Comsat cost estimates for providing the communications services I described to you. Secretary Horwitz sent such a letter to the Comsat Corp. on the same day. On August 26, 1965, the corporation submitted a proposal for providing the service over a 10-year period. The Comsat proposal called for the launching of a satellite over the Pacific, and one over the Atlantic, and Comsat's arranging for the necessary ground stations. The Navy was to install terminals on the three ships. (c) In connection with consideration of the Comsat proposal, I, as Manager of the NCS, prepared analyses of alternate means of possibly fulfilling the requirement. Two means were considered-use of the IDCSP, or use of cable and high frequently radio. However, after extensive coordination, it was determined by NASA that neither of these would adequately fulfill NASA's requirements. (d) On September 30, NASA indicated in a letter to the NCS that NASA proposed to enter into negotiations with Comsat for the provision of the desired services, if the Executive Agent, NCS, has no objections. By his letter of October 5, Mr. McNamara advised Mr. Webb, the NASA Administrator, that if, in the NASA view, the risks associated with the Comsat proposal were acceptable, he should proceed to conduct negotiations with Comsat, acting as representative of the Executive Agent, NCS. On March 18, Mr. Webb advised Secretary McNamara of the status of the negotiations, with a detailed description of the total services to be provided and the estimated costs of these services. On the basis of this information, the Executive Agent, NCS, informed Mr. Webb on May 16 that the proposals were acceptable and that he might proceed with the execution of the several contracts involved. The NASA contract with the Comsat Corp. was signed on July 5, 1966. (e) In summary, the contract between NASA and Comsat has been finalized. It calls for the provision of the required circuitry to NASA beginning October 1, 1966, and for 3 years thereafter at an annual cost of approximately $9 million, subject, of course, to the establishment and approval of the necessary FCC tariff. Contracts with the three foreign entities are in the final stages of negotiations at the present time. PACIFIC CIRCUITS In the late fall of 1965, a second significant requirement for early satellite communications service arose. The requirement was for cir cuits to the southeast Asia peninsula, to the Philippines, and to Japan in support of our increased activities on the southeast Asia mainland Specifically, this is the situation we found ourselves in. Our com munications in support of the southeast Asia operation generally fol low a single cable across the Pacific backed up by high frequency radio The latter is lacking in desired quality and reliability. We knew naturally, of the satellite being put up which would include capacity for Apollo support over the mid-Pacific, and knew it had certain capacity beyond that required for Apollo. This, then, offered us a way of getting a reliable backup for the somewhat vulnerable cable (a) In December 1965, DCA worked out a plan with CINCPAC and southeast Asia commanders for providing this satellite backup In this plan the desirable arrangements would be 10 circuits-thes are voice circuits or their equivalent-to Bangkok, 10 to the Philip pines, and 10 to Japan. From these locations the circuits could connect with other points of major interest. This plan was approved by the Joint Chiefs of Staff and was authorized by the Secretary of Defense. By a letter dated January 21, 1966, I was directed to proceed immediately to conduct negotiations with the Communications Satellite Corp. (b) We had earlier initiated discussions with the Communications. Satellite Corp. as to the technical feasibility for meeting the requirement. We were advised in the middle of April that the requirement could be technically met. (c) It is our normal policy in arranging for communications service to contract with commercial carriers where the service they can provide is satisfactory to our purpose and reasonably costed. Considering the fact that we intended to use the IDCSP and high-frequency radio for minimum "unique and vital" backup circuitry, additional circuits from the Comsat Corp. or other carrier via satellite were judged adequate to meet our needs. It is also our policy when requesting service that can be provided by the common carriers that we ask for proposals from all authorized carriers and award to the carrier proposal offering greatest advantage to the Government. If all proposals appear equal, we follow an apportionment policy which seeks to equalize the revenues received from the DOD among the various carriers. (d) Pursuant to this policy, on May 2 we requested proposals for the service from the Comsat Corp., Western Union International, ITT World Communications, RCA Communications, and the Hawaiian Telephone Co. We asked that the carriers quote costs, a technical description of the method proposed for satisfying the requirement for end-to-end service, the ability to meet service dates, and the specified quality and reliability for up to 10 circuits each from Hawaii to Japan,. Hawaii to the Philippines, and Hawaii to Thailand. Additionally, we required the carriers to indicate any arrangements they had made or proposed to make as DOD's agent in all matters related to the provisioning of service. We asked that the service be available April 1, 1967, if possible, and if this date could not be met, then the earliest possible later date. (e) On May 31, 1966, proposals were received from all five carriers, and that from Comsat appeared much cheaper than the proposal from any other responsive bidder. In addition, Comsat indicated that it had negotiated agreements with the operating entities of all three nations and that these agreements had been signed by two. The other carriers did not show similar assurance. Again following our procedures we notified responsive bidders who were high that they were high and gave them the opportunity of submitting a new proposal. Only RCAC took advantage of this opportunity. Its new proposal was judged by me to be of lesser advantage to the Government than that of Comsat. Therefore, on July 1, 1966, I informed all carriers that negotiations were being placed underway with Comsat for a definitive contract to provide the service. We have proceeded to finalize a contract which was signed on July 26, 1966. (f) Under this contract we expect service to Bangkok and to the Philippines on April 1, 1967 and to Japan about July 1, 1967. These circuits when provided will be an early and important backup for our overall communications in support of southeast Asia. The above provides a summarization of where we stand with regard to meeting operational requirements for communications satellite service in the NCS and in the Department of Defense. There is one question in your letter of August 5 that I have not yet answered and that concerns our relationships in the NCS and DCS to the Director of Telecommunications Management. I would like to elaborate on this. By the Presidential directive of August 21, 1963, which established the NCS, the Director of Telecommunications Management was also made Special Assistant to the President for Telecommunications. In this regard he was given certain responsibilities including one which reads: Assist the President with respect to his coordinating and other functions under the Communications Satellite Act of 1962 as may be specified by Executive order or otherwise. Pursuant to Executive Order 11191, the Director of Telecommunications Management was given the responsibility to generally advise and assist the President in connection with the functions conferred upon the President by the provision of section 201 (a) of the Act. Specifically, the Director, among other things, was made responsible for coordinating the activities of governmental agencies with responsi bilities in the field of telecommunications so as to insure there is full and effective compliance at all times with the policies set forth in the act. Naturally, therefore, we have coordinated closely with the Director of Telecommunications Management in our approaches to the Communications Satellite Corp. for service. We informed and discussed with him the action that we were taking with regard to meeting the NASA Apollo requirements. In connection with the procurement of service for defense use in the Pacific, a question arose as to whether the DOD should negotiate directly with Comsat Corp. or contract through the commercial carriers. Again, we consulted with the Director of Telecommunications Management prior to requesting proposals and on our decision to award to Comsat. I should state that our relationship is one of coordinating to insure that any actions we take are not in conflict with any executive policy. Naturally, responsibility for the contract and for determination of what proposal is most beneficial to the Government must rest with the contracting officer. Thank you very much, Mr. Chairman. Mr. HOLIFIELD. Thank you, General Starbird. At this time, why, we will ask the witnesses to come back tomorrow morning to this room at 10 a.m., and we will adjourn this meeting. Thank you very much. (Whereupon, at 12:30 p.m., the committee was in recess, to reconvene on Tuesday, August 16, 1966, at 10 a.m.) GOVERNMENT USE OF SATELLITE COMMUNICATIONS TUESDAY, AUGUST 16, 1966 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MILITARY OPERATIONS OF THE COMMITTEE ON GOVERNMENT OPERATIONS, Washington, D.C. The subcommittee met, pursuant to adjournment, at 10 a.m., in room 2247, Rayburn Office Building, Hon. William J. Randall (acting chairman) presiding. Present: Representatives Chet Holifield, William J. Randall, Fernand J. St Germain, Frank Horton, and William L. Dickinson. Also present: Herbert Roback, staff administrator; Douglas G. Dahlin, counsel; and J. P. Carlson, minority staff. Mr. RANDALL. The Subcommittee on Military Operations will come to order. I think perhaps, a word of explanation should be in order. The situation this morning demonstrates some of the unexpected happenings that occur here. Chairman Holifield of California is in attendance at a funeral, and the senior ranking member is on his way in, and may be here, and so we were asked to chair the opening of the hearing. I simply want to state that this is a continuation of the hearings which were commenced last year at which some of you may have been in attendance. I talked to the chairman this morning very briefly, and I put it this way. I said: "Mr. Chairman, what are we trying to prove by these hearings?" His answer was, "Nothing. We have no preconceived ideas; we have no position; we are simply going to try to explore the whole problem." I was just conferring here with our chief of our staff and I said, "I don't think we should describe this as an investigation because it is not that. We should instead describe it as an exploration or an examination of some of the problems in connection with communication satellites." I know you have all read with interest some of the things that have been happening in this field or else have been familiar or are familiar, as expressed by your interest here this morning, with what happened last year. It is my understanding that the chairman had planned this morning to start with an examination of procurement from Comsat in certain areas. With that preliminary observation, it is a privilege to welcome the Honorable Solis Horwitz, who is the Assistant Secretary of Defense for Administration. As you know, the Secretary of Defense is the Executive Agent of the National Communications System. I want to emphasize again that I am sure I am speaking for the chairman and all the members of the committee when I say that this subcommittee simply wants to engage in what we hope will be an objective exploration and, to use the old expression, dig into it and just let the chips fall where they may; to try to get the facts, in other words. With that, Mr. Secretary, it is a pleasure for us to have you We know you are going to give us some important testimony, and we know your appearance will be fruitful and productive. Proceed, sir. STATEMENT OF HON. SOLIS HORWITZ, ASSISTANT SECRETARY OF Mr. HORWITZ. I read my statement yesterday morning. Mr. HORWITZ. Right. Mr. RANDALL. I will have to confess that your prepared statemen was on my desk, but with a few other problems, including several roll call votes, I did not get around to covering it. At this time, I will yield to the gentleman from Alabama if he ha any questions. Mr. DICKINSON. Yes, I had a number of questions. Possibly, in order to get these in the correct perspective, though maybe we should let counsel proceed. I think you had an area o inquiry that you intended to develop, so I think possibly it would b best if I let counsel go ahead, and then I will ask any questions tha he has not covered. Mr. RANDALL. Thank you very much. I always yield to our col leagues first. Mr. Roback. FUNCTIONS OF DIRECTOR OF TELECOMMUNICATIONS MANAGEMENT Mr. ROBACK. Mr. Horwitz, in your statement you summarize th functions of the Director of Telecommunications Management. Mr. HORWITZ, Yes. Mr. ROBACK. And, in essence, you said that he gives policy dire tion and advises the President. Do you have any observations regarding his present position, whic makes him both a direct agent of the President and a subordinat agent of the Director of Emergency Planning? Mr. HORWITZ. I think this puts him in a very difficult position, M Roback. It is very difficult for a man both to be in a position wher |