[Application of R&D Under P.L. 97-219]

Pursuant to a congressional request, GAO addressed questions concerning whether activities funded under the Department of Defense's (DOD) operational system development category are within the statutory definition of research or research and development (R&D). In a GAO report which discussed the DOD failure to report operational system development as extramural R&D under the act while reporting the same activities as research, GAO recommended that: (1) DOD definitively determine which activities funded under the DOD research, development, testing, and evaluation (RDT&E) appropriations conform to the common definition of R&D found in the Small Business Innovation Development Act; and (2) that determination then be consistently applied when reporting R&D funding data. GAO found that: (1) under the act, the definition of research or R&D is any activity which is a systematic, intensive study directed at understanding the subject studied, applying the new knowledge to meet a recognized need, or applying that knowledge toward the production of useful materials, systems, or methods to meet specific requirements; and (2) DOD obtains R&D funds under RDT&E appropriations, which are divided into six categories, including operational system development. GAO concluded that, since activities conducted under the operational system innovation development category are within the definition of R&D found in the act, DOD should include the extramural portion of the activities as extramural R&D in its report to the Small Business Administration.