NASA meanwhile began construction of the Manned Spacecraft Center at Houston in late 1961. This center had its own launch team, first called the Preflight Operations Division, later the Florida Operations Group, with launch responsibility for the current manned space program, Mercury. The entire relationship of LOD with the Manned Spacecraft activities in Houston and Florida needed definition. Would Houston or LOD control Apollo launches? Debus believed "that there would be serious problems if the Manned Spacecraft Center thought the launch group was always being loyal to another Center [Huntsville]. What was needed was a launch Center that could be loyal to any Center." To summarize the case for an independent launch center: the Florida operation had to be on a par with Huntsville and Houston; it had to have direct access to Washington rather than through channels at Huntsville; and it had to be the one NASA point of contact with the Air Force Missile Test Center - if it was going to provide launch facilities for Apollo in an efficient and timely manner.10
NASA announced on 7 March 1962 that it would establish the center as an independent installation. Debus continued in charge, reporting to the Director of Manned Space Flight, D. Brainerd Holmes, at NASA Headquarters. Theoretically the new Launch Operations Center (LOC) would serve all NASA vehicles launched from Cape Canaveral and consolidate in a single official all of NASA's operating relationships with the Air Force Commander at the Atlantic Missile Range. NASA replaced Marshall's Launch Operations Directorate with a new Launch Vehicle Operations Division (LVOD) in Alabama. However, Debus would be director of both LOC and the new LVOD and Dr. Hans Gruene would also wear "two hats" as deputy director.11 The creation of the Launch Vehicle Operations Division under Marshall, but with Debus as director, may seem to reflect a reluctance to grant the Launch Operations Center independent status, but was more likely intended to ensure that the Debus team stayed in charge of the Saturn flight program regardless of its tenure at LOC.
According to John D. Young, NASA Deputy Director of Administration, LVOD was "an interim arrangement to provide additional time to carefully consider to what extent, if any, the electrical, electronic, mechanical, structural, and propulsion technical staffs of the present Launch Operations Directorate of MSFC should be divided between MSFC and LOC."12 Debus saw the matter in a somewhat different light: "LVOD was strictly a compromise measure to overcome the problem within von Braun's own group. All of his basic contracts were on incentive fees . . ."; the stage contractors "complained and not unjustifiably, 'We pamper stages through here [Huntsville], then give them to a crew at LOC who may louse it up.'" Mistakes made at the Cape could therefore reduce a contractor's payment.13
Debus and Marshall's Deputy Director Eberhard Rees, acting for von Braun, signed an interim separation agreement between the Launch Operations Center and the Marshall Space Flight Center on 8 June 1962. Of the 666 persons assigned to launch operations for the fiscal year 1962, 375 went to the Launch Operations Office. Independence Day for the Launch Operations Center was 1 July 1962. This arrangement was to hold until the following year when reorganization plans within both NASA centers transferred the Launch Vehicle Operations Division from Marshall to the LOC on 24 April 1963.14