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DESTINATION MOON: A History of the
Lunar Orbiter Program
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- CHAPTER V: IMPLEMENTING THE
PROGRAM
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- Boeing Negotiations with
Subcontractors
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- [105] Boeing
satisfactorily completed technical negotiations with the Eastman
Kodak Company by September 14, but cost negotiations became
protracted. Eastman Kodak submitted a proposal of $27.1 million to
Boeing, and this was substantially higher than the Boeing estimate
of $19.3 million.14 By October 6 the Langley Project Office realized
that cost overruns for the spacecraft would be in the areas of
procurement and the major subcontracts. Boeing resumed
negotiations with Eastman and completed them by October 28. The
Eastman contract would cost $22.4 million, which was still higher
than the original Boeing estimate.15 This meant that Boeing had already overrun the
original contract by approximately $11.91 million: $3.07 million
for procurement, $3.3 million difference [106] between budgeted
and negotiated costs of the Eastman Kodak contract, and an
estimated $5.64 million between budgeted and proposed costs for
the RCA contract.16
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- Although negotiations with RCA originally
were to run simultaneously with Eastman Kodak contract talks, they
were delayed until Boeing had finished with Eastman. Scheduled for
late November, the RCA talks were pushed back to December, when
Boeing and RCA finally began cost negotiations. By December 9 RCA
had offered Boeing a proposal for the communications subsystem
with a total cost of $20.795 million for the spacecraft equipment
and $5.329 million for the ground equipment. The cost was $8.4
million over the original Boeing estimate of $17.726
million.17 Boeing did not complete cost negotiations with RCA
until January 15, 1965, and the final cost figure was $22.6
million, substantially higher than the $17.7 million Boeing
estimate.18 These subcontracts brought the total cost of the
Boeing contract to approximately $94.8 million by February 8,
1965. Of this, $4.0 million was for authorized changes and $10.3
million for estimated overruns.19
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