STATUS STUDY OF DATA PROCESSING SYSTEM OF DEPUTY DIRECTOR FOR SUPPORT(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00708R000600130001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 135
• Document Creation Date: December 16, 2016
• Document Release Date: August 16, 2005
• Sequence Number: 1
• Publication Date: February 19, 1962
• Content Type: STUDY

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STATUS STUDY OF
DATA PROCESSING SYSTEM OF
DEPUTY? DIRECT .A =. : UPPORT
CENTRAL INTELLIGENCE,AGENCY
BOOK 3
APPENDICES A THRUF
19 FEBRUARY 1962
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STATUS STUDY OF
DATA PROCESSING SYSTEM OF
DEPUTY DIRECTOR FOR SUPPORT
CENTRAL INTELLIGENCE AGENCY
BOOK 3
APPENDICES A THRU F
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19 February 1962
"This material contains information
affecting tha r:a ionnl defense of the United This document Consists of /t i P eQ
States -1111) tl, 4.?a,uai; of the espionage 2 -----~
la -s. T, 'le 'P, 5c^s. 7913 and 794, A~C'._.L.__~Of 2?~ .OBies.
Seriea"
the , or is v la ien of which in
any V) a:i unauthorized person is
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APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
BOOK 3
APPENDICES
TABLE OF CONTENTS
Page
MANAGEMENT STAFF STUDIES A- 1 thru
A-83
B-1 thru
B-2
LIST OF ORGANIZATIONAL FUNCTIONS C-1 thru
C-1.5
D-1 thru
D-7
GOVERNMENT BUDGET AND ACCOUNT- E-1 thru
ING, PUBLIC LAW 863, 84th CONGRESS E-3
EVOLUTION OF DD/S COMPUTER F-1 thru
SYSTEM F- 14
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MANAGEMENT STAFF STUDIES
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19 August 1957
MEMORANDUM FOR: Deputy Director (Support)
SUBJECT:
Electronic Data Processing Feasibility Study of
Supply Division, Office of Logistics
This memorandum contains recommendations submitted for DD/S approval.
Such recommendations are contained in paragraph 5.
1.
PROBLEM:
a.
Determine the feasibility and advisability of applying electronic
data processing (EDP) to the procedures of the Supply Division,
Office of Logistics.
2.
FACTS BEARING ON THE PROBLEM:
a. It has been accepted generally by both commercial enterprises and
governmental agencies that irv.entory control offers one of the best
fields for EDP. Such control in the Agency is maintained principally
through the processing of purchase orders, receipts, requisitions and
shipments, and the compilation of reports incorporating the data
accumulated from these documents.
b. Large stocks of Agency material (including some combustible ordnance
mater' 1 are maintained at the and limited sto21
at the '
the first two of which also function as transhipping points. Certain
ordnance materials are warehoused at various arsenals.
c. For Agency use an item of material is,, identified by a. stock number
and more or less extensive nomenclature, plus a four-part code to
denote: (1) type of sterility, (2) allocation to an Agency component,
(3) location by station or warehouse, and (4) condition of usability.
An item thus identified is called a "line item". A variance is one
or more parts of the code creates a different line item, even though
the stock number and nomenclature are identical with other line items.
Items for which the SD/OL is accountable are carried as "in stock"
or as "property in use's.
d. Records of the :SD /OL indicated that, as. of 30 June 1957, a total of
39, 304 items of possible Agency use had been identified and assigned
stock numbers and nomenclature. Of these, 20., 005 were in stock .
(or carried on stock-status reports compiled periodically). Because
of variances in codes these 20, 005 items represented approximately
27, 000 line items. In addition, the property in use items totalled
approximately 11, 000 line items.
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several weeks.. No visits have been made
ion. with this study.
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e.. Stock-status reports are prepared by Machine Records Division, Office
of the Comptroller,. and are up-date4 in total from previous balances
by transactions in receipts,. requisitions and issu.es, and shipments.
In the interim between reports such up-dating is performed in detail
manually by the Stock-Editing Unit SD/OL. Records of the SD/OL in-
dicate that during FY 1957 there were processed 15., 499 receipts,
17, 426 requisitions and 52, 399 shipments. The requisitions represented
78, 219 line items, but no totals of line items were available for receipts
and shipments. Each receipt, requisition and shipment requires one
or more original documents and one or more entries.
f. Requisitions may be originated, by headquarters components, by Stock
.Management Section, SD/OL (for replenishment) or by components out-
side of headquarters. The latter may be referred directly to OL
through thel indicator.
g. Currently, at least 174 different forms are used at headquarters and
the in the receiving, requisitioning and shipping
operations of SD/OL. Only 50 of these have been approved by Forms
Management Branch, Records Man?.gernent Staff.
h. At least 214 steps are involved in the present method of processing
a requisition for a non-technical cargo. While the same requisition
form may be used for all requirements,, at least 15 different procedures
have been used in handling them; there appears to be no standard for.
all. Inventory control data is all produced manually by SD/OL and
reproduced in MRD by card punching each items for printing reports.
i; At the inception of. this study 67 reports were being produced by MRD
on the IBM. tabulating equipment from data produced in SD/OL. Ten
people, are required for this work.
j. Th (control procedure) is so arranged that,, not
only the flow of material, but the handling of paperwork is cumber-
some. Deliveries of material to headquarters frequently require.
k. The Mission of the SD/OL (
1956) is stated as. follows:
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m. The IBM 350 RAMAC is an electronic computer having memory storage
capacity for 50,000 records of 100 characters each, and. computing
speed capable of handling all of the data arising from such documents
as purchase orders, receiving reports, requisitions, etc. , randomly
at a rate of over 300 line items per hour, simultaneously turning
out shipping documents, replenishment lists,, and punched. cards for
printing such reports as might be essential to maintain inventory
control and.furnish compiled data for accounting purposes, program
analysis,. audit trails, and stock research and management. It would
eliminate the necessity for most of the stock editing, locating and
document processing, and, with proper programming, make many
logical decisions now the responsibility of the Stock Man~Lgement and
Requirements Section, OL,
n, Two flexowriters are in process of being installed in OL, one in the
headquarters Procurement. Division and one in the Receiving Unit,
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to simplify the procurement and receiving procedures,
o. This report embodies the results from approximately 25 man-months of
study on the part of a feasibility team consisting of 4 members from
Management Staff, assisted from time to time by 3 others from Manage-
ment Staff,. 1 from Supply Division and 1, from Administrative Staff,. OL
and 1 from the Office of the Comptroller. The latter 2 have collaborated.
in arriving at most of the conclusions contained herein. The cost is
estimated at $19, 650.
3. DISCUSSION:
a.. In conducting this study the specific requirements of the Comptroller,
Annex I, Tab A, and a general, procedural outline of possible computer
application, Tab B, were set up as guides. For convenience the work
was divided into several sections each of which is discussed separately
in the other Annexes attached hereto and, may contain suggestions which
amount to subsidiary recommendations.
b. Annex 11 describes the present requisitioning procedure and shows how
a change in this procedure in conjunction with publication of a catalog in
two parts would simplify even a manual procedure; how elimination of
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the I indicator could. reduce, criticism and possibly speed tip
shipments; and why carrying material in stock". under more than
one classification code is unnecessary. Paragraph 7 contains 9
specific suggestions,
c. Annex III lists the 67 reports (Tab D) which were being produced from
5D/OL data by the MRD at the time this study was started., Elimination
of 35 (TAB E) and combination of 13 others into 6'(Tab F) of these 67
reports is justified even under a manual procedure,. with an indicated
annual gross saving of $25, 620. Under a computer system, 15 new
reports (Tab H) would replace all 67 with an indicated annual.gross
saving of $84, 000,
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d, Annex IV points up through Tabs 1, 3'., K., L,, and M the necessity for 25X1
'control" that has accrued because of decentralization of functions and
expessive detail, both at headquarters and the
It has been estimated that as many as 2., 000., 000 pieces o 1 paper are
generated annually, Tab N suggests a different procedure to simplify
this work even under an Electric Accounting Machine-Manual operation..
No estimate of dollar savings which might result has been made, On the
other, hand, in certain filing areas at the Tabs R,X1
and T, definitesollar savings are indicated amounting to some. $1.3, 000
one-time and $8, 000 annually under a manual system, or- $14., 000 one-
time and $12, 000 annually under a computer system. Tab W furnishes son
pictorial information re these problems. All indicate the need for a com-
plete management study.
Annex V shows under Tab X a complete sub=division of the.SD/OL into
its various components and., under Tab Y, the specific functions of
each,. and, serves to emphasize the extent to which decentralization
has necessitated the build-up of control mechanisms with resulting un-
necessary forms and steps. It also shows in paragraphs 3 and 4that
installation, of electronic processing equipment and a reorganization of
certain components will result in an annual gross saving in payroll of
I-- I
f, Annex VI. shows the advantages of the IBM 305 RAMAC over other types
of computers; how the SD/OL work' would flow through this computer
(Tab Z) and the time it would, take (paragraph 5); data on installation
(Tab AA) at an estimated cost not to exceed. $10., 000; and monthly
operating costs -(paragraph 7) of $7., 416, 07. The MRD presently has all
peripheral equipment except a tape-to-card converter (required to make
full use of the flexowriters with or without a computer); in fact, some
MRD equipment can be dispensed with if the computer is placed under
its supervision. On the other hand,. should the computer be placed else-
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where it will be necessary to provide duplicate peripheral equipment
and train other employees to operate it,. at an-increased cost of at
least $2, 500, 00 per month. It is worthy of note that IBM and many
companies represented, at seminars attended by members of this
team report that best results are obtained by centralizing all corn-
puter operations under one head.
g. Annex VII describes in general and, by detail charts, Tabs AE, AF,
and AG, how the flexowriter installation may be used to simplify all
procurement action from the receipt of a requisition through invita-
tion to bid,, actual procurement,. receiving and accounting. It also
indicates justification for the transfer of the Identification and Catalog-
uing Branch from the Supply Division to the Procurement Division,. OL,
h. Annex VIII analyses the estimated cost of making this study, which
must be counted against the advantages to be gained. It is felt that
a similar study might have been made at a somewhat lower -cost if
a team, of full time personnel, especially representatives of the Comp-
troller and Director of Logistics, had been available from the start.
i. Annex IX reflects the net dollar savings and costs (excepting the cost
of this study), as estimated by the .feasibility team, in the areas where
such values were assigned,. from improvements in. present procedures,
as follows
ONETIME SAVIN
Without Computer
With Com
uter
GS
$16
p
NET ANNUAL SAVINGS
,
62.3.
41
$ 272.34
$33,
676.
52
$172,143. 68
4. CONCLUSIONS-
a. Application of electronic data processing to the procedures of the
Supply Division/OL is both feasible and advisable,
b. Improvements in the manual. procedures of SD/OL, as outlined in the
Annexes, should result in appreciable dollar savings and. increased
efficiency of operation,
c. Immediate installation: of an EDP system should result in very sub-
stantial dollar savings and efficiency of operation, and provide a means
for its operating unit and/or others to acquire practical experiences
in the techniques of EDP essential in connection with this or any larger
computer which subsequently might be installed. Such installation
should be under the control of M.RD.
d. Organization changes in. two Divisions of OL, as indicated in the Annexes,
should result in much greater efficiency of operation.
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e. A complete management study of all phases of procurement, supply and
transportation functions in the Agency should result in much greater
dollar savings and efficiency of operation.
5, RECOMMENDATIONS:
It is recommended that:
a. Reports, as listed in Tab' E be discontinued and those listed in Tab F
be combined, as indicated, forthwith.
b. The suggestions outlined in Annex II, paragraph 7, be implemented
by the date of computer installation (estimated at 6 months after
approval of this report).
c. An'IBM 305 RAMAC and such peripheral equipment as may be required to
support it be installed in the MRD on a rental basis at the earliest
date possible (estimated delivery, 6 months), and funds in the amount
of $10, 000 be allocated to cover the cost of installation.
d. The organizational changes suggested in Annex V, Paragraph 6 be im-
plemented at once, and those in. Paragraphs 3. b, and 5. be implemented
concurrently with the installation of a computer.
-Y -- uyiec wr OI
Logistics on a full time schedule for implementing the EDP pro-
cedures listed herein and for studying the potential and use of
the IBM 305 RAMAC. (Full knowledge of the RAMAC is essential in im-
plementing the new procedures and developing future applications).
(2) :MRD personnel be assigned by the Comptroller to the opera-
tion of the IBM MAC and
be enrolled in IBM courses of in-
struction covering all phases of RAMAC operation, programming,
use and maintenance techniques.
(3) The Chief, Management Staff be made responsible for directing and
assisting the above -OL and MRD personnel; establishing completion
schedules covering the periods of implementing procedural changes,
training and installation of the RAMAC; and for rendering periodic
progress reports to the DD/S,. the Director of Logistics and the
Comptroller.
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f. During the period of preparation for the computer installation a
complete management study of all OL procure"meet, supply and
transportation. functions and operations be conducted.
g. The Records Management Staff immediately institute a survey of
all unauthorized forms being used by the SD/OL.
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Chief, Management Staff
ANNEXES:
See Table of Contents
The recommendations in paragraph
5 are Approved:
Date
L. K. WHITE
Deputy Director
( Support)
DISTRIBUTION:
Orig. & 1
DD / S
2
Dir. of Log.
1
Comptroller
1
Mgt/S
Mgt/S/D.LD:ee
(19 Aug 1957)
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I ANALYSIS OF .EDP FEASIBILITY STUDY
SUPPLY DIVISION, OFFICE OF LOGISTICS
AUGUST 19, 1957
2. How elimination of the
Annex I Tab A Specific Requirements of the Comptroller
Tab B General procedural outline of possible computer
application.
Annex II Present requisitioning procedure and how a
change in the procedure in conjunction with
publication. of stock catalogue. in two parts will
simplify even a manual procedure.
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status) could reduce and possibly speed up ship-
ments.
3. Why carrying material in stock under more than one
classification code is unnecessary.
4. Suggestions in Paragraph 7
Annex III Tab D-H Shows how 15 new reports, under a computer system,
can be used in place of the present 67 to permit a
gross saving. of $84, 000 annually.
Annex IV Tab I-T-1 Shows an EAM-Manual method of reducing paper work
Tab I-T-2 Recommends changes in filing areas.
Tab I-T-3 Shows need for complete management study.
Annex V Tab X, Y Recommends reorganization of some components of
SD /OL and shows a saving,, by computer methods, of
$165, 000 annually.
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Annex VI Shows 305 advantages,. SD/OL workflow diagrams,
cost of installation and operation, and the advantages
of putting the 305 in MRD (centralization).
Annex VII Tab AE-AG
Shows flexowriter installation and flow.
Justifies transfer of Identification and Cataloging
Branch from Supply Division. to Procurement Divis-
ion (O/L).
Costs of this study - Salaries $16, 1404
Net savings to be expected from a computer-(305)
system - $172, 143, 68 annually.
Location of Recommendations for Changes
14 Tab E and Tab F Reports
2. Annex V Paragraph 3B, 5, 6
3. Report Recommendations, Page 6
(a) Installation of.305 under MRD.
(b) Assignment of.O/L personnel for study and
implementation of EDP for O/L.
(c) Assignment of MRD personnel for 305 training
with IBM. .
(d) Assignment of Chief of Management Staff for
scheduling, direction and assisting implementa-
tion of changeover,
(e) Management system study for O/L4
(f) Analysis of O/L forms.
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Present Status.-- Annex II
Stock Report Shows:
Control
Stock No.
Allocation Code
Condition Code
Property and In Use Account
Voucher No.
Warehouse
Transfer
Fy
Cost Account
Property Code
Transaction Analysis Code
Guarantee
Unit Price
Dollar Value
Day, Month, Year of Transaction
Material Classification Code
Once a line item is established,. it usually stays one year after out of stock at the
warehouse.
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Present Flow -.-Annex II
Requisition
Stock edit unit
In stock reduce
by amount
requisitioned
Not in stock
but normally
carried
Not in stock
Not properly
identified
warehouse
requisition
Identification and
Catalog Branch
Determines stock
number and
nomenclature
description
Stock Management and
Requirements Section
Writes
requisition
extract
No complete catalog of stock items was on hand.
The Solution
req,
extract
Procuremerit
Division
l.. Complete catalog. of in-stock items
2.
Catalog of items which would have to be procured
then:
(1)
Only in-stock items would go to inventory record
(2)
Requisition for non-stock items directly to SMC section
EDP
1.
Would eliminate manual stock recording
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Annex. II _.
Manual Solution:
Originator Stock Edit Unit
Writes requisition
Consults catalog
requisition
Stock Management
and Control Section
Requisition
review
1
Originator
Writes
requisition
req.
Deduct from
stock
Identification and
Cataloguing Branch
Flexowriter
processing.
00. Fill requisition
from stock
req. Procurement
extract
Computer Computer
Checks stock
status
out of stock
Deduct from
stock
Identification &
Stock Mgmt. & Control Catalog Br..
Reviews requisition Codes
writes extract F extraci item
trac
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Fill requisition
ex- Procurement
t-'
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Other Recommendations Annex II P. 3
a. Publish catalogues for in-stock material showing stock
number, single name description, normal order quantity,
, no allocation codes.
b. Provide two types of requisitions, one for in-stock items,
one for "to be procured" items.
c. Items. requested in larger than normal quantities or in
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other than that one in stock, to be put in
"to be procured" category.
d. Condition codes one and two combined.
e. Reclassification and rehabilitation of items for placement in
use or other disposition should be done item by item, rather
than hatching.
f. Establishment of "proper" stock levels.
g. Standard substitution procedure and establishment of substitu-
tions in stock catalog.
h. Remove all stock items from in-stock catalog for which there
has been no activity for one year.
i. Separate combustibles.
should not be used as warehouses
unless given full capacity of meeting normal demand.
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Annex II Tab G.
Estimated savings from elimination and consolidation of reports $25, 620
Elimination of 7-8 drawer card safe cabinets 3, 395
Annex IV
Back up of recommendations for a management study
1. Burdensome control procedures caused by decentralization
of SD / OL.
2. Large volume of paper flow for each requisition.
3.. Devious routes of paper work and material flow at warehouse.
4. Cumbersome locator files could be eliminated by computer
locator system.
5. This is only a summary from cursory examination.
6. Utilization of floor areas extremely inefficient.
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Annex V Organization and Functions O/L
1. Functions to be performed electronically:
(1) Editing, - comparison of requisition and stock status report
issue records, receipts, coding sheets, updating inventory
(2) Stock. management
(3) Document processing
(4) Receipts control
(5) Locator
(6) Packing and shipping documents
(7) Machine records reports
(8) Depot stock control
2. Eliminate
MRD wit
14 retained for computer.
Elimination breakdown-
Stock F citing Uhit
Stock 1l4anagement and Requisition: Section
Document Procurement Unit
Receipts Control Unit
Depot Stock Control Section
Shipping Sub Unit
Locator Sub Units
positions in 5X1
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Abolition of Special Accounts Unit
3. Expected dollar savings in salaries
$165, 000
4. Establishment of a Stock Management and
Control Section to, replace the Stock Editing Unit
Stock Managements Requirements Section
Document Processing Unit
Depot Stock Control Section
5. Move several components of f_dentification and Cataloging
Branch (Supply Division) to Procurement Division,
6. Additional management study
Tab VI Computer Requirements and Estimated Cost of IBM 305
to Inventory control by a random access computer will permit
updating of information as the transaction occurs so as to
furnish at any given moment exact status of any inventory item
It will automatically perform the following inventory functions.
(a) Check inventory, location, substitute if necessary,
adjust stock balances.
(b) Enter reciepts, evaluate new average price; price
items and make extensions,
(c) Note item activity, adjust due=in, due-outs.
(d) Issue punched cards for financial accounting.
(e) Eliminate form copying and duplication of items.
Average time required for 305 to process all transactions
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2.
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involved in an average day's work of SD /01, would be 83
minutes,
3. Installation costs will not exceed. $10, 000.
4. Cost of IBM 305 Ramac System:
Monthly Rental
$ 4,916.00
Personnel (monthly)
1,932.
07
Materials
568.
00
Total Monthly Costs
$ 7,416. 07
Total Annual Cost
$ 88, 992. 84
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city 6June1958
MEMORANDUM FOR: Deputy Director .(Support)
SUBJECT: Electronic Data Processing
This memorandum contains recommendations for approval of the
Deputy Director (Support). Such recommendations are presented in
paragraph 5 below,
it is feasible and advisable for the Machine Records Division (MRD)
to perform its work by the use of electronic data processing (EDP) equip-
ment? If so, what type of electronic computer should be installed?
2, ASSUMPTION:
For the purpose of reaching a conclusion regarding the problem ques-
tions this study has been limited to the Offices of Comptroller and Personnel
but it is desirable that it contemplate the possibility of all components, which
are or, may be served by MRD, receiving the benefits to be derived from a
computer installation.
FACTS AND DISCUSSION:
a? Data
(1) Facts:
(a) Data, in numerical and alphabetical form presently
originating in the Offices under consideration and neces-
sary for their records and reports consists principally of:
1. Personnel: statistical, historical and qualifying information
in respect to each employee, and tables or organization and
statistics in respect to groups of employees; extracted from
employment resumes, personal histories,. and actions affect-
ing transfers, step increases, promotions, separations, etc.
From Form 50 alone, there are an average of 200 trans-
actions daily.
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2.
Comptroller: payroll, leave, general ledger, sub-
sidiary ledgers, allotment,,. .budgetary, financial
property and other accounts information; extracted
from time and attendance reports, personnel actions,
travel vouchers, purchase orders, requisitions, re-
ceipts, etc. General ledger transactions alone average
1400 daily.
(b) _1, Most of this data, after manual, preparation, is pre-
sently processed on a non-integrated basis by the
Machine Records Division (MRD) on electric accoun-
ting machinery (EAM), the input to which consists of
punched cards. The correct status,,pf a record is
maintained in a "desk" of punched-cards numbering
from a few hundred to over-l0.QYQ,..0.00 for a single
record. The total of cards in all desks approximates
4, 000, 000.. To up-date these record desks approxi-
mately 950, 000 cards are processed monthly.
2. Various other records of statistical or historical
nature are maintained manually, and much manual work
is performed outside of MRD i, preparing documents
for card punching by MRD,
3.
All of the data under cons ideratlon,,,could be processed
by EDP on an integrated basis.
(2) Discussion:
(a) Data presently being processed by MRD is distributed by
major functions to six organizational branches within MRD,
each charged with the responsibility for performing all
processing and for producing all reports, required by the
components it serves. There is very little integration of
these data, primarily because of puncled,,,card limitations
and various procedural problems. Requirements scheduling:
and cut-off dates frequently create peak loads necessitating
overtime operations. Obviously, since many records, be-
cause of their lengths require multiple cards, there is much
duplication of some -data. A great amount of sorting, merging,
summarizing and combining of cards becomes necessary to
maintain the records and produce reports required in varying
formats. Because records originate from different sources it
is practically impossible, remembering the limitation of a
card, to integrate these records into one storage from which any
desired item might be extracted.
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(a) In electronic processing each item of data could
be entered into the record storage just one, currently
maintained and up-dated,, and selected automatically,
through proper programming for production.(with
the limits of the equipment) in any desired format.
In the case of transaction input affecting more. than
one file or account, each individual record might be
up-dated with one punched card. Many records could
be maintained on a daily basis making possible the
elimination of cutoff dates, peak loads and result-
ing overtime, and the production of special reports
upon demand. Because of such ready demand avail-
ability, many periodic reports presently prepared-An
anticipation of possible need or for manual prepara-
tion of summaries could be eliminated. "Decks" of
cards would give way to magnetic tape.
b. (1) Facts
(a) The annual cost of operating the MRD, not including -
overhead, using EAM, is approximately $502, 000, in-
cluding $22, 500 for overtime of personnel. This may
be distributed as follows-
25X1
(b) No estimate of the cost of maintaining records man-
ually or preparing documents for card punching has
been made but significant numbers of people are em-
ployed in this work, such as: I '
F1 Section, OP
Payroll Branch (Fiscal), Compt
to name a few examples
25X1
(c) The study has progressed far enough.to indicate sav-
ings and reduction of personnel.. However,. the figures
below are necessarily subject to any modification' the
completed. study may produce. The estimated annual
cost of operation the MRD,. not including overhead, usir 5X1
EDP with IBM 650 or Datatron. 220 is-'
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(d) The Bureau of the Budget is concerned about the like-
lihood of the proselyting of trained EDP personnel as
the use of EDP expands. Hence,, the Civil Service
Commission presently has under consideration. the
.establishment of a proper grade structure for EDP
operating and programming personnel.. The estimates
for personnel costs shown above are based upon avail-
able information re present grades in other organiza-
tions using EDP. These costs are subject to possible
change when firm grades. have been established.
(2) Discussion:
(a) Since it has been impossible to complete full systems
studies, the costs presented in (c) above are for max-
imum.EDP equipment considered at this time. to be nec.?
essary to perform all of the present MRD work in one eight
hour shift. Should the completion of the systems studies
indicate that less equipmentmight1be required., any letter
of intent should be amended accordingly.
(b) No meaningful estimate of savings in components outside
of MRD can be made at this time, However, EDP will re-
sult in the elimination of much manual work now performed
in preparation of documents prior to card: punching and
of summary reports prepared: manually. After the com-
puter system has been completely installed and has been
in operation for a period of time savings should be sub-
stantial.
(c) No dollar value can be placed upon the better and more
timely products that may result from EDP.
c, Equipment
(1) Facts:
(a) Manufacturers have produced various types of EDP compu-
ters for processing data as outlined in paragraph 3, a.
above. These computers have beeni regarded as being
divided into three broad classifications, based on purchase
prices which are, to some extent, indicative of their ;proces-
sing potentials-
1. Small-scale - under 100, 000
7. Large-scale - over
100, 000 to 000, 000
1,000,000
(b) The Feasibility Team considered. computers in all classific
ations and conducted exhaustive research into the experienceE
of many other organizations to determine that a computer of
the medium-scale classification would be required and would
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satisfy the demands for processing the data outlined
above.
(c) The following five computers were studied in.detail.
1. NCR 304
2. Univac File Computer,. Model I
3. Datatron 205
4. IBM 650, with and without RAMAC
5. Datatron 220
The following were eliminated for final consideration
for the reasons specified.
1. NCR 304,. too expensive. and delivery uncertain
2. Univac File Computer, rated 4th in most desir-
able features
3. Datatron 205, rated 3rd or 4th in three character-
istics considered essential
4. IBM 650 RAMAC, no application apparent at this
time
(d) Final consideration was given to the IBM 650 tape system
with Read/Write device and off-line Tape-Date=-Selector.
and to the Datatron 220 tape system as two computer
systems either of which would satisfy the requirements for
processing the data outlined in paragraph 3. a. above. Com-
parison indicates the great superiority of the 220 over the
650. (See TAB A)
(e) There are certain "intangible" factors which contribute to
the success and growth of a machine installation regard-
less of the type of EDP equipment used. These-factors
are:
2.
System Service o The service rendered the user. by the
manufacturer in respect to assistance in designing. and
installing the system, assistance in programming. the
applications,. training. of programmers and machine
operators and providing for the education in the field
of EDP to other officials in the user Agency.
Research and Development 4 The introduction of new pr,
ducts and the improvement to existing equipment permit
the user to improve the operation of his system and ex-
pand its use in more fields of work. Basic research
leads to better methods and to the solution. of problems
previously not susceptible to mechanical solution.
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(f)
3, Range of Products m A wide range of products makes
it possible to .meet limited requirements with small.
capacity equipment and to expand the system where
greater capacity equipment is needed, without the
cost of changing from one make of machine to that of
another manufacturer.
EDP equipment may be rented or purchased and a letter
of intent will be accepted in lieu of a purchase order to
buy or lease. Equipment installed on a leased basis
may be discontinued upon 30 days notice. A letter of
intent may be withdrawn 90 days prior to delivery of equip--
m ent,
(2) Discussion.
(a) Research conducted by the Feasibility Team convinced it
that a medium-scale computer having prime features of
flexibility, large internal storage, expandable external
storage; and adequate speed for input-output, internal
operations and file searching would. suffice for data
processing in the components affected. The IBM 650, with
certain added equipment or the Datatron 220 tape systems
are the two computers which best satisfy these requirement;
(b) In comparing these two computers the Team considered not
nnly the basic equipment but such additional equipment as
might be required to perform the task now apparent, with
some allowance for expansion within the area covered by
this study. This comparison indicated beyond doubt the
superiority of the 220 over the 650 in technical features
as disclosed in paragraph 3, c (1)(d.) above,
(c) In considering the intangible factors with respect to,
1. The IBM Corporation. It can be said that, based on
over 10 years experience in using IBM products to meet
Agency requirements and knowledge of the policies of
the IBM Corporation, all of the factors enumerated in
3, c. (1)(e) above are present in their operations and
service to customers.
2. The Burroughs Corporation: The Agency has not used
their equipment in its accounting work. However, in-
quiries directed to other users, particularly the Depart-
meat of the Interior, which made a nation-wide survey
of Datatron users, disclosed that support furnished to
customers has been. excellent. Interviews held with
Burroughs officials convinced the Feasibility Team that
the Burroughs Corporation is well equipped to render se:
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d.. Systems Concepts
(1) Facts o
(a) Two systems concepts have been advanced by manufacturers
and users with respect to the manner of acquiring a.computer.
1. The "building-block" concept under which pieces of com-
puter systems hardware are installed as. programs are
developed for individual application.
2. The "integrated system" under which all of the computer
system hardware is installed at one time for completely
integrated programs including all fcareseeable applications.
Practically all users favor the "integrated system".
(2) Discussion:
(a) In all of the studies conducted by the Feasibility Team only
isolated examples of "building-block" installations were found.
The great majority of users, consultants and experts in EDP
advocate an integrated system.
(b) In cost, the 1B building -block0I concept would actually be more
expensive over a period of time than the "integrated systemBe
concept due to the fact that, until all programs had been placed
on the computer, it would be necessary to retain EAM equipment
and personnel to operate it. While no dollar cost can be assigne
re-programming old applications to integrate new ones each time
one was added would also be much more costly than a completely
integrated set of programs from the start, each to be applied as
rapidly as feasible.
e. Implementation
(1) Fact:
(a) Manufacturers require lead time of twelve to sixteen months
from the date of receiving a letter of intent or order before
making delivery of a computer. In order to avoid the loss
of this time the Feasibility Team has confined its work to an
over-all estimate of EDP requirements so that a letter of
intent may be entered at once. Completion of detailed systems
studies will be required before taking delivery of any computer.
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(b) A one-month parallel operation under EAM before discontinu-
ing' any present method of processing any record.is: estimated
to be sufficient to prove the efficacy of a. computer with respect
to each record.
4. CONCLUSIONS:
flow. charts, block diagramming and computer. progratnming,, -
in order to have an integrated. system re.ady:at the ti'mo or com,
pater delivery.. A year or more may be required to finish
this task. Programmers and operators will have to be trained
To assist the Management Staff in this work and to keep th
interested offices fully informed with respect to anticipated
changes in procedures, T/Os,..etc. , the.continued fine co-
operations of these components is necessary. At least one
representative from each office,. placed in a position of report-
ing, directly to the head of his component and with responsibility
for obtaining concurrences in..procedural changes will be es-
sential to complete this work.
a. The Comptroller be authorized and direct to execute a letter of intent
to the Electro Data Division of the Burroughs, Corporation for instal-
lation in early 1959 of a Datatron.220 system on a rental basis (with.
purchase option. )
Now . A-~
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'(a) These studies include the completion of procedures analysis,
Discussion:
(a) The :application of EDP to the work of MRD Eis both feasible
and advisable.
(b) Significant. savings will result from a computer installation.
(c) , A Datatron 220.Computer will be the best to install.
'(d) .A fully "integrated" systems concept should be adopted in
conjunction with the installation. of any computer
(e) Detailed studies to complete systems .analysis and training for
programming and computer operation will be required.
(f) . In order to retain.EDP personnel after training it will be neces
nary to provide a grade structure comparable with industry
and other governmental organizations,, and be prepared continu
to keep abreast of compensation changes in this field.
RECOMMENDATIONS:
It is recommended that:
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25X1A
Chief, Management Staff
Attachment:
TAB A
Comptroller
With respect to recommendations
c? and e:
Director of Personnel
The recommendations in Paragraph 5 are approved. (Date)
A-26 L. K. White, Dep. D Approved For Release 2005/085 t1Tooo7o8Rooo6ool3oool9 (Suppor-
..r
b. The Management Staff be made responsible for directing all studies
requisite to such installation, and for making a final recommendation
in respect to the letter of intent before the :expiration of its with,
drawal date '(1 March 1959).
c. The Offices of Personnel and Comptroller each appoint one full-time
representative to work :in conjunction with the Management Staff in
pursuing such studies and to have the responsibility of securing.
appropriate expedited approval for procedural changes.
d. The MRD designate personnel to be progressively trained (at least
a total of 14), as time will allow during the coming 12 months in
programming for and/or operation of Datatron 220 and to develop,
in conjunction with the. Management Staff, the essential computer
programs.
(1) To serve this purpose the DDIS provide the Office of Comptrol-
ler with 2 ceiling positions for one year if and when. the Comp-
troller's on duty personnel meet his assigned ceiling
e. The Office of Personnel institute a study to determine the proper
grade structure to be adopted for EDP operating and programming
personnel within the Agency.
CONCURRENCES:
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CONCURRENCE SHEET
SUBJECT Electronic Data Processing
CONCURRENCE:
Comptroller
The recommendations in paragraph 5 are approved:
Distribution: Orig & 1 - DD/S w/att.
4 - C om pt. w/att.
1 - Feas. Team w/att.
1 - Mgt/S file w/att.
1 Mgt/S chrono
Mgt-/S 25X1A .hps (22 April 59)
L. K. WHITE
Deputy Director (Support)
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TABLE OF (CONTENTS
Annex I Comptroller and Computer.-Requirements Charts.
Tab A Effect of Requisitioning .Process on Agency Financial and Finan-
'cia.l Property Accounting Records.
Tab -B General Chart of Computer Operation for Supply Process.
Annex II Requisitioning in Conjunction with Catalog.
Tab C Processi.ng,.a Stock.Item Requisition - Computer Procedure.
Annex III Electric Accounting Machine Reports.
Tab D Analysis of Machine Records Division Reports (Logistics) -
March 1957.
Tab E Eliminated Reports - Revised Manual Procedure.
Tab F Combined Present and Proposed New Reports - Revised Manual
Procedure.
Tab G Summary of Savings to be Realized Elimination of Reports -
Manual Procedure.
Tab H Proposed Reports - Computer Procedure. 25X1
Annex IV Examples Showing Advisability.of Making,. a Complete Management
Study of Supply Division/OL.
Tab I Flow Chart -.Current SD OL Headquarters) Procedure Requisitio
Tab J Flow Chart - Currenti Procedure - Requisition.
Tab K Present iRequirements - Numbers o Copies of Form 88, Requisitiox
Tab L Chart of Steps Presently Required in Processing a Stock Requisition
at Headquarters. (June 1957)
Tab.M Chart of Steps Presently Required in Processing a Requisition
for a Non-Technical Cargo a (May,1957) 25X1
Tab N Flow Chart - Proposed New E_-_._- f Processing a
Requisition - Headquarters, and 25X1
Tab 0 Diagram - Present Path of Paper Flow for- Non- ec nical Bin
25X1
25X1
y
n
Tab Q
Tab R Analysis of Present Cost,( of Filing Equiprn2 1
Floor Space, and Locator Personnel.
Tab S Analysis of Cost Proposed Filing Equippent
and Floor Space - Manual Method.
Tab T Analysis of Cost of Proposed Filing Equip
and Floor Space Computer e od Eliminating Locator Personni
Tab U Diagram - Proposed New. Office Area AI
Tab V Analysis of Pr sent and-Proposed Floor Space Utilization Office Area,
Tab W Rhutoara.Q hs,. with Location. Chart, of Certain. Areas in
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cargo l I 25X1
Tab P Diagram Present and Proposed Paths for Bin Material Flow.,
sis of Possible Travel Savings - 1 1.
al
A
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Annex V Organization and Functions - Supply Division, OL.
Tab X Chart of Organization Supply Division, OL.
Tab Y Mission of Supply Division,
25X1A
Annex VI Computer Requirements and Estimated Cost of IBM 305 RAMAC..4
Tab Z Computer Procedure Chart Prepared by IBM.
Tab AA. Installation Requirements - IBM 305 RAMAC.
Annex VII Flexowriter Procedure.
Tab AI3 Flow Chart - Procurement of a, Stock Item, Present Process?5X1
Tab. AC Step Analysis Present Receiving Procedure Headquarters.
Tab Al) Flow Chart - Present Receiving Procedure -
4 Parts
Tab AE Flow Chart Proposed Flexowriter Procurement Process Stock
Item - Manual Process.
Tab. AF Flow Chart - Proposed Procurement-Requisition, Purchase Order,
and Combined Receiving and Shipping Report - Using Flexowriter)
Tab AG Flow Chart - Procuring a Stock Item - Computer Procedure.
Annex VIII Cost of Feasibility Study.
Annex IX Summary of Estimated Savings and Costs.
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rCCT 20 May 1959
MEMORANDUM FOR: Deputy Director.(Support)
VIA: The Comptroller
SUBJECT: Electronic. Data: Processing
REFERENCE: Report of 10 June 1958 from Chief,. Management Staff
to DD/S, Entitled "Electronic Data Processing"
(This report embraced a general review of support.
Records
area data processing required of
types
Division, comparative costs
of computers - with particular emphasis on five
different makes in the medium scale class, computer
systems concepts, and impingements consequent upon
installation of a computer. The study concluded
that EDP, in the support areas, is both feasible and
adviseable, and resulted in approval by the DD/S of
a recommendation to execute a letter of intent for.
Responsibility
installation of a Datatron 22'0 "system:
for making a final recommendation regarding action
under such letter was placed upon the Management
Staff).
This memorandum contains recommendations for approval of the
Deputy Director (Support). Such recommendations are contained in
paragraph 5 below.
1. PROBLEM
Determine which electronic computer system shall be acquired to do the
work of MRD.
2. FACTS
a. Systems studies sufficient in scope to make a final determination
with respect to computer equipment have been made by Feasibility
Team*in the area of:
(1) Personnel Records
(2) Payroll Records
(3) General Accounting
(4) Supply Accounting
* See TAB C.
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comprising approximately 90% of the work presently performed
by the Machine Records Division (MRD) on electric accounting
machines (EAM).
25X1A
25X1A
25X1A
b. The methods and cost of handling data at present are as fol-
lows:
(1) In MRD, data is abstracted from 101 different types
of source documents, transferred to punched cards, then proc-
essed to up-date 156 permanent card files, which are the media
for retaining such data. EAM equipment, working with these
punched cards, is doing all of this work but intelligent manual
intervention is involved in every step of any job. Every such
job required some of the following operations, each of which
necessitates several manual steps:
Key Punching Merging
Verifying Gang Punching
Interpreting Reproducing
Sorting Calculating
Matching Tabulating
To illustrate, the permanently retained cards plus the monthly
transaction cards average a total of 2, 314, 000. Commonly, . the
bulk of these cards pass through one or more machines one or
more times a month. It is closely estimated that such. process-
ing involves approximately 39, 000, 000 individual card passes.
These operations are now necessary because Agency components
require MRD to produce (as of January 1959) an average of 669
reports a month - 378 Comptroller, =Personnel, 133 Logistics,
and 25 others.
Present plans call for an increased worklead in MRD arising
from changes in allotment coding, cost accounting, Fiscal
Division accounting to be put on tabulating machines, etc.
25X9
(2) As of 31 December 1958 there were=employees
in MR.D. In fiscal year 1958 the cost of operating MRD
was consisting o for personal
services (including $33, 888. 37 for supplies).
(3) A projected cost for fiscal year 1959 - based on
personnel costs of for the first 18 pay periods of
FY 1959, monthly machine rental of $47, 7.10 (as of January
1959), and an average monthly cost of $3, 300 for supplies -
is This does not include any beginning of the
substantial increase in the work referred to above.
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25X1A
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stCRET
e. Any computer suitable for Agency use will have the potential
to accomplish all of the work presently required of MRD more
efficiently, with greater speed and accuracy, more convenient
access to stored records, and very much less manual inter-
vention - hence, fewer personnel.
(1) Prior to submitting the referenced report, compar=
isons of the NCR 304, the IBM 650, the Datatron 205, the' Da-
tatron 220, and the Univac.. File Computer were made, showing
the Datatron 220 to be the most-suitable computer then avail-
able.
Within the class (medium scale) under consideration,
the computers which have been placed on the market since that
report are the Philco S-2,000, the IBM 7070, and the RCA 501.
All of these are transistorized but, amoung computer manufact-
urers, RCA is the oldest and largest producer of transistors.
The Philco S-2000 is too expensive to consider, the
yearly rental for a minimum recommended system. being' $376, 200
without corresponding offset.
(*)
(a) A comparison of the overall estimated costs of
MRD operations, using the IBM 7070, Datatron 220, or RCA 501,
and the 19.59. fiscal.year projected, cost of MRD, using present
EAM, is given below:
7070 .2
20
501..
EAM
Machine Rental
$332, 298 $317,.
448
$279.852
$176
520
Personnel
*1
214, 735 214,
735
214, 735
,
358,
154
Supplies
*1
50, 000 50,
000
50, 000
39,
600
Total
$597,033 $582,
183
$544, 587
$574,
274
(b) The-,cost of one-time expense for installation of
an RCA 501 is estimated to range from $100, 000 to: $125, 000..
The cost is made up as. follows:
1.
For the first two months' rental of a
card transcriber, Model 527 and tape
station
Model 581, totalling
$5, 650.00
One-time cost magnetic tape
8,000.00
Site preparation
20, 000. 00
De-bugging
51000.00
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ILK tt Grand total for
two. months is .. $38, 650. 00
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2. The parallel operation now begins and runs for
three months with the following costs:
The Computer (including the card transscriber
and tape station) $20, 100 each month, plus $1, 000
each month for supplies. This is a total of $63, 300
additional for these three parallel-operation months.
3. The grand total amounts to $101, 950, without taking
into account any release of punch card equipment
now operating under EAM or release-of personnel.
This type of cost for IBM 7070 or the Datatron 220 would-be substantially
more.
(2) A hypothetical accounting problem, typical of support area transaction
processing, was presented to manufacturers for timing their equipment. This
problem comprised 3, 500 transactions (represented by non-sequenced punched
cards), to be processed to up-date a permanent file of 35, 000 records (in sequence),
and to produce a listing (in sequence) of the transaction amounts and the up-dated
records showing the old and new balances. The results,' given below, were based
upon the most efficient manner of processing on each manufacturer's equipment
and were carefully checked by the Feasibility Team. Time in minutes, is shown
for each system under two headings: "C" represents time of the basic computer;
"OL" (off-line) represents time of integrated detached peripheral equipment.
7070
220
C
OL
C
OL
Input 31
-
25
-
9
15
Processing 30
-
19
. -
13
-
Output -
24
-
13
-
20
Basis Computer
Time 61
44
22
Peripheral Time
24
13
35
Total Clapsed Time
85
57
57
(3) Significent technical characteristics are compared in. TAB B.
d. Space currently occupied in Curie Hall by MRD totals 8, 080 square feet; 2, 400
square feet additional in Curie Hall will be required to accommodate the computer
during the period of parallel operation. The ultimate space requirement for a com-
puter and its peripheral equipment will not exceed 4, 000 square feet, based upon the
present MRD workload.
*1 - These computer estimates include anticipated substantial increase in the MRD wort
load from both present and future customers in the Support Area -2. b. (1) and 3. f.
Neither of these two additional workloads show in the EAM table.
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3. DISCUSSION
a. The acceptance of this study does not complete the work to be
done in connection with the installation of a computer.
(1) Systems studies have progressed to a point where it
is essential that a decision be made regarding the type of
co=mputer to be installed. Detailed systems design (block dis-
gramming) can be m ost efficiently accomplished wi th a specific
computer in mind, and programming cannot be done without one.
This will require approximately six months prior to installation.
(2) Other tasks to be completed before installation include:
(a) T raining in programming
(b) Testing of programs
(c) Review of requirements with operating officials
to obtain their concurrences in the recommendations of the Feasibility
Team regarding the elimination and/or modification of reports,
(d) Dissemination of information concerning EDP and
its impact on systems and procedures to all interested operating.
components and their personnel.
b. The Feasibility Team has made careful estimates of the possible
effects which may result from the installation of an EDP integrated
system.
25X1
(1) Reduction of at least 90% of the individual punched card
operations, see par. 2. b. (1) above, resulting from automatic
processing. within the computer as opposed to present EAM.
(2) Reduction of 1/4 of the tabulations (reports) presently
produced by MRD, resulting from the computer ability to turn
out end products now prepared from several tabulations, and the
facility with which reports can be produced on a required basis,
rather than at stipulated intervals, and acceptance by operating
officials of the "management by exception" concept,
(3) Reduction of 11 positions in MRD.
(4) The Feasibility Team is convinced that there are appreciable
personnel savings within other affected components, arising from the
revised systems which will be made possible by the use of computer.
These savings much more than effect continuation of personnel
within or outside of MRD.
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(5) Stimulation of increased demands as a result of having
.a computer m. thus providing faster and more flexible information
suggests that a new form of control of workload should be considered
by the Comptroller. A good possibility here is the imposition of
charges on using components responsive to cost accounting.
C. The comparisons presented in par.. 2. c. , above, are those which
the Feasibility Team consider to be essential for making an intel-
ligent determination with respect to both the advisability of any
installation and the selection of a specific computer.
(1) The operating costs for computers were obtained as
follows:
Machine rentals from GSA schedules.
Personnel from consultations with manufacturers.
Supplies from estimates based upon MRD experience,
making allowance for added cost of magnetic tapes.
MRI) costs were obtained from Agency records.
One-time expenses were estimated as follows:
Site preparation and physical installation is an
average suggested by manufacturers. Testing
and debugging programs, and parallel operation
are based on careful studies made by the Feasibil-
ity Team.
(2) In any, evaluation of computers, timing of an actual
or typical application is essential to determine the utility of
the system. Since peripheral equipment may be added as needed,
timing of the "main frame" or basic computer is particularly
important to ascertain the possible expansible potential.
(3) Generally, there are significant technical advantages
of one computer over another for any specific application. The
features which the Feasibility Team feels are of most importance
to the Agency have been compared in detail in TAB B. These
include punched paper tape reading speed,, size and character of
'computer" words and records, method of handling alphabetic infor-
mation, safety in recording information pn magnetic tape and speed
of reading and writing on such tape, and. pre-installation conversion
of records from punched cards to magnetic tape. Features more or
less comparable in all computer systems were not included in this
comparison.
TA.B B makes a significant addition, which coincides with the direct-
ion of the previous comparisons.
A-35
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d. The problem of additional space for the computer during the
period of parallel operation is one which will require immediate
attention following the acceptance of this report, "Ell w ing. firgt
floor of Curie Hall, has the floor-loading capacity required, will
need a minimum of electrical wiring, and is adjacent to space
presently occupied by MRD ? a necessary condition? It should
be noted that, with completion of paralled operation, the space
occupied by MRD will be reduced by approximately 50%.
Staff security clearance for selected manufacturer's personnel
would give the Team access to invaluable training and systems
assistance, and must be initiated immediately following accept-
ance of the recommendations herein. Such. clearances are neces-
s-ary for equipment maintenance in any event.
?. Further studies in the Offices of Logistics, Training, Security
Medical, and other components will result in additional applica-
tions being programmed for a computer.
4. CONCLUSIONS=
Systems studies made to date by the Feasibility Team confirm
that annual savings of $29, 000 which may be realized within
MRD by transferring the bulk of the MRD work to an electronic
computer, combined with more timely up-dating of records and
production of reports, warrant the installation of such equipment.
The redesigning of systems and procedures in inherent in the
sure-essful application of computer to data processing.
c. Such redesigning will result in substantial additional savings, as
discussed in paragraphs 3. a. , page 5; 3. b, (4),. page 5; and 3.. f.
page 7.
d. The RCA 501 is the most suitable computer for the requirements
Of MRD, has the additional capacity for work presently performed
on EAM by other components and can readily be expanded further
to most foreseeable future demands in other areas.
5. RECOMMENDATIONS
It is recommended that:
a. The Comptroller be authorized to secure a firm rental contract with
the Radio Corporation. of America for an RCA 501 computer system
(TAB A) to be installed 1 November 1959 under his operating supervision.
00708R000600130001-9
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 Approved For Release 200x# :RIR-1P90-00708R000600130001-9
b. The Comptroller be authorized to take the steps necessary to
secure, on or before 15 July 1959, space of approximately 2400
square feet suitable for computer installation and adjacent to,
other space occupied by MRD,
c. The Comptroller be authorized to construct a simple cost account-
ing plan to charge back appropriate costs on the components making
MRD demands.
d. Funds' in the amount of. $115, 000 be set aside for fiscal year 1960
to cover one-time expenses.
e. The period of. one year for which the Comptroller was-provided
with two ceiling positions by the report of 6 June 1958 be extended
by the DD/S to cover such period of time as may be required to
complete initial parallel operations, not to extend beyond 1 June
19 6 0.
f, The Management Staff in coordination with Office of Comptroller and
other offices affected be made responsible for direction all studies
requisite to such installation and authorized, to design and program
an electronic data processing system utilizing the RCA 501 for all
work presently performed by MRD.
g. The Management Staff, with the concurrence of the Coin-ptroller
be authorized to deal directly with the Radio Corporation of Am er-
ica in connection with establishing any date other than 1 November
1959 for the delivery of the various pieces of equipment.
25X1A
O
C hief, Mangement Staff
Attachments:
TAB A
TAB B
TAB C
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 Approved For Release 200510T ClR AO-00708R000600130001-9
COMPARISON OF SIGNIFICANT
TECHNICAL FEATURES
The paper tape reading speed of the 7070 is negligible and. its
maximum card read speed is at the rate of 667 characters per
second compared to 1, 000 from paper tape for the 501 and 220.
The 220 paper tape must be coded for each 10 numeric or five
alphabetic characters, placing a burden on the operator prepar-
ing the tape and making document reproduction from such tape
impossible without the probability that a code indicator will be
printed within the end limits of a number or word.. The pre-
paration of 501 paper tape required a code indicator only at the
beginning of each number or word, regardless of length, min-
imizing the burden on the operator and resulting in tape which
may, be used for document reproduction. It is quite conceivable
that much key punching,could be eliminated because of this feature.
2. The 501 will handle numbers or words of any conceivable length;
the 7070 and 220 require that a number of more than 10 digits or
a word of more than five letters be broken into two or more
"computor words".
3. The 501 require s only one digit space on magnetic tape or within
computer memory for each alphabetic character; on tape the 7070
requires one and the 220 two, in memory both require two.
4. The read-w rite speed of the 501 exceeds that of the 7070 (except
with higher priced systems) and the 220,
5. The. variability of record length on magnetic tape for the 501
permits greater compression of information than is possible for
the 7070 or 220 and has the effect of providing faster reading.
6. Dual recording of information on magnetic tape is a safety feature
of the 501 not available with the 7070 or 220.
7. The 501 system considered by the Feasibility Team includes a card
transcriber (not recommended by the manufacturer for use with the
7070, and not available with the 220). This is a device for conver-
ting information from punched cards to magnetic tape which, in. turn,
is used as input to the basic computer. It can be rented as a. separate
unit prior to. installation for the purpose of converting permanent card
files to. magnetic tape in preparation for parallel operation. ? an impor-
tant consideration in keeping the cost for such operation at a minimum.
Approved For Release t E:Clk[)T90-00708R000600130001-9
ming effort of Management Staff and other personnel under the
direction of Management Staff.
f, After this initial conversion fromEAM, a revision of
programs to effect simplification, integration and introduc-
tion of systems changes would be undertaken along with
studies in other components of the Support Area with a view
to making full use of computer time.
Management would accept at least some degree of the "total
systems" and 9Bmanagement by exception" concepts to simplify
both input and output through compatibility of source document-
ation with reports, and, reduction in both the size and number
of reports as well as compatibility- in the reporting dates
of related reports,
2. To expedite implementation of computer use-
a. The following persons were given authority for final approval
of systems by the heads of their respective offices-
25X1A
/C ompt,
O/Pe rs,
/Log,
b, In addition to MRD and Management personnel a number of
designees from the Office of Personnel, Logistics, Training,
Communications, etc. were trained by .RCA in programming
procedures for the 501.
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c. Two systems analysts, with some programming training, were
assigned by RCA to work with and conduct additional training of
Agency personnel.
The detailed systems studies and charting necessary for programming
d
was started in the fall of 1959, and the computer was installed as operational
3 October 196.0,, . As of this date (25 October 1961) the following programs,
?designed to process data for the Office of Personnel, Comptroller and
Logistics, (as well as several for other components, not included in this
survey) have been planned, comprising practically all of the work formerly
accomplished by MRD, plus some work formerly, presently, or neither pre.,
viously nor presently processed by others-
a. Personnel- 38 Programs consisting of over 38, 000 steps. Three
of these were for single-use-conversion from punched cards
to mag, tape; the 35 others were or will be parallel or
operational as follows-
9 as of Nov, 30-60
2 as of Feb. 1-61
5 as of Max. 1-61
1 as of June 30-61
Z as of July 31-61
2.as of Sep. 30-61
9 as of Oct. 31-61
3 as of Nov, 30-61
2 as of Dec, 31-61
'A--45
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From these programs some 200 reports, listings, tabulations,
tapes for payroll input, tapes for vital records storage, etc.
.are being or w ill be produced on a request, bi-weekly, monthly,
quarterly, semi-annually or annual frequency. In addition, an
average of seven reports per month, for which programs have
not yet been written, have been planned.
b. Payroll:
(T)' Vouchered: 29 Programs consisting of over 22, 000 steps.
These were or will be parallel or operational as follows:
2 as of Jan, 1-61
12 as of July 20-61
8 a, ;s of July 27-61
2 as of Oct. 1-61
2-as of Oct, 14-61
2 as of Jan. 1-62
Final details respecting various outputs is not yet available.
(2) Unvouchered: 2 Temporary Programs consisting of 375
steps have been written and are operational, processing
work formerly accomplished on the IBM 604. One con- 25X1
Accounts:: 15 Programs completed consisting of over 23, 000 steps.
6 Programs incomplete.
46
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These 21 programs were or are expected to be parallel or
operational as follows:
7.as of Aprl 1-61
2 as of May 1-61
2.as of June 1-61
2 as of Aug. 1-61
las of Nov. 1-61
1 as of Dec.. 1-61
2.as of Jan. 1-61
2 as of Mar. 31-62
2 .as of June 30-62
Final details respecting various outputs is not yet available.
d. Logistics: 20 Programs consisting of over 23, 000 steps.
These programs were or are expected to be parallel or
operational as follows:
2 as of June 1-61
11 as of July 1-61
1 as of Sep. 30-61
1 as of Nov. 1-61
2. as of Nov 30-61
2.-as of Jan. 1-62
I as of June 30-62
Final details respecting various outputs is not yet available
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25X1
E
e. In these four areas of Personnel, Payroll, Accounts and
Logistics there are presently planned a minimum. of 115
programs consisting of well over 1000, 000 step. Of these,
approximately 80% are in parallel or production operation.
Aside fromi on which no firm. a stimate is
available, all are expected to be fully operational for the next
calendar or fiscal year's annual reports as maybe desired.
The total operational time to run these programs has been
estimated by the ADP Division at 270 hours average per month.
4. In justice to all personnel involved in this effort, the following
should be considered:
a. When systems representing the work being processed by MRD,
were drawn for computer processing and submitted to the
appointed officials for approval, demands for changes and
enlargements poured in from all directions. At no time has it
been possible to secure a firm approval of a system as conceived
by the analysts, and demands for changes continue to pour in.
For example, as recently as 60 days ago, it was necessary to
review all Logistics programming to satisfy changes requested in
that area. In view of the extent of these demands for changes,
and at the urging of RCA analyst personnel, a decision was made
to scrap the idea of a simple conversion from EAM and proceed
with a fully integrated. system except in respect to Logistics
which has been developing its own concept. of conversion,
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 Approved For Release 2005/08_SJ CIRFEHTO-00708R000600130001-9
b. At no time has it been possible to "sell" the idea of "management"
by exception with the result that the number and size of reports,
some certainly of questionable justification, has increased rather
than decreased. No apparent effort has been made to take a hard
look at the "total system" or to achieve any compatibility of
input with output or of reporting periods for related reports.
Very little, if any effort has been put for achieving accuracy
of input except by the Accounts Branch, Finance Division. For
example, Personnel Input has been showing as much as 6% error
and Logistics up to 12%,
c. Insufficient space for programmers and no space for EAM
equipment was'provided in Central Building. This necessitated
a constant flow of information back and forth between Central
Building and C urie and Barton Halls.
d? It was necessary to use MRD personnel, intended to be full-
time programmers, as EAM operators part-time not only to keep
up with the basic workload, but frequently to implement the many
changes in punch-card form for future conversion to computer.
Early in the programming effort, at the suggestion of the Office
of the Comptroller, Management Staff personnel were relieved
of responsibility for completing the conversion to computer and
left in an advisory capacity only.
5. In view of the above trend away from the original concept of simple
conversion and the failure of the other assumptions to materialize objectively,
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it is impossible to evaluate the soundness of the estimates of computer
time fir dollar savings. It is strongly felt that entirely too much computer
time is being consumed for legitimate processing of support data and that
dollar savings can still be achieved by the elimination of all redundant
reports, an objective approach to justifiable requirements, a revision of
systems (including source documentation for input), and an insistence upon
accuracy in clerical work involving input.
25X1A
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 Approved For Release 20&E(2R E1RDp90-00708R00060100r9L
Comparison of Data P rocessing by EAM vs. EDP
1. Under the present E.AM system of processing data every transaction issuing
from the Offices of the Support Area must be punched into a card or cards,
each card limited to 80 characters, either alphabetic or numeric. This
data maybe a record originating from a personnel form 50, a logistics
requistion, an accounting voucher, a payroll T & A, or any one of a
large number of other records from various sources. Because it is prac-
tically impossible to integrate most of this data under the present EAM
system, much duplication of identifying and descriptive information in
punched card. form results. A great amount of sorting, merging, summariz-
ing and combining of card records becomes necessary. Each individual
record may consist of several punched cards containing a total of up to
several hundred characters of numerical and alphabetical information.
Files of these punched card records, maintained for the. production of
some 10, 000 reports annually, reach voluminous proportions. Often the
same or nearly the same information is printed out in more than one re-
port in differing formats. In many instances these reports are used to
compile manually still other (ultimate) reports.
2. In electronic. processing, each item of data could be entered into the
system storage just once through punched cards (or paper tape). currently
maintained, processed, manipulated and selected automatically,. through
proper programming, for production (within the limits of the equipment)
in any desired format. All such information could be kept together. in
one "block" of magnetic tape, as compared to a "deck" of.. punched cards.
In the case of transaction imput affecting more than one file or account.,
each individual record affected in such files or accounts might be up-
dated simultaneously with one punched card (or tape), thereby saving-a
substantial amount of card duplication, processing and storage space and
achieving real integration of reoords. Many of these records could be
maintained on a daily basis, making possible the timely production of
special reports upon demand. In addition, many subsidiary or periodic
reports, those prepared in anticipation of possible need and the man-
ual preparation of "ultimate" reports could be eliminated because of the
availability of such information within the memory of the computer sys-
tem. Because of the speed of operation, many scheduling problems should
be overcome, minimizing the need for overtime.
A-51
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 Approved For Release 20SFC2R[ITRDP90-00708R000600130001-9 ANNEX I I.
COSTS
Comparative .C osts of MRD - EAM vs. EDP
.(RENTAL BASIS)
1. The Feasibility Team has made various comparisons of the present cost of
operating the MRD as an EAM service organization versus the estimated
cost of its operation as a computer center. These comparisons, below,
show that the estimated annual cost of operation as a computer center,
despite savings of $131, 200 in personnel and supplies, will be from
$5, 000 to $30, 000 more than the present EAM cost, because of increased
machine rental, deplnding upon the type of computer installed. The max-
imum one-time physical installation cost is estimated at $50, 000.
2. No estimate of anticipated savings in components outside of MRD resulting
from EDP installation has been made. However, It should be evident that
if a complete systems analysis is made and an efficient integrated sys-
tem is designed prior to such installation, such savings must result
from elimination of much manual work now being performed in the prepar-
tion of data for EAM processing, the manual accumulation of data for
"ultimate" reports, and elimination of duplication of data by proper inte-
gration. Many organizations have reported large savings in these areas.
How ever, there is always the tendency, when equipment is available, to
increase the demands upon it for reports not presently being processed.
If these demands are held to actual requirements, based upon the exper-
ience of others and possible improvements in procedures now evident,
the annual savings should far exceed the increased cost of computer
operation.
EA M
Present Cost
Datatron 220
IBM 650
Machine Rental
EAM Equipment
$159, 810
$
Computer
194.160
197,100
Peripheral Equipment
101, 202
124, 008
TOTAL RENTAL
$159, 810
$295, 302
$321,108
Salaries - Personnel
$250,000
$160, 800
$160, 800
Supplies
92, 000
50,000
50, 000
TOTAL, SALARIES,
$342,000
$210,800
$210, 800
SUPPLIE S
GRAND TOTAL
$501,800
$506,102
$331,.908
LESS EAM COST $501, 800
$501,800
ADDED COST., EDP $ 4, 292
30, 098
*Peripheral Equipment Consists of:
Computer Input/Output Card Equipment $ 35, 310
$ 56, 070
Off-Line Card Equipment 65, 892
67, 938
TOTAL $101,202
.$124,008
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 Approved For Release 20055> 2(:Rl l P90-00708R000600130001-9.
ANNEX TTT
TAB - B
Types of Computers - Comparisons of Medium Scale Computers
The.members of the Feasibility Team have studied manufacturers' specif-
ications and many case histories of users, read many descriptive pamph-
lets, articles and technical books, visited computer installations, partici-
pated in, seminars and conferences, and, attended manufacturers ?.s detailed
briefings on'various computers and. computer systems. They have made
arrangements for representatives of all components concerned to attend
similar conferences, seminars, briefings and installations so that those
interested could become familiar with the theories, at least, under which
computers function and how data is electronically processed,
Manufacturers have devised various types of EDP computers for processing
such data as outlined in ANNEX I. These computers have been regarded as
being divided into three broad classifications based" on purchase prices-
a.
Small scale - under $,.100,000
b.
Medium scale - from. 100,,
000 to $1, 000,
000
c.
Large scale - over 1,000,
000
3. As disclosed in published reports of their experiences, many large organ-
izations have concluded, and the experience of the Feasibility Team dic-
tates, that electronic processing of a variety of data such as is indicated
by the current support requirements of this Agency demands a medium
scale computer.
4. A medium scale computer having the following capabilities is believed to
be essential for any computer system intended to replace present EAM
equipment:
a. Flexibility of Command Structure. A s a computer must be directed by
means of instruction codes to perform each individual step in each
routine to be processed, a, large number of instruction. codes for
programming such directions is required. Among the medium scale
computer systems, many different types of programming are provided.
How ever, those which have the most flexible and widest range in in-
struction codes are more efficient for data processing,
b. Internal Storage Integrated data processing often requires complex,
lengthy programs. It logically follows that greater internal storage
capacity will accommodate not only larger programs, but` more tables
of reference, constants, and sub-routines,, and facilitate manipulation
during processing. A s a general rule, the larger the internal storage ,
the more efficient the programs,
A-53
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c. Speed of Internal Operation. Internal operating speed should be fast
enough to accomplish arithmetic operations, computer decision making,
and transfer of data, while at ,the same time permitting the .imput-out-
put facilities to be utilized at their maximum speeds..
d. Expandable, Large Capacity Eternal Storage. To avoid the necessity
for sorting, collating, maintaining, and otherwise processing large
files of punched cards, and for filing source documents containing
duplicate data, and the time spent in such processing and filing, a
large, expandable external storage capacity is needed. Magnetic stow
gage is available in medium scale computer systems in the form of
additional magnetic drums, magnetic tape, or magnetic disk files.
e. High Speed, Flexible Input-Output. To meet present requirements, to
produce additional reports not now possible, and to assure maximum
use of input-output machines, this feature is needed.
f. High Speed Search and Extraction of Information from Magnetic Tape.
To retrieve and update information, abstract parts of files, summar-
ize various categories, and re-arrange data within reasonable time
limits, the ability to perform high speed search and retrieval oper-
ations from magnetic. external storage is; mandatory.
5. Medium scale computers studied in detail and compared . as. to their capa-
bilities by the Feasibility Team and presently being produced by manu-
facturers considered t6be reliable and in a position to furnish adequate
maintenance support included the IBM 650, Datatron 205,. Datatron 220 and
Univac File Computer. Others were found to be lacking in one or more
desirable features. The attached. table, compiled from published reports,
gives the ratings of these four medium scale computers with respect to
the features enumerated in paragraph 4 above. Datatron.220 ranks first
in most respects on this table.
6. The Datatron 205, Univac File Computer and the RAMAC feature of the IBM
650 were eliminated from final consideration for various reasons, such
as indicated increased costs for personnel and equipment, increased
processing and off-line time, randomization or cross-indexing of machine
generated address systems, and slower access time to and limited capacity
of storage. The NCR 304 was not considered because of its higher com-
parative cost and the fact that it would not be available for delivery for two
years. Final consideration is thus narrowed, to the Datatron 220 tape
system and the IBM 650 tape system.
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 IpproveLi For Release 2605/081*: CIA-1kDP90-(L)708R0106001*001-9
CWAB8TIVE TABLE - MEDIUM SCE COMPU1 RS
Internal
p
puV
..rer
.+
u},u1.. i.kii~
ta
v
1.c1i:14
Characteristics
Magnetic Tape
Gomputw
Logic
W? rd .
Arithmetic
Access
Re6j
Transport
Access
. 0n Line
Off-line
Punch
Printer
Paper
Command
Capacity
Speed
Speed
Capacity
Speed
Time
Independent
0peaions
Card
Speed
Tape
Search
Speed
Speed
IBM 650
Tape _
2
3
2
3
NM
2
3
2
NON&
system
Datatron
20S
3
3
2
.. 2.
2
1
2
2
NONE
2
2
Datatrou.
- 226
1.
2
1
9,
1
DONE
1
2
Univac
1
1.~
4
!i.
3
1
2
i
!t
1
3
computer.
O
~.~t
i
~- Q/~~,,waC
ti5t cs
t'
'
i
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 SEC REI
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ANNEX III
Tab C
1. The LB M 650 and Datatron 220 systems have been. thoroughly investigated
and compared, keeping in mind the feature.s considered. essential. Each of the
systems is deemed capable of processing the work now being done by MRD. The
technical comparisons (Tab A) are expanded below by narrative comparisons,
summarizing the features and what they mean in terms of applications. The
advantages and disadvantages of each system have been carefully v ighed. and,
although each system contains some desirable features not available at the
present time in the other, the comparisons show the superiority of the 220
system inmost of the areas considered, essential.
Comparison of Outstanding Features
220 System Versus 650 System
220 650
1. One reel of 220 magnetic tape will One reel of 650 magnetic tape will
accommodate over 13 1/2 million accommodate a maximum of 4, 608, 000
digits of useful data, digits of useful data, about 1/3 the
+n
e
220
f
h
The 220 tape units are equipped
with independent search features
utilized in file inquiry and up-
dating operations, which permit
tapes to be searched in either
forward or backward directions
without interfering with other
operations of the computer.
3. The 220 tape units are also
equipped with independent scan
features which permit the high
speed scanning of any (or. any
part) of the first 10 words of
any tape record without inter-
fering with other operations of
the computer.
,
e p
t
capacity o
File searching on the 650 computer
can be processed in a forward dir-
ection only, is performed by the
computer instead of the t ape unit,
and occupies the computer full time,
unless offline tape searching is per-
formed through a Tape Data Selector
(see item 13).
See T ape Data Selector ( item 13).
4. The high internal speed and tape The 650 is not a core storage computer
transfer speed, of the 220 -made and speeds are limited by the drum.
possible by core storage; allow
faster rearrangement of data,
and should result in faster overall
operations than could be obtained
with any drum type 1 computer.
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. Equipment
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5. 220 tape records can vary in
length from 10 to 100 words,
any combination of record
length in any file. This
makes possible a great deal
of flexibility in establishing
and maintaining tape files.
6. The expandable core memory of
2000 to 10, 000 words in the 220
permits in-line processing of
exceptions, large scale programs,
storage of more tables of ref
erence and constants, simplified.
programming, and summarization
of information,
7. The input/output facilities
available with the 220 and the
format control of the Cardatron
system make possible the on-line
production of a wide variety of
printed reports, punched. cards
and paper tapes.
8. In the 220 system, tape files may
be changed by either writing a
complete new record on tape or
rewriting on the same tape only
that portion of the record which
is changed, thus increasing the
flexibility of tape operations.
The method of handling alphabet-
ic information in the 220 system
is simple, not limited to a
specific number of characters,
does not require special devices,
andj does not take excess storage
space for controlling alphabetic
information written on magnetic
tape.
ANNEX III
Tab C
Page 2
650 tape records can vary in length
from 1 to 60 words, but all records
in any one file must be of the same
length, thus reducing tape file
flexibility, unless extra storage
space and special programming
techniques are resorted to.
The drum memory of 2000 words
is not expandable.
The 650 is limited. in formats and. in
the number of on-line input/output
devices.
To change any portion of a tape file
in the 650 system, a complete new
tape must be written.
The 650 system requires special
devices to handle alphabetic and
special characters and, when alpha-
betic information is included in
tape records, one work out of each
10, must be sacrificed for alphabetic
control purposes, thus reducing the
amount of usable alphabetic inform-
ation,
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10. The 220 system was designed
to cope with the full ,.,range of
electronic computing problems.
11. The 220 1pystem has a super-
visory printer which ca.n be used
to print error items, results of
inquiries4 etc. , without dis-
turbing card punching, report
printing or computer processing.
12. The 220 system is not yet in use
by customers,
13. Off-line devices for use with
the 220 are scheduled to be
available in two years,
14. On-line punch card equipment
can not be used as input/out-
put at the same time. Control-
ling. Cardatron units are fixed, as
either input or output.
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P age 3
The 650 was originally designed as
a scientific computer and has been
.adapted for other uses through the
addition of special. devices and other
machines.
Supervisory printer is not available
with the 650 system e4ept with the
disk storage, feature.
The length of time the 650 computer
has been in use provides a source of
knowledge and e xperience available
to the user,
A Tape Data Selector presently avail-
able in conjunction with a tape urj,t
and a printer or punch can be utilksed
for off-line searching and file scan-
ning operations. The computer is not
affected and is free for other uses.
(see items 2 and 3).
On.-line punch card, equipment can be
used. as either input devices, output
devices, or simultaneous input/output
devices.
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Miscellaneous Comparisons
220 650
Ow
Delivery Time
Quoted by manufacturers'
representative s
Maintenance
Furnished at no cost when
equipment is rented
Engineer on site' full time
Time requested by manufacturer
for testing- and preventative
maintenance
Furnished by contract, if
desired, when equipment
is purchased
Standby. Equipment
Provisions for standby
equipment
Assistance
Customer assistance by
manufacturer -
9 . months 6 months
Yes ,- if manufact-
urer feels installa-
tion is large enough
to require it
At least 2 hours During regular shift
before start of operations, if
shift possible
Will be provided Available from
by manufacturer manufacturer and/or
possibly at other
installations
service
tation of furnish.- and. assistance,
ing excellent
support
ANNEX III
Tab C
Page 4
The IBM Corporation
has the largest
organization in the
data-processing
field to provide
and has the repum customer
The Burroughs
Corporation is
well established
in the electronic
computer field
2. Based upon the experience of others, it is probable that after equipment is
installed, unforeseen demands and, applications will arise, These added demands,
plus growth'Il..of existing jobs, may tax the original computer system beyond the
bounds of efficient operation. Therefore, the expansion., possibilities 'of each
computer system must be considered. These comparisons have been made and
show the growth potential of the Datatro.n 220 system i.s much greater than the
IBM 650,
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Expansion possibilities
Datatron 220
ed from the proposed 3000 words to a
1 Internal memory can be expand
maximum of 10, 000 words,
The number of card input/output units can be increased from the
proposed 4 to a maximum of Z?
number of taps units can be increased from the proposed 4 to a
3, The
maximum of 10,
each accommodatin g a maximum of 50, 000, 000
4, As may as 10 Datafiles, 1-1 owever, the system
digits can be incorporated into the 220 system,
is limited to a total of 10 tape units and/or Datafiles in any corm binati.on.
The number of paper tape readers can be increased from the pro posed
5, on
one (included in control console) to a maximum of 10?
an as 10 paper tape punches can. be incorporated into the system?
6, As m y
7. The number of supervisory printers can be increased from the proposed
one (included in the control console) to a maximum of 10,
8 High speed printers (up to 900 lines per minute) for either online
use with the computer or.'.off cline use with a tape unit will be avail.a:ble
in le s s than 24 months, dviis 9? The Burroughs Corporation representatifoves
pute that r ew
use ah the ed.
high speed card input/output equipment
be available for order in the near future,
IBM 650
to 4 disk storage units, each accommodating a maximum of 6, 000;000
1, Up
digits can be added, to the 650 tape system?
up to 10 inquiry typewriters, which
2. With the addition of disk storage,
a also be used to a limited degree a supervisory controls for the 650
m y
can be added,
3. The number of''tape units on line can be increased from the proposed
4 tc~a maximum of 6; according to manufacturer's representatives, can
be increased . to a maximum of 10 (with the addition of concurrent read/
write equipment).
4 An unlimited number of Tape Data Selectors can be installed.
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ow
5. Certain types of punches and printers designed for 7',o series IBM
computers can be used in conjunction with a 650 system, off-line,
SYSTEMS CONCEPTS
the Feasibility Team studied many
1, In considering the two systems concepts,
case histories, articles and, books dealing. with. electronic data processing.
Only isolated, instances which advocated the "building block" approach were
found. In the information available, preponderant support was given to the
integrated systems approach, Examples of systems concepts of various
writers, all experienced. in the field of EDP, are contained. inthe attached
abstracts,
20 Some 34 case histories of large organizations whose installations were for
Payroll, Inventory Control, Billing, Personnel Statistics and Control, Budge-
ting, and various other data processing applications are enumerated. in this
Tab, Of these, the lone organization which adopted, the "building block."
approach has experienced no net cost savings. as yet, but expects to over a
period of five years. Those organizations giving cost information and, which
had installed a complete integrated, system as the initial step realized,
savings within one to' two years, These case histories are attached follow-
ing the abstracted information,
.ABSTRACTS
False Starts In Office Automation,
John Diebold
"The Management Review", July 1957; pages 81-88
As quoted in "Data Processing Digest", October, 1.957; pages 3-4
"Many of the problems which have frustrate d management in realizing
the full. potentials of their electronic c ompu?ter installations are the re s'ul.t
of two major managerial errors.
The first of these errors is the concen.trati.on. on hardware rather than
on the system, 'Although the scope of the automation problem encompasses
virtually all areas of the business or. gani.zation, the nature of the analysis
and the decisions that must be 'undertaken does not lend itself well to
committee organization. These are operational problems and should bf?
treated as s u c h , , , , The problem of automation should. be specifically as-
signed as the responsibility of an. operating executive, ? Delegating authority
to a committee 'usually leads the company to approach automation from the
standpoint of technology or hardware The very phrase feasibility study, ,
frequently serves to imply. that they are trying to find, an application for a
computer, Their objective should be to design the best possible information a communication system for meeting the needs of the organization,w hether it
or entirely
RELIES U PON A computer, a simple manual and. machine system,
upon humans.
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mCPYRGHT
"The second error is the delegation of important decisions to tech-
nical people, rather than. to those thoroughly familiar with the business
itself, The introduction into a company of 'experts' who would, be consid-
ered 'floaters' in any other field., 'has the same consequences as the vio-
lation of any other sound, personnel policy, , , o The solution is to train
personnel from your own organization in analytical procedures, machine
operation, and programming, , , o The installation of automation equip-
ment cannot be properly made without a thorough understs.nn.d.ing of the
functions and needs of the business itself, '
A common method of proceeding with, the study is the step-by-step
method, which term 'is in.tended to con:vey the impression of caution and
proper business reserve, Actually, it often means that another uncoordi-
nated. misstep is being taken into automation.,'
'The step-by-step approach frequently ignorers that fact that the whole
concept of systems analysis and design, which is 'basic to automation re
quire, a careful. and detailed. plan for the entire organization. if the bene-
fits realized are to be more than margi ~a, , Thas a.na~grsas must pre-
y+~?rr~,Yae
ce e v aTuation of equipment.- your pith the system, not with the
machinery. Such a s tud.y often results in great improvements and s ub=,
stantial savings, even when automatic machinery is not installed.'
'One result of treating the computer as just, another tabulating machine
and. not integrating it into the business system is that the high costs of
data-preparation often reduce or eliminate any ? savings that result from
automatic p.roc:essing, On :many existing computer 1bti.sta1lati.ons, a sub-
stantial portion, of the savings has been made poss ible by deriving data
automatically from a process as a by-product. This eliminates the
extensive key-punching or other data. --prepa:;ration. costs that are encountered
when the computer is consi.d.ered only a new, faster, and more automatic
addition to the tabulating room.
'However, it is important for management to be familiar with the reach-
ines that are available, since a knowledge of existing equipment which fits
the needs of the system is obviously necessary to the successful accomp-
lishment of the conversion to automation, ' "
Never versestinnate the Powe:rof.A Computer
Ralph F. Lewi s, Arthur. Young & Co.
"Harvard. B usiness Review", September=,October, 1957; pages 77=84
As quoted, in "Data Processing .Digest", October 1957; pages 4=5
PYRGHT
"The significant subtitle i.s, 'Tt can do the calculating, but it can't
do the planning, ' Four reasons are given for the majority- of orders for EDP
systems up to the present, to keep up with the Joneses; to see what can be
done with computers; to obtain identifiable cost savings; to obtain better or
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faster information, ' An example of each type of motive is given,. i enti'
fled only as Company A, etc. If you have kept up with the literature in
the field, it will not be difficult to identify the companies. In commenting
on the motives, the author makes the follw oing statements,
'The net gains of transferring an already mechanized operation to the
computer will rarely bring any advantageo To produce better__,cts for
manag__ ement means an entire. studyof management, problems. In many
instances such a study may well result in formalating_a complete new
system of processing p,.per{ work'. This is followed by example of
Company D (the fourth motive above),.
'The sound way of approaching acomputer installation is to determine
first of all what information management really needs and how fast, o , .
Priorities must be established as to which items of information can be
of most benefit. At that point, detailed systems work should be started, ?
'Normally, no single application will economically carry the. cost of a
computer system. Only in a few specialized, areas can a computer pay its
way .ol?__a
cated problem of public utility billing and revenue accounting, or some of
the volume operations of the larger insurance companies, such as premimum
billing and actuarial studies. In most situations economic results can be
obtained only by programming a multiapplication installation.
'This does not necessarily mean, however, that those operations now
being handle d..efficiently on tabulating equipment can be profitably put on
computers. As a matter 'of fact, the best possibilities are those volume
operations which defied economic tabulating systems. ?
Although the most popular of the applications initially placed on a com-
puting system, payroll 'is normally nota prof itable~com,puter application'.
An example is given of a well-known company which started with a huge pay-
roll application; and is now 'quietly decentralizing the payroll operations,
moving them back to conventional equipment, and substituting more worth-
while operations on the computer. ' The author has found. few computer
systems now in use which could be considered as economic. 'The number th
are paying their way at this point can.be counted on one hand, with some
fingers left over' However, 'in addition to the ever present payroll instal-
lations, headway is being made in such potentially profitable areas as
inventory control, production control9 sales accounting, and in such pre-
viously mentioned specialized fields as public utility billing and insurance
accounting. '
Fou 'don'ts' conclude the article, -
':Don't order to keep up with the Joneses. Don't switch established
h
tabulating routines to the computer. Don't expect that one application will
pay for the computer. D.on't accept delivery until you are really ready,'
SECR
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Conducting a Feasibility Study For Inventory Control Application
Neal J.. Dean, Ramo-Wooldridge Corp. , Los Angeles, Cal.
Paper presented to AMA Seminar, March, 1957
As .quoted in "Data Processing Digest", November, 1957; page 12
" ?, .. A fully integrated. electronic data processing system cannot be
obtained by putting together islands of mechanization. Systems must be planne
i.n advance i.n su ZfTc e-nt "detail to accomplish the required integration. ?
Rather, the author recommends that the company 'conduct a comprehensive
study of the data processing requirements of an organization. ? Two methods
may be used for conducting such a study. In the analytical rriethod, the com-
pany 'studies in detail the functional possibilities of electronic data pro-
cessing in order to assess the operational and economic advantages and dis-
advantages of an electronic system. ' The empi:r ical method entails soli c-
iting from several computer manufacturers proposals for application of equip,.
ment to a specific system. 'The advantage of the first method is that the
company has the assurance that it has explored the full possibilities of
electronic data processing and has selected the best system for its needs. ?
The author considers 'the empirical approach... dangerous unless a company
is sure of all the details of its application. '
The feasibility study has four parts; 1, priority study, to determine
where the payoff is largest and most immediate; Z. the integration study
to reduce the computer work load through relating source documents and man
agement reports; 3, the economic study, to determine costs; 4, the ope r.
tional study, to determine the machine characteristics needed. for the system.
Electronic Data Processing or usin.ess ?n n usry
Richard G. Canning
Published by John W Hey & Sons, 1956
Chapter 1, pages 2932
PYRGHT
"Alternative Approaches for the Investigation
A very comrr?on method, of selecting a course of actiona which has been
used in many problems other than data processing, is for company managemer
to be so engrossed. in the day-by-day management that no action is taken on a
problem until it reaches cr. is ii.s proportions. When action can no 1 onger be
defer red, the obvious desire is to obtain an immediate remedy. For problem.,
in data processing, this means calling in various equipment manufacturers to
see whose equipment comes closest to solving the problem. In some case, thi
has resulted in the manufacturer developing a specialized piece of equipment
to solve the problem, in the belief that other companies probably have the
same problem. In most cases of this type with, which the author is familiar,
the results have been unsatisfactory; the equipment may perform like it was
supposed to, but the crisis seems to shift to another area within company
operations, and, management still does not get the answers desired.
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-Another approach for installing electronic data processing is to have
it take ove the majority of the functions which the punched card equipment
is already performing for a company. Since electronic machines are faster
than punched card. machines, it is usually expected that the machine will
have considerable free time which can then be used to take on additional
functions. Thus, electronic systems are looked upon as if they were 'super
punched. card systems'. A slight variation of this approach is to select
certain 'gravy' functions for the first application of electronics, functions
that promise to give big savings with the least effort. It is felt that one
advantage of such an approach is that the equipment manufacturers, from
their experience with punched card equipment, can provide considerable
advice on the installation. of the 'super punched. card system. '
The major difficulty with this type of approach is evident- punched
card. systems have usually been installed. for accounting operati ons, and
accounting practices are reasonably formalized, A 'cookbook' approach
often turns out to be reasonable. But the requirements of the accounting
operations may not reflect the data processing requirements of the rest
of the organization. Thus, management encounters more and more
difficulty in trying; to expand the 'super punched. card system' to other
management control operations -? the equipment just does not seem to fit
the needs,
Another approach is to rent small or medium size electronic equipment
for one data processing operation within the company, and plan to expand
the system later if the initial installation works out. Since the equipment
is rented, it can be returned, in favor of a larger machine when expansion
is desired,. or else additional small units can be rented.. As in the case
of specialized equipment, this approach often turns out to be unsatisfactory;
the bottleneck just seems to shift to another area of company operations,
and. management is never sure that a real improvement has been accomp-
lished,
These approaches have something in ccmnmon- all of them propose patch-
work types of solutions, trying to fix up one part of the data process ing
system at a time, without considering the other parts of the system. Such
approaches resemble that of the amateur house builder, who draws no plans
and who solves each. problem as he comes to it. while building the house.
As new requirements are uncovered, a wall is torn down or a room is
added. The completed house might be classified as rambling.
The approach for installing electronic data processing with which this
book will be concerned is called, the 'systems approach', It proposes an
engineered, solution to the data processing problem, rather than a patchwork
solution. It consideres and solves the overall data processing needs within
the company, on paper, before the first step, in procuring equipment is taken.
It promises a much greater chance for satisfactory operation of the data
processing system than does the patchwork solution. It short, it is very
similar to having an architect lay out the plan for a large building, in which
as many requirements as possible are considered in advance and solutions
developed to meet those requirements,
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The Systems Engineering Approach
A. What is the systems engineering approach? The systems engineering
approach considers a company to be an integrated system, working toward
the common goal which has been specified by management. The accounting
department, production department:, purchasing department, and so. on, are
not looked upon as separate operations, but rather as parts of the overall
operation.
From a data processing standpoint, the objective is to achieve a balanced
flow of information throughout the company, according to the needs
different departm ents. The approach does not c onsider just one departm ent,
and try, tto mechanize its operations _with little or no regard f or the other
departments. So the first step in be inning a stems study is to look at
the cornpariy as an integrated sy tem,~ and, to visual.ize_the reTat c u iups. of.
the various departments in the system.
Looking at the company as an integrated system, the next step is to
determine the major data flows. That is, what information must flow from
department to department, and. perhaps plant to plant, in order for the c om-
pany to function? At the same time that the data flows are determined, the
quantities must also be etermaned. How many decimal digits and alphabetic
characters are being stored -In the maser active ord.ei- fees of the company,
and what is the quantity of data flowing between departments daily? The
data f )ws and uanti.tie s of rata constitute, t;h dada processing needs, or
requirements of the company.
Once the requirements have been determined, the next step is to en in?
eer a. data processing system to meet those requirements. In this case, the
term 'engineer' means the selection of components which can be asse mbled
into a system, under the normal engineering considerations of efficiency and
economy, It might seem strange to the reader at first that an information
system can be engineered, because people are not accustomed, to thinking of
information in such terms. However, methods now exist for measuring the
quantity of information; information flow can be stopped, started, varied, and
manipulated in other ways, similar to a physical system. Information flow,
and manipulations upon information, are subject to an engineering analysis.
When the system has been engineered, on paper, the next step is to d.ev
elop a practical step-by-step program for attaining the system. The whole
system need not be installed at one tiem, but rather may be procured in
phases, in most cases. "
Office Automation. Applications
Published, by Automation Consultants, Inc.
Case Studies Enumerated.
PYRGHT
Case Study Number D-6, Metropolitan Life Ins. Co.
"From this study it was possible to extract some guiding principles for
approaching the design of an operating system suitable for use with elect-
ronic de ices. These guide-posts were.
(1) An electronic computer should, be applied to the whole job,
not to some separately departmentalized piece of it.
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('2). Small jobs should be combined with others.
(3) Source records should be consolidated,
(4) All calculations should be made at one time,
Case Study Number E-2, Detroit Edison.
"D etroit Edison is currently engaged, in a massive conversion operation,
according to Mr, J. D. Elliott, Director of Revenue Accounting. The object
of the conversion is to transfer the customer accounting operation from an
elaborate punched card, system that includes IBM 650's to one 705. Until
this changeover is completed, the company understandably feels reluctant
to publicize any details,
The two 650 machines were installed in April 1955, and the 705 in
November 1.956, As of October, 1957, the conversion. was not complete, and
further systems analyses were being undertaken,
Case Study Number E?4, Canadian Pacific Railway
"According to Canadian Pacific President N. R. Crgmp,'With this new
equipment, (IBM 705) we move from the narrow concept of old methods,
with a highly departmentalized practice in the collection and processing of
information, to the new concept of integrated. data processing, based on a
system wide integration to meet all requirements more quickly, m ore fully
2YA lc,cc asr~ aflSi\1 ly "
CPYRGHT
CPYRGHT
tPYRGHT
Case Study Number G-2, Socia.. Security Administration
"In May, 1955, the Management of the Division of Accounting Operations,
Bureau of Old-Age and Survivers Insurance,. Social Security Administration,
decided to convert a substantial portion of its accounting processes to
electronic equipment, At that time the Division had among its thousands of
employees less than a half-dozen with. an understanding of the capacities of
the equipment. Yet by March 1956, when the central, processing unit of its
IBM 705 was installed, the Division was ready -to puut the system to work on
a 24-hourma-day basis,
In the ten months intervening, 1.8 ,man.-years of planning and programming
were completed and 5, 000 pages of programs, block diagrams, and related
procedures were written, And, it was done without recruiting personnel with
electronic training from outside the organization. "
Installing Electronic Data i-rocess:Lng2_ysiems
Richard G. Canning
Chapter. I, pages 4.-5
"There are two major approaches being followed throughout the country
which, for lack of better names, 2:n ight be called the 'one step' and the 'two
step' approaches. The one'step approach says, We see EDP as a powerful
action. Rather, let's set our minds to doing the job right and go after these
not dilute our efforts or delay these benefits by taking some easy course of
management tool, through which we can gain a competitive advantage. Let's
big benefits from the outset. '
The two-step approach says, 'We agree that EDP offers big benefits for
management, but it is a new tool, one with which we and, our employees are
unfamiliar. We feel that we should. not rush into this program blindly.
Rather, we are goi.ng to t a wrr%e ~ o4nabl.y safe step first by substituting
who
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this new EDP equipment for some of the punched card equipment we have. beer
using. Then, when we have some experience under our belts we will go after
the big benefits, '
It is not the purpose of this book to argue the advantages and disadvantages
of the two approaches; each organization will have to make its own
decision. Our purpose here is to recognize that eventually all companies
will go after the big benefits through the use of EDP. Experience has indi-
cated that when a company is starting to take the second step in the two
step approach, it is still faced with a majority of the problems''that the
one-step approach, tackles at the outset, "
Ibid.
Chapter 10, page 1.54
.CPYRGHT
Crawling Versus Walking
The AAA Manufacturing Company decided to try to 'walk' in its EDP pro-
gram right from the beginning, instead of following the 'crawling' approach
first as so many other companies have done. They feel that it has taken
then somewhat longer to put their operations on the electronic system than
if they had merely converted large punched card jobs over to EDP. How-
ever, since they were aiming at i.mp.rovi.rig the Company's competitive pos-
ition, and not just at obtaining some clerical and punched card savings,
they feel that the approach. they chose was right for them.
They also feel, from their experience, that the 'crawling' approach
would not have saved them :much time, if any, in eventually acquiring the
benefits they desired., Most of the planning and. programming that they
would have had to do for converting large punched. card operatings over to
EDP would have to be largely scrapped. when they started planning and
programming the phase I system, So, for this particular case, they have
felt that the decision to go after big 'benefits from the start_was a wise one, "
Ibid.
Chapter 1.0, page 155
CPYRGHT
Other Lessons Learned
"Also, management; has learned that the pl.ani ing should have looked a
little farther into the future and should have provided sufficient system
capacity for handling what will likely be put on the equipment during the
next year or so, l:n the planning that was done during the first year, the
planners had, their eyes set too firmly on the Phase I. program and therefore
selected a machine that would, handle the Phase I operations in approximate-
ly one shift of operation, B y now, management sees that this one electron-
ic system will. soon be overloaded. At that time, they must either get a
second machine of this same type or replace the present one with a newer,
faster :machine. However, during the first year of planning, the company
management still was not too sure of EDP and. probably would not have
accepted a proposal for obtaining a machine considerably faster than was
required. by the Phase I operations, Now , how ever, they have overcome
that attitude. "
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CPYRGHT
Case Histories Studied, Compiled From
"Office Automation Application", published by Automation Consultants, Inc,
"A Management Guide to Electronic Computers", by W. D. Bell, published
by McGraw-Hill y - - -
I.nsta.lled, a C omplete integrated System
Organization System Installed
Sylvania Electric
Carrier. Corp
Square D Corp.
Elwell-Parker Electric Co,
Magnavox Co,
Ford, Motor Co,
B. F. Goodrich-Hood, Rubber Co,
Peppe ft.ll Mfg. C a.
Gladding, McBean & Co,
Ashland Oil & Refining Go,
Standard Oil of California
General Petroleum Corp,
Nationwide In.s, Co.
Equitable Life Insurance Co.
Farmers Insurance Group
Metropolitan Life Insurance
Equitable Life Assurance Co.
Franklin Life Insurance Co,
Arizona Public Service Go,
Canadian Pacific Railway
State of California Department of
Employment
U. S. Government or Social Security
Administration
County of Los Angeles, California
H. Q. U. S. Air Force, Statist`ca3.
Services
U. S. Army Signal Supply Agency
U. S. Navy Ships Parts Control Center.
Lockheed Aircraft Corp,
Installed One System, Plan Change to Different System
Combustion Engineering
Mutual Benefit Life Insurance Co,
John Hancock Mutual Life insurance
A-69
Univac I:
IBM Card 650
IBM 305 Ramac
Univac 60
IBM Card 650
Univac File Computer
Teleregister Special Purpose
Computers
Datatron 205
2 Univac 120 Computers
IBM Card 650
IBM Card. 650 and 704
Da.tatron205
IBM Card. 650
?B.M Card 650
IBM 705
3 Univac I Computers
IBM Card 650 and, 705
Univac 1
U::niva c 1.
IBM 705
IBM 702
Datarnat:ic 1000
:BM 705
IBM 705
IBM 70.5
2IBM 704 Computers
IBM Card 650 to 2 Tape 650 to
IBM 709
IBM Card. 650 to 2 Card 650 to
Tape 650
Univac I to 2 Univac 11 Computers
Approved For Release 2005/05 CcRE0T900070810006001300019
 Approved For Release 2005/cSf rS
FT 90-00708R000600A3 GM IV
Tab D
Page 10
CPYRGHT
All-State Insurance Co. 1 Datatron 205 to 6 Datatron
205 Computers
The Detroit Edison Co. 2 IBM Card 650 to IBM 705
New York Central Railroad 5 IBM Card 650 to 6 IBM Ramac
Tape 650 and IBM 705
Building Block Installation
Pan American Life Insurance Co. IBM Card 650 to IBM Tape 650
with Tape Data Selector
and High Speed Printer.
A-70
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 Approved For Release 2005/0> CcRT90007081000600130 00Araex IV
LL. . Tab.-E
Computer Systems Concepts
1. The Feasibility Team has considered very carefully the advantages and dis-
advantages of installing a computer under the "building, block" concept
versus installing ,a complete integrated system.
2.o Under a "building block" concept only-the computer and peripheral equipment
sufficient for a major application .(such as is described below in paragraph
5. Installation.I) would be acquired initially. As each succeeding applica-
tion became converted to computer operation, additional equipment necessary
to process the added data would be installed. In each such instance it
would be necessary to.do extensive re-programming, possibly :involving all
previous applications, so as ultimately to achieve a fully integrated system
and the most efficient use of the equipment. No estimates of the costs of,
or of the time required for such re-programming have been made,, but it should
be emphasized that they could be substantial. Because EAM equipment and
operating personnel would be required for processing all applications not
transferred to the computer, no significant reduction in either EAM equip-
ment or MRD personnel could be realized until most major applications had
been integrated into the computer system.
3. Under a completely integrated system, fully integrated programs would be
prepared for all applications and the computer, with all required peripheral
equipment, would be installed at one time. Since all the programs for the
fully integrated system.could be tested prior to installation, a brief
period of parallel operation should suffice, following ;which all EAM equip-
ment not required in the system could be returned to the lessor and a sub-
stantial number of MRD positions abolished (see paragraph 5, Installation IV).
4. The costs for a "building block" versus an "integrated" system were compared
very carefully by. the Feasibility Team. The results are shown at the end of
this Tab under "Summary of Comparative Rental Costs". This comparison
produced the following estimated overall costs for all equipment rental for
Machine Records Division under the two computers receiving final considera-
tion-
for Complete System System. Installed
Installed in 4 Steps at One Time
During 12 Months
(First Year Only) (Each Year)
IBM 650
$289,720-50
$321,108. 00
Datatron 220
x?02, 803.. 50
295,30Z.00
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 Approved For Release 2005A78n RE FP90-00708R000600130M1IX IV
TAB-E
Page 2
Cumulative Costs Based on Building Block in 1st Year
Year
Yearly
Accumulated
Computer
IBM 650
1st
$289,720.50
$289,720.50
2nd
321, 1086 00
610, 828. 50*
3rd
321,108.00
931,936-50
*c
* * * * *
* * * *
* * * *
Datatron 220
1st
$30Z,803.50
$302,803.50
2nd
295, 302.00
598, 105. 50*
3rd
295, 302.00
893, 407.50
*This comparison shows that by the end of the second year the Datatron 220
would be the :less costly of the two systems. It also shows that the cost
of a complete installation of a Datatron 220 would be $7,.,,501. 50 less than
the "building block" cost of this system in the first yeax and $25, 806. 00
less than the complete installation cost of an IBM 650 each year.
#This would be due to the fact that it would not be possible to release
certain EAM equipment and operating personnel until (under a "building
block" concept) the computer installation was complete.
5. The first three presentations below (Installations I, 11 and III) are
designed to show the progressive changes in equipment requirements thought
to. be necessary for a "building block" approach. Applications would be
converted to computer operations step-by-step as set forth below. The
fourth presentation (Installation IV) shows what the Team believes to
be the equipment, personnel and supplies needed for either the final
"building block" stage or a complete integrated computer system.
Applications Envisioned
Installation I: Leave accounting, all payroll, a limited amount of
financial accounting, and all calculating now being
,done electronically.
II: All of the above plus the remainder of financial
accounting.
III- All of the above plus most personnel applications.
IV: All major applications now being processed. by MRD.
Approved For Release 2005/08/54EELpIP-007687 00600130001-9
 Approved For Release 2005/OS(lRF?000708R0006001 30001-9
Annex IV
Tab E
Page3
Installation 'I
Compute r
220
Monthly Rental
650
Monthly Rental
Data Processor
Power Unit, Model 2
Power Unit, Alpha, Synchroniz
Storage Unit
$ 7,800-00
ers
Z, 40-0.,00
1, 100.0'0
150.00
Tape Control Unit
1 575. 00
Tape Units (3)
1,200-00
725
1
00
1,050100
Tape Units (.4)
Cardatron, Basic
,
.
2, 200. 00
2,735.00
Sub-total
$13, 460.00
$ 8, 4.75.00
Punch Card Equipment
For Computer
Collator, Type 089
209.00
Punch, Type 523
93. 50
Punch, Type 533
Alpha, Device for 533
550. 00
Spec. Char. Device for 533
175. 00
Printer
T
100
00
,
ype. 407 (1) 880. 00
Synchronizer for 407
'Alpha. Device for 407
.
880. 00
200. 00
Spec. Char. Device for 407
175.00
Sub-total.
100.00
$,.1, 182.50
$ 2, 180.0 0
Peripheral Equipment:
Punch, Type 024, (14)
616.00
Punch, Type 047, (1)
Verifier
T
616..00
170
50
,
ype 056, (8) 440. 00
Collator
T
_
.
440
00
,
ype 077, (7) 770.00
Sorter
T
.
770
0
0
,
ype 083, (1) 726
00
.
.
Collator
T
.
726
00
,
Printer
ype 089, (1)
T
242. 00
.
2
42
00
,
Printe
ype 403, (1)
T
517..00
.
.
517.
00
r,
Printer
ype 407, (3)
T
3,090.0o
.
3
090
0o
,
ype 408, (2)
2
,
.
,585.00
Punch
T
5
2
585
00
,
ype
14, (5) 707
5
1
.
Inter
ret
T
5
.
0
70.7. 501
p
er,
ype
~2,, (1)
88
00
Sub - total
.
88. 00
$ 9,781.5.0
$ 9
, 5Z. 00
Treasury D. 0. Equipment
Punch ,Type 024, (1)
Printer
T
44. 00
44
00
,
ype 416, (1)
Inter
ret
T
182. 00
.
.
182
00
p
er,
ype 556, (1)
Sub- total
142.00
76-8.00
..
142.00
$ 3.6_8.0 0
~+
A_73
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RIL,
 Approved For Release 2005/OC2~Ct[r0-00708R00060013 A& Iv
TabE
Page 4
Installation I
220
Monthly Rental
650
Monthly' Rental
Summary Monthly Rental
Computer
$13,.460.00
$ 8,475.00
Punch Card Equipment
For Computer
1, 182.50
- 2,180.00
Peripheral Equipment
9,781.50
9, 952.00
Treasury D. 0. Equipment
368. 00
368. 0,0
Total Rental (Monthly) of
Installation I
$24,792.00
$20, 975.00
Less,
Present MRD Machine Rental
13, 317.50
13, 317. 50
Additional MRD.Rental Cost,
Installation I
$11,474.50
$ 7,657-50
A-74
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~
 Approved For Release 2005/OlSE:ElRL.? f~DT90-00708R000600130001-34NNEX IV
TAB - E
Page 5
Computer
220
Monthly. Rental
650
Monthly Rental
Data Processor
Power Unit, Model 3
Power Unit, Alpha Synchronizer
Storage Unit with Index Register
$ 7,800
NA
NA
NA
$ 2, 400
1, 400
225
1,975
Cardatron, Basic
Cardatron Output
Tape Control Unit
Tape Units
2,
1,
2,
735
820
200
300
NA
NA
1, 050
2, 200
Sub-total
$14,
855
$ 9, 250
Punch Card Equipment for Computer
Collator, Type 089
Punch, Type 523
$ 209
93. 50
NA
NA
Punch,, Type 533
Alpha Device for 533
Special Character Device for 533
Printer,. Type 407 (2)
Alpha Devices for 407 (2)
Synchronizer for 407 (1)
Special Character Devices for 407 (2)
NA
NA
NA
1, 760
NA
NA
NA
550
175
100
1, 760
350
200
200
Sub-total
$ 2, 062. 50
$ 3, 335. 00
Peripheral Equipment
Number
024 Punch
14
$ 616.00
$ 616.00
047 Punch
1
NA
170.00
056 Verifier
8
440.00
440. 00
077 Collator
6
660.00
660.00
083 Sorter
5
605.00
605. 00
089 Collator
1
242. 00
242. 00
403 Printer
1
517. 00
517.00
407 Printer
2
2,
060. 00
2,060.00
408 Printer
2
2,585.00
2,585.00
.514 Punch
4
566.00
566. 00
552 Interpreter
1
88. 00
88. 00
Disbursing Office Equipment
368.00
368. 00
Sub - total
$ 8,747-00
$ 8,917.50
A-75
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 Approved For Release 2005/1/E(rRTP90-00708R000600130004'NEX IV
LL TABE
Page 6
Installation II (Cont. )
Computer Total
$14,855.00
$ 9,250.00
Punch Card Equipment for Computer
(Input-Output) Total
Z, 062. 50
3, 335.00
uipment Total
heral E
Peri
8, 747.00
8,917-50
q
p
Total Installation II
$25,664.50
$21,502-50
Less Present MRD Machine Rental
13, 317.50
13, 317. 50
Additional MRD Cost, Installation II
$12,347-00
$ 8, 185.00
A-76
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 Approved For Release 2005/0>E:(1RF~90-00708R000600130001-9 ANNEX IV
TAB E
PAGE 7
Installation III
Data Processor
Extra 1, 000 Words Memory
Power Unit - Model 3
Power Unit Alpha. Sync.
Storage Unit with.Index Register
Storage Unit For Concurrent Read/Write
One Add Control "
Cardatron Basic
Cardatron Outputs (2)
Tape Control Unit
For Concurrent R/W
Tape Unit's (4 and 5)
Tape Data Selector
'Power Supply
Sub-Total
Punch Card Equipment for Computer
Collator-Type 089
Punch - Type 523
it - Type 533
Alpha Device for 533
Spec. Char. Device For 533
Printer - Type 407 (3)
Alpha Devices for 407 (2)
Spec. Char. Devices for 407 (2)
Synchronizer For 407 (1)
Tape Data Selector Control For 407
Punch - Type 519
Tape Data Selector Control For 519
Sub- Total
Peripheral Equipment
No.
024 Punch
14
047 Punch
0
0.56 Verifier
8
077 Collator
2
083 Sorter
3
089 Collator
1
403 Printer
1
407 Printer
1
408 Printer
2
514. Punch
2
220
Monthly Rental
6-50
Monthly Rental
7,800.00
$ 2, 400. 00
500. 00
NA
NA
1, 400.00
NA
225. 00
NA
1,975-00
NA
1, 575.00
NA
700. 00
2,
735.00
NA
1,
640.00
NA
1,
200.00
1, 050.00
NA
11050.00
2,
300.00
2; 750. 00
NA
1,870'.00
NA
550.00
$16,
175.00
$15,545.00
209. 00
93. 50
NA
NA
NA
NA
.NA
550.00
175. 00
100.00
2,640.00
350. 00
200.00
200. 00
82. 50
148. 50
82. 50
4,52 .50
2,640.00
NA
NA
NA
NA
NA
NA
$ 2,942.50
No.
616.00 14
NA 1
440.00 8
220. 00 4
363.00 4
242.00 1
517.00 1
1,030.00 1
2,858.00 1
283.00 2
A-77
Approved For Release 2005/08/1 RARJPI-00708ROO0600130001-9
616. 00
170. 50
440.00
440-00
484. 00
242. 00
517.00
1,030.00
2,585.00
283. 00
 Approved For Release 2005/SR('P90-00708R000600130064IPEX IV
TAB E
PAGE 8
.Installation III Continued
552 Interpreter
88.00
88. 00
D. O. Equipment
368. 00
368.00
Sub - Total
$ 6,,752. 00
$ 7,263.50
:Rental
Monthl
S
y
ummary
Computer Total
$16, 175. 00
$15, 545.00
Punch Card Equipment
For Computer
2,942.50
4,528..50
Peripheral Equipment
6,752.00
7,263.50
TOTAL, Installation III
$25,869.50
$27,337.00
Present MRD Machine Rental
LESS
13, 317.50
13, 317.50
-
ADDITIONAL MRD Rental Cost,
Installation III
$12, 552.00
$14,:019.50
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 Approved For Release 20051 : RT P90-00708R000600130041JNEX IV
JJ R LL TabE
Page 9
Computer
220
Monthly Rental
650
Monthly Rental
Data Processor
$ 7,800.00
$ 2, 400. 00
Extra 1, 000 Words Memory
500. 00
Power Unit, Model 3
1,400.00
Power Unit, Alpha. Sync.
225. 00
Storage Unit ?w/index Register
1, 975.00
Storage Unit for Concurrent R/ W
1, 575. 00
Add Control, (1)
700. 00
Cardatron, Basic
2,.735.00
Cardatron, Output, (2)
1, 640.00
Tape Control Unit
1,200.00
1,050.00
Tape Control Unit, for Conc. R/ W
1, 050.00
Tape Unit, (4)
2,300.00
Tape Unit, (5)
2,750-00
Tape Data Selector
1,870.00
Power Supply for TDS
500. 00
Auxiliary.Alpha. Unit, Type 654-3
750.00
Spec. Char. De-vice, Type 654-3
130. 00
Sub-total
$1.6, 175.00
$16,425.00
Punch Card Equipment
For Computer:
Collator, Type 089, (1)
209. 00
Punch, Type 523, (1)
93.50
Punch, Type 533, (1)
550. 00
Alpha Device for 533
175.00
Spec. Char. Device for 533
100. 00
Auxil. Alpha. Mod. for 533
45.00
Printer, Type 407, (3)
2,640.00
2,640.00
Alpha Devices for 407, (2)
350. 00
Synchronizer for 407, (1)
200. 00
Auxil. Alpha. Mod. for 407, (2)
99.00
TDS Control for 407
82-50
Punch,, Type 519
;1.48. 50
TDS Control for 519
82. 50
Spec. Char, Devices for 407, (2)
200.00
Sub - total
$2-,9.42.50
4, 672. 50
A-79
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 Approved For Release 2005 P90-00708R00060013 IV
RfRT TabE
Page 10
Peripheral Equipment
220
Monthly Rental
650
Monthly Rental
Punch, Type 024, (14)
$ 616.0.0
616.00
Punch, Type 047, (1)
170.50
Verifier, Type 056, (8)
440. 00
440.00
Collator, Type 077, (1)
. 110. 00
110.00
Sorter, Type 083, (2)
242. 00
242.00
Collator, Type 089, (1)
242.00
242.00
Printer, Type 403, (1)
517.00
517. 00
Printer, Type 408, (2)
2,, 585.00
2,585.00
Punch, Type 514, (2)
283.00
283. 00
Interpreter, Type 552, (1)
88. 00
88.00
D. O. Equipment
368..00
368.00
Sub v total
$ 5,491.00
$ 5,661.50
Summary Monthly Rental
Computer
$16, 175.00
$16,425.00
Punch Card Equipment
For Computer
2,942.50
4,672-50
Peripheral Equipment
5, 491.00
5,661.50
Total Rental (Monthly) of
Installation IV
$24,608.50
$26,759.00
Less,
Present MRD Machine Rental
13, 317. 50
13, 317. 50
Additional MRD Rental Cost,
Installation IV
$11,291.00
$13, 441. 50
Approved For Release 2005/01Q2E:CR lp0-00708R000600130001-9
 Approved For Release 2005/085 f (Annex.-IV
~~++ Tab E
Page 11
Personnel Requirements
Installation:. IV
Chief and Staff
4
Programmers
4
Console-Operators
2
Tape Librarian
1
Machine Operators
6
Key Punch Supervisors
2
Key Punch Operators
16
Total
35
.Supplies
Tapes, Cards, and'Paper
Total Personnel and Supplies
Annual Cost Equipment
$295,302.00
Annual Cost, Personnel and'Supplies
210, 8000.00
Total Annual Cost, Installation IV
$506,102.00
Total Annual
Salaries
$ 30, 0000 00
2.6,8OOa00
9, 6,000:00
4,000.00
24, 0000 00
8, 800?.00
57, 6000 00
$160,800.00
$ 50, 0000 00
$Z10,800.00
650
$321, 1080 00
210, 800.00
$531, 9.084 00
A-81
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 Approved For Release 2005/
SK ftfTP 90- 00708R0006001300A=9NEX IV
TAB E
Page 12
Comparative Summary - Machine Rental Costs
(Building ,Block. Approach)
Installation
Period
Per Month
Period
I, First -3' Months
$24,792.00
$ 74,,376..00
$20,975-00
$ 6?-,925.00
II, Second 3 Months
25, 664. 50
76, 993. 50
21, 5024 50
64, 507. 50
III, Third 3 Months
25, 869. 50
77, 6.08.0 50
27,337-00
82, 0110 00
IV, Fourth 3 Months
24, 608. 50
73,825.50
26, 759. 00
80,277-00
Total Cost, First Year
$302,803.50
$289,720-50
Installation IV, Second Year
295, 302.. 00
321, 108.00
Total Cost, First Two Years
$598,105.50
$610,828.50
Excess Cost of 650 System for Two Years
$ 12, 723.00
Comparative Summary. Machine Rental Costs*
(Complete Installation)
*