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OFFICE OF THE SECRETARY ,,4V°TZ1) By 

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MEMORANDUM FOR THE SECRETARY OF THE AIR FORCE 

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The attached Status Report on the Manned Orbiting 

Laboratory (MOL) Program covers activities through 

January 31, 1967 and is submitted in accordance with 

the January 16, 1967 memorandum from the Office of 

the Secretary. 

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4, J NIFIAOIERGU ON mmmmm 

General, USAF 

Director, MOL Program 

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I. PROBLEMS 

A. Funds 

On January 7, 1967, the Deputy Secretary of 

Defense approved a FY 1967 budget of $228.446 million 

for the MOL Program in lieu of the $178.446 million 

previously approved. Simultaneously, the FY 1968 budget 

was reduced to $430.0 million from the $480.0 million 

previously approved. This action brought FY 1967 requirements and approved budget into agreement. However, the 

FY 1968 approved budget is now approximately $157.0 million 

less than the Systems Office estimated requirements and 

$381.0 million less than contractors' estimated requirements. The contracts for the MOL Program, which are 

predominantly of the fixed price incentive type, will have 

to be renegotiated in the near future unless the FY 1968 

budget and anticipated contractor requirements for FY 68 

funds can be brought into accord. The Vice Director, MOL 

will confer with contractors top management on February 

2 on this problem. A second meeting is now scheduled for 

February 15th between government and contractor management 

for further discussions. 

B. MOL Priorities 

MOL Engineering Development Phase contracts with 

Douglas, McDonnell, and General Electric were negotiated 

on the basis of DX industrial priority. In the existing 

circumstances, the Government cannot execute these contracts 

as negotiated. As an interim device, to avoid delay in 

contract definitization and to provide contractual coverage to the contractors during the period required to reach 

a final determination on the MOL Brickbat .01/DX request, 

the Systems Office will continue with the definitization 

of existing contracts, amended to include provision for 

renegotiation in case DX industrial priority is not 

authorized. These contracts will be DO-rated at the time 

of distribution, and will provide for an equitable adjustment of price, incentives, and period of performance if 

DX rating is not authorized by March 15, 1967. It is the 

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preliminary judgment of the Systems Office that an 

adjustment from DX to DO rating for the program would 

add approximately $100 million to negotiated program 

price, and would slip the first manned flight date 

approximately six months. 

C. Review of Decision of MOL Subsystem Testing at 

Douglas Sacramento Test Facility 

On January 23, the Secretary of the Air Force 

made a commitment to the New Mexico congressional delegation 

to re-evaluate the MOL Program decision to test two subsystems at the Douglas Sacramento test facility as originally planned, rather than at the NASA White Sands test 

facility, which had been surveyed by MOL personnel this 

past fall as a possible test site. An ad hoc group has 

been established to review this decision on a basis of 

overall national interest and to provide findings and 

recommendations which can serve as a basis for the reevaluation. The group is composed of one representative 

from each of these offices: MOL Program Office, Office 

of Manned Space Flight, NASA Headquarters, and the new 

Directorate of Space, DCS/R&D, Headquarters USAF. A 

written report is to be provided to the Vice Director, 

MOL Program, on February 17, 1967. 

II. CHANGE PAST MONTH 

A. Authority to Proceed with Engineering Development 

By memorandum dated January 13, 1967, Dr. Flax 

authorized continuation of the engineering development of 

the MOL System, subject to the following constraints: 

1. FY 1967 funding is established at a 

maximum of $228 million; all practicable actions to hold 

requirements below this figure should be taken. 

2. FY 1968 funding levels will be established 

at a later date, following accumulation of actual program 

experience in obligation and expenditure of FY 67 funds, 

and resolution of certain other program issues. 

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3. Actual obligations and expenditures of 

FY 67 funds are to be reviewed in detail prior to release 

of remaining deferred FY 67 funds. 

4. FY 1967 and FY 1968 dollar requirements 

will be held to minimum levels compatible with approved 

program objectives. 

B. Congressional 

Inputs on MOL have been provided for posture 

statements, back-up material, and testimony to Congress 

by Secretary of Defense, DDR&E, Chief of Staff, and 

DCS/R&D. The status and problems of MOL FY 68 funding 

were presented to the Chief of Staff in one of the 

scheduled sessions in preparation for his Congressional 

appearances. 

The accident at AMD, Brooks, involving a 100% 

oxygen atmosphere cabin, following so closely the Apollo 

accident, has generated a series of Congressional questions 

and investigations. Briefings to the Senate and House 

Committee Staffs on the subject of one-gas vs two-gas 

systems have been scheduled for February 7 and 8. Congressmen Stratton and Brooks of the House Armed Services Subcommittee No. 3, (Chairman Price), plan to visit Brooks 

on February 3 to assess the accident. 

C. SIVB Checkout System to Support MOL Flights 

1 and 2 

An SIVB Checkout System currently located in the 

Saturn System Integration Laboratory at Douglas, Huntington 

Beach, has been declared in excess of needs there. If this 

equipment could be made available by NASA to the MOL Program, 

an approximate one million dollars savings could be made 

in support costs for MOL Flights 1 and 2. Requests for 

this equipment were made to the George C. Marshall Space 

Flight Center, Huntsville, by Douglas personnel and the 

Air Force Plant Representative's Office. A formal request 

has been submitted also by the Director, MOL to NASA 

Headquarters, where it is now under consideration. 

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Since most of the equipment is general purpose 

telemetry equipment, other NASA activities also have 

expressed an interest in obtaining this system. A decision 

is expected by February 15, 1967. 

D. Easter Island 

On January 20, the Government of Chile approved 

in principle, without unacceptable conditions, the use of 

Easter Island as a staging base for MOL powered flight 

abort recovery forces. An agreement in detail must now 

be negotiated. The formal agreement will probably take 

the form of an exchange of letters between the two Chiefs 

of Staff, Air Force, similar to the agreement covering the 

operation. 

E. Titan III Management Review 

The management review of the total Titan III 

Program, requested by the MOL Vice Director in December 

1966, has been completed. The group's report dated January 

16, 1967 has been briefed to the Commander, AFSC, and the 

MOL Vice Director. It is planned that Dr. Flax will be 

briefed in the near future. Copies of the report have been 

furnished to the Commander, SSD, and the MOL Deputy Director 

for review. The group's conclusions and recommendations 

are under study by MOL Program, Hq AFSC and SSD personnel 

to determine actions which can be taken to make management 

and financial improvements in the Titan III programs, and 

particularly in the Titan IIIM program. 

F. Acquisition and Tracking Scope Source 

The General Electric Company has completed negotiations for a subcontract with ITEK for the Acquisition and 

Tracking Scope. Signature by GE is being withheld pending 

completion of the basic GE Engineering Development Phase 

contract definitization. The subcontractor is, however, 

being covered financially at the direction of the Systems 

Office so that long lead times and schedules will be 

protected. 

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G. Publication of MOL Program Directive 67-1 

MOL Program Directive No. 67-1, Policy Relating 

to MOL Astronauts, has been issued. The purpose of the 

DireTTive is to minimize any possibility of security 

compromise or unfavorable international incident in 

connection with MOL astronauts, with particular emphasis 

on their selection, training, and operational use. The 

MOL Program Office worked closely with the NRO Staff in 

formulating this Directive. 

H. SIVB Orbital Workshop Experiment Integration Costs 

In a letter to Dr. Mueller dated January 27, 1967, 

Mr. D. J. Fink, Deputy Director (Strategic and Space 

Systems) ODDR&E, expressed DoD concern over the NASA decision 

to prorate integration costs among the sponsors of Orbital 

Workshop experiments. The letter suggests a reevaluation 

of the decision to bill DoD for integration costs, and 

requests an estimate of the integration costs for each of 

the five DoD experiments involved in the event that these 

costs are to be borne by the experimenters. A response 

by February 10 was requested. 

III. CURRENT STATUS 

A. Funds 

Durin January DoD released an additional $120.0 

(FY 67 released to date. Funds released to the 

million (FY 67 to the Air Force for a total of $170.0 

million 

MOL Program since program approval in August 1965 now 

total approximately $336.2 million as of January 31, 1967. 

Funds in the amount of $80.0 million were released to MOL 

operating activities during January, leaving a balance of 

approximately $43.0 million retained by Director, MOL 

Program. It is estimated that these funds will cover 

program requirements through April 1967 at which time a 

request to DoD will be made for the remainder of FY 67 

funds. 

B. Space Launch Complex Number 6, VAFB 

Seven bids for construction of the MOL launch 

complex were opened on January 17. The contract was awarded 

on January 24 to the low bidder, Santa Fe and Stolte of 

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Lancaster, California. The total value of the contract is 

$20.2 million. Completion of this portion of construction 

is scheduled for July 15, 1968. There still remains 

approximately $3.5 million of short lead time construction 

to be contracted for later this year to complete the launch 

complex. 

C. Aircraft Support 

Action has been initiated to base MOL Program 

aircraft at the Los Angeles International Airport. The 

aircraft to be used for Space Flight Readiness Training of 

MOL Aerospace Research Pilots consist of one T-39 presently 

at SSD, two T-38s presently located at the Aerospace 

Research Pilot School, and three T-33s to be made available 

by Hq USAF. Phase-in of the T-38 and T-33 aircraft to 

Los Angeles International will begin in February 1967. 

D. Follow-on Program 

The first phase of the follow-on options study 

was completed by the Systems Office and presented to the 

Program Office on January 17, 1967. The study looked at 

seven different options with various mixtures of manned 

and unmanned configurations, launch rates and conversion 

modes. Five-year program totals ranged from $1.037 billion 

for a three-per-year, all unmanned option, to $3.965 billion 

for a 12-per-year, 50% manned, conversion capability option. 

The study is now in a second phase that will address two 

basic options, refine the accuracy of basic data and 

structure costs under funding procedures most likely to 

prevail. This second phase is scheduled for completion by 

February 15, 1967. 

E. Flight Objectives Directive 

MOL Program Directive No. 67-2, which will specify 

the general test objectives of the flight test phase of 

the MOL Program and define an orderly approach for achieving 

these objectives, is in final review. The document will 

provide broad guidance for program planning and actions 

during the development phase of the program. The MOL Systems 

Office will formulate the detailed test objectives for each 

individual flight. It is expected that this Directive 

will be issued in February 1967. 

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IV. FORECAST FOR FUTURE 

A. MOL Management Meeting 

The monthly MOL Management Meeting for February, 

1967, is scheduled for February 15 at Los Angeles. The 

agenda is included as TAB A. 

B. Government-Contractor Management Meeting 

Immediately following the regular MOL Management 

Meeting on February 15th, top Government and Contractor 

Management will meet to examine contractors' cost and 

schedule data resulting from an exercise initiated by 

the Vice Director, MOL at a similar meeting held on 

February 2. The principal purpose of these meetings is 

to define an optimum baseline program schedule which 

corresponds to anticipated funding levels for FY 68 and 

FY 69. 

V. DUE DATE FOR NEXT PROGRESS REPORT 

The next Monthly MOL Progress Report will be submitted 

March 7, 1967. 

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