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June 14, 1963

Dear Red,

1 UM Early in August of 1964 the DCI and the Deputy Secretary 1 IIIII of Defense agreed to certain changes in the contract structure imi 

. of the CORONA program affecting the conduct of systems integre- :iv imig tion and systems engineering. Specifically, it was agreed .

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.-q. ma that Aerospace Corporation would be given responsibility for .

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min ovnrall systems engineering, and that the Director, Program A; IIIIII (Gem. Greer) would establish a systems integration contract

1 ..

1 - mil wich Lociheed. This latter contract was to be a modification,

ii ram reflecting the establishment of an overall systems engineer, of

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a continuing contract with Lockheed which had previously been •

labelled "systems engineering", although it in fact covered

1 1 11111.E little more than integration of AGENA and payload. This

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am particular Lockheed contract had, through FY 1963, been handled

' Ma by an Air Force contracting officer on Gen. Greer's staff, and

il En during FY 1964 by a CIA contracting officer detailed to

011=1 Gen. Greer.

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II. 0.11111111 Unfortunately, none of the terms of the agreement on this

mlm matter have been fully complied with by the CIA. This is a !LW problem that we will want to discuss at some appropriate time.

1; SEM The purpose of this letter is not to initiate such a discussion, NM but to inform you of actions that I must take in this connection

.. ME and to ask your cooperation to insure the continuity of necessar

I :.i NM work on the CORONA project. OMB

-I1 41111 Following the agreement in August, Gen. Greer's CORONA

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project director negotiated a systems integration contract with

Lockheed. About the 15th of September, a CIA employee, by 1 MEM telephone, instructed Lockheed contracting personnel not to sign

I I . >wcogiiii this contract, citing two considerations which I will . note later

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The work called for by this contract is essential to the

conduct of the CORONA project. It has been continued by

Lockheed, without signed contractual coverage, since last

. II.

.*August. Despite discussions with the DCI, and a written

request from me to the Deputy DCI, the CIA injunction against 11 signing this contract has not been lifted.

Clearly, this si •„ . .. • t be allowed to continue. .

1 .; I intend to instruct

.. .., . r. 7..:-. , Z.{ I.',/,' Lockheed, to sign the

11

act he has nego contr .4, t the Government can legally

'pay the contractor for the Work that has been accomplished.

The contract in question expires on 30 June. To insure

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continuity of the work, I will instruct the Director, Program A,

to initiate a continuation of this contract for FY 1966.

i •

I am dissatisfied with many aspects of the CORONA contract

structure. It is evident that your people are also dissatisfied.

I ask your cooperation, however, to insure that disagreement •

on these matters does not intrude upon proper relations between.

the Government and its contractors. I assure you that, if

later we reach agreement on some different structure, we can

rearrange this particular contract accordingly. Meanwhile,

the work must continue, work done in FY 1965 must be paid for

with FE 1965 funds, and both the Government and the contractor "

must be protected by a properly negotiated instrument.

In instructing Lockheed not to sign the contract at

11 issue, the CIA representative stated as a reason that the

contract specified security procedures not consistent with

the practices being followed on CIA contracts at Lockheed.

This turned out to be the case, and the Deputy DCI later agreed

that CIA practices at Lockheed would be brought into full

conformity with the requirements of the BY (AN system, thus

11 removing the inconsistency. I am informed that this change

has taken place.

The systems integration contract at issue, by its nature, •

must deal with parts of the system that are provided undex

several different contracts, some of them held by CIA. These

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CIA contracts provide that no methods, materials, or equipment

generated thereunder may be used for other work by the contractor

without permission of the CIA. The CIA representative cited

this provision to Lockheed as preventing Lockheed from engaging''

in the systems integration work under the proposed contract

with Gen. Greer without permission from the CIA. In fact, such •.

permission had been graited by the CIA contracting officer who ',

is detailed to Gen. Oreer's office, and the work itself has

been going on for the last ten months, albeit not covered by •

definitive contract, in much the same manner as for acme years

previously.

In sum, there cannot now be objections by the CIA to the •

signing by Lockheed of this systems integration contract,

except as may be occasioned by dissatisfaction with the agreement

Mr. McCone made. You have my assurance that, if changes in the

overall structure are later agreed upon, this particular contract

mill be adjusted accordingly. I trust, therefore, that your .

people will not interpose further obstruction to the signing -

by Lockheed of this contract and to the signing of its continuation for FY 1966.

There is another contract negotiated by Gan. Greer with

Lockheed which suffered exactly the same fate as the systems

integration contract just discussed. In this case, the work is

not of a continuing nature, and has been ,c leted The

contractor must be paid, and I shall ask to sign

this one also, so. hat the whole matter can e c *arid up. '

Sincerely,

Vice Admiral William F. Rsborn,IISN (let) , •

Director

Central Intelligence Agency

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