HW 450955 © ® lies at the heart of the entire TFX endeavor. My instructions on this point were clear and consistent. Another aspect of the Fourth Evaluation Report struck me as I reviewed the report and consulted with my technical advisors, including Dr. Charyk, who was then Under Secretary of the Air Force, and Dr. Brown, the Direc- tor of Defense Research and Engineering. On the basis of my studies, dis- cussions with my advisers, and my experieace over the years in judging development and production programs, it became clear to me that the General Dynamics proposal was generally more straightforward in approach than that of Boeing, although the General Dynamics design was fully"acceptable. There were aspects of the Boeing proposal which, on their face, complicated the development of the aircraft. Three problems in particular stood out in my mind. The first problem was Boeing's proposed use of engine thrust reversers for in-flight deceleration, as well as for reducing ground roll after landing touch down. ‘To date, engine thrust reversers have never been used in flight on operational fighter aircraft, nor have they ever been employed on super- sonic aircraft. The only operational experience has been on subsonic commer- cial jet transports and cargoitype aircrait in which the engines are mounted on outboard pylons underneath the wings. The Air Force does have one fighter aircraft in which a research and development type installation has been made. This is a single engine aircraft with the exhaust on the airplane centerline 20 Doocld: 324274709 Page 142
HY o ® and aft of the tail surfaces, The Boeing design uses two engines nestled in the fuselage with their nozzles exhausting hot gases directly alongside the horizontal and vertical control surfaces. ‘The full effect of this hot gas efflux is unknown. Assurance that longitudinal and directional stability was not impaired could not be obtained without extensive flight tests, in addition to considerable developmental wind tunnel testing. Since flight testing cannot occur until late in the development phase, the Boeing design would impose an added degree of risk in.terms of meeting an early opera- tional date for the TFX, | -In addition, the Boeing thrust reverser feature, as the Fourth Evalua- tion Report observed, adds considerably to the complexity and to the development task associated with the engine. The full impact of this .problem could not be completely assessed because Boeing did not collaborate 0955 in detail with the engine contractor, Pratt and Whitney, on its proposed thrust reverser design and development. Speed brakes, as proposed by General Dynamics, are historically proven and offer a more straight forward approach to meeting the stated military requirement. Since speed brakes will, in themselves, exceed the military requirement, the greater development risk of thrust reversers must be weighed against their possible advantages. I want to point out that in selecting the General Dynamics proposal we retain the option to apply al Boclda: 324294709 Page 145
& thrust reversers to the aircraft design, but we have the flexibility. to under- take this development on an exploratory basis concurrent with. the overall program, and terminable at will if costs should exceed anticipated benefits. The second area in which Boeing's approach seemed likely to produce more complicated development problems was its proposed power plant-instéi- lation with top-mounted inlets. The Fourth Evaluation Report commented that Boeing's location of the inlets on top of the fuselage, in combination with the HY 50955 Boeing subsonic diffuser design, results in significant distortion of the air flow at the engine face under most conditions, and prohibitive distortion during high angle of attack operation. The Report noted that the effect of this distortion on engine operation is virtually impossible to predict accurately, and it can only be determined by actual testing of the engine in flight under the distortion conditions delivered by the induction system. In contrast, General Dynamics chose a conventional ‘straight through" installation and inlet design which the Evaluation Group considered to be a good selection for the TFX aircraft -- one which should give the best trade-off in terms of performance, complexity and operational problems. The top-mounted inlet does minimize the problem of foreign object damage during ground operations, but there is no reason to believe that the more conventional General Dynamics solution for this problem will not be effective, and it avoids all of the other uncertainties of the Boeing approach. 22 Boclda: 32474709 Page i144
HW 450955 The third area in which the Boeing approach involved greater development risks was its extensive use of titanium in its wing carry- through structure. We have had some experience in the use of titanium in other Department of Defense weapon systems but mainly in heat’: oe resistant applications and where high streés levels in thick plates are not involved. The Fourth Evaluation Report observed that data concerning the fatigue design properties of titanium, in the thickness Boeing proposed to use in the wing carry-through structure, is very limited, and that this raises the question of the advisability of using such thickness. The Report further commented that the effect of temperature on structural details, especially in the aluminum-to-titanium splice, can be expected to be quite pronounced in producing metal fatigue, and the Report concluded the Boeing fatigue test program showed lack of realism. In fact, Colonel Gayle, the TFX System Project Officer, sent a letter to the competing companies pointing out that, in the judgment of the Aeronautical Systems Division, it was not advisable to use titanium in fittings which are subject to heavy load, nor in heavy section areas because of a lack of data relating to such use. If Boeing's proposed use of titanium did not work out and heavier steel had to be used to replace the lighter metal, I realized that not only would the operational capabilities of the Boeing plane suffer, but additional costs would be incurred. : In contrast, the General Dynamics design solved the problem of wing loading by the ingenious but simple expedient of providing a bolt-on extra wing extension for the Navy version of the aircraft, instead of employing relatively unusual applications of an exotic metal. 23 Docld: 324274709 Page 145
HY 0955 These three examples point up for me a basic difference between the overall philosophies underlying the two proposals. I should emphasize that this difference in philosophy was not peculiar to the fourth phase of the competition, Boeing had from the very beginning consistently chosen more technically risky trade-offs in an effort to achieve operational features which exceeded the required performance characteristics. This approach was first exemplified in Boeing's choice of the undeveloped General Electric engine for its initial submission. ‘Mr. Chairman, I do not mean to say that the Boeing. approach posed . | insuperable obstacles. On the contrary, I assumed that the problems associated with the use of titanium, the use of thrust reversers in super- | sonic flight, and the high inlet ducts in the propulsion system are all susceptible of solution. But my judgment, ‘reinforced by the Fourth Evaluation Report, clearly indicated that these proposals would, in fact, complicate the development problems, and would require a significantly greater development effort to be expanded by Boeing in their solution. But, significantly, Boeing proposed a development effort less than that proposed by General Dynamics, and this in spite of the greater complexity of the Boeing aircraft design, the greater divergence between the Navy and the Air Force versions of the Boeing aircraft, and the lesser experience which they possess in building high-density supersonic fighter aircraft. This anomaly caused me to examine other cost aspects of the Boeing proposal. 24 Docld: 32424709 Page 146
HY I discovered additional evidence of unrealistic cost estimates in the Boeing proposal. In the judgment of the Evaluation Group, Boeing was overly optimistic.in its estimate of production tooling and was dangerously low in estimating the manufacturing hours for both the development and production phases. It appeared to me that Boeing simply did not appreciate the complexities.of developing the TFX. This is understandable because Boeing's past experience in aircraft development and production has been with bombers and transport aircraft -- experience which is largely inapplicable to TFX estimating. I therefore concluded that as to the third cardinal condition -- . demonstrably credible understanding of costs -- Boeing's proposal was deficient. The Evaluation Team cost estimators recognized this fact. They _ attempted to correct for it by raising Boeing's costs to a level which in 0955 their judgment was more accurate, They also made adjustments for the General Dynamics cost estimates, which were considered deficient, but not nearly so much so as Boeing's. The Air Force estimators applied experience and other statistical factors to the two proposals in an effort to arrive at ultimate costs. The application of such factors is well suited to correction of an intentionally low proposal. Where, however, the low proposal is the result of a lack 25 Boclda: 324294709 Page i147
Hi It is true that any costs over the contract ceiling are at the expense of the contractor and not the government. Nonetheless, if after several years of effort it appeared that a contractor's costs were going to. be far in excess of the ceiling, gay, by several hundred million dollars, the contractor would be.in very serious financial difficulty. He would then be motivated to take every possible cost saving alternative. These alternatives could have a serious adverse impact on the continuity and quality of the development. In short, while incentive contracts are generally important to force efficient management and obtain good estimating, where the dollar expendi - ture is exceedingly large, as in the case of the TFX, it is imperative that 0955 we make our own judgment of cost estimates, This is the only way we can insure that a contractor, through optimism or misunderstanding, has not imposed a ceiling on himself that could lead to serious degradation of the development. This result would hurt the Department of Defense as well as the contractor. Further, the proposed contract covered only the research and development phase of the TFX program. A multi-billion dollar production | 27 Boclda: 3274294709 Page 149
S ee) program is to follow. There is no future price commitment for this pro- duction program. In the event of very large over-runs on the research and development contracts, the price of sthe productioti program, which for all practical purposes would be committed to the development con- “ttactor, would probably be affected. When we talk about the TEX program, ; we are talking National Defense. ‘This aircraft is to be an important element in our militar y force; it must “be ope rational in proper. quantitie 5 in the time span scheduled, The more | straightforward design of General Dynamics, an airframe contractor well versed in the design, development, and production of supersonic fighters, and assisted by Grumman, an outstanding designer, developer, and pro- ducer of Navy carrier-based aircraft, offered a more dependable answer to our needs, Ihave detailed at some length the reasons underlying my judgment that the General Dynamics proposal offered the better possibility of ob- taining.a satisfactory aircraft.on the desired time schedule and within © the dollars programmed, Having studied the TFX question over many months, I met with Deputy . - ? ~ 28 HW 50955 Docld:324274709 Page 150
HY 50955 a & November 1962, I found that their own views, arrived at independently, coincided with mine. After several discussions we concluded: First, that all the evidence showed that the TFX concept was a valid concept that would markedly improve existing military capabilities of the Navy and Air Force. We therefore decided.to move ahead with the development of the TFX aircraft. Second, our best judgment.of the many factors involved let us to the tentative conclusion that General Dynamics should receive the award. Although I considered our judgment to be soundly supported on the broad bases I have outlined, I agreed that Mr. Zuckert was to review the facts again before we arrived at a final decision. ; ¢ Having verified to our satisfaction our judgments, we.decided to award the TFX development contract to General Dynamics. There remains one more important aspect of this case which I believe should be thoroughly understood, Fundamentally, we are dealing with a question of judgment. Granted there are specific technical facts and calculations involved; in the final analysis, judgment is what is at issue. In this case we are faced with a situation in which judgments are pyramided upon judgments. First, we have the judgments of the competing 29 Boclda: 32474709 Page i151
contractors that an aircraft of particular design can be built at a given cost within a specific time-frame. Next, we have the judgments of the Evaluation Group regarding feasibility, and the degree to which the designs would or . would not satisfy the stated requirements. Then the Source Selection Board, using factors weighted by judgment, made a recommendation which appeared to place greater emphasis on potential bonus factors in certain operational areas, rather than on dependability of development and predictability of. costs, This recommendation, understandably; was seconded by the Navy -and Air Staffs, since these officers are most vitally interested in obtaining the ultimate in performance in individual weapons systems. On occasion, this desire leads to the establishment of characteristics for weapons systems which cannot be met within the time or funds available, and it has frequently resulted in lowering operational effectiveness, There is only one way I know to minimize the compounding of error that can occur through this pyramiding of judgment, and that way is to apply the judgment of the decision-maker not only to the final recommendation, but also to the underlying recommendations and facts, This I did to the best of my ability. In doing so, I found.it necessary to balance the promises held out by competing contractors, against the hopes and aspirations of military officers, and the limiting realities of economics and technology. That I attach great importance to the principle. of free competition - is, Ibelieve, demonstrated by my insistence that competition continue HY 50955 30 Bocld: 324274709 Page 152
ae a through the program definition phase of the TFX project. That t attach great importance to the fulfillment of established military requirements is, I believe, demonstrated by my refusal to terminate the program . definition phase until I was satisfied that the. military requirements -of both the Navy and Air Force had been met. That I attach great.importance to the recognition of economic and technological limiting conditions is, I believe, demonstrated by my selection of General Dynamics as the contractor that most clearly recognized the effects of these limitations .on the task to be achieved... -I do not feel that this is a case which presents a-civilian--military conflict but rather one of placing emphasis ‘where it must be placed. In the final analysis, judgments differed, In reaching my decision, I considered the recommendations of my various military and civilian ‘advisors as well as other available. evidence, but I had the final respon sibility, The basic judgments on my part which determined my decision were: - Both the General Dynamics and the Boeing designs met stated military requirements and. would provide .significant improvements in combat capabilities of _the Navy and the Air Force. - The General Dynamics proposal resulted in minimum divergence from a common design compatible with the separate mission of the Navy and Air Force, thus insuring the substantial savings HY 50955 DBocld: 324274709 Page 1453
HY 0955 and increased dependability inherent in a joint ‘program. .- The General Dynamics proposal reflected a more ‘realistic understanding of costs. As Secretary of Defense my responsibilities were clear; the decision was mine, 32 Bocld: 324274709 Page 154