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entitled 'Defense Microelectronics: DOD-Funded Facilities Involved in 
Research Prototyping or Production' which was released on March 14, 
2005. 

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Report to the Chairman, Subcommittee on Tactical Air and Land Forces, 
Committee on Armed Services, House of Representatives:

United States Government Accountability Office:

GAO:

March 2005:

Defense Microelectronics:

DOD-Funded Facilities Involved in Research Prototyping or Production:

GAO-05-278:

GAO Highlights:

Highlights of GAO-05-278, a report to the Chairman, Subcommittee on 
Tactical Air and Land Forces, Committee on Armed Services, House of 
Representatives

Why GAO Did This Study:

The Department of Defenses (DOD) ability to provide superior 
capabilities to the warfighter is dependent on its ability to 
incorporate rapidly evolving, cutting-edge microelectronic devices into 
its defense systems. While many commercial microelectronics advances 
apply to defense systems, DOD has some unique microelectronics needs 
not met by industry. Therefore, to maintain military superiority, DOD 
has the challenge of exploiting state-of-the-art commercial 
microelectronics technology and focusing its research investments in 
areas with the highest potential return for defense systems. 

Given the importance of advanced microelectronics to defense systems 
and the rapid changes in these technologies, you asked GAO to (1) 
identify and describe DOD and federally funded research and development 
center (FFRDC) facilities that receive funding from DOD for 
microelectronics production or research prototyping and (2) describe 
how DOD coordinates investments in microelectronics research. 

What GAO Found:

At the time of our review, eight DOD and FFRDC facilities that received 
funding from DOD were involved in microelectronics research prototyping 
or production. Three of these facilities focused solely on research; 
three primarily focused on research but had limited production 
capabilities; and two focused solely on production. The research 
conducted ranged from exploring potential applications of new materials 
in microelectronic devices to developing a process to improve the 
performance and reliability of microwave devices. Production efforts 
generally focus on devices that are used in defense systems but not 
readily obtainable on the commercial market, either because DODs 
requirements are unique and highly classified or because they are no 
longer commercially produced. For example, one of the two facilities 
that focuses solely on production acquires process lines that 
commercial firms are abandoning and, through reverse-engineering and 
prototyping, provides DOD with these abandoned devices. During the 
course of GAOs review, one facility, which produced microelectronic 
circuits for DODs Trident program, closed. Officials from the facility 
told us that without Trident program funds, operating the facility 
became cost prohibitive. These circuits are now provided by a 
commercial supplier. Another facility is slated for closure in 2006 due 
to exorbitant costs for producing the next generation of circuits. The 
classified integrated circuits produced by this facility will also be 
supplied by a commercial supplier. 

DOD has several mechanisms in place aimed at coordinating and planning 
research conducted by the military services and defense agencies. One 
key mechanism is identifying defense technology objectivesthe specific 
technology advancements that will be developed or demonstrated across 
multiple joint capabilities and technology areas. As of February 2004, 
there were almost 400 defense technology objectives; five of these were 
identified as microelectronics. DOD also collaborates with industry to 
review and assess special technology areas and make recommendations 
about future electronics and microelectronics research. 

Microelectronics Worker in Clean Room Processing Area: 

[See PDF for image]

[End of figure]

What GAO Recommends:

www.gao.gov/cgi-bin/getrpt?GAO-05-278. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Ann Calvaresi-Barr at 
(202) 512-4841 or calvaresibarra@gao.gov. 

[End of section]

Contents:

Letter:

Results in Brief:

Background:

DOD and FFRDC Facilities Receiving DOD Funding Have Varying 
Microelectronics Research and Production Focuses:

DOD Has Several Mechanisms for Coordinating Research:

Agency Comments:

Appendix I: Scope and Methodology:

Appendix II: Comments from the Department of Defense:

Appendix III: GAO Contact and Staff Acknowledgments:

GAO Contact:

Acknowledgments:

Tables:

Table 1: Summary of DOD and FFRDC Facilities Receiving Funding from DOD 
with Research Prototyping or Production Capability through Fiscal Year 
2004:

Table 2: Defense Reliance Process Planning Documents:

Figures:

Figure 1: DOD Budget Authority in Billions, by Major Category for 
Fiscal Year 2005:

Figure 2: Recipients of DOD Research and Advanced Technology 
Development Funds for Fiscal Year 2003:

Figure 3: Microelectronics Worker in Clean Room Processing Area:

Figure 4: DOD and FFRDC Facilities with Microelectronics Research 
Prototyping and/or Production Capabilities That Receive Funding From 
DOD:

Figure 5: Defense Reliance Process:

Figure 6: Defense Technology Objectives by Technology Area:

Abbreviations:

DMEA: Defense Microelectronics Activity:

DOD: Department of Defense:

FFRDC: federally funded research and development center:

NSA: National Security Agency:

SPAWAR: Space and Naval Warfare Systems Command:

S&T: science and technology:

United States Government Accountability Office:

Washington, DC 20548:

March 11, 2005:

The Honorable Curt Weldon: 
Chairman, Subcommittee on Tactical Air and Land Forces: 
Committee on Armed Services: 
House of Representatives:

Dear Mr. Chairman:

Advanced microelectronics are an enabling technology for many U.S. 
defense systems. Satellites and communications equipment, for example, 
are reliant on advanced microelectronics that must meet stringent 
military requirements such as withstanding radiation and extreme- 
temperature environments, operating for longer periods of time, and 
performing at higher power levels. The Department of Defense's (DOD) 
ability to provide superior capabilities to the warfighter is dependent 
on its ability to incorporate rapidly evolving, cutting-edge 
microelectronic devices into its defense systems. While many commercial 
advances are applicable to defense systems, DOD has some unique 
microelectronics research and production needs not met by industry. 
Therefore, to maintain military superiority, DOD faces the challenge of 
exploiting state-of-the-art commercial microelectronics technology 
while focusing DOD research investments in areas with the highest 
potential return for defense systems. 

Given the importance of advanced microelectronics to DOD's defense 
systems and the rapid changes in these technologies, you asked us to 
(1) identify and describe DOD and federally funded research and 
development center (FFRDC)[Footnote 1] facilities that receive funding 
from DOD for microelectronics production or research prototyping and 
(2) describe how DOD coordinates investments in microelectronics 
research. 

We visited and toured all DOD and FFRDC facilities identified by DOD as 
having capability to produce or prototype microelectronics, interviewed 
facility officials, and obtained documentation to describe each 
facility. We interviewed the Executive Staff of the Defense Science and 
Technology Reliance process and other DOD officials and obtained and 
reviewed applicable documentation to determine how DOD coordinates 
investments in microelectronics research. Because microelectronics is a 
part of a much broader area of research, we looked at DOD's overall 
research coordination in addition to microelectronics-specific areas. 
We performed our review from November 2003 to January 2005 in 
accordance with generally accepted government auditing standards. 

Results in Brief:

At the time of our review, eight DOD or FFRDC facilities that received 
funding from DOD were involved in microelectronics research prototyping 
or production--three focused solely on research, three primarily 
focused on research but had limited production capabilities, and two 
focused solely on production. The research conducted ranged from 
exploring potential applications of nonsilicon materials in 
microelectronic devices to developing a process to improve the 
performance and reliability of microwave devices. Production efforts 
generally focused on devices that are used in defense systems but not 
readily obtainable on the commercial market, either because their 
requirements are unique and highly classified or because they are no 
longer commercially produced. One facility that focused primarily on 
research but which produced microelectronic circuits for DOD's Trident 
program closed on October 31, 2004. Officials from the facility told us 
that without the funds from the Trident program, operating the facility 
became cost prohibitive. These circuits are now provided by a 
commercial supplier. Another facility--which produces classified 
integrated circuits--is slated for closure in 2006 because it would 
cost an estimated $1.7 billion to produce the next generation of 
integrated circuits. These circuits will also be supplied by a 
commercial supplier. Additional changes to other facilities could occur 
pending the review of DOD's Base Realignment and Closure Commission. 

DOD has several mechanisms in place aimed at coordinating and planning 
research conducted by the Air Force, Army, Navy and defense agencies. 
One key mechanism is annually identifying defense technology 
objectives--the specific technology advancements that will be developed 
or demonstrated across multiple joint capabilities and technology 
areas. As of February 2004, there were almost 400 defense technology 
objectives; five of these were identified as microelectronics. DOD also 
periodically collaborates with industry to review and assess special 
technology areas and make recommendations about future electronics and 
microelectronics research. 

Background:

Microelectronics focuses on the study and manufacture of micro devices, 
such as silicon integrated circuits, which are fabricated in submicron 
dimensions and form the basis of all electronic products. In DOD 
research, microelectronics extends beyond silicon integrated circuits 
and cuts across scientific disciplines such as biological sciences, 
materials sciences, quantum physics, and photonics. DOD research also 
covers many different types of materials, devices, and processes. For 
example, DOD service laboratories conduct research in materials other 
than silicon, such as gallium nitride, indium arsenide, and silicon 
carbide--materials that could provide higher performing or more 
reliable devices to meet DOD needs. 

DOD's overall budget authority for fiscal year 2005 was approximately 
$400 billion. About $69 billion, or 17 percent of the overall budget, 
was directed toward research and development activities.[Footnote 2] 
The vast majority of this funding goes to development programs for 
major systems such as the Joint Strike Fighter and the Space Based 
Infrared System High. About $5.2 billion, or about 1.3 percent of the 
overall budget, was directed toward research (see fig. 1). Because DOD 
tracks funding by funding category, not by specific technology area, 
the microelectronics portion of this funding category cannot be broken 
out. 

Figure 1: DOD Budget Authority in Billions, by Major Category for 
Fiscal Year 2005:

[See PDF for image]

[End of figure]

DOD research and technology development is conducted by universities, 
DOD laboratories, industry, and other organizations.[Footnote 3] 
Universities and DOD laboratories are primarily involved in research. 
Once a new device is proven and has potential application for DOD, the 
technology is transferred to industry to further develop and ultimately 
produce and integrate into defense systems. These organizations may 
collaborate on microelectronics projects through various arrangements, 
such as cooperative research and development agreements and 
collaborative technology alliances. Figure 2 shows the distribution of 
DOD research and advanced technology development funding by performing 
organizations.[Footnote 4]

Figure 2: Recipients of DOD Research and Advanced Technology 
Development Funds for Fiscal Year 2003:

[See PDF for image]

Note: Data from National Science Foundation, Federal Funds for Research 
and Development, Volume 51 (Washington, D.C.: March 2004). 

[A] Basic research is directed towards greater understanding of 
fundamental aspects of phenomena related to long-term national security 
needs without specific applications to processes or products. 

[B] Applied research translates promising basic research into solutions 
for broadly defined military needs that are short of system 
development. 

[C] Advanced technology development involves development of subsystems 
and components and efforts to integrate subsystems and components into 
system prototypes for field experiments and/or tests in a simulated 
environment. 

[End of figure]

Microelectronics production and research prototyping require 
specialized equipment and facilities. To prevent flaws in production, 
microelectronic devices are produced in clean rooms where the air is 
constantly filtered, and temperature, humidity, and pressure may be 
regulated. Clean rooms are rated according to a federal standard. For 
example, a class 1000 clean room has no more than 1000 particles larger 
than 0.5 microns in a cubic foot of air, while a class 100 clean room 
has no more than 100 particles. The people who work in clean rooms wear 
special protective clothing that prevents workers from contaminating 
the room (see fig. 3). 

Figure 3: Microelectronics Worker in Clean Room Processing Area:

[See PDF for image]

[End of figure]

The equipment found at research facilities and at production facilities 
are similar but are used for different purposes. Because research 
facilities focus on developing new device concepts, materials, and 
processes, the equipment is set up for flexibility because it is used 
for different experiments to prove concepts and validate theories. Once 
a technology is sufficiently developed, a small quantity is prototyped 
in a production environment to prove the design. Production facilities 
are set up to produce higher volumes of microelectronics and have more 
automation and multiple sets of equipment to increase productivity. 

DOD and FFRDC Facilities Receiving DOD Funding Have Varying 
Microelectronics Research and Production Focuses:

At the time of our review, eight DOD and FFRDC facilities that received 
funding from DOD were involved in microelectronics research prototyping 
or production. Three military facilities focused solely on research; 
three primarily focused on research but had limited production 
capabilities; and two focused solely on production (see fig. 4). 

Figure 4: DOD and FFRDC Facilities with Microelectronics Research 
Prototyping and/or Production Capabilities That Receive Funding From 
DOD:

[See PDF for image]

Note: MIT Lincoln Laboratory and Sandia National Laboratories are 
FFRDCs. 

[End of figure]

The three military facilities provide basic and applied research 
covering a wide spectrum of microelectronic devices and materials. For 
example, the Naval Research Laboratory facility is conducting basic 
research on the potential application of nonsilicon materials in 
microelectronic devices. Through its applied research, the Air Force 
Research Laboratory facility developed a process to improve the 
performance and reliability of microwave devices needed for military 
radar and communications systems. This technology was ultimately 
transferred from the Air Force to various contractors and used in a 
number of systems, including the Joint Strike Fighter. The Army 
Research Laboratory facility conducts both basic and applied research, 
primarily on multifunction radiofrequency, optoelectronics, and power 
conversion. 

Three other facilities also conduct research but can produce prototypes 
or limited numbers of devices if commercial sources are not available. 
For example, the Lincoln Laboratory's facility--which primarily focuses 
on applied research in sensing and signal processing technologies--has 
developed components for the space-based visible sensor because no 
commercial source was available to meet this DOD need.[Footnote 5] 
Sandia's facility primarily focuses on research and design of radiation 
hardened microelectronics.[Footnote 6] However, because the number of 
commercial producers able to meet the radiation requirements of the 
Department of Energy and DOD has dwindled to two suppliers, Sandia 
maintains limited in-house production capability to fill near-term 
critical needs. According to Sandia officials, they have not been 
called upon to produce microelectronics for DOD in recent years. The 
SPAWAR facility, which recently closed, primarily conducted research on 
radiation-hardened microelectronics, but at one time produced these 
devices for the Navy's Trident missile system. When production of these 
devices was transferred to a commercial supplier, the facility 
maintained capability to produce microelectronics as a back-up to the 
commercial supplier. 

Two facilities focused only on production--one on leading edge 
technology and one on lagging edge technology.[Footnote 7] NSA's 
microelectronics facility focuses on producing cryptographic 
microelectronics--devices not readily obtainable on the commercial 
market because of their unique and highly classified requirements. DMEA 
fills a unique role within DOD by providing solutions to 
microelectronics that are no longer commercially available.[Footnote 8] 
DMEA acquires process lines that commercial firms are abandoning and, 
through reverse-engineering and prototyping, provides DOD with these 
abandoned devices. In some cases, DMEA may produce the device. 

The type and complexity of research conducted or device produced 
largely determines a facility's clean room class and size and its 
equipment replacement costs.[Footnote 9] For example, to produce 
cryptographic electronics, NSA has a 20,000 square foot class 10 clean 
room facility. In contrast, the Naval Research Laboratory conducts 
research in a 5,000 square foot class 100 clean room facility, with 
some class 10 modules where greater cleanliness is required. In 
general, research does not require state-of-the-art equipment to prove 
concepts, and tools can be purchased one at a time and are often second-
hand or donated. 

Table 1 summarizes the eight facilities' microelectronics focus, clean 
room class and size, and equipment replacement costs. 

Table 1: Summary of DOD and FFRDC Facilities Receiving Funding from DOD 
with Research Prototyping or Production Capability through Fiscal Year 
2004:

Research only: 

Facility: Air Force Research Laboratory, Sensors Directorate Dayton, 
Ohio; 
Microelectronics focus: Applied research: sensors (radiofrequency, 
electro-optical); automatic target recognition and sensor fusion; 
Processing clean room (class: size): 100: 6,000 sq. ft; 10: modules; 
Equipment replacement cost[A]: $13 million. 

Facility: Army Research Laboratory, Sensors and Electron Devices 
Directorate Adelphi, Md; 
Microelectronics focus: Basic and applied research: multifunction 
radiofrequency electronics, optoelectronics, power conversion; 
Processing clean room (class: size): 100: 10,000 sq. ft; 10: 4,800 sq. 
ft; 
Equipment replacement cost[A]: $42 million; (includes $9 million for 
materials growth equipment). 

Facility: Naval Research Laboratory, Electronics Science and Technology 
Division Washington, D.C; 
Microelectronics focus: Basic research: wide bandgap, narrow bandgap, 
group IV materials; 
Processing clean room (class: size): 100: 5,000 sq. ft; 10: modules; 
Equipment replacement cost[A]: $20-$30 million. 

Research with limited production capability: 

Facility: MIT Lincoln Laboratory, Solid State Division Lexington, Mass; 
Microelectronics focus: Applied research: sensors, signal processing; 
Production: experimental sensors and imagers not commercially 
available; 
Processing clean room (class: size): 100: 10,000 sq. ft; 10: 8,100 sq. 
ft; 
Equipment replacement cost[A]: $40 million. 

Facility: Sandia National Laboratories (Department of Energy), 
Microelectronics Development Laboratory Albuquerque, N.M; 
Microelectronics focus: Basic and applied research: microscale and 
acoustic sensors, radiation-hardened applications; Production: backup 
radiation-hardened producer to BAE Systems and Honeywell[C]; 
Processing clean room (class: size): 1: 12,500 sq. ft; 
Equipment replacement cost[A]: $250 million[B]. 

Facility: SPAWAR, Integrated Circuit Fabrication Facility (closed 
October 31, 2004) San Diego, Calif; 
Microelectronics focus: Applied research: radiation-hardened circuits, 
radiofrequency/ analog mixed signal; Production: backup radiation-
hardened producer to Honeywell due to similar processes; 
Processing clean room (class: size): 100: 7,900 sq. ft; 10: modules; 
Equipment replacement cost[A]: $30 million. 

Production only: 

Facility: National Security Agency (NSA), Special Processing Laboratory 
Fort Meade, Md; 
Microelectronics focus: Production: cryptographic electronics; 
Processing clean room (class: size): 10: 20,000 sq. ft; 
Equipment replacement cost[A]: $1.7 billion[D] (phasing out the Special 
Processing Laboratory in 2006). 

Facility: Defense Microelectronics Activity (DMEA) Sacramento, Calif; 
Microelectronics focus: Sustainment prototyping and production: 
Provides DOD-wide microelectronics solutions for sustainment issues 
(when parts are no longer commercially available); 
Processing clean room (class: size): 100: 5,500 sq. ft; 5-10: modules; 
Equipment replacement cost[A]: $12 million[E]. 

Source: GAO based on information provided by each facility. 

[A] These are self-reported data from each facility. 

[B] Higher equipment replacement cost is due to a requirement to 
maintain production capability. 

[C] BAE Systems and Honeywell recently received capital funding under 
the Defense Production Act, Title III Program to assist in technology 
upgrades for their fabrication facilities that produce radiation- 
hardened devices. 

[D] This figure includes facility and equipment upgrade costs. 

[E] DMEA has lower equipment costs because it uses older technologies 
and buys used, less expensive equipment. 

[End of table]

Since we began our review, the SPAWAR facility closed on October 31, 
2004, making Sandia the only backup to the two remaining commercial 
radiation-hardened suppliers to DOD. Officials from the facility told 
us that without funds from the Trident program, operating the facility 
became cost prohibitive. Further, NSA's microelectronics facility is 
slated for closure in 2006. NSA estimated that it would cost $1.7 
billion to upgrade its equipment and facility to produce the next 
generation of integrated circuits. NSA is contracting with IBM to take 
over production of the microelectronic devices produced at its 
facility. Part of the contract costs includes security requirements for 
IBM to produce classified circuits. There may be changes to other 
facilities pending the review of the Base Realignment and Closure 
Commission for 2005.[Footnote 10] As a result of prior commission 
recommendations, the Army constructed a new facility to consolidate 
Army specialized electronics research into one location. 

DOD Has Several Mechanisms for Coordinating Research:

DOD has several mechanisms in place aimed at coordinating and planning 
research conducted by the Air Force, Army, Navy, and defense agencies. 
In electronics and microelectronics research, DOD works with industry 
to review special technology areas and make recommendations about 
future research. 

Defense Reliance Process is the Central Mechanism for Coordinating 
Research across DOD Organizations:

DOD's Defense Reliance process provides the Department with a framework 
to look across science and technology (S&T)[Footnote 11] efforts of the 
Defense Advanced Research Projects Agency, Defense Threat Reduction 
Agency, and the Missile Defense Agency as well as the Army, Navy, and 
Air Force. Each service and defense agency updates its own S&T plans 
with the needs of each organization in mind. The Defense Reliance 
process is intended to improve coordination and determine if the 
overall DOD S&T vision and strategy are being met. The Defense Science 
and Technology Strategy document is updated periodically to provide a 
high-level description of what the science and technology programs aim 
to accomplish. The Defense Reliance process includes the development of 
three planning documents, which taken together provide a near-, mid-, 
and long-term look at DOD specific research needs (see table 2). 

Table 2: Defense Reliance Process Planning Documents:

Plan: Basic Research; (Updated biennially); 
Description: Presents DOD's objectives and investment strategy for DOD-
sponsored basic research performed by universities, industry, and 
service laboratories. 

Plan: Joint Warfighting Science and Technology; (Updated annually); 
Description: Looks at the applied research, advanced technology 
development, and advanced concept technology demonstration portions of 
the services' and defense agencies' science and technology plans to 
ensure that the S&T program supports priority future joint warfighting 
capabilities. 

Plan: Defense Technology Area; (Updated biennially); 
Description: Presents DOD's objectives and the applied research and 
advanced technology development investment strategy for technologies 
critical to DOD acquisition plans, service warfighter capabilities, and 
the Joint Warfighting Science and Technology Plan. It also takes a 
horizontal perspective across service and defense agency efforts, 
thereby charting the total DOD investment for a given technology. 

Source: DOD Defense Reliance Executive Staff. 

[End of table]

The planning documents present the DOD S&T vision, strategy, plan, and 
objectives for the planners, programmers, and performers of defense S&T 
and guide the annual preparation of the defense program and budget. 
Figure 5 illustrates the relationship between the planning documents 
and overall reliance process. 

Figure 5: Defense Reliance Process:

[See PDF for image]

Note: Defense technology objectives identify a specific technology 
advancement that will be developed or demonstrated. 

[End of figure]

Science and technology efforts are planned and funded through service 
and defense agency plans. To obtain a perspective across DOD, a portion 
of the service and agency efforts are represented in the various 
Defense Reliance planning documents. DOD's goal is to have about half 
of the investment in service and agency efforts[Footnote 12] 
represented in defense technology objectives.[Footnote 13] According to 
DOD officials, this goal is aimed at balancing flexibility--which 
services and defense agencies need to pursue research that is important 
to their organizations--with oversight and coordination. DOD officials 
stated that looking at a portion of the efforts provide an adequate 
perspective of the S&T research across the services and defense 
agencies to help ensure the goals of DOD's S&T strategy are being met. 
These projects are generally considered high priority, joint efforts, 
or both. 

Defense Technology Objectives and Technology Area Review and 
Assessments:

Two key components in the Defense Reliance process are the defense 
technology objectives and technology area review and assessments. 
Defense technology objectives are intended to guide the focus of DOD's 
science and technology investments by identifying the following:

* objectives, the specific technology advancements that will be 
developed or demonstrated;

* payoffs, the specific benefits to the warfighter resulting from the 
technology advancement;

* challenges, the technical barriers to be overcome;

* milestones, planned dates for technical accomplishments, including 
the anticipated date of technology availability;

* metrics, a measurement of anticipated results;

* customers sponsoring the research; and:

* funding that DOD estimates is needed to achieve the technology 
advancements. 

Both the Joint Warfighting and Defense Technology Area plans are 
comprised of defense technology objectives that are updated annually. 
In its 2004 update, DOD identified 392 defense technology objectives -
-130 in the Joint Warfighting Science and Technology Plan across five 
joint capabilities, and 262 in the Defense Technology Area Plan across 
12 technology areas. Microelectronics falls within the sensors, 
electronics, and electronic warfare area. There are 40 defense 
technology objectives in this area; five were identified as 
microelectronics (see fig. 6). However, according to DOD officials, 
research relating to microelectronics is not limited to these five 
defense technology objectives because microelectronics is an enabling 
technology found in many other research areas. For example, research in 
electronic warfare is highly dependent on microelectronics. 

Figure 6: Defense Technology Objectives by Technology Area:

[See PDF for image]

[End of figure]

To provide an independent assessment of the planned research, DOD uses 
Technology Area Review and Assessment panels. DOD strives to have a 
majority of the Technology Area Review and Assessment team members from 
outside DOD, including other government agencies, FFRDCs, universities, 
and industry. Most team members are recognized experts in their 
respective research fields. The Technology Area Review and Assessment 
panels assess DOD programs against S&T planning guidance, defense 
technology objectives, affordability, service-unique needs, and 
technology opportunities; and provide their assessments and 
recommendations to the Defense Science and Technology Advisory Group. 

Other Coordination Mechanisms for Electronics Research:

For the electronics research area, additional industry and university 
insight is obtained through the Advisory Group on Electron Devices. DOD 
established this advisory group to help formulate a research investment 
strategy by providing ongoing reviews and assessments of government- 
sponsored programs in electronics, including microelectronics. The 
advisory group is comprised of experts representing the government, 
industry, and universities, who provide DOD with current knowledge on 
the content and objectives of various programs under way at industry, 
university, and government laboratories. 

Periodically, the advisory group conducts special technology area 
reviews to evaluate the status of an electronics technology for defense 
applications. The advisory group also serves as a bridge between 
electronic system and component developers within DOD by establishing 
regular, periodic interactions with system program offices, industry 
system developers, and government and industry components developers. 

Agency Comments:

We provided a draft of this report to DOD for review. In its response, 
DOD did not provide specific written or technical comments (see app. 
II). 

We are sending copies of this report to interested congressional 
committees; the Secretary of Defense; and the Director, Office of 
Management and Budget. We will make copies available to others upon 
request. In addition, this report will be available at no charge on the 
GAO Web site at http://www.gao.gov. 

Please contact me at (202) 512-4841 if you or your staff has any 
questions concerning this report. Major contributors to this report are 
listed in appendix III. 

Sincerely yours,

Signed by: 

Ann Calvaresi-Barr: 
Director, Acquisition and Sourcing Management:

[End of section]

Appendix I: Scope and Methodology:

To identify and describe DOD and FFRDC facilities that receive funding 
from DOD for microelectronics production or research prototyping, we 
visited all eight facilities identified by DOD as having capability to 
produce or prototype microelectronics. Using a set of structured 
questions, we interviewed officials at each facility to determine their 
microelectronics focus, clean-room and equipment characteristics, and 
types of research, production and/or research prototyping the facility 
provides. We also obtained and analyzed supporting documents and toured 
the facilities. We did not include in our scope universities or 
commercial firms that also conduct DOD research and have 
microelectronics facilities. 

Because microelectronics is a part of a much broader area of research, 
we looked at DOD's overall research coordination in addition to 
microelectronics-specific areas. To determine how DOD coordinates its 
research investments, we interviewed officials from the Executive Staff 
of the Defense Science and Technology Reliance process; the Office of 
the Deputy Under Secretary of Defense for Science and Technology (Space 
and Sensor Technology); and the Advisory Group on Electron Devices. We 
also obtained and reviewed DOD's defense research planning-documents-- 
including the Basic Research Plan, the Defense Technology Area Plan, 
Joint Warfighting Science and Technology Plan, and the Defense 
Technology Objectives document. We also met with Defense Advanced 
Research Projects Agency officials to discuss their role in sponsoring 
DOD research and development activities. In addition, at the DOD 
service laboratories that we visited, we obtained information on 
microelectronics related research projects. 

We performed our review from November 2003 to January 2005 in 
accordance with generally accepted government auditing standards. 

[End of section]

Appendix II: Comments from the Department of Defense:

OFFICE OF THE DIRECTOR OF DEFENSE RESEARCH AND ENGINEERING: 
3040 DEFENSE PENTAGON: 
WASHINGTON, DC 20301-3040:

2 March 2005:

Ms. Ann Calvaresi-Barr:
Acting Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office:
441 G. Street, N.W.: 
Washington, DC 20548:

Dear Ms. Calvaresi-Barr,

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-05-278 "Defense Microelectronics: DoD Funded Facilities 
Involved in the Research Prototyping or Production," dated February, 
2005 (GAO Code 120300).

The GAO offered no recommendations. The Department appreciates the 
opportunity to review and comment on the draft report.

Sincerely,

Signed by: 

Charles J. Holland:

Deputy Under Secretary of Defense (Science & Technology): 

[End of section]

Appendix III: GAO Contact and Staff Acknowledgments:

GAO Contact:

Anne-Marie Lasowski, (202) 512-4146:

Acknowledgments:

In addition to the individual named above, Bradley Terry, Lisa Gardner, 
Karen Sloan, Hai Tran, Brian Eddington, and Steven Pedigo made key 
contributions to this report. 

FOOTNOTES

[1] FFRDCs meet some special long-term research or development needs of 
the government and are operated, managed, and/or administered by either 
a university or consortium of universities, other not-for-profit or 
nonprofit organization, or an industrial firm, as an autonomous 
organization or as an identifiable separate operating unit of a parent 
organization. 

[2] Research is the systematic study directed toward fuller scientific 
knowledge. Development is the systematic application of knowledge 
directed toward the production of useful materials, devices, and 
systems. Development categories range from advanced technology 
development, including prototypes and scaled models, to operational 
systems development. 

[3] Other organizations include nonprofit institutions, international 
organizations, and FFRDCs. 

[4] Fiscal year 2003 is the most recent data available on the 
distribution of funds by organization. 

[5] The prototypes were demonstrated on the Midcourse Space Experiment 
satellite. 

[6] Sandia primarily operates for the Department of Energy; in fiscal 
year 2003, only about 1 percent of Sandia's microelectronics research 
funding came from DOD. 

[7] According to DOD officials, "lagging edge" technology generally 
refers to unprofitable process lines for fabricating technologies that 
are abandoned by commercial firms. 

[8] While DOD typically supports defense systems for many years or 
decades, microelectronics have limited product life cycles. 

[9] Replacement costs generally include the equipment for clean room 
processing, testing, characterization, and materials growth used 
primarily for microelectronics. 

[10] The Base Realignment and Closure Commission is periodically 
established to review DOD facilities, including laboratories, for 
potential closure or realignment. The National Defense Authorization 
Act for Fiscal Year 2002 (Pub. L. No. 107-107  3001 (2001)) 
established the commission for 2005. 

[11] S&T includes basic and applied research and advanced technology 
development. 

[12] Efforts pertain to applied research and advanced technology 
development projects. 

[13] The actual percentage fluctuates from year to year as defense 
technology objectives are completed and new ones are added. DOD 
officials estimate that approximately 36 percent of its funded projects 
in 2004 were represented in defense technology objectives. 

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