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j.z1 NATIONAL RECONNA!SSA CE OFFICE 

WASHINGTON, D.C. 

OFFICE OF' THE DIRECTOR 

111111111111111111111111111 lllll 11111111111111111111111111111 IIII 14 00050105D 

Honorable Richard Helms 

Director of Central Intelligence 

Central Intelligence Agency 

Washington, D. c. -- I 

MAR 2 5 1969 

Dear Mr Helms : ' / 

Th: Director of the Bureau of Budget sent tou a memorandum dated 

~,arch 22, 1969 (BYE 11663-69) addressing the HE+AGDN issue. Inasmuch as 

an important consideration to the BOB view is aμ estimated 11 5 year . 

savings 11 of ~t905 million, I believe it ap;~.• :,prir· te to furnish 'the NRO 

cost assessment of the BOB mix options. 'I'nis i dicates that the savings, ·· 

addressed in the same context as the BOB approa h, would more likely be .·. · 

about ~285 to $340 million. In specific relati n to the FY 1970 budget, . 

a reduction of $78 million is indicated to ·oe aphievable, if HEXAC-ON were _. 

terminated as of April 1, 1969, with successivefy lower reductions if the 

program were terminated at later dates.. i _. 

I 

The NRO Comptroller assessment is r?flecte~ in the attachmento All 

costs anticipate that if CORONA were continued,ithere would be no improvements in the system, and there would be no provision for a 1211 S/I ca..'TI.era · program. If either or both assumptions are incorrect, any potential 

savings would be reduced significantly. · 

Attachment 

~incerely, 

I 

} 

.D D (\~N\ p rv \.._ d-.. -\ \d.1--••-'-"V' 

OHN L. McLUCAS 

irector 

cc: ~U'~ Robert Mayo, Director, BOB 

~5~~.ok\i!. t FROM '\JTOMAT!C REGRADING 

DOD OtRE:CTIVE 5200.10 DOES NOT APPLY 

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BOB 11Eaua1 Performance 0-::Jtions 11 - H:sXAC-ON 

(Enclosure "TAB C11 to 22 Y.iarch 69 Memo to DCI) 

Comparison of BOB Estimates with Cost Facts 

BOB NRO 

Unit A.'1.i.'1ual Unit 

Launches Cost Costs Launches Cost 

Mix Ontion 1: 

CORONA 7 $ ]j)f ·i 981⁄2 6 i 15M 

G-3 6 23M 138M 7 20.2M 

Titan Impact _o_ 

Total 2J6M 

Notes: 1. BOB identified this mix as 11 cu:eren.tly app:c>oved11 for FY 1970. 

·Tne current approval is 6 CORONA and 7 GAMBIT for FY 1970. 

2. Tho BOB costs exclude the impact on other Titan boosters, 

previously recognized in all cost tabulations. 

3 0 Both sets of figures exclude anv improvements in CORONA3 and 

make no provision for a 1211 S/I Camera. 

BOB NRO 

Unit An.11ual Unit 

L,nmcbes QQil Costs Launches Cost 

11.dx Ontion 2: 

HEX.AOON 5 $ 45M j225M 5 $ 39.8M 

G-3 5 25M 125M 5 24.5M 

Total 350M 

Notes: 1. The BOB unit cost est:L-rnate for 5 HEXAGON used the same unit 

.cost as for 4. 

A.n.mml 

Costs . 

$ 90M 

142M 

-2ill1 

252.M 

.Annual 

Costs 

$199M 

22311 

.322M 

2. Tne BOB refers to an April 1968 USIE source for the number of 

launches. The Ex: Com November 1968 decision approved 4 HEX.AC-ON and 4 

GAMBIT for FY 1973 s..nd 1974. Accordingly, the BOB Option 2 reflects a 

higher number of launches than the Ex Com approval and the NRP 5 year 

program. If the 4 HEXAGON/4 G.AMnIT basis were used, the costs would be: 

HEXAC-ON 

G-3 

Total 

4 

4 

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~ 44.5M 

27.9M 

$178M 

Jl2M 

290M 
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ButJL. vYSiLt1 

M.-tx Ontion 2 vs, Mix Option 7: 

1. If the corrected Mix Option~ is appropriately adjusted to the 

~252.i.~ annual cost, and using the BOB 5 HEXAGON/5 GAMBIT Option 2 mix at 

• appropriate cos Js, the difference would be $70M annually, or ~?350M for 

some 5 year period. 

2. If, however, the M:i.x Option 1 at ~;,Z:,ZJ.'1 is compa1·ed to the cf'ficittl 

program of 4 HEXAGON/4 G.AMBIT, the difference is $J8M an"'1u.:_tlly, or $190M 

for soille 5 year period, in comparison wi t:1 the BOB estimate of ~?670M 

(incidentally overstated, as the BOB arithmetic works out to ~570M). 

BOB HNoten: 

T'ne BOB note states that nthe CQRONA/G-3 :mix would probably produce 

an even greater savings due to the following factors: 

Surveilla.°1-ce requirements can be met with 4 G-3 

missions per year in mix option #1 

HEXAGON would probably require 5 missions rather 

'than4 in each of the first 2 years in mix option 

#2 as the system is maturing 

Additional HEXAGON development costs 

Additional 

5-year 

savings 

- 115 

- 90 

- 30 - 235 

T'.nese three factors would produce a total cost differential of 

i670M plus ~>235M or $905M over a 5-year period. 11 

Addressing each of these BOB points in sequence: 

If option 1, as• corrected, were adjusted to 4 G-3 missions per 

year, (instead of 7) there would be a difference of $JOM per year, or 

$150M for some 5-year period. 

If HEXAGON were based on 5 missions rather than 4 in each of the 

first 2 years, the difference would be $42M, not ·~p90M (again, the BOB 

overlooked the unit cost differences in their calculations). In any 

event, this is an unrealistic 11 savings, 11 as the official program is 4 

in each of these two years. 

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The BOB estimate of :$30M for additional HEXAGON development costs 

is evidently based on a statement on page 3 that a 11 program slippage of 

3 to 6 months will probably occuro 11 There has been no request for, or 

change in, the objective October 1970 first launch date. Accordingly, 

this is a speculative added cost by BOB. 

From a total 5 year 11 savingsn standpoint 1 then, using a.'1 option of . 6 CORONA &J.1d 4 GAMBIT versus 4 HEX.AGDN and 4 GP.JvffiIT would 11 save 11 in some 

5-year period about ~P.3401'1 vs. the BOB e.o.rtimate of ~p905M. 'ln.0 term 11 som0 

5-year period11 is used he1~ein, because the 5-year period would start when 

a level-off recurring cost year were reached (estimated to be FY 1973 at 

the present time). For example,, the current official planned launches by 

fiscal year are: .: 

' 

CORONA HEXAGON GAMBIT 

FY 1970 6 7 

FY 1971 L.,. 4 5 

FY 1972 4 5 

Yi 1973 4 4 

FY 1974 4 4 

To adjust to the BOB 11 program11 of 6 (or 7) CORONA and 4 GAMBIT in 

the near-term would require a negation of the reasons for the Ex Com 

establishment of the cm·rent GAL\ffiIT schedule. Incidentally, on Page 3, 

the BOB states HThe CORO'.t-TA mix will probably not require more than 6 

CORONA 1 s and 2 GAMBIT-3 1 s;' so there is a BOB inconsistency between page 3 

and Tab C., If 6 CORONA and 5 GAi\ffiIT1 s were planned per year, the 11 some 

5-year savings 11 would be about $28511 .. 

FoYo 1970 Budget Considerations: 

This should be a more pertinent conside1·ation than 11 some 5-year 

savings. 11 In February 1969, revised costs and "savings 11 , if HEXAGON were 

terminated 9.s of 1 Viarch 1969 were furnished for the BOB/OSD discussion. 

··, Inasmuch as the program was not terminated by 1 March, and about ~p20 

million per month costs are being incurred at this time, the estimated 

:l]l)9Si>vl budget reduction would now approximate ·$7SM against a 1 April termin...: 

ation date, $58M against a 1 May termination date, etc. 

This is emphasized, because other material from BOB on potential 

reductions in the FY 1970 budget indicate considerably higher "savings" 

for.a F..EXAGON termination. 

CONTROL SYSTEl 

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