Ultimately, NASA had final say. Director of the Manned Spacecraft Centre Robert Gilruth made the switch from a dual to a single gas environment official with a formal contract change notice signed on August 28, 1962.
North American proceeded according to NASA’s direction, but not without incident. In April of 1966, a fire in the environmental control system of a command module under construction caused significant hardware damage, but this didn’t reopen the question of the crew cabin environment. Much of the damage was attributed to a commercial grade strip heater inside the cabin, and since this wan’t flight hardware the fire was largely dismissed. It did, however, prompt North American to revisit the amount and placement of flammable materials in the spacecraft to ensure no combustible materials were too close to electrical systems. NASA also had North American make design changes to eliminate fire hazards stemming from fluid leaks, overheating lamps, and large areas of exposed fabric and foam.
But these changes were only made in the lunar-capable Block II model of the Apollo spacecraft, not the earlier Block I model that would fly Earth orbital missions. And Apollo 1 was a Block I Earth orbital flight. So not only was Apollo 1’s spacecraft less fire-resistant than later incarnations on the day of the fire, the atmosphere on the day of the fire wasn’t the same low density of pure oxygen it would be in flight. To mimic the five pounds per square inch in space, the cabin was pressurized to 16 psi at sea level; this created the equivalent pressure difference between the spacecraft and the outside environment.
This was the recipe for disaster. During a routine test, a spark ignited all the cabin materials that had been soaking in oxygen for hours. The crew died of smoke inhalation and the spacecraft was destroyed.