Money and Management Problems Again

Gemini's chronic budget ills were marked from time to time by acute episodes. The crisis of late 1962 had scarcely subsided before the project reeled under a new round of cost increases. By 8 March 1963, the program's total price tag stood at just over $1 billion. NASA's projected budget for fiscal year 1963 had been $232.8 million after the impact of reprogramming had been assessed; actual expenditures topped $289 million. The pattern repeated in fiscal year 1964, with a planned budget of $383.8 million exceeded by $35 million. By 2 March 1964, NASA expected to spend over $1.2 billion on the program.23 These increases reflected, in part, Gemini's changing scope and the technical problems that somehow proved harder to solve than anyone had expected. They also reflected, perhaps inevitably in so large and complex a program, mistakes, errors of judgment, and mismanagement, though Gemini appears to have suffered less from those ills than other programs of comparable size. Swelling costs were, for whatever reason, evident throughout the program.

NASA and McDonnell had finished negotiating the Gemini spacecraft contract in February 1963, settling on a total cost plus fixed fee of $456,650,062. This figure was not so firm as it then seemed. At the end of 1963, McDonnell estimated total spacecraft costs at upwards of $612 million. Something less than half the difference could be ascribed to approved changes in the program, as exemplified by the $2.7-million price for adding drogue stabilization to the parachute recovery system, though this change was itself prompted by development problems with reentry thrusters. Much of the balance derived from cost overruns on major Gemini subcontracts, with thrusters by Rocketdyne and fuel cells by General Electric the chief culprits. The new year brought no relief. In March 1964, when NASA estimated the total cost of Gemini at $1.2203 billion, the spacecraft accounted for $667.3 million.24

Launch vehicle budgets were equally ephemeral. The billion-dollar estimate of March 1963 had included $240 million for the Gemini booster. As the year wore on, Air Force Space Systems Division found the situation "extremely fluid. Costs were constantly increasing and changes were being approved so fast it was difficult to keep track of them. . . . [174] Engine problems were causing late deliveries and increasing costs." When SSD completed its first comprehensive review of the Gemini budget in January 1964, it felt obliged to revise the cost upward to $296 million. Just two months later, after another hard look at launch vehicle costs, SSD claimed to need $324 million. This was the same month, March 1964, when NASA was counting the booster's share of a $1.2-billion Gemini budget as $281 million. Toward the end of the month, Gilruth warned Major General Ben Funk, SSD Commander, that MSC's 1964 booster money had been exhausted. With three months of the fiscal year still to go, the $46.9 million allotted looked as if it would fall $30 million short of expenses. Gilruth was much concerned about funding in the coming two years and asked Funk to take another look at his needs. Funk replied with an estimate of $332 million that included $75.3 million for fiscal year 1965, $8.4 million higher than NASA had planned.25

Inexorably rising costs plagued target vehicle as well as launch vehicle development, and for much the same reasons: technical problems compounded by the fact that NASA and the Air Force simply did not agree on how a development program ought to be managed. NASA wanted more control than the Air Force thought wise to impose. NASA efforts to promote its view during late 1963 had availed little, and Mathews' communications with SSD grew more caustic. On 5 February 1964, he scored Bell and Lockheed (and, by implication, SSD) for the sorry job being done on Agena engine development. Costs had "continued to increase even at this late date to a level far beyond that considered reasonable by this office." The excuses offered were, in Mathews' view, worthless:

The emphasis which BAC [Bell Aerosystems Company] has placed on the fact that the development effort was to be one of minimum cost has apparently led them to a belief that sound technical judgment was no longer required or that minimum cost eliminated its use. The GPO does not consider this argument valid or useful.
The fault was as much Lockheed's as Bell's. Mathews believed that -
the costs quoted by BAC and submitted by LMSC [Lockheed Missiles & Space Company] are excessive or unjustified in many areas. Moreover, these costs have increased and are continuing to increase with apparently little financial hazard to BAC and only after-the-fact recognition by LMSC. . . . GPO must express dissatisfaction with LMSC and BAC management of these programs.26
Engine development costs were only part of the problem. The first "firm" budget for the Gemini Atlas-Agena program was ready in September 1963. SSD projected a total cost of $103 million, with Agena's [175] share as $57.5 million. By March 1964, NASA was prepared to spend $137 million for the program, $93 million on Agena alone. The $37 million programmed for Agena in fiscal year 1964 was almost exhausted, although that figure was $2.4 million higher than Lockheed had, in September, claimed to need. Mathews termed the situation "critical" and demanded a complete explanation in writing for the discrepancy between current costs and the September projections. GPO once again saw, in "the contractor's frequent increases in the estimated costs," signs of "a serious need for improvement by the contractor in proper planning and cost control." Mathews warned SSD and Lockheed that "lack of adequate cost control places this program in real jeopardy."27

Ironically, at the same time that Mathews was urging SSD to get Lockheed under control, the contractor was finding that it needed still another $2.5 million in 1964 funds, a request that was duly passed along to GPO on 4 April. Lieutenant Colonel Mark E. Rivers, Jr., who had just replaced Major Charles Wurster as chief of Gemini-Agena engineering for SSD, saw signs of sloppy management in the new Lockheed request, which appeared to be based on small changes that had piled up unnoticed over several months.28

This, then, was the setting in April 1964 when North American, for the fifth time in a row, failed to deploy the paraglider wing in flight. Mounting costs in all phases of Gemini development had stretched the 1964 budget to the breaking point, and the trend was still upward. Paraglider had been budgeted for $16.4 million in 1964, but that would be the last of the money. Keeping paraglider meant finding new funding or cutting back other parts of the program. In the money budget as in the weight budget, once paraglider's status became doubtful, its place was preempted. Against this confluence of forces - technical, operational, and budgetary - paraglider could not stand.

Whether the target vehicle program could survive was also a question. In late April, budget pressures forced Mathews to discuss with his staff some desperate measures. Paraglider, Atlas-Agena, and even one of the planned Gemini missions were on the chopping block. Once again, however, MSC was able to reprogram funds to save the full 12-flight program and, via Agena, the rendezvous objective, if not paraglider and land landing.29 One of the factors that may have made Agena's place in Gemini shaky in April 1964 was a new round of technical problems that had cropped up earlier in the month.

Bell's efforts to complete development testing of Gemini-Agena propulsion systems during 1963 had produced spotty results and many delays, which had, in turn, postponed the start of preliminary flight rating tests of these systems. Scheduled to begin in June 1963, testing of the main engine had been put off until January 1964 but began only on 6 February. Still another two weeks elapsed before the [176] secondary system began its tests on 17 February. Both programs soon ran into trouble.30

Main engine testing proceeded with only minor problems through the first week in April. In the following week, however, the test program encountered what proved to be a six-week delay when the test unit's fuel and oxidizer start tanks failed. These tanks were stainless steel canisters with bellows inside them to push the propellants that started the main engine. Visible lengthwise cracks in their outer shells allowed the gas that was supposed to force the propellants from the tanks to escape. The steel in the shells had corroded. Tanks with a new heat-treated steel shell replaced the defective tanks, and testing resumed in May. But the tests, which should have ended in April, ran into late June. Alarmed by the threat of increased cost such a failure implied, GPO demanded a complete written account of the causes and effects, a point of special concern being "indications that subcontractors may have failed to process materials in a manner essential to the proper operation of components being developed."31

Agena's secondary propulsion system, like the main engine, started preliminary flight-rating tests smoothly, then ran into trouble early in April. Failure of a propellant valve, however, imposed only a minor delay. A harder problem emerged later in the month during high temperature firing, when the wall of a thrust chamber burned through after 354 seconds. While well beyond the 200 seconds regarded as the system's longest useful life in orbit, it fell below the specified time of 400 seconds. Bell installed a new thrust chamber and finished the tests - in mid-August instead of the scheduled mid-June. The failure, however, needed to be explained, and that meant more tests. Bell planned a series of six tests over two weeks, beginning early in September. Test-cell problems hampered the work, which did not end until mid-November and then after only four tests. The four were, however, enough to spot the problem - elevated propellant temperatures - and to show that it would not affect the system's performance in orbit.32

Bell's slow progress in its test program delayed Lockheed's testing. Because of the scope of changes in propulsion systems required to adapt the standard Agena D for Gemini, Lockheed planned a series of static firings using an Agena skeleton fitted out with propulsion and propellant systems at its Santa Cruz Test Base in California. Lockheed received the propulsion systems from Bell in February and March and had the test assembly at Santa Cruz by the end of March. Checkout problems and Bell's cracked start tanks in April held up the testing. Lockheed returned the main-engine start tanks to Bell, but they were not replaced until mid-May. Other minor problems delayed the first firing until 16 June. Once under way, however, the test program moved quickly to an end on 7 August 1964 with no further mishaps. [177] Post-test analysis confirmed that the propulsion systems had come through in fine shape.33

In the meantime, doubts about the Agena's ability to perform its mission had been growing. On 15 April 1964, SSD suggested flying a non-rendezvous Gemini-Agena mission to bolster confidence. GPO dismissed this scheme but accepted an alternative recommendation that one target vehicle be assigned the role of development test vehicle. This would be helpful for troubleshooting malfunctions and testing changes and would also allow further development testing, should the need arise. The plan was approved in May and the first Gemini Agena target vehicle, GATV-5001, was to be the test vehicle. AD-71, the first standard Agena D for Project Gemini, had been accepted by the Air Force on 30 April and transferred to the final assembly area at the Lockheed plant, where it was being converted to GATV-5001. Despite its new role, GATV-5001 was expected to remain in flight status until GPO decided otherwise, although GATV-5002 was now tentatively scheduled for the first rendezvous mission. GATV-5001 was not likely to fly unless GPO later opted for a non-rendezvous mission. So GPO canceled one of the eight Atlas boosters then under contract as Agena launch vehicles, saving the program $2.15 million.34


23 Memo, James E. Bone, Jr., and Walter D. Wolhart for record, "Explanations of Difference between Gemini Requirements shown in FY 63-64 Budgets and the amounts actually provided in FY 1963 and Planned for FY 1964," 30 Oct. 1963; James M. Grimwood and Barton C. Hacker, Project Gemini Technology and Operations: A Chronology, NASA SP-4002 (Washington, 1969), p. 283; "FY 1965 Summary Budget Back Up Data: Gemini," 2 March 1964, in "Gemini Data Book," revision of 1 Nov. 1964, p. L.4.1.

24 Negotiated contract, "Project Gemini Two-Man Spacecraft Development Program," 27 Feb. 1963, signed by Glenn F. Bailey for MSC, by Ernest W. Brackett (29 March 1963) for NASA Hq., and by David S. Lewis for McDonnell; "Gemini Summary: NASA Administered Prior Contract Data," in "Gemini Data Book," p. J.1-5; letter, John Y. Brown to Kline, "Contract NAS 9-170, Gemini Monthly Financial Status Report; Submittal of," 306-16-4962, 17 Jan.1964, with enclosures; "FY 1965 Summary Budget Back Up Data: Gemini Spacecraft," in "Gemini Data Book," p. L.4.3.

25 Harris, "Launch Vehicle Chronology," pp. 28, 32, 35; "FY 1965 Summary Budget Back Up Data: Gemini - Launch Vehicles," in "Gemini Data Book," p. L.4.9; Bone and Wolhart memo, 30 Oct. 1963; TWX, Mathews to Dineen, GPO-54495-A, 13 Jan. 1964.

26 Letter, Mathews to SSD, Attn: Maj. Charles A. Wurster, GV-02134, 5 Feb. 1964.

27 TWX, Mathews to SSD, Attn: Wurster, 13 March 1964; memo, Richard J. Crane to Bailey, "Special Management Conference - Agena Program - Air Force - Lockheed at Sunnyvale, California, March 19, 1964," 27 March 1964, with enclosures; "FY 1965 Summary Budget Back Up Data: Gemini - Launch Vehicles."

28 Letter, Lt. Col. Mark E. Rivers, Jr., to Mathews, "FY 1964 Fund Requirements for Gemini Agena Contract AF 04(695)-129," 4 April 1964, with enclosures.

29 Meyer, notes on GPO staff meetings, 22 and 29 April 1964.

30 Letter, Harold T. Luskin to Wurster, "Contract 04(695)-129, Gemini Program BAG subcontract Financial Status," LMSC/A602008, 11 Nov. 1963, enclosures A and B; "Medium Space Vehicles Programs Monthly Progress Report, April 1963," LMSC-447 186-34, 20 May 1963, p. 2-6; Project Gemini Quarterly Status Report No. 7, for period ending 30 Nov. 1963, p. 69; "Abstract of Meeting on Atlas/Agena, April 7, 1964," 16 April 1964; memo, Schneider to Assoc. Adm., MSF, "Multiple Restart of Agena D Engine," 3 March 1964.

31 "Abstract of Meeting on Atlas/Agena Coordination, May 5, 1964," 18 May 1964; Quarterly Status Report No.9, for period ending 31 May 1964, pp. 42-43; Consolidated Activity Report, 21 June - 18 July 1964, p. 16; Mathews, activity report (21 June-18 July), 21 July 1964, p. 1; TWX, Mathews to SSD, Attn: Rivers, GP-54748, 28 May 1964.

32 Weekly Activity Reports, 5-11 April, p. 3, 19-25 April, p. 1, 6-12 Sept., p. 1, and 8-14 Nov 1964, p. 2; Quarterly Status Report No. 10, for period ending 31 Aug. 1964, p. 48; Quarterly Status Report No. 11, for period ending 30 Nov. 1964, p. 39; "GATV Progress Report, September 1964," LMSC-A605200-1, 20 Oct. 1964, pp. 2-1, -2; "GATV Progress Report, November 1964," LMSC- A605200-3, 20 Dec. 1964, pp. 2-2, 3.

33 "Monthly Progress Report, March 1964," LMSC-447186-45, 20 April 1964, p. 3-4; Quarterly Status Report No. 9, p. 43; Weekly Activity Report, 22-28 March 1964, p. 2; Quarterly Status Report No. 10, p. 49; Weekly Activity Report, 2-8 Aug. 1964, p. 1; "Special Post Fire Functional and Leak Tests Performed on Model 8247 Rocket Engine at Santa Cruz Test Base," LMSC-A605708, 19 Oct. 1964.

34 Paul E. Purser, recorder, "Minutes of Project Gemini Management Panel Meeting . . . , April 15, 1964," pp. 6-7, Fig. B-3-4; TWXs, Mathews to Rivers, GV-52348, 20 April, and GV-52401, 19 May 1964; letter, Mathews to Rivers, GV-02261, 28 May 1964; "Monthly Progress Report, May 1964," LMSC-447 186-47, 20 June 1964, p. 3-6; letter, Mathews to Col. John B. Hudson, GP-01798, 13 Jan. 1965; memo, Charles W. McGuire to Dir., Gemini Test," Agena Target Vehicle (5001)," 5 Feb. 1965; TWX, Rivers to Mathews, 6 June 1964; TWX, Mathews to SSD, Attn: Dineen, GP-54906, 20 Aug. 1964.


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