The US DOE has initiated a program for advanced turbine systems (ATS) that will serve industrial power generation markets. The ATS will provide ultra-high efficiency, environmental superiority, and cost competitiveness. The Industrial ATS Development and Demonstration program is a multi-phased effort. Solar Turbines Incorporated (Solar) has participated in Phases 1 and 2 of the program. On September 14, 1995 Solar was awarded a Cooperative Agreement for Phases 3 and 4 of the program. Phase 3 of the work is separated into two subphases: Phase 3A entails Component Design and Development; Phase 3B will involve Integrated Subsystem Testing. Phase 4 will cover Host Site Testing. Forecasts call for completion of the program within budget as originally estimated. Scheduled completion is forecasted to be approximately 3 years late to original plan. This delay has been intentionally planned in order to better match program tasks to the anticipated availability of DOE funds. To ensure the timely realization of DOE/Solar program goals, the development schedule for the smaller system (Mercury 50) and enabling technologies has been maintained, and commissioning of the field test unit is scheduled for May of 2000. As of the end of the reporting period work on the program is 24.7% complete (22.8% last quarter). Work on the Mercury 50 development and ATS technology development portions of the program (WBS 10000 et seq) is 41.6% complete. Although a great amount of work occurred in the quarter, a significant amount of this work entailed the revision and rerelease of several Mercury 50 drawings. Estimates of percent compete are based upon milestones completed. In order to maintain objectivity in assessing schedule progress, Solar uses a 0/100 percent complete assumption for milestones rather than subjectively estimating progress toward completion of milestones. Cost and schedule variation information is provided in Section 4.0 Program Management.