representatives 'y were ‘not present.: - It i¢.common practice for the LéMso tafe
and the Air Force Btogram team to present technical and administrative
-dssues and differences that require mutual decision fer resalution, By this
technique, it’has bean possible {6r the ‘Air-Force Program Director and
‘the LMSC Program. Director to resolve differences on the-spot and thereby,
expedite the program objectives: ,
6. Technical ement Interface
& In ontabitshing the accélerated 6485'Program, two.of the

Jobisen-Committes growid rules had‘: marked effect ‘on the internal LMSC
exchange of technical information-and the AF/LMSC technical “working
relationships, These were .as follows:'

1. ‘Enginsering personnel shall‘be located in an enclosed
area: iminediataly adjacent:to the tooling and manufacturing zrea, “~

2. "Téchnical directive meatings ‘involving large: groups:~
shall not be required; Aix Force ‘peraonnel ahall work in cloab’liaison with:
the LMSC Project Enginasr ‘so formal meetings are npt required: *'-

"bi ‘The LMSG Agem D engineering staff was ‘sblected from the
exlating, experienced LMSC engineering personnels This ‘staff was moved to
an enclosed area which xsequired “special pass to obtain access. These:
measures ware taken to’ permit the proper concentration of affort:and to
@liminste interruption by non-~AgenaD personnal; ‘A; special aiaon group’
was. eatablishid : to provide itiformation’to the various ‘using programs,

Ge It-wais realized that the normal Air Force ‘technical
direction and monitoring efforts would be ineffectual and tme ‘consuming

Ua



production flow to be established, economical lot ‘buys and fixed price
contracts ‘to be negotiated, configuration control to be eftectively exercised,
costs to be held.down and, in general, better management to hs exexcised.

“"4, “The paradox of the relaxed formal documentation: requirements
and '‘skunk-works" approach of the accelerated program to the stringent
controls necessary for ‘effective management of a OPIF contract make it
difficult for the Air Force Program.Director to satisfy both objectives
without compromise. In large measure, through the close working
relationship and cooperation of both parties, it is believed that this has
been accomplished,

5, Future CPIF contracts would be facilitated - in the negotiation
phase - through the use of a more definitive work statement than was pre-
pared for the Agena-D program,

6. The accounting system evolved for the CPIF contract
indirectly should result in more accurate costing for all LMSC programs,

7 It has been established that through a close working relation-
ship with the Contractor, it is possible to eliminate the requirement for
many reports, meetings, etc., and, in general, reduce documentation,
This has not been accomplished without personal inconvenience to members
of the Air Force program team who ‘routinely spend thrée to five days per
week.on TDY. Should other high priority programs adopt the Agena D
approach, it-is recommended that PCS be considered as a possible means

of eliminating this objectionable aspect.

38


is a production version of the Agena B. Most of its components are the sarne
ox very slightly modified components used in the Agena -B. In order to meet
the accelerated schedule, it was not possible to provide for Many modest
component improvements that. were known to be needed if the design goal of
90% reliability as an ascent vehicle is to be. assiired, The major design —
effort was completed in approximately a six-week period. | Component

improvements. which will enhance overall Agena D reliability have 16-18
month. development lead times associated with their availability,

b,.. Many of the majar.components were designed in the period
1958 to 1960 and are obsolete. Current state-of-the-art can provide
considerable increase in reliability through the reduction in piece parts,
improved companents and high reliability piace parte and improved manu-
facturing.technique, Some of the components have interim fixes that have
been incorporated due to flight failures or changing requirements. Comporients
need to be redesigned to simplify the items, reduce their cost and improve
their reliability.

c. Many items are currently critical life items. These items
should not be. use#l on a long term basis for a vehicle which will be used in
80 many programs. ,

a. The program flexibility that has been incorporated in the
Agena D has been accomplished through the ingenuity of the designers
which accepts the limitations imposed by state-of-the-art hardware. Design

reviews and current studies indicate greater flexibility can be incorporated.

34


NNNMCZCBKA292ZC3QD28
PP RIWZBK REC'D ACTION,

APE
DE RJEZHO 2118 —a___
ZNR 23 WOV 1961 4 05

P 2223092

1961 NOV 22 PM 8:40
¥M HQ USAF WASH DC

TO RJEZFF/A¥SC ANDREWS AFB MD TPO_s9z
INFO RJWZBK/SSD LOS ANGELES CALIF

BT

UNCLAS FR AFSPM 80799
REF BRIEFING COL EVANS THIS HQ 17 NOV 61. SUBJECT AGENA B.
FOLLOWING PROC! GUIDELINES WILL PERTAIN... THIS MBG IN SIX PARTS.
ORGANIZATION AND PROGRAM MANAGEMENT ARE SUBJECT OF SEPARATE
‘UREMENT AU‘

PROG! .| THE SPECIAL DELEGATION OF
Saran REQUESTED REFERENCED BRIEFING IS NOT C PROCUREMEN'

SONSIDERED ESSENTIAL. AFSC IT
iE ADVISABLE. LITTLE DELAY SHOULD ACCRUE THROUGH PROCEDURE PRO.
ON THE SPOT PROCUREMENT COMMITTEE REVIEW

CONSIDERED TO
POSED BY AFSC DIRECTOR OF PROCUREMENT WHERE
WILL BE MADE WHEN

CANNOT
TEAU DOLLAR RANGE MAY BE USED. TARGE'
ING ABOVE AND BELOW, {B) PROFIT RANGE.
SHIP UPWARD AND DOWNWARD FRO!

MUST BE Et} a
TION ONLY IN BeeATION
MEASUREMENT,
KEY MEANINGFUL
AND JUDGMENT TYPE EVALUATION MUST BE
TIVE

CIDE. (E) BALANCE OF INCEN'
IDED COST, DELIVERY AND

PAGE THREE RJEZHNQ 1118

56428
PERFORMANCE, ITEMS SHOULD BE WEIGHTED SO AS TO. PROVIDE A BALANCE OF FORCES DESIGNED TO
ENCOURAGE THE CONTRACTOR TO REMAIN ON A DESIRED EFFORT COURSE, REFERENCED BRIEFING
ALLOCATED 5090/0 TO COST AND ONLY 25 PER CENT TO DELIVERY AND P: IN

ERFORMANCE, THIS CASE,
CONSIDERING THE IMPORTANCE or SP RPORMANCE AND or eeey IT 18 SUGGESTED THAT AN APPROXI-

SEGREGATION TO THE PERTINENT CONTRACT, SUGGEST ACCOUNT!

». ADVISE
IN ADVANCE TO PERMIT ARRANGEMENTS. PART V, THE ACCOUNTING SYSTEM MUST PROPER
AND ALLOCATION OF CosTs ‘ING SYS-
TEM PROVIDE COST DATA WHICH WILL BE USEFUL IN FOLLOW ON :

PAGE FOUR RJEZHQ 1118
PROCUI

. PART VI. FACILITIES CONSIDERATIONS: (A) DURING NEGOTIATIONS ASSURE THAT NO
ITEMS PROPERLY CHARGEABLE TO FACILITY CONTRACTS ARE INCLUDED IN THE TARGET PRICE OF THE
INCENTIVE ‘IVE CONTRAG' LISHED

CONTRACT. (B) AFTER THE 'T 1S ESTAB! FACILITY
MATTERS SO THAT NO ITEMS ANTICIPATED UNDER THE INCENTIVE CONTRACT ARE CHARGED AGAINST
THE FACILITY CONTRACT, (C) NEW FACILITY REQU! AND COSTS MUST SOON,

CONTRA IN T
AND APPROPRIATE ADJUSTMENTS MADE, (D) IN ESTIMATING Cost TARGETS ANTICIPATE THE INCREASE
EYTICIENGY AND EFFECTIVENESS TO BE PROVIDED BY FACILITIES NOW BEING REQUESTED.

22/23262 NOV RJEZHQ


GRAPHIC FRESEMTATION OF FEE FROIN
| 7 i SEA FERPGSRAMEE

is Fe lb

SS

MAMI 9%

‘: THROLT = 7%

(LOOP 6B

Me Va +

Mi fii 60°
PAR - go
AUF 7)

| BEBOP PP POD B

.
N
N
N.
N

Fig #3



F¥-62 0 F¥-63- TOTAL

DEVELOPMENT PROGRAM: | , Yip

FLIGHT TEST

VM

. ts - C

EMERGENCY FUNDS

PROGRAM 622A

. moran,
— mmN a \

Yy

TABLE 1,

21


8. .Configuration Control is a mandatory Prorequibite to ;
effective Standardization of design and should enhance reliability and
quality control, |

C. Contractor's Evaluation, In order to completely document the
ee  vauation,
Advantages and Disadvantages of the Agena D method of operation, the

LMSC Program Director was invited to submit his comments for

inclusion in this report, A reproduction of his letter ‘ reply followisi: .

a ae

39


and rigorously adhered to by both the Contractor and the Government. The
‘management principles proposed by the Johngon. Committee :-wers reviewed. .
by Hq USAF and approved as the basis for program management, Jn general,
these. ground rules ‘apply a streamlined, AE/Gontractor “management concept
and include a BX priarity, reduction in formal procedures, exclusion area
in which to pexfarm the work, and extraprdinary. program mangement ;
-Channela, To insure. gompliance ky both parties,. these 'ground pules'

were actually made a preamble to the.contractual work ‘statement: for the
accelerated Agena:D program. For a more aetailed description and pro-
cedures, refer to Part. Il of the Abbreviated Program Plan, Program 662A
(6483), dated 22 December 61,

The prime objectives of the accelerated Agana D program are:

1. Te Produce 2 more Teliable standardized basic wehicle capable af
performing easential ascent and/or-orhital functions derived from.common
mission, Fequirements of the following programs: 622A, 201, 698AL, 102,
239A, 621A, G98AM, 698AA,Advent,Rebound and Ego in accord with the
accelerated achedule and within the allocated budget.

b. To provide a fixed-price ‘procurement. source for. Agena D vehicles
with.a production capacity of five vehicles per month



The technical effort under the -21 contract has already been significantly
reduced and will be completely phased out by November 1962. Inasmuch
as the -68 contract buys "Chinese copies" of the Agena D developed under
the -21 contract, no provision for further redesign and development will
be provided under the -68 contract. In fact, it has been specifically
excluded in an attempt to preclude changes and increase rejiability and
reguce vehicle cost. Figure 4 (next page) shows graphically how the
Production build up occurs concurrently with the development effort under ‘
the basic contract. It also clearly depicts the engineering void which will
occur in the LMSC Agena D organization if all engineering effort is allowed
to be terminated at the conclusion of the development/ engineering (-21)
contract on 30 November 62. It is recognized that deficiencies will be
discovered for which additional engineering effort and possibly redesign
will be required; state-of-art advancements must be adapted to the Agena D
And qualified prior to being incorporated into the Agena D production, This
is where the "Follow-on R&D" or component improvement contract fits
into the Agena plan. An appropriate level of effort will be provided under
this contract to maintain the required level of engineering support to the
using programs. :
2. Why We Need It. |

a. The objective of. the component improvement program
-- de to provide improved reliability, producibility, mission adaptability
and serviceability of the standard Agena D. Essentially, the Agena D

32


qualified Air Force officers from Aix Force Space Systems Division were
assigned the responsibility of directing this' effort, This team ‘spent a major
Portion of their time in residence'at LMSC {approxiniately three days per week)
and worked very closely with ihe LMSC engineering staff. Members ‘of the
team attended s large aumbe? of the technical and policy meétings,’
Assisted in the discussions and in arciving bt deciatoss. By being present
during these formative discussions, there were minimum delays in obtaining.
Air Force approvals, Personal contact with ‘all engineering personnel was
fostéted. The Air Force had complete access to LMSC internal correspondence,
calciilations and ‘engineering data which wes a substantial assistance in
monitoring the development program.
a4 “Although the 6485 Program perécnnel spent « major portion
of théir time at LMSC, the Program team was normally split between their
APSED tind LMSC offices. To eliminate délays, a dtvect plicne Lins was
installed betweenthe two offices, This provided a rapid means of communication
and has proved very éffective, Formal correspondence and paperwork has’
beei kept to a minimum: Internat LMSC ‘engingering ‘reports; ‘déaign ‘reviews
and analysis have been used throughout the piogrami.: Formal agreements have
been recorded as membratigum of understandisig or mam(oradum for the file.
1. Vehicie Acceptance Proceduréa, vs

a. The team.concept of acceptance as used.on Agena Bs has been

instituted for the Agena Ds, It is Planned that after the modal. specification,

a)



for production, and the related responsibility for all Agena D receiving,
atores, and controlled inventory accounts.
4. An inspection. function responsible for in-house as well as
out-of-house quality control, accomplishing the in-house receiving and
production inspection within Building 152. Other LMSC existing organizations
“will be utilized for inspection in other buildings and at vendor and subcon-
tractor plants, However, specialized out-of-plant inspection problems will
be the responsibility of the Agena D inspection function,
: _ 5. An administration and controls function responsible

for cost. ortimating, contractual, acheduling, and configuration control -
functicns,
: a This Production contract will utilize alirectly the

engineering output of Contract AF 04(695)-21. ‘There will not be a. redesign
: for produetion required since the AF 04 695)- 21. contract will result in :

documentation ofa qualified production configuration. This configuration

will be considered a frozen configuration, and configuration . control will

be enforced. Changes to the configuration will only be made with Air

‘Force ‘concurrence and will require contractual amendment to effect

any changes,

e.. There will be a counterpart “Air Fores organization to the
Msc production organization described. ‘This Air Force organization :

will be production-ortented and, like its LMSC counterpart, . divorced

24


‘, After physical inspection of the vehicle and:review.of the
data, a formal acceptance meeting is held: At that time, an LMSC letter
certifying the vehicle's acceptability to applicable design and specification
ia provided, signed by the LMSC Agena D Program ‘Director. The meeting
is held primsrily to provide answers to the Air Force on any problems,
omissions, discrepancies that have been uncovered, The acceptability of
the vehicle to the terme of the contract is determined at this time, Should
the vehicle be unacceptable, a detailed listing of discrepancies. is, formally
provided to LMSC for necessary corrective action. and. Subsequent reoffer
of the vehicle. The contractual aspects of the incentive fee pertaining. to
schedules. has. been formally documented by memorandum between the LMSC
Program Director and the Air Force Program Director.

8. Funding. Since the Agena-D is. standard launch vehicle which
will be utilized by a large number of space Programs, originally dt was :
Proposed that. the development cost, in toto, be funded.by. reimbursable,
funding techniques thereby pagsing along to the using. Programs, - their. ;
pro-rated share of this cost. This Spproach to funding was disapproved
by the Department of Defense.and recent guidance received from Hq USAF
indicates that appropriated funds totaling 39.9M will be used to finance
the basic -development/ engineering 4-21) contract. The fund requirement -
and method of financing is shown on the following table (Table 1).



.3 3

AGEWA 0 ner meaner rons LAW

EW CONTRACT REQUIRED FOR.

AV Wp yp

TOOUCTION: caviar PRonES
@LROOUCTIN FATE AT 6 VEHICLEB/Mavre
ONTRY.

seagee (a. tatu) stam


af the apcounting syathm is in ayfficient detail such that the problem. of cost.
analysis for the follow-on contract shoyld be measurably reduced from that
of previgus development gontracts negotiated with the, Lockheed Missiles and

insure complisace with the Contractor with the agreed procedures and. the.
proper interpretation of the cost accounting system to support: the GPIF
contract, the Agena.D Program Birsctor requested and ana aagaigned early .
in the program,» foll the Tepresgntative of the Aix Tupoe Auditor Guneral's
Office aga member.af the Agena D staff. Thig individual has had access ta,
all cost.nformation as it js accrued and is.in = poaition to keep the Auditor
Ganesal; AFPR, and Program Director informed af the compliance of the
‘Gontractoz and his corrent fisra].status.at.all times, In addition, .at.the
‘requent.of the AE-PRO, AGO, BGO, and Program Directer, he has conducted
epecial investigations and stndies.as required, boon Loe pe
5, Eppgzam Control Techniques. es
_ B+: Ia ordex to avoid the necessity of special Fepaxts and:
brigGings dy the-Gontractor ta the Air Force Program. Office during the
fo the Air Force Program Dixector and his staff an.ineitaiion to atand the
the actapted. management tool of both the LMSC andAir ‘Forse Prageam
Directors, for.uhtaining a.weekly atatue report on,all features of the program.

15


assemblies and Somponents to the level of the Agena D Master Breakdown
in the Advance Vehicle Description, LMsc 081462, will be Sdentifiea by
their part numbers and by their specification numbers. Also included will
be the identification of acceptance test specifications ; for components to the
level of the Agena D Master Breakdown. The Detail Model Specification
will specify quality ‘control provisions and will reference the Vehicle
Acceptance Test. “Specification, Item 2 of the ‘procurement package'.
Appendices will Het the optional equipment, MiL-5-81696, "Specification,
Detail, Guidea Misiile, Preparation of," vill: be used asa » guide in the
Preparation ot this document.
be Vehicle Acceptance Test. Specification This specification

prescribes te tests to be performed on.each vehicle. The teats. specified will
be those performed on the vehicle in the Agena D systems. checkout. comple.
The tests will validate the vehicles asa unit, and will -be need as the pants
for acceptance. or ‘rejection of the wohicle. .

. Engine soning Drawings The engincoting drawings vill ;
consist of new. Agena. D raninge, Agens, B drawings which are sppieabia 7
to Agena:D,. ‘and subcontractor drawings.

Bard Tooling. During the course of the Aevelopment,
contract, it. was mutually agreed that. the tooling which would be uitimately

utilized in connaction with the Production contract would be ‘eirolved and

employed for the fabrication of the later mode of ‘the prototype vehicle.

In this manner, it would be possible t to transition m saplaly into a fined price


and at laude bases after USAF acceptance, Storerooms, disbursements,
in- storage maintenance, and inventory control’ work. will be. supported

by the using Program logistics’ pool in which the ‘Contract -68 does net
share,

2. Basic: Vehicles; . Contract -68 will deliver vehicles .
ona. dolly ready for transportation to Building 152 storage area, or
alternately, ona transporter, ready for highway transportation, :
Storage dollies, other storage equipment, and in-storage Jahor and
material will be provided by the separate cPrr Logistics Services
Contract, Transporters .and other highway transportation equipment

. will be provided by the using program,

Vehicle handling rings, patch panel test tools, and
other equipment that is normally delivered with Agena D vehicles,
have been provided under the -2] contract. That contract will also

Provide sixteen guidance module shipping containers, The using
Program Logistics Pool will be responsible for returning these
items expeditiously,

+ Optional Equipment: The above Provisions apply
to optional equipment; however, there are no optional equipment items
supplied under Contract “21,

4 Program Peculiar Equipment: ‘Program Peculiar
Equipment are the responsibility of the using Program and are not

Provided for under either the -21 or -68 contract,

30


associated design documentation prior to delivery of hardware, at which
time the . subcontractor design will be frozen and reproducibles of the .
documentation jmpounded. All such documentation will be prlor-approved.
by Engineering ; and represent the basic design which cannot -be subsequently
changed by the ‘Subcontractor without prior LMSC/AF Concurrence,
. | 4 -Controls to comply with management Policy ;
directive that dorignates AD-9 as the last of the Pre-baseline vehicles
on which design changes may be made effective, The majority of design
changes made on the Prototype vehicles through the AD-9. change freeze ,
point, will automatically be applicable to vehicles on the Contract 68
(AD-13 and. up) and these will be recorded and Programmed by the Design
Change Committee to determine impact on cost and schedules Plus :
ron configuration accounting control continuity,
. 5 A policy that during the Prevbaseling period, and

extending through the USAF acceptance of AD-12, Fequests for change
approval will be confined to those changes which may be  Antexpreted as
being outside the scope of the contract, All changes of thie type will be

submitted to the Air Force through the ECP Procedure describe

Paragraph e, below,
dad. In connection with ;
J. .At the time the- ‘frozen’ consgurtion baseline co

established @ detailed configuration status record will have been completed
and will be Provided to ‘the, Air Force,



the organization respansible for | ® vehicle design,, fabrication,
asacmbly and tegt-which was in being to support. the production of the Agana B.
Fram the outset, it'was recognized that at would be necessary, to agaign one.
individual across-the-board esponsibility for all. phases. of the Agens.D,
program, _ Assordingly, LMEG proposed the creation of what might he con- .
sidered, a company, within a company, establishing the Agena D program.nffice
having responsibilities delineated on the following chazt (Figure d), and

reporting rectly to the Vice President and General Manager, , Space Systema,
This organizational approach was dramatic and effective. Ae much as any
other -single-fartor, it has been responsible for the quirk response. time which.
has hean. demonstrated in the perfarmance of LMSC to date. The basic R&D.
contract was definitized in’ such a manner that it. encompassed all of the
roquinemente,for the complete redesign and qualisicasion of the Agena,D,
‘Vehicle, It authprizes the fabrication and use of development .taals ugh as.
the Propulsion Test. Vehicle which was utilized to proof test.the orifice
pressurization system and the dual start capabitity of the rocket engine,

the Structural Test. Vehicles which were abilined to concurrently, ‘qualify

the forward equipment. rack and aft structure, and the. Thermal Test. Vehicle
‘which was used to verify environmantal acceptability of the Assign,
-Additiqnally, a. ‘Functional. Test. Mockup, and necessary. ‘wood ‘mockups were
furnighed, . In.addition, twelve prototype flight articles. will be produced,”
qualified, “ and checked out. under this:contract, | and provision.has been

made for the production. of a Development Test. Vehicle. The DTV: will | :

Serve now and in the future as a means of installing,. qualifying, and where



“A. Background: ” In compliance with guida: aidance’ received from Hq USAF

I, * “CONTRACTS *

(Réferetice Hq USAF niessages (i) AFSDC-F 82350 daisd 30 Nov 61,”
(2) AFSPM'80799 dated 22°Nov 61, aid (3) APSSC"RG 90915 dated 5 Jan ‘62; |

see Annex A'for copies) two separaie’ Contracts tave peek’ astablished to

- accomplish the stated objectives of the accelerated Agena: D pro; 2a. The
basic dévelopmenit/e engineering’ conttact (AF "0M695)~21) provides the “7S
necéssary enginseting capability aiid industrial base for the design, devélop-
ment,’ fabrication, assembly, qualification and test of twalve prototype
Ageiia'D Might Vehicles with initial delivary to suppért'a Jana 1962°firet

lauiich,” ‘This ‘contract also ‘provides as primary objective, ‘creation of*”

the "Procurement Package! to permit a fied’ price procureinent aiid thie’
creation of a capability for production at the ‘rate of five Agena'D Vehicles’
per month. ‘The folisw-on production contract (A¥ 04(695)-68) has bean” ~
established ‘to support an initial delivery of 39° Agena'D vehicles ith *'
an initial ‘production rate established as four ‘Vehicles per month. uae

B. Developm: nent/Baginesring’Contiact “ ;

" ‘L" Geréval: The De'velopment/Engineering Gotitract:

ay

(AF 04(695)-21) was ‘writer: originally to ‘support the standaza Agena 3 Progréim

authorized ‘on'25 August 61. In order to coniplish the: ‘objective 5
acceleration, ‘howéver, the mana agement ‘Approach’ to this ‘contract. was’
completely’ reoriented on 7 November 61, In avaénca;’ the Lcckhséd Misailaé

and Spate'Company in response to Air Force guidanie completely ‘reoiiented’

‘N


The “pipeline meeting', as it is cated, is held.every Tuegday morning at
0800 ‘hours and consists of a detailed diacuasion of the following:

..d« Action items carried over from previous meetings... .;
- 2... Significant accomplishments, since,last meeting...
 3,.Broblems which have arisen during the reporting period.
4, Items which must be accomplished. to. atay.on. schedule
and within costs.

Review af technical. status.

Ip

Review of subcontractor procurement atatus,

In

Review of logistic status.

Ie

Review.of qualification program,

lo

-Financial and manpower status, .

The attendees at thia meeting consist of the members of.the LMSC Program
ataff through management division level and.such additional representation
as may, be required to, adequately answer questions. in connection with.
presentations which are to be given. The milestone technique of program
control ig.utilixed with every major.segment. af the program receiving as
detailed review as 4a required, The. Presence af the Air Force Program
Office at this internal LMSC management menting has: been a unique ad-.
vantage. for the, Program staff for it has permitted.the Air Force team to
participate in the decision making process for all major.issues;that have
arisen to date. Normally the Lockheed Program Director. runs. the. meeting,
and gives the necessary administrative and technical direction to his. staff

in a manner that might be considg#ddwmore appropriate if Air Force |
’

161.


necessary, hot; fring, program peculiar and component improvement
modifications in support of all programs utilizing the ‘Agena D stage. In
addition to the above, itisa requirement: of the -21.. contract that a manu-
facturing production egpability be established which will Permit production
of. Agena D vehicles at the rate of five vehicles per month on a fixed price
contract, .

2, The Procurement. Rackage, In order. that. the follow-on
production contract might: be carried ont satisfactorily, it has long been
recognized by the Agena D Program Office that a clear definitive state-
ment and understanding of what is to be procured under the production
contract and. the method of operation must be definitely ‘established. With
this objective in mind, it has been.a primary, goal of the Development/
Enginkhring contract to provide the : procurement package! for the follow-
on production contract, This.:'procurement package! consists essentially
of the Detail Model. Specification, . Vehicle Acceptance Test Specification,
and Engineering Drawings to define the itera under procutement, Hard
Tooling, and a new LMSC facility (Building 152) to manufacture the
vehicle, and Configuration Contral. to tnaure recurring ‘quality, To provide
better. definition, a brief description of these elements “of the !procurement
Package! follows: ,

Detail. Model Speciseation, This specification: will
describe the physical and functional design of.the systems. and the vehicle,

and will give estimated performance capability of the vehicle, All


mo Accomplishm ents, The extraordinary ¢ effort Placed: on this .
Program by both the Contractor and ‘the Air Force along with the atream-
lined management ground rules has Provided the Air Force with a standard
second stage space booster seven months earlier than originally. scheduled.
To date, two vehicles have been accepted by the ‘Government - AD-1 was :
delivered on {schedule and AD-2 was delivered one day ahead of schedule. :
To date, indications are that both of theae vehicles will meet their
scheduled launch date and fulfill mission requirements, This redesign
of the Agena Vehicle utilizing developed Agena B. components with state of
the art improvements using the module. ‘Concept bas produced a vehicle
which should be more reliable and serviceahle awhile performing ali
misaian requirements, This soncept has also provided anew testing
Philosophy which will materially reduce check out time,

S. Production Contract
1, General

_ 2+ Contract AF 04695)-68 is Antended to be a a Preduction
contract, whereunder fixed-price redeterminahle procurement will be
accomplished on, the basis of a procurement package developed under
Contract AF 04(695)-21, This, Procurement package conalsts of a _
detailed model specification, an acceptance test epecification, and
the required Vehicle, drawings, as Aeseribed in Paragraph H. B. 2. of

this report,

22



heures yirteriecs ripe

a?
Sa
=
:
3
t
at
%.
REPORT ON AGENA D
2 CONTRACT STATUS
;
Le
. “DECLASSIFIED IAW E.O, 12958
|RE
1B
: | DATE, :
URPLASSIFED
’ . CUE &
. DOWNGRADED Ai 3 YEAR INIERVALS
DECLASSIFIED AFTER 12 YEARS. HQ ArSsD
DOD DIR 5200.10

18 MAY 62 —



ere a.

PP RIWZBK REC'D ACTION
~ BE BIW ZED 64 —z ___
6 aH 196216
FM HO usar 1962 JaN~5 PM 9133
TO RIEZFF/AFSC ANDREWS AFB ND
INFO BIN ZNE/S8D INGLEWOOD CALIF mm __sr
RJESBN/WRAMA ROBINS AFB GA —_—___

SCHON ATSe Foe saaS INFO Bae Oy aces, WRAMA WRU. REFERENCE IS MADE TO AGENA D
ACTIO! FOR u..

PRESENTATION BY COL. KUCHEMAN AT HQ USAF ON 3 JANUARY 1962. THIS MESSAGE IN 7 PARTS. PART L
PROGRAM MANAGEMENT, ORGANIZATION, PRODUCTION PLAN AND FACILITIES PLAN FOR THE BASIC
AUTHORIZED TO TO ‘RIAL RESERVE AND

USE THE PRIORITY ASSIGNED TO PROGRAMS USING AGENA D. PART VL PRESENTATION OF PER’

32 NOVEMBER Tan GONTRACT A8 REQUESTED IN PART IV OF HQ USAF MESEACE Afoee ro Ante ene
22 NOVEMBER 1961 WILL BE SCHEDULED AT HQ USAF ON 19 JANUARY 1962 AS AGREED IN ABOVE __
REFERENCED PRESENTATION. PART VIL THIS HQ HAS GREAT RESERVATIONS RELATIVE TO 8SD'S PLANS
70 HAVE INDIVIDUAL USING PROGRAM OFFICES PROCURE [ARE AND SERVICES ASSOCIATED WITH
INSTALLATION AND CHECKOUT OF MBSION PECULIAR ITE! 'T FROM LMSC. CONCERN IS THAT
HAVING NUMEROUS OFFICES CONTRACTING WITH, AND GIVING DIRECTIONS To, LMSC WILL NOT

PROGRAM Cost CONTROL TO TAKE FULL ADVANTAGE OF THE AGENA D STANDARDIZED
TE APPROACH TOR

1C-274

DOWNGRADED AT 3 YEAR INTERVALS;
DEG: 2 YEARS.

DOD DIR 5200. 10

AF 04(695)-21


received from Hq USAF is shown in outline form on Figure 2 which follows
on the ‘suceeading page, . ‘ -

vies! The-féatures of the negotiated incentive formula for ~*~

de

computation.af fee are shown in: ‘Figure 3’ ‘which followi,” Briefly, the fee
‘Ryevisions are; 4° sw Sree a Bed

1): Division of Pee: Equal weight. wilt bo ivan to cost, |
schedule, :and performance '{1/3)-exth, °' ee .

WS
Alike: procedute applies to uiidérrins.” ifthe final’

cost is 5% leas:than'the-target price; the Cbntractoi's fee is facreased oa
By, $31,-712y:de 10%-deee, the fee willbe disc teased by'$63, 4285" atc,

Se a By Sebel: “As't8 vehicle’ delivery, the-Coniractay “°""
will receive ono MRR. upon: target. cont <_y
if all vehicles are deliverad to contract.delivery achedule.: To. permit
eorrection of all reported discrepancies: resulting from. Air'Force
Acceptance inspections and to péimit delivery of a ‘clean’ airticle, the

delivery formule provides a two-week grace period without ‘penalty; if

nd


production, assuring maintenance .of original quality and configuration.
without the necessity of additional Production engineexing. -In large
measure, this.action has been accompHahed, .

e. Building 152, LMSC has under construction. at.the present.
time, a structure known ae, Building 152, financed with.corporate funds
approximating $6,000,000. It has been planned, that this facility willbe .
outfitted as the future industria] facility for the Agens.D vehicle. Air. Force

funds in the amount o ; have been made available through the

Agéna .D development (-21) contract for.the necessary machine tools.and
equipment to suitably outfit this "Agena factory", Through the creation of...
this facility, it will be possible for the first time to. ‘set up.an-efficient... a
produetion line for an orbital stage. segregated from.other programs and. .
activities at LMSC, Sunnyvale, Cost accounting and price determination. .
will be measurably simplified and this alone should. facilitate the fixed
price contract price redetermination, Through the combination of . -
Segregation of facility and cost accounting, it.will be possible from the.
‘corporate point of ylew and that.of the Air Force to evolve a more efficient
operation and produce fhe Agena D vehicle at. significant savings.in unit....
cost,

wot

3. Incentive Features of the Contract, 7 . oboe
a. In conformance with-DOD policy,. it. was, established from
the outset of the Agena D Program, that the research and development phase .

was to be contracted as a Cost Plus Incentive Fee ‘contract, The guidance


"Subject: | Discussion of Advantages and Disadvantages of the _ Page 2
“ler” ‘Agena D Method of Operation j . _ 8 May 1962

‘The hard-line orgahizational concept of Menufacturing reporting directly
“to the Agena D Director has permitted changes in test Philosophy which, .
,in effect, backs up responsibility to.a point where it is most effective. -

At also.has permitted the man in the shop or test laboratory faster and
~,, More direct communication with the designers. ‘

The team approach has permitted more direct control of cost elenents and

faster and more direct budget reporting, insuring rapid menagement attention ©
on potential over-run areas. - . .

‘One of the principal ‘savings bas resulted from the elimination of unnecessary
reports, briefings for casual visitors, duplicative technical meetings, etc.

_ . :
Good persomnel are a prerequisite to operating under the Agena D ground .
rules. This weans that some penalty has to be paid in other areas when

key people are assembled in such @ task force. This also means that only

The isolation of the group by meang of key card. access tends to cause sone
resentment with other organizations and, to some extent, hinders communica-.
‘tion to the using programs in various elements of the SSD Organization. The
necessity to put a large mmber of dollars on a single drawing make it more
@itficult for production to economically break down the various work elements.

during early phases of development make the problem of configuration accounting
more difficult. Because of physical isolation of the Group. support activities,
maintenance personnel, plant engineering, and others have difficulty gaining

Because of the self-sufficient nature of the operation and the speed with

which it has, to operate, there is a tendency ‘to duplicate functions previously.
handled by central organizations.


with or without AFPRO comments. “In any case, ‘proper documentation

will be maintained by the CCB ‘Recorder. On a routine ECP, either a letter
of disapproval’ would be provided to the AF PRO with an information copy to
the Contractor, or a-CCN or other type contractual document would be -.
provided to theContractor with.an information ‘copy to the: \APPRO,.
Rmergency ECPs, which require TWX or phone call-submittal, willbe .-
fully coordinated with the APPRO,

2. Class II changes will be submitted.by the Gontractor.
only to the AFPRO. The AFPRO will review and evaluate and: will notify:
the. -Contractor, in writing, or r approval or disapproval with information
copy to the AF'SSD Agena Office, vet

3. Logistics and Maintenance of Spare ‘Parts
“a. The LMSC-.Central Logistics Organization will. provide
_ logistic ‘support for the -68 ‘contract. This support activity. isoutlined .

1. Basic Spares: ‘Spares required to support. the basic
vehicle during program assembly and at launch bases will. -be procured: ..
and delivered to the Logistics: ‘Storage and Distribution System by
exhibit to the Contract +68. Provisioning action will be-continued by’:

.AFSSD Program Office as needed under the. contract,
A separate CPFF Logistica Services: Contract will .
he established to provide Aepot level repair parts and labor to support: |

the repair of Agena D equipment which fails during Program.assembly

29 sae


2. All proposed design changes subsequent to.the !frozen'
configuration bageline will be submitted by Engineering to the LMSC Design
Change Committee for Processing and/or serialization, designated ag. ;
either.Class I or Class II in conformance with established procedures. All
Proposed changes will-be submitted to the Air Force by the ECP procedure
described in Paragraph e, below,

3. Design changes will be incorporated only. at lot break
points unless effectivity at other than lot breaks has been directed by the
Air Force Agena D Program. Director,

-@. All changes described inc 5.and d 3, above, will be
submitted to the Air Force as follows:

i. The ‘LMSC ‘Design Change ‘Committee will forward
the original copy of ‘an ECP for all Class I. changes. to the LMSC AFPRO,
Simultaneously, copies will.be forwarded to. the AFSSD Agena D Program
Office, The AFPRO will evaluate the ECP and forward comments and/or
recommendations to the SSD Agena D Program Office within five. working
days.. The Advance copies of the Agena.D ECP'g will he received at
AFSSD by the Chairman of the AFSSD Agena D Configuration Control
Board. The.CCB is ‘comprised of representatives, appointed from the
Agena D Program Office and user program offices. The procedure for
action within AFSSD will be to the discretion of the CCB Chairman; i.e.,
the Chairman may approve the changes. upon the. recommendation of the

Agena D technical staff, or he may, require a formal CCB deliberation

28



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feat. spacifiention and teat procedures have been approved. and thoroughly
tried out, the acceptance af vehicles well become the responsibility of the
Air: Force Plant Representative, In the interim,, however, the Acceptance :
Team currently consists. of three members of the AFSSD ASB. Directorate, ;
one of whom . serves.as.:Chairman, two members from the Air Force Plant

~ Representatives Office (Quality. Assurance),. a member from the Ajr Force
using program Rifire, and & member from the MSG using Program, office,

BS Acceptahility . of the vehicle for. dalivery ty she Government _

is astermined by review of the test results during the. assembly process at
the rack and module level, and. during ‘final syatem teat, and through
Phrsisal dnspection, af the vehicle. A final integrated syatem test is mada
prior to Acceptance, af the vehicle. . This teat run simulates a representative
Aucént miisaion and exercises all equipment to be used in the vehicle, The
‘Wats ip then processed and made available for, review of the Acceptance
‘Ream. Ppoccertaace data table (Table 5) 48. completed for, /euse of review,
Also the\vehirle log As provided, which sgives @ complete. story of the vehicle .

_from | ‘beginning of assembly ned] ¢ is offered to the Air Force for acceptance,
After completion of the | myatem teat and analysis ‘of the data, the vehicle is.
thoroughly Anaspectad by the JLMBC. inspection organization, which is. followed
by, the LMSC engineering staff inspection, After, working | aff all diacrepanctes,
it is turned over to the Air Force for physical inspection, The . engineering
members of the Acceptance Team and the APPR (QA) Inspectors then then,

ag 7" “


4.. Solid State Programmer

5. Flight Control Etectronics and J Boxes
6. 400.Cycle 36 Inverter ;
a DG-DC Converter

‘8 Primary Battery -

9. Yaw Attitude Indicator

bei:

10. Electro Explosive Device
1, EED Radiation Effects
c. The detail justiffcations for these items were submitted in
the Abridged Package, 648B - Agena D Development Plan, dated 2 April 62,
| A, “Punding. It 4s understood that the AFSSD recommendation that
ys. FY-63 appropriated funds be provided to. support the
“above described effort was approved by Hq AFSC and awaite necessary
action in Hq USAF. This requést for funds should be combined with the
requirement py... I-B-8) required to complete the
development/engineering (-21) contract to provide FY-63 appropriated
funds for the Agena D line item totalling! Yy,
a, SUMMARY .CONCLUSIONS, This portion of the report is submitted
in direct response to Mr, Rubel's request for "a brief summary statement
of ‘unique accomplishments and lessons learned to date, both good and bad" --
from the Agena D method of contracting and conducting program management,

Unique Accomplishments, Following is a listing of significant
‘firste' which will be accomplished under the Agena D contracts:

36


1, First CPIF contract between LMSC and the Air Force.

2. Firat.CPIF contract to be negotiated in which the performance
fee aspects are adjudged unilaterally by a board of Air Force officers upon
completion of the flight test program, ,

3, First AFSSD procurement of spares to a definitive list.

4, First development program in which all components will have
been formally qualffied for flight before first flight.

5. First ‘procurement package! for a space vehicle,

6. First program to incorporate semi-automatic checkout
equipment in system test.

, 7. .First ‘fixed price! procurement of a space vehicle,

8. First formal Configuration Control Board ontablished ¢ fora
Space program.

B. Lessons Learned. The following may be cited as lessons learned
to date through the CPIF development/ engineering contract:

1 The incentive features of the contract coupled with the
willing acceptance of the chajlenge of the accelerated schedule by the
Contractor, in large measure have been responsible for ‘the high motivation
and unusual productivity of the Agena D program. : , _

2. Without question, the incentive features ofthe contract have
-contributed to increased emphasis on cost control by the Contractor and
resulted in all scheduled deliveries being met thus far.

3. The reimbursable concept of funding the production contracts

for boosters and stages is highly endorsed for it permite an orderly

37


from any potential follow-on vehicle development effort, cmngee initiated

These changes will be programmed onan orderly basis into the Production
Une, in order that normal flow can be maintained and the Jearning associated

with this flow can be maximized, In those cases where changes are requested

which cannot be accomplished on the desired vehicle because of ite pibitia id ;
in the production Hine, it is expected that the changes thereto may be accom-
plished after USAF acceptance, By this means, Alexibility required by the
major. program ‘missions can be maintained, and the desired minimum cost
posture resulting from the Agena D Production effort can be. realized,

£. Onée the basic vehicle Production flow has been establishea
anda degree of certainty has been Sccomplished as to its continuance, it
then appears appropriate. for LMSC and the Air Force to consider extension
of the Agena, D concept to include optionals and perhaps program. peculiars
in the Rroduetion flow. It is necessary that such an inclusion be based on
firm, qualified designs and the initiation of such effort be based « on sound

and careful Planning to guarantee the " Sontinuance of an optimized a plan, from
production to Jaunch,

z. Gonfiguration :Control

- a. One of the basic patlosophies of the Agena D Program is
the standardization of components and- structures for. which a ingles ,
of functional design prevails among the Agena. users, ‘As stated ‘above,

“25°


INTRODUCTION

Early in 1961, “increased activity and mounting costs’ of ‘space program:
forced-recognition by AFSSD of ihe necessity for reducing cost and
incréiising fextbility'through standardization of the Agena stage. In Seles

to eatablish thé technical feasibility of ‘td | aproack; | on'30 June. 61, .the

“Agena Standardization Study was authorized” The reaults of thi tad 7
were favorablé and after approval by Hq USAF and ‘bob, oa’ August 61,”
the U.°S. Air Force awarded Contract AF 04(695)~21 to ikd Léckhéda
Missiles and Space Compaiiy ‘for the design, devaiopm ent ‘and ‘production
of-twelve Agena D satellite vehicles,’ which were to be standard in nature
and capable of being used with a minimum degree of change in various

satellite programs, First launch was scheduled for January 1963,

seph:v.” Charyk, Under ‘Secretary
of the -Alr'Foice, appointed a special committee chufred by Mr. Clarence

L. Janson to investigate ; ways and means of providing a more ‘eliable

Agena on'an accélerated ‘schedule, | This conimitte

Lea

Proposed under the standard “Agena « concept’ and the capacity” ‘at the
Missiles“and space’ “Cotnpany for acceleratiiig the ‘approved "schedule. It
was the conclusion of the commitiece that.a wore reli ighle standay Rims vee

could be produced to support a 28 June 62 first launch Pay dqxtra- d ;



RIWZBK
- BE RJEZHO 369 Rao'D sor
9 —=z_
FM HQ USAF WASH DC 1 DEO 1962 01 04
TO RIEZFF/AFSC ANDREWS AFB MD 1961 WOV 30 PM 5:59
ye RIWZBK/SSD LOS ANGELES CALIF re.
B |

SECRET FROM AFSDC-F 82350 .

REF BRIEFING COL EVANS THIS HOS 17 NOV 61, MESSAGE

PART IL PROGRAM DIRECTION CONTAINED IN HQ USAF LTR TO AFSC SUBJECT STANDARDIZED AGENA D
SPACE VEHICLE DTD 27 SEP 61 AND HQ USAF LTR TO AFSC, SAME SUBJECT, DTD 26 OCT 61 IS SUPER.
SEDED BY DIRECTION CONTAINED HEREIN, NO ACTION TO BE TAKEN RELATIVE PROCEDURES CON-
GOED IN DDR AND E 4 OCT 61 MEMO ATTACHED ABOVE REF 26 OCT G1 LER PART Il, PROCUREMENT
Se RSINES WILL BE IN ACCORDANCE WITH HO USAF (APEPM) MESSAGE TO AYEC Het ox Roe ore PART
mm, FOLLOWING ARE PROGRAM GUIDELINES: (A) AGENA D TO BE PHASED INTO

PAGE TWO RJEZHQ 389

DISCOVERER ASAP, (B) AGENAB TO BE USED AS BACK-UP FOR INITIAL AGENA D FOR DISCOVERER TO

PROTECT LAUNCH DATES. {C) AGENA D TO BE PHASED INTO ALL NEW PROGRAMS AFTER

1 JAN 63. (D} AGENA D TO BE PHASED INTO PROJECTS 10158 AND 201 ON NEXT VEHICLE ORDER. (E)

AGENA D TO BE PHASED INTO PROJECT 102 AFTER INITIAL FOUR VEHICLES, (F) PHASING AGENA D

INTO MIDAS TO BE EVALUATED AND RECOMMENDATIONS PRESENTED TO HO USAF ASAP. (G) INITIAL

2QRNA DS WILL CARRY DX RATING OF USING PROGRAM. DECISION RE: DX RATING FOR JoeeE oN TO
MADE IGINEE!

ROG! DIREC: USING
FACTURING COMPLETION SCHEDULE FOR INITIAL T
MAY (2), JUNE (2), JULY (2), AUGUST (3), SEPT (1). (B) LAUNCH DATES FOR INITIAL TWELVE AGENA D
VEHICLES 1962 JUNE (1), JULY (1), AUGUST (1), SEPT (2), OCT (3), NOV (1), DEC 41); 1963 JAN (1), FEB
D PROGRAM, DISCOVERER PROGRAM AND 4TH DISCOVERER LAUNCH

(1). PART ¥. FUNDING FOR AGENA
PAD WILL COVERED BY SEPARATE COMMUNICATIONS. PART VI.
iT Bi! A PROGRAM

UNC!
ATTN: AF8SV-EQ

PAGE FOUR RJEZHQ 389
BY 15 DEC 1961. A BRIEF MONTHLY REPORT SHOWING PROGRESS AND
WILL BE SUBMITTED TO HQ USAF BEGINNING 1 JAN 1962. PART VIL. (A) TOOLING
TEST EQUIPMENT WILL BE PROVIDED FOR PRODUCTION RATE OF 3 TO 5/MONTH.
RATE TO BE MADE AFTER ANALYSIS LMSC RESPONSE TO 88D REQUEST FOR PRO:

FACILIT INITIAL TWELVE VEHICLE PROGRAM AND
3/MONTH AND FORWARDED TO HO USAF,
INCLUDE STUDY USE AGENA D WITH TITAN UI BOOSTER. FUNDS FOR THIS STUD"

JANUARY 1962,
Br

30/1910Z NOV RIEZHQ
IC 15572


‘APPENDIX


late more than two weeks, the fee ts decreased by .0222% of target. cost
per week for five weeks to a maximum penalty of . 111% af target cost per
vehicle, it all twelve vehicles are seven weeks or more late, the fee ,
would be ‘reduced to 5% of target cost a detailed procedure ~
has been evolved to determine the actual date and time of ‘final acceptance .
and delivery for fee purposes. . °
ar Performance: Gue of the most ‘significant and
unique features of the negotiated incentive fee relates to the ‘payment of
the 1/3 fee based upon performance, The Contractor proposed and the Air
Force accepted the principle that.the Air’Force would unilaterally rate the
Contractor's performance. LMSC officials suggested 2 set.of criteria as
the basis for rating which were similiar bat ‘not identical to those finally
arrived at through negotiation, It is now agreed that the 1/3 fee based”

upon performance shall be by a point rating, erstam. If the Contractor's’

performance is rated the maximum of 60 points, the fee for performance ;
will be based upon 9% of target cost A
performance rating of 30 points sete the target fee of 7% 0:
performance rating of 0 points gets. the miaimum rate af 5% °
An Air Force. hoe composed pf representatives

of the using Programs and the “Agena D Program. ‘Office willbe appointed

by the. Commander, AFSSD, to. ‘rate the ‘Contractor's performance ‘within °

30 days of the launch of the twelfth prototype vehicle. ‘The hoxrd.will use ~~

the following criteria: 30 points for {1}, Reliabliliy, (2) Program Adaptability,

(3) Ease of Checkout; 30 points for (i) Weight of Vehicle, (2) Ascent Perfomance.

12


information his permitted corrective attian td be taken ii euftidient time |
to keep expenditiires withiz the hudget. It is nignificant to ‘note that at

this polit th the jhiogram, approximately 60% af the castéhave'bocn incurred
and program costs are still tracking an expenditure curve whith will result
in the Contrkctor ‘completing the contnaict-at ok ‘Adlighily below the target cost
‘eatabMshed during ‘the negotiation. : ioe :

"bd. Agena D Accounting System. Jn early December 1961

os.

"to" eatablish's épetial’ accounting aystem for the Agénd D'prograin which ©
would watiefy the Aix Forcs' Auditor Genaral requiréinants for.the:CPIF* |:
contract. ‘This has. been accomplished to the satisfaction of the Auditor
General and’ should permit the moat accurate cost acoumilation,va-vehiele
Prodiiétion thas fiir wehlevéd at LMBC'Suntyvale;° ‘The main prahlem ‘with‘ike
pré-Agena D accounting eystem'at LMBC, ‘celated té the ‘pool ‘chargés which:
were utilized.to fund-common oF ‘eénivalixed facilities and séxvices’” I¢-1aa*
been the approved technique to prorate'these.costs ‘@mong appropriate
customef contracts. In large meaauié, ‘this actdunting isyétenr limitation
has been overcome by the straight Mne orgaiitzation cteated by LMSC for" *
the Agena D program and the fact that the Prograin ‘Dikector has ‘been able
to negotiate with tlie remainder‘of ‘the Corporaiioa foi'services provided
Outeidé his. control, i The ‘cost accounting’ syateni which tas beeii establistied
was nilitually’ evolved athorig the Contracto’, ‘AF'PRO; ‘local representatives’
af the Auditor General's Office, and’the Program Office, ‘The bréakdown’'

U
i4



Section

CONTENTS

Description
Foreword
Introduction
Contracts

A. Background

B. Development/Engineering Contract

1.
2,
3,
4.
5.
6.
qe
8.
9.

General

The Procurement Package
Incentive Features of the Contract
Cost Management

Program .Control Techniques
Technical Management Interface
Vehicle Acceptance Procedures
Funding - :

Accomplishments

a
C. Production Contract

1.

2,

3. Logistics and Maintenance of Spare Parts

4.

General .

Configuration. Control

Funding

D. Component Improvement Contract

1. How It Related ‘to the -21 and «68 Contracts

2.

Why We Need It

di

13

15

17

18

20

22

22

25

31

31

31
32



in the Agena D by certain.component improvements which will alao improve
: reliability and provide greater ‘simplicity;

: "oe, ‘Additionally, in order to establish « prope? tontractual
interface with LMSC for the industrial base which will support thé vehicle
‘engineering ‘effort supporting all space ‘programs, the AFSSD xrequeated
that funds ueceasary to support the Development Test Lehoratory, Santa’
‘Cruz Teat Base, vehicle zeliability program, etc. ,. be consolidated in to
AgenaD line item for FY-63 and administeréd by the AFSSD Agena Program
Office. Through this means all proposed vehicle change ‘requirements :can
be fannelled through one ‘responsible Air Force agency, controlled by one
contract and the benefits of the staidard vehicle ‘coricept can be batter

Preserved, ~

3. “What It Buys
"a, A look at the projected Agena D usage indicates large
scale requirements for the foreseeable fiiture. -. Considering that’ an ‘Agena
Taunch,. inchiding booster aiid payload, ‘will cost 5 to 10 millions of dollars,
an extensive, aggressive reliability Program appears to be an absolute’
necesaity. Such a program will be supported,” ©
: 'b, In the current development contract’ study efforts are
underway to determine the optimum component improvément program. The
following items currently appear to'he the somponent improvement items:
, ‘2, Horizon Sensor MODI -!-
2, Velocity. Meter
‘3. Inertial Reference Package’ ~

35


b.” It is planned that the management of the -68 contract
will be in compliance with standard Air Force productisn: “procurement
regulations and that aithough it will not necéssarily encompass alt of"

the military specifications associated with standard Air Force procure-

ment, it ‘will saliaty completely ‘the intent of ‘those specifications,

©. Operations under the contiact will ba ‘conducted
primarily in LMS¢ Building 152,, Sunnyvale, Califoriia, which will be ~
recognized as a factory for the production of the Agena, D Vehicle, The -
Lockheed. organization housed therein ‘ will be Fesponsible’ ‘for the’
accomplishment of that Production effort and will carry out all
necessary functions associated: therewith. The organization will include:

«2 A sustaintig cnginsoring effort to provide
engineering support to the production effort, This will include a:
value ongineering- type effort to provide an’ ‘improved; Product froma”
product, standpoint, This group will not necessarily: have-a’
capability, for the accomplishment of design improvement-nor ‘will it
be authorized to accomplish design change af a Alevelepeient nature,

2A manufacturing capability for the fabricatian, -

assembly, and checkout of the vehicles, drawing ‘on other Lockheed”!
manufacturing organizations for a'portion of the fabrication’ add °* ’

assembly effort, “* ‘""-

3. A procurement group responsible’ for the procirétent

of all purchased parts, yendor items and subcontracted items required *

23



18 May 62

FOREWORD

In conformance with directives received from Hq USAF and in recognition

of the urgency attached to the satisfactory accomplishment.of the Accelerated
Agena D Program, certain extra-ordinary and unusual technica] and con-
tractual ralationships were established with the Lockheed Missiles and
Space-Company, Sunnyvale, California. It is the Purpose of this paper to
record these relationships, to analyze the effectiveness of this unique
management approach in light of the results obtained to date, and to present

summary conclusions in response to Hq USAF message AFSSV-EQ 85147

dated 4 May 62.

Colon SAF TM~s
Program Director .



4, -Eunding. . Since the end product. of the Production (-68) contract
isa » aleale product which must subsequently be augmented with Program
peculiar payloads, ete. ? before it can serve ‘ite intended Purpose, it is
currently planned to fund ‘this contract with reimbursable fonds. By this .
technique. @ stable Production rate can be established, lot buys at a fixed ,
price negotiated ana the maximum benefit of the siandardized configuration

: roglixed, = : Based on the directed 49-vehicle buy and assuming a continued
production at the rate of four vehicles per month, the fincal requirements
for the Production ¢-68), Contract are shown below:

' --648B ‘PRODUCTION: FUNDING: REQUIREMENTS
EE EEEREMENTS

‘FY-62 © Fy-63°" “TOTAL

N

FOLLOW-ON CONTRACT (-68):
Long Lead Procurement
Follow-on Procurement
TOTAL N
é os :
TABLE 2,

D. Gomponent Improvement Contract.
1, How it zelately to the -21 and -68 conte acth. Aa staied above

in.Section J, the -21 contract provided sobive v vehicles, ‘but more important
it provided for the technical effort necessary for the redesign, development

and qualifying of the Agena into a standard ascent vehicle ~- the Ageia D.

3k


7 —~ vn . a
“MISSILES .~

.& SPACE...
COMPANY ..

8 Mey 1962

“Henry B. Kucheman, Jr.
. Colonel, USAF’.

System Program. Director
‘for Agena -

-Discussion of Advantages and Disadvantages of the Agena D

“. Subjects
. Method of Operation

In response to your verbal request, I have listed below my personal opinion of
"the: advantages and Gisadvantages of operating: a Program under the ground rules
that we have established for Agena D. Sufficient time has elapsed so that a
_Peasonable objective view can be taken of the gains made under this method of
Operation and some-of the trouble areas that might reswit. While these are
ny‘own personal views, I believe they also reflect the opinions of the majority .
of my staff. . . oo

“Accomplishing a given task ins shorter time period generally means
& savings of total dollars even though the'rate of expenditure may

Providing the proper team is assembled in i

are required to do a given job because of the short communication
channels, thé personal identification with the

. Yeduction in paperwork. There is less lost

;
;
é
i
:
i
F

_ The "skunk vorks" approach places great’ emphasis on the ability of the’.
“designer to follow a project from inception to completion. It allows
. tor very fast reaction vhen changes or corrective action are required.

Because of the vapid pace, mistakes are learned early, and. corrective
ection can be taken before a pipeline is full of fabricated parts. .

- 49 * o


the Agena configuration will be established’ and frozen under the -22
contract. From this baseline position, Agena D vehicles will be procured
on a fixed price basis. It foliows then that changes muat be kept.to ae
minimum -- configuration must be controlled.

b. In connection with this function, configuration control;
procedures have and will be eatablistied covering Design Change and
Engineering Release Controls which meet the requirements of Configuration
Accountability (AFBM Exhibit 61-62) under the AF 04(695)-68 contract,
Implementation of these controls will be divided into two phases: Pre:
Baseline Configuration Accounting and Post-Baseline Configuration Control.

¢. With respect to the first phase, Pre» Baseline Configuration
Accounting, there has been. established;

4. A LMSC Design Change Commiittee to prograin,
serialize, control, and release all changes considered within the scope
of Contzact -68 that originate .on:Contract -21 through Serial AD-9,
which will not require formal Air Force approval until final configuration”
control has been established at the “frozen! baseline for Contract -68,

: : 2 An Engineering Release-Center which is responsible
for the release of all drawings, maintenance of drawing status records,
preparation of complete parts lists, and the impounding of all specifica-
tions and drawing vellums (vendor and subcontractors included) affecting '
vehicles on Contract -68. ; ;

3. Design approval and change control procedures for
subcontractors who will be required to submit design drawings and
a6


. GSEAF FEE GUICANCE
@ TARGEIS re ;
be KEALIBTIO .
_ MPCATEAG MAY CE EP
yw 4 7/4 EXTENT UP ANP POR,
DAML OTATUTORY CWT :
MME LATEST NEGOTIATED FEE AO TARGET
“'S @ PERFORMANCE _
 MOPECIFY COBENTIAL PER ORMNCE
AE POUELE, OE FINAL OR CRUNCH RECUCTO

© MEASUREMENT ; i
RMT 10.4 FEW KEY MEAMV CUE CCITT

WHERE JHNGTECE MERBUREMENTO AKE WOT ALHILAPLE, a MUDEMENT :
Wil APPLY :

ML WERAT TO COGT, DELIVER, PERFORMANCE
@ OTHER CONTRACTS . . _
MB AOBURE NO DETRIMENTAL EFFECT OW OTHER FRCCKANIT
@ ACCT SYSTEM .
BR ABSURE OESREGATION OF COSTE 10 PERTINENT CONTRACT
AMIETEN UD PROVIDE COT CHIR HBEFUL ON FOLLOW-OW

Fig #2


, Additionally, it has been mutually, agreed between _
the ‘Contractor ‘and the Agena. D Program Oftee that. should failure to :
qualify all components af the Agena D vehicle prior to Might of each of the
Prototype vehicles Aelay the flight of any vehicle, a suitable sdjuetment of
the performance fee will he made, This will be the first time that the
Agena vehicle will be contractually required to have all components
quelified for fight prior to fight. .

_ The Air Fores has ‘otahltahed :

the incentive features < of the contract. in an effort to contral. conty- schedules
and ingure performance, ‘Tha atfectiveness af the incengive features at: the.
contract pastaining to cost immediately, became evident whan the Contractor
-Gatabliahed ais. Program Cost Accounting Systern. ‘In ordar to delegate .
and fix management responaibility and authority, each af the major
departmant heads, i.c.,. Syatems Engineering and Reliability, Vehicle
Engineering, Manufacturing, Inspection, Procurement, and Adcnntatzatian
have been ven. individual operating budgets and. pvertime allocation. These
budgets are reviewed’ weekly by the. LMSC and Air: Force Program Directors
and are tracked against individual . organizational allocations and master .
program. milentones that should | permit the Contractor to stay within conte
allocated 1 to, the ) program, _ Experience. to date has indicated that this method ,
of high. lighting and controlling coat has Permitted the Program Directors

timely access to information which forewarns af potential overruns, . This

13