Federal Research:

Opportunities Exist to Improve the Management and Oversight of Federally Funded Research and Development Centers

GAO-09-15: Published: Oct 8, 2008. Publicly Released: Nov 7, 2008.

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In 2006, the federal government spent $13 billion--14 percent of its research and development (R&D) expenditures--to enable 38 federally funded R&D centers (FFRDCs) to meet special research needs. FFRDCs--including laboratories, studies and analyses centers, and systems engineering centers--conduct research in military space programs, nanotechnology, microelectronics, nuclear warfare, and biodefense countermeasures, among other areas. GAO was asked to identify (1) how federal agencies contract with organizations operating FFRDCs and (2) agency oversight processes used to ensure that FFRDCs are well-managed. GAO's work is based on a review of documents and interviews with officials from eight FFRDCs sponsored by the departments of Defense (DOD), Energy (DOE), Health and Human Services (HHS), and Homeland Security (DHS). What GAO Recommends

Federal agencies GAO reviewed use cost-reimbursement contracts with the organizations that operate FFRDCs, and three of the agencies generally use full and open competition to award the contracts. Only DOD consistently awards its FFRDC contracts on a sole-source basis, as permitted by law and regulation when properly justified. FFRDCs receive funding for individual projects from customers that require the FFRDCs' specialized research capabilities. Because FFRDCs have a special relationship with their sponsoring agencies and may be given access to sensitive or proprietary data, regulations require that FFRDCs be free from organizational conflicts of interest. DOD and DOE also have policies that prescribe specific areas that FFRDC contractors must address to ensure their employees are free from personal conflicts of interest. In a May 2008 report, GAO recognized the importance of implementing such safeguards for contractor employees. Currently, although DHS and HHS have policies that require their FFRDC contractors to implement conflicts-of-interest safeguards, these policies lack the specificity needed to ensure their FFRDC contractors will consistently address employees' personal conflicts of interest. Sponsoring agencies use various approaches in their oversight of FFRDC contractors, including: (1) Review and approval of work assigned to FFRDCs, or conducted for other agencies or entities, to determine consistency with the FFRDC's purpose, capacity, and special competency. In this process, only DOD must abide by congressionally imposed annual workload limits for its FFRDCs. (2) Conduct performance reviews and audits of contractor costs, finances, and internal controls. (3) Conduct a comprehensive review before a contract is renewed to assess the continuing need for the FFRDC and if the contractor can meet that need, based on annual assessments of contractor performance. Some agencies have adopted other agencies' FFRDC oversight and management practices. For example, DHS mirrored most of DOD's FFRDC Management Plan--an internal DOD guidance document--in developing an approach to FFRDC oversight, and DHS officials told us they learned from DOE's experience in selecting and overseeing contractors for laboratory FFRDCs. In addition, HHS plans to implement certain DOE practices, including rewarding innovation and excellence in performance through various contract incentives. While agency officials have acknowledged the potential benefits from sharing best practices, there is currently no formal cross-agency forum or other established mechanism for doing so.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To ensure that FFRDC employees operate in the government's best interest, the Secretary of Homeland Security should revise agency policies to address specific areas for potential personal conflicts of interest for FFRDC personnel in a position to make or materially influence research findings or agency decision making.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: In written comments on the report, DHS concurred with this recommendation. Its Science and Technology Directorate has revised Management Directive 143.04 to update its policies regarding potential personnel conflicts of interest of work involving Federally Funded Research and Development Center (FFRDC) personnel.

    Recommendation: To ensure that FFRDC employees operate in the government's best interest, the Secretary of Health and Human Services should review agency policy regarding personal conflicts of interest for its sponsored FFRDC and revise as appropriate to ensure that this policy addresses all personnel in a position to make or materially influence research findings or agency decision making.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: In providing comments on this report, HHS concurred with this recommendation and currently has a final rule addressing it, 45 CFR Part 94, August 25, 2011.

    Recommendation: To improve the sharing of oversight best practices among agencies that sponsor FFRDCs, the Secretaries of Energy, Defense, Homeland Security, and Health and Human Services, which together sponsor the vast majority of the government's FFRDCs, should take the lead in establishing an ongoing forum for government personnel from these and other agencies that sponsor FFRDCs to discuss their agencies' FFRDC policies and practices. Areas for knowledge sharing could include, for example, implementing personal conflicts of interest safeguards and processes for completing the justification reviews prior to renewing sponsoring agreements, among others.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: In providing comments on this report, Department of Energy concurred with this recommendation. DOD took the lead, working with DOE, to implement this interagency recommendation to establish an ongoing forum for government personnel that sponsor Federally Funded Research and Development Centers (FFRDC) to discuss FFRDC policies and practices. In December 2012, DOD held a forum for FFRDC-responsible representatives from DOD, DHS, DOE, and HHS, and agreed to make the forum an annual event.

    Recommendation: To improve the sharing of oversight best practices among agencies that sponsor FFRDCs, the Secretaries of Energy, Defense, Homeland Security, and Health and Human Services, which together sponsor the vast majority of the government's FFRDCs, should take the lead in establishing an ongoing forum for government personnel from these and other agencies that sponsor FFRDCs to discuss their agencies' FFRDC policies and practices. Areas for knowledge sharing could include, for example, implementing personal conflicts of interest safeguards and processes for completing the justification reviews prior to renewing sponsoring agreements, among others.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: In providing comments on this report, HHS concurred with this recommendation. DOD took the lead, working with HHS, to implement this interagency recommendation to establish an ongoing forum for government personnel from all government agencies that sponsor Federally Funded Research and Development Centers (FFRDC) to discuss FFRDC policies and practices. In December 2012, DOD held a forum for FFRDC-responsible representatives from DOD, DHS, DOE, and HHS, and agreed to make the forum an annual event.

    Recommendation: To improve the sharing of oversight best practices among agencies that sponsor FFRDCs, the Secretaries of Energy, Defense, Homeland Security, and Health and Human Services, which together sponsor the vast majority of the government's FFRDCs, should take the lead in establishing an ongoing forum for government personnel from these and other agencies that sponsor FFRDCs to discuss their agencies' FFRDC policies and practices. Areas for knowledge sharing could include, for example, implementing personal conflicts of interest safeguards and processes for completing the justification reviews prior to renewing sponsoring agreements, among others.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: In providing comments on this report, Department of Homeland Security concurred with this recommendation. DOD took the lead, working with DHS, to implement this interagency recommendation to establish an ongoing forum for government personnel that sponsor Federally Funded Research and Development Centers (FFRDC) to discuss FFRDC policies and practices. In December 2012, DOD held a forum for FFRDC-responsible representatives from DOD, DHS, DOE, and HHS, and agreed to make the forum an annual event.

    Recommendation: To improve the sharing of oversight best practices among agencies that sponsor FFRDCs, the Secretaries of Energy, Defense, Homeland Security, and Health and Human Services, which together sponsor the vast majority of the government's FFRDCs, should take the lead in establishing an ongoing forum for government personnel from these and other agencies that sponsor FFRDCs to discuss their agencies' FFRDC policies and practices. Areas for knowledge sharing could include, for example, implementing personal conflicts of interest safeguards and processes for completing the justification reviews prior to renewing sponsoring agreements, among others.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: In providing comments on this report, DOD concurred with this recommendation. DOD took the lead (working with Energy, Homeland Security and Health and Human Service) for implementing this interagency recommendation to establish an ongoing forum for government personnel from all government agencies that sponsor Federally Funded Research and Development Centers (FFRDC) to discuss FFRDC policies and practices. In December 2012, DOD held a forum for FFRDC-responsible representatives from DOD, DHS, DOE, and HHS, and agreed to make the forum an annual event.

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