met. Further-
more, some additional labor In the areas of mechanical design and system
dreg must be planned. Altogether, these factors result in an Increase of our
no
2100 man hours, technician labor from 900 men
to 1050 moo hours, and machinist's labor from 350 man hours to 400
a - Our estimates for material would also
price mater
1.
2. Burden I of Item
4.
Direct material
Other direct costs
Selling expense
xed price of
be increased to cover broad,
would be utilized
Thus, our feed-
6. Total direct cast and burden
7. G A (10% of item 6)
Total estimated cost
9. Profit
10. Price
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In, the. major portion of this lncr
uld amount to approximately
STAT
ing STAT
ate of engineering staff labor from 3220 man hours to 4000 man hours,
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"or either of the above programs we ore including our standard manua
drawings, list of recommended spare parts, personnel training, and installation as
follows:
supply six copies of our operating and maintenan
manual containing full operating instructions, discussion of the theory of operation,,
description of actual circuits, illustrative diagrams, recommend d maintenance
procedures, etc.
11 supply two sets of prints of working drawings used
to construct the plotter system. These will include mechanical layouts and dotal
sufficient for operation and maintenance of the equipment, and complete al
tics, wiring diagrams, and block diagrams.
f
mended for a
d supp,
mended Spare Parts
e data ,
ch
aintenonce of the system. This
rally expected to be consumed In operation of the equip-
permit procurement and such special parts as circuit
ally consumed but which greatly facilitate rapid trouble
Personnel Training - We will provide training programs for both operating
matoly one
be arranged at your convenience either at
,ystem cheep-cut or-at dual
installation
noel. This program may STATOTHR
all necessary technic
personnel to supervise the installation of the equipment at the customer'
All necessary iro.tallation instructions and power requirements needed to
proper space, services facilities, and personnel at the installation vvill be,
ustomer in advance of the estimated delivery of the system.
STATOTHR
ruction for one or two of
shipment of the completed equipmen
will perform such tests and operations as ore requ
of the system meets
-ce personnel. Training for maintenance personnel will include approx!'
pecifications set forth In this
during the final phos
Installation period.
customer,
prance
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STATOTHR
STATOTHR
system IF
specific programs and procedures to be used in thi
tests will be determined jointly by customer all
at major DUD a
fora
Bent contracts include the
STAT
STATOTHR
ontour
ac Ing system
rtic
tocom
placement
4 Loran C
receivers
STATOTHR
$i
he
under Contrac
STAT
mapping market as well as other scientific and engineering markets,
STATOTHR
STATOTHR The
center around
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n, we have recently shipped a large precision plotter system rather
eseently proposed equipment to the U. S. Navy Oceanographic Office
ty o11
. will
present ord
hington, 0. C. The
ce of these acceptance
representatives
nd the Contracting Officer's
uturee Sales actty'
ter oriented systems for map preparation and production. $# 'ong
Bring emphasis and meticulous manufacturing technique has enabled us to 'penes-
cklog
11 he shipped during the . next twelve months.
STAT
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ly months of 1963 saw a rapid rise in our backlo
The total amount of these contracts STATOTHR
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lest single order we have received for mapping sy t
This contract is vi th the USAF for an Automatic Photo Coi
System; value
To this we conservatively expect
worth of additional mapping system orders to 19 43. In electronic instrume
NASA and 0 we will add 0 and in oceanographic research inst
Our forecast for orders received in 1963 is
STATOTHR
Because of the favorably redundant nature of the work
year no development write-offs are anticipated. A sound profit is
the
year ending Dec-ember 1963 and for the next twelve-month period.
g organixaticn for this project will be restricted to those individuals within
specifically understand and wee that knowledge of the identity of the
our company who have been specifically approved in advance by your rxganizattc n.
authority includes authorization to safeguard classified information of this
type and we are, therefore, authorized to withhold such classified Information from
Officers, directors, and stockholders of our parent corporation in accordance
:urity regulation
rapt
rs and as standing loan
under
twi
pledge receipts under contracts to process. We understand your
On for
luctacee
to su m"lt the proposed contract to assignmeent# yet in the absence of assignment we
will require substantial financial assistance in prosecuting the project. We would,
urge again the CPFF type of contract under which full current costs are
returnable as progress payments under adequate audit safeguard to you. Alternatively,
under a fixed-price contract we would require progress payments to 1 W0 of total cost,
which would allow some advanced payments, or which v utd allow you
ad document evidencin
k.
then as
STATOTHR
t obligation which we could
STAT
STAT
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I certify that current action of our Board of Directors c u thorl e6 me to accept con-
tracts on behalf oil
STATOTHR
D/hc
I without llml
STATOTHR
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