OVERRUN ON ADVANCED RHOMBOID CONTRACT (Sanitized) FY 1967 (Sanitized)

• Document Type: CREST
• Collection: NGA Records (Formerly NIMA)
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78B04770A000100080011-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 28, 2016
• Document Release Date: January 21, 2005
• Sequence Number: 11
• Publication Date: August 9, 1968
• Content Type: MF

~,ri ... , ..~ ~a. ~ - ~~ ~~ ~
Approved For Release 2005/,t~$/1~!,~~IA-RDP78B04770A0001000800 ~1-2 .~.~
D RAF T
NPIC TSSG DED
ugus
25X1
SUBJECT: Overrun on Advanced Rhomboid Contract ~
FX 1967
1. The overrun requested. is for
It was caused by an original
25X1
25X1
25X1
underestimation in the time required to complete the optical design. It
is ~Y opinion that the original estimate was as accurate as possible.
In other words, I consider the original estimate reasonable when the
final cost is within 10-15?~ of that originally estimated. Phase I
was greater by 8.7?fo and it is estimated that Phase II will cost 11.6?fo
more. There is no guarantee from the Contractor that there wild not
~,
be another requirement~for additional funds to complete this effort; it~~? ~~{sE?1` es1~p~.,y=
i
is merely his best estimate at this point in time regarding the costs
to complete the project. I have reviewed in minute detail his cost
accounting system both as to past work performed and future efforts
required and believe that the figures are as reasonable and reliable as
possible under this form of development (cost type). The Government
assumes the cost risk -- with the Contractor assuming little if any of__._
this risk; probably only those risks associated, with the lack of
production if we are displeased. with his performance -- but it is
because we desire an item to be developed specifically for us that we
of contrac~~++~
engage in arrangements of this type. This system,,required3 that we trust
the integrity and honesty of the contractor~we_choose to the utmost. This
Declass Review by ~~'i.oved For Release 200
l ~ u dtii~l' ii -
IA-RDP78B04770A00010~Q0.8'4~1~~'' ~! ___
 Approved For Release 2005/02/17: CIA-RDP78B04770A000100080011-2
FY 1967
Additionally, it must be remembered.
that no contractor desires to have overruns because he makes no profits
on the overrun work. Therefore ?she must use his people on the no-profit
d~~' Mak~nq
work when he could be using them ona profits efforts _? L'== _- -
-s=u~r~-e.-x. Of course no profit making company desires to loose
a
this source of wit. Considering the extreme difficulty in atte~pt-
ing to predict the number of hours required to develop or invent an
optical design, I certainly think this slight increase is justifiable.
Problems of this type -- new optical designs -- can be analogized to
some degree with the process of discovery of cures for diseases in that
in both situations there is a risk of failure. Additionally} it is just
extremely difficult to predict how long it will take an individual to
find the cure. Certainly, optical designs have different degrees of
difficulty, varying from the simplest task of putting a few existing
~~
lenses together to perform a non-critical task to the most complex
design significantly increasing the state-of-the-art. This effort falls
a
slightly to the right of the middle of this range -- toward the more
difficult tasks -- because not only must
0
produce a high quality
system which is matched to an existing instrument -- thereby reducing
the number of degrees of design freedom -- but they must produce an
optical instrument that we can afford to purchase, which therefore
requires a rather simple device -- ~~ again reducing the degrees
of design freedom or the number of possible or alternate solutions
2 ,~
Approved For Release 2005/02/17: CIA ~~~B04770A000100080011-2
25X11
 ~.~r
Approved For Release 2005/02f~17,: CIA.=RDP78B04770A000100080011-2
~t~...:,~_,.
5X1
5X1
FY 1967
available. It can be said from the above that the contractor simply
underestimated the cost to perform the task; however, I hope it is
evident from the above considerations that the difficulty arises in
evaluating or justificating the underestimation and. after considerable
investigation and consideration; it is ~Y professional opinion that the
additional costs are justified.
2. NPIC has received a wooden mock-up with the Final Phase I Report
and. an evaluation by both this staff and the operational groups has
shown the design to be satisfactory.
3. The rhomboid will allow the P.I. to view stereoscopic images
with the recently designed
0
Zoom 2~+0 stereoscope. In addition, it
will allow him to scan a single image by viewing with both eyes through
a single rhomboid arm. This will be particularly valuable when greater
volumes of film are obtained. The Rhomboid attachment is specifically
configured for a future system.
X1
251X1
Approved For Release 2005/02/17: CIA-RDP78B04770A000100080011-2