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MEMORANDUM FOR RECORD 

March 14, 196 

SUBJECT: March 10 Meeting on MOL Revised Costs/Schedules 

A meeting was convened at Headquarters Air Force 

Systems Command, Andrews Air Force Base, Maryland, on 

March 10, 1967 to review the analyses and conclusions 

reached as a result of the scheduling exercise directed 

upon all MOL associate contractors at the February 15 

MOL Management Meeting. A copy of the material presented 

at the March 10 meeting is attached. Those in attendance 

included: 

General Ferguson Director MOL 

Dr. Flax SAF-R&D 

Brigadier General Berg SAFSS 

Brigadier General Hedrick Hq AFSC 

Dr. Yarymovych SAFSL 

Colonel Battle SAFSS 

Colonel Heran SAFSL 

Colonel Kester SAFSL 

Colonel Knolle SAFSP 

Colonel Randall SAFSL 

Colonel Sanders SAFSL 

Colonel Smith SAFSP 

Mr. Donovan Aerospace 

Dr. Leonard Aerospace 

Mr. Tennant Aerospace 

DISCUSSION 

During the period of February 16-27 a concerted and 

integrated effort was undertaken by the Systems Office/ 

Aerospace and all MOL associate Contractors to rework all 

segment schedules on the basis of: (a) a 9-month program 

slip and (b) a 12-months program slip. These schedules 

were then incorporated into revised test plans with fiscal 

year and total program costs identified for each.* 

The Systems Office concluded from this exercise 

that a 9-months program extension was extremely tight on 

scheduling of exchange hardware between Eastman Kodak, 

General Electric, and Douglas. Although technically 

feasible it was felt that the high risk and excessive 

fiscal year cost associated with this schedule made it 

unacceptable. 
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Conversely, the 12-month program extension to the 

baseline schedule, resulted in a test flow plan acceptable 

to all associate contractors. However, the ROM costs 

associated with this revised schedule ($586 million for 

FY 68 and $637 million for FY 69) exceeded the FY 68/69, 

guidelines of $500/$600 million laid down by Dr. Flax 

at the February 15 Executive Management Meeting. The 

presentation further contended that to impose fiscal 

year 68/69 ceilings of $500/$650 million would result 

in a minimum program slip of 15 months. Also, it was 

pointed out that the contractors' ROM costs were based 

on expenditure plus fee type funding. To go to normal 

commitment type funding would add additional cost 

requirements of approximately $75.0 million in, FY 67 

and $30.0 million in FY 68 with only slight reductions 

in FY 69. 

In the discussions which ensued, the following 

decisions were made: 

FY 68/69 BUDGET 

Dr. Flax and General Ferguson agreed that they 

would attempt to see Dr. Brown and Dr. Foster on Saturday, 

March 11 to review with them the revised scheduling data 

and to obtain FY 68 and FY 69 funding levels which could 

be used by the Systems Office in negotiating revised 

baseline schedules. In no case did Dr. Flax envision 

that these levels would exceed $500/$650 million forFY 68/69. 

DX PRIORITY 

It was agreed that a DX industrial priority for 

the program is still required and Dr. Flax will continue 

his efforts with OSD to obtain a dollar limited DX priority. 

As an interim course of action Dr. Flax will support 

action to raise the Program DO industrial priority to a 

more favorable level. For the immediate period, the 

Systems Office will negotiate the revised program schedules 

on the assumption of a DO industrial priority with 

provisions for providing special assistance to the 

contractors for obtaining critical long lead items. 

DORIAN 
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TYPE FUNDING (EXPENDITURE VS COMMITMENT) 

Dr. Flax directed that the MOL contracts be 

negotiated and funded on a commitment rather than an 

expenditure basis. He asked to be notified, as soon 

as possible, of the additional costs required in FY 67 

to fund the MOL contracts on a commitment basis. If 

these costs, when identified, prove to exceed the FY 67 

budget level, then the Secretary will initiate internal 

Air Force reprogramming action to correct the funds 

deficiency. 

CONTRACTS 

The Systems Office recommended and Dr. Flax 

agreed that fully structural incentive contracts, as 

previously negotiated, are still appropriate for the MOL 

Program, even in light of the schedule slip. The same 

type contracts as orginally negotiated with each of the 

contractors prior to the program slip will be maintained 

in the renegotiations. 

ACTIVE MOLECULAR SIEVE EXPERIMENT ON SATURN IVB 

The MOL Program Office recommended that an active 

molecular sieve experiment be carried on the proposed 

Section IV Orbital Workshop flight scheduled for June 

1968. Dr. Flax stated that before approving this 

experiment he wanted to talk to Geo:Miellerof NASA. No 

decision date or reason for this contact', was indicated. 

TITAN IIIM DEVELOPMENT COSTS 

Dr. Flax indicated he would discuss with Dr. Foster 

the possible transfer of Titan IIIM development funds 

from the MOL to the Titan III line item. No specific 

date was given from this action. 

NEXT MOL MANAGEMENT MEETING 

Dr. Flax and General Ferguson both agreed that 

either April 6 or April 7 would be an appropriate and 

acceptable date for the next MOL Management Meeting on 

the West Coast. The meeting is tentatively scheduled 

for April 6. 

DORIAN 

RICHARD C. RKNDALL 

Colonel, USAF 

Cbtlef Program Control 

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