FY 1973 FINANCIAL PROGRAM, FY 1974 BUDGET, AND FY 1975 THROUGH FY 1978 PLANNING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00159R000200010012-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 5
• Document Creation Date: December 19, 2016
• Document Release Date: December 13, 2006
• Sequence Number: 12
• Publication Date: March 20, 1972
• Content Type: MF

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MEMORANDUM FOR: Director of Special Activities
Deputy Director of Special Activities
Comptroller, OSA
SUBJECT: FY 1973 Financial Program, FY 1974 Budget,
and FY 1975 through FY 1978 Planning
1. The following comments apply to draft unsigned memorandum
from D/NRO dated 16 March 1972,1 Subject: FY 1973
Financial Program, FY 1974 Budget, and 1975 through FY 1978 Planning.
2. It should be noted that the comments are in somewhat greater
detail; however, it was provided in this manner so that an under-
standing can be appreciated when manipulations and juggling in future
budgets transpire.
3. Comments:
a. FY 1973
Assuming that the contracting will remain in OSA during
FY 1973, it appears that there should be no problems generated
by the change in estimating responsibilities from OSA to
Director D, provided that we also have a say in the funding of
the various contracts in the common account. I assume also that
we would nominally remain the SPO during FY 1973, since there
is no mention made of a change in that responsibility during that
fiscal year. If this be true, we will still have primary control
over systems modifications, service bulletins, etc. If this
assumption proves to be incorrect we then will be faced in FY 1973
with a situation approaching that of FY 1974, when budgeting and
contracting for this account reverts to the Air Force.
and
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b. FY 1974
The policy here is, in effect, a reversion to that which
existed prior to emergence of the U-2R; i.e., two separate fleets
with divergent missions, dissimilar requirements for defense gear,
and different requirements for primary mission equipment. During
that period each of the program managers went his merry way,
developing systems for which he had a requirement, occasionally
coordinating with the opposite manager but proceeding on course
regardless of whether the counterpart concurred in the need for
the systems and sensors being developed. For instance, the CIA
fleet of U-2's converted to J-75 engines early in the game
(circa 1960-1961), while the SAC conversion did not take place
until 1967. (no requirement). During that time each program
budgeted for its peculiar requirements and for its share of the
common account, and the common account was small as compared to
the present day common account. The difference between that period
and the proposed policy in -FY 1974 is that all funding was
accomplished by the NRO; contracting was by the CIA for both
programs. In order to insure that all of our systems are covered
it appears that we must revert to the previous system; covering
all of our peculiar requirements in the IDEALIST Peculiar Budget
regardless of contractor, and that we must also budget under peculiar
for our share of the common account. If the Air Force program is
subject to the same scrutiny as normal Air Force Programs there is
no guarantee that they will receive the amount requested in the
common account, which would make it awkward indeed if we did not
have some provision in our budget to take care of our needs.
Regarding defensive systems and primary mission systems, this
proposed program could be a blessing in disguise, in that we will
be responsible only for those systems which we require for our
fleet, and will be in the position of determining and selling our
requirements without regard to coordinate or concurrence of
Program D, since we will have a separate SPO for each program.
In that regard, the NRO memo, in effect, recognizes and legalizes
the present state of affairs. Although the memo does not
specifically say so, it appears that we must assume that the CIA
operation will continue to be funded by the NRO, and that if we
have requirements for additional money in any fiscal year we have
recourse to the NRO as we do at present.
 Aside from the funding aspects, the limiting to 4 airplanes
definitely detracts from our contingency capabilities. As we have
said before, ad infinitum, if we are committed to a 50 hour response
time, we must have three airplanes at While it will be 25
possible under certain conditions to meet such a response time, it
can not be guaranteed with two airplanes, while with three it can.
In the situation where one airplane is down for PE and the second
one is configured for a particular flight test or is down for
unscheduled maintenance, it would be impossible to meet the 50
hour response time. This condition has existed fairly regularly
during recent months, and would have existed even more regularly
had we not experienced slippages in deliveries of some of our primary
equipments. Should we have an exercise likel it would be
25
necessar to utilize on a rotational basis, at least one aircraft
fro In
2
at one other we utilized
1
all cra w icl were then at It would have 2
been difficult, if not impossible, to have met mission requirements
had we had only two aircraft to play with. Most of the difficulties
created by this change will be faced by the Depot, who will be
administering black contracts and white contracts with the same
contractors for support of the same items. It will be extremely
difficult for them to keep track of who is doing what. However,
it should be possible to operate under these ground rules provided
certain special dispensations in accounting procedures, audits,
inspections by GAO and others, can be agreed upon before-hand.
They are required to preserve the security relating to support
of a CIA operation and to enable quick response to unforeseen
requirements. If these special dispensations are not forthcoming,
and the Air Force contracts are subject to the normal contract
review procedures, support of the U-2 fleet will be jeopardized
greatly, due to the limited assets available and the quick turn-
around time required for overhaul and repair of parts and systems.
Deputy for Materiel, OSA
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D/M/OSAet (20 March 72)
Distrib
#1 - D/SA
#2 - DD/SA
#3 - COMPT/OSA
#4 - CMD/OSA
#5 - B&FD/OSA
#6 - D/0/OSA
#7 - D/M/OSA
#8 - D/M/.OSA (Chrono)
#9 - RB/OSA
1 :1
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