oversight

Army's Evaluation of Alternative Designs for Providing Computer Capabilities Needed for SAFEGUARD Antiballistic Missile System

Published by the Government Accountability Office on 1971-08-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Y
    REPORT TO TiiE-
    ON ATOMIC ENERGY-             RELZASED
    CONGRESS OF THE UNITED STATES
                       I.-..”;-/- .(2 L,/;j @-’
                        i w*             . / :’
        RElElSED
                                ‘~~~~I~~~~~~~~~~/~~
                                                h
    Army’s Evaluation Of                      /
    Alternative Designs For
    Providing Computer Capabilities
    Needed For SAFEGUARD
    Antiballistic Missile System   8-164250




    Department   of the Army




    BY THE COMPTROLLER GENERAL
    OF THE UNITED STATES
                                                                                   r
                                                                L


                                 COMPTROLLER        GENERAL         OF      THE        UNITED      STATES
                                                  WASHINGTON.        D.C.         20548




           B-164250



<-    I




           Dear       Mr.   Chairman:

                     During     the executive             hearing    on the SAFEGUARD              antiballistic
           missile       (ABM)      system          held February        16, 1970, we told you that our
       1   work in process             included         an examination       into (1) the Army*           s role in       23
     .N     certain     contractor         -initiated      de sign change s and make -or &buy decisions
           for components             of the SENTINEL             ABM’s      data
                                                                             L..._i processing          subsystem--
           the command           and control            computer      which links     the system’s           radars    and
           interceptor        missile         s --and    (2) the impact      of the decisions           on cost-
                                        icon of the greater          data processing         capabilities        needed
           for SAFEGUARD.

                  The results       of our examination        are discussed      briefly     in the fol-
           lowing   paragraphs       and are detailed       in the summary       which follows.         The
           report    is not intended     as a General      Accounting     Office    evaluation     of the
           management         of the overall  ABM      program      or of the ABM        system’s    mil-
           itary  effectiveness.

                       To eliminate        the need for assigning            a national          security      classifi-
           cation,       we have deleted          from    the summary          certain        information         which,
           according          to the Army,        warrants       a SECRET          classification.            We are
           separately          forwarding       for your use a listing            entitled        “Classified       Infor-
           mation        Deleted      from    Report     on Army’s        Evaluation           of Alternative         De-
           signs for Providing               Computer        Capabilities      Needed         for SAFEGUARD
           Antiballistic          Missile     System”       (B-164250).

                    Our examination            indicated      that the Army         project      office--because
           of an insufficient        number         of competent       technical      personnel-         -had not
           made     critical    and independent            evaluations       of the rationale          and support
           for, or available        alternatives         to, the proposal         of the system*           s prime
           contractor        to change     memory         components        from     a film     design       to a
            slower     core design.        It   appears,      however,      that   the    Army’s        acceptance




                                        50 TH ANNIVERSARY                    1921-          1971
                                                      ,         .
B-164250




of the prime       contractorrs        proposals     did not have any adverse            effect   on
the ABM      system’s       capability      to meet the lesser      threat      for which     the
SENTINEL        program         was authorized.         Because   of the rapidity        of later
advancements         in memory         technology,     we were unable         to make     any
conclusions       on the decision*s          effect on the system’s         cost or its poten-
tial for growth        to meet     SAFEGUARD          defense   objectives.         (See p- 5 of
 summary.)

         It should     be noted,     however,     that further   changes      in the data
processing       subsystem        have been recommended           by the National       Acad-
emy of Sciences          Advisory      Committee.       Although    the recommended
changes     in the subsystem          have not been adopted        by the Army       for the
approved      segment      of the ABM       program,      the changes      may be applicable
to the future      program        and may have a significant          impact    on the cost
and effectiveness         of the program.          (See pa 19 of summary.)

       We found that the Army            had not been required         to participate,       and
had not participated,      in the prime         contractor*s  decision      to make      rather
than buy certain      components       of the processors.       In addition,        the Army
had not been required        to review,       and had not reviewed,       the cost and
other  considerations       supporting      the decision.

          Our examination          into the circumstances                     of the prime         contractorls
decision       indicated,      however,        a reasonable          basis       for the decision.             The
original      manufacturing         plans       provided       that the processors                be manufac-
tured     mainly       by the prime       contractor.            The    prime        contractor       later      con-
 sidered     modifying       its make-or          -buy program             because       of the advantages
of retaining         in the ABM      program           the experience             of the subcontractor              who
had designed           and developed         the processors.              Accordingly           the subcontrac-
tor was requested            to submit         a price      proposal        to assemble,          wire,      and test
the processors            and to fabricate          certain       of their      components.           The subcon-
tractor’s       proposal      was rejected,           however,        because         it was determined             to
be not economically             competitive.             The    records        of  the    system’s       prime       con-
tractor      showed that the estimated                  buy costs exceeded                the estimated           make
costs.      (See p. 24 of summary.)



                                                          2
        .-

i   l




             B-164250




                     This   report   is also   being   sent         today    to the     Vice     Chairman   of
             your   Committee.

                                                                        Sincerely       yours,




                                                       !kfvla           Comptroller            General
                                                                        of the United          States


             The Honorable      John 0. Pastore,        Chairman
             Joint  Committee     on Atomic      Energy          1’                 1
             Congress     of the United   States




                                                                3
                                   Content
                                  -------

SUMMARY OF INFORMATION ON GENERAL ACCOUNTING
  OFFICE EXAMINATION INTO ARMY'S EVALUATION
  OF ALTERNATIVE DESIGNS FOR PROVIDING COMPUTER
  CAPABILITIES      NEEDED FOR SAFEGUARD ANTIBALLISTIC
  MISSILE SYSTEM                                                   1
    Description      of data processing      subsystem             1
    Decision    to change performance        and design re-
       quirements     for data processor's        memory compo-
       nents                                                       5
         Agency and contractor        comments                    14
    Changes to data processing         configuration     recom-
       mended by National      Academy of Sciences Advisory
       Committee                                                  19
          Contractor     comments                                 22
    Prime contractor's       decision   to manufacture     pro-
       cessors in-house                                           24
APPENDIX

       I   Letter    dated April     29, 1971, from the Deputy
           Assistant     Secretary    of the Army (Research
           and Development)        to the General Accounting
           Office                                                 29
  II       Letter  dated April 22, 1971, from the West-
           ern Electric  Company, Incorporated,  to the
           General Accounting  Office                             38

                                   ABBREVIATIONS
                                           mm---
           Antiballistic           missile

MSR        Missile         Site   Radar

PAR        Perimeter         Acquisition       Radar

ICBM       Intercontinental            ballistic       missile
        ..

t   *
                                                   .



                                 SIJMWRY OF INFORMATION ON
                       GENERAL ACCOUNTIHG OFFICE EXAMINATION INTO
                        ARMY'S EVALUATION OF ALTERNATIVE DESIGNS
                     FOR PROVIDING COMPUTER CAPABILITIES  NEEDED FOR
                         SAFEGUARD AXTIBALLISTIC  MISSILE SYSTEM

             DESCRIPTION OF DATA PROCESSING SUBSYSTEM

                    The data processing       subsystem controls        the entire   oper-
             ation of the antiballistic          missile      (ABM) system,    Each radar
             site has its own data processor             serving   as the automated
             command and control      link between the sensors (radar)             and the
             reactors   (interceptor      missiles)      and is subject     to only cer-
             tain connnand decisions       and to some human intervention.

                      The data processor's        command and control      of the radars
             and SPARTAN1 missile           in the area defense concept is illus-
             trated     on page 2. The Perimeter          Acquisition     Radar (PAR) or
             long-range       radar detects      and tracks the incoming object           and
             provides      data to its data processor--which           identifies      the
             object as an incoming target,             computes the probable        point
             of intercept,         and provides    the target     data to the appropri-
             ate Missile        Site Radar's     (MSR's) data processor.          When ad-
             ditional      target     data are ordered and obtained        from its own
             radar,     the MSR's data processor         plans the interception;
             readies,      launches,      and guides the SPARTAN missile;          and arms
             and detonates         the SPARTAN's warhead.

                   Computer programs tell        the       data processors      how to han-
             dle and act on data provided          by      the radars.     These instruc-
             tions are designed      in advance to           attempt   to provide   for ev-
             ery conceivable    attack   situation           and are stored in the data
             processor's    memory components.

                     The data processor's    major components and their      inter-
             face with each other and other ABM system elements are sche-
             matically    illustrated    on page 3. Processing      is done in the
             Central    Logic and Control    component which consists     primarily
             of (1) two types of memory units--program         storage units


             1The SPRINT missile  is used in the terminal  defense situa-
              tion against  enemy missiles  which elude the SPARTAN.


                                                       1
                                                       MAJOR COMPONENTS OF A RlSSlLE SITE RADAR DATA PROCESSOR AND INTERFACE                                                                                                                WITH OTHER
                                                                                       ABM SYSTEM ELEMENTSd

                                                                 DATA             PROCESSOR                            SUBSYSTEM
                                                                                                                                                     I                                                          I
                                            CENTRAL LOGIC AND CONTROL                                                                                I          OtHERCOMPONENtS                                  1                             OTHER SUBSYSTEMS AND ELBMENTS



                                                                                                                                                     !                                                                      RADAR
                                                                                                                                                     I     C
                                                                                                                                                                 LOGIC
                                                                                                                                                                 RELAY
                                                                                                                                                                           TO
                                                                                                                                                                                                F-
                                                                                                                                                                 CONVERTER


                                                                                                                                                                                                                                                                                                                  REMOTE
                                                                                                                                                                                                                                                                                                                  MISSILE
                                                                                                                                                     I           EQUIPMENT                   1
                                                                                                                                                I    I                                                          I
                                                                                                                                                                                                                                                                RADAR
                                                                                                                           INPUT
                                                                                                                                                                                                                                                                SITE
                                                                                                                                                                                                                                                                PERSONNEL
                                                                                                                           3UTPUT

                                                                                                                           TONTROL.
                                                                                                                            LER
w




                                                                                                                                            I,;,1               DATA
                                                                                                                                                                MISSION
                                                                                                                                                                           TRANS-                               I
                                                                                                                                                                                                                                                                           I




    LOGIC      TO RELAY     CONVERTER                      - Provides               the     communication            link between        the                        MAINTENANCF                  AND            DIAGNOSTlC      - Provides                      maintenance               information          on the       dota
    data   processing    subsystem    ond                the collocated                    SPRINT        ond      SPARTAN        missile                            processing           subsystem               and the radar,
    launch    equipment.
                                                                                                                                                                    RECORDING               -        Provides             for     the    storage,         recording,               playback,            and    readout       of
    REMOTE       LAUNCH      EQUIPMENT                       -     Provides        the communication                 link between          the                      informationofdota.
    data processing     subsystem     and              the        launch       equipment    of missiles                 remote  from       the
                                                                                                                                                                    DATA      TRANSMISSION                          CONTROLLER                   - Provides        the   external                      communication
    rador  site.
                                                                                                                                                                     link that connects          the            doto processing               subsystem       with other    rador                  sites   and higher
    COMMAND            AND CONTROL              -     Provides      the          communication             link      between       the   data                       command      outhority--Fire                     Coordination              Centers     and the Ballistic                       Missile      Defense
    processing         subsystem ond        radar       site personnel.                                                                                             ienter.

                                                                                                                                                                    EXERCISE         CGNTROL                         -    Provides         for operational               testing         of the         data   processing
                                                                                                                                                                    system   through     simulated                       tactical       exercises.

    1    The     PAR    d a t o processor       has     the       same        components          and    interface       as the      MSR    data    processor     except      for the      Remote           Launch              Equipment           and   the    Logic         to Relay         Converter.
                                                 .


containing      the computer programs and variable                storage units
containing      raw and processed data,          (2) processor         units per-
forming the arithmetic          and logic analysis          of data in accor-
dance with the preset programs,             and (3) input-output             con-
troller    units    for transmitting      instructions         and status data
to the other data processor           components and, in turn,               to the
other elements of the ABM system.
        The preset program instructions              are read from the pro-
gram storage       unit into the processor           at its request.           In
executing     the instructions,       the processor          sends requests         for
new or updated data to the radar through the variable                          stor-
age unit and the input-output            controller,          A notification
to the processor        is placed in variable           storage when the data
are received       and are available      for analysis         and processing.

        The subcomponents      of the Central      Logic and Control     are
being designed     so that the number of processor           and memory
units    can be varied   to satisfy      the throughput1     and storage
requirements     of the various      radar sites to provide       for sys-
tem growth.      The resulting      combination     of these units    is
referred    to as a multiprocessor         system,

       According      to Army officials,          the maximum throughput            of
a multiprocessor        configuration        is determined by the number
and internal      operating       speed of the processors            and by the
time required       for the processors          to locate and obtain data
from the memory units.             Slower memories can decrease the out-
put of the processors           by requiring        them to wait for requested
data.     Increases     in the number of program and variable                    stor-
age units provide         greater     storage capacities          but do not pro-
vide greater      memory operating          speed,      Although    additional
memory units can provide            greater     processor      output,     greater
memory speed is a factor            in achieving        the Central      Logic and
Control's     maximum throughput          capacity,


1Throughput     refers to the output of the processors and is
 usually    expressed  in terms of the average number of instruc-
 tions that can be executed in 1 second.




                                          4
                                          .



DECISION TO CHANGE
PERFORMANCEAND DESIGN REQUIREMENTS FOR
DATA PROCESSOR'S MEMORY COMPONENTS

        The performance          requirements      for the NIXE-X system's
Multifunction        Array Radar's data processor                 called    for a
throughput       capability        of 30 million       instructions        a second.
According      to the prime contractor,1               Bell Telephone Labora-
tories,      a review of the state of the art in 1964 showed
that commercially           available      computers could not provide             the
throughput       and reliability         required.        To meet these require-
ments, the development              plan called      for faster        processors
and memories in a multiprocessor                  configuration.

      The throughput     capability       was to be achieved      by using
eight processors     for each site,        by developing    processors
having average processing          rates of 4 million     instructions
a second for each processor,            and by developing    random access


1The prime contractor        is the Western Electric        Company.   West-
 ern Electric       is a wholly    owned subsidiary     of the American
 Telephone    and Telegraph       Company.    Bell Telephone Labora-
 tories'    capital    stock is owned jointly        and equally  by those
 companies.       Contracts    are written    between the Government
 and Western,       and Western then authorizes        Bell to do certain
 parts of the work.         Bell acts for Western as the technical
 director    of research,      design,    and development.

 Bell's    technical     direction      relates    primarily      to (1) all re-
 search and development,            (2) design requirements            and testing,
 (3) technical       discussions       with customers,         and (4) design
 and configuration         control.       With respect       to research      and
 development      contracts,       Western's    responsibilities         involve
 primarily     (1) administrative          and financial        matters relating
 to the contracts        and (2) fabrication          of hardware.


                                                                   .
                                                .



storage units having speeds of 200 nanoseconds.1           According
to the prime contractor,       a thin film memory design was cho-
sen because, among the memory designs then considered           suit-
able for meeting the 200-nanosecond        speed requirement,     (1)
its technology       was in an advanced state,   (2) it was capable
of high reliability,       and (3) its design was susceptible      to
upgrading.

         Because of its experience      in film memories and in the
development      of computer systems for NIKE-ZEUS--the            predeces-
sor ABM system-- the Univac Division           of Sperry Rand Corpora-
tion was chosen by Bell in 1964 to develop             for the NIKE-X
system a type of thin film memory, called            coupled film,
having a 200-nanosecond       speed.     Univac demonstrated         the ca-
pability      to meet the 200-nanosecond       speed specification       for
coupled film during       an acceptance     test in January      1967.

     Univac's  experience     in fabricating the coupled film
showed that this design would be very expensive,        In June
1966 Bell authorized    Univac to study the feasibility     of


1One nanosecond         is equivalent          to one billionth        of a second.
 For the variable         storage unit,           the 200 nanoseconds repre-
 sented the time required               by the memory unit to respond to
 a processor's        request     for data.           It covers the cycle re-
 ferred   to as read and restore;                 i.e.,   locating    a word in
 storage,     reading     the word into a storage register                 for trans-
 fer out of the storage             unit,     and restoring        the word to its
 storage    location.         The 200 nanoseconds also represented
 the time required          to update stored data in a cycle referred
 to as clear and write;             i.e.,     locating      a word in storage,
 clearing     or erasing       the word from that location,               and placing
 a new word in the storage                location.

For the program storage unit,                the objective    of 200 nano-
seconds represented       the time         required    by the memory unit
to make stored instructions              available     for reading  by the
processor.       The nondestruct         design of the program storage
unit eliminated       the need to        restore    the words to their
storage    locations,




                                          6
replacing    coupled film with less expensive           ZOO-nanosecond
mated film.1      According to an Army report,          Univac later
demonstrated     to Bell and Army representatives           that ZOO-
nanosecond mated film was feasible.

        According       to the Army, the effort         to check out data
processing        software    required     a more rapid delivery     of mem-
ory units       than could be provided          in the development     con-
tract    for coupled film.           To obtain      the additional  memory
units,    Bell,      in  December    1966,   solicited    proposals  for five
variable     memory units having cycle times of 700 nanoseconds
or better.

      These memories were to be used to supplement       the ZOO-
nanosecond coupled-film    memories in applications     where lesser
speeds could be tolerated.      Lockheed Electronics    Company
quoted on two commercial    (nonmilitarized)    models:    a 650-
nanosecond core memory at a fixed unit price of $70,596 and
a 500-nanosecond   core memory at a fixed unit price of
$83,226.

      In March 1967 Bell awarded subcontract    304561 to Lock-
heed for the five 500-nanosecond  core variable    memory sys-
tems needed to check out software  for the data processing
subsystem.

         Meanwhile,    according   to the Army, Univac realized       that
a slower memory unit might be used and proposed a 500-
nanosecond mated-film          memory,    In February   1967 Bell di-
rected Univac to start design and development              of the slower
militarized       mated film,    to terminate    all work on the coupled-
film program storage units,            and not to start new fabrication


1The basic concept of the coupled-film          design was to deposit
 spots of magnetic material       on two separate     plates.      Sensing
 wires were placed between the two plates.            The two plates
 then were assembled and aligned         so that the deposited         spots
 formed coupled cells.      Mated film consists       of a multilayer
 deposited  magnetic element built        upon a single     substrate,
 Both the magnetic elements and the sensing conductors                 are
 produced by deposition.       According    to Univac officials,
 Univac's  mated film is planned for use in the Navy's S-3A
 aircraft  avionics   program.

                                       7
 of coupled-film     variable   storage units.     The Army approved
 the mated-film     development    in April  1967.

       In April      1967 the Army directed          Bell to study an ABM
deployment       for thin area defense and for limited               terminal
defense of MINUTEMAN sites --referred                to as the l-67 deploy-
ment.      Limited     protection      for MINUTEMAN sites was defined
in July 1967 as a high confidence                that a number of MINUTEMAN
missiles       would survive       a Russian intercontinental         ballistic
missile      (ICBM) attack        on their  silos.      In a subsequent         op-
erational       model--the      2-67 deployment--the       defense was to
be expanded to provide             greater  protection,     including      more
protection       of the ABM system's radars.

       For the l-67 deployment,primaryemphasis         was to be
placed on cost-effective       growth of the MINUTEMAN terminal
defense.     Bell reported   that, by using a 500-nanosecond
instead   of a 200-nanosecond      memory, the lesser threat   could
be met and significant      cost savings could be realized.
According    to Bell,   the use of a core design to achieve a
500-nanosecond     speed would be less expensive     than the mated-
film design being developed        by Univac.

        In August 1967 Bell issued a specification          for mili-
tarized      core memory for the program storage and variable
storage units.       Bell requested   seven contractors,       including
Lockheed and Univac,       to propose a firm fixed price for 15
(five     program and 10 variable)    500-nanosecond     core memory
units.

        On September 8, 1967, the Government project                   office
told Bell that it understood            that Bell was trying           to save
money by specifying         a 500-nanosecond         memory on the basis
that the thin area defense planned for the l-67 deployment
would not require        the faster     200-nanosecond        memory.       The
project    office   advised Bell that the existing               specification
of a 200-nanosecond         memory speed would be required               for the
2-67 deployment       and requested      justification        for a 500-
nanosecond memory.          The project     office     asked whether the 500-
nanosecond memory could handle a threat                 greater    than that
postulated      for the l-67 deployment           and whether the use of
both 200- and 500-nanosecond            memories in the same data pro-
cessor was the most cost-effective                approach.



                                        8
       Bell  replied    by message dated September 13, 1967, that
the matter of the most cost-effective          memory was being re-
studied;   that     the 500-nanosecond    memory would satisfy   the
l-67 requirements;        and that,   if more capacity were required
for later growth,       faster   memory could be added compatibly
with the slower memory,

        A project     office  official       informed us that the Govern-
ment had not made an independent                study to evaluate       Bell's
position.        We were told that the project             office  staff     had
discussed      and analyzed     the problem with Bell officials                and
had concluded       that Bell's      position      was valid.     On Septem-
ber 19, 1967, the project            office     changed the approved re-
quirement      from 200 nanoseconds          to the slower memory speed
of 500 nanoseconds.

        As stated on page 5, the approved processor                    throughput
requirement      for each NIKE-X deployment          site was 30 million
instructions       a second, or 4 million       instructions           a second
for each processor.         In September 1967 the requirement                  was
reduced from 4 million        to 1.6 million       instructions           a second
because,     according    to SAFEGUARD System Office             officials,
processors      having the higher    speed would not be available
in time for early deployment         of a thin defense.                Shortly
thereafter      Bell reported   that substituting           the slower mem-
ory units for the 200-nanosecond           units would reduce the
processor's      throughput   and that the approved requirement
had been reduced further        to 1.3 million         instructions          a
second.

        On September 22, 1967, Lockheed responded to Bell's
request    for quotation      for fifteen      500-nanosecond      core mem-
ory units and proposed a fixed price of about $1.4 million.
According     to a Bell memorandum, the other six contractors
solicited     had replied     that they were not in a position           to
make a fixed-price        proposal     on Bell's    specification.

        In a response dated September 22, 1967, Univac,                in
declining      to bid on the core proposal,        stated that mated
film had advantages         over core memory, such as (1) potential
for greater       speed, (2) lower power requirement,          (3) higher
packaging      density   for each memory rack, (4) greater           long-
term reliability,        and (5) application      of low-cost,      mass-
produced,      automated techniques.        Univac contended      that these

                                          9
advantages   outweighed    any initial cost advantages    of core
memory.  Since there may have been other factors       which have
not been brought    to our attention,  we cannot comment on the
validity of Univac's    statements.
        A project    office           told us that the core proposal
                                 official
and   the mated-film        alternative
                                      had been compared     by Army
and Bell officials       at a meeting on October 11, 1967, and
that,    on this basis,    Lockheed had been selected      as the
source for the 50O-nanosecond        memory units.      In November
1967 Bell directed       Univac to stop further    development      and
notified     Lockheed that it had been selected       to manufacture
the core units.        A subcontract  amendment terminating       the
mated-film     development    effort was approved by the project
office     in October 1968.

       A project    office official    told us that   the only docu-
mentation     of the October 11 meeting was a Bell memorandum
dated November 1, 1967.          The memorandum  showed that   Bell
had   specified       a mean-time-between-failure              reliability      rate1


1
 The Army requires        that the operation of the ABM's data processing
  equipment be guaranteed on a continuous basis for 24 hours a day. To
  ensure the continuous operation of the data processing equipment, the
 very highest reliability           possible within the state of the art of com-
 ponent development is required              to meet the long mean-tirne-between-
  failure    requirement.      This requirement      specifies  the average number of
 operating      hours that a component will operate before the occurrence of
 a known system failure.            Army officials     informed us that the mean-time-
 between-failure       specification       for the core memory modules being fur-
 nished by Lockheed was 5,000 hours and was required                for the Central
 Logic and Control system to meet its availability                and reliability   spec-
  ification.
 During a meeting held on December 4, 1968, between Bell and Lockheed
 representatives,       it was stated that a component provided by one of the
 component vendors did not meet Bell's         specifications   and that this had
 resulted     in a memory system mean time between failure       of only 3,900
 hours.     In June 1970 we asked Bell for the mean-time-between-failure
 rate of the core memory units as reported          by Lockheed and for the sup-
 porting    documentation.      We asked also whether Bell agreed or disagreed
 with Lockheed's reliability        estimates.    On December 28, 1970, Bell re-
 plied that Lockheed had reported a mean time between failure            of 5,000
 hours on the basis of nominal failure         rates for the component parts in
 the design.       Bell concurred in Lockheed's estimate.      Bell, however,
 furnished      no supporting   documentation.

                                             10
of 5,000     hours but that Lockheed's       memory unit,     as pro-
posed,   had a mean-time-between-failure          reliability       rate of
1,200 to 1,500 hours.       Lockheed later      increased     its proposed
price for the 15 memory units          from about $1.4 million            to
about $2.2 million     to provide      for the 5,000-hour       reliability
requirement.

       According     to the memorandum on the October 11 meeting,
core was selected        over mated-film  memory on the basis of
Bell's   representations       that core would cost less.     We found
no evidence      that the Army had independently,       or in partici-
pation   with Bell,      compared the technical   features   and the
expected costs of the core design with the mated-film              design
or with other alternatives.

       We were told that the project                 office      evaluations      had
been limited    to desk reviews of Bell's                   findings       and to dis-
cussions with Bell personnel,                 that the reviews had been pre-
mised on the competence and reliability                       of Bell personnel,.
and that detailed         independent         evaluations        had not been made
because adequate technical              staff     and facilities           had not been
available    to the project         office,        The project         office    offi-
cial explained      that,     during      1967 and 1968, the data process-
ing technical     staff      comprised three people and that,                    at the
time of our inquiry          in May 1970, it comprised seven people.

      Subsequent    to Bell's      November 1967 direction      to termi-
nate Government-funded        effort,      Univac independently   contin-
ued developing    mated film and, on March 21, 1968, submitted
an unsolicited    fixed-price         proposal   to Bell for 250-
nanosecond mated-film        memory for the SENTINEL system.
Univac contended      that mated film would:

         1. Decrease size.    Thirty-two thousand 68-bit    words
            could be placed in one rack.      (A rack of core mem-
            ory consisted  of 16,000 words.)     This reduced the
            rack and space requirements    for the memory by one
            half and reduced line length between the processors
            and the memories.

         2. Increase processor    throughput.    Throughput    would be
            about 20 percent greater      than a 500-nanosecond     mem-
            ory due to the faster     memory's higher    supply rate.


                                           11
            Lower cost.    Savings would            result    from the reduced
            number of racks,    interface           switching     units, and
            space requirements     for the          memory and from the re-
            duced number of processors              because of the increase
            in throughput.

        In August 1968 Bell told Univac that its proposal                         had
been rejected       because the units were of commercial                   quality
and would not meet the requirements                     for militarized      equip-
ment of the highest           possible     reliability.           Bell expressed
interest,    however,       in the greater           speed and increased        pack-
ing density      offered,        In  later     meetings     Bell     and Univac    of-
ficials    explored      the possibility          of using 250-nanosecond
mated film in the SENTINEL system.

          By letter    dated December 20, 1968, the executive                  direc-
tor of Bell's         SENTINEL Design Division             furnished     to the
project      office    a memorandum dated December 11, 1968, entitled
"Study of UNIVAC Unsolicited               Proposal      for Mated Film Memo-
ries."       Bell reported       that (1) the mated-film             memory ap-
peared to be technically             feasible       to produce with adequate
reliability         and margins,     (2) the cost per bit1 of the 250-
nanosecond memory would be essentially                     the same as that of
the core memory, and (3) by putting                   twice as much memory in
one rack,2        the reduction      in the number of racks permitted
by the increased         packaging      density      would result      in savings
of about $27 million           less development          costs (approximate
net savings         of about $20 million)          for acquisition        of the
number of memory units            required      for the then-planned         SENTINEL
deployment,

        Univac officials      told us that the greater    packaging
density     and the resultant      reduction   in the number of racks
referred     to by Bell in its letter        of December 20, 1968,
were the same as Univac's          September 1967 proposals.      In


1A bit    is a computer        term for     one discrete        information      posi-
 tion.

'Lockheed's     core memories had a storage capacity   of 16,384
  words,   whereas  Univac's  proposed mated-film  memories had
  twice this storage capacity.


                                           12
addition     to proposing    the cost benefits,   Univac stated     in
its    September 1967 response that the 500-nanosecond          mated-
film memory could be easily        upgraded to a 200-nanosecond
cycle time.       Univac stated also that it had demonstrated          to
the Government and to Bell representatives           that mated-film
memory at a speed of 200 nanoseconds was feasible            and that,
prior    to September 1967, Univac had successfully        demon-
strated     a 250-nanosecond    mated-film   memory in laboratory
tests.

       Bell advised,      however,   that it did not appear possible
to take advantage        of Univac's    mated-film     proposal   since the
design change at that time would have delayed                 the then-
present    schedules     for the SENTINEL program by 14 months.
Bell concluded      that,    if substantial      schedule changes were
made, such development         might be reconsidered.

        In March 1969 the President               announced the planned de-
ployment     of the SAFEGUARD system, which provided                       for a 15-
month delay in the readiness                date for the first           site.   In
April     1969 the project        office     replied    to Bell's        letter  of
December 20, 1968, and concurred                  in Bell's      findings.      The
project     office   informed Bell that efforts                to meet ABM's
evolving     requirements       indicated       the need for a larger           com-
puter and possible         further       delays in schedule.             Bell was
directed     to consider      Univac's       proposal,      together       with other
advanced-type       memories, for possible             use in meeting the re-
quirements.




                                          13
Agency    and contractor       comments
        As requested     by the Joint   Committee on Atomic Energy,
a classified      draft   of this report was released    to the Secre-
tary of Defense on March 26, 1971, for comment and declassi-
fication.      On April     1, 1971, the Army provided   copies to
Western Electric        Company, the prime contractor,     for comment.

         By letter     dated April   29, 1971, the Deputy Assistant
Secretary       of the Army (Research and Development)            furnished
the Army's comments on the draft             of this report.        (See
app. I.)       Western furnished       its comments by letter         dated
April      22, 1971.      (See app. II.>     Corrections      and suggested
clarifications         have been appropriately        recognized    in the
preceding       sections    of the report.     The more significant
comments are summarized and discussed               below.

         1. In regard to the Army's participation  in the deci-
sion     to use the slower core memory, the Army stated   that:

                  I'***   Government representatives       were con-
            stantly     aware of both the alternatives        being
            considered      by the contractor      and the conse-
            quences of those alternatives.            The extent    of
            Government participation          in the final   decision
            to utilize      the 500 nanosecond core memory is
            consistent     with the broad responsibility         and
            extensive     capability   which the Government re-
            quires     of the Weapon System Contractor.
             *             *              *             *             *


                   I'*** Alternatives       to the Data Processing
            System memory were under continuous                 review and
            consideration      by the NIKE-X Project            Office with
            regard to both cost and system effectiveness.
            The Project     Office had considered            the use of
            plated wire,      coupled film,         mated film,      and
            core memories, and Government personnel                   agreed
            with *** [Bell's]         recommendation      to use 500
            nanosecond core memories only after                 assuring
            themselves    that it was in all important                regards
            the most advantageous          approach in terms of
            cost, efficiency,         and reliability,

                                          14
. :   ..




                       *             *               *              *               *


                             'I***    while the Government must supervise,
                     review,       and   evaluate      the proposals          and recom-
                     mendations        of the prime contractor                in the de-
                     velopment        of the program,           the Government has
                     neither       the facilities          nor the staff        to dupli-
                     cate completely            the  ***    [weapon     system      con-
                     tractor's]        efforts.        Between the extremes of
                     complete Government in-house                   capability,        on
                     the one hand, and unreasonable                    abdication        of
                     Government responsibility,                   on the other hand,
                      lies the middle ground upon which effective
                     Government management must rest.                       Qualified
                     Government personnel              must remain aware and
                     fully      informed      of the prime contractor's                ac-
                      tivities       and must evaluate            and review any con-
                      tractor      proposal       or recommendation           which,     if
                      acted upon, would significantly                   affect      cost,
                      schedule,       system integrity,            or system perfor-
                     mance.        It is considered           that the Government
                      adequately        performed       this required         management
                      function."

                    We recognize     that the technical          expertise      required     to
           design and develop a weapon system as complex as ABM makes
           critical      and independent         evaluations     difficult      and necessi-
           tates a large degree of reliance                  on a prime contractor's
           technical      advice.      The Army acknowledged            that it must review
           and evaluate       contractor        proposals     or recommendations         which
           would significantly           affect     cost, schedule,        system integrity,
           or system performance.

                  During our review we asked the Army for its memorandum
           of the meeting with Bell officials             which led to the memory
           change decision.        The Army could not provide          such documen-
           tation    but did furnish     Bell's    memorandum of the meeting,
           which stated,     in essence, that core had been chosen because
           it cost less than mated- or couple-film              memory.    (See p. 11.1
           This memorandum did not refer           to the extent     that the Army
           had participated      in this decision.         The Army informed us
            that detailed    independent      evaluations     had not been made be-
           cause of the unavailabiliv           of adequate technical        staff
            and facilities.

                                                         15
        Since the Government's        review and evaluation          were lim-
ited to desk reviews and discussions              with contractor        person-
nel (see p. ll),         we do not agree with the Army's contention
that an adequate review was made in this instance.                     In our
opinion,       the memory design change described          in this report
involved       the types of system design,        cost, and growth po-
tential      issue that require      critical   Government assessment
of a contractor's          proposal  by in-house     staff   and/or,     where
appropriate,         by technical   advisory   groups to ensure that the
technical        advice does not become, in effect,          technical      de-
cisionmaking         and that the Government makes the important
program decisions.

       2. With respect to the advantages  of mated film pro-
posed by UNIVAC in its September 1967 response to the core
proposal   (see p. 91, the Army stated that:
                  "**    The reliability    of the thin film mem-
            ory has not been proven in a production             model
            data processor,        Some members of the technical
            community are aware of the inherent          effects     of
            aging on thin film memory,          These effects     could
            reduce the reliability       of the memory.       In addi-
            tion,  neither   Univac nor any other known com-
            puter vendor has delivered        large computers de-
            signed upon thin film memory concepts.              The
            trends have been toward using core or inte-
            grated circuit    memory."

        It appears that the Army was             referring  to current  in-
formation      on the state of the art           and the producibility    of
the memory design--especially           the      trends toward the use of
integrated-circuit       memory--rather          than to information   avail-
able at the time of the decision.

            As far as the current          technology     and applications       are
concerned,          the magnetic       film design has been produced for
use in military            systems where there is a need for high re-
 liability,         long life,      and extreme environmental          applica-
tions;        e.g.,    the Navy has selected          mated film for use in
the S-3A aircraft             avionics     program.     The available      documen-
tation        indicates     that,    in the 1967 time frame, when the de-
sign changes were being considered,                    core and film were the
prime alternatives             for use in ABM's data processing              subsys-
tem.
                                          16
        In September 1967 Univac proposed a mated-film                        alter-
native     having characteristics            that seemed to offer           signifi-
cant advantages.           About 6 months later Univac submitted                     an
unsolicited       proposal     for a faster        mated-film       memory having
similar     characteristics.          After      a visit     to Univac's      facil-
ities,     Bell personnel        substantially        validated      Univac's
claims,     added that the mated-film              design appeared to be
producible       and reliable,       and estimated          a material    savings
if the mated-film          design were used in SENTINEL.                 As pre-
viously     explained,       we believe       that these circumstances
should have prompted the Army to more critically                         and in-
dependently       evaluate     the mated-film          alternative.

       3. Western       stated    that:

            r'*** statements      by Univac officials          are reported
            suggesting    that the mated film proposal               made by
            Univac in 1968 was substantially              similar      to its
            1967 proposal.        [See pp. 12 and 13.1            In fact,
            the 1967 proposal       was technically         inadequate.
            Univac's    1968 proposal     reflected       further      inde-
            pendent development        of a new memory of differ-
            ent characteristics,         Also, the estimate            of
            potential    cost savings from this later               proposal
            was predicated       on the much larger         number of sites
            in the SENTINEL deployment,            and could not have
            been realized      in the much smaller          SAFEGUARD de-
            ployment even if otherwise           feasible."

        It appears that the basic characteristics                 or advantages
of mated film were its greater            packaging     density      and the
related    reduction   in the number of racks, which resulted
primarily     in the $27 million       savings for SENTINEL estimated
by Bell in 1968.       Greater    packaging     density     was also one
of the major characteristics           for mated film proposed by
Univac in 1967.       With respect       to the technical         adequacy of
Univac's     original  proposal,     the documentation          furnished     to
us showed that the reason for choosing              the core rather         than
the film design was Bell's         representations         that the core
memory would cost less.          (See p. 11.1
     The estimate   of $27 million                  in savings was based on
the SENTINEL deployment   plan.                  (See p. 12.1

                                            17
The reduction       in the number of racks, however,             also should
result     in savings for the SAFEGUARD deployment.                 We agree
that,    under the present plans,        the amount of savings for
SAFEGUARD would be less because of the fewer number of
sites at this time.         With respect      to possible       modifications
to SAFEGUARD, however, Bell stated              in its SAFEGUARD Growth
Study (see p. 22) that           the possible     alternative       of using
multiple      radars Instead     of one radar would tend to increase
the memory requirement.            This, we believe,        would correspond-
ingly    increase     the savings resulting       from the greater          pack-
aging density.




                                        18
CHANGES TO DATA PROCESSING CONFIGURATION
RECOMMENDEDBy NATIONAL ACADEMY OF
SCIENCES ADVISORY COMMITTEE

       The shift   from the SENTINEL to the SAFEGUARD deployment
resulted   in significant       upgrading     of the requirements      for
the data processing        subsystem.       The ABM objectives    shifted
from thin area defense against            the unsophisticated     Chinese
threat   to terminal      defense of the MINUTEMAN sites against           a
more massive and sophisticated            Russian threat.

       To meet SAFEGUARD's greater           defense objectives,          the re-
quirement    for a Central      Logic and Control         having throughput
capability     of approximately       6.5 million      instructions       a sec-
ond (a five-processor        multiprocessing        system) for the 1-68
SENTINEL Chinese deployment           was increased       to about 13 mil-
lion instructions      a second (a lo-processor             multiprocessing
system) for the Russian threat.              The requirements         for pro-
gram and data storage capacity            also were substantially            in-
creased.

       On the basis of the data processing                 performance     and de-
sign specifications,           maximum sizing     is 10 processors,         16
program storage units,           and 16 variable        storage units
(10-16-16).      The     point   at  which    an additional       processor    will
not increase     throughput        in proportion      to the additional        pro-
cessor's    capabilities        and cost has not yet been demonstrated.

      According    to the prime contractor,         the Central   Logic
and Control     has a design limit        of 15 processors    and produc-
tion of configurations        containing     more than 10 processors
will  require    modification     to the interfaces      between the pro-
cessor units and the various           other units    of the Central
Logic and Control.

      Four processors        are installed       and operating     as a multi-
processor    Central     Logic and Control        at the prototype      MSR lo-
cated at Kwajalein         Missile  Range.       No more processors      will
be added to this test site.             The first    lo-processor      Central
Logic and Control        is scheduled      to be installed      at the SAFE-
GUARD Tactical       Software Control        Site at Whippany, New Jersey,
in February    1972 for use in the development               of software      for
the tactical     sites.


                                         19
       The National       Academy of Sciences Advisory             Committee on
the NIKE-X Data Processing             System, at a meeting held in
April   1969 with representatives              of the SAFEGUARD organiza-
tion,   the Advanced Ballistic             Missile     Defense Agency, and the
prime contractor,         discussed      the results       of its review of the
data processing        plans for SAFEGUARD. According               to the ad-
visory    committee's      report    on this meeting,          the Army's plans
called    for continued       development        of the existing     multipro-
cessor Central      Logic and Control            and--due    to the uncertainty
of achieving     the desired        performance       by this approach--for
concurrent    parallel       development       of alternatives,

      The advisory     committee's    position  was that the data
processing   system must be made to accommodate changing re-
quirements--  handling    more complex threats       and more demanding
radars --and that commercial        systems probably    could better
meet these requirements        than the complex software      needed for
the present   Central    Logic and Control.

        For SAFEGUARD Phase 1 deployment         at two MINUTEMAN sites,
the advisory     committee recommended commercially             available
computers as the prime candidates          instead     of the hardware
being developed     for the existing     Central    Logic and Control
approach.      The existing  multiprocessor       configuration         for the
Central    Logic and Control   would continue        in development         as
a backup system.

        The advisory    committee reasoned,        in essence,     that com-
mercial    data processors      currently,    or soon to be,       available
could handle the traffic         projected    at the busiest       centers
with one or two central        processors     instead    of the    10 to 15
processors     needed for the current       multiprocessor        approach.
The advisory      committee questioned      the feasibility        and ef-
ficiency    of the complex software        system needed to        handle
many processors.
       The SAFEGUARD System Manager and the prime contractor
concluded       that   the adoption    of the advisory      committee's     rec-
ommendations         could endanger SAFEGUARD's scheduled readiness
dates,particularly           for Phase 1. Therefore,        according    to a
SAFEGUARD system design review,             it was concluded       (1) that
planning      for Phase 1 should be pursued by employing              the cur-
rent Central         Logic and Control    multiprocessor      approach and
that production          planning   and software    development     must

                                        20
proceed as required     to support all options        of Phase Z,(l)
 (2) that continuous    review of the program should be main-
tained to determine     whether modification      of this course of
action would be required,      and (3) that studies       should be
continued,   on an expanded basis,     of alternative      approaches
involving  later   generation   commercial hardware and software.

       In May 1969 the Director,             Defense Research and Engineer-
ing, and the SAFEGUARD System Manager requested                   that a re-
view of the status of the SAFEGUARD data processing                    system
be performed       by the Office       of the Director,      Defense Research
and Engineering.          According     to a Defense memorandum, the
major conclusion        reached during this study was that the pri-
mary system should be the current                hardware to meet the
Phase 1 schedules.          The memorandum stated,          however,   that the
advisory    committee was likely            correct   in its judgment that
very large commercially           available      computers would become the
best candidates       in the long run for operational             ABM systems.
Accordingly      the memorandum stated that the SAFEGUARD project
office    should:

      1. Study means for introducing           commercial  data process-
         ing into SAFEGUARD, including           the remote possibility
         of use in Phase 1.

      2. Initiate    software  development        to use higher   order
         languages    and other techniques          to facilitate  trans-
         fer from the prime contractor's             machines to other
         processors.


1Under Phase 2 there are three optional               deployments     which
 can be implemented      individually        or in combination.         Phase 2a
 provides    for deployment       at other MINUTEMAN sites and at the
 National    Command Authority        at Washington,      D.C., to provide
 confidence     that a number of MINUTEMAN missiles              will   survive.
 Other Phase 2 options        provide    for expansion      to 12 sites for
 additional     defense objectives,        including     (1) increased       pro-
 tection    of the strategic       bomber force against         Russian-
 submarine-launched      ballistic      missiles     and fractional      or-
 bital    bombardment systems and (2) area defense against                  a
 Chinese ICBM attack.



                                      21
        In August 1969 the Director,             Defense Research and En-
gineering,     directed     the prime contractor         to study the growth
of the SAFEGUARD deployment              that would be necessary         to en-
sure that a number of MINUTEMAN missiles                 would survive       an
attack     by an evolving      Russian counterforce        capability.        In
its report     dated December 31, 1969, and entitled                 "SAFEGUARD
Growth Study,"       Dell estimated         a throughput   requirement       of
25 million     instructions         a second on the basis of an assumed
need for the capabilities              of the data processing        subsystem
to equal the full         capabilities       of the MSR.

       The study found that      obtaining       25 million       instructions
a second by using SAFEGUARD Central              Logic and Control           hard-
ware was possible    but would require           either      (1) upgrading        the
component with faster      memories, incorporating              other improve-
ments, and providing      configurations         of 15 processors           or (2)
using two cooperating      SAFEGUARD Central            Logic and Control
configurations.     The study concluded            that,    in comparison
with alternative    data processing         implementations,           the exten-
sion of the present     SAFEGUARD Central            Logic and Control          tech-
nology would result     in clearly       exorbitant       costs.

       As of June 1971 the Army planned to use the present
Central   Logic and Control  for SAFEGUARD data processing    hard-
ware but studies   were being made of alternatives    for pas+
sible use if the growth threat    exceeded the capacity    of the
Central   Logic and Control.

Contractor       comments

       Western     stated   that:

      "On pages 20-24, the draft        provides      data selected
      from the report      of the NAS [National        Academy of
      Sciences]   Advisory    Committee.      The selected         data
      may give the impression       that commercial          data pro-
      cessing systems could be used more readily                 in
      SAFEGUARD than was actually         envisioned       in the NAS
      report.   NAS recognized      that no available           connner-
      cial data processors       meet SAFEGUARD requirements
      and that the use of commercial          data processors
      would require    a combination      of computer reengi-
      neering,  radar redesign,       or modifying       the overall
      SAFEGUARD objectives       or deployment      plan."

                                         22
       As stated in this report,           the advisory       committee's     po-
sition   was essentially      that (1) the computers being devel-
oped for the multiprocessor            concept involved        complex soft-
ware of questionable       feasibility        and (2) very large comput-
ers currently,       or soon to be, available            could better     handle
the projected     threat.     The prime contractor            was technically
correct    in pointing    out that a commercial            computer could
not be used in its on-the-shelf              configuration      and that some
degree of engineering        modification        would be needed to achieve
a specified     SAFEGUARD configuration.

       It seems reasonable    to assume, however,         that this type
of additional    effort  would not be significant           when compared
with the alternative     of continued      development      under the
present multiprocessor     concept which, as stated in the SAFE-
GUAM Growth Study, involved        clearly     exorbitant     costs.




                                        23
>PRIME CONTRACTOR'S DECISION TO
MANUFACTURE PROCESSORSIN-HOUSE

       Under its research and development          subcontract,   Univac's
responsibilities      included    the design and development      of pro-
cessors and the fabrication          of breadboard   models.    The pro-
cessors were fabricated         by Western and were shipped to
Univac for checkout and debugging.            Under the production
program Univac had no responsibility           for the manufacture      of
processors;      the processors    were to be manufactured      mainly
by Western.

       Ihe decision    to utilize     Lockheed's    core memory rather
than Univac's     film memory left      Univac without      a specific
hardware allocation       in the SENTINEL production         program.  On
December 5, 1967, Bell told Western that,              because Univac had
designed   and developed       the processor,    it would be desirable
to have Univac's      engineering     design support during design
and deployment      of the SENTINEL system.

         BelltoldWestern          also that engineering             design effort
alone might not be sufficient                 to ensure the availability          of
Univac's        best designers       and, consequently,           suggested that
Univac be given complete responsibility,                       including   manufac-
turing,       for the processor.           Bell suggested that the respon-
sibility       would enlist       Univac's      self-interest        and would bet-
ter ensure the availability                of Univac's        employees for the
SENTINEL program.             Bell stated,       however,      that it would not
expect Western to take this action                     if Univac were not eco-
nomically        competitive.

        On December 28, 1967, Western began discussions             with
Univac.      On May 1, 1968, Western requested         Univac to submit
a proposal     in connection    with the processors.        Western's
request    did not concern complete manufacturing           responsibil-
ity for the processors       but, rather,    was limited      to (1) wir-
ing, assembling,      and testing    101 processors,     (2) manufactur-
ing 9,000 multilayer       boards,   (3) manufacturing      10,500 access
frames, and (4) manufacturing         2,220 analog racks.1        At that


1Multilayer boards and access frames are components of the
 processor.  The analog rack is used to house such compo-
 nents as power supplies  and test equipment.

                                        24
time Western's      manufacturing plans provided     for             processor
wiring,    assembling,   and testing  in its Burlington                 shops;
for either making or buying the multilayer                     boards and analog
racks; and for buying access frames.

        Western told us that,      in its opinion,     wiring,     assem-
bling,    and testing     101 processors     would have satisfied        Bell's
objective     of giving    Univac a significant      and continuing
role in the SENTINEL and SAFEGUARD programs.                Western said
that the requirements        for access frames, multilayer           boards,
and analog racks had been included            to create a procurement
package which would (1) be attractive             to Univac,    (2) have
the least adverse economic effect            on the program,      (3) be
acceptable     to the Government,      and (4) respond to Bell's          re-
quest.     Western said that Univac had not been requested                to
submit a proposal       for complete manufacture       of processors
because Univac was not qualified           to make digital     racks.
The racks were made previously           by Western.

        On May 24,     1968, Univac        submitted     the   following   cost-
plus-a-fixed-fee        proposal.

              Processors                               $ 4,456,444
              Access frames                              7,136,500
              Multilayer          boards                 2,609,OOO
              Analog      racks                          8,234,600

                  Total                                $22,436,544

The proposed amounts for processors                did not include     (1) the
c&t of equipment       to be furnished          to Univac by Western,       (2)
transportation      of logic chassis and digital           racks from West-
ern to Univac,      (3) Univac' s expense for handling             the
Western-furnished      equipment,       logic     chassis, and digital
racks, and (4) Western's         expense for supervising           and moni-
toring    Univac's   work.     Adjusted      for these items, Western's
estimated      cost of placing     the work with Univac was as fol-
lows:




                                           25
                Processors                           $ 6,171,168
                Access frames                          7,136,500
                Multilayer   boards                    2,609,OOO
                Analog racks                           8,234,602

                    Total                            $24,151,268

        In its evaluation       of Univac's     proposal,     Western com-
pared (1) the proposed costs for assembling,                  wiring,      and
testing    the processors       with the estimated        costs for doing
the work in-house       and (2) the proposed costs for multilayer
boards, access frames, and analog racks with proposals                       from
other potential      suppliers.      These comparisons          showed that
Univac's     cost of $24.2 million        ($6.2 million       for processors)
would be about $4.5 million          higher     than Western's        estimated
cost of $19.7 million         ($3.4 million       for processors).          On
that basis Western concluded           that Univac was not competitive
and, on June 21, 1968, notified             Univac that its proposal            had
been rejected.

      We examined Western's     cost estimates,     Univac's      proposal,
and proposals   from Western's    other potential      suppliers.       We
found that the difference      of about $4.5 million       computed by
Western had been based on a comparison        of Univac's       proposed
price for the components with Western's         estimated     cost to
wire,  assemble, and test the processors        and with the average
prices quoted to Western by other sources to manufacture                the
other components.

        Our examination          showed that the Army project            office    had
not been required            to review,     and had not reviewed,         the costs
and other considerations               supporting   Western's     decision      to
reject      Univac's      proposal.      Western officials      informed us
that the Government's             review and approval       usually      were not
requested        until    a supply source had been selected              and that
Western's        negotiations       with Univac represented         preliminary
evaluations         of Univac as a potential         manufacturing        source.
In this case, however,              it appears that a review by the Army
project      office     would not have resulted         in a reversal         or a
significant         modification       of Western's   decision.




                                         26
APPENDIXES




  27
                                                                                                     APPENDIX      I



                                 DEPARTMENT  OF THE ARMY
                           OFFICE OF THE A§SISTANT  SECRETARY
                                             WASHINGTON,            D.C.   20310



                                                                                        29 April       197 1

Dear     Mr.     Bailey:

This is in response            to your letter       of March      26, 1971, to the Secretary
of Defense      concerning         your review        of the Data Processing           Subsystem
for the SAFEGUARD                System.       Please      find enclosed      the Army      comments
to GAO Draft          Report,     “Examination          Into Army’s      Evaluation      of Certain
Contractor      -Initiated      Design     Changes        and Make -or -Buy Decision             for
Components         of Data Processing            Subsystem       of SAFEGUARD           Antiballistic
Missile    System,         ” (Code 67029),        dated 26 March         1971,     (OSD Case #3257).

The Army          comments          are generally           addressed         to clarification            and explana-
tion of portions          of the draft         report.        However,         I think       that the comment
concerning         Army      participation           in the decision          to utilize        the slower         core
memory         is particularly           important.          Although       the decision            to use the core
memory         is now more           than three         and one-half        years       old,      a review       of
circumstances           leading        up to the-decision           indicates         that Government
 representatives          were constantly               aware     of both the alternatives                  being
 considered        by the contractor              and the consequences                 of those       alternatives.
 The extent        of Government            participation         in the final         decision        to utilize
the 500 nanosecond              core memory               is consistent        with the broad             responsi-
bility    and extensive          capability         which the Government                  requires         of the
Weapon        System      Contractor.

The General        Accounting     Office  is authorized                         to distribute        copies  of this
report    to the Congress       in accordance       with                     DOD Directive           5200.1.    It is
requested      that this reply,      with  comments,                          be published         as an appendix     to
the final    report.




                                                                            Charles      L. Poor
                                                           Deputy   Assistant      Secretary     of the          Army
                                                                  (Research       and Development)

Mr.     Charles       M. Bailey
Director,         Defense     Division
U.S.      General      Accounting         Office
Washington,           D. C. 20548


                                                               29
    APPENDIX I


                               SPECIFIC  COMMENTS ON GAO DRAFT REPORT
                               RE SAFEGUARD DATA PROCESSING SUBSYSTEM
                                        DATED 26 MARCH 1971


GAO STATEMENTS            [p age 1, lines          22-27,J      [See    GAO note,        p.   37.3

 (Reference      Page 1, elin&               1549,         of the GAO letter              forwarding       the Report
to Congress)
ItOur examination            indicated          that       the Army project             office--because         of an
insufficient         number of competent                     technical       personnel--did            not make critical
and independent            evaluations             of the rationale              and support         for,    or available
alternatives         to, the system prime                      contractor's          proposal      to change memory
components       from a film              design      to a slower           core design."
                        [Page 9, lines               7-9,l
 (Reference      Page 9, lines               12 and 13, of the GAO Report)
"A Project       Office        official          informed         us that the Government                did not make an
 independent       study       to evaluate            BTL's position."
                  [Page 11, lines               g-13,1
 (Reference      Pa.ge 12, lines               3-6, of the GAO Report)
"We found no evidence                   that     the Army had independently,                      or in participation
with BTL, compared               the technical               features       and the expected            costs of the core
design       vs. the mated film                design        or other       alternatives."


ARMY COMMeNT

The GAO statements                relate      to the Army participation                  in the decision            to
change from a 200 nanosecond                       film     to a 500 nanosecond              core memory,           At all
times      during       the evolution           of the change to a 500 nanosecond                       core memory,
key Government              personnel       at the Project            Office      were aware that          improvements
in the Data Processing                   System were being              considered       by BIT,.       Government         and
BTL personnel             were in frequent             contact      with each other           discussing         the status
of memory considerations.                      Alternatives           to the Data Processing               System memory
were under continuous                  review      and consideration              by the NIKE-X         Project       Office
with     regard       to both cost and system effectiveness.                             The Project         Office      had
considered          the use of plated              wire,      coupled      film,     mated film,        and core
memories,         and Government            personnel         agreed with BTL's recommendation                      to use
500 nanosecond              core memories          only after         assuring       themselves       that     it was in
all    important          regards      the most advantageous                  approach     in terms of cost,
efficiency,           and reliability,

An integral        aspect     of the NIKE-X/SENTINEL/SAFEGUARD                    development       has been
the utilization          of a prime Weapons System Contractor                       (WSC), Western      Electric
Company (WECo) and its associate,                   Bell     Telephone        Laboratories       (BTL),     It is
the function         of the WSC to provide             system engineering            and technical      direction,
including       developing,      testing,      integrating,           producing,        and deploying     the
weapons system.             The Department       of Defense        recognizes         that such a prime
contractor       occupies      a highly    influential          position       both in determining          basic




                                                               30
 :     .
                                                                                APPENDIX I


ARMY COMMENT(Continued)
concepts of a system and in supervising            their execution by other contractors.
Realistically,       while the Government must supervise,            review,    and evaluate     the
proposals and recommendations of the prime contractor                   in the development       of
the program, the Government has neither            the facilities         nor the staff to dup-
licate completely        the WSC's efforts.     Between the extremes of complete
Government in-house capability,           on the one hand, and unreasonable            abdication
of Government responsibility,         on the other hand, lies the middle ground upon
which effective       Government management must rest.           Qualified      Government
personnel must remain aware and fully           informed of the prime contractor's
activities     and must evaluate     and review any contractor            proposal or recommend-
ation which, if acted upon, would significantly               affect      cost, schedule,    system
integrity,     or system performance.        It is considered        that the Government
adequately     performed this required       management function.




                                                 31
   APPENDIX I


                     [Page 2, lines 15-19, 3
GAO STATEMENT (Ref. Page 2, last line, and Page 3, lines 1 and 2, of the
              GAO letter   forwarding the Report to Congress)

"We found that    the Army did not participate      in or review the cost and other
considerations    supporting  the prime contractor's     decision."

ARMY COMMENT

It is not clear whether this statement is intended to be critical;                   however,
it is easily construed as implying that the Army failed               to perform a required
task.     The contractor's    action in issuance of a Request for Quotation and the
subsequent rejection       of the proposal was within        the normal prerogatives
inherent    to a prime contractor       responsible    for total system integration      and
management.     As   noted  and  explained    in   the last paragraph   of the  GAO   Report,
beginning    at page 22, the Army was not required           to review this type of
contractor    decision.

Because the above quoted statement        could be misconstrued      easily,   it   is
recommended that it be deleted.




                                            32
                                                                      APPENDIX I



                      [Page 8, lines     3-6 and 13-15,]
GAO STATEMENT (Ref.    Page 8, lines     S-11, of the GAOReport)

"In April 1967 the Army directed       Bell to study an ABM deployment for thin
area defense and limited  terminal      defense of MINUTEMAN sites--referred      to
as the 1-67 deployment,   Primary      emphasis was to be placed on cost-effective
growth of the MINUTEMAN terminal       defense."

ARMY COMMENT
This statement could be construed as implying that the l-67 study was primarily
aimed only at evaluating   MINUTEMAN terminal defense.  This was not the case;
rather,  both the CPR and MINUTEMAN defense were primary considerations   in that
study.   Later a CPR defense portion  of the study was used as a basis for the
decision for deployment of the SENTINEL system.




                                          33
    APPENDIX     I



                   IPage 9, lines       H-27,1
GAO STATEMENT (Ref. Page 9, line       21, Page 10, line    1-7,   GAO Report)

"In September 1967 the requirement          was reduced from 4 million   to 1.6 million
instructions    per second, according       to SAFEGUARDSystem Office officials
processors with the higher speed would not be available           in time for early
deployment of a thin defense.          Shortly thereafter,  BTL reported that sub-
stituting    the slower memory units for the 200 nanosecond units would
reduce the processor throughput         and the approved requirement    was further
reduced to 1.3 million     instructions       per second."

ABHY COXMENT

The GAO statement could be construed as implying that the basic design of the
processor was changed to effect    the reduction in throughput.     The reduction
in throughput  was accomplished by changing the memory from 200 nanoseconds
to 500 nanoseconds.   The slower memory was selected because the I-67 System
Studies showed that a slower memory was the most cost effective      approach with
the reduced threat.   Choosing the slower memory resulted    in only a 20% decrease
in throughput  at a substantial  oost savings.




                                              34
                                                                        APPENDIX    I




                        [Page 9 Lines 34-40 and page 10         lines   l-4,]
-GAO STATEMENT (Ref.     Page 16, line 13-18, GAO Reportj

"In a response dated 22 September 1967, UNIVAC, in declining            to bid on the
core proposal,   stated that mated film had advantages over core memory such
as: (1) potential      for greater speed, (2) lower power requirements,        (3) higher
packaging density per memory rack, (4) greater long-term         reliability    and
(5) application   of low cost, mass production    automated techniques.        UNIVAC
contended that these advantages outweighed any initial         cost advantages of
core memory.    Since there may have been other factors which have not been
brought to our attention,      we cannot comment on the validity      of UNIVAC's
statements."

ARMY COMMENT

It should be noted that there were other considerations           in the response to
the points made by UNIVAC. The reliability         of the thin film memory has not
been proven in a production      model data processor.      Some members of the technical
community are aware of the inherent        effects  of aging on thin film memory.
These effects     could   reduce the reliability    of the memory. In addition,       neither
UNIVAC nor any other known computer vendor has delivered            large computersdesigned
upon thin film memory concepts.       The trends have been toward using core or
integrated    circuit   memory.




                                            35
  APPENDIX I



                 [Page 10, lines 15-18, and page 11, lines                 l-6,]
GAO STATEMENT (Ref. Page 11, lines 3-10, GAO Report)

"A Project Office official       told us that the only documentation      of the 11 Ott 67
meeting was a BTL memorandum dated 1 Nov 67. The memorandum showed that BTL
had specified      a level of reliability    of 5000 hours mean-time-between-failure
but Lockheed's memory unit as proposed had a mean-time-between-failure
reliability     rate of 1200 to 1500 hours.      Lockheed later increased its
proposed price for 15 memory units from $1.4 million            to about $2.2 million
to provide    for the 5000 hours reliability      requirement."

ARXY COMMENT
The GAO statement could be construed as implying that the escalation                      in cost
required     to achieve the indicated        higher memory reliability     is excessive and
more than that initially         proposed by the subcontractor.        Therefore,       the following
estimated vs. actual cost per bit for the higher reliability                militarized        and
the non-militarized        systems, indicates       that the cost is as anticipated         in
the referenced      BTL memorandum dated 1 Nov 67. This data indicated                that cost
estimate data used by the Government and BTL to make memory choice was reasonable.
The BTL memorandum estimated the cost for the R&D commercial core memories
systems to be 8 cents per bit.             This was the estimated cost per bit for a
non-militarized,       non-high reliable       (R&D 16,000 word 500 nanosecond) system.
The actual cost per bit for the first             ten R&D 16,000 word 500 nanosecond systems
delivered     was 7.84 cents.       Delivery    of these units began in May 1969.

The BTL memorandum also estimated the cost for the fully militarized           R&D
systems in small lots, with high reliability         components to be 11 cents per
bit.   The actual   cost for the first     20 fully militarized  systems  (16,000
dual 8,000 words) delivered      for R&D use, was an average of 10.89 cents per
bit.   The delivery   of the first   militarized    systems began in September 1969.




                                                 36
                                                                      APPENDIX I


                          [Page 13, lines 16-26,]
GAO STATEMENT (Ref.      Page 14, line 7-15, GAO Report)

"In March 1969 the President     announced the planned deployment of the
SAFEGUARDABM system which provided       for a 15 month delay in the readiness
date for the first   site.    In April 1969 the Project Office replied          to BTL's
letter  of 20 Dee 68 and concurred with BTL's findings.           The Project Office
informed BTL that efforts    to meet the ABM's evolving       requirements    indicated
the need for a larger computer and possibly      further     delays in schedule.
BTL was directed   to consider UNIVAC's proposal,      together     with other advanced
type memories, for possible use in meeting the requirements."

ARMY COMMENT

During the April 1969 thru April 1970 timeframe,            the Weapon System Contractor
made detailed      studies and analysis of SAFEGUARDData Processing System size
vs. threat.       A summary of these studies and analysis is contained in a
Memorandum for File signed by Mr. T. H. Crowley presented to SAFSCOMon
14 April 1970. This memo documented the results             of a SAFEGUARDdata
processing     growth study.     One of several alternatives     considered to
increase the throughput        of the Central Logic and Control was to include
a faster memory. This option remains open if the need arises.                 In the text
of the BTL studies,       several memories were considered,      including     a faster
core, based on the present core memory; a magnetic film, similar                to those
first    considered for SAFEGUARD; and integrated        circuit   memories.      All
segments of industry       at the time of the report felt that the most promising
high speed memory during the next decade would be an integrated                circuit
memory. The BTL conclusions          in the study were that if a memory change
does come about in the future,         studies will be concentrated       on the
integrated     circuit   memories rather than either core or magnetic film.


GAO note:    Page number references in this appendix have been changed
             to correspond to the pages of this report.




                                        37
APPENDIX II




  Arthur P. Glow
  Executive   Vice President                                                 W&tern Electric

                                                             April     22,   1971



MR. C. M. BAILEY,      Director
Defense Division
United   States   General Accounting                     Office
Washington,     D. c. 29548
Dear Mr. Bailey:
        In accordance     with the request       in your letter      of
March 26, 1971 to the Secretary             of Defense,    I enclose
the comments of Western Electric              Company, Incorporated,
to GAO Draft       Report of March 1971 on Army's evaluation
of (a) a contractor-initiated             design change and (b) a
proposal    to subcontract        certain   components    of the data
processing      subsystem    of the SAFEGUARD antiballistic
missile    system.      I trust    that you will     make these
comments available        to the Joint      Committee    on Atomic
Energy along with your report             and that you will     consider
it in the development           of your final    report.
          We thank             you for   the   opportunity        to comment     on the
draft      report.

                                                             Very    truly    yours,




Enc.



 196 Broadway, New York, New York 16QQ7 I 212 5714761




                                                   38
          ,




 .’   .



                                                                                        APPENDIX II
L




                                 Comments of
      Western Electric      Company, Incorporated     to GAO Draft Report
      of March 1971 on Army's evaluation          of (a) a contractor-
      initiated   design change and (b) a proposal        to subcontract
      certain   components of the data processing        subsystem of the
      SAFEGUARD antiballistic       missile   system.


                                             April      22,    1971


                                                     CONTENTS

                      Summary Statement              of Western       Electric

                      Specific       Comments
                                 The Contractor-Initiated                 Design     Change
                                 to Core Memory
                                 The NAS Advisory             Committee     Report
                                 The Subcontract          Proposal
                                 Miscellaneous         Corrections         [see GAOnote.~




              GAO note:   These comments were omitted because they included classi-
                          fied information    which is being forwarded   separately    to
                          the Chairman, Joint Committee on Atomic Energy, and because
                          the other unclassified    corrections  are recognized     in the
                          body of the report.
                                                          39
APPENDIX      II



Summary     Statement       of Position       of Western       Electric
        It appears that no particular                   criticism     of the
prime contractor       in the performance               of the ABM Program,
or of its Associate,        Bell Telephone              Laboratories,      is
stated    or reflected    in the GAO draft               report    or its cover
letter.
         Our comments,       therefore,     are limited         to a summary
statement       and some specific        comments designed         to correct
certain     inaccuracies       found in the draft          and to amplify
upon the draft        in severalplaces,         where we felt         misleading
inferences       might otherwise        be drawn.
                                              [Pages 1 and 21 [See GAO note, p. 44.1
         With regard to the first           of the matters         discussed,
the 1967 decision        to use core memory in the data processing
subsystem,       the draft,      on page l/of     its cover letter,          makes
it clear      that the ABM system!s         capability        to realize
program objectives          was not adversely         affected.
          The draft       indicates      that the decision             to use core
memory was motivated              by the desire          to save money since
the use of core memory would be less expensive                               than the
mated film       design.        Equally      important        to the decision
were the significant              technical        risks     surrounding        the mated
film memory development               which were not present                 with core
memories.        The Army and Bell             Laboratories         could proceed
with assurance          that 500 nanosecond              core memories of the
requisite      characteristics           could be produced             in the
required      quantities        on schedule.            This was not the case
for film memories.              When changes in system requirements
were made that permitted                use of core memory, the decision
was basically         clear.
                                     [Pages 12 and 131
          In a footnote         on page 14 of the draft,                 statements
by Univac officials             are reported           suggesting      that the
mated film proposal             made by Univac in 1968 was substantially
similar     to its 1967 proposal.                 In fact,       the 1967 proposal
was technically           inadequate.         Univac's        1968 proposal
reflected      further       independent         development        of a new
memory of different             characteristics.              Also,    the estimate
of potential        cost savings         from this         later    proposal       was
predicated       on the much larger             number of sites            in the
SENTINEL de,ployment,             and could not have been realized                     in
the much smaller            SAFEGUARD deployment              even if otherwise
feasible.




                                             40
                                                                       APPENDIX II



                 [Pages 19-22,]
        On pages 15-19, the draft      provides      data selected
from thereport     of the NAS Advisory        Committee.       The
selected    data may give the impression         that commercial
data processing      systems could be used more readily            in
SAFEGUARD than was actually        envisioned      in the NAS report.
NAS recognized     that no available      commercial       data
processors     meet SAFEGUARD requirements         and that the use
of commercial data processors         would require        a combination
of computer reengineering,       radar redesign,         or modifying    the
overall    SAFEGUARD objectives      or deployment       plan.
        With regard to the second of the two principal
matters discussed,         the review in 1968 of a proposal        to
subcontract     certain      work on components of the data
processing     subsystem of the ABM system, the draft,           in its
concluding     portion     is to the point that Western's
determination       was sound and appropriate        and that an
independent     review by the Army would not have reversed            or
significantly       modified     Western's decision,
        Western's        determination        is characteriz.ed        in the title
and the cover letter             to the draft        (though not in the draft
discussion       itself)       as a "make-buy decision".               It is more
correct,    however,         to characterize         it in the way used in
the draft      discussion,         namely, as an evaluation              of a
proposal     to subcontract           certain     components of the data
processing       subsystem.         It was merely a second look at a
decision     dating back as far as 1963, and incorporated                        in
approved make-buy programs since that time, to assemble,
wire and test the processors                  in-house,     utiliz.ing     in part
purchased components.                The second look confirmed             the
original     decision.
        On Page 5, in a footnote,                the draft      states:       'Western's
responsibilities          involve      primarily      (1) administrative           and
financial       matters relating          to the contracts          and (2)
fabrication        of hardware."          This summary is accurate              as to
Western's       R&D contracts        administered        through its Associate,
Bell Telephone Laboratories.                   With regard to production
contracts,       Western's      responsibilities           include      (1) management
of the overall         project,       (2) engineering         administration,
 (3) technical       assistance        to subcontractors           on manufacturing
processes,        (4) product       control      of subcontractors,
    5 financial       control     relating       to the contract,
    g fabrication       of hardware,         (7) installation           and test,     and
 ii   coordination        of all phases of the project                  to meet
established        schedules.


                                           41
                                                                                           -7




                                                                                                ,       . .


APPENDIX II                                                                                         .         .




                              SPECIFIC        COMMENTS


The Contractor-Initiated                 Design   Change to Core-Memory
          Page 8 - Concerning              the decision          to use a core
memory design instead               of a mated film            design,     the GAO
draft     report      omits mention          of a major factor.              The
technological           development        and production           base for core
memories was firmly              established          and in being during            the
 1966-1969 interval.              This was not the case for large
coupled      film     or mated film memories.                 Hence, the Army and
Bell     Laboratories        could proceed into the SENTINEL and
SAFEGUARD production              programs with assurance                that 500
nanosecond         core memories of the requisite                    characteristics
could be produced             in the required            quantities      on the
required        schedule.       This was not the case for film memories,
In the absence of a large manufacturing                           base and extensive
field     experience        with film memories of comparable                      size,
the adoption          of film memories for the production                      program
would have introduced               a significant          risk of encountering
technical        or production         difficulties          so severe as to
impact on project             schedules.          Film memories were attractive
in the 200-nanosecond               speed region,          where core memories
were not available,             and showed promise               as an eventual
competitor        for core in the 50%nanosecond                      speed re ion.
             [Page 11, last paragraph           to page 13, first      paragrap%,]
          Page 12, last paragraph                 to page 13, [last         paragraph
and page 14, footnote               - It should be noted that the 25%
nanosecond        mated film memory referred                   to here (Univac's
unsolicited         'proposal     in 1968) was not the same as the 5OO-
nanosecond        mated film memory referred                  to on pages 8 and
10 (Univac's          mated film proposal              in 1967).       Univac's
unsolicited         proposal      was for a new memory of different
characteristics           than those previously               developed       by Univac.
           [Page 12, lines     25-26,]
         Page 14, line      1 - The $27 million           saving estimated
in the "Study of Univac Unsolicited                  Proposal    for Mated
Film Memories'I     (1968) was based on a SENTINEL deployment
of 6 PAR sites,       17 MSR sites         and a BMDC, which was
estimated     to require      344 racks of Lockheed core memory
at the various      sites.        This compares to 107 racks of
Lockheed core required            for the 2 PAR sites,          3 MSR sites
and BMDC presently         authorized        for SAFEGUARD. It is
evident    that neither       the estimated         $27 million     saving nor
the estimated     $20 million         dollar     net saving can be
construed     as applying       to SAFEGUARD.




                                             42
.


                                                                    APPENDIX        II


The NAS Advisory           Committee     Report
                   [Page 20, paragraph 31
        Page 16, paragraph             3 - Concerning     proposed     use of
commercial        data processing        systems for use in ABM systems,
the draft       report     fails     to observe that no commercial          data
processor       available        for procurement     meets the availability
and reliability           objectives,      the environmental      criteria     and
the throughput          requirements       of SAFEGUARD. Thus, adoption
of a commercial           data processor      would require      some combination
of:

        a> Reengineering          a commercial       data    processor.

        b)    Redesigning   other SAFEGUARD components
              (and in particular   the MSR and PAR
              buildings),   and/or

        4     Modifying     the overall     objectives or the
              overall     deployment    plan for SAFEGUARD.
        Thus, the NAS Advisory          Committee's     recommendation
was not for direct         substitution    of a commercial        computer
in place of the CLC to meet the existing                requirements.
Rather,     it was the committee's        opinion    that changes of
types (b) and (c) above might be required                 in any event
to meet changing        system requirements,        and it was the
committee's     opinion     that such changes could be accommodated
more easily     with a commercial        data processor       than with
the CLC.

The Subcontract        Proposal
        Page 213, 'Pags'ec2~~8a~~K;'t"E$nhc2e'Se~oeqps~~~~~~~ories did
not tell     Western that Univac's            engineering       design   support
was "necessary",         but rather      that it was desirable;           hence,
Bell   Laboratories'        statement      that it would not expect
Western to give Univac a production                   responsibility      if
Univac were not economically               competitive.
                   Page 24, paragraph 4, third senhence]
         Page 2 d , last paragraph,           states,      WECo's request
did not concern complete            manufacturing         responsibility
for the processors          but, rather,        was limited        to (1) wiring,
assembling,      and testing       131 processors,          (2) manufacturing
9,000 multilayer         boards,    (3) manufacturing            10,500 access
frames,     and (4) manufacturing            2,220 analog racks."
Concerning     any implication         that Western did not fully




                                       43
                                                                           .

                                                                               ,   ..

 APPENDIX II
                                       .


implement     the request made by Bell Laboratories            stated
in the preceding      paragraph,    it was not economical         to
have all components.for        a processor    manufactured      by
Univac.      Many manufactured     or purchased articles,         which
are common to other units besides processors,               are included
in the wired,     assembled,     and tested   end item.      We believe
the scope of work for the Univac proposal            filled     Bell
Laboratories*     request.

GAO note:      Page number references        in this appendix have been
               changed to correspond       to the pages of this report.




                                      44