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United States Government Accountability Office: 
GAO: 

Report to the Chairman, Subcommittee on Financial and Contracting 
Oversight, Committee on Homeland Security and Governmental Affairs, 
U.S. Senate: 

August 2014: 

Federally Funded Research Centers: 

Agency Reviews of Employee Compensation and Center Performance: 

GAO-14-593: 

GAO Highlights: 

Highlights of GAO-14-593, a report to the Chairman, Subcommittee on 
Financial and Contracting Oversight, Committee on Homeland Security 
and Governmental Affairs, U.S. Senate. 

Why GAO Did This Study: 

Federal agencies sponsor 40 FFRDCs for research and development tasks 
that are integral to their missions. DOE, DOD, and NSF sponsor the 
largest number of FFRDCs—-16, 10, and 4 centers, respectively. Federal 
agencies sponsor FFRDCs by contracting with nonprofit, university-
affiliated, or private industry operators. Federal statute and 
regulations provide for reimbursements for compensation for FFRDC 
contractor employees and require that sponsoring agencies evaluate the 
use and need for their FFRDCs. 

GAO was asked to review the management and oversight of FFRDCs. This 
report (1) describes funding for FFRDCs sponsored by DOE, DOD, and NSF 
for fiscal years 2008 through 2012; (2) examines compensation for 
FFRDC employees and these agencies' processes for review of 
compensation; and (3) determines how these agencies assess FFRDC 
performance. GAO surveyed the agency sponsors for the 30 FFRDCs, 
analyzed agency policies and reviews of these FFRDCs, and interviewed 
agency officials and contractor representatives. 

What GAO Found: 

The 30 federally funded research and development centers (FFRDC) 
sponsored by the Department of Energy (DOE), Department of Defense 
(DOD), and National Science Foundation (NSF) received nearly $84 
billion in total funding for fiscal years 2008 through 2012. Of these 
30 centers, the 16 sponsored by DOE received about 79 percent of this 
funding according to GAO's analysis of sponsoring agencies' responses 
to a GAO survey on FFRDC funding and compensation. During this time, 
DOE obligated about 34 percent of its budget to the FFRDCs it 
sponsored, and DOD and NSF devoted less than 1 percent and 4 percent 
of their budgets, respectively. FFRDCs sponsored by these agencies 
received approximately $15 billion of their total funding from sources 
other than the sponsoring agency—-specifically other federal agencies, 
nonfederal entities such as state or local governments, and private 
entities. 

Many FFRDCs sponsored by DOE, DOD, and NSF spent over half of their 
total funding on employee compensation, and the three agencies had 
processes in place to review such compensation. For example, the 
agencies reviewed senior executive compensation to ensure that they do 
not reimburse FFRDC contractors in excess of the cap set in statute. 
All three agencies also have processes in place to document the total 
reimbursed compensation for senior executives against the cap, 
although DOE changed its policy during the course of GAO's work. In 
May 2014, DOE updated its policy on executive compensation to require 
documentation of compensation subject to the cap-—a requirement that 
was not in place prior to this date. DOE officials noted that this 
change was due, in part, to the recent action by Congress in December 
2013 to reduce the cap from $952,308 to $487,000. 

DOE, DOD, and NSF assess performance of FFRDCs through three types of 
reviews: (1) comprehensive reviews—which the Federal Acquisition 
Regulation (FAR) requires at least every 5 years, (2) annual 
performance reviews, and (3) other review activities such as day-to-
day oversight. DOE, DOD, and NSF conducted timely comprehensive 
reviews of the use and need for the FFRDCs they sponsored in most 
cases and, in all cases, the agencies recommended the continuance of 
the FFRDCs they sponsor. The FAR describes five elements the review 
should include, and DOE, DOD, and NSF generally included these 
elements, with varying levels of detail in keeping with the 
flexibilities the FAR provides. These agencies also have procedures to 
annually review and document the performance of the FFRDCs they 
sponsor, and many of these reviews use surveys of federal officials 
who interact with the centers. In addition, officials from DOE, DOD, 
and NSF told GAO that they engage in other day-to-day oversight 
activities to help them assess FFRDC performance, such as observing 
work and meeting with contractor employees. 

What GAO Recommends: 

GAO is not making recommendations in this report. DOE, DOD, and NSF 
reviewed a draft of this report and did not provide formal comments. 
Technical comments provided by DOE, DOD, and NSF were incorporated, as 
appropriate. 

View [hyperlink, http://www.gao.gov/products/GAO-14-593]. For more 
information, contact John Neumann at (202) 512-3841 or 
jneumann@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

FFRDCs Sponsored by DOE Received More Total Funding Than Those 
Sponsored by DOD and NSF: 

Many FFRDCs Sponsored by DOE, DOD, and NSF Spent Over Half of Their 
Total Funding on Compensation, and These Agencies Have Processes to 
Review FFRDC Contractor Compensation: 

DOE, DOD, and NSF Use Multiple Reviews to Assess FFRDC Performance: 

Agency Comments: 

Appendix I:Scope and Methodology: 

Appendix II:Funding and Contract Data for FFRDCs Sponsored by DOE, 
DOD, and NSF: 

Appendix III:GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Percentage of Agency's Available Funds Obligated to Sponsored 
Federally Funded Research and Development Centers (FFRDC) for Fiscal 
Years 2008 through 2012: 

Table 2: Total Obligations and Funding to Federally Funded Research 
and Development Centers Sponsored by DOE, DOD, and NSF for Fiscal 
Years 2008 through 2012: 

Table 3: Obligations by Sponsoring Agency to Federally Funded Research 
and Development Centers Sponsored by DOE, DOD, and NSF for Fiscal 
Years 2008 through 2012: 

Table 4: Obligations by Federal Agencies other than the Sponsoring 
Agency to Federally Funded Research and Development Centers Sponsored 
by DOE, DOD, and NSF for Fiscal Years 2008 through 2012: 

Table 5: Funding from Nonfederal Entities to Federally Funded Research 
and Development Centers Sponsored by DOE, DOD, and NSF for Fiscal 
Years 2008 through 2012: 

Table 6: Compensation Costs at Federally Funded Research and 
Development Centers Sponsored by DOE, DOD, and NSF, Fiscal Years 2010 
through 2012: 

Table 7: Establishment and Contract Dates for Federally Funded 
Research and Development Centers Sponsored by DOE, DOD, and NSF: 

Figures: 

Figure 1: Federally Funded Research and Development Centers (FFRDC) 
and Their Federal Sponsors as of May 2014: 

Figure 2: Compensation Subject to Cap on Reimbursement for Federally 
Funded Research and Development Center (FFRDC) Contractors: 

Figure 3: Change in the Cap on Compensation for Federal Contractor 
Employees from 1998 through 2013: 

Figure 4: Total Funding for Federally Funding Research and Development 
Centers (FFRDC) Sponsored by DOE, DOD, and NSF (FY 2008-FY 2012): 

Figure 5: Total Funding for DOE, DOD, and NSF Sponsored Federally 
Funded Research and Development Centers (FFRDC) (FY 2008-FY 2012): 

Figure 6: Highest Reported Executive Salaries at Federally Funded 
Research and Development Centers (FFRDC) sponsored by DOE, DOD, and 
NSF in FY 2011: 

Abbreviations: 

DCAA: Defense Contract Audit Agency: 

DCMA: Defense Contract Management Agency: 

DOD: Department of Defense: 

DOE: Department of Energy: 

FAR: Federal Acquisition Regulation: 

FFRDC: federally funded research and development center: 

FTE: full-time equivalent: 

GPRA: Government Performance and Results Act of 1993: 

NCAR: National Center for Atmospheric Research: 

NNSA: National Nuclear Security Administration: 

NSEC: National Security Engineering Center: 

NSF: National Science Foundation: 

OFPP: Office of Federal Procurement Policy: 

OMB: Office of Management and Budget: 

ORNL: Oak Ridge National Laboratory: 

OSTP: Office of Science and Technology Policy: 

SRNL: Savannah River National Laboratory: 

STE: staff-years of technical effort: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

August 11, 2014: 

The Honorable Claire C. McCaskill: 
Chairman: 
Subcommittee on Financial and Contracting Oversight: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Dear Madam Chairman: 

The federal government supports research and development activities at 
40 federally funded research and development centers (FFRDC). FFRDCs 
are government-funded entities that have long-term relationships with 
one or more federal agencies to perform research and development and 
related tasks. FFRDCs are typically entirely federally funded, or 
nearly so, but they are operated by contractors or other 
nongovernmental organizations. The National Science Foundation (NSF) 
has reported that federal agencies provide billions of dollars each 
year for research and development activities at FFRDCs. Federal 
agencies sponsor FFRDCs by establishing contracts or other agreements 
with nonprofit, university-affiliated, or private industry 
organizations, which in turn operate the FFRDCs. As described in the 
Federal Acquisition Regulation (FAR), FFRDCs are intended to meet 
special, long-term research or development needs of the sponsoring 
agencies that are integral to their missions and cannot be met as 
effectively by existing federal or non-FFRDC contractor resources. 
[Footnote 1] 

The agencies that sponsor FFRDCs are subject to various laws and 
regulations concerning the management and performance of their 
activities. These laws and regulations guide the sponsors' oversight 
activities and shape the relationship between sponsors and the FFRDC 
contractors. Federal law caps the total allowable compensation for 
certain contractor positions for which federal agencies may reimburse 
contractors.[Footnote 2] In addition, the FAR provides criteria for 
agencies and contractors to use to determine what costs may comprise 
the compensation charged to the government. The FAR also describes 
characteristics of FFRDCs operated by contract and includes 
requirements for their establishment, use, and review.[Footnote 3] 
Among other things, the FAR encourages long-term relationships between 
the federal government and FFRDCs to provide continuity and to attract 
high-quality personnel to the FFRDCs. Because FFRDCs are contractor 
operated, sponsoring agencies do not directly determine pay or nonpay 
benefits for contractor employees. 

As agencies provide a significant amount of funding for FFRDC 
activities, you asked us to examine the management and oversight of 
FFRDCs. Our objectives for this report were to: (1) describe the total 
funding for FFRDCs associated with the Department of Energy (DOE), 
Department of Defense (DOD), and NSF for the 5 most recent years 
available--fiscal years 2008 through 2012; (2) examine compensation 
for FFRDC employees and these agencies' processes to review 
compensation; and (3) determine how these agencies assess FFRDC 
performance. 

To address our objectives, we selected a nonprobability sample of 30 
FFRDCs for review based on a complete list of FFRDCs compiled by NSF. 
[Footnote 4] We selected FFRDCs sponsored by DOE, DOD, and NSF because 
these three agencies sponsor the largest numbers of FFRDCs--16, 10, 
and 4, respectively. Of these 30 selected FFRDCs, we then identified 
for site visits the FFRDC with the highest research and development 
expenditures at each of the three agencies as reported by NSF for 
fiscal year 2010,[Footnote 5] which were (1) Oak Ridge National 
Laboratory (ORNL), operated by UT-Battelle, LLC, on behalf of DOE's 
Office of Science; (2) the National Security Engineering Center 
(NSEC), operated by the MITRE Corporation on behalf of DOD;[Footnote 
6] and (3) the National Center for Atmospheric Research (NCAR), 
operated by the University Corporation for Atmospheric Research on 
behalf of NSF. We visited these three FFRDCs, spoke with contractor 
representatives and agency officials overseeing them, and evaluated 
additional documentation regarding the sponsorship of these FFRDCs and 
their performance.[Footnote 7] To examine FFRDC funding and 
compensation, we surveyed, and received responses from, the agency 
sponsors for all of the 30 FFRDCs in our review. We also spoke with 
agency officials and contractor representatives, and we reviewed 
agency policy and guidance documentation they provided. Our survey 
asked about funding to the FFRDCs for the 5 most recent fiscal years 
for which data were available, or for fiscal years 2008 through 2012. 
Our survey also asked about compensation from fiscal year 2010 through 
fiscal year 2012--the 3 years for which data were available and the 
cap on compensation was set by regulation (i.e., before the statutory 
cap had been implemented)--and sponsoring agency efforts to review 
compensation. To assess the reliability of the survey data, we 
reviewed the survey responses of agency and contractor data for 
consistency and reliability by examining the sources of the data, 
interviewing knowledgeable agency officials about the data, and 
obtaining follow-up information from agency sponsors when necessary. 
Agency officials submitted written clarifications to the original 
survey responses and follow-up questions, as necessary. We found that 
the data were sufficiently reliable for our purposes. To examine 
sponsoring agencies' assessments of FFRDC contractor performance, we 
obtained the most recent comprehensive reviews developed by the 
agencies that sponsored the FFRDCs and evaluated them against elements 
described by the FAR.[Footnote 8] We also spoke with agency officials 
and contractor representatives at the three selected FFRDCs to 
determine how performance was assessed and reviewed relevant 
documentation of that performance. Additional information on our scope 
and methodology is in appendix I. 

We conducted this performance audit from December 2012 to August 2014 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

FFRDCs perform tasks such as research and development, systems 
engineering, and technical studies and analyses on behalf of 
sponsoring federal agencies. FFRDCs arose from partnerships between 
the federal government and academic researchers and scientists during 
World War II. Those partnerships were later restructured into federal 
research centers to retain scientists and became known as FFRDCs by 
the mid-1960s. Since that time, FFRDCs have continued to support the 
research and development needs of various federal agencies. As of 
April 2014, there were 40 FFRDCs sponsored government-wide.[Footnote 
9] A list of these FFRDCs and their federal sponsors, including those 
sponsored by DOE, DOD, and NSF that are within the scope of our 
review, is shown in figure 1. 

Figure 1: Federally Funded Research and Development Centers (FFRDC) 
and Their Federal Sponsors as of May 2014: 

[Refer to PDF for image: lists] 

Federally funded research and development centers (FFRDC) sponsored by 
DOE, DOD, and NSF (included in GAO's sample): 

Department of Energy (DOE): 
Ames Laboratory; 
Argonne National Laboratory; 
Brookhaven National Laboratory; 
Fermi National Accelerator Laboratory; 
Idaho National Laboratory; 
Lawrence Berkeley National Laboratory; 
Lawrence Livermore National Laboratory; 
Los Alamos National Laboratory; 
National Renewable Energy Laboratory; 
Oak Ridge National Laboratory[A]; 
Pacific Northwest National Laboratory; 
Princeton Plasma Physics Laboratory; 
Sandia National Laboratories; 
Savannah River National Laboratory; 
SLAC National Accelerator Laboratory; 
Thomas Jefferson National Accelerator Facility. 

Department of Defense (DOD): 
Aerospace Federally Funded Research and Development Center; 
Arroyo Center; 
Center for Naval Analyses; 
Systems and Analyses Center; 
Center for Communications and Computing; 
Lincoln Laboratory; 
National Defense Research Institute; 
National Security Engineering Center[A]; 
Project Air Force; 
Software Engineering Institute. 

National Science Foundation (NSF): 
National Center for Atmospheric Research[A]; 
National Optical Astronomy Observatory; 
National Radio Astronomy Observatory; 
Science and Technology Policy Institute. 

FFRDCs Sponsored by other agencies (not included in GAO's sample): 

Department of Homeland Security: 
Homeland Security Studies and Analysis Institute; 
Homeland Security Systems Engineering and Development Institute; 
National Biodefense Analysis and Countermeasures Center. 

Department of Health and Human Services: 
Centers for Medicare and Medicaid Services Federally Funded Research 
and Development Center; 
Frederick National Laboratory for Cancer Research. 

Department of Veterans Affairs and Department of the Treasury: 
Center for Enterprise Modernization. 

Department of Transportation: 
Center for Advanced Aviation System Development. 

National Aeronautics and Space Administration: 
Jet Propulsion Laboratory. 

Nuclear Regulatory Commission: 
Center for Nuclear Waste Regulatory Analyses. 

Administrative Office of the United States Courts: 
Judiciary Engineering and Modernization Center. 

[A] FFRDCs selected by GAO for site visits. 

Source: NSF. GAO-14-593. 

[End of figure] 

The 16 FFRDCs that DOE sponsors are overseen by different program 
offices within the Department. Ten of these FFRDCs, including ORNL, 
are overseen by the Office of Science; three by the National Nuclear 
Security Administration (NNSA);[Footnote 10] one by the Office of 
Environmental Management; one by the Office of Nuclear Energy; and one 
by the Office of Energy Efficiency and Renewable Energy. DOE's Office 
of Management manages department-wide policies relating to DOE's 
FFRDCs, and DOE program offices control many of the decisions 
associated with the operations of the FFRDCs, including their budgets, 
structures, and missions. Federal officials located at or near each 
FFRDC site directly oversee the operations of the FFRDCs. 

The 10 FFRDCs that DOD sponsors are managed by various military 
departments or divisions of DOD. The Under Secretary of Defense for 
Acquisition, Technology and Logistics is responsible for setting DOD-
wide policies for FFRDCs, allocating staff years within an annual 
ceiling set by Congress at the FFRDCs, and approving renewals of FFRDC 
contracts, among other things.[Footnote 11] The Under Secretary 
carries out these duties through the Office of Acquisition Resources 
and Analysis. The DOD divisions that oversee FFRDCs are responsible 
for creating procedures to monitor the value, quality, and 
responsiveness of FFRDC work and ensuring appropriate contract 
support. The Deputy Assistant Secretary for Defense for Systems 
Engineering oversees NSEC, with assistance from Army and Air Force 
subsponsors. Two additional DOD divisions may provide administrative 
support for DOD contracts, including those for FFRDCs. The Defense 
Contract Management Agency (DCMA), a DOD component, is responsible for 
providing contract administration services for DOD buying activities, 
working directly with defense contractors to help ensure that goods 
and services are delivered on time, at projected cost, and that they 
meet performance requirements. The Defense Contract Audit Agency 
(DCAA), another DOD component, audits projected and actual costs 
associated with DOD contracts to ensure they are allowable, allocable, 
and reasonable in accordance with cost accounting standards and FAR 
rules. 

The four FFRDCs that NSF sponsors are overseen by the Office of 
Budget, Finance, and Award Management and the divisions whose 
objectives the FFRDCs primarily support. For example, NSF's Division 
of Atmospheric and Geospace Sciences oversees NCAR, with assistance 
from the other NSF offices. Of NSF-sponsored FFRDCs, three, including 
NCAR, are established through cooperative agreements rather than 
contracts as was done for the other 27 FFRDCs we reviewed.[Footnote 
12] The remaining NSF-sponsored FFRDC, the Science and Technology 
Policy Institute, is sponsored by NSF on behalf of the White House 
Office of Science and Technology Policy (OSTP), and it provides 
analysis on significant domestic and international science and 
technology policies and developments for OSTP and other federal 
agencies. 

NSF also maintains a master list of all FFRDCs and reports data on 
research and development expenditures at FFRDCs.[Footnote 13] 
Specifically, NSF collects data on funds expended for activities 
specifically organized to produce research outcomes. These data focus 
on research activities and may not include all expenditures, such as 
those associated with administering the FFRDC or construction or 
renovation of facilities. 

FFRDCs are defined through the sponsoring agreement between the agency 
and the contractor retained to operate the FFRDC. At some agencies, 
the sponsoring agreement is a separate document that is incorporated 
into the contract or cooperative agreement and, at other agencies, the 
contract or cooperative agreement itself constitutes the sponsoring 
agreement. Historically, contractors have been retained for many years 
or decades as the operator of an FFRDC. Although FFRDCs are entirely 
federally funded, or nearly so, the organization operating the FFRDC 
is regarded as a contractor and not an agency of the United States. 
The contractor continues to exercise primary control over its business 
concerns, such as its personnel policies and compensation. 

Contractors can charge a number of costs to federal government 
contracts, including certain types and levels of compensation costs. 
Some types of compensation costs are considered allowable under 
government contracts, while others are considered unallowable. For 
example, compensation in the form of bonuses are allowable under 
certain conditions, while compensation in the form of stock options 
are unallowable. In order to be allowable, costs must meet certain 
requirements, such as being reasonable and in compliance with the 
terms of the contract and generally accepted accounting principles and 
practices. In determining reasonableness, the FAR directs agencies to 
consider if the cost exceeds that which would be incurred by a prudent 
person in the conduct of competitive business, such as the extent to 
which a contractor employee's compensation is consistent with other 
companies that are similar in size, industry, geographic area, and/or 
other factors.[Footnote 14] In addition, federal law caps the 
allowable total compensation for certain positions for which federal 
agencies may reimburse contractors. As shown in figure 2, the 
statutory cap on compensation reimbursements applies to pay (e.g., 
salaries, wages, bonuses, and other cash incentives) and some nonpay 
benefits (e.g., pensions and deferred compensation benefits) under 
contracts.[Footnote 15] Federal agencies may reimburse contractors for 
all or a portion of these costs, as long as the costs are allowable 
and the total reimbursement does not exceed the cap. The cap does not 
apply to other nonpay benefits, such as health insurance or other 
fringe benefits. FFRDC contractors, like other contractors, may 
provide compensation to their employees at levels they choose, but 
such compensation may be unallowable for reimbursement by federal 
sponsors. 

Figure 2: Compensation Subject to Cap on Reimbursement for Federally 
Funded Research and Development Center (FFRDC) Contractors: 

[Refer to PDF for image: illustration] 

Compensation paid to federally funded research and development centers'
contractors: 

Pay: 
Salaries and wages (subject to cap on reimbursement); 
Bonuses and other cash incentives (subject to cap on reimbursement). 

Nonpay benefits: 
Pensions and deferred compensation (subject to cap on reimbursement); 
Fringe benefits (e.g., health insurance). 

Source: GAO. GAO-14-593. 

[End of figure] 

From 1998 to 2012, the Office of Federal Procurement Policy (OFPP) 
[Footnote 16] calculated the cap amount annually based on the amount 
of compensation provided to the five most highly compensated employees 
in management positions at all publicly-owned U.S. companies with 
annual sales over $50 million. Over the 3-year period from fiscal year 
2010 through fiscal year 2012, the cap rose from $693,951 in 2010 to 
$763,029 in 2011, and then to $952,308 in 2012. In 2013, Congress 
effectively fixed the cap for preexisting contracts to the fiscal year 
2012 amount, and reduced the cap amount for new contracts to $487,000 
(see figure. 3).[Footnote 17] Contracts awarded prior to June 24, 
2014, are subject to the annual cap calculated by OFPP. Contracts 
awarded on or after June 24, 2014, are subject to a lower cap of 
$487,000. [Footnote 18] In addition, Congress amended the cap in 2011 
to include all defense agency contractor employees and again in 2013 
to include all civilian contractor employees instead of the top five 
most highly paid contractor employees--senior executives.[Footnote 19] 

Figure 3: Change in the Cap on Compensation for Federal Contractor 
Employees from 1998 through 2013: 

[Refer to PDF for image: plotted point graph] 

Year: 1998; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$340,650; 
Inflation adjusted, base year 2013 dollars: $487,200. 

Year: 1999; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$342,986; 
Inflation adjusted, base year 2013 dollars: $481,303. 

Year: 2000; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$353,010; 
Inflation adjusted, base year 2013 dollars: $480,188. 

Year: 2001; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$374,228; 
Inflation adjusted, base year 2013 dollars: $493,210. 

Year: 2002; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$387,783; 
Inflation adjusted, base year 2013 dollars: $503,529. 

Year: 2003; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$405,273; 
Inflation adjusted, base year 2013 dollars: $514,097. 

Year: 2004; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$432,851; 
Inflation adjusted, base year 2013 dollars: $536,623. 

Year: 2005; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$473,318; 
Inflation adjusted, base year 2013 dollars: $568,093. 

Year: 2006; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$546,689; 
Inflation adjusted, base year 2013 dollars: $633,006. 

Year: 2007; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$597,912; 
Inflation adjusted, base year 2013 dollars: $676,394. 

Year: 2008; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$612,196; 
Inflation adjusted, base year 2013 dollars: $663,131. 

Year: 2009; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$684,181; 
Inflation adjusted, base year 2013 dollars: $743,344. 

Year: 2010; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$693,951; 
Inflation adjusted, base year 2013 dollars: $741,298. 

Year: 2011; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$763,029; 
Inflation adjusted, base year 2013 dollars: $794,342. 

Year: 2012; 
Cap set by Office of Federal Procurement Policy, then year dollars: 
$952,308; 
Inflation adjusted, base year 2013 dollars: $967,871. 

Year: 2013; 
Cap revised by Congress: $487,000; 
Inflation adjusted, base year 2013 dollars: $487,000. 

Source: GAO analysis of Federal Register notices. GAO-14-593. 

[End of figure] 

The agencies that sponsor FFRDCs are also subject to the federal 
standards for internal control that state that agencies should collect 
information needed to determine whether the agency is complying with 
laws and regulations--such as the cap on executive compensation--and 
clearly document transactions and other significant events and make 
such documentation readily available. The Standards for Internal 
Control in the Federal Government provide a framework for establishing 
and maintaining internal control and identifying and addressing major 
performance and management challenges, and internal controls comprise 
the plans, methods, and procedures used by agencies to meet missions, 
goals, and objectives.[Footnote 20] 

Furthermore, federal agencies, including those that sponsor FFRDCs, 
are subject the Government Performance and Results Act of 1993 (GPRA) 
and the GPRA Modernization Act of 2010.[Footnote 21] These acts 
require agencies to develop long-term and annual goals and measures 
and report on progress toward achieving those goals on an annual 
basis. We have reported that agencies face long-standing difficulties 
measuring the performance of various types of federal programs and 
activities, including contracts, grants, and research and development. 
[Footnote 22] Whereas federal agencies are subject to the performance 
reporting requirements of GPRA, as specified by the Office of 
Management and Budget (OMB), FFRDC contractors are not subject to any 
generally applicable, post-award reporting requirements. The reporting 
requirements for FFRDC contractors are specified in the applicable 
contracts or cooperative agreements between the sponsoring agency and 
FFRDC contractor. 

The FAR establishes certain requirements that apply when agencies 
enter into contracts to sponsor FFRDCs.[Footnote 23] For example, 
while FFRDC contractors primarily perform work for the sponsoring 
agency, they may also enter into additional contracts or agreements to 
perform work for other entities. In such cases, the FAR requires that 
the contract include provisions allowing the sponsoring agency to 
approve that the additional work is within the purpose, mission, 
general scope of effort, or special competency of the FFRDC. In 
addition, prior to extending a contract or sponsoring agreement for an 
FFRDC, the FAR requires that the federal sponsor conduct a 
comprehensive review of the use and need for the FFRDC at least every 
5 years.[Footnote 24] The FAR describes elements of that review to 
include the following: 

1. an examination of the sponsor's special technical needs and 
missions requirements that are performed by the FFRDC; 

2. consideration of alternative sources; 

3. an assessment of the efficiency and effectiveness of the FFRDC in 
meeting the sponsor's needs; 

4. an assessment of the adequacy of the FFRDC management in ensuring a 
cost effective operation; and: 

5. a determination that the sponsoring agreement is in compliance with 
other FAR requirements concerning FFRDCs (e.g., ensuring that the 
sponsoring agreement or contract contains a statement of purpose, 
provisions for termination, and prohibition on competition). 

The FAR further requires that the head of the sponsoring agency 
approve or terminate sponsorship based on the results of the 
comprehensive review conducted in accordance with these elements. 
Because the elements are not required by the FAR, agencies have 
flexibility to determine the content of the comprehensive review and 
its documentation. 

FFRDCs Sponsored by DOE Received More Total Funding Than Those 
Sponsored by DOD and NSF: 

The 30 FFRDCs sponsored by DOE, DOD, and NSF received nearly $84 
billion in total funding for fiscal years 2008 through 2012. The 16 
FFRDCs sponsored by DOE received more funding than the FFRDCs 
sponsored by the other two agencies and performed more work for 
entities other than the sponsoring agency. Specifically, DOE-sponsored 
FFRDCs received about 79 percent of the nearly $84 billion in total 
funding for FFRDCs sponsored by these agencies for fiscal years 2008 
through 2012, according to our analysis of agency reports of 
contractor and agency data provided in response to our survey of FFRDC 
sponsors. As shown in figure 4, during this period, the 16 DOE-
sponsored FFRDCs received about $66 billion in total funding, the 10 
DOD-sponsored FFRDCs received about $15.7 billion in total funding, 
and the 4 NSF-sponsored FFRDCs received about $1.8 billion in total 
funding. Each year, DOE, DOD, and NSF collectively obligated between 
$12 and $15 billion to the 30 FFRDCs they sponsored over this period. 

Figure 4: Total Funding for Federally Funding Research and Development 
Centers (FFRDC) Sponsored by DOE, DOD, and NSF (FY 2008-FY 2012): 

[Refer to PDF for image: pie-chart] 

National Science Foundation: $1.763 billion; 
Department of Defense: $15.726 billion; 
Department of Energy: $66.355 billion. 

Sources: GAO analysis of agency reports of contractor and agency data. 
GAO-14-593. 

[End of figure] 

As shown in table 1, DOE obligated about 34 percent of its available 
budget authority toward the FFRDCs it sponsored, while DOD and NSF 
dedicated less than 1 percent and 4 percent, respectively, based on 
obligations as a percent of budget authority from fiscal year 2008 
through fiscal year 2012.[Footnote 25] With regard to the significant 
share of DOE's budget being obligated to its FFRDCs, DOE officials 
noted that for many decades the FFRDCs sponsored by the Department 
have been the primary means for carrying out its research and 
development mission. While FFRDCs represent a smaller proportion of 
the overall budget of DOD and NSF, in some cases they represent a 
larger proportion of individual office budgets at those agencies. For 
example, over one-third of the budget for NSF's Division of 
Atmospheric and Geospace Sciences is used to support NCAR.[Footnote 26] 

Table 1: Percentage of Agency's Available Funds Obligated to Sponsored 
Federally Funded Research and Development Centers (FFRDC) for Fiscal 
Years 2008 through 2012: 

Agency: Department of Energy; 
FY 2008: 40.8%; 
FY 2009: 17.2%; 
FY 2010: 47.4%; 
FY 2011: 48.3%; 
FY 2012: 47.1%; 
FY 2008-FY 2012: 33.6%. 

Agency: Department of Defense; 
FY 2008: 0.4%; 
FY 2009: 0.4%; 
FY 2010: 0.4%; 
FY 2011: 0.4%; 
FY 2012: 0.4%; 
FY 2008-FY 2012: 0.4%. 

Agency: National Science Foundation; 
FY 2008: 4.5%; 
FY 2009: 3.5%; 
FY 2010: 4.2%; 
FY 2011: 3.8%; 
FY 2012: 3.2%; 
FY 2008-FY 2012: 3.8%. 

Sources: GAO analysis of agency data. GAO-14-593. 

[End of table] 

Most FFRDCs in our review received funding from entities other than 
their sponsoring agency, and DOE-sponsored FFRDCs received more funds 
from other entities than FFRDCs sponsored by DOD and NSF. For fiscal 
years 2008 through 2012, FFRDCs sponsored by DOE, DOD, and NSF 
received approximately $15 billion of the nearly $84 billion in total 
funding from sources other than their sponsoring agency--specifically 
from other federal agencies (about $13 billion) and nonfederal 
entities, such as state or local governments, and private entities 
(about $1.9 billion). Figure 5 shows the total funding reported at 
each of the 30 FFRDCs for fiscal years 2008 through 2012 and the 
amounts received from the sponsoring agency, other federal agencies, 
and nonfederal entities.[Footnote 27] 

Figure 5: Total Funding for DOE, DOD, and NSF Sponsored Federally 
Funded Research and Development Centers (FFRDC) (FY 2008-FY 2012): 

[Refer to PDF for image: stacked horizontal bar graph] 

Department of Energy: 

Los Alamos National Laboratory: 
Obligations by sponsoring agency: $10.247 billion; 
Obligations by other federal agencies: $1.071 billion; 
Nonfederal funding: $203 million. 

Sandia National Laboratories: 
Obligations by sponsoring agency: $7.446 billion; 
Obligations by other federal agencies: $4.283 billion; 
Nonfederal funding: $204 million. 

Lawrence Livermore National Laboratory: 
Obligations by sponsoring agency: $6.325 billion; 
Obligations by other federal agencies: $1.240 billion; 
Nonfederal funding: $197 million. 

Oak Ridge National Laboratory: 
Obligations by sponsoring agency: $5.926 billion; 
Obligations by other federal agencies: $1.191 billion; 
Nonfederal funding: $189 million. 

Lawrence Berkeley National Laboratory: 
Obligations by sponsoring agency: $3.310 billion; 
Obligations by other federal agencies: $299 million; 
Nonfederal funding: $272 million. 

Idaho National Laboratory: 
Obligations by sponsoring agency: $3.279 billion; 
Obligations by other federal agencies: $736 million; 
Nonfederal funding: $63 million. 

Pacific Northwest National Laboratory: 
Obligations by sponsoring agency: $3.228 billion; 
Obligations by other federal agencies: $1311
Nonfederal funding: $55 million. 

Brookhaven National Laboratory: 
Obligations by sponsoring agency: $3.139 billion; 
Obligations by other federal agencies: $242 million; 
Nonfederal funding: $57 million. 

Argonne National Laboratory: 
Obligations by sponsoring agency: $2.906 billion; 
Obligations by other federal agencies: $460 million; 
Nonfederal funding: $179 million. 

Fermi National Accelerator Laboratory: 
Obligations by sponsoring agency: $2.101 billion; 
Obligations by other federal agencies: $1 million; 
Nonfederal funding: $28 million. 

National Renewable Energy Laboratory: 
Obligations by sponsoring agency: $1.943 billion; 
Obligations by other federal agencies: $92 million; 
Nonfederal funding: $67 million. 

SLAC National Accelerator Laboratory: 
Obligations by sponsoring agency: $1.682 billion; 
Obligations by other federal agencies: $8 million; 
Nonfederal funding: $40 million. 

Thomas Jefferson National Accelerator Facility: 
Obligations by sponsoring agency: $793 million; 
Obligations by other federal agencies: $30 million; 
Nonfederal funding: $18 million. 

Savannah River National Laboratory: 
Obligations by sponsoring agency: $753 million; 
Obligations by other federal agencies: $137 million; 
Nonfederal funding: $11 million. 

Princeton Plasma Physics Laboratory: 
Obligations by sponsoring agency: $408 million; 
Obligations by other federal agencies: $5 million; 
Nonfederal funding: $5 million. 

Ames Laboratory: 
Obligations by sponsoring agency: $154 million; 
Obligations by other federal agencies: $10 million; 
Nonfederal funding: $11 million. 

Department of Defense: 

Aerospace Federally Funded Research and Development Center: 
Obligations by sponsoring agency: $3.904 billion; 
Obligations by other federal agencies: $106 million; 
Nonfederal funding: $0. 

National Security Engineering Center: 
Obligations by sponsoring agency: $3.831 billion; 
Obligations by other federal agencies: $846 million; 
Nonfederal funding: $4 million. 

Lincoln Laboratory: 
Obligations by sponsoring agency: $3.588 billion; 
Obligations by other federal agencies: $535 million; 
Nonfederal funding: $7 million. 

Systems and Analyses Center: 
Obligations by sponsoring agency: $702 million; 
Obligations by other federal agencies: $71 million; 
Nonfederal funding: $0. 

Center for Naval Analyses: 
Obligations by sponsoring agency: $451 million; 
Obligations by other federal agencies: $0; 
Nonfederal funding: $0. 

Center for Communications and Computing: 
Obligations by sponsoring agency: $333 million; 
Obligations by other federal agencies: $0; 
Nonfederal funding: $0. 

Software Engineering Institute: 
Obligations by sponsoring agency: $320 million; 
Obligations by other federal agencies: $245 million; 
Nonfederal funding: $128 million. 

National Defense Research Institute: 
Obligations by sponsoring agency: $244 million; 
Obligations by other federal agencies: $25 million; 
Nonfederal funding: $0. 

Project Air Force: 
Obligations by sponsoring agency: $226 million; 
Obligations by other federal agencies: $0; 
Nonfederal funding: $0. 

Arroyo Center: 
Obligations by sponsoring agency: $160 million; 
Obligations by other federal agencies: $0; 
Nonfederal funding: $0. 

National Science Foundation: 

National Center for Atmospheric Research: 
Obligations by sponsoring agency: $621 million; 
Obligations by other federal agencies: $187 million; 
Nonfederal funding: $82 million. 

National Radio Astronomy Observatory: 
Obligations by sponsoring agency: $572 million; 
Obligations by other federal agencies: $0.1 million; 
Nonfederal funding: $57 million. 

National Optical Astronomy Observatory: 
Obligations by sponsoring agency: $185 million; 
Obligations by other federal agencies: $1 million; 
Nonfederal funding: $25 million. 

Science and Technology Policy Institute: 
Obligations by sponsoring agency: $24 million; 
Obligations by other federal agencies: $10 million; 
Nonfederal funding: $0. 

Sources: GAO analysis of agency reports of contractor and agency data. 
GAO-14-593. 

[End of figure] 

Many FFRDCs Sponsored by DOE, DOD, and NSF Spent Over Half of Their 
Total Funding on Compensation, and These Agencies Have Processes to 
Review FFRDC Contractor Compensation: 

Many FFRDCs sponsored by DOE, DOD, and NSF spent over half of their 
total funding on compensation for fiscal years 2010 through 2012, and 
sponsoring agencies have processes to review compensation annually to 
ensure that FFRDC contractors were not reimbursed in excess of the cap 
amount set in federal law. These agencies also have processes to 
review compensation more generally for all contractor employees. 

Compensation Costs Generally Represented Half or More of Total FFRDC 
Funding: 

For fiscal years 2010 through 2012, 20 of 30 FFRDCs sponsored by DOE, 
DOD, and NSF spent over half of their annual funding on compensation, 
based on our analysis of agency and contractor data provided in 
response to our survey of FFRDC sponsors. According to these data, 
compensation costs ranged from 27 to 79 percent of annual funding at 
the FFRDCs sponsored by these agencies over this period. In total, 
these costs provided about 71,000 full-time equivalents (FTE) per year 
in fiscal years 2010 through 2012 at the 30 FFRDCs sponsored by these 
three agencies.[Footnote 28] In 2012, the average compensation cost 
for each FTE across the 30 FFRDCs was $135,694. In comparison, we 
previously reported that total government-wide compensation for 
federal employees for each FTE position averaged $116,828 in 2012. 
[Footnote 29] The average compensation cost for each FTE at a single 
FFRDC ranged from $88,000 to $177,000 per year. FFRDC sponsors also 
reported that the maximum salary received by executives at these 
FFRDCs ranged between $200,000 and $600,000, as shown in figure 6. 
[Footnote 30] (Appendix II, table 6, provides more information on 
compensation costs as a percentage of total FFRDC funding, the 
compensation cost per FTE, and average FTEs across fiscal years 2010 
through 2012 at the 30 FFRDCs we reviewed.) 

Figure 6: Highest Reported Executive Salaries at Federally Funded 
Research and Development Centers (FFRDC) sponsored by DOE, DOD, and 
NSF in FY 2011: 

[Refer to PDF for image: vertical bar graph] 

Highest reported executive salary: $200,000 to $299,999; 
Number of federally funded research and development centers[A]: 5. 

Highest reported executive salary: $300,000 to $399,999; 
Number of federally funded research and development centers[A]: 14. 

Highest reported executive salary: $400,000 to $499,999; 
Number of federally funded research and development centers[A]: 8. 

Highest reported executive salary: $500,000 to $599,999; 
Number of federally funded research and development centers[A]: 3. 

Sources: GAO analysis of agency reports of contractor and agency data. 
GAO-14-593. 

[A] DOE, DOD, and NSF sponsor 30 individual FFRDCs, operated by 26 
different contractors. Therefore, some contractors are represented 
multiple times. 

[End of figure] 

DOE, DOD, and NSF Have Processes to Review Compensation Reimbursements 
for Senior Executives and other FFRDC Contractor Employees: 

DOE, DOD, and NSF have processes to annually review compensation 
reimbursements for senior executives against the federal statutory cap 
and conduct general reviews of compensation for other employees. 

DOE: 

DOE relies on its contracting officers to review senior executive 
compensation reimbursements against the federal statutory cap, and, 
until May of 2014, DOE generally did not document the total reimbursed 
compensation subject to the cap for these senior executives. DOE has 
additional processes in place to review compensation for all FFRDC 
contractor employees. 

Reviews of Senior Executive Compensation Reimbursements Against the 
Statutory Cap: 

DOE contracting officers evaluate the reimbursed compensation of 
senior executives to assess the applicability of the cap, and these 
evaluations differ for two groups of senior executives at its FFRDCs--
(1) laboratory directors and (2) other executives--based on our 
discussions with DOE officials and review of DOE policy on executive 
compensation.[Footnote 31] Prior to May 2014, contracting officers 
evaluated the reimbursed portions of senior executives' pay and nonpay 
benefits separately,[Footnote 32] and DOE officials told us that, in 
general, they did not document the total subject to the cap, except at 
the Savannah River National Laboratory (SRNL).[Footnote 33] For the 
laboratory directors, contracting officers evaluated reimbursable pay 
annually by approving a required form submitted by the contractor that 
documents the laboratory directors' pay--salary and any bonuses or 
incentives--and any proposed changes. For other FFRDC senior 
executives, contracting officers evaluated reimbursable pay by 
approving the form documenting salary, bonuses, and incentives only at 
the start of the contract or when those individuals are hired. 
Thereafter, contracting officers evaluated pay for these senior 
executives on an annual basis through approval of a plan describing 
the contractor's request for reimbursement for pay for all FFRDC 
employees, called the compensation increase plan.[Footnote 34] This 
plan describes pay for specific groups and does not describe the 
salaries, bonuses, or other incentives received by individual 
contractor senior executives.[Footnote 35] For example, ORNL's 
compensation increase plan describes pay for its senior executives 
within a group of managers. Regarding nonpay benefits for senior 
executives, DOE officials told us that the only nonpay benefits 
subject to the cap that they receive are certain pension plans. Costs 
for these plans are based on a percentage of the executive's salary 
and the plans are approved by the contracting officers. According to 
these officials, since the contracting officers approved reimbursable 
pay and the pension plans, they could calculate the laboratory 
directors' total reimbursed compensation subject to the cap and 
estimate it for other executives. 

In May 2014, DOE updated its policy on senior executive compensation 
to require documentation of all the laboratory directors' pay and 
nonpay benefits subject to the cap in addition to the reviews 
described above. For other FFRDC senior executives under a 
compensation increase plan, officials told us that DOE limits 
contractor compensation to amounts less than the laboratory director 
by establishing the director's salary as the maximum allowable at each 
FFRDC and requiring contractors to report the bonus and incentive pay 
for senior executives. Officials told us that DOE previously did not 
require all its contractors to submit documentation itemizing pay and 
nonpay benefits as was done at SRNL because the reimbursable 
compensation for senior executives at the FFRDCs the agency sponsors 
was well below the cap. These officials told us that, because the 
reduction in the cap increases the risk that FFRDC executives could 
receive pay subject to the cap, DOE decided to adopt a process similar 
to that previously used at SRNL. The FFRDCs currently sponsored by DOE 
are subject to the OFPP fiscal year 2012 calculated cap of $952,308, 
until such time as their current contracts end. New contracts awarded 
after June 2014 will be subject to the lower cap of $487,000. 
Additional information on the current contract award and end dates for 
these FFRDCs, and those sponsored by DOD and NSF, are shown in 
appendix II (table 7). 

Other Reviews of Compensation for FFRDC Contractor Employees: 

In addition to reviewing reimbursed compensation for senior 
executives, DOE officials told us that they also review various 
aspects of employee compensation for all FFRDC contractors. DOE 
officials annually approve the FFRDC contractors' requests for pay 
increases through the compensation increase plan, described above, and 
review and approve the contractors' overall compensation systems at 
least once during the term of the contract. The compensation increase 
plan includes supporting information for the contractor's request, 
such as comparisons of average pay for groups of FFRDC employees 
against market averages for similar groups. For example, the 
compensation increase plan for ORNL describes the average pay for its 
administrative support employees and for its managers relative to 
average pay for those groups derived from market surveys. Compensation 
increase plan proposals, and the salary survey data used by the FFRDC 
contractor, are evaluated by DOE officials, who ensure that proposed 
funds are reasonable and will maintain appropriate comparability with 
market averages from the survey data. DOE officials also review an 
additional report provided each year by the FFRDC contractor that 
includes actual compensation reimbursed for groups of FFRDC employees 
to ensure compliance with the FFRDC compensation increase plans that 
DOE previously approved. 

DOD: 

DOD relies on audits by DCAA to review documented compensation for 
senior executives and other employees against the cap on 
reimbursements, and DCAA and DCMA review the overall pay and nonpay 
benefits at DOD-sponsored FFRDCs. 

Reviews of Senior Executive Compensation Reimbursements Against the 
Statutory Cap: 

DOD relies on audits by the DCAA to review documented compensation for 
FFRDC employees against the cap on reimbursements. DCAA 
retrospectively evaluates the compensation of executives--including 
senior executives--separately from other groups of contractor 
employees.[Footnote 36] DCAA officials told us that they annually 
audit costs incurred on DOD contracts, and the review of 
reimbursements for executive compensation against the cap is a 
standard step in these audits. According to the document DCAA uses to 
assist auditors in planning and performing these audits, DCAA compares 
executive compensation claimed for reimbursement to prior years, 
determines if there are significant changes from prior years, or if 
claimed executive compensation is over the statutory cap on 
compensation.[Footnote 37] As part of this review, DCAA auditors told 
us that they obtain documented information from the contractor on the 
itemized components of pay and nonpay benefits for individual 
executives and amounts claimed for reimbursement and verify that 
contractors correctly calculated the allowable portion of compensation 
costs for each executive. DCAA officials may also request assistance 
from another DCAA team specializing in executive compensation audits. 
Auditors from this team told us that they evaluate compensation for 
employees or classes of employees against the FAR criteria on 
allowability, including compliance with the cap on compensation 
reimbursements, as well as their reasonableness. From 2009 to 2013, 
this team evaluated, or is in the process of evaluating, executive 
compensation at 5 of the 10 DOD-sponsored FFRDCs. In the completed 
evaluations, DCAA found no instances of reimbursements above the cap. 
For other contractor employees, DCAA's incurred cost audits include 
evaluations of the contractors' overall compensation system and 
internal controls, including the applicability of caps on compensation 
reimbursements. According to DOD and DCAA officials, few employees at 
DOD-sponsored FFRDCs receive compensation near the cap. For example, 
DOD officials responding to our survey stated that, of the 10 DOD-
sponsored FFRDCs, 5 FFRDCs operated by three different contractors had 
a single senior executive employee with total compensation--including 
unreimbursed amounts--above the cap in place for fiscal years 2010 and 
2011.[Footnote 38] Further, DCAA officials who audit 1 of the DOD-
sponsored FFRDCs told us that the lower cap enacted in 2013 would 
affect only a few employees at that FFRDC contractor. 

Other Reviews of Compensation for FFRDC Contractor Employees: 

In addition to reviewing reimbursed compensation against the statutory 
cap, DCAA also evaluates compensation for individual employees or 
classes of employees, including executives, against the FAR criteria 
for reasonableness, such as conformity with compensation practices of 
other firms of the same size, industry, and geographic area. DOD and 
DCAA officials told us they analyzed the reasonableness of 
compensation costs as part of the annual incurred cost audits and 
during negotiation of the contract. The audit team that specializes in 
assessing executive compensation evaluates reasonableness by 
confirming executive compensation amounts and comparing them against 
surveys of compensation at similar firms. DCAA auditors also examine 
the reasonableness for other groups of employees if audits of the 
contractor's overall compensation system and internal controls over 
compensation find that those systems cannot be relied upon to 
demonstrate reasonable levels of compensation and that the potential 
for unreasonable compensation exists. DOD also utilizes DCMA to 
evaluate some DOD FFRDC contractors' indirect costs, which include 
pension and other benefit costs. 

NSF: 

Most NSF-sponsored FFRDCs are not subject to the federal statutory cap 
on compensation reimbursements because they operate under cooperative 
agreements rather than contracts. Nonetheless, NSF reported that none 
of the four FFRDCs have senior executives with compensation above the 
cap and that NSF has procedures to review compensation at the FFRDCs 
it sponsors. NSF utilizes audits by DCAA to review documented 
compensation for executives at the one NSF-sponsored FFRDC that 
operated under a contract, and NSF conducts various reviews of 
compensation for all FFRDC employees. 

Reviews of Senior Executive Compensation Reimbursements Against the 
Statutory Cap: 

NSF has different procedures across the four FFRDCs it sponsors to 
review senior executive compensation. For the Science and Technology 
Policy Institute (STPI), the only NSF-sponsored FFRDC that operates 
under contract and is thus subject to the cap, DCAA reviews documented 
compensation because the FFRDC is operated under a contract by the 
Institute for Defense Analyses, which also operates FFRDCs sponsored 
by DOD that are subject to DCAA audit. For the three FFRDCs awarded 
through cooperative agreements, the cap does not apply. However, the 
agreements for these FFRDCs require that NSF approves the salary for 
the FFRDC directors. In addition, these agreements require that the 
FFRDC contractors notify NSF of all other forms of compensation for 
directors at two of these three FFRDCs and stipulates that no part of 
the management fee received by the third FFRDC may fund the director's 
salary. NSF officials also noted that they had performed a salary 
comparison for the NCAR director based largely on survey data on 
salaries for college and university administrators. NSF responded to 
our survey that none of its FFRDCs had executives with compensation 
above the cap. 

Other Reviews of Compensation for FFRDC Contractor Employees: 

NSF officials told us that they conduct various reviews of 
compensation for all FFRDC employees, including reviews before 
awarding and during the period of performance of an FFRDC contract or 
agreement. For STPI, the one NSF-sponsored FFRDC operating under a 
contract, NSF, in response to our survey asking about steps they take 
to evaluate compensation, told us that they review the compensation 
rates charged by the FFRDC annually to ensure they are fair and 
reasonable. In addition, DCAA and DCMA review the compensation costs 
for STPI, as they do for DOD-sponsored FFRDCs. For the three FFRDCs 
under cooperative agreements, NSF officials told us that they reviewed 
a sample of compensation costs from the proposed budget before 
awarding new cooperative agreements. For example, before awarding the 
most recent cooperative agreement sponsoring NCAR, NSF officials 
reviewed NCAR's budget and financial capability, including the total 
compensation plan, positions with corresponding salary grades, and the 
FFRDC operator's procedures for determining compensation rates. NSF 
also reviewed contributions to retirement and medical benefits at NCAR 
and found that the FFRDC operator appeared to have made a thorough and 
detailed examination of salary rates and levels and that its policies 
and procedures for salary rates and total compensation were generally 
adequate. NSF has also incorporated terms regarding compensation into 
its cooperative agreements. For example, the cooperative agreements 
for NCAR and the National Optical Astronomy Observatory require the 
FFRDC operator to notify NSF of any substantive changes to its 
compensation policies and describe the rationale for any changes. 

DOE, DOD, and NSF Use Multiple Reviews to Assess FFRDC Performance: 

DOE, DOD, and NSF assess FFRDC performance through three types of 
reviews--comprehensive reviews, annual performance reviews, and other 
review activities such as day-to-day oversight. 

DOE, DOD, and NSF Conducted Comprehensive Reviews of the Use and Need 
for FFRDCs That Vary in Level of Detail: 

DOE, DOD, and NSF conducted comprehensive reviews of the use and need 
for the FFRDCs they sponsored and, in keeping with the flexibilities 
the FAR provides, these reviews varied in level of detail. The FAR 
requires sponsoring agencies to conduct a comprehensive review at 
least every 5 years on the use and need for an FFRDC prior to 
extending the contract or agreement, and it describes five elements it 
should include: (1) an examination of the special technical needs and 
mission requirements performed by the FFRDC, (2) a consideration of 
alternative sources, (3) an assessment of the efficiency and 
effectiveness of the FFRDC in meeting the sponsor's needs, (4) an 
assessment of the adequacy of the FFRDC management in ensuring a cost-
effective operation, and (5) a determination that the sponsoring 
agreement or contract complies with other FAR requirements concerning 
FFRDCs. Within those five elements, the FAR gives agencies the 
flexibility to determine how much information to include and how to 
document the review. 

Based on our analysis of agency documents, DOE, DOD, and NSF met the 
FAR requirement to conduct a comprehensive review of the use and need 
for the FFRDCs they sponsored in most instances and, in all cases, 
they recommended the continuance of the FFRDC.[Footnote 39] DOE has 
conducted comprehensive reviews for all 16 of its FFRDCs; however, in 
two cases, DOE did not meet the FAR requirement to conduct a 
comprehensive review at least every 5 years. Los Alamos and Lawrence 
Livermore National Laboratories were the two exceptions. DOE last 
conducted comprehensive reviews for Los Alamos in 2005 and Lawrence 
Livermore in 2007. The department has not conducted additional reviews 
within the 5-year period required by the FAR. DOE officials told us 
that NNSA, which is responsible for conducting the reviews of the two 
laboratories, is updating its comprehensive reviews, and the officials 
expect them to be finalized in the next few months. DOD met the FAR 
requirement to conduct a comprehensive review on the use and need for 
all 10 of the FFRDCs we reviewed. NSF also met the FAR requirement to 
conduct a comprehensive review on the use and need for the 1 FFRDC it 
operates by contract.[Footnote 40] These comprehensive reviews stated 
that all of the FFRDCs were performing effectively or adequately and 
either recommended or supported continuing the FFRDC.[Footnote 41] 
Further, DOD officials told us that all of its 10 FFRDCs have retained 
the same contractor throughout the existence of their FFRDCs, and NSF 
officials said that 3 of its 4 FFRDCs have retained the same 
contractor.[Footnote 42] Since 2004, DOE has competed 6 of its 16 
FFRDC contracts and replaced the incumbent contractor in four 
instances. 

In keeping with the flexibilities that the FAR provides, DOE, DOD, and 
NSF documented the results of their most recent comprehensive reviews 
to varying degrees of detail and in how much information they included 
in addressing the FAR elements, as follows: [Footnote 43] 

* DOE. DOE's comprehensive review documents generally followed a 
consistent format that provided general statements for each of the 
five FAR elements. The comprehensive reviews provided more information 
regarding the department's technical needs and mission requirements 
for the FFRDC than they did for the other FAR elements, with almost 
all of the 16 FFRDC reviews documenting this element in detail. Most 
of DOE's comprehensive reviews partially documented the other four FAR 
elements. For example, as part of the discussion on the efficiency and 
effectiveness of the FFRDC for ORNL, the comprehensive review 
described DOE's satisfaction with the FFRDC contractor by providing 
the letter grades received by ORNL based on DOE's annual appraisal 
process to evaluate the scientific, technological, managerial, and 
operational performance of the contractors who manage and operate each 
of its national laboratories. ORNL's comprehensive review did not 
provide additional details on the outcome of the annual appraisals. 

* DOD. DOD's comprehensive review documents generally documented each 
of the five elements in detail. Seven of the nine DOD comprehensive 
reviews contained supporting evidence on all five FAR elements, 
including a rationale for their determinations relating to each 
element.[Footnote 44] For example, regarding the FAR element to 
examine alternative sources, the NSEC comprehensive review described 
the relative merits of using DOD personnel, for-profit contractors, 
and other nonprofit contractors to complete the work currently done by 
NSEC. The other two reviews were partially documented, including 
limited supporting evidence regarding the efficiency and effectiveness 
of the FFRDC. One of these reviews also included limited supporting 
evidence related to the cost-effectiveness of the FFRDC and no 
documentation or discussion related to compliance of the sponsoring 
agreement with the FAR requirements. 

* NSF. The comprehensive review for NSF's Science and Technology 
Policy Institute--according to NSF officials, the only one of NSF's 
FFRDCs subject to the FAR requirement for a comprehensive review--
included all five FAR elements and provided detailed information 
regarding the sponsor's needs and the efficiency and effectiveness of 
the FFRDC and a limited discussion on alternative sources and the 
FFRDC's cost-effectiveness. 

DOE and DOD officials have developed guidance on how to conduct 
comprehensive reviews, and NSF officials stated that the FAR informs 
their reviews of NSF-sponsored FFRDCs. DOE's guidance calls for a 
review of the use and need for continued operation as an FFRDC in 
accordance with the FAR, without additional elaboration on these FAR 
requirements. This guidance states that the comprehensive review 
should be completed as part of the agency's process for deciding if it 
will extend or compete an FFRDC contract when the current contract's 
term has ended. This guidance also calls for the preparation of an 
alternatives package 24 months before the FFRDC's contract expires, 
consisting of an action memo for the Secretary to approve and other 
documentation, for example a discussion of the incumbent FFRDC 
contractor's performance history, including technical, administrative, 
and cost performance.[Footnote 45] DOE officials stated that FFRDC 
reviews are required every 5 years in accordance with the FAR 
requirements, regardless of award provisions and competitions for the 
FFRDC contract. 

DOD has issued guidance on how to conduct comprehensive reviews in the 
form of a memorandum to DOD offices and divisions on the management of 
FFRDCs. DOD's guidance was issued to clarify the FAR requirements, 
assist DOD officials with the oversight and management of the FFRDCs 
they sponsor, and ensure consistency across the department.[Footnote 
46] It includes references to certain FAR elements relating to the 
execution of comprehensive reviews and adds additional requirements 
for DOD sponsors. Among other things, the guidance assigns 
responsibilities to the Under Secretary of Defense for Acquisition, 
Technology and Logistics to establish and promulgate FFRDC procedures; 
allocate the number of staff years and funding within the annual 
ceiling set by Congress for all DOD-sponsored FFRDCs; and review and 
approve all comprehensive reviews for FFRDCs prior to a contract 
renewal decision. In addition, the guidance provides direction to DOD 
sponsors for reporting the results of the FFRDC comprehensive reviews 
and, according to DOD officials, helps DOD foster the optimal and 
appropriate management of FFRDCs in accordance with law, regulation, 
and policy. The guidance directs DOD sponsors to establish annual 
governance procedures to monitor the value, quality, and 
responsiveness of FFRDC work. DOD officials added that the guidance 
helps make sure that the sponsors are paying attention to the quality 
of the products they are getting from the FFRDC, and it allows the 
department to state with confidence that the services provided by the 
FFRDC are needed.[Footnote 47] 

As stated earlier, according to NSF, the specific provisions in the 
FAR requiring a comprehensive review do not apply to three of its four 
FFRDCs because they are established under cooperative agreements. 
[Footnote 48] However, NSF officials said that the agency carries out 
a midpoint review for these three FFRDCs similar to the comprehensive 
review and its associated FAR requirements. For example, per the terms 
of the cooperative agreement with NCAR, NSF initiates a midpoint 
review once during the 5-year term of the agreement with the FFRDC 
operator. According to NSF officials, the midpoint review includes 
assessments of the management, science, and service functions by 
multiple teams of independent experts based on criteria given to them 
by NSF. The officials said that NSF has used the results of the 
midpoint review to inform changes to the cooperative agreement. For 
example, the most recent review was critical of the FFRDC operator's 
efforts to coordinate and plan their educational programs, so NSF 
included specific requirements to increase coordination among these 
programs in the subsequent cooperative agreement. 

DOE and DOD officials provided different explanations on how the 
comprehensive review process supports their assessments of FFRDC 
performance. DOE officials described the comprehensive review as a 
summation largely derived from the findings of its annual performance 
appraisals, and not a stand-alone evaluation or an exhaustive 
description of the FFRDC contractor's performance.[Footnote 49] 
According to those officials, the DOE comprehensive reviews rely on 
annual performance reports to provide a multiyear assessment. In 
contrast, DOD officials and contractor representatives described the 
comprehensive review process as an opportunity to take a broad 
assessment of the FFRDC and its key competencies over and above DOD's 
annual assessments of its FFRDCs. For example, NSEC's comprehensive 
review served as an opportunity for the department to recognize that 
NSEC had developed expertise in countering improvised explosive 
devices, that DOD had an ongoing need for this work, and that DOD 
should elevate the importance of this work. In another example, the 
last comprehensive review for the Software Engineering Institute 
identified concerns about the execution and ability of the FFRDC to 
meet the sponsor's need for more research engineers. The comprehensive 
review recommended a revised sponsoring agreement with substantial 
changes in governance and to the core statement. It also recommended 
removing most of the process improvement work from the FFRDC and 
emphasizing research. DOD implemented the recommendation to remove 
most process improvement work and the subsequent sponsoring agreement 
emphasized research. 

DOE, DOD, and NSF Conduct Annual Performance Assessments, Many of 
Which Rely on User Surveys: 

DOE, DOD, and NSF annually review and document the performance of the 
FFRDCs they sponsor. Annual reviews are conducted to evaluate the 
performance of contractors who manage and operate the FFRDCs. 

DOE. DOE develops annual performance plans and undertakes an annual 
appraisal process to evaluate its FFRDCs, including surveying federal 
officials responsible for the work at the DOE-sponsored centers. With 
respect to the 10 FFRDCs sponsored by DOE's Office of Science, DOE 
officials conduct an annual appraisal process to evaluate the 
scientific, technological, managerial, and operational performance of 
the contractors who manage and operate each of its national 
laboratories. According to DOE officials, these evaluations provide 
the basis for determining performance fees and the possibility of 
earning additional years on the contract through an award term 
extension. They also serve to inform the decisions DOE makes regarding 
whether to extend or compete the contracts when they expire. For each 
of the FFRDCs sponsored by the Office of Science, DOE officials told 
us that they prepare a performance evaluation and measurement plan a 
few months prior to the beginning of the fiscal year that provides a 
common structure and scoring system using goals, objectives, and 
notable outcomes that are weighted in importance by the appropriate 
program office or other FFRDC users.[Footnote 50] These plans serve as 
the evaluation template for the FFRDCs and their contractors at the 
close of the fiscal year. At the conclusion of the fiscal year, a 
performance and evaluation report is developed for each DOE FFRDC that 
provides performance scores and the amount of performance-based fee 
earned by the contractor.[Footnote 51] 

DOD. DOD officials are responsible for annual reviews of the FFRDCs 
sponsored by the department. Under DOD guidance, sponsors are to 
annually assess the technical quality, responsiveness, value, cost and 
timeliness of FFRDCs. According to DOD officials, the guidance does 
not specify how sponsors are to complete the annual FFRDC reviews; 
however, almost all DOD sponsors use surveys to obtain input about the 
FFRDC's performance in support of these annual reviews, including the 
sponsors for NSEC. The timing of the annual review is determined by 
the DOD sponsors. For example, NSEC's annual survey and associated 
review is typically completed by the end of March, at which time it is 
provided to the DOD sponsor for review. In addition, DOD officials 
compare FFRDC user survey responses with survey responses provided by 
the FFRDC contractor, which also provides input to the survey, to 
identify any inconsistencies in performance. Some of the information 
from the annual surveys may be used in support of the comprehensive 
review; for example, all of the last 5 years of annual survey 
responses provided by Army and Air Force were used to support the 
findings of NSEC's latest comprehensive review. 

NSF. On an annual basis, NSF's FFRDC operators submit to NSF a 
retrospective review, called a program operating plan progress report, 
on FFRDC performance. This review describes progress made at an FFRDC 
based on milestones, objectives, targets, and deliverables described 
in a program operating plan, among other things. For example, 
according to NSF officials, for NCAR this review shall be submitted 
for review and approval by November 15 after the end of each fiscal 
year, and it is conducted by both NSF and the FFRDC operator and is 
reviewed by NSF officials. In addition, the FFRDC operator submits an 
annual management report to NSF that focuses on the FFRDC operator's 
management activities for the year.[Footnote 52] This review describes 
the FFRDC operator's performance of specific duties and its progress 
in meeting objectives. The format and content of this report is 
developed in consultation with NSF officials, and it is to be 
submitted within 90 days prior to the end of each fiscal year. 

DOE, DOD, and NSF Engage in Other Ongoing Activities Critical to 
Assessing FFRDC Performance: 

Officials from DOE, DOD and NSF described the day-to-day interactions 
between agency and contractor officials, as well as other review 
activities as critical to assessing FFRDC performance. 

DOE: 

DOE officials told us that agency site office officials co-located 
with the contractors are primarily responsible for assessing business 
and operational performance at their respective FFRDCs, and DOE's 
program officials assess performance of the mission work. 

According to DOE officials at ORNL, for example, the agency's site 
office officials manage the contract with the FFRDC contractor and the 
resources associated with that effort; perform operational oversight 
and ensure regulatory compliance of contractor operations; perform 
regulatory compliance work and manage resources to ensure efficient 
operation; and provide stewardship of ORNL assets, such as research 
equipment and buildings.[Footnote 53] According to DOE's ORNL site 
office officials and documents, review activities include routine, day-
to-day monitoring through facility tours, walk-throughs, 
surveillances, work observations, document reviews, meeting attendance 
and participation, and ongoing interaction with contractor workers. 
These site office officials also conduct structured evaluations of 
contractor programs and performance to confirm that operations are 
being conducted in a safe and efficient manner and are in compliance 
with contract requirements.[Footnote 54] DOE's ORNL site office and 
FFRDC contractor employees said that the standard set of documentation 
associated with performance and oversight, such as the annual 
performance plans and reports, is not fully sufficient to understand 
the full range of performance and associated oversight being performed 
by ORNL site office employees. DOE's program office officials 
associated with ORNL assess the quality of the laboratory's work 
through several types of evaluations, including reviews of project 
outcomes and peer reviews of the scientific work. For example, DOE's 
program officials monitor performance through regular meetings with 
FFRDC technical staff to discuss specific projects. They also oversee 
peer-reviews that are performed on a triennial basis, working with 
experts external to the program from academia or other DOE 
laboratories to assess the quality of the work performed by the 
contractor for specific research projects. 

According to DOE officials, FFRDC performance is also monitored as a 
part of its work authorization system, which DOE uses as a control 
process for work performed by contractors.[Footnote 55] Authorizations 
for most DOE-funded work must be documented in work authorizations, 
and each authorization must include a detailed statement of work to be 
performed and associated performance-based indicators or targets, 
including any additional guidance that will assist the contractor in 
the performance of the work. For example, the delivery of the work 
could be the publication of a paper in a scientific journal, and DOE 
would use peer review committees to determine if the FFRDC contractor 
met the objective as stated in the work authorization. FFRDC ORNL site 
office officials are responsible for authorizing the work put forth in 
work authorizations, while DOE program office officials set the 
technical specifications and evaluate the technical progress of the 
work. 

DOD: 

DOD officials described a number of other activities performed as part 
of its ongoing oversight of its FFRDCs. For example, DOD officials 
said that they use a "tiered accountability" framework or structure 
when overseeing the contract to manage NSEC, which includes: 

* Day-to-day oversight. DOD program managers, contracting officers, 
and contracting officer representatives told us they perform some day-
to-day oversight activities, including funding on the contract and 
monitoring the allocation of STE, or 1 year of fully burdened labor, 
charged against the contract throughout year. Sometimes, small 
adjustments to the STE levels are made, being driven by the overall 
budget or priorities of the program. As part of this oversight, DOD 
officials look at the scope of work on all projects and compare them 
against the core work statements as defined in the FFRDC sponsoring 
agreements to make sure that work is within the scope for the FFRDC. 

* Working with the DCAA. DOD officials told us the department's 
administrative contracting officers work closely with DCAA on funding 
reports and on audits of funding. 

* Negotiating indirect rates. The DOD procuring contract officer 
negotiates FFRDC contractor's indirect rates under the NSEC contract. 
[Footnote 56] 

In addition, with respect to NSEC, DOD's program managers told us that 
they request an annual and semiannual feedback and assessment for the 
work being done by the FFRDC on behalf of the Army and the Air Force. 
DOD officials also noted the importance of regular user forums between 
FFRDC staff and DOD users. In addition to the user surveys, DOD 
officials told us that the performance for NSEC's FFRDC contractor is 
overseen through daily interactions between DOD and the FFRDC 
contractor staff at the project level. In addition, monthly or weekly 
meetings take place between DOD program and FFRDC contractor employees 
at the division level, and DOD and FFRDC contractor management 
officials also meet quarterly to discuss the overall performance of 
NSEC. 

NSF: 

According to NSF officials, the agency's oversight role with its 
FFRDCs is specified in the cooperative agreements NSF has with the 
FFRDCs. Generally, the terms and conditions laid out in the 
cooperative agreement provide NSF's oversight guidelines. NSF 
officials said that they do not have employees collocated or on-site 
at the FFRDCs to perform oversight. Instead, NSF officials travel to 
the FFRDCs and FFRDC contractor employees travel to NSF headquarters 
to exchange information on the oversight of the FFRDCs. 

Agency Comments: 

We provided a draft of this product to DOE, DOD, and NSF for their 
review and comment. Formal comments were not provided by DOE, DOD, and 
NSF. Technical comments provided by DOE, DOD, and NSF were 
incorporated, as appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the appropriate congressional committees, the Secretary of Energy, 
Secretary of Defense, Director of the NSF, and other interested 
parties. In addition, the report will be available at no charge on the 
GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff members have any questions about this report, 
please contact me at (202) 512-3841 or neumannj@gao.gov. Contact 
points for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this report. GAO staff who made key 
contributions to this report are listed in appendix III. 

Sincerely yours, 

Signed by: 

John Neumann: 
Acting Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Scope and Methodology: 

We selected a non-probability sample of Federally Funded Research and 
Development Centers (FFRDC) for review based on the master list of 
FFRDCs compiled by the National Science Foundation (NSF).[Footnote 57] 
We chose to review FFRDCs sponsored by the Department of Energy (DOE), 
Department of Defense (DOD), and NSF because these three agencies 
sponsor the largest numbers of FFRDCs--16, 10, and 4, respectively. 
Our findings related to these 30 FFRDCs are not generalizable to the 
complete set of 40 FFRDCs in operation in 2014 (see figure 1). To 
select FFRDCs for site visits and additional review from among the 30 
sponsored by DOE, DOD, and NSF, we identified the FFRDCs with the 
highest research and development expenditures reported by the NSF for 
fiscal year 2010 within each agency.[Footnote 58] The FFRDCs we chose 
for site visits at each agency were: (1) Oak Ridge National 
Laboratory, run by UT-Battelle, LLC, on behalf of DOE's Office of 
Science; (2) the National Security Engineering Center, run by the 
MITRE Corporation on behalf of DOD; and (3) the National Center for 
Atmospheric Research, run by the University Corporation for 
Atmospheric Research on behalf of NSF. We evaluated additional 
documentation regarding the sponsorship of these FFRDCs and their 
performance.[Footnote 59] 

To learn about FFRDC funding and compensation we surveyed the agency 
sponsors for the 30 FFRDCs in our scope, spoke to agency officials and 
contractor representatives, and reviewed agency policy and guidance 
documentation. We developed a standard questionnaire to obtain 
information on the obligations and funding received by FFRDCs, full-
time equivalents (FTE), compensation costs at each FFRDC, and the 
controls agencies have in place to review or assess compensation. We 
asked for information on obligations and funding for the 5 most recent 
fiscal years available at the time of our review, fiscal years 2008 
through 2012. We asked for information on employees and compensation 
for fiscal years 2010 through 2012--the 3 years for which data were 
available and the cap on compensation was set by regulation (i.e., 
before the statutory cap had been implemented)--and sponsoring agency 
efforts to review compensation.[Footnote 60] 

Our survey of FFRDC sponsors asked for obligations provided to the 
FFRDC by the federal sponsoring agency, obligations provided to the 
FFRDC from all other federal government departments and agencies, and 
funding provided to the FFRDC from nonfederal, governmental entities 
(such as state or local governments) and nongovernmental entities for 
fiscal years 2008 through 2012. Our survey of FFRDC sponsors also 
asked for the total FFRDC employee compensation costs, including 
salary and nonpay benefits such as pensions, insurance, or fringe 
benefits, paid by the FFRDC contractor, for the total FTE employment 
during fiscal years 2010 through 2012, and for the range of salaries 
for senior executives whose compensation is charged or allocated to 
the FFRDC contract or agreement. 

We pretested the questionnaire by phone with agency officials who had 
responsibilities for overseeing FFRDCs at DOE, DOD, and NSF in order 
to ensure that the survey questions and definitions were clear and 
that the information could feasibly be obtained. We made changes to 
the content of the questionnaire after each review based on the 
feedback we received. The questionnaire was distributed to agency 
liaisons in September 2013, and responses for all 30 FFRDC were 
received by December 2013. We reviewed the survey responses of agency 
and contractor data for consistency and reliability by examining 
information provided by the respondents on their data sources, the 
steps taken to ensure the accuracy and completeness of the data 
provided, and any known limitations. We also interviewed knowledgeable 
agency officials about the data, and obtained follow-up information by 
phone and e-mail from agency sponsors when necessary between January 
2014 and April 2014. Agency officials submitted written clarifications 
to the original survey responses and follow-up questions, as 
necessary. Data obtained from the survey was also presented to the 
agencies for review prior to reporting. We found that the data were 
sufficiently reliable for our purposes. 

To assess agency management and oversight of FFRDC operator 
performance, we conducted interviews with agency officials at DOE, 
DOD, and NSF and contractor officials at ORNL, NSEC, and NCAR to 
determine how performance was assessed and reviewed relevant 
documentation of those activities. These interviews included officials 
from DOE's National Nuclear Security Administration, Office of 
Science, and Office of Management; DOD's Office of Acquisition 
Resources and Analysis; and NSF's Office of Budget, Finance, and Award 
Management who have oversight responsibilities for multiple FFRDCs. We 
also interviewed agency officials with direct oversight 
responsibilities for ORNL, NSEC, and NCAR, including the Oak Ridge 
Site Office, Deputy Assistant Secretary of Defense for Systems 
Engineering, and Division of Atmospheric and Geospace Sciences. 

We obtained the most recent comprehensive reviews performed by the 
agency for 26 FFRDCs in our sample as of September 2013 and evaluated 
them against the elements described by the FAR. We received reviews 
completed between 2005 and 2013. Some FFRDCs included in our review 
were not subject to the requirement to perform a comprehensive review, 
according to their sponsoring agency. Because the FAR applies only to 
federal government acquisitions made by contract, cooperative 
agreements between sponsoring agencies and an FFRDC operator are 
generally not subject to requirements in the FAR. Three FFRDCs 
sponsored by NSF operate under cooperative agreements. According to 
NSF officials, the agency is not required to perform a comprehensive 
review for these FFRDCs and we excluded them from our analysis. In 
addition, we excluded the comprehensive review for the Center for 
Communications and Computing FFRDC due to security classification of 
material within the document. For the remaining 26 FFRDCs, we examined 
the comprehensive reviews for the extent that the review documented 
and supported the five elements described by the FAR. Two analysts 
independently categorized the extent of information provided for each 
element into three categories. If the documentation of the 
comprehensive review did not discuss the element at all, we 
categorized it as "Not Documented." If the documentation in the 
comprehensive review provided a determination or finding related to 
the element, but it did not fully address the criteria or provide 
supporting evidence, we categorized it as "Partially Documented." If 
the review provides a determination or finding for the element, and 
provides additional supporting evidence, we categorized it as 
"Documented." Three analysts, including those that performed the 
initial review, then examined any differences between the two reviews 
and made a final determination for each comprehensive review and 
element. 

We conducted this performance audit from December 2012 to July 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Funding and Contract Data for FFRDCs Sponsored by DOE, 
DOD, and NSF: 

To learn about funding and compensation at federally funded research 
and development centers (FFRDC) we surveyed the agency sponsors for 
the 30 FFRDCs sponsored by the Department of Energy (DOE), Department 
of Defense (DOD), and National Science Foundation (NSF) and collected 
information on their operators. Our survey asked for obligations to 
the FFRDC by the federal sponsoring agency, obligations provided to 
the FFRDC by all other federal government departments and agencies, 
and funding provided to the FFRDC from nonfederal, governmental 
entities (such as state or local governments) and nongovernmental 
entities for fiscal years 2008 through 2012. Table 2 provides the 
total obligations and funding to the 30 FFRDCs in our scope. Table 3 
provides the obligations by the federal sponsor. Table 4 provides the 
obligations by all other federal government departments and agencies. 
Table 5 provides the funding from nonfederal entities. Table 6 
provides data responding to our survey questions on the total FFRDC 
employee compensation costs paid by the FFRDC contractor and the total 
FTE employment during fiscal years 2010 through 2012. Table 7 
describes the 30 FFRDCs we examined, their current operators, and 
start and end dates of their current contracts or cooperative 
agreements. 

Table 2: Total Obligations and Funding to Federally Funded Research 
and Development Centers Sponsored by DOE, DOD, and NSF for Fiscal 
Years 2008 through 2012: 

Dollars in thousands: 

Nominal values: 

Department of Energy: 

Ames Laboratory; 
2008: $33,059; 
2009: $33,408; 
2010: $33,017; 
2011: $34,499; 
2012: $41,294; 
Total: $175,278. 

Argonne National Laboratory; 
2008: $539,631; 
2009: $774,649; 
2010: $719,048; 
2011: $753,272; 
2012: $758,676; 
Total: $3,545,277. 

Brookhaven National Laboratory; 
2008: $512,832; 
2009: $874,448; 
2010: $698,718; 
2011: $669,690; 
2012: $681,958; 
Total: $3,437,646. 

Fermi National Accelerator Laboratory; 
2008: $360,597; 
2009: $487,641; 
2010: $458,997; 
2011: $413,925; 
2012: $409,627; 
Total: $2,130,787. 

Idaho National Laboratory; 
2008: $737,828; 
2009: $819,162; 
2010: $843,177; 
2011: $871,596; 
2012: $805,796; 
Total: $4,077,559. 

Lawrence Berkeley National Laboratory; 
2008: $667,030; 
2009: $897,223; 
2010: $835,910; 
2011: $749,152; 
2012: $731,815; 
Total: $3,881,131. 

Lawrence Livermore National Laboratory; 
2008: $1,520,511; 
2009: $1,492,965; 
2010: $1,532,081; 
2011: $1,574,742; 
2012: $1,641,769; 
Total: $7,762,068. 

Los Alamos National Laboratory; 
2008: $2,181,254; 
2009: $2,482,563; 
2010: $2,204,846; 
2011: $2,504,962; 
2012: $2,147,580; 
Total: $11,521,205. 

National Renewable Energy Laboratory; 
2008: $325,925; 
2009: $519,733; 
2010: $529,406; 
2011: $382,879; 
2012: $343,206; 
Total: $2,101,149. 

Oak Ridge National Laboratory; 
2008: $1,202,181; 
2009: $1,705,723; 
2010: $1,653,603; 
2011: $1,397,973; 
2012: $1,346,027; 
Total: $7,305,507. 

Pacific Northwest National Laboratory; 
2008: $935,089; 
2009: $940,131; 
2010: $968,005; 
2011: $822,586; 
2012: $928,326; 
Total: $4,594,137. 

Princeton Plasma Physics Laboratory; 
2008: $77,319; 
2009: $89,250; 
2010: $85,624; 
2011: $81,929; 
2012: $83,703; 
Total: $417,825. 

Sandia National Laboratories; 
2008: $2,268,428; 
2009: $2,372,363; 
2010: $2,331,423; 
2011: $2,383,269; 
2012: $2,577,335; 
Total: $11,932,818. 

Savannah River National Laboratory; 
2008: $175,132; 
2009: $181,805; 
2010: $204,895; 
2011: $182,269; 
2012: $157,359; 
Total: $901,462. 

SLAC National Accelerator Laboratory; 
2008: $307,310; 
2009: $421,389; 
2010: $318,185; 
2011: $342,105; 
2012: $341,005; 
Total: $1,729,993. 

Thomas Jefferson National Accelerator Facility; 
2008: $107,246; 
2009: $225,097; 
2010: $151,342; 
2011: $184,653; 
2012: $172,332; 
Total: $840,670. 

Subtotal of obligations and funding; 
2008: $11,951,373; 
2009: $14,317,550; 
2010: $13,568,277; 
2011: $13,349,502; 
2012: $13,167,809; 
Total: $66,354,511. 

Department of Defense: 

Aerospace Federally Funded Research and Development Center; 
2008: $766,632; 
2009: $718,860; 
2010: $828,519; 
2011: $862,443; 
2012: $833,752; 
Total: $4,010,206. 

Arroyo Center; 
2008: $27,984; 
2009: $32,316; 
2010: $28,096; 
2011: $35,444; 
2012: $35,722; 
Total: $159,561. 

Center for Communications and Computing; 
2008: $59,500; 
2009: $66,293; 
2010: $71,927; 
2011: $72,721; 
2012: $62,575; 
Total: $333,016. 

Center for Naval Analyses; 
2008: $83,634; 
2009: $88,605; 
2010: $94,747; 
2011: $88,650; 
2012: $95,343; 
Total: $450,979. 

Lincoln Laboratory; 
2008: $675,618; 
2009: $748,836; 
2010: $895,804; 
2011: $870,005; 
2012: $940,863; 
Total: $4,131,126. 

National Defense Research Institute; 
2008: $42,350; 
2009: $48,250; 
2010: $50,890; 
2011: $63,950; 
2012: $63,920; 
Total: $269,360. 

National Security Engineering Center; 
2008: $935,175; 
2009: $937,634; 
2010: $923,286; 
2011: $939,541; 
2012: $944,915; 
Total: $4,680,551. 

Project Air Force; 
2008: $44,463; 
2009: $44,592; 
2010: $45,467; 
2011: $45,549; 
2012: $45,436; 
Total: $225,508. 

Software Engineering Institute; 
2008: $118,458; 
2009: $142,646; 
2010: $129,611; 
2011: $168,406; 
2012: $133,947; 
Total: $693,068. 

Systems and Analyses Center; 
2008: $145,132; 
2009: $163,692; 
2010: $156,411; 
2011: $157,515; 
2012: $150,205; 
Total: $772,955. 

Subtotal of obligations and funding; 
2008: $2,898,946; 
2009: $2,991,723; 
2010: $3,224,758; 
2011: $3,304,224; 
2012: $3,306,678; 
Total: $15,726,329. 

National Science Foundation: 

National Center for Atmospheric Research; 
2008: $129,639; 
2009: $195,902; 
2010: $221,330; 
2011: $183,279; 
2012: $159,577; 
Total: $889,726. 

National Optical Astronomy Observatory; 
2008: $42,471; 
2009: $51,507; 
2010: $43,927; 
2011: $40,581; 
2012: $32,052; 
Total: $210,536. 

National Radio Astronomy Observatory; 
2008: $166,869; 
2009: $162,738; 
2010: $113,979; 
2011: $91,907; 
2012: $93,315; 
Total: $628,809. 

Science and Technology Policy Institute; 
2008: $6,011; 
2009: $5,066; 
2010: $6,257; 
2011: $8,757; 
2012: $7,747; 
Total: $33,838. 

Subtotal of obligations and funding; 
2008: $344,989; 
2009: $415,213; 
2010: $385,493; 
2011: $324,523; 
2012: $292,690; 
Total: $1,762,909. 

Total obligations and funding; 
2008: $15,195,308; 
2009: $17,724,487; 
2010: $17,178,529; 
2011: $16,978,249; 
2012: $16,767,177; 
Total: $83,843,750. 

Sources: DOE, DOD, and NSF reports of contractor and agency data 
provided in response to GAO survey. GAO-14-593. 

Notes: Totals may not match due to rounding. 

Data includes obligations from federal agencies and funding provided 
by nonfederal entities. 

[End of table] 

Table 3: Obligations by Sponsoring Agency to Federally Funded Research 
and Development Centers Sponsored by DOE, DOD, and NSF for Fiscal 
Years 2008 through 2012: 

Dollars in thousands: 

Nominal values: 

Department of Energy: 

Ames Laboratory; 
2008: $25,865; 
2009: $30,303; 
2010: $29,900; 
2011: $31,783; 
2012: $36,148; 
Total: $154,000. 

Argonne National Laboratory; 
2008: $424,308; 
2009: $647,300; 
2010: $578,621; 
2011: $627,814; 
2012: $627,758; 
Total: $2,905,800. 

Brookhaven National Laboratory; 
2008: $467,472; 
2009: $823,439; 
2010: $633,980; 
2011: $602,034; 
2012: $612,403; 
Total: $3,139,328. 

Fermi National Accelerator Laboratory; 
2008: $354,702; 
2009: $486,529; 
2010: $438,402; 
2011: $413,430; 
2012: $408,346; 
Total: $2,101,408. 

Idaho National Laboratory; 
2008: $473,560; 
2009: $686,244; 
2010: $711,002; 
2011: $760,744; 
2012: $647,359; 
Total: $3,278,909. 

Lawrence Berkeley National Laboratory; 
2008: $560,969; 
2009: $791,428; 
2010: $707,504; 
2011: $628,735; 
2012: $621,537; 
Total: $3,310,173. 

Lawrence Livermore National Laboratory; 
2008: $1,230,306; 
2009: $1,245,372; 
2010: $1,216,417; 
2011: $1,280,285; 
2012: $1,352,352; 
Total: $6,324,732. 

Los Alamos National Laboratory; 
2008: $1,927,986; 
2009: $2,233,866; 
2010: $1,923,169; 
2011: $2,242,584; 
2012: $1,919,837; 
Total: $10,247,442. 

National Renewable Energy Laboratory; 
2008: $307,300; 
2009: $502,936; 
2010: $510,648; 
2011: $322,815; 
2012: $298,987; 
Total: $1,942,686. 

Oak Ridge National Laboratory; 
2008: $934,278; 
2009: $1,348,640; 
2010: $1,367,826; 
2011: $1,157,809; 
2012: $1,117,008; 
Total: $5,925,560. 

Pacific Northwest National Laboratory; 
2008: $560,322; 
2009: $696,948; 
2010: $692,474; 
2011: $571,327; 
2012: $706,725; 
Total: $3,227,797. 

Princeton Plasma Physics Laboratory; 
2008: $76,378; 
2009: $88,281; 
2010: $83,675; 
2011: $80,369; 
2012: $79,007; 
Total: $407,710. 

Sandia National Laboratories; 
2008: $1,384,837; 
2009: $1,456,779; 
2010: $1,387,234; 
2011: $1,578,968; 
2012: $1,638,243; 
Total: $7,446,062. 

Savannah River National Laboratory; 
2008: $147,356; 
2009: $152,761; 
2010: $172,019; 
2011: $145,077; 
2012: $136,088; 
Total: $753,301. 

SLAC National Accelerator Laboratory; 
2008: $296,583; 
2009: $412,771; 
2010: $307,280; 
2011: $333,494; 
2012: $332,339; 
Total: $1,682,467. 

Thomas Jefferson National Accelerator Facility; 
2008: $98,253; 
2009: $216,092; 
2010: $146,953; 
2011: $168,798; 
2012: $162,594; 
Total: $792,691. 

Subtotal of obligations; 
2008: $9,270,475; 
2009: $11,819,689; 
2010: $10,907,105; 
2011: $10,946,066; 
2012: $10,696,731; 
Total: $53,640,066. 

Department of Defense: 

Aerospace Federally Funded Research and Development Center; 
2008: $746,003; 
2009: $697,450; 
2010: $806,335; 
2011: $841,695; 
2012: $812,955; 
Total: $3,904,438. 

Arroyo Center; 
2008: $27,984; 
2009: $32,316; 
2010: $28,096; 
2011: $35,444; 
2012: $35,722; 
Total: $159,561. 

Center for Communications and Computing; 
2008: $59,500; 
2009: $66,293; 
2010: $71,927; 
2011: $72,721; 
2012: $62,575; 
Total: $333,016. 

Center for Naval Analyses; 
2008: $83,634; 
2009: $88,605; 
2010: $94,747; 
2011: $88,650; 
2012: $95,343; 
Total: $450,979. 

Lincoln Laboratory; 
2008: $592,271; 
2009: $637,415; 
2010: $773,953; 
2011: $768,020; 
2012: $816,820; 
Total: $3,588,479. 

National Defense Research Institute; 
2008: $40,440; 
2009: $44,800; 
2010: $48,530; 
2011: $51,790; 
2012: $58,630; 
Total: $244,190. 

National Security Engineering Center; 
2008: $763,532; 
2009: $772,069; 
2010: $757,767; 
2011: $769,026; 
2012: $768,234; 
Total: $3,830,628. 

Project Air Force; 
2008: $44,463; 
2009: $44,592; 
2010: $45,467; 
2011: $45,549; 
2012: $45,436; 
Total: $225,508. 

Software Engineering Institute; 
2008: $52,771; 
2009: $66,990; 
2010: $60,499; 
2011: $72,755; 
2012: $67,049; 
Total: $320,065. 

Systems and Analyses Center; 
2008: $130,931; 
2009: $143,624; 
2010: $146,848; 
2011: $143,341; 
2012: $136,925; 
Total: $701,668. 

Subtotal of obligations; 
2008: $2,541,529; 
2009: $2,594,153; 
2010: $2,834,169; 
2011: $2,888,991; 
2012: $2,899,690; 
Total: $13,758,532. 

National Science Foundation: 

National Center for Atmospheric Research; 
2008: $87,636; 
2009: $136,418; 
2010: $140,468; 
2011: $138,062; 
2012: $118,679; 
Total: $621,264. 

National Optical Astronomy Observatory; 
2008: $35,985; 
2009: $46,258; 
2010: $39,559; 
2011: $35,352; 
2012: $27,501; 
Total: $184,655. 

National Radio Astronomy Observatory; 
2008: $155,686; 
2009: $149,027; 
2010: $110,434; 
2011: $81,762; 
2012: $74,755; 
Total: $571,664. 

Science and Technology Policy Institute; 
2008: $2,565; 
2009: $3,662; 
2010: $5,070; 
2011: $6,595; 
2012: $6,067; 
Total: $23,960. 

Subtotal of obligations; 
2008: $281,872; 
2009: $335,365; 
2010: $295,531; 
2011: $261,771; 
2012: $227,002; 
Total: $1,401,542. 

Total obligations; 
2008: $12,093,876; 
2009: $14,749,207; 
2010: $14,036,806; 
2011: $14,096,828; 
2012: $13,823,423; 
Total: $68,800,140. 

Sources: DOE, DOD, and NSF reports of contractor and agency data 
provided in response to GAO survey. | GAO-14-593: 

Note: Totals may not match due to rounding. 

[End of table] 

Table 4: Obligations by Federal Agencies other than the Sponsoring 
Agency to Federally Funded Research and Development Centers Sponsored 
by DOE, DOD, and NSF for Fiscal Years 2008 through 2012: 

Dollars in thousands: 

Nominal values: 

Department of Energy: 

Ames Laboratory; 
2008: $5,563; 
2009: $1,625; 
2010: $1,110; 
2011: $712; 
2012: $1,134; 
Total: $10,144. 

Argonne National Laboratory; 
2008: $84,680; 
2009: $96,282; 
2010: $92,607; 
2011: $94,850; 
2012: $91,800; 
Total: $460,220. 

Brookhaven National Laboratory; 
2008: $37,756; 
2009: $44,107; 
2010: $56,778; 
2011: $59,463; 
2012: $43,420; 
Total: $241,523. 

Fermi National Accelerator Laboratory; 
2008: $158; 
2009: $487; 
2010: $195; 
2011: $50; 
2012: $0; 
Total: $889. 

Idaho National Laboratory; 
2008: $252,846; 
2009: $116,075; 
2010: $119,021; 
2011: $100,967; 
2012: $146,815; 
Total: $735,724. 

Lawrence Berkeley National Laboratory; 
2008: $61,640; 
2009: $56,474; 
2010: $63,654; 
2011: $62,778; 
2012: $54,854; 
Total: $299,401. 

Lawrence Livermore National Laboratory; 
2008: $236,017; 
2009: $208,266; 
2010: $283,420; 
2011: $256,985; 
2012: $255,241; 
Total: $1,239,928. 

Los Alamos National Laboratory; 
2008: $215,238; 
2009: $215,679; 
2010: $246,306; 
2011: $215,651; 
2012: $178,306; 
Total: $1,071,180. 

National Renewable Energy Laboratory; 
2008: $5,088; 
2009: $8,401; 
2010: $6,857; 
2011: $46,013; 
2012: $25,318; 
Total: $91,677. 

Oak Ridge National Laboratory; 
2008: $223,362; 
2009: $324,130; 
2010: $245,456; 
2011: $201,988; 
2012: $195,842; 
Total: $1,190,778. 

Pacific Northwest National Laboratory; 
2008: $372,423; 
2009: $239,581; 
2010: $266,907; 
2011: $238,030; 
2012: $194,446; 
Total: $1,311,387. 

Princeton Plasma Physics Laboratory; 
2008: $811; 
2009: $858; 
2010: $1,119; 
2011: $1,027; 
2012: $1,159; 
Total: $4,973. 

Sandia National Laboratories; 
2008: $840,782; 
2009: $859,755; 
2010: $899,196; 
2011: $769,047; 
2012: $914,308; 
Total: $4,283,088. 

Savannah River National Laboratory; 
2008: $25,074; 
2009: $26,468; 
2010: $31,214; 
2011: $34,137; 
2012: $20,213; 
Total: $137,106. 

SLAC National Accelerator Laboratory; 
2008: $943; 
2009: $971; 
2010: $1,366; 
2011: $1,052; 
2012: $3,465; 
Total: $7,796. 

Thomas Jefferson National Accelerator Facility; 
2008: $8,411; 
2009: $7,501; 
2010: $2,820; 
2011: $4,694; 
2012: $6,747; 
Total: $30,173. 

Subtotal of obligations; 
2008: $2,370,790; 
2009: $2,206,661; 
2010: $2,318,025; 
2011: $2,087,445; 
2012: $2,133,066; 
Total: $11,115,987. 

Department of Defense: 

Aerospace Federally Funded Research and 
Development Center; 
2008: $20,628; 
2009: $21,411; 
2010: $22,184; 
2011: $20,748; 
2012: $20,796; 
Total: $105,768. 

Arroyo Center; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Center for Communications and Computing; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Center for Naval Analyses; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Lincoln Laboratory; 
2008: $80,583; 
2009: $109,671; 
2010: $120,667; 
2011: $101,259; 
2012: $123,111; 
Total: $535,291. 

National Defense Research Institute; 
2008: $1,910; 
2009: $3,450; 
2010: $2,360; 
2011: $12,160; 
2012: $5,290; 
Total: $25,170. 

National Security Engineering Center; 
2008: $170,435; 
2009: $164,615; 
2010: $164,540; 
2011: $169,918; 
2012: $176,012; 
Total: $845,520. 

Project Air Force; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Software Engineering Institute; 
2008: $24,398; 
2009: $44,777; 
2010: $49,229; 
2011: $75,778; 
2012: $50,671; 
Total: $244,853. 

Systems and Analyses Center; 
2008: $14,201; 
2009: $20,068; 
2010: $9,563; 
2011: $14,175; 
2012: $13,280; 
Total: $71,287. 

Subtotal of obligations; 
2008: $312,155; 
2009: $363,992; 
2010: $368,543; 
2011: $394,037; 
2012: $389,161; 
Total: $1,827,889. 

National Science Foundation: 

National Center for Atmospheric Research; 
2008: $28,229; 
2009: $46,259; 
2010: $38,382; 
2011: $40,360; 
2012: $33,592; 
Total: $186,822. 

National Optical Astronomy Observatory[A]; 
2008: $728; 
2009: $366; 
2010: $143; 
2011: $70; 
2012: ($28); 
Total: $1,278. 

National Radio Astronomy Observatory; 
2008: $10; 
2009: $0; 
2010: $47; 
2011: $87; 
2012: $0; 
Total: $144. 

Science and Technology Policy Institute; 
2008: $3,446; 
2009: $1,404; 
2010: $1,186; 
2011: $2,162; 
2012: $1,680; 
Total: $9,878. 

Subtotal of obligations; 
2008: $32,412; 
2009: $48,029; 
2010: $39,758; 
2011: $42,679; 
2012: $35,243; 
Total: $198,122. 

Total obligations; 
2008: $2,715,358; 
2009: $2,618,681; 
2010: $2,726,326; 
2011: $2,524,161; 
2012: $2,557,470; 
Total: $13,141,998. 

Sources: DOE, DOD, and NSF reports of contractor and agency data 
provided in response to GAO survey. GAO-14-593. 

Note: Totals may not match due to rounding. 

[A] In 2012, funding was deobligated from the National Optical 
Astronomy Observatory. 

[End of table] 

Table 5: Funding from Nonfederal Entities to Federally Funded Research 
and Development Centers Sponsored by DOE, DOD, and NSF for Fiscal 
Years 2008 through 2012: 

Dollars in thousands: 

Nominal values: 

Department of Energy: 

Ames Laboratory; 
2008: $1,632; 
2009: $1,480; 
2010: $2,007; 
2011: $2,004; 
2012: $4,013; 
Total: $11,135. 

Argonne National Laboratory; 
2008: $30,644; 
2009: $31,067; 
2010: $47,820; 
2011: $30,609; 
2012: $39,117; 
Total: $179,257. 

Brookhaven National Laboratory; 
2008: $7,604; 
2009: $6,902; 
2010: $7,960; 
2011: $8,193; 
2012: $26,135; 
Total: $56,795. 

Fermi National Accelerator Laboratory; 
2008: $5,737; 
2009: $625; 
2010: $20,400; 
2011: $445; 
2012: $1,281; 
Total: $28,490. 

Idaho National Laboratory; 
2008: $11,422; 
2009: $16,843; 
2010: $13,154; 
2011: $9,885; 
2012: $11,623; 
Total: $62,927. 

Lawrence Berkeley National Laboratory; 
2008: $44,421; 
2009: $49,321; 
2010: $64,752; 
2011: $57,639; 
2012: $55,424; 
Total: $271,557. 

Lawrence Livermore National Laboratory; 
2008: $54,189; 
2009: $39,327; 
2010: $32,244; 
2011: $37,471; 
2012: $34,176; 
Total: $197,408. 

Los Alamos National Laboratory; 
2008: $38,030; 
2009: $33,018; 
2010: $35,370; 
2011: $46,727; 
2012: $49,438; 
Total: $202,584. 

National Renewable Energy Laboratory; 
2008: $13,537; 
2009: $8,397; 
2010: $11,900; 
2011: $14,051; 
2012: $18,901; 
Total: $66,785. 

Oak Ridge National Laboratory; 
2008: $44,542; 
2009: $32,953; 
2010: $40,321; 
2011: $38,176; 
2012: $33,176; 
Total: $189,168. 

Pacific Northwest National Laboratory; 
2008: $2,344; 
2009: $3,602; 
2010: $8,624; 
2011: $13,229; 
2012: $27,154; 
Total: $54,954. 

Princeton Plasma Physics Laboratory; 
2008: $130; 
2009: $111; 
2010: $831; 
2011: $533; 
2012: $3,537; 
Total: $5,142. 

Sandia National Laboratories; 
2008: $42,809; 
2009: $55,829; 
2010: $44,993; 
2011: $35,253; 
2012: $24,785; 
Total: $203,668. 

Savannah River National Laboratory; 
2008: $2,702; 
2009: $2,577; 
2010: $1,662; 
2011: $3,055; 
2012: $1,058; 
Total: $11,055. 

SLAC National Accelerator Laboratory; 
2008: $9,783; 
2009: $7,646; 
2010: $9,540; 
2011: $7,559; 
2012: $5,201; 
Total: $39,730. 

Thomas Jefferson National Accelerator Facility; 
2008: $582; 
2009: $1,504; 
2010: $1,569; 
2011: $11,160; 
2012: $2,991; 
Total: $17,806. 

Subtotal of funding; 
2008: $310,108; 
2009: $291,201; 
2010: $343,147; 
2011: $315,991; 
2012: $338,011; 
Total: $1,598,458. 

Department of Defense: 

Aerospace Federally Funded Research and Development Center; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Arroyo Center; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Center for Communications and Computing; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Center for Naval Analyses; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Lincoln Laboratory; 
2008: $2,764; 
2009: $1,749; 
2010: $1,184; 
2011: $727; 
2012: $932; 
Total: $7,356. 

National Defense Research Institute; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

National Security Engineering Center; 
2008: $1,209; 
2009: $950; 
2010: $979; 
2011: $596; 
2012: $669; 
Total: $4,403. 

Project Air Force; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Software Engineering Institute; 
2008: $41,289; 
2009: $30,879; 
2010: $19,884; 
2011: $19,872; 
2012: $16,226; 
Total: $128,150. 

Systems and Analyses Center; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Subtotal of funding; 
2008: $45,262; 
2009: $33,578; 
2010: $22,046; 
2011: $21,195; 
2012: $17,827; 
Total: $139,908. 

National Science Foundation: 

National Center for Atmospheric Research; 
2008: $13,774; 
2009: $13,224; 
2010: $42,480; 
2011: $4,857; 
2012: $7,306; 
Total: $81,641. 

National Optical Astronomy Observatory; 
2008: $5,757; 
2009: $4,883; 
2010: $4,225; 
2011: $5,159; 
2012: $4,579; 
Total: $24,603. 

National Radio Astronomy Observatory; 
2008: $11,174; 
2009: $13,711; 
2010: $3,499; 
2011: $10,058; 
2012: $18,560; 
Total: $57,001. 

Science and Technology Policy Institute; 
2008: $0; 
2009: $0; 
2010: $0; 
2011: $0; 
2012: $0; 
Total: $0. 

Subtotal of funding; 
2008: $30,705; 
2009: $31,819; 
2010: $50,204; 
2011: $20,073; 
2012: $30,445; 
Total: $163,245. 

Total funding; 
2008: $386,074; 
2009: $356,598; 
2010: $415,397; 
2011: $357,259; 
2012: $386,283; 
Total: $1,901,612. 

Sources: $DOE, DOD, and NSF reports of contractor and agency data 
provided in response to GAO survey. GAO-14-593. 

Note: Totals may not match due to rounding. 

[End of table] 

Table 6: Compensation Costs at Federally Funded Research and 
Development Centers Sponsored by DOE, DOD, and NSF, Fiscal Years 2010 
through 2012: 

Department of Energy: 

Ames Laboratory; 
Compensation costs as a percentage of total funding: 65%; 
Compensation per full-time equivalent (FTE)[A]: $88,200; 
Average FTEs: $269. 

Argonne National Laboratory; 
Compensation costs as a percentage of total funding: 53%; 
Compensation per full-time equivalent (FTE)[A]: $119,861; 
Average FTEs: $3,300. 

Brookhaven National Laboratory; 
Compensation costs as a percentage of total funding: 54%; 
Compensation per full-time equivalent (FTE)[A]: $123,203; 
Average FTEs: $2,993. 

Fermi National Accelerator Laboratory; 
Compensation costs as a percentage of total funding: 51%; 
Compensation per full-time equivalent (FTE)[A]: $109,161; 
Average FTEs: $2,013. 

Idaho National Laboratory; 
Compensation costs as a percentage of total funding: $59%; 
Compensation per full-time equivalent (FTE)[A]: $114,133; 
Average FTEs: $4,342. 

Lawrence Berkeley National Laboratory; 
Compensation costs as a percentage of total funding: 48%; 
Compensation per full-time equivalent (FTE)[A]: $104,938; 
Average FTEs: $3,563. 

Lawrence Livermore National Laboratory; 
Compensation costs as a percentage of total funding: 61%; 
Compensation per full-time equivalent (FTE)[A]: $148,699; 
Average FTEs: $6,469. 

Los Alamos National Laboratory; 
Compensation costs as a percentage of total funding: 58%; 
Compensation per full-time equivalent (FTE)[A]: $134,445; 
Average FTEs: $9,852. 

National Renewable Energy Laboratory; 
Compensation costs as a percentage of total funding: 45%; 
Compensation per full-time equivalent (FTE)[A]: $116,431; 
Average FTEs: $1,635. 

Oak Ridge National Laboratory; 
Compensation costs as a percentage of total funding: 45%; 
Compensation per full-time equivalent (FTE)[A]: $144,190; 
Average FTEs: $4,624. 

Pacific Northwest National Laboratory; 
Compensation costs as a percentage of total funding: 63%; 
Compensation per full-time equivalent (FTE)[A]: $121,205; 
Average FTEs: $4,709. 

Princeton Plasma Physics Laboratory; 
Compensation costs as a percentage of total funding: 69%; 
Compensation per full-time equivalent (FTE)[A]: $125,329; 
Average FTEs: $459. 

Sandia National Laboratories; 
Compensation costs as a percentage of total funding: 54%; 
Compensation per full-time equivalent (FTE)[A]: $136,070; 
Average FTEs: $9,727. 

Savannah River National Laboratory; 
Compensation costs as a percentage of total funding: 51%; 
Compensation per full-time equivalent (FTE)[A]: $119,639; 
Average FTEs: $776. 

SLAC National Accelerator Laboratory[B]; 
Compensation costs as a percentage of total funding: 67%; 
Compensation per full-time equivalent (FTE)[A]: $137,138; 
Average FTEs: $1,626. 

Thomas Jefferson National Accelerator Facility; 
Compensation costs as a percentage of total funding: 49%; 
Compensation per full-time equivalent (FTE)[A]: $104,780; 
Average FTEs: $795. 

Department of Defense: 

Aerospace Federally Funded Research and Development Center; 
Compensation costs as a percentage of total funding: 79%; 
Compensation per full-time equivalent (FTE)[A]: $177,848; 
Average FTEs: $3,717. 

Arroyo Center; 
Compensation costs as a percentage of total funding: 44%; 
Compensation per full-time equivalent (FTE)[A]: $143,692; 
Average FTEs: $102. 

Center for Communications and Computing; 
Compensation costs as a percentage of total funding: 59%; 
Compensation per full-time equivalent (FTE)[A]: $143,633; 
Average FTEs: $283. 

Center for Naval Analyses; 
Compensation costs as a percentage of total funding: $48%; 
Compensation per full-time equivalent (FTE)[A]: $130,597; 
Average FTEs: $343. 

Lincoln Laboratory; 
Compensation costs as a percentage of total funding: $43%; 
Compensation per full-time equivalent (FTE)[A]: $120,418; 
Average FTEs: $3,214. 

National Defense Research Institute; 
Compensation costs as a percentage of total funding: 33%; 
Compensation per full-time equivalent (FTE)[A]: $147,490; 
Average FTEs: $132. 

National Security Engineering Center; 
Compensation costs as a percentage of total funding: 58%; 
Compensation per full-time equivalent (FTE)[A]: $156,913; 
Average FTEs: $3,474. 

Project Air Force; 
Compensation costs as a percentage of total funding: 45%; 
Compensation per full-time equivalent (FTE)[A]: $152,612; 
Average FTEs: $134. 

Software Engineering Institute; 
Compensation costs as a percentage of total funding: 53%; 
Compensation per full-time equivalent (FTE)[A]: $119,291; 
Average FTEs: $643. 

Systems and Analyses Center; 
Compensation costs as a percentage of total funding: 57%; 
Compensation per full-time equivalent (FTE)[A]: $157,980; 
Average FTEs: $554. 

National Science Foundation: 

National Center for Atmospheric Research; 
Compensation costs as a percentage of total funding: 27%; 
Compensation per full-time equivalent (FTE)[A]: $124,267; 
Average FTEs: $408. 

National Optical Astronomy Observatory; 
Compensation costs as a percentage of total funding: 68%; 
Compensation per full-time equivalent (FTE)[A]: $91,223; 
Average FTEs: $288. 

National Radio Astronomy Observatory; 
Compensation costs as a percentage of total funding: 74%; 
Compensation per full-time equivalent (FTE)[A]: $90,106; 
Average FTEs: $823. 

Science and Technology Policy Institute; 
Compensation costs as a percentage of total funding: 52%; 
Compensation per full-time equivalent (FTE)[A]: $117,842; 
Average FTEs: $34. 

Sources: GAO analysis of DOE, DOD, and NSF reports of contractor and 
agency data provided in response to GAO survey. GAO-14-593. 

[A] Compensation per FTE was calculated by taking a 3-year ratio of 
total compensation to total FTEs. FTEs reflect the total number of 
regular straight-time hours (i.e., not including overtime or holiday 
hours) worked by employees divided by the number of compensable hours 
applicable to each fiscal year. Annual leave, sick leave, and 
compensatory time off and other approved leave categories are 
considered to be hours worked for purposes of defining FTE employment. 

[B] DOE officials told us that the department's data on FTEs at SLAC 
National Accelerator Laboratory do not include Stanford University 
employees with joint appointments between the university and FFRDC. 
Based on their estimates, these individuals provide an additional 68 
average FTEs. Including these FTE's reduces the cost per FTE to 
$131,633. 

[End of table] 

Table 7: Establishment and Contract Dates for Federally Funded 
Research and Development Centers Sponsored by DOE, DOD, and NSF: 

Department of Energy: 

FFRDC (current operator): Ames Laboratory (Iowa State University of 
Science and Technology); 
Year established: 1947; 
Current award date: Dec. 4, 2006; 
Current end date: Dec. 31, 2016; 
Potential end date with all award term/options: Dec. 31, 2026. 

FFRDC (current operator): Argonne National Laboratory (UChicago 
Argonne, LLC); 
Year established: 1946; 
Current award date: July 31, 2006; 
Current end date: Sept. 30, 2016; 
Potential end date with all award term/options: Sept. 30, 2026. 

FFRDC (current operator): Brookhaven National Laboratory (Brookhaven 
Science Associates, LLC); 
Year established: 1947; 
Current award date: Jan. 5, 1998; 
Current end date: Jan. 4, 2015; 
Potential end date with all award term/options: Jan. 4, 2015. 

FFRDC (current operator): Fermi National Accelerator Laboratory (Fermi 
Research Alliance, LLC); 
Year established: 1967; 
Current award date: Nov. 1, 2006; 
Current end date: Dec. 31, 2016; 
Potential end date with all award term/options: Dec. 31, 2026. 

FFRDC (current operator): Idaho National Laboratory (Battelle Energy 
Alliance, LLC); 
Year established: 1949; 
Current award date: Nov. 9, 2004; 
Current end date: Sept. 30, 2019; 
Potential end date with all award term/options: Sept. 30, 2019. 

FFRDC (current operator): Lawrence Berkeley National Laboratory 
(University of California); 
Year established: 1931; 
Current award date: Apr. 19, 2005; 
Current end date: May 31, 2015; 
Potential end date with all award term/options: May 31, 2025. 

FFRDC (current operator): Lawrence Livermore National Laboratory 
(Lawrence Livermore National Security, LLC); 
Year established: 1952; 
Current award date: May 9, 2007; 
Current end date: Sept. 30, 2018; 
Potential end date with all award term/options: Sept. 30, 2027. 

FFRDC (current operator): Los Alamos National Laboratory (Los Alamos 
National Security, LLC); 
Year established: 1943; 
Current award date: Dec. 21, 2005; 
Current end date: Sept. 30, 2018; 
Potential end date with all award term/options: Sept. 30, 2025. 

FFRDC (current operator): National Renewable Energy Laboratory 
(Alliance for Sustainable Energy, LLC); 
Year established: 1991; 
Current award date: July 29, 2008; 
Current end date: May 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2018. 

FFRDC (current operator): Oak Ridge National Laboratory (UT-Battelle, 
LLC); 
Year established: 1943; 
Current award date: Oct. 18, 1999; 
Current end date: Mar. 31, 2015; 
Potential end date with all award term/options: Mar. 31, 2020. 

FFRDC (current operator): Pacific Northwest National Laboratory 
(Battelle Memorial Institute); 
Year established: 1965; 
Current award date: Dec. 30, 2002; 
Current end date: Sept. 30, 2017; 
Potential end date with all award term/options: Sept. 30, 2017. 

FFRDC (current operator): Princeton Plasma Physics Laboratory 
(Princeton University); 
Year established: 1951; 
Current award date: Apr. 1, 2009; 
Current end date: Mar. 31, 2018; 
Potential end date with all award term/options: Mar. 31, 2019. 

FFRDC (current operator): Sandia National Laboratories (Sandia 
Corporation); 
Year established: 1948; 
Current award date: Sept. 30, 2003; 
Current end date: April 30, 2016; 
Potential end date with all award term/options: April 30, 2017. 

FFRDC (current operator): Savannah River National Laboratory (Savannah 
River Nuclear Solutions, LLC); 
Year established: 1951; 
Current award date: Jan. 10, 2008; 
Current end date: Sept. 30, 2016; 
Potential end date with all award term/options: July 31, 2018. 

FFRDC (current operator): SLAC National Accelerator Laboratory (Leland 
Stanford, Jr., University); 
Year established: 1962; 
Current award date: Jan. 25, 1981; 
Current end date: Sept. 30, 2017; 
Potential end date with all award term/options: Sept. 30, 2017. 

FFRDC (current operator): Thomas Jefferson National Accelerator 
Facility (Jefferson Science Associates, LLC); 
Year established: 1985; 
Current award date: Apr. 14, 2006; 
Current end date: May 31, 2016; 
Potential end date with all award term/options: May 31, 2025. 

Department of Defense: 

FFRDC (current operator): Aerospace Federally Funded Research and 
Development Center (The Aerospace Corporation); 
Year established: 1960; 
Current award date: Oct. 1, 2013; 
Current end date: Sept. 30, 2014; 
Potential end date with all award term/options: Sept. 30, 2018. 

FFRDC (current operator): Arroyo Center (RAND Corporation); 
Year established: 1948; 
Current award date: Dec. 9, 2005; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): Center for Communications and Computing 
(Institute for Defense Analyses); 
Year established: 1956; 
Current award date: Oct. 25, 2005; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): Center for Naval Analyses (CNA Corporation); 
Year established: 1962; 
Current award date: April 1, 2011; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): Lincoln Laboratory (Massachusetts Institute 
of Technology); 
Year established: 1951; 
Current award date: April 1, 2005; 
Current end date: Mar. 31, 2015; 
Potential end date with all award term/options: Mar. 31, 2015. 

FFRDC (current operator): National Defense Research Institute (RAND 
Corporation); 
Year established: 1984; 
Current award date: Dec. 5, 2005; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): National Security Engineering Center (MITRE 
Corporation); 
Year established: 1958; 
Current award date: Oct. 1, 2013; 
Current end date: Sept. 30, 2014; 
Potential end date with all award term/options: Sept. 30, 2018. 

FFRDC (current operator): Project Air Force (RAND Corporation); 
Year established: 1948; 
Current award date: Oct. 1, 2005; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): Software Engineering Institute (Carnegie 
Mellon University); 
Year established: 1984; 
Current award date: July 1, 2005; 
Current end date: June 30, 2015; 
Potential end date with all award term/options: June 30, 2015. 

FFRDC (current operator): Systems and Analyses Center (Institute for 
Defense Analyses); 
Year established: 1956; 
Current award date: Oct. 1, 2013; 
Current end date: Sept. 30, 2018; 
Potential end date with all award term/options: Sept. 30, 2018. 

National Science Foundation: 

FFRDC (current operator): National Center for Atmospheric Research 
(University Corporation for Atmospheric Research); 
Year established: 1960; 
Current award date: Oct. 1, 2008; 
Current end date: Sept. 30, 2018; 
Potential end date with all award term/options: Sept. 30, 2018. 

FFRDC (current operator): National Radio Astronomy Observatory 
(Associated Universities, Inc.); 
Year established: 1958; 
Current award date: Oct. 1, 2009; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): National Optical Astronomy Observatory 
(Association of Universities for Research in Astronomy, Inc.); 
Year established: 1982; 
Current award date: Oct. 1, 2009; 
Current end date: Sept. 30, 2015; 
Potential end date with all award term/options: Sept. 30, 2015. 

FFRDC (current operator): Science and Technology Policy Institute 
(Institute for Defense Analyses); 
Year established: 1991; 
Current award date: Dec. 4, 2003; 
Current end date: Dec. 3, 2018; 
Potential end date with all award term/options: June 3, 2019. 

Sources: Reported by DOE, DOD and NSF. GAO-14-593. 

[End of table] 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

John Neumann, (202) 512-3841 or neumannj@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Dan Haas (Assistant 
Director), John Barrett, Kevin Bray, Alysia D. Davis, R. Eli DeVan, 
Cindy Gilbert, Paul Kinney, Alison O'Neill, Kelly Rubin, Tind Shepper 
Ryen, Aaron Shiffrin, Kiki Theodoropoulos, Jack Wang, and Bill Woods 
made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Federal Acquisition Regulation (FAR), 48 C.F.R. § 35.017(a)(2). 

[2] 10 U.S.C. § 2324(e)(1)(P), 41 U.S.C. § 4304(a)(16). 

[3] FAR, 48 C.F.R. §§ 35.017(a)(1), 35.017-2, 35.017-3, 35.017-4, 
35.017-7. 

[4] Because this was a nonprobability sample, findings from our sample 
cannot be generalized to all FFRDCs, but the sample provides 
illustrative examples of the FFRDCs reviewed. 

[5] To avoid overlap with recent and ongoing work at DOE laboratories 
sponsored by the National Nuclear Security Administration (NNSA), we 
excluded those from our selection of sites chosen for site visits. 

[6] Prior to April 2011, NSEC was named the C3I Federally Funded 
Research and Development Center. 

[7] Findings from the site visits are also not generalizable to all 
FFRDCs. 

[8] We requested and reviewed the most recent comprehensive review 
documents for 26 of the 30 FFRDCs in our sample. Three FFRDCs 
sponsored by NSF operate under cooperative agreements instead of 
contracts and, according to NSF officials, are not subject to the FAR 
requirement to conduct this review. We excluded one comprehensive 
review document for a DOD-sponsored FFRDC due to security 
classification of material within the document. 

[9] In addition to the 40 FFRDCs listed in figure 1, the National 
Institute of Standards and Technology has published a notice in the 
Federal Register of its intention to sponsor an additional FFRDC (79 
Fed. Reg. 1831 (Jan. 10, 2014)). 

[10] NNSA is a separately organized agency within DOE that is 
responsible for the management and security of DOE's nuclear weapons, 
nuclear nonproliferation, and naval reactor programs. 

[11] DOD FFRDCs work within an annual ceiling of staff-years of 
technical effort (STE), defined as 1,810 hours of paid effort for 
technical services. Another measure of employment is full-time 
equivalent (FTE) employment, which is defined in Office of Management 
and Budget (OMB) Circular A-11 as the total number of hours worked 
divided by the number of compensable hours applicable to the fiscal 
year. STE differs from FTE in that it specifies technical services and 
a fixed number of hours per fiscal year (1,810), whereas FTE includes 
all work activity and is based on the total hours available in any 
particular fiscal year. 

[12] Cooperative agreements are used when the principal purpose of the 
relationship is to transfer a thing of value to the recipient in order 
to carry out a public purpose. This differs from contracts, which 
usually involve the acquisition of property or services for the direct 
benefit or use of the government. For the purposes of this report, we 
refer to organizations operating FFRDCs through contracts or 
cooperative agreements as the FFRDC contractor. 

[13] [hyperlink, http://www.nsf.gov/statistics/ffrdc/] (last accessed 
July 17, 2014). 

[14] FAR, 48 C.F.R. §§ 31.201-2, 31.201-3, 31.205-6. 

[15] The federal statutory cap on compensation does not apply to 
cooperative agreements or fixed-price contracts without cost 
incentives or any firm fixed-price contract for commercial items. 

[16] OFPP in the OMB plays a central role in shaping the policies and 
practices federal agencies use to acquire the goods and services they 
need to carry out their responsibilities. To promote economy, 
efficiency, and effectiveness in the acquisition processes, Congress 
established OFPP in 1974 to provide overall direction for government-
wide procurement policies, regulations and procedures. 

[17] Bipartisan Budget Act of 2013, Pub. L. No. 113-67 § 702, 127 
Stat. 1165, 1189. This legislation effectively moved responsibility 
for setting the annual cap away from OFPP for contracts beginning on 
or after June 24, 2014, or 180 days after enactment. 

[18] The cap established in 2013 is adjusted annually based on the 
Employment Cost Index for all workers. The Employment Cost Index is 
calculated by the Bureau of Labor Statistics as a measure of the 
change in the cost of labor, free from the influence of employment 
shifts among occupations and industries. The head of the sponsoring 
agency may establish narrowly targeted exceptions upon a determination 
that such exceptions are needed to ensure that the agency has 
continued access to needed skills and capabilities. 

[19] Pub. L. No. 113-67 § 702, National Defense Authorization Act for 
Fiscal Year 2012 (2011), Pub. L. No. 112-81 § 803, 125 Stat. 1298, 
1485. 

[20] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 15, 1999). 

[21] The GPRA Modernization Act of 2010 refined existing and added new 
agency-level planning and reporting requirements; laid out a framework 
for setting goals, measuring performance, and reporting progress on a 
cross-agency and whole of government basis; and created agency Chief 
Operating Officers and Performance Improvement Officers with 
responsibilities for improving the management and performance of their 
agencies, among other things. 

[22] GAO, Managing for Results: Executive Branch Should More Fully 
Implement the GPRA Modernization Act to Address Pressing Governance 
Challenges, [hyperlink, http://www.gao.gov/products/GAO-13-518] 
(Washington, D.C.: June 26, 2013). 

[23] Generally, requirements in the FAR are applicable to contracts 
only and would not apply to cooperative agreements. 

[24] Specifically, the FAR limits the term of such agreements to 5 
years, and before such contracts or agreements can be extended the 
sponsoring agency much conduct a comprehensive review. 

[25] In fiscal year 2009, the American Recovery and Reinvestment Act 
of 2009 provided DOE with $41.7 billion in addition to its regular 
appropriations resulting in a higher available budget authority in 
2009 than other years. In the 3 years following, DOE has obligated 
nearly one-half of its available budget authority to the FFRDCs it 
sponsors. 

[26] NCAR is a federally funded research and development center 
devoted to service, research, and education in the atmospheric and 
related sciences. NCAR's mission is to understand the behavior of the 
atmosphere and related physical, biological, and social systems; to 
support, enhance and extend the capabilities of the university 
community and the broader scientific community - nationally and 
internationally; and to foster transfer of knowledge and technology 
for the betterment of life on Earth. 

[27] Appendix II contains complete funding data for the 30 FFRDCs 
sponsored by DOE, DOD, and NSF for fiscal years 2008 through 2012. 

[28] FTEs reflect the total number of regular straight-time hours 
(i.e., not including overtime or holiday hours) worked by employees 
divided by the number of compensable hours applicable to each fiscal 
year. Annual leave, sick leave, and compensatory time off and other 
approved leave categories are considered to be hours worked for 
purposes of defining FTE employment. 

[29] Federal Workforce: Recent Trends in Federal Civilian Employment 
and Compensation, [hyperlink, http://www.gao.gov/products/GAO-14-215] 
(Washington, D.C.: Jan. 29, 2014). 

[30] Salary data reported by FFRDCs do not include other components of 
compensation, such as bonuses or other incentives. 

[31] DOE, Acquisition Letter 2014-07: Benchmark Compensation Amount 
for Individual Executive Salary Actions (May 23, 2014), DOE 
Acquisition Letter 2013-04: Contractor Executive Compensation (Mar. 1, 
2013), and DOE Order 350.1: Contractor Human Resource Management 
Programs (Feb. 23, 2010). 

[32] DOE officials do not document the portion of the total 
compensation of FFRDC senior executives that is nonreimbursable and, 
therefore, they were not able to report the number of senior 
executives whose total compensation--reimbursable and nonreimbursable 
amounts--exceeded the cap. 

[33] At SRNL, in addition to the required form documenting pay for 
laboratory directors and some other senior executives, the contracting 
officer also received a supplemental form from the contractor that 
describes total reimbursed compensation for each senior executive, 
including the pay and nonpay benefits subject to the cap and other 
benefits such as fringe benefits. 

[34] Since 2013, DOE policy states that all employees should be 
transitioned to the compensation increase plan except for the 
laboratory directors. Employees who are not included in the 
compensation increase plan are subject to individual approvals and 
documentation of compensation subject to the cap, as is done for the 
laboratory directors. 

[35] DOE officials approve funding for bonuses and incentives--such as 
performance, retention, or recruitment awards--on either an annual 
basis in the compensation increase plan or as an ongoing authorization 
under the contract. 

[36] The DCAA Contract Audit Manual describes executive positions as 
usually unique positions within that company. Only the largest of 
firms have the potential for a class of employees performing vice-
presidential level duties, which can be described as having similar 
rank, function, and responsibility. Normally, executives are not part 
of a class of employees and must be evaluated individually. 

[37] DCAA, Audit Program for Incurred Costs, February 2014. 

[38] At the time of the survey, the cap for compensation 
reimbursements was not set for fiscal years 2012 or 2013. 

[39] We requested and reviewed the most recent comprehensive review 
documents for 26 of the 30 FFRDCs in our scope. Three FFRDCs sponsored 
by NSF operate under cooperative agreements instead of contracts and, 
according to NSF officials, are not subject to the FAR requirement to 
conduct this review. We excluded one comprehensive review document for 
a DOD-sponsored FFRDC due to classification of material within the 
document. 

[40] NSF officials told us that they did not complete comprehensive 
reviews for the other 3 NSF-sponsored FFRDCs operating under 
cooperative agreements because these FFRDCs are not subject to 
contract requirements contained in the FAR, but NSF officials stated 
that they use the FAR as guidance when managing these FFRDCs. 

[41] According to DOD officials, with respect to the Software 
Engineering Institute, while the comprehensive review found that the 
FFRDC had acceptable performance, its mission and core statement were 
no longer wholly appropriate and substantial changes to the sponsoring 
agreement were recommended to meet evolving DOD needs. 

[42] The Science and Technology Policy Institute changed contractors 
from RAND to the Institute for Defense Analyses in 2003. 

[43] We rated an element as documented if the comprehensive review 
documented a determination or finding for the FAR element and provided 
supporting evidence. We rated an element as partially documented if 
the determination or finding did not address the entire element or if 
there was little to no supporting evidence within the comprehensive 
review. We rated an element as not documented if no determination or 
finding was documented. 

[44] We excluded one comprehensive review document for a DOD-sponsored 
FFRDC from our review due to classification of material within the 
document. 

[45] DOE, AL-2013-03, Acquisition Letter: Acquisition Planning 
Considerations for Management and Operating Centers (Feb. 20, 2013), 
DOE, Acquisition Guide, Chapter 7.3 (September 2013). Between 2010 and 
2013, DOE had an acquisition letter that called for the comprehensive 
review to be completed as part of the acquisition plan when DOE 
considered extending the FFRDC contract using other than full and open 
competition. 

[46] The guidance was issued on May 2, 2011, in a memorandum for 
Secretaries of the military departments; Director, Operational Test 
and Evaluation; Assistant Secretary of Defense for Networks and 
Information Integration; and the Director of the National Security 
Agency. The guidance is referred to as the DOD FFRDC Management Plan, 
superseding the DOD's Management Plan of May 15, 2003. Both documents 
include the same guidance concerning comprehensive reviews. 

[47] DOD officials stated that the FAR requirements for the 
comprehensive review are brief and that the longer discussion of these 
elements in its FFRDC Management Plan benefits agency officials, as 
the detailed requirements provide more explicit direction for the 
review and consistency between reviews, and address items DOD 
leadership believe are important. 

[48] NSF officials told us that they considered the FAR language when 
developing the cooperative agreement for NCAR and the other two FFRDCs 
NSF sponsors through cooperative agreements. 

[49] DOE officials told us that the agency does not publicly release 
comprehensive review documents or approvals, and that they expect 
those documents would be available through a Freedom of Information 
Act request. 

[50] According to DOE officials and documents, each performance 
evaluation and measurement plan is structured around eight performance 
goals, which are general overarching statements of the desired outcome 
for each major performance area that is scored and reported annually. 
The goals comprise a small number of objectives, which are statements 
of desired results for an organization or activity. Within each 
objective, DOE officials can identify a small number of notable 
outcomes that illustrate or amplify important features of a 
laboratory's performance for the coming year. The notable outcomes 
were established as a part of all performance evaluation and 
measurement plans in 2009 because DOE officials felt the prior system 
had too few outcome-driven metrics across its objectives and too many 
measures overall. 

[51] DOE's Office of Science FFRDC appraisal process has been in place 
since 2006, and DOE's Office of Science posts performance report 
cards, by fiscal year, for each of the FFRDCs it sponsors on its 
website. DOE officials said that the associated performance and 
evaluation reports are not available on the department's website but 
would be provided upon request. 

[52] NSF has limited performance information regarding NCAR efforts 
funded by entities other than the NSF. NSF officials stated that they 
review some, but not all, non-NSF supported activities at NCAR to 
ensure their scope is within NCAR's mission. These officials stated 
that they generally review large proposals but do not have a specific 
threshold amount. 

[53] DOE's ORNL site office, like all other DOE FFRDCs, must establish 
and implement an effective oversight program consistent with a DOE 
order that directs, among other things, that DOE evaluate contractor 
programs for effectiveness of performance. DOE, DOE O 226.1b, 
Implementation of Department of Energy Oversight Policy (Apr. 25, 
2011). 

[54] DOE site offices develop an oversight plan each fiscal year as 
part of its contractor and quality assurance plan. We did not evaluate 
these plans; however, NNSA's inspector general found that Sandia 
National Laboratory had not always performed effective self-
assessments to identify safety weaknesses as part of its contractor 
assurance system. National Nuclear Security Administration: Contractor 
Governance. DOE/IG-0881 (Feb. 19, 2013). 

[55] DOE established a work authorization and control process for work 
performed by DOE facilities, including most of its FFRDCs. DOE, DOE O 
412.1a, Work Authorization System (Apr. 21, 2005). DOE's Office of 
Environmental Management does not use DOE's work authorization process. 

[56] Indirect costs are spread across multiple contracts at a 
particular contractor, as opposed to direct costs such as labor and 
material costs that can be associated with a specific contract. 

[57] Because this was a nonprobability sample, findings from our 
sample cannot be generalized to all FFRDCs. 

[58] To avoid overlap with recent and ongoing engagements at DOE labs 
sponsored by the National Nuclear Security Administration (NNSA), we 
excluded those labs from our selection. 

[59] Findings from the site visits are also not generalizable to all 
FFRDCs. 

[60] We reported data on executive compensation at DOD contractors 
generally for this period in GAO, Information on the Impact of 
Reducing the Cap on Employee Compensation Costs, [hyperlink, 
http://www.gao.gov/products/GAO-13-566] (Washington, D.C.: June 19, 
2013). 

[End of section] 

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