291. Memorandum From John Holdridge and Richard Kennedy of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger), Washington, March 1, 1973.1 2
MEMORANDUM
NATIONAL SECURITY COUNCIL
ACTION
March 1, 1973
MEMORANDUM FOR: MR. KISSINGER
FROM: JOHN H.
HOLDRIDGE [JHH initialed]
RICHARD T. KENNEDY
[RTK initialed]
SUBJECT: DOD Procurement for Singapore
At Tab A is a draft State/DOD cable which would inform the Government of Singapore (GOS) and Lockheed Air Services Singapore (LASS), which is the only significant air repair facility in Singapore, that we do not intend to make any directed procurement for either air or naval repairs in Singapore for FY74. (Directed procurement is that which we make when a repair facility cannot obtain our contract on a competitive basis.) This is one of four facilities in East Asia — the others being in Thailand, Taiwan, and Japan — that the U.S. Air Force uses for major overhauls of its aircraft.
Your memoranda of May 7 and June 28, 1971 conveyed the President’s decision that we should help to preserve U.S. access to Singapore’s air and naval repair facilities and to deny or minimize Soviet access to them by increasing our use of these facilities and the level of our ship visits to Singapore (Tab B).
Subsequent DOD directed procurement in FY72-73 helped materially in the accomplishment of these objectives. LASS was brought into being, although its relatively high cost will make it continue dependent on directed procurement. Singapore’s ship repair facilities have now made it through the slump caused by the British withdrawal in 1971, and are no longer dependent on U.S. Navy support. The Soviet presence has been kept well within bounds.
The current problem is whether to continue directed procurement of aircraft repairs into FY74. Embassy Singapore and CINCPAC conclude that we should, while State and Defense argue the contrary. The Embassy and CINCPAC contend that without directed procurement: [Page 2]
- — The amount of GOS and USAF procurement for FY74 will cause the LASS facility to fall 250,000 hours short of the 650,000 hours needed in FY74 to keep open both its air repair plants, and one would probably be closed.
- — If we do not pick up the tab for the difference, the GOS probably will do so in order to keep the second repair plant open.
- — In consequence, the GOS would feel the U.S. had reneged, and would likely reassess its recently increased military procurement in the U.S. and cooperation with us on ship visits.
State and Defense hold that:
- — Singapore’s willingness to insure our military access and to minimize that of the Soviet’s proceeds from its assessment of the balance of power in Asia and the Pacific, which the GOS believes has now tilted in our favor.
- — LASS contracts for FY74 now bring it only 150,000 hours short of the 650,000 hour optimum, and LASS has a chance to bid competitively on an additional 240,000 hours of USAF work. Even if its high costs lose the contract for LASS, the GOS will not be resentful.
- — We have incurred limited Congressional criticism (Senator Dole) of the subsidization of the Singapore facility as taking business away from U.S. plants here at home.
Our Opinion
We agree with the Embassy and CINCPAC that we should continue directed procurement of air repairs in Singapore at least into FY74. The small FY74 budgetary savings on 150,000 hours of USAF work (probably $100,000-$200,000) and minor Congressional criticism are not worth the risks pointed out by the Embassy and CINCPAC. In addition:
- — We believe we should respond to Lee Kuan Yew’s recently improved confidence in our intentions in Asia by continuing, at least for the short term, our military use of Singapore’s air repair facility — which, incidentally, Lee took a personal hand in establishing and in encouraging our support for.
- — For us to indicate in the next six months that we plan to reduce our support for this facility in future years would be particularly bad timing.
Lee is visiting the U.S. in late March and early April, and Prime Minister Whitlam has already begun altering the security equation in Malaysia-Singapore by announcing a reduction of Australian ground forces there.
Beyond FY74
For the same reasons, the State/Defense draft cable also states that U.S. subsidization of Singapore’s air repair facilities is unlikely in later years, and that USAF procurement of air repair services in Singapore will in all probability be confined to a competitive basis.
We disagree. In effect, State and Defense are trying to take off the books the basic policy articulated in your mid -1971 memoranda, i.e., that increased U.S. military use of Singapore can have a significant impact on our military access to Singapore versus that of the Soviets. The Departments deny that our military use has such an effect, holding that the significant factor is Singapore’s perception of the Asian-Pacific power balance. We believe that we should keep the policy intact for possible future use.
Unless Defense is advised to the contrary by March 9, the USAF will proceed to procure repairs on a competitive bid basis.
Recommendation:
That the USAF continue directed
procurement of the air repair services in Singapore in FY 74 at a level sufficient to assure LASS of
650,000 hour level.
Approve [HK
initialed]
Disapprove
That the question of U.S. directed procurement of air and naval repairs
for FY 75 and beyond be considered in the
light of conditions at that time.
Approve [HK initialed]
Disapprove
- Source: National Archives, Nixon Presidential Materials, NSC Files, Box 559, Country Files, Far East, Singapore, 1972–. Secret. Sent for action. Tab A, the draft State/Defense cable on procurement policy, and Tab B, Kissinger’s memoranda of May 7 and June 28, 1971, are attached but not published. Kissinger initialed his approval of both recommendations on March 6.↩
- Kissinger agreed with Holdridge’s and Kennedy’s recommendation that the U.S. Air Force continue directed procurement of air repair service in Singapore.↩