Federally Funded R&D Centers:

Issues Relating to the Management of DOD-Sponsored Centers

NSIAD-96-112: Published: Aug 6, 1996. Publicly Released: Aug 6, 1996.

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GAO reviewed issues that merit closer attention as Congress and the Department of Defense (DOD) seek to resolve concerns relating to DOD management and use of federally funded research and development centers (FFRDC).

GAO found that: (1) on the basis of its work as well as studies done by others, it identified four issues it believes merit attention as Congress and DOD work to resolve concerns relating to FFRDCs; (2) these issues are whether DOD limits FFRDCs to performing appropriate work, adequately safeguards the objectivity of FFRDCs, oversees FFRDCs effectively, and adequately considers cost-effective alternatives to using FFRDCs; (3) the DOD Inspector General's office and others have raised concerns that FFRDC mission statements are too broad and do not clearly identify the specialized tasks that FFRDCs should perform; (4) DOD now defines the role of FFRDCs as performing work that is consistent with the FFRDC's purpose, mission, capabilities, and core competencies and requires a special relationship between the FFRDC and its sponsor; (5) while DOD states that it is important to ensure that tasks assigned to the FFRDC meet the core work criteria, GAO believes it will continue to be difficult to determine whether a task meets these criteria; (6) questions have been raised about whether DOD efforts to safeguard the objectivity of its FFRDCs are adequate; (7) DOD has issued little specific FFRDC-wide guidance on safeguarding objectivity or regulating the outside interests of Board of Trustee members and has not historically exerted strong control over work FFRDCs' parent organizations perform through non-FFRDC divisions; (8) Congress and others have repeatedly raised questions about the adequacy of DOD policy guidance and oversight; (9) concerns have been raised regarding whether DOD policy guidance ensures that sponsors adequately justify awarding noncompetitive contracts for the operation of the FFRDCs, adequately screen tasks assigned to FFRDCs, implement adequate audit controls for the FFRDCs, award reasonable contract fees, and make certain that FFRDC employees' compensation is reasonable; (10) while DOD has taken some steps to address the concerns regarding oversight, a Defense Science Board Task Force recently noted a significant distrust of DOD's use and management of FFRDCs and recommended the establishment of an independent advisory panel to address this distrust; (11) concerns have long been expressed that DOD does not adequately consider hiring civil servants or contracting with commercial firms as alternatives to using FFRDCs; (12) DOD maintains that in-house and commercial contractor alternatives to the centers are not as effective; and (13) GAO generally supports the direction DOD has taken with initiatives to address long-standing issues related to management of FFRDCs, but it is too early to tell how effectively the initiatives will be implemented or how well they will address long-standing concerns regarding use of FFRDCs.

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