Federally Funded R&D Centers: Observations on DOD Actions To Improve
Management (Testimony, 03/05/96, GAO/T-NSIAD-96-117).

GAO discussed the Department of Defense's (DOD) efforts to improve the
management of its federally funded research and development centers
(FFRDC), focusing on the: (1) guidelines to ensure that management fees
paid to FFRDC are justified; (2) core work appropriate for FFRDC; (3)
criteria for the acceptance of work outside of the core by FFRDC parent
corporations; and (4) establishment of an independent advisory committee
to review DOD management, use, and oversight of FFRDC. GAO noted that:
(1) the DOD action plan recommended that management fees be revised to
move allowable costs out of fee, reduce fees, and establish policies on
ordinary and necessary costs; (2) it is difficult to determine whether
tasks assigned to FFRDC meet core work criteria because the mission
statements are broad and the core competencies offer little deviation
from previous work descriptions; (3) six of the eight parent
organizations that operate FFRDC also operate one or more non-FFRDC
affiliates; and (4) DOD established an independent advisory committee to
review FFRDC work, customers, and organizational structure and size,
oversee FFRDC compliance with the DOD FFRDC management plan, review
sponsor's management of FFRDC, determine the level and appropriateness
of non-DOD and non-sponsor work performed by FFRDC, monitor the
comprehensive review process, and perform selected FFRDC program
reviews.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-NSIAD-96-117
     TITLE:  Federally Funded R&D Centers: Observations on DOD Actions 
             To Improve Management
      DATE:  03/05/96
   SUBJECT:  Research and development facilities
             Reengineering (management)
             Fees
             Funds management
             Research and development contracts
             Department of Defense contractors
             Laboratories
             Program abuses
             Contract monitoring

             
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Cover
================================================================ COVER


Before the Subcommittee on Military Research and Development,
Committee on National Security,
House of Representatives

For Release on Delivery
Expected at
2:00 p.m., EDT,
Tuesday,
March 5, 1996

FEDERALLY FUNDED R&D CENTERS -
OBSERVATIONS ON DOD ACTIONS TO
IMPROVE MANAGEMENT

Statement for the Record by David E.  Cooper,
Associate Director, Defense Acquisitions Issues,
National Security and International Affairs Division

GAO/T-NSIAD-96-117

GAO/NSIAD-96-117T


(707160)


Abbreviations
=============================================================== ABBREV

  DOD - x
  FFRDC - x
  DCAA - x
  DSB - x
  OMB - x
  MITRE - x

============================================================ Chapter 0

Mr.  Chairman and Members of the Committee: 

I am pleased to be able to provide this statement for the record on
the results of our work on the Department of Defense's (DOD)
federally funded research and development centers (FFRDC).  In recent
years, we, as well as the DOD Inspector General, Defense Contract
Audit Agency (DCAA), Congressional Research Service, and Defense
Science Board (DSB), have reported on issues related to DOD's
management and use of its FFRDCs.  Appendix I lists these reports. 

To address the issues discussed in these reports, DOD established an
internal advisory group to review and make recommendations for
improving DOD's management of its FFRDCs.  Its work resulted in an
action plan, which was provided to the Congress in May 1995.  In
February 1996, DOD provided an update on the status of its action
plan.  My statement focuses on four key issues presented in the plan
and discussed in the status update.  These issues are (1) developing
guidelines to ensure that management fees provided to FFRDCs are
based on need and detailed justification, (2) defining core work
appropriate for FFRDCs, (3) establishing criteria for the acceptance
of work outside the core by the FFRDCs' parent corporations, and (4)
establishing an independent advisory committee to review DOD's
management, use, and oversight of its FFRDCs. 

We generally support the direction provided in the action plan and
believe it addresses some of the long-standing issues that have faced
DOD and its FFRDCs.  We also support the potential value of
establishing strategic relationships between DOD and its contractors,
a key factor that DOD attaches to its association with FFRDCs.  The
only concern on our part is that some of the proposed actions are
still in draft form or early implementation, and we have yet to see
how well they will address long-standing concerns and how effectively
they will be implemented. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

FFRDCs were first established during World War II to meet specialized
or unique research and development needs that could not be readily
satisfied by government personnel or private contractors.  Additional
and expanded requirements for specialized services led to increases
not only in the size of the FFRDCs but also the number of FFRDCs,
which peaked at 74 in 1969.  Today, 8 agencies, including DOD, fund
39 FFRDCs that are operated by universities, nonprofit organizations,
or private firms under long-term contracts.  Federal policy allows
agencies to award these contracts noncompetitively.  The Office of
Federal Procurement Policy within the Office of Management and Budget
(OMB) establishes governmentwide policy on the use and management of
FFRDCs. 

Within DOD, the Director of Defense Research and Engineering is
responsible for developing overall policy for DOD's 11 FFRDCs.  The
Director communicates DOD policy and detailed implementing guidance
to FFRDC sponsors through a periodically updated management plan, and
determines the funding level for each FFRDC based on the overall
congressional ceiling on FFRDC funding and FFRDC requirements.  Total
funding for DOD's FFRDCs was $1.25 billion in fiscal year 1995.  DOD
categorizes each of its FFRDCs as a systems engineering and
integration center, a studies and analyses center, or a research and
development laboratory.  Appendix II provides information on each
FFRDC, including its parent organization, primary sponsor, DOD
funding, and staffing levels for fiscal year 1995. 

The military services and defense agencies sponsor individual FFRDCs
and award and administer the 5-year contracts, typically negotiated
noncompetitively, after reviewing the continued need for the FFRDC. 
Unlike a private contractor, an FFRDC accepts restrictions on its
ability to manufacture products and compete for other government or
commercial business.  These restrictions are intended to (1) limit
the potential for conflicts of interest when FFRDC staff have access
to sensitive government or contractor data and (2) allow the center
to form a special or strategic relationship with its DOD sponsor. 


   DEVELOPING GUIDELINES ON
   MANAGEMENT FEES
---------------------------------------------------------- Chapter 0:2

Management fees are discretionary funds provided to FFRDCs in
addition to reimbursement for incurred costs, and these fees are
similar to profits private contractors earn.  Two issues that have
remained unresolved for many years are what should management fee be
provided for and how should FFRDCs use this fee.  As far back as
1969, we concluded that nonprofit organizations such as FFRDCs incur
some necessary costs that may not be reimbursed under the procurement
regulations, and we recommended that the Bureau of the Budget (now
known as OMB), develop guidance that specified the costs contracting
officers should provide fees to cover.\1 In 1993, the Office of
Federal Procurement Policy agreed that governmentwide guidance on
management fees for nonprofit organizations was needed, but it has
not yet issued detailed guidance. 

In the absence of such governmentwide guidance, recurring questions
continue to be raised about how FFRDCs use their fees.  In its 1994
report, for example, the DOD Inspector General concluded that FFRDCs
used $43 million of the $46.9 million in fiscal year 1992 DOD fees
for items that should not have been funded from fees.  The bulk of
this $43 million funded independent research projects that should
have been charged to overhead, according to the report.  The
remainder funded otherwise unallowable costs and future requirements,
which the report concluded were not necessary for FFRDC operations. 
Similarly, as we recently reported, DCAA reviewed fiscal year 1993
fee expenditures at the MITRE Corporation and concluded that just 11
percent of the expenditures reviewed were ordinary and necessary to
the operation of the FFRDC.  DCAA reported that MITRE used fees to
pay for items such as lavish entertainment, personal expenses for
company officers, and generous employee benefits.\2 In our recent
work at The Aerospace Corporation, we found that the corporation used
about $11.5 million of its $15.5 million management fee for sponsored
research.\3 Aerospace used the remainder of its fee and other
corporate resources for capital equipment purchases; real and
leasehold property improvements; and other unreimbursed expenditures,
such as contributions, personal use of company cars, conference
meals, trustee expenses, and new business development expenses. 

DOD's action plan recommended implementation of revised guidelines
for management fee.  Specifically, it recommended (1) moving
allowable costs out of fee and reducing fee accordingly, and (2)
establishing consistent policies on ordinary and necessary costs to
be funded through fee.  If effectively implemented, these actions
should help to resolve many of the long-standing concerns over FFRDC
use of management fee.  Moving FFRDC-sponsored research out of fee
would result in a substantial reduction of fee amount and should
provide for more effective DOD oversight of FFRDC expenditures.  This
action would also subject all research to the Federal Acquisition
Regulation cost principles applicable to cost-reimbursable items. 

Defining ordinary and necessary expenses which may be covered by fee
is a more challenging issue, which may explain why the issue has gone
unresolved for so long.  However, until DOD issues specific guidance
regarding ordinary and necessary expenses, debate will likely
continue on whether fee can be used for such things as personal
expenses for company officers, entertainment, and new business
development.  Although DOD's action plan identifies the need for
clarifying guidance, our understanding is that such guidance has not
been issued. 


--------------------
\1 Need for Improved Guidelines In Contracting for Research With
Government-Sponsored Nonprofit Contractors (B-146810, Feb.  1969). 

\2 Federally Funded R&D Centers:  Use of Fee by the MITRE Corporation
(GAO/NSIAD-96-26, Nov.  27, 1995). 

\3 Federally Funded R&D Centers:  Use of Contract Fee by The
Aerospace Corporation (GAO/NSIAD-95-174, Sept.  28, 1995). 


   DEFINING CORE WORK
---------------------------------------------------------- Chapter 0:3

As a robust private-sector professional services industry grew to
meet the demand for technical services, it became apparent that
industry had the capability to perform some tasks assigned to FFRDCs. 
As early as 1962, the Bell Report noted criticism that nonprofit
systems engineering contractors had undertaken work traditionally
done by private firms.\4 A 1971 DOD report stated, "It is pointless
to say that the [systems engineering FFRDCs'] function could not be
provided by another instrumentality...."\5 According to this report,
private contractors could also do the same type of work as the
studies and analyses FFRDCs.  The report pointed to the flexibility
of using the centers and their broad experience with sponsors'
problems as reasons for continuing their use.  More recently, the DOD
Inspector General concluded that FFRDC mission statements did not
identify unique capabilities or expertise, resulting in FFRDCs being
assigned work without adequate justification.\6

In a 1988 report, we pointed out that governmentwide policy did not
require that FFRDCs be limited to work that industry could not do;
FFRDCs could also undertake tasks they could perform more effectively
than industry.\7 FFRDCs are effective, we observed, partly because of
their special relationship with their sponsoring agency.  This
special relationship embodies elements of access and privilege as
well as constraints to limit their activities to those DOD deems
appropriate. 

In 1995, the DSB and DOD's Action Plan elaborated on and refined the
concept of the FFRDC special relationship.  According to DOD, FFRDCs
perform tasks that require a special or strategic relationship to
exist between the task sponsor and the organization performing the
task.  Table 1 shows DOD's description of the characteristics of this
special relationship. 



                                     Table 1
                     
                       Characteristics of the Relationship
                       Between an FFRDC and Its DOD Sponsor

Characteristic                           Description
---------------------------------------  ---------------------------------------
Long-term continuity.                    Uninterrupted, consistent support based
                                         on a continuing relationship.

Comprehensive knowledge of sponsor       Expertise on and institutional memory
needs and operations.                    about issues of enduring concern to the
                                         sponsor.

Adaptability.                            Ability to respond to emerging needs of
                                         their sponsors.

Objective, high-quality, current         A highly educated and skilled
research.                                professional staff that can produce
                                         thorough, independent analyses to
                                         address complex technical and
                                         analytical problems and maintain
                                         currency in their fields of expertise.

Freedom from real or perceived           Independence from commercial,
conflicts of interest.                   shareholder, political, and other
                                         associations and dedication to the
                                         public interest.

Broad access to sensitive government     Lack of institutional interests that
and commercial proprietary information.  could lead to misuse of information or
                                         cause contractor reluctance to provide
                                         such information.

Quick response capability.               Short-term assistance to help sponsors
                                         meet urgent and high-priority
                                         requirements.
--------------------------------------------------------------------------------
According to the DSB, this special relationship allows an FFRDC to
perform research, development, and analytical tasks that are integral
to the mission and operation of the DOD sponsor. 

The DSB and an internal DOD advisory group concluded that there is a
continuing need for certain core work that requires the special
relationship previously described.\8 DOD concluded that giving such
tasks to private contractors would raise numerous concerns, including
questions about potential conflicts of interest.  Accordingly, DOD
has defined an FFRDC's core work as tasks that (1) are consistent
with the FFRDC's purpose, mission, capabilities, and core
competencies and (2) require the FFRDC's special relationship with
its sponsor.  The DOD advisory group estimated that this core work
represented about 6 percent of DOD's research, development, and
analytic effort.  The DSB and the DOD advisory group also concluded
that FFRDCs performed some noncore work that did not require a
special relationship, and they concluded that this work should be
transitioned out of the FFRDCs and acquired competitively.  On the
basis of these conclusions, DOD directed each sponsor to review its
FFRDC's core competencies, identify and prioritize the FFRDC's core
work, and identify the noncore work that should be transitioned out
of the FFRDC. 

The core competencies the DOD sponsors identified appear to differ
little from the scope of work descriptions that were in place
previously.  In several cases, sponsors seem to have simply restated
the functions listed in an FFRDC's scope of work description.  In
other cases, the core competencies summarized the scope of work
functions into more generic categories. 

In February 1996, the Under Secretary for Defense (Acquisition and
Technology) reported that DOD sponsors had identified $43 million, or
about 4 percent of FFRDC funding, in noncore work being performed at
the FFRDCs.  According to the Under Secretary, ongoing noncore work
is currently being transferred out of the FFRDCs. 

Even though DOD states that it is important to ensure that tasks
assigned to the FFRDC meet the core work criteria, we believe it will
continue to be difficult to determine whether a task meets these
criteria.  FFRDC mission statements remain broad, and core
competencies appear to differ little from the previous scope of work
descriptions.  As we stated in our 1988 report, the special
relationship is the key to determining whether work is appropriate
for an FFRDC.  However, determining whether one or more of the
characteristics of the special relationship is required for a task
may be difficult, since the need for an element of the special
relationship is normally relative rather than absolute.  For example,
we believe DOD would expect objectivity in any research effort, but
it may be difficult to demonstrate that a particular task requires
the special degree of objectivity an FFRDC is believed to provide. 

Uncertainty about whether an FFRDC's special relationship allows it
to perform a task more effectively than other organizations also
accompanies decisions to assign work to an FFRDC.  In our 1988
report, we stated that full and open competition between all relevant
organizations (FFRDCs and non-FFRDCs) could provide DOD assurance
that it has selected the most effective source for the work. 
However, exposing FFRDCs to marketplace competition would
fundamentally alter the character of the special relationship. 

While DOD has initiated a department-wide effort to define more
clearly the work its FFRDCs will perform, the criteria DOD has
developed remains somewhat general.  Applying this criteria requires
the making of judgements about the relative effectiveness of various
sources for work in the absence of full information on capabilities
which open competition would provide.  It is doubtful that DOD's
criteria will be satisfactory to those critics who are seeking a
simple and unambiguous definition of work appropriate for FFRDCs. 


--------------------
\4 Report to the President on Government Contracting for Research and
Development, U.S.  Senate, 87th Congress, 2nd Session, Document No. 
94, May 17, 1962.  This report, prepared by a presidentially
appointed committee led by Bureau of the Budget Director David Bell,
is commonly referred to as the "Bell Report."

\5 Report of the Special Study Group on Federal Contract Research
Centers, Director of Defense Research and Engineering, Office of the
Secretary of Defense, August 30, 1971. 

\6 Contracting Practices for the Use and Operations of DOD-Sponsored
Federally Funded Research and Development Centers, Office of the
Inspector General, Department of Defense (95-048, Dec.  2, 1994). 

\7 Competition:  Issues on Establishing and Using Federally Funded
Research and Development Centers (GAO/NSIAD-88-22, Mar.  7, 1988). 

\8 Report of the DOD Internal Advisory Group on Federally Funded
Research and Development Centers (May 18, 1995). 


   ACCEPTING NON-FFRDC WORK
---------------------------------------------------------- Chapter 0:4

The question of whether accepting work from organizations other than
its sponsor impairs an FFRDC's ability to provide objective advice
has long been discussed.  As early as 1962, the Bell Report raised
this question but noted that no clear consensus had developed as to
whether concerns about diversification were well founded.  The report
recognized that studies and analyses FFRDCs could effectively serve
multiple clients but concluded that systems engineering organizations
were primarily of value when they served a single client.  During the
early 1970s, DOD encouraged its FFRDCs to diversify into nonsponsor
work.  According to a 1976 DOD report, FFRDCs that did not diversify
suffered efficiency and morale problems as their organizations shrank
in the face of declining DOD research and development budgets.\9

Nonetheless, this report recommended that the systems engineering
FFRDCs limit themselves to DOD work and adjust their work forces in
line with changes in the DOD budget.  Regarding the MITRE
Corporation, the report recommended that MITRE create a separate
affiliate organization to carry out its nonDOD work.  In 1994,
Congress raised the issue that non-FFRDC affiliate organizations
resulted in "...an ambiguous legal, regulatory, organizational, and
financial situation," and directed that DOD prepare a report on
non-FFRDC activities.\10

More recently, however, the DSB concluded that FFRDCs and their
parent companies should be allowed to accept work outside the core
domain only when doing so was in the best interests of the country;
the DSB did not propose criteria for determining when accepting
nonsponsor work was in the country's best interests. 

Acceptance of nonsponsor work is now common at DOD's FFRDCs.  Except
for the Institute for Defense Analyses, each parent organization
performs some non-DOD work either within the FFRDC or through an
affiliate organization created to pursue non-FFRDC work.  Currently,
six of the eight parent organizations that operate FFRDCs also
operate one or more non-FFRDC affiliates.  Some of these affiliates
are quite small:  the Center for Naval Analyses Corporation's
Institute for Public Research accounts for about 3 percent of the
center's total effort.  Other affiliates are more significant:  the
MITRE Corporation's two non-FFRDC affiliates accounted for about 11
percent of MITRE's total effort, and the RAND Corporation's 5
non-FFRDC divisions account for about 32 percent of its total effort. 
The Massachusetts Institute of Technology and Carnegie-Mellon
University--parent organizations of the MIT Lincoln Laboratory and
the Software Engineering Institute, respectively--each pursue a
diverse range of non-FFRDC activities. 

DOD has recently become more active in seeking to oversee work its
FFRDCs perform through non-FFRDC divisions.  DOD sponsors have
historically had the opportunity to oversee nonsponsor work performed
within the FFRDC because the work is carried out under the FFRDC
contracts that sponsors administer.  This contract oversight
mechanism is not available for non-FFRDC divisions.  During 1995, for
example, the Air Force expressed great reluctance to support The
Aerospace Corporation's proposal to establish a non-FFRDC affiliate,
indicating that the Air Force was concerned that it could not avoid
the perception of a conflict of interest.  Similarly, the MITRE
Corporation sought permission to create a separate corporate division
to perform non-FFRDC work.  Recognizing that this arrangement could
create a potential for conflicts of interest, DOD required MITRE to
spin off a separate corporation to carry out its non-FFRDC
activities.  DOD required this new corporation to have a separate
board of trustees and its own corporate officers.  Further, DOD
required that no work be subcontracted between the two entities to
preclude the sharing of employees involved in DOD work--and knowledge
developed in the course of DOD work--with the new corporation. 

DOD's recent update of its action plan stated that a new policy
requires the use of stringent criteria for the acceptance of work
outside the core by the FFRDC's parent corporation.  According to
DOD, this new policy will ensure focus on FFRDC operations by the
parent and eliminate concerns regarding "unfair advantage" in
acquiring of such work.  Currently, DOD plans to revise its FFRDC
management plan, which would provide for greater oversight of
non-FFRDC affiliates at all centers.  These changes would require
FFRDCs to agree to conduct non-FFRDC activities only if the
activities are (1) subject to sponsor review and approval, (2) in the
national interest, and (3) do not give rise to real or potential
conflicts of interest. 


--------------------
\9 Management of the DOD Federal Contract Research Centers, Director
of Defense Research and Engineering, Office of the Secretary of
Defense, June 1976. 

\10 National Defense Authorization Act for Fiscal Year 1995, Senate
Report 103-282. 


   ESTABLISHING AN INDEPENDENT
   ADVISORY COMMITTEE
---------------------------------------------------------- Chapter 0:5

Even though it endorsed the need for organizations such as FFRDCs, a
DSB study recently concluded that the public mistrusted DOD's use and
oversight of FFRDCs.  A principal concern, according to the study, is
that DOD assigns work to FFRDCs that can be performed as effectively
by private industry and acquired using competitive procurement
procedures.  Further, DSB found that the lack of opportunities for
public review and comment on DOD's process for managing and assigning
work to FFRDCs--available in the competitive contracting
process--invites mistrust.  To address public skepticism about DOD's
use and management of FFRDCs, DSB recommended the creation of an
independent advisory committee of highly respected personnel from
outside DOD.  The committee would review the continuing need for
FFRDCs, FFRDC missions, and DOD's management and oversight mechanisms
for FFRDCs.  DOD's action plan also recommended the establishment of
an independent advisory committee to review and advise on FFRDC
management. 

In late 1995, an independent advisory committee was established.  The
six committee members, who are either DSB members or consultants,
represent both industry and government.  The committee is responsible
for reviewing and advising DOD on the management of its FFRDCs by

  providing guidelines on the appropriate scope of work, customers,
     organizational structure, and size of the FFRDCs;

  overseeing compliance with DOD's FFRDC Management Plan;

  reviewing sponsor's management of FFRDCs;

  reviewing the level and appropriateness of non-DOD and nonsponsor
     work performed by the FFRDCs;

  overseeing the comprehensive review process; and

  performing selected FFRDC program reviews. 

In January 1996, the advisory committee began a series of panel
discussions at several FFRDCs, which were attended by DOD sponsor
personnel and FFRDC officials.  Representatives of our office
attended the initial fact finding meetings and observed that the
panel members appear to approach their task with the utmost
seriousness and challenged the conventional wisdom by asking tough
questions of both DOD and FFRDC officials.  The advisory group plans
to produce its first report in March 1996. 


-------------------------------------------------------- Chapter 0:5.1

Mr.  Chairman, this completes my statement for the record. 


RELATED FFRDC PRODUCTS
=========================================================== Appendix I

Defense Research and Development:  Fiscal Year 1993 Trustee and
Advisor Costs at Federally Funded Centers (GAO/NSIAD-96-27, Dec.  26,
1995). 

Federal Research:  Information on Fees for Selected Federally Funded
Research and Development Centers (GAO/RCED-96-31FS, Dec.  8, 1995). 

Federally Funded R&D Centers:  Use of Fee by the MITRE Corporation
(GAO/NSIAD-96-26, Nov.  27, 1995). 

Federally Funded R&D Centers:  Use of Contract Fee by The Aerospace
Corporation (GAO/NSIAD-95-174, Sept.  28, 1995). 

Defense Research and Development:  Affiliations of Fiscal Year 1993
Trustees for Federally Funded Centers (GAO/NSIAD-95-135, July 26,
1995). 

Department of Defense Federally Funded Research and Development
Centers, Office of Technology Assessment (OTA-BP-ISS-157, June 1995). 

Compensation to Presidents, Senior Executives, and Technical Staff at
Federally Funded Research and Development Centers, DOD Office of the
Inspector General (95-182, May 1, 1995). 

Comprehensive Review of the Department of Defense's Fee-Granting
Process for Federally Funded Research and Development Centers,
Director for Defense Research and Engineering, May 1, 1995. 

The Role of Federally Funded Research and Development Centers in the
Mission of the Department of Defense, Defense Science Board Task
Force, April 25, 1995. 

Addendum to Final Audit Report on Contracting Practices for the Use
and Operations of DOD-Sponsored Federally Funded Research and
Development Centers, DOD Office of the Inspector General (95-048A,
Apr.  19, 1995). 

DOD's Federally Funded Research and Development Centers,
Congressional Research Service (95-489 SPR, Apr.  13, 1995). 

Report on Department of Defense Federally Funded Research and
Development Centers and Affiliated Organizations, Director for
Defense Research and Engineering, April 3, 1995. 

Federally Funded R&D Centers:  Executive Compensation at The
Aerospace Corporation, (GAO/NSIAD-95-75, Feb.  7, 1995).  Contracting
Practices for the Use and Operations of DOD-Sponsored Federally
Funded Research and Development Centers, DOD Office of the Inspector
General (95-048, Dec.  2, 1994). 

Sole Source Justifications for DOD-Sponsored Federally Funded
Research and Development Centers, DOD Office of the Inspector General
(94-012, Nov.  4, 1993). 

DOD's Federally Funded Research and Development Centers,
Congressional Research Service (93-549 SPR, June 3, 1993). 

Inadequate Federal Oversight of Federally Funded Research and
Development Centers, Subcommittee on Oversight of Government
Operations, Senate Governmental Affairs Committee (102-98, July
1992).  DOD's Federally Funded Research and Development Centers,
Congressional Research Service (91-378 SPR, Apr.  29, 1991). 

Competition:  Issues on Establishing and Using Federally Funded
Research and Development Centers (GAO/NSIAD-88-22, Mar.  7, 1988). 


INFORMATION ON DOD'S FEDERALLY
FUNDED RESEARCH AND DEVELOPMENT
CENTERS
========================================================== Appendix II

                 (Fiscal year 1995 dollars in millions)

                  Parent                               Obligatio
FFRDC             organization      Primary sponsor           ns   MTS
----------------  ----------------  -----------------  ---------  ----
Systems engineering and integration centers
----------------------------------------------------------------------
Aerospace         The Aerospace     Air Force               $335  1,91
                  Corp.                                              0

MITRE C\3I        MITRE             Assistant                374  2,10
                  Corporation       Secretary of                     9
                                    Defense (C\3I)


Subtotal $709 4,019
----------------------------------------------------------------------

Studies and analyses centers
----------------------------------------------------------------------
Arroyo Center     RAND Corporation  Army                      20    99

Project Air       RAND Corporation  Air Force                 24   112
Force

National Defense  RAND Corporation  OSD                       19   105
Research
Institute

Center for Naval  The CNA           Navy                      47   238
Analyses          Corporation

IDA-Studies and   IDA               OSD                       68   377
Analyses/
Operational Test
and Eval. Ctr.

Logistics         Logistics         OSD                       29   166
Management        Management
Institute         Institute


Subtotal $207 1,097
----------------------------------------------------------------------

Research and development laboratories
----------------------------------------------------------------------
Lincoln           Massachusetts     Air Force                275  1,01
Laboratory        Institute of                                       8
                  Technology

Software          Carnegie-Mellon   Advanced Research         29   170
Engineering       University        Projects Agency
Institute

IDA-              IDA               National Security         33   142
Communications                      Agency
and Computing


Subtotal $337 1,330
----------------------------------------------------------------------

Total $1,253 6,446
----------------------------------------------------------------------
----------------------------------------------------------------------
Note:  command, control, communication, and intelligence (C\3 I);
Office of the Secretary of Defense (OSD); and Institute for Defense
Analyses (IDA). 

Source:  OSD. 


*** End of document. ***