SECOND THOUGHTS

Events took an unexpected twist on the afternoon of 23 August 1955 when the North American representative in Dayton verbally informed the WADC Project Office that his company wished to withdraw its proposal. Captain McCollough notified Hartley Soule, Air Force Headquarters, and BuAer of this decision, touching off a series of discussions concerning future actions. Within a week the Air Force asked North American to reconsider its decision. The Air Materiel Command recommended that Douglas be declared the winner if North American did not reconsider. The Research Airplane Committee, however, cautioned that the Douglas design would require considerable modification before it satisfied Air Force and NACA requirements. On 30 August, North American sent a letter to the Air Force formally withdrawing its proposal because sufficient resources were not available to complete the X-15 program within the 30-month schedule.-1159!

On 1 September Hugh Dryden informed Soule that he and General Kelsey had decided to continue the procurement, pending receipt of official notification from North American. The letter arrived sometime later in the week, and on 7 September, Soule contacted Dryden and recommended that the Research Airplane Committee consider the second-place bidder. Dryden responded that he wanted to reopen the competition rather than award the contract to Douglas.

Despite North American’s request to withdraw, the procurement process continued. A presentation to the Defense Air Technical Advisory Panel on 14 September presented the selection of North American for formal approval. Naturally, the Air Force recommended approval, but the Army representative to the panel flatly opposed the project if it required more Department of Defense funds than previously discussed. This prompted the Air Force to reduce project costs below earlier estimates. The panel was also concerned that the program could not be completed in 30 months, and concurred with the earlier Research Airplane Committee recommendation that the schedule be relaxed.1160!

By 21 September the Department of Defense had approved the selection of North American, with a caveat: a reduction in annual funding. The same week General Estes met with John Leland "Lee" Atwood, the president of North American, who announced that an extended schedule would allow North American to reconsider its position.-1161!

Two days later, the vice president and chief engineer for North American, Raymond H. Rice, explained that the company had decided to withdraw from the competition because it had recently won new bomber (WS-110A) and long-range interceptor (WS-202A) studies, and had increased activity relating to its ongoing YF-107 fighter program. Having undertaken these projects, North American said it would be unable to accommodate the fast engineering labor build-up that would be required to support the desired 30-month schedule. Rice went on to say that "due to the apparent interest that has subsequently been expressed in the North American design, the contractor [North American] wishes to extend two alternate courses which have been previously discussed with Air Force personnel. The engineering man-power work load schedule has been reviewed and the contractor wishes to point out that Project 1226 could be handled if it were permissible to extend the schedule…over an additional eight month period. In the event the above time extension is not acceptable and in the best interest of the project, the contractor is willing to release the proposal data to the Air Force at no cost."!162!

The approval granted by the Research Airplane Committee and the Defense Air Technical Advisory Panel to extend the schedule allowed North American to retract its previous decision to withdraw from the competition once the Air Force notified the company of its selection. Accordingly, on 30 September, Colonel Carl F. Damberg, chief of the Aircraft Division at Wright Field, formally notified North American that the company had won the X-15 competition. The company retracted its letter of withdrawal, and the Air Force thanked the other bidders for their participation. In the competitive environment that exists in the early 21st century, this course of events would undoubtedly lead to protests from the losing contractors, and possibly congressional investigations and court actions. However, as business was conducted in 1955, it was not considered cause for comment and the award went forward uncontested.!163!

Within North American, the program had also been the subject of discussions of which the government was probably unaware. The internal concerns were much the same as those related to the government, but they showed a marked divide between technical personnel and corporate management. Harrison Storms, who would be the chief engineer for the North American Los Angeles Division during the design of the X-15, remembers:!164!

My position at that time was that of manager of research and development for the Los Angles Division…. I was told that top corporate management wanted to reject the [X-15] program since it was small and they were concerned that too many of the top engineering personnel would be absorbed into the program and not be available for other projects that they considered more important to the future of the corporation. There was considerable objection to this position in the technical area. I was finally called into Mr. Rice’s office, the then chief engineer, and told that we could have the program on the condition that none of the problems were ever to be brought into his office. He further elaborated that it would be up to me to seek all the solutions and act as the top NAA representative for the program.

This was fine with me.

Funding was another issue, and on 5 October 1955 a meeting was held at Wright Field to discuss how to pay for the program. The Defense Coordinating Committee for Piloted Aircraft had tentatively allocated $30,000,000 to the program from the Department of Defense general contingency fund, with an expected burn rate of approximately $10,000,000 per year. The problem was that the new program estimate was $56,100,000, including a first-year expenditure of almost $26,000,000. The X-15 Project Office began to reduce expenditures by eliminating the static-test article (nobody was sure how to test it in any case), reducing the modifications to the B-36 carrier aircraft, and eliminating some previously required studies and evaluations. The agreed-upon eight-month extension also eased the peak annual expenditures somewhat. After some juggling, the revised cost estimates were $50,063,500-$38,742,500 for the airframes, $9,961,000 for the engine, and $1,360,000 for the new flight test range at Edwards. The peak expenditure ($16,600,000) would occur in the third year of the project.-1165

Contract negotiations followed. The Air Materiel Command took revised budget figures to a meeting on 11 October at the Pentagon. By that time, the reduced estimate was approximately $45,000,000 and the maximum annual expenditure was less than $15,000,000. The Air Force presented these figures to the Defense Coordinating Committee for Piloted Aircraft on 19 October. Support for the project was reconfirmed, although no additional funds were allocated. Nevertheless, the Department of Defense released funds to continue the procurement process.-1166!

The AMC Directorate of Procurement and Production drafted a $2,600,000 letter contract for North American on 7 November 1955. Higher headquarters approved the letter contract on 15 November, and North America returned a signed copy on 5 December. The detailed design and development of the hypersonic research airplane had been under way for just under a year at this point. Reaction Motors returned a signed copy of its $2,900,000 letter contract on 14 February

1956.H6Z1

At this point, the X-15 program budget was (in millions);!1681

FY56

FY57

FY58

FY59

FY60

Total

Airframe

6.0

10.3

13.9

6.9

0.6

37.7

Engine

2.9

2.8

0.5

0.0

0.0

6.2

Range

0.4

0.9

0.1

0.0

0.0

1.4

Total

9.3

14.0

14.5

6.9

0.6

45.3

However, the available funds were only (in millions):^169

FY56

FY57

FY58

FY59

FY60

Total

Air Force

9.5

8.0

4.0

3.0

0.0

24.5

Navy

0.5

1.8

1.7

1.0

0.0

5.0

Total

10.0

9.8

5.7

4.0

0.0

29.5

Surplus/Deficit

0.7

-4.2

-8.8

-2.9

-0.6

-15.8

There was still less than $30,000,000 available for the project, and an additional $16,000,000 needed to be found. In reality, this amount would become trivial as the project progressed.

The Air Force completed the definitive $5,315,000 contract for North American on 11 June 1956. The contract included three X-15 research airplanes, a full-scale mockup, various wind-tunnel models, propulsion system test articles, preliminary flight tests, and the modification of a B-36 carrier aircraft. The costs did not include government-furnished equipment, such as the engine, research instrumentation, fuel, and oil, or expenses to operate the B-36. The delivery date for the first X-15 was 31 October 1958.[1] [2] [3] [4] [5]™

All parties signed the final contract for the major piece of government-furnished equipment, the Reaction Motors engine, on 7 September 1956. The "propulsion subsystem" effort became Project 3116, which was carried on the books separately from the Project 1226 airframe. The final $10,160,030 contract, plus a fee of $614,000, required Reaction Motors to deliver one engine and a full-scale mockup. Amendments to the contract would cover the procurement of additional engines.-11719

Aircraft, 29 July 1954. In the files at the AFMC History Office; memorandum, E. C. Phillips, Chief, Operations Office, Power Plant Laboratory, to Director of Laboratories, WADC, subject: NACA Conference on 9 July 1954 on Research Aircraft-Propulsion System, 5 August 1954; letter,

Colonel Victor R. Haugen, Director of Laboratories, WADC, to Commander, ARDC, subject: new research aircraft, 13 August 1954. In the files at the ASD History Office; memorandum, J. W. Rogers, Liquid Propellant and Rocket Branch, Rocket Propulsion Division, Power Plant Laboratory, to Chief, Non-Rotating Engine Branch, Power Plant Laboratory, WADC, subject: conferences on 9 and 10 August 1954 on NACA Research Aircraft-Propulsion System, 11 August 1954. In the files at the AFMC History Office.