(Sanitized)PROBLEM

• Document Type: CREST
• Collection: NGA Records (Formerly NIMA)
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78B04747A002900040023-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 28, 2016
• Document Release Date: November 25, 2002
• Sequence Number: 23
• Publication Date: November 30, 1966
• Content Type: MF

Approved For Release 2
NPIC/TDS/D/6-
30 November 176
MEMORANDUM FOR: Deputy Assistant for Technical Development, NPIC
THROUGH: Chief, Development, Staff, TDS
25X1
1. Facts Bearing on the Problem:
25X1
is in rather precarious financial
condition. Failure to provide at least partial relief could
result in bankruptcy.
25X1
has been a valuable contractor - good
engineering but poor management. There is little competition in
their field; the1ra loss would be our loss.
c. The contract should have been a cost type. Procurement
Division, OL pushed
into accepting a fixed price 25X1
contract over the objections of the contract monitor.
0
d. Procurement Division, OL failed to include the develop-
ment objectives in the contract -- standard good contracting
procedure.
e. Two of the units are not Agency, one is Army(SPAD) and
ont.Navy(NRTSC).
f. Funds are available in FY-1963 and1964 to cover the
change in scope " -f we can charge against the year in which
they occurred.
says he thinks we can.
25X1
25X1
~I GAOOP 1
CONFIDE I~ T I A L Excluded from automatic
Declass Review by downgrading and
nltl ti
N I MA/DO D decia...~
Approved For Release 2003/01/28 : CIA-RDP78B04747A002900040023-2
 Approved For Release ~003/0DP78B04747A002900040023-2
SUBJECT:
claims a total out Of -6%` Pock"t
"overrun" on this contract ofl
h. Agency auditors claim that of this amount)
is the predicted total allowable expenses -- if it had been a
cost type contract*
i our original answer to
present contracts
2. Recommendations:
a. That we have
ure and
there was no change in scopepthat it was an overrun p
simple __ there is no vehicle for paying overruns on fixed price
p
contracts. objectives
j. Office of Logistics discovered the development were not written into the contract and asked that we re-evaluate
claims with respect only to what was promised in the
an increase of
a settlement which amounts to
negotiated settlement. They currently intend to offer
proposal. This was done in otA
Our analysis indicated that only in one item, the vacuum holddown)
did there appear to be any basis for a claim as to a change -in-
scope.
k. Office of Logistics has been proceeding towards a
contact
claims was that
as to the
legality of the problem.
Assuming it is legal, that we should fund as a change-
b.
all those cost