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The IBM Corporation's Federal Systems Division (FSD) has designed, developed and implemented a VLSI design methodology selected specifically for the DoD's design environment. The military industry VLSI requirements and IBM FSD's design system goals for developing chip design methodology are described. Substantial reduction in computer costs and design schedule using the methodology and the design system components is demonstrated. The rationale behind selecting the specific combination of tools, from the many design systems in IBM, for forming the FSD chip design system and the methodology is explained.