The problem of designing a linear controller for systems subject to inequality variance constraints is considered. A quadratic penalty function approach is used to yield a linear controller. Both the weights in the quadratic penalty function and the locations of sensors and actuators are selected by successive approximations to obtain an optimal design which satisfies the input/output variance constraints. The method is applied to NASA's 64 meter Hoop-Column Space Antenna for satellite communications. In addition the solution for the control law, the main feature of these results is the systematic determination of actuator design requirements which allow the given input/output performance constraints to be satisfied