Contracting for the Command Module

The attention devoted to guidance and navigation did not halt preparations for a contract on the command module. Data from the feasibility studies and from Space Task Group's in-house work were used to prepare a statement of work, detailing the contractor's responsibilities and the scope of his obligations in designing, building, and testing the spacecraft.23

Project Apollo would have three phases: earth-orbital, circumlunar and lunar-orbital, and lunar landing. The prime spacecraft contractor would develop and build the command module, service propulsion module, adapter (to fit the spacecraft to a space laboratory for earth-orbital flights and to the lunar landing propulsion section for lunar missions), and ground support equipment. Although the prime spacecraft contractor would not build the lunar landing module, he would integrate that system into the complete spacecraft stack and ensure compatibility of the spacecraft with the launch vehicle.24

Just before leaving NASA early in 1961, Administrator Keith Glennan had revised the procedures for the establishment and operation of source evaluation boards. For any NASA contract expected to exceed $1 million, all proposals would have to be evaluated by such a board; for any contract that might cost over $5 million, all proposals would be judged by a special source evaluation board appointed by the Associate Administrator. The board's findings would then be passed to the Administrator himself for final selection. On 28 July 1961, Seamans approved the overall plan for Apollo spacecraft procurement, appointed the source evaluation board members, and delegated authority for establishing assessment teams to assist the board. Then the Space Task Group issued its request for proposal to 14 aerospace Companies.* 25

Working arrangements for the development contract followed very closely those evolved for the feasibility studies. The deadline for the submission of proposals was set for 9 October 1961, giving prospective bidders more than ten weeks to work out their proposals. A conference was held on 14 August so NASA could explain the guidelines for the contract in detail. Almost 400 questions were asked at the meeting and answered; the answers were recorded and distributed. Seamans then appointed an 11-man Source Evaluation Board, headed by Faget and including one nonvoting member from Headquarters (James T. Koppenhaver, a reliability expert). The board consisted of six voting members from the Space Task Group (Robert Piland, Wesley Hjornevik, Kenneth S. Kleinknecht, Charles W. Mathews, James A. Chamberlin, and Dave W. Lang), one from Marshall (Oswald H. Lange), and two from Headquarters (George Low and Albert A. Clagett). Faget's board directed the technical assessment teams and a business subcommittee to work out and submit a numerical scoring system for comparative analyses of the proposals.26

On 9 October 1961, five hopeful giants** of the aerospace industry brought their proposals to the Chamberlain Hotel, Old Point Comfort, Virginia. During the first two days of a three-day meeting, these documents were distributed among the members of the NASA assessment teams. The massive technical proposals, separated from those on business management and cost, were scrutinized and evaluated by more than a hundred specialists. Each group of bidders was then called in on the third day to make an oral presentation and answer questions. Gilruth persistently asked the proposal leaders, "What single problem do your people identify as the most difficult task in getting man to the moon?"27 The industrialists' answers to this question generally stressed the balance between performance, cost, and schedule controls for so complex an undertaking.

Several weeks of intensive study followed, as the assessment teams made their rankings of the proposals. Submitted on 24 November 1961, the report of the Source Evaluation Board summarized the scoring by the assessors and evaluators:

SEB Ratings of Apollo Spacecraft Proposals by Major Area

   (Marks out of 10)           Technical  Technical
                               Approach   Qualification  Business
                               (30%)        (30%)        (40%)

Martin Co.                     5.58         6.63         8.09

General Dynamics Astronautics  5.27         5.35         8.52

North American Aviation        5.09         6.66         7.59

General Electric Co.           5.16         5.60         7.99

McDonnell Aircraft Corp.       5.53         5.67         7.62

This step led to a summary rating, with Martin scoring 6.9, General Dynamics tied with North American at 6.6, and General Electric matched with McDonnell at 6.4 for final grades. The board was unequivocal in its final recommendation:

The Martin Company is considered the outstanding source for the Apollo prime contractor. Martin not only rated first in Technical Approach, a very close second in Technical Qualification, and second in Business Management, but also stood up well under further scrutiny of the board.

If Martin were not selected, however, the board suggested North American as the most desirable alternative.

North American Aviation [NAA] . . . rated highest of all proposers in the major area of Technical Qualifications. North American's pertinent experience consisting of the X-15, Navajo, and Hound Dog coupled with an outstanding performance in the development of manned aircraft (F-100 and F-86) resulted in it[s] being the highest rated in this area. The lead personnel proposed showed a strong background in development projects and were judged to be the best of any proposed. Like Martin, NAA proposed a project managed by a single prime contractor with subsystems obtained by subcontracting, which also had the good features described for the Martin proposal. Their project organization, however, did not enjoy quite as strong a position within the corporate structure as Martin's did. The high Technical Qualification rating resulting from these features of the proposal was therefore high enough to give North American a rating of second in the total Technical Evaluation although its detailed Technical Approach was assessed as the weakest submitted. This relative weakness might be attributed to the advantage of the McDonnell Aircraft Corporation's Mercury experience, and the other three proposers' experience on the Apollo study contracts. The Source Evaluation Board is convinced that NAA is well qualified to carry out the assignment of Apollo prime contractor and that the shortcomings in its proposal could be rectified through further design effort on their part. North American submitted a low cost estimate which, however, contained a number of discrepancies. North American's cost history was evaluated as the best.28

Word leaked out prematurely to Martin that it had scored highest in the evaluations. After two years of planning and five weeks of waiting, the Martin employees were informed over the public address system on 27 November 1961 that they had won the contest to build the moonship. The next day they learned the truth.29

North American won the spacecraft development sweepstakes. Webb, Dryden, and Seamans apparently chose the company with the longest record of close association with NACA-NASA and the most straightforward advance into space flight. The decision would have to be defended before Congress and would be the cause of some anguish later.30 When it was announced on 28 November, shouts of joy rang through the plant at Downey, California, as John W. Paup broke the news over the "squawk box."31

During December 1961, Space Task Group (renamed Manned Spacecraft Center on 1 November) and North American program directors and engineers met in Williamsburg, Virginia, to lay the technical groundwork for the spacecraft development program and begin contract negotiations.32 The spacecraft portion of Apollo had entered the hardware phase, although the launch vehicle (or vehicles) and the lunar lander had not.

* The 14 firms were Boeing, Chance Vought, Douglas, Astronautics Division of General Dynamics, General Electric, Goodyear Aircraft, Grumman, Lockheed Missiles & Space Company, Martin, McDonnell, North American, Radio Corporation of America, Republic Aviation, and Space Technology Laboratories (STL).

** General Dynamics Astronautics with Avco; General Electric, with Douglas, Grumman, and STL; McDonnell, with Lockheed Aircraft, Hughes Aircraft, and Chance Vought; Martin; and North American.

23. [Robert O. Piland], "Apollo Spacecraft Chronology," n.d., [pp. 9-10].

24. STG, "Project Apollo Spacecraft Development, Statement of Work, Phase A," 28 July 1961, pp. I-1 through I-3, III-2; [Disher], "Preliminary Project Development Plan for Project Apollo Spacecraft," 9 Aug. 1961, pp. 19-20.

25. NASA, "Establishment of Source Evaluation Boards," General Management Instruction 2-4-3, 1 Feb. 1961; NASA, "Project Apollo Spacecraft Procurement Plan," n.d., approved by Seamans, 28 July 1961, with encs.; Bailey to PneumoDynamics Corp., Attn.: G. W. Rice, 3 Aug. 1961.

26. Seamans to STG, Attn.: Gilruth, "Appointment of Source Evaluation Board," 7 July 1961 (signed by Seamans, 28 July 1961); Gilruth, memo for staff, "Pre-proposal Briefing Attendance List," 7 Aug. 1961; agenda, Pre-proposal Conference, Project Apollo Spacecraft, 14 and 15 Aug. 1961; Johnson to Allen L. Grandfield et al., "NASA written response to questions submitted by prospective Contractors on REP 9-150," 15 Aug. 1961; NASA, "Project Apollo RFP No. 9-150: Technical Evaluation of Contractors Proposals," 9 Oct. 1961; Seamans to STG, "Redesignation of Source Evaluation Board Members," 2 Nov. 1961; NASA/MSC, "Source Evaluation Board Report: Apollo Spacecraft," NASA RFP 9-150, 24 Nov. 1961.

27. NASA/MSC, "Source Evaluation Board Report," pp. 7-10, 13, 14; John W. Paup, interview, Downey, Calif., 7 June 1966.

28. NASA/MSC, "Source Evaluation Board Report," pp. 10, 13, 14.

29. William B. Bergen, interview, El Segundo, Calif., 21 June 1971; E. E. Clark and John DeNike, interviews, Seal Beach, Calif., 24 June 1971; John P. Healey, interviews, Downey, 16 and 21 July 1970.

30. North American news release, 28 Nov. 1961; "Apollo Contract Is Awarded to North American Aviation," MSC Space News Roundup, 13 Dec. 1961; NASA, "Apollo Contractor Selected," news release 61-263, 28 Nov. 1961; Seamans memo for file, "The selection of North American Aviation, Inc. as the prime contractor for the command and service module," 9 June 1967.

31. Paup interview; Harrison A. Storms, Jr., interview, El Segundo, 16 July 1970.

32. Minutes of Technical Panel Meetings for negotiation of spacecraft development, 12-15 Dec. 1961.