TAB B Estimated costs of satellite communications services to meet requirements in support of NCS-NASCOM 1. Charges by Comsat Corp.: 1 For 12 voice-data-grade and 4 teletypewriter-grade channels (b) Pacific section: For 12 voice-data-grade and 4 teletypewriter-grade channels Total... 2. Charges by Cable & Wireless, Ltd. (C. & W.): For 6 voice-data-grade circuits between an earth station on Ascension Rate per circuit per year. Total ($165,000×6) For 2, 75-baud duplex teletype circuits between the same points: Total. 3. Charges by Compania Telefonica Nacional de Espana (CTNE): 4. Charges by Australian Overseas Telecommunications Commission For 6 voice-data-grade channels between an earth station at Carnar- Rate per circuit per year... Total ($236,000×6)-. 1 These proposed charges will form basis of tariff to be filed by Comsat with the FCC. Calculated on basis that 2 TTY circuits=1 voice-data circuit. Administrator, National Aeronautics and Space Administration, DEAR JIM: We have reviewed your letter of 18 March 1966, wherein you supplied the information requested in my letter of 5 October 1965, regarding communications services needed in the NASA Apollo Program. I note that you have found it necessary to negotiate with the three foreign telecommunications companies involved, in addition to the Communications Satellite Corporation (COMSAT). I further note, in this regard, that COMSAT's proposed charges for furnishing their services will be subject to a tariff to be established under FCC procedures. On the other hand, the charges to be made by the three foreign carriers are still under negotiation, with the hope of eventual reductions being accomplished. I appreciate that these foreign charges are not subject to review by the FCC and trust that you will continue to exert every effort to reduce them as far as possible. It appears, therefore, that the proposals, as set forth in your letter and the attachments thereto, are acceptable, and that you may proceed with the execution of the several contracts involved. Sincerely, CYRUS R. VANCE. Mr. HORTON. On this point, Mr. Roback, I noted on my copy of General Starbird's testimony yesterday to ask a question. On page 5 of your testimony, subparagraph (d), General Starbird, you indicated that Mr. McNamara stated or indicated that Mr. Webb should proceed to conduct negotiations with Comsat, acting as representative of the Executive Agent, NCS. What is the basis of this delegation? Can Mr. McNamara delegate these Executive Agent responsibilities to whomever he chooses? General STARBIRD. The wording in the directive from the President that was just given was that the Executive Agent would arrange, not that he should necessarily do the actual negotiating. I actually Mr. HORTON. Your statement says that he was authorized. It says he should proceed to conduct negotiations. General STARBIRD. That is Mr. Webb, not Mr. McNamara. Let me clarify my statement to you. Mr. HORTON. Perhaps I am asking the wrong question, but in your statement you said: By his letter of 5 October Mr. McNamara advised Mr. Webb, the NASA Administrator, that if in the NASA view the risks associated with the Comsat proposal were acceptable he I would assume you mean General STARBIRD. Mr. Webb. Mr. HORTON. Mr. Webb should proceed to conduct negotiations with Comsat acting as representative of the Executive Agent, NCS. Then you go on to say that on March 18 Mr. Webb advised Mr. McNamara on the status of the negotiations, with a detailed description of the basis for this information. The Executive Agent, NCS, informed Mr. Webb on May 16 that the proposal was acceptable, and that he might I assume you mean by "he" Mr. Webb General STARBIRD. Mr. Webb. Mr. HORTON. He might proceed with the execution of the several contracts involved. General STARBIRD. Yes; that is what I was trying to answer, sir. The directive from the President does not say to the Executive Agent that he will negotiate the contract. It uses the words, "that he will arrange the contract," and assure that the service is satisfactory to the NCS. At the time that decision was made to go ahead, there were discussions with NASA. There was also consideration given as to who should do the actual negotiating, and after considering it, I recommended that NASA do the negotiating. After all, the funds for the purpose and the laws that govern the procurement were laws applicable to NASA. It appeared to me that, subject to having decided that this was the way to go, the thing to do was to have Mr. Webb actually do the negotiating, and we did recommend that the wording go in there that he do so as a representative of the Executive Agent. Mr. HORTON. Well, what authority does Mr. McNamara have to appoint Mr. Webb as the representative of the Executive Agent, and then to permit him to execute the contract? This is a function, is it not, of the Executive Agent? General STARBIRD. No, I do not think it is. Mr. HORTON. Whose function is it? General STARBIRD. Mr. Horton, I feel that it was the Executive Agent's responsibility to review, to make sure that the contract should go ahead, but once that was reviewed and it was decided that it should go ahead, then the agency that was actually to carry out the contract and to furnish the funds was the one to do the actual negotiation with Comsat. Mr. HORTON. What is the limitation on anyone else in Government carrying out this responsibility? General STARBIRD. I think the Secretary could delegate it to another agency that wanted the service. Let us say the State Department wanted a circuit. Then the State Department would come to the Executive Agent. He would investigate it. If it was determined that that was the way to go, then he would delegate to the State Department the right to negotiate the detailed contract. Now, in the case of the DOD procurement, the Secretary did not act for the circuits in the Pacific in his Executive Agent hat. He delegated to me, as the Director of the Defense Communications System, the authority to negotiate the contract and told me to act as his representative for this purpose. Mr. HORTON. Is it your contention then that he has this authority by the so-called memorandum? General STARBIRD. It is my contention, Mr. Horton, that he has that authority, but before doing it we checked it with our General Counsel. Mr. HORTON. And he indicated that he did have this authority to designate General STARBIRD. They concurred in this. Mr. HORTON (Continuing). To designate any one of these agencies looking for this service to act as a representative and then to execute contracts? General STARBIRD. Right, sir. GUIDELINES FOR EXERCISE OF AUTHORITY Mr. HORTON. What is the control on that? Must they go back to the Executive Agent to report? In this case Mr. Webb did go back. But is there anything spelled out as to what the limits are? General STARBIRD. There is nothing spelled out as to the limits. But in this particular case, as you have just brought out, the Executive Agent did ask that he be informed of the costs and of the exact service to be rendered prior to the time the contract was executed. Mr. HORTON. Don't you think there ought to be some guidelines in this respect? Perhaps the question should not go to you, but to Mr. Horwitz because he acts as the Executive Agent. You are just the Manager; is that right? General STARBIRD. I am the Manager. Mr. HORWITZ. An assistant. We have never thought it was necessary to spell out the way we had adopted the procedure, and here this was the first instance, and it is a procedure that we intend to follow on any request that comes forward in which a request for consideration were to be given, and that normally it would be turned over to the people who have the service. Mr. HORTON. You say normally it would be, but this does necessarily follow? Mr. HORWITZ. No, because you have to consider the whole NCS system. For instance, the satellite is only one feature of the whole. NCS system. You might come up with a desire on the part of one of the constituent elements of the NCS system for additional cable lines, cable requirements. It may be that the decision would be in that case that while there needs to be additional cable, because of other agency involvements, that an agency other than the one that is making the request should do the work at that point and should be the procuring agency. In other words, sometimes the decision might be that it would be better to augment the Defense Communications Agency rather than the diplomatic system. This is the type of problem that is involved in the whole NCS. Now, this might be involved in the satellite system. Suppose that when the request for satellite comes up, suppose two of them come up. Let us say NASA came up with one, the Defense Department came up with one, and you wanted to consolidate them. Now, you would have to make a determination of which of the two should be the procuring party in this particular instance because Mr. HORTON. Why? Mr. HORWITZ. Because it might be for economy, it might be that by putting the two together Mr. HORTON. You won't have to make that decision. You could decide that each of them could operate separately. Mr. HORWITZ. You could decide that each of them operate separately, but the whole purpose of the NCS is to provide which is the best way to do it. Mr. HORTON. Precisely. And that is why I am wondering about this unlimited authority, so to speak, to permit different agencies to go out and conduct their own negotiation within a general framework, without any guidelines. Mr. HORWITZ. It is subject to final review by the Secretary. It comes back to him. Mr. HORTON. By what basis? Mr. HORWITZ. Because his very request to Mr. Webb was that when he finished his negotiation Mr. HORTON. But suppose he does not make that request? There is no guideline for that." Mr. HORWITZ. I think he has to make that request in light of the responsibilities that have been placed on him by the President. Mr. HORTON. You may think that, but it does not necessarily follow that everyone is going to do it. They may wake up one morning and learn that it is no longer required. Mr. HORWITZ. Mr. Horton, I would be glad Mr. HORTON. This is why I feel that perhaps someone should set down guidelines on this type of procedure, when authority is delegated. There should be a requirement that the proposal be submitted back to the Executive Agent and those who are acting under his authority should not be permitted to negotiate and execute a contract. Mr. HORWITZ. As a matter of fact, I think what you are suggesting is an excellent suggestion, and one of the first things I shall do now is develop an Executive Agent instruction for how these things will be handled in the future, that is, spelling it out as a procedure. Mr. HORTON. I think that would be very helpful, especially in con nection with the overall mission of this Mr. HORWITZ. Yes. Mr. HORTON (Continuing). NCS. Mr. HORWITZ. Yes. I think this is an excellent suggestion, Mr. Horton. Mr. HORTON. As I understand it now, these people acting under authority of the Executive Agent can be dealing with Comsat, dealing with other carriers or any number of people. They might very well go on their own, and if they execute a contract, the Government will find it difficult to say that this was done without authority, unless you have some guideline that puts a limit on it. Mr. HORWITZ. As I say, I think it is an excellent suggestion, and this is an early task that I shall undertake to see that we can put this into a procedural framework. Mr. ROBACK. On that particular point, Mr. Horton, the point is well taken, it seems, because by this instruction Mr. Webb was acting as the representative of Secretary McNamara in procuring services for his own agency; and interestingly enough Mr. Webb, under the Communications Satellite Act, is obligated to consult, cooperate with the Comsat Corp. on technical matters. So, in effect, Mr. Webb had to get a technical OK from Secretary McNamara even though under the Comsat Act he has a direct channel of communication. The arrangement is a little bit on the crazy quilt side. Mr. RANDALL. It occurs to me, unless I fail to follow this carefully, Mr. Webb had to get permission to speak to himself, in other words, almost. Mr. HORWITZ. Well, hardly. One is giving technical advice to the corporation, and the other is entering into a contract with them, and I think these are entirely different things. Mr. RANDALL. Mr. Roback, a little later here, in a little bit, when you get a break, I would like to get some kind of table of organization down here as to the different hats that are worn by this Director of Telecommunications Management, and maybe we can come back to it, but go ahead. You go ahead with your questions at this point. Mr. ROBACK. I may say we will have the Director in the course of these hearings. Mr. RANDALL. Fine. Mr. HORWITZ. He might be better to ask; it might be better to ask him that. Mr. HORTON. It might be well to point out that Mr. Horwitz yesterday fairly well spelled out that the Director of Telecommunications |