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l. This memorandum contains a recommendation for your approval which appears in paragraph 7. This is sent to ycu for approval because the work proposed was included only in the first quarter reviev.

2. TheMaterials Analysis program is directed toward the development of a system capable of auticipating and identifying potential Bloc coumtry developments of psychoactive, incapacitating, or behavior-control agents. The challenge will be to develop a structure-activity predictive capability such that the more dangerous analogs of parent molecules could be specified and where so indicated, fabricated and tested. To be able to anticipate, then duplicate and prepare countermeasures against the more dangerous developments and discoveries in this field could typify the best features of the intelligence process. This ambitious goal appears feasible if this selective screening program is used in conjunction vith the special data base nov inbeing developed as a computer-mansged and analyzable reference source.

3. The proposed work was approved in principle during the first
quarter review. A preliminary 90-day contrat was let, however, in
order to allow time for appraisal of all potentially competitive firms
in the greater Washington area while still maintaining screening
activity. Four companies were contacted and imviteć to bid on this
follow-on efsort. Two proposals were received: one frors and the other from These
proposals were compared according tc: (a) total costs, (b) assigned
personnel, (c) personnel experience, (d) average labor rate, (e) facil
ities, and (f) capability to respond to the special computer-compatible

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reporting format of resulting data. was significantly
lower than on total cost; however, their
average labor rate was high Ir. all other elements, rated much higher. No significant savings
(the lower bid cost was clearly sn underestimate of the work load) or
improvements could be identified in the proposal.After
hearing a full discussion of the evaluation process and its results, the Project Review Board agreed that the work should be continued with

4. The proposed work will require a level of effort sufficient to conduct spproximately 2lo primary screens and 40 to 50 secondary screens over a period of nine months and vill cost approximately No supporting action will be required from any other Agency couponent. is sware of this work and endorses it.

5. Follow-on action is planned at approximately the same level of effort.

6. As in the past, this research will be classified Associaticn with the Agency wiil be classified CONFIDENTIAL. The work will be UNCLASSIFIED, i.e., the screening of the new compounds will be carried on in free access laboratories and the raw data will not require special handling. This classification is warranted because the work and data are not unique, especially within companies providing toxicological assessment of new compounds. Reports will be classified SECRkT when they represent interpretative mimaries revealing the purposes of the work. Dr.m WExtension will be the project officer and will monitor the Execution of this contract.

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