This has made us somewhat unhappy, and we should not, as you and the chairman have indicated, be in the position of not being able to expeditiously insist that this be done. Yet we have been very careful not to lay down an iron rule and say, "Two weeks from now we must have that task order or else we do away with the contract." This would not have been in the Government's interest.

In each of the cases where difficulties have occurred they have been overcome in the new contract. It requires the task orders be established, that the cost be estimated, that the reports show precisely what work has been done under each task order. Then both JPL and we will know how much of the effort is going into each of these

areas.

These are some of the kind of things that are involved.

Mr. GURNEY. Is the task order approach a similar approach to that you use with other prime contractors?

Mr. WEBB. In essence, I believe that is true. It is a somewhat different procedure, but nonetheless the principle underlying it is not much different. We use work orders with them.

Dr. SEAMANS. We have a wide variety of work going on at JPL, work coming not only out of the Space Sciences Office, but also from our Tracking and Data Acquisition Office, and Advanced Research and Technology Office, and we have to have a clear definition of each one of the assignments that we are giving JPL. We want to have our financial reporting against these assignments. We have not had as complete financial reporting in the past as we would have liked. This is one of the things we are working out in the course of this negotiation. Mr. GURNEY. That certainly sounds good.

Then would it be fair to say, again back to my question, in the new contract your future relationship, as far as supervisory authority is concerned, over a program like Ranger is going to be similar to that which you have with prime contractors?

We now

Mr. WEBB. Mr. Gurney, it will be similar in some ways, certainly, but we do not go to a prime contractor and say, "Fire your general manager and hire another one." We judge his performance by how he does, and how it fits in with the accomplishment of the work. What we are saying with CIT is that it isn't any good to go along without a clear meeting of the minds, so we negotiated one. have a signed agreement. But we also want to be very sure that that signed agreement means the same thing to them and to us, and that the actions they will take under the agreement will be those that we will find acceptable. We have simply said to them, "Go ahead and implement this, and we will judge by how you implement it whether you fully understand all that is important to us, and you judge NASA as to how we implement it on the basis of whether we understand what is important to you."

You see, California Institute of Technology doesn't have to undertake this responsibility. They are doing it as a great public service as well as because they believe it will increase the effectiveness of their institution and provide a closer interface between these advanced technologies and their institution.

Mr. GURNEY. Well, I understand that, and I don't like to be stubborn about this, but I still am not really sure.

Mr. WEBB. Would you like me to go to the contract? I have it here. Mr. GURNEY. No. In fact, I think really the question I asked was not difficult to answer. If you are going to take a sailboat out on Chesapeake Bay, essentially you sail the boat pretty much the same no matter how you sail it. One sailor may take one tack, another another one, or maybe he will trim sail, but if he is a sailor he will sail the boat in pretty much the same way. All I am asking is, in your future relations under this contract with JPL, essentially are you going to exercise the same supervisory authority as you do with prime contractors? I realize the words in the contract may be a little different and you may not have exactly the same periods and exclamation points, but I do think the question is a reasonable one, and I think honestly could be answered yes or no.

Mr. WEBB. Well, I think I would answer by saying that with respect to hardware development, the deep space network, the research and development leading to these, and their subcontractors, it is substantially the same; but with respect to certain other areas it is not precisely the same.

Mr. GURNEY. Well, that is what I really wanted to know, and I think that is really what the committee is looking for, too.

One other thing. In this new relationship, if you want to call it that, this does represent a considerable departure from the relationship you had before, at least in the projects that we are speaking about like Ranger?

Mr. WEBB. Yes.

Mr. GURNEY. Thank you.

Mr. WEBB. And in the language of the contract, which makes it easier, I think, to accomplish these things.

Mr. KARTH. Mr. Webb, one more question, and then I think we will allow you to continue with your prepared text.

On several occasions you mentioned difficulties--some difficulties you had with JPL in arriving at decisions.

I wonder if for the benefit of this committee you might list those difficulties? You need not do it now if you don't have them clearly in mind, and I can appreciate the thought that you might not, but if you could list those difficulties for the record that you have had in the last 2 or 3 years, I think it might be extremely helpful.

Sometimes when you focus public attention on problem areas, it has a very peculiar way of correcting the difficulty or problem areas, and I think maybe in this instance it might be helpful.

Mr. WEBB. Mr. Chairman, would you permit me to discuss this more or less informally with you rather than having an absolute requirement to list all difficulties, since this presents quite a problem. Maybe you want some illustrative ones, and I would like to point outMr. KARTH. I didn't know there were that many.

Mr. WEBB. Well, in a big matter like this, yes sir, there are lots of difficulties, but the difficulties focus on a small area of the relationship, whereas the accomplishments and tremendous benefits can easily be lost to sight with a list of difficulties, and this is what I am very much concerned about.

Mr. KARTH. Why don't we leave it this way. You use your own good judgment in listing for the committee the difficulties that you consider to be major and might contribute in any shape, manner or

form to the problems you have had with Project Ranger or might have in future programs that have not necessarily shown up in other areas. Mr. WEBB. I would like to make this one comment. All through the problem of building relationships with an organization like Dr. von Braun's at Huntsville, or creating a new center like Houston, or a relatively new center like Goddard, we have tried very hard to develop means by which we constantly progressed.

Now, one of the means has been to develop a top management examination of areas of difficulty. We expect those top management examinations to be tough, to be realistic, and we do not expect them to be in full perspective with respect to all of the work of the center; we expect them to be in perspective with the next problems that we have got to solve.

Now, I think down the line, both in NASA and in JPL, could easily take offense at my statement of what might be called a difficulty. I would like to mention a simple fact; a question which I raised with Dr. duBridge as to whether we should have an incentive fee for the operation of JPL. This caused them very grave concern, you might almost say an overreaction, about a Government agency that would even think of such a thing. I am exaggerating slightly here.

However, when I pointed out that the purpose I had in mind was to identify the specific problems related to what would be acceptable to us and what would be acceptable to them, and how they should be rewarded for outstanding work, that what I had in mind was not necessarily to end up with an incentive fee but rather a process by which we identified everything that might relate to an incentive fee, when that became clear, much of the difficulty involved in even making the suggestion disappeared.

It is very easy to have people down the line take offense at a suggestion such as an incentive fee for a university. Also, no listing of difficulties can relate those difficulties to the good work that has been done. We have tried very hard, Dr. Dryden, Dr. Seamans and I, to avoid emotional reactions and to concentrate on the solution of the difficulties rather than to maximize them. I am very much afraid if we get too much attention on difficulties we are going to have a defensive attitude that is not going to be in accord with where we are clearly moving now-that is, toward a very strong, vigorous relationship that a year from now will make people forget the difficulties and think about the accomplishments.

I just want to point out that we do have that very real problem. Mr. KARTH. Well, if you would use your own judgment, Mr. Webb, so as not to impair whatever better relationships have evolved as a result of closer liaison with JPL and Cal Tech organizations, I think it would be helpful to the committee.

(The information requested is as follows:)

At the outset, it must be noted that the difficulties that have occurred in establishing and maintaining a fruitful NASA/CIT relationship cannot be said to have contributed directly to the technical problems of the Ranger project. These technical problems, as have been clearly brought out in the testimony, are the result of the inherent difficulties of the mission, the actual state of the technology available for application to the mission, and component reliability factors. Any scientific and engineering project of the magnitude of Ranger has encountered, and will always encounter, these kinds of problems.

The NASA/CIT relationship is being developed to permit the most effective marshaling of the creative resources of the university and the Laboratry for application to the national space program. There have been difficulties in the evolution of this relationship. Many have been minor; others have paralleled NASA's experience with its own centers. Still others are the normal result of any contractual interface between the Government and the private sectors. There are a few which are peculiar to the NASA/CIT area of interest. As has been noted, the single most important of these has been the principle of mutuality in its contractual form and the exercise of that principle in the administrative conduct of the Government's business. So strong was the CIT/JPL adherence to the concept of mutuality that NASA needs in such areas as accounting, reporting, program planning, manpower utilization, project organization, property control, and subcontract selection and award procedures were not readily met. In each case, difficult and extensive discussions and negotiations were necessary before the Laboratory came to understand the nature and urgency of the NASA requirements. It was in these areas that initial responsiveness was considered slow. We are proud to state that in the last 18 months great progress has been made in these areas in advance of the institution of our new contractual instrument which eliminates mutuality as a controlling factor.

A second area of management difficulty that has arisen with CIT and NASA has been the role of CIT itself as the manager, not only of the Jet Propulsion Laboratory as an instrument of the space program, but also of a broadgage, multiuniversity space-oriented research effort. CIT did not at first accept easily the dual role of laboratory manager under normal business administration control procedures while still feeling capable of maintaining its unique university strength. NASA has felt that administrative management of the Laboratory was slighted in favor of the campus method of operations. Again, over the last several months, the dedication and interest of the top management of the Institute has grown to the point where we both feel confident that a long-term relationship highly satisfactory to both parties will be established.

These two areas of difficulty have, we feel, been highlighted during our recent discussions and negotiations. It is these two areas which we will scrutinize carefully during the next several months prior to finally committing ourselves to the new contract. If the promise of the current situation comes fully to fruition as we expect, it appears that a real innovation in the management of governmental research and development actions will have been proven successful. Mr. RIEHLMAN. Mr. Chairman.

Mr. KARTH. Mr. Riehlman.

Mr. RIEHLMAN. Before we leave the points that have been discussed here, particularly Mr. Gurney's interest in the different contractual relationships between JPL and private contractors, I know the Administrator has endeavored to give us some pretty clear ideas of what he hopes to accomplish in the new contract that is being drawn up, as I understand it, at this time.

I wonder, for the committee's edification, Mr. Chairman, when this is completed, if we should not have a clear idea of the difference in writing between the type of contract that you are going to enter into or hope to enter into with JPL and that with the private contractors, and spell it out a little more clearly than we have had been this morning.

Mr. WEBB. We would be glad to do that.

Mr. RIEHLMAN. I think that would give us better insight. Mr. WEBB. We have supplied the committee's staff with the contract we have under negotiation, Mr. Riehlman, so they do know what is in the contract; but we would be glad to identify those differences.

Mr. KARTH. If the gentleman would yield, I wonder if you could also then identify the differences between the existing agreement and the agreement that you anticipate signing in the near future.

Mr. WEBB. If you will give me a little leeway there, also, to identify those that are most important rather than every change, because this is very difficult in these long documents with boilerplate appendixes. Mr. KARTH. Yes, I understand-these areas that you consider to be a major roadblocks.

BASIC DIFFERENCES BETWEEN THE PRESENT NASA/CIT CONTRACT FOR THE OPERATION OF JPL AND THE PROPOSED NEW CONTRACT TO BE IMPLEMENTED SHORTLY

BASIC DIFFERENCES BETWEEN THE PENDING NASA/CIT CONTRACT AND NASA/ INDUSTRY CONTRACTS

1. Scope

The NASA/CIT contract calls for the best efforts of CIT/JPL in carrying out a broad program of research, development, and space flight activity, the details of which are unilaterally defined by NASA in the specific task orders.

A NASA/industry contract is normally at the level of a NASA/CIT task, in that it deals with a specific project or research task with a funding, manpower, performance and delivery schedule specified in negotiation.

2. Contract type

The NASA/CIT contract is a management contract for operation of the Jet Propulsion Laboratory and direct and indirect costs charged to the Government are solely the result of Government actions taken through the unilateral task orders. The fee structure permits the Government to reward or penalize CIT for its management performance.

NASA/industry contracts of the cost type do not permit unilateral action on the Government's part as does the NASA/CIT instrument, in that change orders must be negotiated. Costs are under the contractor's control rather than NASA's; incentives are therefore higher than with CIT.

3. Property

The NASA/CIT contract relationship includes the construction, operation, and management of a wholly Government owned plant. As such, CIT is the Government's agent rather than its own. Government ownership extends to all property involved with JPL, including tools and office supplies. CIT there fore has total custodial responsibility but no investment responsibility. With industry, the contractor is expected to provide his own facilities and tools; in cases where additional specialized facilities are required, the Govern ment funds these as an element of the contract and retains title thereto.

4. Personnel

The NASA/CIT contract imposes a specific ceiling on personnel, and controls the application of that ceiling to the individual tasks being undertaken. A NASA/industry contract is normally directed toward performance goals and does not give the Government detailed control over the individuals being